Amber Grid — Interim / Quarterly Report 2017

Nov 23, 2017

Savanoriq pr, 28, LT-03 1 1 6 Vilnius, Lithuania www.ambergrid.lt

Phone +370 5 236 0855 Fax +370 5 236 0850 E-mail info@ambergrid.lt

CONFIRMATION OF RESPONSIBTE PERSONS

²³November 2017 No. 5' 3t0- lJ

Acting in accordance with Article 24 of the Law on Securities of the Republic of Lithuania and the Rules for Drawing up and Submission of Periodic and Additional lnformation, we, Saulius Bilys, Director General of AB Amber Grid, and Rimantas Sukys, Financial Director of AB Amber Grid, hereby confirm that, to the best of our knowledge, the attached condensed financial statements of the company AB Amber Grid as of 30 September 2OL7 drawn up according to International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of AB Amber Grid.

Director General Saulius Bilys

Financial Director Rimantas 5ukys

Statement of financial Position

			As of	As of
			30 September	31 December
			20L7	2016 (unaudited) (c!Ci!eCI
		Notes
	ASSETS		34O,9t7	348,7t5
A.	Non-current assets			631
l.	Intangible assets		576	347,409
ll.	Property, Plant and equiPment		338,668	L25
	11.1. Land		125	276,1-53
	11.2. Buildings and structures		272,909
	11.2.!. Buildings		6,038	6,244
	11.2.2. Gas transmission pipelines and related			264,918
	installations		262,202
	11.2.3. Gas distribution pipelines and related		101	L03
	installations		4,568	4,888
1t.2.4.	Other buildings and structures		57,682	55,565
il.3.	Machinery and equipment		1,055	t,tot
il.4. il.5.	Motor vehicles Other equipment, tools and devices		1,948	2,717
	Other property, plant and equipment		686	6tr
1t.6. .7.	Construction in progress		10,263	tt,t37
ilt.	Non-current financial assets		L,673	675
ilt.1	Investment in the subsidiary		675	675
	Non current trade receivables		998
il t.2.
B.	Current assets		21,835	42,583
l.	Inventories and Prepayments		2,251	1,515
	1.1. Raw materials, spare parts and other
	inventories		2,O54	L,360
1.2.	Prepayments		t97	155
il.	Accounts receivable		t9,36t	25,444
1t.1.	Trade receivables	5,L7	5,378	6,858
.2.	Other receivables	6,17	13,983	18,586
ilt.	Other financial assets	7	tl	1,658
tv.	Cash and cash equivalents	8	2t2	13,966
	Total assets		362,752	391,298

(cont'd on the next Page)

Statement of financial position (cont'd)

As of As of 30 September 31 December 20L7 20t6 (unaudited) (audt!qC)- Notes EQUITY AND LIABITITIES C. t96,l4L Equity l. 5L,73t Share capital ll. 130,151 Reserves 5,L73 11.1. Legal reserve ]-24,978 11.2. Other reserves lll. t4,259 Retained earnings (deficit) lll.1. Current year profit (loss) 14,259 lll.2. Previous year profit (loss) t66,6t1- Accounts payable and liabilities D. Amounts payable after one year and t. 142,006 non-cu rrent liabilities 1.1. Non-current borrowings 70,778 9 1.2. Grants (deferred revenue) 63,946 10 1.3. Non-currentemployeebenefits 426 1.4. Deferred income tax liability 6,856	2O2,8tO 5t,731 130,151 5,1-73 t24,978
	20,928
	20,928
	188,488
	L52,816
	82,222
	64,45O
	426
	5,718
Accounts payable within one year and
ll. 24,605 short-term liabilities	35,672
11.1. Current financial liability
'J.2. Current portion of non-current
6,444 borrowings	LL,444
ll.3 Current year portion of non-current
80 employee benefits	80
t2 11.4. Trade payables 2,7L3	5,694
11.5. Advance amounts 5	5
11.6. lncome tax payable L29	876
11.7. Payroll related liabilities L,547	1,422
11.8. Other payables and current liabilities t3,687 13	t6,tsr
362,752 Totaf equity and fiabifities

AB AMBER GRID, company code 303090867, Savanoriq pr. 28, Vilnius, Lithuania COMPANY,S CONDENSED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2017

(all amounts are in euro thousand unless stated otherwise)

lncome statement

			For the period of ended 20L7	For the period of three months three months nine months ended 30 September 30 September 30 September 30 September 20L6 (unaudited) (unaudited) (unaudited) (unaudited)	For the period of ended 20t7	For the period of nine months ended 20L6
t.	Revenue	15	t4,t47	13,088	46,764	46,992
il.	Expenses		(1o,1oo)	(9,901)		(29,71.61 (30,256)
il.1.	Cost of natural gas		(2,384)	(t,646)	(5,514)	(5,653)
.2.	Depreciation and amortization		(3,572)	(3,968)	(10,860)	(11,915)
il.3.	Remuneration and related
	social security tax expenses		(1,969)	(1,866)	(5,924)	(5,818)
.4.	Repair and technical
	maintenance expenses		(1,037)	(1,373)	(4,O78)	(3,677l'
il.s.	Taxes other than income tax		(4s6)	(478)	(t,3441	(1.,4Ot)
il.6.	Telecommunications and lT
	systems expenses		(183)	(143)	(48s)	(40o)
.7.	Other expenses		(4ss)	(427)	(1,511)	(t,4o2)
il1.	Operation profit (loss)		4,O47	3,L87	L7,O48	t6,726
tv.	Financial activity					(40
tv.1.	lncome	T7		3323 (132)
tv.2.	Expense		(83)		(260)	(473)
V.	Profit (loss) before income tax		3,967	3,058	16,811	16,325
vt.	lncome tax	tt
vt.1.	Current period income tax		(33s)		(!,4t4)	(1,430)
vt.2	Deferred income tax		(248)	(7)	(1,138)	(seo)
vil.	Net profit (loss)		3,384	2,769	L4,259	t!3o5
	Basic and diluted earnings (loss) per share (Eur)				0,08	0,08

Director General		23 November 2017
Chief Accountant		23 November 2017

Statement of comprehensive income

		For the period of ended 2Ot7	For the period of three months three months nine months nine months ended 30 September 30 September 30 September 30 September 2Ot6 (unaudited) (unaudited) (unaudited) (unaudited)	For the period of ended 2OL7	For the period of ended 2OL6
l.	Net profit (loss)	3,384	2,769	t4,259	14,305
ll.	Total comprehensive income (loss)	3,384	2,759	t4,259	14,305

Director General	,^urrurrj		*or" O"r rOU
Chief Accountant	Dzintra Tamuliene	c\/ Dth	23 November 2017

Statement of changes in equity

				Retained
	Share	Legal	Other	earnings
	capital			ieserve reserves (deficit)	Total
Balance as of
31 December 2015 (audited)	5t,73t	5,166	t21,789		L5,978 t94,664
Transfer from other reserves			3,189	(3,189)
Transfer to legal reserve				(7)
Dividends declared					(!2,7821 (L2,7821
Total comprehensive income (loss)				14.305	14,305
Net profit (loss) for the yeor				74,305	74,305
Balance as of
30 September 2016 (unaudited)	5t,73t	5,173	t24,978		14,305 196,L87
Total comprehensive income (loss)				6,623	6,623
Net profit (loss) for the year				6,623	6,623
Balance as of
31 December 2015 (audited)	51,73L	5,t73	L24,978	20,928	2O2,8LO
Dividends declared					(20,928) (20,928)
Total comprehensive income (loss)				14,259	t4,259
Net profit (loss)for the year				14,259	14,259
Balance as of
30 September 2017 (unaudited)	51,73t	5,L73	t24,978	t4,259	t96,L4t

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

* Result of share capital conversion into the euro.

Director General	Saulius Bilys	23 November 2017
Chief Accountant	Dzintra Tamuliend	23 November 2017

Statement of cash flows

		30 September 30 September 20L7	20L6
		(unaudited) (unaudited)
l.	Cash flows from (to) operating activities
	1.1. Net profit (loss)	14,259	L4,305
	Adjustments of non-cash items and other corrections:
t.2.	Depreciation and amortisation	12,2!2	13,364
t.3.	Loss (gain) on property, plant and equipment, doubtful trade
	accounts receivable and inventories write-off and disposal	(r2)	(10)
t.4.	lmpairment losses (reversal of impairment) for property, plant
	and equipment, financial assets, allowance for doubtful trade
	accounts receivable and inventories	34	7
	1.5. Income tax expenses (income)	2,552	2,020
	1.6. Interest (income)	(4)	(3)
	1.7. Interest expenses	260	473
	1.8. Amortisation of grants (deferred revenue)	(2,205) (1e)	(1,49t)
	1.9. Elimination of other non-cash items		(6e)
		27,O77	28,596
	Changes in working capital:
	1.10. Decrease (increase) in inventories	(783)	677
	1.11. Decrease (increase) in trade accounts receivable	L,440	4,0L5
	l.t2 Decrease (increase) in other accounts receivable and
	prepayments	1,807	(!,443)
	1.13. Increase (decrease) in trade accounts payable	12	(8so)
	1.t4. lncrease (decrease) in other accounts payable and other current
	liabilities	(2,245)	(29,550)
	1.15. Decrease (increase) in other financial assets	t,647	3t,t89
	1.16. Income tax (paid)	(2,L61)	(L,264)
	Total changes in working capital	(283)	2,774
	Net cash flows from operating activities	26,794	3L,370
ll.	Cash flows from (to) investing activities
	11.1. (Acquisitions) of property, plant and equipment and intangible
	assets	(6,287)	(12,684)
	1'.2. Proceeds from sales ol'property, plant and equipment	t2	10
	11.3. Acquisition of investments in joint venture		(!32)
	11.4. (Acquisition) of held-to maturity investment
	11.5. (Disposal) of held-to-maturity investment
	11.6. Loans granted	(120)
	11.7. lnterest received	3
	ll.8 Disposal (acquisition) of other short term investments
	Net cash flows (to) investing activities	(6,392)	(t2,8041

The accompanying notes are an integral part of these financial statements. (cont'd on the next page)

Statements of cash flows (cont'd)

		30 September 20L7 (unaudited)	30 September 20L6 (unaudited)
tll.	Cash flows from (to) financing activities
	lll.1. Dividends(paid)	(2O,984)	(t2,780)
	lll.2. Proceeds from borrowings
	lll.3. (Repayments) of borrowings	(16,4441	(32,900)
	lll.4. Grants received	3,576	!7,691
	lll.5. Interest (paid)	(323)	(so2)
	lll.6. Other cash flows from (to) financial activities	19	69
	Net cash flows from (to) financing activities	(34,156)	(28,4221
tv.	Net increase (decrease) in cash and cash equivalents	(L3,754l'	(9,855)
V.	Cash and cash equivalents at the beginning of the period	13,956	26,969
vt.	Cash and cash equivalents at the end ofthe period		L7,tL3

Director General		23 November 2017
Chief Accountant	Dzintra Tamulien6	23 November 2017

Notes to the Financial Statements

General information

AB Amber Grid (hereinafter referred to as the'Company') 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 13 January 2075, the National Commission for Energy Control and Prices (hereinafter referred to as the 'NCC') stated that AB Amber Grid's transmission activity unbundling was in compliance with provisions of the Law on Natural Gas. On 10 April 2015, upon the obtaining of a positive decision from the European Commission, the NCC issued in respect of the Cornpany 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's largest shareholder is UAB EPSO-G. UAB EPSO-G is 1O0-percent owned by the Republic of Lithuania and is managed kry trust by the Ministry of Energy of the Republic of Lithuania. UAB EPSO-G is in charge of the management of the shareholdings of the electricity and gas transmission system operators of the Republic of Lithuania.

Since 1 August 2013, the Clompany's shares have been traded on a stock exchange; they are listed on the Baltic Secondary Trading List of NASDAQ OMX Vilnius Stock Exchange (lSlN code 1T0000128696, instrument AMGlL).

As of 30 September 20!7,lhe Company's shareholders were as follows:

	Number of shares owned	Ownership share (percent)
UAB EPSO-G (Company Code 302826889,	L72,279,125	96.58
A. Juozapavidiaus g. 13, Vilnius)
Other shareholders	6,103,389	3.42
	L78,382,5r4	100.00

The Company's share capital amounts to EUR 5!,730,929.06. lt is divided into 178,382,514 ordinary registered shares with par value of EUR 0.29 each.

AB Amber Grid has a single subsidiary, UAB GET Baltic. In the financial statements as of 30 September 2Ot7 and 2016, UAB GET Baltic was accounted for at acquisition cost.

UAB GET Baltic is a company with a valid natural gas market operator's license, and its main function is to organise and develop tradcl on the Natural Gas Exchange.

On 23 December 2016, AB Amber Grid acquired from the Finnish natural gas company, Gasum Oy, the remaining 34 % stake in UAB GET Baltic, and in this way AB Amber Grid became the only shareholder of UAB GET Baltic, which controls 100 % of the authorised share capital. As at 30 September 201-7,UAB GET Baltic's authorised share capital amounted to EUR 580,450 and was composed of 3,055,000 units of ordinary registered shares with par value of EUR 0.19 each.

Company	code	Company Registered address of the company	Stake of shares held as of 30 September 2Ot7	Stake of shares held as of 30 September 2016
UAB GET Baltic 30286L178		Savanoriq pr. 28, Vilnius	t00%	66%

In accordance to the exemption provisions of Article 6.1 of the Law on Consolidated Financial Statements, the financial statements of the subsidiary were not subject to consolidation since from the point of view of the Company they are negligernt, as of the end of the financial year, the value of the subsidiary's assets did not exceed 5 percent of the value of the Company's assets and the subsidiary's net income from Sales did not exceed 5 percent of the Company's net income over the same period.

UAB GET Baltic's condensed financial statements as of 30 September 2017 were drawn up in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and have not been audited.

1 General information (cont'd)

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

• a transmission of natural gas in the territory of the Republic of Lithuania;
• a balancing of flows of natural gas in the transmission system;
• a administration of thr: funds intended to compensate for the installation and fixed operating costs of the Liquefied Natural Gas Terminal, its infrastructure and connector and, as from2Ot6, for reasonable costs of the designated supplier for the supply of an obligatory quantity of liquefied natural gas.

As of 30 September 2017,the Company was party to 99 natural gas transmission service contracts with natural gas transmission system users (consumers of natural gas, natural gas distribution system operators, natural gas companies which supply gas up to consumer systems). As regards natural gas businesses that trade in natural gas, but do not transmit gas via the transmission system, the Company had entered with such companies into ³ natural gas balancing agreements.

AB Amber Grid's condenserd financial statements, including the financial statements as of 30 September 2Ot7, the profit (loss) accounts, the comprehensive income statements, the cash flow statements and the statement of changes in equity have not been audited. The Company's financial statements as of 31 December 2016 have been audited; they were prepared in accordance with International Financial Reporting Standards (IFRS). For a better understanding of the information contained in these condensed financial statements it is highly recommended to read the present AB Amber Grid's condensed financial statements in conjunction with the Company's annual financial statements of 20,16.

2 Accountingprinciples

The Company's condensed financial statements as of 30 September 2017 were prepared in accordance with International Accounting Standard 34'lnterim Financial Reporting'.

The figures in the Company's financial statements are presented in thousand euros. The financial statements were prepared relying on the historical cost basis. The Company's accounting policies are consistent with the accounting principles used in the previous year.

3 Information according to segments

The Company is engaged in natural gas transmission activity and operates as one segment. All non-current assets of the Company are located in Lithuania, where the Company carries out its activity.

During the first nine months of 2017, the Company earned 76 percent of its revenue from Lithuanian system users (in 201,6: 76 percent) and 24 percent of its revenue was received from the transit service, i.e, transportation of gas to the Kaliningrad Region of the Russian Federation and in the direction of Latvia (in 2016: 24 percent).

4 Construction in progress

The largest objects of construction in progress of the Company as of 30 September 2017 were as follows:

Object	30 September 20L7 (unaudited)	31 December 20t6 (audited)
lmplementation of the Gas lnterconnection Poland-Lithuania (GIPL) Project in the
territory of the Republic of Lithuania	6,431	6,262
Modernisation of PaneveZyrs Gas Compressor Station	2,833	L,86t
Modernisation of gas transmission pipelines' line block valve units		L,765
Construction of an interconnection of Vilnius-Kaunas and Kaunas-Sakiai gas
transmission pipelines	551	551
Introduction of automation into the supervision of the cathodic protection of gas
transmission pipelines through the installation of a remote supervision and
control system	t44	430
Other	884	848
* Less: lmpairment of construction in progress	(sso)	(s80)
	L0,263	t'-,L37

* lmpairment for the Project "Construction of interconnection between the gas transmission pipelines Vilnius-Kaunas and Kaunas-Sakiai (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.

5 Trade receivables

Non-current trade receivables	30 September 31 December 20L7 (unaudited) (audited)	20t6
Other trade receivables	998
Current trade receivables Gas transmission services receivables	5,408	6,859
Other trade receivables	27	15
Less: allowance for the decrease in value of trade receivables	(s7)	(16)
	5,378	6,858

The trade receivables do not include any interest; their payment period is 15 calendar days. ln 2Ot7 in respect of the heat producer, UAB Ge'oterma, an impairment loss of EUR 4L thousand was formed.

6 Other receivables

	30 September 31 December 20t7	20L6
	(unaudited) (audited)
LNG terminal funds receiviable (administered by the Company)	!2,994	13,279
Other receivables (grants)	788	3,488
Receivables accrued for natural gas transportation		L,676
Other receivables	201	t43
	13,983	18,586

The LNG terminal funds receivable as at 30 September 2017 include the overdue amount of EUR 4,829 thousand, of which AB Achema's overrdue amount is EUR 3,658 thousand, the overdue amount of UAB Kauno Termofikacine Elektrine is EUR 1,002 thousand and the overdue amount of UAB Geoterma is EUR 65 thousand. For more

6 Other receivables (,cont'd)

information about AB Achema's liabilities and about UAB Geoterma see Note 16 'Commitments and contingencies'.

The Company's Other Recr::ivables are not subject to impairment.

7 Other financial assets

As of 30 September 2Ot7,the Company's Other Financial Assets consisted of the cash received from the natural gas supply security-relatecil extra tariff component added to the natural gas transmission price (surcharge), for the sake of brevity referred to as LNG terminal funds. The aforesaid funds were received from system users, they are kept in a separate LNG terminal funds bank account fully compliant with legislative requirements and are designated to be paid out to the beneficiaries of LNG terminal funds: to the operator of the LNG terminal (AB Klaipedos Nafta), to the dr:signated supplier (UAB Litgas) and to AB Amber Grid (in order to compensate for the cost of the administration of the LNG terminal funds). On 15 May 20!7, by Resolution No 03E-145, the NCC adopted a new additional security-related price component to be added to the regular natural gas price, which started to be applied to system users as from 1 July 2OI7. The NCC by Note No O5E-107 as of 11 May 2O!7 "On the recalculation of the ral.e of additional security-related price component to be added to the regular natural gas price for the year 2017" and by Note No O5E-109 as of 12 May 2Ot7 "On the adjustment of the recalculation of the rate of additional security-related price component to be added to the regular natural gas price for the year 2OL7 as approved by Note No O5E-107 as of 11 May 20t7" and by Letter No R2-(D)-2I25 as 28 July 2Ot7 "Regarding proportions of the LNG terminal funds to be assigned to the beneficiaries" assigned the specific shares (in percentage), in which the LNGT funds administered by AB Amber Grid shall on a monthly basis be distributed and paid out to LNGT funds' beneficiaries.

8 Cash and cash equlvalents

30 September 20L7 (unaudited)	31 December 20t6 (audited)
2t2	13,966
2L2	13,965

The Company keeps its cash balance in bank accounts. Cash balance as of 30 September 2017 decreased due to the fact that the Company, under the impact of the negative interest rates prevailing on the market, decided to change the Company's treiasury management policies, the aim being minimum cash balance. Nevertheless, where there is such a possibility, the Company invests in deposits with the shortest term possible (overnight). As of 30 September 2OL7, the Company had no overnight deposit contracts.

9 Loans

	30 September 20L7 (unaudited)	31 December 20L6 (audited)
[ong-term loans
Loans from credit institutions of Lithuania	45,778	57,222
Loan from international {'inancial institutions	25,000	25,000
Short-term loans
Loans from credit institutions of Lithuania
Current portion of long-tr:rm loans	6,444	11 AAA
	77,222	93,665

9 Loans (cont'd)

ln February and April of 2At7 , the Company repaid prior to maturity part (EUR 16,444 thousand) of its long-term loan to Swedbank, AB. After the repayment, the outstanding loan to Swedbank, AB amounts to EUR52,222 thousand.

On 22 December 2015, thra Company entered into an agreement with the European Investment Bank on the possibility of borrowing of up to EUR 28,000 thousand for the period of up to 20 years. As of 30 September 2017, the loan was not used. The repayment of the loan or its part is possible until 21 December 20L7.

ln order to balance its working capital, on 1 March 2O!7 the Company concluded an overdraft contract for the amount of up to EUR 10,000 thousand. As at 30 September 20t7,the overdraft was not used

10 Grants (deferred revenue)

	Deferred revenue	related grants	Asset- Revenue related grants	Total
Balance as at 31 December 2016	1,535	62,9L5		64,450
Received / receivable		873	3	876
Depreciation/a mortisation	(26)	(1,3s1)	(3)	(1.380)
Balance as at 30 September 2017	1,509	62,437		63,946

In the profit (loss) statement, the depreciation of the asset-related grants as at 30 September 2017 amounting to EUR 1,351 thousand (in 2016: EUR 1,003 thousand) was presented by cross-covering the costs of depreciation of the related assets with the grant-related revenue.

11 Income tax

|n2017, the standard corporate income tax rate applicable to the companies of the Republic of Lithuania was 15 per cent (in 2016: 15 per cent). The income tax expenses for the period comprise the current income tax and the deferred income tax.

In accordance with amendments to the Law on Corporate Income Tax, which provide for a possibility of taking advantage of the corporate income tax relief on investments in new technologies, as at 30 September 2017,lhe Company had calculated a corporate income tax relief amounting to EUR 1,399 thousand (as at 30 September 20t6: EUR 1,405 thousand).

12 Trade payables

	30 September 31 December 20L7 (unaudited) (audited)	20L6
Payables to suppliers under investment programme (new construction) Payables to suppliers under investment programme (reconstruction	26	8
and modernisation)	804	3,8r4
Payables to suppliers of goods and providers of services	599	828
Payables to providers of repairs services under non-current assets
repairs programme	412	381
Payables to suppliers of natural gas	872	663
	2,7L3	5,694

The decrease in trade payables as at 30 September 2O!7 came as a result of the Company's lower investments according to Investment Programmes and settlements with contractors, the payment terms range from 30 to 60 days. The trade payables are interest-free.

13 Other payables ancl current liabilities

	30 September 31 December
	20t7	20L6
	(unaudited) (audited)
Payable LNG terminal funrds administrated by the Company Accrued LNG terminal funds subject to administration by the	12,123	tL,468
Company*	838	3,696
Real Estate Tax payable		423
Value Added Tax (VAT) payable	501	165
Other payables	225	399
	L3,687	L6,lsL

*Accrued LNG terminal I'unds 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 Klaipedos Nafta and UAB Litgas issue a VAT invoice to the Company irl respect of the security-of-supply-related extra tariff component added to the regular natural gas tariff.

14 Earnings per share

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

	30 September 20L7 (unaudited)	30 September 20t6 (unaudited)
Net profit (loss) attributable to the shareholders (EUR thousand)	14,259	14,305
Weighted average number of shares (thousand)	178,383	178,383
Earnings per share (EUR)	0.08	0.08

15 Revenue

	For the period of three months ended 30 September 20L7 (unaudited)	For the period of three month ended 30 September 20t6 (unaudited)	For the period of nine months ended 30 September 20t7 (unaudited)	For the period of nine months ended 30 September 20t6 (unaudited)
Income from natural gas tritnsmission in the
territory of Lithuania	11,443	Lt,468	40,616	41,370
Income from balancing services in the
transmission system	1,796	1,553	5,033	5,428
Grants recognised as inconre	834	L4	853	42
Income from LNG terminal fund administration	31	36	89	108
Other income	43	t7	Lt3	44
	t4,L47	13,088	46,764	46,992

16 Commitments and contingencies

Litieation

1. Pursuant to the Republic of Lithuania Law on the Liquefied Natural Gas Terminal and resolutions adopted by the NCC, all users of the natural gas system that transport natural gas through the transmission system, when they make payments for natural gas transmission services, are required to pay an integral natural gas transmission price compo'nent that is intended to compensate for the costs of the installation and operation of the liquefied natural gas terminal facility, its infrastructure and the connector (hereinafter referred to as the "LNG terminal funds")1. Since A,B Achema, in spite of the fact that it is a transmission system user, has systematically failed to pay the LNG terrninal funds, on 7 March 20t4, AB Amber Grid filed a claim with Kaunas Regional Court requesting the Court to award from AB Achema its debt for the LNG terminal funds failed to pay for the period from 1 September 2013 tr: 31 December 2013 plus a late payment penalty for the unpaid LNG terminal funds for the said period. On 16 March 2015, AB Amber Grid filed a new claim with Kaunas Regional Court regarding the adjudgement form AB Achema of the debt for the LNG terminal funds intended to cover the fixed operating costs of the LNG terminal, its infrastructure and connector that were started to be collected as from 3 December 2014, the late payment penalty and 6 percent annual interest. The Court merged the two cases into one and, on ²⁹ September 2015, Kaunas ltegional Court satisfied the claim of AB Amber Grid in its entirety, i.e. awarded the debt of EUR 3,188 thousand for the period from 1 September 2013 to 3L December 2013, plus late payment penalty of EUR 545 thousand, plus procedural interest and awarded the debt of EUR I4,72L thousand for the period from ³ December 2014 to 30 Apnil 2015 and a late payment penalty of EUR 305 thousand and procedural interest. AB Achema appealed against the aforesaid court decision. On 8 June 2016, the Court of Appeal of Lithuania upheld the decision of the court of first instance.

On 9 August 2016, the lsupreme Court of Lithuania accepted cassation appeal. On 8 December 2016, the Supreme Court of Lithuania accepted AB Achema's request to suspend the judicial proceedings until AB Achema's claim is adjudgr:d by the European Union's General Court in case No 1-417/20!6. At the Supreme Court of Lithuania, the case has not been adjudged yet.

1. On t9 November z)t;!-, AB Achema applied to Vilnius Regional Administrative Court requesting to revoke paragraphs 3.1 and 4 of the Commission's Resolution No 03-317 of 19 October20L2'On the establishment of funds intended to compensate for all or part of the construction and operating costs of the liquefied natural gas terminal, its infrastructurr:l and connector for the year 20t3', and to revoke paragraph 2 of the NCC's Resolution No 03-330 of 26 October 2Ot2'On adjustment of the price caps for natural gas transmission and distribution of AB Lietuvos Dujos and establishment of the additional component to be included in the natural gas transmission price cap (the LNG termirral component) for the year 2013' (hereinafter referred to as the "First Administrative Case"). AB Amber Grid i:; involved in the proceedings as a third party concerned. On 28 May 2015, Vilnius Regional Court rejected tlre claim of ABAchema in its entirety. ABAchema filed an appeal. On 24 October 20X6, Lithuania's Supreme Administrative Court suspended the judicial proceedings until the final decision of the European Union's General Court in case No. f -4I7/20!6 takes effect.

2. On 22 December20L4, ABAchema applied to Vilnius Regional Administrative Court requesting to revoke paragraphs t.t, 2.2.1, 2.3 and 3 of the NCC's Resolution No 03-895 as of 20 November 2014 'On the establishment of the uppetr liquefaction limit of natural gas (additional natural gas supply security component to be included in the natural gas transmission price) for the years 2015-20L9'. By the Court ruling as of 7 July 20L5, AB Amber Grid was involved in the case as a third interested party. On 11 November 201.5, the Court suspended the proceedings by its ruling, and separate appeals were filed. On 11 January 2016, Lithuania's Supreme Administrative Court upheld Vilnius Regional Administrative Court's ruling as of 11 November 2015 on suspension of judicial proceedings until Lithuania's Supreme Administrative Court adjudges the First Administrative Case.

¹The Republic of Lithuania Law on the Liquefied Natural Gas Terminal (the original version) stipulated that the Liquefied Natural Gas Terminal expenses shall be compensated, and the Natural Gas Transmission and Distribution Price Caps Calculation Methodology as approved by the NCC'S Resolution No 03-106 a:; of 8 August 2008 employed the term "LNcT-related extra tariff (surcharge)". Since 2014 the Law on the Liquefied Natural Gas Terminal employs the term "natural gas supply security-related extra price component added to the natural gas transmission orice".

15 Commitments and contingencies (cont'd)

1. On 22 January 2016, AB Achema appealed to the Vilnius Regional Administrative Court requesting to annul paragraph L of the Commission's Resolution No 03-583 of 23 December 20L5 'On the setting of an additional natural gas supply securil;y-related price component to be included in the natural gas transmission price'. By ^a was involved in the judiciial proceedings as a third interested party. The parties submitted their responses. On ¹⁰ November 2016, Vilnius Regional Court decided to suspend the judicial proceedings until Lithuania's Supreme Administrative Court adjudges the First Administrative Case.

2. On 18 April 2016, Atii Achema applied to Vilnius Regional Administrative Court requesting to revoke paragraph 1 of the NCC':'; Resolution No 03-83 of 25 March 2016 'On the setting of an additional natural gas supply security-related price component to be included in the natural gas transmission price'. By a court ruling of 2May2016, ABAmber Gnid was involved in the proceedings as a third interested party. The parties submitted their responses. On 16 November 2016, Vilnius Regional Administrative Court decided to adjourn the judicial proceedings until Lithuania's Supreme Administrative Court adjudges the First Administrative Case.

3. On 18 August 2016, AB, Amber Grid filed a lawsuit with Kaunas Regional Court requesting to adjudge from AB Achema debt amounting to EUR 2,430 thousand of the LNG terminal funds under the natural gas transmission service contracts of 2OL2and20L4. At present the case is being prepared for action on the merits. The court has received AB Achema's request to suspend the case, but the issue still awaits resolution.

4. On 6 October 2016, At3 Achema filed a complaint against the defendant, the Republic of Lithuania, claiming damages incurred as a result of the provision of state aid thatwas uncoordinated with the European Commission. AB Amber Grid was involved in the judicial proceedings as a third interested party. In the case, the parties have already submitted their responses. On 15 March 2017 the court rejected the complaint, and AB Achema filed an appear.

5. On 28 December 2016, AB Achema appealed to Vilnius Regional Administrative Court for the annulment of the NCC's Resolution No 03-369 as of 17 November 2016 "On the setting of an additional natural gas supply securityrelated price component to be included in the natural gas transmission price". AB Amber Grid was involved in the proceedings as a third interested party. In the case, a deadline was set for the submission of responses. On 3 April 2017, a ruling was issued to suspended the judicial proceedings until the coming into effect of the final decision in administrative case No,A-162-858/2Ot7 examined at Lithuania's Supreme Administrative Court (judicial proceedings No 3-6 1-3-02929-2012-01.

6. On 15 June 2017, AB Achema appealed to Vilnius Regional Administrative Court for the annulment of the NCC's Resolution No 03E-145 as of 15 May 2Ot7 "On the recalculation of an additional natural gas supply securityrelated price component to be included in the natural gas transmission price for the year 20L7". AB Amber Grid was involved in the proceedings as a third party concerned and on 29 June 2017 submitted a response to AB Achema's appeal. The case awaits a hearing, which has been already scheduled.

7. On 21 June 2017, AB Amber Grid appealed to the Klaipeda City District Court with a petition for the issuance of a court order regarding the debtor UAB GEOTERMA in the amount of EUR 106 thousand, plus penalty in the amount of 6 thousand plt,ts 6 percent annual interest from the awarded amount for the period from the date of the opening of the court proceedings until the date of full execution of the court order, plus award of the litigation expenses in the amount of EUR 0.4 thousand. In order to enforce the execution of the court, it was requested to impose interim measures on the seizure of immovable and movable property, monetary funds and property rights belonging to the borrower and / or third parties amounting to EUR 112 thousand. On 22 June 201-7, Klaipeda City District Court granted the claim of AB Amber Grid, ordered the aforesaid amount and decided to apply the interim measures. The debtor did not raise any objections, and the bailiff, Brigita Tamkevidiene, applied interim measures, arrested the debtor's assets, and started an enforcement case in order to recover the awarded debt amount.

AS OF 30 SEPTEMBER 2017

(all amounts are in euro thousand unless stated otherwise)

17 Related party transactions

The parties are considered to be related where one party has a possibility to control the other one or may have ^a significant influence over the other party in making financial and operating decisions.

As of 30 September 2o!7 and as of 30 September 2016, the related parties of the Company were as follows:

• UAB GET Baltic (a subsidiary of AB Amber Grid);
• UAB EPSO-G (the parent company);
• LITGRID AB (a sukrsidiary of UAB EPSO-G);
• UAB Baltpool (a s;ubsidiary of UAB EPSO-G);
• UAB Tetas (a subsidiary of AB L|TGRtD);
• UAB LITGRID Power Link Service (a subsidiary of AB LITGRID);
• UAB Duomenq Lr:gistikos Centras (an associated company of AB LITGRID Group);
• Lit Pol Link Sp.z.o.o. (a joint venture co-owned by AB LITGRID and the Polish electricity network operator PSE S.A.);
• Management.

The tables below present the Company's balances and transactions with the related parties as of 30 September 20L7 and as of 30 September 2016:

As of 30 September 2017 (unaudited)	Acquisitions	Sales	Accounts receivable	Accounts payable
UAB GET Baltic	2,217	13	r22	731
UAB EPSO-G	77			31
	2,294	L3	L22	762
As of 30 September 2015 (unaudited)	Acquisitions	Sales	Accounts receivable	Accounts payable
UAB GET BaItic	133
	133

On 30 March 20L7, AB Amber Grid and GET Baltic signed a loan agreement under which AB Amber Grid may extend to GET Baltic UAB a loan of up to EUR 200,000 (two hundred thousand euros). The annual interest rate on the loan is variable consisting of a variable interest rate of 1 (one) month EURIBOR plus a fixed-rate margin of 1.5 percent (one point five percent). The contractual maturity date of the loan is 31 March 2018.

As at 30 September 2Ot7, AB Amber Grid's loan granted to UAB GET Baltic amounted EUR 120,000 (one hundred and twenty thousand euros).

From 6 April 2017 until 30 September 2017 Ihe interest accrued on the loan amount used stood at EUR 604.53 (six hundred and four euros and 53 euro cents).

There were no guarantees; either provided or received for receivables from the related parties or for payables to them. As at 30 September 2077, the Company did not account any impairment loss allowances for receivables from any related parties.

Benefits to the Management

During the period of nine months ended 30 September 20!7, the Company's benefits to the Management of the Company amounted to EUR 308 thousand (during the period of nine months ended 30 September 2016; EUR 294 thousand). The Company's Management consists of the Chief Executive Officer (Director General) and his four deputies. The Management of the Company were not given any loans or guarantees and were not subject to any asset transfers.

During the first nine months of 20!7, benefits paid to the members of the Board amounted to EUR 22 thousand (in 2016: EUR 8 thousand).

18 Subsequent events

On 4 October 20L7, UAB Kauno Termofikacijos Elektrine paid the overdue amount of EUR L,002 thousand of LNGterminal-funds administrated by our Company.