Amber Grid — Annual Report 2020

Feb 4, 2021

Dokumentą elektroniniu parašu pasirašė NEMUNAS,BIKNIUS Data: 2021-02-04 15:14:25

Dokumentą elektroniniu parašu pasirašė RASA,BALTARAGIENĖ Data: 2021-02-04 14:58:49

AB AMBER GRID

CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 PREPARED ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION

AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Statement of financial position

Notes ASSETS A. Non-current assets I. Intangible assets 4 II. Property, plant and equipment 4 II.1. Land II.2. Buildings II.3. Plant and equipment II.4. Machinery and equipment II.5. Motor vehicles II.6. Other II.7. Construction in progress III. The right-of-use assets 6 IV. Non-current financial assets IV.1 Investment in the subsidiary IV.2. Non-current trade receivables 7 IV.3 Other non-current financial assets V. A deferred tax asset B. Current assets I. Inventories and prepayments I.1. Raw materials, spare parts and other inventories I.2. Prepayments II. Accounts receivable II.1. Trade receivables 7 II.2. Other receivables 7 III. Corporate income tax paid in advance IV. Other financial assets 9 V. Cash and cash equivalents Total assets	Group Company
	As of 31 December As of 31 December As of 31 December As of 31 December 2020 2019 2020 2019
	253,372 209,346 253,264 209,215
	2,654 2,910 2,010 2,262
	241,624 201,362 241,620 201,359
	125 125 125 125
	5,427 5,183 5,427 5,183 146,003 147,770 146,003 147,770 34,583 37,714 34,583 37,714 542 773 542 773 3,171 2,637 3,167 2,634 51,773 7,160 51,773 7,160 2,335 2,001 2,204 1,850 4 4 675 675
	- - 675 675 - - - - 4 4 - - 6,755 3,069 6,755 3,069
	60,614 46,783 49,144 28,094
	2,626 2,651 2,611 2,640
	1,897 2,119 1,897 2,119
	729 532 714 521
	47,377 25,251 45,356 25,253
	7,870 5,860 5,851 5,865
	39,507 19,391 39,505 19,388
	1,171 - 1,171 -
	8,687 18,648 3 4
	753 233 3 197
	313,986 256,129 302,408 237,309

(cont’d on the next page)

The accompanying notes are an integral part of these financial statements.

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AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Statement of financial position (cont’d)

Notes EQUITY AND LIABILITIES C. Equity I. Share capital II. Reserves II.1. Legal reserve II.2. Other reserves III. Retained earnings (deficit) D. Accounts payable and liabilities I. Amounts payable after one year and non-current liabilities I.1. Non-current borrowings 10 I.2. A right-of-use asset and corresponding liability 6 I.3. Non-current employee benefits I.4. Deferred income tax liability I.5. Other non-current liabilities II. Accounts payable within one year and short-term liabilities II.1. Current financial liability II.2. Current portion of non-current borrowings 10 II.3 A right-of-use asset and corresponding liability 6 II.4 Current year portion of non-current employee benefits II.5 Trade payables 12 II.6 Advance amounts 13 II.7 Income tax payable II.8 Payroll related liabilities II.9. Other payables and current liabilities 14 Total equity and liabilities	Group Company
	As of 31 December As of 31 December As of 31 December As of 31 December 2020 2019 2020 2019
	155,995 137,854 155,575 138,172
	51,731 51,731 51,731 51,731
	74,638 74,638 74,638 74,638
	5,173 5,173 5,173 5,173 69,465 69,465 69,465 69,465 29,626 11,485 29,206 11,803
	157,991 118,275 146,833 99,137 104,027 54,075 103,917 53,945
	101,565 51,739 101,565 51,739 1,953 1,849 1,843 1,719 509 487 509 487 - - - - - - - - 53,964 64,200 42,916 45,192
	7,852 6,452 7,852 6,272 10,174 13,618 10,174 13,618 410 160 387 138 39 53 39 53 10,429 6,967 8,151 4,191 8,524 17,103 278 1,431 51 688 - 688 2,140 1,723 2,054 1,655 14,345 17,436 13,981 17,146 313,986 256,129 302,408 237,309

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

3

AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Income statement

Notes I. Revenue 16 II. Expenses II.1. Cost of natural gas II.2. Depreciation and amortization II.3. Remuneration and related social security tax expenses II.4. Repair and technical maintenance expenses II.5. Taxes other than income tax II.6. Telecommunications and IT systems expenses II.7. Other expenses III. Operation profit (loss) IV. Financial activity IV.1. Income IV.2. Expense V. Profit (loss) before income tax VI. Income tax VI.1. Current period income tax VI.2 Deferred income tax VII. Net profit (loss) Basic and diluted earnings (loss) per share (Eur) 15	Group
	For the period of three months ended 31 December 2020 For the period of three months ended 31 December 2019 For the period of twelve months ended 31 December 2020 For the period of twelve months ended 31 December 2019
	14,085 16,106 52,252 54,756
	(10,328) (11,489) (37,337) (40,544)
	(1,285) (3,151) (6,345) (11,336) (2,811) (2,568) (11,126) (10,159) (2,871) (2,582) (10,254) (9,784) (1,517) (1,284) (3,405) (3,573) (499) (443) (1,954) (1,798) (457) (345) (1,561) (1,010) (888) (1,116) (2,692) (2,884) 3,757 4,617 14,915 14,212
	(54) (64) (363) (341) 1 1 3 12 (55) (65) (366) (353) 3,703 4,553 14,552 13,871
	978 (474) 3,589 (2,033)
	(29) (512) (98) (1,945) 1,007 38 3,687 (88)
	4,681 4,079 18,141 11,838
	0,10 0,07

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

4

AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania

CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Statement of comprehensive income

I. Net profit (loss) II. Total comprehensive income (loss)	Group
	For the period of three months ended 31 December For the period of three months ended 31 December For the period of twelve months ended 31 December For the period of twelve months ended 31 December
	4,681 4,079 18,141 11,838
	4,681 4,079 18,141 11,838

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

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AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Income statement

Notes I. Revenue 16 II. Expenses II.1. Cost of natural gas II.2. Depreciation and amortization II.3. Remuneration and related social security tax expenses II.4. Repair and technical maintenance expenses II.5. Taxes other than income tax II.6. Telecommunications and IT systems expenses II.7. Other expenses III. Operation profit (loss) IV. Financial activity IV.1. Income IV.2. Expense V. Profit (loss) before income tax VI. Income tax VI.1. Current period income tax VI.2 Deferred income tax VII. Net profit (loss) Basic and diluted earnings (loss) per share (Eur) 15	Company
	For the period of three months ended 31 December 2020 For the period of three months ended 31 December 2019 For the period of twelve months ended 31 December 2020 For the period of twelve months ended 31 December 2019
	13,597 15,962 50,797 54,217
	(10,144) (11,355) (36,674) (40,044)
	(1,285) (3,151) (6,345) (11,336) (2,762) (2,536) (10,934) (10,032) (2,777) (2,511) (9,905) (9,509) (1,517) (1,284) (3,405) (3,573) (499) (443) (1,953) (1,798) (436) (332) (1,483) (954) (868) (1,098) (2,649) (2,842) 3,453 4,607 14,123 14,173
	(53) (64) (360) (339) 1 1 3 13 (54) (65) (363) (352) 3,400 4,543 13,763 13,834
	1,007 (472) 3,640 (2,031)
	- (510) (47) (1,943) 1,007 38 3,687 (88)
	4,407 4,071 17,403 11,803
	0,10 0,07

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer

Head of accounting

Nemunas Biknius 4 February 2021 Rasa Baltaragienėgienėienė 4 February 2021

Rasa Baltaragienėgienėienė

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AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Statement of comprehensive income

I. Net profit (loss) II. Total comprehensive income (loss)	Company
	For the period of three months ended 31 December For the period of three months ended 31 December For the period of twelve months ended 31 December For the period of twelve months ended 31 December
	4,407 4,071 17,403 11,803
	4,407 4,071 17,403 11,803

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

10

AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania

AS OF 31 DECEMBER 2020

CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Statement of changes in equity

Group Balance as of 31 December 2018 Transfer from other reserves Dividends declared Total comprehensive income (loss) Net profit (loss) for the year Balance as of 31 December 2019 Transfer from other reserves Dividends declared Total comprehensive income (loss) Net profit (loss) for the year Balance as of 31 December 2020	Authorised share capital Legal reserve Other reserves Retained earnings (deficit) Total
	51,731 5,173 94,817 (20,478) 131,243
	- - (25,352) 25,352 -
	- - - (5,227) (5,227)
	- - - 11,838 11,838
	- - - 11,838 11,838
	51,731 5,173 69,465 11,485 137,854
	- - - - -
	- - - - -
	- - - 18,141 18,141
	- - - 18,141 18,141
	51,731 5,173 69,465 29,626 155,995

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

11

AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania

CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Statement of changes in equity

Company Balance as of 31 December 2018 Transfer from other reserves Dividends declared Total comprehensive income (loss) Net profit (loss) for the year Balance as of 31 December 2019 Transfer from other reserves Dividends declared Total comprehensive income (loss) Net profit (loss) for the year Balance as of 31 December 2020	Authorised share capital Legal reserve Other reserves Retained earnings (deficit) Total
	51,731 5,173 94,817 (20,125) 131,596
	(25,352) 25,352 -
	(5,227) (5,227)
	- - - 11,803 11,803
	- - - 11,803 11,803
	51,731 5,173 69,465 11,803 138,172
	- - - - -
	- - - - -
	- - - 17,403 17,403
	- - - 17,403 17,403
	51,731 5,173 69,465 29,206 155,575

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

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AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidated and Company’s Statement of cash flows

I. Cash flows from (to) operating activities I.1. Net profit (loss) Adjustments of non-cash items and other corrections: I.2. Depreciation and amortisation I.3. Loss (gain) on property, plant and equipment, doubtful trade accounts receivable and inventories write-off and disposal I.4. Revaluation loss of fixed assets I.5. Impairment losses (reversal of impairment) for property, plant and equipment, financial assets, allowance for doubtful trade accounts receivable and inventories I.6. Income tax expenses (income) I.7. Interest (income) I.8. Interest expenses I.9. Amortisation of grants (deferred revenue) I.10. Elimination of other non-cash items Changes in working capital: I.11. Decrease (increase) in inventories I.12. Decrease (increase) in trade accounts receivable I.13 Decrease (increase) in other accounts receivable and prepayments I.14. Increase (decrease) in trade accounts payable I.15. Increase (decrease) in other accounts payable and other current liabilities I.16. Decrease (increase) in other financial assets I.17. Income tax (paid) Total changes in working capital Net cash flows from operating activities II. Cash flows from (to) investing activities II.1. (Acquisitions) of property, plant and equipment and intangible assets II.2. Proceeds from sales of property, plant and equipment II.3. Grants received II.4. Loans recovered II.5. Interest received Net cash flows (to) investing activities (cont’d on the next page)	Group Company
	31 December 31 December 31 December 31 December 2020 2019 2020 2019
	18,141 11,838 17,403 11,803 - 11,126 10,159 10,934 10,032 (123) (110) (123) (110) - - - - (39) 56 (39) 56 (3,589) 2,031 (3,640) 2,031 - - - - 291 353 291 352 - 661 - 661 - 35 - 34
	25,807 25,023 24,826 24,859
	294 950 294 950 (2,010) 322 14 243 3,689 (1,609) 3,688 (1,455) 62 7,737 560 (102) (11,252) 3,451 (3,918) 3,044 9,961 (8,019) 1 51 (1,906) (639) (1,906) (639)
	(1,162) 2,193 (1,267) 2,092
	24,645 27,216 23,559 26,951
	(86,308) (19,915) (86,136) (19,665) 173 27 173 27 15,065 6,941 15,065 6,941 - - - 150 - 5 - 5
	(71,070) (12,942) (70,898) (12,542)

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AB AMBER GRID, company code 303090867, Savanorių pr. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Consolidates and Company’s statements of cash flows (cont’d)

III. Cash flows from (to) financing activities III.1. Dividends (paid) III.2. Proceeds from borrowings III.3. (Repayments) of borrowings III.4. The overdraft change III.5. Interest (paid) III.6. The right-of-use assets III.7. Other cash flows from (to) financial activities Net cash flows from (to) financing activities IV. Net increase (decrease) in cash and cash equivalents V. Cash and cash equivalents at the beginning of the period VI. Cash and cash equivalents at the end of the period	Group Company
	31 December 2020 31 December 2019 31 December 2020 31 December 2019
	(3) (5,228) (3) (5,228) 60,000 10,000 60,000 10,000 (13,798) (17,976) (13,618) (17,976) 1,580 (339) 1,580 (519) (421) (374) (421) (373) (413) (166) (393) (150) - - - -
	46,945 (14,083) 47,145 (14,246)
	520 191 (194) 163 233 42 197 34
	753 233 3 197

The accompanying notes are an integral part of these financial statements.

Chief Executive Officer Head of accounting	Nemunas Biknius Rasa Baltaragienė		4 February2021
			4 February2021

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

Notes to the consolidated and the Company’s financial Statements

1 General information

The consolidated financial statements disclose the financial position and performance of the AB Amber Grid (hereinafter referred to as the ‘Company’) and its subsidiary UAB GET Baltic (hereinafter together referred to as the ‘Group’).

AB Amber Grid was registered on 25 June 2013 after the spin-off from AB Lietuvos Dujos of the natural gas transmission activity with respective assets, rights and obligations attributed to the activity in question. The Company’s operations date back to 1 August 2013.

On 10 April 2015, upon the obtaining of a positive decision from the European Commission, the National Energy Regulatory Council (before National Commission for Energy Control and Prices) issued in respect of the Company an open-ended License No. L2-3 (GDP) for the engagement in the Transmission System Operator's activity within the territory of Lithuania.

The Company is engaged in the natural gas transmission system operator’s activity and provides to system users, other operators, and gas market players the following services:

• transmission of natural gas in the territory of the Republic of Lithuania;

• balancing of natural gas flows in the transmission system;

• administration of the funds intended to compensate for the installation and fixed operating costs of the Liquefied Natural Gas Terminal, its infrastructure and connector and, as from 2016, for reasonable costs of the designated supplier for the supply of an obligatory quantity of liquefied natural gas;

• administration of the register of guarantees of origin for gas produced from renewable energy sources.

On 31 December 2020, the Company had 108 contracts for natural gas transmission services with the users of natural gas transmission system (natural gas customers, natural gas distribution system operators, natural gas supply companies that supply gas up to customers systems). In addition, Company had entered into natural gas balancing agreements with 2 natural gas trade companies that trade natural gas, but do not use Company’s transmission system infrastructure.

The Company's largest shareholder is UAB EPSO-G (www.epsog.lt). The rights and obligations of the sole shareholder of the management company UAB EPSO - G are implemented by the Ministry of Energy of the Republic of Lithuania.

Since 1 August 2013, the Company’s shares have been traded on a stock exchange; they are listed on the Baltic Secondary Trading List of NASDAQ OMX Vilnius Stock Exchange (ISIN code LT0000128696, instrument AMG1L).

As of 30 of September 2020 and 31 December 2019, the Company’s shareholders were as follows:

UAB EPSO-G (Company Code 302826889, Gedimino av, 20, Vilnius) Other shareholders	Number of shares owned Ownership share (percent)
	172,279,125 96,58 6,103,389 3,42
	178,382,514 100,00

The Company’s share capital amounts to EUR 51,730,929,06, It is divided into 178,382,514 ordinary registered shares with par value of EUR 0,29 each.

GET Baltic is a Joint Stock Company registered in the Republic of Lithuania. The Company was registered in the Register of Legal Entities on 13 September 2012. The Company is the sole shareholder of GET Baltic, which owns 100% of the authorized capital.

15

AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

	Company	Registered address of	Stake of shares held as	Stake of shares held as
Company	code	the company	of 31 December 2020	of 31 December 2019
UAB GET Baltic	302861178	Geležinio Vilko st. 18 A,	100 %	100 %
		Vilnius

On 31 December 2020 and 31 December 2019 the authorized capital of GET Baltic was valued of EUR 580,450 and it consists of 3,055,000 ordinary registered shares with a nominal value of EUR 0,19.

GET Baltic is a licensed natural gas market operator with a status of Registered Reporting Mechanism status provided by the ACER. The Company administrates the electronic trading system for trading spot and forward natural gas products with physical delivery in the market areas located in Lithuania, Latvia, Estonia and Finland. The Company also provides the following services to wholesale natural gas market participants:

• Providing REMIT data to the ACER;

• Providing inside information;

• Distribution of indirect natural gas transmission capacity at interconnection points between the Baltic States;

• Organizing LNG auction;

• Announcement of balancing marginal pricing.

On 31 December 2020 Get Baltic had 99 registered stock exchange participants.

On 31 December 2020 the average number of employees of the Group and the Company consisted 325 (as at 31 December 2019 – 329); on 31 December 2020 the Company consisted of 318 employees (as at 31 December 2019 - 323).

2 Accounting principles

The financial statements present the figures in thousands of euros. The financial year of the Group and the Company coincides with the calendar year.

These condensed interim consolidated and the Company’s financial statements, including the statements of financial standing and profit (loss) accounts, statements of comprehensive income, cash flow statement and the statements of changes in equity for the period ended 31 December 2020 have not been audited. The consolidated and the Company’s financial statements for the period ended 31 December 2019 have been audited and prepared in accordance with International Financial Reporting Standards (IFRS).

For a better understanding of the information presented in these financial statements, these condensed financial statements should be read together with the annual consolidate and the Company’s financial statements for the period ended 31 December 2019. UAB Deloitte Lietuva carried out an audit of Consolidated and Company’s Financial Statements for the period ended on 31 December 2019.

The Group’s and the Company’s condensed interim consolidated financial statements as of 31 December 2020 were prepared in accordance with International Accounting Standard 34 Interim Financial Reporting . The Group and the Company have been following the same accounting principles as the ones that were followed in the preparation of financial statements for the year 2019.

The statements were prepared based on an acquisition cost, excluding tangible fixed assets, which were presented at revalued amount.

In accordance with the accounting principles of fixed assets of EPSO–G UAB group companies, assets are accounted at revalued amount deducting accumulated depreciation and impairment losses, whereas grants are accounted for by reducing the carrying amount of the related asset.

1 January 2019, the Company and the Group first adopted IFRS 16 and its amendments using a modified retrospective method, in which rights-of-use assets and liabilities were recognized in equal amounts, without any adjustment to equity.

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

3 Information by segments

The Group singles out 2 operating segments: 1) natural gas transmission operations and 2) natural gas exchange operator activities.

All non-current assets of the Group are located in Lithuania, where the Company operates.

As of 31 December 2020, the Group generated 72 % (31 December 2019: 70 %) of its total revenue from the system users in Lithuania, and 25 % (31 December 2019: 29 %) of revenue totalled from transportation of gas to adjacent transmission systems accounted for 3% (31 December 2019: 1%) of revenue originated from the revenue from services provided by the Natural Gas Exchange.

The Group’s information on segments for the twelve months period ended on 31 December 2020 is disclosed below:

elow:
Revenues Income having eliminated the income of Group entities Profit / loss from operating activities Net financing income (costs) Profit / loss before tax Income tax Net earnings (loss) Depreciation / amortisation costs Write-offs of non-current tangible assets	Transfer activity Activities of the gas exchange Total
	50,797 1,503 52,300 50,797 1,455 52,252 14,123 792 14,915 (360) (3) (363) 13,763 789 14,552 3,640 (51) 3,589 17,403 738 18,141 (10,934) (192) (11,126) (25) - (25)

The Group’s information on segments for the twelve months period ended on 31 December 2019 is disclosed below:

elow:
Revenues Income having eliminated the income of Group entities Profit / loss from operating activities Net financing income (costs) Profit / loss before tax Income tax Net earnings (loss) Depreciation / amortisation costs Write-offs of non-current tangible assets	Transfer activity Activities of the gas exchange Total
	54.217 595 54.812 54.213 543 54.756 14.173 39 14.212 (339) (2) (341) 13.834 37 13.871 (2.031) (2) (2.033) 11.803 35 11.838 (10.032) (127) (10.159) (84) - (84)

4 Non-current tangible and intangible assets

Non-current intangible assets Residual value as of 31 December 2018	Group Company
	2,699 2,259
Additions Amortization Netting of grants with the non-current assets Residual value as of 31 December 2019 Residual value as of 31 December 2019	1,115 798 (866) (757) (38) (38)
	2,910 2,262
	2,910 2,262
Additions Write-offs Amortization Netting of grants with the non-current assets Residual value as of 31 December 2020	897 719 (15) - (960) (794) (177) (177)
	2,655 2,010

17

AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Non-current tangible assets Residual value as of 31 December 2018	Group Company
	200,031 200,028
Additions Depreciation Sales Write-offs Netting of grants with the non-current assets Residual value as of 31 December 2019 Residual value as of 31 December 2019	17,226 17,224 (9,128) (9,128) (1) (1) (284) (282) (6,482) (6,482)
	201,362 201,359
	201,362 201,359
Additions Depreciation Sales Write-offs Netting of grants with the non-current assets Residual value as of 31 December 2020	88,958 88,955 (9,727) (9,727) (24) (24) (59) (57) (38,886) (38,886)
	241,624 241,620

In the Group and the Company, non-current assets are accounted at revalued amount of assets, reducing the grants received for that asset.

In 2020 year construction of the gas pipeline connection between Poland and Lithuania has been started. During 2020 year the value of procurement of construction works, materials, etc, services for the implementation of the project was amounted to EUR 76,977 thousand, EUR, recognized amount of the grants receivables - EUR 34,437 thousand.

The amount of the depreciation of the grants in the income statement is reflected by deducting the depreciation costs of the related assets with the grant income, as of 31 December 2020, it stood at EUR 2,646 thousand (as of 31 December 2019 - EUR 2,460 thousand).

5 Construction in progress

The largest objects of construction in progress of the Group and Company as of 31 December 2020 and 31 December 2019 were as follows:

Object Implementation of the gas interconnection Poland-Lithuania in the territory of Lithuania Installation of control device releasing and receiving chambers Implementation of operative technological control of gas transmission system Construction of the gas transmission pipeline Vilnius-Kaunas and the connection Kaunas-Šakiai Other Recognized grants (netting of grants with the non-current assets) 1)Less: impairment of construction in progress	Group
	31 December 31 December 2020 2019
	83,799 6,822 4,446 764 2,776 1,970 551 551 1,691 1,857 (40.910) (4.224) (580) (580)
	51,773 7,160

[1)] Impairment for the Project “Construction of interconnection between the gas transmission pipelines Vilnius-Kaunas and Kaunas-Šakiai (spatial planning and design services)” was made for the amount of EUR 551 thousand because the construction of the pipeline was postponed for later periods and there arose certain uncertainties regarding the resolution of its funding issues and its further development, 29 thousand EUR impairment was performed for reconstruction of dispatch building,

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

6 The right-of-use assets and lease liabilities

As stated below, the Group and the Company leases office space, vehicles, and land, Lease terms for premises - 8- 9 years, vehicles - 4 years, land - 99 years. The Group and the Company, in recognizing its right-of-use assets and lease liabilities by determining the lease terms assessed the likelihood of contract extension. Preparing these condensed financial statements, the Company has reviewed the lease term for the office space based on reasonable assumptions that the lease will not be renewed and reassessed the lease obligations.

Initial value of recognized assets at 1 January 2019*		Group
		Buildings Land Motor vehicles Total
		749 1,278 - 2,027
Acquisitions Write-offs Amortization Residual value at 31 December 2019 Residual value of recognized assets at 31 December 2019		152 - 16 168 (30) - - (30) (148) (13) (3) (164)
		723 1,265 13 2,001
		723 1,265 13 2,001
Acquisitions Write-offs Amortization Residual value at 31 December 2020 Initial value Accumulated depreciation Residual value at 31 December 2020		4 - 1,119 1,123 (354) - - (354) (152) (13) (270) (435)
		221 1,252 862 2,335
		521 1,278 1,136 2,935 (300) (26) (274) (600)
		221 1,252 862 2,335

• The Company and its subsidiary as at 1 January 2019 and in prior periods did not have non-current assets held on a finance lease basis.

Initial value of recognized assets at 1 January 2019*		Buildings Land Motor vehicles Total 749 1,278 - 2,027
Acquisitions Write-offs Amortization Residual value at 31 December 2019 Residual value of recognized assets at 31 December 2019		- - - - (30) - - (30) (134) (13) - (147)
		585 1,265 - 1,850
		585 1,265 - 1,850
Acquisitions Write-offs Amortization Residual value at 31 December 2020 Initial value Accumulated depreciation Residual value at 31 December 2020		- 1,119 1,119 (354) - - (354) (132) (13) (266) (411)
		99 1,252 853 2,204
		366 1,278 1,119 2,763 (267) (26) (266) (559)
		99 1,252 853 2,204

• The Company as at 1 January 2019 and in prior periods did not have non-current assets held on a finance lease basis,

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

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 to the end of the lease term.

Carrying amount of lease liabilities at 31 December, 2019 Recognition of lease liabilities under IFRS 16 Concluded lease contracts Termination of leases (write-offs of debts and accrued interest) Interest expenses Lease payments (Principal and Interest) Carrying amount of lease liabilities at 31 December, 2020 Non-current lease liabilities Current lease liabilities Lease liabilities Current year Repayment terms of non-current liabilities: Between 1 and 2 years From 2 to 3 years From 3 to 5 years After 5 years		Group Company At 31 December 2020 At 31 December 2020 2,008 1,857 4 1,119 1,119 (354) (354) 26 24 (440) (416) 2,363 2,230 1,953 1,843 410 387 Group
		At 31 December 2020 At 31 December 2019
		410 160
		1,953 1,849
		310 161 312 162 84 248 1,247 1,278

Lease liabilities Current year Repayment terms of non-current liabilities: Between 1 and 2 years From 2 to 3 years From 3 to 5 years After 5 years	Company
	At 31 December At 31 December 2020 2019
	387 138
	1,843 1,719
	287 138 289 139 46 209 1,221 1,233

Interest calculated on lease liabilities reflected in Group’s financial operating expenses on 31 December 2020 is EUR 26 thousand.

The Group and the Company had no leases with variable payments not included in the value of lease obligations. In 2020, the Group made lease payments worth EUR 414 thousand.

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

7 Trade receivables

Non-current trade receivables Other trade receivables Current trade receivables Gas transmission services receivables Other trade receivables Less: allowance for the decrease in value of trade receivables	Group Company
	31 December 31 December 31 December 31 December 2020 2019 2020 2019
	- - - - 5,745 5,508 5,799 5,524 2,195 422 122 411 (70) (70) (70) (70)
	7,870 5,860 5,851 5,865

Short-term trade receivables were interest-free; their payment period ranged from 9 to 30 calendar days. In 2020 impairment of EUR 41 thousand was established in respect of “Geoterma” UAB, a producer of thermal energy, whereas “Geros dujos” UAB formed impairment of EUR 29 thousand.

8 Other receivables

LNG terminal funds receivable (administered by the Company) Grants receivable Receivables accrued for natural gas transportation Other receivables	Group Company
	31 December 31 December 31 December 31 December 2020 2019 2020 2019
	12,834 16,020 12,834 16,020 25,628 2,754 25,628 2,754 965 541 965 541 80 76 78 73
	39,507 19,391 39,505 19,388

The LNG terminal funds receivable as at 31 December 2020 include the overdue amount of EUR 5,253 thousand (as at 31 December 2019 - EUR 4,701) of which total the overdue amount of AB “Achema’s” was EUR 5,168 thousand, the overdue amount of UAB “Geros dujos” was EUR 19 thousand, the overdue amount of UAB “Geoterma” was EUR 65 thousand, other - EUR 1 thousand. For more information about AB “Achema” see note 18 Commitments and Contingencies.

For the Company’s Other Receivables, no impairment loss was formed.

9 Other financial assets

As of 31 December 2020, the Group other financial assets consisted of cash collected from the additional natural gas supply security component to be included in the natural gas transmission price, referred to as the LNG terminal funds. These funds are received from the system users, kept in line with the requirements of legal acts in a separate bank account for the administered LNG terminal funds and designated for the payment to the recipients of the LNG terminal funds – i,e, the LNG terminal operator (Klaipėdos Nafta AB), the designated supplier (UAB “Ignitis”) and Company – to cover the administration expenses of the LNG terminal funds, Based on the State Energy Regulatory Councils Resolution No. O3E-766 of 25 November 2019 (amendment Resolution No, O3E-924 of 31 December 2019) the new natural gas supply security component has been effect from 1 January 2020.

The advance payment funds received by gas exchange members as at 31 December 2020 are accounted for EUR 8,684 thousand (as at 31 December 2019 – EUR 18,644).

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

Funds of the LNG terminal Funds transferred by the gas exchange members	Group
	31 December 2020 31 December 2019
	3 4
	8,684 18,644
	8,687 18,648

The Group and the Company keeps its cash in the accounts of those banks, which meet reliability requirements.

10 Loans

Long-term loans Loans from credit institutions of Lithuania Loans from international financial institutions Short-term loans Loans from credit institutions of Lithuania Short-term loan (EPSO-G UAB) Current portion of long-term loans	Group Company
	31 December 2020 31 December 2019 31 December 2020 31 December 2019
	22,000 30,000 22,000 30,000 79,565 21,739 79,565 21,739 - - - - 7,852 6,452 7,852 6,272 10,174 13,618 10,174 13,618
	119,591 71,809 119,591 71,629

For the balancing of working capital on 27 February 2019 the Company and EPSO-G UAB entered into lending and borrowing via cash pool agreement, in which a maximum borrowing limit of EUR 15,000 thousand from EPSO-G UAB has been set. On 31 March 2020 an additional agreement was signed, which increased the maximum borrowing limit to 35,000 thousand euros and on 29 June 2020 according another supplementary agreement - to 40,000 thousand euros.

On 30 June 2020 AB Amber Grid signed up to 65 million euros long-term financing agreement with the European Investment Bank (EIB) for the construction of a gas pipeline connection between Poland and Lithuania in the territory of the Republic of Lithuania. On 31 December 2020 used part of loan amounted to 60,000 thousand. The weighted average of the interest of the Group and Company loans as of 31 December 2020 was at 0,39 per cent (31 December 2019 was at 0,49 per cent).

11 Income tax

In 2020, the standard corporate income tax rate applicable to the companies of the Republic of Lithuania was 15 per cent (in 2019: 15 per cent). The income tax expenses for the period comprise the current income tax and the deferred income tax.

On investments in new technologies, as at 31 December 2020, the Company had calculated a corporate income tax relief amounting to EUR 5,888 thousand (as at 31 December 2019: EUR 218 thousand).

12 Trade payables

12 Trade payables
Payables to suppliers under investment programme (reconstruction and modernisation) Payables to suppliers of goods and providers of services Payables to providers of repairs services under non-current assets repairs programme Payables to suppliers of natural gas	Group Company
	31 December 31 December 31 December 31 December 2020 2019 2020 2019
	4,810 1,440 4,810 1,440 2,106 1,280 2,007 1,195 265 396 265 396 3,248 3,851 1,069 1,160
	10,429 6,967 8,151 4,191

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

Ensuring the implementation of the strategic project, construction works of the gas pipeline connection between Poland and Lithuania (see Note 4), obligations to suppliers (contractors) regarding the implementation of the project on 31 December 2020 were amounted to EUR 3,282 thousand.

As at 31 December 2020, the trade payables were interest-free and the payment terms of the largest share of them ranged from 30 to 60 days.

13 Received advanced payments

Prepayments received by the Group on 31 December 2020 was in amount of EUR 8,524 thousand (as of 31 December 2019 EUR -17,103 thousand). Advance payments received by the Company are the payments received from the EU for investment projects, advance payments for the provision of transmission services and gas exchange members.

GET Baltic advance payments paid by the participants of Exchange are accounted for as prepayments received from the exchange participants and are used on the settlement date, unless a request is made from the participants not to use the advance paid for reduction of the amount due for gas and exchange services. An unused advance or part thereof remains with the other participant's settlements. If the participant does not use the advance for more than 1 year, it is returned back to him.

14 Other payables and current liabilities

Payable LNG terminal funds administrated by the Company Accrued LNG terminal funds subject to administration by the Company* Real Estate Tax payable Value Added Tax (VAT) payable Other payables	Group Company
	31 December 31 December 31 December 31 December 2019 2019 2020 2019
	10,670 13,562 10,670 13,562 2,175 2,461 2,175 2,461 453 432 453 432 582 501 278 222 465 480 405 469
	14,345 17,436 13,981 17,146

*Accrued LNG terminal funds subject to administration by the Company are accounted when natural gas transmission system users are issued VAT invoices. Accrued funds subject to administration by the Company are included into the account of LNG terminal funds payable when AB “Klaipėdos Nafta” and UAB “Ignitis” former UAB „Lietuvos energijos tiekimas“ issue a VAT invoice to the Company in respect of the security-of-supply-related extra tariff component added to the regular natural gas tariff.

15 Earnings per share

Basic earnings per share reflect the Group net profit divided by the weighted average number of shares. There are no diluting instruments, therefore basic and diluted earnings per share are equal. Calculations of the basic earnings per share are presented below:

Net profit (loss) attributable to the shareholders (EUR thousand) Weighted average number of shares (thousand) Earnings per share (EUR)	Group
	31 December 31 December 2020 2019
	18,141 11,838 178,383 178,383
	0,10 0,07

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

16 Dividends

The annual meeting of shareholders of the Company of 23 April 2019 approved the dividends for the year ended 31 December 2018; the dividends accounted for EUR 5,227 thousand or EUR 0,0293 per share. In view of the decision of the market regulator in 2019 to set a significantly lower allowable income level for the company for 2020 year due to exceeding the return on investment in previous years and at the same time increasing the need for investments in the construction of the GIPL gas pipeline with Poland, the shareholders' meeting on 20 April 2020 approved the proposal of the Board of Amber Grid to keep the earned profit in the company. During 2020 year dividends approved by shareholders in previous periods were paid.

17 Commitments and contingencies

Litigations

Currently, the Company has initiated two civil cases on the adjudication of the additional component, regarding the security of natural gas supply, to the natural gas transmission price (hereinafter - LNG terminal funds) from Achema AB. The Company acts solely as a LNG terminal funds administrator and transfers LNG terminal funds to its recipients only after collecting them from buyers, so there is no credit risk arising from the disputed amounts.

In addition, the courts are considering a case regarding the legality of the decisions of the Company's Procurement Commission in the procurement of the GIPL project (procurement No, 381642). On 21 May 2020, the Lithuanian Court of Appeal issued a ruling by which the decision of the Vilnius Regional Court of 29 February 2020 was left unchanged (the purchase results remained unchanged). Currently, the plaintiff in the case has filed a cassation appeal, which is accepted and will be considered in the Supreme Court of Lithuania. The Supreme Court of Lithuania will announce the ruling on 3 March 2021.

18 Related party transactions

As at 31 December 2020 and 31 December 2019, the parent company was EPSO-G UAB. The parent country of the latter company was the Republic of Lithuania, represented by the Ministry of Energy of the Republic of Lithuania. For the purposes of related-party disclosures, the Republic of Lithuania does not include central or local authorities. Disclosures include transactions and balances with EPSO-G Group companies, subsidiaries, all statecontrolled companies or those under significant influence (transactions with such entities are disclosed separately only if the amount of transactions exceeds EUR 100,000 in a calendar year) and management, and close family members. A list of publicly-controlled entities or those under significant influence that are subject to disclosure is - - provided here: https://vkc.sipa.lt/apie imones/vvi sarasas/

The Company's/Group’s related parties as at 31 December 2020 and 31 December 2019 were as follows:

• EPSO-G (the parent company), 100% of EPSO-G share capital is owned by the Ministry of Energy of the Republic of Lithuania;

• Epso-G UAB Group companies:

• Litgrid AB (common shareholders);

• Tetas UAB (common shareholders);

• Baltpool UAB (common shareholders),

• The subsidiary of the Company GET Baltic UAB;

• Ignitis grupė UAB companies:

• Energijos skirstymo operatorius AB;

• Ignitis UAB;

• Ignitis gamyba AB;

• Energetikos paslaugų ir rangos organizacija UAB

• Other state-controlled companies:

• Klaipėdos nafta AB;

• State Enterprise Ignalina Nuclear Power Plant;

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

• State Enterprise Geoterma

• Other state-controlled companies or those under significant influence,

• Management.

The tables below show the Group's and the Company's receivables and payables from related parties as at 31 December 2020 and 31 December 2019. Transactions with related parties are disclosed for the twelve-month period ended 31 December 2020 and 31 December 2019:

For the year 2020 UAB „EPSO - G“ UAB „TETAS“ AB „Ignitis gamyba“ AB „Energijos skirstymo operatorius“ UAB „Ignitis“ UAB „Transporto valdymas“ AB „Klaipėdos nafta“ VĮ Ignalinos atominė VĮ „Geoterma“ Other state-owned companies	Group
	Acquisitions Sales Accounts receivable Loans granted Accounts payable Costs of financial operations
	130 - - 7,852 18 69 16 1 - - - - 72) 38,7262) 2,0682) - 2,365 - 188 468 49 - - - 54,4572) 35,8482) 3,0982) - 4,6932) - 358 - - - 41 - 35,7292) 2 - - 7,2402) - - 1602) 202) - - - - - 110 - - - 73 - - - 6 -
	90,958 75,205 5,345 7,852 14,363 69

For the year 2019 UAB „EPSO - G“ UAB „TETAS“ AB „Ignitis gamyba“ AB „Energijos skirstymo operatorius“ UAB „Ignitis“ AB „Klaipėdos nafta“ VĮ Ignalinos atominė VĮ „Geoterma“ Other state-owned companies	Acquisitions Sales Accounts receivable Loans granted Accounts payable Costs of financial operations
	103 - - 6,452 21 5 2 - - - 1 - 82) 21,6532) 2,0372) - 12,2422) - 178 941 84 - 2 - 58,3292) 41,1652) 4,1912) - 4,9372) - 67,7242) 21) - - 10,1562) - - 2422) 292) - - - - - 1102) - - - 138 - - - 8 -
	126,487 64,003 6,451 6,452 27,367 5

pany

For the year 2020 UAB GET Baltic UAB „EPSO - G“ UAB „TETAS“ AB „Ignitis gamyba“ AB „Energijos skirstymo operatorius“ UAB „Ignitis“ UAB „Transporto valdymas“ AB „Klaipėdos nafta“ VĮ Ignalinos atominė VĮ „Geoterma“ Other state-owned companies	Acquisitions Sales Accounts receivable Loans granted Accounts payable Costs of financial operations
	3,8701) 1091) 541) 3121) - 130 - - 7,852 18 69 16 1 - - - - 2 19,0632) 2,0682) - 1 - 188 467 49 - - - 29,6012)27,0042) 3,0972) - 4,1552) - 352 - - - 40 - 35,7292) - - - 7,2402) - - 1602) 202) - - - - 110 - - 67 - - - 6 -
	69,955 46,804 5,398 7,852 11,772 69

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020

(all amounts are in euro thousand unless stated otherwise)

For the year 2019 UAB GET Baltic UAB „EPSO - G“ UAB „TETAS“ AB „Ignitis gamyba“ AB „Energijos skirstymo operatorius“ UAB „Ignitis“ AB „Klaipėdos nafta“ VĮ Ignalinos atominė VĮ „Geoterma“ Other state-owned companies	Acquisitions Sales Accounts receivable Loans granted Accounts payable Costs of financial operations
	7,0721) 801) 161) - 3541) - 108 - - 6,272 21 5 2 - - - 1 - 8 19,9342) 2,0372) - - - 178 940 84 - 2 - 32,2842)40,7822) 4,1902) - 4,1842) - 67,7242) - - - 10,1562) - - 2422) 292) - - - - - 1102) - - - 133 - - - 7 -
	107,509 61,978 6,466 6,272 14,725 5

1) The Company is a participant of the Natural Gas Exchange operated by Get Baltic UAB and has a participation agreement. The agreement is on standard terms and the under the same terms and conditions as with the other participants. The amount represents the purchases and sales made through this Exchange.

2) LNG terminal funds included.

There have been none guaranties received to the revenue obtained and payable by the related parties. On 31 December 2020 the Company and Group did not form and accounted the depreciation of value to the revenue received from the related parties.

Benefits to the Management

Earnings-related benefits Benefits for Board Members	Group Company
	31 December 2020 31 December 2019 31 December 2020 31 December 2019
	539 440 455 384 38 16 38 16
	577 456 493 400

The management of the Group and the Company includes the CEO and the Directors of Technical, Legal and Administration, Commercial, Organisation Progress and Chief Financial Officer. No loans, guarantees or assets have been granted to the management of the Group and the Company.

19 Assessment of the impact of COVID-19 on demand and results, significant increase in credit risk, expected credit losses

Preparing the interim condensed financial statements for the period ended on 31 December 2020, the estimates and assumptions of the Company's management regarding the impact of COVID-19 have not changed compared to the estimates presented in the financial statements of the previous periods.

The Company's management, assessing the possible impact of the main COVID-19 factors on the Company's strategic objectives, cash flows, financial results, did not identify any threats to the Company's business continuity.

Due to the spread threat of the new coronavirus (COVID-19), business continuity and preventive measures have been reviewed and implemented by the Group and the Company: responsible personnel for monitoring the situation and providing information to the Company's management has been appointed; units and personnel performing critical functions and administering the key systems have been identified; additional organizational measures at system control centers are being applied; technical and replacement measures in case of the virus

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AB AMBER GRID, company code 303090867, Savanorių g. 28, Vilnius, Lithuania CONDENSED CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS AS OF 31 DECEMBER 2020 (all amounts are in euro thousand unless stated otherwise)

spread have been planned, The company is constantly reviews the emergency management plan, prepares for additional continuity of critical activities.

No significant adverse effects due to COVID-19 have been identified during the monitoring of the Company's key customers. Gas transportation volumes for 9 months of 2020 year, compared to 2019 year, increased, therefore, the decrease in revenue due to the impact of COVID-19 is not identified. According to the Company, other reasons (fluctuations in air temperatures, natural gas prices in the market) have a more significant impact on the demand and volume of outsourced services than the restrictions caused by quarantine.

The Company does not forecast liquidity or credit risk issues. The main Company’s clients are large companies, which are often also regulated and / or listed as risk-free. Due to the specifics of the Company's trade receivables, expected credit losses are assessed individually, taking into account the probability (risk) of non fulfillment of customer’s obligation. The Company assessed the current and expected future economic condition of its main customers and did not identify any significant differences, at the time of reporting, settlements took place as usual. Expected credit losses should remain at a similar level as in 2019 year. The Company plans regularly update its credit risk assessments on economic environment changes and takes measures to strengthen payment control.

Considering that the negative impact of COVID-19 on the results of the activity and cash flows has not been identified, the Company's management believes that there are no indications of impairment of non-current assets. Even if financial results or cash flows would be deteriorated in the short term, due to the regulatory mechanism it would not have a negative impact on cash flows and impairment of fixed assets in the long run.

Short-term borrowing is guaranteed to the extent of EPSO-G UAB. The Company has a sufficient short-term borrowing limit (overdraft) ensuring current solvency.

The negative impact of COVID-19 on the financial results, cash flows and financial condition is not forecasting, as a result of which no negative impact on the performance of covenants provided in agreements with banks is not expected, Cooperation with commercial and institutional banks takes place without changeovers.

Implementation of the strategic project of the Company - the gas pipeline connection project between Poland and Lithuania (GIPL) has been performed faster than planned during the twelve months of of 2020 year. Due to COVID-19, the Company till 31 December 2020 incurred costs in amount of EUR 88 thousand, i,e, EUR 33 thousand for additional wages and salaries and contributions to social security fund for temporarily isolated employees, EUR 51 thousand the purchase of safety equipment, the disinfection of premises and other operational needs, EUR 4 thousand for the cancellation of business trips during the quarantine period.

20 Subsequent events

There were no subsequent events that could materially affect the Company's financial statements prior to the date of approval of the financial statements.

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