Annual Report (ESEF) • Apr 7, 2025
Preview not available for this file type.
Download Source FileDear all,
Lithuania's energy sector is in an increasingly strong position on the path to transformation. The changes underway are laying a strong foundation for the country's economic development. Amber Grid has a key role to play in implementing Lithuania's energy vision. It ensures the reliability and security of the national gas transmission network and is leading the creation and development of the future energy infrastructure. Biomethane producers continue to be integrated into the grid, and the green hydrogen corridor is being rapidly developed with partners in Northern Europe and the Baltics. The company has already laid the foundations for the development of green energy, so it is crucial to keep up the momentum and to jointly explore new opportunities to strengthen the country's and region's energy security.
In 2024, Amber Grid's Board was reconstituted with two independent members from Denmark and Germany. It is encouraging that colleagues working and living in European countries are sharing their international experience and promoting the development of Lithuania's energy sector. Their contribution to a positive change in Amber Grid is highly appreciated. Together, we are striving for this company to successfully initiate new green energy-related activities while ensuring the smooth and efficient operation of the existing gas infrastructure, thus, strengthening Lithuania's energy security and independence. The aim of the entire Board is to help the company to organize its business in a way that adapts to the changing industrial environment, ensuring its leadership in the sector while maintaining long-term goals.
Last year, as part of the new energy group EPSO-G, Amber Grid developed an integrated strategy until 2035. We have to work and live in times when geopolitical tensions are increasing the pressure on energy security and supply chains. Security is therefore one of the key thrusts of the strategy for the ten years ahead, which focuses on uninterrupted energy transmission, while strengthening the physical and cyber protection of system facilities. On the other hand, Lithuania's energy independence will only be secured when we become an energy-exporting country. The European hydrogen network is one of the key points for future development to enable significant green energy flows between northern and western Europe. Amber Grid's specialists have many years of experience in the development of large-scale energy infrastructure projects, so I am optimistic and believe that the company will work purposefully and successfully on the new energy projects, such as the planned development of the CO2 network, the installation of the hydrogen corridor and the replacement of gas compressors with electric ones.
As we look to future projects, it is necessary to keep in mind the current situation. The company must continue to optimize the gas transmission infrastructure developed to date, both in terms of security and efficiency. Transforming energy is not just about infrastructure change, but also about building and maintaining strong partnerships. Amber Grid strives to be a reliable partner in the market. And while there is a growth in this area, as evidenced by ongoing customer surveys, we will continue to improve the experience, be even faster, provide user-friendly tools and deploy business solutions that meet our customers' needs. We are committed not only to delivering services, but also to becoming an active partner to our customers, helping them to adapt to a changing environment and to take full advantage of modern energy.
I thank the people of Amber Grid for a successful past year and wish the company to move forward with confidence, to grow its new energy competences, to strengthen the Baltic energy industry and to create benefits for Lithuania in a rapidly changing energy sector.
Yours faithfully
Paulius Butkus
Chairman of the Board of Amber Grid
Dear colleagues, partners and customers,
In this Amber Grid management report, we provide you with a detailed picture of what we have accomplished over the past 2024, describing our operating principles, the values we are guided by, and disclosing information about the most important operational and financial indicators.
Having been the head of this unique company for five years, I always draw attention in reports to the large amounts of energy transmitted by the gas transmission system we manage. In 2024 this number was lower, but still impressive, we transported 55 terawatt-hours of gas through the gas transmission network. Gas flows daily through the 2,300 kilometer gas pipeline installed in the territory of Lithuania, which is extremely necessary for Lithuania and neighboring countries. And since 2022, when we connected to Poland via the GIPL gas pipeline, we have been transporting gas to any European country that has purchased it. We see that natural gas remains a key resource in ensuring energy security and industrial needs, and the peak gas demand in Lithuania, reaching 120 GWh per day demonstrates the need for reliable and sufficient infrastructure.
Last year, the amount of gas transmitted through our infrastructure was slightly lower for obvious reasons – the Balticconnector gas pipeline between Finland and Estonia was still out of service for the first four months after it was intentionally damaged in the fall of 2023. In addition, in 2024, for the first time in history, the Klaipėda LNG terminal underwent a technical inspection, which caused the terminal to be shut down for more than a month. Despite these infrastructure challenges, gas consumers in the region were supplied on time and without disruption.
Assessing the daily changing geopolitical situation in the world, we first of all turn our attention to the security and reliability of the gas transmission system. The availability of energy resources and energy security ensure the sustainability of the state's development. Therefore, we constantly carry out technical inspection, maintenance and reconstruction of the system. In the integrated strategy approved in 2024, we have foreseen investments until 2035 that will need to be poured into the reconstruction and maintenance of the gas transmission network created so far. We plan that investments in the existing network will amount to about 200 million euros, and all investments in new energy, which we plan to develop in the activities of Amber Grid, will amount to more than 3 billion euros.For this, we have planned to allocate our own funds and attract external investments until 2035. These ambitious goals would not be achieved alone. Therefore, I highly appreciate Amber Grid being part of the EPSO-G group of companies. Together we can do much more than one. Cooperation and synergy between the group's companies bring much more benefits than working in separate spheres. During 2024, the company made particular progress in planning the implementation of the North-Baltic Hydrogen Corridor (NBHC) project. In the hydrogen project, we conducted a pre-feasibility study in 2024 and, together with five other partners - Finland, Estonia, Latvia, Poland and Germany, we began preparing a feasibility study that will lead us to the design stage of the hydrogen pipeline. We are pleased to have received CEF funding for the studies, so we are rapidly moving towards the implementation of this project, which is important for both the state and European energy. Also, last year another idea emerged and is already taking the form of a project – to create a CO2 transportation system in Lithuania. This would be another step towards establishing new energy in our country and creating benefits for business development and society. In 2024, two biogas producer systems were connected to the Amber Grid transmission network. Biomethane from two other biogas producing power plants that are not connected to the grid is transported to the pipeline by tankers. The result of 2024 is that around 130 GWh of biomethane was accepted into our system and the company issued guarantees of origin for this gas. We are working intensively with new customers - we plan to connect 6 biogas producers in 2025. With Amber Grid increasingly focusing on sustainable operations, we have started to assess more sustainability indicators. The company aims to comply with the best sustainability management practices and principles, ensuring that sustainability aspects are integrated into strategic decisions and daily operations. Our sustainability report is prepared voluntarily, aiming to comply as closely as possible with European sustainability reporting standards. Looking ahead to 2024, I would like to say #ThankYou to Amber Grid colleagues for your dedication, loyalty to the energy industry and professionalism. I also say #ThankYou to our customers, partners and shareholders for their trust and support. I know that 2025, which has already begun, will be full of new ideas and, at the same time, challenges, but by working together we will overcome them with courage and be even stronger! Yours faithfully Nemunas Biknius, Chief Executive Officer of Amber Grid
The Consolidated Management Report covers the reporting period for the year 2024.
Company name Amber Grid AB (hereinafter “Amber Grid” or the “Company”)
Legal form Public limited liability company
Date of registration and name of register 25 June 2013, Register of Legal Entities
Legal entity code 303090867
Manager of the Register of Legal Entities State Enterprise Centre of Registers
Issued capital EUR 51,730,929.06
LEI code 097900BGMP0000061061
Registered office address Laisvės ave. 10, LT-04215 Vilnius, Lithuania
Phone +370 5 236 0855
Email address [email protected]
Website www.ambergrid.lt
Amber Grid is the gas transmission system operator in Lithuania, which ensures reliable and safe transporting of natural gas to its consumers through high pressure gas pipelines. The Company is responsible for the operation, maintenance and development of the Lithuanian gas transmission infrastructure consisting of a network of nearly 2,300 km-long gas pipelines and two gas compressor stations. A well-developed gas transmission infrastructure in Lithuania is convenient for transporting large volumes of energy to Poland, the Baltic States and Finland. The Company has implemented two strategic energy projects, i.e. GIPL and ELLI, which interconnected the gas transmission systems of Poland and Lithuania, and fostered integration of the Baltic and Finnish gas markets into the pan-European gas trading market. As part of its decarbonisation goals, Amber Gird takes active measures to look into innovative technological and market solutions and to facilitate adaptation of the Lithuanian gas transmission system to transporting green gas, including hydrogen. Amber Grid also administers the National Register of Guarantees of Origin for gas produced from renewable energy sources (RES).
Amber Grid is a part of the EPSO-G UAB group of companies (hereinafter “EPSO-G” or the “EPSO-G Group”). EPSO-G is a state-owned group of energy transmission and exchange companies, and EPSO-G UAB acts as a holding company of the EPSO-G Group, with its shareholder’s rights and obligations implemented by the Ministry of Energy of the Republic of Lithuania. For more information about EPSO-G UAB and the EPSO- G Group, see www.epsog.lt.
Amber Grid holds 34% of shares in the GET Baltic UAB gas exchange. GET Baltic, a part of the EEX gas exchange, undertakes and develops gas exchange trade in Lithuania, Latvia, Estonia and Finland. For more information about GET Baltic, see www.getbaltic.com.
The Company has no branches and representative offices.
The Company’s performance indicators in 2022–2024
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Quantity of gas transported to domestic exit point and used for own needs, GWh | 16,947 | 14,913 | 15,576 |
| Quantity of gas transported to adjacent transmission systems ¹ , GWh | 38,361 | 46,326 | 48,213 |
| Number of systems users at the end of the period | 88 | 127 | 122 |
| Length of main gas pipelines, km | 2,288 | 2,285 | 2,285 |
| Gas distribution stations and gas metering stations (number of units) | 68 | 68 | 68 |
| Number of employees at the end of the period | 345 | 327 | 327 |
¹ The transmission systems in Latvia, Poland and the Kaliningrad Region
An environmentally friendly, innovative energy company in the integrated European gas network.
To develop the system that enables competition and the use of climate-friendly energy.
3 rd January: The European Gas Transmission System Operators Gasgrid Finland (Finland), Elering (Estonia), Conexus Baltic Grid (Latvia), Amber Grid (Lithuania), GAZ-SYSTEM (Poland) and ONTRAS (Germany) participating in the international project for the creation of the Nordic-Baltic Hydrogen Corridor (NBHC) signed a contract on the pre-feasibility study on the 01 January 8 green hydrogen corridor. AFRY Management Consulting, the winner of the tender, will analyse the conditions for the development of cross-border hydrogen infrastructure from Finland, through the Baltic countries and Poland to Germany, as well as green hydrogen trends in the region. The study, which will provide a comprehensive, fact-based framework to allow the optimal decisions to be made, is scheduled to be prepared in June 2024.
26 th of January: The ELLI project, a joint partnership between Amber Grid and Latvian gas transmission and storage system operator Conexus Baltic Grid, has been officially completed. The project increases the interconnection capacity in both directions, strengthening the security of natural gas supply in the region. The ELLI project was included in the BEMIP gas priority corridor in the list of projects of common interest adopted by the European Commission, and co-financed by the European Union.
1 st of February: A new electronic system for the registry of guarantees of origin of green gas, administered by Amber Grid, was launched. It provides green electricity producers, users and other market participants with a safe, reliable and easy access to data on the guarantees of origin. The system is accessible via Certigy platform created by a Czech company Unicorn Systems. The Guarantee of Origin Register allows market participants to create their own accounts, easily manage the guarantee of origin processes, monitor real-time guarantee of origin balances, transaction statistics, etc.
11 th of April: Amber Grid filed a lawsuit against Alvora, the contractor for the construction of the GIPL gas pipeline, for damages for deficient performance of the GIPL construction contract. The damages amount to EUR 10.6 million. These funds are necessary to remedy the defects that occurred during the contracting of the project, including the replacement of parts of the pipeline and related technological processes.
28 th of April: The Nordic-Baltic Hydrogen Corridor was granted the status of the project of common interest (PCI) by the European Commission.
30 th of April: Amber Grid’s General Meeting of Shareholders elected new members of the Company’s Board. Peter Loof Helth and Alexander Feindt were elected as independent members of the Board for the remaining term of office. Darius Kašauskas was elected and Paulius Butkus was re-elected as members of the Board, nominated by the parent company EPSO-G. As well as, Karolis Švaikauskas was re-elected as a civil servant member.
30 th of April: The ordinary General Meeting of Shareholders of Amber Grid resolved to distribute the Company’s profit for 2023 and to grant a dividend of EUR 0.1131 per share. In total, EUR 13.4 million in dividends was paid.
10 th of May: Paulius Butkus, a member of the Board of Amber Grid and Head of Development and Innovation at EPSO-G Group, was elected as Chairman of the Board at the meeting of the Board of Amber Grid. At the EPSO-G Group of companies, P. Butkus is responsible for strategy, innovation development, data analytics and management, and development of other activities.
21 st of May: Amber Grid set gas transmission service prices for 2025. The prices are based on the maximum permissible regulated revenues approved by the National Energy Regulatory 05 February 02 April 04 May 9 Council (NERC). The average price for transmission services for Lithuanian consumers in 2025 will increase by 7.4% to EUR 1.60/MWh compared to the 2023 price for Lithuanian consumers (1.39 EUR/MWh).# Key Events in 2024
On June 6th, as part of the planned integration of GET Baltic into EEX, a further step will be taken to transfer gas trading in the Baltic states and Finland to the EEX platform. It is planned that by the end of the first quarter of 2025, GET Baltic's customers will trade gas on EEX’s trading platform, while the GET Baltic team will remain to serve the local customer base and further develop the product offering in line with market needs.
On June 14th, the Company received NERC’s resolution confirming the investigation report on the accident in the main gas pipeline Panevėžys–Riga of Amber Grid, located at Valakėliai, Pasvalys district on January 13, 2023. The investigation found that the principal cause of the accident was a poor quality welding joint from the construction period.
On June 17th, nine gas transmission system operators (TSOs) in the countries around the Baltic Sea have signed a Memorandum of Understanding (MoU) which aims to coordinate and facilitate hydrogen infrastructure and also to foster hydrogen market development in the Baltic Sea region. The MoU establishes and implements the cooperation between TSOs. The parties of the MoU are Polish GAZ-SYSTEM, Estonian Elering, Danish Energinet, Finnish Gasgrid Vetyverkot, Lithuanian Amber Grid, Swedish Nordion Energi, German GASCADE Gastransport, Latvian Conexus Baltic Grid and German ONTRAS Gastransport.
On June 18th, Amber Grid’s General Meeting of Shareholders approved the provision of aid to Ukraine’s energy sector. Amber Grid will send a humanitarian aid package, consisting of five generators and ten gas pipeline reinforcement couplings, to Ukraine’s energy sector. The total value of the humanitarian aid is almost EUR 108 thousand.
On June 28th, the NBHC study has been completed. It identifies a possible trajectory for a hydrogen pipeline through the six Member States of the project, the preliminary technical characteristics of the pipeline, and the hydrogen compression capacities for different time periods up to 2050. The project partners are continuing their activities and preparing the documentation for the CEF application, which will request support to carry out in-depth feasibility studies and pre-project solutions in each of the participating countries. The deadline for the application is October 2024.
On July 1st, Amber Grid submitted a 10-year network development plan for the gas transmission system operator to NERC following a public consultation in June. Key elements of the plan include: upgrading existing gas infrastructure, ensuring security, increasing resilience to crisis situations, developing alternative energy sources, integrating renewable energy, developing a hydrogen transport network, synergies between the gas and electricity sectors, and reducing greenhouse gas (GHG) emissions.
On July 26th, NERC set the weighted average cost of capital (WACC) to be applied to Amber Grid from 2025. The WACC will increase from 5.04% to 5.63%.
On August 5th, the EU legislative package, approved on June 13, 2024, to decarbonise the EU gas market by facilitating the uptake of renewable and low-carbon gases, including hydrogen, while ensuring security of supply and affordability of energy for all citizens in the EU, was adopted (Regulation (EU) 2024/1789 of the European Parliament and of the Council of June 13, 2024 on the internal markets for renewable gas, natural gas and hydrogen and Directive (EU) 2024/1788 of the European Parliament and of the Council of June 13, 2024 on common rules for the internal markets for renewable gas, natural gas and hydrogen).
On August 4th, on June 13, 2024, Regulation was adopted on methane emission reduction in the energy sector laying down rules on the accurate measurement, quantification, monitoring, data reporting and verification of methane emissions in the EU energy sector, as well as on the reduction of methane emissions, including leak detection and repair surveys, repair obligations and restrictions on venting and flaring, and on the means to ensure transparency of methane emission reporting (Regulation (EU) 2024/1787 of the European Parliament and of the Council of June 13, 2024 on the reduction of methane emissions in the energy sector).
On August 13th, Amber Grid received the notification from the National Energy Regulatory Council (NERC) regarding the sanctioning process initiated against Amber Grid by NERC for deficiencies identified in the inspection report on the GIPL construction.
On September 9th, operators of the Ontras gas transmission system of Lithuania, Finland, Estonia, Latvia, Poland and Germany successfully completed the preliminary feasibility study of the Nordic Baltic Hydrogen Corridor (NBHC). The significant study, which was started in January 2024, examines the main conditions for the development of the NBHC project. The project aims to create opportunities for the transportation of green hydrogen between the six countries.
In October, a second biomethane injection point in Lithuania became operational, connecting a biomethane plant owned by the Agrokoncernas group of companies. Green biogas produced from Agrokoncernas’ agricultural raw materials is delivered through the main gas pipelines, and the technical intake capacity will allow the transport of more than 21 gigawatt hours (GWh) of biomethane every year.
On November 18th, the General Meeting of Shareholders of Amber Grid approved the Company’s proposal to transfer 55 vehicles and 4 generators to Ukraine. The total value of the humanitarian aid is almost EUR 62 thousand. Part of the aid was transferred in autumn 2024, and another is planned to be delivered in 2025.
On November 18th, the NBHC project partners applied for funding under the Connecting Europe Facility (CEF).
On November 22nd, NERC imposed an EUR 81 thousand fine on Amber Grid for deficiencies identified in the construction inspection report.
On November 29th, Amber Grid received NERC’s for a ten-year country’s gas transmission network development plan. The plan envisages investments in the development of the gas transmission system up to 2033 in order to achieve the strategic objectives of the European Union and Lithuania in the gas sector. The gas transmission network is expected to require investments of around €201 million over the next decade, of which the investments over the next five years will amount to around EUR 138 million.
On December 11th, Amber Grid signed the design, equipment supply and contracting work contract with MT Group, the energy infrastructure project development company, for the reconstruction of the Elektrėnai gas distribution station. The value of the contracting work is EUR 2.6 million. The reconstruction of the station is expected to be completed by mid-2026.
On December 12th, the European Gas Transmission System Operators (TSOs) of Finland, Estonia, Latvia, Lithuania, Poland and Germany’s ONTRAS announced the start of the feasibility study phase for the Nordic-Baltic Hydrogen Corridor (NBHC). These studies will focus on various crucial aspects including pipeline routing, compressor stations planning, financial and economic analysis, environmental and safety permitting issues as well as investigations on an implementation timeline. These studies are expected to run until mid-2026.
On December 16th, NERC published public consultation on the reference price methodology for determining the tariffs of services provided by Amber Grid, effective for 2026 and subsequent periods. Some of the envisaged pricing amendments are also driven by the provisions of the Regulation on Decarbonisation, adopted in mid-2024. This public consultation closes on February 14, 2025.
On December 27th, NERC approved the security component, with effect from January 1, 2025, which for the first time is set negative (-25.55 EUR/MWh/day/year). Acting as the administrator of the LNGT funds and in accordance with the description of the procedure for the administration of the LNGT funds, as amended by NERC, the Company will have to repay the LNGT funds to their payers (transmission system users) in 2025.
On January 13, 2025. Approaching the end of the 5-year term of the current CEO of Amber Grid and following the decision of the Board, the selection of candidates for the position of the Company's CEO was announced.
On January 15, 2025, the Board of Amber Grid approved the Company’s Strategy 2035, which foresees that the Company’s investments will amount to EUR 3.3 billion over the next ten years. The largest amount of the investment will be in new infrastructure for the development of renewable energy, such as a green hydrogen corridor. It will also include the development of the carbon dioxide (CO2) transportation ecosystem, upgrading the existing gas transmission network and making it more resilient. The investments will be financed through a mix of financing sources, with the bulk of the funding coming from the European Union and international funds, and optimising the structure of debt and equity capital of the Company.
On January 17, 2025, in implementing NERC obligation to inspect safety of the GIPL gas interconnection, the experts confirmed that the GIPL gas pipeline is safe to operate. GIPL’s security check was carried out in November - December, 2024 by JSC Inspecta Latvia, which won the public tender.
On February 4, 2025, the European Commission has announced to allocate co-financing from the Connecting Europe Facility (CEF) to cross-border energy infrastructure projects under the Trans-European Networks for Energy (TEN-E) framework. Nordic Baltic Hydrogen Corridor (NBHC) stands out with a EUR 6.8 million grant to support its feasibility study phase.# MEMBERSHIP
The Company has membership in the following organisations: European Network of Transmission System Operators for Gas (ENTSO-G) (www.entsog.eu), Association Polish and Lithuanian Chamber of Commerce, National Lithuanian Energy Association, Lithuanian Liquefied Natural Gas (LNG) Platform, EASEE-gas Association, European Renewable Gas Registry (ERGaR), European Clean Hydrogen Alliance, Lithuanian Hydrogen Platform, Lithuanian Hydrogen Energy Association, association INFOBALT, European Hydrogen Backbone initiative: ENTSOG was established in accordance with Regulation No. 715/2009 of the European Parliament and of the Council, as an organisation facilitating cooperation between the gas transmission system operators at the European Community level. Association Polish and Lithuanian Chamber of Commerce is a bilateral organisation for economic cooperation between Lithuania and Poland. The Association collects information for its members about the emerging business opportunities in both countries, cooperates with organisations and individuals ensuring business management and development, and organises conferences and events on various subjects. The National Lithuanian Energy Association develops a common position of the energy sector, represents the interests of its members with the state authorities, public and international organisations, seeks to ensure development and improvement of electrical energy and gas supply conditions for the domestic consumers, and promotion of progress in the economic and technical energy sector. The Lithuanian Liquefied Natural Gas (LNG) Platform partners seek to promote the use of LNG as a new, cleaner and less noisy fuel in the sectors of transport, industry and others, in order to build a single information and operation platform for all potential LNG market participants. EASEE-gas association was set up to develop and promote business practices to simplify and streamline physical transporting of gas and trading across Europe. The main purpose of ERGaR Association is to promote, develop and maintain a trustworthy system that meets the EU regulatory requirements and enables cross-border trade in certificates of origin for renewable gases via the European natural gas network while preventing double sale and double counting of renewable gases. Amber Grid is a member of the European Clean Hydrogen Alliance, which aims to assist with the implementation of the goals of the EU Hydrogen Strategy in order to support the scaling up of renewable hydrogen value chain across Europe. LNG ECH2A 13 Amber Grid is a member of the Lithuanian Hydrogen Platform set up under the Ministry of Energy. The platform aims to help achieve the goals of the EU Hydrogen Strategy to create a full-fledged and affordable renewable hydrogen value chain. It also promotes the use of hydrogen as a clean fuel, energy source and carrier in the sectors of transport, industry and others, as well as promotes engagement of local businesses and organisations in the activities of the hydrogen value chain as they develop and manufacture products and prove services for the domestic and external needs. Amber Grid is a member of the Lithuanian Hydrogen Energy Association. The Association joins the local scholars and business organisations and participates in the formation of national, regional and EU policy and goals, including the preparation of strategy and hydrogen development action plan during the legislative process of legal acts regulating the hydrogen energy sector in Lithuania; also contributes to proposition of legislative initiatives that would promote local development of hydrogen technology, thereby ensuring cross-sector hydrogen integration and implementation of related technologies; and promotes joined initiatives in research & development activities, innovations, etc. Amber Grid is a member of association INFOBALT. INFOBALT is the information, communication and technology sector association aiming to create the best conditions for application of technologies, market expansion and export. In cooperation with partners of this association Amber Grid develops a think tank cooperation platform of the energy, science and IT field EnergyTech, which brings together energy companies, scientific community and the most advanced and experienced IT and technology companies. The EnergyTech platform develops in three directions: the bank of innovative ideas and the centre of exportable competences; the area for like-minded professionals for an effective dialogue to promote innovations in the energy sector; the leader bringing together the local, regional and international community to ensure a sustainable energy of the future. Amber Grid is the member of the European hydrogen development initiative European Hydrogen Backbone, which operates as an independent working group within the Gas Infrastructure Europe association. The members of the initiative devote their efforts to the creation of the vision of the hydrogen transportation infrastructure across Europe and contribute to the development of the green hydrogen market with their expert insights. Amber Grid is the member of AIB, the organization uniting bodies issuing guarantees of origin in Europe. AIB creates and develops a standardized system for the exchange of guarantees of origin of energy among the bodies issuing guarantees of origin of the European Union and the member states of the European Economic Area to ensure a reliable, transparent and economical cross-border exchange of guarantees of origin of energy. In 2023, Amber Grid joined Oil & Gas Methane Partnership 2.0 (OGMP 2.0). This is the United Nations Environment Programme’s (UNEP) flagship programme for oil and gas reporting and environmental impact reduction. OGMP 2.0 is the only comprehensive, measurement-based reporting framework for industry that improves the accuracy and transparency of methane emissions reporting. OGMP 2.0 directly engages oil and gas LHP AIB 14 companies that have the power to address methane emissions. It helps them to better understand their emission profiles and, most importantly, to use this knowledge to reduce emissions in a cost-effective way, focusing their efforts on the largest emission sources. In 2024, for the second year in a row, Amber Grid was awarded the Gold Standard Pathway by OGMP 2.0. In October 2024, the Ministry of Energy of the Republic of Lithuania, together with other ministries, industrial companies, research institutions and universities, signed an agreement to establish the CCS/CCUS platform. Amber Grid is one of the members of the platform. The Platform was created to strengthen dialogue and cooperation on critical issues related to carbon capture, utilisation and storage (CCS/CCUS) technologies in Lithuania. The Platform will aim to promote the engagement of Lithuanian companies, the public sector, and research institutions and universities in the activities of the carbon capture, transport, storage and utilisation sector’s value chain, developing and manufacturing products and services for the needs of Lithuania and other countries.
In pursuit of full energy independence from the Russian gas, in response to Russia’s blackmailing of Europe over energy and the outbreak of war in Ukraine, Lithuania has completely discontinued imports of Russian gas: the Lithuanian gas transmission system has been operating without imported Russian gas since 1 April 2022. Lithuania’s entire gas demand is met through Klaipėda Liquefied Natural Gas (LNG) terminal, and Santaka entry point for gas from Poland, and Kiemėnai entry point for gas from Latvia. Gas is continued to be transported to the Kaliningrad Region by transit through Lithuania, however, in an unusual technical mode, which ensures transmission of gas only to the extent necessary for the transit.
During 2024, 29.2 terawatt hours (TWh) of gas was supplied to Lithuania, excluding gas transported to the Kaliningrad Region. This was by 21,4% less than 37.7 TWh of gas transported to Lithuania in 2023.
The pipeline connection to Latvia transported 9.9 TWh of gas for the needs of other Baltic States and Finland, which is by 49,4% less than 19.1 TWh transported towards the Baltic States in 2023.
The pipeline connection to Poland transported 2.5 TWh of gas, which is by 21.3% less than 3.2 TWh transported towards Poland in 2023.
Gas consumption in Lithuania in 2024 increased. In total 16.9 TWh of gas was consumed in Lithuania during 2024, which was 13.6% more compared to 2023, when the demand was 14.9 TWh of gas.
Klaipėda LNG terminal continues to be the most important source of gas supply for Lithuania and the Baltic States. During 2024, 23.9 TWh of gas or 80.6% was supplied from the terminal, 4.1 TWh or 14% – from Latvia, 1.5 TWh or 5% – from Poland, and 0.1 TWh from biogas producers, or 0.4% of total gas input. Klaipėda LNG terminal capacity is fully booked until 2033, i.e. 33 TWh of capacity will be allocated to the terminal’s customers each year. CO 2 15
From end-2022, biomethane produced in EU countries meeting sustainability criteria has been imported to Lithuania. Guarantees of origin recognised in Lithuania were issued for this biomethane. In 2023, a total of 40 GWh of biomethane was imported to Lithuania. The guarantees of origin were also issued for the biomethane which been produced in Lithuania since the summer of 2023. By the end of 2023, 47 GWh of biomethane had been produced in Lithuania and injected into the Amber Grid system, and almost 130 GWh during 2024. In 2024, two biogas producer systems were connected to the Company’s transmission network. From two more biogas plants, which are not connected to the network, biomethane is transported to the pipeline by tankers. Six biogas producers are planned to be connected in 2025.# In the context of fight against climate change, adoption of more stringent requirements of the EU environmental policy, promotion and expansion of use of renewable energy sources, and more efficient use of energy – all these factors will contribute to lower consumption of natural gas for energy purposes and for the needs of the industry sector in Lithuania. However, due to the limited number of alternatives in some of the industries and segments of the transport sector, and due to competitiveness while rendering balancing, reservation services in the heat and electricity sectors, natural gas will play an important role as a transitional source of energy in pursuance of pan-European and national goals to reduce greenhouse gas emissions. At the same time, gas transported via the pipelines will change with an increasing share of green gas: biomethane and gas generated through the process of conversion of green electricity – green hydrogen and synthetic methane.
On 28 June 2024, the Parliament (Seimas) of the Republic of Lithuania approved the resolution on the approval of the National Climate Change Management Agenda regarding the National Energy Independence Strategy. In its NENS, Lithuania has set ambitious goals that will contribute significantly to the implementation of the United Nations’ 2030 Agenda for Sustainable Development, and implementation of the goals set forth in the Paris Agreement, and the goals set forth in the EU’s 2030 Climate and Energy Framework. They aim to increase the share of renewable energy sources (including biomethane and other RES-produced gases) in the country’s total final energy consumption: The Law on Energy from Renewable Sources of the Republic of Lithuania sets a target of at least 55% of renewable energy sources in the country’s total final energy consumption by 2030, with a further increase in this share. In Lithuania, similarly as in the EU, it is expected that natural gas will remain an important energy source at the time of transition to a low-carbon economy. The domestic annual demand for natural gas will reach around 17 TWh by 2030, of which more than 50% will represent demand for gas as a raw material in the fertilizer production industry.
There is an urgency to transform Europe’s energy system: In response to the difficulties and disruptions in the global energy market caused by Russia’s invasion of Ukraine, the European Commission (EC) has launched the RePowerEU plan in 2022 to gradually phase out Russian fossil fuel imports. 16 As foreseen in the REPowerEU Plan, the objectives will be pursued by:
* energy savings,
* diversification of energy supplies,
* accelerated roll-out of renewable energy
The gas sector and networks can effectively contribute to the creation and development of the European hydrogen economy as envisaged in the EU Hydrogen Strategy. The European Commission envisages two phases – the transition period until 2030 and the period until the hydrogen market is established in 2050. On 13 June 2024, the hydrogen and gas decarbonisation package were adopted (hereinafter the “Gas package”). The package comprises a Regulation and a Directive. The aim of the initiative of the proposals stipulated in the Directive and the Regulation is to facilitate the integration of renewable and low-carbon gases, particularly hydrogen and biomethane, into the energy system. The objective is a 55% reduction in methane emissions compared to 1990 by 2030 and the achievement of the climate-neural economy in the EU by 2050. One of the main objectives of the Gas Package is to create the hydrogen market, develop a proper environment for investments and facilitate the development of the related infrastructure and trade with the third parties. Firstly, the access to the hydrogen infrastructure, segregation of the hydrogen production and transport activities and setting the tariffs will be governed by the market rules.
Geopolitical circumstances and rise in energy prices caused a stronger focus on the importance of energy security, particularly at the time of volatile global markets. The European Commission has offered to improve resilience of the gas system and strengthen the existing supply security provisions. In case of shortage, none of the households in the European Union will be left without help, and the international automatic solidarity will be enhanced through new pre-agreed measures and revisions regarding control and compensations in the internal energy market. The Gas Package expands the current rules to ensure their application to renewable and low-carbon gases, and new provisions are stipulated to address the arising cyber security risk.
On 13 June 2024, the long-awaited EU regulation on the reduction of methane emissions in the energy sector was adopted and officially entered into force on 5th August. The requirements in this regulation aim to increase the transparency of imports of fossil energy (e.g. natural gas, oil and coal) into the EU, promote the wider application of measures to reduce methane emissions in the energy sector, and harmonize comprehensive standards for the measurement, reporting and verification (MRV) of methane emissions and guidelines. The requirements of this Regulation will have a great impact on the organization of the Company’s activities. 17
A new regulatory period of 5 years started in 2024. Accordingly, for the new regulatory period, the amended (2023) provisions of the Methodology for Setting Income and Prices of State Regulated Natural Gas Transmission Activities and the Methodology for Setting the Rate of Return on Investment come into full force. In December 2024, NERC published public consultation on the reference price methodology, effective for 2026 and subsequent tariff periods. Some of the envisaged pricing amendments are also driven by the provisions of the Regulation on Decarbonisation, adopted in mid-2024. The public consultation closes on 14 February 2025. It is expected that, in H1 2025, NERC will amend the Methodology for Determining Revenue From and Prices for Regulated Natural Gas Transmission Activities.
| Company name | GET Baltic UAB (hereinafter “GET Baltic”) |
|---|---|
| Legal form | Private limited company |
| Date of registration and name of register | 13 September 2012, Register of Legal Entities |
| Legal entity code | 302861178 |
| Manager of the Register of Legal Entities | State Enterprise Centre of Registers |
| Issued capital | EUR 580,450.00 |
| Registered office address | Geležinio Vilko st. 18A, LT-08104 Vilnius, Lithuania |
| Phone | +370 5 36 0000 |
| Email address | [email protected] |
| Website | www.getbaltic.com |
GET Baltic, the gas exchange owned by the European Energy Exchange (EEX) and the Lithuanian gas transmission system operator Amber Grid, is a licensed natural gas market operator with Registered Reporting Market Operator (RRM) status granted by the ACER. The company operates the electronic trading system for short-term and long-term (one-month) natural gas products with physical delivery on virtual trading venues in Lithuania, Latvia, Estonia and Finland. By developing tailor-made solutions for natural gas trading, GET Baltic aims to increase the liquidity, competitiveness and transparency of the wholesale natural gas market in the Baltic States and Finland.
To ensure optimal use of the potential of the opening of the European gas market and to provide the opportunity to offer customers of the regional gas exchange GET Baltic the cutting-edge gas trading solutions, the Company’s sole shareholder announced the selection of the strategic partner for the GET Baltic exchange early in 2022. In 2023, the EEX exchange was selected as GET Baltic’s strategic partner following the conclusion of the international public tender. In the same year, Amber Grid and EEX have officially signed an agreement under which EEX will acquire a 66% stake in GET Baltic. GET Baltic, the 18 gas exchange operating in three Baltic countries and Finland, thus became part of the EEX Group. Amber Grid continues to hold the remaining 34% of shares.
As part of its transformation, GET Baltic updated its logo and visual identity in February 2024. The move reflects GE’s close relationship with the EEX Group companies. At the same time, it has strengthened ties with the pan-European gas markets where EEX already operates. This has revealed new potential and opened a new path for the joint development of the Baltic and Finnish gas markets. The renewed corporate brand maintains the identity of GET Baltic and at the same time fits in the context of the EEX Group as a whole.
Important to mention that aiming to implement the client-focused strategy of the organisation, fulfil client expectations as well as improve the quality of products and service, the client satisfaction survey was conducted by the Company from September to October. The survey included questions to the clients of GET Baltic on their experience and evaluation relating to the scope, quality of products, service, and employees as a knowledge and competence centre. The client satisfaction survey results showed that the clients of GET Baltic consider the Company to be a stable entity that complies with the high standard of the market services. Throughout the year, the Company aid special attention to meeting customer needs and expectations.
On 11 December 2024, GET Baltic, in cooperation with EEX, organised event “EEX and GET Baltic Trader workshop and Onboarding in Vilnius”. The event brought together market players from the Baltics and Finland. Participants actively exchanged ideas and expectations on the opportunities for the integration of the Baltic-Finnish gas markets into EEX, which were presented during the workshop by experts from GET Baltic, EEX and ECC. This is an important step in building relationships and fostering the region’s active and growing international community.In the near future, GET Baltic will continue to drive the work forward, will continue to improve the quality of its services, and will meet market participants’ and shareholders’ expectations regarding the ambition to strengthen the Baltic and Finnish gas markets and foster integration into the pan-European gas trading markets. Together with the EEX Group, the aim will be to add natural gas products for Baltic-Finnish markets to the EEX trading platform by 2025. In addition, EEX will enable location spread trading between these markets and selected pan-European gas markets, which are already available at EEX. It should be noted that ECC will assume the clearing and settlement for all transactions in natural gas products. The cross-margining effect will allow for efficiency improvement and significant capital savings. Following the market integration into the EEX platform, within EEX Group, GET Baltic will remain the key centre of competence for the further development of gas markets in the region and ensure close cooperation with customers on site.
Gas Exchange GET Baltic performance in 2024:
* The trade turnover totalled 8.4 TWh, which is less by 8% compared to 2023 (9 TWh).
* Annual gas consumption in the Baltic-Finland region grew by 10% to 43.5 TWh compared to 2023, while the volume traded on the GET Baltic’s exchange accounted for 19% of the region’s total consumption.
* In 2024, the volume of gas traded through cross-border transactions amounted to 1.4 TWh, or 33% less than last year (2023: 2.1 GWh), due to the Balticconnector, which was out of service until the end of April of 2024;
* 44% of the total traded volume was purchased in Lithuania (3,735 GWh), 30% in the common Latvian- Estonian market area (2,493 GWh) and 26% in Finland (2,144 GWh);
* In total, 31,599 transactions were made on the exchange, which is slightly less than in 2023 (32,213 transactions)
* 78 participants placed orders on the exchange. There were 70 participants actively placing orders throughout 2023.
* At the end of 2024, there were a total of 110 registered participants on the exchange: 72 on the Lithuanian trading floor, 47 on the joint Latvian-Estonian trading floor and 41 in Finland.
* The cheapest transaction was recorded in February at EUR 5.00/MWh and the most expensive – in January at EUR 100.00/MWh.
* In June 2024, 10 new participants from Lithuania, Latvia, Estonia, Denmark, Poland, Austria and the United Kingdom registered. The active registration of participants was driven by the consistent development of the exchange’s operations alongside other regional infrastructure.
GET Baltic performance in 2024
110 Exchange participants
78 Active exchange participants
8,372 GWh Trade turnover
31,599 Concluded transactions
In 2024, the Company continued to implement the updated long-term Amber Grid’s Strategy by 2030. The strategy updating process was launched at the beginning of 2024 at EPSO-G Group level. An updated Company’s Strategy by 2035 was approved at the beginning of 2025. The updated Amber Grid’s Strategy, together with the companies of the EPSO-G Group, highlights the Group’s common mission - to accelerate energy independence and increase system reliability, and its vision - to enable green transformation, while ensuring the interests of energy and national security. To achieve objectives, the main directions have been outlined: to build the infrastructure of future, to ensure reliability and security, and to be reliable strategic partner. To deliver strategic changes and objectives, we will rely on a range of empowerment tools: financing, innovation and digitalisation, partnerships, asset development and management, improving supply chains and procurement. In this journey of change, Amber Grid sees itself as a trusted partner, building the hydrogen network, the carbon ecosystem, continuing to actively develop green gas connections to the transmission network, developing markets and strengthening relationships with existing and future customers.
| Trade floor | Number of Exchange participants | Purchase turnover, GWh | Sale turnover, GWh |
|---|---|---|---|
| Finland | 41 | 2,145 | 2,194 |
| Latvia-Estonia | 47 | 2,493 | 2,930 |
| Lithuania | 72 | 3,734 | 3,248 |
Below is an overview of the implementation of the Company’s 2030 Strategy for 2024. The main objective set in the Company’s strategy to 2030 is to work together on the way of the Lithuanian energy system’s transformation towards climate-neutral economy. The natural gas transportation system, including main gas pipelines, gas distribution, metering and compressor stations, is an integral part of the Lithuanian energy system. It plays an important role in the creation of an environment-neutral economy and, more importantly, a cleaner and safer future. Amber Grid is ready to transform the natural gas system by adapting it to the safe transportation of renewable energy sources, that is biogas, a mix of methane and hydrogen and pure hydrogen, as well as to create a new system for hydrogen transportation, and opportunities are being analysed for the development of carbon dioxide activities. We were working to integrate into the single European market, creating a unified system that will help the country to confidently pursue the European Green Deal and consumers to enjoy clean energy at the best price. Value for stakeholders is the axis of the strategy. Five stakeholders are in the focus of attention: customers, producers/suppliers, shareholders, the society and employees, and the Company is committed to create value for each of them. For each stakeholder, we have defined obligations and the unifying mission thus identifying the main purpose as long-term obligations to the stakeholders.
Main guidelines for the implementation of the strategy during the 10-year period have been prepared for each stakeholder, with specific actions planned for each year of the period. Based on the main strategy implementation guidelines, we have formulated objectives, measures and strategic performance indicators for the short term (3-year period). Implementation of the mission, pursuit of the vision and all activities of the Company are based on the fundamental human and professional values: professionalism, cooperation, and progress.
| Stakeholders | Consumers | Producers | Founder | Society | Employees |
|---|---|---|---|---|---|
| Objectives | • Adapt the transmission system for green gas supply to the market • Create the customer- centric organisation • Implement strategic projects provided for in the NEIS in a timely manner and to the envisaged extent |
• Ensure efficient management of the system to accommodate RES integration • Reduce the environmental impact of operations |
• Enable gas sector transformation through RES integration | • Create inclusive and advanced organisation • Create an advanced organisation - Centre of Excellence for Future Energy |
|
| Key performance indicators | • Implementation of the action plan for adapting the transmission system for the supply of green gas to the market on time and to the envisaged extent • Customer satisfaction index, % • Implementation of strategic projects covered by the NEIS in a timely manner and to the envisaged extent |
• Quantity of RES gas in the system (TWh) • Reduction of the environmental impact of operations (CO2, CH4 emissions, etc.) |
• Quantity of RES gas in the system (TWh) | • Employee engagement (%) • Recognised new gas experts are invited to deliver reports on this topic on at least two Lithuanian and international conferences each year |
|
| • ROE | |||||
| • Allowable return to be earned by the regulator (EUR m) | |||||
| Result in 2030 | • Created possibilities for transporting hydrogen and gas mixtures according to new national and transnational standards • Quantity of RES gas entering the gas system (with guarantees of origin) – 1.6 TWh • Customer satisfaction index in 2030 ≥80% • Implemented NEIS projects on time and with 100% of the expected scope |
• Environmental impact of operations (CO2, CH4 emissions, etc.) reduced by 2/3 compared with the established base year | • Quantity of RES gas entering the gas system (with guarantees of origin) – 1.6 TWh | • Employee engagement by 70 % • Centre of Excellence for New Gas – shaping future energy trends, lawmaking, business model |
|
| • ROE not less than established by the RL Government • 100% of allowable return to be earned by the regulator |
|||||
| • Quantity of RES gas entering the gas system (with guarantees of origin) – 1.6 TWh |
Amber Grid continuously evaluates the implementation and progress of the strategy to achieve its goals. A detailed information on the Company’s strategy is available on the Company’s website at www.ambergrid.lt/strategija.
Table 3 below shows the status of implementation of the strategy.
CONSUMERS
Objective
To adapt the transmission network to placing of green gas on the market
Within the scope of this objective, two measures were envisaged:
The measures were suspended in mid-2024 following failure to coordinate the Company’s P2G investment project with the National Energy Regulatory Council, therefore the decision was made to suspend the implementation of the P2G project and the investment programme for the adaptation of the transmission system to the transport of hydrogen- methane mixtures.
The indicator value for 2024 was achieved. The amount of RES gas entering the gas system (with guarantees of origin) was 0.18 TWh (planned 0.25 TWh).# PRODUCERS/SUPPLIERS
Achieving this goal involves several measures:
Two strategic projects have been assigned to this objective:
A more detailed overview of the objective “To ensure a Sustainable Return to the Shareholder” is provided in section Financial results.
A number of measures are foreseen to achieve this goal.
Integration of the national system of guarantees of origin for gas produced from RES (including hydrogen) into the European system. The AIB gas scheme has been developed but not approved due to changing EU legislation. Due to changes in IT system for the administration of guarantees of origin, it has been decided to first connect to the AIB system as from 1 July 2025, instead of ERGaR system.
Implementation of environmental impact mitigation measures. In 2024, the modelling of GHG targets to 2030 took place at the Group level, which will lead to adjustments in the measures and targets in the GHG Roadmap. GHG emissions have been reduced by 55% (compared to 2019), i.e. more than initially planned.
Better employee experience. All the measures were implemented according to the employer branding plan.
The Board of the Company formulated and approved the annual operating objectives of the Company for the year 2024. Both financial and non-financial objectives set for the Company and the objectives of the Company’s CEO are identical. The Company’s CEO reports to the Board for the achievement of the set objectives. The table below presents the status on the implementation of the Company’s objectives set for the year 2024.
| Status of the implementation of the Company’s objectives for 2024 | Target values for the indicator | Weight of the goal | Assessment of goal achievement |
|---|---|---|---|
| Enabling energy transformation | (1) Hydrogen programme implemented as planned (60% weight) (2) A new Amber Grid’s long-term strategy has been developed as an integral part of the Group of companies strategy (40% weight) |
30% | 26% |
| Safe and efficient asset management. | (1) Implementation of the strategic asset management plan (SAMP) (50% weight) (2) Optimisation of gas compressor station capacities and ensuring continuity of their operation through the decarbonisation of the gas transport system (50% weight). |
30% | 26% |
| Financial and operational sustainability | (1) adjROE ≥ 5.0%; adjEBITDA ≥ EUR 27.0 million (60% weight) (2) Sustainable business development (40% weight) |
20% | 20% |
| Building sustainable organisation | (1) Establishing a centre for future energy competences (50% weight) (2) Building a culture of operational efficiency (50% weight) |
20% | 20% |
The Board of the Company annually assesses the progress achieved in respect of the implementation of the objectives. The result is used as one of the components when awarding annual financial incentive to both the Company’s management and employees. The objectives set for the Company are identical to those of the Company’s CEO. They are available Amber Grid’s website https://ambergrid.lt/tikslai
Based on the Board’s assessment, the objectives set for the Company for 2024 were achieved at 92%.
In 2022-2023, the Company completed the implementation of strategic natural gas infrastructure projects –: the construction of the Gas Interconnection Poland-Lithuania (GIPL) and the Enhancement of Latvia-Lithuania Interconnection (ELLI). The Lithuanian natural gas transmission system has become an important part of the integrated infrastructure of the Baltic region, connecting the Lithuanian transmission system to the European natural gas transmission system and creating broader opportunities for Baltic and Finnish market participants to access diversified sources of gas supply, as well as ensuring security and reliability of gas supply.
28
Gas infrastructure in the Baltic region (source: ENTSOG) in 2024
The natural gas transmission system consists of the gas transmission pipelines, gas compressor stations, gas distribution stations, gas metering stations, anti-corrosion equipment for protection of pipelines, data transmission and communication systems, and other facilities belonging to the transmission system. The Lithuanian gas transmission system is connected to the gas transmission systems of the Republic of Poland, the Republic of Latvia, the Republic of Belarus, the Kaliningrad Region of the Russian Federation, and the Klaipėda LNG terminal. The Company operates 64 gas distribution stations (GDS), 4 gas metering stations (GMS) and 2 gas compressor stations (GCS). The length of the operated pipelines is 2,288 km, and the diameter ranges between 100 and 1220 mm. The design pressure in the larger part of the transmission system is 54 bar.
29
Lithuanian gas transmission system
Maintenance of the main gas pipelines is regulated under the legal acts and is carried out strictly in compliance with the requirements set forth therein. Maintenance and repair works are conducted continuously to ensure a reliable and safe transmission system.
In 2024, 67 km of the main gas transmission pipelines Panevėžys – Šiauliai, Santaka – Lithuania-Poland border was inspected by way of internal diagnostics.
In 2024, 515 km of pipelines were tested for the integrity of the protective coating and the effectiveness of the cathodic protection.
In 2024, the Company carried out the following reconstruction and modernisation works:
30
Amber Grid provides natural gas transmission services to the system users, other operators, biogas producers and gas market participants in the territory of Lithuania: it transmits gas to the domestic consumers, also transports natural gas to Latvia, Poland and the Kaliningrad Region of the Russian Federation. Gas is supplied to the system via the LNG terminal in Klaipėda and gas entry points from Latvia, Poland and Belarus. As of the summer 2023, the biomethane produced in Lithuania has also been injected into the transmission system. With effect from 1 April 2022, gas supply for domestic consumption was discontinued from Russia.
Amber Grid is also responsible for balancing gas flows in the transmission system and administering the Klaipėda LNG terminal, its infrastructure, installation of the interconnector and the funds (LNGT funds) to compensate for fixed operating costs and the nominated supplier's reasonable costs of supplying the necessary volume of liquefied natural gas. The Company actively works with its partners to create conditions for efficient functioning of the natural gas market by increasing the competitiveness and liquidity of the gas market and by ensuring attractive conditions for customers to operate in the natural gas market.
Amber Grid administers the National Register of Guarantees of Origin for gas produced from renewable energy sources, i.e. fulfils the following functions: issuance, transfer and cancellation of the guarantees of origin, supervision and monitoring of the use of the guarantees of origin, and recognition of the guarantees of origin issued in other states as acceptable in Lithuania. Green gas is produced from biomass and other RES. The guarantee of origin is granted per unit of energy: one megawatt-hour (MWh) supplied to the gas transmission and distribution network. The guarantee of origin system enables identification, registration and monitoring of the biomethane produced, while the end-users of such fuel can be assured that the gas they use is produced from renewable energy sources.
The customers of Amber Grid’s services of natural gas transmission via gas transmission pipelines and balancing of natural gas flows in the transmission system are large Lithuanian electricity and district heating companies, industrial and medium-size businesses in Lithuania, energy and natural gas supply companies in the Baltic and third countries that receive natural gas transmission services.
At the end of 2022 and H1 2023, the Company received a number of requests
31
from biomethane producers for the issuance of preliminary connection conditions, following the adoption of amendments to Article 32 of the Law of the Republic of Lithuania on Renewable Energy Resources in 2022, which entered into force on 1 November 2022, which provide that a biogas producer, after coordinating with the gas system operator, shall have the right to design and/or construct / install and perform works in the gas system on behalf of the gas system operator, according to the procedure, terms and conditions set out in the gas system service agreement for connection of the biogas production facilities to the gas system. The new legal framework has significantly boosted the initiatives of biogas producers to connect to Amber Grid’s gas transmission system. More information thereon is available in the Section “Green gas activities”.
The Company provides the following services to system users, other operators and gas market participants:
In 2024, 23,854 GWh of natural gas was injected into Amber Grid’s gas transmission system from Klaipėda LNG terminal for consumers of Lithuania and EU Member States; 4,137 GWh was transported from Latvia to Lithuania and 1,488 GWh – from Poland to Lithuania. In 2024, 127 GWh of biomethane had been produced in Lithuania and injected into the transmission system in Lithuania. Klaipėda LNG terminal supplied 80.6% of the total required quantity of gas for consumers of Lithuania and EU Member States.
In 2024, 16,947 GWh of gas was transported up to the domestic exit point for the gas consumers in Lithuania. Compared to 14,913 GWh of gas transported during 2023, gas transmission quantities increased by 13.6%.
In 2024, 9,687 GWh of gas was transported from the Lithuanian transmission system to Latvia through the Kiemėnai gas metering station, i.e. 49.4% less than in 2023 (19,140 GWh).
In 2024, 2,545 GWh of gas was transported from Lithuania to Poland via Santaka gas metering station, i.e. 21.3% less than in 2023 (3,240 GWh).
During the reporting period, 26,125 GWh of gas was transported to the Kaliningrad Region of the Russian Federation, i.e. 9,1% more than in 2023 (23,946 GWh).
As at 31 December 2024, the Company had 88 agreements on natural gas transmission services with the transmission system users (gas consumers, gas distribution system operators, importers, gas suppliers supplying gas up to the consumer systems), of which 66 system users used the transmission capacity during the reporting period. The Company had 1 natural gas balancing agreement with the market participants trading natural gas via the virtual trading point, but not transporting it via the transmission system.
32
Gas volumes transported at the local exit point by transmission system user in Lithuania
The application of the network code on harmonised transmission tariff structures for gas (TAR NC) established by Commission Regulation (EU) 2017/460 of 16 March 2017 was started in 2020 for pricing of transmission services. Regulation of gas transmission prices is conducted by NERC through setting the revenue cap, the pricing methodology, and through approval of the specific prices set by the Company. The revenue caps for regulated activities can be annually adjusted by the decision of NERC in accordance with the procedure established in the Methodology for determining revenue from and prices for regulated natural gas transmission activities. In 2024, a new 5-year regulatory period began, which will end at the end of 2028.The revenue cap set by NERC for the regulated activity for 2024, the first year of the current regulatory period, was EUR 67.01 million, which is 4.43% more compared to the revenue cap approved for 2023 (due to the increase in total costs). The revenue cap for regulated activities for 2025 set by NERC in May 2024, amounts to EUR 63.83 million, which is 4.75% lower than the approved RC for 2024 of EUR 67.01 million. The decrease in the RC is due to lower forecast technological costs. Detailed information on the prices of gas transmission services is available on Amber Grid’s website. At the beginning of 2024, when setting the transmission tariffs for 2025, 65.3 TWh of natural gas was forecast to be transported through the Lithuanian gas transmission system, which is 1.4% less than the estimate for 2024 (66.3 TWh) and 15.3% more than the actual transport in 2024 (55.3 TWh). In 2024, the actual transport to Poland and Latvia was almost twice as low as forecast, mainly due to the scheduled maintenance of the LNG terminal, which took more than a month. Higher consumption of natural gas in Lithuania was also expected. Although Lithuania’s gas consumption amounted to 17 TWh, which is 2 TWh more than in 2023, this is 4 TWh less than the projected gas demand. The projected level of booked capacity, consumption capacity and transported gas volumes has been determined taking into account historical data, the needs of existing and potential system users. In 2024, the average price of gas transmission services for Lithuanian consumers (considering both long and short-term services) was EUR 1.49/MWh (higher by 7.4% than in 2023). The average price of gas transmission services approved for Lithuanian consumers, based on the tariffs for 2025, was 1.60 Eur/MWh (7.4% increase compared to 2024).
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Total, GWh | 24136 | 12564 | 11572 | 15576 |
| Local exit point, GWh | 8486 | 7090 | 14913 | 7894 |
| Local exit point Achema, GWh | 7019 | 16947 | 8923 | 8024 |
In 2024, transmission prices at all entry points (including the Klaipėda entry point) are aligned with entry prices in the neighbouring tariff area of Latvia, Estonia and Finland. At the end of 2024, NERC published public consultation on the reference price methodology for determining the tariffs of services provided by Amber Grid, effective for 2026 and subsequent periods. Some of the envisaged pricing amendments are also driven by the provisions of the Regulation on Decarbonisation, adopted in mid-2024. This public consultation closes on 14 February 2025.
Amber Grid ensures the balancing of natural gas flows in the transmission system. By following the Rules for Natural Gas Transmission System Balancing, the Company purchases balancing gas from a gas market participant when there occurs gas surplus in the transmission system, and the Company sells balancing gas to a gas market participant when there occurs gas shortage in the transmission system. The Rules for Balancing the Natural Gas Transmission System enforced on 1 March 2022 stipulate that the virtual trading point cannot trade in day-ahead products, which has increased the number of market participants causing imbalances. The Transmission system operator calculates a neutrality fee for each market participant to ensure financial neutrality for the reporting period. The amendments have been drafted in accordance with the provisions of Commission Regulation (EU) No 312/2014 of 26 March 2014 establishing a Network Code on Gas Balancing of Transmission Networks. During 2024, due to the imbalance caused by the system users, the Company bought 326.25 GWh and sold 323.5 GWh of gas. Following the amendments to Amber Grid’s Rules for Balancing the Natural Gas Transmission System rules enforced on 1 March 2022, Amber Grid calculates a neutrality fee for market participants to ensure financial neutrality. In 2024, EUR 2.6 million was refunded to system users and EUR 0.03 million was collected from them.
Transmission of gas by transit from/to third countries causes mixing of physical gas flows in the transmission system, which in turn results in a difference between the gross calorific value of gas at the entry and exit points of the gas transmission system. In 2024, the gas transmission to the Kaliningrad region resulted in a difference of 344.0 GWh at the entry and exit points of the transmission system, which was bought from the Company through the settlement of the third country to third country transmission services provided. Apart from balancing of gas flows of the system users and other gas market participants, the quantity of natural gas contained in the pipelines of the Company’s transmission system fluctuates due to technical and technological characteristics of the transmission system.
In order to ensure compliance with the requirements of the legal acts (the Law on Liquefied Natural Gas Terminal and the supplementing legal acts), the Company collects, administers and pays out the LNG terminal funds to the terminal operator (KN Energies AB) and to the designated supplier (Ignitis UAB) in accordance with the procedure prescribed by laws, and these funds are used to compensate Amber Grid for the costs of administration of the LNG terminal funds. The security component set for 2024 is EUR 205.93/ MWh/ day/ year (in accordance with Resolution No O3E-1694 of NERC of 22 November 2023). It applies from 1 January 2024 to 31 December. The proportions of the allocation of funds of the LNG terminal to the beneficiaries of the SGD terminal’s funds (applicable in 2023 and from 1 January 2024, respectively), as agreed with NERC, are presented in Table 3.
| Components | Proportion 01/01/2023- 30/06/2023 | Proportion 01/07/2023- 31/12/2023 | Proportion 01/01/2024- 31/12/2024 | Proportion 01/01/2025- 31/12/2025 |
|---|---|---|---|---|
| Liquefied natural gas regasification component | 0% | 0% | 0.000% | |
| Administrative cost component | 0%* | 0% | 0.401% | |
| Reasonable costs’ component for supplying the necessary quantity to the LNG terminal | 0% | 100% | 99.599% | |
| In total: | - | 100% | 100% | n/a |
*In line with the NERC’s decision, the costs of administering the funds for 2023 were reimbursed by the designated supplier.
By Decision No O3E-1469 of 27 December 2024, NERC approved the security component, with the effect from 1 January 2025, which for the first time is set negative (-25.55 EUR/MWh/day/year). Acting as the administrator of the LNGT funds and in accordance with the description of the procedure for the administration of the LNGT funds, as amended by NERC, the Company will have to repay the LNGT funds to their payers (transmission system users) in 2025.
Due to funds unpaid to the LNG terminal, the Company currently has one civil case pending regarding the award of LNG terminal’s funds and default interest from AB Achema. By the decision of Kaunas Regional Court of 20 January 2022, the proceedings were suspended in respect of the claimed LNG extra charges of EUR 4,678 thousand and late interest of EUR 55 thousand arising from the natural gas transmission service contract of 22 December 2014, as it was pending the decision of the European Commission regarding the compatibility of the LNGT extra charges, collected during the period from 1 January 2016 to 31 December 2018, with the state aid rules under the EU law. By decision of 17 March 2022, the Lithuanian Court of Appeal left the decision of Kaunas Regional Court of 20 January 2022 unchanged.
By the decision of Kaunas Regional Court of 20 September 2022, the proceedings were also suspended in respect of late interest of EUR 763 thousand arising from the natural gas transmission service contract of 21 December 2012 and a counterclaim, whereby Achema AB requested to declare as unlawful the Company’s actions when calculating late interest under the natural gas transmission service contract of 21 December 2012 and when allocating the payments collected from Achema AB under the contract for offsetting against late interest, as it was pending the decision of the European Commission regarding the compatibility of the LNG terminal funds, charged during the period from 1 January 2016 to 31 December 2018, with the state aid rules under the EU law. As the Company disagreed with the decision of Kaunas Regional Court of 20 June 2022, it filed a separate appeal regarding the annulment of the aforementioned part of the decision. As the Lithuanian Court of Appeal investigated the Company’s separate appeal, it made a decision on 8 September 2022, by which the decision of Kaunas Regional Court of 20 June 2022 was left unchanged. In the absence of a decision by the European Commission, the proceedings have been stayed pending grounds for suspension.
On 6 September 2024, the Company submitted a statement to the Kaunas District Court regarding the increase of the claim (hereinafter the “Statement”), asking the court to award EUR 763,119.55 of default interest from Achema AB in favour of the Company based on the natural gas transmission service contract dated 21 December 2012, EUR 7,080,801.52 of LNG extra charges and EUR 67,776.35 of default interest under the natural gas transmission service contract dated 22 December 2014. The issue of acceptance of the Company’s Statement will be decided by the Kaunas District Court after resuming the proceedings.
In accordance with the provisions of the Law on Natural Gas, Amber Grid prepares the Ten-Year Network Development Plan of the transmission system operator every two years.# In June 2024, Amber Grid prepared the Ten-Year Network Development Plan (2024-2033) and submitted to NERC. The plan was approved by NERC in October. The main aspects of Amber Grid's 10-year network development plan include:
• Modernising existing gas infrastructure, ensuring security and increasing resilience to crisis situations.
• Developing alternative energy sources, integrating renewable energy.
• Building a hydrogen transport network, synergies between the gas and electricity sectors.
• Reducing greenhouse gases (GHGs).
One of the Company’s commitments mentioned in the plan is to modernise the national gas transmission infrastructure, taking into account Lithuania’s energy independence goals, European energy and decarbonisation provisions, and the needs of green energy project developers and market players. Considerable attention is paid to the integration and diversification of renewable energy sources (RES) such as biomethane and green hydrogen. The needs of potential customers have been taken into account in the development of the integrated hydrogen network in the 10-year network development plan. Possible network solutions were coordinated with the electricity transmission system operator Litgrid and its network development plans. Investments of around EUR 213 million are planned in gas transmission system development projects over the next decade in the Plan, of which, the investments over the next five years will amount to around EUR 150 million. They are planned to be channelled into the projects to adapt the transmission system to transport hydrogen and gas mixtures, and to rehabilitate and modernise existing transmission infrastructure.
The Guidelines for Hydrogen Development in Lithuania 2024-2050 (hereinafter – H2 Guidelines) were approved by Order No 1-81 of the Minister of Energy of the Republic of Lithuania of 26 April 2024. The H2 Guidelines set out a vision for hydrogen development in Lithuania, defining strategic directions and stages of hydrogen development, the business environment and challenges The H2 Guidelines document identifies the hydrogen network from Finland to Germany as one of the main hydrogen transport projects, which will run through Lithuania and will enable the export or import of hydrogen from other EU countries. The implementation of this project will allow Lithuania to benefit from underground hydrogen storage facilities planned in other Member States. Hydrogen blending in the natural gas network is identified in the H2 Guidelines as a transitional measure to stimulate the emergence of a green hydrogen market and to
36
create the first hydrogen transport capacities. In order to exploit the potential of green hydrogen and its derivatives in the Lithuanian economy and export markets, at least one hydrogen valley is planned to be established in the first stage, later increasing this number to two. According to the H2 Guidelines, the installation of a 1.3 GW electrolysis plant in Lithuania would produce 129,000 tonnes of green hydrogen per year from 2030. Taking into account Lithuania’s GHG reduction targets and its international commitments, it is estimated that the demand for green hydrogen in Lithuania could reach 110,000 tonnes per year in 2030. In addition, around 33,000 tonnes could be available for export.
On 27 June 2024, the Seimas of the Republic of Lithuania approved the National Energy Independence Strategy, designed to implement fundamental changes in the energy sector, ensuring that the amount of energy produced in Lithuania matches the amount consumed and that the energy sector becomes completely climate-neutral by 2050. In order to contribute more significantly to the promotion of hydrogen and Power-to-Gas technologies at local and regional level, the Company further participates in the Lithuanian Hydrogen Platform established by the Ministry of Energy, and is a member of the European Clean Hydrogen Alliance and the Lithuanian Hydrogen Energy Association. The Company has continued to participate in the European Hydrogen Backbone initiative, which brings together more than 30 transmission system operators from across Europe to develop a vision, analyse alternatives, and draw up implementation plans for a nationwide interconnected hydrogen transport/storage infrastructure.
In January 2024, the Baltic Sea Region gas transmission system operators: Gasgrid vetyverkot Oy (Finland), Elering AS (Estonia), AS Conexus Baltic Grid (Latvia), Amber Grid AB, GAZ-SYSTEM S.A. (Poland) and Ontras Gastransport GmbH (Germany) signed the agreement with the consultancy company whereby they decided to draw up the pre-feasibility study for a Nordic-Baltic green hydrogen transport corridor linking the hydrogen production and consumption centres of the Member States between Finland and Germany. The study examines the basic conditions for the development of the NBHC project, the technical, legal, organisational, and economic aspects necessary to realise the hydrogen corridor. The hydrogen corridor will play a crucial role in achieving the European Union’s decarbonisation goals with hydrogen produced and further supplied within the EU territory. The Nordic and Baltic region provides significant renewable hydrogen potential identified within the pre-feasibility study at the amount of approx. 27.1 million tons (Mt) of renewable hydrogen production (based on combined onshore and offshore wind and solar) by 2040. This creates a large hydrogen market creation and export potential towards continental Europe which the NBHC aims to address. By 2040, the corridor is projected to transport up to 2.7 million tons (Mt) of renewable hydrogen annually between the countries. The pre-feasibility study indicated that the NBHC can be one of the first
37
operational cross-border hydrogen pipelines in Europe. The NBHC pipeline is currently planned to be 1,200 mm in diameter, with several compressor stations and spanning approximately 2,500 km.
In 2025, the project partners plan to start feasibility studies across the respective countries. These studies will focus on various crucial aspects including pipeline routing, compressor stations planning, financial and economic analysis, environmental and safety permitting issues as well as investigations on the project implementation timeline. These studies are expected to run until the end of 2026. In addition to these studies, the involved partners aim to complete several cross-border analyses to further substantiate the NBHC planning on an overall project level based on the outcomes from the aforementioned studies. These studies involve project coordination, technical and commercial alignment, and customer and stakeholder engagement. The cross-border studies are expected to run until the end of 2026. The project participants believe that the feasibility study phase will allow to accelerate cooperation and make a good progress on the realization of the NBHC project Not only has hydrogen corridor project the potential to significantly reduce carbon emissions of the participating countries, but it can also promote business growth and support the ramp-up of a completely new hydrogen economy in Europe. Together, these thorough analyses will build a path towards NBHC’s progression as a safe, reliable and cost-efficient transport route for renewable hydrogen connected to the future European hydrogen network in Central Europe.
As Lithuania’s economy grows and the country moves towards achieving the European green energy transformation goals, there is a growing need to look for possibilities to utilize renewable energy resources in the country. Recently, the emergence of biogas and biomethane in the gas system has played one of the most significant roles in this context. In Lithuania, investments in biomethane production is also growing rapidly. Large industrial companies and new entrants are actively exploring the possibility of installing biomethane plants, connecting them to the gas transmission and distribution system, and supplying the biomethane produced to the domestic and foreign markets through the Green Gas Guarantee of Origin (GO). The integration of biomethane into the common energy system is now a key energy objective for European countries, and is therefore a significant future opportunity for the Company’s customers. The Lithuanian government has recognised the potential of biomethane and has already implemented certain policy measures to support its development. For example, the Alternative Fuels Act sets ambitious goals for the use of renewable fuels in the transport sector, providing a strong incentive to build new biomethane plants. The government has allocated funds to support biomethane projects, demonstrating its commitment to transitioning to a more sustainable energy system.
38
| Distribution of biomethane connection conditions by location and projected scope of biomethane inlet into the transmission network in 2025-2028, MWh/m | |
|---|---|
| At the end of 2024, biomethane was fed into the transmission network by UAB Tube Green in Pasvalys district and UAB Agrokoncerno biometanas In Radviliškis district. According to data of 2025, 12 connection conditions have been issued, of which 6 were already under contract. |
In the development of the biomethane business, a significant benefit comes from the ability to trade biomethane guarantees of origin. This became available after completing the international GIPL gas pipeline interconnection between Poland and Lithuania, which has connected our system to the European gas network. The physical pipeline interconnection between the Baltic States region and the rest of Europe opens opportunities for the exchange of guarantees of origin with EU countries.
Amber Grid has developed and administers the system for guarantees of origin for green gas in Lithuania. The system is necessary for the accounting and traceability of the green gases injected into the transmission system. In 2024, biomethane plants operating in Lithuania produced and injected about 130 gigawatt-hours (GWh) of renewable gas into the transmission network.
## Guarantees of origin issued for biomethane produced in Lithuania, GWh, 2024
The system for guarantees of origin is beneficial for energy consumers who want to use renewable energy produced in Lithuania or another EU country in their activities. Amber Grid is a member of organizations uniting European issuing bodies for guarantees of origin, such as the AIB (Association of Issuing Bodies) and ERGaR (European Renewable Gas Registry).
## European Renewable Gas Registry. Fig.9. Guarantees of origin issued, imported and exported, GWh, 2024
In 2024, more than 50 GWh of green gas was imported into Lithuania via the guarantees of origin system, and in 2023, more than 40 GWh. This biomethane is used as fuel in transport, and the guarantees of origin are used in the renewable fuel unit system to cover the obligations of fuel suppliers regarding the share of renewable fuels in the final fuel mix.
markdown
126,5 | 52,7 | 57,9
0 | 20 | 40
## 4.8 RESEARCH & DEVELOPMENT ACTIVITIES
### H2
In June 2024, a pre-feasibility study of the NBHC project was completed. Six TSO’s decided to carry out feasibility studies across the respective countries and cross-border studies based on the outcomes from the aforementioned studies. The outcome of the cross-border studies will form the basis for the design and construction of a pipeline from Finland to Germany.
### CO₂
Carbon capture, utilisation, and storage is the main instrument for reducing carbon dioxide emissions in industrial sectors where it is difficult to reduce greenhouse gas (GHG) emissions. Creating a value chain for carbon capture, utilisation, and storage is a prerequisite for achieving the EU’s 2050 climate neutrality target. The CCS Baltic Consortium, established in 2022, aims to create a common carbon capture and storage (CCS) value chain in Lithuania and Latvia and has secured Projects of Common Interest (PCI) status for a planned carbon capture and transport route across both EU Member States to transport CO₂ to the port of Klaipėda and then to disposal sites. Initially, CCS Baltic Consortium considered transporting CO₂ by rail and road, but subsequent analysis showed that transporting by pipeline would be a rational choice, therefore the cooperation was established with Amber Grid and Conexus Baltic Grid, Latvia’s natural gas transmission system operator. Amber Grid supports the development and implementation of the carbon value chain and could become a partner of CCS Baltic Consortium if the consortium decides to transport CO₂ onshore via pipelines.
### Synthetic fuel
Amber Grid carried out an analysis of the potential for synthetic fuels (from hydrogen and CO₂) production, export and storage in Lithuania. The analysis assessed the regulatory environment for synthetic fuels in the context of the EU’s Green Deal objectives. Particular attention is paid to synthetic fuels as emerging trend in the heavy-duty vehicle, aviation, and shipping sectors at EU and global level, considering the maturity of synthetic fuel production technologies, their mass production readiness and cost- effectiveness potential. The analysis presents the opportunities of synthetic fuel production development in Lithuania: production, consumption, storage and export potential, taking into account Lithuania’s geographical location, existing infrastructure and the potential to integrate into the EU single market. This study helps the Company prepare for the future energy transformation by identifying the potential for the development of hydrogen and CO₂ networks, enhancing the country’s energy independence and contributing to decarbonisation goals.
# 4.9 BUSINESS PLANS AND PROSPECTS
By contributing to Lithuania's ambitious goals for a greater share of renewable energy in the domestic energy balance, the Company participates in a number of initiatives and projects that enable its specialists to develop competencies in the field of RES gas. The Company’s membership in the ERGaR (European Renewable Gas Registry) association and in the Association of Issuing Bodies (AIB), besides the aforementioned goals, enables to develop new competencies that will contribute in future to the promotion of green gas production and market development in Lithuania, safeguarding the business continuity of the Company, and implementation of the National Energy Strategy.
Looking at the outlook for gas transmission, in 2025, the Company expects to transport about 16.9 TWh to domestic gas exit points, 2.5 TWh to Poland, around 26 TWh to Kaliningrad Region, and 9.7 TWh to Latvia. As estimated for 2024, the bigger part of the natural gas quantity for consumers of Lithuania and other Baltic States is forecast to come from Klaipėda LNG terminal.
# 5. FINANCIAL RESULTS
## 5.1. FINANCIAL INDICATORS
### Financial indicators
| Company | 2024 | 2023 | 2022 |
|---|---|---|---|
| Financial performance (EUR thousand) | |||
| Revenue | 74,583 | 81,337 | 96,652 |
| EBITDA | 26,527 | 25,739 | 30,965 |
| Profit (loss) before taxation | 9,502 | 13,992 | 18,088 |
| Net profit (loss) | 8,306 | 13,425 | 15,720 |
| Net cash flows from operating activities | 34,601 | 39,940 | 18,992 |
| Investments | 6,405 | 35,703 | 42,852 |
| Financial debt (loans) | 84,794 | 92,046 | 100,962 |
| Profitability indicators (%) | |||
| EBITDA margin (%) | 35.6 | 31.6 | 32.0 |
| Net profit (loss) margin | 11.1 | 16.5 | 16.3 |
| Average return on assets (ROA) | 2.5 | 4.0 | 4.7 |
| Average return on equity (ROE) | 4.6 | 7.2 | 8.7 |
| Liquidity indicators | |||
| Total liquidity ratio | 0.39 | 0.43 | 0.64 |
| Fixed assets turnover | 0.27 | 0.28 | 0.34 |
| Capital structure indicators | |||
| Equity-to-assets ratio | 0.54 | 0.56 | 0.53 |
| Financial debt-to-equity ratio | 0.48 | 0.49 | 0.55 |
| Financial debt-to-EBITDA ratio, times | 3.20 | 3.58 | 3.26 |
| Market value indicators | |||
| Share price to earnings per share ratio (P/E), in times | 24.9 | 14.6 | 14.2 |
| Net earnings (loss) per share, EUR | 0.05 | 0.08 | 0.09 |
Formulas for calculating indicators:
EBITDA margin = EBITDA/revenue
Net profit (loss) margin = net profit (loss)/revenue
ROA = net profit (loss)/average asset value
ROE = net profit (loss)/average equity value
Current ratio = current assets/current liabilities
Turnover of non-current assets = revenue/property, plant and equipment and intangible assets
Equity-to-assets ratio = equity/assets
Financial debt-to-equity ratio = financial debt/equity
Financial debt-to-EBITDA ratio = financial debt/EBITDA
Share price/earnings per share ratio = share price at the end of period/(net earnings/number of shares)
### Investments (additions of property, plant and equipment and intangible assets)
## 5.2. REVENUE
In 2024, the Group’s revenue totalled EUR 74.6 thousand, i.e. decreased by 8% compared to 2023 (EUR 6.8 million). The main reason for the decrease in revenues is the 10% reduction in gas volumes transmitted compared to 2023. Balancing product revenue slightly increased (+3%; EUR 0.3 million). Balancing product revenue was generated from technological balancing of the transmission system caused by the technological transmission system features and the deviations in gas flows (imbalances) for technical reasons.
## Revenue structure, %; EUR million
## 5.3. EXPENSES
Operating expenses (excluding depreciation, other non-cash items) amounted to EUR 48.1 million in 2024, a decrease of 14% compared to 2023
The decrease was due to the fall in gas prices and the corresponding decrease in gas expenses. Wages and salaries and related expenses amounted to EUR 15.5 million (32% of total expenses), an increase of 12% compared to 2023. Repair and maintenance costs amounted to EUR 2.6 million (5% of the total costs). Natural gas expenses amounted to EUR 16.5 million and accounted for 34% of total expenses
Compared to 2023, the natural gas expenses decreased by 35% due to o lower gas prices.
### Expense structure, %; EUR million
markdown
| % | EUR million | 2022 | 2023 | 2024 |
| :--- | :---------- | :--- | :--- | :--- |
| 27% | 25,7 | X | | |
| 48% | 39,2 | | X | |
| 48% | 36,2 | | | X |
| 41% | 39,7 | X | | |
| 35% | 28,2 | | X | |
| 34% | 25,0 | | | X |
| 32% | 30,6 | X | | |
| 15% | 12,5 | | X | |
| 17% | 12,9 | | | X |
| 1% | 0,7 | X | | |
| 2% | 1,4 | | X | |
| 1% | 0,5 | | | X |
markdown
| Other | Balancing | Transportation to neighbouring TSO | Transportation to Lithuanian consumers |
| :----------------------- | :-------- | :------------------------------- | :------------------------------------ |
| 61%; 39,8 | 46%; 25,4 | 34%; 16,5 | 18%; 11,9 |
| 25%; 13,8 | 32%; 15,5 | 5%; 3,1 | 5%; 2,6 |
| 16%; 10,6 | 24%; 13,4 | 28%; 13,4 | |
markdown
| Other | Repair and maintenance | Wages and salaries and related expenses | Natural gas |
| :---------------------------- | :--------------------- | :-------------------------------------- | :---------- |
| 2022 | 61%; 39,8 | 32%; 30,6 | 16%; 10,6 |
| 2023 | 46%; 25,4 | 35%; 28,2 | 24%; 13,4 |
| 2024 | 34%; 16,5 | 32%; 15,5 | 5%; 2,6 |
## 5.4. OPERATING RESULTS
In 2024, net profit totalled EUR 8.3 million, i.e. decreased by 38% compared to 2023 (EUR 13.4 million). The Company’s earnings before taxes, interest, depreciation and amortisation (EBITDA) amounted to EUR 26.5 million (2023: EUR 25.7 million). The drop in net profit in 2024 was due to the recognition of a gain on the disposal and revaluation of a subsidiary in 2023 (one-off effect of - EUR 10.1 million).# 5.5. INVESTMENTS
In 2024, we successfully completed important projects that started in 2023. In 2024, investments were lower than in 2023 (EUR 35.7 million) and amounted to EUR 6.4 million. A more detailed description of investments under way and planned is provided in sections 4.2 and 4.6 of this report. In planning and executing investments, the Company is guided by the Technological Assets Development and Operation Policy, which aims to justify and prioritise investments in the natural gas transmission system infrastructure by applying cost-benefit analysis. Investments in the gas transmission system ensure the safe, reliable, economically and environmentally efficient transmission of natural gas to customers and consumers.
| 2022 | 2023 | 2024 |
|---|---|---|
| 35.6 | 11.1 | 6.2 |
| 2022 | 2023 | 2024 |
|---|---|---|
| 16.3 | 16.5 | 11.5 |
| 32.0 | 31.6 | 31.3 |
As at 31 December 2024, the value of assets amounted to EUR 327.2 million: non-current assets accounted for 89% and current assets 11% of the total assets. Non-current assets decreased by 2% to EUR 291.9 million in 2024 due to investments below depreciation. The value of current assets as at 31 December 2024 was EUR 35.3 million, and increased by 3% during 2024 due to increase in financial assets.
During 2024, equity decreased by 6% due to dividends paid above the profit earned in 2024, and, at the end of the reporting period, amounted to EUR 175.6 million. At the end of the reporting period, equity represented 54% of the total assets. As at 31 December 2024, payables and liabilities amounted to EUR 151.6 million, i.e. increased by 4% during the year. As at 31 December 2024, the financial debt (loans) amounted to EUR 84.8 million, i.e. decreased by EUR 7.3 million over the reporting period. The financial debt-to-equity ratio was 58%.
| 2022 | 2023 | 2024 |
|---|---|---|
| 0.1 | 0.2 | 0.0 |
| 3.7 | 4.5 | 4.7 |
| 0.0 | 0.0 | 0.0 |
In 2024, net cash flows from operating activities amounted to EUR 34.6 million (2023: EUR 39.9 million). Capital investments amounted to EUR 6.1 million (2023: EUR 37.6 million). In 2024, the EU financial support obtained to finance the investment projects amounted to EUR 7.2 million (2023: EUR 14.3 million).
Adjusted performance indicators are presented to reflect the Company’s performance more accurately in a given period and to provide a more objective comparison with prior periods. Regulated revenue, expense and profitability indicators were adjusted due to temporary regulatory deviations from the regulatory profitability approved by NERC, also eliminating atypical/one-off transactions (sale of shares in GET Baltic UAB). The adjustments to the indicators take into account:
* The profitability adjustment (temporary regulatory differences for previous periods) approved by the NERC’s decision for the reporting period;
* A projected NERC’s adjustment for the next period due to deviations in the current period’s regulated profitability (temporary regulatory differences for reporting period);
* Other non-ordinary transactions, income tax adjustments.
Company’s adjusted indicators, Eur million
| 2024 | 2023 | |
|---|---|---|
| EBITDA | 26.5 | 25.7 |
| Temporary regulatory differences for previous period | 2.0 | -2.9 |
| Temporary regulatory differences for reporting period | -1.1 | +1.9 |
| Adjusted EBITDA | 27.4 | 24.7 |
| Net profit | 8.3 | 13.4 |
| Temporary regulatory differences for previous period | 2.0 | -2.9 |
| Temporary regulatory differences for reporting period | -0.3 | 1.7 |
| Other (non-ordinary transactions, income tax adjustments) | 0.1 | -3.0 |
| Adjusted net profit | 10.1 | 9.2 |
| Adjusted return on equity (ROE) | 5.5% | 5.0% |
Other information has been disclosed in the notes to the financial statements of Amber Grid for the year 2024.
Significant events after the end of the reporting period have been disclosed in the notes to the financial statements of Amber Grid for the year 2024.
On 30 April 2024, the Company’s General Meeting of Shareholders allocated EUR 403 thousand of distributable profit to support. To address the issue of attracting experts needed for the transformation of the Lithuanian energy sector, in August 2024, the Company provided a support to training institutions totalling EUR 75 thousand. Support and humanitarian aid to Ukraine for the reconstruction of Ukraine’s energy facilities damaged by the war amounted to EUR 109 thousand. The Company’s support policy is publicly available at: https://www.epsog.lt/uploads/documents/files/Politikos/20220527_Paramos%20politika.pdf.
Information on related-party transactions is presented in the financial statements of Amber Grid for the year 2024. During the reporting period, the Company neither entered into any detrimental transactions (transactions that are inconsistent with the Company’s objectives or standard market terms, that infringe on interests of shareholders or any other stakeholders, etc.), nor into any transactions giving rise to conflict of interests in respect of responsibilities fulfilled by the Company’s management, controlling shareholders or any other related parties, also in respect of the Company’s interests and their private interest and/or other responsibilities. The Audit Committee of EPSO-G, which operates at the group level and performs the functions of the Audit Committee of Amber Grid, expresses opinion on significant related-party transactions of Amber Grid. The Audit Committee assesses whether the respective related-party transaction has been concluded on market terms, and whether the transaction is fair from the standpoint of all the shareholders.
Amber Grid’s related-party transactions, 2024
| Agreement No | Type of relationship | Name of related party | Details of related party | Agreement effective date | Type of agreement | Subject of agreement | Estimated value, excl. VAT |
|---|---|---|---|---|---|---|---|
| 23-94976 | SOE | Energijos skirstymo operatorius AB | Company code 304151376, Aguonų st. 24, LT-03212 Vilnius | 02/01/2024 | Other than public procurement contracts | Service of connecting the main line Vilnius – Kaliningrad LČ-18/19B (Smiltynai I vlg., Domeikava Eld., Kaunas D.) to ESO AB electricity network | 4,781.16 |
| 686899 | SOE | State Enterprise Centre of Registers | Company code 124110246, Lvovo st. 25-101, LT-09320 Vilnius | 09/01/2024 | Purchase of services | Preparation of plans for the revision of territories subject to special land use conditions | 224,000.00 |
| SOE | Ignitis UAB | Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius | 01/04/2024 | Natural gas transmission services | Additional agreement No 14 (on an uninterrupted natural gas supply) | 0.00 | |
| 24-12547 | SOE | Energijos skirstymo operatorius AB | Company code 304151376, Aguonų st. 24, LT-03212 Vilnius | 15/04/2024 | Other than public procurement contracts | Birštonas DSS power increase service | 60.72 |
| 1_CPO271503 | SOE | Ignitis UAB | Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius | 23/04/2024 | Purchase of goods | Electricity (compensation) | 0.00 |
| SOE | KN Energies AB | Company code 110648893, Burių st. 19, LT-92276 Klaipėda | 14/05/2024 | Cooperation agreements | MEMORANDUM OF UNDERSTANDING | 0.00 | |
| 2024-SUT-045 | SOE | EPSO-G UAB | Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius | 31/07/2024 | Other than public procurement contracts | Agreement on termination of Information Provision Contract No SUT-20-045 of 2020-01-20 | 0.00 |
| SOE | EPSO-G UAB | Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius | 19/08/2024 | Cooperation agreements | Information sharing with EPSO-G UAB | 0.00 | |
| SOE | State Enterprise Centre of Registers | Company code 124110246, Lvovo st. 25-101, LT-09320 Vilnius | 30/08/2024 | Other than public procurement contracts | Data on main gas pipelines publication agreement | 0.00 | |
| 2022-118134 | SOE | EPSO-G UAB | Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius | 02/09/2024 | Financial agreements | Additional agreement No 2 ‘Lending and borrowing’ | 0.00 |
| 2024-SUT-060 | SOE | EPSO-G UAB | Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius | 02/09/2024 | Financial agreements | Lending and borrowing | 70,000,000.00 |
| VPP-3916 | SOE | Regitra AB | Company code 110078991, Liepkalnio st. 97A, LT-02121 Vilnius | 04/10/2024 | Purchase of services | For exam at Regitra | 35.00 |
| 676194 | SOE | EPSO-G UAB | Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius | 28/10/2024 | Purchase of services | Additional agreement No 1 ‘Management (holding) services’ | 0.00 |
| SOE | Ignitis UAB | Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius | 08/11/2024 | Natural gas transmission services | Additional agreement No 16 (on an uninterrupted natural gas supply) | 0.00 | |
| SOE | Ignitis UAB | Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius | 05/11/2024 | Natural gas transmission services | Additional agreement No 15 (on an uninterrupted natural gas supply) | 0.00 | |
| CPO274751 | SOE | Lietuvos paštas AB | Company code 121215587, Juozo Balčikonio st. 3, LT-08247 Vilnius | 07/11/2024 | Purchase of services | Courier services | 2,548.00 |
| VPP-3644 | SOE | Žemės ūkio duomenų centras VĮ | Company code 306205513, Vinco Kudirkos st. 18-1, LT-03105 Vilnius | 12/11/2024 | Purchase of services | Services for the preparation of plans for land plots with servitude and/or territories subject to special land use conditions | 8,000.00 |
| SOE | Ignitis UAB | Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius | Additional agreement No 17 | ||||
| SOE State Enterprise Centre of Registers Company code 124110246, Lvovo st. 25-101, LT-09320 Vilnius 10/12/2024 Purchase of services Issue of one non-qualified systemic certificate per year 120.00 621598/1 | |||||||
| SOE Ignitis UAB Company code 303383884, Laisvės ave. 10, LT-04215 Vilnius 20/12/2024 Purchase of services Agreement on the extension of the Ignitis ON service purchase and sale contract 0.00 | |||||||
| SOE EPSO-G UAB Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius 31/12/2024 Financial agreements Letter of intent on tax loss transfer and takeover 0.00 | |||||||
| SOE Tetas UAB Company code 300513148, Senamiesčio st. 102B, LT-35116 Panevėžys 31/12/2024 Financial agreements Letter of intent on tax loss transfer and takeover 0.00 | |||||||
| SOE KN Energies AB Company code 110648893, Burių st. 19, LT-92276 Klaipėda 06/02/2024 Cooperation agreements Concerning the end of cooperation in the Lithuanian LNG platform 0.00 PS-2526 (10.46 E) | |||||||
| SOE State Enterprise Centre of Registers Company code 124110246, Lvovo st. 25-101, LT-09320 Vilnius 21/02/2024 Other than public procurement contracts Addition to the Agreement No. PS-2526 (10.46 E) 0.00 49 | |||||||
| SOE EPSO-G UAB Company code 302826889, Laisvės ave. 10, LT-04215 Vilnius 27/08/2024 Cooperation agreements Memorandum on cooperation in jointly conducted procurements 0.00 Annex No. 10 | |||||||
| SOE Via Lietuva AB Company code 188710638, Kauno st. 22-202, LT-03212 Vilnius 24/09/2024 Other than public procurement contracts Annex 10 to Agreement S-882 0.00 5.14. INFORMATION ON SIGNIFICANT DIRECT AND INDIRECT HOLDINGS | |||||||
| As at 31 December 2024, the Company held 34% of shares in the associate GET Baltic UAB. More details on the associate are provided in Amber Grid’s financial statements. | |||||||
| 5.15. REFERENCES TO AND ADDITIONAL EXPLANATIONS OF DATA REPORTED IN THE FINANCIAL STATEMENTS | |||||||
| Other information has been disclosed in the notes to the financial statements of Amber Grid for the year 2024. | |||||||
| 5.16. INFORMATION ON SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD | |||||||
| Significant events after the end of the reporting period have been disclosed in the notes to the financial statements of Amber Grid for the year 2024. | |||||||
| 5.17. INFORMATION ON ANY FINANCIAL ASSISTANCE | |||||||
| On 30 April 2024, the Company’s General Meeting of Shareholders allocated EUR 403 thousand of distributable profit to support. To address the issue of attracting experts needed for the transformation of the Lithuanian energy sector, in August 2024, the Company provided a support to training institutions totalling EUR 75 thousand. Support and humanitarian aid to Ukraine for the reconstruction of Ukraine’s energy facilities damaged by the war amounted to EUR 109 thousand. The Company’s support policy is publicly available at: https://www.epsog.lt/uploads/documents/files/Politikos/20220527_Paramos%20politika.pdf. |
RISKS AND RISK MANAGEMENT
6.1. RISK MANAGEMENT FRAMEWORK
The Company views risk management as a structured approach to managing uncertainties by methodically assessing the impact and likelihood of risks and applying appropriate risk management tools. In 2024, the Company followed the Risk Management Policy and Risk Management Methodology of the EPSO-G Group approved by the Board. These documents embedded a uniform risk management system 50 that is based on common principles and meeting good practice according to COSO ERM (Committee of Sponsoring Organisations of the Treadway Commission Enterprise Risk Management) methodology applicable in the international practice. The Risk Management Policy defines the key risk management principles and responsibilities for the EPSO-G Group companies to ensure a unified corporate risk management process based on common principles. The EPSO-G Group companies define risk management principles and responsibilities in the Risk Management Policy. The Policy is publicly available on EPSO-G website. The Company’s risk appetite, as defined in the Risk Management Policy, is the level of risk that is below the highest level of risk that is equal to or greater than a score of 15 (the product of the probability and the impact of the risk on the Company), or the level of risk the Company’s governing bodies willing to accept to achieve the strategy and performance objectives set. Risks exceeding the score set for the risk appetite are subject to additional management measures. The Company has in place the following risk management process (stages):
I. Identification of environment. The Company identifies aspects that may have an impact on the Company’s failure to achieve its goals based on the Company’s internal and external environment, planning documents, the Risk Assessment history and the monitoring of the implementation of the risk management measures. Regular environmental assessments are carried out to adapt to changes and to prepare in advance for unexpected threats.
II. Risk assessment. The Company identifies, analyses and assesses risks on regular basis, identifies Key Risk Indicators, and prepares the List of Risks. The Company also identifies the risk appetite, and categorizes risks according to their priority and the appetite identified.
III. Developing a Plan on risk Management Measures. The Company develops a Plan on Risk Management Measures for risks exceeding risk appetite.
IV. Monitoring of risks and the implementation of the Plan on Risk Management Measures. This process involves continuous monitoring of the Company’s List of Risks and the Plan on Risk Management Measures, as well as monitoring of the Group-level risks and the list of the Group-level risks management measures. Communication and information. Regular and effective sharing of information among the participants in the Risk Management process that has impact on the assessment of the companies’ risks and their management. Relevant information on risks and their management is communicated to the Company’s employees during staff meetings. The Company identified operational risks for 2024, assessed them, set risk monitoring indicators and provided risk management measures. After assessing the risks identified and managed in the Company and their level (impact on the Company’s activities), the Board of Amber Grid approved the group-level risk list. In each quarter of 2024, the Audit Committee of EPSO-G assessed the changes in the key risk indicators of the Company, the effectiveness of risk management, and presented its conclusions and recommendations to the Boards of Amber Grid. To improve risk management and integrity within the Group, Power App, the Risk Management Information System, has been installed. Using the tool, users can enter relevant risk information, depending on their role, to generate relevant content from a common dataset, and to send reminders or comments related to risk management.
51 Sustainability risks are treated as an integral part of the Group’s day-to-day operations and are integrated into the risk management process. The Group assess all the risks against the criteria set for the sustainability risks. Risks that meet these criteria are assigned to the relevant sustainability risk type.
6.2 KEY RISKS AND THEIR MANAGEMENT
6.2.1. Group’s risk map
6.2.2. Full description of the Group’s risks
Risk of delays in strategic projects
The Company, together with the Group’s PMO, participates in meetings between the programme, the project team and the project developer and contractors, joint problem solving and risk assessment.
* Project process audits are carried out to review in detail risks, issues, benefits, timeliness and compliance with approved processes.
Risk of disruption to systems used in core business
| Risk level | Risk factors | Risk impact | ESG type | Risk area |
|---|---|---|---|---|
| 5 | ||||
| 4 | ||||
| 4; 7; 1; 2; 3; 5; 3; 6; 2; 1; 1; 2; 3; 4; 5 | ||||
| External - political, technological; Internal - personnel, infrastructure | Finances, reputation, business continuity | - | Electricity and natural gas system management; Management of the assets attributed to the transmission system |
| Risk of delays in strategic projects | Risk of disruption to systems used in core business | Risk of non-compliance with occupational safety requirements | Risk of too little competition in procurement procedures carried out | Cybersecurity risk | Risk of failing to meet the budget | Environmental impact mitigation risk |
|---|---|---|---|---|---|---|
| 5 | 4 | 4 | 7 | 1 | 2 | 3 |
| 3 | 6 | 2 | 1 | 1 | 2 | 3 |
| 4 | 5 |
Trends in a risk level: Increase, No change, Decrease
VERY HIGH# Management measures
• To ensure reliable operation of transmission systems, the Company implement specialized information systems, modern business management systems, update accident and technological disruption and emergency management, business continuity plans on a continuous basis, and set high standards for the contractors.
• To avoid disruptions to the transmission systems, the systems are continuously monitored, maintenance plans are drawn up accordingly, and the necessary new investments in network upgrades are planned in time.
Risk level: MODERATE
Risk factors: Internal - personnel
Risk impact: Human health, finances, reputation
ESG type: Corporate Social Responsibility
Risk area: Occupational Safety
Risk description: The Company places great emphasis on occupational safety. Given the applicable and most relevant occupational safety requirements and the current implementation situation, there is a risk of non-compliance with the OHS requirements.
Management measures:
• Proper installation of workstations, timely maintenance and control of systems, equipment, work tools.
• Internal documents on health and safety have been approved.
• Staff training, certification and briefings on safety and health issues.
• Continuous monitoring and supervision of employees' and contractors' compliance with OHS requirements.
Risk level: HIGH
Risk factors: Internal - processes, personnel, External - economic
Risk impact: Finances, reputation
ESG type: Governance
Risk area: Purchases
Risk description: The companies implement large-scale projects as part of NEIS. There is a risk that insufficient competition from suppliers will lead to economically unfavourable tenders exceeding the planned budget/not meeting the company's needs or to the procurement having to be cancelled and re-tendered.
Management measures:
• The requirement to publish all procurements with the value exceeding EUR 15 thousand on the CPP IS have been taken into the consideration, and additional publicity platforms have been utilised.
• Requirement for promoters to identify at least 3 Suppliers in their application or justify a smaller number of suppliers.
• Requirement to carry out a market consultation in all simplified and international procurement.
• The principle of ‘4-eye’ control is set as a minimum.
• Events are organised for the suppliers.
Risk level: MODERATE
Risk factors: External - technological, Internal - personnel
Risk impact: Finances, reputation, business continuity
ESG type: Governance
Risk area: Information security
Risk description: The information and data managed by the Company are of strategic importance for the security of Lithuania, therefore, loss of such information or data, illegal change or disclosure, damage thereof, or termination of the data flow which is necessary for a secure operation of transmission systems may cause disturbances of the activities of the Company, cause damage to other natural persons and legal entities.
Management measures:
• In order to prevent cyber incidents, threats to the information systems, physical protection and security management systems of the Company are regularly assessed, existing security measures, systems and/or tools are constantly updated and new ones are introduced to comply with the strict requirements of the EU and the Republic of Lithuania’s legislation on information security.
• The Company’s employees actively participate in cybersecurity exercises to train how to manage and respond to cyber incidents targeting critical information systems and networks, and to ensure the functioning of their services.
Risk level: MODERATE
Risk factors: External - economic, Internal - processes, personnel
Risk impact: Finances, reputation
ESG type: -
Risk area: Finance management
Risk description: There is a risk that the Company will fail to meet their budgets and financial plans, which will adversely affect their ability to meet the commitments of specific companies and EPSO-G as the Group’s, as well as ability to meet financial covenants and other obligations, and to pay dividends.
Management measures:
• Performance control (monitoring by EPSO- G, the Boards) as part of the Integrated Planning and Monitoring Policy.
• For the purpose of regulated activities, comments and recommendations, as appropriate, on decisions related to recognition of expenses, changes in a methodology, and development of a common Group position.
• For the purpose of non-regulated activities, review of, amendments to the action plan, where appropriate.
Risk level: HIGH
Risk factors: Internal - processes, personnel
Risk impact: Environment, reputation, finances
ESG type: Environment protection
Risk area: Environment protection, Sustainability development
Risk description: Untimely or inaccurate recording and reporting of sustainability-related indicators, inaccurate calculation of GHG emissions from the Group’s operations, or delays in reporting compliance with requirements to institutional investors may result in sanctions from the exchange authorities, and fines for defaulting on commitments to investors. There is also a risk of non-achievement of EPSO-G’s long-term strategic objectives and its commitments (sustainability indicators) related to the issued bonds when the regulatory approval for the necessary investments to reduce environmental impacts (GHG emissions) is not obtained due to regulatory restrictions or lack of cost- effectiveness.
Management measures:
• The Company is provided with the list of ESG indicators to be selected. Additional measures are also being put in place: ESG system (IT solution) is developed for the timely collection of sustainability-related indicators.
• The Company is required to develop and implement cost-effective mitigation plans and related measures.
In 2024, corruption, compliance, going concern risks were included in the Company’s key risk register. All of these risks are medium or low level because of applied effective risk management measures. Being aware of the importance of these risks for the achievement of the sustainability objectives, the Company pays particular attention to the management and disclosure of these risks.
Given the importance of climate-change challenges in the energy sector, the EU regulations (the EU Taxonomy Regulation, the European Sustainability Reporting Standards (ESRS), etc.), climate-related risk disclosures and to improve related risk management, in 2023, Amber Grid AB together with other EPSO-G Group companies and in partnership with consulting firm Deloitte conducted a comprehensive analysis of the EPSO-G Group’s climate-related risks (physical and transition), opportunities and climate scenarios (based on IPCC climate change scenarios) in the short-term (2026), medium-term (to 2030) and long-term to 2050. The evaluation was carried out in the EPSO-G Group for the first time and was guided by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The evaluation report and methodology drawn up will help to improve the assessment and management of climate change risks, improve disclosures to the Group’s stakeholders and strengthen the sustainability risk management in the Group. The assessment comprised climate-related physical risks (impact of occurrence of extreme weather events on transmission infrastructure, buildings, offices) and transition risks (regulatory, technology, reputation, market, public pressure), measures and indicators were developed to manage these risks. Climate-related issues fall within the wide range of sustainability topics and are integrated into the Group’s decision-making process (see earlier in Section “Risk management framework”).
The scale for assessing climate risks is based on the EPSO-G Group’s risk management methodology (the same scale is being used), and the impact is understood as the financial impact compared to the income level. The impact assessment was carried out at each company level, and then aggregated in the Group- level analysis.
Due to the risk management measures already in place and applied in the Group, physical and transition risks are identified as moderate or low. However, the Group, being aware of the importance of these risks for the achievement of the sustainability objectives, will pay particular attention to the management these risks, better disclosures and integration of risk-related opportunities into business strategy. More detailed information disclosed in the Report on Climate Change Risks 2022/2023 (see reference to the report).
Amber Grid complies with the Corporate Governance Code for Companies Listed on NASDAQ Vilnius Stock Exchange (available at www.nasdaqbaltic.com; hereinafter “the Code”). The Code applies to the extent that the Articles of Association of the Company do not provide otherwise. The Company has disclosed its compliance with the requirements of the Code, and such information is available on the Company’s website at http://www.ambergrid.lt, and on the Central Storage Facility at www.crib.lt.
The Company’s issued capital amounts to EUR 51,730,929.06. It is divided into 178,382,514 ordinary registered shares with nominal value of EUR 0.29 each. One ordinary registered share with the nominal value of EUR 0.29 gives one vote at the General Meeting of Shareholders. All shares are fully paid up. There were no changes in the Company’s shareholder structure during 2024. EPSO-G UAB retained its 96.58% shareholding in the Company and was the only shareholder holding more than 5% of the Company’s shares.# 7.3. SHARES AND SHAREHOLDER RIGHTS
The number of the Company’s shares that entitle their holders to vote at the General Meeting of Shareholders matches the number of shares in issue, which is equal to 178,382,514 shares. All property and non-property rights conferred by the shares of Amber Grid are equal, and none of the Company’s shareholders has special control rights. Pursuant to Article 20 of the Law on Companies of the Republic of Lithuania (hereinafter the “Law on Companies”), only the General Meeting of Shareholders of the Company may take decisions on the issuance of new shares and the purchase of its own shares. The Company is not aware of any arrangements between shareholders that may restrict the transfer of securities and/or voting rights. There are no restrictions imposed on the voting rights at the Company. In 2024, the Company did not acquire any own shares and did not enter in any transactions involving the acquisition or disposal of own shares.
As at 31 December 2024, Amber Grid had over 2600 shareholders (Lithuanian and foreign natural and legal persons), whereof 1 (one) shareholder held more than 5% of the Company’s shares.
| Shareholder | Registered office address/company code | Ownership interest, number of shares |
|---|---|---|
| EPSO-G UAB | Laisvės ave. 10, Vilnius, Lithuania, 302826889 | 172,279,125 |
| Minority shareholders | 6,103,389 | |
| In total: | 178,382,514 |
Fig. 15. Shareholder structure as at 31 December 2024
Since 1 August 2013, the Company’s shares have been traded on a regulated market and quoted on the Secondary List of NASDAQ Vilnius Stock Exchange.
Main data on Amber Grid’s shares
| ISIN code | LT0000128696 |
| LEI code | 097900BGMP0000061061 |
| Ticker | AMG1L |
| Issue size (units) | 178,382,514 |
EPSO-G UAB 96.58%
Minority shareholders 3.42%
In 2024, the Company’s turnover of trading in shares amounted to EUR 0.393 million (2023: EUR 0.410 million), 349,855 shares were transferred by way of transactions (2023: 337,659 shares). As at 31 December 2024, the Company’s share market capitalisation amounted to EUR 206.92 million.
Share price dynamics on NASDAQ Vilnius, 2024
Amber Grid’s share price and turnover, 2024
As at 30 June 2024, Amber Grid’s share market capitalisation amounted to EUR 203.36 million.
| EUR | |
|---|---|
| Opening price per share | 1.10 |
| Weighted average price per share | 1.12 |
| Highest price per share | 1.19 |
| Lowest price per share | 0.70 |
| Closing price per share | 1.16 |
Turnover, Eur (0 - 30,000)
Share price, Eur (0 - 1.4)
The EPSO-G Group’s and Amber Grid’s Dividend Policy 2 stipulates uniform rules for estimation, payment and declaration of dividends across all companies of the EPSO-G Group. The main purpose of the Dividend Policy 3 is to set clear guidelines regarding the expected return on equity for the existing and potential shareholders through sustainable corporate value growth of the Group and its companies, and development of the strategic projects, thereby consistently strengthening trust in the whole group of energy transmission and exchange companies.
On 30 April 2024, the Ordinary General Meeting of Shareholders made the decision to pay out dividends in total amount of EUR 20.17 million or EUR 0.1131 per share.
On 11 April 2023, the Ordinary General Meeting of Shareholders made the decision to pay out dividends in total amount of EUR 12.1 million or EUR 0.0676 per share.
Amber Grid has an agreement with SEB Bankas AB for provision of accounting and related services of the Company’s securities. On 1 May 2024, a new agreement between the Company and AB SEB Bank on dividend payment/distribution to minority shareholders came into force, under which AB SEB Bank calculates and pays dividends to all shareholders of the Company.
Bank details
| Details of AB SEB Bankas | |
|---|---|
| Company code | 112021238 |
| Registered office address | Konstitucijos ave. 24, LT-08105 Vilnius, Lithuania |
| Phone | +370 5 268 2800 |
| [email protected] | |
| Website | www.seb.lt |
The Company’s activities are governed by the Law on Companies and the Law on Securities, the Company’s Articles of Association, and other legal acts of the Republic of Lithuania. The competence of the General Meeting of Shareholders, the rights of shareholders and their enforcement are defined in the Law on Companies and in the Company’s Articles of Association. The Company’s Articles of Association are available at: https://ambergrid.lt/en/doclib/q0ofcjrsdma13vm5v29pr98tuuskjkjh
The Articles of Association provide that they may be amended in accordance with the procedure laid down in the Law on Companies. The management bodies of the Company specified in the Articles of Association:
The Company’s procedure for convening the General Meeting of Shareholder, decision-making process, and the powers of the General Meeting of Shareholders are consistent with those stipulated in the Law on Companies, except for the additional powers of the General Meeting of Shareholders stipulated in Article 25 of the Company’s Articles of Association. Article 25 of the Articles of Association provides that the General Meeting of Shareholders shall also decide on (additional competence of the Meeting):
The Articles of Association of Amber Grid stipulate that the Company’s Board consists of five members appointed by the General Meeting of Shareholders for a term of four years. Two members of the Board shall be independent members. A continuous term of office of a Board member shall be no longer than two consecutive terms of office and, in any case, may not hold the Board member’s position for more than 10 (ten) consecutive years. The selection of the Board members shall be carried out in accordance with the Description of the Procedure for the Selection of Candidates to the Collegial Supervisory Body or Management Body of Municipal Enterprise, State or Municipal Company or Subsidiary approved by Resolution No 631 of 17 June 2015 of the Government of the Republic of Lithuania.
The powers of the Board of the Company are consistent with those stipulated in the Law on Companies, except for the additional powers stipulated in Articles 34–41 and Article 43 of the Articles of Association. Additional powers of the Board encompass approval of the fundamental documents of the Company (strategy, annual performance targets, budget, etc.), determination of employment terms and conditions of the Company’s CEO, determination of prices for gas transmission services and other regulated services, approval of disposal of the Company’s assets, conclusion of material transactions stipulated in the Articles of Association.
The Board of the Company also fulfils the following supervisory functions:
Information on Amber Grid’s Board members, CEO and Chief Accountant
| Full name | Position ## Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
On 27th of August, the cash-pool agreement between Amber Grid and EPSO-G was terminated, and a new cash-pool agreement was concluded and new material terms and conditions were approved. On 13th of September, the decision was made on the settlement agreement with SOLIRIS UAB.
February 02 04 April May 05 06 June 07 July 08 August 09 September
64 On 26th of September, the provision of financial support to state enterprise Memorabilis and humanitarian aid to Ukraine was approved and a decision was made to convene an Extraordinary General Meeting of Shareholders. New prices for Amber Grid’s natural gas transmission services in 2025, applicable at the entry and exit points of Kiemenai, were approved. On 18th of October, an Extraordinary General Meeting of Shareholders of Amber Grid was convened, also making a decision to conclude a humanitarian aid agreement. On 25th of October, approval was given to the amendment of some material terms of the holding management services agreement. On 12th of November, Amber Grid’s Board meeting calendar and Action Plan for 2025 was approved. Decision was made to conclude the works contract for the Reconstruction of the Elektrėnai Gas Distribution Station with MT Group UAB, and Physical and Technical Security Services Contract with EUROCASH1 AB. A draft of Amber Grid’s new operational strategy to 2035 was approved. On 10th of December, EPSO-G’s risk appetite was determined and the plan of risk management measures for 2025 was approved. New monthly remuneration bands for Amber Grid’s employees were approved and applied from 2025.
In line with the guidelines for the annual performance evaluation of the Group's collegiate bodies approved by EPSO-G Remuneration and Nomination Committee, at the beginning of 2025 the Board of the Company carried out an evaluation of its performance for 2024, and discussed the aspects of the implementation of the action plan drawn up for 2024. The summarised evaluations of each of the members of the Board were discussed at the Board performance evaluation session, which identified areas for improvement and set out the directions to be taken to improve the business processes, drawing up an action plan for 2025, which agreed on a focus on defence, optimisation of the Board's work and the training of the Board members, and improvement of the sharing of information between the UAB EPSO-G Group and the members of the Board.
Based on the Company’s Articles of Association, the Audit Committee’s functions at Amber Grid are fulfilled by the Audit Committee of the parent company EPSO-G UAB. Amber Grid has the following committees acting jointly within the EPSO-G Group:
Detailed information on Amber Grid’s committees is accessible via following links:
To ensure transparency and efficiency of its operations, the EPSO-G Group has implemented a centralised internal audit system. It means that the internal audit unit fulfils the assigned functions at the Group level, and is directly accountable to the Board of EPSO-G UAB, the majority of which are independent members. The auditors of EPSO-G UAB are not subordinate to the administration personnel of the auditee.
[1] Information on the professional experience of the members of the Board, the Company’s CEO and other senior executives is available at (in Lithuanian) https://ambergrid.lt/mes/amber-grid/vadovybe/3
10 October 11 November 12 December
65
On 30 August 2023, the General Meeting of Shareholders selected PricewaterhouseCoopers UAB as the audit company that will perform the audit of the financial statements for the period of 2023-2025. The remuneration for the audit of the Company’s financial statements was set of no more than EUR 432.9 thousand. PricewaterhouseCoopers UAB conducted audit of the Company’s and its subsidiaries’ annual financial statements (including regulated activity verification) for the year ended 31 December 2024 and 2023. The fee for the audit services of PricewaterhouseCoopers UAB for the years ended 31 December 2023 was EUR 77 thousand. The fee for the audit services of PricewaterhouseCoopers UAB for the years ended 31 December 2024 was EUR 75 thousand. In 2024 and 2023, the non-audit services (regulated activity verification and other services) provided to the Company by PricewaterhouseCoopers UAB amounted to EUR 17 thousand each year.
On 25 October 2022, Amber Grid joined the updated EPSO-G Group Employee Remuneration, Performance Appraisal and Self-development Policy (hereinafter the “Policy”), which applies to all employees of the Company and is available on the Company's website. The Policy is approved/joined by decision of the Company’s Board considering the recommendations of the EPSO-G Remuneration and Nomination Committee. The Remuneration and Nomination Committee of EPSO-G periodically evaluates the provisions of the remuneration policy, its effectiveness, implementation, and application. The aim of the policy is to manage remuneration costs in an efficient, clear, and transparent way and, at the same time, to create motivational incentives and to encourage staff to perform better, to contribute more actively to the achievement of objectives, to go beyond the formal performance of their duties, to develop innovative, out-of-the-box solutions, and to improve performance.
The remuneration of EPSO-G Group employees consists of the following components: monthly remuneration; fringe benefits provided for in the Labour Code of the Republic of Lithuania, internal regulations and collective agreements of the Companies; financial incentives; project incentives; one-off bonuses for exceptional performance and innovation; fringe benefits; non-financial remuneration.
66
Fig 18. Remuneration structure
Monthly remuneration is the largest and most important part of the monetary remuneration, which depends on the level of the post, determined for each post according to a methodology used in international practice. The monthly remuneration of staff members is set within the limits of the remuneration scales for the grade of the post concerned, taking into account the staff member’s experience, competence, level of expertise and independence in performing the functions assigned to the post, and the remuneration budget for the relevant year.
Financial incentives are determined by reference to the following standard criteria for assessing the employee’s performance: the results of the assessment of the employee’s achievement of his/her objectives, the assessment of the employee’s values, the results of the assessment of the employee’s quality of performance. Financial incentives for the Company’s CEO are allocated by the Board of the Company, and for other employees – by the Company’s CEO. The financial incentive is paid once a year when the Board of the Company approves the audited financial results of the Company and when they are confirmed by the resolution of the General Meeting of Shareholders. A one-off bonus for exceptional performance may be payable by the decision of the Company’s CEO. For the purpose of maintaining continuous progress, different incentives may be payable to encourage innovation initiatives across the EPSO-G UAB Group. Such incentives may be payable for innovation-driven approach and creativity of employees as they present their innovative ideas.
Amber Grid’s average remuneration by category of employees in 2024 (EUR/month):
| Groups of job positions | 2024 | 2023 |
|---|---|---|
| Company’s CEO | 14,137 | 15,612 |
| Top-level managers | 9,458 | 9,906 |
| Middle and first-level managers | 5,107 | 5,060 |
| Expert professionals | 3,270 | 3,171 |
| Workers | 1,965 | 1,768 |
| Total: | 3,228 | 3,078 |
| Total annual wage guarantee fund, EUR thousand | 14,652 | 13,755 |
67
On 20 April 2020, the General Meeting of Shareholders of the Company approved the Remuneration Policy for CEO and Board Members of Amber Grid (the updated policy was approved by decision of the Company’s General Meeting of Shareholders of 30 April 2024) [1] aimed at establishing common, clear and transparent principles of monetary reward for work of the Company’s CEO and Board members and the remuneration system based on these principles in order to effectively manage the Company’s operating costs and to create motivational incentives for the CEO and Board members to contribute to the achievement of the Company's mission, vision, values and objectives. The principles of remuneration of members of the Company’s management bodies are also regulated by the Guidelines for determining the remuneration of members of the management bodies of the EPSO-G Group companies approved by a decision of the sole shareholder of EPSO-G.
When determining the remuneration for the management bodies, the Company follows a principle that the size of the remuneration and its payment procedure should:
Remuneration for the functions fulfilled in the Company‘s Board may be payable only to those Board members of the Company who meet the criteria set forth in the effective legal acts of the Republic of Lithuania and the Guidelines for Determining the Remuneration for Fulfilment of Functions in the Bodies of EPSO-G UAB and the EPSO-G UAB Group.
By decision of the Extraordinary General Meeting of Shareholders of 30 April 2024, the following fixed monthly remunerations, before tax, were fixed as from the date of adoption of the decision of the General Meeting of Shareholders:
| Job position | Monthly fixed pay component (EUR) |
|---|---|
| Chairman of the Board (independent) | 4600 |
| Member of the Board (independent) | 3500 |
| Member of the Board (civil servant), if the civil servant neither holds the position nor engages in activities of the collegial body of another SE/SOE and/or ME/MOE | 42800 |
| Member of the Board (civil servant), if the civil servant holds the position and engages in activities of the collegial body of another SE/SOE and/or ME/MOE | 1800 |
In addition, by the said decision of the General Meeting of Shareholders of 30 April 2024, the total annual budget for 2024 for the remuneration of the Company’s Board members and additional expenses to ensure activities of the Board were set at EUR 129.4 thousand.
4 SE - state enterprise, SOE - state-owned enterprise, ME - municipal enterprise, MOE - municipality- owned enterprise
| Position | Full name | Date of appointment | Components of remuneration | Gross wage (EUR) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Company’s CEO | Nemunas Biknius | October 2019 | Total, EUR | 20,075 | 117,192 | 148,586 | 159,410 | 188,090 | 169,649 | |
| Variable component, EUR | - | 4,581 | 33,488 | 38,603 | 55,462 | 23,000 | ||||
| Variable component, % | - | 4% | 23% | 24% | 29% | 14% |
The amounts of the remuneration paid to the Company’s CEO were in line with the Remuneration Policy, and the variable remuneration component was paid based on the implementation of the annual objectives of the Company set by the Board. The Company’s CEO does not receive a remuneration based on shares of the Company.
| Position | Full name | Remuneration for work in the Board (EUR) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|---|
| Member of the Board since 20/04/2022, Chairman of the Board since 22/11/2022 Term of office ended on 20/04/2024 | Dalius Svetulevičius | - | - | - | - | - | - | - | |
| Board member. Re-elected to the Board from 30/04/2024. Chair of the Board from 10/05/2024 | Paulius Butkus | - | - | - | - | - | - | - | |
| Independent member of the Board. Term of office ended on 20/04/2024 | Ignas Degutis | - | - | 11,713 | 16,800 | 17,278 | 36,876 | 11,268 | |
| Independent member of the Board. Term of office ended on 20/04/2024 | Sigitas Žutautas | 3,850 | 14,125 | 21,000 | 30,535 | 30,078 | 36,876 | 11,268 | |
| Board member Karolis Švaikauskas Term of office ended on 20/04/2024 Re-elected to the Board on 30/04/2024 | Karolis Švaikauskas | - | - | - | - | 439 | 18,432 | 20,118 | |
| Member of the Board from 30/04/2024 | Peter Loof Helth | 28,167 | |||||||
| Member of the Board from 30/04/2024 | Darius Kašauskas | - | - | - | - | - | - | - | |
| Member of the Board from 30/04/2024 | Alexander Feindt | 28,167 |
A fixed monthly salary paid to the Board members of the Company is not dependent on the financial or non-financial performance of the Company. No variable component or other bonuses are paid to the Board members of the Company. The Board members of the Company also do not receive any share-based payment awarding shares of the Company.
[1] The Policy is available on the Company’s website at www.ambergrid.lt
Amber Grid has a Compliance Management System, designed to:
1. protect the Company from financial or reputational damage that may result from behaviour that does not meet internal and external requirements;
2. manage the risks of non-compliance and mitigate their impact and likelihood of occurrence;
3. promote a culture of compliance, i. e. encourage employees to work in accordance with the set requirements and to justify their application on the Group’s values.
The Company’s compliance is based on the Three Lines Principle and principle governing the use of the risk-based approach. In 2024, the Company focused their compliance activities on the following high-risk compliance priority areas:
Ensuring monitoring of personal data protection legislation, management of personal data security incidents, provision of consultations, assessment and coordination of personal data processing agreements, updating of the Company’s activity records, legitimate interest assessments, etc. The Description of Personal Data Security Incident Management is approved. Data Security Memo is prepared for employees working with Artificial Intelligence (AI) applications. All Company’s employees received practical training on the use of AI while ensuring safe use of data, and training on Personal Data Protection (144 employees attended the training).
An action plan for the sustainability compliance priority area for 2024 has been developed. A list of key legislation relevant to sustainability has been drawn up and is included in the Company’s monitoring of legislation.
In 2024, the Company developed and approved the Description of Control on Bringing Materials and Equipment into Operation. Identification and assessment of the likelihood of corruption has been carried out and a conclusion on the ‘Control of Materials Input During Construction Works for Amber Grid’ has been issued. Employees received continuing training (technicians) on ‘Changes in the Law on Construction 2023-2024’.
To improve compliance management, in 2024, with the joint efforts of the Group companies, the Compliance Management Methodology was updated, the key compliance management indicators were defined and the compliance management maturity assessment methodology was established. The methodology guided the compliance management maturity assessment of Amber Grid AB during the reporting period. In view of the outcome of this assessment and the drive for a higher level of maturity, the Company’s strategy priorities, shareholder expectations and regulatory developments, the Group has, for the first time, the Compliance Management Framework 2025-2027 was established at the Group level, outlining the key priorities and directions for these activities over a three-year period.
To promote a culture of compliance, as it was every year, we communicated with employees on external and internal regulatory requirements, organised training, and encouraged to report non-compliance. In 2024, no significant non-compliance issues were identified in Amber Grid.
Amber Group’s business decisions are guided by the principles of objectivity, impartiality, transparency, accountability and the rule of law, combined with the zero tolerance to corruption or any other forms and manifestations thereof. With the aim to build a transparent and trust-based Company, we continuously assess and implement measures to manage corruption risks. The Company’s anti-corruption activities are based on the international standard ISO 37001:2016 Anti-bribery management systems — Requirements with guidance for use, as well as the following measures implemented in the Company:
In 2024, an international management accreditation body issued certificates to three of the Group’s companies, Litgrid, Amber Grid and EPSO-G, confirming their anti-corruption management systems compliance with the standard requirements. It demonstrates the ability of companies to prevent corruption risks, build trust in the supply chain and protect their reputation through tangible and organised measures. Corruption risk assessment is carried out in the Company on an annual basis in accordance with the Group’s Risk Management Policy and methodology, and the status of implementation of the measures identified to manage corruption risk is assessed on a quarterly basis. To better manage third-party corruption risk, in 2024, together with other Group companies, we developed a business partner screening system, defining procedures for assessing risks related to business partners.
Anti-corruption education of employees is an important part of our Company’s anti-corruption activities, delivered in various forms: training sessions for external or in-house coaches, specialised e-trainings on ‘Conflicts of Interest’ and ‘Public Procurement’ on e-training platform of Special Investigation Service (58 employees), and communication messages on the current anti-corruption related issues. To ensure consistent anti-corruption awareness-raising among employees, we developed an interactive mandatory anti-corruption training in 2024. As of 2025, all employees of the Company will be required to complete the training, which will also be included in the set of mandatory trainings for newcomers. We also built the competences of our anti-corruption experts by inviting guest speakers to give a talk on practical topics of conflict of interest management. On 9-12 December 2024, Amber Grid organised an Anti-Corruption Week, during which employees were actively involved in various discussions, training sessions and a survey. A corruption tolerance survey was conducted among the Company’s employees to determine employees’ approach to corruption and to identify aspects of anti-corruption requiring improvement.The survey was updated with new questions and a new title, which is Anti-Corruption Culture Survey. The employees’ participation rate remained similar to recent years (120 in 2024, 119 in 2023). The answers to the main survey questions are positive for several consecutive years: percentage of employees who have not encountered any forms corruption in their work (98% in 2024, 98% in 2023, and 97% in 2022), percentage of employees who know where to go to report a case of corruption (95% in 2024, 98% in 2023, and 97% in 2022). The new survey questions (knowledge about withdrawal in the event of a conflict of interest, actions after receiving a gift, etc.) provided new indications in terms of raising anti-corruption awareness. Key anti-corruption indicators: 2022-2024: no any cases of corruption identified; no any corruption-related cases filed against the Company/employees; no any corruption cases identified due to which contracts with business partners are not concluded. The Company has Helpline– [email protected]. Reports can also be submitted via the Group’s Trust line – [email protected]. The Company’s employees and other stakeholders can directly or anonymously report, without fear of negative consequences, vie Helpline [email protected], by phone +37061270606, by mail – to the Company’s registered office at Laisvės ave. 10, Vilnius, may report suspected violations, unethical or unfair behaviour to the designated person or to other employees of Prevention Department. No reports related to manifestations of corruption were received in 2024.
Management of Conflicts of Interest
The Company’s governance framework promotes avoidance of conflicts of interest among and members of collegial bodies, and ensures a transparent and an effective conflict of interest disclosure mechanism.
The Company has an integrated model for the declaration of private interests as defined in the Policy of Management of Interests of Employees and Members of Collegial Bodies. It requires to disclose all private interests of the Company’s employees and members of the collegiate bodies in an internal declaration form prescribed by the Group, and, when applicable to the job position and functions, in PINREG, the register of private interests. Amber Grid implements active monitoring, control and supervision of private interests: assessing potential conflict of interest situations during the job application process, reviewing and analysing declarations, recommending on potential conflicts of interest management and actions and/or decisions requiring refraining. As part of the implementation of the Policy of Management of Interests of Employees and Members of Collegial Bodies, and to ensure the proper functioning of the conflict of interest framework, the legislation governing the management of interests in Amber Grid was developed and adopted in 2024, defining the procedures for declaring, and refraining, removing, monitoring, supervising and controlling in the context of private interests. The Company’s anti-corruption activities are targeted to managing corruption risks in Lithuania and abroad. The Company's employees cooperating with foreign officials or officials acting in foreign countries shall be guided in their activities by the principles set in the Anti-Corruption Policy, including the principle of zero tolerance to corruption. In 2024, no cases of bribery of officials in international business transactions, corruption or other corruption manifestations abroad or in Lithuania were detected in EPSO-G and its subsidiaries.
At the end of the reporting period:
* The members of the collegial management bodies, administrative staff and the Group companies’ CEOs have not acquired any shares in EPSO-G group companies, except for Nemunas Biknius, CEO of Amber Grid, who holds 0.001055% of shares in Amber Grid. His shareholding remained unchanged during the reporting period.
* The declarations of interests of all members of the collegial management bodies, members of the Board and the Company’s CEO, are submitted and published in the Register of Private Interests (PINREG), on the website of the Chief Official Ethics Commission (COEC) and at www.epsog.lt. All CEO’s of EPSO-G Group companies have submitted declarations of interest to the holding company to the extent and according to the procedure set out in the Group’s Policy of Management of Interests of Employees and Members of Collegial Bodies, which is available at www.epsog.lt in the menu item “Operating Policies”.
* No any conflicts of interest among members of the collegial management bodies and the Group companies’ CEOs .
* Members of the collegial management bodies and Group companies’ CEOs have not been convicted of any criminal offence, have not been subject to any indictment or sanction by any regulatory authority in the last five years, have not been barred by a court from holding any office as a member of the Company’s administrative, management or supervisory bodies of the Company or from holding any managerial position or from managing the affairs of any issuer.
* EPSO-G, Amber Grid has not entered into any transactions with the above-mentioned persons which are outside the operating activities of the Company or which have not been duly notified to and authorised by EPSO-G, Amber Grid’s collegiate management bodies.
8.1. ABOUT THE REPORT
8.2. SUSTAINABILITY GOVERNANCE
8.3. STRATEGY, BUSINESS MODEL AND VALUE CHAIN
8.4. DOUBLE MATERIALITY ASSESSMENT
8.5. ENVIRONMENTAL AREA
E1 CLIMATE CHANGE
E2 POLLUTION
E3 WATER AND MARINE RESOURCES
E4 BIODIVERSITY AND ECOSYSTEMS
E5 RESOURCE USE AND CIRCULAR ECONOMY
8.6. SOCIAL AREA
S1 OWN WORKFORCE
S3 AFFECTED COMMUNITIES
S4 CONSUMERS AND END USERS
8.7. GOVERNANCE AREA
8.8. EU TAXONOMY REGULATION INDICATORS
8.9. INDICES
This section presents the company's Amber Grid (the "Company" or Amber Grid) sustainability information (the "Sustainability Report") for 2024. This report is not yet subject to the provisions of the Corporate Sustainability Reporting Directive (CSRD) requirements – it has been developed voluntarily to maximise its compliance with the European Sustainability Reporting Standards (ESRS). The Company will fully comply with ESRS starting from the 2025 reporting period when the sustainability report is prepared according to all applicable requirements and is subject to an external independent audit. The Company is a member of the EPSO-G group of companies (the "Group" or “EPSO-G). Therefore, its sustainability information is also included in the Group's consolidated sustainability report for 2024, which complies with the ESRS requirements and has been verified by an external independent auditor. The Sustainability Report presents the Company's achievements and goals in the environmental, social and governance areas (ESG). The information provided covers all of the Company's direct activities and its value chain. The Sustainability Report is prepared in cooperation with external sustainability reporting experts to ensure quality and comprehensiveness. The report is published as part of the annual Management Report. The Company has not used the option to omit specific information corresponding to intellectual property, know-how, or the results of innovation or other confidential and sensitive information, as outlined in ESRS standard, part 1 (ESRS 1). According to Appendix C of ESRS 1, certain disclosure requirements or datapoints of disclosure requirements in ESRS may be omitted in the first year(s) of preparation of the sustainability statement under the ESRS (for the Company – for the reporting year 2025). Therefore, in this report, the Company does not disclose information under disclosure requirements SBM-1 40.b. and 40.c., SBM-3 48.e., E1-9, E2- 6, E5-3, E4-6, and E5-6, to which this phase-in provision applies.
For the purposes of this report, the Company uses the ESRS definitions of short-, medium- and long-term: short-term – up to 1 year, medium-term – 2 to 4 years and long-term – more than 5 years. This time perspective is consistent with the periods used by the Group to ensure consistency across the Group. In addition to the information required by the ESRS, the Company includes tables with key performance indicators of the EU Taxonomy in its Sustainability Report based on the templates of Commission Delegated Regulation (EU) 2021/2178. For this reporting period, the Company applied the ESRS standard for the first time, ensuring that all disclosures were presented in compliance with ESRS requirements. The disclosed indicators include comparative information for the previous reporting periods of 2021–2023, except for GHG indicators, for which information is provided from the base year (2019). The methodology used to calculate Scope 3 GHG emissions is detailed in the E1 Climate Change chapter. No other value chain indicators covering upstream/downstream value chain data are included in the report.# 75 In 2024, based on updated emission factors and a refined natural gas calculation methodology, the baseline Scope 1 and 2 GHG emissions for 2019 were recalculated (rebaselining). To ensure data comparability and accurately track the progress of the Group's companies, similar recalculations were performed for GHG emissions data for 2020–2023. This update allows for a more precise assessment of emission changes, ensures consistent monitoring of emission reductions in line with the SBTi methodology, and guarantees compliance with industry best practices and regulatory requirements. There have been no other changes in the preparation or presentation of the Sustainability Report compared to the previous reporting period. No quantitative indicators with a high level of measurement uncertainty were identified, nor were any significant errors from the previous reporting period detected. As the Company is part of the EPSO-G group of companies, it does not fall under the phase-in provisions applicable to companies with fewer than 750 employees. Although phase-in provisions could apply to Amber Grid individually, the Company does not utilize them, as the conditions do not apply to the entire EPSO-G group. To ensure consistency and alignment with the Group’s report, the Company provides all material information required under Disclosure Requirements E4 ESRS, S1 ESRS, S2 ESRS, S3 ESRS, and S4 ESRS.
Amber Grid aims to actively contribute to the transformation of the energy sector by balancing environmental, social, and economic objectives. The Company strives to adhere to best sustainability management practices and principles, ensuring that sustainability considerations are integrated into both strategic decisions and day-to-day operations. EPSO-G's corporate sustainability governance structure aligns with the Group's corporate governance framework. Management, supervisory, and advisory bodies oversee and manage sustainability issues within their respective areas of responsibility and expertise. Detailed information on sustainability management and monitoring at the Group level is provided in the EPSO-G Consolidated Management Report for 2024.
"Amber Grid's long-term strategic sustainability objectives are formulated, reviewed and monitored by the Company's Board of Directors. It also approves the Company's annual targets, which include sustainability commitments. he company's environmental, social responsibility and governance objectives are allocated to the relevant functional units according to their competencies, such as environmental protection, occupational safety, organisation development, risk and compliance management, etc. In addition, the Company has a person responsible for ensuring the implementation of the principles of equal opportunities."
The Articles of Association provide for the following bodies of the Company:
The Company's governing bodies are regularly informed about material impacts, risks, and opportunities. The Board discusses relevant issues, including those related to sustainability, on a monthly basis. The Board plans and conducts its activities in accordance with its annual work plan. In the first year of reporting, the Double Materiality Assessment considered all topics from the ESRS list, as well as other sustainability topics relevant to the Company.
Amber Grid's remuneration policy is outlined in the Report on the Implementation of the Remuneration Policy section of the Management Report. The Company does not have any sustainability-related incentive schemes or remuneration policies for members of the governing bodies.
So far, the Company is not subject to legal requirements for sustainability due diligence. Therefore, no specific due diligence system is in place. However, the Company continuously assesses potential negative impacts within its operations and value chain, strives to prevent them, and is committed to cooperating in addressing any negative impacts should they occur or should the Company contribute to them. Despite the absence of a formalised due diligence system, some elements have already been integrated into the Company's operations. The key aspects and steps outlined in ESRS 1, Chapter 4 Due Diligence correspond to several horizontal and topical disclosure requirements under ESRS. The table below outlines how and where the main aspects and steps of the due diligence process are reflected in the Company's Sustainability Report.
| Key elements of the due diligence | Parts of the sustainability report |
|---|---|
| a) Integrating due diligence into governance, strategy and business model | GOV-1, GOV-2, GOV-3, SBM-3 (b) |
| b) Involvement of affected stakeholders in all key stages of due diligence | GOV-2, SBM-2, IRO-1, MDR-P, E1, E2, E3, E4, E5, S1, S3, S4, G1 |
| c) Identification and assessment of negative impacts | IRO-1, SBM-3 |
| d) Taking action to address these negative impacts | MDR-A, E1, E2, E3, E4, E5, S1, S3, S4, G1 |
| e) Monitoring and communicating the effectiveness of these efforts | MDR-T, E1, E2, E3, E4, E5, S1, S3, S4, G1 |
Sustainability reporting aligns with Group-level principles and processes related to regulatory compliance, risk management, and internal control. Internal control in sustainability reporting is based on risk identification, analysis, and a focus on the most significant identified risks. The Group's risk management process follows the principles of the COSO (ERM) framework. To ensure a unified risk management approach across all companies, the Group has adopted a risk management policy that defines the key principles and responsibilities within the EPSO-G Group, based on shared principles. Sustainability risks are regarded as an integral part of the Group's day-to-day operations and are embedded within the risk management process. The Group assesses risks against specific criteria within sustainability areas, and those meeting these criteria are categorised under the relevant risk type within the sustainability domain. Risks related to sustainability reporting primarily concern the accuracy and reliability of data and information.
The role of administrative and supervisory bodies:
We operate the Lithuanian natural gas transmission system. Our responsibility is the transmission of natural gas to consumers, as well as the operation, maintenance, and development of infrastructure. Amber Grid's goal is to transform the natural gas system by 2030, adapting it to safely transport renewable energy sources and contribute to a cleaner future for all. We plan to modify the gas transmission system to accommodate new energy sources, enabling Lithuanian pipelines to carry hydrogen as well as natural gas. We are committed to supporting a climate-neutral economy.# By supplying green energy in Lithuania and abroad, we help reduce the impact on climate change by focusing on energy from renewable sources. Our transmission system includes:
* Main gas pipelines.
* Gas compressor stations.
* Gas metering and distribution stations.
* Corrosion protection devices for gas pipelines.
* Data and communication systems.
Our customers include Lithuania’s large and medium-sized enterprises, as well as companies supplying natural gas. More information on customers and services can be found in the Amber Grid Management Report 2024. Amber Grid employs qualified specialists with many years of experience in gas system maintenance and management knowledge. At the end of the reporting period 2024, the Company employed 352 employees.
We have been in business since 2013 and became a natural gas transmission system operator in 2015. We are part of a state-owned group, EPSO-G. The Group consists of energy transmission and exchange companies. We are members of the European Network of Transmission System Operators for Gas ENTSOG. Amber Grid owns 34% of GET Baltic shares. The latter organises and develops natural gas exchange trading in Lithuania, Latvia, Estonia and Finland. GET Baltic is majority-owned by the European Energy Exchange AG (EEX). Amber Grid has also connected biomethane producers to the existing grid, thereby contributing to Lithuania's renewable energy development. The integration of biomethane into the joint energy system is one of the main energy goals of European countries, and it opens up new opportunities for the Company's customers to expand and develop.
79
The Company operates in the fossil fuel sector (gas), i.e. it derives its revenues from the distribution – including transport, storage and trade – of fossil fuels as defined in Regulation (EU) 2018/1999 of the European Parliament and of the Council, Article 2, p. 62. The income derived from these activities is shown in the Company's financial statements: Group companies do not derive revenues from taxonomy-aligned activities (4.29, 4.30, 4.31) related to fossil gas.
Amber Grid's renewed strategy, together with EPSO-G Group companies, clarifies the Group's shared mission to accelerate energy independence and increase system reliability, as well as its vision to enable green transformation while safeguarding energy and national security interests. A range of strategic tools will be utilised to achieve these goals, including financing, innovation and digitalisation, partnerships, asset development and management, as well as improvements in supply chains and procurement. Amber Grid aims to contribute directly to the Sustainable Development Goals. The Company focuses on ensuring access to clean and modern energy, taking action to combat climate change, developing resilient infrastructure and promoting innovation, ensuring safe working conditions, employee well-being and developing a sustainable supply chain. Green energy is at the heart of the Company's strategy and strategic plan. Sustainability is an integral part of the Company's activities, and its key objectives are integrated into the EPSO-G group's long-term corporate strategy, which was updated in 2024. More information on the Group's strategic sustainability objectives can be found in EPSO-G’s Consolidated Management Report 2024. Information on Amber Grid's Strategy 2035 can be found in the Amber Grid Management Report 2024, section . A more detailed presentation can also be found here: Strategy 2035.
The Company's key environmental, social and governance objectives:
80
The diagram below visually represents EPSO-G’s value chain, including Amber Grid, encompassing both the upstream value chain, which includes suppliers and resources, and the downstream value chain, where value is delivered to customers and society. It highlights the key resources and dependencies within the company’s operating model, from core business activities to final outcomes.
81
To successfully achieve its strategic objectives and ensure sustainable development, the Company must maintain a regular dialogue with stakeholders, consider their expectations and integrate them into the decision-making process. Stakeholders are groups whose activities significantly impact the Company or may be substantially impacted by the Company. The Sustainability Report's content is based on key stakeholders' insights, needs and expectations. The table below highlights the main stakeholder groups, their engagement, and how the Company addresses their concerns. The analysis of these engagement results was also used in the double materiality assessment process. The Company's administrative, management and supervisory bodies are informed of stakeholder concerns if needed.
| Key stakeholders | Company’s methods of engagement # Non- governmental organisations (NGOs)
Collaborating with NGOs enables the Company to contribute to global progress while leveraging specialised knowledge and resources. It also provides an opportunity to engage with wider target audiences and enhance the impact of sustainability initiatives.
Employee engagement is essential to the Group's success. It is important for the Company to maintain an open dialogue, listen to employee expectations, and integrate them into performance improvement processes.
It is essential for the Group to remain aligned with the public interest and to provide up-to-date information on its progress.
Community support is essential for the successful implementation of major energy projects. The Company strives to consider valid feedback when carrying out projects and, as part of its long-term strategy, is committed to creating a positive impact on communities.
83
SBM-3, IRO-1 - MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL – DESCRIPTION OF THE PROCESSES TO IDENTIFY AND ASSESS MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
The information and indicators presented in this Sustainability Report have been selected based on a Double Materiality Assessment (DMA). This approach enables a comprehensive evaluation of sustainability matters by considering both their environmental and social impacts as well as their financial materiality, ensuring a balanced and responsible approach to sustainability management.
In 2024, EPSO-G conducted a DMA for the first time, in accordance with the criteria established by the European Sustainability Reporting Standards (ESRS). The purpose of this assessment is to identify the key sustainability topics and sub-topics that should be included and disclosed in the sustainability report. The Group's assessment was guided by the general requirements of the ESRS and the European Financial Reporting Advisory Group (EFRAG) practical application guidelines. The materiality analysis considered both impact materiality and financial materiality, along with their interrelationships. The main steps in the assessment were:
Stakeholders were actively involved in the Group's DMA. "Nature", recognised as a silent stakeholder, was also considered in the assessment. The methods and levels of stakeholder involvement were determined in accordance with the AA1000 Stakeholder Engagement Standard. Details of the Group's DMA methodology are provided in EPSO-G's Consolidated Management Report 2024.
In line with the DMA results, this report provides a detailed account of how each material topic is managed, including its associated impacts, risks, and opportunities, in chapters structured according to ESRS topics.
The sustainability topic matrix highlights the most relevant sustainability issues. According to EPSO-G’s methodology, a sustainability issue is considered material if it is classified as "critical" or "material" based on its final impact and/or financial materiality scores. An exception applies to the sustainability issue "Business Ethics (Whistleblower Protection)," which is classified as material specifically to the Company, given its status as a state-owned enterprise.
84
Given the significance of climate change challenges in the energy sector and the requirements of EU legislation (including the Taxonomy Regulation and European Sustainability Reporting Standards (ESRS)) on climate risk disclosures, EPSO-G carried out a comprehensive analysis of physical and transitional climate risks, opportunities, and climate scenarios in 2023. The analysis was conducted under the Intergovernmental Panel on Climate Change (IPCC) climate change scenarios for the short (2026), medium (2030), and long (2050) term. The Group's assessment was carried out in line with the recommendations of the Task Force on Climate- related Financial Disclosures (TCFD). The assessment and methodology developed allow for improving the evaluation and management of climate change risks, enhancing related disclosures to the Group’s stakeholders, and strengthening the Group’s governance of sustainability risks. The assessment covered climate change-related risks, both physical (likelihood of extreme events affecting infrastructure, buildings, and offices) and transitional (Policy and Legal, Technology, Market, and Reputation). Measures and indicators have been developed to manage these risks. The methodology and results of the climate risk assessment are reported in the EPSO-G Consolidated Management Report 2024 and a separate report, which can be found here: EPSO-G Climate risk report 2023.
85
A table of contents listing the disclosure requirements met in the preparation of this Sustainability Report, based on the results of the materiality assessment, can be found in the chapter ESRS Index. A table of all data units required by other EU legislation, as specified in Appendix B of the ESRS standard, is available in the section List of data points in cross-cutting and topical standards that derive from other EU legislation.
Climate change is a material topic for the Company and is included in this report. The material information to be disclosed has been determined by the Company based on the DMA conducted.
The Company applies and discloses information in accordance with the Minimum Disclosure Requirements on policies (MDR-P), actions (MDR-A), metrics (MDR-M), and targets (MDR-T), together with the relevant disclosure requirements set out in the topical ESRS throughout this report.
SBM-3, E1 SBM-3 MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL
The Company recognises its responsibility in the context of climate change and understands that protecting the environment is an integral part of sustainable operations. Climate change mitigation and adaptation to its challenges are vital for both current and future generations. The Company is therefore continuously assessing the environmental impact of its activities and looking for innovative solutions to reduce this impact and achieve positive results for both the organisation and wider society.
The Company is actively working to reduce greenhouse gas (GHG) emissions and meet international standards in this area to contribute to the global climate goals. It continues to invest in clean energy solutions to ensure a sustainable energy supply and reduce carbon emissions. It is also upgrading infrastructure to make energy supply more efficient, sustainable, and less environmentally impactful. Decisions are made considering mitigation and adaptation risks and opportunities to ensure long-term impacts and environmental compliance.
The Company keeps monitoring the impact of climate change and identifying potential risks and opportunities related to climate change and its impact on operations. Climate change mitigation and adaptation strategies are taking into account the overall value chain, ensuring coherent and responsible management of activities. The table below summarises the material topics related to climate change impacts, risks and their location in the value chain.
86
| Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|
| Climate change adaptation | - | - | - |
| Climate change mitigation | Actual negative impact due to the Group's GHG emissions. | Risks arise from the need to finance the renewal of infrastructure and to provide for investment in new technologies to reduce the Group's impact on climate change (by reducing GHG emissions). The entire value chain | The entire value chain |
| Energy | Actual negative impacts from operations of Group companies and the Group's supply chain. | The risks stem from the need to invest in renewable energy sources. | The entire value chain |
| Note: *No significant impacts, risks and/or opportunities identified. | |||
| E1-1 Transition plan for climate change mitigation | Amber Grid is committed to contributing to climate change mitigation and the sustainable development of the energy sector, in line with the Paris Agreement and the National Energy Independence Strategy. |
These actions will allow a sustainable transition to green energy and contribute to the achievement of the country's strategic objectives.
The Transition Plan is an integral part of the Company's strategy and financial planning to contribute to the objectives of the Paris Agreement and the requirements of European climate legislation. EPSO-G Group aims to become climate-neutral by 2050. Amber Grid's investment plan includes both long-term strategic investments and 10-year investments for material projects. The Company's budget is established annually and is aligned with the work and investments foreseen in the business plan. An important part of implementing the strategy is the Company's action plan, which is approved by the CEO. The Action Plan 2025, approved by the Board, contains ambitious objectives and clear priorities:
The Company's Business Plan 2025-2027 was approved at the end of February 2025 and its implementation will be evaluated by the Board. To achieve its objectives, the Company continuously assesses changes in the operating environment, the implementation and progress of its strategy and, where necessary, updates its strategic documents. For detailed information on Amber Grid’s strategy, see Strategy | Amber Grid.
Amber Grid is consistently implementing its GHG Mitigation Action Plan (GHG MAP) to contribute to climate change mitigation targets. The plan consists of pilot projects, market analyses of suppliers and investment plans that form the basis for sustainable development.
Key decarbonisation levers (actions 2025 to 2030):
Preparations are underway for the transformation and optimisation of the transmission system. The milestones are:
Amber Grid will allocate approximately €58 million for the implementation of GHG emission reduction measures (disclosed by the E1-3 disclosure requirement) for the period from 2025 to 2030 (the amount set out in the GHG Mitigation Plan in addition to other material projects in the Company's strategy).
Amber Grid owns and operates the NG (natural gas) transmission infrastructure and conducts repairs and refurbishments resulting in locked-in GHG emissions of approximately 55,720 tonnes of CO₂e by 2030. This includes energy production in the Company’s own installations, fuel consumption in mobile units, NG leakages and other circumstances that directly or indirectly contribute to GHG emissions. In the Company's plan for emission reduction targets and measures, Amber Grid has set out 8 measures that allow reducing the costs of the Scope 1 and Scope 2 emissions. These locked-in GHG emissions may make it challenging to meet the Company's 2030 targets, especially in the absence of infrastructure transformation, use of alternative energy sources, and introduction of advanced technologies to reduce methane emissions to the atmosphere.
In 2023, Amber Grid performed three Scope 3 emission inventories (these are indirect emissions that occur in the activity chain and are not included in Scope 1 or 2). In 2025, the Company plans to conduct a comprehensive review of its Scope 3 emission inventories followed by the modelling of emission assumptions, and the development of an emission reduction plan for this type of emissions.
The company is not subject to the European Union's benchmarks in line with the Paris Agreement. However, in line with international and national sustainability standards, the Company will keep contributing to climate change mitigation goals and implement actions allowing to achieve the emission reduction targets. Amber Grid is continuously carrying out maintenance and repairs to ensure the reliability and security of the transmission system, and is focusing on upgrading and expanding the existing infrastructure network. Amber Grid has invested €6.3 million in 2024. The major spendings:
In 2024, the Company undertook a GHG emissions modelling exercise and a review of the GHG Roadmap to better understand the emission reduction potential and to develop a sound Roadmap. The measures were prioritised by the highest mitigation potential and cost-effectiveness. In addition, an analysis of potential risks and modelling of different scenarios has been carried out to achieve emission reduction targets more effectively. A risk management plan for GHG measures is planned for 2025 to address potential challenges more effectively.# To foster clean energy, In 2024, the pre-feasibility study for the Nordic-Baltic Hydrogen Corridor (NBHC) was successfully completed by the gas transmission system operators of Lithuania, Finland, Estonia, Latvia, Latvia, Poland, and Germany including Ontras. This study marks an important step in the development of an international hydrogen transport infrastructure that will connect the Baltic Sea region with Central Europe. The NBHC project is an essential part of the development of the European hydrogen market to ensure sustainable energy supply and promote decarbonisation in the region. In April 2024, the European Commission (EC) granted the Nordic-Baltic Hydrogen Corridor (NBHC) project the status of a Project of Common Interest (PCI). This project is part of the Baltic Energy Market Interconnection Plan (BEMIP Hydrogen). PCI status assigns the project a strategic priority at the EU level, enabling it to acquire EU funding and expedite permitting procedures, thereby facilitating project implementation and accelerating the development of hydrogen infrastructure in the Baltic region. A major study launched in January 2024 examines the basic conditions for the development of the Nordic- Baltic Hydrogen Corridor (NBHC) project. The study estimates H₂ transport volumes from 2030 to 2050, calculates H₂ rates and tariffs for consumers and conducts consumer surveys along with other relevant assessments.
90 Based on the results of the pre-feasibility study, the transmission system operators for gas are set to launch a comprehensive feasibility study. This study will offer a detailed technical analysis, alongside a commercial and economic assessment of the project as well as a thorough timetable for the implementation of the Nordic-Baltic Hydrogen Corridor (NBHC). At the same time, in February 2025, the European Commission announced the funding of the Connecting Europe Facility (CEF) for cross-border energy infrastructure projects under the Trans-European Energy Networks Programme (TEN-E). The Nordic-Baltic Hydrogen Corridor project has been approved for a €6.8 million grant to finance the feasibility study phase. This funding will enable detailed studies concentrating on the critical components of the project: pipeline routing, compressor station planning, financial and economic analysis, environmental permits, safety considerations and project scheduling. These studies will help to ensure a sustainable and economically viable development of the NBHC network, contributing to the development of the hydrogen market in the region.
From 2025, the Company will be obliged to meet strict requirements of Methane Regulation and promote a culture of zero CH₄ emissions. These requirements will significantly impact the organisation of repair work and other operational aspects, promoting the adoption of new technologies and processes that minimise methane emissions. Implementing these changes will require modern gas leakage control systems, advanced maintenance solutions and more efficient infrastructure optimisation measures. The Company is also committed to actively adopting best practices and innovations to reduce the environmental impact of methane and to contribute to the EU's climate neutrality targets.
In 2025, Amber Grid plans to identify all potential sources of methane (CH₄) emissions, carry out a detailed inventory of these sources, and closely monitor all facilities, including the main gas pipelines. To reduce uncontrolled emissions of natural gas, consisting of about 95% CH₄, the Company will seek and apply advanced stationary methane leak detection technologies. These measures will enable more effective emissions management, enhanced environmental controls and a zero CH₄ culture that complies with the stringent requirements of the EU Methane Regulation. Furthermore, the purchase of important GHG reduction measures (stopple, mobile compressor and combustion equipment) is planned for 2025; they shall be applied for repairs from 2026.
5 The Company implements EPSO-G Group's policies on climate change mitigation and energy restructuring in accordance with the Group's sustainability policy documents, which outline the key directions and principles for sustainable development. The energy sector is one of the most important sectors for climate policy, and as a group of energy transmission and exchange companies, EPSO-G plays an important role in ensuring a smooth and reliable transformation of the energy system in Lithuania. This transformation includes: developing renewable energy sources and integrating them into the energy system, reducing dependence on fossil fuels, initiating interconnection projects, and facilitating climate-neutral energy exchanges.
5 MDR-P 91
In 2022, EPSO-G announced a long-term Sustainability-linked finance framework. The framework has been independently evaluated by CICERO Shades of Green, an international climate and environmental research centre. The assessment showed that EPSO-G's targets are ambitious compared to its European peers and in line with the Paris Agreement's targets for reducing climate change impacts.
To mitigate its impact on the climate, the Group implements an Environmental Policy. The Group's environmental policy commits to:
As a manager of strategically important energy infrastructure, the Group seeks to contribute to the fulfilment of the climate change and environmental commitments laid out in the Paris Agreement, the European Green Deal, the National Energy Independence Strategy and the National Climate Change Management Agenda.
6 Planned actions to reduce GHG emissions by 2030 (Scope 1 and Scope 2 emission reductions)
Amber Grid plans to implement a range of GHG emission reduction measures to reduce Scope 1 and Scope 2 emissions by 2030. Specific actions, broken down by year, are listed below:
6 MDR-A 92
The GHG Emissions Reduction Plan is an ongoing document, and the actions outlined above may change depending on the Company's situation and the market situation. Amber Grid organises quarterly meetings with the responsible employees to share information on new measures, market analysis and the status of project implementation. Based on the information provided, the Company initiates pilot projects, writes investment projects and carries out other important work.
Amber Grid finances its GHG emission reduction measures from its own funds, which consist of revenues from its operations and borrowings. The Company's borrowings are provided by the Group's parent company, EPSO-G, which lends to its subsidiaries from both own and borrowed funds. EPSO-G finances its activities with sustainable financial instruments and has also issued a sustainability bond.
Amber Grid will allocate approximately €58 million to meet its GHG emission reduction targets for the period from 2025 to 2030. These funds will be used for:
All GHG reduction measures are included in the long-term Procurement Plan “Network Operating Costs and Fixed Asset Investments”. In the financial statements, these investments are shown under fixed assets, without distinguishing them as measures to reduce GHG emissions.# PROGRESS IN REDUCING GHG EMISSIONS IN PREVIOUS PERIODS
GHG emissions vary from year to year, as the Company's direct emissions depend on the scale of the work it carries out, including reconstruction, new projects and other activities that affect the level of emissions. Natural gas savings and the efficiency of compressor installations play an important role in reducing emissions. The introduction of new, cleaner technologies and the reduction of natural gas consumption for process use not only reduce GHG emissions but also increase operational efficiency, contributing to CO₂e reduction and sustainability objectives. Nevertheless, to ensure safety, the Company must keep maintaining and upgrading its infrastructure. Therefore, repairs are carried out annually on the main gas pipelines, and their scope can vary depending on the condition of the infrastructure and technological needs.
In 2021, the Company carried out a GHG emissions inventory and a general environmental impact assessment. In 2022, based on the inventory results, it prepared and approved an Environmental Impact Mitigation Plan (EIMP) until 2030. In 2024, the GHG targets and measures plan was updated following the modelling of the Group's GHG targets and measures. While most elements of the plan remained unchanged, the H₂ pilot project, which foresaw the admission of natural gas and hydrogen into the NG supply system (up to 2%), was rejected in 2024.
Reasons for rejection of the pilot project:
It is possible that in the future, as market conditions change, there may be a need for H₂ blending service. In this case, the project may be reconsidered or updated. The Company continuously monitors changes in the regulatory environment and analyses the needs, demand and prices in the market to be ready to respond to possible future changes.
In 2021, Amber Grid built 1.45 MW of solar parks at three of the Company's facilities. In February 2022, these renewable energy parks became fully operational. Some of the electricity generated covers the electricity costs of the administrative buildings, contributing to sustainable operations and energy efficiency. From 2023, the Company has switched 100% of its electricity consumption from non-renewable sources to green energy (produced from RES).
In 2024, the Company replaced its polluting diesel and petrol cars with less polluting hybrid cars and less polluting electric cars. A total of 119 polluting cars were replaced. Amber Grid currently uses 50 hybrid cars and 20 zero-emission electric vehicles. In the summer months of 2024, the energy generated by the Company's solar power plants fully covered the charging needs of electric vehicles. For the procurement of charging services for electric vehicles, a supplier was selected that supplies electricity generated from RES. In 2024, 17 slow charging (11 kW) (AC) and two fast charging (DC) charging stations were put into operation at the Company's Panevėžys and Vilnius (Gudelių St.) locations.
In 2025, Amber Grid is about to analyse the possibility of replacing the natural gas (NG) used for the Company's technological needs with biomethane. The assessment of alternatives will consider the feasibility of using biogas for the operation of the fuel installations and will consider the possibility of purchasing guarantees of origin.
In order to reduce direct GHG emissions, investments in technological measures are planned for the period 2025-2026 that will contribute to the effective reduction of scope 1 emissions. Key tools such as a mobile compressor, gas flaring equipment and specialised pressure drilling equipment were presented to the Company's Technical and Innovation Committee in 2024 and approved by the Company's Board of Directors for the possible initiation of procurement for their acquisition. They will be used for the reconstruction and repair of the main gas pipeline in order to reduce emissions and increase gas efficiency. In addition, these measures are essential to meet the requirements of the Methane Regulation, which entered into force on 4 August 2024, contributing to the development of a sustainable and environmentally friendly gas transmission system.
The mobile compressor is one of the key measures to mitigate environmental impact – measures to reduce emissions and contribute to CO₂e savings. Its use is effective wherever the technology can be applied, especially in the repair and reconstruction of main gas pipelines. The mobile gas compressor allowed saving (not emitting into the environment) 789.8 thousand m³ of natural gas in 2022, 2,118.0 thousand m³ in 2021 and 2,030.0 thousand m³ in 2020. In 2023, the application of this technology in repairs and refurbishments resulted in savings of more than 3.2 million m³ of natural gas or about 54.6 thousand tonnes of CO₂e; and in 2024, 1.4 million m³ of natural gas, or 31.9 thousand tonnes of CO₂e. These savings depend on the amount of repair and reconstruction work and the possibilities to use the mobile compressor, so results can vary from year to year. Each year, the aim is to make the use of mobile compressors as widespread and efficient as possible to reduce the environmental impact. This installation is one of the main Tier 1 emission reduction measures applied by the Company and included in the Environmental Impact Reduction Plan. Its use allows to optimise gas losses, reduce GHG emissions and contribute to the implementation of the principles of sustainable operations.
Pilot projects were carried out in 2024 to test and evaluate different technologies for detecting methane leaks. At the gas compressor stations, the results of the acoustic camera were compared with a typical leak detection round using the Pressure Incident Detection System (PIDS) and the Optical Gas Imaging (OGI) camera. In addition, at the Vilnius Gas Distribution Station, the Company's employees participated in practical training on the use of the thermal imaging camera (OGI) to assess its effectiveness in real-life conditions. So far, the field trials carried out in 2024 have made an insignificant contribution to improving the management of methane leakage and have not shown significant effectiveness in meeting the requirements of the Methane Regulation. In 2025, the European Commission is expected to issue implementing acts that will not only provide more explicit technical guidance on the use of methane leak detection technologies but also facilitate their adaptation and ensure clearly defined technical requirements.
The GHG emission reduction plan also includes improving fuel efficiency and switching appliances from fuel-burning to electric compressors or to cleaner fuel-burning devices. In 2023, an efficiency improvement analysis carried out by external consultants on the Jauniūnai and Panevėžys GCS showed that the most appropriate way to reduce fuel consumption and emissions at these stations is to introduce new electric-driven technologies. In the same year, the purchase of a new electric compressor for the Jauniūnai GCS was initiated. The procurement of the procurement, design and contracting and design work for the purchase of the electric compressor equipment for the Juniūnai DKS was announced in 2024 due to the delayed procurement, design and contracting and design work for the Juniūnai DKS and this procurement has been postponed to 2025. The new electric compressor is expected to take over most of the operational loads of the gas compressors by the end of 2027. This would lead to a significant reduction of GHG emissions and air pollution from the Jauniūnai LCA. A similar upgrade is planned for the Panevėžys GCS in the future. The modernisation of the Panevėžys GCS is planned to be completed by 2030.
Amber Grid implements GHG emission reduction initiatives and continuously reviews its environmental impact reduction plans to minimise its negative environmental impact and meet stakeholders' expectations. In 2021, the Company carried out a GHG emissions inventory and an overall environmental impact assessment. Based on the inventory results, a plan of mitigation measures up to 2030 was prepared and approved in 2022. In 2024, the GHG emission reduction plan was revised based on the annual plans and the work to be carried out, and the estimated emission savings were recalculated. The company has modelled its GHG emissions under various scenarios, including a climate scenario that limits global warming to 1.5 °C.# SCIENCE-BASED GHG REDUCTION TARGETS
Amber Grid aims to ensure that its GHG emission reduction targets are scientifically sound and compatible with the global goal of limiting global warming to 1.5 °C. The Company's emission reduction targets have been set in accordance with the Science Based Targets Initiative (SBTi) methodology, which is globally recognised and used to set targets that are consistent with climate change mitigation requirements. This methodology has been applied at a Group-wide level, ensuring consistency and scientific validity across all Group companies.
| Base year (2019) | 2025 target | 2026 target | 2030 target | |
|---|---|---|---|---|
| GHG emissions before reduction measures (Scope 1- 2) (tCO2e) | 62 921 | 59 363 | 62 411 | 67 387 |
| GHG emissions after reduction measures (Scope 1, 2) (tCO2e) | - | 56 629 | 44 045 | 31 461 |
| GHG emissions (Scope 1-2) (% change compared to base year) | - | - 10 % | - 30% | - 50% |
In 2024, the calculation factors for electricity and methane (CH₄) gases were updated to ensure more accurate emissions assessment and reduction planning. In June 2024, Amber Grid's natural gas calculation methodology, Consumption of Natural Gas for Technological Purposes in the AB Amber Grid Gas Transmission System, was changed and will be applied in the future. This methodology influences the calculation of uncontrolled natural gas emissions (Scope 1 emissions). The methodology has been adapted in light of changing legislation and Regulation (EU) No 2024/1787 of the European Parliament and of the Council on reducing methane emissions in the energy sector. The Regulation partially amends Regulation (EU) 2019/942 (the "Methane Regulation"), and the guidelines set out therein. Following the change in the calculation methodology and to ensure data comparability, the values for the base and follow-up years have been recalculated for reporting to SBTi. The recalculation of the emission factors and the change in the methodology resulted in a 17% reduction in base year emissions compared to the previously established value.
All measures included in the GHG emission reduction plan are documented and systematically monitored. Quarterly meetings are held with those responsible to ensure that the measures are implemented and that the timetables are met. The Company's Board assesses the achievement of the objectives on an annual basis. The assessment results become one of the components that determine the annual financial incentives for both managers and employees. The plans and associated risks are managed and included in Amber Grid's risk management register. Potential risks include: untimely or inaccurate collection and reporting of sustainability-related indicators; inaccurate calculation of GHG emissions in the Company's operations, and delays in reporting on the fulfilment of commitments to institutional investors. These risks can lead to sanctions from regulators (such as exchange supervisors) and financial penalties for non-compliance. The risk that the regulator's disapproval of necessary investments in environmental mitigation measures (e.g. GHG emission reductions) due to regulatory constraints or economic disadvantage may prevent the achievement of long-term strategic objectives and commitments.
Amber Grid is currently focusing on reducing Scope 1 and Scope 2 emissions, as these are the areas with the highest GHG emissions. The plan was designed to regulate activities in the most environmentally damaging areas. The Company has identified the most significant contributors to GHG emissions. These are controlled and uncontrolled releases of CH₄ from operations and stationary installations using natural gas (NG) for technological purposes. Scope 3 emissions were calculated for the first time in 2023 and accounted for 21% of total GHG emissions. In 2025, Amber Grid plans to analyse the most significant aspects of Scope 3 emission reductions and plan appropriate abatement actions.
The Methane Regulation, which entered into force on 4 August 2024, is one of the most important pieces of legislation contributing to Amber Grid's sustainability objectives. The Regulation promotes a culture of zero CH₄ emissions, sets stricter requirements to prevent methane leakage, and obliges effective measures to reduce methane emissions. Its implementation will directly impact infrastructure management, emissions monitoring, and the modernisation of the gas transmission system, ensuring greater transparency and compliance with EU climate policy objectives. The provisions of the Methane Regulation are directly related to Scope 1 emissions, which will significantly impact infrastructure maintenance and monitoring. The company aims to reduce uncontrolled releases of CH₄ by monitoring the performance of on-site equipment and to reduce controlled releases of CH₄ into the atmosphere by finding alternative solutions during repair and refurbishment works. For example, the aim is to return NG to the market instead of releasing it into the atmosphere. The Company also plans to refer to the implementing acts (standards) of the Methane Regulation, which should be issued within 18 months of the Regulation's entry into force. These standards will provide a common methodology for calculating CH₄ emissions and reporting on the calculation of these gases, as well as requirements for measures such as combustion equipment, methane leakage detection technologies, etc.
| 2021 | 2022 | Comparative 2022/21, % | 2023 | Comparative 2023/22, % | 2024 | Comparative 2024/23, % | |
|---|---|---|---|---|---|---|---|
| (1) Fuel consumption from coal and coal products (MWh) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| (2) Fuel consumption from crude oil and petroleum products (MWh) | 2836.84 | 2597.47 | -8.4% | 2868.98 | 10.5% | 2214.97 | -22.8% |
| (3) Fuel consumption from natural gas (MWh) | 32 682.3 | 78 352.69 | 139.7 % | 93 079.01 | 18.8% | 86 915.04 | -6.6% |
| (4) Fuel consumption from other fossil sources (MWh) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5) Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh) | 3 248.4 | 0 | 2 233.2 | - 31.3% | 57.3 | - 97.4 | 55.28 |
| (6) Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5) | 38 768.17 | 83 183.39 | 114.6 % | 96 005.29 | 15.4% | 89 185.29 | -7.1% |
| Share of fossil sources in total energy consumption (%) | 100.0 | 0 | 99.69 | - | 99.58 | - | 99.39 |
| (7) Consumption from nuclear sources (MWh) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Share of consumption from nuclear sources in total energy consumption (%) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (8) Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (9) Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh) | n/a | 1.96 | n/a | 1 883.8 | 3 | 0.00 | 1 874.18 |
| (10) The consumption of self-generated non-fuel renewable energy (MWh) | n/a | 288.51 | n/a | 492.71 | 0.00 | 512.33 | 4.0% |
| (11) Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10) | n/a | 290.47 | n/a | 2 376.54 | 0.00 | 2386,501 | 0.4% |
| Share of renewable sources in total energy consumption (%) | n/a | 0.09 | n/a | 0.64 | 0.00 | 0.79 | 24.7% |
| Total energy consumption (MWh) (calculated as the sum of lines 6, and 11) | 38 768.17 | 1 83 473.86 | 115.32% | 98 381.83 | 17.86 % | 91 571.79 | -6.92% |
| 2021 | 2022 | Comparative 2022/21 % | 2023 | Comparative 2023/22 % | 2024 | Comparative 2024/23 % | |
|---|---|---|---|---|---|---|---|
| Total energy consumption from activities in high climate impact sectors per net revenue from activities in high climate impact sectors (MWh/Eur) | 0.467 | 0.345 | -26.06% | 0.467 | 35.21% | 0.405 | -13.23% |
Notes:
1) According to the NACE codes, the Company's activities are classified under the following sectors, all of which are recognised as high climate impact sectors: Transportation of natural gas – D.35.22 Distribution of gaseous fuels through mains; Construction – F.42.99 construction of other civil engineering works n.e.c.# E1-6 GROSS SCOPES 1, 2, 3 AND TOTAL GHG EMISSIONS
The GHG emissions inventory is based on the Greenhouse Gas Protocol (GHG) and ESRS standards and recommendations. This report presents the estimated GHG emissions of the Company's activities, expressed in CO₂ equivalent. The calculation was based on the knowledge and methodologies of the market financial institutions and suppliers of energy resources. The assessment includes carbon dioxide (CO₂) and also other greenhouse gases such as methane (CH₄), nitrous oxide (N₂O), fluorinated gases (HFCs), which are converted to CO₂ equivalent using standard conversion factors. Emission consolidation method: operational control. The base year for the GHG calculation is 2019, as this was the first year that Amber Grid started to systematically measure and calculate emissions. 2019 Scope 1 and 2 GHG emissions were recalculated ( rebaselining ) per updated emission factors and a revised GHG calculation methodology in 2024. Recalculation has been carried out for the GHG emission data from 2020 to 2023 to ensure comparability of the data and to track the progress of the Group accurately. This update allows for a more accurate assessment of emission changes, consistent monitoring of emission reductions in line with the SBTi methodology and compliance with industry best practices and regulatory requirements.
Emission factors (EFs) have been selected based on reliable sources and national and international guidelines, with preference given to the geographically closest data. When deciding which factors to apply, the EFs provided by the supplier are prioritised first; if these are unavailable, the EFs nearest to the area are considered (Lithuanian data are preferred), and if these are not accessible, the most recently available EFs are utilised.
Sources of emission factors used:
* Global Warming Potential Values (GWPVs) set by the Intergovernmental Panel on Climate Change (IPCC).
* UK Department for Environment, Food and Rural Affairs (DEFRA) databases.
* Association of Issuing Bodies (AIB) databases.
* One Click LCA databases.
* Exiobase databases.
The disclosure of Scope 3 GHG emissions is subject to reporting scope and methods for calculating GHG emissions. Within this Scope, the Company has six emission categories:
The emission factors (EFs) from the Exiobase database are used to calculate emissions in these categories. The financial EFs are stable with minimal year-on-year variations. If the most recent EFs are not available or are difficult to obtain, average annual inflation is estimated, adjusted for the previous year's EFs, and used for the annual calculations.
This category includes emissions from transporting the fuel from the point of extraction to the point of sale, energy transmission losses to purchasing organisations and emissions from electricity and heat consumption (central heating). The data is taken from Scope 1 and Scope 2 emission calculation activity data and the EF is taken from the DEFRA database.
The calculation of emissions is based on accounting logs and information provided by contractors. The calculations apply annual waste generation and emissions are assessed for each waste category. EFs are also taken from the DEFRA database.
Emissions in this category are calculated on the basis of the travel tally of the Company's employees. The data includes:
* Flights flown (distance travelled by plane, km).
* Overnight stays in hotels.
All kilometres travelled (domestic and international long-distance) and hotel nights are multiplied by the corresponding EFs taken from the DEFRA database.
These emissions are calculated using data on the number of employees in the company and EF from the Statista and Climate Analytics databases. According to Statista Lithuania, around 94.3% of employees travel to work by car. Emissions are calculated by multiplying the total number of employees by the share of the mode of transport used and EF per employee.
| Emission type | Base year 2019 | 2021 | 2022 | 2023 | 2024 | Comparative 2024/2022 |
|---|---|---|---|---|---|---|
| Scope 1 GHG emissions | ||||||
| Gross Scope 1 GHG emissions (tCO2eq) | 61 772.29 | 51 569.15 | 22 694.96 | 39 971.75 | 28261.988 | -33510.298 |
| Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) | 7.19 | 0.79 | 12.04 | 35.64 | 23.51 | 16,317 |
| Scope 2 GHG emissions | ||||||
| Gross market-based Scope 2 GHG emissions (tCO2eq) | 1148.39 | 1212.66 | 1003.22 | 2.83 | 4.53 | -1143.85 |
| Gross location-based Scope 2 GHG emissions (tCO2eq) | 483.50 | 795.00 | 515.40 | 289.20 | 283.30 | -200.20 |
| Significant Scope 3 GHG emissions | ||||||
| Total Gross indirect (Scope 3) GHG emissions (tCO2eq) | - | - | 7 972.99 | 12 984.50 | 6007.670 | 1965.325 |
| 1. Purchased goods and services | - | - | 936.49 | 1 670.54 | 1220.405 | 283.914 |
| [Optional subcategory: Cloud computing and data centre services] | - | - | - | - | - | - |
| 2. Capital goods | - | - | 3 706.97 | 8 158.01 | 1584.387 | -723.63 |
| 3. Fuel and energy-related activities (not included in Scope 1 or 2). | - | - | 2 975.50 | 2 815.62 | 2839 | 7.84 |
| 4. Upstream transportation and distribution | - | - | - | - | - | - |
| 5. Waste generated in operations | - | - | 32.73 | 66.52 | 3.53 | -29.206 |
| 6. Business traveling | - | - | 53.98 | 24.69 | 39.029 | -14.948 |
| 7. Employee commuting | - | - | 267.32 | 249.12 | 367.004 | 99.680 |
| 8. Upstream leased assets | - | - | - | - | - | - |
| 9. Downstream transportation | - | - | - | - | - | - |
| 10. Processing of sold products | - | - | - | - | - | - |
| 11. Use of sold products | - | - | - | - | - | - |
| Total GHG emissions (tCO2eq) | ||||||
| Total GHG emissions (location- based) (tCO₂e) | 62 255.77 | 52 364.15 | 31 183.32 | 53 245.44 | 34 552.95 | 27 702.82 |
| Total GHG emissions (market- based) (tCO₂e) | 62 920.67 | 52 781.81 | 31 671.17 | 52 959.08 | 34 274.19 | 28 646.48 |
Note: Amber Grid does not own any other companies and therefore does not allocate additional GHG emissions. The definition of the Company and its value chain has not changed substantially since the base year, so there is no impact on GHG comparability.
| 2021 | Comparative 2022/21, % | 2022 | Comparative 2023/22, % | 2023 | Comparative 2024/23, % | 2024 | |
|---|---|---|---|---|---|---|---|
| Energy intensity per net revenue | |||||||
| Total GHG emissions (location- based) per net revenue (tCO2eq/Eur) | 0.078 | -58.74% | 0.032 | 102.90% | 0.065 | -28.46% | 0.047 |
| Total GHG emissions (market- based) per net revenue (tCO2eq/Eur) | 0.079 | -58.42% | 0.033 | 98.70% | 0.065 | -28.65% | 0.046 |
Note: Lines in the financial statements disclosing the amount of revenue used to calculate the GHG intensity indicator: Data for 2024 are reported in 25 page (“Revenue”) and 26 (“Other income”). Data for 2023 are reported in 31 December 2023 financial statements, paragraphs 28 ("Revenue") and 29 ("Other income"); for 2022 – paragraphs 27 and 28; and for 2021 – paragraphs 15 and 16. Financial statements and announcements are made public on the Company’s website.
The Company does not have such a practice and does not disclose relevant information.
The Company does not have such a practice and does not disclose relevant information.
The DMA of the EPSO-G Group has shown that pollution is not a material topic at the group level. Nevertheless, Amber Grid plans to further assess its relevance in the context of the Company in 2025. To ensure completeness and transparency, Amber Grid provides information on the management of pollution-related impacts and risks in this report.
The Company's pollution-related impacts are managed through the implementation of the Environmental Policy, which applies to all companies in the EPSO-G Group. The policy commits to operating in compliance with all mandatory environmental legislation, continuously assessing risks, developing prevention plans and working towards avoiding significant environmental incidents in the Group's operations. In addition, the aim is to continuously build and reinforce a culture of zero tolerance to environmental pollution and zero environmental incidents. Company employees are made aware of the Environmental Policy and encouraged to comply with it. The policy is published publicly on Amber Grid's website.
The Company imposes additional environmental requirements in the area of pollution prevention in its projects to ensure that partners (contractors) are not only familiar with, but also effectively apply measures to prevent air, water and soil pollution.
Other procedures in place at the Company for pollution incidents and/or management actions in the event of an emergency:
MODERNISATION OF JAUNIŪNAI AND PANEVĖŽYS GAS COMPRESSOR STATIONS
In 2023, an efficiency improvement analysis of the Jauniūnai and Panevėžys gas compressor stations carried out by external consultants showed that the most appropriate way to reduce fuel consumption and emissions to ambient air at the stations was through the installation of new electrical units. Replacing the gas compressor units at Jauniūnai Compressor Station with new electric compressors – designed to operate without fossil fuels and to assume most of the workload from the gas compressors – should result in a substantial reduction in air pollution from the site. In addition, emission limit values will apply to the compressor units of the Panevėžys Gas Compressor Station (PDCS) or existing medium-sized combustion plants from 1 January 2030. The emission limit value for nitrogen oxides (NOₓ) will be 150 mg/Nm³ from 1 January 2030. Consequently, to meet the new environmental requirements, upgrade outdated equipment, and optimise the operation of the transmission system, Amber Grid has decided to commence the replacement of the compressor units installed in the PDKS since 1974 with new, power-driven gas compressors. The project "Modernisation of the Panevėžys Gas Compressor Station", scheduled for 2025 to 2029, includes a new gas pumping station with associated facilities meeting environmental requirements and the Green Deal.
The table below presents the quantities of pollutants emitted by the Company's air pollution sources, as specified in Regulation (EU) 166/2006. Emission levels from 2021 to 2024 remained within the limits established by this Regulation. In 2024, fewer pollutants were emitted than in 2022. In 2022, following the commissioning of the newly built Gas Interconnection Poland-Lithuania, the operation of the plants was not yet well established or fully optimised. This led to increased fuel consumption in stationary plants and, consequently, higher emissions into the ambient air. By 2023, stationary installations at gas compressor stations, gas distribution stations, operated more consistently, resulting in more efficient fuel use.
| Pollutants (excluding greenhouse gases) | Threshold for releases* | Pollutants released to air kg/year | |||
|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | ||
| Carbon monoxide (CO) | 500 000 | 46 029 | 51 010 | 73 300 | 35 210 |
| Nitrogen oxides (NOₓ / NO₂) | 100 000 | 29 254 | 35 000 | 58 600 | 27 300 |
Note: * In accordance with the release threshold laid down in Annex II to Regulation (EC) No 166/2006.
Monitoring of air pollution sources in the Panevėžys and Jauniūnai LCAs is conducted in accordance with the monitoring programmes approved by the Environmental Protection Agency (EPA). This is carried out in compliance with the requirements of the Law on Environmental Monitoring and in consideration of the conditions and requirements of Integrated Pollution Prevention and Control (IPPC) and pollution permits (IP). Monitoring of stationary air pollution sources is conducted quarterly, following the approved monitoring programmes and taking into account the operating hours of the compressors. Additionally, measurements of air emissions from mobile pollution sources (boilers) are performed at gas distribution stations to ensure their proper operation. Periodic measurements are carried out by a laboratory authorised to perform the necessary tests using accredited methods. Air pollutant data is collected using calculation methodologies approved by the Environmental Protection Agency for IPPC and pollution permits. Pollutant calculations are conducted monthly, and the data is monitored and published in the Company’s internal system reports.
The topic of Water and Marine Resources is currently considered non-material for Amber Grid. The Company uses water solely for employees' domestic needs and for filling fire tanks. Due to the Company's low water consumption, it was not included in the DMA matrix. Amber Grid ensures proper wastewater treatment and water pollution prevention by regularly monitoring the operation of its water treatment plants.
The Company strives to balance infrastructure development with biodiversity conservation in its activities. Therefore, special attention is given to environmental principles in development projects. The Company continuously assesses the impact of its activities on nature and implements measures to minimise negative effects on ecosystems and biodiversity. Environmental impact assessments are conducted during the infrastructure development phases, considering the need to conserve species populations and maintain ecosystem health. The table below lists the material impacts and risks related to biodiversity identified by the Company.
| Company’s impacts, risks and opportunities related to biodiversity. | Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|---|
| Land-use changes, changes in freshwater use, and changes in marine use | Actual negative impacts are related to land-use changes resulting from the impact of network infrastructure on ecosystems. * ** Species population size | Potential negative impacts may be related to the development and maintenance of network infrastructure. * ** *No material risks and/or opportunities identified. | **Impact on sustainability topics arises directly in the Company's operations, so location in the value chain is not indicated. |
A balance of vegetation, green space, and soil sealing is maintained at most Amber Grid sites and their surroundings. The sites are not fully paved, with many using water-permeable rubble, and vegetation is preserved wherever pipeline operation, fire safety, and legal requirements allow. In accordance with the State Service for Protected Areas, the following table provides information on Amber Grid's GCS, GDS, and gas metering stations, as well as pipelines that are within, adjacent to, or crossing protected areas and sites with a 25-metre buffer zone. In total, the Company's stations are adjacent to three protected areas and, according to the Cadastre of Rivers, Lakes, and Ponds of the Republic of Lithuania, cross the Luponė stream. The Company's main pipeline extends across the entire territory of Lithuania, crossing 414 rivers and nine ponds, entering 41 nature reserves, two botanical natural heritage sites, five biosphere polygons, and 52 areas important for habitat protection. As monitoring has not been conducted at all Amber Grid sites, precise information on potential biodiversity impacts is unavailable. However, monitoring of the GIPL pipeline (2021–2024) has shown that construction had no significant negative environmental impact. Biodiversity is recovering naturally, considering the effects of climate change and other anthropogenic activities in the vicinity of the Company's facilities.
| Boundaries of the pipeline and its buffer zone with protected areas. | Stations and protection zones | Gas pipeline and protection zone | Territories important for the protection of habitats | Out of scope # E4 BIODIVERSITY AND ECOSYSTEMS
Biodiversity conservation is one of the strategic objectives of the EPSO-G Group, ensuring that its activities do not have a negative impact on biodiversity. At present, the Group does not have a biodiversity mitigation plan (Biodiversity Transition Plan).
The Company does not have a separate policy for managing impacts, risks, and dependencies on natural resources related to biodiversity and ecosystems. Currently, it follows a Group-wide Environmental Policy, which is set to be updated in 2025. The Group adheres to the following principles and plans to integrate them into its policy documents:
The Company also follows the Group’s Sustainability Policy to manage its impact on biodiversity and ecosystems. The Group is committed to biodiversity protection by conducting monitoring where necessary and, in cases of unavoidable circumstances, implementing mitigation or compensation measures. These commitments aim to minimise or fully offset Amber Grid’s impact on biodiversity and ecosystems. Additionally, the Company is dedicated to addressing the social consequences of its impact on biodiversity and ecosystems in line with the principles of responsible business conduct. Risks are continuously assessed, prevention plans are developed, and a culture of zero environmental incidents is promoted. The Company places strong emphasis on the environmental competencies of its employees, engaging with local communities, stakeholders, and partners to ensure their involvement. Environmental initiatives are communicated publicly, and the Company actively implements such initiatives, encouraging employee participation and enhancing their expertise in nature conservation.
Amber Grid assesses and manages the impact of its activities on biodiversity through a range of measures, including environmental monitoring, Environmental Impact Assessment (EIA) documents and Natura 2000 site assessments. The Company complies with legal requirements, monitors environmental impacts and actively engages with stakeholders.
After the completion of the Gas Interconnection Poland–Lithuania (GIPL) in 2022, post-construction monitoring of the individual stages has been carried out for 4 years in accordance with the environmental monitoring programme agreed with the Environmental Protection Agency (EPA) in 2016. The monitoring plan is not limited to monitoring the status of surface water bodies (the rivers Musė, Strėva and Lapainios). It also covers monitoring of the landscape and state of birds (western marsh harrier, Montagu's harrier, spotted crake, common crane, lesser spotted eagle, black stork, middle spotted woodpecker), fish (protected species in the Strėva, Verknė and Lapainis rivers: Thymallus thymallus, Alburnoides bipunctatus, Amur bitterling, Spined loach, European bullhead), insects (Geranium argus, False heath fritillary, Woodland brown, Large white-faced darter, Large copper) reptiles (European pond turtle, European fire-bellied toad); emergence, spread, and vegetation cover of invasive species (Heracleum sosnowskyi, Boxelder maple, Large-leaved lupine, Canada goldenrod). Four years of monitoring have shown that the construction of the gas pipeline link between Lithuania and Poland had no significant negative impacts on the environment. Biodiversity is recovering naturally, as expected. Changes to natural habitats of the European Community (EC) importance in the area affected by the pipeline are also being recorded and assessed following the construction of the GIPL link. The number of plant species remained almost unchanged during the monitoring period, and no significant changes in the composition of the flora were detected. This indicates that the damaged part of the habitat meadow is recovering and that the restoration process has already started.
The Group aims to prevent negative impacts on biodiversity by adhering to a hierarchy of avoidance and mitigation measures and by implementing the commitments outlined under disclosure requirement E4-1. At present, no additional measurable targets are foreseen, unless a need for them is identified in new EIA documents or monitoring reports.
The Company has identified no negative impacts on biodiversity from its sites adjacent to areas of biodiversity sensitivity. The Company has no biodiversity and ecosystem-related impact indicators identified at this stage.
Amber Grid manages the resources used in its operations responsibly and strives to minimise waste throughout the value chain. Recognising that infrastructure development can have additional environmental impacts, the Company places great emphasis on resource efficiency and proper waste management. A range of measures is in place to optimise the use of raw materials, promote recycling, and reduce waste. Ongoing environmental impact assessments are conducted to identify potential risks in a timely manner and ensure that resource flows related to products and services are managed responsibly and sustainably. The table below summarises the key sustainability topics related to resource use and waste management, their impacts, potential risks, and their location within the value chain.
| Material impacts and risks related to the circular economy | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|
| Resource inflows, including resource use. | Resource outflows related to products and services. Potential negative impacts relate to the envisaged expansion of energy transmission infrastructure. | - * | - ** |
| Waste | Actual negative impacts arise from waste generated by the Group's activities and throughout the value chain. | - * | Upstream and downstream value chain |
* No material risks/opportunities identified.
** Impact on sustainability topics arises directly from the Company’s operations, so no value chain location is indicated.
The Company's pollution-related impacts are managed through the implementation of the Environmental Policy, which applies to all EPSO-G Group companies. Under this policy, the Company is committed to applying pollution prevention principles, reducing waste, and ensuring its safe and responsible management. The implementation of the Environmental Policy is overseen by the Group's company managers and Environmental Functional Supervisors. Together with the Group, the Company has set objectives for responsible supply chain management, with a key focus on ensuring a sustainable supply chain and financial stability.# E5-2 - ACTIONS AND RESOURCES RELATED TO RESOURCE USE AND CIRCULAR ECONOMY
The Company is continuously taking steps to improve resource efficiency and promote a circular economy, thereby reducing its environmental impact:
One of the key objectives for 2025 is to establish a sustainable and responsible supply chain. The planned actions for 2025 include:
The Company is committed to ensuring that waste generated from the operation and maintenance of the gas transmission network is managed in line with circular economy principles:
The Company and the Group have set ambitious long-term goals for responsible supply chain management. The primary objective is to establish a sustainable, environmentally friendly supply chain while ensuring efficient financial management. One of the key targets is to ensure that by 2035, at least 50% of contracts are awarded to suppliers that commit to reducing their greenhouse gas (GHG) emissions and adopting environmentally friendly practices. This initiative not only aims to minimise indirect environmental impacts but also encourages suppliers to contribute to climate change mitigation goals. Additionally, the Group plans to transition to a circular procurement model by 2035, prioritising renewable, recyclable, and sustainable materials. This approach will help reduce waste, enhance resource efficiency, and ensure responsible and effective supply chain operations.
The Company’s operations require a wide range of technical materials and equipment to ensure safe and reliable service delivery, including the maintenance and repair of the gas transmission network. The selection and use of these materials and equipment are based on high quality and sustainability standards to optimise operational processes and minimise environmental impact.
Main technical materials used:
Equipment used for network maintenance and repair:
The Company continuously reviews and enhances its material and equipment management processes to ensure operational efficiency, environmental compliance, and contribute to the sustainable development of the gas transmission network.
The primary resource required for the Company’s operations is natural gas. In 2024, 433,117 MWh of natural gas was consumed for operational processes and other uses. At present, Amber Grid does not have data on the total weight (in tonnes) of other resources consumed during the reporting period.
The Company's natural gas transmission activities generate specific waste streams, including metal, construction and insulation materials, petroleum products, and electronic waste. All waste is segregated and either sent to certified recyclers or managed in compliance with hazardous waste regulations. The goal is to minimise environmental impact and promote a circular economy. Metal waste generated during the replacement of sections of the main gas pipeline is handed over to specialised metal collectors. Waste flow data is regularly obtained from waste handlers and recyclers, based on formal transfer notes provided by contractors and certified waste collectors. These processes ensure transparent waste management and support the Company's commitment to operating responsibly and sustainably, minimising environmental impact, and using natural resources efficiently.
| Waste generated, t | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | 451.99 | 3 076.75 | 1 170.24 | 78.23 |
| Hazardous | 25.67 | 40.76 | 28.66 | 38.10 |
| Non-hazardous | 426.32 | 3 035.99 | 1 141.58 | 40.12 |
| Waste diverted to recycling | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | 393.10 | 3 041.63 | 1 102.63 | 61.78 |
| Hazardous | 0.00 | 13.79 | 12.53 | 26.75 |
| Non-hazardous | 393.10 | 3 027.84 | 1 090.11 | 35.13 |
| Waste diverted to reuse | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | Not available | Not available | Not available | Not available |
| Waste diverted to other recovery operations* | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | 28.38 | 0.00 | 0.00 | 0.00 |
| Hazardous | 15.72 | 0.00 | 0.00 | 0.00 |
| Non-hazardous | 12.66 | 0.00 | 0.00 | 0.00 |
| Waste directed to disposal (combustion with energy recovery) | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | 28.38 | 32.77 | 39.57 | 13.88 |
| Hazardous | 15.72 | 26.97 | 16.14 | 11.36 |
| Non-hazardous | 12.66 | 5.80 | 23.43 | 2.52 |
| Waste directed for disposal (landfill) | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total amount | 1.69 | 2.35 | 28.04 | 2.47 |
| Hazardous | 0,00 | 0.00 | 0.00 | 0.00 |
| Non-hazardous | 1.69 | 2.35 | 28.04 | 2.47 |
Comments: The Company’s activities do not generate radioactive waste. * According to the report submitted by the waste handler, in compliance with the Waste Management Regulations and waste disposal codes, most of the waste is classified under recovery code R12. This indicates that the waste is being recycled or reprocessed before undergoing any of the activities listed under codes R1–R11. The R-code classification (R1–R12) refers to waste recovery processes, which include recycling, reclamation, and other forms of reuse. In 2024, the amount of non-hazardous waste was seven times lower than in 2023. As mentioned earlier, waste flow and volume are significantly influenced by the projects and maintenance works carried out during the reporting year. More than 80% of the waste generated by the Company consists of metallic waste, primarily produced during the reconstruction of main gas pipelines (MG). Given the lower volume of MG reconstruction projects in 2024, a corresponding decrease in waste generation was recorded. As in previous periods, the vast majority of waste (93% in 2024) was diverted to recycling or other recovery operations.
| Non-recycled waste* | Total amount, t | Share, % |
|---|---|---|
| 2024 | 30.07 | 6.65 |
| 2023 | 32.12 | 1.14 |
| 2022 | 67.61 | 5.78 |
| 2021 | 16.35 | 20.91 |
Notes: * Non-recycled waste is the amount of waste that is sent for disposal. In this case, according to the definition of the ESRS standard, non-recycled waste is that which has been disposed of and has not been diverted into recycling or recovery operations.# SOCIAL AREA S1 OWN WORKFORCE SBM-3, S1
The Company recognises that employee well-being is important both for sustainable business development and for long-term success. Therefore, employee-related sustainability issues are continuously monitored and evaluated to ensure a safe, inclusive and motivating working environment. The Company actively seeks to ensure that employees are provided with the necessary support and conditions to develop and that potential risks are identified and managed in a timely manner. Sustainability matters related to employees, which are addressed in this part of the report, include work-life balance, fair pay, health and safety measures, training and development opportunities, and the promotion of diversity and inclusion. The Company places great emphasis on protecting privacy and strives to create an environment where every employee feels respected, valued, and safe. The table below summarises the main sustainability topics related to employees and the related impacts, risks, and opportunities.
| Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|
| Working time. Work-life balance | Actual negative impact on workers operating in outdoor conditions (non-administrative jobs). | - -* | |
| Adequate wages | Actual positive impact due to a transparent remuneration policy. | - -* | |
| Social dialogue. Freedom of association, the existence of work councils and employees’ rights to be informed, consulted, and to participate. Collective bargaining, including the share of employees covered by collective agreements. | Actual positive impact is created through open and active communication and communication with trade unions, work councils, and workers. | - -* | |
| Health and safety | Potential negative impact on workers' health and safety due to specific working conditions, especially for those working on- site and in outdoor environments. Risks arise from non-compliance with health and safety requirements. | -** | |
| Training and skills development | Actual positive impact arises from the provision of internal and external skill development programs (including soft skills) and job improvement programs for all employees within the Group. | - -* | |
| Employment and inclusion of persons with disabilities | Actual negative impact due to minimal inclusion of people with disabilities. | - -* | |
| Privacy | Potential negative impact due to the improper processing of personal data, including by third parties, and personal data breaches, which may adversely affect employees' rights as data subjects. | - -* |
*No material risks/opportunities identified.
**The impact arises in own operations and therefore the location of the value chain is not specified.
The Company's employees are exposed to a high-risk working environment when working outdoors, in civil engineering structures (e.g. GDS, GCS) and in safety zones where gas pipeline operations are carried out. As a result, Amber Grid pays particular attention to their safety, training, and professional development. To ensure the highest safety standards, employees regularly receive specialised professional and technical training to keep their knowledge and skills up to date. Practical exercises are also carried out to give employees the skills that are relevant to real-life situations.
Amber Grid has carried out a detailed analysis of the potential hazards and risks related to the impact of natural gas transmission system disruptions on third parties. In addition, an Emergency Management Plan has been prepared to organise the localisation and response of events. The staff involved in these procedures are properly trained and instructed and practical exercises are carried out each year to reinforce their preparedness to respond to emergencies.
The Company has assessed the occupational risks for all employees, identifying potential adverse health effects and providing effective risk reduction and management measures. The occupational risk assessment is periodically updated to take account of changes in working conditions and the latest safety practices. This safety management system ensures that Amber Grid's employees are well prepared, informed, and protected in challenging conditions. In addition, the Company carries out remote monitoring of gas pipelines, which allows it to promptly identify potential risks and ensure the safety and efficient management of infrastructure.
The Company's activities are guided by the highest ethical and human rights standards in accordance with international principles and national legislation. The United Nations Guiding Principles on Business and Human Rights, the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises are applied in the organisation's activities. These principles are integrated into internal policy documents, including the Code of Ethics, the Equal Opportunities Policy, the Remuneration, Performance Appraisal, Development Policy, and the Policy on Prevention of Discrimination, Harassment, and Violence. This ensures a clear and consistent approach to building respectful, fair, and responsible working relationships.
The Company strives to create an inclusive work environment where every employee feels valued, respected, and has equal opportunities. This is achieved through a Diversity and Inclusion Strategy, which includes the inclusion of diverse groups in the labour market, the strengthening of managerial competences, and the application of transparent and objective selection processes. Employees are actively encouraged to participate in inclusion initiatives, such as sharing personal stories, and training and events, which contribute to building a tolerant and open organisational culture.
Any form of discrimination, harassment, psychological violence, or mobbing is not tolerated in Amber Grid's operations. The Company shall ensure that the working environment is free from discrimination regardless of gender, age, nationality, disability, religion, or other factors. Harassment, psychological violence, and abuse of position shall be prevented. Ensuring that all employees work in a respectful, safe, and supportive environment. The Company's employment relationship is based on equal opportunities, respect, and dignity. Every employee is provided not only with safe working conditions that meet their needs, but also with opportunities for professional and personal development. The Company's policy is that every member of the organisation, regardless of their position, is responsible for a respectful and safe working environment. Even in the absence of obvious signs of discrimination, harassment or violence, the Company actively promotes a positive organisational culture, reinforces prevention, and ensures the well-being of employees.
The Company's Code of Conduct clearly defines the principles that ensure fair, responsible, and ethical behaviour within the organisation. The Code states that communication should be cordial, respectful and fact-based. It ensures the protection of personal dignity, privacy, and reputation, and strictly prohibits any discrimination based on sex, ethnic origin, age, religious beliefs, political opinions, sexual orientation, marital status, disability, or any other characteristics. Where legislation or the Code of Conduct does not provide a clear standard of conduct in certain situations, staff are encouraged to apply the highest standards of integrity, reliability, and transparency. The Company strives to create an organisational culture in which ethical behaviour is not only the rule, but also a daily practice.
The Group has an Equal Opportunities Policy, which complies with the United Nations Sustainable Development Goals and national legislation. Amber Grid actively supports and participates in social initiatives aimed at ensuring human rights and equal opportunities for all employees. The policy ensures that:
The company has a Discrimination, Harassment, and Violence Prevention Procedure, which includes specific measures to prevent intolerable behaviour. It provides for the appointment of responsible persons, training, and information dissemination to raise awareness and ensure a safe working environment. Workers are encouraged to report observed violations through anonymous reporting channels. To improve the effectiveness of prevention activities, the Company organises regular training for both employees and managers. This training includes practical situations and concrete examples of how to recognise and avoid discrimination or harassment.
The organisation has a permanent monitoring system to prevent discrimination. All reports of possible violations received are analysed to identify risk factors and improve internal processes. The Company has an active trade union representing the interests of its employees and participating in decision-making concerning their welfare, working conditions, and rights.# S1 – GOVERNANCE AND MATERIAL TOPICS OF THE COMPANY
The Company also pays particular attention to supply chain management, ensuring that human rights and labour protection principles are applied to all partners and suppliers. In 2025, Amber Grid plans to seek the Equal Opportunities Ombudsperson’s recognition – the 'Equal Opportunities Wings' award – which would confirm the organisation’s efforts to create an equitable, safe, and inclusive working environment for all employees.
The Company implements a range of measures to promote employee involvement in the organisation, ensuring their rights, well-being, and ability to influence decision-making. Channels for employee feedback and suggestions:
* Employee engagement surveys – regular surveys to gather employees' views on working conditions, motivation, and opportunities for improvement.
* Annual interviews with line managers – one-to-one meetings to discuss each employee's contribution, professional development, and aspects of improving the working environment.
* Performance evaluation questionnaires – an opportunity to anonymously express employees’ views on work processes, management support, and personal career prospects.
* The annual top management meetings with employees – provide a direct opportunity for employees to raise important issues and make suggestions on strategic issues for the organisation.
OPERATION WITH TRADE UNIONS AND EMPLOYEE REPRESENTATIVES
The Company has a collective agreement with the trade union/employee representatives that provides information and consultation on planned workforce changes. This includes changes in work organisation, changes in remuneration policy, and other decisions that may affect employees' interests. The Company maintains an ongoing dialogue with the trade union:
* Responsible person – the Head of Organisational Development coordinates the cooperation.
* Regular communication – both written and verbal, inviting people to collective bargaining, consultations, and informing them of changes in the organisation.
* Meetings – quarterly meetings with trade union representatives were organised in 2023 and 2024 to discuss:
* Implementation of the collective agreement.
* Results of the Employee Engagement Survey.
* Remuneration policy.
* Consultations on redundancies and other important issues.
ASSESSING THE EFFECTIVENESS OF EMPLOYEE ENGAGEMENT
The Company continuously analyses the effectiveness of its employee engagement measures based on:
* Results of employee engagement surveys.
* Information gathered during the annual interviews.
* Expert judgement.
These measures help to ensure that workers' voices are heard, their interests are represented, and the organisation's decisions are taken in a way that considers social responsibility and the well-being of workers. The Company adheres to the EPSO-G Group policy, developing its activities in line with the guidelines and principles set out in the Group's sustainability documents.
Amber Grid has processes in place to prevent and manage negative impacts. If the Company's activities cause adverse impacts or if employees are exposed to inappropriate behaviour, they can raise their concerns and make reports through the following channels:
If they are temporarily absent, the information can be provided to their designated replacements.
These channels are available to all employees of the Company. Reports can be made both by those who have direct experience of the situation and by those who have observed misconduct or received information about possible violations. Reports may be made anonymously or by revealing your identity, depending on the method chosen. In addition, employee suggestions and concerns are conveyed to the Company by the Trade Union, fostering a constructive dialogue between employees and management.
HANDLING AND PROTECTING NOTIFICATIONS
The Company has integrated monitoring and performance assurance processes to ensure that reporting channels are legal, accessible, transparent, and are based on the protection of workers' rights. All whistleblowing reports received are dealt with in accordance with the mechanisms established at Group level, ensuring a prompt response and the implementation of appropriate actions. Employees have access to all internal legislation relevant to their work, including:
* Procedures for the prevention of discrimination, violence and/or harassment, and sexual harassment.
* Other policies related to employee rights and work culture.
These documents are filed in the Company's document management system and are available to all employees for review.
PROTECTION OF WHISTLEBLOWERS
Whistleblower protection is described in detail in disclosure G1-1 of this report. The Company shall ensure the safe and confidential handling of reports and the protection of whistleblowers and other informants from any possible discrimination or adverse consequences as a result of the information provided.
The Company implements consistent and targeted actions to manage employee-related impacts, risks, and opportunities in order to ensure the well-being of its employees, promote their professional development, create a safe and supportive working environment, and guarantee equal opportunities for all without exception.
DIVERSITY, EQUALITY, AND INCLUSION
Actions and initiatives in recent years have contributed to increasing employee engagement, building trust in the organisation and ensuring consistent implementation of policies. A Diversity and Inclusion Strategy was developed and launched in 2024 to promote equality, inclusion, and tolerance in all areas of the Group's operations. Progress and achievements:
* New e-learning course 'Diversity and Inclusion: Equal Opportunities at Work' was introduced to employees, with approximately 60% of Amber Grid employees successfully completing it by the end of 2024.
* Between 2023 and 2024, more than 80% of the Company's employees received diversity and equal opportunities training to raise awareness and foster an inclusive work environment.
* The Equal Opportunities Month events, discussions, and training sessions in November raised staff awareness of the importance of equal opportunities and encouraged them to become more involved in equal opportunities initiatives.
By 2027, Amber Grid will implement the following measures to promote equal opportunities:
* Employee survey and Equal Opportunities Ruler – to measure organisation's progress.
* Diversity and Inclusion Ambassadors Club – to promote employee engagement.
* Consistent communication and training – for both employees and managers.
* Creating an equal opportunities space on the intranet – to increase accessibility of information.
* Mentoring programme - for employee development and career progression.
EMPLOYEE ENGAGEMENT SURVEY
Amber Grid's Employee Engagement Survey, conducted in January 2024, attracted a very high level of participation, with 96% of employees expressing their opinion. This high level of engagement confirms that employees take an active interest in the organisation's activities and want to contribute to improving the working environment. The survey assesses key aspects of the working environment: work/leisure balance, opportunities for learning and professional development, equal opportunities, reward system, and overall satisfaction with working conditions. Given the importance of the survey for the growth of the organisation, the Employee Engagement Survey is planned to be carried out on an annual basis in order to systematically analyse the situation and make data-driven decisions.
WORK-LIFE BALANCE
According to the 2024 Employee Engagement Survey, employees have a positive attitude towards work- life balance. In order to maintain this positive perception and to further enhance the well-being of employees, the Company is continuing to apply a hybrid working model, allowing some work to be delivered remotely at certain times in the week. This allows employees to flexibly combine professional and personal needs. In addition, in 2024, the Company has made it possible for employees to work remotely from abroad for a period of time. 10 employees have already used this option and their experience shows that this model is convenient and contributes to increasing motivation and engagement. To ensure a balance between work and rest, the Company keeps track of fixed working and rest times, which are documented in timesheets. For greater transparency, monthly reports will be made available to each head of unit from 2024. This practice will continue in 2025, ensuring the long-term well-being and productivity of employees. A review of the documents governing working time and rest periods was launched in 2024 in response to the changing needs of work organisation and recent changes in legislation. The following provisions are currently under review: Work Regulations, Procedure for Filling in Working Time Records, and Procedure for Passive On-Call Duty at Home.These changes are expected to contribute to a more effective work-life balance and to a positive working environment.
REMUNERATION
In 2024, the Company has successfully fulfilled all its obligations to employees under the current Remuneration Policy:
The Company's remuneration system ensures that pay is transparent, fair, and equally accessible to all employees, regardless of their personal or social characteristics.
Key principles of the reward system:
These principles ensure that every employee in the Company is properly valued, motivated, and has clear prospects for both career and financial growth.
EMPLOYEE PERFORMANCE EVALUATION
In 2024, the Company organised employee performance evaluation calibration sessions for the first time. During these sessions, managers from different departments jointly reviewed and aligned employee performance assessment results to ensure objectivity, transparency, and a unified evaluation standard across the organisation.
The main objectives of the calibration sessions:
Based on the positive results of the first sessions and feedback from employees and managers, the calibration process will be continued and improved in the coming year.
ADDITIONAL HEALTH INSURANCE
In 2024, the Company decided to increase funding for voluntary health insurance for employees. This decision was made in response to rising healthcare costs, ensuring that employees continue to have access to the same comprehensive package of services as in previous years. Health insurance is not only an additional benefit but also a key motivator and a vital employee well-being tool. The Company is committed to continuously monitoring market trends and, when necessary, improving insurance terms and conditions to maintain the accessibility and quality of healthcare services for all employees. Moving forward, the Company will continue to prioritise employees' access to the best possible healthcare options, supporting their long-term well-being and job satisfaction.
WORKERS' REPRESENTATIVES FOR HEALTH AND SAFETY
The Company has an active system of workers' representatives to ensure that every employee's interests in occupational safety and health are represented. Currently, this role is fulfilled by 14 employee representatives, who have a mandate to actively contribute to a safe and healthy working environment. In addition, the Company has an Occupational Health and Safety Committee that collaborates closely with employee representatives to continuously improve safety processes. All employees are encouraged to share observations, suggestions, or concerns regarding workplace safety and health. Workers' representatives play an active role in key health and safety decisions. They participate in discussions and decision-making on matters such as occupational risk assessment, the selection of personal protective equipment (PPE), and the implementation of drink-driving prevention measures. This approach ensures that employees are not only heard but also actively contribute to their own well-being and that of their colleagues. At the same time, the Company maintains a transparent, inclusive, and effective safety management process.
ASSESSMENT OF PSYCHOSOCIAL RISK FACTORS
In 2024, the Company conducted a psychosocial risk assessment to evaluate the emotional climate of the workplace and identify potential risks to employee well-being. A total of 208 employees participated in the assessment, representing 61.3% of the Company’s workforce.
Positive changes compared to 2022:
These assessments provide valuable insights into employees' needs, enable the timely identification and mitigation of potential risks, and help maintain a positive emotional environment that enhances employee productivity. The Company remains committed to systematically monitoring employee well-being and implementing measures to foster an even more supportive and motivating work environment.
TRAINING AND SKILLS DEVELOPMENT
Amber Grid actively invests in training and skills development in order to build a motivated, competent, and continuously developing team. The Company understands that strengthening the competences of its employees is key to the long-term success of the organisation, and has therefore set ambitious targets in this area.
Progress and achievements in 2024:
In 2025, the Company plans to continue its initiatives and further invest in employee development. Programmes will be implemented to strengthen general and leadership competences, launch a mentoring programme, and continue existing development activities. These initiatives will provide employees with opportunities to grow, share experiences, and enhance both their professional and personal skills, contributing to the overall growth of the organisation.
MONITORING THE EFFECTIVENESS OF ACTIONS AND INITIATIVES
The Company consistently monitors and evaluates the effectiveness of its initiatives through various indicators and employee feedback. The organisation uses the following methods to ensure a high quality working environment and employee engagement:
Trade unions play a vital role in ensuring workers' well-being. Regular meetings provide a platform to discuss employees' needs, challenges, and expectations while reviewing information on planned and implemented initiatives. The Company regularly reviews and updates existing policies and strategies, such as the Equal Opportunities Policy and the Diversity and Inclusion Strategy, taking into account employee feedback and data collected. This ensures that the decisions taken are in line with real needs and contribute to a positive working environment. The results indicate that the existing measures and initiatives are effective, with employees appreciating the opportunity to contribute to the decision-making process and share their insights.
PREVENTION OF NEGATIVE IMPACTS
The Company consistently strives to ensure that its activities do not negatively impact employees by implementing actions based on legislation, internal policies, and international standards. All processes are regularly reviewed, and risk management measures are in place to prevent potential breaches and uphold a high level of employee well-being.Dedicated teams continuously analyse information received through employee engagement channels in accordance with the Equal Opportunities Policy and other relevant regulations. When potential violations are identified, immediate interventions are taken, or long-term preventive measures are planned to maintain a safe and respectful working environment. To foster trust, the Company actively communicates decisions to employees, explaining the rationale behind them. Employees are encouraged to provide feedback to further enhance organisational practices and ensure the continuous improvement of employee well-being.
The Company remains committed to strengthening risk management mechanisms and preventive measures to ensure a safe, transparent, and supportive working environment for all employees.
The Company consistently invests in employee well-being, allocating both human and financial resources to various initiatives each year. A dedicated budget is set aside for well-being programmes, training, and workplace improvements, fostering employee motivation, engagement, and professional growth. In addition, funds are allocated to the development of information systems, including enhancements to messaging channels, document management, and other internal platforms. These investments ensure a smooth flow of information, streamlined work processes, and improved communication—both among employees and with external stakeholders.
The 2024 budget covered the following main areas:
The following financial resources are foreseen for 2025:
Amber Grid's sustainability objectives are closely linked to its strategic goals to promote diversity, inclusion, and a strong organisational culture. These objectives focus on creating a unified, engaging work environment, developing employee competencies and building long-term employee engagement. The 2025-2027 objectives are aligned with the Company's sustainable development provisions, taking into account the organisation's long-term aspirations.
Strategic goal: Implement diversity and inclusion measures to ensure equal opportunities and an inclusive work culture.
Strategic Objective: to ensure that the Company has the necessary competencies, fosters internal talent potential, and effectively plans workforce continuity and knowledge transfer.
Strategic objective: to ensure employee engagement of no less than 70% annually (2025–2027).
The Company consistently monitors and evaluates progress towards the targets through key performance indicators (KPIs), which are presented in the Company's indicator monitoring system. This system ensures that targets are achieved on time and within the set quality and quantity targets. The indicator monitoring process is carried out on a regular basis and the results are recorded in quarterly and annual reports.
The Company's objectives are developed in a targeted manner to align with the Company's strategic goals of inclusion, equal opportunities and the development of organisational culture. These objectives are pursued through a consistent monitoring process and the active involvement of employees to ensure their engagement and contribution to the success of the organisation. The company's objectives are designed to ensure effective impact management and the implementation of opportunities across the Group's businesses. The objectives cover all locations in Lithuania and span the value chain from the initial to the final stages. The objectives are based on national and international policy guidelines, the principles of sustainable development, and social responsibility. Each target has a clear methodological framework with action plans, indicators, and targets.
The Company's objectives were set on the basis of a detailed analysis of internal and external data. The results of the employee engagement surveys, the requirements of the Labour Code, and other relevant legislation, as well as the organisation's internal documents were taken into account in assessing the objectives. The diversity and inclusion objectives are aligned with the provisions of the Labour Code of the Republic of Lithuania, the recommendations of the Equal Opportunities Ombudsperson, and are also in line with the UN's Sustainable Development Goals (SDGs). These objectives are also oriented towards compliance with UN and OECD standards, ensuring the implementation of internationally recognised principles of human rights, equal opportunities and social responsibility.
In setting the objectives, the Company modelled different scenarios to assess the long-term impact on employee motivation, engagement and strengthening the culture of the organisation. This modelling allowed for an early assessment of potential risks, anticipation of the impact on the working environment, and informed decision-making.
Significant assumptions that have been taken into account:
The Company actively learns from its performance and continuously improves processes to further increase the positive impact on employees. The Company will continue to look after the well-being of its employees by expanding additional programmes. Particular attention will be paid to health initiatives and psychological support programmes to maintain the emotional and physical well-being of employees.
In 2024 and the beginning of 2025, the Company has made changes to the methodologies for setting and measuring targets and indicators to better reflect the context of the Sustainability Objectives and to ensure their relevance and accuracy. To align the indicators with the latest national and international sustainability requirements, the following changes have been made:
| Gender | Number of employees (head count)* | |||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | |
| Male | 261 | 264 | 257 | 252 |
| Female | 91 | 87 | 85 | 77 |
| Other** | Not applicable | Not applicable | Not applicable | Not applicable |
| Not reported | 0 | 0 | 0 | 0 |
| Total Employees | 352 | 351 | 342 | 329 |
*The number of employees (headcount) is reported as of the end of the reporting period – December 31. The total number of employees includes those on parental leave as well as interns with employment contracts.
** ‘Other’ does not apply as it is not legally possible to register as a third gender in Lithuania.
The number of employees disclosed in the Company’s financial statements:
| 2024 | 2023 | |
|---|---|---|
| Number of employees | Number of employees | |
| Female | Male | |
| Number of employees | 91 | 261 |
| Number of permanent employees | 86 | 258 |
| Number of temporary employees | 5 | 3 |
| Number of non-guaranteed hours employees | Not applicable | Not applicable |
The number of employees (headcount) is reported as of the end of the reporting period – December 31. The total number of employees includes those on parental leave as well as interns with employment contracts.
| 2022 | 2021 | |
|---|---|---|
| Number of employees | Number of employees | |
| Female | Male | |
| Number of employees | 85 | 257 |
| Number of permanent employees | 76 | 254 |
| Number of temporary employees | 9 | 3 |
| Number of non-guaranteed hours employees | 131 | Not applicable |
The number of employees (headcount) is reported as of the end of the reporting period – December 31. The total number of employees includes those on parental leave as well as interns with employment contracts.
| Employees who left* | Rate of employee turnover** | |
|---|---|---|
| 2024 | 53 | 0.15 |
| 2023 | 36 | 0.1 |
| 2022 | 36 | 0.11 |
| 2021 | 36 | 0.11 |
*Employees who resigned voluntarily, were dismissed, retired, or passed away while in service. Calculation method: based on headcount.
**The number of employees who left or were dismissed is divided by the total number of employees.
| Number of non-employees* (headcount / FTE) | |
|---|---|
| 2024 | 0 |
| 2023 | 0 |
| 2022 | 0 |
| 2021 | 0 |
*Definition of non-employees used: people with contracts with the undertaking to supply labour (‘self-employed people’) or people provided by undertakings primarily engaged in ‘employment activities’ (NACE Code N78). The Company does not have any such employees.
In 2023, a collective agreement was approved, applicable to all Company employees who are members of the trade union. There are no agreements with employees regarding their representation in the European Works Council, the European Company (SE) Works Council, or the European Cooperative Society (SCE) Works Council.
| Collective Bargaining Coverage | Social dialogue Coverage Rate | |
|---|---|---|
| Employees - EEA | 0-19% | Not applicable |
| Employees - Non-EEA | 20-39% | |
| Workplace representation (EEA only) | 40-59% | |
| 60-79% | ||
| 80-100% | 80-100 % | |
| Lithuania (100%) | Lithuania (100%) |
Note: The Company does not have any employees outside the EEA.
132
| Gender | Number | Percentage | Number | Percentage | Number | Percentage | Number | Percentage |
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | |||||
| Male | 5 | 83 % | 5 | 83 % | 5 | 83 % | 5 | 83 % |
| Female | 1 | 17 % | 1 | 17 % | 1 | 17 % | 1 | 17 % |
| Total | 6 | 100 % | 6 | 100 % | 6 | 100 % | 6 | 100 % |
Note: The definition of top management used: all top-level managers and the CEO of the Company.
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Number | Percentage | Number | Percentage | |
| Under 30 Years Old | 26 | 7.39 % | 28 | 7.98 % |
| 30-50 Years Old | 211 | 59.94 % | 205 | 58.4 % |
| Over 50 Years Old | 115 | 32.67 % | 118 | 33.62 % |
| Total | 352 | 100 % | 351 | 100 % |
All salaried employees of the Company receive a fair wage that aligns with applicable benchmark indices. In accordance with legal regulations and market indicators, the adequate wage in Lithuania for 2024 was €924 per month gross (minimum monthly wage, MMA).
All employees of the Company are covered by social security, which helps to ensure financial stability in the event of major life events such as illness, loss of employment with the Company, work-related accident or disability, parental leave or retirement. Social security is provided in accordance with the applicable legislation of the Republic of Lithuania and additional benefits offered by the Company. In accordance with the collective agreement, the Company provides additional support to employees in the event of retirement by paying additional benefits based on length of service, even if this is not required by the Labour Code. If the employment of an employee is terminated by mutual agreement of the parties when he/she becomes entitled to a full retirement pension, the employee shall be paid a severance payment, the amount of which shall depend on his/her continuous service with the Company:
The Company provides additional financial benefits:
All employees are covered by additional health insurance. These measures help to ensure the financial security and well-being of employees, strengthening their trust in the Company and promoting their long-term commitment to the organisation.
133
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Percentage of Employees with Disabilities | 0.57 | 0 | 0 | 0.3 |
| Total amongst all employees |
Notes: Data is based on information provided by employees, subject to restrictions on the collection of such information.
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Total, out of which: | 100 % | 100 % | 100 % | 100 % |
| Male | 100 % | 100 % | 100 % | 100 % |
| Female | 100 % | 100 % | 100 % | 100 % |
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Total, out of which: | 44.84 | 77.76 | 61.5 | 31.25 |
| Male | 51.97 | 78.29 | 61.54 | 43.9 |
| Female | 43.62 | 66.6 | 59.5 | 34.83 |
Note: Calculations are based on the number of employees who have actually received training.
134
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Company employees: | ||||
| Number of deaths due to work-related injuries and work- related ill health | 0 | 0 | 0 | 0 |
| Number of work-related accidents to be recorded | 1 | 1 | 2 | 0 |
| Total annual hours worked by all staff | 587 068 | 590 247 | 664 747 | 650 673 |
| Recordable work-related accident rate | 1.70 | 1.69 | 3.01 | 0.00 |
| Number of recordable work-related health problems | 0 | 0 | 0 | 0 |
| Number of working days lost due to work-related injuries and deaths due to accidents at work, work-related health disorders and deaths due to health disorders | 7 | 6 | 11 | 0 |
| Non-employees classified as own labour: | ||||
| Number of deaths due to work-related injuries and work- related health problems among non-employees working at the company's sites | 0 | 0 | 0 | 0 |
Note: The company has a health and safety management system in place for all employees.# WORK-LIFE BALANCE METRICS
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| Total, out of which | 0.02 | 0.022 | 0.0175 | 0.033 |
| Male | 0.01 | 0.019 | 0.0058 | 0.021 |
| Female | 0.01 | 0.002 | 0.0116 | 0.012 |
Note: In accordance with social policy, all employees of the Company are entitled to family leave.
| Gender Pay Gap (%) | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|
| Total | -4.27 | -4.76 | -2.30 | -4.47 |
Notes:
*Formula used to calculate the gender pay gap: (Average hourly earnings before tax of male employees - Average hourly earnings before tax of female employees) / Average hourly earnings before tax of male employees 𝑥 100
In the Company, the average hourly wage for men is lower than for women, as 26% of all employees hold lower-paid worker-category positions. From 2021 to 2024, these positions were predominantly occupied by men, with only one female employee in this category.
Ratio of the total annual remuneration of the highest paid person to the average total annual remuneration of all employees (excluding the highest paid person)*
| 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|
| 4.24 | 4.28 | 4.83 | 5.15 |
Notes:
* Formula used to calculate the total remuneration ratio: Annual total remuneration of the Company's highest paid person / Average annual total remuneration of all employees (excluding the highest paid person).
No complaints of discrimination were reported in the Company during the period 2021–2024, and no such cases were identified. Additionally, no major human rights incidents involving the workforce occurred during the reporting period.
The nature of the Amber Grid’s activities and the sector it represents naturally impact local communities. As the Company's business processes often involve the development of physical infrastructure, they may cause temporary but significant disruptions to surrounding areas. These impacts can include noise, dust generation, traffic restrictions, or temporary interruptions to transport links. The Company recognises the importance of these impacts on communities and takes proactive steps to minimise them. This includes responsible project planning, the application of environmental mitigation measures, and clear communication with communities regarding potential changes and planned works.
| Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|
| Communities’ economic, social and cultural rights. | Actual negative impacts arise from the industry represented by the Company and from direct activities that inherently involve certain impacts on communities (e.g. noise, dust or traffic restrictions). | -* | -** |
*No material risks/opportunities identified.
**The impact arises from the direct activity and therefore the location in the value chain is not specified.
Amber Grid recognises that its operations can have a direct impact on local communities and continuously strives to ensure that its processes are carried out responsibly, taking into account the interests of both communities and the environment. Commitments in this area are embedded in various policies that define the principles of responsible operations and aim to create a lasting, positive impact:
The Sustainability Policy emphasises full stakeholder involvement and transparent engagement with consumers, suppliers, the public, communities, employees and other stakeholder groups. The main objective of this policy is to ensure that sustainable development processes are focused on long-term benefits and transparency.
The Environmental Policy establishes a zero-tolerance principle and culture to prevent any environmental incidents. Contractors and partners are obliged to comply with these principles, in order to conform with applicable legislation and to take responsibility for their environmental impact. Involvement of local communities in environmental impact assessment processes and full cooperation with stakeholders towards a climate-neutral economy shall be encouraged.
The Sponsorship Policy defines the Company's commitment to working with the communities in which activities or projects are carried out. Support is given to welfare initiatives, educational activities, and other targeted beneficiary groups. Voluntary involvement of employees in activities that benefit society is encouraged.
These policies help to ensure a responsible approach to community needs, environmental protection, and social responsibility, with a view to achieving sustainable, long-term results. Amber Grid is also working to ensure the sustainable implementation of its projects, in line with the principles of environmental impact mitigation. Key areas include:
The Company continuously monitors the impact of its activities on local communities and takes proactive steps to mitigate any negative effects. During the period 2021-2024, the Company has not received any reports of human rights abuses in the communities where it operates. This reflects the effective and responsible implementation of the Company’s commitment to social responsibility and environmental protection.
Amber Grid strives to work closely and responsibly with local communities to ensure a positive impact and minimise potential negative effects on their lives and the environment. By involving communities in decision-making processes, the Company aims to build mutual trust by ensuring their interests and views are considered in projects and developments. Before work begins, projects are presented to local communities at meetings where members can learn about the planned work, discuss potential risks, and provide suggestions or comments. Furthermore, to ensure awareness and transparency, all relevant information regarding ongoing and upcoming projects is published in local newspapers, and community leaders such as presidents and elders are directly informed. The Company also adjusts the timing and deadlines of works to avoid conflict with events or periods important to the communities, aiming to minimise disruptions to local life and daily routines. These practices ensure that local communities are not only informed but also actively involved in processes that directly impact their environment. The Company seeks to ensure that every community member has a voice and feels their interests and opinions are respected and considered in project and development decisions.
The Company and the Group as a whole provide communities with the opportunity to anonymously and safely raise concerns about important issues through Trust Lines. These lines offer a direct and confidential way to report potential corruption, environmental violations, operational non-compliance, or any other issues that may negatively impact communities or the environment. The Trust Lines operate to the highest standards of confidentiality and security, ensuring that all reports are properly addressed and that whistleblowers are protected from any potential negative consequences. The Company encourages communities to actively use this tool to promote transparency, accountability, and lasting trust in the Company's operations and its stakeholders.
Reports to the Company can be made by:
All reports submitted will be treated in accordance with the highest standards of confidentiality and responsible behaviour.
The ongoing steps taken by the Company to identify and respond to significant impacts on affected communities are described in disclosure S3-1.
Within the Company, impacts on local communities are managed on a project-by-project basis, considering the specific circumstances and in line with the Group's policy principles (see S3-1). While there are no overarching measurable targets in this area, the Company consistently evaluates the impact of its activities on communities.# S4 CONSUMERS AND END-USERS
In order to adequately meet the expectations of its shareholders and address the needs of its stakeholders, Amber Grid is committed to organising its operations in such a way that service delivery to customers and end-users is uninterrupted and stable. The company operates on a business-to-business (B2B) model, meaning its services reach end-users indirectly through energy transmission and exchange operators. It should be noted that the Company does not directly supply products to the market. Detailed information about the strategic objectives, performance indicators, and management principles related to service accessibility across the entire EPSO-G Group can be found in the 'Operational Strategy and Implementation Progress' section of the EPSO-G’s Consolidated Management Report 2024.
The Company's business model also includes responsibility for the accessibility of information and its impact on direct users and end-users. To ensure transparency and sustainability, the Company consistently manages this aspect through its long-term strategy and the implementation of legislation. By maintaining high standards of information disclosure, the Company ensures that the public and stakeholders receive clear, timely, and reliable information. All stakeholders, including service users and end-users, can contact the Company through both anonymous and non-anonymous channels. Detailed information regarding the reporting procedures is provided under Disclosure Requirement G1-1. Communication and dissemination of information is carried out in accordance with the laws of the Republic of Lithuania and the Company’s internal procedures to ensure transparency and responsible dialogue with the public.
| Material impacts related to consumers and end-users | Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|---|
| Access to (quality) information | Potential negative impacts on consumers and end-users arise from late or overly bureaucratic provision of information. Mismanagement in this area can have a negative impact on stakeholders. | -* | -** | |
| Access to products and services | Potential negative impacts could arise through the value chain due to inadequate infrastructure in peripheral areas, disruptions to the transmission system, fluctuations in energy prices due to the impact of the excessive costs of infrastructure upgrades on transmission tariffs, etc. | -* | Downstream |
*No material risks/opportunities identified.
**The impact arises from the direct activity and therefore the location in the value chain is not specified.
The Company and the Group operate Trust Lines, providing users and end-users with the opportunity to anonymously and safely raise concerns about various important issues, such as potential cases of corruption, environmental violations, or operational non-compliance. Reports to the Company can be made by:
All reports submitted will be treated in accordance with the highest standards of confidentiality and responsible behaviour.
Adherence to business ethics principles is one of the key components of the Company’s sustainability. Ethical conduct, transparency, responsibility, and respect for various stakeholders are essential to ensuring trust in the organisation and the long-term sustainability of its operations. Business ethics practices encompass both internal processes and external relationships with partners, suppliers, and the community, making continuous impact assessment and management in this area particularly important. To effectively manage potential impacts, risk factors and opportunities related to business ethics are continuously analysed. Both internal measures for strengthening the organisational culture and external influences that may significantly affect the Company's operations or reputation are assessed. The table below provides an overview of the significant impacts, risks, and opportunities related to business ethics.
| Sustainability topic | Impacts | Risks and opportunities | Location in the value chain |
|---|---|---|---|
| Corporate culture | Potential negative impacts may arise from possible non-compliance with the Company's culture, policies and principles, including transparency, accountability, diversity, inclusiveness, and ethical behaviour. | -* | -** |
| Protection of whistle- blowers | Potential negative impact on the rights of stakeholders may arise if the whistle-blowers’ protection system does not function effectively. This includes breaches of whistle-blowers’ confidentiality, possible direct or indirect discrimination, retaliatory actions, or other negative treatment against them. | Providing stakeholders (from workers to other stakeholders) with the opportunity to voice their concerns and address them creates the conditions for financial opportunity. | Upstream and downstream value chain |
| Management of relationships with suppliers, including payment practices | Potential negative impact on the rights of stakeholders in public procurement. | -* | -** |
| Corruption and bribery | Potential negative impacts on stakeholders' rights may arise from corrupt or unethical practices along the value chain. | -* | Upstream and downstream value chain |
*No material risks/opportunities identified.
**The impact arises from the direct activity and therefore the location in the value chain is not specified.
The Company actively promotes business conduct and fosters a responsible corporate culture based on group-wide policy documents:
Compliance with these documents helps build trust in the Company, both internally and with external stakeholders. In 2024, Amber Grid was awarded the ISO 37001:2016 International Standard 'Anti-bribery Management Systems: Requirements with Guidelines for Use,' confirming that Amber Grid actively promotes ethical business conduct and fosters a responsible corporate culture.
The Company actively fosters its corporate culture to create an inclusive, respectful, and trusting working environment. This culture is intentionally developed through various initiatives and measures that enhance employee engagement, a sense of community, and responsibility for shared goals.
The following ways are used to promote corporate culture:
Fostering a corporate culture begins with senior management. Managers, in line with the Group's Code of Conduct, must set a personal example, adhere to ethical behaviour standards, and promote these within their teams. Leadership by managers in this area is essential to creating a transparent, fair, and respectful working environment.
Internal documents are in place to support and reinforce the company culture:
Amber Grid has established and defined values that form the common basis for all the Company‘s activities.
Amber Grid and the Group operate a Trust Line, which allows employees and other stakeholders to report potential violations anonymously and securely. Reports can cover a wide range of areas, including corrupt practices, compliance violations, environmental non-compliance, or other forms of non-compliance.# Employees and other stakeholders of the Company may report suspected irregularities, unethical, or dishonest behaviour directly or anonymously to the Designated Person in Charge or to other employees of the Prevention Unit, without fear of adverse consequences. Reports can be made through the following channels:
There were no reports of corruption in 2024. The principles of the Trust Line and information regarding whistle-blower protection are detailed in the EPSO-G's Anti-Corruption Policy. These channels allow employees and other stakeholders to report potential irregularities, unethical, or dishonest behaviour in a safe and confidential manner. The Company ensures that each report is properly investigated in accordance with the highest standards of transparency and confidentiality. Information on reporting channels and options is published on the Group's websites and on the internal intranet, accessible to all employees. The Company's whistle-blowing procedures are governed by clearly defined internal regulations, ensuring that whistle-blowers are treated objectively, professionally, and confidentially, prior to the appropriate actions being taken.
In accordance with the provisions of national and internal legislation, the Company ensures that individuals providing information through the Trust Line are protected from any potential negative consequences. The confidentiality of whistle-blowers is maintained at all stages, and full anonymity is granted upon request. These safeguards apply in all cases, regardless of whether the information provided in the report is substantiated. Whistle-blowers are afforded a wide range of protections in line with national law and the application of the Company’s internal procedures. These protections extend not only to the whistle-blower but also to their family members, to protect them from any adverse effects resulting from the information provided.
Adverse effects are prohibited in all forms, including but not limited to the following actions:
All employees are made aware of the Group's primary internal legal instrument governing business ethics, the Group Code of Conduct, which outlines the standards for fair, transparent, and responsible business practices. To ensure compliance with these principles, training is provided on business conduct and anti-corruption. Additionally, various events are organised to present the Company's values, behavioural principles, and other relevant cultural aspects.
Amber Grid consistently monitors employees' attitudes towards ethics and anti-corruption culture. An anonymous Employee Corruption Tolerance Survey is organised annually. The results of this survey allow the Company to assess the current situation, identify areas for improvement, and ensure that ethical standards remain an important part of the Company’s operations.
In accordance with national legislation and the Company's internal rules, job positions identified as having the highest risk of corruption are included in a specific list to be monitored. To ensure public awareness and transparency, this list of high-risk positions is made publicly available on the Company's website. This allows both employees and stakeholders to understand the areas of activity where special attention is given to the prevention of corruption.
The Procurement function is considered one of the strategic enablers contributing to sustainable growth and effective risk management across the Company and Group. Procurement's activities focus on the following key areas: long-term planning, digitisation, resilience, and sustainability. The objectives of the procurement function reflect the Company's commitment to social responsibility and environmental goals. One of the key objectives is to ensure that 100% of purchases are made according to green criteria, with at least 7% of purchases meeting social criteria. To ensure transparency and responsible supply chain management, suppliers are required to review the Supplier Code of Conduct before contracts are awarded and confirm their commitment to the principles outlined in the Code. A specific questionnaire is also completed to help identify suppliers' behavioural patterns and potential risks. All suppliers must comply with the requirements set out, with no grounds for exclusion, including environmental and social irregularities.
Focusing on procurement quality and process compliance, the most significant purchases are carried out by employees holding official Procurement Officer certificates. This practice helps manage risks inherent in the procurement process and ensures a high level of competence. The Group organises regular in-house training sessions to improve employees' understanding of social and environmental performance principles. This raises awareness and fosters a responsible purchasing culture. It is worth noting that the majority of the Group's suppliers are local businesses, accounting for more than 80% of the contracts awarded. This supports the growth of the local economy and promotes cooperation with reliable, socially responsible partners. The procurement process also includes a contract monitoring mechanism to assess supplier performance, evaluate their ability to meet commitments, and identify potential issues in advance. Special attention is given to working with more vulnerable groups of suppliers to ensure fair competition and long-term cooperation.
In order to identify, assess, and manage potential corruption risks, the Company implements the measures set out in the Anti-Corruption Policy. These measures ensure transparent, responsible, and ethical operations while strengthening the corporate culture:
In 2024, Amber Grid was awarded the ISO 37001:2016 International Standard "Anti-corruption Management Systems. Requirements and Guidelines for Use".
The Company continuously identifies and assesses corruption risk factors, implements measures to manage them, and analyses their effectiveness. Corruption risk management is carried out in accordance with the Group's risk management policy and methodology, ensuring systematic and effective corruption prevention. To ensure objectivity and impartiality, the Company’s managers are not involved in handling incidents that may involve corruption. This responsibility is carried out by a dedicated corporate unit with the necessary competencies and authority to conduct investigations in accordance with established procedures and confidentiality principles. The report of the internal investigation, prepared in accordance with the Internal Investigations Procedures, is submitted to the Chief Executive Officer of the Company. The report may also be shared with the heads of relevant departments, where appropriate, but only to the extent necessary for the performance of their functions and for decisions related to the findings of the investigation.
The Company’s website has a dedicated Anti-Corruption section where stakeholders can find key information on the Company’s anti-corruption activities. This section includes:
All of this information is available in both Lithuanian and English languages, ensuring wider accessibility for both local and international stakeholders.To ensure that suppliers adhere to the highest ethical standards, Amber Grid familiarises them with the Group's Supplier Code of Conduct during the procurement process. This Code sets out the basic principles of ethical behaviour, including anti-corruption provisions, which the Company expects all of its partners and suppliers to comply with. Employees are provided with information related to anti-corruption activities through an internal communication channel, the intranet, within a dedicated section. Depending on the need, relevant anti-corruption issues are regularly communicated to employees. In addition, all employees are made aware of anti-corruption legislation through the document management system. These measures ensure that both the Company’s employees and external partners have a clear understanding of anti-corruption principles, their importance, and their responsibility for compliance.
Amber Grid consistently organises targeted anti-corruption training to strengthen the Company's culture of transparency and responsibility. Employee development includes a variety of activities aimed at all employees and targeted groups:
Amber Grid provides training for all employees, regardless of whether their job is classified as high-risk. Specialised training is also available on demand for specific employee groups, addressing issues relevant to them and enhancing their practical knowledge of corruption prevention. These measures ensure that employees fully understand the importance of anti-corruption and adhere to the principles set out, contributing to a fair and responsible corporate culture.
No cases of anti-corruption have been identified or confirmed by Amber Grid in the reporting periods of 2021-2024. Furthermore, there were no convictions for breaches of corruption and bribery laws during this period. The Company has also not been subject to any fines or other sanctions related to these types of violations. These results confirm Amber Grid's ongoing commitment to implementing the principles of transparency and accountability, ensuring that all processes adhere to the highest ethical standards.
| 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|
| Cases of corruption identified | 0 | 0 | 0 | 0 |
| Employees sanctioned and dismissed for corruption | 0 | 0 | 0 | 0 |
| Company/employees facing corruption-related lawsuits | 0 | 0 | 0 | 0 |
| Corruption cases identified resulting in contracts not being concluded/renewed with operational partners | 0 | 0 | 0 | 0 |
Amber Grid aims to ensure clear and transparent payment terms that facilitate smooth cooperation with suppliers. In 2024, the Company’s average payment period for all invoices was 27.4 days.
The payment analysis includes all payments made in 2024, including invoices issued in previous periods. Advances and advances to accountable persons are not included in the calculations. The Company follows a responsible payment policy to ensure financial stability within the supply chain. Clearly defined payment terms allow suppliers to plan their financial flows, and timely payments contribute to a trusting business relationship.
The European Union (EU) Taxonomy Regulation (EU) 2020/852 and its associated delegated acts (hereinafter referred to as the Taxonomy) establish a classification system for environmentally sustainable economic activities. This system aims to promote private investment in activities that contribute to achieving the goals of the European Green Deal. The Taxonomy sets out science-based criteria for assessing the sustainability of economic activities and establishes corporate accountability and reporting obligations. Amber Grid's identification of taxonomy-aligned economic activities, assessment of compliance with technical screening criteria, evaluation of climate-related risks and vulnerabilities, assessment of compliance with minimum safeguards, and calculation of taxonomy-non-eligible activity indicators are presented in the EPSO-G’s Consolidated Management Report 2024, in the section ‘Disclosure of Information under the EU Taxonomy Regulation’. Below are the tables of Amber Grid's Taxonomy indicators (revenue, capital expenditure, and operating expenditure), prepared in accordance with the requirements and templates of the European Commission’s Delegated Regulation (EU) 2021/2178.
| | | | | | | | # 8. SUSTAINABILITY AND ESG - Continued
The EU Taxonomy Regulation establishes a classification system for environmentally sustainable economic activities. The following tables present the Company’s turnover and OPEX in relation to the Taxonomy, broken down by eligible and non-eligible activities, and further by environmental objectives.
Definitions for the tables below:
| Category | Absolute turnover (M EUR) | Proportion of turnover year 2023 (%) | Proportion of turnover year 2024 (%) | Climate change mitigation (Substantial contribution criteria) | Climate change adaptation (Substantial contribution criteria) | Water and marine resources (Substantial contribution criteria) | Pollution (Substantial contribution criteria) | Circular economy (Substantial contribution criteria) | Biodiversity and ecosystems (Substantial contribution criteria) | Climate change mitigation (DNSH criteria) | Climate change adaptation (DNSH criteria) | Water and marine resources (DNSH criteria) | Pollution (DNSH criteria) | Circular economy (DNSH criteria) | Biodiversity and ecosystems (DNSH criteria) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. TAXONOMY ELIGIBLE ACTIVITIES | |||||||||||||||
| A.1 Environmental sustainable activities (Taxonomy-aligned) | |||||||||||||||
| Electricity generation using solar photovoltaic technology (CCM 4.1./CCA 4.1.) | 0 | 0% | 0% | Y | N | N/E L | N/E L | N/E L | N/E L | Y | Y | Y | Y | Y | Y |
| Transmission and distribution networks for renewable and low-carbon gases (CCM 4.14. / CCA 4.14.) | 0.3 | 4% | 4% | Y | N | N/E L | N/E L | N/E L | N/E L | Y | Y | Y | Y | Y | Y |
| Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) (CCM 7.4. / CCA 7.4.) | 0 | 0% | 0% | Y | N | N/E L | N/E L | N/E L | N/E L | Y | Y | Y | Y | Y | Y |
| E Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 0.3 | 4% | 4% | N | N/E L | N/E L | N/E L | N/E L | N/E L | Y | Y | Y | Y | Y | Y |
| Of which enabling | 0 | 0% | 0% | N | N/E L | N/E L | N/E L | N/E L | N/E L | Y | Y | Y | Y | Y | Y |
| E Of which transitional | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||
| Transport by motorbikes, passenger cars and light commercial vehicles (CCM 6.5. / CCA 6.5.) | 0 | 0% | 0% | EL | N/E L | N/E L | N/E L | N/E L | N/E L | ||||||
| Renovation of existing buildings (CCM 7.2. / CCA 7.2.) | 0 | 0% | 0% | EL | N/E L | N/E L | N/E L | N/E L | N/E L | Y | |||||
| Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 0 | 0% | 0% | - | - | - | - | - | - | - | - | - | - | - | - |
| Turnover of Taxonomy-eligible activities (A.1+A.2) | 0 | 0% | 0% | - | - | - | - | - | - | - | - | - | - | - | - |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||
| Turnover of Taxonomy-non- eligible activities | 14.2 | 100% | 100% | ||||||||||||
| TOTAL (A+B) | 14.2 | 100% | 100% |
| Category # LIST OF DATAPOINTS IN CROSS-CUTTING AND TOPICAL STANDARDS THAT DERIVE FROM OTHER EU LEGISLATION
| Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Page |
|---|---|---|---|---|---|
| ESRS 2 GOV-1 Board's gender diversity | 69 | ||||
| paragraph 21 (d) | |||||
| Indicator number 13 of Table #1 of Annex 1 | Commission Delegated Regulation (EU) 2020/1816 16, Annex II | ||||
| ESRS 2 GOV-1 Percentage of board members who are independent | Delegated Regulation (EU) 2020/1816, Annex II | 69 | |||
| paragraph 21 (e) | |||||
| ESRS 2 GOV-4 Statement on due diligence | 70 | ||||
| paragraph 30 | |||||
| Indicator number 10 Table #3 of Annex 1 | |||||
| ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 17 Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk | 72 | |||
| paragraph 40 (d) i | Delegated Regulation (EU) 2020/1816, Annex II | ||||
| Indicators number 4 Table #1 of Annex 1 | |||||
| ESRS 2 SBM-1 Involvement in activities related to chemical production | Delegated Regulation (EU) 2020/1816, Annex II | 72 | |||
| paragraph 40 (d) ii | |||||
| Indicator number 9 Table #2 of Annex 1 | |||||
| ESRS 2 SBM-1 Involvement in activities related to controversial weapons | Delegated Regulation (EU) 2020/1818 18, Article 12(1) | Delegated Regulation (EU) 2020/1816, Annex II | 72 | ||
| paragraph 40 (d) iii | |||||
| Indicator number 14 Table #1 of Annex 1 | |||||
| ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco | Delegated Regulation (EU) 2020/1818, Article 12(1) | Delegated Regulation (EU) 2020/1816, Annex II | 72 | ||
| paragraph 40 (d) iv | |||||
| ESRS E1-1 Transition plan to reach climate neutrality by 2050 | Regulation (EU) 2021/1119, Article 2(1) | 79 | |||
| paragraph 14 | |||||
| ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book-Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2 | 79 | ||
| paragraph 16 (g) | |||||
| ESRS E1-4 GHG emission reduction targets | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 6 | 87 | ||
| paragraph 34 | |||||
| Indicator number 4 Table #2 of Annex 1 | |||||
| ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) | 91 | ||||
| paragraph 38 | |||||
| Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1 | |||||
| ESRS E1-5 Energy consumption and mix | 91 | ||||
| paragraph 37 | |||||
| Indicator number 5 Table #1 of Annex 1 | |||||
| ESRS E1-5 Energy intensity associated with activities in high climate impact sectors | 91 | ||||
| paragraphs 40 to 43 | |||||
| Indicator number 6 Table #1 of Annex 1 | |||||
| ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions | Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1) | 92 | ||
| paragraph 44 | |||||
| Indicators number 1 and 2 Table #1 of Annex 1 | |||||
| ESRS E1-6 Gross GHG emissions intensity | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 8(1) | 92 | ||
| paragraphs 53 to 55 | |||||
| Indicators number 3 Table #1 of Annex 1 | |||||
| ESRS E1-7 GHG removals and carbon credits | Regulation (EU) 2021/1119, Article 2(1) | 95 | |||
| paragraph 56 | |||||
| ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks | Delegated Regulation (EU) 2020/1818, Annex II | Delegated Regulation (EU) 2020/1816, Annex II | Not material | ||
| paragraph 66 | |||||
| ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk. | Not material | |||
| paragraph 66 (a) | |||||
| ESRS E1-9 Location of significant assets at material physical risk | Not material | ||||
| paragraph 66 (c). | |||||
| ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34;Template 2:Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral | Not material | |||
| paragraph 67 (c). | |||||
| ESRS E1-9 Degree of exposure of the portfolio to climate- related opportunities | Delegated Regulation (EU) 2020/1818, Annex II | Delegated Regulation (EU) 2020/1816, Annex II | Not material | ||
| paragraph 69 | |||||
| ESRS E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, | 96 | ||||
| paragraph 28 | |||||
| Indicator number 8 Table #1 of Annex 1 | |||||
| Indicator number 2 Table #2 of Annex 1 | |||||
| Indicator number 1 Table #2 of Annex 1 | |||||
| Indicator number 3 Table #2 of Annex 1 | |||||
| ESRS E3-1 | Not material | ||||
| Water and marine resources paragraph 9 | |||||
| ESRS E3-1 Dedicated policy paragraph 13 | Not material | ||||
| Indicator number 8 Table 2 of Annex 1 | |||||
| ESRS E3-1 Sustainable oceans and seas paragraph 14 | Not material | ||||
| Indicator number 12 Table #2 of Annex 1 | |||||
| ESRS E3-4 Total water recycled and reused | Not material | ||||
| paragraph 28 (c) | |||||
| Indicator number 6.2 Table #2 of Annex 1 | |||||
| ESRS E3-4 Total water consumption in m 3 per net revenue on own operations | Not material | ||||
| paragraph 29 | |||||
| Indicator number 6.1 Table #2 of Annex 1 | |||||
| ESRS 2- IRO 1 - E4 paragraph 16 (a) i | 76 | ||||
| Indicator number 7 Table #1 of Annex 1 | |||||
| ESRS 2- IRO 1 - E4 paragraph 16 (b) | 76 | ||||
| Indicator number 10 Table #2 of Annex 1 | |||||
| ESRS 2- IRO 1 - E4 paragraph 16 (c) | 76 | ||||
| Indicator number 14 Table #2 of Annex 1 | |||||
| ESRS E4-2 Sustainable land / agriculture practices or policies | 99 | ||||
| paragraph 24 (b) | |||||
| Indicator number 11 Table #2 of Annex 1 | |||||
| ESRS E4-2 Sustainable oceans / seas practices or policies | 99 | ||||
| paragraph 24 (c) | |||||
| Indicator number 12 Table #2 of Annex 1 | |||||
| ESRS E5-5 Non-recycled waste paragraph 37 (d) Indicator number 13 Table #2 of Annex 1 103 | |||||
| ESRS E5-5 Hazardous waste and radioactive waste paragraph 39 Indicator number 9 Table #1 of Annex 1 103 | |||||
| ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f) Indicator number 13 Table #3 of Annex I 104 | |||||
| ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g) Indicator number 12 Table #3 of Annex I 104 | |||||
| ESRS S1-1 Human rights policy commitments paragraph 20 Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex I 105 159 | |||||
| ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21 Delegated Regulation (EU) 2020/1816, Annex II 105 | |||||
| ESRS S1-1 processes and measures for preventing trafficking in human beings paragraph 22 Indicator number 11 Table #3 of Annex I 105 | |||||
| ESRS S1-1 workplace accident prevention policy or management system paragraph 23 Indicator number 1 Table #3 of Annex I 105 | |||||
| ESRS S1-3 grievance/complaints handling mechanisms paragraph 32 (c) Indicator number 5 Table #3 of Annex I 108 | |||||
| ESRS S1-14 Number of fatalities and number and rate of work-related accidents paragraph 88 (b) and (c) Indicator number 2 Table #3 of Annex I Delegated Regulation (EU) 2020/1816, Annex II 120 | |||||
| ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e) Indicator number 3 Table #3 of Annex I 120 | |||||
| ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a) Indicator number 12 Table #1 of Annex I Delegated Regulation (EU) 2020/1816, Annex II 121 | |||||
| ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b) Indicator number 8 Table #3 of Annex I 121 | |||||
| ESRS S1-17 Incidents of discrimination paragraph 103 (a) Indicator number 7 Table #3 of Annex I 121 | |||||
| ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a) Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1) 121 | |||||
| ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the value chain paragraph 11 (b) Indicators number 12 and n. 13 Table #3 of Annex I Not material | |||||
| ESRS S2-1 Human rights policy commitments paragraph 17 Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1 Not material 160 | |||||
| ESRS S2-1 Policies related to value chain workers paragraph 18 Indicator number 11 and n. 4 Table #3 of Annex 1 Not material | |||||
| ESRS S2-1Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19 Indicator number 10 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) Not material | |||||
| ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19 Delegated Regulation (EU) 2020/1816, Annex II Not material | |||||
| ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36 Indicator number 14 Table #3 of Annex 1 Not material | |||||
| ESRS S3-1 Human rights policy commitments paragraph 16 Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1 122 | |||||
| ESRS S3-1 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17 Indicator number 10 Table #1 Annex 1 Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) 122 | |||||
| ESRS S3-4 Human rights issues and incidents paragraph 36 Indicator number 14 Table #3 of Annex 1 123 | |||||
| ESRS S4-1 Policies related to consumers and end-users paragraph 16 Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 Not material | |||||
| ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17 Indicator number 10 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) Not material | |||||
| ESRS S4-4 Human rights issues and incidents paragraph 35 Indicator number 14 Table #3 of Annex 1 Not material | |||||
| ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b) Indicator number 15 Table #3 of Annex 1 127 | |||||
| ESRS G1-1 Indicator number 6 Table #3 of Annex 1 127 161 |
This appendix is an integral part of the ESRS 2. The table below illustrates the datapoints in ESRS 2 and topical ESRS that derive from other EU legislation.
In fulfilling its obligations under legal acts governing the securities market applicable to it, the Company publishes significant events and other regulated information at the EU level. This information is accessible on the Company’s website (www.ambergrid.lt/lt/apie_mus/rubrika-investuotojams/esminiai-ivykiai) and on the website of NASDAQ Vilnius Stock Exchange (www.nasdaqbaltic.com).
Significant events during the reporting period 2024:
| Date | Significant events during the reporting period |
|---|---|
| 02/02/2024 | Amber Grid investor calendar for 2024 |
| 29/02/2024 | Consolidated operating results of Amber Grid Group of 2023 |
| 28/03/2024 | Notice of the convening the ordinary General Meeting of Shareholders of Amber Grid AB |
| 28/03/2024 | Correction: Amber Grid Investor's Calendar for 2024 |
| 26/04/2024 | The proposal of UAB EPSO-G regarding the election of the Board members determination of remuneration amounts for the members of the board and the operating budget of the board in 2024 was received |
| 30/04/2024 | Annual Information of Amber Grid for 2023 |
| 30/04/2024 | Decisions adopted in the Extraordinary General Meeting of Shareholders of AB Amber Grid |
| 09/05/2024 | Regarding Gas Transmission System Operator's Revenue Cap of Regulated Activities for 2025 |
| 10/05/2024 | Ex-dividend date |
| 10/05/2024 | Procedure for the payment of AB Amber Grid dividends for 2023 |
| 10/05/2024 | Regarding the election of the Chairman of the Board of Amber Grid |
| 10/05/2024 | Amber Grid AB Operating Results for the 1st Quarter of 2024 |
| 21/05/2024 | Regarding new prices for natural gas transmission services |
| 21/05/2024 | New wording of Amber Grid Articles of Association registered |
Protection of whistle- blowers paragraph 10 (d)
ESRS G1-4 Fines for violation of anti- corruption and anti-bribery laws paragraph 24 (a) Indicator number 17 Table #3 of Annex 1 Delegated Regulation (EU) 2020/1816, Annex II) 131
ESRS G1-4 Standards of anti- corruption and anti- bribery paragraph 24 (b) Indicator number 16 Table #3 of Annex 1 131 162
| Date | Significant events during the reporting period |
|---|---|
| 28/05/2024 | Notice on Convening an Extraordinary General Meeting of Shareholders of Amber Grid AB |
| 30/05/2024 | New prices for natural gas transmission services have been approved |
| 16/08/2024 | Decisions adopted in the Extraordinary General Meeting of Shareholders of Amber Grid AB |
| 09/08/2024 | Amber Grid AB Operating Results for the first half of 2024 |
| 13/08/2024 | Regarding the initiation of NERC sanctioning procedure |
| 02/09/2024 | Amber Grid AB concluded the cash pool agreement with EPSO-G UAB. |
| 27/09/2024 | Notice on Convening an Extraordinary General Meeting of Shareholders of Amber Grid AB |
| 18/10/2024 | Decisions adopted in the Extraordinary General Meeting of Shareholders of Amber Grid AB |
| 08/11/2024 | Amber Grid AB results of operations for a nine-month period of 2024 |
| 31/12/2024 | Amber Grid investor calendar for 2025 |
All notices that are made available to public according to the procedure defined in legal acts can be found in an electronic publication of the Manager of the Register of Legal Entities. All notices on convening the Company’s General Meeting of Shareholders and other material events are announced on the Central Storage Facility at www.crib.lt and on the Company’s official website www.ambergrid.lt in accordance with the procedure established in the Law on Securities. The shareholders whose shares entitle them to at least 10% of total voting rights, receive notices on convocation of the General Meetings of Shareholders in accordance with the procedure established in the Company’s Articles of Association.
Amber Grid Organisational Structure 163
Amber Grid statement of compliance with the Corporate Governance Code for the Companies Listed on NASDAQ Vilnius
In line with Article 12(3) of the Law on Securities of the Republic of Lithuania and paragraph 24.5 of the Listing Rules of Nasdaq Vilnius AB, Amber Grid AB (the “Company”) has disclosed its compliance with the Corporate Governance Code for the Companies Listed on Nasdaq Vilnius and its specific provisions or recommendations. In case of non- compliance with the Code or some of its provisions or recommendations, the specific provisions or recommendations that are not complied with must be indicated, the reasons for such non-compliance must be specified, and other explanatory information indicated in this form must be presented.
Summary of the Company’s Corporate Governance Report:
Amber Grid AB is a part of the EPSO-G Group companies (“the Group”). The Company’s management structure and governance model are determined by the Company’s Articles of Association, the Corporate Governance Guidelines of the EPSO-G Group approved on 29 December 2022 by the Ministry of Energy (the ME), the sole shareholder of the parent company EPSO-G UAB, and the Corporate Governance Policy of the EPSO-G Group. All these documents are available on the Company’s website (www.ambergrid.lt) and EPSO-G’s website (www.epsog.lt).
Fig. 1 Main scheme of the implementation of corporate governance at the Group level.
Being a part of the Group does not affect the Company’s independence. The Company operates independently as it seeks to achieve the objectives set in the Company’s Articles of Association, and it has the obligation to independently assess whether compliance with the Group’s corporate governance documents does not harm the interests of the Company, its creditors, shareholders or other stakeholders.# Corporate Governance Structure
The Group has a centralized internal audit function. In order to ensure the independence of the internal audit, it is established that the head of the internal audit function is appointed and dismissed by the Board of EPSO-G UAB, which is mainly composed of independent members. The internal audit function is also accountable to the Audit Committee, which also consists mostly of independent members. The internal audit recommendations are analyzed by the Company’s Board, which also approves the plan of measures for implementation of audit recommendations.
On the basis of the Risk Management Policy of the EPSO-G Group, a uniform risk management system of the Group has been implemented at the Company according to the COSO ERM standards applicable in a global practice, which set out the risk identification, assessment and management principles and responsibilities. Risk management coordination is performed at the Group level. The purpose of the Group’s operating policies is to introduce a consistent and effective organization management system that helps employees successfully implement important strategic projects and create value to local private and business customers in a transparent and effective manner. To ensure the effectiveness of the operating policies, the Company annually reports on the progress achieved with the implementation of the operating policies.
The operating policies that are currently effective at the Company:
| Principle/recommendation | Yes/No/Not Applicable | Comments # In order to maintain an appropriate balance between the qualifications of the members of the Supervisory Council, it should be ensured that the members of the Supervisory Council as a whole have a broad range of knowledge, views and experience to perform their tasks properly.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
Not applicable Supervisory Council is not formed at the Company.
The Board should ensure the implementation of the company’s strategy, as well as good corporate governance, taking into account the interests of shareholders, employees and other stakeholders.
Yes
Paragraph 34 of the Company‘s Articles of Association stipulates the power of the Company’s Board to approve the Company’s strategy and supervise its implementation. In addition, in carrying out its supervisory function the Board regularly reviews reports on the implementation of the strategy.
Yes
Section 7.3 of the Company’s Articles of Association stipulates that the Company’s Board undertakes the supervisory functions. By performing the functions assigned to it, the Board takes into account the Audit Committee’s recommendations, as well as the needs of the company’s shareholders, employees and other stakeholders.
Yes
Article 36 paragraph (xxi) of the Company’s Articles of Association provides that the Board takes decisions on the non-application to the Company or the application with exceptions of the documents applicable at the level of the Group of companies approved by the Board of the parent company. The Board ensures and regularly monitors the implementation of the documents it approves (strategy, performance plans, budget, etc.) within the Company.
Yes
The Company’s Board ensures and monitors implementation of internal controls, ethics and compliance measures as follows:
- there is an internal audit function at the group level;
- the Audit Committee is formed at the group level, mostly consisting of independent members, with the internal audit function accountable to it;
- there is the Code of Conduct and the EPSO-G Group Anti-Corruption Policy, the EPSO-G Group Sponsorship and Charity Policy, Sponsorship and Charity Policy, and the EPSO-G Group Conflict of Interest Management Policy in place.
Yes
When the Board appoints the head of the Company, it follows the procedure approved by Resolution of the Government of the Republic of Lithuania for the selection of candidates to a collegial supervisory or management body of a state-owned or municipal enterprise or of a company or its subsidiary owned by a state-owned or municipal enterprise, also takes into account the recommendations of the Remuneration and Nomination Committee (Clause 53 of the Company’s Articles of Association), and the appropriate balance between the candidate‘s qualification, experience and competence. Article 55 of the Company’s Articles of Association provides that, when assessing the suitability of a candidate for the position of CEO, the Board shall assess the candidate’s compliance with the requirements set out in the Articles of Association and applicable legislation and may, for that purpose, require the candidate to submit documents substantiating such compliance and/or request the competent public authorities to provide the necessary information about the candidate.
Yes
Paragraph 27 of the Company’s Articles of Association stipulates that in the process of selection of the Board members it is ensured that the Board consists of at least 2 (two) independent members. Their independence is established in accordance with the criteria laid down in the Corporate Governance Code and the Policy for Management of Interests of Members of Collegial Bodies, Executives and Employees of the Group, as well as the requirements set forth in other applicable legal acts. It is aimed that the Board members have competences that are required in the areas of responsibility and functions of the Board. The selection of the Company’s Board members is carried out by the Remuneration and Nomination Committee in accordance with the approved matrix of the Board competences. The Board members carry out their performance assessment on annual basis. In addition, the Remuneration and Nomination Committee evaluates the performance of the Board on an annual basis and provides recommendations on performance improvement.# 3.2.2. Board Members’ Disclosure of Information
The names of the candidates for election to the Board, their education, qualifications, professional experience, positions held, other relevant professional commitments and potential conflicts of interest should be disclosed, without prejudice to the requirements of the legislation governing the processing of personal data, at the meeting of the Supervisory Council at which the Board or its individual members will be elected. If the Supervisory Council is not established, the information set out in this point should be submitted to the General Meeting of Shareholders. The Board should compile the data on its members referred to in this point each year and disclose it in the company’s annual report.
Yes
Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
All new members of the Board should be briefed on their duties, the company’s structure and its activities.
Yes
The Board members are introduced to their duties, the structure and activities of the Company by sharing with them the Company‘s corporate documents – a set of such documents is sent by email to the newly elected Board members.
Members of the Board should be appointed for a fixed term, with the possibility of individual re-election, in order to ensure the necessary growth in professional experience and sufficiently frequent reconfirmation of their status.
Yes
Paragraph 26 of the Company’s Articles of Association stipulates that the Board is a collegial management body of the Company consisting of five members. The members of the Board are elected for a four-year term of office by the General Meeting of Shareholders, to which the Board is accountable. A member of the Board may not serve as a member of the Board for more than two consecutive full Board terms and in any case may not serve as a member of the Board for more than 10 (ten) consecutive years.
The Chair of the Board should be a person whose current or former position would not be an obstacle to the impartial conduct of business. A former CEO of the company should not immediately be appointed as a Chair of the Board. Where a company chooses not to comply with these recommendations, information should be provided on the measures taken to ensure operational impartiality.
Yes
Paragraph 28 of the Company’s Articles of Association stipulates the criteria prohibiting a person to be elected as a member of the Board. Article 28 of the Company’s Articles of Association provides the criteria according to which a person cannot be elected as a member of the Board. Article 46 of the Company’s Articles of Association provides that the chairperson of the Board should be elected from among the Board members nominated by the parent company.
Each member should devote sufficient time and attention to his or her duties as a Board member. If a member of the Board has attended less than half of the meetings of the Board during the company’s financial year, the company’s Supervisory Council should be informed, or, if there is no Supervisory Council, the General Meeting of Shareholders.
Yes
The Board members actively attend the meetings, and the minutes of the meetings provide records of attendance and voting by the Board members during the decision-making process. As provided for in Paragraph 51 of the Company’s Articles of Association, the Board of the Company shall account for its activities by providing the General Meeting of Shareholders with its annual report of activities on the Board, including information about adopted resolutions and the annual self-assessment. The report can be submitted within the framework of the annual report of the Company.
If, in the cases provided for in the Law, when the Board is elected in the absence of a Supervisory Council, some of the members of the Board will be independent i , it should be published which members of the Board are considered independent. The Board may decide that a particular member of the Board, although fulfilling all the criteria for independence set out in the Law, may not be considered independent because of special personal or company-related circumstances.
Yes
The Company’s website and the annual report contain information about the Company's Board members, with specific indication of which members are independent. At each Board meeting, the Board members are required to declare potential conflicts of interest related to the agenda items.
The amount of remuneration to be paid to members of the Board for their activities and participation in Board meetings should be approved by the company’s General Meeting of Shareholders.
Yes
Article 25 of the Company’s Articles of Association provides that the General Meeting of Shareholders decides on the appointment and removal of Board members, fixing the remuneration of Board members, conclusion of contracts with Board members and their standard terms and conditions. Based on the decision of the General Meeting of Shareholders, a fixed monthly pay for service at the Board and for activities at the group’s committees has been set only for independent Board members.
Board members should act honestly, diligently and responsibly in the best interests of the company and its shareholders and represent their interests, taking into account other interest holders. They should not pursue personal interests in their decision-making, should be subject to non-competition agreements, and should not, to the detriment of the company's interests, take advantage of business information and opportunities that are relevant to the company's activities.
Yes
Taking into account the objective to monitor the absence of conflicts of interest of the Company‘s Board members, each year the Board members update their declarations of interests, and the independent members are assessed for their independence. In addition, paragraph 31 of the Company’s Articles of Association stipulates that the Board members may be employed elsewhere or hold other job position compatible with their activities in the Board, including but not limited to executive positions in other legal entities, a job in a state or statutory service, duties at the Company and other legal entities (in view of the restrictions set in paragraph 28 of the Articles of Association), as well as in legal entities where the Company or the parent company acts as a member, only by providing a prior notice to the Company’s Board. The Company has adopted the Policy of Management of Interests of Members of Collegial Bodies, Executives and Employees of EPSO-G Group. Members of the Boards have signed commitments to protect the information confidential. No-compete agreements are not concluded with the members of the Board. The need for such agreements was not established because the Company conducts a monopoly business.
Every year the management board should carry out an assessment of its activities. It should include an assessment of the structure, organisation and ability to act as a group, as well as an assessment of the competence and effectiveness of each member of the Board and an assessment of whether the Board has achieved its stated performance objectives. The management board should, at least once a year, make public respective information about its internal structure and working procedures in observance of the legal acts regulating the processing of personal data.
Yes
The Board carries out a self-assessment of its activities annually, and on its basis prepares a performance improvement plan. In addition, the Remuneration and Nomination Committee and the Audit Committee, acting at the EPSO- G Group level, evaluate annually decisions made by the Board and provide recommendations on performance improvement. The results of assessment of the Board’s activities are presented in the Company’s annual report.
The company's procedures for the work of the Supervisory Council, if established, and the Board should ensure the effective work and decision-making of these bodies and promote active cooperation between the company’s bodies.
The Board and the Supervisory Council, if established, should work closely together for the benefit of both the company and its shareholders. Good corporate governance requires an open discussion between the management board and the supervisory board. The Board should regularly and, if necessary, promptly inform the Supervisory Council of all matters of importance to the company in relation to planning, business development, risk management and control, and compliance with the company’s obligations. The Board should inform the supervisory board about any derogations in its business development from the previously formulated plans and objectives by specifying the reasons for this.
Not applicable
The Supervisory Council is not formed at the Company.
It is recommended that meetings of the company’s collegial bodies be held at appropriate intervals in accordance with a pre-approved schedule. It is up to each company to decide on the frequency of meetings of the collegial bodies, but it is recommended that they should be held at such a frequency as to ensure the uninterrupted discussion of the company’s key governance issues. Meetings of the company’s collegiate bodies should be convened at least once a quarter of the year.
Yes
Article 45 of the Company’s Article of Association provides that the Board shall adopt its resolutions at the meetings of the Board. The regulation of the convocation of Board meetings and the voting procedure, as well as other procedural issues shall be as provided by the Law on Companies and related legal acts, and shall be defined in detail in the rules of procedure of the Board, which shall be approved by the Board.# At the end/beginning of each year, the Company’s Board approves the schedule and activity plan (a preliminary agenda for the respective Board meeting) for the upcoming/current year.
The members of the collegial body should be informed in advance of the convening of the meeting in order to allow sufficient time for adequate preparation of the issues to be discussed at the meeting and for the discussion leading to the adoption of decisions. The members of the collegial body should be provided with all relevant material relating to the agenda of the meeting together with the notice of the meeting. The agenda should not be amended or supplemented during a meeting unless all members of the collegiate body are present and agree to such amendment or supplementation or unless there is an urgent need to deal with important matters of the company.
Yes
The work of the Board is guided by the Rules of Procedure of the Board, governing the convening of meetings, the information of the Board members, the submission of material and other procedural issues. According to the Board’s Rules of Procedure, the material must be submitted to the Board five working days before the regular meeting. The Board follows the recommendation to amend the agenda.
In order to coordinate the work of the company’s collegial bodies and to ensure an efficient decision-making process, the chairpersons of the company’s collegial supervisory and management bodies should coordinate the dates and agendas of the meetings to be convened and should cooperate closely on other issues related to the company’s management. Meetings of the company’s Supervisory Council should be open to the members of the company’s Board, in particular where the meeting deals with matters relating to the removal of members of the Board, their liability and the determination of remuneration.
Not applicable
The Supervisory Council is not formed at the Company.
The committees established within the company should enhance the effectiveness of the Supervisory Council and, if the Supervisory Council is not established, of the Board, which performs supervisory functions, by ensuring that decisions are taken after due deliberation and by helping to organise the work in such a way as to ensure that decisions are not affected by material conflicts of interest. The Committees should act independently and in a principled manner and make recommendations related to the decision of the collegial body, but the final decision is taken by the collegial body itself.
Depending on the specific circumstances of the company and the governance structure chosen, the company’s Supervisory Council and, if the Supervisory Council not established, the Board, which performs the supervisory functions, form committees. It is recommended that the collegial body form Nomination, Remuneration and Audit committees.
Yes
The Company has the Remuneration and Nomination Committee at the Group level, which is formed by the Board of EPSO-G UAB and acts in accordance with the regulations approved by the body that forms it, and the Audit Committee at the Group level, which is formed by the sole shareholder EPSO-G UAB and acts in accordance with the regulations approved by the body that forms it. Given the close links between remuneration and nomination issues and the need for experts with the same qualifications, it has been decided to form a single Remuneration and Nomination Committee.
Companies may decide to have fewer than three committees. In this case, companies should provide an explanation as to why they have chosen the alternative approach and how the chosen approach meets the objectives set by the three separate Committees.
Yes
The functions assigned to the committees formed in companies may be performed by the collegial body itself in the cases provided for by law. In such a case, the provisions of this Code relating to committees (in particular as regards their role, functioning and transparency) should, where appropriate, apply to the collegiate body as a whole.
Not applicable
Please see par. 5.1.1.
Committees established by the collegial body should normally be composed of at least three members. Subject to the requirements of the legal acts, committees could be comprised only of two members as well. Members of each committee should be selected on the basis of their competences by giving priority to independent members of the collegial body. The chair of the management board should not serve as the chair of committees.
Yes
Paragraphs 7.8 and 7.9 of the Articles of Association of EPSO-G UAB regulate the formation of committees at the EPSO-G Group level and the areas of their competence. The aforementioned statutes state that the Remuneration and Nomination and Audit Committees shall consist of at least three members. It is ensured that from among three members there is at least one independent member in the Remuneration and Nomination Committee, and more than half of the members in the Audit Committee. Not all members of the Remuneration and Nomination Committee and the Audit Committee are appointed from the Board of EPSO-G. One member to each of the committees is appointed on the basis of competence when performing the external selection of an independent member of the committee.
21 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).
The authority of each committee formed should be determined by the collegial body itself. Committees should perform their duties according to the authority delegated to them and regularly report to the collegial body on their activities and performance on a regular basis. The Rules of Procedure of each committee, defining its role and specifying its rights and duties, should be published at least once a year (as part of the information that the company publishes annually about its governance structure and practices). Companies should also publish each year in their annual report, without prejudice to the requirements of the legislation on the processing of personal data, the composition, number of meetings and attendance of members of the existing committees during the previous year, as well as the main operational goals and their performance.
Yes
The authority of the committees is determined in the Articles of Association of EPSO-G UAB and under the decision of the body forming the committee – the Regulations of the Remuneration and Nomination Committee are approved by the decision of the Board of EPSO-G UAB, and the Regulations of the Audit Committee are approved by the decision of the sole shareholder EPSO-G UAB, as it is permitted by the Requirements for Members of the Audit Committee approved by the Bank of Lithuania (Article 10). The Regulations of the Committees are available on EPSO-G UAB website. Information about the composition, activities of the committees and other information is presented in the consolidated Group’s annual report.
In order to ensure the independence and objectivity of committees, members of the collegial body who are not members of the committee should normally be entitled to attend committee meetings only at the invitation of the committee. The Committee may invite or require the attendance of certain employees or experts of the Company. The Chair of each committee should be able to communicate directly with shareholders. The cases in which this should be done should be specified in the rules governing the operation of the Committee.
Yes
The Regulations of the Committees provide for the right of the members of the Committees to invite, at their discretion, to their meetings the members of the bodies of the companies of the EPSO-G UAB group of companies, employees, representatives, candidates for certain positions or other persons and to obtain from them the necessary explanations within their competence as well as require for that purpose that necessary actions would be carried out needed for the performance of the functions of the Committees.
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 assess the balance of skills, knowledge and experience in the governing body, develop a description of the functions and skills required for the specific position and assess the time required to complete the assignment; (2) to 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) to devote the attention necessary to ensure succession planning.
Yes
The Remuneration and Nomination Committee of EPSO- G UAB serves as the advisory body to the Board of EPSO- G UAB and to the Company’s Board.## 5.2.2. Nomination Committee.
The main functions of the Committee are as follows:
- assistance in the selection of candidates to members of the bodies in all the group companies;
- provision of recommendations for the group companies on appointment of members to the management bodies, conclusion of contracts with them and determination of remuneration for them;
- provision of recommendations on the policies of the group companies that govern the remuneration policy and employee performance assessment;
- provision of recommendations on the system of succession of critical positions.
- makes recommendations on the system of equal opportunities, inclusion and diversity promotion within the Group;
- etc.
The Company’s CEO should be consulted on matters relating to members of the collegial body who have an employment relationship with the company and to the Senior Management, with the right to make proposals to the Nomination Committee. Yes
The Regulations establish that the right of initiative to convene the Remuneration and Nomination Committee is exercised by the boards or CEOs of the Group of companies that also propose the agenda of the meeting by submitting issue-related materials and draft resolutions. Currently, the Company’s Board has no members who have employment relations with the Company.
The main functions of the Remuneration Committee should be:
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 policies should cover all forms of remuneration, including fixed remuneration, performance- related remuneration, financial incentive schemes, pension schemes, severance payments, as well as conditions that would allow the company to recover amounts or suspend payments, indicating the circumstances that would make it appropriate;
2) submit to the collegial body proposals regarding individual remuneration for members of the collegial bodies and the heads of the administration in order to ensure that they would be consistent with the company's remuneration policy and the evaluation of the performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its implementation. Yes
The Company has a single Remuneration and Nomination Committee, with functions described in detail in point 5.2.1.
The key functions of the audit committee are defined in the legal acts regulating the activities of the audit committee 22. Yes
The Audit Committee of EPSO-G UAB serves as the advisory body to the Board of EPSO-G UAB and to the Company’s Board. The main functions of the Committee are as follows:
- supervision of the preparation of the financial statements of the companies of the Group and performance of their audit;
- ensuring compliance with the principles of independence and objectivity by the auditors and audit firms of the companies of the Group;
- oversight of the effectiveness of the Group companies’ internal control, risk management and internal audit systems and business processes;
- responsibility for control over provision of non-audit services by the auditor and/or audit firm of the Group companies;
- ensuring the functioning of the complaints system and complaints handling;
- evaluation of transactions with related parties.
All members of the committee should be provided with detailed information on specific issues of the company’s accounting system, finances and operations. The Audit Committee should be informed by the company’s executives of the accounting treatment of significant and unusual transactions, which may be accounted for in different ways. Please see par. 5.4.1.
22 For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions. For the purposes of this Code, the criteria of independence of members of the supervisory council are interpreted as the criteria of unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania. 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.
The Audit Committee should decide whether the participation of the chair of the management board, CEO 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 able to meet the persons concerned, if necessary, without the presence of members of the management bodies. Yes
The Regulations of the Audit Committee stipulate that the members of the Committee, at their own discretion, may invite to their meetings the members of the bodies of the companies of the group, their employees, representatives, candidates for certain positions or other persons, and obtain from them the necessary explanations within their competence, as well as require for that purpose that necessary actions would be taken for the performance of the functions of the Committee.
The Audit Committee should be informed about the internal auditor’s work programme and should be furnished with internal audit reports or periodic summaries. The Audit Committee should also be informed of the work programme of the external auditors and should receive a report from the audit firm describing any relationship between the independent audit company and the company and its group. Yes
Please see par. 5.4.3. The Audit Committee is regularly, at least quarterly, informed about the internal audit reports and at least once every six months, with the internal audit plan and it may provide recommendations with regard to them to the boards of the companies of the EPSO-G Group. The Audit Committee organises meetings with the external auditors to discuss the auditors’ work program and uncertainties arising during the audit, and after the performance of the external audit, their conclusions and recommendations are discussed with the external auditors. Each year, before the start of annual audits, the audit firm submits its declaration of independence to the Audit Committee and to the companies.
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 Regulations of the Audit Committee stipulate that the Audit Committee ensures the effective functioning of the complaints system and the proportionate and independent investigation of submitted complaints. In the implementation of this function, the Chairperson of the Audit Committee is immediately informed about significant complaints received. In addition, the Audit Committee is regularly reported on all complaints received by the companies of the EPSO-G Group, their investigation and decisions made on the basis of the findings of investigations carried out.
The Audit Committee should submit to the supervisory board or, where the supervisory board is not formed, to the management board its activity report at least once in every six months, at the time that annual and half-yearly reports are approved. Yes
The Regulations of the Audit Committee stipulate that the Audit Committee submits quarterly activity reports to the Board. In addition, it submit a consolidated activity report to the Ordinary General Meeting of Shareholders and to the Board of EPSO-G UAB.
The corporate governance framework should encourage members of the company’s supervisory and management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to members of the supervisory and management bodies. The corporate governance system should recognise the rights of stakeholders as established by law and promote active cooperation between the company and stakeholders to create wealth, jobs and financial stability. In the context of this principle, stakeholders include investors, employees, creditors, suppliers, customers, the local community and others with an interest in the company. A member of a company’s supervisory and management body should avoid a situation where his or her personal interests conflict or may conflict with the interests of the company. If such a situation does arise, a member of the supervisory or management body of the company should, within a reasonable period of time, inform the other members of the same body, or the body of the company that elected him or her, or the shareholders of the company of the existence of such a conflict of interests, indicating the nature of the interests and, where possible, the value. Yes
This obligation is set out in paragraphs 56-57 of the Company’s Articles of Association, the Regulations of the management bodies, and the Policy of Management of Interests of Members of Collegial Bodies, Executives and Employees of EPSO-G Group. Article 30 of the Company’s Articles of Association stipulates that upon emergence of new circumstances, which may lead to a conflict of interests of a member of the Board, the member of the Board must notify the Board and the Company of such new circumstances without any undue delay.# Principle: Company’s remuneration policy
The company’s remuneration policy and the procedures for its review and disclosure should prevent potential conflicts of interest and abuse in determining the remuneration of the members of the collegiate bodies and of the executives, and ensure the openness and transparency of the company's remuneration policy, as well as the company’s long-term strategy.
Yes
The Company applies the Guidelines for Determining the Remuneration for Service at the Bodies of EPSO-G UAB and EPSO-G UAB Group Companies, which are approved by the sole shareholder EPSO-G UAB and are available to public. The Company applies in full EPSO-G Group’s Remuneration, Performance Appraisal and Training Policy. The Remuneration Policy is available to the public.
Yes
All possible forms of remuneration for collegiate bodies and employees are set out in the Guidelines for determining remuneration for activities in the corporate bodies of EPSO-G UAB and EPSO-G Group and in the Remuneration, Performance Assessment and Development Policy of the EPSO-G Group. Both documents are made public.
Yes
The Company applies the Guidelines for Determining the Remuneration for Service at the Bodies of EPSO-G UAB and the EPSO-G Group Companies, which define a fixed remuneration for independent members of the collegial bodies. The members of the Board do not receive remuneration (bonuses) based on the Company’s performance.
No
The Remuneration, Performance Appraisal and Training Policy of the EPSO-G Group stipulates that the Group companies do not enter into advance agreements on the amounts of termination benefits (except for the heads of the companies whose terms of employment are determined by the Board). The amounts of termination benefits are determined by taking into account the mandatory minimum amounts of such benefits established by the provisions of labour law, except for exceptional cases when there are objective reasons for the agreement on higher amounts of benefits. The Board of the company shall be informed about the payment of such benefits and the grounds for their payment during the upcoming meeting
Not applicable
No such schemes are applied at the Company.
Yes
General information on the implementation of the Remuneration Policy and average salary levels by each category of employees are disclosed to public in the Company’s annual report. According to Article 25(5) of the Law on Energy of the Republic of Lithuania, the Company discloses remuneration of the members of the Company’s management bodies, and other benefits related to the functions of the members of the management bodies. Information on employee remuneration is made available to public on a quarterly basis on the Company’s website.
Yes
Not applicable
The remuneration of the members of the Company’s Board is determined by the General Meeting of Shareholders of the Company. When determining the remuneration, the Company follows the Guidelines for Determining the Remuneration for Service at the Bodies of EPSO-G UAB and the EPSO-G Group Companies, which are approved by the sole shareholder EPSO-G UAB. Such schemes are not applied at the Company.
The corporate governance framework should recognise the rights of stakeholders entrenched in the laws or mutual agreements and encourage active cooperation between the company and stakeholders in creating the company value, jobs and financial sustainability. In the context of this principle, stakeholders include investors, employees, creditors, suppliers, customers, the local community and others with an interest in the company.
Yes
The Company has adopted the Transparency and Communication Policy of the EPSO-G Group of Companies, which establishes goals to increase awareness and understanding of stakeholders about the activities of the EPSO-G Group of companies and individual group companies; to ensure employee engagement; to create and maintain sustainable relationship with stakeholders based on mutual respect.
Yes
The Company, together with the representatives of the Company’s employees, conducts consultations, negotiations and briefings on the processes for improving efficiency of the Company’s operations. Stakeholders can take part in the corporate governance to the extent permitted by law.
Yes
The stakeholders are provided with the conditions to familiarise themselves with the required information.
Yes
The Company’s Trust Line contacts are available to public on the Company’s official website. The contacts can be used by the stakeholders to report any incidents of violation of environmental, occupational health and safety requirements, unethical or inappropriate work practices, violation of anti-corruption requirements. The stakeholders are introduced to the possibility to contact directly the head of the Company or the chairperson of the Board. The Audit Committee operating at the level of the EPSO- G Group of companies ensures the functioning of the system of lodging complaints and their handling.
The corporate governance framework should ensure that timely and accurate disclosures are made on all material matters concerning the company, including its financial position, performance and corporate governance.
Yes
The Company applies the Transparency and Communication Policy of the EPSO-G Group, based on which the essential financial and non-financial information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
Yes
Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
Yes
Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.Here is the input text formatted into Markdown:
the persons owning or controlling a shareholding in the company, directly and/or indirectly and/or jointly with associated persons, as well as the structure of the group of companies and the interrelationships between them, with an indication of the ultimate beneficial owner; Yes Information is disclosed to public in the Company’s interim and annual reports and on the Company’s and/or the Group companies’ website.
9.5. the members of the Company’s supervisory and management bodies, which of them are considered independent, the Company’s CEO, their shareholdings or votes in the Company, and their involvement in the management of other companies, their competence and remuneration; Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.6. reports from existing committees on their composition, number of meetings and attendance of members during the previous year, as well as on their main activities and results; Yes Information is disclosed to public in the Company’s interim and annual reports and on the Company’s and/or the Group companies’ website.
9.7. the potential key risk factors, the company’s risk management and supervision policy; Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.8. the company’s transactions with related parties; Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.9. key issues relating to employees and other stakeholders (e.g. human resources policies, employee participation in the management of the company, incentives in the form of shares or share options, relations with creditors, suppliers, the local community, etc.); Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.10. the company’s governance structure and strategy; Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.11. initiatives and measures of social responsibility policy and anti-corruption fight, significant current or planned investment projects. This list is deemed minimum and companies are encouraged not to restrict themselves to the disclosure of information included into this list. This principle of the Code does not relieve a company of its obligation to disclose information as required by law. Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
179
9.12. When disclosing the information specified in Item 9.1.1 of recommendation 9.1, it is recommended that the company which is a parent company in respect of other companies should disclose information about the consolidated results of the whole group of companies. Yes EPSO-G UAB, as a parent company, discloses consolidated information in the consolidated annual report.
9.13. When disclosing the information specified in Item 9.1.4 of recommendation 9.1, it is recommended that the information on the professional experience and qualifications of members of the Company’s supervisory and management bodies and 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 CEO of the company should be disclosed, as provided for in greater detail in Principle 7. Yes Information is disclosed to public in the Company’s interim and annual report and on the Company’s official website.
9.14. 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 the information via the information disclosure system used by the NASDAQ Vilnius stock exchange in the Lithuanian and English languages simultaneously. The Company discloses information prior to or after a trading session at NASDAQ Vilnius Stock Exchange and presents it simultaneously to all the markets in which the Company’s stock is traded. The Company does not disclose information that may affect the price of its stock in any comments, interviews or by any other means until such information is provided through the information disclosure system of the stock exchange.
10 Principle: Selection of the Company’s audit firm
The Company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.
10.1. With a view to obtain an objective opinion on the company’s financial position and financial performance results, the company’s annual financial statements and the financial information provided in its annual report should be audited by an independent audit firm. Yes The Company’s financial information is audited by an independent audit firm. The independent auditor is appointed by the General Meeting of Shareholders.
10.2. It is recommended that the audit firm would be proposed to the general meeting of shareholders by the supervisory board or, if the supervisory board is not formed at the company, by the management board of the company. Yes The Audit Committee operating at the Group level takes part in the selection process of an auditor, by recommending a candidate for the independent auditor to the Company’s Board. As the Board assesses the candidate proposed by the Audit Committee, it proposes the candidate for the approval by the General Meeting of Shareholders.
10.3. In the event that the audit firm has received remuneration from the company for the non-audit services provided, the company should disclose this publicly. This information should also be available to the Supervisory Council or, if the Supervisory Council 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 The fee for non-audit services received by the audit firm is made available to public by the Company. The non- audit services provided by the audit company shall be in accordance with the policy approved by the Audit Committee of EPSO-G Group on the purchase of non- audit services from the audit company or from any network to which the audit company belongs. The provision of non-audit services is supervised by the Audit Committee operating at the Group level, which has all the necessary information about the auditor to provide recommends to the Board on a candidate for the independent auditor.
180
INFORMATION ON COMPLIANCE WITH TRANSPARENCY GUIDELINES
EPSO-G UAB and its subsidiaries comply 23 with Resolution No 1052 of the Government of 14 July 2010 On the Approval of the Description of the Guidelines for Ensuring the Transparency of the Activities of State- Owned Enterprises (hereinafter the “Transparency Guidelines”). The application of the Transparency Guidelines is mandatory to EPSO-G as it is a state-owned enterprise (hereinafter the “SOE”). In order to ensure compliance with the Transparency Guidelines across EPSO-G Group, the Business Transparency and Communication Policy of the EPSO-G Group was approved at the Group level, which considers in detail the requirements set forth in the Transparency Guidelines, and defines their applicability to the EPSO-G Group companies.
Implementation of the Transparency Guidelines is largely ensured by Amber Grid AB through disclosure of information in the annual report and on the official website of Amber Grid, where information is disclosed in the format that is acceptable and comprehensible to the stakeholders. Article 3 of the Transparency Guidelines stipulates that SOE complies with the provisions of the Corporate Governance Code for the Companies Listed on Nasdaq Vilnius AB 24 that are related to public disclosure of information. Information on how Amber Grid complies with the provisions of the Code is provided in Annex to Amber Grid’s Annual Report - Amber Grid Notice of Compliance with the Corporate Governance Code for the Companies Listed on Nasdaq Vilnius AB.
Below is structured information on the implementation of the Transparency Guidelines:
23 Under Article 17.11 of the Transparency Guidelines, in the event of failure to comply with the Transparency Guidelines, the reasons for such non-compliance must be explained.
24 Corporate Governance Code for the Companies Listed on Nasdaq Vilnius approved at the Board meeting of Nasdaq Vilnius AB on 15 January 2019, Minutes No 19-63.
The following information must be published/other requirements must be implemented on Amber Grid’s website (www.ambergrid.lt):
| Company name, company code and the register in which the data on the Company is collected and stored, registered office (address) | Implemented |
|---|---|
| Legal form, in case Amber Grid is restructured, reorganised (the way of reorganisation is to be indicated), under liquidation, in the process of bankruptcy or bankrupt | Not applicable |
| Information on the authority representing the State, i.e. the Ministry of Energy, and link to its official website | Implemented |
| Operational objectives, vision and mission | Implemented |
| Structure | Implemented |
| CEO’s details* | Implemented |
| Data on the chair and members of the Board* | Implemented |
| Details of the chair and members of the Supervisory Council* | Not applicable |
| Names of committees, their chairs and members* | Not applicable |
(All amounts are in EUR ’000 unless otherwise stated)
| Company¹ | Notes | As at 31 December 2024 | As at 31 December 2023 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 5 | 2,210 | 2,559 |
| Property, plant and equipment | 6 | 276,754 | 284,353 |
| Right-of-use assets | 8 | 4,281 | 3,100 |
| Investments in subsidiaries and associates | 7 | 3,560 | 3,644 |
| Derivatives | 9 | 1,153 | 1,226 |
| Deferred tax assets | 33 | 3,931 | 4,086 |
| Total non-current assets | 291,889 | 298,968 | |
| Current assets | |||
| Inventories | 10 | 4,761 | 4,874 |
| Prepayments | 865 | 794 | |
| Trade receivables | 11 | 9,763 | 9,030 |
| Other receivable | 12 | 13,152 | 19,074 |
| Prepaid income tax | - | - | |
| Other financial assets | 13 | 6,735 | 528 |
| Cash and cash equivalents | 14 | 31 | 121 |
| Total current assets | 35,307 | 34,421 | |
| Total assets | 327,196 | 333,389 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Issued capital | 15 | 51,731 | 51,731 |
| Legal reserve | 17 | 5,173 | 5,173 |
| Other reserves | 17 | 403 | 114,430 |
| Revaluation reserve | 17 | 2,479 | 2,767 |
| Retained earnings | 115,842 | 13,425 | |
| Total equity | 175,628 | 187,526 | |
| Non-current liabilities | |||
| Non-current borrowings | 19 | 55,312 | 60,962 |
| Lease liabilities | 20 | 3,492 | 2,933 |
| Contract liabilities | 21 | 1,700 | 1,530 |
| Provisions | 22 | 937 | 667 |
| Total non-current liabilities | 61,441 | 66,092 | |
| Current liabilities | |||
| Current borrowings | 19 | 23,563 | 25,435 |
| Current portion of non-current borrowings | 19 | 5,919 | 5,649 |
| Current portion of lease liabilities | 20 | 986 | 317 |
| Trade payables | 23 | 6,384 | 5,335 |
| Prepayments received and contract liabilities | 24 | 1,036 | 622 |
| Income tax liability | 1,071 | - | |
| Other payables and current liabilities | 25 | 45,197 | 41,950 |
| Provisions | 22 | 5,971 | 463 |
| Total current liabilities | 90,127 | 79,771 | |
| Total equity and liabilities | 327,196 | 333,389 |
1) As the Company has elected to apply the equity method of accounting to its investment in an associate (after the loss of control) in the consolidated and separate financial statements for 2023, there is an overlap between the economic interest (group) and the Company’s figures for 2024 and 2023, and therefore only the Company's figures are presented.
(All amounts are in EUR ’000 unless otherwise stated)
| Company¹ | Group | Notes | 2024 | 2023 | 2023 |
|---|---|---|---|---|---|
| Revenue | 26 | 74,310 | 80,029 | 80,921 | |
| Other income | 27 | 273 | 1,308 | 1,308 | |
| 74,583 | 81,337 | 82,229 | |||
| Purchases of natural gas and other services | 29 | (16,079) | (17,441) | (17,441) | |
| Impact of the change of gas balances | 29 | (430) | (7,911) | (7,911) | |
| Payroll and related expenses | 30 | (15,501) | (13,840) | (14,096) | |
| Purchases of repair and maintenance services | (2,612) | (3,055) | (3,055) | ||
| Other expenses | 31 | (13,434) | (13,351) | (13,419) | |
| (48,056) | (55,598) | (55,922) | |||
| EBITDA | 26,527 | 25,739 | 26,307 | ||
| Dividend income | 28 | - | 542 | - | |
| Result on loss of control and revaluation of associates | - | 10,146 | 9,489 | ||
| Gain (loss) on derivatives | (364) | (208) | (208) | ||
| Depreciation and amortisation | 5,6,8 | (14,932) | (12,595) | (12,680) | |
| Revaluation of property, plant and equipment | 6 | - | (7,940) | (7,940) | |
| Loss on impairment and write-off of property, plant and equipment | (43) | (229) | (229) | ||
| Operating profit (EBIT) | 11,188 | 15,455 | 14,739 | ||
| Finance income | 186 | 22 | 467 | 467 | |
| Finance costs | (2,352) | (1,780) | (1,781) | ||
| Total finance costs, net | 32 | (2,166) | (1,758) | (1,314) | |
| Share of results of associates | 7 | 480 | 295 | 295 | |
| Profit before income tax | 9,502 | 13,992 | 13,720 | ||
| Income tax | |||||
| Current year income tax expenses | (1,071) | - | (140) | ||
| Deferred tax benefit (expenses) | (125) | (567) | (567) | ||
| Total income tax | 33 | (1,196) | (567) | (707) | |
| Net profit | 8,306 | 13,425 | 13,013 | ||
| Other comprehensive income | |||||
| Items that will not be reclassified to profit or loss | |||||
| Gain on revaluation of non-current assets | 17 | - | 3,255 | 3,255 | |
| Deferred tax (expenses) | 17 | (30) | (488) | (488) | |
| Total other comprehensive income | (30) | 2,767 | 2,767 | ||
| Total comprehensive income for the period | 8,276 | 16,192 | 15,780 | ||
| Basic and diluted earnings per share (EUR) | 34 | 0.05 | 0.08 | 0.07 |
1) As the Company has elected to apply the equity method of accounting to its investment in an associate (after the loss of control) in the consolidated and separate financial statements for 2023, there is an overlap between the economic interest (group) and the Company’s figures for 2024, and therefore only the Company's figures are presented.
The accompanying notes form an integral part of these financial statements.# Consolidated statement of changes in equity (All amounts are in EUR ’000 unless otherwise stated)
| Notes | Issued capital | Legal reserve | Other reserves | Revaluation reserve | Retained earnings | Total |
|---|---|---|---|---|---|---|
| Balance as at 31 December 2022 | 51,731 | 5,231 | 110,768 | - | 16,074 | 183,804 |
| Reserves established | - | - | 3,662 | - | (3,662) | - |
| Dividends declared | - | - | - | - | (12,058) | (12,058) |
| Eliminating the impact of loss of control | - | (58) | - | - | 58 | - |
| Total transactions with owners | - | (58) | 3,662 | - | (15,662) | (12,058) |
| Net profit for the year | - | - | - | - | 13,013 | 13,013 |
| Other comprehensive income | 17 | - | - | - | 2,767 | - |
| Total comprehensive income for the period | - | - | - | 2,767 | 13,013 | 15,780 |
| Balance as at 31 December 2023 | 51,731 | 5,173 | 114,430 | 2,767 | 13,425 | 187,526 |
| Depreciation of revaluation reserve and write-offs | - | - | - | (258) | 258 | - |
| Reserves cancelled | 17 | - | - | (114,027) | - | 114,027 |
| Dividends declared | - | - | - | - | (20,174) | (20,174) |
| Total transactions with owners | - | - | (114,027) | (258) | 94,111 | (20,174) |
| Net profit for the year | - | - | - | - | 8,306 | 8,306 |
| Other comprehensive income | 17 | - | - | - | (30) | - |
| Total comprehensive income for the period | - | - | - | (30) | 8,306 | 8,276 |
| Balance as at 31 December 2024 | 51,731 | 5,173 | 403 | 2,479 | 115,842 | 175,628 |
The accompanying notes form an integral part of these financial statements.
| Notes | Issued capital | Legal reserve | Other reserves | Revaluation reserve | Retained earnings | Total |
|---|---|---|---|---|---|---|
| Balance as at 31 December 2022 | 51,731 | 5,173 | 110,768 | - | 15,720 | 183,392 |
| Reserves established | - | - | 3,662 | - | (3,662) | - |
| Dividends declared | - | - | - | - | (12,058) | (12,058) |
| Total transactions with owners | - | - | 3,662 | - | (15,720) | (12,058) |
| Net profit for the year | - | - | - | - | 13,425 | 13,425 |
| Other comprehensive income | 17 | - | - | - | 2,767 | - |
| Total comprehensive income for the period | - | - | - | 2,767 | 13,425 | 16,192 |
| Balance as at 31 December 2023 | 51,731 | 5,173 | 114,430 | 2,767 | 13,425 | 187,526 |
| Depreciation of revaluation reserve and write-offs | 17 | - | - | - | (258) | 258 |
| Reserves cancelled | 17 | - | - | (114,027) | - | 114,027 |
| Dividends declared | - | - | - | - | (20,174) | (20,174) |
| Total transactions with owners | - | - | (114,027) | (258) | 94,111 | (20,174) |
| Net profit for the year | - | - | - | - | 8,306 | 8,306 |
| Other comprehensive income | 17 | - | - | - | (30) | - |
| Total comprehensive income for the period | - | - | - | (30) | 8,306 | 8,276 |
| Balance as at 31 December 2024 | 51,731 | 5,173 | 403 | 2,479 | 115,842 | 175,628 |
The accompanying notes form an integral part of these financial statements.
| Company ¹ | Group | Notes | 2024 | 2023 | 2023 |
|---|---|---|---|---|---|
| I. Cash flows from operating activities | |||||
| I.1. Net profit | 8,306 | 13,425 | 13,013 | ||
| Adjustments for non-cash items and other corrections: | |||||
| I.2. Depreciation and amortisation | 5,6,8 | 14,932 | 12,595 | 12,680 | |
| I.3. Revaluation of property, plant and equipment | - | 7,940 | 7,940 | ||
| I.4. Loss on impairment and gain/loss on disposal/write-off of property, plant and equipment | 41 | (78) | (78) | ||
| I.5. Gain/loss on impairment and write-off of inventories, trade receivables | (132) | (31) | (31) | ||
| I.6. Income tax expenses (benefit) | 33 | 1,196 | 567 | 707 | |
| I.7. Grants recognised as income | (4) | (54) | (54) | ||
| I.8. Increase (decrease) in provisions | 5,8 | 5,834 | 37 | 37 | |
| I.9. Elimination of other non-cash items | - | - | 3 | ||
| Elimination of results of financing and investing activities: | |||||
| I.10. Dividend income | - | (542) | - | ||
| I.11. Result on loss of control and revaluation of associate | 7 | - | (10,146) | (9,489) | |
| I.12. Gain/loss on derivatives | 8 | 364 | 208 | 208 | |
| I.13. Share of results of associate | 7 | (480) | (295) | (295) | |
| I.14. Total finance costs, net | 32 | 2,166 | 1,769 | 1,324 | |
| Changes in working capital: | |||||
| I.15. (Increase) decrease in inventories, prepayments and other current assets | 255 | 8,167 | 8,173 | ||
| I.16. (Increase) decrease in trade receivables | (738) | 9,466 | 18,664 | ||
| I.17. (Increase) decrease in other receivables | (1,376) | 1,109 | (1,277) | ||
| I.18. (Decrease) increase in trade payables | 980 | (6,079) | (52,811) | ||
| I.19. (Decrease) increase in other payables and current liabilities | 3,259 | 1,484 | (114,248) | ||
| I.20. (Increase) decrease in other financial assets | (2) | 398 | 156,063 | ||
| I.21. Income tax received (paid) | - | - | (95) | ||
| Net cash flows from operating activities | 34,601 | 39,940 | 40,434 |
The accompanying notes form an integral part of these financial statements. (cont’d on the next page)
| Company ¹ | Group | Notes | 2024 | 2023 | 2023 |
|---|---|---|---|---|---|
| II. Cash flows from investing activities | |||||
| II.1. (Acquisition) of property, plant and equipment and intangible assets | (6,072) | (37,625) | (37,633) | ||
| II.2. Proceeds from disposal of property, plant and equipment | 340 | 749 | 749 | ||
| II.3. Grants received | 18 | 7,192 | 14,259 | 14,259 | |
| II.4. Sale (acquisition) of subsidiaries (associates) | - | 6,500 | 5,307 | ||
| II.5. Loans granted (repayments received) | - | - | - | ||
| II.6. Interest received | 135 | 8 | 453 | ||
| II.7. Dividends received | 564 | 542 | - | ||
| II.8. Decrease (increase) in deposits | 13 | (6,205) | (503) | (503) | |
| Net cash flows used in investing activities | (4,046) | (16,070) | (17,368) | ||
| III. Cash flows from financing activities | |||||
| III.1. Dividends (paid) | (20,166) | (12,051) | (12,051) | ||
| III.2. Proceeds from borrowings | - | - | - | ||
| III.3. (Repayments) of borrowings | (5,649) | (24,780) | (24,780) | ||
| III.4. Change in overdraft | (1,526) | 15,437 | 15,437 | ||
| III.5. Interest (paid) | (2,415) | (1,864) | (1,864) | ||
| III.6. Coverage of lease liability | (876) | (512) | (525) | ||
| III.7. Other cash flows from financing activities | (13) | - | - | ||
| Cash flows from/used in financing activities | (30,645) | (23,770) | (23,783) | ||
| IV. Change in cash and cash equivalents included in disposal group | - | - | 817 | ||
| V. Net increase (decrease) in cash and cash equivalents | (90) | 100 | 100 | ||
| VI. Cash and cash equivalents at the beginning of the year | 14 | 121 | 21 | 21 | |
| VII. Cash and cash equivalents at the end of the period | 14 | 31 | 121 | 121 |
1) As the Company has elected to apply the equity method of accounting to its investment in an associate (after the loss of control) in the consolidated and separate financial statements for 2023, there is an overlap between the economic interest (group) and the Company’s figures for 2024, and therefore only the Company's figures are presented.
The accompanying notes form an integral part of these financial statements.
Amber Grid AB (hereinafter the “Company”) is a public limited liability company registered in the Republic of Lithuania. Its registered office address is as follows: Laisvės pr. 10, LT – 04215, Vilnius, Lithuania.
Amber Grid AB was registered on 25 June 2013 as a result of unbundling of natural gas transmission activity (including assets, rights and obligations attributed thereto) from Lietuvos Dujos AB. The Company has been actively operating since 1 August 2013.
After obtaining a favourable decision from the European Commission, on 10 April 2015 the National Control Commission for Prices and Energy (the National Energy Regulatory Council (NERC) as from 1 July 2019) granted to the Company an energy operator licence No L2-3 (GDP) to engage in natural gas transmission activities for indefinite term in the territory of Lithuania.
Acting as a natural gas transmission system operator, the Company provides the following services to the system users, other operators and gas market participants:
The Company’s clients are large companies (operating in the sectors of electricity, district heating, and industry) and medium-sized local businesses, as well as natural gas suppliers receiving natural gas transmission services.
All the shares of the Company are ordinary registered shares with the par value of EUR 0.29 each. As at 31 December 2024 and 2023, all the shares had been fully paid. The Company had no its own shares.
Since 1 August 2013, the Company’s shares have been traded on stock exchange and have been quoted on the Baltic Secondary List of NASDAQ Vilnius. (ISIN – LT0000128696, LEI code 097900BGMP0000061061, ticker AMG1L).
As at 31 December 2024 and 31 December 2023, the Company’s shareholders were as follows:
| Number of shares held | Ownership interest, (%) | |
|---|---|---|
| EPSO-G UAB (company code 302826889, Laisvės ave. 10, Vilnius) | 172,279,125 | 96.58 |
| Other shareholders | 6,103,389 | 3.42 |
| Total | 178,382,514 | 100 |
EPSO-G UAB (hereinafter “EPSO-G”) is a state-owned group of energy transmission and exchange companies (www.epsog.lt). The rights and duties of the sole shareholder of the holding company EPSO-G UAB are exercised by the Ministry of Energy of the Republic of Lithuania (www.enmin.lt).
The consolidated and separate financial statements disclose the combined financial position and results of operations of Amber Grid AB (hereinafter - the "Company") and the Group consisting of Amber Grid AB and its subsidiary GET Baltic UAB (hereinafter - the "Group") up to the date of the change of control (on 31 May 2023).
Information on the shareholding of GET Baltic UAB (hereinafter – “GET Baltic”) as at 31 December 2024 and 31 December 2023 is presented below:
| Company name | Company’s registered office | Shareholding Profile of activities | As at 31 December 2024 | As at 31 December 2023 |
|---|---|---|---|---|
| GET Baltic UAB | Geležinio Vilko st. 18A, LT-08104 Vilnius, the Republic of Lithuania | Licensed activities of natural gas market operator trading natural gas short-term and long-term products. | 34% | 34% |
On 31 May 2023, upon sale of 66% shares in GET Baltic, the Company lost control in GET Baltic. The retained investment in GET Baltic is accounted for as investment in associate.# As at 31 December 2024, the number of employees on payroll at the Company was 349 (31 December 2023: 351).
The principal accounting policies applied in the preparation of the Company’s and the Group’s financial statements for the year ended 31 December 2024 are set out below:
The Group’s and the Company’s financial statements for the year ended 31 December 2024 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and are in compliance thereof. These consolidated and separate financial statements have been prepared on a historical cost basis, except for property, plant and equipment which is recorded at revalued amount, less accumulated depreciation and estimated impairment loss and derivative financial instruments accounted for at fair value. In accordance with the accounting principles of non-current assets of EPSO–G UAB group companies, the non-current assets are accounted at revalued amount less accumulated depreciation and impairment losses, whereas grants are accounted for by reducing the carrying amount of the related asset. These financial statements are presented in EUR ‘000 unless otherwise stated. The Group’s and the Company’s financial year coincides with the calendar year. The Company’s management authorized these financial statements on 7 April 2025. The shareholders of the Company have a statutory right to either approve or refuse to approve these financial statements and require the management to prepare a new set of financial statements. The accounting policies applied in the preparation of the financial statements are consistent with those of the previous financial year except as follows:
The following IFRSs, amendments and IFRIC interpretations were adopted by the Group and the Company for the first time in the financial year ended 31 December 2024:
All amounts in these financial statements have been measured and presented in the euros (EUR), which is an official currency of the Republic of Lithuania.
The Group’s consolidated financial statements included Amber Grid AB and its subsidiary GET Baltic UAB until the loss of control. The financial statements of GET Baltic UAB have been prepared for the same reporting period and using the same accounting policies consistent with those applied by the parent company.
Investments in subsidiaries are accounted for in the parent company’s balance sheet at cost less impairment loss, when the carrying amount of investment reported in the parent company’s balance sheet exceeds the expected recoverable amount. Investments in associates are recorded in the subsidiary’s separate financial statements using the equity method. Under the equity method, the carrying amount of investment in associate is subsequently increased or decreased by the post-acquisition change in the share of the associate’s net assets, less any impairment of investments. The Group’s and Company’s share of the acquired associate’s post-acquisition profits or losses is recognised in profit or loss in the statement of comprehensive income, and the Group’s and Company’s share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The carrying amounts of investments in associates are adjusted by these amounts.
The Group’s and the Company’s intangible assets are recognised if it is probable that future economic benefits associated with the asset will flow to the Group and the Company and the cost of the asset can be measured reliably. Intangible assets are carried at cost, see Note 5. The useful lives of intangible assets other than those with indefinite useful lives are 4 to 8 years. After initial recognition, intangible assets are stated at cost less accumulated amortisation and impairment losses, if any. Intangible assets mainly consist of software, licences and other intangible assets used in the Group’s and the Company’s activities.
In its financial statements for the year ended 31 December 2020, the Company recognised as intangible assets a commitment to register and a right to use the land parcels of third parties on the basis of the special land use conditions. The special land use conditions mean conditions involving certain restrictions or limitations on the activities carried out on the land parcel, which depend on the geographic location, the principal purpose of use, the method of use of the land parcel, and on the environmental and public health needs. The special land use conditions apply for as long as there is an object, in respect of which the protected areas have been established, irrespective of the physical condition of such object; or special land use conditions may be established when there is an intention to implement a project. The special land use conditions remain in force for indefinite period. Since the useful life of the intangible assets is indefinite, such assets are not amortised. The useful life is not limited because the special land use conditions are established for the land parcels for indefinite period.# A provision for non-current liabilities in relation to the commitment to register the special land use conditions (protected areas) has been formed under IAS 37 (see Note 22).
The Group and the Company recognise a financial asset in the statement of financial position only when they become a party to the contractual provisions of the financial instrument, the purchase or sale of the financial asset is recognised or derecognised using the accounting at the trade date. At initial recognition, the Group and the Company measure the financial assets at fair value, except for trade receivables that do not include a significant component of financing. Initial measurement of financial assets other than those measured at fair value through profit or loss, includes the fair value of the instrument and transaction costs directly attributable to the acquisition of the financial asset. Transaction costs include all fees and commissions that the Group and the Company would not have paid if they had not entered into a financial instrument contract.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are recognised as current assets, except for the loans and receivables with maturity term of more than 12 months after the date of the statement of financial position, in which case they are recognised as non-current assets. Loans and receivables are initially recognised at cost (fair value of the amount receivable) and subsequently amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the assets are derecognised or impaired, as well as through the amortisation process.
The Group and the Company account for financial assets measured at fair value through profit or loss using a business model, the goal of which is achieved through the collection of contractual cash flows and the sale of financial assets. The Group and the Company do not have financial assets held for trading that are acquired for the purpose of selling in the near future, and within such category only classify the financial asset that arises on disposal of a business or investment and that represents a non-equity contingent consideration.
The Group and the Company seek to recognise the expected credit losses for the period before the financial instrument becomes past due. Normally, credit risk increases significantly before a financial instrument becomes past due or other delay factors are observed from the debtor (such as restructuring, bankruptcy, other economic difficulties of a client, etc.). Therefore, if there is a considerable amount of cost or effort to obtain reasonable and reliable information that is more forward-looking than past due payments, it should be based on the assessment of credit risk changes. Expected credit losses are recognised based on individually or collectively assessed credit risk of loans and trade receivables, the assessment of which is based on all reasonable and supportable information, including forward-looking information. Lifetime expected credit losses of trade receivables are assessed taking into consideration the level of credit risk. The individual assessment basis is applied to debts with a high level of credit risk concentration or when there is a significant increase in the probability of credit losses. During the individual assessment, information on the credit history of a particular borrower, its financial position as at the date of assessment is analysed, including forward-looking information that would allow to timely determine whether there has been a significant increase in the credit risk of that particular borrower, thus enabling making judgement on the recognition of lifetime expected credit losses in respect of that particular borrower. Lifetime expected credit losses for loans receivable and trade receivables are accounted for through profit or loss using the contra account for doubtful receivables. Loans receivable and trade receivables are written off when the Group and the Company lose the right to the contractual cash flows from the financial assets.
Financial liabilities, including borrowings, are recognised initially at fair value, less transaction costs. Subsequently, financial liabilities are carried at amortised cost using the effective interest rate method. Interest expense is recognised using the effective interest rate method. If a financing agreement concluded before the date of the statement of financial position proves that the liability was non-current as of the date of the statement of financial position, such financial liability is classified as non-current.
Trade payables represent commitments to pay for goods and services acquired from suppliers in the ordinary course of business. Trade payables are classified as current liabilities if the term of their settlement is no longer than one year; otherwise, they are included in non-current liabilities.
A financial liability is derecognised when the obligation under the liability is settled or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.
Inventories consist of spare parts, consumables, and natural gas contained in the gas pipelines used in the activities and for provision of services. Inventories also include waste or metal scrap which is fit for use and was retrieved from written off items of property, plant and equipment. Inventories are initially recorded at cost. Subsequent to initial recognition, inventories are stated at the lower of cost and net realisable value. The cost of inventories includes acquisition price and related taxes that are not subsequently recovered from tax administration authorities and costs associated with bringing inventory into their current condition and location. Other costs are included in the cost of inventories to the extent they are related to bringing inventory into their current condition and location. The cost of inventories is determined net of trade discounts. The cost of inventories, except for natural gas, is determined using the first-in, first-out (FIFO) method, according to which write-offs are firstly carried out in respect of the same type of inventories that were acquired first. The cost of inventories which consist of natural gas contained in the gas pipelines is determined using the weighted average costing method. The cost of one unit of energy of natural gas (kWh) is determined by applying the weighted average costing method using the following formula:
The cost of one energy unit of natural gas (kWh) = (opening balance of natural gas (quantity * price) + purchases of natural gas over the period (quantity * price)) / opening balance of natural gas + purchases of natural gas over the period).
Purchases of natural gas from 1 March 2022 exclude gas purchased for the balancing of the system user.
Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value. If there are indications that cash and cash equivalents may not be recoverable, impairment is accounted for. Impairment is recorded in the statement of profit or loss within operating expenses for the period during which it occurred.
Grants are recognised when the Group and the Company comply with all conditions attached to the grants, as set out in the respective grant agreement, and when there is a reasonable assurance that the grant will be received. Government grants or grants received from the EU in a form of non-current assets or intended for purchase of non-current assets are considered as grants related to assets. At the Group and the Company grants are recognised by deducting them from the asset’s carrying amount. For the purpose of the statement of profit or loss and other comprehensive income, grants are recognised over the useful life of the related asset as a deduction from depreciation expenses. Accumulated grants receivable are classified as other amounts receivable when, according to the agreement, the European Commission undertakes a commitment to fund strategic projects and there is strong evidence that the funding will be received.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Grants received as a compensation for the expenses or unearned income in the current or previous reporting periods, also all grants other than grants related to assets, are considered as grants related to income. Income-related grants are recognised as utilised to the extent of the expenses incurred during the reporting period or unearned income to be compensated by that grant. For the purpose of the statement of profit or loss, income-related grants are recognised when related costs are incurred, for which the grant was intended to compensate, by adding them to other income. If no connection can be established between the grants and incurred costs or deferred expenses, they are recognised as income during the period they are received or when the Group and the Company comply with all the conditions attached to grants, as established in the respective grant agreement, and there is a reasonable assurance that the grant will be received.
The amount of the initial measurement of lease liability is calculated as the present value of lease payments not paid at the commencement date. The lease payments are discounted using the incremental borrowing rate. The incremental borrowing rate is determined as the rate at which the Group and the Company would be able to borrow funds for the purpose of acquiring certain assets for a respective period. At the commencement date, the lease payments included in the measurement of lease liability comprise the following payments:
Subsequent to initial recognition, the Group and the Company recognise a change in the value of the lease liability by:
For a lease modification that is not accounted for as a separate lease, the Group and the Company account for the remeasurement of the lease liability by:
The Company classifies assets as right-of-use assets by recognising under non-current assets in the statement of financial position, if the asset and lease contract meet all of the following criteria:
The Group and the Company present its lease liabilities separately from other liabilities in the statement of financial position. Interest expense on the lease liability is presented separately from the depreciation charge for the right-of-use assets. The interest expense on the lease liability is a component of finance costs recognised in the statement of comprehensive income.
Each employee of retirement age who terminates his/her employment with the Group and the Company upon retirement receives the payment, the amount of which is established by the Lithuanian laws. A liability for such payments is recognised in the balance sheet and it reflects the present value of these payments at the date of the financial statements. The non-current liability for payments to employees at the date of the financial statements is estimated with reference to actuary valuations using the projected relative unit method. The present value of the defined non-current liability for payments to employees is determined by discounting the estimated future cash flows using the effective interest rates as set for government debentures denominated in a currency in which payments to employees are expected to be made and with maturity similar to that of the related liability.
Provisions are recognised when the Group and the Company have a legal obligation or irrevocable commitment, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the estimate of the expenditure required to settle the obligation (the expected value). Where the effect of the time value of money is material, the amount of a provision is discounted using a pre-tax effective interest rate that, if necessary, reflects the risks specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as borrowing cost. Provisions are reviewed at the end of each reporting period and adjusted to reflect the changes in circumstances. If the amount of the provision is discounted, the amount reversed at each reporting period is equal to the discounting effect (interest expenses). If circumstance change and the provision is no longer necessary, the provision is reversed in the statement of profit or loss and other comprehensive income through the expense line item where it has been recorded initially at the time of establishment. Provisions are classified as non-current liabilities, if the Group’s and the Company’s management expect to settle them after twelve months from the date of the statement of financial position, and as current liabilities, if the Group and the Company’s management expect to settle them within twelve months from the date of the statement of financial position.
A contingent liability is a liability that may arise from past events, or a present obligation that arises from past events, when it is not probable that resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured reliably. Contingent liabilities are not accounted for, but are disclosed in the notes to the financial statements unless the probability of the loss of resources embodying economic benefits is remote.
A contingent asset is an asset that may arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events, that are not wholly within the Group's and Company's control. Contingent assets are not recognised in the financial statements, but are described in the notes to the financial statements when it is probable that income or economic benefits will be received.
Income tax expense for the period comprises current and deferred income tax.
Current income tax charges are calculated on current profit before tax, as adjusted for certain non-deductible expenses/non-taxable income. Income tax is calculated using the tax rate effective at the date of issue of the financial statements. Income tax rate of 15% was used in 2024 and 2023. Current year income tax may be reduced by tax losses carried forward. In addition, the Company can take over tax losses from the Group companies, provided it meets the requirements laid down in the Law on Corporate Income Tax.
Deferred taxes are calculated using the balance sheet liability method. Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred income tax liability is recognised for all temporary differences that will increase taxable profit in the future, and deferred tax asset is recognised only to the extent it is likely to reduce the taxable income in the future. Deferred tax assets are reviewed at each financial reporting date, and if it is not probable that the Group and the Company will generate sufficient taxable profit to realize these assets, they are reduced to an amount which is likely to reduce the taxable profit in future. Deferred income tax assets and liabilities are estimated using the tax rate that has been applied when calculating income tax for the year when the related temporary differences are to be realised or settled. Deferred tax assets and liabilities are offset only where they relate to income tax assessed by the same fiscal authority or where there is a legally enforceable right to offset current tax assets and current tax liabilities.
Current income tax and deferred income tax are recognised as income or expenses and included in net profit or loss for the reporting period, except for the cases when tax arises from a transaction or event that is recognized directly in equity or in other comprehensive income, in which case taxes are also recorded in equity and other comprehensive income respectively.# 2.16 Revenue recognition
Recognition and measurement of the Group’s and the Company’s revenue is based on a five-step revenue recognition model which is applied to all contracts with customers. The Group’s and the Company’s revenue is recognised at a point in time or over time, during which the performance obligation is settled, i.e. the control of services or goods is transferred to the customer.
The Group’s revenue includes as follows:
* revenue from natural gas transmission and related services;
* revenue from administration of the LNG terminal funds;
* revenue from the activities of the natural gas exchange operator;
* other income;
* finance income.
Revenue from transmission services Revenue from system users for natural gas transmission services is recognised over time, based on the reported data on natural gas quantities, distributed to the system users connected to the distribution system, and based on the statements of transmitted natural gas that were signed with the system users directly connected to the transmission system.
The Company’s revenue from system balancing products consists of technical balancing revenue, transit flow balancing revenue, and system users balancing revenue. In transactions of balancing providing technical balancing and transit flow balancing services, the Company acts as principal. Below is described the revenue recognition for the provision of system user’s balancing services.
199
Based on the EC regulation establishing a network code on gas balancing of transmission networks (the “Regulation“), the system users bear the responsibility of balancing their inputs against their off-takes. If the system users fail to balance gas at the entry/exit points, the Company is entitled to undertake the balancing actions as set forth in the Regulation. In accordance with the Regulation, the Company undertakes the balancing actions in respect of the system users with reference to measures on each gas day.
Revenue from balancing services is recognised when the transmission system user‘s imbalance quantity becomes negative, thereby causing natural gas shortfall. Expenses from balancing services are recognised when the transmission system user‘s imbalance quantity becomes positive, thereby causing natural gas surplus.
As the Company seeks to ensure financial neutrality, it levies a neutrality charge for each reporting month with effect from 1 March 2022. Neutrality charge means a charge payable to/by the transmission system operator due to performance of its balancing activities. The neutrality charge represents the difference between the expenses and revenue of the transmission system operator from the balancing activities. The neutrality charge may be both positive and negative. When the neutrality charge is negative, the transmission system operator pays the neutrality charge to the system users. When the neutrality charge is positive, the system users pay the neutrality charge to the transmission system operator. The purpose of the neutrality charge is to ensure financial neutrality of the transmission system operator.
Due to amendments introduced in regulation of balancing activities with effect from 1 March 2022, the Company acts as an agent in its gas purchase/sale transactions and reports net result of balancing activities in the financial statements. The neutrality charge is expected to ensure a zero gain/(loss) from balancing activities. Acting as an agent in balancing gas purchase/sale transactions is explained by limited control of the balancing services and purchases of gas, absence of economic benefits, no discretion in establishing the price for the balancing services since the pricing is governed by law, no discretion in choosing a counterparty and inability to regulate demand. In addition, the activities of the Company, as the transmission system operator, are not associated with trade in natural gas, and the regulated balancing actions are performed for the benefit of all system users rather than for the benefit of a specific system user.
Based on the provisions of Article 5(2) of the Republic of Lithuania Law on Liquefied Natural Gas Terminal, the Company carries out the function of administration of the LNG terminal funds. The administration of the LNG terminal funds is performed in accordance with the Description of the procedure for the administration of funds intended to compensate for the construction and fixed operating expenses of the liquefied natural gas terminal, its infrastructure and connector, including subsequent amendments and supplements thereto (the title was changed on 18 December 2015 under the Commission’s Resolution No 03-653 of 17 December 2015), as approved by the Commission’s Resolution No O3-294 of 9 October 2012).
The Company collects and administers the LNG terminal funds and acts as an agent on behalf of the State, and such activities do not generate any revenue/profit for the Company in the ordinary course of business. The LNG terminal funds are collected and transferred to the recipients of the LNG terminal funds. The share of the LNG terminal funds intended solely to cover the administration expenses of the LNG terminal funds is considered as the Company's revenue. The amount of administration of the LNG terminal funds is calculated as the amount of costs that are expected to be incurred, by taking into account the actual costs incurred in the previous periods, and such amount is specified in the NERC’s certificate.
The LNG terminal funds are not treated as the Company's revenue/expenses, but they are rather accounted for as other receivables/other payables and other financial assets.
The amounts collected by the exchange operator for the services provided in the course of trading are recognised as revenue of the exchange operator, based on the following service fees agreed with NERC:
* initial registration fee: a one-off fee payable upon becoming an exchange participant which is recognised as revenue at a point in time when a service is rendered;
* annual membership fee: a fixed membership fee payable annually by an exchange participant. The annual membership fee is payable for the calendar year (adjusted in proportion to the remaining number of days in a year in case the market participant joins the exchange at some point of time in the course of a year). This revenue is recognised over a period of time, during which the membership right is exercised;
* floating trading fee: a fee estimated as EUR per 1 MWh, which is payable by a participant who is a party to the transaction for the quantity of natural gas purchased and/or sold on the exchange. It is recognised as revenue at a point in time when a service is rendered.
The connection "service" is considered as a single performance obligation together with the future gas transmission services, as defined in IFRS 15 Revenue from contracts with customers, because the pricing of the connection fee is directly
200
linked to the pricing of the transmission services. Therefore revenue (including the compensation for the connection to the grid) are recognised in profit or loss over time during the useful life (or lives) of the connection assets constructed / built by Company and compensated by a consumer. Accounting for the connection fees on connection of new producers is based on the accounting policies for grants (IAS 20 Accounting for government grants and disclosure of government assistance), and the acquisition cost of the assets is reduced by the amount of the connection fee.
Upon a customer’s request, the Company carries out relocation or reconstruction of infrastructure facilities and incurs related expenses. Such relocation work does not give rise to any economic benefits for the Company, and all expenses related to such work are compensated in full by a customer through acquisition of energy facility relocation service from the Company.
Based on IFRS and the Company’s accounting policies, there are two approaches for recognition of such transactions:
When relocation of assets involves substantial improvement of assets. Under IAS 16 Property, plant and equipment, the relocation expenses incurred by the Company are added to the acquisition cost of the related assets. Accounting for the compensation (i.e. relocation fee) due from a customer is based on the accounting policies for grants (IAS 20 Government grants and disclosure of government assistance) and the acquisition cost of the assets is reduced by the amount of the relocation fee. Since all relocation costs are compensated in full for the Company by a customer, such transaction results in a zero impact on the Company’s profit or loss, i.e. the Company neither incurs additional expenses nor earns additional revenue from such transaction.
When relocation of assets does not involve substantial improvement of assets. Under IFRS 15 Revenue from contracts with customers, the Company earns revenue from relocation service (i.e. revenue is recognised at the time of rendering the service) and incurs relocation service expenses (i.e. all costs incurred on relocation of assets are recognised as expenses in the same period as revenue from relocation service). Since all relocation costs are covered in full for the Company by a customer, such transaction results in a zero impact on the Company’s profit or loss, i.e. revenue earned by the Company equals expenses incurred.# 2. Accounting Policies (Continued)
Gain from disposal of property, plant and equipment, lease income, income from sale of other goods and provision of other services, income from default charges and fines collected from the contractors as a result of late fulfilment of work, income-related grants are recognised by the Group as other income.
Expenses incurred in relation to revenue earned during the reporting period are recognised by the Group and the Company on an accrual basis, and based on the following principles: 1) the costs are recognised as expenses to the extent of the value of goods sold or services rendered, since the criterion for recognition of expenses is that they have been incurred to earn revenue of the reporting period; 2) the costs incurred by the Group company during the reporting period are recognised as expenses of the reporting period immediately, unless they can be linked to earning of the specific revenue, and no income is expected to be earned in relation to such expenses in the next periods. The Group and the Company use expense classification by type. Taxes such as real estate tax, land tax, land rent tax, taxes related to environmental pollution, non-deductible value added tax, etc. are recognized as expenses.
Finance income includes income earned by the Company from financing activities, such as foreign exchange gain, when cash balances are translated into the functional currency euro, interest income on cash balance.
The Group‘s and the Company‘s finance costs include as follows:
‐ foreign exchange loss from financing transactions;
‐ interest on borrowings.
Interest income and expenses are recognised on accrual basis considering the outstanding balance of debt and the applicable interest rate.
The Group and the Company report cash flows using the indirect method. Reporting of cash flows from operating activities based on the indirect method means that net profit/(loss) for the reporting period is presented as cash inflows or outflows from operating activities of the Group and the Company for the reporting period. Cash inflows and outflows from investing and financing activities for the reporting period are presented separately unless cash flows are presented on a net basis. For the purpose of the Group‘s and the Company‘s financial statements, dividends paid are reported as cash flows of financing activities, whereas dividends received are reported as cash flows of investing activities. For the purpose of the Group‘s and the Company‘s financial statements, interest paid is reported as cash flows of financing activities, whereas interest received is reported as cash flows of investing activities.
The preparation of financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingencies. The material areas of estimation used in the preparation of these financial statements relate to GET Baltic’s share call/put options (Notes 3.1 and 9), provisions (Notes 3.2 and 22), the fair value of property, plant and equipment, the useful life of non-current assets, estimation of a revalued amount (Notes 3.3, 6).
Future events may occur which may cause the assumptions used in arriving at the estimates to change. The effect of any changes in estimates will be recorded in the financial statements, when determinable.
On 31 May 2023, the Company purchased a put option enabling the Company to sell the remaining shareholding in GET Baltic at a fixed price. Under the same option agreement, the Company issued a call option for the investor to purchase the remaining shares of GET Baltic at a fixed price. In the Company management’s assessment, these options meet the definition of derivatives. The put option, given the maximum 48-month option expiration term, creates a non-current financial asset for the Company that is measured at fair value. The investor’s call option creates a financial liability for the Company. Based on the Company management’s estimates, the expected exercise period of the call option is 24 months from the reporting date, i.e. upon fulfillment of the contractual obligations by the investor. As the Company does not have an irrevocable right to defer the put option, the liability is recognised as a current liability and measured at fair value. More information on options is disclosed in Note 9.
The Company has a legal dispute with a construction contractor over the non-performance or improper performance of warranty obligations regarding the defects identified in the works during the construction of the gas pipeline interconnection between Poland and Lithuania (GIPL), which the contractor refuses to remedy. As a result of the non-performance or improper performance of the guarantee obligations, the Company has lodged claims for payment of the guarantee funds, and has guarantee funds received in the amount of EUR 5,815 thousand. The lawfulness of the claims for payment of the guarantee funds is being challenged by the contractor in court. In view of the uncertainties surrounding the outcome of the legal proceedings, the Company has recognised a provision for the potential repayment of the guarantee funds. More information on the provision and legal dispute is provided in Notes 22 and 38.
Based on the Company’s assessment, the carrying amount of property, plant and equipment as at 31 December 2024 approximated the fair value of the asset, as there were no changes that could have a material effect on the changes in the fair value, the impairment of non-current assets, or the changes in useful life. The remaining useful life of property, plant and equipment and the depreciation method used reflect the actual period during which the asset will provide economic benefit. No indications of impairment were identified. As at 31 December 2023, the Company revalued its property, plant and equipment by recognising a EUR 4,685 thousand revaluation loss. An increase in value of property, plant and equipment of EUR 3,255 thousand was recognised in other comprehensive income, and the impairment of EUR 7,940 thousand was recognised in profit or loss. The assumptions used in determining the fair value are described in more detail in Note 6.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker, who is responsible for allocating resources and assessing performance, has been identified as the Board of Directors that makes strategic decisions.
Until 31 May 2023, the Group has two business segments which are consistent with the business directions stipulated in the Group’s strategy:
* natural gas transmission segment;
* natural gas exchange operator’s segment (activities of GET Baltic until 31 May 2023).
From 1 June 2023, the Group has only one operating segment, natural gas transmission segment.
The Group has a single geographical segment – the Republic of Lithuania. All non-current assets of the Group are domiciled in Lithuania, where the Group operates.
The Board as the main decision-making body monitors the results with reference to the financial reports that have been prepared using the same accounting policies as those used for the preparation of the financial statements, i.e., information on profit or loss, including the reported amounts of income and expenses. Key performance indicators are net profit and profit before interest, taxes, depreciation and amortisation, loss on revaluation, impairment and write-off of property, plant and equipment (EBITDA, which is non-GAAP performance indicator). These indicators are calculated on the basis of data reported in the financial statements. EBIT, which is non-GAAP performance indicator, represent profit before interest and taxes.
The Board also monitors adjusted performance indicators, particularly the adjusted EBITDA. Adjusted EBITDA ratio is EBITDA ratio further adjusted by adding management’s adjustments. That is non-IFRS alternative performance measure. Management’s adjustments include temporary regulatory differences resulting from the Council’s decisions. Management’s adjustments may have both positive and negative impact on the adjusted ratios for the period. In management’s view, adjusted EBITDA ratio more accurately presents results of the operations and allows for an objective comparison of the results between the periods as revenue and costs have been adjusted due to the regulator’s decisions or are of a one-off nature.
Management also analyses investments and net debt of each individual segment.
The table below contains information on the Group’s operating segments for the year ended 31 December 2024:
| Transmission of natural gas | |
|---|---|
| Revenue and other income | 74,583 |
| Operating expenses, excl. |
| 2024 | 2023 | |
|---|---|---|
| EBITDA | 26,527 | 26,307 |
| Adjusted EBITDA | 27,373 | 25,248 |
| Temporary regulatory differences for previous periods | 2,006 | (2,883) |
| Temporary regulatory differences for reporting period | (1,160) | 1,824 |
| Overall effect of management’s adjustments on EBITDA | 846 | (1,059) |
| EBITDA (under IFRS) reconciliation to Net profit/loss | (18,221) | (13,294) |
| Depreciation and amortisation | (14,932) | (12,680) |
| Loss on impairment and write-off of property, plant and equipment | (43) | (229) |
| Total finance costs, net | (2,166) | (1,314) |
| Income tax | (1,196) | (707) |
| Gains (losses) on derivative financial instruments | (364) | (208) |
| Share of net profit of associates | 480 | 295 |
| Net profit/(loss) | 8,306 | 13,013 |
| Total assets | 327,196 | 333,389 |
| Net debt | 82,534 | 95,175 |
| Investments (additions of property, plant and equipment and intangible assets) | 6,405 | 35,703 |
The table below contains information on the Group’s operating segments for the year ended 31 December 2023:
| Transmission of natural gas | Natural gas exchange operator’s activities | Total | |
|---|---|---|---|
| Total Revenue and other income | 81,337 | 892 | 82,229 |
| Operating expenses, excl. depreciation, write-off and impairment | (55,598) | (324) | (55,922) |
| EBITDA | 25,739 | 568 | 26,307 |
| Adjusted EBITDA | 24,680 | 568 | 25,248 |
| Temporary regulatory differences for previous periods | (2,883) | - | (2,883) |
| Temporary regulatory differences for reporting period | 1,824 | - | 1,824 |
| Overall effect of management’s adjustments on EBITDA | (1,059) | - | (1,059) |
| EBITDA (under IFRS) reconciliation to Net profit/loss | (12,314) | (980) | (13,294) |
| Depreciation and amortisation | (12,595) | (85) | (12,680) |
| Revaluation of property, plant and equipment | (7,940) | - | (7,940) |
| Loss on impairment and write-off of property, plant and equipment | (229) | - | (229) |
| Finance costs, net | (1,758) | 444 | (1,314) |
| Income tax | (567) | (140) | (707) |
| Dividend income | 542 | (542) | - |
| Result on loss of control and revaluation of associates | 10,146 | (657) | 9,489 |
| Gains (losses) on derivative financial instruments | (208) | - | (208) |
| Share of net profit of associates | 295 | - | 295 |
| Net profit/(loss) | 13,425 | (412) | 13,013 |
| Total assets | 333,389 | - | 333,389 |
| Net debt | 95,175 | - | 95,175 |
| Investments (additions of property, plant and equipment and intangible assets) | 35,703 | - | 35,703 |
As at 31 December 2024, there were three customers of the Company each generating over 10% of the Company’s total revenue. Revenue from customers totalled EUR 45,730 thousand, whereof: Customer A – EUR 25,257 thousand; Customer B – EUR 11,120 thousand; Customer C – EUR 9,353 thousand.
As at 31 December 2023, there were two customers of the Company each generating over 10% of the Company’s total revenue. Revenue from customers totalled EUR 37,504 thousand, whereof: Customer A – EUR 25,653 thousand; Customer B – EUR 11,851 thousand.
Movements on intangible assets account during the current and previous reporting period were as follows:
| As at 31 December 2022 | Additions | Write-offs | Adjustment for changes in assumptions | Amortisation charge | Off-set of grants against non-current assets | As at 31 December 2023 | Acquisition/revaluation amount | Accumulated amortisation | Net book value as at 31 December 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Patents and licences | 6 | 4 | - | - | (3) | - | 7 | 55 | (48) | 7 |
| Computer software | 1,288 | 767 | (4) | - | (525) | - | 1,526 | 5,571 | (4,045) | 1,526 |
| Other intangible assets | - | - | - | - | - | - | - | 5 | (5) | - |
| Protected areas | 1,290 | - | - | (264) | - | - | 1,026 | 1,026 | - | 1,026 |
| Total | 2,584 | 771 | (4) | (264) | (528) | - | 2,559 | 6,657 | (4,098) | 2,559 |
| Net book value as at 31 December 2023 | Additions | Write-offs | Adjustment for changes in assumptions | Amortisation charge | Off-set of grants against non-current assets | As at 31 December 2024 | Acquisition/revaluation amount | Accumulated amortisation | Net book value as at 31 December 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Patents and licences | 7 | - | - | - | (3) | - | 4 | 55 | (51) | 4 |
| Computer software | 1,526 | 460 | (12) | - | (746) | - | 1,228 | 6,019 | (4,791) | 1,228 |
| Other intangible assets | - | - | - | - | - | - | - | 5 | (5) | - |
| Protected areas | 1,026 | - | - | (48) | - | - | 978 | 978 | - | 978 |
| Total | 2,559 | 460 | (12) | (48) | (749) | - | 2,210 | 7,057 | (4,847) | 2,210 |
The Company’s intangible assets with the acquisition cost of EUR 63 thousand as at 31 December 2024 (31 December 2023: EUR 101 thousand) was fully amortised but still in use.
Depreciation of grants in amount of EUR 177 thousand as at 31 December 2024 (31 December 2023: EUR 205 thousand) was reported in the statement of profit or loss as an offsetting of depreciation of related assets against proceeds from grants.
Taking into account changes in the regulatory framework, the value of services for the establishment of protected zones and classes of the areas acquired through public procurement, changes in the prices of services provided by the State Enterprise Centre of Registers (e-delivery, submission of registration data), the Company reviews the estimated cost of establishing special land use conditions and remeasures the intangible asset and liability over the expected term of fulfilment of obligation. Due to changes in assumptions, the value of provision and related intangible assets was reduced by EUR 48 thousand as at 31 December 2024, and by EUR 264 thousand as at 31 December 2023.
Movements on the property, plant and equipment account during the current and previous reporting period were as follows:
| As at 31 December 2022 | Additions | Write-offs | Sales | Impairment (reversal) of assets | Revaluation | Reclassification from/to inventories | Reclassifications between categories | Depreciation charge | Off-set of grants against non-current assets | As at 31 December 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Land | 125 | - | - | - | - | 11 | - | - | - | - | 136 |
| Buildings | 6,527 | - | (13) | - | - | 85 | - | 1,343 | (295) | - | 7,647 |
| Structures and equip- ment | 229,891 | 83 | (440) | - | (57) | (8,821) | (38) | 13,727 | (6,156) | - | 228,189 |
| Plant and machinery | 33,831 | 25 | (183) | - | - | 4,010 | (12) | 3,414 | (3,383) | - | 37,702 |
| Vehicles | 220 | 2 | - | - | - | 21 | - | - | (108) | - | 135 |
| Other PP&E | 3,849 | 55 | (9) | (1) | - | 9 | (1) | 2,378 | (1,612) | - | 4,668 |
| Constru- ction work in progress | 6,646 | 34,767 | - | - | 11 | 9 | - | (20,862) | - | (14,686) | 5,876 |
| Total | 281,089 | 34,932 | (645) | (1) | (46) | (4,685) | (51) | (3,000) | (11,554) | (14,686) | 284,353 |
| As at 31 December 2023 | Additions | Write-offs | Disposals | Reclassification from/to inventories | Reclassifications between categories | Depreciation charge | Reversal of grants recognised | As at 31 December 2024 | |
|---|---|---|---|---|---|---|---|---|---|
| Land | 136 | - | - | - | - | - | - | - | 136 |
| Buildings | 7,647 | - | - | - | - | 1,278 | (351) | 34 | 8,608 |
| Structures and equip- ment | 228,189 | (2) | (441) | - | (7) | 6,064 | (6,855) | 193 | 227,141 |
| Plant and machinery | 37,702 | 191 | - | - | 77 | 259 | (3,989) | 77 | 34,317 |
| Vehicles | 135 | 3 | (2) | - | (40) | - | (92) | - | 4 |
| Other PP&E | 4,668 | 165 | (1) | (2) | - | 1,344 | (1,973) | 27 | 4,228 |
| Constru- ction work in progress | 5,876 | 5,588 | (29) | - | - | (8,945) | - | (170) | 2,320 |
| Total | 284,353 | 5,945 | (473) | (2) | (8) | (0) | (13,260) | 161 | 276,754 |
The Company’s part of property, plant and equipment with the acquisition (revaluation) cost of EUR 196 thousand as at 31 December 2024 (31 December 2023: EUR 94 thousand) was fully depreciated but still in use.
In the Company non-current assets are accounted at revalued amount of assets, reduced by the amount of accumulated depreciation, recognized grants and impairment losses. The cost of PP&E in 2024 included: the renovation of cathodic protection systems amounting to EUR 649 thousand; the reconstruction of the Dispatching Building amounting to EUR 1,230 thousand; the installation of the gas pipeline shutoff devices and the remote control systems (SCADA) amounting to EUR 1,190 thousand, the reconstruction of the main gas pipelines based on diagnostics results amounting to EUR 724 thousand, etc.
Prepayments for PP&E, reflected under construction in progress:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Carrying amount at the beginning of the period | 20 | 48 |
| Prepayment for PP&E during the period | 269 | 87 |
| Moved to construction in progress | (297) | (39) |
| Carrying amount at the end of the period | 20 | 48 |
Depreciation of grants in amount of EUR 5,181 thousand as at 31 December 2024 (As at 31 December 2023: EUR 4,293 thousand) was reported in the statement of profit or loss as an offsetting of depreciation of related assets against proceeds from grants.
No borrowing costs (interest) were added to the cost of PP&E during 2024, whereas at 31 December 2023 EUR 329 thousand capitalised borrowing costs (interest) were added to the cost of PP&E.
The Company did not revalued its property, plant and equipment as at 31 December 2024. Given that there have been no significant changes in the regulatory environment in 2024, the Company did not identify a significant difference between the carrying amount of its property, plant and equipment as at 31 December 2024 and its fair value at the date of the financial statements.
Value of PP&E in 2023
The Company accounts for property, plant and equipment at revalued amount in accordance with IAS 16 Property, Plant and Equipment. Based on the requirements set forth in paragraph 34 of IAS 16, as at December 2023 the Company revalued its property, plant and equipment by recognising a negative revaluation result of EUR 4,685 thousand. When evaluating property, plant and equipment, the Company determined that, as at 31 December 2023, the fair value of the property, plant and equipment (including construction in progress) was EUR 284,353 million, which was EUR 4,685 thousand lower than the carrying amount of PP&E before remeasurement as at 31 December 2023. The evaluation was carried using internal finance and accounting experts of the Company, with the assistance of experienced external asset valuation consultants throughout the process.The valuation of property, plant and equipment was carried out using the replacement cost method and the discounted cash-flow methods. The change in the value of property, plant and equipment was largely influenced by the regulatory principles applied to natural gas transmission activities, the rate of return on investments set by the Council for natural gas transmission activities, which was actually lower than the discount rate. The valuation involved the following steps:
The cost method involves determining the replacement cost of a new asset (RCN) at the level of the individual asset item. A direct cost method was applied to 68% of PP&E (based on the asset’s carrying amount as at 31 December 2023), whereby RCN was estimated for new assets. RCN includes the cost of materials, installation works, labour, transportation and handling fees, overall costs of contractor. The market prices were determined using the data of the Company’s transactions for the last three years, the financial statements of the European Union Agency for the Cooperation of Energy Regulators (ACER), other enterprises operating in natural gas sector, and other publicly available data.
During the valuation, indirect cost method was applied to assets, for which it was impossible to apply a direct cost method due to their multiple nature or for which insufficient data was available. Indirect cost method was applied to approx. 1% of PP&E value (determined when calculating carrying amount as at 31 December 2023). The indirect cost method was used to determine the current replacement value of each new asset by indexing (based on consumer price, gas price, metal price and building cost indices published by Statistics Lithuania) the capitalized historical cost of the new asset. The asset’s RCN value which fell below the regulated asset base (RAB) after physical and functional obsolescence was treated as equal to RAB. The direct market value method was used to determine the values of land and process gases, however, after adjusting for economic obsolescence, the values were treated as equal to RAB. This method was applied to approx. 1% of PP&E value (determined when calculating carrying amounts as at 31 December 2023). RCN was calculated at underlying asset level, while the Iowa-type survivor curves were applied to allocate the identified value of the asset item to asset components. These curves were used to determine the life cycle of asset based on economic useful life, in view of current repairs and maintenance. The application of residual value was conditioned on the asset class (Hold Factor). Further reduction in RCN by the amount of obsolescence resulted in the amount of the depreciated replacement cost (DRC). The DRC premium is the difference between DRC and RAB. The assets fair value was obtained by applying the 3.4% economic obsolescence, plus the RAB value.
The following key assumptions of the replacement cost method were used in valuation:
In discounted cash flow method (DCF), future cash flows are estimated and discounted by using cost of capital to give their present values. This method was applied to measure the fair value of property, plant and equipment and to estimate the economic obsolescence. For the purpose of fair value measurement and estimation of the economic obsolescence, the cash flow forecast was developed for the period from October 2023 to 2028. The terminal value of cash flows is applied in subsequent periods.
Key assumptions of the DCF model:
Asset values estimated using the DRC method were reduced in proportion to the results of the economic obsolescence test (the total fair value of assets was determined using DCF method), except for assets for which such allocation would have resulted in a value lower than the asset’s RAB value. For such assets the RAB was considered to be its fair value. The amount of reduction that would otherwise have been allocated to the asset was allocated pro rata to the other assets. In order to distribute the value of economic obsolescence among separate items of assets so that the resulting value would reflect more accurately the fair value of the respective separate item of assets, the Company followed a policy whereby the fair value of particular item of assets would not be lower than the RAB assumption used in respect of that particular item of assets.
Economic obsolescence was applied (i.e. distributed) to all assets, except for the following categories (or separate items of assets from different categories), where DRC was approximated to the carrying amount of these assets:
The main reasons for the change in the value of separate items of assets include the following:
The fair value of revalued property, plant and equipment is attributed to Level 3 of the fair value hierarchy.
Based on the provisions set forth in paragraph 93 of IFRS 13, the Company performed fair value sensitivity analysis in respect of changes in unobservable inputs. The fair value measurement is the most sensitive to the rate of return (WACC) set by the Council and the discount rate. The fair value of the asset sensitivity is presented for the following scenarios:
Scenario (1) of sensitivity analysis: to determine the level of revenue from 2024 onwards, the Council would apply a rate of return of 6.04/4.04% (currently WACC is set at 5.04% for 2024) with a 1% increase/decrease in the rate of return and the other valuation parameters remaining unchanged; a 1% increase in WACC would result in the EUR 9,727 thousand increase in the fair value of property, plant and equipment, and a 1% drop in WACC would result in the EUR 9,727 thousand decrease in the fair value of property, plant and equipment.
Scenario (2) of sensitivity analysis: applying a 1% higher/lower discount rate (after tax), which is 6.16/4.16%, with the other valuation parameters remaining unchanged; a 1% increase in the discount rate would result in the EUR 11,544 thousand decrease in the fair value of property, plant and equipment, and a 1% decrease in the discount rate would result in the EUR 12,181 thousand increase in the fair value of property, plant and equipment.
Below is the table on the asset’s sensitivity analysis:
| WACC (pre-tax return on investments approved by the Council) | Discount rate (post-tax) | Change | ||
|---|---|---|---|---|
| -1.0% | 0.0% | 1.0% | ||
| 4.04% | 4.16% | 2,189 | 12,181 | 22,174 |
| 5.04% | 5.16% | (9,727) | - | 9,727 |
| 6.04% | 6.16% | (21,017) | (11,544) | (2,070) |
The table below presents the net book values of property, plant and equipment, which would have been recognised had the historical cost method been used, less grants received and negative revaluations that would be treated as an impairment equivalent, as at 31 December 2024 and 31 December 2023:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Land | 125 | 125 |
| Buildings | 8,519 | 7,553 |
| Structures and equipment | 225,655 | 226,645 |
| Plant and machinery | 32,958 | 36,135 |
| Vehicles | 4 | 114 |
| Other PP&E | 4,225 | 4,651 |
| Construction work in progress | 2,320 | 5,876 |
| Total | 273,806 | 281,099 |
The revaluation impact on profit or loss and other comprehensive income is presented below:
| Recognised in other comprehensive income (revaluation reserve) | Recognised through profit or loss | Total revaluation impact | |
|---|---|---|---|
| Increase in net book value as at 31 December 2023 | 3,255 | 18,568 | 21,823 |
| (Decrease) in net book value as at 31 December 2023 | - | (26,508) | (26,508) |
| Total revaluation impact at 31 December 2023: | 3,255 | (7,940) | (4,685) |
Had the value of the Company‘s PP&E been not reduced by the amount of grants, the carrying amount of PP&E as at 31 December 2024 would be higher# Notes to the Consolidated Financial Statements
Once the General Meeting of Shareholders approved the sale of shares in GET Baltic and the material terms and conditions thereof on 11 April 2023, the sale of a 66 % shareholding in GET Baltic was completed on 31 May 2023. The Company lost control of GET Baltic following the completion of the share sale transaction on 31 May 2023. The remaining part of the investment in GET Baltic after the loss of control is recognised as an investment in an associate, which is accounted for using the equity method and measured at fair value at the time of loss of control. The fair value of investment in GET Baltic was determined on the basis of the sale of 66% of the shares. In the consolidated statement of comprehensive income, the result of disposal of the subsidiary (after considering the GET Baltic shares’ call/put options) and revaluation of the remaining part of investment in associate was EUR 9,489 thousand, of which gain on disposal of control was EUR 6,627 thousand, and gain on revaluation of investment in associate was EUR 2,862 thousand. In the separate financial statements, the result of disposal of the subsidiary (after considering the GET Baltic shares’ call/put options) and revaluation of the remaining part of investment in associate was EUR 10,146 thousand, of which gain on disposal of control was EUR 7,059 thousand, and gain on revaluation of investment in associate was EUR 3,087 thousand. The investment in associate is recorded in the consolidated and separate financial statements using the equity method.
Effect of loss of control on the items of the consolidated statement of comprehensive income:
| 2023 | |
|---|---|
| Gain on disposal of subsidiary, cash | 6,500 |
| Fair value after the revaluation of the remaining part of the investment | 3,348 |
| Fair value of options at the date of issue | 1,070 |
| Fair value of the loss of control transaction | 10,918 |
| Net assets of subsidiary | (1,429) |
| Gain on loss of control and revaluation of associates | 9,489 |
Effect of loss of control on the items of the separate statement of comprehensive income:
| 2023 | |
|---|---|
| Gain on disposal of subsidiary, cash | 6,500 |
| Fair value after the revaluation of the remaining part of the investment | 3,348 |
| Fair value of options at the date of issue | 1,070 |
| Fair value of the loss of control transaction | 10,918 |
| Carrying amount of investment in subsidiary | (769) |
| Other transaction costs | (3) |
| Gain on loss of control and revaluation of associates | 10,146 |
Main categories of assets and liabilities over which the control was lost at the time of loss of control:
| Non-current assets | 498 |
| Intangible assets | 409 |
| Property, plant and equipment | 3 |
| Right-of-use assets | 82 |
| Non-current financial assets | 4 |
| Current assets | 41,791 |
| Prepayments | 20 |
| Receivables | 7,274 |
| Other current financial assets | 33,304 |
| Cash and cash equivalents | 1,193 |
| Total assets: | 42,289 |
| Non-current liabilities | 48 |
| Non-current lease liabilities | 48 |
| Current liabilities | 40,812 |
| Current portion of lease liabilities | 34 |
| Trade payables, prepayments received and other payables | 40,602 |
| Income tax liability | 59 |
| Employment-related liabilities | 117 |
| Total liabilities: | 40,860 |
| Net assets | 1,429 |
Information on the cash flow generated by the subsidiary is provided below:
| 2023 | |
|---|---|
| Net cash flows from operating activities | 494 |
| Net cash flows used in investing activities | (437) |
| Cash flows from/used in financing activities | (555) |
| Net increase in cash generated by the subsidiary | 376 |
Investment in an associate in consolidated and separate financial statements is accounted for using the equity method. Summarized statement of financial position of GET Baltic is presented below:
| 31 December 2024 | 31 December 2023 | |
|---|---|---|
| Non-current assets | 165 | 353 |
| Current assets | 53,343 | 74,900 |
| Total assets: | 53,508 | 75,253 |
| Non-current liabilities | 43 | 36 |
| Current liabilities | 51,414 | 72,920 |
| Total liabilities: | 51,457 | 72,956 |
| Net assets | 2,051 | 2,297 |
| Group's share, % | 34 | 34 |
| Group's share of net assets | 697 | 781 |
| Group's share of goodwill | 2,863 | 2,863 |
| Carrying amount of investment in associate | 3,560 | 3,644 |
Summarized statement of comprehensive income of GET Baltic for the period ended 31 December 2024 and for the period of 2023 from the date of loss of control until 31 December 2023:
| 1 January - 31 December 2024 | 1 June - 31 December 2023 | |
|---|---|---|
| Revenue | 1,918 | 1,111 |
| Profit before tax | 1,676 | 1,027 |
| Income tax benefit (expenses) | (264) | (159) |
| Net profit (loss) | 1,412 | 868 |
| Other comprehensive income | - | - |
| Total comprehensive income for the period | 1,412 | 868 |
| Total comprehensive income attributable to the Company/ Group | 480 | 295 |
| Dividends paid to Company/Group | 564 | - |
Changes in carrying amount of the investment in associate due to the application of the equity method:
| 31 December 2024 | 31 December 2023 | |
|---|---|---|
| Carrying amount at the beginning of the period | 3,644 | - |
| Acquisition | - | 3,348 |
| Associate’s net profit (loss) | 480 | 295 |
| Associate’s other comprehensive income | - | - |
| Dividends received | (564) | - |
| Carrying amount at the end of the period | 3,560 | 3,644 |
As described below, the Group and the Company have taken on lease office premises, motor vehicles, and land. Lease periods for premises, motor vehicles and land are 5-10 years, 3 years, and 99 years, respectively. The Group and the Company assessed the probability of exercising the lease extension option when recognising right-of-use assets and lease liabilities, and when determining the lease periods. As at 31 December 2024, the initial cost of moto vehicles recognised as right of use assets amounted to EUR 2,076 thousand, lease period was 3 years. From 1 January 2024 the Company has reviewed the value of right of use assets (office premises) for rent indexation. The rent for the office premises may be revalued based on the average change in the consumer price index in line with inflation, but may not exced 2 per cent.
| Buildings | Land | Vehicles | Total | |
|---|---|---|---|---|
| Net book value at 31 December 2022 | 1,495 | 1,478 | 392 | 3,365 |
| New leases | - | - | 217 | 217 |
| Indexation | 31 | - | - | 31 |
| Write-offs | - | - | - | - |
| Depreciation charge | (180) | (16) | (317) | (513) |
| Net book value as at 31 December 2023 | 1,346 | 1,462 | 292 | 3,100 |
| Initial cost | 1,747 | 1,534 | 1,442 | 4,723 |
| Accumulated depreciation | (401) | (72) | (1,150) | (1,623) |
| Net book value as at 31 December 2023 | 1,346 | 1,462 | 292 | 3,100 |
| Net book value as at 31 December 2023 | 1,346 | 1,462 | 292 | 3,100 |
| New leases | - | - | 2,076 | 2,076 |
| Indexation | 28 | - | - | 28 |
| Write-offs | - | - | - | - |
| Depreciation charge | (184) | (16) | (723) | (923) |
| Net book value as at 31 December 2024 | 1,190 | 1,446 | 1,645 | 4,281 |
| Initial cost | 1,775 | 1,534 | 2,399 | 5,708 |
| Accumulated depreciation | (585) | (88) | (754) | (1,427) |
| Net book value as at 31 December 2024 | 1,190 | 1,446 | 1,645 | 4,281 |
As the useful life of the right-of-use assets is longer than the lease term, depreciation is calculated from the commencement date of the lease till the end of the lease term.
The Company’s derivatives are reported under the following items of the statement of financial position:
| 31 December 2024 | 31 December 2023 | |
|---|---|---|
| Non-current assets | ||
| Put option of GET Baltic | 1,153 | 1,226 |
| Total non-current derivative assets: | 1,153 | 1,226 |
| Current liabilities | ||
| Call option of GET Baltic | 654 | 364 |
| Total current derivative liabilities: | 654 | 364 |
| Share option | Subscription date | Maturity | Exercise price, EUR | Fair value of option As at 31 December 2024 | Fair value of option As at 31 December 2023 |
|---|---|---|---|---|---|
| Put Option | As at 31 May 2023 | As at 31 May 2027 | 4.07 | 1,153 | 1,226 |
| Call Option | As at 31 May 2023 | As at 31 December 2026 | 3.97 | 654 | 364 |
The call option can be exercised at any time after the investor has fulfilled its obligations, therefore this obligation is classified as a current liability. The fair value was determined based on the most likely option exercise period estimated by the management.
Information on the changes in the fair value of derivatives:
| 31 December 2024 | 31 December 2023 | |
|---|---|---|
| Non-current assets | ||
| Carrying amount at the beginning of the period | 1,226 | - |
| Initial recognition | 1,392 | - |
| Change in fair value | (73) | (166) |
| Carrying amount at the end of the period | 1,153 | 1,226 |
| Current liabilities | ||
| Carrying amount at the beginning of the period | 364 | - |
| Initial recognition | 322 | - |
| Change in fair value | 290 | 42 |
| Carrying amount at the end of the period | 654 | 364 |
Below are the assumptions and estimates used to measure fair values of financial instruments. The Black-Scholes model was used to estimate an option's fair value. The assumptions used in estimating the option’s fair value as at 31 December 2024 were as follows:
| Put Option | Call Option | |
|---|---|---|
| Current stock price, EUR | 4.09 | 4.09 |
| Strike price, EUR | 4.07 | 3.97 |
| Time to maturity (years) | 2.4 | 2.0 |
| Dividend yield (%) | 8.07 | 8.07 |
| Volatility (%) | 38.40 | 38.40 |
| Risk free interest rate (%) | 2.30 | 2.30 |
The current stock price was determined under the income approach, using the discounted cash flows calculation method.Sensitivity of the put option’s fair value to changes in key assumptions as at 31 December 2024, the impact in EUR’000 is presented for a 34% shareholding:
| Volatility (%) | Current stock price | Pokytis -10.00% | Pokytis 0.00% | Pokytis 10.00% |
|---|---|---|---|---|
| 34.56% | EUR 3,68 | 145 | 218 | 291 |
| 38.40% | EUR 4,09 | (83) | - | 83 |
| 42.24% | EUR 4,50 | (270) | (187) | (93) |
Sensitivity of the call option’s fair value to changes in key assumptions as at 31 December 2024, the impact in EUR’000 is presented for a 34% shareholding:
| Volatility (%) | Current stock price | Pokytis -10.00% | Pokytis 0.00% | Pokytis 10.00% |
|---|---|---|---|---|
| 34.56% | EUR 3,68 | 280 | 208 | 135 |
| 38.40% | EUR 4,09 | 73 | - | (83) |
| 42.24% | EUR 4,50 | (166) | (249) | (332) |
The assumptions used in estimating the option’s fair value as at 31 December 2023 were as follows:
| Put Option | Call Option | |
|---|---|---|
| Current stock price, EUR | 3.50 | 3.50 |
| Strike price, EUR | 4.07 | 3.62 |
| Time to maturity (years) | 3.4 | 1.4 |
| Dividend yield (%) | 5.26 | 5.26 |
| Volatility (%) | 29.26 | 29.26 |
| Risk free interest rate (%) | 2.57 | 2.57 |
Sensitivity of the put option’s fair value to changes in key assumptions as at 31 December 2023, the impact in EUR’000 is presented for a 34% shareholding:
| Volatility (%) | Current stock price | Pokytis -5.00% | Pokytis 0.00% | Pokytis 5.00% |
|---|---|---|---|---|
| 24.26% | EUR 3,15 | 93 | 187 | 280 |
| 29.26% | EUR 3,50 | (114) | - | 114 |
| 34.26% | EUR 3,85 | (291) | (166) | (42) |
Sensitivity of the call option’s fair value to changes in key assumptions as at 31 December 2023, the impact in EUR’000 is presented for a 34% shareholding:
| Volatility (%) | Current stock price | Pokytis -5.00% | Pokytis 0.00% | Pokytis 5.00% |
|---|---|---|---|---|
| 24.26% | EUR 3,15 | 208 | 135 | 73 |
| 29.26% | EUR 3,50 | 73 | - | (83) |
| 34.26% | EUR 3,85 | (21) | (104) | (187) |
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Raw materials, spare parts and other inventories | 1,245 | 1,052 |
| Natural gas | 3,908 | 4,339 |
| Assets held for sale | 40 | - |
| Inventories, gross | 5,193 | 5,391 |
| Less: impairment | (432) | (517) |
| Total inventories | 4,761 | 4,874 |
The acquisition cost of the Company’s inventories accounted for at net realisable value as at 31 December 2024 amounted to EUR 794 thousand (31 December 2023: EUR 969 thousand). Inventory write-down allowance was included in other expenses. Inventories recognised as expenses during the reporting period amounted to EUR 17,740 thousand as at 31 December 2023 (31 December 2022: EUR 26,854 thousand).
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| I. Trade receivables under contracts with customers | ||
| I.1 Receivables after one year | - | - |
| Net book of receivables after one year: | - | - |
| I.2. Current trade receivables | ||
| Receivables for transmission of natural gas | 8,103 | 6,770 |
| Receivables for natural gas | 112 | 713 |
| Receivables for balancing of transmission system | 1,564 | 1,553 |
| Receivables for other services | 4 | 2 |
| Less: expected credit losses for trade receivables | (23) | (19) |
| Trade receivables under contracts with customers | 9,760 | 9,019 |
| II. Trade receivables under other contracts | ||
| Other trade receivables | 3 | 11 |
| Less: impairment of trade receivables | - | - |
| Total trade receivables under other contracts | 3 | 11 |
| Total trade receivable | 9,763 | 9,030 |
Current trade receivables are interest free and their settlement term is typically between 7 and 30 calendar days. Impairment allowance of EUR 23 thousand was established for trade receivables as at 31 December 2024 (31 December 2023: EUR 19 thousand). The change in trade receivables as at 31 December 2024, compared to 31 December 2023, was a response to higher volumes of natural gas transmitted due of increased natural gas consumption The Company applies a simplified credit risk assessment approach as required by IFRS 9, and accounts for loss allowances for lifetime credit losses from initial recognition of receivables. To determine credit losses for receivables, the Company applies an individual assessment and a provision matrix. The loss ratio matrix is based on historical data for a period exceeding 36 months on settlements of debts by customers. The loss ratios may be adjusted in view of macroeconomic forecasts. The loss ratios are classified into separate groups of receivables on the basis of credit risk characteristics and overdue period. Debts of entities undergoing or in bankruptcy/liquidation are subject to a 100% expected credit loss ratio.
Expected credit losses of trade receivables as at 31 December 2024 were as follows:
| Not past due | 1-30 days | 31-90 days | 91-180 days | 181 and more days | Total: | |
|---|---|---|---|---|---|---|
| Trade receivables assessed individually | 3,619 | - | - | - | - | 3,619 |
| Expected credit losses | (15) | - | - | - | - | (15) |
| Trade receivables assessed collectively | ||||||
| State-owned companies | 2,673 | - | - | - | - | 2,673 |
| Loss ratio (%) | 0% | 0% | 0% | 0% | 0% | |
| Expected credit losses | - | - | - | - | - | - |
| Other entities | 3,273 | 221 | - | - | - | 3,494 |
| Loss ratio (%) | 0,04% | 2,99% | 5,83% | 17,55% | 100% | |
| Expected credit losses | (1) | (7) | - | - | - | (8) |
| Total trade receivables | 9,565 | 221 | - | - | - | 9,786 |
| Total expected credit losses | (16) | (7) | - | - | - | (23) |
Expected credit losses of trade receivables as at 31 December 2023 were as follows:
| Not past due | 1-30 days | 31-90 days | 91-180 days | 181 and more days | Total: | |
|---|---|---|---|---|---|---|
| Trade receivables assessed individually | 2,945 | - | - | - | - | 2,945 |
| Expected credit losses | (7) | - | - | - | - | (7) |
| Trade receivables assessed collectively | ||||||
| State-owned companies | 2,174 | - | - | - | - | 2,174 |
| Loss ratio (%) | 0% | 0% | 0% | 0% | 0% | |
| Expected credit losses | - | - | - | - | - | - |
| Other entities | 3,764 | 6 | 159 | - | 1 | 3,930 |
| Loss ratio (%) | 0,04% | 2,99% | 5,83% | 17,55% | 100% | |
| Expected credit losses | (2) | - | (9) | - | (1) | (12) |
| Total trade receivables | 8,883 | 6 | 159 | - | 1 | 9,049 |
| Total expected credit losses | (9) | - | (9) | - | (1) | (19) |
For the purpose of the individual assessment, the range of expected credit losses was 0-2.0% in 2023 (2023: 0-1.1%). Movement on impairment allowance account of the Company‘s trade receivables:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Carrying amount at the beginning of the period | 19 | 17 |
| Impairment (reversal of impairment) | 4 | 2 |
| Carrying amount at the end of the period | 23 | 19 |
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Non-financial assets | ||
| LNG terminal funds receivable | 11,626 | 9,377 |
| Grants receivable | - | 7,360 |
| Taxes receivable | 221 | 37 |
| Total non-financial assets | 11,847 | 16,774 |
| Contract assets | 1,220 | 1,798 |
| Financial assets | ||
| Other receivables | 85 | 502 |
| Total financial assets | 85 | 502 |
| Total other receivables | 13,152 | 19,074 |
The fair value of other receivables of the Company approximates their carrying amount. As at 31 December 2024 LNG terminal funds receivable included an overdue amount of EUR 7,632 thousand, whereof overdue amount of Achema AB amounted to EUR 7,429 thousand. As at 31 December 2023, the overdue amount included in LNG terminal funds receivable amounted to EUR 6,582 thousand of which EUR 6,432 thousand of AB Achema debt. The legal dispute with Achema AB is disclosed in Note 38. The Company does not recognise impairment for the LNG terminal funds receivable as the Company, acting as administrator of the LNG terminal funds, is not exposed to credit risk. Since the LNG terminal funds are not treated as assets of the administrator of the LNG terminal funds based on the Description of the procedure for administration of the LNG terminal funds, and therefore, they cannot be subject to debt recovery procedures based on the obligations of the administrator of the LNG terminal funds that are not related to the administration of the LNG terminal funds. The decrease in grants receivable was influenced by the support received from the EU Structural Funds to fund the Company’s investment projects, of which EUR 3,196 thousand was the financing of the gas pipeline interconnection between Lithuania and Poland (GIPL); EUR 253 thousand - the financing for the gas pipline interconnection between Lithuania and Latvia (ELLI) under the Connecting Europe Facility (CINEA) fund; EUR 3,743 thousand - the financing from the European Regional Development Fund. No impairment was established for the Company‘s other amounts receivables as the amount is insignificant.
As at 31 December 2024 and 31 December 2023, the Company’s other financial assets comprised term deposits, security deposits collected from the system users and LNG terminal funds. Part of the security deposits received from the system users is held in the form of term bank deposits. Three fixed-term deposit agreements with different maturities were concluded for storage of the deposits: EUR 575 thousand (12-month fixed-term deposit), EUR 140 thousand (6-month fixed-term deposit), and EUR 177 thousand (4-month fixed-term deposit). On 27 September 2024, the Company entered into a term deposit agreement for a period of 6 months in the amount of EUR 5,815 thousand to meet the Company’s future long-term obligations. The Company holds its deposits for guarantees, security deposits and term deposits with banking institutions, that are rated by rating agencies as having high investment-grade ratings for long-term obligations: Standard & Poors (A+), Moody’s (Aa3) anf Fitch (AA-). Consequently, ECLs were not recognised for other financial assets.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| LNG terminal funds | 3 | - |
| Deposits received | 917 | 528 |
| Fixed-term deposits | 5,815 | - |
| Total other financial assets | 6,735 | 528 |
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Cash at bank | 31 | 121 |
| Total cash and cash equivalents | 31 | 121 |
The Company keeps its cash balances on bank accounts. As at 31 December 2024, the cash balance was not material due to the Company’s and the Group’s treasury management policy aimed at maintaining minimum cash balances. The table below presents the long-term foreign currency credit ratings of the banks with which the Group kept its cash balances as at 31 December 2024:
| Bank | Cash at bank a at 31 December 2024 | Credit rating agency | Moody‘s | Standart&Poor‘s | Fitch Ratings |
|---|---|---|---|---|---|
| Bank No.1¹⁾ | 5 | Aa3 | A+ | AA | |
| Bank No.2¹⁾ | 26 | Aa3 | A+ | AA- |
¹⁾ The ratings assigned to the parent banks as at 31 December 2024.
The Company‘s share capital amounted to EUR 51,731 thousand and it is divided into 178,382,514 ordinary registered shares with par value of EUR 0.29 each.16. Dividends
The Ordinary General Meeting of Shareholders held on 30 April 2024 approved the distribution of profit for 2023. EUR 20,174 thousand was allocated to payment of dividends, i.e. EUR 0.1131 per share. During the Company‘s Ordinary General Meeting of Shareholders held on 11 April 2023, the decision was made to pay put dividends in total amount of EUR 12,059 thousand, i.e. EUR 0.0676 per share.
Legal reserve
A legal reserve is a compulsory reserve under the laws of the Republic of Lithuania. Annual transfers of not less than 5% of net profit are compulsory until the reserve reaches 10% of the authorised share capital. The Company’s legal reserve amounts to EUR 5,173 thousand and represents 10% of its authorised share capital.
Other reserves
Other reserves are formed by the decision of the Annual General Meeting of Shareholders regarding the proposed appropriation of profit. When approving the proposed appropriation of profit for 2023, an unutilised reserves EUR 114,430 thousand were transferred back to retained earnings, a EUR 403 thousand share of profit allocated to a target reserve for support. The Company’s profit for the development of its operations and for the implementation of strategic projects, temporarily restricting the use of profits, was accrued in other reserves. Reserves were cancelled following the achievement of the objectives for which the restrictions on the use of profits were imposed. When approving the proposed appropriation of profit for 2022, an unutilised reserve for support of EUR 166 thousand by the decision of the Annual Meeting Of Shareholders was reclassified back to retained earnings, a EUR 3,827 thousand was transferred to other reserves of which EUR 471 thousand a target reserve for support.
Revaluation reserve
Below is the impact of revaluation of property, plant and equipment on revaluation reserve as at 31 December 2023 and changes in the revaluation reserve over 2024.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Carrying amount at the beginning of the period | 2,767 | - |
| PP&E revaluation impact | - | 3,255 |
| Transfer of revaluation reserve to retained earnings | (304) | - |
| Effect of deferred income tax | 46 | (488) |
| Impact of a change in income tax tariff | (30) | - |
| Carrying amount at the end of the period | 2,479 | 2,767 |
Pursuant to Articles 39, 42, 51 and 59 of the Law on Companies of the Republic of Lithuania, no part of the revaluation reserve may be distributed, either directly or indirectly, it may be used only to increase the issued capital. The general meeting of shareholders may not adopt a decision to pay dividends if the equity capital of the company is lower or upon payment of dividends would become lower than the revaluation reserve, i.e. the use of the revaluation reserve for profit/loss allocation is prohibited.
Grants comprise grants for the acquisition of non-current assets and compensation of expenses. As at 31 December 2024 and 31 December 2023 movements in grants were as follows:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Opening balance | ||
| Grants receivable (Note 12) | 7,360 | 6,976 |
| Grants received in advance (current liabilities) | (10) | (107) |
| 7,350 | 6,869 | |
| Recognised grants | ||
| Transfer to property, plant and equipment (Note 6) | - | 14,686 |
| Transfer to intangible assets (Note 5) | - | - |
| Write-off | (161) | - |
| Grants used for compensation of expenses | 3 | 54 |
| (158) | 14,740 | |
| Grants received | ||
| Grants received as cash | 7,192 | 14,259 |
| 7,192 | 14,259 | |
| Grants received in the form of assets | - | - |
| Closing balance | ||
| Grants receivable (Note 12) | - | 7,360 |
| Grants received in advance (current liabilities) | - | (10) |
| - | 7,350 |
As at 31 December 2024, the Company had two long-term loan agreements with Nordic Investment Bank and European Investment Bank. The balance of borrowings from Nordic Investment Bank, less the current portion of non-current borrowings, amounted to EUR 10,870 thousand as at 31 December 2024 (31 December 2023: EUR 13,043 thousand). The balance of the borrowing from European Investment Bank, less the current portion of the non-current borrowing, amounted to EUR 44,443 thousand as at 31 December 2024 (31 December 2023: EUR 47,918 thousand). To balance its working capital, on 2 September 2024 the Company and EPSO-G entered into a cash pool contract, based on which the maximum borrowing limit (overdraft) from EPSO-G was set in amount of EUR 70,000 thousand. As at 31 December 2024, the Company’s borrowings under this contract amounted to EUR 23,482 thousand (31 December 2023: EUR 25,009 thousand).
As at 31 December 2024, the weighted average interest rate on the Company’s borrowings was 2.25% (31 December 2023: 2.60%). As at 31 December 2024, a EUR 43,870 thousand loan was subject to a variable interest rate (31 December 2023: EUR 48,095 thousand), and a EUR 40,574 thousand loan was subject to a fixed interest rate (31 December 2023: EUR 43,525 thousand). The interest rate is linked to variable 3-6-month EURIBOR rate. The long-term loan agreements include financial covenants that the Company is obliged to comply with. The said financial covenants are defined by the following performance indicators: Financial debt-to-EBITDA ratio, Net debt to RAB ratio, Net Interest Coverage Ratio. As at 31 December 2024 and 2023, the Company complied with the covenants and obligations set forth in the loan agreements with the above mentioned banks.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Non-current borrowings | 55,312 | 60,962 |
| Current borrowings | 29,482 | 31,084 |
| Current borrowings | 23,482 | 25,009 |
| Current portion of non-current borrowings | 5,649 | 5,649 |
| Accrued interest payable | 351 | 426 |
| Total borrowings | 84,794 | 92,046 |
Non-current borrowings by maturity:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Between 1 and 2 years | 5,649 | 5,649 |
| Between 2 and 5 years | 16,948 | 16,949 |
| After 5 years | 32,715 | 38,364 |
| Total | 55,312 | 60,962 |
Non-current borrowings grouped by maturity into fixed-rate and variable-rate loans:
| As at 31 December 2024 | As at 31 December 2023 | As at 31 December 2024 | As at 31 December 2023 | ||
|---|---|---|---|---|---|
| Borrowings with a fixed interest rate | Borrowings with a fixed interest rate | Borrowings with a variable interest rate | Borrowings with a variable interest rate | ||
| 2024 | - | 2,951 | 2024 | - | 2,699 |
| 2025 | 2,951 | 2,951 | 2025 | 2,699 | 2,699 |
| 2026 | 2,951 | 2,951 | 2026 | 2,699 | 2,699 |
| 2027 | 2,951 | 2,951 | 2027 | 2,699 | 2,699 |
| 2028 | 2,951 | 2,951 | 2028 | 2,699 | 2,699 |
| 2029 | 2,951 | 2,951 | 2029 | 2,699 | 2,699 |
| 2030 | 2,951 | 2,951 | 2030 | 2,699 | 2,699 |
| 2031 | 2,951 | 2,951 | 2031 | 525 | 525 |
| 2032 | 2,951 | 2,951 | 2032 | 524 | 524 |
| 2033 | 2,951 | 2,951 | 2033 | 524 | 524 |
| 2034 | 2,951 | 2,951 | 2034 | 524 | 524 |
| 2035 | 2,951 | 2,951 | 2035 | 524 | 524 |
| 2036 | 2,951 | 2,951 | 2036 | 524 | 524 |
| 2037 | 2,951 | 2,951 | 2037 | 524 | 524 |
| 2038 | 2,211 | 2,211 | 2038 | 524 | 524 |
| Total | 40,574 | 43,525 | Total | 20,387 | 23,086 |
All borrowings of the Company were obtained in the euros, and therefore, the outstanding balances of borrowings were denominated in the euros for the period of 31 December 2024 and 31 December 2023, thereby resulting in no foreign exchange effect. There are no third-party guarantees or assets pledged by the Company as a collateral for bank borrowings.
Net debt balances:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Cash and cash equivalents | 31 | 121 |
| Other liquid assets | 6,707 | - |
| Non-current borrowings | (55,312) | (60,962) |
| Lease liabilities | (3,492) | (2,933) |
| Current portion of non-current borrowings | (5,649) | (5,649) |
| Current borrowings | (23,482) | (25,009) |
| Accrued interest payable | (351) | (426) |
| Current portion of lease liabilities | (986) | (317) |
| Net debt | (82,534) | (95,175) |
Reconciliation of net debt balances and cash flows from financing activities:
| Cash | Other liquid assets | Borrowings | Lease liabilities | Total | |
|---|---|---|---|---|---|
| Net debt as at 31 December 2022 | 21 | - | (101,137) | (3,514) | (104,630) |
| Changes in cash and cash equivalents | 100 | - | - | - | 100 |
| Loan (received) | - | - | - | - | - |
| Repayment of borrowings | - | - | 24,780 | - | 24,780 |
| Change in overdraft | - | - | (15,437) | - | (15,437) |
| Lease payments | - | - | - | 512 | 512 |
| Concluded lease contracts | - | - | - | (217) | (217) |
| Indexation | - | - | - | (31) | (31) |
| Other movements | - | - | - | - | - |
| Interest charges expensed and interest capitalised | - | - | (2,071) | (30) | (2,101) |
| Interest paid | - | - | 1,834 | 30 | 1,864 |
| Other non-cash changes | - | - | (15) | - | (15) |
| Net debt as at 31 December 2023 | 121 | - | (92,046) | (3,250) | (95,175) |
| Net debt as at 31 December 2023 | 121 | - | (92,046) | (3,250) | (95,175) |
| Changes in cash and cash equivalents | (90) | - | - | - | (90) |
| Increase in other liquid assets* | - | 6,707 | - | - | 6,707 |
| Loans (received) | - | - | - | - | - |
| Repayment of borrowings | - | - | 5,649 | - | 5,649 |
| Change in overdraft | - | - | 1,526 | - | 1,526 |
| Lease payments | - | - | - | 876 | 876 |
| Concluded lease contracts | - | - | - | (2,076) | (2,076) |
| Indexation | - | - | - | (28) | (28) |
| Other changes | - | - | - | - | - |
| Interest charges expensed and interest capitalised | - | - | (2,235) | (103) | (2,338) |
| Interest paid | - | - | 2,312 | 103 | 2,415 |
| Other non-cash changes | - | - | - | - | - |
| Net debt as at 31 December 2024 | 31 | 6,707 | (84,794) | (4,478) | (82,534) |
20.# Lease liabilities
Lease liabilities and their movement were as follows:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Carrying amount at the beginning of the period | 3,250 | 3,514 |
| Indexation | 28 | 31 |
| Concluded lease contracts | 2,076 | 217 |
| Terminated lease contracts (write-off of debt and accrued interest) | - | - |
| Interest charged | 103 | 30 |
| Lease payments (principal and interest) | (979) | (542) |
| Carrying amount at the end of the period | 4,478 | 3,250 |
| Non-current lease liabilities | 3,492 | 2,933 |
| Current lease liabilities | 986 | 317 |
Future rental payments under non-cancellable lease agreements:
| Lease liabilities | As at 31 December 2024 | As at 31 December 2023 |
|---|---|---|
| Current portion | 986 | 317 |
Maturity of non-current liabilities:
| 3,492 | 2,933 | |
|---|---|---|
| Between 1 and 2 years | 1,013 | 295 |
| Between 2 and 3 years | 314 | 291 |
| Between 3 and 5 years | 390 | 386 |
| After 5 years | 1,775 | 1,961 |
Interest charged on lease liabilities and included in the Group’s finance costs amounted to EUR 103 thousand as at 31 December 2024 (31 December 2023: EUR 30 thousand). The Company has a lease contract for office premises with variable lease payments not included in the value of lease liabilities. As from 1 January 2024, the lease rate for office premises revised in view of changes in the average consumer price index up to a maximum of 2 per cent. As at 31 December 2024, the Company’s lease payments (principal amount) totalled EUR 876 thousand (as at 31 December 2023: EUR 512 thousand). The Company had no short-term lease contracts. The EUR 154 thousand lease payments were recognised as expenses under low-value leases which are not part of the lease liabilities.
Funds from connection of new system users to the gas transmission system are recognised as liabilities under contracts with customers. Contract liabilities included as follows:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Non-current portion of contract liabilities under connection contracts | 1,700 | 1,530 |
| Total non-current contract liabilities | 1,700 | 1,530 |
| Current portion of contract liabilities under connection contracts | 89 | 70 |
| Prepayments received for connection services | - | - |
| Total current liabilities under contracts with customers | 89 | 70 |
| Total contract liabilities | 1,789 | 1,600 |
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Provisions for pension benefits to employees | 793 | 774 |
| Provisions for registration of special land use conditions (protected areas) | 300 | 356 |
| Provision for repayment of guarantee funds | 5,815 | - |
| Carrying amount | 6,908 | 1,130 |
| Non-current provisions | 937 | 667 |
| Current provisions | 5,971 | 463 |
Movement in provisions:
| Provisions for pension benefits to employees | Provisions for registration of protection zones | Provision for repayment of guarantee funds | Total | |
|---|---|---|---|---|
| Carrying amount as at 31 December 2022 | 738 | 1,024 | - | 1,762 |
| Calculated | 36 | - | - | 36 |
| Revised estimate | - | (264) | - | (264) |
| Payments made | - | (404) | - | (404) |
| Carrying amount as at 31 December 2023 | 774 | 356 | - | 1,130 |
| Calculated | 19 | - | 5,815 | 5,834 |
| Revised estimate | - | (49) | - | (49) |
| Payments made | - | (7) | - | (7) |
| Carrying amount as at 31 March 2024 | 793 | 300 | 5,815 | 6,908 |
As at 31 December 2024, the Company’s employee benefit obligations related to payment of one-off benefits to employees leaving the Company at retirement age amounted to EUR 793 thousand (as at 31 December 2023: EUR 774 thousand). There are no other long-term employee benefit obligations for long-term service of employees as per the collective agreement.
Key assumptions used in assessing the Company’s and the Group’s long-term employee benefit obligations are given below:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Discount rate | 0.96% | 1.24% |
| Annual employee turnover rate | 7.12% | 6.91% |
| Annual salary growth | 2.80% | 3.00% |
| Average time to retirement (years) | 19.84 | 19.81 |
The Company has obligation to register special conditions for the use of land (protection zones). As at 31 December 2024 and 2023, the Company re-measured the provision for registration of special land use conditions (protected areas) and the related intangible assets in view of changes in assumptions. As at 31 December 2024, the provision reduced by EUR 49 thousand (31 December 2023: EUR 264 thousand). As at 31 December 2024, the Company’s outstanding obligation to register special conditions for the use of land (protection zones) amounted to EUR 300 thousand (31 December 2023: EUR 356 thousand).
Following the contractor’s failure to perform and/or improper performance of its warranty obligations under the contract for the construction of the gas pipeline interconnection between Poland and Lithuania (GIPL), the Company has received guarantee funds of EUR 5,815 thousand under the guarantee bank guarantees provided by the contractor Alvora UAB. In the event the contractor challenges the non-performance or improper performance of its warranty obligations in court and requests to declare the Company’s claims for payment of the guarantee funds unlawful, the Company has made a provision for the expected repayment of funds received under the guarantee. More information on the legal dispute with Alvora UAB is disclosed in Note 38.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Payables for property, plant and equipment | 969 | 900 |
| Payables for goods and services | 1,602 | 1,892 |
| Payables for repair services | 47 | 127 |
| Payables for natural gas | 1,513 | 1 |
| Payables for balancing services | 2,253 | 2,415 |
| 6,384 | 5,335 |
Trade payables are non-interest bearing and are generally collectible within 30 days. As at 31 December 2024, trade payables were by 20% higher than as at 31 December 2023. The increase in trade payables was influenced by higher volumes of natural gas transmitted due of increased natural gas consumption and increased technological needs.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Financial liabilities | ||
| Security deposits received | 918 | 528 |
| Other prepayments received | - | - |
| Total financial liabilities | 918 | 528 |
| Non-financial liabilities | ||
| Contract liabilities | 89 | 70 |
| Advance grants received | - | 6 |
| Other accrued revenue | - | 4 |
| Other prepayments received | 29 | 14 |
| Total non-financial liabilities | 118 | 94 |
| Total prepayments received and contract liabilities | 1,036 | 622 |
As at 31 December 2024 in prepayments received consisted of comprised security deposits received from the system users as a contract enforcement measure amounted to EUR 918 thousand as at 31 December 2024 (31 December 2023 – EUR 528 thousand). The system user, before entering into the transmission contract, must provide the Company with appropriate contract enforcement measures.
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Non-financial liabilities | ||
| Employment-related liabilities | 1,952 | 1,199 |
| Accrued expenses relating to vocation reserve | 1,525 | 1,654 |
| Administered LNG terminal funds payable | 10,794 | 8,906 |
| Accrued administered LNG terminal funds | 833 | 471 |
| Real estate tax payable | 780 | 732 |
| Payable value added tax | - | - |
| Other taxes payable | 16 | 19 |
| Other payables | - | - |
| Total non-financial liabilities | 15,900 | 12,981 |
| Financial liabilities | ||
| Payable CBCA contribution | 27,450 | 27,450 |
| Payable dividends | 73 | 65 |
| Other payables | - | 1 |
| Accrued expenses | 1,120 | 1,089 |
| Derivative liabilities | 654 | 364 |
| Total financial liabilities | 29,297 | 28,969 |
| Total other payables | 45,197 | 41,950 |
The Company has agreed to the commitment to pay the compensation of EUR 27,450 thousand (hereinafter the ‘CBCA contribution’) set out in the Transmission System Operators Agreement) (hereinafter the ‘ITA Agreement’) and imposed be the decision of the Agency for the Cooperation of Energy Regulators of the European Union (ACER) to the Polish TSO, calculated in accordance with the principles of cost allocation between the Member States of the gas interconnection project between Lithuania and Poland (GIPL). The CBCA contribution will be paid to the Polish transmission system operator upon receipt of its payment request based on the value of the GIPL construction works on the Polish side validated by the auditors. The ITA agreement provides for the indexation of the CBCA contribution in the event of non-completion of the project by the deadline of 1 January 2022, considering the euro area's inflation based on Eurostat data. In addition, the CBCA contribution is adjusted by the rate calculated as the ratio between actual and planned project costs. Any financial settlements under the ITA Agreement, including the translation of GIPL costs from Polish zlotys into euro, are made at the exchange reference rates published by the European Central Bank. The exchange rate prevailing on the date of invoice must be applied. As the amendment to the ITA Agreement requires the approval of the management of the transmission system operators in the project countries, the CBCA contribution adjustment is directly dependent on the applicable exchange rate between Polish zloty and euro, which is variable, the Company is unable to reliably estimate the amount of the CBCA contribution adjustment and this uncertainty about the amount of compensation adjustment, no financial liability in respect of the adjustment is recognised.
The Group‘s other income includes as follows:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Grants recognised as income | 4 | 54 | 54 | |
| Proceeds from the sale of inventories and returnable materials | 4 | 875 | 875 | |
| Rental income | 8 | 1 | 1 | |
| Gain on disposal of PP&E | 2 | 19 | 19 | |
| Interest on late payment | 39 | 40 | 40 | |
| Other income | 216 | 319 | 319 | |
| 273 | 1,308 | 1,308 |
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Dividend income | - | 542 | - |
In 2024, the Company received EUR 564 thousand in dividends from its associate GET Baltic. Under the equity method of accounting of the associate, dividends received from the associate are treated as a reduction in the carrying amount of the investment, rather than recognised in income. In 2023, EUR 542 thousand were received in dividends from the subsidiary GET Baltic and recognised in income.
The cost of purchase of natural gas were consisted of:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Expenses for natural gas system balancing products | (13,079) | (18,210) | (18,210) | |
| Expenses for natural gas technological needs | (3,430) | (7,142) | (7,142) | |
| Total* | (16,509) | (25,352) | (25,352) |
In 2024, compared to 2023, natural gas costs decreased by 35%. The changes in natural gas costs were driven by:
- a 28% decrease in expenses from balancing services due lower prices;
- a 52% decrease in technological needs due to lower consumption and lower gas prices.
Payroll and related expenses were consisted of:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Wages and salaries | (15,227) | (13,596) | (13,848) | |
| Cost of social security contributions | (274) | (244) | (248) | |
| Total wages and related costs: | (15,501) | (13,840) | (14,096) |
Other expenses of the Group and Company were consisted of:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Telecommunications and IT system expenses | (2,263) | (2,285) | (2,336) | |
| Business trips | (304) | (259) | (259) | |
| Consulting services | (334) | (117) | (117) | |
| Expenses of governing bodies | (104) | (92) | (92) | |
| Management services | (760) | (349) | (349) | |
| Personnel development | (222) | (227) | (227) | |
| Public relations | (177) | (236) | (236) | |
| Premise expenses | (740) | (1,071) | (1,071) | |
| Transport | (791) | (702) | (702) | |
| Council fee | (1,111) | (1,321) | (1,321) | |
| Taxes | (3,314) | (2,979) | (2,979) | |
| Business protection | (583) | (542) | (542) | |
| Membership fees | (258) | (242) | (242) | |
| Insurance | (532) | (520) | (520) | |
| Other expenses | (1,941) | (2,409) | (2,426) | |
| Total | (13,434) | (13,351) | (13,419) |
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Interest income | 186 | 9 | 454 | |
| Other | - | 13 | 13 | |
| Total finance income | 186 | 22 | 467 | |
| Interest costs | (2,345) | (1,778) | (1,778) | |
| Other finance costs | (7) | (2) | (3) | |
| Total finance costs | (2,352) | (1,780) | (1,781) | |
| Total finance costs, net | (2,166) | (1,758) | (1,314) |
Income tax expenses include as follows:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Current income tax expense for the reporting year | 1,071 | - | 140 | |
| Deferred income tax expenses (benefit) | 125 | 567 | 567 | |
| Income tax expenses/(benefit) for the reporting period | 1,196 | 567 | 707 |
The movement in deferred tax assets and liabilities prior to offsetting the balances with the same fiscal authority was as follows:
Deferred income tax assets
| As at 31 December 2022 | Recognised in profit or loss | Recognised in other comprehensive income | As at 31 December 2023 | Recognised in profit or loss | Recognised in other comprehensive income | As at 31 December 2024 | |
|---|---|---|---|---|---|---|---|
| PP&E revaluation (impairment) | 2,342 | 1,068 | - | 3,410 | 190 | - | 3,600 |
| Fees on connection of new consumers | 196 | 44 | - | 240 | 5 | - | 245 |
| Impairment of inventories and receivables | 86 | (6) | - | 80 | (7) | - | 73 |
| Accrued expenses | 303 | 61 | - | 364 | 7 | - | 371 |
| Unutilised investment incentive | 2,192 | (1,744) | - | 448 | (448) | - | - |
| Lease liabilities | 505 | (40) | - | 465 | 220 | - | 685 |
| Other | 145 | 56 | - | 201 | 106 | - | 307 |
| Total | 5,769 | (561) | - | 5,208 | 73 | - | 5,281 |
Deferred tax liabilities
| As at 31 December 2022 | Recognised in profit or loss | Recognised in other comprehensive income | As at 31 December 2023 | Recognised in profit or loss | Recognised in other comprehensive income | As at 31 December 2024 | |
|---|---|---|---|---|---|---|---|
| Effect of capitalisation of interest | (123) | (46) | - | (169) | (7) | - | (176) |
| PP&E depreciation | - | - | (488) | (488) | (17) | (30) | (472) |
| PP&E revaluation | (505) | 40 | - | (465) | 46 | - | (685) |
| Right-of-use assets | - | (6) | - | (628) | (220) | - | (1,350) |
| Total | (628) | (12) | (488) | (1,122) | (198) | (30) | (1,350) |
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Deferred tax assets before offset | 5,281 | 5,208 |
| Less: deferred tax assets offset against deferred tax liabilities | (1,350) | (1,122) |
| Deferred tax asset, net | 3,931 | 4,086 |
| Deferred income tax, net, at 31 December 2022 | 5,141 | |
| Deferred income tax, net, at 31 December 2023 | 4,086 | |
| Deferred income tax, net, at 31 December 2024 | 3,931 |
Under the assessment of the Company EUR 356 thousand net deferred income tax will be realized within 12 months, EUR 3,575 thousand over a period of more than 12 months.
Deferred income tax assets and deferred income tax liabilities were offset in the Group’s and the Company’s statement of financial position, as they were related to the same tax authority.
When estimating the components of deferred income assets and liabilities as at 31 December 2024 the Company applied income tax rate of 16% , as at 31 December 2023 - income tax rate of 15%.
The reported amount of current income tax expenses can be reconciled to the income tax expenses that would result from applying a standard income tax rate of 15% to profit before tax:
| Company | Group | 2024 | 2023 | 2023 |
|---|---|---|---|---|
| Profit (loss) before tax | 9,502 | 13,992 | 13,720 | |
| Income tax (expenses) at the effective income tax rate | 1,425 | 2,099 | 2,058 | |
| Non-deductible expenses, non-taxable income | 56 | 29 | 111 | |
| Disposal of subsidiary and revaluation of the remaining investment in associate | - | (1,521) | (1,422) | |
| Investment relief utilised during the reporting period | (10) | (40) | (40) | |
| Impact of a change in the corporate income tax rate | (275) | - | - | |
| Other | - | - | - | |
| Adjustments to previous year income tax | - | - | - | |
| 1,196 | 567 | 707 |
Basic and diluted earnings (loss) per share reflect net profit (loss) divided by the weighted average number of shares. There are no diluting instruments, therefore, the basic and diluted earnings (loss) per share are the same.
Calculation of basic and diluted earnings (loss) per share is presented below:
| Group | 2024 | 2023 |
|---|---|---|
| Net profit attributable to equity holders of the Group (EUR ’000) | 8,306 | 13,013 |
| Weighted average number of shares (’000 units) | 178,383 | 178,383 |
| Basic and diluted earnings (loss) per share (EUR) | 0.05 | 0.07 |
The impact of significant investment and financing transactions, classified as non-cash transactions, on the cash flows from financing and investing activities is disclosed below.
When calculating cash flows from investing and financing activities as at 31 December 2023, the Company took into consideration the following: changes in payables for non-current assets of EUR 2.260 thousand, re-measurement of provision for registration of special land use conditions and related intangible assets of EUR 264 thousand, payments made to set special land use conditions of EUR 404 thousand, and capitalised interest costs of EUR 329 thousand.
Reclassification from non-current assets (including construction work in progress) to inventories and assets held for sale amounted to EUR 59 thousand and change in grants receivable to EUR 427 thousand.
The Company is exposed to financial risks in its operations. By managing the risks, the Group and the Company seek to mitigate the impact of factors that might have an adverse effect on the financial performance. The Company follows the Group‘s Treasury and Financial Risk Management Policy.# Financial instruments by category based on the items of the statement of financial position:
| Note | As at 31 December 2024 | As at 31 December 2023 |
|---|---|---|
| Financial assets at fair value through profit or loss | 1,153 | 1,226 |
| Derivatives | 9 | 1,153 |
| Financial assets at amortised cost | 16,611 | 10,181 |
| Trade receivables | 11 | 9,763 |
| Other receivables | 12 | 85 |
| Cash and cash equivalents | 14 | 31 |
| Other financial assets | 13 | 6,732 |
| Total financial assets: | 17,764 | 11,407 |
| Note | As at 31 December 2024 | As at 31 December 2023 |
|---|---|---|
| Financial liabilities at fair value through profit or loss | 654 | 364 |
| Derivatives | 9 | 654 |
| Financial liabilities measured at amortised cost | 125,217 | 129,764 |
| Borrowings | 19 | 84,794 |
| Lease liabilities | 20 | 4,478 |
| Trade payables | 23 | 6,384 |
| Other payables and liabilities | 24,25 | 29,561 |
| Total | 125,871 | 130,128 |
The table below provides information on the values of balance sheet items exposed to credit risk:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| At fair value through profit or loss | 1,153 | 1,226 |
| At amortized cost | 16,611 | 10,181 |
| Contract assets | 1,220 | 1,798 |
| Total | 18,984 | 13,205 |
Liquidity risk is managed continuously by making short-term and long-term cash flow forecasts of the Group. Where necessary, the Company relies on the forecasts to make decisions aimed at ensuring its solvency, i.e. uses the credit limit on EPSO-G’s cash pool account to balance its working capital. The cash pool agreements concluded with EPSO-G UAB is effective until 1 September 2027. Balance of undrawn credit limit as at 31 December 2024 was EUR 46,518 thousand (as at 31 December 2023, EUR 44,991 thousand).
The Group’s liquidity ratios (after elimination of effects of the LNG terminal funds under administration) were as follows as at 31 December 2024 and 2023:
| As at 31 December 2024 | As at 31 December 2023 | |
|---|---|---|
| Current ratio | 0.30 | 0.36 |
| Quick ratio | 0.24 | 0.28 |
An increase in current liabilities resulted in lower liquidity rates.
The table below presents the Company’s financial liabilities grouped by maturity as at 31 December 2024 and 2023, based on the undiscounted contractual payments (scheduled payments including interest):
As at 31 December 2024
| Up to 3 months | Between 3 and 12 months | Between 1 and 5 years | After 5 years | Total | |
|---|---|---|---|---|---|
| Interest-bearing borrowings and liabilities | 27,653 | 4,427 | 26,129 | 40,501 | 98,710 |
| Lease liabilities | 101 | 251 | 1,075 | 3,081 | 4,508 |
| Other liabilities | 1,683 | 27,450 | 364 | - | 29,497 |
| Trade payables | 5,335 | - | - | - | 5,335 |
| Balance as at 31 December 2023 | 34,772 | 32,128 | 27,568 | 43,582 | 138,050 |
As at 31 December 2023
| Up to 3 months | Between 3 and 12 months | Between 1 and 5 years | After 5 years | Total | |
|---|---|---|---|---|---|
| Interest-bearing borrowings and liabilities | 2,575 | 28,143 | 25,200 | 34,080 | 89,998 |
| Lease liabilities | 267 | 803 | 1,835 | 2,873 | 5,778 |
| Other current liabilities | 29,561 | - | 654 | - | 30,215 |
| Trade payables | 6,384 | - | - | - | 6,384 |
| Balance as at 31 December 2024 | 38,787 | 28,946 | 27,689 | 36,953 | 132,375 |
The maximum exposure to credit risk is equal to the amount of trade receivables (except for receivable LNG terminal funds), other receivables, cash, other financial assets, less recognised impairment losses. Delays in settlement of 231 significant amounts of trade receivables may affect the Company’s ordinary course of business and lead to search of additional financing sources. Credit risk is managed through regular monitoring procedures (individual supervision of debtors, monitoring and analysis of customers in order to identify potential solvency issues that may arise in the future, etc.). The Company has approved the description of administration of payments for the transmission services, which stipulates the specific actions and deadlines to be followed in order to reduce the outstanding balance of trade receivables. Creditworthiness of all customers is assessed, and in case of any deviations from the criteria set out in the Description of administration of payments for the transmission services, the risk is assessed individually in respect of creditworthiness of each customer, and, if necessary, additional credit enhancements are ensured to eliminate such risk. The Company is exposed to significant concentration of credit risk. The credit risk exposure is distributed among the Company’s 10 major customers with trade receivables from them representing 86% of the Company’s total trade receivables as at 31 December 2024 (31 December 2023: 87%).
The Group’s exposure to credit risk arises from cash at bank. The level of exposure depends on the credibility of the selected bank (Note 14). The Group has an effective treasury and financial risk management policy in place. The policy establishes the credibility level of the banks selected for partnership; the diversification limits for funds kept as deposits or invested in the investment products of banks or their subsidiaries, other securities, etc. The credibility of the selected partners is assessed according to the procedure established at the Company. The system users assigned with the highest risk level are assessed by engaging an entity that provides specialised creditworthiness assessment services, and an exchange participant willing to make a purchase order is required to provide a credit enhancement (advance payment or bank guarantee). The Group does not issue guarantees to secure the fulfilment of obligations of other parties.
As at 31 December 2024 and 2023, the Group had borrowings with variable interest rates. Exposure to interest rate risk arises from variable interest rates that are linked to EURIBOR. In view of the situation in market of the interbank offered rates, the Group did not enter into any financial instrument transactions intended to manage the interest rate risk during 2024 and 2023.
The table below demonstrates the sensitivity of the Company's profit before tax to theoretic potential shifts in EURIBOR interest rates, with all other variables held constant. The Company estimates sensitivity using 100 basis points, which make 1%. There is no impact on the Company’s equity, other than that on current year profit.
| Increase in EURIBOR, b.p. | Impact on profit before tax, EUR ’000 |
|---|---|
| As at 31 December 2024 | 100 |
| As at 31 December 2023 | 100 |
The Group is exposed to a risk arising from changes in the natural gas purchase price. The changes are driven by fluctuations in Lithuanian and international natural gas markets and exchanges. The level of this risk is low as the transmission pricing approved by NERC recognises actual gas prices and therefore in 2024 the Group did not take any measures to mitigate the natural gas price risk.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group's major financial assets and liabilities not carried at fair value are trade and other receivables, trade and other payables, current and non-current loans granted and borrowings, and finance lease. The following methods and assumptions are used by the Group and the Company to estimate the fair value of each class of financial instruments:
a. The carrying amount of current trade and other amounts receivable, current trade and other amounts payables approximates their fair value (level 3);
b. The fair value of non-current loans received and granted is measured using the interest rate for the same or similar issues or on the current rates available for debt with the same maturity profile and similar credit risk. The Group estimated that the carrying amount of interest-bearing long-term loans was EUR 9,512 thousand as at 31 December 2024 (EUR 11,627 thousand as at 31 December 2023).
232
According to the Company’s management, more stringent EU environmental policy requirements introduced in the context of combating climate change, promotion and development of renewable energy sources and more efficient use of energy will reduce consumption of natural gas for both energetic and industrial domestic needs. However, natural gas will play an important role as a transition energy in achieving European and national targets of reducing greenhouse gas emissions. A key goal se in the Company’s strategy is to work together on Lithuania’s energy transformation towards a climate neutral economy. One of the main sustainability objectives of the Company is to mitigate the environmental impact of its operations. To significantly reduce the impact on environment, the plan of measures has been developed and consistently implemented. Actions are focused on preparing for the new EU legal framework for methane emissions. Measures for mitigating climate change and reducing GHG emissions and related investments are covered by the Company’s Ten-Year Network Development Plan (2024-2033). Once implemented, these investments will be included in the regulated asset base, thereby ensuring additional income and economic benefit to the Company. These investments encompass the generation of new assets and the replacement of existing depreciated assets to increase efficiency of the transmission network and sustainability. There are no plans to reduce the useful life of the existing assets or to write off the regulated assets, and there are no evidences of impairment. In the view of the Company’s management, the requirements related to climate change do not cast significant uncertainties and doubts on the ability to continue as a going concern, and the reasonableness and effectiveness of the environmental mitigation measures. Climate-related risk does not affect the Company’s exposure to expected credit losses. The climate change impact assessments and assumptions do not pose a significant risk of material adjustments to the carrying amounts of assets and liabilities, or of impairment of non-current assets and inventories.# Climate-related matters do not have a material impact on the recognition of deferred tax assets, the materialisation of contingent liabilities arising from climate change requirements, market and liquidity risk. For more details on the climate impact refer to the Consolidated Management Report 2024, section “Sustainability Information”.
Below is information on pending civil cases:
Civil case regarding the award of LNG terminal funds in the amount of EUR 7,080 thousand and late payment interest in the amount of EUR 830 thousand from Achema AB under the natural gas transmission service agreements concluded on 21 December 2012 and 22 December 2014. The District Court of Kaunas suspended the proceedings, as it is pending the decision of the European Commission on the compatibility of the LNG terminal surcharge funds collected for the period from 1 January 2016 to 31 December 2018 with the State aid rules under the EU law. In respect of the civil case regarding award of the LNG terminal funds, the Company acts solely as an administrator of the LNG terminal funds, transfers the LNG terminal funds to their recipients only after collecting them from the buyers, and accordingly, the Company does not incur credit risk in respect of the disputed amount.
Civil case in which the Company is the defendant, is pending on the claim of the claimant Alvora UAB, by which it request the Court to declare the claims of the defendant, i.e. the Company, for the payment of EUR 4,868 thousand on the basis of the guarantee obligations unlawful and unfounded, and the Company’s claim (treated as a counterclaim), by which it request Alvora UAB to be ordered to pay EUR 4,820 thousand by way of damages, in addition to default interest on the awarded amount, and a fine for breach of the contract. At the moment, the proceedings are pending before the court of first instance. The Company has received EUR 5.815 thousand in warranty performance security funds based on the claims submitted. However, a provision for the possible repayment of the same amount has been recognized in the provision account for a possible return of the guarantee funds. The Company considers that the bank guarantees were used duly in accordance with laws and terms and conditions of the contract, as defects were found in the work, which Alvora UAB refused to remedy. The proceeds from the guarantees will be used to remedy the defects found. In the event Alvora UAB remedies the defects found at its own expense until the outcome of the proceedings, the Company will reimburse the money to the claimant Alvora UAB received under the guarantees. The court has declared the case material non-public.
The company challenges two decisions of the National Energy Regulatory Council (NERC) in court, following a non-routine inspection of the legality of the use of the GIPL pipeline interconnectors during construction and testing during operation adopted by NERC: (i) resolution, approving the Inspection Report (the ‘Report’), finding the infringements by the Company and imposing related obligations on the Company (including the replacement of the fittings found by the Report to be unsuitable); and (ii) NERC’s resolution, finding that the Company has committed an infringement of a regulatory obligation and imposing a EUR 81 thousand fine. The Company seeks to prove that it did not commit the infringements of the regulated activities identified by NERC (the infringements were committed by the contractor for the construction of the GIPL gas pipeline) and there were no grounds for imposing the sanction. Notwithstanding the fact that the Company has not paid the fine imposed, because it is challenging NERC’s decision to impose a penalty, the Company has acknowledged its financial obligation to pay a set amount of the fine, which has been recognized in the other payables and liabilities account. If the Company’s submissions are rejected by the Court or upheld in part, the sanction will remain the same or will be reduced. The Court suspended the administrative proceedings until the final judgement in the said civil case becomes effective (see point 2). The court has declared the case material non-public. As specified in point 2, the Company has made the provision of EUR 5,815 thousand for potential repayments of funds received under the guarantee, of which EUR 4,868 thousand is contested in the court by Alvora UAB. An action in respect of the guarantee funds of EUR 947 thousand has not yet been brought before a court, although the contractor providing the guarantee is also involved in the legal proceedings. The Company has not recognised contingent assets to cover additional losses in the action due to the high uncertainty of the outcome of the legal proceedings. In the context of the high uncertainty about the outcome of the proceedings, the useful life of the fittings being replaced was not reviewed as at 31 December 2024. Where it is found that the fittings need to be replaced, the useful life of the old parts would have to be reviewed and would be significantly reduced, considering their useful life up to the date of replacement. According to our preliminary assessment, the useful life of the fittings being replaced could be reduced by up to 3 years and the depreciation expenses would increase by EUR 3 million due to the replacement cost of the parts replaced. There is also a high risk that the replacement cost of new parts would not be included in the regulated asset base (RAB), which could result in a decrease in asset value.
As at 31 December 2024, the Company had off-balance sheet contractual commitments to acquire non-current assets for the amount of EUR 3.8 million (31 December 2023: EUR 1.3 million).
Disclosure includes transactions and their balances with the EPSO-G group companies, associate GET Baltic UAB, all state-owned enterprises or entities under significant influence of the State (transactions with such entities are disclosed separately only if the amount of the transactions exceeds EUR 100,000 per calendar year), management and their close family members. The Group’s and the Company’s related parties as at 31 December 2024 and 31 December 2023 were as follows:
The tables below present the Company’s related-party transactions and their balances as at 31 December 2024 and 31 December 2023:
As at 31 December 2024
| Purchases LNG terminal funds (purchases)* | Sales LNG terminal funds (sales)* | Receivables LNG terminal funds receivable (Proceeds) from borrowings | Payables LNG terminal funds payable | Dividends received | Finance costs | |
|---|---|---|---|---|---|---|
| GET Baltic UAB | 17,616 | - | 2,128 | - | 228 | - |
| EPSO-G | 751 | - | - | - | 23,482 | 274 |
| TETAS UAB | 4 | - | - | - | - | - |
| Ignitis gamyba AB | 1,547 | - | 5,152 | 8,568 | 1,014 | 864 |
| Energijos skirstymo operatorius AB | 424 | - | 532 | 150 | 29 | 15 |
| Ignitis UAB | 4,163 | 31,797 | 12,312 | 7,047 | 1,650 | 733 |
| Transporto valdymas UAB | 52 | - | - | - | - | - |
| KN Energies AB | - | - | - | - | - | - |
| Other state-owned enterprises | 62 | - | - | - | - | 7 |
| Total | 24,619 | 31,797 | 20,124 | 15,765 | 2,921 | 1,612 |
* The disclosed LNG terminal purchases and sales are not presented in the statement of profit or loss, as the Group acts as an agent in respect of these funds when collecting and allocating these funds.
As at 31 December 2023
| Purchases LNG terminal funds (purchases)* | Sales LNG terminal funds (sales)* | Receivables LNG terminal funds receivable (Proceeds) from borrowings | Payables LNG terminal funds payable | Dividends received | Finance costs | |
|---|---|---|---|---|---|---|
| GET Baltic UAB | 19,210 | - | 4,801 | - | 796 | - |
| EPSO-G | 349 | - | - | - | 25,009 | 227 |
| TETAS UAB | 4 | - | - | - | - | - |
| Ignitis gamyba AB | 2,811 | - | 4,947 | 3,172 | 625 | 640 |
| Energijos skirstymo operatorius AB | 474 | - | 354 | 58 | 167 | 12 |
| Ignitis UAB | 4,845 | 11,235 | 13,024 | 2,796 | 1,457 | 528 |
| Transporto valdymas UAB | 401 | - | - | - | - | 40 |
| KN Energies AB | - | - | - | - | - | - |
| Ignitis Polska sp. Z.o.o. | - | - | 121 | - | - | - |
| Other state-owned enterprises | 184 | - | - | - | - | 2 |
| Total | 28,278 | 11,235 | 23,247 | 6,026 | 3,045 | 1,180 |
* The disclosed LNG terminal purchases and sales are not presented in the statement of profit or loss, as the Group acts as an agent in respect of these funds when collecting and allocating these funds.
There were no guarantees issued or received for payables to/receivables from related parties, the settlement term was between 15 and 30 days. As at 31 December 2024, the Company neither formed nor recognised any impairment provisions for receivables from related parties.
| 2024 | 2023 | |
|---|---|---|
| Employment-related payments | 784 | 805 |
| Payments to Board members | 99 | 92 |
| Total compensation to management | 883 | 897 |
The management of the Company is deemed to include the Company’s manager, the Technical Director, the Legal and Administration Director, the Commerce Director, the Organisational Progress Director, and the Finance Director. No loans, guarantees were issued nor were any assets transferred to the management of the Company.
In the period from 2024 to 2023 the audit firm provided the following audit and non-audit services to the Company. Information on non-audit services is disclosed based on the date of services rendered:
| 2024 | 2023 | |
|---|---|---|
| Audit services | 75 | 77 |
| Total audit services | 75 | 77 |
| Non-audit services | ||
| Assurance and other related services | 12 | 14 |
| Other services | 5 | 3 |
| Total non-audit services: | 17 | 17 |
Audit costs are shown in the statement of comprehensive income under other expenses.
Under the Lithuanian Law on Companies, the Company is required to maintain its equity at no less than 50% of its authorised share capital. In 2024 and 2023, the Company and its subsidiary complied with this requirement.
Under the Lithuanian Law on Companies, there are certain restrictions for distribution and payment of dividends. The Group‘s dividend policy defines the principles for setting, payment and declaration of dividends. There are no other external or intra-group imposed capital requirements on the Company. Information on the fulfilment of financial covenants in contracts with banks is disclosed in Note 19.
There were no other events after the reporting period until the date of approval of the financial statements that could have a material impact on the Company’s financial statements.
235
AB Amber Grid
Laisves ave. 10
LT 04215 Vilnius
Lithuania
Tel. +370 5 236 0855
[email protected]
www.ambergrid.lt
Company code 303090867
VAT code LT100007844017
LT71 07044 0600 0790 5969, AB SEB bank
7 April 2025
Following the Law on Securities of the Republic of Lithuania and the Rules on Information Disclosure of the Bank of Lithuania, we, Nemunas Biknius, Chief Executive Officer of AB Amber Grid, Gytis Fominas, Chief Financial Officer of AB Amber Grid and Head of accounting Rasa Baltaragienė of AB Amber Grid, hereby confirm that, to the best of our knowledge, the attached AB Amber Grid consolidated and separate financial statements, for the period ended 31 December 2024, prepared in accordance with International Financial Reporting Standards adopted by the European Union, give a true and fair view of the AB Amber Grid and Group assets, liabilities, financial position, profit and cash flows. AB Amber Grid consolidated management report for 2024 year gives a true and fair view of business developments and operating activities and AB Amber Grid and Group situation including a survey report of the principal risks and uncertainties.
Chief Executive Officer
Nemunas Biknius
(The document is signed with a qualified electronic signature)
Chief Financial Officer
Gytis Fominas
(The document is signed with a qualified electronic signature)
Head of accounting
Rasa Baltaragienė
(The document is signed with a qualified electronic signature)
PricewaterhouseCoopers UAB,
J. Jasinskio str. 16B,
03163 Vilnius, Lithuania
+370 (5) 239 2300,
[email protected],
www.pwc.lt
Company code 111473315, registered with the Legal Entities’ Register of the Republic of Lithuania
In our opinion, the separate and consolidated financial statements give a true and fair view of the separate and consolidated financial position of Amber Grid AB (the “Company”) and its subsidiary (together - the “Group”) as at 31 December 2024, and of the Company’s and of the Group’s separate and consolidated financial performance and separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. Our opinion is consistent with our additional report to the Audit Committee dated 7 April 2025.
The consolidated and separate financial statements comprise:
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Company and the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) and the Law of the Republic of Lithuania on the Audit of Financial Statements and Other Assurance Services that are relevant to our audit of the separate and consolidated financial statements in the Republic of Lithuania. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Law of the Republic of Lithuania on the Audit of Financial Statements and Other Assurance Services.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the Company and the Group are in accordance with the applicable law and regulations in the Republic of Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed in the Law of the Republic of Lithuania on the Audit of Financial Statements and Other Assurance Services. The non-audit services that we have provided to the Company and the Group, in the period from 1 January 2024 to 31 December 2024, are disclosed in note 39 to the separate and consolidated financial statements.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the separate and consolidated financial statements (together “the financial statements”). In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including, among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall Company and Group materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if any, both individually and in aggregate on the financial statements as a whole.
| Overall Company and Group materiality | |
|---|---|
| EUR 800 thousand (EUR 800 thousand) |
Overall Company and Group materiality represents 1% of average annual revenue for 3-year period.
We chose revenue as the benchmark for the overall materiality because it is the measure against which the performance of the Company and the Group is assessed by the regulatory bodies as well as external creditors and other stakeholders. The Company’s results depend on approved tariffs for regulated activities, therefore the Company’s profit before tax fluctuates widely year over year, whereas its revenue is more stable and growth-oriented indicator which can be compared to other market participants. Because of 2022-2024 revenue fluctuations due to changes in energy prices, we chose average 3-year revenue figure as the benchmark. We chose 1% which are within the range of acceptable quantitative materiality thresholds.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above EUR 40 thousand, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key audit matter | How our audit addressed the key audit matter |
|---|---|
| The carrying value of property, plant and equipment (refer to Notes 2.6 and 6) | The Group applies the revaluation model for subsequent measurement of property, plant and equipment (‘PPE’). |
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. We performed a full scope audit of the Company. Before 31 May 2023, the Group comprised the Company and its subsidiary GET Baltic UAB, both operating in Lithuania. As a result of disposal of the controlling interest in the subsidiary, it became an associate and is accounted for using the equity method in both the separate and consolidated financial statements. Consequently, the Group's (economic interest) data coincides with the Company's data for the year 2024, and therefore, additional audit procedures for the Group's financial statements were not necessary.
Management is responsible for the other information. The other information comprises the consolidated management report, including the information on corporate governance matters, remuneration and consolidated sustainability matters (but does not include the financial statements and our auditor’s report thereon). Our opinion on the financial statements does not cover the other information, including the consolidated management report. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
With respect to the consolidated management report, including the information on corporate governance matters and remuneration and excluding the information on consolidated sustainability matters that the legislation did not require the Company to prepare and on which assurance services were not within the scope of our work, we considered whether it includes the disclosures required by the Law of the Republic of Lithuania on Reporting by Undertakings and by Groups of Undertakings. Based on the work undertaken in the course of our audit, in our opinion:
In addition, in light of the knowledge and understanding of the Company and the Group and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the consolidated management report which we obtained prior to the date of this auditor’s report. We have nothing to report in this regard.
Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
We have been engaged based on our audit agreement by the management of the Company to conduct a reasonable assurance engagement for the verification of compliance with the applicable requirements of the European single electronic reporting format of the Company’s separate and the Group’s consolidated financial statements, including the consolidated management report, for the year ended 31 December 2024 (the “Single Electronic Reporting Format of the separate and consolidated financial statements”).
The Single Electronic Reporting Format of the separate and consolidated financial statements has been applied by the management of the Company to comply with the requirements of art. 3 and 4 of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the “ESEF Regulation”). The applicable requirements regarding the Single Electronic Reporting Format of the separate and consolidated financial statements are contained in the ESEF Regulation. The requirements described in the preceding sentence determine the basis for application of the Single Electronic Reporting Format of the separate and consolidated financial statements and, in our view, constitute appropriate criteria to form a reasonable assurance conclusion.
The management of the Company is responsible for the application of the Single Electronic Reporting Format of the separate and consolidated financial statements that complies with the requirements of the ESEF Regulation. This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF taxonomy and designing, implementing and maintaining internal controls relevant for the preparation of the Single Electronic Reporting Format of the separate and consolidated financial statements which is free from material non-compliance with the requirements of the ESEF Regulation. Those charged with governance are responsible for overseeing the financial reporting process, which should also be understood as the preparation of financial statements in accordance with the format resulting from the ESEF Regulation.
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic Reporting Format of the separate and consolidated financial statements complies, in all material aspects, with the ESEF Regulation. We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical Financial Information’ (“ISAE 3000 (R)”). This standard requires that we comply with ethical requirements, plan and perform procedures to obtain reasonable assurance whether the Single Electronic Reporting Format of the separate and consolidated financial statements complies, in all material aspects, with the applicable requirements. Reasonable assurance is a high level of assurance, but it does not guarantee that the service performed in accordance ISAE 3000 (R) will always detect the existing material misstatement (significant non-compliance with the requirements).
Our planned and performed procedures were aimed at obtaining reasonable assurance that the Single Electronic Reporting Format of the separate and consolidated financial statements was applied, in all material aspects, in accordance with the applicable requirements and such application is free from material errors or omissions. Our procedures included in particular:
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
In our opinion, the Single Electronic Reporting Format of the separate and consolidated financial statements for the year ended 31 December 2024 complies, in all material aspects, with the ESEF Regulation.
We were first appointed as auditors of the Company and the Group on 23 April 2015 and had an uninterrupted engagement appointment of 3 years for 2015-2017 audits. After a 2-year break our appointment was renewed for 2020-2022 audits and renewed again for 2023-2024 audit on 30 August 2023, representing a total period of engagement appointment of 8 years, out of which 5 years represent the latest uninterrupted period of engagement.
The key audit partner on the audit resulting in this independent auditor’s report is Rasa Radzevičienė.
On behalf of PricewaterhouseCoopers UAB
Rasa Radzevičienė
Partner
Auditor's Certificate No.000377
Vilnius, Republic of Lithuania
7 April 2025
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.