City Service SE — Annual Report 2025

May 19, 2026

CONSOLIDATED MANAGEMENT REPORT

Beginning of the reporting period: 1 January 2025
End of the reporting period: 31 December 2025
Business name: City Service SE
Registration number: 12827710
Legal address: Narva mnt. 5, 10117 Tallinn, the Republic of Estonia
Telephone: +370 5 239 49 00
Fax: +370 5 239 48 48
E-mail: info@cityservice.eu
Website: http://www.cityservice.eu
Auditor: Ernstı & Young Baltic AS

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CONTENT

1. Corporate profile
2. 1.1. City Service Group
3. 1.2. Strategy and objectives
4. 1.3. Mission and vision
5. 1.4. Structure of the Group
6. 1.5. Employees
7. Management and Corporate Governance report
8. 2.1. Main areas of activity
9. 2.1.1. Administration of apartment buildings
10. 2.1.2. Management of commercial building facilities
11. 2.1.3. Maintenance and cleaning of territories
12. 2.1.4. Other activities
13. 2.1.5. Apartment rental and property management
14. 2.2. Performance improvement
15. 2.3. Significant events
16. 2.4. Key risk activity types and uncertainties
17. 2.5. The main financial ratios concerning the financial year
18. 2.6. The structure of the Company’s share capital
19. 2.7. The shareholders of the Company
20. 2.8. Restrictions on the transfer of securities and restrictions on voting rights
21. 2.9. Company’s supervisory board and management board
22. 2.9.1. Company’s supervisory board
23. 2.9.2. Company’s management board
24. 2.10. Dividend policy
25. 2.11. Procedure of amendment of the Statutes of the Company
26. 2.12. Material agreements concluded by the Company which may be important after change of control of the Company
27. 2.13. Auditing system and description of the main features of internal audit and risk management systems in connection with the process of the preparation of the annual accounts
28. 2.14. Information on compliance with the corporate governance code
29. 2.15. Remuneration report
30. Sustainability Statement 2025
31. Consolidated financial statements

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DECLARATION OF THE MANAGEMENT

According to Management Board Regulations of City Service SE, Chairman of the Management Board hereby declares and confirms that according to his best knowledge, the financial statements, prepared according to the accounting standards in force, present a correct and fair view of the assets, liabilities, financial situation and loss or profit of the issuer and the undertakings involved in the consolidation as a whole, and the management and sustainability reports, prepared according to the accounting standards in force, gives a correct and fair view of the development and results of the business activities, financial status and aims in environmental, social and governance areas of the issuer and the undertakings involved in the consolidation as a whole and contains a description of the main risks and doubts.

Chairman of the Management Board: Artūras Gudelis
Date: 30 April 2026

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1. CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

1.1. CITY SERVICE GROUP

City Service SE is a holding company managing a group of companies operating in the field of building management and integrated facility services in the Baltic States. The Group provides comprehensive solutions for the management of residential and commercial real estate. The companies within the Group are engaged in the administration of building management processes, maintenance and repair of engineering systems, energy resource management based on artificial intelligence solutions, building renovation, technical and energy audits. In addition, the Group provides territory maintenance and cleaning services, apartment rental and administration services, IT services, fuel station maintenance, and debt administration services. The Group conducts its operations in accordance with sustainable environmental principles, focusing on efficient resource use and the long-term preservation of building value.

Main business areas of the Group:
* Administration of residential apartment buildings
* Commercial property management
* Territory cleaning and maintenance
* Apartment rental and administration
* Other related activities

1.2. STRATEGY AND OBJECTIVES

By combining City Service expertise with a deep understanding of local specifics, we provide our customers with modern and convenient services. Our long-term objective is very linked with our mission – growth of commercial, public and private property management, development of integrated utility services.

Currently, City Service SE Group operates in Lithuania and Latvia. The total area of buildings administered by the Group in these regions amounts to 16.2 millions m².

1.3. MISSION AND VISION

• OUR VISION is to be a leader in value creation of residential property.
• OUR MISSION is to represent the interests of customers by increasing the value of their property and improving their living environment.

1.4. STRUCTURE OF THE GROUP

LITHUANIA	LATVIA
UAB Alytaus namų valda	SIA BILANCE
UAB Energijos taupymo paslaugos	SIA MultiHouse
UAB Mano Būstas Kaunas	SIA Manas MĀJAS
UAB Mano Būsto klientų patirčių centras	SIA Latvijas Namsaimnieks
UAB Rinkų vystymas	SIA BonoDomo
UAB Baltijos NT valdymas	SIA Livonijas Nami
UAB EPC projektai	SIA Manas MĀJAS 1
UAB Mano Būstas Klaipėda	SIA Namu serviss APSE
UAB Mano Būsto priežiūra	SIA Manas MĀJAS 2
UAB Šiaulių NT valdymas	SIA Manas MĀJAS Tukums
UAB Baltijos transporto valdymas	SIA Manas Majas
UAB Kapitalo Sprendimai
UAB Mano Būstas Neris
UAB Merlangas
UAB Skolos LT
UAB Biržų butų ūkis (57.71%)
UAB Mano aplinka
UAB Mano Būstas NPC
UAB Monto EU
UAB Unitechna
UAB BonoDomo
UAB Mano bendrabutis
UAB Mano Būstas Radviliškis
UAB Namų priežiūros tarnyba
UAB Žemaitijos būstas
UAB BonoDomo Pay
UAB Mano Būstas
UAB Mano Būstas Šiauliai
UAB Naujininkų ūkis
SIA Manas MĀJAS Jelgava 100%
UAB Būsto aplinka 100%
UAB Mano Būstas Alytus 100%
UAB Mano Būstas Sostinė 100%
UAB GS-Servisas 100%
SIA City Service Engineering 100%
SIA Nia Nami 100%
UAB City Service Cleaning 100%
UAB Mano Būstas Aukštaitija 100%
UAB Mano Būstas Ukmergė 100%
UAB Nacionalinis renovacijos fondas 100%
SIA Manas MĀJAS 3 100%
UAB City Service Engineering UAB Mano Būstas 100%
Baltija 99.97%
UAB Mano Būstas Vakarai 100%
UAB Pastatų priežiūra 100%
SIA Ēku pārvaldīšanas serviss 100%
UAB CSG IT 100%
UAB Mano Būstas Dainava 100%
UAB Mano Būstas Vilnius 100%
UAB Pastatų valdymas 100%
SIA Manas MĀJAS Ventspils 1.4. STRUCTURE OF THE GROUP 10 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

1.5. EMPLOYEES

In 2025, the City Service Group continued to strengthen employee engagement, internal communication, and organizational culture across all Group companies. To ensure transparent information sharing and consistent employee awareness, regular in-person meetings with management were held, during which the Group’s strategy, operational objectives, and achieved results were presented. This practice has become a sustainable organizational tradition, supporting a clearer understanding of the business direction, strengthening trust in leadership, and fostering long-term employee engagement.

Significant focus was placed on digitalization and the development of artificial intelligence solutions. The Group actively continued to develop and implement AI solutions aimed at improving work quality, increasing operational efficiency, and promoting innovation. Employees from various functions were involved in AI initiatives, enabling interdisciplinary collaboration. Solutions were presented during project meetings, training sessions, and practical workshops, while accumulated experience was leveraged in the development of new processes and services that enhance the Group’s competitiveness.

The onboarding of new employees was carried out through a structured integration process, including introductory training, informational materials, welcome initiatives, and active involvement of direct managers. At City Service Engineering, the new employee day initiative was continued, introducing newcomers to the Group’s operations, values, strategic priorities, occupational safety, data protection, and principles of responsible technology use. This approach supports smooth integration of new employees, increases job satisfaction, and contributes to reducing early-stage employee turnover.

Employee well-being and organizational culture remained among the key priorities of the Group. In 2025, employees were offered additional benefits, community-building initiatives were organized, and access to professional, confidential, and anonymous psychological support was provided. A traditional summer event was held, holiday gifts were provided, long-serving employees were recognized, access to seasonal flu vaccination was offered, and additional allowances were granted to employees working remotely. Motivational and team-building activities remained an integral part of the organizational culture, with employees participating in joint gatherings, team activities, and informal initiatives aimed at strengthening interpersonal relationships. The digital MELP platform was used to support internal communication, employee recognition, and engagement surveys.

11 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

The Group also actively contributed to social impact initiatives and the support of local communities. For the third consecutive year, City Service Engineering implemented a corporate social responsibility initiative, with six regional teams across Lithuania participating in 2025. As part of the initiative, support was provided to social and non-governmental organizations, infrastructure improvement works were carried out, technical assistance was delivered, and support was extended to animal welfare organizations, contributing to community well-being and the reduction of social exclusion.

In 2025, an employee engagement survey was conducted, with results indicating an employee NPS¹ of +23 and an overall engagement score of 51.1%. The insights from the survey were communicated to employees, and follow-up actions were defined to further enhance engagement and job satisfaction. During annual performance and development discussions, employees were assigned performance objectives and provided with structured feedback on professional development and values-based behaviours. In 2025, this process was expanded to more actively include technical employees, and candidate NPS measurement was also introduced.

The City Service Group continued to invest in employee skills development by organizing internal and external training programs delivered both in person and remotely, with particular focus on onboarding, adaptation, and long-term professional growth. The Group regularly participates in salary benchmarking surveys and, taking into account market developments, reviews remuneration systems across countries of operation to ensure a competitive, transparent, and motivating compensation policy.

As of the end of 2025, the Group employed a total of 1,339 employees, of whom 1,225 were based in Lithuania and 114 in Latvia.

LITHUANIA employees	LATVIA employees
1,225	114

The total number of employees of the Group is 1,339

¹ NPS - Net Promoter Score
12 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.1. MAIN AREAS OF ACTIVITY

2.1.1. Administration of apartment buildings

The Group’s companies provide multi-apartment building administration services, performing all actions necessary to preserve common-use property and ensure its use in accordance with its intended purpose, as well as carrying out ongoing technical maintenance. The companies ensure the mechanical stability of the main building structures, eliminate minor defects, conduct preventive maintenance and adjustment of common engineering systems, ensure safe operation, eliminate emergencies, and perform preventive maintenance, adjustment, and preparation for the heating season of heat and hot water supply systems. The Group provides multi-apartment building administration, technical maintenance, and repair services in Lithuania and Latvia.

MANAGEMENT AND CORPORATE GOVERNANCE REPORT 13 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

In Lithuania, the Group expanded its portfolio of managed multi-apartment buildings by signing new agreements with apartment owners. During the year, comprehensive property maintenance services were additionally launched for 129 multi-apartment buildings with a total area exceeding 205 thousand sq. m. The total managed portfolio amounts to approximately 10 million sq. m. as of 31 December 2025.

In order to improve service quality and better meet customer expectations, the Group companies systematically monitored the customer satisfaction index (NPS) and adjusted operational processes based on the results. The stairwell vacuum cleaning service grew significantly – from only a few stairwells maintained in 2024 to 250 premises serviced in 2025. Remote management of heating systems was also expanded – in 2025, 519 heating substations were connected to the remote management platform. This enables real-time preventive monitoring of parameters and faster response to system disruptions.

The self-service platform “BonoDomo” continues to play an important role in the Group’s customer service. In 2025, 44% of the Group’s customers used the platform, and 600 thousand invoices were paid through it. During the reporting period, the total number of user logins reached 3.9 million, reflecting the growing use of digital services.

• Area of currently maintained buildings in Lithuania amounts to 10 million m²
• Total number of user logins reached in BonoDomo was 3.9 million
• Area of currently maintained buildings in Latvia amounts to 0.8 million m²

In Latvia, the Group’s companies actively improved customer inquiry management, call center, and invoicing systems, as well as internal processes. These changes helped increase operational efficiency and improve the quality of services provided. Customer satisfaction is monitored using the Net Promoter Score (NPS), which remained stable during the first half of the year, reflecting customers’ trust in the company. The Group’s companies plan to continue expanding their operations in Latvia, both organically and through new acquisitions. Activities will also be expanded to other cities across the country. Currently, services are provided in Riga, Liepāja, Ventspils, Tukums, Jelgava, and Ogre.

14 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

Changes in the area of managed apartment buildings in the Group companies, million m²

2022	2023	2024	2025
11.9	10.6	10.3	10.6

Area of apartment buildings managed by the Group decreased mainly due to sale of business in Poland in 2023 (1.08 million m²).

15 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.1.2. Management of commercial building facilities

The Group’s companies provide commercial building facility management services that ensure reliable operation of building systems and reduced maintenance costs. The companies take care of building maintenance ranging from engineering equipment, energy resource management and efficiency, to indoor cleaning services. The Group’s commercial building facility management services are provided in Lithuania and Latvia. City Service Engineering continues to strengthen its position in the Lithuanian building maintenance market. In 2025, the company signed 41 new building maintenance contracts, maintaining a steady pace of growth and expanding the scope of its services.Among the most significant projects are contracts for the maintenance of four business centres managed by the investment company “Capitalica”. The company’s portfolio was also expanded with two major industrial facilities – the “Hommanit” and “Narbutas” factories, the new “Eurovaistinė” logistics warehouse, and the “Tower” shopping centre. In addition, cooperation with the long-term client “Telia” continues to be strengthened through the commencement of refrigeration equipment maintenance services. The company continues to implement advanced solutions focused on efficient building maintenance and preserving the value of clients’ assets. The newly signed contracts reflect growing clients’ trust and the company’s expertise in the field of facility management. 41 contracts with new customers were signed in Lithuania. A Group company operating in Latvia has recently signed several significant contracts for integrated building facility management and maintenance services. Among the key clients is “RĪGAS SATIKSME” (Riga Transport), for which ventilation and air conditioning system maintenance services are being provided across 38 sites, as well as “MAXIMA”, for which full servicing of 40 new locations is being ensured. In addition, the Group is carrying out ventilation and air conditioning system maintenance for the “Latvian Prison Administration” and will provide comprehensive maintenance of all engineering systems for the “Valmiera Drama Theatre”. Multiple contracts with customers were signed in Latvia.

16 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

Changes in the areas of commercial, public and industrial buildings in managed by the Group companies, m²

Year	Area (m²)
2022	4.7
2023	5.1
2024	5.1
2025	5.7

17 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.1.3. Maintenance and cleaning of territories

The Group’s companies provide a full range of territory maintenance and cleaning services: they carry out indoor and outdoor cleaning works, maintain private territories and the surroundings of apartment buildings, take care of snow, sand, and leaf removal, mow grass, perform specialized cleaning works, and supply hygiene products. Cleaning and territory maintenance services are provided throughout Lithuania.

In Lithuania, the Group’s companies provide stairwell and territory maintenance services for apartment buildings in Vilnius, Kaunas, Klaipėda, Šiauliai, Alytus, Šilutė, Šilalė, Telšiai, Radviliškis, Panevėžys, Palanga, and Tauragė. In commercial properties—such as shopping centers, sports clubs, exhibition halls, manufacturing and energy facilities, and others—the Group’s company provides cleaning services in Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, and Alytus. In 2025, the Group’s company began providing specialized cleaning services to new business centers in Vilnius (“Hero” and “AeroCity”) and in Kaunas to the “Žalgirio” and “Šilainių” swimming pools.

A Group company engaged in the interior cleaning of commercial, industrial, and public buildings uses only sustainable cleaning products instead of conventional chemical cleaners—products that do not contain chemicals harmful to the environment or human health. This step was motivated by the company’s desire to contribute to environmental preservation, further ensure the cleanliness of premises, and take more responsible care of the health of clients and company employees.

18 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.1.4. Other activities

In addition to their core operations, the Group’s companies also provide other services.

2.1.5. Apartment rental and property management

In 2025, the group company “Monto” started providing apartment rental and property management services. The company assists with all aspects of the real estate rental or sale process—from preparing the property to finding tenants or buyers, as well as ensuring long-term management and maintenance.

In Lithuania, in 2025 the Group’s subsidiaries implemented building renovation projects in 122 residential buildings, provided maintenance services to 203 fuel stations, and recovered debts for the benefit of clients through judicial and pre-trial procedures amounting to EUR 3.8 million.

Having become one of the largest residential rental management companies, it currently manages more than 570 real estate properties across Lithuania, Latvia, and Poland. The company’s clients include both individual property owners and institutional investors managing large, distinctive, and unique real estate portfolios. The company plans to expand further in Lithuania and other European regions. The total value of assets managed by “Monto” today exceeds EUR 70 million.

19 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

In the area of administrative processes, the organization continued to expand automation initiatives, including the use of virtual assistants to support internal operations. The application of AI solutions for document analysis and evaluation significantly reduced processing times, improved accuracy, and decreased the number of errors across administrative workflows.

Significant attention is devoted to strengthening employees’ AI literacy. Regular training sessions are conducted covering AI fundamentals, application opportunities, associated risks, and principles of responsible use. Additional targeted training is organized on a regular or ad hoc basis for relevant stakeholders, focusing on practical tool usage, risk awareness, and best practices. Training programs are tailored to different competency levels and the specific needs of individual departments, ensuring effective and responsible adoption of AI solutions across the organization.

2.2. PERFORMANCE IMPROVEMENT

In 2025, the Customer Service Centre continued the systematic implementation and development of strategic artificial intelligence solutions aimed at increasing operational efficiency, optimizing costs, and enhancing customer experience. Artificial intelligence was applied across customer service, process automation, and sales enablement, enabling faster response to customer inquiries, reducing manual workload, and ensuring service continuity during peak demand periods.

MANAGEMENT AND CORPORATE GOVERNANCE REPORT

In the area of customer service, AI solutions were deployed across both written and voice communication channels, accelerating request handling, automating repetitive tasks, and supporting uninterrupted service delivery during seasonal peak loads. Automated solutions were also introduced to support voting-related processes and proactive customer engagement, including outbound communications for service sales, customer activation, and the collection of additional service needs.

Within maintenance operations, AI-enabled solutions were implemented to improve the speed and accuracy of work order documentation and reporting. Voice-based technologies support the prompt capture of completed work information, while AI agents developed within internal systems contribute to the automation of routine internal tasks, process acceleration, and the reduction of manual effort.

20 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

On 13 January 2025 UAB “Merlangas” acquired 100% of the shares of UAB “Naujininkų ūkis” (acquisition price EUR 1,875 thousand). UAB “Naujininkų ūkis” is engaged in facility administration activities in Lithuania.

On 27 January 2025 the Company „Monto EU“ entered into a tripartite transfer agreement under which it assumed from UAB „Newsec Property Management LT“ all rights and obligations under the residential property management agreement and its amendments in relation to the transferred property portfolio in amount of EUR 180 thousand. As a result of this transaction, the Company became the new property manager and service provider for that portfolio from the effective transfer date.

On 02 April 2025 the title of SIA “Manas MĀJAS” was changed to SIA “Manas MĀJAS 1”. Other contact details did not change.

On 02 April 2025 the title of SIA “City Service” was changed to SIA “Manas MĀJAS”. Other contact details did not change.

On 05 August 2025 the title of SIA “Nebruk Jelgava” was changed to SIA “Manas MĀJAS Jelgava”. Other contact details did not change.

On 29 September 2025 UAB “Monto” acquired 100% of the shares of UAB “Stop Kaune” (acquisition price EUR 123 thousand). UAB “Stop Kaune” is engaged in rental properties management activities in Lithuania.

On 29 September 2025 UAB “Mano Būstas” acquired 100% of the shares of UAB “Namų Priežiūros Tarnyba” (acquisition price EUR 134 thousand). UAB “Namų Priežiūros Tarnyba” is engaged in administration of dwelling-houses in Lithuania.

On 27 November 2025 the title of UAB ”Butų ūkio valdos” was changed to UAB “Žemaitijos būstas”. Other contact details did not change.

On 01 December 2025 the title of SIA “Ventspils Nami” was changed to SIA “Manas MĀJAS Ventspils”. Other contact details did not change.

On 23 December 2025 UAB “City Service Engineering” acquired 100% of shares of UAB “GS servisas” (acquisition price EUR 640 thousand). UAB “GS servisas” operates a niche business specializing in the installation, maintenance, and servicing of automatic doors, windows, gates, and related systems.

On 03 December 2025 the composition of the Company’s Management Board was expanded from two to six members. The following individuals were appointed as additional members of the Management Board, effective as of that date: Giedrius Jakubauskas, Mindaugas Genys, Aistė Cikanaitė-Jankauskė, and Tomas Sujeta.

On 30 December 2025 UAB “CSG IT” was reorganized by way of division and ceased to exist as a legal entity.All rights and obligations of UAB “CSG IT” were transferred to two other subsidiaries of the Company - UAB “Mano Būstas” and UAB “Baltijos transporto valdy- mas”. No effect on parent’s unconsolidated statement of financial position. On 30 December 2025 the Company’s subsidiary UAB “Stop Kaune” was merged with UAB “Monto EU”. Following the completion of the merger, UAB “Stop Kaune” ceased to exist as a separate legal entity. No ef- fect on parent’s unconsolidated statement of financial position. 2.3. SIGNIFICANT EVENTS 21 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report The risks remain similar to last year‘s: inflation, customers’ ability to pay, competition-influenced stricter demands from commercial and residential clients, supply of qualified personnel in the market. Regarding inflation and customers‘ ability to pay Group doesn‘t see significant risk as the prices are stabilized and salary growth is stable. The scope of residential apartment building administration and maintenance services, the essential requirements for service providers, and the tariff calculation procedure are set and regulated in detail by the national and local authorities. Local authorities are empowered to set maximum tariffs for such services, together with the relevant inspectorates control the proper implementation by service providers of the administration and maintenance requirements set out in legislation. In case of incompliance with set requirements, local authorities may impose sanctions. Any claims concerning the services provided may be presented to the authorities or service providers by individual owners as well. Taking into account the aforementioned, additional risk factors in the field of apartment building administration and maintenance include any possible amendments to the enforced legislation, the frequency of adoption of such amendments, resolutions passed by central or local authorities which provide additional obligations for service providers and the results of controls carried out by various inspectorates and local authorities. Timely and correct indexation of the set maximum tariffs is also a risk factor which has an impact on the Group’s activities in the field of residential apartment building administration and maintenance. There were no other material changes in the legal regulation of the area of administration and maintenance of apartment buildings in 2025, and neither were there any decisions providing significant additional obligations for service providers. Supervising institutions did not identify any deficiencies in the provision of the services or inconsistencies with the legislative requirements.

CREDIT RISK

The Group’s procedures are in force to ensure on a permanent basis that sales are made to customers with an appropriate credit history and do not exceed an acceptable credit exposure limit. There are no individual customers exceeding 10% of segment sales. The maximum exposure to credit risk is represented by the carrying amount of each financial asset. Therefore, the management considers that its maximum exposure is reflected by the amount of trade and other receivables, net of allowance for doubtful accounts recognized at the date of the statement of financial position.

INTEREST RATE RISK

The major part of the Group’s borrowings (loans and financial lease obligations) are subject to EURIBOR which create an interest rate risk (Financial statements’ Notes 14 and 15). There are no financial instruments designated in the financial statements to manage the exposure to the interest rate risk outstanding as of 31 December 2025 and 2024. The sensitivity of the Group’s profit before tax to a reasonably possible change in interest rates would have a negative effect on the profit before the income tax in amount of EUR (296) thousand if the interest rates would increase by 1 basis point (EUR (275) thousand in the year 2024). The Group doesn‘t see significant interest rates risk as there were no significant changes in Company’s financing from last year.

SEASONALITY

The Group doesn’t have observable seasonality as usually revenues from facility management and residential building administration are based on contractual flat terms and services and works are provided continuously. However, the most profitable is Q3 as the major part of additional works are completed during this season due to favorable weather conditions.

2.4. KEY RISK ACTIVITY TYPES AND UNCERTAINTIES

In 2025 the market was stable, prices and purchasing power did not decline in comparison with 2024. Due to heavy competition in facility management market the Group had to concentrate on further efficiency of activities. Building administration tariff has not changed significantly in a year. Improved customers experience and active sales led to rapid increase in additional services sales volume. 22 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.5. THE MAIN FINANCIAL RATIOS CONCERNING THE FINANCIAL YEAR

KEY FINANCIAL INDICATORS*

	2022	2023	2024	2025
Sales in Baltics (Lithuania and Latvia)	84,145	101,561	109,891	115,566
Sales in foreign markets (Poland, CIS and Spain)**	31,207	7,919	-	-
Area under management in Lithuania and Latvia (thousand sq. m)	14,945	15,233	15,322	16,276
Area under management in foreign markets (Poland, CIS and Spain)**	1,080	-	-	-
GROSS PROFIT	-	-	-	-
EBITDA	664	10,377	10,490	13,061
EBITDA margin	0,6%	9,5%	9,5%	11,3%
Operating profit (EBIT)	(3,177)	6,577	8,336	10,825
EBIT margin	-2,8%	6,0%	7,6%	9,4%
Earnings before tax (EBT)	(4,400)	7,461	7,123	10,487
EBT margin	-3,8%	6,8%	6,5%	9,1%
Net profit	(5,179)	5,150	6,549	9,564
Net profit in foreign markets (Poland, Russia and Spain)**	(10,749)	(1,760)	-	-
Net profit margin	-6.15%	5.07%	5.96%	8.28%
Profit per share (EUR)	-0.15	0.19	0.21	0.30
Return on equity (ROE)	-28.7%	24.6%	22.7%	29.0%
Return on assets (ROA)	-6.7%	7.1%	7.1%	9.6%

• Key financial data and ratios in 2022 - 2023 are represented including subsidiaries that were disposed in 2022 - 2023. All amounts in key financial indicators are in EUR thousand unless otherwise stated.
  ** Group companies operating in Russia were disposed during 2022, Poland, Spain, Czech and Portugal disposed during 2023.

EBITDA = Net profit + Income Tax + Depreciation and Amortization + Other finance income (expenses) + Interest income (expenses) + Loss (gain) on sale of investments
EBITDA margin = EBITDA / Revenue from contracts with customers * 100 %
Profit (loss) from operations (EBIT) = Net profit + Income Tax + Other finance income (expenses) + Interest income (expenses) + Loss (gain) on sale of investments
EBIT margin = EBIT / Revenue from contracts with customers * 100 %
Profit (loss) before tax (EBT) = Net profit (loss) - Income Tax
EBT margin = EBT / Revenue from contracts with customers * 100 %
Net profit (loss) = EBT + Income Tax
Net profit (loss) margin = Net profit / Revenue from contracts with customers
Profit (loss) per share (EUR) = Net profit / Amount of shares
Return on equity (ROE) = Net profit / Equity * 100 %
Return on assets (ROA) = Net profit / Assets * 100%

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HIGHLIGHTS

Metric	2022	2023	2024	2025
Sales in Lithuania and Latvia market	84,145	101,561	109,891	115,566
Sales in foreign markets (Russia, Poland, Czech and Portugal)*	31,207	7,919	0	0
Area under management in Lithuania and Latvia	14,945	15,233	15,322	16,276
Area in foreign markets (Russia, Poland, Czech and Portugal)*	1,080	0	0	0
NET profit (loss), thousand Eur	(5,179)	5,150	6,549	9,564
NET profit (loss), margin %	-6.15	5.07	5.96	8.28

24 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.6. THE STRUCTURE OF THE COMPANY’S SHARE CAPITAL

The share capital of the Company is EUR 9,483 thousand as of 31 December 2025. It is divided into 31,610 thousand ordinary shares with the nominal value of EUR 0.30 each. All shares of the Company are paid up. As of 31 December 2025 all 31,610 thousand ordinary shares of the Company are included into the Parallel Market of Warsaw Stock Exchange and Baltic First North Foreign Shares trading list of NASDAQ Baltic Market (ISIN Code of the shares is EE3100126368). Trading Code of the shares on Warsaw Stock Exchange is CTS, on NASDAQ Baltic Market - CTS1L. The Company does not have any other classes of shares than ordinary shares mentioned above, there are no any restrictions of share rights or special control rights for the shareholders settled in the Statutes of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital. There are no shareholders with special control rights in the Company; the ordinary shares grant equal rights to all the shareholders of the Company.THE RIGHTS CONFERRED BY THE SHARES ARE AS FOLLOWS:

• to receive a portion of the Company’s profit (dividends);
• to receive the Company’s funds when the capital of the Company is reduced with intend to pay out the Company’s funds to the shareholders;
• to receive shares without payment if the capital is increased from the shareholders’ equity (bonus issue);
• to have a pre-emption right in acquiring the shares or convertible debentures issued by the Company, except in the case when the General Meeting decides to withdraw the pre-emption right for all the shareholders;
• to receive a part of the assets of the Company in liquidation;
• to attend General Meetings;
• to vote at General Meetings according to voting rights carried by their shares;
• to receive information on the activities of the Company from the Management Board at the General Meeting, unless this may cause significant damage to the interests of the Company;
• to demand the calling of a General Meeting, if this is demanded by shareholders whose shares represent at least one-twentieth of the share capital of the Company;
• to call a General Meeting, if the Management Board does not call a General Meeting within one month after receipt of such a demand by shareholders whose shares represent at least one-twentieth of the share capital of the Company;
• to demand at the General Meeting a resolution to conduct a special audit on matters regarding the management or financial situation of the Company, if this is demanded by shareholders whose shares represent at least one-tenth of the share capital of the Company;
• other property and non-property rights set out in the Commercial Code.

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2.7. THE SHAREHOLDERS OF THE COMPANY

On 31 December 2025 the total number of shareholders of the Company was 72.

2.8. RESTRICTIONS ON THE TRANSFER OF SECURITIES AND RESTRICTIONS ON VOTING RIGHTS

To the best knowledge of the Company and its management, the transfer of the shares was free from any restrictions on the transfer of the Company’s shares in 2025. Company’s shares distribution among shareholders who have more than 5 % shares of the Company as of 31 December 2025 was the following:

To the best knowledge of the Company and its management, the voting rights were free from any other restrictions on the shares issued by the Company. To the best knowledge of the Company, all shareholders of the Company have the voting right in the General Meeting.

• Number of the shareholders includes shareholders who hold more than 0.5 per cent of the votes through a nominee accounts (according to amendments that entered into force in 10 September 2020 in the Securities Register Maintenance Act (§ 6 Nominee account (subsection 9.2)) and the shareholders who hold their shares directly (not through nominee accounts).

Shareholder	Number of shares held owned	Percentage of the share capital and votes, %
UAB Unit Invest, legal entity code 305873584, address: Ozo str. 12A-1, Vilnius, Lithuania	26,813,293	84.83 %
Other private and institutional shareholders	4,796,707	15.17 %
TOTAL	31,610,000	100 %

Other private and institutional shareholders UAB Unit Invest 84.83% 15.17%

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2.9. COMPANY’S SUPERVISORY BOARD AND MANAGEMENT BOARD

2.9.1. Company’s supervisory board

The Supervisory Board is a collegial management body of the Company. The Supervisory Board shall consist of one (1) to seven (7) members elected for a term of 4 (four) years by the General meeting in accordance with the procedure provided for by the Law on Companies of the Republic of Estonia. Only a natural person may be elected to serve on the Supervisory Board. There is no limitation on the number of terms of offices a member of the Supervisory Board may serve. The Supervisory Board shall elect its chairman from among its members. The General Meeting may remove from office the entire Supervisory Board or its individual mem- bers before the expiry of their term of office. A member of the Supervisory Board may resign from office prior to the expiry of his term of office by giving a written notice thereof to the Company.

The powers of the Supervisory Board shall cover consideration of the following issues and taking of the following decisions:

• to elect and remove from the office the members of the Management Board, set their remuneration, other terms of office (employment), approve Management Board regulations;
• to appoint and remove procurators;
• for the Company to become a founder or a member of other legal entities, to acquire, transfer or dissolve (liquidate) any such entities, as well as decisions to transfer or encumber any shares (parts, shares of stock) or rights assigned thereto held by the Company to other persons;
• to establish or terminate activities of affiliates or representative offices of the Company, approve their regulations;
• to transfer, lease or encumber immovables or registered movables of the balance value exceeding 1/20 (one- twentieth) of the Company’s share capital (per each type of transaction);
• to make investments exceeding approved budget for the current financial year;
• to assume loans or debt obligations exceeding approved budget for the current financial year;
• to offer surety or guarantee of obligations of third parties for an amount in excess of 1/20 (one-twentieth) of the share capital of the Company;
• to acquire long-term assets at a price exceeding 1/20 (one-twentieth) of the Company’s share capital;
• to engage the Company into new business activities or to discontinue any specific activity currently performed;
• to approve participation and (or) conclusion of peaceful settlement agreements in legal proceedings where the amount of claims made to or by the Company exceeds 1/5 (one fifth) of the share capital of the Company;
• to issue debentures of the Company or other forms of borrowing from any natural or legal persons (regardless of the amount);
• to conclude transactions between the Company and the management board members which are beyond the scope of everyday economic activities of the Company or exceed the market price;
• to determine which information will be considered the Company’s commercial (industrial) secret and confidential information;
• to approve operating strategy, annual report, interim report, management structure of the Company, as well as positions of employees, positions to which employees are recruited by holding competitions;
• to approve merger, acquisition, reorganization, separation, foundation of new legal entities or similar corporate legal actions;
• to approve acquisition of all long-term assets (including but not limited companies, real estate, cars, tools, equipment, computers, software, telephones etc.);
• to determine the methods used by the Company to calculate the depreciation of tangible assets and the amortization of intangible assets.

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The Supervisory Board shall plan the activities of the Company, organize the Management of the Company and supervise the activities of the Management Board. The Supervisory Board also has the right to decide on other issues which are not assigned to the competence of the Management Board or the General Meeting of shareholders pursuant to law or the Statutes. The Supervisory Board analyses and assesses the Company’s draft of its annual set of financial statements and draft of profit/loss appropriation and along with annual report shall submit them to the General Meeting.

• the implementation of the operating strategy of the Company;
• the organization of the activities of the Company;
• the financial status of the Company;
• of the Management Board or the General Meeting of shareholders pursuant to law or the Statutes. The Supervisory Board analyses and assesses the Company’s draft of its annual set of financial statements and draft of profit/loss appropriation and along with annual report shall submit them to the General Meeting;
• the results of business activities, income and expenditure estimated, stocktaking;
• data and other accounting data of changes in the assets;
• quarterly investment plans.

The Supervisory Board shall analyze and evaluate documents submitted by the Management Board of the company on:

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NAME AND SURNAME	POSITION	START OF TERM	END OF TERM
Andrius Janukonis	Chairman of the Supervisory Board	June 21, 2023	June 21, 2027
Gintautas Jaugielavičius	Member of the Supervisory Board	June 21, 2023	June 21, 2027

As of 31 December 2025, the Supervisory Board of the Company comprises of the following persons:

Andrius Janukonis is the Chairman of the Supervisory Board of City Service SE. In 2004, he worked as a con- sultant to UAB “ICOR” and has since served as Chair- man of the Board of the company. From 2009 to 2015, he was Chairman of the Board of AB “City Service”. Mr. Janukonis holds a Master’s degree in Law.

Gintautas Jaugielavičius is a Member of the Super- visory Board of City Service SE. In 2004, he worked as a consultant to UAB “ICOR” and has since been a Member of the Board of the company. From 2009 to 2015, he served as a Member of the Board of AB “City Service”. Mr. Jaugielavičius holds a Bachelor’s degree in Economics.

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The Management Board of the Company comprises of six (6) members who are representing and directing the Company. The members of the Management Board are elected by Supervisory Board for a term of four (4) years. Supervisory Board has right to elect and remove from the office the members of the Management Board, set their remuneration, other terms of office (employment), approve Management Board regulations. A member of the Management Board may resign from office prior to the expiry of his term of office by giving a written notice.Management Board members are authorized to represent the Company in all legal acts which do not fall within competence are of other Management bodies. The individual members of the Management Board have competence, are accountable and responsible within the following jurisdictions and areas of activity of the Company and its directly controlled subsidiaries under Management Board regulations. Management Board member isn’t authorized to issue or repurchase shares of the Company. Also there is no agreements between the Company and its Management Board or employees. As of 31 December 2025 the Management Board of the Company comprises of the following persons:

2.9.2. Company’s management board

NAME AND SURNAME	POSITION WITHIN THE GROUP	START OF TERM	END OF TERM
Artūras Gudelis	Chairman of the Management Board	June 26, 2021	June 26, 2029
Vytautas Turonis	Member of the Management Board	June 26, 2021	June 26, 2029
Mindaugas Genys	Member of the Management Board	December 03, 2025	December 03, 2029
Aistė Cikanaitė-Jankauskė	Member of the Management Board	December 03, 2025	December 03, 2029
Giedrius Jakubauskas	Member of the Management Board	December 03, 2025	December 03, 2029
Tomas Sujeta	Member of the Management Board	December 03, 2025	December 03, 2029

They do not own any shares of the Company.

30 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

Artūras Gudelis

Artūras Gudelis has been working within the ICOR group of companies since 2006 and has served as Chairman of the Management Board of City Service SE since 2017. From 2015 to 2017, he was a Member of the Supervisory Board of the Company. Mr. Gudelis is responsible for performing the functions of the Chairman of the Management Board, ensuring the efficient organization of the Board’s activities, and overseeing the implementation of strategic decisions. He ensures proper corporate governance of the Company, coordinates the activities of the Management Board, and contributes to the development and execution of the Company’s long-term strategy. His professional experience enables him to ensure the Company’s sustainable development, transparency, and responsible management in the interests of shareholders and investors. Mr. Gudelis holds a Bachelor’s degree in Economics and a Master’s degree in Business Administration.

Vytautas Turonis

Vytautas Turonis has been working within the Group since 2004, initially as Head of the Market Development Department, and subsequently held various managerial positions. Since 2017, he has been a Member of the Board of City Service SE and is currently responsible for the Baltic countries. Mr. Turonis oversees the strategic and operational management of the Group’s activities in Lithuania and Latvia. His responsibilities include operational planning and execution, supervision of financial performance, budget control, enhancement of operational efficiency, risk management, and ensuring compliance and sustainability. Mr. Turonis holds a Bachelor’s degree in International Business.

Mindaugas Genys

Mindaugas Genys has been working within the Group since 2007. He began his career as a Project Manager, later served as Head of the Klaipėda Region, and also led the Multi-Apartment Building Administration Department. Since 2023, he has been the CEO of the “Mano BŪSTAS” group of companies, and since 2025 – a Member of the Board of City Service SE. Mr. Genys is responsible for the strategic and operational management of “Mano BŪSTAS.” His responsibilities include operational planning and implementation, ensuring service quality and efficiency, supervision of financial results, budget control, improvement of organizational processes, coordination of team performance, and creation of long-term business value. Mr. Genys has completed studies in history, theology, and business.

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Aistė Cikanaitė-Jankauskė

Aistė Cikanaitė-Jankauskė has been working within the Group for 21 years and currently serves as Chief Executive Officer of City Service SE. During this period, she has gained significant experience in legal affairs, operational management, and the building maintenance services sector. Since 2025, she has been a Member of the Board of City Service SE. Ms. Cikanaitė-Jankauskė is responsible for the legal, human resources, procurement, real estate, and fleet management functions across the Group. Her responsibilities include strengthening internal processes, increasing organizational maturity, and ensuring sustainable growth of the Group. Ms. Cikanaitė-Jankauskė is an experienced executive with competencies in data analytics, strategic planning, business development, legal affairs, and sales management. She holds a Master’s degree in Law.

Giedrius Jakubauskas

Giedrius Jakubauskas joined the City Service SE group of companies in 2025 as Group Chief Financial Officer. He has extensive experience in financial management and has worked in companies operating in the building maintenance sector, as well as in corporate groups such as AB “Achema Group,” “KIKA Group,” and others. Since 2025, he has been a Member of the Board of City Service SE. Mr. Jakubauskas is responsible for the overall financial management of the Group. His responsibilities include financial planning and control, budgeting and budget supervision, organization of accounting, and ensuring the efficiency of financial processes across all jurisdictions in which the Group operates. Mr. Jakubauskas holds a Master’s degree in Finance.

Tomas Sujeta

Tomas Sujeta has been working within the group of companies since 2006. He started his career as a Manager and later became Director of City Service Engineering. Since 2025, he has been a Member of the Management Board of City Service SE. Within the Group, Mr. Sujeta is responsible for commercial buildings segment. He oversees engineering operations management, ensuring the quality of technical solutions, service efficiency, and technological advancement across commercial real estate properties. His responsibilities include operational planning and implementation, coordination of engineering teams, process improvement, and the creation of long-term value for clients. Mr. Sujeta holds a Bachelor’s degree in Law.

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2.10. DIVIDEND POLICY

The Company does not have an approved policy on dividend distributions and any restrictions thereon. Decision on distribution of dividends to shareholders is adopted by the General Meeting.

2.11. PROCEDURE OF AMENDMENT OF THE STATUTES OF THE COMPANY

The Statutes of the Company shall be amended in accordance with the procedure provided for by the Law on Companies of the Republic of Estonia and the Statutes of the Company. The Statutes of the Company may be amended only by the decision of the General Meeting, exceptions may occur under the Law on Companies of the Republic of Estonia. The resolution regarding amendment of the Statutes of the Company shall be taken in the General Meeting by at least 2/3 of all votes conferred by the shares of the shareholders present at the General Meeting. Following the decision taken by the General Meeting to amend the Statutes of the Company, the full text of the amended Statutes shall be drawn up and signed by the person authorized by the General Meeting. The amended Statutes shall become effective and may be used as the basis following registration of the amended Statutes with the Commercial register of the Republic of Estonia. In the period since the 1st of January 2025 by the 31st of December 2025 and the day of Annual Report is released Company‘s Statutes are valid in wording registered in Estonian Commercial register on Register of Legal Entities. The relevant Statutes of the Company is available on its website at www.cityservice.eu.

2.12. MATERIAL AGREEMENTS CONCLUDED BY THE COMPANY WHICH MAY BE IMPORTANT AFTER CHANGE OF CONTROL OF THE COMPANY

There were no material agreements concluded by the Company which came into effect, were amended or terminated following a change of control of the Company during the reporting period.

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2.13. AUDITING SYSTEM AND DESCRIPTION OF THE MAIN FEATURES OF INTERNAL AUDIT AND RISK MANAGEMENT SYSTEMS IN CONNECTION WITH THE PROCESS OF THE PREPARATION OF THE ANNUAL ACCOUNTS

The Company has the Audit Committee in place. The Regulations of the activity of the Audit Committee were approved by the Supervisory Board. According to the Regulations of the activity of the Audit Committee the main functions of this committee are as follows:

• to monitor and analyze processing of financial information, including observing the process of the preparation of financial reports of the Company;
• to provide the Supervisory Board with recommendations regarding the selection and/or removal of an external audit company;
• to provide the Supervisory Board with recommendations regarding the selection and/or removal of the internal auditor;
• to observe the efficiency of the internal control systems, risk management and internal audit systems;
• to observe the process of carrying out an external audit;
• to observe how the external auditor or audit company follow the principles of independence and objectivity;
• to fulfil other functions specified in the legal acts of the Republic of Estonia, including to:
• monitor and analyze efficiency of risk management and internal control;
• monitor and analyze the process of auditing of annual accounts and consolidated accounts;
• monitor and analyze independence of an audit firm and a sworn auditor representing an audit firm on the basis of law and compliance of the activities thereof with other requirements of the Auditors Activities Act of the Republic of Estonia (in Estonian: audiitortegevuse seadus);
• make recommendations or proposals to the Supervisory Board regardingprevention or elimination of problems and inefficiencies in an organization and compliance with laws and the good practice of professional activities; ● to immediately inform the Supervisory Board about the information presented to the Audit Committee by the audit company regarding any issues arisen during the audit especially in case of significant shortcomings of internal control related to financial reports.

Members of the Audit Committee shall be appointed by the Supervisory Board. The Audit Committee consists of 3 members, one of whom shall be independent and the other two members shall be appointed out of the non-overhead staff of the Administration of the Company or Subsidiaries of the Company. The internal auditor, a member of the Management Board of the Company or a procurator or a person performing an audit of the Company shall not be a member of the Audit Committee. At least two of the members of the Audit Committee shall be experts in accounting, finance or law. The criteria of independency and eligibility requirements to be appointed a member of the Audit Committee are determined in the Regulations of the activity of the Audit Committee. The term of office of the Audit Committee shall be 4 (four) years. An uninterrupted term of office of a member of the Audit Committee shall be no longer than 12 years. A member of the Audit Committee shall have the right to resign upon submitting before 10 days written notice to the Supervisory Board. The Supervisory Board shall have the right to recall one or all the members of the Audit Committee should they fail to perform their functions and/or should they no longer conform to the requirements specified in the applicable legal acts or the Regulations of the activity of the Audit Committee.

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The principal objective of the Audit Committee is to generate higher added value to the Company. Audit Committee operates in accordance with the Regulations approved by the General Meeting of Shareholders of the Company. The Audit Committee follows in its activities the requirements of effective legal acts and seeks overall implementation of the recommendations of Corporate Governance Code, for the Companies Listed on Warsaw Stock Exchange.

MRS. ILONA MATUSEVIČIENĖ – a chairman of the Audit committee, independent member, does not work at the Company.

MRS. AUŠRA ANIULYTĖ – independent member, does not work at the Company.

The Audit Committee monitors the external audit firm of the Company at the performance of Company’s Annual Report and the Annual set of the Financial Statements audit. The conclusions of the Audit Committee are presented to the Supervisory Board of the Company in accordance with the requirements of the Regulations of the Audit Committee. The Group does not have internal audit department.

MR. ROBERTAS RATKEVIČIUS – independent member, does not work at the Company. Audit Committee members do not own shares of the Company.

Members of the audit committee of the company:

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2.14. INFORMATION ON COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Company observes applicable legislation, the rules of the Warsaw Stock Exchange, and the Best Practice for GPW Listed Companies 2025 (hereinafter also referred to as the “WSE Corporate Governance Code”). The Company intends to be as transparent as it is legally and practically possible using multilingual Company’s website. However, due to, inter alia, differences between Polish and Estonian corporate law the Company does not comply with the following rules of the WSE Corporate Governance Code:

1.5. Companies disclose at least on an annual basis the amounts expensed by the company and its group in support of culture, sports, charities, the media, social organizations, trade unions, etc. If the company or its group have such expenses in the reporting year, the disclosure presents a list of such expenses. Company does not publish the information about the amounts expensed in support of culture, sports, charities, the media, social organisations, trade unions, etc.

2.1. Companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%. The Company does not have a formal diversity policy, it does not apply any limitations to the diversity of its bodies and makes every effort to ensure diversity in bodies in all areas, also in terms of gender. The selection criteria for performing functions in the Company’s bodies are the competences, experience, education as well as time and organizational capacity of the candidate for a given function.

2.2. Decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1. As at the date of this report, the Company does not have a diversity policy with regard to the Management Board and Supervisory Board of the Company. The most important selection criteria are the competences of the members of the Management Board and the Supervisory Board. The Company is not able to appoint candidates for positions in governing bodies and to influence the decisions of the Shareholders and the Supervisory Board of the Company.

2.3. At least two members of the supervisory board meet the criteria of being independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision, and have no actual and material relations with any shareholder who holds at least 5% of the total vote in the company. However, taking into consideration that following the Statutes of the Company the Supervisory Board is comprised of three to five members, depending on circumstances, the Company does not rule out proposing to the General Meeting to elect two independent members to the Supervisory Board in the future.

2.11.5. Assessment of the rationality of expenses referred to in principle 1.5.

2.11.6. Information regarding the degree of implementation of the diversity policy applicable to the management board and the supervisory board, including the achievement of goals referred to in principle 2.1. The Company does not have a formal diversity policy with respect to the Management Board and Supervisory Board of the Company.

3.4. The remuneration of persons responsible for risk and compliance management and of the head of internal audit should depend on the performance of delegated tasks rather than short-term results of the company. The Company does not have separate units responsible for this scope of tasks that would be remunerated on this account.

3.5. Persons responsible for risk and compliance management report directly to the president or other member of the management board. The Company has no separate units responsible for the scope of tasks described in principle 3.5.

3.6. The head of internal audit reports organizationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee. The Company has no separate units responsible for the scope of tasks described in principle 3.6.

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3.7. Principles 3.4 to 3.6 apply also to members of the company’s group which are material to its activity if they appoint persons to perform such tasks. Among the entities from the Company’s group, no persons were appointed to perform the tasks referred to in principles 3.4. - 3.6.

4.1. Companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed. Company does not rule out applying thereof in the future whenever the shareholders submit such request, provided that it has sufficient technical conditions, in particular ensuring technical and legal security.

4.3. Companies provide a public real-life broadcast of the general meeting. The Company will consider the possibility of broadcasting the general meeting, provided that it has sufficient technical conditions, in particular ensuring technical and legal security.

4.9.1. Candidates for members of the supervisory board should be nominated with a notice necessary for shareholders present at the general meeting to make an informed decision and in any case no later than three days before the general meeting; the names of candidates and all related documents should be immediately published on the company’s website; Candidates for members of the Supervisory Board may be put forward by shareholders during a general meeting containing an item on the agenda regarding the appointment of supervisory board members.

4.9.2.Candidates for members of the supervisory board make a declaration concerning fulfilment of the requirements for members of the audit committee referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision and having actual and material relations with any shareholder who holds at least 5% of the total vote in the company. The Company is established in Estonia and it follows Estonian law when concerning fulfilment of the requirements for members of the Supervisory Board.

4.11. Members of the management board and members of the supervisory board participate in a general meeting, at the location of the meeting or via means of bilateral real-time electronic communication, as necessary to speak on matters discussed by the general meeting and answer questions asked at the general meeting. The management board presents to participants of an annual general meeting the financial results of the company and other relevant information, including non-financial information, contained in the financial statements to be approved by the general meeting. The management board presents key events of the last financial year, compares presented data with previous years, and presents the degree of implementation of the plans for the last year. Only members of the Management Board participate in the general meeting.

2.14. INFORMATION ON COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE 37 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Management report

2.15. REMUNERATION REPORT

The management remuneration is set based on the long-term objectives of the Group, considering the financial results of the Group and the legitimate interests of investors and creditors. The remuneration of the management in respect of the financial year 2025 was granted without derogation. The Group‘s management remuneration amounted to EUR 759 thousand in 2025 (EUR 218 thousand in 2024). Management remuneration increased due to increased number of board members in 2025.

SUSTAINABILITY STATEMENT 39 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement 39 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

BP-1 – General basis for preparation of sustainability statements
BP-2 – Disclosures in relation to specific circumstances

In this report the Group applies ESRS, ensuring that all indicators are presented in accordance with ESRS requirements.

ABOUT THE REPORT

This section presents the Sustainability Statement (hereafter - Sustainability Report and/or report) of the City Service SE group of companies (hereinafter - City Service; the Group), prepared in accordance with the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). The Sustainability Report covers the 2025 reporting period. The scope of consolidation of sustainability information is the same as that of financial statements.

Time horizons
City Service has not deviated from the short, medium or long-term horizons defined by ESRS, which are: short term - up to 1 year, medium term - 2-5 years, long term - more than 5 years.

Value chain estimation
The measurement methodology used to calculate Scope 3 GHG emissions and the level of accuracy is provided in section E1 Climate Change. Relevant assumptions, measurement uncertainties, and judgements related to quantitative metrics are disclosed where applicable alongside Scope 3 disclosures E1-6. The Group plans to explore opportunities to enhance the accuracy of metrics based on indirect data sources in the future. No other indicators include data from the upstream or downstream value chain. The Sustainability Report provides information of the Group’s performance and aims in environmental, social and governance areas covering the Group’s direct operations and the upstream and downstream value chain. The group used the option provided by the ESRS to withhold confidential information related to the standard disclosure requirements on the S1 topic - Adequate Wages.

Sources of estimation and outcome uncertainty
There are no quantitative metrics and monetary amounts disclosed in the report that are subject to a high level of measurement uncertainty. In cases where any level of uncertainty exists, it is clearly explained alongside the relevant metric, including the assumptions, approximations, and judgments applied in the measurement process, to ensure transparency and accuracy in reporting. No metrics in this report have been confirmed by an external body other than the sustainability report limited assurance provider.

Changes in preparation or presentation of sustainability information
As this is the second year in which the Group applies the ESRS standards, the approach to the preparation and presentation of the sustainability information remains consistent with the prior reporting period. No significant changes were made to the structure, methodology, or presentation of the sustainability report compared to the previous year.

40 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement 40

Reporting errors in prior periods
There were no material reporting errors identified in the prior reporting period.

Use of phase-in provisions in accordance with Appendix C of ESRS 1
Annex C of ESRS 1 provides for transitional provisions allowing certain disclosure requirements to be phased in and omitted during the initial years of ESRS application. In accordance with the Quick Fix Directive, undertakings are permitted to continue applying these transitional exemptions for an additional two-year period. Accordingly, the Group continues to apply these exemptions and has not disclosed information under SBM-1 points 40(b) and 40(c), SBM-3 point 48(e), E1-9, S1-7, S1-13, and S1-14 points 88(d) and 88(e). In addition, the Group has applied the transitional exemption from disclosures under the S2 Workers in the Value Chain standard. However, the management principles related to this topic are disclosed in accordance with the requirements of ESRS 2 in the chapter S2 Workers in the Value Chain.

Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements
This sustainability report includes the information requirements set forth in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation). The report also includes all other applicable sustainability-related disclosure requirements in accordance with the national legislation and regulatory frameworks of Lithuania, Latvia, and Estonia.

Disclosures incorporated by reference

Where they are disclosed in the report
BP-2 10 (b), (c), (d)	E1-6
BP-2 11 (b.i), (b.ii)	E1-6
E1	GOV-3 13
ESRS 2 GOV-3	E1 IRO-1, E2 IRO-1, E3 IRO-1, E4 IRO-1, E5 IRO-1, G1 IRO-1
ESRS 2 IRO-1	MDR-P - entity-specific sub-topic: Energy efficiency for society and customers
E1-2	E1-2
MDR-P	Partly covered in Minimum disclosure requirements; Sustainability Policy (MDR-P)
S1 SBM 2	ESRS 2 SBM-2
S1 SBM-3 14 (d)	ESRS 2 SBM-3
S1-1 20 (b)	S1-2
S1-4 38 (d), AR 42	S1-5
S1-5 46	ESRS 2 SBM-1
S2 SBM-2	ESRS 2 SBM-2
S4 SBM-2	ESRS 2 SBM-2
G1 GOV-1	ESRS 2 GOV-1

CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement Incorporation by reference 41 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

GOV-1 – The role of the administrative, management and supervisory bodies (G1 GOV-1)

SUSTAINABILITY GOVERNANCE

The Group’s administrative, management, and supervisory bodies are as follows:
● Supervisory Board: 2 non-executive members.
● Management Board: 6 executive members. The Management Board members do not hold any shares in the Group.
● Chief Operating Officer (COO).

The aforementioned members have extensive expertise in building management and administration, cleaning services, and energy efficiency. Their in-depth knowledge of the Group’s operations in the Baltic region (Lithuania and Latvia) ensures a strong understanding of the local regulatory and market dynamics.

Gender distribution:
● Supervisory Board: 100% male; gender diversity ratio – 0:2.
● Management Board: 83% male, 17% female; gender diversity ratio – 1:5.
● COO: 100% female.

There are no employee representatives among the administrative, management, or supervisory bodies. There are no independent members on the Supervisory Board.

More information on the administrative, management, and supervisory bodies is provided in the Management Report section: Company’s Supervisory Board and Management Board.

Sustainability governance processes
During the reporting period, the Group formally defined and embedded its sustainability governance processes through the approval of the Sustainability Policy. The roles, responsibilities, and management and oversight arrangements related to sustainability are clearly established and are described in the table below. These responsibilities are directly reflected in the Sustainability Policy, which serves as the primary document defining sustainability-related mandates, roles and oversight arrangements across the Group.

42 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

FUNCTION / ROLE	RESPONSIBILITIES
Management Board Member responsible for the Baltic State	● Defines and oversees the Group’s sustainability (ESG) strategy, strategic priorities, and objectives. ● Approves sustainability-related policies and key strategic decisions. ● Oversees the implementation of the sustainability strategy at Group level. ● Ensures prioritisation of key sustainability impacts, risks, and opportunities (IROs), including oversight of the double materiality assessment process. ● Approves sustainability targets, budgets, and key initiatives. ● Reviews and approves the Group’s sustainability reports and conducts annual reviews of progress against sustainability targets and ESRS requirements. ● Participates in sustainability-related meetings and promotes the development of a sustainability culture across the Group.
* Oversees day-to-day sustainability-related matters across the Group.
* Coordinates the implementation of sustainability policies and action plans.
* Ensures the integration of sustainability practices and targets into operational and strategic decisions, including energy efficiency initiatives and emission reduction targets.
* Together with the Sustainability Officer, oversees the identification, assessment, and prioritisation of sustainability impacts, risks, and opportunities (IROs).
* Participates in scheduled sustainability discussion meetings and provides regular updates to the Management Board Member responsible for sustainability oversight.

Sustainability Officer (Person Responsible for the Sustainability Process)

• Organises sustainability meetings and prepares agendas as required.
• Prepares sustainability KPI analyses, progress reviews, and data reports.
• Coordinates the double materiality assessment process and supports the monitoring of material IROs.
• Ensures the collection, consistency, and consolidation of data for sustainability reporting.
• Coordinates the preparation of the annual sustainability report in line with ESRS requirements.

Group Business Unit Heads

• Integrate sustainability principles into business operations, services, and product development.
• Ensure implementation of sustainability objectives at operational and client levels.
• Participate in sustainability-related investment and business development decisions.
• Monitor sustainability performance indicators within their business areas and initiate corrective actions where necessary.
• Participate in sustainability meetings and represent business unit perspectives.

43 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

FUNCTION / ROLE	RESPONSIBILITIES
Chief Financial Officer (CFO)	Ensures integration of sustainability objectives and indicators into budgeting, financial planning, and resource allocation processes. Incorporates sustainability KPIs into periodic financial and management reporting to support informed decision-making.
Human Resources Manager	Ensures employee well-being, diversity, and inclusion. Oversees occupational health and safety practices and employee-related sustainability initiatives.
Business Support Manager (Procurement)	Integrates sustainability criteria into supplier evaluation and selection processes. Implements and oversees the sustainable procurement policy.
Person Responsible for Transport Management	Manages transport-related emissions and supports the achievement of emission reduction targets. Ensures the sustainability and efficiency of the vehicle fleet.
Person Responsible for Asset Management	Oversees initiatives to improve energy efficiency and environmental performance in managed buildings and equipment.
Head of Legal Department	Ensures compliance with sustainability-related regulatory and legal requirements. Oversees data protection and compliance with applicable privacy regulations.
Head / Responsible Person for Occupational Health and Safety	Coordinates the implementation of occupational health and safety measures across the Group. Oversees occupational risk assessments and preventive action plans. Contributes to the creation of a safe and sustainable working environment.
Head of IT Department	Supports the collection, management, and analysis of sustainability-related data. Oversees the maintenance and development of sustainability data management systems.

Responsibilities of the Management Board

In addition to the sustainability governance structure described above, the Group applies formal internal control and risk management mechanisms to support the effective management and oversight of sustainability-related impacts, risks, and opportunities (IROs). Risk assessments across business areas are coordinated centrally in line with the ISO 31000 risk management standard to ensure a consistent approach at Group level. Sustainability risks are integrated into the Group’s overall risk management framework and are addressed through established internal control standards, including ISO 14001 and ISO 45001.

44 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Sustainability Expertise

City Service’s administrative, management, and supervisory bodies comprise members with a diverse range of skills and expertise directly related to the Group’s material sustainability impacts, risks, and opportunities:
* One of the Management Board Members responsible for the Baltic countries has extensive experience in environmental management and energy efficiency, gained over many years of managing Group companies.
* The Group Managing Director possesses expertise in corporate governance and regulatory compliance, ensuring alignment with ESG reporting frameworks.
* The Group’s business executives have specialised knowledge in real estate management and engineering, which are crucial for addressing sustainability risks and opportunities in the building maintenance sector.
* The management bodies have hands-on experience in implementing sustainability projects such as smart building solutions.
* Governance-related competencies are primarily concentrated within the Management Board and the COO, while social sustainability expertise resides at the business unit leadership level.

The administrative, management, and supervisory bodies collectively leverage their expertise to formulate policies and strategies, while also consulting with third-party sustainability experts to remain informed about emerging risks, opportunities, and best practices. Designated employees attend annual workshops on sustainability reporting, climate risk management, and regulatory developments to enhance their knowledge.

Independent consultants specialising in sustainability strategy and reporting assist Group’s management bodies in:
* Ensuring compliance with regulatory requirements.
* Conducting materiality assessments and reporting in accordance with ESRS frameworks.
* Providing guidance on the calculation and management of Scope 1, 2, and 3 emissions.

Their expertise helps the Group align with evolving sustainability standards and enhance transparency in ESG reporting. City Service ensures that the expertise of its governing bodies remains directly relevant to the Group’s core sustainability priorities, including:
* Managing energy efficiency initiatives in buildings.
* Reducing carbon emissions through operational improvements.
* Addressing regulatory risks related to ESG compliance.

45 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Sustainability-related IROs, such as climate change impacts, regulatory compliance, and energy efficiency trends, are integrated into the Group’s strategic planning process. The Management Board and executive managers actively incorporate sustainability considerations into decision-making processes, including major transactions and risk management. Key areas of focus include:

• Balancing trade-offs:
  • Aligning economic performance with sustainability commitments.
  • Implementing energy-saving measures while minimizing operational disruptions.
  • Prioritizing long-term value creation, even when requiring higher initial investments, such as transitioning to renewable energy.
• Major transactions: When acquisitions occur, the same sustainability objectives and requirements set for City Service apply to the acquired companies, ensuring consistency in ESG commitments.
• Corporate strategy alignment: The management team ensures that the Group’s strategic initiatives reflect long-term sustainability priorities and stakeholder expectations.

Material impacts, risks, and opportunities addressed during the reporting period

During the reporting period, the administrative, management, and supervisory bodies of City Service have specifically addressed the following key sustainability matters (IROs) listed in the table below.

GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies

The COO holds quarterly meetings with the Management Board to discuss key sustainability issues and risks. These updates cover identified impacts, risks, opportunities, and the effectiveness of policies, actions, metrics, and targets.

SUSTAINABILITY MATTER ADDRESSED	ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES
ESG discussion following the Sustainability Report audit	Management Board Member responsible for the Baltic States; COO
Group business continuity plan; Group policies, procedures, and strategies; readiness for the 2025 sustainability report audit	COO; Director of SKOLOS LT, UAB; Head of Legal Department; Human Resources Manager (Lithuania); Sustainability Officer; Business Support Manager (Procurement); Head / Responsible Person for Occupational Health and Safety; Person Responsible for Transport Management; Person Responsible for Asset Management
Sustainability action plan and actions review	COO; Director of SKOLOS LT, UAB; Head of Legal Department; Human Resources Manager (Lithuania); Sustainability Officer; Business Support Manager (Procurement); Head / Responsible Person for Occupational Health and Safety; Person Responsible for Transport Management; Person Responsible for Asset Management
Sustainability risk assessment	Business Support Manager (Procurement); Sustainability Officer
Approval of sustainability risks	COO; Business Support Manager (Procurement); Sustainability Officer
Approval of the sustainability questionnaire for partners	Business Support Manager (Procurement); Sustainability Officer
Sustainability status review	Management Board Member responsible for the Baltic States; COO
Sustainability status and action plan reviews	COO; Director of SKOLOS LT, UAB; Head of Legal Department; Human Resources Manager (Lithuania); Sustainability Officer; Business Support Manager (Procurement); Head

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Sustainability Statement

SUSTAINABILITY MATTER ADDRESSED	ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES
NPS management sessions	COO; CFO; Human Resources Manager (Lithuania); Regional Managers; Group Business Unit Heads
Transition plan preparation review	COO; Director of UAB SKOLOS LT; Head of Legal Department; Human Resources Manager (Lithuania); Sustainability Officer; Business Support Manager (Procurement); Head / Responsible Person for Occupational Health and Safety; Person Responsible for Transport Management; Person Responsible for Asset Management
Transition plan preparation review (operational level)	Sustainability Officer; Business Support Manager (Procurement); Head / Responsible Person for Occupational Health and Safety; Person Responsible for Transport Management; Person Responsible for Asset Management
Data collection for the sustainability report	COO; Project Manager (Latvia); Sustainability Officer; Head of Legal Department (Latvia); Human Resources Manager (Latvia); CFO (Latvia); Customer Service Specialist
ESG status review	Management Board Member responsible for the Baltic States; COO; Business Management Director; Commercial Director
Taxonomy data review	COO; CFO; Sustainability Officer; Financial Controller
ESG strategic aspects review	Management Board Member responsible for the Baltic States; COO

GOV-3 – Integration of sustainability-related performance in incentive schemes (E1 GOV-3)

The current remuneration policy for members of City Service’s administrative, management and supervisory bodies does not contain specific provisions on sustainability issues. Currently, incentive schemes and performance-related remuneration are focused on financial and performance indicators including revenue growth, cost efficiency and performance targets. Certain elements of sustainability due diligence are applied within the Group companies. The key due diligence aspects and steps outlined in ESRS 1, Section 4 “Due Diligence”, relate to several horizontal and thematic disclosure requirements under the ESRS framework (see a table below).

GOV-4 - Statement on due diligence

The Group is not subject to legal requirements regarding comprehensive sustainability due diligence and has not implemented a dedicated due diligence system. However, the Group continuously assesses potential negative impacts within its operations and value chain, takes measures to prevent them, and is committed to cooperating in remedying adverse impacts if it causes or contributes to them.

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Sustainability Statement

Key elements of due diligence (GOV-4)

CORE ELEMENTS OF DUE DILIGENCE	DISCLOSURES IN THE SUSTAINABILITY STATEMENT
a) Embedding due diligence in governance, strategy and business model	GOV-1, GOV-2, GOV-3, SBM-3, E1, SBM-3, S1, SBM-3, S2, SBM-3, S4, SBM-3, G1, SBM-3
b) Engaging with affected stakeholders in all key steps of the due diligence	GOV-2, SBM-2, IRO-1, S1-2, S4-2
c) Identifying and assessing adverse impacts	SBM-3, E1, SBM-3, S1, SBM-3, S2, SBM-3, S4, SBM-3, G1, SBM-3, IRO-1, E1-2, S1-1, S2, Workers in the value chain, S4-1, G1-1
d) Taking actions to address those adverse impacts	E1-3, S1-4, S2, Workers in the value chain, S4-4, G1-1
e) Tracking the effectiveness of these efforts and communicating	E1-4, S1-2, S1-5, S2, Workers in the value chain, S4-2, S4-5, G1-4

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Sustainability Statement

GOV-5 - Risk management and internal controls over sustainability reporting

The Group has established a structured and formalised sustainability reporting process supported by internal controls to ensure the accuracy, completeness, consistency, and traceability of sustainability information. Sustainability reporting risks (completeness, accuracy and timeliness) are managed as part of the Group’s overall governance and internal control framework, described in the table below.

Role / Function	Key responsibilities
Sustainability Committee / Management	● Sets strategic direction and sustainability objectives. ● Approves sustainability targets and allocates resources. ● Reviews and approves the final sustainability report.
Person responsible for the sustainability process	● Acts as the central coordinator of the sustainability reporting process. ● Organises and oversees data collection across the Group. ● Performs quality checks and consistency reviews. ● Prepares draft versions of the sustainability report. ● Ensures effective communication among all involved functions.
Department heads / Data owners	● Collect sustainability-related data within their areas of responsibility (e.g. HR, operations, finance, logistics). ● Ensure the accuracy, completeness, and reliability of the data provided. ● Submit data and supporting information to the sustainability coordinator.
Communications Department	● Supports the design, layout, and narrative development of the sustainability report. ● Coordinates publication and external communication of the report.
External auditor	● Acts as an independent third party providing limited assurance over sustainability information and disclosures.

Roles and responsibilities in the sustainability reporting process

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Sustainability Statement

Key stages in the sustainability reporting process

The sustainability reporting process is carried out through the following key stages:
● Preparation and planning. The scope of reporting, applicable standards, and responsibilities are defined and aligned with the Group’s sustainability strategy and regulatory requirements.
● Data collection. Sustainability-related quantitative and qualitative data is gathered across business units using consistent approaches and clearly assigned data ownership.
● Data consolidation and quality control. Plausibility checks, consistency reviews, and comparisons with prior periods are performed to identify potential gaps or inconsistencies. Identified issues are clarified and corrected in cooperation with the relevant data owners.
● Analysis and report drafting. Consolidated data is analysed, key trends and progress are assessed, and the sustainability narrative is prepared in line with ESRS requirements.
● Internal review and approval. Factual validation by responsible departments and strategic review by management are completed to ensure accuracy, completeness, and alignment with the Group’s objectives.
● Independent limited assurance and publication. Sustainability information is subject to limited assurance and is subsequently approved and published.

To ensure data integrity and minimise discrepancies, sustainability data from various departments, including operations, procurement, and human resources, is centrally consolidated in a dedicated SharePoint platform. City Service is also exploring AI-driven solutions to further streamline sustainability data collection in the coming years. These innovations are aimed at simplifying the process and reducing the risk of errors, ultimately enhancing the quality and reliability of future sustainability reports.

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Sustainability Statement

Main areas of activities include:
● Administration of apartment buildings.
● Management of commercial building facilities.
● Maintenance and cleaning of territories.
● Other activities (e.g. premises rental).

The Group’s business model is focused on providing high-quality services to owners of residential, commercial and public buildings in Lithuania and Latvia. The Group continuously implements convenient digital tools for clients in its operations, leveraging artificial intelligence and expert knowledge, with particular attention paid to energy resource savings in both commercial and residential buildings. In addition to its core operations, the Group is also involved in building renovation, gas station maintenance, and provides debt management services.

The main City Service customer groups are:
● Residents (inhabitants of multi-apartment buildings), who receive building administration, maintenance, renovation, and cleaning services.
● Business clients, such as owners or tenants of office, commercial, and industrial properties, who are provided with engineering system maintenance, energy solutions, and cleaning services.
● Public sector entities - public institutions that are offered engineering system maintenance, energy solutions, and cleaning services.

At the end of the reporting period the Group had 1 324 employees in Lithuania and 157 in Latvia – a total of 1 481 employees by headcount. For the 2025 reporting period, no significant changes were recorded in relation to the services or product range provided by the City Service Group. The Group continued its core activities. More detailed information about the Group’s activities is available in the Annual Report.

Key sustainability directions and goals

The table below outlines the main directions and goals of the Group’s sustainable development, and performance in 2025, aligned with its overall business strategy through 2025–2027. The Group’s strategy will further define its sustainability priorities and address key environmental and social challenges in the years ahead. To enable effective implementation, the Group plans to empower its teams through several measures: allocating a dedicated budget for sustainability initiatives, assigning new responsibilities across relevant functions, enhancing internal competencies, and expanding the sustainability team to strengthen execution capacity. The Group recognises that the adoption and implementation of a climate Transition Plan will be a key sustainability challenge in the coming years.This will require setting science-based GHG reduction targets, aligning investments and operations with those targets and integrating transition-related considerations into core business decisions.

SBM-1 – Strategy, business model and value chain

City Service operates in the Baltic region (Lithuania and Latvia). The Group is active in the building management sector: the core activity of the Group of companies is focused on the comprehensive maintenance of apartment buildings as well as commercial, public, and industrial properties.

STRATEGY, BUSINESS MODEL AND VALUE CHAIN 51

CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Sustainability pillar	Directions (policy objectives)	Indicators	Goals	Results 2024	Results 2025
Environment	Climate impact and GHG emissions reduction (in line with Paris Agreement and EU Green Deal)	GHG emissions (Scope 1, 2 & 3)	Set GHG emissions reduction targets and adopt a Transition Plan until 2028.	Calculated Scope 1, 2 & 3 emissions.	Calculated Scope 1, 2 & 3 emissions. Transition Plan is under development.
Social area	Employee health & safety	Recordable work-related incidents	Zero recordable incidents.	Fatal incidents – 0; Severe incidents – 0; Minor incidents – 17.	Fatal incidents – 1 1; Severe incidents – 0; Minor incidents – 16.
Social area	Employee well-being, fair remuneration, and engagement in company activities	Employee Engagement Surveys (incl. eNPS - Employee Experience Survey)	Employee net promoter score – minimum values: 50.6 in 2025, 52.7 in 2026 and 55 in 2027.	48.7	51.1
Social area	Employee skills development	Continuous employee skills development	No specific indicator set yet.	No specific target set.	No specific target set. Not available yet
Social area	Client experience and satisfaction	Net Promoter Score	Net Promoter Score – minimum values 2025–2027: 15 at “Mano Bustas”; 50 in the CS engineering business; 25 in the CS cleaning business; 15 in the Latvian business	-19.1 at “Mano Bustas”; 61 in the CS engineering business; Not yet measured in the CS cleaning business; -44 in the Latvian business2	20.4 at “Mano Bustas”; 71 in the CS engineering business; Not yet measured in the CS cleaning business; -25 in the Latvian business2
Social area	Personal data protection (in line with GDPR)	Major data protection incidents	Monitoring of personal data protection incidents with the aim of maintaining zero major incidents (ongoing target).	0	0 3
Governance	Ethical business, anti-corruption, and transparency	Confirmed breaches of business ethics/corruption	0 confirmed breaches of business ethics/corruption (ongoing target).	0	0

1 The incident refers to a severe criminal act that occurred during the course of work-related activities.
2 The results vary significantly as different business units began measuring NPS at different times. Improvements are planned to enhance and standardise the measurement process going forward.
3 In 2025, five minor incidents were recorded, defined as isolated cases with very limited effect. No major incidents, such as large-scale data exposure (e.g., recipient lists exceeding 100 individuals or disclosure of sensitive data), were registered during the year.

Sustainability is an integral part of the Group’s strategy, reflected in its services, stakeholder relationships, and long-term goals across key markets. In the commercial services segment, the Group provides solutions focused on improving energy efficiency, reducing electricity and heating costs, and enhancing indoor air quality. For private customers, the Group contributes to the renovation of residential buildings, aiming to increase their energy performance and overall property value. In Lithuania, the Group seeks to supply green electricity - specifically wind power - for the common areas of apartment buildings, supporting the broader shift toward renewable energy sources.

Since 2023, City Service Cleaning business has adopted a policy to actively use only environmentally friendly cleaning products that are certified for their ecological credentials (e.g., EcoLabel). The Group promotes the use of biodegradable and eco-certified cleaning agents wherever possible. Clients are offered sustainable product options, with the flexibility to select what best suits their specific needs. In exceptional cases, such as when dealing with more persistent or complex cleaning challenges, non-ecological products may still be used to ensure effective results, although such use is minimised and carefully considered.

52 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Description of the business model and value chain

Upstream value chain	Group’s activities	Downstream value chain
Activity	• Various goods and services (from external suppliers) • Hire of equipment/means • Transport services	• Administration of apartment buildings • Commercial building management • Cleaning and maintenance of premises and grounds • Artificial intelligence solutions for building management • Maintenance and repair of engineering systems • Energy management and renovation • Technical and energy audits of buildings • IT services • Petrol station maintenance services • Debt management services • Premises rental
Location	Contractors (partners): Lithuania, Latvia; Suppliers (Tier 1): EU; Suppliers (Tier 2 and beyond): global	Lithuania, Latvia

Stakeholders and key business actors
• Investors (shareholders)
• Municipalities and other public authorities, regulatory authorities
• Suppliers and partners (incl. contractors).
• Value chain employees
• Customers (residents, commercial and public building owners, incl. communities)

Sustainability standards are also embedded in supplier relationships. The Group previously followed a Supplier Code of Conduct, which has since been enhanced and expanded. As of 2024, all new contracts with partners include mandatory compliance with the updated Code of Conduct, supported by contractual annexes. In addition, during 2025 the Group conducted a partner survey to assess suppliers’ and business partners’ approaches to sustainability, awareness of ESG principles, and alignment with the Group’s expectations. The results of this engagement support the further development of supplier sustainability management practices and dialogue with partners.

Inputs

City Service operates in the building management sector, with a focus on residential, commercial, industrial, and public properties. The Group’s business model is built on reliable inputs such as skilled human resources and advanced technological solutions (including AI). To ensure long-term value creation, the Group collaborates with suppliers who comply with EU standards, fostering durable partnerships through long-term contracts. The supply chain is diversified to reduce geopolitical and economic risks, and continuous employee training ensures high service quality and technological adaptability.

Outputs and outcomes

The Group’s outputs are integrated building management services aimed at increasing energy efficiency, reducing operational costs, and improving the living and working environment for clients. Services include engineering system maintenance, energy audits, renovation projects, cleaning, emergency services, and public space upkeep. For customers, these services translate into cost savings, increased comfort, and access to modern, energy-efficient buildings. For investors, long-term service contracts ensure steady revenue streams and reduce operational risks. For society, the Group’s work supports environmental goals, particularly CO₂ reduction, and contributes to improved urban quality of life.

53 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

The table below lists the Group’s key stakeholders, the methods of their engagement, the most important topics, and a brief explanation of how the Group incorporates stakeholder opinions and interests into its business model and strategy. These aspects are described in more detail throughout the report in the relevant topic-specific sections. The main stakeholders are groups for whom the Group’s activities are particularly relevant and/or have a significant impact, as well as individuals and organisations that have substantial influence on the Group itself.

The content of the Sustainability Report is prepared with consideration of the views, needs, and expectations of all the key stakeholders. The administrative, management and supervisory bodies are regularly informed about the views and interests of stakeholders concerning the Group’s sustainability-related impacts through regular meetings, strategy sessions, etc.

SBM-2 – Interests and views of stakeholders (S1 SBM-2, S2 SBM-2, S4 SBM-2)

City Service’s stakeholder engagement processes are designed to ensure that the needs, expectations and concerns of all stakeholders are heard and appropriately reflected in the Group’s activities.

STAKEHOLDER ENGAGEMENT 54 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Stakeholder engagement overview

Key stakeholders	Category	Methods of engagement	Key concerns / expectations	How the Group takes into account the concerns and expectations of stakeholders
Employees	Affected stakeholders	• Employee opinion survey (eNPS) • Employee meeting (conference) • Internal communication channels	• Employee well-being, fair remuneration, and engagement in company activities	The Group takes active ongoing measures to improve employee well-being, engagement, and improve remuneration system
Customers (residents, commercial and public building owners, incl.

55 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model

DOUBLE MATERIALITY ASSESSMENT

Double materiality matrix

The matrix below summarises sustainability topics linked to the Group’s material impacts, risks and/or opportunities (IRO’s). The vertical axis represents impact materiality, while the horizontal axis – financial materiality. Sustainability topics are considered material when they are related to material IRO’s through either impact or financial materiality, or both.

Impact materiality
High	• E1 Climate Change: Climate impact and GHG emissions • S1 Own Workforce: Employee health & safety • S1 Own Workforce: Employee well-being, fair remuneration, and engagement in company activities • G1 Business Ethics: Ethical business, anti-corruption, and transparency • S1 Own Workforce: Competent employees now and in the future • S4 Consumers and End-Users: Client experience and satisfaction
Medium	• S2 Value Chain Workers • E1 Climate Change: Energy efficiency for the public and clients
Low
Financial materiality	Low

The table below details the Group’s material (ESRS) sustainability topics, sub-topics and their relationship to material impacts, risks/opportunities, while indicating where they are concentrated in the value chain. The topics have been grouped to provide a comprehensive picture and to reveal all information that may be relevant to stakeholders.

56 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Material topic	Material sub-topic	Material sub-sub-topic	Material IROs	Description	Value chain (Upstream / Own Operations / Downstream)	Time horizon
E1 Climate change	Climate change mitigation	GHG emissions	Positive / Actual / Potential / Risks / Opportunities	GHG emissions in direct activities and throughout the value chain contributing to climate change. The Group operates in a sector classified as high climate impact (NACE code L), and its activities generate greenhouse gas (GHG) emissions both directly and across the value chain.	Upstream ✓ Own Operations ✓ Downstream ✓	All
	Adaptation to climate change	Transition opportunities	Opportunities	Opportunity to reinforce the Group's image with science-based GHG reduction targets and actions. Developing science-based GHG reduction targets and taking supportive action is both a necessity and an opportunity for the Group.	Upstream ✓ Own Operations ✓ Downstream ✓	Medium and long term
			Opportunities	Opportunities to expand climate change adaptation services (e.g. cooling systems). The Group already provides energy efficiency services for residential and commercial buildings.	Upstream ✓ Own Operations ✓	Medium and long term
	Energy		Opportunities	Opportunity of fleet renewal with electric vehicles and other applicable energy efficiency measures (cost reduction, reputational benefits).	Upstream ✓ Own Operations ✓	Medium and long term
	Energy efficiency for society and customers			The Group’s energy efficiency services contribute to the EU Green Deal’s goals of climate change mitigation. The Group delivers services that are EU taxonomy-eligible.	Upstream ✓ Own Operations ✓ Downstream ✓	All
			Opportunities	Opportunities to expand climate change mitigation and adaptation services (e.g. cooling systems).	Upstream ✓ Own Operations ✓	Medium and long term
S1 Own workforce	Working conditions	Health and Safety	Negative / Potential	Accidents at work worsen workers’ physical and emotional health and cause financial losses. While the Group’s business model does not lead to elevated health and safety risks, minor workplace accidents do occur.	All	All
			Positive / Actual	Additional health-related benefits, such as, vaccinations, and partnerships contribute to the health and wellbeing of employees.	All	All
			Risks	Reduced worker productivity due to injuries. The Group considers this risk to be well managed.	All	All

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Material topic	Material sub-topic	Material sub-sub-topic	Material IROs	Description	Value chain (Upstream / Own Operations / Downstream)	Time horizon
S1 Own workforce	Equal treatment and opportunities for all	Training and skills development	Positive / Actual	An engaging work environment and educational opportunities improve the emotional background. The Group already provides training and educational opportunities in key focus areas.	All	All
			Risks	High employee turnover due to lack of training and competencies. Lack of adequate onboarding and career development opportunities can lead to increased employee turnover.	All	All

58 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Material topic	Material sub-topic	Material sub-sub-topic	Material IROs Description	Value chain (Upstream)	Value chain (Own Operations)	Value chain (Downstream)	Time horizon
S2 Value chain workers	Working conditions	Health and safety	Work-related accidents among contractors performing tasks on behalf of the Group. Partners (upstream value chain workers) operate at the Group’s client sites, making it essential for the Group to ensure worker health and safety. This responsibility applies equally across all business segments and is overseen on an on-going basis. Occupational safety is prioritised as the most important social factor and is explicitly addressed in partnership agreements. Expectations are clearly defined in the Group’s Code of Conduct for Partners and form part of the supplier selection process.	✓	✓	✓	All
S4 Consumers and end-users	Customer experience and satisfaction		Providing poor-quality services can lead to reputational damage and financial losses. Poor quality services can lead to customer dissatisfaction, financial loss, and psychological damage. Providing high-quality services is closely linked to the Group’s reputation, which is critical to the continuity of its operations. As such, service quality is managed as a key risk and business priority across all segments. Poor service could harm both the Group’s reputation and its clients, although this risk is not unique to the Group’s business model and applies broadly across industries.			✓	All
		Disputes between clients	Disputes between clients can lead to lengthy and costly legal proceedings. This potential impact is most relevant to the Group’s residential building maintenance segment, which operates under strict legal regulation and is therefore more exposed to misunderstandings or human error. While disputes between customers may arise on service delivery related matters, they are rarely the direct result of the Group’s actions.		✓	✓	All
		Digitalisation and 24/7 self-service	Digitalisation and 24/7 self-service improve customer experience, accessibility, and speed. This is already a strong area of focus and a key opportunity for further improvement, aimed at enhancing the Group’s efficiency and competitiveness while delivering clear benefits to clients. It is relevant across all business segments and projects, and is partly driven by shareholder expectations. A positive financial impact is expected to materialise over the long term.		✓	✓	All
		Digitalised processes	Digitalised processes and self-service increase customer convenience and satisfaction.		✓	✓	Long term
		New technologies	New technologies increase operational efficiency and competitiveness, strengthens the long-term growth of Group’s businesses. New technologies - including AI, innovation, and robotics - enhance operational efficiency and strengthen the Group’s competitiveness. As an integral part of the business model across all segments, this is already a priority and presents ongoing opportunities for continuous improvement and long-term growth.		✓	✓	All
Information-related impacts for consumers and/or end-users	Privacy and data protection	Personal data breaches	Personal data breaches can lead to discrimination, material and non-material damage for clients. While no significant incidents have occurred to date, a major data breach could negatively impact clients. This risk is linked to the Group’s business model, which involves handling personal data of individuals in the residential buildings segment, and managing contractual obligations and commercially sensitive information in the commercial segment. The risk is expected to decrease over time as the Group continues to invest in cybersecurity.		✓	✓	Short and medium term
		Inappropriate use of personal data	Inappropriate use of personal data may violate the GDPR and lead to legal consequences. This is a general business risk not specific to the Group’s business model.		✓	✓	All
		Increasing costs of data protection	Increasing costs of data protection due to stricter laws and breach prevention. A large client base and upcoming legal changes require the Group to invest in additional security measures. More investments are foreseen in the medium to long term.		✓	✓	Medium and long term

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Material topic	Material sub-topic	Material sub-sub-topic	Material IROs Description	Value chain (Upstream)	Value chain (Own Operations)	Value chain (Downstream)	Time horizon
G1 Business ethics	Corporate culture	Corruption and bribery	Corruption and non-compliance with the law can damage the Group’s reputation and cause material and psychological damage to stakeholders. While not directly linked to the Group’s business model or specific segments, ongoing prevention of negative impacts remains essential. The likelihood of corruption is very low and effective prevention measures are in place. However, if such an incident were to occur, it could have a severe and widespread impact on employees, clients, and other stakeholders.		✓	✓	All
		Violations of the law	Violations of the law (e.g., competition law or illegal subcontracting) can lead to financial and reputational damage for the Group. This risk is more relevant in the residential buildings segment due to stricter regulation and a higher likelihood of human error. As reputation is critical to business continuity, the risk is actively and continuously managed aiming to prevent any cases of non-compliance, and is expected to diminish in the long term.		✓	✓	Short and medium term
		Implementing good sustainability governance	Implementing good sustainability governance practices can enhance Group’s image and attract customers and partners. As sustainability-related services (energy efficiency improvement) are central to the Group’s commercial building maintenance business, growing client demand presents clear opportunities to further strengthen the Group’s sustainability governance and reputation.		✓	✓	Medium and long term
	Corruption and bribery	Prevention and detection	The availability of a whistleblowing channel increases the possibility of reporting corruption anonymously. The availability of an anonymous whistleblowing channel increases the likelihood of reporting potential corruption. This is considered a market best practice and serves as a preventive measure, though it is not directly linked to the Group’s business model.

60 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Sustainability Statement

The results of the DMA were reviewed and reconfirmed for the 2025 reporting period, with no material changes identified. While the ESRS does not prescribe a specific methodology for conducting a double materiality assessment, the Group developed a process that adheres to the principles and guidelines outlined in ESRS 1, considering the nature and circumstances of its operations, as well as the established sustainability practices already in place. The Group relies on the general requirements of ESRS and the European Financial Reporting Advisory Group’s (EFRAG) practical application guidance. In the materiality assessment, the Group considered both impact and financial materiality and their interrelationships.

The principle of double materiality:

• A sustainability issue is considered material from an impact perspective when it relates to an entity’s significant actual or potential positive or negative impacts on society or the environment, both in the short, medium and long term. This reflects an inside-out perspective.
• A sustainability issue is financially material when the sustainability issue arises to risks or opportunities that have, or could have, a significant effect on the entity’s changes in its business activities, financial position, financial performance, cash flows, access to finance or cost of capital in the short, medium and long term. This reflects an outside-in perspective.

The materiality assessment was carried out in consultation with the external and internal experts, taking into account the best available information at the time of the assessment. It is noted that it is the first time the Group has carried out a double materiality assessment, and the Group is continuously improving its processes to identify actual and potential IROs, and therefore the list of sustainability matters identified in this assessment is not exhaustive, but may be reviewed and expanded in the future.

The process of identifying and assessing material IROs involved the managers and specialists responsible for the activities related to the Group’s material sustainability topics, as identified in the previous materiality assessment and/or identified in the list of sustainability issues to be included in the materiality assessment under ESRS 1, AR 16. The company has assessed the materiality of each sustainability matter individually, in accordance with the ESRS criteria, taking into account the specificities of its operations, sector and circumstances. The assessment of materiality was based, to the extent possible, on objective information, expert insights and generally accepted scientific advice. IROs have been assessed in the short, medium and long-term, which are consistent with the definitions of the time periods set out in ESRS.

The main steps in the assessment of the Group’s double materiality are:

• Understanding the operational context: value chain and business model.
• Overview of stakeholder views.
• Identification of existing and potential IROs.
• Assessment of the materiality of IROs.
• Final review and validation of the materiality of IROs.

The DMA process in 2025 was based on a review of the DMA conducted in 2024. No separate stakeholder engagement was carried out as part of this process; instead, the assessment relied on ongoing stakeholder engagement practices.

Impact materiality assessment

The impact materiality assessment has been carried out by considering the Group’s significant actual or potential, positive or negative impacts on people and the environment in the short, medium and long term. The materiality of actual negative impacts was based on the severity of the impact, and the materiality of potential negative impacts was based on their severity and likelihood. The severity of impacts was determined on the basis of scale, scope and the nature of the irreversible impacts. In assessing the potential adverse impact on human rights, the severity of the impact was considered more important than the likelihood. The significance of positive impacts was based on scale and scope in the case of actual impacts, scale, scope and likelihood in the case of potential impacts.

IRO-1 - Description of the process to identify and assess material impacts, risks and opportunities (E1 IRO-1, E2 IRO-1, E3 IRO-1, E4 IRO-1, E5 IRO-1, G1 IRO-1)

To identify and assess material impacts, risks and opportunities, the Group conducted a double materiality assessment (DMA) in 2024 in alignment with the ESRS criteria.

61 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Sustainability Statement

Based on the impact materiality assessment methodology, actual and potential impacts have been classified into three categories:

• High – Considered highly significant/material (final assessment scores: 15–25).
• Medium – Deemed material unless justified otherwise (final assessment scores: 4–14).
• Low – Assessed as non-material (final assessment scores: 0–3).

The materiality assessment analysed the entire value chain of the Group companies, taking into account the operations of the Group companies, the business relationships, the geographical location of the value chain and the affected stakeholders. The materiality of topics was also assessed at the company level to ensure that significant impacts are not excluded, even if they occur within a single company rather than across the entire Group.

Based on various sources (see list below) and information available to the Group, the factors that could lead to a risk of negative impacts were taken into account. The assessment was carried out by evaluating the views of stakeholders as identified by the Group through its ongoing dialogue with stakeholders in its operations (for a more detailed disclosure, see SBM-2), publicly available information provided by competent organisations and the stakeholder survey carried out as part of a previous materiality assessment.

To accurately assess climate change risks and opportunities, the Group conducted an evaluation of both transition and physical climate risks and opportunities. The results of this assessment are presented in detail in the section Climate Risk Assessment. Biodiversity-related transition and physical risks were not assessed separately, as the Group’s companies are not located in or near protected biodiversity areas, and no direct negative impact on biodiversity, nor related risks or opportunities have been identified in the Group’s operations.

Financial materiality assessment

The financial materiality assessment was carried out by taking into account the magnitude of the financial impact and the likelihood of risks and opportunities that may arise in the immediate business or value chain in the short, medium and long term. Based on the financial materiality assessment formula, the risks and opportunities have been categorised into three categories:

• High – Considered highly significant/material (final assessment scores: 15–25).
• Medium – Deemed material unless justified otherwise (final assessment scores: 4–14).
• Low – Assessed as non-material (final assessment scores: 0–3).

Risks and opportunities related to sustainability may arise from the Group’s impacts on the environment and stakeholders or resource dependencies. Therefore, the assessment of financial materiality has been carried out in conjunction with the assessment of impact materiality by first assessing the impacts and then considering the linkages of impacts and dependencies to risks and opportunities. Dependencies were analysed both during the value chain assessment, such as reliance on key resource inputs like skilled human capital, and throughout the process of identifying and assessing IROs. The double materiality assessment prioritised sustainability-related risks, i.e. risks directly related to the sustainability matters previously identified by the organisation and the sustainability topics given by the ESRS standard.

The DMA was carried out by senior management and specialists responsible for the relevant sustainability topics. The results were reviewed and approved by the Management Board. The DMA process is not integrated into the Group’s overall risk management or overall management processes—however, it is intended to be integrated in the future, in line with the improvement of sustainability governance and adherence to established sustainability practices in the market.Sustainability-related risks are not currently prioritised separately within the Group’s overall risk management framework. Risk management is conducted in accordance with the ISO 31000 standard. All risks, including sustainability and other business risks, are assessed using the same evaluation methodology, and their prioritisation is based on the outcome of the risk assessment process. At present, strategic risks include certain sustainability-related risks, reflecting their relevance to the Group’s long-term objectives.

62 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

The parameters of severity and likelihood of impact, and magnitude and likelihood of financial impact have been assessed on the basis of available information from various sources:

• Policies developed and implemented by the Group, reports and internal documents.
• Value chain analysis: nature of activities, geographical locations.
• Stakeholder survey results, 2023, and other information available to the Group on sustainability issues relevant to stakeholders.
• Annual reports from other industry players and identified material topics.
• Industry rankings and materiality maps such as SASB and MSCI.
• City Service’s Annual Report.
• Auditor’s Report on the Organization’s Management System Compliance with the requirements of ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 standards.
• City Service’s employee engagement survey results.
• Risk Management Procedure of UAB “Mano Būstas”.
• Risk Management Policy of UAB “Mano Būstas” Group of Companies.
• City Service Risk List and Risk Management Measures Plan.

The Group reviews the double materiality assessment process annually and updates the information provided. The results of the DMA were reviewed and reconfirmed for the 2025 reporting period, with no material changes identified. A list of the disclosure requirements followed in preparing the sustainability report is provided in the section “List of ESRS Disclosures Included in This Report”. The Group’s DMA was followed by the identification of material disclosures and data points to be reported, in alignment with EFRAG’s Implementation Guidance 3 (IG 3). The Group’s material sustainability topics are addressed through the corresponding topical ESRS standards, ensuring a focused and standards-aligned reporting approach. Data points selected from the ESRS directly reflect the Group’s material topics and have been included in this report to provide a transparent and complete picture of sustainability performance. This process ensures that no material information has been omitted.

IRO-2 – Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement

The Group’s Sustainability Report is prepared based on a double materiality assessment, with the process and results described in detail in the IRO-1 disclosure section. A table of all data points required under other EU legislation, as referenced in Annex B of the ESRS 2 standard, is available in the section “List of datapoints in ESRS that derive from other EU legislation.” Climate change is considered a material topic for the Group and is included in this report.

Minimum disclosure requirements

The Group applies and discloses information in accordance with the minimum disclosure requirements on policies (MDR-P), actions (MDR-A), metrics (MDR-M), and targets (MDR-T), along with the relevant disclosure requirements set out in the topic-specific ESRS further in this report.

63 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Sustainability policy (MDR-P)

In 2025, as part of strengthening its sustainability framework, the Group approved a comprehensive Sustainability Policy covering all material sustainability matters identified through the double materiality assessment. The policy establishes a common approach to managing sustainability-related impacts, risks, and opportunities across the Group and refers to the European Sustainability Reporting Standards (ESRS) as the main reporting and disclosure framework.

Key elements of the Sustainability Policy include:
* Sustainability principles and objectives across environmental, social, and governance (ESG) areas.
* Integration of sustainability considerations into the Group’s activities, decision-making, and risk management processes.
* Commitments related to responsible resource use, climate impact mitigation, employee well-being, ethical and transparent business conduct, data protection, customer satisfaction, and responsible use of digital technologies, including artificial intelligence.
* Monitoring of sustainability performance through defined indicators and regular reporting.
* Group’s commitment to its key stakeholder groups, including employees, clients, partners, and society, as defined in the policy.

The Sustainability Policy applies to all Group companies and employees. Its provisions are further detailed in other internal documents, strategies, and action plans. The policy covers the Group’s own operations and activities. Sustainability expectations towards partners and suppliers are addressed through separate procurement- and partner-related arrangements.

Overall responsibility for the implementation of the Sustainability Policy lies with the Group’s senior management, in line with the governance arrangements described in the Sustainability Governance section of this report. The Sustainability Policy is communicated to all Group employees through internal document management systems and written or electronic means and is publicly available on the Group’s website.

Other policies addressing specific material sustainability topics are described further in this report within the respective topic-specific sections. All policies are applicable to every employee, and all staff members are required to familiarise themselves with them. All policies were developed with stakeholder interests in mind. While no direct stakeholder engagement was conducted specifically for their development, policies reflect the Group’s understanding of key stakeholder expectations and are aligned with established good practice.

64 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

ENVIRONMENTAL AREA E1

GOV-3 Integration of sustainability-related performance in incentive schemes	E1 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model and E1 IRO-1 – Description of the processes to identify and assess material climate-related impacts, risks and opportunities
E1 CLIMATE CHANGE	This information is provided alongside the ESRS 2 GOV-3 disclosure in the chapter Sustainability Governance of this report.

65 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

CLIMATE RISK ASSESSMENT

To prepare for the upcoming CSRD sustainability reporting requirements, the Group undertook a climate risk and opportunity assessment in 2024, aligning with ESRS standards and the ‘Do No Significant Harm’ criteria for climate change adaptation under the EU Taxonomy Regulation (Annex A of Delegated Regulations No. 2021/2178 and No. 2023/2486). The methodology followed guidance from the Task Force on Climate-related Financial Disclosures (TCFD) and scenario analysis recommendations tailored to non-financial undertakings. The results of this assessment were reviewed and remain applicable for the 2025 reporting period, with no material changes identified.

The assessment involved scenario-based analysis to identify and evaluate both physical climate risks and transition-related risks and opportunities. It was based on the best currently available data and will be reviewed on an annual basis and/or in the event of significant changes in business context or updated forecasts of relevant physical or transition developments.

Assessment of physical climate risks

The assessment of physical climate risks was conducted in proportion to the scale and expected duration of the Group companies’ operations. Three time horizons were defined: short-term (up to 2026), medium-term (2026–2030), and long-term (2030–2050). The Group assessed climate-related hazards across its entire operations and supply chain. During the climate risk assessment, the full list of physical hazards provided in Annex A of Commission Delegated Regulation (EU) 2021/2139 was examined. A comprehensive assessment concluded that there are no material physical climate risks to the Group’s operations or assets.

As the Group operates in the service sector, with activities distributed across urban areas in Lithuania and Latvia, no potential risks were identified that could have a material financial impact. While isolated incidents may occur – such as heavy rainfall affecting drainage systems in buildings under the Group’s maintenance – these are unlikely to significantly impact operational performance. Only in extreme cases might there be minor effects, such as temporary customer dissatisfaction, but these would not affect the Group’s overall economic activity.

To carry out the assessment, the Group used climate data from two key national sources: the report Preparation of Climate Change Projections until 2100, commissioned by Lithuania’s Ministry of Environment (with projections based on a 12x12 km grid), and the Study on climate change risks by the middle of the 21st century by the Lithuanian Hydrometeorological Service (with regional-level projections). Both sources were used to analyse the IPCC’s RCP4.5 and RCP8.5 scenarios, which show very little difference in projected outcomes up to mid-century. Since reliable data was available for Lithuania, and Latvia’s climate conditions are very similar, the Group confidently used Lithuanian projections to assess risks in both countries, given that operations in both markets are similar and focused in urban areas.During the assessment, the Group carefully evaluated whether any physical hazards might result in materially different outcomes for its operations in Latvia. No such risks were identified.

Assessment of transition risks and opportunities

The assessment of transition risks was carried out using the following timeframes: short-term (up to 2026), medium-term (2026–2030), and long-term (2030–2050). The Group analysed expected and potential developments under a net-zero emissions by 2050 scenario, which aligns with the Paris Agreement and the overarching goal of the European Green Deal to achieve climate neutrality by 2050. The evaluation followed the TCFD guidelines, using the TCFD classification of climate-related transition events.

At this stage, the climate risk assessment remains preliminary, as the Group has not yet developed a formal Transition Plan and therefore the costs of transitioning to lower-emission technologies remain uncertain. The assessment will be refined once the Transition Plan is in place.

The main assumptions considered, along with the identified transition risks and opportunities, are summarised in the table below.

1 Preparation of climate change projections, national study on the vulnerability and sensitivity of Lithuanian municipalities to climate change, and adaptation plan for the most vulnerable municipality. Stage I: Preparation of climate change projections until 2100. Introductory report (report prepared by order of the Ministry of Environment of the Republic of Lithuania, Riga, 2022). Available here.
2 Study on Climate Change Risks by Mid-21st Century (Lithuanian Hydrometeorological Service, Climate and Research Division; analysis conducted on behalf of the Lithuanian Banking Association, Vilnius, 2023). Available here.

66 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Overview of climate-related transition risks and opportunities

No risks/opportunities | Medium – material | Low – not material | High – highly significant/material

Transition events (TCFD)	Risks	Opportunities	Materiality 2026	Materiality 2030	Materiality 2050
Policy and Legal
Increased pricing of GHG emissions	No risks identified	As fuel prices rise, demand increases among clients for building energy efficiency improvements (e.g. insulation and related upgrades). This trend presents an opportunity to expand service offerings and strengthen the Group’s position as a provider of sustainable, energy-efficient building maintenance solutions and is expected to materialise medium- to long-term.
Increased reporting obligations	No risks identified	No opportunities identified
Mandates on and regulation of existing products and services	No risks identified	Regulatory requirements for building energy efficiency are becoming more stringent. This drives growing demand for related services and opens opportunities to develop and offer new, regulation-aligned solutions. These services are already embedded in the Group’s business model and are expected to contribute to even stronger financial performance in the medium to long term.
Litigation risk	No risks identified	No opportunities identified
Technology
Costs to transition to lower emissions technology	No risks identified	No opportunities identified
Unsuccessful investment in new technologies	No risks identified	No opportunities identified
Substitution of existing products and services with lower emissio	No risks identified	Replacing existing products and services with lower-emission alternatives presents an opportunity to strengthen the Group’s competitive advantage by aligning with client expectations for sustainable solutions and positioning the Group as a forward-looking market leader. This is expected to increasingly drive material performance improvements in the medium to long term.

67 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Transition events (TCFD)	Risks	Opportunities	Materiality 2026	Materiality 2030	Materiality 2050
Market
Changing consumer behavior	No risks identified	Clients are increasingly favouring sustainable solutions, creating a favourable environment for expanding the Group’s offering of environmentally responsible services.
Uncertainty in market signals	No risks identified	No opportunities identified
Increased cost of raw material	More complex sales processes due to rising raw material costs, which increase the overall cost of works (suppliers unable to guarantee raw material availability). This may limit sales growth potential. However, as the Group’s services are not easily substitutable, the overall financial impact is expected to be limited.	No opportunities identified
Reputation
Shifts in consumer preferences	No risks identified	No opportunities identified
Increased stakeholder concern or negative stakeholder feedback	No risks identified	Increased investor concern regarding sustainability issues may lead to more favourable financing conditions. However, as such benefits largely depend on state-level policy decisions which are unknown, the opportunity is not considered material.
Stigmatization of sector	No risks identified	No opportunities identified

Climate related impact assessment

As part of its climate-related impact assessment, the Group considered the nature of its operations and calculated its Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions. Based on this assessment, the Group concluded that its impact on climate change is material. At present, the Group does not foresee any significant changes to its operations in the short, medium, or long term that would affect this materiality evaluation.

E1-1 – Transition plan for climate change mitigation

Currently City Service does not have a Transition Plan in place. A Transition Plan is a roadmap that outlines how an organisation will adapt its business model and operations to contribute to a low-carbon, climate-resilient economy. The Group plans to adopt a Transition Plan aimed at implementing a long-term climate change mitigation strategy aligned with the EU Green Deal and the Paris Agreement. The Transition Plan is expected to be adopted within the next 2–3 years, taking into account stakeholder expectations and updates to the operational strategy.

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E1-2 – Policies related to climate change mitigation and adaptation

The Group’s overarching policy covering all material sustainability matters, including climate change, is described in the Sustainability Policy (MDR-P) section. The Sustainability Policy covers all material impacts, risks, and opportunities related to climate change identified through the double materiality assessment, including climate change mitigation; climate change adaptation and energy efficiency. In particular, the policy includes the following commitments:

• Reducing energy consumption and greenhouse gas emissions in the Group’s operations and supporting clients in reducing their energy use and related emissions.
• Improving energy efficiency and promoting building modernisation, including the use of smart and digital solutions in managed buildings.
• Increasing the use of renewable energy in the Group’s operations and encouraging renewable energy solutions in client-managed properties.
• Developing and offering sustainable, energy-saving services, including the expansion of solutions based on smart technologies and client-focused sustainability support.
• Ensuring transparent and consistent measurement and disclosure of greenhouse gas emissions.

In addition, the Group’s policy commitments are further detailed through its Quality, Environmental Protection, and Occupational Health and Safety Policy, which has been developed in alignment with relevant ISO standards. This policy applies to all Group operations, including those carried out by outsourced partners and contractors executing projects on behalf of clients. The COO holds the highest level of accountability for its implementation.

The policy addresses climate change mitigation, climate change adaptation and energy efficiency through the following commitments:

• Compliance and continuous improvement of the environmental management system, in line with applicable legal and regulatory requirements.
• Ongoing monitoring and evaluation of environmental and energy performance.
• Oversight of external processes, ensuring that selected partners meet legal and environmental protection standards.
• Renovation of buildings and equipment to reduce environmental impact.
• Enhancing client environments by maintaining engineering systems in an environmentally responsible manner.
• Reducing annual energy consumption, taking into account climate and other influencing factors.
• Developing and implementing energy-saving services to support broader sustainability goals.
• Continuously improving employee competencies in environmental protection and energy management, while fostering engagement, responsibility, and professional development.
• Raising awareness among employees about their roles in preserving the environment and promoting energy efficiency.
• Ongoing improvement of the integrated management system, including performance analysis and actions to increase its overall effectiveness.

The policy has been developed with stakeholder interests taken into consideration, particularly those of clients, employees, and nature as a silent stakeholder, recognising expectations for the Group’s contribution to environmental protection. The policy is made available to all Group employees, who are responsible for its implementation, via the Group’s internal document-sharing platforms.

E1-3 – Actions and resources in relation to climate change policies and E1-4 – Targets related to climate change mitigation and adaptation

The Group’s GHG emission reduction strategy (Transition Plan) is currently under development.As such, City Service has not yet adopted specific actions, targets, or a formal action plan related to climate transition without a clear strategy in place. Consequently, there are no relevant disclosures to report at this stage in relation to the minimum disclosure requirements for MDR-A or MDR-T. To track its performance to date, the Group has been calculating its Scope 1 and Scope 2 greenhouse gas (GHG) emissions since 2022. Since 2024, Scope 3 emissions were included in the assessment. The results are presented in the tables below.

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Energy efficiency for society and customers (MDR-P, MDR-A, MDR-T)

The policy addressing this sub-topic is provided alongside the E1-2 disclosure in this report. Energy efficiency services form a core part of City Service’s value proposition to both society and its customers. The Group provides these services as part of its ongoing commercial and residential building maintenance activities, contributing to reduced energy consumption and lower utility costs for clients.

In the commercial building segment, Group companies deliver tailored energy consumption reduction plans to clients. While actual savings vary depending on the specific project, the objective is always to optimise building performance and improve energy efficiency outcomes.

In the residential segment, energy efficiency is promoted through renovation projects, the installation of smart metering systems, and partial renovation initiatives. These efforts are aimed at reducing household energy bills and improving the overall energy performance of buildings.

Entity-specific metric – energy savings from renovated residential buildings

As an entity-specific metric, the Group monitors energy savings achieved through residential building renovation projects. Based on available data for the 2024–2025 period, a total of 28 apartment buildings were renovated. The estimated annual energy savings achieved in these buildings amount to approximately 9,746.49 MWh, calculated based on average post-renovation performance. As a result of these energy savings, an estimated 502.51 tonnes of CO₂ emissions are avoided annually.

Taxonomy eligible activities

Given that energy efficiency services are taxonomy-eligible under the EU Taxonomy for sustainable activities - specifically contributing to climate change mitigation - the Group plans to enhance the granularity of its Taxonomy disclosures in future reporting periods. Currently, the disclosure of taxonomy-aligned revenue from these services is limited only to installment of EV charging stations. This is due to system limitations in the Group’s accounting practices, which currently do not allow for the precise identification and calculation of revenue specifically linked to other energy efficiency services. The Group is committed to addressing this matter over the next few years, with the goal of achieving more detailed and accurate reporting on its contribution to the EU’s climate goals.

E1-5 – Energy consumption and mix

The data on energy consumption is considered accurate, with a high level of reliability. Calculations are based on the Group’s fuel accounting records reflecting actual consumption, as well as purchase invoices, meter readings, and guarantees of origin provided by energy suppliers for electricity procured from the grid and district heating used in buildings under operational control.

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Energy consumption and mix

Energy consumption and mix	2022	2023	2024	2025	YoY (change vs. previous year)	vs. Base year
(1) Fuel consumption from coal and coal products (MWh)	0	0	0	0	-	-
(2) Fuel consumption from crude oil and petroleum products (MWh)	9 407.04	10 645.37	10 443.68	10 054.05	-3.7%	6.9%
(3) Fuel consumption from natural gas (MWh)	186.98	350.32	243.42	228.37	-6.2%	22.1%
(4) Fuel consumption from other fossil sources (MWh)	0	0	0	0	-	-
(5) Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh)	796.24	583.19	390.87	396.58	1.5%	-50.2%
(6) Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5)	10 390.26	11 578.88	11 077.97	10 679.00	-3.6%	2.7%
Share of fossil sources in total energy consumption (%)	99.9	100	98.3	98.5	-	-
(7) Consumption from nuclear sources (MWh)
Share of consumption from nuclear sources in total energy consumption (%)
(8) Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh)	11.39
(9) Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh)	0	0	196.15	162.38	-17.2%
(10) The consumption of self-generated non-fuel renewable energy (MWh)	0	0	0	0
(11) Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10)	11.39	0	196.15	162.38	-17.2%	-
Share of renewable sources in total energy consumption (%)	0.1	0	1.7	1.5	-	-
Total energy consumption (MWh) (calculated as the sum of lines 6, and 11)	10 401.65	11 578.88	11 274.12	10 841.38	-3.8%	4.2%

Notes: The cells marked in grey in the table are not applicable. The Group does not generate energy from renewable sources. Production from non-renewable sources amounted to 10 687.1 MWh in 2024 and 10 278.0 MWh in 2025.

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Energy intensity

Energy intensity is calculated by dividing the total energy consumption from activities in high climate impact sectors by the Group’s total revenue. In the Group’s case, this means dividing total energy consumption (in MWh) - as all activities fall under sectors classified as high climate impact - by the revenue figure in euros reported in the Group’s financial statements (see cross-reference in the note below the following table).

E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions

GHG emissions inventory methodology

The emission assessment was carried out in accordance with the Greenhouse Gas Protocol (GHG Protocol) guidelines and ESRS requirements. The calculation includes not only CO₂ but also all other greenhouse gases generated by the Group’s operations (CO₂, N₂O, CH₄), converted into CO₂ equivalent using standard conversion factors from IPCC AR5, with the final total reported as CO₂e. The chosen consolidation approach for emissions is the operational control method. The base year for Scope 1 and Scope 2 GHG emissions is 2022. For Scope 3 emissions, the base year is 2024, as it marks the first year in which the Group assessed emissions resulting from its value chain activities.

All emission-generating activities falling under the operational control approach are included in the Group’s greenhouse gas (GHG) assessment. Exceptions are made only in cases where the reliability of available data is very low and the estimated emissions are considered immaterial to the overall GHG inventory. To determine whether emissions are material, the Group applies a quantitative threshold: emission sources contributing more than 5% to the total GHG inventory are classified as material and prioritised for monitoring and management. Sources of emission factors used are detailed in the tables below.

Energy consumption and mix	2022	2023	2024	2025	YoY (change vs. previous year)	vs. Base year
Total energy consumption from activities in high climate impact sectors per net revenue from activities in high climate impact sectors (MWh/Eur)	0.0001236	0.0001114	0.0001026	0.00009381	-7.3%	-23.0%

Notes: 1) According to the NACE codes, the Group’s activities are classified under the sector L68.3.2 - Management of real estate on a fee or contract basis, which is a high climate impact sector. Therefore, all Group’s revenue is included in the calculation of energy intensity. 2) Cross-reference to the corresponding revenue amount in the financial statements: Consolidated statement of comprehensive, Revenue from contracts with customers.

72 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Calculation and reporting coverage of Scope 1 and Scope 2 GHG emissions

Scope 1 and Scope 2: Assessment boundaries, assumptions, and data accuracy

Assessment category	Assumptions and boundaries	Emission sources	Emission factor sources	Data accuracy / reliability of calculations
Scope 1 – Direct emissions	The company does not operate any commercial refrigeration equipment and therefore does not incur any refrigerant leakages.	Fuel for company- controlled transport. Natural gas for heating.	LT NIR 2024, Annex V, Natural gas, Table 5-3. Country specific CO2 emission factors of natural gas, t/TJ; EMEP/EEA air pollutant emission inventory guidebook 2019.	The data is accurate, and the reliability of the calculation is high. It is based on the company’s fuel accounting records reflecting actual consumption.
Scope 2 – Indirect emissions (purchased electricity and district heating)	Procured electricity and district heating	Electricity procured from the grid and district heating used in buildings under operational control.	AIB 2023 Residual Mix (market-based) and Production Mix (location-based). Heating emission factors are based: on official letter from the Ministry of Environment of the Republic of Lithuania regarding the approval of the construction technical regulation STR 2.01.02:2016 “Design and Certification of Building Energy Performance.”	The data is accurate, and the reliability is high. It is based on purchase invoices, meter readings, and supplier-provided guarantees of origin documentation.

Note: Guarantees of Origin bundled with Energy purchases are used in some locations (100%). Please refer to the E1-5 part for Green/Brown electricity shares.Calculation and reporting coverage of Scope 3 GHG emissions 100% of the Group’s Scope 3 GHG emissions were assessed using data based on specific activities within its upstream and downstream value chain. However, no primary data (0%) was obtained from suppliers or other value chain entities. The table below summarises Scope 3 assessment categories, calculation sources and methods, and the resulting data accuracy. Categories no. 1-7 are significant Scope 3 categories based on the magnitude of their estimated GHG emissions and other criteria provided by GHG Protocol. 73 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Scope 3: Assessment boundaries, assumptions, and data accuracy

Assessment category	Assumptions and boundaries	Emission sources	Emission factor sources	Data accuracy / reliability of calculations
1. Purchased goods and services	All expenses for the purchase of goods and services are assessed.	Goods (materials and goods purchased for resale) and third- party services acquired during the reporting year.	BEIS 2019 (DEFRA), inflation adjusted (EU27).	The data is accurate; however, the reliability of the calculations is considered medium, as the assessment is based on expenditure data.
2. Capital goods	All expenses related to capital goods are assessed.	Long-term asset acquisitions during the reporting year.	BEIS 2019 (DEFRA), inflation adjusted (EU27).	The data is accurate; however, the reliability of the calculations is considered medium, as the assessment is based on expenditure data.
3. Fuel and energy-related activities (not included in Scope 1 or 2)	Based on actual energy and fuel consumption	Well-to-tank emissions related to fuel and energy, and energy transmission losses.	IEA 2022; DEFRA 2023; Glec v3, based on Ecoinvent v3.9.1	The assessment is based on accurate data.
4. Upstream transportation and distribution	All transportation expenses (third-party services) are assessed.	Transportation expenses (third- party services)	BEIS 2019 (DEFRA), inflation adjusted (EU27).	The data is accurate; however, the reliability of the calculations is considered medium, as the assessment is based on expenditure data.
5. Waste generated in operations	Waste generated based on GPAIS report. Additionally small amounts of municipal waste is generated in offices - it is assessed together with office maintenance costs and not included in Waste category due to limited data access.	Expenses for waste management services.	DEFRA 2023.	The data is accurate and based on GPAIS reports.
6. Business traveling	Includes expenses for flights, bus and train tickets, taxis, and accommodation.	Expenses for flights, bus and train tickets, and taxi services, as well as accommodation costs.	BEIS 2019 (DEFRA), inflation adjusted (EU27).	The data is accurate; however, the reliability of the calculations is considered medium due to the expenditure-based assessment.
7. Employee commuting	Employee commute using private vehicles (results extrapolated from survey responses).	Employee commuting by private transport.	DEFRA 2023.	The data is accurate but extrapolated from a subset of employees who participated in the survey.
8. Upstream leased assets	Not applicable. All related emissions are included in Scope 1 and 2 assessments.	Some refrigerant leakage
9. Downstream transportation	Not applicable.
10. Processing of sold products	Not applicable.
11. Use of sold products	Not applicable.
12. End-of-life treatment of sold products	Not calculated due to low materiality and lack of reliable data. Assessment planned in future years.
13. Downstream leased assets	Not applicable.
14. Franchises	Not applicable.
15. Investments	Not applicable.

74 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

GHG emissions	Retrospective Base year 2022	2023	2024	2024 YoY (change vs. previous year)	Vs. Base year
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO2eq)	2 563.24	2 927.93	2 852.25	2 742.35	-3.9%
Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)	0	0	0	0
Scope 2 GHG emissions*
Gross market-based Scope 2 GHG emissions (tCO2eq)	238,34	216,04	86,82	85.81	-1.17%
Gross location-based Scope 2 GHG emissions (tCO2eq)	138.63	80.228	70,70	60.86	-14.0%
Significant Scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions (tCO2eq)		10 668,18	10 851.1	1.7%
1. Purchased goods and services		8 029.08	8168.99	1.7%
2. Capital goods		295.51	369.79	25.1%
3. Fuel and energy- related activities (not included in Scope 1 or 2).		1 000.14	945.2	-5.5%
4. Upstream transportation and distribution		645.16	756.26	17.2%
5. Waste generated in operations		0.19	0.36	86.9%
6. Business traveling		6.56	37.91	477.6%
7. Employee commuting		691.54	573.03	-17.1%
8. Upstream leased assets		0	0
9. Downstream transportation		0	0
10. Processing of sold products		0	0
11. Use of sold products		0	0
12. End-of-life treatment of sold products		0	0
13. Downstream leased assets		0	0
14. Franchises		0	0
15. Investments		0	0
Total GHG emissions (tCO2eq)
Total GHG emissions (market-based) (tCO₂e)	2 751.27**	3 110.30**	13 607,26	13 679.69	0.5%
Total GHG emissions (location-based) (tCO₂e)	2 651.56**	2 974.54**	13 627,07	13 684.51	0.4%

• In 2025 small amount of biogenic emissions were emitted due to district heating usage, however they are not estimated due to lack of detail in emission factors data.
• **Scope 1&2 only
  Notes: The cells market in grey in the table are not applicable. City Service group does not own any other companies that are not integrated within the Group boundary and therefore does not allocate additional GHG emissions. There were slight changes in organisational structure, however the impact in GHG inventory was negligible, so there is no impact on GHG comparability over the years. 75 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

GHG intensity

Greenhouse gas (GHG) intensity is calculated by dividing the total GHG emissions by the Group’s total revenue. In the Group’s case, this means dividing total GHG emissions (in tonnes of CO₂ equivalent) by the revenue figure reported in the Group’s financial statements, expressed in euros (Eur) (see cross-reference in the note below the following table). The indicator is presented using both the location-based and market-based approaches.

E1-7 – GHG removals and GHG mitigation projects financed through carbon credits and E1-8 – Internal carbon pricing

The Group does not currently have such practices in place and therefore has no relevant information to disclose.

GHG intensity per net revenue	2024	2025	YoY
Total GHG emissions (location-based) per net revenue (tCO2eq/Eur)*	0.00012382	0.00011837	-4.4%
Total GHG emissions (market-based) per net revenue (tCO2eq/Eur)*	0.00012400	0.00011841	-4.5%

Notes: *Cross-reference to the corresponding revenue amount in the financial statements: Consolidated statement of comprehensive, Revenue from contracts with customers. 76 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

EU TAXONOMY DISCLOSURE

The European Union (EU) Taxonomy (Regulation 2020/852 and associated delegated acts) serves as a classification system for economic activities, aiming to channel private investment into environmentally sustainable initiatives that align with the EU Green Deal’s environmental goals. The Taxonomy outlines six key environmental objectives:
* CCM – Climate Change Mitigation.
* CCA – Climate Change Adaptation.
* WTR – Sustainable Use and Protection of Water and Marine Resources.
* CE – Transition to a Circular Economy.
* PPC – Pollution Prevention and Control.
* BIO – Protection and Restoration of Biodiversity and Ecosystems.

It sets out science-based technical screening criteria to assess the environmental sustainability of various economic activities. Activities that fall within the scope of the Taxonomy and meet these criteria may be considered environmentally sustainable and eligible for green investment.

A taxonomy-eligible activity is one that is included in the delegated acts of the Taxonomy Regulation. Companies whose revenues (Turnover), capital expenditures (CapEx), and/or operating expenses (OpEx) are linked to such activities are required to analyse and report the Taxonomy Key Performance Indicators (KPIs) and the extent to which their operations meet the relevant Taxonomy criteria.

A taxonomy-aligned activity is one that not only qualifies as eligible but also fulfills the technical screening criteria by:
* Substantially contributing to at least one of the six environmental objectives.
* Doing no significant harm (DNSH) to the other five objectives.
* Complying with the minimum safeguards requirements.

This section, prepared in accordance with the Taxonomy Regulation and its delegated acts, presents the key performance indicators of the Group (City Service and its subsidiaries), along with details on how its activities align with the Taxonomy framework. In this report, the Group applies the updated EU Taxonomy disclosure requirements established by the “Omnibus” Delegated Act, applicable from 1 January 2026.

Identification of eligible activities

The Group is engaged in activities and/or makes investments that qualify as taxonomy-eligible and contribute to climate change mitigation. The Group does not currently perform activities that support the other five environmental objectives under the EU Taxonomy.

The scope of taxonomy-eligible activities disclosed by the Group is determined based on the availability and reliability of financial data required to calculate and substantiate the Taxonomy KPIs in line with regulatory requirements. Where relevant financial information is not available or cannot be robustly evidenced, such activities are not included in the disclosed taxonomy scope, as this would not provide meaningful or decision-useful information.At the same time, the Group is committed to gradually expanding the scope and quality of its Taxonomy disclosures as data availability and internal processes further develop. In this context, the 2025 disclosures have been expanded to include information related to CCM 6.6 Freight transport services by road, covering the acquisition of freight vehicles for the 2024 and 2025 reporting periods.

Evaluation of alignment with Taxonomy criteria

In 2024, the Group conducted a comprehensive climate risk assessment to evaluate whether the identified activities do not cause significant harm to climate change adaptation. The assessment found no material physical risks to the Group’s operations or assets, therefore meeting the DNSH criterion for this objective. The results of the assessment remain applicable for the 2025 reporting period, with no material changes identified.

The Group also complies with the minimum safeguards requirement. It adheres to socially responsible and ethical business practices, following the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Compliance was verified based on the European Commission’s Platform on Sustainable Finance’s “Final Report on Minimum Safeguards” (2022).

The Group’s activity CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) is 77 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement considered taxonomy-aligned. The Group generates revenue from the installation of EV charging stations, an activity recognised as making a substantial contribution to climate change mitigation. As no physical climate-related risks were identified during the assessment, this activity meets the DNSH criteria for climate change adaptation and is fully aligned with the Taxonomy criteria. Compared to 2024, the revenue disclosed for this activity in 2025 is approximately four times lower, reflecting fluctuations in demand, as the Group implemented fewer related projects during the reporting period.

In 2025, the Group’s list of taxonomy-aligned activities was expanded to include an additional activity. City Service leased a new building in Kaunas that meets the criteria of Taxonomy activity CCM 7.7. The building was constructed in 2025 and was assessed against the substantial contribution criteria applicable at the time of acquisition, in line with the requirements of CCM 7.1. The building’s primary energy demand, used to determine its post-construction energy performance, is at least 10% lower than the threshold for nearly zero-energy buildings. Specifically, the building’s primary energy consumption amounts to 58.95 kWh/m² per year, which is approximately 65% lower than the applicable normative level. No additional substantial contribution criteria are applicable to this building. No physical climate-related risks were identified during the assessment, and therefore the activity meets the applicable DNSH criteria for climate change adaptation. This contributed to a significant increase in taxonomy-aligned CapEx and OpEx percentages compared to 2024.

Other activities are not considered aligned, either because they do not meet one or more of the necessary criteria, or due to the absence of sufficient information to support a conclusive assessment.

Calculation of Taxonomy KPIs

The following information presents the calculated Taxonomy indicators. All disclosed indicators related to Taxonomy-eligible activities avoid double counting, as each specific amount of revenue/expenditure is attributed to only one Taxonomy activity.

During the reporting period, the Group made additional efforts to more accurately identify and allocate expenses and revenues to Taxonomy-eligible and Taxonomy-aligned activities. As a result, the 2024 figures have been recalculated to ensure consistency and improved comparability with the current year. The updated 2024 data are reflected in the following indicators: Taxonomy-aligned activities in previous financial year 2024 and Proportion of Taxonomy-aligned activities in previous financial year 2024.

Revenue (turnover)

A portion of the revenue received by the Group in 2024–2025 corresponds to the following activity defined in the Taxonomy:
* Installation of EV charging stations – CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings).
* Leasing of premises to third parties – CCM 7.7 Acquisition and ownership of buildings.
* Leasing of vehicles to third parties – CCM 6.6 Freight transport services by road and CCM 6.5 Transport by motorcycles, passenger cars and light commercial vehicles.

The share of revenue from this taxonomy-aligned activity was determined by dividing the revenue from services directly related to this activity by the Group’s total revenue. Turnover corresponds to “Revenue from contracts with customers” as reported in the financial statements (i.e. operating revenue recognised under applicable accounting standards). Cross-reference to the corresponding revenue amount in the financial statements: Consolidated statement of comprehensive, Revenue from contracts with customers.

Capital Expenditures (CapEx)

A portion of the Group’s long-term asset investments in 2024 corresponds to the following activities defined in the Taxonomy:
* Acquisition of assets under IFRS 16 – CCM 7.7 Acquisition and ownership of buildings.
* Acquisition of EV charging stations for own use – CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings).
* Acquisition of cars/commercial vehicles – CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles.

The share of capital expenditures (CapEx) relating to taxonomy-eligible activities was calculated by dividing the investments associated with eligible activities, as defined in the Taxonomy, by the Group’s total capital expenditures in accordance with the Taxonomy definition. The note in the consolidated financial statement that best corresponds to the CapEx indicator under the Taxonomy is note 17 Leases. 78 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Operational Expenditures (OpEx)

A portion of the Group’s operating expenses in 2024–2025 corresponds to the following activities defined in the Taxonomy:
* Maintenance, repair and/or cleaning costs related to buildings for own use – CCM 7.7 Acquisition and ownership of buildings.
* Maintenance and/or lease-related costs of EV charging stations – CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings).
* Maintenance and/or repair of Group’s vehicles – CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles; CCM 6.6 Freight transport services by road.

The definition of operating expenses (OpEx) under the EU Taxonomy differs from the commonly accepted definition in financial accounting, covering only a narrow subset of expenses.

Based on the Group’s current expense classification structure, only a limited portion of OpEx can be separately identified and directly attributed to Taxonomy-eligible activities. Specifically, costs related to technical maintenance and repairs are partially identifiable and were included in the calculation. Consequently, the disclosed OpEx is based solely on clearly identifiable amounts and represents the best available estimate given the current level of cost granularity.

The OpEx indicator was calculated by dividing the operating expenses related to taxonomy-eligible activities by the total operating expenses as defined under the Taxonomy. 79 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

KPI	Total	Proportion of Taxonomy- eligible activities	Taxonomy-aligned activities	Proportion of Taxonomy- aligned activities	Breakdown by environmental objectives of Taxonomy- aligned activities	Proportion of enabling activities	Proportion of transitional activities	Not assessed activities considered non-material	Taxonomy-aligned activities in previous financial year 2024	Proportion of Taxonomy- aligned activities in previous financial year 2024
					Climate Change Mitigation	Climate Change Adaptation	Water	Circular Economy	Pollution	Biodiversity
					(E where applicable)	(T where applicable)
	Text	%	Thousand Eur	%	%	%	%	%	%	%
Turnover	115566	0%	43.82	0.04%	0.04%	-	-	-	-	-
CapEx	3713	32%	1000.02	26.93%	26.93%	-	-	-	-	-
OpEx	768	48%	13.96	2%	2%	0.64%	0	0%	0	0.00%

1 The 2024 data has been restated for turnover and CapEx. In the 2024 sustainability report, taxonomy-aligned activities were disclosed as EUR 166.28 thousand in turnover and EUR 0 in CapEx, representing 0.2% of turnover and 0% of CapEx. The restatement reflects updated revenue figures based on the latest financial data, as well as the identification in 2025 of a previously unreported amount of CapEx related to the acquisition of electric vehicle charging stations for own use.

SUMMARY KPIs

Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (summary KPIs)

Note: In the 2024 sustainability report, the following figures were reported: taxonomy-aligned revenue from CCM 7.4 amounted to EUR 166.28 thousand (0.2%). No taxonomy-eligible but non-aligned revenue from CCM 7.7 and CCM 6.5 was reported.TURNOVER KPI Proportion of turnover from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (activity breakdown)

Economic activities	Code(s)	Taxonomy-eligible KPI (Proportion of Taxonomy-eligible Turnover) %	Taxonomy-aligned KPI (monetary value of Turnover) Thousand Eur	Taxonomy-aligned KPI (Proportion of Taxonomy-aligned Turnover) %	Climate Change Mitigation %	Climate Change Adaptation %	Water %	Circular Economy %	Pollution %	Biodiversity %	Enabling activity (E where applicable)	Transitional activity (T where applicable)	Proportion of Taxonomy-aligned in Taxonomy-eligible %
Acquisition and ownership of buildings	CCM 7.7	0.10%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Installation, maintenance and repair of electric vehicle charging stations in buildings (and in parking spaces attached to buildings)	CCM 7.4	0.04%	43.82	0.04%	0.04%	-	-	-	-	-	E	-	100%
Freight transport services by road	CCM 6.6	0.002%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Transport by motorcycles, passenger cars and light commercial vehicles	CCM 6.5	0.03%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Sum of alignment per objective				0.04%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Total KPI (Turnover)		0.16%	43.82	0.04%	0.04%	0.00%							23%

80 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

CAPEX KPI Proportion CapEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (activity breakdown)

Economic activities	Code(s)	Taxonomy-eligible KPI (Proportion of Taxonomy-eligible Turnover) %	Taxonomy-aligned KPI (monetary value of Turnover) Thousand Eur	Taxonomy-aligned KPI (Proportion of Taxonomy-aligned Turnover) %	Climate Change Mitigation %	Climate Change Adaptation %	Water %	Circular Economy %	Pollution %	Biodiversity %	Enabling activity (E where applicable)	Transitional activity (T where applicable)	Proportion of Taxonomy-aligned in Taxonomy-eligible %
Acquisition and ownership of buildings	CCM 7.7	27.35%	999.05	26.91%	26.91%	-	-	-	-	-	-	-	98%
Installation, maintenance and repair of electric vehicle charging stations in buildings (and in parking spaces attached to buildings)	CCM 7.4	0.03%	0.97	0.03%	0.03%	-	-	-	-	-	E	-	100%
Freight transport services by road	CCM 6.6	0.00%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Transport by motorcycles, passenger cars and light commercial vehicles	CCM 6.5	4.52%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Sum of alignment per objective				26.93%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Total KPI (CapEx)		32%	1000.02	27%	0.03%	0.00%							84%

Note: In the 2024 sustainability report, no taxonomy-aligned CapEx was reported. Taxonomy-eligible but non-aligned CapEx from CCM 7.7 amounted to EUR 52.31 thousand (2%), and CapEx from CCM 6.5 amounted to EUR 67.36 thousand (2%). 81 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

Note: In the 2024 sustainability report, taxonomy-eligible but non-aligned OpEx from CCM 6.5 amounted to EUR 186.15 thousand (34%). The activities CCM 7.7 and CCM 6.6 were not reported.

OPEX KPI Proportion OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (activity breakdown)

Economic activities	Code(s)	Taxonomy-eligible KPI (Proportion of Taxonomy-eligible Turnover) %	Taxonomy-aligned KPI (monetary value of Turnover) Thousand Eur	Taxonomy-aligned KPI (Proportion of Taxonomy-aligned Turnover) %	Climate Change Mitigation %	Climate Change Adaptation %	Water %	Circular Economy %	Pollution %	Biodiversity %	Enabling activity (E where applicable)	Transitional activity (T where applicable)	Proportion of Taxonomy-aligned in Taxonomy-eligible %
Acquisition and ownership of buildings	CCM 7.7	1.52%	9.04	1.18%	1.18%	-	-	-	-	-	-	-	77%
Installation, maintenance and repair of electric vehicle charging stations in buildings (and in parking spaces attached to buildings)	CCM 7.4	0.64%	4.92	0.64%	0.64%	-	-	-	-	-	E	-	100%
Freight transport services by road	CCM 6.6	29.81%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Transport by motorcycles, passenger cars and light commercial vehicles	CCM 6.5	16.20%	0	0.00%	0.00%	-	-	-	-	-	-	-	0%
Sum of alignment per objective				1.82%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Total KPI (CapEx)		48.17%	13.96	1.82%	0.64%	0.00%							4%

82 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

S1 SBM-2 – INTERESTS AND VIEWS OF STAKEHOLDERS

This information is provided alongside the ESRS 2 SBM-2 disclosure in the chapter Stakeholder Engagement of this report.

S1 SBM-3 – MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL

As a service and technology-driven company, City Service’s business model is dependent on engaged and skilled employees. The risks and opportunities arising from this dependency are detailed in the ESRS 2 SBM-3 disclosure table “Material Impacts, Risks, and Opportunities”, under the sub-topics “Training and Skills Development” and “Engagement/Satisfaction.”

S1 OWN WORKFORCE

Employee well-being, fair remuneration, engagement, and continuous skills development are strategic priorities that directly influence the Group’s success and customer satisfaction, while driving positive impacts on employees. The Group continuously manages and updates its strategy in these topics. Given the nature of the work - often performed on-site and outdoors - the Group places strong emphasis on employee health and safety. In addition, it ensures the protection of employee’s personal data.

The workforce subject to material impacts by City Service’s operations are the Group’s hired employees. There are no widespread or systematic negative impacts caused by the Group’s operations or related to individual incidents, as defined in ESRS. Of course, the risk of occupational safety accidents is ever-present. However, The Group effectively mitigates these risks through proactive measures. A continuous monitoring of the supply chain and the activity of contractors is also carried out in order to prevent negative impacts. Currently there are no material impacts foreseen on the Group’s own employees that arise from the Transition Plan, as such a plan is not approved yet. There are no operations that would be at a significant risk of incidents of forced labour, compulsory labour or child labour.

The Group strives to ensure that all employees, regardless of the type of employment contract, are subject to the same standards of working conditions and social protection. 83 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement

S1-1 – POLICIES RELATED TO OWN WORKFORCE (MDR-P)

In 2025, the Group strengthened its sustainability governance by adopting a comprehensive Workforce Management Policy covering all material workforce-related topics. The policy sets out the Group’s approach and commitments to responsible workforce management, including respect for human rights, equal opportunities and inclusion, occupational health and safety, fair remuneration and social protection, skills development and career opportunities, work–life balance, employee engagement, and social dialogue. It addresses the management of material workforce-related impacts, risks, and opportunities and supports their integration into the Group’s overall strategy and business model.

The policy applies to the entire workforce of City Service SE Group, including employees working under employment contracts and, where relevant based on the nature of activities, self-employed persons and third-party workers (such as contractors and suppliers’ employees) performing work for or on behalf of the Group at its managed sites. The policy covers direct operations of all Group companies and geographies and extends, where applicable, to the upstream value chain.

The policy establishes mechanisms for monitoring and accountability, including regular risk assessments, performance indicators (such as employee turnover, accident frequency, training hours, pay gap indicators, and employee engagement metrics), and ongoing social dialogue with employees and their representatives. Progress and outcomes are reviewed annually and disclosed in the Group’s sustainability reporting.

The member of the Board of City Service SE responsible for the Baltic countries holds the highest level of accountability for oversight of the policy, while its implementation is ensured by Group company management and the human resources function. The policy applicable to every employee, and all staff members are required to familiarise themselves with it.

Health and safety

The Group’s commitments to employee health and safety are also outlined in its Quality, Environmental Protection, and Occupational Health and Safety Policy, developed in line with ISO standards. The policy applies to all Group employees and the scope of the policy is the same as that of the Group. The COO holds the highest level of accountability within the organisation for the implementation of the policy.

Human rights, non-discrimination and remedy

The Group’s human rights commitments are defined in its Workforce Management Policy. Through this policy, City Service SE Group commits to respecting and protecting human rights across its workforce by ensuring equal opportunities and non-discrimination, safeguarding freedom of association and the right to collective bargaining, providing safe and healthy working conditions, ensuring fair remuneration and access to statutory social protections, and fostering an inclusive, respectful, and dignified working environment. The Group does not tolerate forced labour, child labour or any form of human trafficking.Although the policy does not explicitly reference international human rights instruments, its provisions are aligned with internationally recognised human rights frameworks, including the United Nations Global Compact, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. In 2025, the Group formalised its approach to grievance handling and remedy by adopting a dedicated Reporting of Violations and Whistleblower Protection Policy, which complements the Group’s Workforce Management Policy and forms an integral part of its sustainability governance framework. The policy establishes confidential and secure reporting channels, investigation procedures, defined timelines, and protection against retaliation for individuals who raise concerns in good faith. No human rights complaints or confirmed violations have been recorded within City Service to date. The Group’s general approaches to employee engagement, including those related to human rights, are disclosed alongside the information provided under ESRS S1-2. City Service has also adopted a Harassment, Sexual Harassment, and Prevention of Violence policy. This policy outlines behavioural expectations for all employees, emphasizing respect for others, including colleagues, customers, suppliers, and other stakeholders. It promotes sensitivity to privacy, beliefs, views, and the physical and mental integrity of individuals, while prohibiting any verbal, written, or physical conduct that could cause discomfort or disturbance in the workplace.

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The Group’s Workforce Management Policy explicitly prohibits discrimination on a range of grounds, including gender, age, race, nationality, religion, disability, sexual orientation, beliefs, and other personal characteristics, and the Group adheres to all applicable national and EU regulations prohibiting discriminatory practices. At present, the Group does not have specific policy commitments related to the inclusion of or positive action for individuals from groups at particular risk of vulnerability as no such groups have been identified within the Group’s current workforce. The Group is committed to ensuring a safe, respectful, and non-discriminatory work environment for all employees. These commitments are implemented through internal procedures, including management accountability, employee training, confidential reporting and grievance mechanisms, and investigation processes defined in the Group’s internal policies.

Policies applied to business partners
Information on policy applicable to value chain employees (business partners) is provided in the section S2 Workers in the Value Chain of this report.

S1-2 – PROCESSES FOR ENGAGING WITH OWN WORKFORCE AND WORKERS’ REPRESENTATIVES ABOUT IMPACTS

The Group maintains active, ongoing engagement with its employees as part of daily operations. A combination of direct and indirect communication channels is used to ensure employee voices are heard and considered in decision-making. A key channel of engagement is collaboration with the Labour Union, which facilitates regular dialogue with employee representatives. In addition, the Group engages directly with employees through various tools such as Employee Engagement Surveys (incl. eNPS - Employee Experience Survey), employee meetings and conferences, and internal communication platform and direct communication with line managers. Employee perspectives are recognised as essential to the Group’s success. Communication takes place as needed to ensure that feedback is continuously gathered and used to inform relevant business decisions. The HR Manager is responsible for overseeing these engagement processes and ensuring that input from employees and their representatives is integrated into the Group’s operations and planning.

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S1-3 – PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND CHANNELS FOR OWN WORKFORCE TO RAISE CONCERNS

Following the adoption of the Reporting of Violations and Whistleblower Protection Policy in 2025, the Group has established formal processes to receive, assess, investigate, and address reported workforce-related concerns, including potential human rights impacts. To date, no systemic material negative impacts on employees requiring remediation have been identified. An isolated work-related incident involving an external criminal act occurred during the reporting period, and the Group is addressing its consequences in line with applicable legal requirements and internal procedures. Health and safety incidents are managed through established procedures aligned with ISO 45001 standards.

City Service provides multiple channels for employees to raise concerns, express needs, or provide feedback, including both informal engagement mechanisms and formal reporting procedures:

• Direct communication with line managers through meetings, phone calls, email, or performance appraisals;
• Employee representation through the Labour Union;
• Anonymous employee feedback collected through the annual Engagement and eNPS survey; and
• A dedicated, confidential reporting channel established under the Reporting of Violations and Whistleblower Protection Policy, allowing employees to report suspected violations, including human rights or labour-related concerns, with protection against retaliation.

The whistleblowing channel constitutes the Group’s formal grievance and complaints handling mechanism for employee-related matters. Employees are informed about available channels through internal communication tools, onboarding processes, regular briefings, e-learning platform eCITY, ensuring accessibility across the workforce. Issues raised through different channels are reviewed and handled by the responsible functions. While the Group does not operate a single centralised tracking system, relevant matters are documented at functional level, escalated where necessary, and discussed through internal management processes. The effectiveness of channels is reviewed periodically, including through employee feedback collected via the annual survey and direct engagement with employee representatives. Employee awareness of and trust in these channels is primarily assessed through the annual eNPS survey, which includes questions on communication, the ability to raise concerns, and management responsiveness. The Group follows applicable laws and its internal whistleblower protection policy to ensure that individuals raising concerns, including workers’ representatives, are protected against retaliation. More information on whistleblowing channels and protections is provided in section G1-1 of this report.

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S1-4 – TAKING ACTION ON MATERIAL IMPACTS ON OWN WORKFORCE, AND APPROACHES TO MANAGING MATERIAL RISKS AND PURSUING MATERIAL OPPORTUNITIES RELATED TO OWN WORKFORCE, AND EFFECTIVENESS OF THOSE ACTIONS (MDR-A)

City Service aims to ensure that its ongoing practices do not cause or contribute to material negative impacts on its employees. To prevent negative and manage positive impacts related to its own employees, the Group allocates a range of resources, including:

• Internal processes and dedicated personnel, such as occupational safety officers and HR partners, who are directly responsible for overseeing and managing employee-related impacts;
• Investments in systems and capacity-building, including IT tools for data monitoring and employee training programmes aimed at strengthening awareness and competence;
• Collaboration with external partners, such as consultants and relevant stakeholders, to support the implementation of effective mitigation and monitoring measures.

The Group allocates internal financial resources as needed to manage material matters related to employees, including a dedicated budget for initiatives such as training programmes (e.g., individual training allowances). These resources are funded from the Group’s own budget. The effectiveness of initiatives is monitored through a combination of employee surveys, performance interviews, and feedback collected during and after training activities. Depending on the nature of the training, tests or other evaluation methods may be used to assess learning outcomes. The implementation of process improvements is reviewed through management follow-up and operational oversight, drawing on the Group’s continuous improvement principles. The combined effect of employee-related initiatives is expected to contribute to improved employee engagement and satisfaction, as reflected in the eNPS survey (please refer to S1-5 for more details). Based on the 2025 results, overall progress is assessed as positive, with the employee engagement index reaching 51.1% and meeting the set target. The results indicate strong performance in areas such as workplace atmosphere, management accessibility, organisational stability, and development opportunities. At the same time, the analysis highlighted pay transparency as the main area for improvement, which has been identified as a priority focus for further actions.

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TRAINING AND SKILLS DEVELOPMENT

COMPETENT EMPLOYEES – NOW AND FOR THE FUTURE

Ensuring a skilled and capable workforce, both now and in the future, is a core objective embedded in the Group’s strategy. To support this, Group companies take a number of ongoing actions: regularly develop and implement training plans, conduct employee surveys. Specialised training programmes are also delivered in partnership with vocational training centres.These actions are aimed at developing employee competencies and supporting long-term employee retention, in line with the Group’s strategic priorities. The Group actively encourages employee development and collaboration. Employees are involved in proposing and implementing efficiency improvements, and regularly participate in training sessions and seminars. In both operating countries, annual development interviews are held between employees and their direct managers. These meetings focus on goal-setting, performance feedback, career planning, and identifying areas for professional growth. In the engineering segment, the Group maintains ongoing collaboration with vocational training centres, including apprenticeship programmes and participation in career days. In one of the Group’s companies, this cooperation has proven effective in attracting young talent, as participants of vocational training programmes increasingly choose to start their careers within the organisation. The Group is already working with educational institutions to co-develop targeted training programmes that align with future business needs and aims to expand and strengthen these partnerships further. The overarching objective is to attract and retain talent. Managers are provided with ample opportunities to learn and develop their competencies through both structured training and targeted sessions. This includes participation in strategic or topic-specific workshops, such as NPS sessions at Mano Būstas or AI solutions sessions, which may also involve employees beyond management roles. The Group is already taking ongoing action to seize the opportunity of integrating AI solutions into its operations. These tools are designed to improve productivity and reduce workload without replacing employees. In parallel, employee training on the use of AI and digital tools is actively promoted to ensure effective adoption. The development and implementation of AI and digitalisation tools is an ongoing process, with positive results expected to continue in the coming years.

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The Group monitors employee development through training participation and recorded learning hours based on internal training records. The metric reflects unique training participants and total learning hours completed during the reporting period, with average learning hours calculated per participant and presented by gender. Differences in average learning hours between women and men reflect variations in job roles and training needs across the workforce. The Group provides equal access to training opportunities and does not differentiate training allocation based on gender.

Note: Data provided for Lithuania only. Calculations are not available for Latvia, as gender-disaggregated data and information on unique training participants are not currently tracked.

2025	Total	Male	Female
Number of training participants (unique)	767	391	376
Learning hours	17 932	5 949	11 974
Average learning hours per participant	23.4	15.2	31.8

Entity-specific metric. Employee training participation and learning hours in Lithuania

At present, the Group does not have the technical capability to calculate ESRS S1-13 metric in line with the standard methodology, as the e-learning platform is not fully integrated into central reporting systems, and learning hours for non-qualified personnel are not systematically captured. The Group therefore discloses this entity-specific metric as the most accurate representation of employee training activities.

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ADEQUATE WAGES; ENGAGEMENT/SATISFACTION

EMPLOYEE WELL-BEING, FAIR REMUNERATION, AND ENGAGEMENT

Employee well-being, fair pay, and engagement are key priorities embedded in the Group’s overall strategy and detailed in strategic plans, which are reviewed annually. Fostering employee engagement is essential, as it directly impacts performance and overall results. To support this, the Group organises various social and internal initiatives that promote a sense of community and inclusion across its companies.

The Group has a defined remuneration policy, which is reviewed and adjusted as needed. Each company within the Group may apply specific bonus structures in addition to base salaries. Pay policies are overseen internally by senior and middle management. In some cases, and with client agreement, pay may be increased for employees working extensively on client premises.

The Group is continuously improving its remuneration and motivational systems, with the aim of increasing transparency and aligning benefits and salaries more closely with employee functions. This ongoing development includes regular review of compensation and benefits, with the goal of remaining competitive in the market, attracting new talent, and retaining existing employees.

In parallel, the Group is preparing for the implementation of the EU Pay Transparency Directive, which will become applicable from June 2026. A dedicated internal project has been prepared, and the Group continuously monitors legislative developments to ensure timely and compliant implementation once the national legal framework is established.

The initiative also seeks to strengthen employee motivation and long-term engagement. Areas for improvement have been identified through ongoing employee engagement and recruitment processes, where feedback has shown a need to better align the Group’s offer with market and sector expectations. Challenges such as longer recruitment timelines and difficulties attracting candidates, along with employee feedback regarding salary expectations, have highlighted the need for adjustments in the current system.

There are no compensation differences based on employment type. However, differences in benefits may apply to employees who are members of a Labour Union. In Lithuania, collective agreements are in place at all Group companies.

City Service also actively promotes emotional well-being and inclusive work culture. Free, anonymous psychological counselling is available to all staff. Employees can access internal and external training opportunities, with some programmes developed in-house. Additional discounts and benefits are offered through the MELP app, sponsored by the Group.

City Service also has a GDPR regulation expert who ensures compliance and mitigates potential negative impact on the workforce. The Group recognises the opportunity to further strengthen the engagement and well-being of all employees, including unskilled workers. Based on market practices and internal insights, the Group anticipates the possibility of further developing measures that could contribute to the engagement of this employee segment in the future, such as better participation in eNPS surveys or other initiatives. At the same time, it is emphasised that all employees are already integrated into the Group’s overall well-being, communication, and cultural initiatives, with the most important role in their daily experience being played by their immediate managers and close cooperation between business and HR.

The Group recognises that more effective internal communication contributes to a stronger organisational culture. In 2023, a dedicated internal communication app was introduced to ensure that a broader segment of employees, including those without regular access to computers, can easily access up-to-date information. This tool has improved the reach and timeliness of internal updates.

Occupational health and safety

The Group places strong emphasis on employee health and safety, recognising that safe working conditions and social protection depend largely on the Group’s efforts. The occupational health and safety (OHS) management system applies to all employees across the Group. The Group operates in line with the ISO 45001:2018 standard. Internal safety knowledge checks are conducted annually, with follow-up actions taken where needed

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to maintain a safe work environment. Regular health and safety audits are also carried out across sites and will continue going forward. In 2025, a total of 125 OHS audits (in 2024 - 86 OHS audits) were conducted across various locations. These audits helped identify potential accident risks and assess compliance with safety protocols. Based on the findings, the Group introduced additional safety measures to mitigate risks and enhance workplace safety.

In 2025, there were 16 recorded minor workplace incidents, for which no remedial actions were required. Each case was managed in accordance with pre-defined procedures established under the ISO 45001:2018 standard and in full compliance with applicable local legislation.

One fatal incident occurred in 2025. Based on the information available to date, the incident involved a criminal act and was not related to employer fault. The case is currently under investigation by the competent authorities; therefore, no further details can be disclosed at this stage.

The Group has defined a clear process in the event of a serious incident resulting in significant harm to an employee or the company. In such cases, a dedicated investigation commission is formed to examine the circumstances thoroughly. All Group’s employees are informed of the investigation outcomes and are encouraged to provide feedback. Additional training or safety reminders are immediately organised, and further measures or process improvements are introduced if needed, based on the findings of the investigation.

The Head of OHS oversees all safety-related matters on a daily basis. OHS specialists continually improve their knowledge through training.In addition, a strong Labour Union plays an active role in ongoing consultations and dialogue on health and safety topics. To further support employee well-being, the Group offers a range of preventative measures, including additional accident insurance, free vaccinations against tick-borne encephalitis and flu, and partnerships providing employee discounts on health check-ups. Additionally, any material negative impacts related to employee data use are prevented through the strict implementation of all applicable laws and regulations, including the GDPR, across the Group’s operations.

S1-5 – TARGETS RELATED TO MANAGING MATERIAL NEGATIVE IMPACTS, ADVANCING POSITIVE IMPACTS, AND MANAGING MATERIAL RISKS AND OPPORTUNITIES (MDR-T)

The targets related to managing employee-related impacts, risks and opportunities in accordance with ESRS 2 MDR-T are summarised at a table in ESRS 2 SBM-1. City Service sets its employee-focused targets based on internationally recognised good practices, such as Engagement index, eNPS, zero recordable injuries, zero major data protection violations, and continuous tracking of training hours per employee.

While targets are not set through direct employee consultation, they are designed to support overall employee well-being and development. Progress is reviewed annually to assess outcomes and identify areas for improvement.

The Group uses a standardised eNPS methodology, based on the question: “How likely are you to recommend us as an employer to your friends or acquaintances?” Responses are rated on a 0–10 scale, and the final eNPS index is calculated accordingly to measure overall employee loyalty and engagement. In 2025, employee engagement showed positive progress, with the engagement index reaching 51.1% and meeting the set target, indicating stable employee sentiment and overall improvement in engagement levels.

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S1-6 – CHARACTERISTICS OF THE UNDERTAKING’S EMPLOYEES

The following table provides the number of employees (headcount), including a breakdown by gender and by country. The figures are based on the number of active employment contracts on the last day of the reporting period, as recorded in the Group’s HR systems. Cross-reference the number of employees in financial statements: section Employees (page 10)

The majority of employees are based in Lithuania, which reflects the concentration of the Group’s business operations in that market. The gender distribution indicates that the Group offers a diverse range of roles that appeal to both men and women across different functions and service areas.

Employee breakdown by gender and country

Gender	Total number of employees (head count)*	Group	Lithuania	Latvia
2024
Male		745	688	57
Female		860	754	106
Other**		not applicable	not applicable	not applicable
Not reported		0	0	0
Total		1605	1442	163

Gender	Total number of employees (head count)*	Group	Lithuania	Latvia
2025
Male		684	623	61
Female		797	701	96
Other**		not applicable	not applicable	not applicable
Not reported		0	0	0
Total		1 481	1 324	157

Notes:
* The table presents an actual number of employees (as headcount), regardless of the worked FTE (full-time equivalent), on 31st December.
* The “other” category is not applicable because registering as having a third, often neutral, gender is not legally possible in the countries where the Group operates.

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Employee breakdown by gender and country

2024	Number of employees (headcount)	Female	Male	Other*	Not disclosed	Total
Number of employees	Group	860	745	not applicable	0	1605
Number of permanent employees		819	730	not applicable	0	1549
Number of temporary employees		41	15	not applicable	0	56
Number of non-guaranteed hours employees		not applicable	not applicable	not applicable	not applicable	not applicable
Number of employees	Lithuania	754	688	not applicable	0	1442
Number of permanent employees		713	673	not applicable	0	1386
Number of temporary employees		41	15	not applicable	0	56
Number of employees	Latvia	106	57	not applicable	0	163
Number of permanent employees		106	57	not applicable	0	163
Number of temporary employees		0	0	not applicable	0	0

2025	Number of employees (headcount)	Female	Male	Other*	Not disclosed	Total
Number of employees	Group	797	684	not applicable	0	1481
Number of permanent employees		739	656	not applicable	0	1395
Number of temporary employees		58	28	not applicable	0	86
Number of non-guaranteed hours employees		not applicable	not applicable	not applicable	not applicable	not applicable
Number of employees	Lithuania	701	623	not applicable	0	1324
Number of permanent employees		644	595	not applicable	0	1239
Number of temporary employees		57	28	not applicable	0	85
Number of employees	Latvia	96	61	not applicable	0	157
Number of permanent employees		95	61	not applicable	0	156
Number of temporary employees		1	0	not applicable	0	1

Notes:
* The table presents an actual number of employees (as headcount), regardless of the worked FTE (full-time equivalent), on 31-12-2024.
* The “other” category is not applicable because registering as having a third, often neutral, gender is not legally possible in the countries where the Group operates.

In line with its business model, the Group does not employ temporary agency staff. All employment contracts within the Group in both Lithuania and Latvia are either permanent or fixed-term. This reflects the Group’s commitment to direct employment relationships, ensuring workforce stability, supporting long-term operational planning, and enhancing employee engagement.

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Employee turnover

• The aggregate of the number of employees (headcount) who left voluntarily or due to dismissal, retirement, or death in service.
• The number of employees who left divided by the total number of employees (headcount).

The overall employee turnover rate is primarily driven by the turnover of unskilled cleaning employees within the City Service Cleaning business, which is characteristic of this job category due to the nature of the work and market specifics. The figures are based on the number of active employment contracts on the last day of the reporting period, as recorded in the Group’s HR systems.

	Group		Lithuania		Latvia
	Employees who left*	Employee turnover rate**	Employees who left*	Employee turnover rate**	Employees who left*	Employee turnover rate**
2025	845	57%	768	58%	77	49%
2024	901	56%	823	57%	78	48%

S1-9 – DIVERSITY METRICS

Gender distribution at top level management

	2025		2024
	Group	Group	Group	Group
	Number	Percentage	Number	Percentage
Male	7	70%	6	67%
Female	3	30%	3	33%
Total	10	100%	9	100%

Note: The Group’s top management is defined as: a Member of the Management Board, the COO, Business Managers/Directors, and the Head of Human Resources.

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S1-14 – HEALTH AND SAFETY METRICS

All City Service own employees are covered by a health and safety management system based on recognised international standard ISO 45001. While not all Group companies are ISO 45001 certified, the same health and safety practices are applied consistently across the Group. In the reporting period, the Group recorded one fatal incident and a total of 16 minor incidents, all of which were reported in Lithuania in accordance with applicable national laws. Preventative measures were implemented following the incidents.

The fatal incident resulted from an external criminal act that occurred during a work-related client meeting within one of the Group’s real estate activities. Following the incident, the Group reviewed existing procedures related to employee safety during in-person meetings with clients and is assessing additional organisational and technical measures aimed at strengthening employee protection in such situations. One of the measures under consideration is the introduction of a prior registration process for property viewings and other in-person meetings, which would allow the identification of individuals attending meetings and support the investigation of incidents, should they occur. The Group continues to evaluate additional preventive measures as part of its ongoing review of employee safety procedures.

S1-10 – ADEQUATE WAGES

All City Service employees are paid adequate wages that are in line with applicable benchmarks.

S1-11 – SOCIAL PROTECTION

All City Service employees are covered by social protection, through public programs and benefits offered by the Group, against loss of income due to the major life events.

Distribution of employees by age group

2025	Group		Lithuania		Latvia
	Number	Percentage	Number	Percentage	Number	Percentage
<30 years old	167	11%	157	12%	10	6%
30-50 years old	654	44%	587	44%	67	43%
>50 years old	660	45%	580	44%	80	51%
Total	1481	100%	1324	100%	157	100%

2024	Group		Lithuania		Latvia
	Number	Percentage	Number	Percentage	Number	Percentage
<30 years old	153	10%	143	10%	10	6%
30-50 years old	692	43%	622	43%	70	43%
>50 years old	760	47%	677	47%	83	51%
Total	1605	100%	1442	100%	163	100%

Health and safety indicators

	2025			2024
Company employees	Group	Lithuania	Latvia	Group	Lithuania	Latvia
Number of deaths due to work-related injuries and work-related ill health	1*	1*	0	0	0	0
Number of recordable work-related accidents	16	16	0	17	17	0
Total hours worked per year by all employees	2 227 267	1 996 579	230 688	n/a**	n/a**	n/a**
Recordable work-related accident rate per million hours worked, %	7,63	8,51	0	n/a**	n/a**	n/a**
Number of recordable work-related health problems	0	0	0	0	0	0
Non-employees classified as own labour
Number of deaths due to work-related injuries and work-related ill-health among non-employees working at the company’s sites	0	0	0	0	0	0

The fatal incident resulted from an external criminal act that occurred during a work-related client meeting within one of the Group’s real estate activities. Competent authorities have classified the incident as work-related as it occurred in the course of work. The Group is addressing the consequences in accordance with applicable legal requirements and internal procedures.
*Information is not available as data on total hours worked was not collected.
Note: Metrics provided in the table were derived from the internal HR systems and are not based on estimates.

S1-15 – WORK-LIFE BALANCE METRICS

All Group employees are entitled to family-related leave in accordance with applicable national legislation and social policies in the countries where the Group operates. The Group applies the exemption provided under the Quick Fix Directive and does not disclose detailed quantitative information on the percentage of employees taking family-related leave by gender. The Group will continue to support equitable access to such benefits across its operations, promoting a workplace culture that respects and encourages work-life balance.

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S1-16 – REMUNERATION METRICS (PAY GAP AND TOTAL REMUNERATION)

At present, the Group has evaluated the following remuneration-related indicators as not material:

● Ratio of the annual total remuneration of the highest-paid individual to the median remuneration of all employees – This indicator is currently assessed as not material due to the lack of a consistent and appropriate methodology for calculation. Given the Group’s operational structure, where a significant portion of employees perform non-skilled work at or near minimum wage levels, and the proportion of administrative roles is relatively small, the result would provide a distorted and potentially misleading picture of the Group’s overall remuneration practices.
● Gender pay gap – The Group does not consider this indicator material, as there is no evidence of gender-based pay discrimination. Employees in equivalent positions receive equal pay regardless of gender, and there have been no employee complaints received on this matter. Additionally, there is no significant negative impact on employees attributable to gender-based pay disparities.

The Group remains committed to remuneration fairness, equal treatment, and transparency, and will continue to monitor and re-evaluate the relevance of these indicators in future reporting cycles.

S1-17 – INCIDENTS, COMPLAINTS AND SEVERE HUMAN RIGHTS IMPACTS

During the reporting period, no incidents of discrimination, harassment, or severe human rights violations (such as forced labour, human trafficking, or child labour) were identified or reported within the Group. One complaint related to alleged psychological harassment at work was recorded and reviewed in accordance with the Group’s internal procedures. The investigation concluded that the complaint was unfounded, and no psychological harassment was identified.

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S2 SBM-2 – INTERESTS AND VIEWS OF STAKEHOLDERS

This information is provided alongside the ESRS 2 SBM-2 disclosure in the chapter Stakeholder Engagement of this report.

S2 SBM-3 MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL

The Group depends on value chain workers to deliver its building maintenance services across residential, commercial, and public sectors. The most important of these are contractors (referred to as partners) who handle tasks like installing energy efficiency solutions, carrying out renovations, or performing technical upgrades. While they are not employed directly by the Group, their work is essential to daily operations and closely tied to the Group’s overall business model and strategy.

S2 WORKERS IN THE VALUE CHAIN

Because of their important role, the Group has built clear expectations for how it works with contractors. All partners must follow the Group’s Code of Conduct for Partners, which sets out rules around environmental responsibility, workplace safety, ethical behaviour, and overall reputation. The Group regularly checks that partners follow these rules, and carries out on-the-spot audits. Health and safety is especially important - not only when choosing contractors, but through Suppliers commit to comply with the Group’s Code of Conduct for Partners through contractual agreements. If a contractor does not meet expectations, the Group can end the partnership and bar them from tenders for one year.

So far, the Group has not identified or received reports on human rights or labor law violations by contractors. All contractors are considered to be equally exposed to potential impacts, with no specific groups of workers identified as being at greater risk of harm. The policy (Code of Conduct for Partners) covers upstream value chain workers (there are no material impacts related to downstream value chain workers).

Other suppliers - those who provide materials, equipment, or general services - are also expected to follow the Code of Conduct for Partners. However, the Group does not currently carry out detailed checks on this group, and no major social impacts/risks have been identified so far. While no negative impacts have been reported, the Group recognises that risks could exist deeper in the supply chain, especially where the origins of materials are not fully known, such as when sourcing from outside the EU. This could include issues like forced or child labour. However, there is no current evidence of such risks, and they are not considered material to the Group at this time. The Group’s Code of Conduct for Partners stipulates that all those involved in our operations must ensure that no child labour or forced labour is used. It also explicitly stipulates that all suppliers must comply with labour rights requirements.

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Policies related to value chain workers

The Group’s commitments to human and labour rights for value chain workers are outlined in the Code of Conduct for Partners, which also addresses issues such as human trafficking, precarious work, forced or compulsory labour, and child labour, and includes provisions addressing the safety of workers. The Board of City Service has approved and holds accountability for the implementation of the policy.

The policy (Code of Conduct for Partners) covers upstream value chain workers (there are no material impacts related to downstream value chain workers). The Code also encourages partners to continuously improve responsible business practices, guided by internationally recognised sustainability principles.

In 2025, the Group strengthened its supply chain sustainability governance by conducting a sustainability survey of suppliers and business partners. The survey covered environmental, social, and governance topics, including occupational health and safety, employee well-being, non-discrimination, and responsible labour practices. Based on the results of the survey, no indications of material human rights risks related to value chain workers were identified.

The Group does not have a separate policy for direct engagement with value chain workers or specific measures for providing remedy, as no negative impacts have been identified. Contractors and direct suppliers are based in Lithuania, Latvia, or other EU countries and are subject to national labour laws aligned with EU standards, which provide adequate worker protections.

Information on Group’s whistleblowing channels and protections is provided in section G1-1 of this report. The Group does not require the availability of such channels in the workplace of value chain workers.

The Group monitors the effectiveness of its policies and actions related to value chain workers through grievance mechanisms (including whistleblowing channels), contractor selection procedures and on-the-spot audits. In 2025, the Group also initiated a sustainability survey of selected suppliers and business partners as an additional measure to strengthen oversight. The Group’s current level of ambition is to ensure compliance with the principles set out in the Code of Conduct for Partners. Progress is assessed qualitatively, based on the absence of confirmed violations, audit findings and available supplier information. As no actual negative impacts have been identified to date, the Group has not engaged value chain workers directly on working conditions and has not set specific actions or targets related to them. Accordingly, there are no additional relevant disclosures under ESRS S2 Value Chain Workers in this report.

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S4 SBM-2 – INTERESTS AND VIEWS OF STAKEHOLDERS

This information is provided alongside the ESRS 2 SBM-2 disclosure in the chapter Stakeholder Engagement of this report.# S4 SBM-3 – MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL

Customer experience and satisfaction, high service quality are essential to City Service’s business model and overall competitiveness. They reflect the Group’s core values and approach to service. To meet the needs of clients across residential, commercial, and public sectors, the Group regularly invests in modern tools and technologies that help improve service quality and user experience. These solutions also increase efficiency and support the Group’s strong position in the market.

S4 CONSUMERS AND END-USERS

To deliver its services, the Group needs to manage a large amount of personal data. This makes data privacy and security a key priority. Protecting personal data is important for keeping customer trust and meeting legal requirements. The Group collects and stores only the data that is necessary, ensures that access is controlled, and carries out regular security checks. Customers are clearly informed about how their data is used. These practices follow national and international standards and apply equally to all customers.

Although there have been no major data breaches in the reporting period, the Group understands that risks exist. Misuse of data could lead to harm for customers or legal consequences under the General Data Protection Regulation (GDPR). As privacy laws become stricter, the Group is aware of the rising costs of compliance and continues to improve its data protection systems.

City Service serves a wide range of clients, such as residents, public and commercial institutions, building managers, offices, factories, and shopping centres. End-users include anyone who uses or visits the buildings and facilities the Group manages or maintains - such as building occupants, employees, visitors, and customers. These users benefit from the Group’s strong commitment to privacy, safety, and fair treatment. The Group also ensures that marketing, pricing, and presentation of services do not negatively affect vulnerable users and avoids aggressive sales tactics.

The Group’s activities also create positive results for clients and end-users. Well-maintained and clean buildings, digitalised services, and better energy efficiency are examples of improvements that benefit both residential and business clients. City Service has looked at whether any user groups are particularly vulnerable to Group’s impacts but has not identified any such groups. The Group has also not found material risks or opportunities linked to specific types of users - all impacts are considered relevant to clients and end-users in general. There are no known widespread or systemic negative impacts on users from the Group’s activities. At the same time, the Group has not identified any material risks and opportunities arising from impacts and dependencies on end-users, that would relate to specific groups rather than to all end-users.

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S4-1 – POLICIES RELATED TO CONSUMERS AND END-USERS (MDR-P)

CUSTOMER EXPERIENCE AND SATISFACTION

The Group’s commitments to client experience and satisfaction are embedded in its integrated management system and formalised through its Quality, Environmental Protection, and Occupational Health and Safety Policy, which is aligned with ISO standards. This policy applies across all Group operations and covers all clients. The COO holds the highest level of accountability within the organisation for the implementation of the policy. The policy is publicly available on the City Service website in Lithuanian and is planned to be translated into additional languages to ensure accessibility for all partners, not only those based in Lithuania.

To fully meet customer needs and expectations and ensure high-quality operations, the Group’s management is committed to:

• Complying with applicable legal and regulatory requirements and continuously improving the quality management system.
• Ensuring ongoing monitoring and evaluation of the quality system.
• Delivering only high-quality services and minimising instances of customer dissatisfaction.
• Continuously enhancing service delivery and management processes, guided by best practice standards.
• Managing external processes that may impact service quality, and working only with partners who comply with legal obligations.
• Improving clients’ working environments and quality of life through the environmentally responsible maintenance of engineering systems.
• Continuously developing employee competencies, encouraging their engagement in improvement initiatives, supporting professional development and self-expression, and fostering accountability for quality.
• Improving the effectiveness of the integrated management system by implementing policy and company objectives, monitoring performance, and ensuring ongoing system optimisation.

The policy has been developed with stakeholder interests taken into consideration. While no direct engagement was conducted specifically for its development, the process was informed by existing insights, the Group’s understanding of key issues relevant to clients, and alignment with established best practices, as the policy is based on a recognised ISO standard.

Privacy

The Group’s Privacy Policy ensures that clients have a clear understanding of how their personal data is processed and kept, and ensures them the right to request its removal. The COO is responsible for overseeing the implementation of the policy across the Group. All clients have the right to access the Privacy Policy and may also submit feedback regarding its content or the Group’s data protection practices.

In 2025, the Group updated its internal Personal Data Processing Rules, establishing a unified framework for personal data governance across all Group companies. The updated rules strengthen data protection practices and ensure continued alignment with the EU General Data Protection Regulation (GDPR) and applicable national legislation, with a focus on data minimisation, security, confidentiality, and accountability. The COO oversees the implementation of data protection policies across City Service SE, and clients may access the Privacy Policy and submit feedback regarding data protection practices through established channels.

Protection of client human rights

The Group’s commitment to respecting and protecting the human rights of its clients and end-users is defined in its Sustainability Policy, as disclosed under ESRS 2 MDR-P. City Service SE ensures respectful treatment of clients, protection of personal data, service quality, and fair handling of complaints. The Group engages with clients on a day-to-day basis through operational communication channels and feedback mechanisms, and addresses client complaints and concerns in a timely and transparent manner.

The Group’s Sustainability Policy and related internal procedures are aligned with internationally recognised human rights principles, including the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. No client-related human rights complaints or confirmed violations have been recorded to date.

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S4-2 – PROCESSES FOR ENGAGING WITH CONSUMERS AND END-USERS ABOUT IMPACTS

The Group actively engages with end-users to understand and manage actual or potential impacts related to its services. Feedback is collected through several channels, including 24/7 customer service platforms, direct communication, and regular customer satisfaction surveys (NPS). Further details on the scope and results of client NPS are disclosed in the SBM-1 section of the report.

Engagement occurs at key stages such as during service delivery, in response to enquiries or complaints, and through periodic consultations, especially in the B2B segment. The main types of engagement include informing, consulting, and inviting suggestions for improvement. Operational responsibility for managing engagement lies with Customer Service Centre line managers and other designated employees. These teams ensure feedback is captured, analysed, and used to inform service quality and impact management.

S4-3 – PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND CHANNELS FOR CONSUMERS AND END-USERS TO RAISE CONCERNS

The Group takes prompt action when it identifies that it has caused or contributed to a material negative impact on end-users. Its general approach to remedy is based on the following principles:

• Responding quickly to ensure that customer rights are protected, with a target response time of 8 hours for customer complaints.
• When dissatisfaction is identified, conducting internal analysis at the regional level, where each region is responsible for complaint management and quality review, including tracking complaints through dedicated reporting tools and identifying necessary corrective measures (e.g. service improvements or process changes). Effectiveness is assessed based on response time and changes in NPS following resolution.

Clients can raise concerns through various channels: email, phone, online forms, social media, NPS surveys and the whistleblowing channel. These options are clearly listed on the Group’s website, in service terms, and Effectiveness is monitored through customer feedback analysis, satisfaction indices, and online sentiment tracking. A review of the customer engagement strategy is planned to further enhance these processes.

The Group has not identified any particularly vulnerable or marginalised groups of consumers or end-users that would be disproportionately affected by its services, and related impacts are not considered material.Accordingly, no specific additional measures are currently in place to gain further insight into such groups. provided by customer service. The Group’s experience shows that clients trust the available channels and freely express their views on all matters important to them. Given the nature of the sector, there is no need to introduce additional measures to ensure or formally assess client trust in these channels. All complaints are logged in an internal system and assigned to the relevant team or staff member. Each case is tracked from registration to resolution, with regular updates provided to the customer. While the Group maintains strong internal processes, it does not currently require business partners to provide equivalent grievance channels. All concerns are handled confidentially and in accordance with GDPR. Information on whistleblowing channels and protections is provided in section G1-1 of this report. While the Group does not operate a dedicated human rights remediation mechanism for clients, clients may raise concerns, including potential human rights-related issues, through existing complaint-handling processes and the Group’s whistleblowing channels, which are available to external stakeholders. Should any adverse human rights impacts occur, the Group commits to addressing them in line with applicable laws and internal procedures.

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S4-4 – TAKING ACTION ON MATERIAL IMPACTS ON CONSUMERS AND END-USERS, AND APPROACHES TO MANAGING MATERIAL RISKS AND PURSUING MATERIAL OPPORTUNITIES RELATED TO CONSUMERS AND END-USERS, AND EFFECTIVENESS OF THOSE ACTIONS (MDR-A)

Customer satisfaction is a key priority for the Group and is embedded in its overall strategy. To ensure high-quality and user-focused services, the Group invests in modern tools and regularly reviews its customer service standards. While no dedicated action plans were in place during the reporting period beyond routine operations, customer experience remains a strategic focus, and all the related actions are ongoing.

The Group recognises two potential types of negative impacts on clients: those related to data protection and those related to service quality. To prevent and address those impacts, the Group ensures full compliance with GDPR, provides clear service terms, and applies internal standards to maintain transparency and accuracy in communication. If a data breach or issue were to occur, remedies would be provided in accordance with the procedures outlined in applicable GDPR legislation. In the case of insufficient service quality, the Group conducts internal analysis and implements corrective actions, such as service or process improvements, when dissatisfaction is identified. No formal remedies to individual clients are foreseen, as such cases are considered highly exceptional. The nature of the Group’s services typically does not lead to significant harm to clients, and therefore does not give rise to the need for compensation or other individual-level remedies.

The Group also supports positive outcomes through clear communication (e.g. FAQs), and by training employees to respond effectively to customer needs. Feedback and complaints are analysed regularly. Opportunities related to end-users are pursued through digitalisation and automation initiatives, such as IoT solutions, which improve efficiency. While specific impact-related targets are still under development, NPS remains the key metric for tracking client satisfaction.

In 2025, 5 minor personal data protection breaches were recorded, defined as isolated cases with very limited effect (no material negative impact was caused, hence, no remedies were enabled). No major incidents, such as large-scale data exposure (e.g., recipient lists exceeding 100 individuals or disclosure of sensitive data), were registered during the year. The management of material IROs is financed using the Group’s own financial resources. No external funding or sustainable finance instruments are currently used for this purpose.

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S4-5 – TARGETS RELATED TO MANAGING MATERIAL NEGATIVE IMPACTS, ADVANCING POSITIVE IMPACTS, AND MANAGING MATERIAL RISKS AND OPPORTUNITIES (MDR-T)

The targets related to managing impacts, risks and opportunities in accordance with ESRS 2 MDR-T are summarised at a table in ESRS 2, SBM-1. City Service sets targets related to customer experience and satisfaction based on NPS tracking and adherence to GDPR requirements. While these targets are not developed through direct consultation with clients, they are aligned with recognised best practices. Progress is reviewed annually to evaluate results and identify areas for improvement.

Overall, the results in 2025 indicate a decline in certain segments, primarily linked to ongoing operational transformation initiatives rather than changes in service quality or scope. These include process standardisation, increased use of subcontractors, and efficiency improvements, which had a short-term impact on customer experience. At the same time, the Group is strengthening its quality management approach, including the introduction of quarterly performance reviews that incorporate both results and behavioural aspects. Differences in performance across business units have been identified, and more targeted actions at segment level are planned. In addition, ongoing investments in automation and AI-based solutions are expected to contribute to improvements in customer experience over the medium term.

The Group applies a standardised NPS methodology, across all of its companies and for all clients. The approach is based on the question: “How likely are you to recommend us as a service provider to your friends or acquaintances?” Respondents rate their likelihood on a 0–10 scale, and an NPS index is calculated to assess overall customer satisfaction and loyalty. The NPS is a widely used and well-established customer loyalty and satisfaction metric, but it is not considered a scientifically validated tool. No changes to targets have been made compared to the previous reporting period.

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Regardless of the business segment, employee meetings are held twice a year, reaching all regions. These sessions provide a platform to discuss corporate culture, share updates, and address employee questions. In addition, monthly onboarding sessions (or more frequently when new hire groups are formed) also cover culture-related topics, helping new employees integrate into the Group’s values from the outset. Current issues and key updates are communicated through various internal communication channels, including emails and the MELP employee recognition app, which reinforces cultural values by highlighting positive employee behaviours and achievements.

The Group’s values are embedded in and operationalised through the Group’s Sustainability Policy (see ESRS 2 MDR-P) and Workforce Management Policy (see S1-1). These policies set out clear principles related to ethical conduct, respect for human rights, inclusion, employee well-being, and responsible management practices, which together form the foundation of the Group’s corporate culture. Through their consistent application, leadership engagement, and internal communication, the Group ensures that its corporate culture is clearly defined, actively reinforced, and continuously developed.

GOVERNANCE AREA G1 BUSINESS CONDUCT

G1 GOV-1 – THE ROLE OF THE ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES

This information is provided alongside the ESRS 2 GOV-1 disclosure in the chapter Sustainability Governance of this report.

G1 IRO-1 – DESCRIPTION OF THE PROCESSES TO IDENTIFY AND ASSESS MATERIAL IMPACTS, RISKS AND OPPORTUNITIES

This information is provided alongside the ESRS 2 IRO-1 disclosure in the chapter Double Materiality Assessment of this report.

G1-1 – BUSINESS CONDUCT POLICIES AND CORPORATE CULTURE (MDR-P)

City Service has established and clearly communicated its core values and purpose, which actively shape and guide its corporate culture. These principles are regularly reinforced by the leadership team through ongoing communication. Challenges and opportunities related to the continuous improvement of the Group’s culture are consistently addressed during management meetings, ensuring that the culture remains dynamic and inclusive.

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Anticorruption policy

The Group has an Anticorruption policy consistent with the United Nations Convention against Corruption. The policy applies across all entities within the Group and is binding for all employees, as well as stakeholders engaging with the Group. A member of the Management Board responsible for the Baltic countries is the most senior person in the organisation accountable for the implementation of this policy. The Group adheres to a strict zero-tolerance approach to corruption and any form of criminal or unethical conduct. This principle is embedded in the Group’s operations and is reflected in its Anti-Corruption Policy, which prohibits, among other things:

• Soliciting, offering, giving, receiving, or authorizing bribes - whether directly or indirectly - as well as trading in influence.
• Bribery of public officials, both in Lithuania and abroad.
• Participation in cartel agreements or other violations of competition law.
• Facilitation payments intended to speed up routine business processes.
• Improper financial accounting and tax evasion.
• Engagement in criminal or other unethical business practices.
• Misuse of funds or unjustified expenditures.
• Giving or accepting gifts, donations, or other benefits that could influence or appear to influence unlawful or unethical decision-making.Internal stakeholders were involved in the development of this policy, including representatives from HR, legal, various business units, the COO, and a member of the Management Board. The final policy is made accessible to all employees via the Group’s internal system, ensuring broad awareness and understanding of its principles and requirements. This policy reflects the Group’s firm commitment to integrity, transparency, and compliance with both local and international anti-corruption laws and standards.

Reporting channels and whistleblower protection

In 2025, City Service SE formalised and strengthened its whistleblowing framework by adopting a dedicated Reporting of Violations and Whistleblower Protection Policy. The policy was developed taking into account the needs and expectations of both internal and external stakeholders, ensuring safe, confidential and accessible reporting channels.

The policy applies across all entities within the Group and covers employees, former employees, candidates, contractors, suppliers, partners, shareholders and other stakeholders who have or have had a professional relationship with the Group. The policy is publicly available on the Group’s website and internally via the eCity system, ensuring it is easily accessible to all relevant stakeholders. Group employees have been formally informed about the policy and confirmed their acknowledgement by signature. In addition, a dedicated digital reporting platform (accessible via QR code) is available across all offices and displayed in common areas.

The Head of the Legal function is the most senior person in the organisation accountable for the implementation and oversight of the policy.

The Group provides secure, confidential, and, where appropriate, anonymous channels for reporting suspected violations, including unlawful conduct, breaches of internal policies, corruption, or human rights concerns. Reports can be submitted through:

• dedicated digital whistleblowing platform (accessible via QR code);
• a dedicated email address pranesk@cityservice.eu;
• written submissions by registered mail; or
• external competent authorities, in accordance with applicable whistleblower protection legislation.

These channels are available to employees, former employees, candidates, contractors, suppliers, partners, clients, and other external stakeholders. Customers may also raise concerns through established client communication channels, including phone, email, or feedback mechanisms.

The Group complies with national legislation transposing Directive (EU) 2019/1937 on the protection of whistleblowers. All reports are handled impartially and confidentially, with strict safeguards in place to protect the identity of the reporting person and to prevent retaliation. Reports received through the whistleblowing channels are assessed and investigated by a designated competent person and, where necessary, an ad hoc investigation commission. Investigations are carried out by persons who are not directly involved in the matter and are independent from the management chain related to the case, ensuring objectivity and impartiality. Investigations are conducted within defined timeframes, with findings reported to company management and escalated to senior management as appropriate. Where criminal conduct is suspected, relevant authorities are notified.

In 2025 and 2024, no reports were received through the Group’s whistleblowing channels.

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Anti-corruption awareness and training

The Group’s policy is to enhance employees’ awareness of ethical conduct and anti-corruption by regularly sharing relevant information and organising targeted training initiatives. Participation in business ethics and anti-corruption training is mandatory for all employees in one form or another. Business ethics and anti-corruption training is organised by the Legal function and delivered based on identified needs, typically in group sessions. The Group aims to hold such training sessions at least on a quarterly basis. In addition, within City Service Engineering, anti-corruption topics are systematically addressed during the monthly “New Employee Day” onboarding sessions, ensuring that new employees are familiar with ethical standards and reporting mechanisms from the outset.

Within the Group, the functions identified as being most exposed to corruption and bribery risks include procurement, business representation, and, in some cases, operational roles related to the engagement and management of contractors. Training content and awareness-raising activities place particular emphasis on these higher-risk functions.

At present, quantitative data on the number of trainings delivered and participants is not systematically tracked across the Group and is therefore not disclosed. The Group intends to strengthen data collection processes and provide such information in future reporting periods.

G1-2 – MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS (MDR-P)

City Service manages supplier relationships through a structured selection process and a Code of Conduct for Partners (approved and overseen by the Board), which outlines expectations related to sustainability, reputation, and other key principles. The Group conducts ongoing monitoring to ensure that suppliers comply with contractual obligations.

In 2025, this approach was complemented by a supplier sustainability survey, used to gather information on suppliers’ environmental, social, and governance practices and to support the identification of potential risks in the supply chain. If a supplier is found to have breached the Code of Conduct for Partners, Group companies may refuse to engage in any business relationship with the supplier and/or add them to an internal list of unreliable entities.

The Group does not apply discriminatory practices toward small and medium-sized enterprises (SMEs), including in its payment practices. The supplier selection process incorporates both social and environmental criteria. Occupational safety is prioritised as the most important social factor and is explicitly addressed in partnership agreements. Environmental expectations are defined in the Code of Conduct for Partners.

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G1-3 – PREVENTION AND DETECTION OF CORRUPTION AND BRIBERY (MDR-A)

There are no additional procedures of prevention and detection of corruption or bribery aside from those described in the G1-1 disclosure requirement (Anticorruption policy, whistleblowing channels and investigation procedures), and the existing procedures are considered sufficient to minimise related risks.

City Service communicates its Anti-Corruption Policy to all relevant stakeholders, including employees, contractors, and suppliers. The policies and guidelines are accessible on the Group’s internal communication platform eCity. Relevant information is regularly included in the internal newsletter. Implications of the Group’s anti-corruption policies are periodically explained through the mandatory training.

The Group’s anti-corruption training is designed to equip employees with a clear understanding of corruption and bribery risks, potential breaches, prevention mechanisms, and the company’s internal policies. Training topics include:

• Definitions and examples of corruption and bribery.
• The Group’s Anti-Corruption Policy and its practical application.
• Whistleblowing mechanisms and how to use them.
• Legal consequences of engaging in corrupt activities.
• The importance of ethics and integrity in the workplace.

The training is targeted at all employees and is delivered through interactive working sessions. At the City Service Engineering business the anti-corruption policies are also presented during entry-level onboarding days. Training frequency is determined by the Head of the Legal Team and provided as needed, with the overarching goal of ensuring that all employees are trained.

Anti-corruption training is mandatory for all managers, including those in administrative, management, and supervisory roles. It is conducted annually or upon updates to the Anti-Corruption Policy. The training ensures that managers:

• Understand the risks and potential impact of corruption and bribery on business operations.
• Are equipped to implement and oversee anti-corruption policies.
• Can make informed strategic decisions and appropriately manage associated risks.

The actions related to anti-corruption training as listed above are the Group’s ongoing measures to ensure corruption prevention. No additional action plans are in place as defined in ESRS 2 MDR-A.

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G1-4 – INCIDENTS OF CORRUPTION OR BRIBERY (MDR-T)

During the reporting period, no cases of corruption or bribery were identified within the Group. There were no legal proceedings, penalties, or confirmed incidents involving employees or business partners, nor any contract terminations related to such violations. The Group and its employees were also not involved in any corruption or bribery cases involving actors in its value chain.

The Group has set a target to maintain zero confirmed breaches of business ethics or corruption on an annual basis in its own operations and in those related to direct business partners (suppliers and contractors). A breach is considered confirmed following an internal investigation that verifies a violation of the Anti-Corruption Policy or Code of Conduct for Partners.109 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025 Sustainability Statement INDICES

Health and safety indicators

Applicable ESRS Sector: Not available

ESRS 2 General Disclosures	Disclosure Requirement	Page
BP-1	General basis for preparation of sustainability statements	39
BP-2	Entities included in the organisation's sustainability reporting	39
GOV-1	The role of the administrative, management and supervisory bodies	41
GOV-2	Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies	45
GOV-3	Integration of sustainability-related performance in incentive schemes	46
GOV-4	Statement on due diligence	46
GOV-5	Risk management and internal controls over sustainability reporting	48
SBM-1	Strategy, business model and value chain	50
SBM-2	Interests and views of stakeholders	53
SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	55
IRO-1	Description of the process to identify and assess material impacts, risks and opportunities	60
IRO-2	Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement	62
Policies
MDR-P	Policies adopted to manage material sustainability matters	63
Actions
MDR-A	Actions and resources in relation to material sustainability matters	69
Metrics
MDR-M	Metrics in relation to material sustainability matters	69
Targets
MDR-T	Tracking effectiveness of policies and actions through targets	69

Environmental topics

Disclosure Requirement	Page
E1 GOV-3 Integration of sustainability-related performance in incentive schemes	64
E1-1 Transition plan for climate change mitigation	67
E1 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model	64
E1 IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities	64
E1-2 Policies related to climate change mitigation and adaptation	68
E1-3 Actions and resources in relation to climate change policies	68
E1-4 Targets related to climate change mitigation and adaptation	68
E1-5 Energy consumption and mix	69
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions	71
E1-7 GHG removals and GHG mitigation projects financed through carbon credits	75
E1-8 Internal carbon pricing	75

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ESRS E2 Pollution (not material)	Page
E2 IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities	60

ESRS E3 Water and marine resources (not material)	Page
E3 IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities	60

ESRS E4 Biodiversity and ecosystems (not material)	Page
E4 IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities	60

ESRS E5 Resource use and circular economy (not material)	Page
E5 IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities	60

Social topics

ESRS S1 Own workforce	Page
S1 SBM-2 Interests and views of stakeholders	82
S1 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model	82
S1-1 Policies related to own workforce	83
S1-2 Processes for engaging with own workers and workers’ representatives about impacts	84
S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns	85
S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions	86
S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	90
S1-6 Characteristics of the undertaking’s employees	91
S1-9 Diversity metrics	93
S1-10 Adequate wages	94
S1-11 Social protection	94
S1-14 Health and safety metrics	94
S1-15 Work-life balance metrics	95
S1-16 Remuneration metrics (pay gap and total remuneration)	96
S1-17 Incidents, complaints and severe human rights impacts	96

ESRS S2 Workers in the value chain	Page
S2 SBM-2 Interests and views of stakeholders	97
S2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model	97
S2-1 Policies related to value chain workers	98

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ESRS S2 Workers in the value chain	Page
S4 SBM-2 Interests and views of stakeholders	99
S4 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model	99
S4-1 Policies related to consumers and end-users	100
S4-2 Processes for engaging with consumers and end-users about impacts	101
S4-3 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns	101
S4-4 Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions	102
S4-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	103

Governance topics

ESRS G1 Business Conduct	Page
G1 GOV-1 The role of the administrative, supervisory and management bodies	104
G1 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities	104
G1-1 Corporate culture and Business conduct policies and corporate culture	104
G1-2 Management of relationships with suppliers	106
G1-3 Prevention and detection of corruption and bribery	107
G1-4 Confirmed incidents of corruption or bribery	108

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List of datapoints in cross-cutting and topical standards that derive from other EU legislation

This appendix is an integral part of the ESRS 2. The table below illustrates the datapoints in ESRS 2 and topical ESRS that derive from other EU legislation.

Disclosure Requirement and related datapoint	SFDR [1] reference	Pillar 3 [2] reference	Benchmark Regulation [3] reference	EU Climate Law [4] reference	Page
ESRS 2 GOV-1 Board’s gender diversity paragraph 21 (d)	Indicator number 13 of Table #1 of Annex 1	-	Commission Delegated Regulation (EU) 2020/1816 [5], Annex II	-	41
ESRS 2 GOV-1 Percentage of board members who are independent paragraph 21 (e)	-	-	Delegated Regulation (EU) 2020/1816, Annex II	-	41
ESRS 2 GOV-4 Statement on due diligence paragraph 30	Indicator number 10 Table #3 of Annex 1	-	-	-	46
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i	Indicators number 4 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 [6] Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk	Delegated Regulation (EU) 2020/1816, Annex II	Not applicable (the Group is not involved in such activities)	-
ESRS 2 SBM-1 Involvement in activities related to chemical production paragraph 40 (d) ii	Indicator number 9 Table #2 of Annex 1	-	Delegated Regulation (EU) 2020/1816, Annex II	Not applicable (the Group is not involved in such activities)	-
ESRS 2 SBM-1 Involvement in activities related to controversial weapons paragraph 40 (d) iii	Indicator number 14 Table #1 of Annex 1	-	Delegated Regulation (EU) 2020/1818 [7], Article 12(1)	Delegated Regulation (EU) 2020/1816, Annex II	Not applicable (the Group is not involved in such activities)
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv	-	-	Delegated Regulation (EU) 2020/1818, Article 12(1)	Delegated Regulation (EU) 2020/1816, Annex II	Not applicable (the Group is not involved in such activities)

[1] Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (Sustainable Finance Disclosures Regulation) (OJ L 317, 9.12.2019, p. 1).
[2] Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Capital Requirements Regulation “CRR”) (OJ L 176, 27.6.2013, p. 1).
[3] Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
[4] Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1)
[5] Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1).
[6] Commission Implementing Regulation (EU) 2022/2453 of 30 November 2022 amending the implementing technical standards laid down in Implementing Regulation (EU) 2021/637 as regards the disclosure of environmental, social and governance risks (OJ L 324,19.12.2022, p.1.).
[7] Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17).# 113 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Sustainability Statement

Disclosure Requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Page
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14			Regulation (EU) 2021/1119, Article 2(1)		67
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g)	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book-Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity	Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2			67
ESRS E1-4 GHG emission reduction targets paragraph 34	Indicator number 4 Table #2 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 6		68
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38	Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1				69
ESRS E1-5 Energy consumption and mix paragraph 37	Indicator number 5 Table #1 of Annex 1				69
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43	Indicator number 6 Table #1 of Annex 1				69
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44	Indicators number 1 and 2 Table #1 of Annex 1	Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity	Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1)		71
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55	Indicators number 3 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 8(1)		71
ESRS E1-7 GHG removals and carbon credits paragraph 56				Regulation (EU) 2021/1119, Article 2(1)	75
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66		Delegated Regulation (EU) 2020/1818, Annex II	Delegated Regulation (EU) 2020/1816, Annex II		Phased-in disclosure requirement

114 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Disclosure Requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Page
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a)
ESRS E1-9 Location of significant assets at material physical risk paragraph 66 (c).		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk.			Phased-in disclosure requirement
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c).		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34;Template 2:Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral			Phased-in disclosure requirement
ESRS E1-9 Degree of exposure of the portfolio to climate- related opportunities paragraph 69		Delegated Regulation (EU) 2020/1818, Annex II			Phased-in disclosure requirement
ESRS E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28	Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1				Not material
ESRS E3-1 Water and marine resources paragraph 9	Indicator number 7 Table #2 of Annex 1				Not material
ESRS E3-1 Dedicated policy paragraph 13	Indicator number 8 Table 2 of Annex 1				Not material
ESRS E3-1 Sustainable oceans and seas paragraph 14	Indicator number 12 Table #2 of Annex 1				Not material
ESRS E3-4 Total water recycled and reused paragraph 28 (c)	Indicator number 6.2 Table #2 of Annex 1				Not material
ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29	Indicator number 6.1 Table #2 of Annex 1				Not material
ESRS 2- SBM 3 - E4 paragraph 16 (a) i	Indicator number 7 Table #1 of Annex 1				60
ESRS 2- SBM 3 - E4 paragraph 16 (b)	Indicator number 10 Table #2 of Annex 1				60
ESRS 2- SBM 3 - E4 paragraph 16 (c)	Indicator number 14 Table #2 of Annex 1				60

115 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Disclosure Requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Page
ESRS E4-2 Sustainable land / agriculture practices or policies paragraph 24 (b)	Indicator number 11 Table #2 of Annex 1				Not material
ESRS E4-2 Sustainable oceans / seas practices or policies paragraph 24 (c)	Indicator number 12 Table #2 of Annex 1				Not material
ESRS E4-2 Policies to address deforestation paragraph 24 (d)	Indicator number 15 Table #2 of Annex 1				Not material
ESRS E5-5 Non-recycled waste paragraph 37 (d)	Indicator number 13 Table #2 of Annex 1				Not material
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39	Indicator number 9 Table #1 of Annex 1				Not material
ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f)	Indicator number 13 Table #3 of Annex I				82
ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g)	Indicator number 12 Table #3 of Annex I				82
ESRS S1-1 Human rights policy commitments paragraph 20	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex I				83
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21			Delegated Regulation (EU) 2020/1816, Annex II		83
ESRS S1-1 processes and measures for preventing trafficking in human beings paragraph 22	Indicator number 11 Table #3 of Annex I				83
ESRS S1-1 workplace accident prevention policy or management system paragraph 23	Indicator number 1 Table #3 of Annex I				83
ESRS S1-3 grievance/complaints handling mechanisms paragraph 32 (c)	Indicator number 5 Table #3 of Annex I				85
ESRS S1-14 Number of fatalities and number and rate of work-related accidents paragraph 88 (b) and (c)	Indicator number 2 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		94

116 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Disclosure Requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Page
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)	Indicator number 3 Table #3 of Annex I				Phased-in disclosure requirement
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)	Indicator number 12 Table #1 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		Not material
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)	Indicator number 8 Table #3 of Annex I				96
ESRS S1-17 Incidents of discrimination paragraph 103 (a)	Indicator number 7 Table #3 of Annex I				96
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)	Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II	Delegated Regulation (EU) 2020/1818 Art 12 (1)	96
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the value chain paragraph 11 (b)	Indicators number 12 and n. 13 Table #3 of Annex I				97
ESRS S2-1 Human rights policy commitments paragraph 17	Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1				98
ESRS S2-1 Policies related to value chain workers paragraph 18	Indicator number 11 and n. 4 Table #3 of Annex 1				98
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II	Delegated Regulation (EU) 2020/1818, Art 12 (1)	98
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19			Delegated Regulation (EU) 2020/1816, Annex II		97
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36	Indicator number 14 Table #3 of Annex 1				97

117 CITY SERVICE SE CONSOLIDATED MANAGEMENT REPORT 2025

Disclosure Requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Page
ESRS S3-1 Human rights policy commitments paragraph 16	Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1				Not material
ESRS S3-1 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17	Indicator number 10 Table #1 Annex 1		Delegated Regulation (EU) 2020/1816, Annex II	Delegated Regulation (EU) 2020/1818, Art 12 (1)	Not material
ESRS S3-4 Human rights issues and incidents paragraph 36	Indicator number 14 Table #3 of Annex 1				Not material
ESRS S4-1 Policies related to consumers and end- users paragraph 16	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1				100
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II	Delegated Regulation (EU) 2020/1818, Art 12 (1)	100
ESRS S4-4 Human rights issues and incidents paragraph 35	Indicator number 14 Table #3 of Annex 1				102
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b)

FINANCIAL STATEMENTS, FOR THE TWELVE MONTHS PERIOD ENDED

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
119

Consolidated statement of financial position

ASSETS	Notes	As of 31 December 2025	As of 31 December 2024*
Non-current assets
Goodwill	5	10,068	9,129
Other intangible assets	6	22,595	20,156
Property, plant and equipment	7	935	860
Right of use assets	15	2,948	2,252
Receivables from related parties (including loans granted)	26	7,711	-
Non-current receivables	10	5,182	5,278
Deferred income tax asset	21	1,762	1,609
Total non-current assets		51,201	39,284
Current assets
Inventories	8	501	581
Prepayments	9	1,965	1,923
Trade receivables	11	27,204	25,353
Receivables from related parties (including loans granted)	26	3,569	14,443
Other receivables	10	6,035	3,224
Prepaid income tax		224	174
Contract assets		1,143	1,523
Cash and cash equivalents	12	7,459	4,826
Total current assets		48,100	52,047
Total assets		99,301	91,331

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

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
120

Consolidated statement of financial position (cont’d)

EQUITY AND LIABILITIES	Notes	As of 31 December 2025	As of 31 December 2024*
Equity
Share capital		9,483	9,483
Share premium	13	8,490	8,490
Reserves	13	948	420
Retained earnings		13,805	10,285
Equity attributable to equity holders of the parent		32,726	28,678
Non-controlling interests		238	220
Total equity		32,964	28,898
Liabilities
Non-current liabilities
Non-current borrowings	14	1,777	19,353
Lease liabilities	15	2,233	1,694
Deferred income tax liability	21	1,203	973
Contract liabilities	18	3,285	2,265
Provisions for employee benefits, non-current	16	100	112
Trade and other payables	17	806	999
Total non-current liabilities		9,404	25,396
Current liabilities
Current loans	14	7,729	5,469
Current portion of non-current borrowings	14	17,629	1,967
Current portion of lease liabilities	15	805	678
Trade and other payables	17, 26	19,355	19,753
Contract liabilities	18	9,816	7,776
Income tax payable	21	1,477	1,185
Provisions for employee benefits, current	16	122	209
Total current liabilities		56,933	37,037
Total liabilities		66,337	62,433
Total equity and liabilities		99,301	91,331

The accompanying notes are an integral part of these financial statements.
* The classification of deferred tax assets and liabilities for the year ended 31 December 2024 has been revised. Further details regarding this reclassification are disclosed in Note 21.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
121

Consolidated statement of comprehensive income

	Notes	2025	2024
Revenue from contracts with customers	4	115,566	109,891
Cost of sales	19	(84,530)	(81,423)
Gross profit		31,036	28,468
General and administrative expenses	20	(20,233)	(19,990)
Expected credit losses (reversals) on financial assets	9,10,11	92	(638)
Other operating income		266	553
Other operating expenses		(336)	(57)
Gain on sale of investments	1	-	341
Profit from operations		10,825	8,677
Finance income		786	190
Finance costs		(1,124)	(1,744)
Profit before tax		10,487	7,123
Income tax expense	21	(923)	(574)
Net profit		9,564	6,549
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year, net of tax		9,564	6,549
Net profit attributable to:
The shareholders of the Company		9,546	6,505
Non-controlling interests		18	44
		9,564	6,549
Total comprehensive income attributable to:
The shareholders of the Company		9,546	6,505
Non-controlling interests		18	44
		9,564	6,549
Basic and diluted earnings per share (EUR)	22	0.30	0.21

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

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
122

Consolidated statement of changes in equity

	Notes	Share capital	Share premium	Other reserves	Retained earnings	Subtotal	Non-controlling interest	Total
Balance as of 1 January 2024		9,483	8,490	-	5,874	23,847	176	24,023
Net profit for the year		-	-	-	6,505	6,505	44	6,549
Other comprehensive income		-	-	-	-	-	-	-
Total comprehensive income		-	-	-	6,505	6,505	44	6,549
Transfers to (from) reserves		-	-	420	(420)	-	-	-
Dividends declared		-	-	-	(1,674)	(1,674)	-	(1,674)
Balance as of 31 December 2024		9,483	8,490	420	10,285	28,678	220	28,898
Net profit for the year		-	-	-	9,546	9,546	18	9,564
Other comprehensive income		-	-	-	-	-	-	-
Total comprehensive income		-	-	-	9,546	9,546	18	9,564
Transfers to (from) reserves	13	-	-	528	(528)	-	-	-
Dividends declared	23	-	-	-	(5,498)	(5,498)	-	(5,498)
Balance as of 31 December 2025		9,483	8,490	948	13,805	32,726	238	32,964

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

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
123

Consolidated statement of cash flows

	Notes	2025	2024
Cash flows from (to) operating activities
Net profit		9,564	6,549
Adjusting items:
Income tax expenses	21	923	574
Depreciation and amortization	6, 7, 15	2,236	2,154
Impairment (reversal) and write-off of accounts receivable	11	(92)	638
(Gain) loss on disposal of property, plant and equipment		(39)	(147)
(Gain) loss from sale of investments	1	-	(341)
Finance income		(723)	(175)
Finance costs		1,042	1,305
Other financial activity result, net		82	440
		12,993	10,997
Changes in working capital:
(Increase) decrease in inventories		159	(20)
(Increase) decrease in trade receivables, receivables from related parties, contract assets, non-current receivables, other receivables		(5,366)	(374)
(Increase) decrease in prepayments		(10)	(294)
Increase (decrease) in trade payables and payables to related parties		5,108	(2,053)
Increase (decrease) in contract liabilities, trade payables and other payables, provisions from employee benefits, non-current payables		(2,592)	(1,132)
		10,292	7,124
Income tax (paid)		(824)	(680)
Net cash flows from operating activities		9,468	6,444

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

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
124

Consolidated statement of cash flows (cont‘d)

	Notes	2025	2024
Cash flows from (to) investing activities
(Acquisition) of non-current assets	6, 7	(2,520)	(2,449)
Proceeds from sale of non-current assets	6, 7	105	245
(Acquisition) of subsidiaries, net of cash acquired	1, 5	(2,337)	125
Disposal of investments in subsidiaries (net of cash disposed) an	1	-	1
Interest received		722	175
Loans (granted)	26	-	(12,012)
Repayments of loans granted	26	4,301	894
Net cash flows from (to) investing activities		271	(13,021)
Cash flows from (to) financing activities
Dividends (paid)	23	(5,498)	(1,674)
Proceeds from loans	14	2,325	10,687
Payment of principal portion of lease liabilities	15	(833)	(786)
Loans (repaid)	14	(1,984)	(4,256)
Interest (paid)	14	(1,116)	(1,744)
Net cash flows from (to) financing activities		(7,106)	2,227
Net (decrease) increase in cash and cash equivalents		2,633	(4,350)
Cash and cash equivalents at the beginning of the year		4,826	9,176
Cash and cash equivalents at the end of the year		7,459	4,826

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

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
125

Notes to the financial statements

1 General information

City Service SE (hereinafter – “the Company”) is a public limited liability company registered in the Republic of Estonia on 2 April 2015, which in the course of reorganization has taken over a public limited liability company City Service AS rights and liabilities. The Company controls corporate group, engaged in the provision of facility management and integrated utility services. The City Service group (hereinafter – “the Group”) is the market leader in facility management and integrated utility services in the Baltic States. It provides services in Lithuania and Latvia. As of 31 December 2025 the number of employees of the Group was 1.339 (as of 31 December 2024 – 1.494).

As of 31 December 2025 and 2024 all 31.610 thousand ordinary shares of the Company are included into the Parallel Market of Warsaw Stock Exchange (ISIN Code of the shares is EE3100126368) and Baltic First North Foreign Shares trading list of NASDAQ Baltic Market (ISIN Code of the shares is EE3100126368). Trading Code of the shares on Warsaw Stock Exchange is CTS, on NASDAQ Baltic Market - CTS1L.As of 31 December 2025 and 2024 the shareholders of the Company were:

Shareholder	Number of shares held (2025)	Owned percentage of share capital and votes, % (2025)	Number of shares held (2024)	Owned percentage of share capital and votes, % (2024)
UAB Unit Invest	26,813,293	84.83%	26,813,293	84.83%
Other private and institutional shareholders	4,796,707	15.17%	4,796,707	15.17%
Total	31,610,000	100 %	31,610,000	100 %

The ultimate parent of the Company is UAB Unit Invest, a holding company registered in Lithuania. The parent of City Service SE, UAB Unit Invest has pledged part of the Company’s shares, i.e. 17,396,275 units, which constitutes 55.03% the authorized capital of the Company, to a bank. The right to transfer, pledge or dispose of the abovementioned shares otherwise has been restricted. All other property and non-property rights of UAB Unit Invest, as the shareholder, are free from any encumbrances or restrictions.

Share capital of the Company

The share capital of the Company is EUR 9,483 thousand as of 31 December 2025 and 2024. It is divided into 31,610 thousand ordinary shares with the nominal value of EUR 0.30 each. All shares of the Company are fully paid. The Company does not have any other classes of shares than ordinary shares mentioned above, there are no restrictions of share rights or special control rights for the shareholders set in the articles of association of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital as of 31 December 2025 and 2024.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 126

1 General information (cont’d)

Structure of the Group

On 31 December 2025 the City Service SE group consists of the parent City Service SE and the following directly and indirectly controlled subsidiaries:

Company	Country	Share of the stock held by the Group as of 31 December 2025	Share of the stock held by the Group as of 31 December 2024	Main activities
UAB Alytaus namų valda	Lithuania	76%	76%	Dormant
UAB Baltijos NT valdymas	Lithuania	100%	100%	Real estate management
UAB Baltijos transporto valdymas	Lithuania	100%	100%	Asset management
UAB Biržų butų ūkis	Lithuania	57.71%	57.71%	Administration of dwelling-houses
UAB BonoDomo	Lithuania	100%	100%	IT services
UAB BonoDomo Pay	Lithuania	100%	100%	Intermediary activities of an electronic money institution
UAB Žemaitijos būstas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Būsto aplinka	Lithuania	100%	100%	Maintenance and cleaning of dwelling-houses territories and premises
UAB Mano būstas	Lithuania	100%	100%	Holding company
UAB City Service Cleaning	Lithuania	100%	100%	Maintenance and cleaning of commercial real estate, territories and premises
UAB City Service Engineering	Lithuania	100%	100%	Commercial real estate management and building maintenance
UAB CSG IT	Lithuania	-	100%	IT services
UAB Energijos taupymo paslaugos	Lithuania	100%	100%	Energy saving solution services
UAB Kapitalo sprendimai	Lithuania	100%	100%	PPP project company
UAB EPC projektai	Lithuania	100%	100%	Dormant
UAB Mano aplinka	Lithuania	100%	100%	Maintenance and cleaning of public territories and premises
UAB Mano bendrabutis	Lithuania	100%	100%	Administration of buildings
UAB Mano Būsto klientų patirčių centras	Lithuania	100%	100%	Client service center services
UAB Mano Būstas Alytus	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Aukštaitija	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Baltija	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Dainava	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Neris	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas NPC	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Kaunas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Klaipėda	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Radviliškis	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Sostinė	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Šiauliai	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Ukmergė	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būstas Vakarai	Lithuania	99.97%	99.97%	Administration of dwelling-houses
UAB Mano Būstas Vilnius	Lithuania	100%	100%	Administration of dwelling-houses
UAB Mano Būsto priežiūra	Lithuania	100%	100%	Building maintenance
UAB Merlangas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Nacionalinis renovacijos fondas	Lithuania	100%	100%	Administration of dwelling-houses renovation projects
UAB Pastatų priežiūra	Lithuania	100%	100%	Building maintenance
UAB Pastatų valdymas	Lithuania	100%	100%	Administration of dwelling-houses
UAB Rinkų vystymas	Lithuania	100%	100%	Dormant
UAB Skolos LT	Lithuania	100%	100%	Debt collection services
UAB Šiaulių NT valdymas	Lithuania	100%	100%	Dormant
UAB Unitechna	Lithuania	100%	100%	Maintenance and construction of gas stations
UAB Monto EU	Lithuania	100%	100%	Administration of rented properties

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 127

Company	Country	Share of the stock held by the Group as of 31 December 2025	Share of the stock held by the Group as of 31 December 2024	Main activities
UAB Namų priežiūros tarnyba	Lithuania	100%	-	Administration of dwelling-houses
UAB Naujininkų ūkis	Lithuania	100%	-	Administration of dwelling-houses
UAB GS-Servisas	Lithuania	100%	-	Automated gates maintenance and installation
SIA BILANCE	Latvia	100%	100%	Administration of dwelling-houses
SIA BonoDomo	Latvia	100%	100%	Dormant
SIA Manas MĀJAS	Latvia	100%	100%	Holding company
SIA City Service Engineering	Latvia	100%	100%	Commercial real estate management and building maintenance
SIA Ēku pārvaldīšanas serviss	Latvia	100%	100%	Building maintenance
SIA Latvijas Namsaimnieks	Latvia	100%	100%	Administration of dwelling-houses
SIA Livonijas Nami	Latvia	100%	100%	Administration of dwelling-houses
SIA Namu serviss APSE	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS 1	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS 2	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas Mājas Salnas 21	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS 3	Latvia	100%	100%	Administration of dwelling-houses
SIA Multihouse	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS Ventspils	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS Tukums	Latvia	100%	100%	Administration of dwelling-houses
SIA Nia Nami	Latvia	100%	100%	Administration of dwelling-houses
SIA Manas MĀJAS Jelgava	Latvia	100%	100%	Administration of dwelling-houses

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated)

1 General information (cont‘d)

Changes in the Group in 2025

On 13 January 2025 UAB "Merlangas" acquired 100% of the shares of UAB "Naujininkų ūkis" (acquisition price EUR 1,875 thousand). UAB "Naujininkų ūkis" is engaged in facility administration activities in Lithuania.

On 27 January 2025, the Company „Monto EU“ entered into a tripartite transfer agreement under which it assumed from UAB „Newsec Property Management LT“ all rights and obligations under the residential property management agreement and its amendments in relation to the transferred property portfolio in amount of EUR 180 thousand. As a result of this transaction, the Company became the new property manager and service provider for that portfolio from the effective transfer date.

On 02 April 2025 the title of “SIA Manas MĀJAS” was changed into “SIA Manas MĀJAS 1”. Other contact details did not change.

On 02 April 2025 the title of SIA “City Service” was changed into “SIA Manas MĀJAS”. Other contact details did not change.

On 05 August 2025 the Group changed Latvian subsidiary company name SIA “Nebruk Jelgava” to SIA “Manas MĀJAS Jelgava”. Other contact details did not change.

On 29 September 2025 UAB "Monto" acquired 100% of the shares of UAB "Stop Kaune" (acquisition price EUR 123 thousand). UAB "Stop Kaune" is engaged in rental properties management activities in Lithuania.

On 29 September 2025 UAB "Mano Būstas" acquired 100% of the shares of UAB "Namų Priežiūros Tarnyba" (acquisition price EUR 134 thousand). UAB "Namų Priežiūros Tarnyba" is engaged in administration of dwelling-houses in Lithuania.

On 27 November 2025 the title of UAB “Butų ūkio valdos” was changed into UAB “Žemaitijos būstas”. Other contact details did not change.

On 01 December 2025 the Group changed Latvian subsidiary company name SIA “Ventspils Nami” to SIA “Manas MĀJAS Ventspils”. Other contact details did not change.

On 23 December 2025 UAB “City Service Engineering” acquired 100% of shares of UAB "GS servisas" (acquisition price EUR 640 thousand). UAB "GS servisas" operates a niche business specializing in the installation, maintenance, and servicing of automatic doors, windows, gates, and related systems.

On 03 December 2025 the composition of the Company’s Management Board was expanded from two to six members. The following individuals were appointed as additional members of the Management Board, effective as of that date: Giedrius Jakubauskas, Mindaugas Genys, Aistė Cikanaitė-Jankauskė and Tomas Sujeta.

On 30 December 2025 UAB "CSG IT" was reorganized by way of division and ceased to exist as a legal entity.All rights and obligations of UAB "CSG IT" were transferred to two other subsidiaries of the Company - UAB "Mano Būstas" and UAB "Baltijos transporto valdymas". No effect on parent’s unconsolidated statement of financial position. On 30 December 2025 the Company’s subsidiary UAB "Stop Kaune" was merged with UAB "Monto EU". Following the completion of the merger, UAB "Stop Kaune" ceased to exist as a separate legal entity. No effect on parent’s unconsolidated statement of financial position. Acquisitions in more details are disclosed in Note 5.

Changes in the Group in 2024

In 2024 the Group, through Latvian subsidiary acquired 100% of the shares of SIA “Nebruk Jelgava” (acquisition price EUR 184 thousand), SIA “Nia Nami” (acquisition price EUR 529 thousand) and SIA “Manas MĀJAS Tukums” (acquisition price EUR 186 thousand), which are based in Latvia. Acquisitions in more details are disclosed in Note 5.

128
CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
129

1 General information (cont‘d)

On 23 August 2024, the Group, through its Lithuanian subsidiary established a new company “Monto EU”, UAB (share capital of company is EUR 1 thousand). Company conducts business as administrator for rented properties. Group company UAB “Exergio” operating in Lithuania was sold to related party on 06 June 2024 and after that date ceased to be consolidated in these financial statements. Total value of the shares sale – purchase agreement is EUR 2,5 thousand. Information about the disposed subsidiary is summarized below:

UAB Exergio
Date of disposal	06 June, 2024
Goodwill	-
Non-current assets other than goodwill	348
Current assets other than cash and cash equivalents	479
Cash and cash equivalents	2
Non-current and current liabilities	(1,167)
Total net assets disposed of	(338)
attributable to equity holders of the parent	(338)
attributable to non-controlling interests	-
Total consideration received, all consisting of cash and cash equivalents	3

The Group recorded the net gain of EUR 341 thousand from the sale of shares of the subsidiary under the line of Gain on sale of investments in the consolidated statement of comprehensive income.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
130

2 Material accounting policies

2.1. Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (hereinafter the EU). The consolidated financial statements have been prepared on a historical cost basis. The Company’s management authorized these financial statements on 30 April 2026. The shareholders of the Company have a statutory right to either approve these financial statements or not approve them and require the management to prepare a new set of financial statements.

Adoption of new and/or changed International Financial Reporting Standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are effective and have been endorsed by the European Union

The accounting policies adopted are consistent with those of the previous financial year except for the following International Financial Reporting Standards amendments which do not have a significant impact on the Group’s financial statements:

• IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments)
  The amendments are effective for annual reporting periods beginning on or after January 1, 2025. The amendments specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. A currency is considered to be exchangeable into another currency when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and obligations. If a currency is not exchangeable into another currency, an entity is required to estimate the spot exchange rate at the measurement date. An entity’s objective in estimating the spot exchange rate is to reflect the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. The amendments note that an entity can use an observable exchange rate without adjustment or another estimation technique. After reviewing the amendment, it has been determined that it does not have an impact on the consolidated financial statements as the Group doesn’t have material transactions in foreign currency.

Standards issued, endorsed for use in the EU, but not yet effective and not early adopted
Management has preliminary assessed the possible application of the following amendments and concluded that no material impact is expected for consolidated financial statements, except for IFRS 18 as disclosed below:

• IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and Measurement of Financial Instruments (Amendments). In May 2024, the IASB issued amendments to the Classification and Measurement of Financial Instruments which amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures and they become effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted.
• IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-dependent Electricity (Amendments). In December 2024, the IASB issued targeted amendments for a better reflection of Contracts Referencing Nature-dependent Electricity, which amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures and they become effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted.
• Annual Improvements to International Financial Reporting Standards – Volume 11. In July 2024, the IASB issued Annual Improvements to International Financial Reporting Standards – Volume 11. An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted.
• IFRS 18 Presentation and Disclosure in Financial Statements. In April 2024, the IASB issued the IFRS 18 - Presentation and Disclosure in Financial Statements which replaces IAS 1 - Presentation of Financial Statements and it becomes effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. Management has assessed that the application of these amendments may have an impact on the presentation of items in the consolidated statement of financial position, consolidated statement of comprehensive income, however, the Group has not yet conducted a comprehensive analysis.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
131

2 Material accounting policies (cont’d)

2.1. Basis of preparation (cont’d)

Standards issued but have not yet been endorsed for use in the EU
Management has preliminary assessed the possible application of the following amendments and concluded that it would have no effect for consolidated financial statements:

• IFRS 19 Subsidiaries without Public Accountability, Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 21 August 2025). In May 2024, the IASB issued the IFRS 19 - Subsidiaries without Public Accountability: Disclosures, and it becomes effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted.
• IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency (Amendments). In November 2025, the IASB issued amendments to Translation to a Hyperinflationary Presentation Currency which amend IAS 21 The Effects of Changes in Foreign Exchange Rates, and they become effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted.
• Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture. In December 2015, the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting.

2.2. Measurement and presentation currency

The amounts shown in these financial statements are presented in the local currency of the Republic of Estonia, Euro (EUR), rounded to EUR thousand, unless otherwise stated. Due to rounding the amounts presented in the financial statements, notes may not reconcile by insignificant amounts. The functional currency of the Company is Euro. The functional currencies of foreign subsidiaries are the respective foreign currencies of the country of residence. Items included in the financial statements of these subsidiaries are measured using their functional currency. Transactions in foreign currencies are initially recorded in the functional currency as of the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange as at the date of the statement of financial position.

2.3. Principles of consolidation

The consolidated financial statements of the Group include City Service SE and its subsidiaries.The financial statements of the subsidiaries are prepared for the same reporting year, using consistent accounting policies. Subsidiaries are consolidated from the date from which effective control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Group. The net result of disposed subsidiaries is accounted for under the item of gain (loss) on sale of investments in consolidated statement of comprehensive income. When control over subsidiaries is lost due to other reasons (bankruptcies, liquidations), the net result of the deconsolidation of subsidiaries is accounted for under the item of operating expenses in consolidated statement of comprehensive income.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Acquisition costs incurred are expensed and included in administrative expenses. Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)

2 Material accounting policies (cont’d)

2.3. Principles of consolidation (cont’d)

After initial recognition, goodwill is measured at cost less any accumulated impairment losses (tested annually). For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

2.4. Investments in subsidiaries and associates (the Company)

Investments in subsidiaries and associates in the unconsolidated primary statements of the Company (Note 29) are carried at cost, less impairment.

2.5. Intangible assets other than goodwill

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. After initial recognition, intangible assets with finite lives are measured at cost less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over their useful lives:

Asset Type	Useful Life
Customer relationships	5 – 40 years
Computer software	3 – 4 years
Other intangible assets	3 – 10 years

Intangible assets, other than goodwill, are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The useful lives, residual values and amortization method are reviewed annually to ensure that they are consistent with the expected pattern of economic benefits from items in intangible assets other than goodwill. The Group does not have any intangible assets with indefinite useful life other than goodwill.

Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate:
* The technical feasibility of completing the intangible asset so that the asset will be available for use or sale;
* Its intention to complete and its ability and intention to use or sell the asset;
* How the asset will generate future economic benefits;
* The availability of resources to complete the asset;
* The ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in cost of sales. During the period of development, the asset is tested for impairment annually.

132

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)

2 Material accounting policies (cont’d)

2.6. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The useful lives, residual values and depreciation method are reviewed annually. Depreciation is computed on a straight-line basis over the following estimated useful lives:

Asset Type	Useful Life
Buildings	15 – 50 years
Vehicles	4 – 10 years
Other property, plant and equipment	3 – 6 years

2.7. Financial assets

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. A regular way purchases or sales of financial assets are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

Non-current receivables for residential buildings repair works
A portion of the Group’s clients (exclusively natural persons) are offered a deferred payment model for high-value repair and renovation works. This arrangement allows the clients to settle their liabilities in instalments over an extended period. Upon completion and acceptance of the works by the clients, a third party - not a financial institution - executes the settlement with the contractor, based on the Group’s client's consent. The Group acts solely as an intermediary, collecting payments from the clients and transferring them to the third-party financier. Amounts payable to the financier are accounted in trade and other payables. These transactions do not contain a financing component, as there is no difference between the amount of consideration (invoice issued by the contractor) and financed amount. The deferral period generally ranges from 9 to 24 months, although longer periods may be agreed in exceptional cases.

In the financial statements, non-current receivables are measured at their fair value by discounting the repayment schedule based future cash flows, using the parent company’s average borrowing interest rate 4.163% as of 31 December 2025 (5.155% as of 31 December 2024).

Financial assets at amortized cost (debt instruments)
The Group measures financial assets which have cash flows consistent with solely payment of principal and interest and are held in a business model to hold and collect the contractual cash flows at amortized cost. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Group’s financial assets at amortized cost includes trade receivables and non-current receivables. Non-current receivables mainly comprise of long-term part of receivables for residential buildings’ repair works performed and are received in from 1 to 3 years period. The Group’s non-current and current receivables from related parties are comprised of loans and receivables from commissions.

133

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)

2 Material accounting policies (cont’d)

2.7. Financial assets (cont’d)

Impairment of trade receivables
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established the provision matrixes based on their historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment, including GDP growth and unemployment rates. The provision matrixes have been structured based on homogeneous customers’ groups.

Impairment of non-current receivables is calculated in the same way as not overdue accounts receivable. In previous years, receivables from municipalities were excluded from the collective assessment due to their historically low credit risk and the expectation that such balances would be settled in full. Instead, municipalities were monitored on an individual basis, outstanding balances were consistently decreasing.As part of a periodic review of the impairment methodology, management determined that including all customer segments in the calculation provides a more consistent and comprehensive application of the expected credit loss model in accordance with IFRS 9. Including municipalities in the collective assessment resulted in an additional trade receivables allowance of EUR 114 thousand as of 31 December 2025. For material individual customers the Group performs an assessment of specifically expected credit losses, taking into account the customer’s credit history as well as forward looking factors and risk factors specific to the debtor.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments, other than trade receivables and contract assets, not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recognized in two stages.

For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). At the end of every reporting period it is assessed whether credit risk significantly increased from initial recognition taking into account change in probability of default during the maturity of the instrument. During this process the Group summarizes debt instruments into stages 1, 2 and 3:

• Stage 1: on initial recognition the Group recognizes a 12-month ECL. Stage 1 debt instruments include instruments which credit risk improved and which were transferred back from Stage 2.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Group records an allowance for the lifetime ECL. Stage 2 debt instruments include instruments which credit risk improved, and which were transferred back from Stage 3. The Group considers that significant increase in credit risk is when debt is overdue more than 60 days or when it is visible from financial information that debtor is experiencing financial difficulties.
• Stage 3: For loans considered credit-impaired, the Company recognizes the lifetime expected credit losses for these loans. The Company considers the loan credit-impaired, when debt is overdue more than 180 days or when it is visible from financial information that debtor is experiencing financial difficulties. The method is similar to that for Stage 2 assets, with the probability of default set at 100%, while interest income is recognized on the net carrying amount of the asset.

Financial liabilities

Initial recognition and measurement
Financial liabilities are recognized on initial recognition when the Group becomes a party to the contractual terms. Upon initial recognition financial liabilities are measured at fair value net of any directly attributable transaction costs, and subsequently at amortized cost. A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. The Group’s financial liabilities include loans and borrowings including bank overdrafts and lease liabilities.

.

134
CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
135

2 Material accounting policies (cont’d)

2.8. Fair value measurements

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 1 measurement is used to determine discount rate used in cash generating units fair value valuation, purchase price allocation and provisions for employee benefits calculation.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 2 measurement is used to determine discount rate for non-current receivables fair value calculation.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. Level 3 measurement as customer attrition rate is used in purchase price allocation calculations.

2.9. Inventories

Inventories are measured at the lower of cost or net realizable value, after impairment evaluation for obsolete and slow moving items. Unrealizable inventory is fully written-off.

2.10. Cash and cash equivalents

Cash includes cash on hand and cash in banks. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and in current bank accounts. Restricted cash balances comprise balances of cash which are restricted as to withdrawal under the terms of long-term agreements. Restricted cash balances are excluded from cash and cash equivalents in the consolidated statement of cash flows. Restricted cash is presented as current and non-current accounts receivable in the statement of financial position as of 31 December 2025 and 2024 and disclosed in Note 10 and 12.

2.11. Right of use assets and lease liabilities

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Asset	Useful Life
Buildings	1 to 10 years
Vehicles	4 to 10 years

The right-of-use assets are also subject to impairment. The Group presents rights-of-use assets separately from property, plant and equipment in the statement of financial position.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
136

2 Material accounting policies (cont’d)

2.11. Right of use assets and lease liabilities (cont’d)

If there is a change in the lease term or in the assessment of an option to purchase, the Group determines the revised discount rate as the interest rate implicit in the lease for the lease term, if that rate can be readily determined, or the lessee’s incremental borrowing rate at the date of reassessment, if the interest rate implicit in the lease cannot be readily determined.

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value, in amount less than EUR 5 thousand. Lease payments on short-term leases and leases of low value assets are recognized as expense on a straight-line basis over the lease term.

2.12. Provision for employee benefits

According to the requirements of Lithuanian Labor Code, each employee leaving company at the age of retirement is entitled to a one-off payment in the amount of 2 months salary. Current year cost of employee benefits is recognized as incurred in the statement of comprehensive income. The past service costs are recognized as an expense as incurred in profit or loss. Any gains or losses appearing as a result of curtailment and/or settlement are recognized in the statement of comprehensive income as incurred.

The above-mentioned employee benefit obligation is calculated based on actuarial assumptions, using the projected unit credit method. As of 31 December 2025 the Group adjusted the provision for employee benefits calculation by applying the actual historical percentage of employees retiring on pension. Obligation is recognized in the statement of financial position and reflects the present value of these benefits on the preparation date of the statement of financial position.

Present value of the non-current obligation to employees is determined by discounting estimated future cash flows using the discount rate 3.8% as of 31 December 2025 (3.5% as of 31 December 2024) which reflects the interest rate of the Government bonds of the same currency and similar maturity as the employment benefits (disclosed in Note 16). Actuarial gains and losses are recognized in statement of other comprehensive income as incurred under General and administrative expenses.

2.13.# Income tax

The Group companies are taxed individually, irrespective of the overall results of the Group. Income tax charge is based on profit for the year and considers deferred taxation. The charge for taxation included in these financial statements is based on the calculation made by the management in accordance with tax legislation of the Republic of Estonia, the Republic of Lithuania and the Republic of Latvia.

The standard income tax rate in Lithuania was 15% in 2024. From 1 January 2025 the income tax rate increased by 1 p.p. to 16%, and from 1 January 2026, it increased further to 17%.

In accordance with Latvian Income Tax Act, income tax is not levied on companies’ profits but on dividends distributed. The tax rate in 2025 was 20/80 of the amount distributed as the net dividend (20/80 in 2024). As the object of taxation is dividends, not profit, there are generally no differences between the carrying amounts and tax bases of assets and liabilities which could give rise to deferred tax assets or liabilities. The income tax payable on dividends is recognized as the income tax expense of the period in which the dividends are declared. As an exception to the above, deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

In accordance with the effective Estonian Income Tax Act, income tax is not levied on companies’ profits but on dividends distributed. From 1 January 2025 the tax rate increased from 20% to 22%, thus effectively in 2025 was 22/78 of the amount distributed as the net dividend (20/80 in 2024). As the object of taxation is dividends, not profit, there are generally no differences between the carrying amounts and tax bases of assets and liabilities which could give rise to deferred tax assets or liabilities. The income tax payable on dividends is recognized as the income tax expense of the period in which the dividends are declared. As an exception to the above, deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 137

2 Material accounting policies (cont’d)

2.13. Income tax (cont’d)

As at 31 December 2025, the Group’s retained earnings amounted to EUR 13,805 thousand. Income tax upon the payment of dividends is 22/78 on the net dividends paid out. However, a number of exemptions are applicable to the Group, thus dividends received from foreign subsidiaries and permanent establishments can be distributed to the shareholders tax free.

Tax losses in Lithuania can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities and/or derivative financial instruments. Such carrying forward is disrupted if the company changes its activities due to which these losses are incurred except when the company does not continue its activities due to reasons which do not depend on company itself. The losses from disposal of securities and/or derivative financial instruments can be carried forward for 5 consecutive years and only be used to reduce the taxable income earned from transactions of the same nature. Tax losses carried forward can be used to reduce the taxable income earned during the reporting year by maximum 70%.

Deferred taxes are calculated using the liability method. Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled based on tax rates enacted or substantially enacted at the date of the statement of financial position.

Deferred tax assets have been recognized in the statement of financial position to the extent the management believes it will be realized in the foreseeable future, based on taxable profit forecasts. If it is believed that part of the deferred tax is not going to be realized, this part of the deferred tax asset is not recognized in the financial statements. In Group’s consolidated financial statements deferred tax is calculated according to an increased income taxation valid from 2026 with a higher income tax rate at 17% (16% during 2025 and 15% during 2024).

2.14. Revenue recognition

Revenue from contracts with customers

The Group has generally concluded that it is the principal in its revenue arrangements (except for utilities payment collection services provided in Latvia as described further) even in the cases when subcontractors are used in the process of provisions of the services, because it typically controls the goods or services before transferring them to the customer. Group companies also are responsible for the quality of services and have the right to use flexible pricing.

In Latvia the Group is providing services of utility services invoicing and collection of respective fees and for these transactions the Group is acting as an agent of the utilities suppliers based on the assessment of the management as the Group does not control the services before they are transferred to the customer, including their pricing. Therefore, the Group nets inflows and outflows of administered utilities turnovers, associated with residential houses administration activity in Latvia, as the Group’s companies engaged in such activity primarily act as agent in respect of utilities provision for its clients. Also, funds collected from residents on behalf of the residential communities as community fund for future repairs and maintenance, are not reported as the Group’s revenue.

The Group is in the business of providing administration of apartment buildings and commercial facility management services. The Group concluded that it transfers control of administration of apartment buildings and commercial facility management services over-time, because the customer simultaneously receives and consumes the benefits provided by the Group’s performance. Sales revenue for these services are invoiced and accounted on a monthly basis and it relates to one agreed performance obligation.

The Group also provides cleaning and maintenance services and other on demand services to its customers. Revenue from contracts with customers is recognized when these services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. The Group concluded that it transfers control over these services over time depending on the level of performance obligation fulfilment.

Group provides repair or construction works for the clients when required. The Group concluded that it transfers control over these services over-time, because the customer simultaneously receives and consumes the benefits provided by the Group’s performance. Also, Group’s performance does not create an asset with alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. When the Group can reasonably measure its progress towards complete satisfaction of the performance obligation, the Group recognizes revenue and expenses in relation to each repair or construction contract over time, based on the progress of performance. The progress of performance is assessed

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 138

2 Material accounting policies (cont’d)

2.14. Revenue recognition (cont’d)

based on the proportion of the costs incurred in fulfilling the contract up to date over to the total estimated costs of the contract. In such cases, Group has one agreed performance obligation.

Revenue from other than described above services or sales of inventory is recognized when services are rendered or inventory transferred to the clients and this type of revenue is relatively not material to the financial statements.

Due to the Group’s business nature, apart from what is described in this note, the management did not make any other significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers recognition, as there are no complex/multi-elemental goods or services, no variable consideration, financing component, volume rebates, discounts, rights of return, contract cost or amounts payable to the customers.

Dividend income from subsidiaries is recognized in the Company’s unconsolidated financial statements (Note 29) when the dividends are declared by the subsidiary.

Interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or liability. It is included in interest income or expenses in the statement of comprehensive income.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer.If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional. Accrued income representing estimated amount of services which has been performed but not have been agreed with and accepted by the customer until the last day of the month and for which invoice is issued next month is presented as Contract assets and are reclassified to the account receivable as soon as services are accepted and sales invoices are issued in subsequent month.

Trade receivables
A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Group satisfied performance obligation under the contract.

2.15. Impairment of non-financial assets

Non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in profit or loss. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. The reversal is accounted for in the same caption of profit or loss as the impairment loss.

Goodwill is tested for impairment annually as at 31 December and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. The recoverable amount of Lithuania, Latvia cash generating units is determined based on the value in use calculation using cash flow projections based on the five-year financial forecasts prepared by the management. Both goodwill

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
139

2 Material accounting policies (cont’d)
2.15. Impairment of non-financial assets (cont’d)
and customer relationships intangible assets for each CGU unit are included in the carrying value tested. Significant assumptions used for the assessment of the value in use are described in the Note 5. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.

3 Use of judgements and estimates in preparation of financial statements

The preparation of financial statements in conformity with International Financial Reporting Standards as adopted by European Union requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingencies. The areas of estimation used in the preparation of the accompanying financial statements relate to depreciation (Note 2.7 and Note 7), amortization (Note 2.6 and Note 6), impairment evaluation of goodwill, other intangible assets and property, plant and equipment, including allocation of Group assets to cash generating units (Note 2.3, 2.16 and Note 5, 6, 7), trade receivables loss allowance and trade receivable classification to current and non-current (Note 2.8, Note 12), other assets impairment (Note 2.8, Note 9, Note 10 and Note 11), recognition and realization of deferred tax asset (Note 21), application of purchase price allocation in business combinations (Note 5).

Future events may occur which will cause the assumptions used in arriving at the estimates to change. The effect of any changes in estimates will be recorded in the financial statements, when determinable. At the date of preparing these financial statements, the underlying assumptions and estimates were not subject to a significant risk that from today’s point of view it is likely that the carrying amounts of assets and liabilities will have to be adjusted significantly in the subsequent fiscal year.

The management made the following important judgments and estimates in the preparation of these financial statements:

Useful life of customer relationships intangible assets

Estimated useful life of customer relationships intangible assets, which are accounted for under other intangible assets and their acquisition value amounts to EUR 21,410 thousand as of 31 December 2025 and EUR 19,892 thousand as of 31 December 2024. The management amortizes these customer relationship intangible assets over the estimated validity period of existing contracts, which is 5-40 years.

Deferred tax recognized from tax loss carry forward

The recognition of deferred tax assets arising from tax loss carryforwards involves significant judgment, as their realization depends on whether forecasted financial results will be achieved and the tax losses utilized in the foreseeable future. The management estimated what part of the deferred tax asset will be utilized based on the best knowledge of the operations and results of the Group companies as at 31 December 2025 and 2024 and remaining amount will be carried on and utilized in the next reporting periods (Note 21). Additionally, significant judgment is applied in assessing whether and when retained earnings will be distributed in subsidiaries operating in Latvia, where corporate income tax is levied only upon profit distribution. As at 31 December 2025 and 2024, the management does not intend to distribute dividends in the foreseeable future, as profits are planned to be reinvested in operations and development activities, therefore no deferred tax liability has been recognized on those amounts.

Receivables which are overdue

As disclosed in Note 11 as of 31 December 2025 the Group has EUR 2,790 thousand (EUR 1,375 thousand as of 31 December 2024) overdue more than a year current receivables from trade customers (public and private) which were not impaired. Management estimate is based on the analysis of individual material overdue balances as well as analysis of general collection periods in a respective country and taking into account forward looking estimations. Group’s management reviewed macroeconomic indicators (inflation, GDP, unemployment rate and wages) and changes in overdue trade receivables in Lithuania and Latvia. Based on Group management’s opinion increased overdue balances are mainly due to the lower allowance percentage applied starting 31 December 2025 and the acquisition of new entities.

Goodwill and customer related intangible assets

As disclosed in Note 5 and Note 6, as of 31 December 2025 the Group has goodwill and customer related intangibles in the amount of EUR 24,078 thousand (EUR 22,305 thousand – as of 31 December 2024). Significant management estimates were required in the cash generating units impairment testing performed as of 31 December 2025 and 31 December 2024,

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
140

3 Use of judgements and estimates in preparation of financial statements (cont’d)
such as forecasting of future EBITDA 1 levels, determining annual growth rate, determining weighted average cost of capital (Note 5, 6).

Climate change matters

The Group constantly monitors the latest legislation in relation to climate related matters. The significant accounting estimates made by management incorporate the future effects of the Group’s strategic decisions and commitments on having its set of production adhered to the energy transition targets, short and long-term impacts of climate-related matters and energy transition to lower carbon energy sources. At the current time, no legislation has been passed that will significantly impact the Group. Also, management considers that climate change matters have no impact on Goodwill, Customer contracts, Property Plant and Equipment impairment or useful lives setting.

Presentation of contract liabilities

In the statement of financial position Group’s contract liabilities are disclosed as current and non-current. Management used estimate and as of 31 December 2025 in scope of IAS 37 reclassified EUR 3,285 thousand of the current contract liabilities to non-current based on the historical yearly usage of such liabilities (as of 31 December 2024 EUR 2,265 thousand) (Note 18).

Lease term

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.Lease interest rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The Group estimates the IBR using observable inputs (such as market interest rates). 1 EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization Net profit (loss) with added back income tax, interest income (expenses), gain (loss) on sale of investments, other finance gain (expenses), depreciation and amortization expenses.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 141

4 Segment information

For management purposes, the Group is organized into business units based on services provided and have one main reportable segment - buildings’ administration. Segment of buildings’ administration includes services of administration and maintenance of commercial and residential buildings. The segment also includes services of maintenance of engineering systems to educational institutions and other different activities which are not material.

The administration segment is therefore divided into two segments geographically: Lithuania and Latvia. The segment information is presented as analyzed by chief operating decision maker of the Group (the Board). Segment performance is evaluated based on operating profit or loss calculated as gross profit less general and administrative expenses. However, general and administrative expenses related to Group’s management activities, financing (including finance costs and finance income), and income taxes of the Group are managed on a group basis and are not allocated to operating segments. Transfer prices between operating segments are based on the prices set by the management, which management considers to be similar to transactions with third parties.

Operating segments In these financial statements information about operating segments areas means a constituent part of the Group revenue from external customers attributed to the Group’s country of domicile and attributed to all foreign countries in total from which the Group derives revenue. The following tables present revenue, profit and certain asset and liability information regarding the Group's reportable operating segments for continuing operations:

Year ended 31 December 2025	Buildings’ administration Lithuania	Buildings’ administration Latvia	Total
Revenue from contracts with customers	108,801	6,765	115,566
Total revenue from contracts with customers			115,566
Cost of goods sold	(80,092)	(4,438)	(84,530)
General and administrative expenses	(15,353)	(2,373)	(17,726)
Segment results	13,356	(46)	13,310
Unallocated expenses (parent company)			(2,485)
Profit from operations			10,825
Net financial income			(338)
Profit before income tax			10,487
Income tax expenses			(923)
Net profit (loss) for the year			9,564
Other segment information
Additions to non-current assets other than financial instruments and deferred tax assets	2,470	49	2,519
Non-current assets	47,744	3,457	51,201

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 142

4 Segment information (cont’d)

Year ended 31 December 2024	Buildings’ administration Lithuania	Buildings’ administration Latvia	Total
Revenue from contracts with customers	101,283	8,608	109,891
Total revenue from contracts with customers			109,891
Cost of goods sold	(76,139)	(5,280)	(81,419)
General and administrative expenses	(14,631)	(3,775)	(18,406)
Segment results	10,512	(447)	10,066
Unallocated expenses (parent company)			(1,729)
Profit from operations			8,337
Net financial income			(1,213)
Profit before income tax			7,124
Income tax expenses			(574)
Net profit (loss) for the year			6,549
Other segment information
Additions to non-current assets other than financial instruments and deferred tax assets	2,261	188	2,449
Non-current assets	35,600	3,684	39,284

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 143

5 Goodwill

Group
Cost:
Balance as of 1 January 2024	10,475
Additions	330
Balance as of 31 December 2024	10,805
Additions	939
Balance as of 31 December 2025	11,744
Impairment:
Balance as of 1 January 2024	1,676
Balance as of 31 December 2024	1,676
Balance as of 31 December 2025	1,676
Net book value as of 31 December 2024	9,129
Net book value as of 31 December 2025	10,068

Acquisitions during 2025

As described in Note 1, during 2025 the Group acquired the following entities:

Name of entity acquired	Acquisition cost	Notes
UAB Stop Kaune	EUR 123 thousand	EUR 123 thousand paid in cash
UAB Namų Priežiūros Tarnyba	EUR 134 thousand	EUR 134 thousand paid in cash
UAB Naujininkų ūkis	EUR 1,875 thousand	EUR 1,875 thousand paid in cash
UAB GS Servisas	EUR 640 thousand	EUR 640 thousand paid in cash

At the acquisition of these subsidiaries a total goodwill of EUR 939 thousand has been accounted for in consolidated statement of financial position. The goodwill appears due to expected synergies, which are expected to be derived from horizontal expansion of business.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 144

5 Goodwill (cont’d)

The fair values of the assets acquired, liabilities and contingent liabilities assumed at the date of acquisitions made during 2025 were as follows:

Fair value of assets, liabilities and contingent liabilities	UAB Naujininkų ūkis	UAB Stop Kaune	UAB Namų Priežiūros Tarnyba	UAB GS Servisas
Date of acquisition	13 January, 2025	29 September, 2025	29 September, 2025	23 December, 2025
Customer related intangibles	1,350	6	160	-
Property, plant and equipment	16	-	2	23
Other non-current assets	-	-	1	-
Deferred tax asset	34	-	-	-
Trade receivables	808	61	48	105
Other current assets	335	82	38	149
Total assets	2,543	149	249	277
Long-term liabilities	90	-	-	-
Trade payables	337	22	41	74
Other current liabilities	329	110	47	81
Deferred tax liability from customer related intangibles	230	1	27	-
Total liabilities	986	133	115	155
Total identifiable net assets at fair value	1,557	16	134	122
Goodwill	316	105	-	518
Purchase consideration transferred	1,875	121	134	640
Cash acquired	327	57	32	17
Total purchase consideration, net of cash acquired	1,548	64	102	623

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 145

6 Goodwill (cont’d)

	UAB Naujininkų ūkis	UAB Stop Kaune	UAB Namų Priežiūros Tarnyba	UAB GS Servisas
Date of acquisition	13 January, 2025	29 September, 2025	29 September, 2025	23 December, 2025
Profit (loss) incurred since acquisition date to 31 December 2025	(13)	(4)	8	(94)
Total revenue since acquisition date to 31 December 2025	4,983	62	22	58
Total revenue for the year 2025 (unaudited)	4,983	263	135	1,476
Total profit (loss) for the year 2025 (unaudited)	(13)	(7)	27	(102)

During 2024 the Group acquired the following entities:

Name of entity acquired	Acquisition cost	Notes
SIA Nia Nami	EUR 529 thousand	EUR 453 thousand paid in cash
SIA Nebruk Jelgava	EUR 184 thousand	EUR 184 thousand paid in cash
SIA Manas MĀJAS Tukums	EUR 186 thousand	EUR 186 thousand paid in cash

At the acquisition of these subsidiaries a total goodwill of EUR 330 thousand has been accounted for in consolidated statement of financial position. The goodwill appears due to expected synergies, which are expected to be derived from horizontal expansion of business.

The fair values of the assets acquired, liabilities and contingent liabilities assumed at the date of acquisitions made during 2024 were as follows:

Fair value of assets, liabilities and contingent liabilities	Manas MĀJAS Tukums SIA	Nebruk Jelgava SIA	Nia Nami SIA
Date of acquisition	7 March, 2024	7 March, 2024	7 March, 2024
Customer related intangibles	-	109	386
Property, plant and equipment	7	28	19
Trade receivables	45	99	436
Other current assets	319	109	907
Total assets	371	345	1,748
Long-term liabilities	-	-	85
Trade payables	144	37	433
Other current liabilities	301	150	744
Total liabilities	445	187	1,262
Total identifiable net assets at fair value	(74)	158	486
Goodwill	260	26	43
Purchase consideration transferred	186	184	529
Cash acquired	258	93	672
Total purchase consideration, net of cash acquired	(72)	91	(143)

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 146

5 Goodwill (cont’d)

	Manas MĀJAS Tukums SIA	Nebruk Jelgava SIA	Nia Nami SIA
Date of acquisition	7 March, 2024	7 March, 2024	7 March, 2024
Profit incurred since acquisition date to 31 December 2024	79	3	111
Total revenue since acquisition date to 31 December 2024	333	376	982
Total revenue for the year 2024 (unaudited)	381	435	1,165
Total profit for the year 2024 (unaudited)	74	6	82

As part of the purchase agreement with the previous owner of Nia Nami SIA, a contingent consideration has been agreed. A part of the acquisition price shall be settled within 9 months after signing the sale-purchase agreement if there will be no significant changes in useful area acquired and no accounting or certifications errors will be revealed. Due to ongoing nonconcurrence with the seller this contingent consideration has not been settled at the date of the release of the financial statements. Contingent consideration was considered during the preparation of the purchase price allocation (PPA) model.For the purpose of impairment evaluation, the goodwill as of 31 December 2025 and 2024 was allocated to the following CGU:

Cash generating unit	Carrying value of allocated goodwill as of 31 December 2025	Carrying value of allocated goodwill as of 31 December 2024
Subsidiaries operating in Lithuania	8,951	8,011
Subsidiaries operating in Latvia	1,118	1,118
	10,068	9,129

As of 31 December 2025 and 2024 there was no impairment of goodwill accounted for in the consolidated statement of comprehensive income.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 147

5 Goodwill (cont’d)

The forecasted revenues for CGU involved in administration of dwelling houses in Lithuania, Latvia were estimated based on the area of the dwelling-houses administered as of 31 December 2025 assuming that the area administered will remain the same in the future years and the growth in revenue will be derived from a service fee increase, which was forecasted to be in line with the estimated inflation rate. The costs were projected based on the actual cost level taking into account estimated inflation.

Cash flows beyond the five-year period were extrapolated using 2% growth rate in Lithuania and 1,5 – 3% in Latvia in 2025 (2% for Lithuania and Latvia in 2024) that reflects the best estimate of the management based on the current situation in the respective industry. All these elements and their trends constitute the EBITDA projections applied by the Group for CGU testing.

The pre-tax discount rate used by the management was estimated for each individual cash generating unit as a weighted average cost of capital for that particular cash generating unit and is equal to 7.07% for cash generating unit located in Lithuania (8.99 % in 2024), 7.76% for cash generating unit located in Latvia (10.54% in 2024).

In the opinion of the Group’s management, the most important and most change-like assumptions are the forecasted level of revenues and discount rate. Based on management’s estimations, a reasonable change in these assumptions in Lithuanian cash generating units would not result in any impairment as of 31 December 2025. At the moment of preparing these financial statements the management of the Group did not expect any significant changes in the assumptions used.

In Latvia the impairment assessment is highly dependent on the assumptions used in the model. Below is provided sensitivity analysis for key assumptions of impairment assessment as at 31 December 2025:

• A decrease in annual revenue growth rate by 1.0 p.p. would not result in impairment loss to goodwill (would result in EUR 493 thousand impairment loss to goodwill in 31 December 2024);
• An increase in pre-tax WACC (discount rate) by 1.0 p.p. would not result in impairment loss to goodwill (would result in EUR 483 thousand impairment loss to goodwill in 31 December 2024).

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 148

6 Other intangible assets

Movement of other intangible assets in 2025 and 2024 is presented below:

	Customer related intangibles	Computer software and other intangibles	Total other assets
Cost:
Balance as of 1 January 2024	19,397	6,911	26,308
Additions	-	1,980	1,980
Additions arising from acquisitions of subsidiaries	495	-	495
Disposals and retirements	-	(405)	(405)
Disposals of subsidiaries	-	(741)	(741)
Reclassifications	-	-	-
Balance as of 31 December 2024	19,892	7,745	27,637
Additions	-	1,992	1,992
Additions arising from acquisitions of subsidiaries	1,518	-	1,518
Disposals and retirements	-	(759)	(759)
Reclassifications from other property, plant and equipment (Note 7)	-	2	2
Balance as of 31 December 2025	21,410	8,980	30,390
Accumulated amortization and impairment:
Balance as of 1 January 2024	6,067	1,286	7,353
Charge for the year	649	337	986
Disposals and retirements	-	(405)	(405)
Disposals of subsidiaries	-	(453)	(453)
Balance as of 31 December 2024	6,716	765	7,481
Charge for the year	686	387	1,073
Disposals and retirements	-	(759)	(759)
Balance as of 31 December 2025	7,402	393	7,795
Net book value as of 31 December 2024	13,176	6,980	20,156
Net book value as of 31 December 2025	14,008	8,587	22,595

The amortization charge of the Group’s other intangible assets for the year 2025 amounts to EUR 1,073 thousand (EUR 986 thousand in the year 2024) and has been included into general and administrative expenses in the Group’s statement of comprehensive income.

As of 31 December 2025 the Group has capitalized internally generated intangible assets of EUR 1,806 thousand (EUR 929 thousand as of December 2024). Capitalized internally generated intangible assets are related to software, planned to be used in administration of dwelling houses and facility management activities. Part of the other intangible assets of the Group with the acquisition value of EUR 332 thousand as of 31 December 2025 were fully amortized but still in use (EUR 1,073 thousand of the Group as of 31 December 2024).

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 149

7 Property, plant and equipment

Movement of property, plant and equipment in 2025 and 2024 is presented below:

	Buildings	Vehicles	Other property, plant and equipment*	Total
Cost:
Balance as of 1 January 2024	95	1,082	2,155	3,332
Additions arising from acquisitions of subsidiaries	-	18	37	55
Additions	-	44	425	469
Disposals and retirements	(1)	(183)	(267)	(451)
Balance as of 31 December 2024	94	961	2,350	3,405
Additions arising from acquisitions of subsidiaries	-	22	19	41
Additions	-	-	550	550
Disposals and retirements	-	(102)	(789)	(891)
Reclassifications to computer software (Note 6) and vehicles leases (Note 15)	-	(55)	(2)	(57)
Balance as of 31 December 2025	94	826	2,128	3,048
Accumulated depreciation and impairment:
Balance as of 1 January 2024	95	946	1,478	2,519
Charge for the year	-	54	331	385
Disposals and retirements	(1)	(133)	(226)	(360)
Balance as of 31 December 2024	94	867	1,584	2,545
Charge for the year	-	(3)	376	373
Disposals and retirements	-	(78)	(727)	(805)
Reclassifications	-	2	(2)	-
Balance as of 31 December 2025	94	788	1,231	2,113
Net book value as of 31 December 2024	-	94	766	860
Net book value as of 31 December 2025	-	38	897	935

• other property, plant and equipment mainly consist of cleaning equipment, furniture and other assets.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 150

7 Property, plant and equipment (cont‘d)

The depreciation charge of the Group’s property, plant and equipment for the year 2025 amounts to EUR 373 thousand (EUR 385 thousand in the year 2024). Amount of EUR 393 thousand for the year 2025 (EUR 382 thousand for the year 2024) has been included into general and administrative expenses in the Group’s statement of comprehensive income.

Property, plant and equipment of the entire consolidated Group with an acquisition cost of EUR 802 thousand was fully depreciated as of 31 December 2025 (EUR 1,680 thousand as of 31 December 2024), but were still in active use.

As of 31 December 2025 and 2024 no property, plant and equipment of the Group was pledged to banks as collateral for the loans (Note 14). As of 31 December 2025 and 2024 there was no impairment of property, plant and equipment.

8 Inventories

	As of 31 December 2025	As of 31 December 2024
Raw and auxiliary materials	481	491
Goods for resale	20	90
	501	581

During 2025, EUR 4,347 thousand (EUR 5,092 thousand in 2024) was recognized as an expense in cost of sales. Amounts are shown with net realizable value allowance of EUR 3 thousand in 31 December 2024 and 31 December 2025.

9 Prepayments

Prepayments of the Group amount to EUR 1,965 thousand (net of EUR 437 thousand allowance) as of 31 December 2025 (EUR 1,923 thousand (net of EUR 432 thousand allowance) as of 31 December 2024) and mainly include prepayments to suppliers and subcontractors.

10 Other non-current and current receivables

Non-current receivables at the end of the financial year consists of:

	As of 31 December 2025	As of 31 December 2024
Non-current receivables for residential buildings' repair works performed	3,135	2,851
ESCO (Energy saving projects)	1,922	2,294
Other long-term receivables	125	177
Allowance for expected credit losses of long-term part of receivables for residential buildings' repair works performed	-	(44)
	5,182	5,278

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated) 151

10 Other non-current and current receivables (cont’d)

Non-current receivables mainly consist of long-term part of receivables for residential buildings repair works performed in the amount of EUR 3,135 thousand (EUR 3,327 thousand offset by a discounting adjustment of EUR 192 thousand.) as of 31 December 2025 (EUR 2,851 thousand (EUR 3,090 thousand offset by a discounting adjustment of EUR 44 thousand allowance and EUR 439 thousand discounting) as of 31 December 2024).

Non-current part of the projects related to ESCO (Energy saving projects) amounted to EUR 1,922 thousand as of 31 December 2025 (EUR 2,294 thousand as of 31 December 2024).Current receivables at the end of the financial year consist of:

Group	As of 31 December 2025	As of 31 December 2024
Restricted cash and guarantees provided	1,574	2,067
Other receivables, current, gross	4,969	923
Other receivables, allowance for expected credit losses	(1,172)	(119)
Receivable VAT	162	264
Taxes paid in advance (except income tax)	502	89
	6,035	3,224

As of 31 December 2025 other receivables increased due to not yet received subsidies from municipalities for renovation of dwelling houses.

11 Trade receivables

Group	As of 31 December 2025	As of 31 December 2024
Trade receivables, gross	32,424	31,400
Less: allowance for expected credit losses	(5,220)	(6,047)
	27,204	25,353

Change in allowance for expected credit losses for trade receivables for the years 2025 and 2024 has been included into credit loss expenses on financial assets in the statement of comprehensive income. Trade receivables and other receivables are generally non-interest bearing and are usually collectible on 30 - 90 days terms.

Movements in the allowance for impairment of the Group’s trade receivables were as follows:

	Individually assessed	Collectively assessed	Total
Balance as of 1 January 2024	1,117	5,132	6,249
Charge for the year	-	896	896
Reversed during the year	-	(1,098)	(1,098)
Balance as of 31 December 2024	1,117	4,930	6,047
Charge for the year	-	424	424
Reversed during the year	-	(1,251)	(1,251)
Balance as of 31 December 2025	1,117	4,103	5,220

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 152

11 Trade receivables (cont’d)

As of 31 December 2025 the average percentages used for allowance formation were revised and are as follows: 0.37% for not past due, 0.37% for past due less than 30 days, 0.37% for past due 30-60 days, 0.37% for past due 60-90 days, 10% for past due 90-180 days, 15% for past due 180-360 days, 50% for past due 1-3 years, 100% for past due more than 3 years (1.63% for not past due, 1.63% for past due less than 30 days, 1.63% for past due 30-60 days, 1.63% for past due 60-90 days, 25% for past due 90-180 days, 35% for past due 180-360 days, 65% for past due 1-3 years, 100% for past due more than 3 years as of 31 December 2024).

The ageing analysis of the Group’s trade receivables (presented net of loss allowance) as of 31 December 2025 and 2024 is as follows:

Trade receivables	Not past due	Less than 30 days	30 – 60 days	60 – 90 days	90 – 360 days	More than 360 days	Total
2024	19,844	1,683	649	426	1,376	1,375	25,353
2025	18,213	1,697	1,252	1,156	2,096	2,790	27,204

12 Cash

Group	As of 31 December 2025	As of 31 December 2024
Cash at bank	7,456	4,723
Cash on hand	3	-
Short-term deposits	-	103
	7,459	4,826

As of 31 December 2025 and 2024 the Group had restricted cash, held in the bank as guarantee provided to customers - see further information in Note 10.

13 Reserves and share premium

Legal reserve
A legal reserve is a compulsory reserve under Estonian legislation and the Statutes of the Company. Annual transfers of not less than 1/20 (one-twentieth) of net profit, calculated for statutory reporting purposes are required until the reserve reaches 1/10 (one-tenth) of the share capital. As of 31 December 2025 upon profit distribution the reserve was fully formed with EUR 528 thousand transfer from Group’s retained earnings.

Share premium
Share premium represents the excess of the share issue price over nominal value of the shares issued. In December 2025 and 2024 share premium amounts to EUR 8,490 thousand.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 153

14 Borrowings

The list of borrowings of the Group as of 31 December 2025 and 2024 are as follows:

Group	Currency of the loan	As of 31 December 2025	As of 31 December 2024
Current loans
Bank loans	EUR	7,729	5,469
Current loan balance		7,729	5,469
Non-current loans
Bank loans	EUR	19,406	21,320
Less: current portion of long term loans		(17,629)*	(1,967)
Non-current loan balance		1,777	19,353

*As of 31 December 2025 the Group exceeded amount of allowed investments stated in the loan agreement with the bank. As a result, bank borrowings in amount of EUR 15,508 previously classified as long-term have been reclassified to short- term. The breach and reclassification did not affect the Group’s and the Company’s cash flows or its ability to meet obligations, as reflected in the liquidity ratios before and after reclassification (Note 24), because subsequently to the reporting date, the Group received a waiver from the bank, dated as of 10 February 2026. The Group was in compliance with its bank covenants as of 31 December 2024.

For the loans of the Group variable interest rates apply. Actual interest rates are close to effective interest rates. As of 31 December 2025 the weighted average annual interest rate of borrowings outstanding was 3.92% (4.85% as of 31 December 2024). In 2025 and 2024 the period of re-pricing of floating interest rates on borrowings was 3 months. Interest is paid monthly. The Group didn’t have unutilized borrowing facilities as of 31 December 2025 (EUR 3,531 as of 31 December 2024).

For the loans and overdraft, the Company and its subsidiaries have pledged the bank accounts of the Company and its subsidiaries in Lithuania. Shares of UAB Mano būstas are pledged to AB Swedbank bank as well.

Terms of repayment of non-current debt are as follows:

Group	As of 31 December 2025	As of 31 December 2024
Within one year	17,629*	1,967
From one to five years	699	18,058
More than five years	1,078	1,295
	19,406	21,320

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 154

14 Borrowings (cont‘d)

The following tables present financial liabilities movement during the financial year:

	1 January 2025	Cash flows from proceeds from loans	Cash flows to loans and leases repaid	New leases	31 December 2025
Current interest-bearing loans and borrowing (excluding items listed below)	5,469	3,971	-	-	9,440
Non-current interest-bearing loans and borrowings (excluding items listed below)	18,987	65	(3,185)	-	15,867
Obligations under lease contracts (Note 15)	2,288	-	(932)	1,504	2,860
Total liabilities from financing activities	26,744	4,036	(4,117)	1,504	28,167

	1 January 2024	Cash flows from proceeds from loans	Cash flows to loans and leases repaid	New leases	31 December 2024
Current interest-bearing loans and borrowing (excluding items listed below)	9,000	-	(3,531)	-	5,469
Non-current interest-bearing loans and borrowings (excluding items listed below)	10,130	10,687	(1,830)	-	18,987
Obligations under lease contracts (Note 15)	2,223	-	(870)	935	2,288
Total liabilities from financing activities	21,353	10,687	(6,231)	935	26,744

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 155

15 Leases

As of 31 December 2025 the contractual interest rate on the lease liabilities obligations for vehicles is 6 month EURIBOR + 1.49 – 2.05%, 3 month EURIBOR + 2.37 – 2.49% (as of 31 December 2024 - 6 month EURIBOR + 1.49% - 2.05%, 3 month EURIBOR + 2.29 – 2.39%). Interest is paid monthly. The terms of the lease agreements are from 1 to 10 years. The currency of the lease agreements is EUR.

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:

Acquisition cost	Buildings	Vehicles	Total
Balance as of 1 January 2024	2,440	2,471	4,911
Additions	645	262	907
Decrease related to lease termination	(9)	-	(9)
Balance as of 31 December 2024	3,076	2,733	5,809
Additions	1,271	206	1,477
Decrease related to lease modifications	(945)	(78)	(1,023)
Reclassification from vehicles (Note 7)	-	56	56
Balance as of 31 December 2025	3,402	2,917	6,319

Accumulated depreciation and impairment	Buildings	Vehicles	Total
Balance as of 1 January 2024	509	2,249	2,758
Charge for the year	656	144	800
Decrease related to lease modifications	(1)	-	(1)
Balance as of 31 December 2024	1,164	2,393	3,557
Charge for the year	698	137	835
Decrease related to lease modifications	(943)	(78)	(1,021)
Balance as of 31 December 2025	919	2,452	3,371

	Buildings	Vehicles	Total
Right of use assets as of 31 December 2024	1,912	340	2,252
Right of use assets as of 31 December 2025	2,483	465	2,948

Maturity analysis of lease payments under the above-mentioned lease contracts as of 31 December 2025 and under lease contracts as of 31 December 2024 are as follows:

Group	As of 31 December 2025	As of 31 December 2024
Within one year	351	762
From one to five years	2,950	1,803
More than five years	5	5
Total lease obligations	3,306	2,570
Interest	(268)	(198)
Present value of lease obligations	3,038	2,372
Lease obligations are accounted as:
- current	805	678
- non-current	2,233	1,694

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 156

15 Lease (cont’d)

Set out below are IFRS 16 impact to profit (loss):

	2025	2024
Depreciation expense of right-of-use assets	835	800
Interest expense on lease liabilities	78	70
Expense relating to short-term leases or leases of low-value assets (included in administrative expenses)	395	356
Other expenses relating to right-of-use assets	(14)	(2)
Total amount recognized in profit (loss)	1,294	1,224

Group has no variable lease payments. The Group had total cash outflows for leases of EUR 911 thousand in 2025 (EUR 856 thousand in 2024). The Group had EUR 1,477 thousand non-cash additions to right-of-use assets and lease liabilities in 2025 (EUR 907 thousand in 2024).# 16 Provision for employee benefits

As of 31 December 2025 and 2024 the Group accounted for employee benefits for employees leaving the Group at the age of retirement (Note 2.12). Related expenses are included into general and administrative expenses in the Group’s statement of comprehensive income.

Group	As of 31 December 2025	As of 31 December 2024
As of 31 December of the previous year	321	274
Change during the year	(99)	47
As of 31 December of the financial year	222	321

As of 31 December 2025 EUR 122 thousand (EUR 209 thousand as of 31 December 2024) is accounted under current provisions for employee benefits, whereas under non-current part is accounted EUR 100 thousand (EUR 112 thousand as of 31 December 2024). As of 31 December 2025 provisions are lower due to revised calculation.

Main assumptions applied while evaluating the Group’s provision for employee benefits as of 31 December 2025 and 2024 are as follows:

Group	As of 31 December 2025	As of 31 December 2024
Discount rate	3.8%	3.5%
Anticipated annual salary increase	3.0%	3.0%

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
157

17 Trade payables and other payables

Group	As of 31 December 2025	As of 31 December 2024
Trade payables	9,800	8,512
Payables to related parties (Note 26)	625	3,026
Other payables	9,736	9,214
Total	20,161	20,752

Trade payables consist of current part in amount of EUR 8,994 thousand (EUR 7,513 thousand as of 31 December 2024) and non-current part in amount of EUR 806 thousand (EUR 999 thousand as of 31 December 2024). Other payables detailed list is provided below.

Group	As of 31 December 2025	As of 31 December 2024
Salaries and social security	3,357	3,152
Vacation pay accrual	2,502	2,247
Accrued expenses	287	334
Payable VAT	1,365	1,299
Other current liabilities	2,225	2,182
Total	9,736	9,214

18 Contract liabilities - advances received

As of 31 December 2025 EUR 13,101 thousand amount represents advances received from the owners of commercial and residential buildings administrated by the Group for repair and other works and other contract liabilities and EUR 3,285 thousand of it were related to long-term obligations (EUR 10,041 thousand and EUR 2,265 thousand as of 31 December 2024 respectively). During the reporting period, EUR 5,075 thousand was recognized in revenue from contracts with customers in the consolidated statement of comprehensive income that was included in the contract liability balance at the beginning of the period (EUR 5,878 thousand during 2024).

19 Cost of sales

Group	2025	2024
Services of subcontractors and materials used	56,223	54,465
Wages and salaries and social security	28,246	26,919
Cost of goods sold	57	32
Depreciation	4	3
Other	-	4
Total cost of sales	84,530	81,423

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
158

20 General and administrative expenses

Group	2025	2024
Wages and salaries and social security	10,973	10,461
Depreciation and amortization	2,232	2,151
Consulting and similar expenses*	1,385	503
Computer software maintenance	830	753
Commissions for collection of payments	698	323
Rent of premises and other assets	395	356
Advertising	463	397
Insurance	460	327
Representational costs	318	239
Office expenses	300	-
Transportation	286	308
Taxes other than income tax	193	248
Business trips and trainings	157	210
Charity and support	111	60
Communication expenses	106	113
Bank payments	106	98
Other personnel related expenses	85	-
Utilities	69	240
Administrative costs	-	245
Other	1,066	2,958
Total general and administrative expenses	20,233	19,990

• In 2025 includes 295,1 thousand financial statements and CSRD² audit expenses (275 thousand as of 31 December 2024) incurred from audit company Ernst & Young Baltic. In 2025 and 2024 includes also EUR 4.7 thousand of translation services including CSRD translation services.
  ² CSRD - Corporate Sustainability Reporting Directive

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
159

21 Income tax

Group	2025	2024
Components of the income tax expenses
Current income tax	1,025	906
Deferred income tax (income)	(102)	(332)
Income tax expenses recorded in the statement of comprehensive income	923	574

Group	As of 31 December 2025	As of 31 December 2024
Deferred income tax asset
Expected credit losses of accounts receivable	752	812
Accruals and similar temporary differences	427	401
Tax loss carried forward	924	751
Tax goodwill	84	110
Allowance for inventories	8	9
Lease liabilities (Buildings)	472	312
Net deferred income tax asset	2,667	2,395
Deferred income tax liability
Property, plant and equipment and intangible assets	(1,708)	(1,453)
Right of use assets (Buildings)	(403)	(306)
Deferred income tax liability	(2,111)	(1,759)
Deferred income tax, net	556	636

Presented in the statement of financial position as follows:
Deferred income tax asset (before correction)*	-	2,395
Deferred income tax asset (after correction)*	1,762	1,609
Deferred income tax liability (before correction)*	-	(1,759)
Deferred income tax liability (after correction)*	(1,203)	(973)

• In the annual financial statements for year ended 31 December 2024, in the statement of financial position and related note to the financial statements, deferred tax assets and liabilities were incorrectly presented at gross on separate entity level. The error related solely to the presentation between captions of deferred tax asset and liabilities. In the statement of financial position for the year 2025, the presentation on comparative figures was revised to correct the error.

Tax loss carried forward can be utilized indefinitely in Lithuania: EUR 5,438 thousand as of 31 December 2025 (EUR 924 thousand recognized as deferred tax), EUR 4,693 thousand as of 31 December 2024 (EUR 751 thousand recognized as deferred tax). Deferred income tax asset and liability, related to entities operating in Lithuania, were accounted for at 17% rate as at 31 December 2025 and at 16% as at 31 December 2024.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
160

21 Income tax (cont’d)

The changes of temporary differences before and after tax effect in the Group were as follows:

	Balance as of 31 December 2024	Recognized in profit or loss	Acquired subsidiaries	Balance as of 31 December 2025
Allowance for accounts receivable	5,075	(868)	215	4,422
Allowance for inventories	55	(6)	-	49
Accruals and similar temporary differences	2,503	(6)	13	2,510
Right of use assets	(1,913)	(458)	-	(2,371)
Tax loss carried forward	4,694	745	-	5,439
Tax goodwill	689	(194)	-	495
Property, plant and equipment and intangible assets	(9,080)	510	(1,475)	(10,045)
Lease liabilities	1,951	826	-	2,777
Total temporary differences	3,974	548	(1,246)	3,276
Deferred income tax, net	636	146*	(225)	556

• Amount differs from deferred income tax in the table above because of the tax loss transferred and used between subsidiaries.

The changes of temporary differences before and after tax effect in the Group were as follows:

	Balance as of 31 December 2023	Recognized in profit or loss	Disposed subsidiaries	Balance as of 31 December 2024
Allowance for accounts receivable	5,120	(45)	-	5,075
Allowance for inventories	19	36	-	55
Accruals and similar temporary differences	2,577	21	(95)	2,503
Right of use assets	(1,932)	19	-	(1,913)
Tax loss carried forward	3,286	1,643	(235)	4,694
Tax goodwill	984	(295)	-	689
Property, plant and equipment and intangible assets	(9,596)	516	-	(9,080)
Lease liabilities (RoUA)	1,946	5	-	1,951
Total temporary differences	2,404	1,900	(330)	3,974
Deferred income tax, net	361	285*	(50)	636

• Amount differs from deferred income tax in the table above because of the tax loss transferred and used between subsidiaries.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025
(all amounts are in EUR thousand unless otherwise stated)
161

21 Income tax (cont’d)

The reported amount of income tax expenses attributable to the year can be reconciled to the amount of income tax expenses that would result from applying Lithuanian income tax rate (16%), since most of the operations of the Group is conducted in Lithuania, to pre-tax income as follows:

Group	2025	2024
Income tax expenses computed at 16% in 2025 and 15% in 2024	(1,678)	(1,101)
Effect of different tax rates applicable to foreign subsidiaries	(38)	(180)
Change in deferred tax asset tariff	(33)	-
Permanent differences	(65)	392
Adjustments of income tax expenses for the previous years	891	314
Income tax expenses reported in the statement of comprehensive income	(923)	(574)

22 Basic and diluted earnings per share (EUR)

Basic earnings per share are calculated by dividing the net profit attributable to the shareholders by the weighted average number of ordinary shares issued and paid during the year. The Company has no diluting instruments, therefore basic and diluted earnings per share are equal.Calculation of basic and diluted earnings per share is presented below:

Group	2025	2024
Net profit attributable to the shareholders of the Parent	9,546	6,505
Net profit attributable to the shareholders of the Parent	9,546	6,505
Number of shares (thousand), opening balance	31,610	31,610
Number of shares (thousand), closing balance	31,610	31,610
Weighted average number of shares (thousand)	31,610	31,610
Basic and diluted earnings per share (EUR)	0.30	0.21
From continuing operations	0.30	0.21

23 Dividends per share

	2025	2024
Approved dividends*	5,498	1,674
Number of shares (in thousand)**	31,610	31,610
Approved dividends per share (EUR)	0.17	0.05

• The year when the dividends are approved.
  ** At the date when dividends are approved.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 162

24 Financial assets and liabilities and risk management

Credit risk

The Group’s procedures are in force to ensure on a permanent basis that sales are made to customers with an appropriate credit history and do not exceed an acceptable credit exposure limit. There are no individual customers exceeding 10% of segment sales. The maximum exposure to credit risk is represented by the carrying amount of each financial assets and contract assets. Therefore, the management considers that its maximum exposure is reflected by the amount of non-current receivables, loans granted, trade receivables and other receivables, cash, net of loss allowance for doubtful accounts recognized at the date of the statement of financial position.

Interest rate risk

The major part of the Group’s borrowings (loans and financial lease obligations) are subject to variable rates, related to EURIBOR which create an interest rate risk (Notes 14 and 15). There are no financial instruments designated to manage the exposure to the interest rate risk outstanding as of 31 December 2025 and 2024. The following table demonstrates the sensitivity of the Group’s profit before tax (through the impact on floating rate borrowings) to a reasonably possible change in interest rates, with all other variables held constant. There is no impact on the Group’s comprehensive income, other than that to current year profit.

Effect on the profit before income tax	Increase/decrease in basis points	2025 EUR	2024 EUR
	+1	(296)	(275)
	-1	296	275

Foreign exchange risk

Group in 2025 and 2024 does not have assets or liabilities denominated in other currency than Euro.

Liquidity risk

The Group’s policy is to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of committed overdraft and loans to meet its commitments at a given date in accordance with its strategic plans. The Group’s liquidity (current assets / current liabilities) and quick ((current assets – inventory) / current liabilities) ratios as of 31 December 2025 were 0.84 and 0.84 respectively (1.41 and 1.39 as of 31 December 2024 respectively). As described in Note 14, if the long-term loan from the bank would be reclassified back to long-term, ratios would be 1.16 and 1.15 respectively. The reclassification did not affect the Company’s cash flows or ability to meet obligations as further explained in Note 14.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 163

24 Financial assets and liabilities and risk management (cont’d)

The table below summarizes the maturity profile of the Group’s financial liabilities as of 31 December 2025 and 2024 based on contractual undiscounted payments:

	On demand	Less than 1 year	1 to 5 years	More than 5 years	Total
Non-current interest-bearing borrowings	-	709	1,073	-	1,782
Current portion of non-current interest-bearing borrowings	15,508*	2,116	-	-	17,624
Current loans	7,729	-	-	-	7,729
Lease liabilities	-	351	2,950	5	3,306
Trade payables and other payables	-	19,355	806	-	20,161
Balance as of 31 December 2025	23,237	21,822	4,465	1,078	50,602
Non-current interest-bearing borrowings	-	-	18,063	1,290	19,353
Current portion of non-current interest-bearing borrowings	-	1,967	-	-	1,967
Current loans	5,469	-	-	-	5,469
Lease liabilities	-	762	1,803	5	2,570
Trade payables and other payables	-	19,753	999	-	20,752
Balance as of 31 December 2024	5,469	22,482	20,865	1,295	50,111

*Although reported as “due on demand”, settlement is expected within 1–5 years due to bank waiver on incompliance with covenants, received after 31 December 2025 as disclosed in Note 14.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 164

24 Financial assets and liabilities and risk management (cont’d)

Fair value of financial instruments

The Group’s principal financial instruments not carried at fair value are loans granted, non-current and current borrowings, trade and other receivables and payables. Fair value is defined as the amount at which the instrument could be exchanged between knowledgeable and willing parties in an arm’s length transaction, other than in forced or liquidation sale. The following methods and assumptions are used to estimate the fair value of each class of financial instruments:
(a) The carrying amount of current trade and other accounts receivable, current accounts payable and current borrowings approximates fair value due to short maturity;
(b) The fair value of non-current receivables and borrowings is based on the quoted market price for the same or similar issues or on the current rates available for borrowings with the same maturity profile. The fair value of non-current borrowings with variable interest rates approximates their carrying amounts. The fair values of the Group’s financial assets and financial liabilities approximate their carrying values. Based on fair value measurement categorization principles described in Note 2.8, the Group categorizes inputs used for borrowings from financial institutions valuation as level 2.

25 Commitments and contingencies

A civil lawsuit has been filed against UAB Mano Būstas Vilnius and ERGO Insurance SE in the Vilnius Regional Court for compensation of damages arising from a fire incident at a managed property. The total amount of the claim is EUR 344 thousand. UAB Mano Būstas Vilnius denies the claim as there is no sufficient legal or factual basis to recognize the liability. In the event of an adverse outcome, any potential damages would be covered by the Company’s civil liability insurance. Based on management’s assessment, no provision has been recognized as of the reporting date.

As part of the acquisition agreement with the previous owner of Nia Nami SIA, contingent consideration of EUR 128 thousand was agreed. Under the terms of the agreement, this amount was payable within nine months of signing the sale and purchase agreement, subject to there being no significant changes in the acquired useful area and no identified accounting discrepancies. As of the date of approval of these financial statements, the contingent consideration remains unsettled due to an ongoing dispute with the seller regarding the fulfillment of the relevant conditions. Based on management’s assessment, no liability has been recognized in the financial statements, as it is not expected that payment will be required. The contingent consideration was taken into account in the preparation of the purchase price allocation model. There was no outstanding amount of commitments and contingencies accounted as of 31 December 2024.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 165

26 Related party transactions

The parties are considered related when one party has the possibility to control the other one or has significant influence over the other party in making financial and operating decisions. The related parties of the Group and the Company are as follows:
− UAB Unit invest – the ultimate shareholder and parent of the Company;
− Subsidiaries and associates of UAB Unit Invest (same ultimate controlling shareholder);
− Associates of City Service SE subsidiaries (for the list of the associates, see also Note 1);
− A. Gudelis, V. Turonis (Management of the Group companies).

Transactions with related parties include:
− sales and purchases of goods and services in the ordinary course of business;
− acquisitions and disposals of property, plant and equipment;
− disposals of subsidiaries (disclosed in Note 1).

UAB Mano būstas and SIA City Service have provided surety for City Service SE to AB Swedbank under credit agreement. Companies are liable to the extent of all its assets to the Bank with respect to the same amount as the City Service SE. Shares of UAB Mano būstas are pledged to AB Swedbank as well.

Payables and receivables between related parties are non-interest bearing. Receivables and payables payment terms between the related parties are up to 15-30 days, except for the dividends and loans, which are repaid in accordance with the legal or contractual requirements, respectively.### 2025

Entity	Relation	Purchases and prepayments	Sales	Receivables	Loans granted	Payables and advances received
Medžiagų tiekimo centras	Subsidiary of parent company	309	29	9	-	55
UAB Verslo finansavimo sprendimai	Subsidiary of parent company	-	-	996	-	341
ICOR	Subsidiary of parent company	564	240	24	-	100
UAB Vandens parkas	Subsidiary of parent company	2	621	56	-	-
Associates and other related parties	Subsidiaries of parent company	695	1,621	2,484	7,711	129
		1,570	2,511	3,569	7,711	625

Loans granted comprise of loan granted to ultimate controlling parent, the loan is repayable in 2027, interest is charged at EURIBOR for 6 months plus lenders margin of 1.95%.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 166

26 Related party transactions (cont‘d)

2024

Entity	Relation	Purchases and prepayments	Sales	Receivables	Loans granted	Payables and advances received
Medžiagų tiekimo centras	Subsidiary of parent company	661	74	16	-	95
UAB Verslo finansavimo sprendimai	Subsidiary of parent company	-	-	1,559	-	2,755
ICOR	Subsidiary of parent company	553	227	157	-	31
UAB Vandens parkas	Subsidiary of parent company	2	587	61	-	-
Associates and other related parties	Subsidiaries of parent company	546	1,370	650	12,000	145
		1,762	2,258	2,443	12,000	3,026

The ageing analysis of the Group’s receivables from related parties as of 31 December 2025 and 2024 is as follows:

	Trade receivables not past due	Less than 30 days	30 – 60 days	60 – 90 days	90 – 360 days	More than 360 days	Total
2024	1,804	101	134	270	108	26	2,443
2025	361	1,943	94	872	77	222	3,569

Remuneration of the management and other payments

The Group’s management comprises 6 members in 2025 (2 in 2024). The Group’s management remuneration amounted to EUR 759 thousand in 2025 (EUR 281 thousand in 2024). In 2025 and 2024 the management of the Group did not receive any loans or guarantees; no other payments or property transfers were made or accrued. There was no supervisory board remuneration in 2025 and 2024.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 167

27 Capital management

The primary objectives of the Group‘s capital management are to ensure that the Group complies with externally imposed capital requirements and that the Group maintains healthy capital ratios in order to support the business and to maximize shareholders’ value. For capital management purposes, capital comprises equity attributable to equity holders of the Parent Company. The Group manages capital structure and makes adjustments to it in the light of changes in economic conditions and risk characteristics of the activities. To maintain or adjust the capital structure, the Group may issue new shares, adjust the dividend payment to shareholders and/or return capital to shareholders. No changes were made in the objectives, policies or processes of capital management during the years ended 31 December 2025 and 2024.

The Group companies registered in Lithuania, Latvia and Estonia are obliged to upkeep their equity (as per statutory financial statements) at not less than 50% of their share capital (comprised of share capital), as imposed by the Law on Companies of the Republic of Lithuania, Commercial Law of Latvia and the Commercial Code of the Republic of Estonia. As at 31 December 2025 and 31 December 2024, not all Group companies complied with this statutory capital requirement. It is expected that the results of the subsidiaries will improve in the future and, accordingly, the required ratio will be achieved. Therefore, no additional measures to achieve compliance with this requirement are currently planned.

In addition, the Group has committed to its lenders to keep to certain minimum capital requirements which were met as of 31 December 2025 as of 31 December 2024. There were no other externally imposed capital requirements on the Group.

The Group monitors capital using equity to assets ratio. There is no target equity to assets ratio set out by the Group’s management, however, current ratio presented below is considered as good performance indicator, taking into account the changes in the Group (Note 1).

Group	2025	2024
Equity	32,964	28,898
Assets	99,301	91,331
Equity to assets ratio	33.2	31.6

28 Subsequent events

On 28 January 2026 the Company’s subsidiary “Monto EU” UAB acquired “Santer SP. Z o.o” (acquisition price EUR 309 thousand), from unrelated party. “Santer SP. Z o.o” is engaged in rental properties management activities in Poland. At the moment of issuance of these financial statements Group’s management was not able to obtain reliable financial information of the newly acquired company and evaluate fair value of net assets as at the acquisition. After the acquisition “Santer SP. Z o.o”. is renamed to “MONTO Sp. z o.o”.

On 30 January 2026, the Company signed an amendment to the cash pool loan agreement with Swedbank, AB in connection with the refinancing of the loan. On 05 February 2026 as a result of the reorganization, SIA "Multihouse" was merged with SIA "Livonijas nami". On 26 February 2026 the Group changed Latvian subsidiary company name SIA “Ēku pārvaldīšanas serviss” to SIA “Manas MĀJAS serviss”. Other contact details did not change.

On 28 February 2026 the geopolitical situation in the Middle East escalated due to the armed conflict. As of the date of authorization of the financial statements, the conflict continues to evolve in the Middle East as military activity persists. The Group does not have direct operations or assets in the region and therefore has no direct exposure to these events. Based on management’s assessment as at the reporting date, no material impact on the Group’s financial position, financial performance or cash flows has been identified. Management continues to monitor developments related to the geopolitical environment.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 168

28 Subsequent events (cont’d)

On 7 April 2026, the merger of the Company’s subsidiaries UAB City Service Engineering and UAB Unitechna was completed. Following the merger, UAB City Service Engineering assumed all rights and obligations of UAB Unitechna as its legal successor.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 169

29 Parent company’s unconsolidated financial statements

The unconsolidated financial statements of the parent company have been prepared in accordance with the Accounting Act of the Republic of Estonia and these are not separate financial statements of the parent company in the meaning of IAS 27 “Separate Financial Statements”. The parent’s unconsolidated financial statements have been prepared using the same accounting policies as for the preparation of the consolidated financial statements, except for the accounting policy of the investments in subsidiaries and associates which are carried at cost, less impairment (Note 2.4).

Statement of financial position

ASSETS	As of 31 December 2025	As of 31 December 2024
Non-current assets
Property, plant and equipment	7	4
Investments into subsidiaries	65,921	65,921
Receivables from related parties (including loans granted)	7,711	-
Non-current receivables	8,886	3,667
Deferred income tax asset	1,101	664
Total non-current assets	83,626	70,256
Current assets
Inventories	17	21
Prepayments	167	177
Trade receivables	647	1,446
Receivables from related parties (including loans granted)	3,176	12,128
Other receivables	28	554
Cash	10	995
Total current assets	4,045	15,321
Total assets	87,671	85,577

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 170

29 Parent company’s unconsolidated financial statements (cont’d)

Statement of financial position (cont’d)

EQUITY AND LIABILITIES	As of 31 December 2025	As of 31 December 2024
Equity
Share capital	9,483	9,483
Share premium	8,490	8,490
Reserves	948	420
Retained earnings	32,005	28,428
Total equity	50,926	46,821
Liabilities
Non-current liabilities
Non-current borrowings	-	17,424
Provisions for employee benefits	1	-
Non-current payables	9,274	-
Total non-current liabilities	9,275	17,424
Current liabilities
Current loans	9,440	5,469
Current portion of non-current borrowings	17,426	1,758
Trade payables and other payables	594	14,095
Contract liabilities	-	10
Other current liabilities	10	-
Total current liabilities	27,470	21,332
Total liabilities	36,745	38,756
Total equity and liabilities	87,671	85,577

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 171

29 Parent company’s unconsolidated financial statements (cont’d)

Statement of comprehensive income

	2025	2024
Revenue from contracts with customers	750	768
Cost of sales	(119)	-
Gross profit	631	768
General and administrative expenses	(3,067)	(2,663)
Expected credit losses on financial assets	(9)	146
Other operating income	54	17
Other operating expenses	(95)	-
Profit (loss) from operations	(2,486)	(1,732)
Finance income	12,848	1,299
Finance costs	(1,195)	(1,073)
Profit (loss) before tax	9,167	(1,506)
Income tax (expense) benefit	436	340
Net profit (loss)	9,603	(1,166)
Other comprehensive income	-	-
Total comprehensive income (expense) for the year, net of tax	9,603	(1,166)

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, EstoniaNarva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 172 29 Parent company’s unconsolidated financial statements (cont’d)

Statement of changes in equity

	Share capital	Share premium	Legal reserve	Other reserves	Retained earnings	Total
Balance as of 1 January 2025	9,483	8,490	420	-	28,428	46,821
Net profit for the year	-	-	-	-	9,603	9,603
Other comprehensive income	-	-	-	-	-	-
Total comprehensive income	-	-	-	-	9,603	9,603
Transfer from reserves	-	-	528	-	(528)	-
Dividends declared	-	-	-	-	(5,498)	(5,498)
Balance as of 31 December 2025	9,483	8,490	948	-	32,005	50,926

• Book value of holdings under control or significant influence: (65,921)
• Value of holdings under control of significant influence, calculated under equity method: 50,689

• Adjusted unconsolidated equity as of 31 December 2025*: 35,694

• Adjusted unconsolidated equity differs from the consolidated equity as of 31 December 2025 because the Company’s share of losses of certain subsidiaries exceeds its interest in respective subsidiaries, accounted for based on equity method.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 173 29 Parent company’s unconsolidated financial statements (cont’d)

Statement of changes in equity

	Share capital	Share premium	Legal reserve	Other reserves	Retained earnings	Total
Balance as of 1 January 2024	9,483	8,490	-	-	31,688	49,661
Net profit for the year	-	-	-	-	(1,166)	(1,166)
Other comprehensive income	-	-	-	-	-	-
Total comprehensive income	-	-	-	-	(1,166)	(1,166)
Transfer from reserves	-	-	420	-	(420)	-
Dividends declared	-	-	-	-	(1,674)	(1,674)
Balance as of 31 December 2024	9,483	8,490	420	-	28,428	46,821

• Book value of holdings under control or significant influence: (65,921)
• Value of holdings under control of significant influence, calculated under equity method: 51,908

• Adjusted unconsolidated equity as of 31 December 2024*: 32,808

• Adjusted unconsolidated equity differs from the consolidated equity as of 31 December 2024 because the Company’s share of losses of certain subsidiaries exceeds its interest in respective subsidiaries, accounted for based on equity method.

CITY SERVICE SE, company code 12827710, Narva mnt. 5, Tallinn, Estonia CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2025 (all amounts are in EUR thousand unless otherwise stated) 29 Parent company’s unconsolidated financial statements (cont’d)

Statement of cash flows

	2025	2024
Cash flows from (to) operating activities
Net profit from continued operations	9,603	(1,166)
Adjusting items:
Income tax expenses	(436)	(340)
Depreciation and amortization	3	2
Impairment and write-off of accounts receivable	9	(1,125)
Dividend (income)	(12,069)	(1,400)
Interest (income)	(779)	101
Interest expenses	1,195	1,073
Other provisions	1	-
	(2,473)	(2,855)
Changes in working capital:
(Increase) decrease in inventories	4	-
(Increase) decrease in trade receivables, receivables from related parties, non-current receivables, other receivables and other current assets	(1,747)	2,579
(Increase) decrease in prepayments	14	(28)
Increase (decrease) in trade payables and payables to related parties	(9,176)	4,096
Increase (decrease) in advances received and other current liabilities	84	(67)
	(13,294)	3,725
Income tax paid	9	(9)
Net cash flows from (to) operating activities	(13,285)	3,716
Cash flows from (to) investing activities
(Acquisition) of non-current assets	(5)	(4)
Dividends received	12,069	1,400
Interests received	778	(101)
Loans (granted)	(496)	(13,200)
Loans repaid	4,431	1,367
Net cash flows (to) from investing activities	16,777	(10,538)
Cash flows (to) financing activities
Dividends paid	(5,498)	(1,674)
Proceeds from loans	3,972	10,660
Loans (repaid)	(1,756)	(4,009)
Interest (paid)	(1,195)	(1,073)
Net cash flows from (to) financing activities	(4,477)	3,904
Net increase in cash and cash equivalents	(985)	(2,918)
Cash and cash equivalents at the beginning of the year	995	3,913
Cash and cash equivalents at the end of the year	10	995

174