Ignitis Grupe — Interim / Quarterly Report 2019

Feb 28, 2020

2019

UAB Ignitis Grupė consolidated and Company‘s condensed interim financial information

Consolidated and Company’s condensed interim financial information for the twelve month period ended 31 December 2019, prepared according to international accounting standard 34, 'Interim financial reporting' as adopted by the European Union (unaudited)

www.ignitisgrupe.lt

UAB „Ignitis grupė“ Žvejų str.. 14, 09310 Vilnius, Lithuania E-mail grupe@ignitis.lt Company code 301844044

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Contents

Condensed interim statements of financial position	3
Condensed interim statements of comprehensive income	4
Condensed interim statements of changes in equity	5
Condensed interim statements of cash flows	7
Notes to the condensed interim financial information	8

Translation note:

These condensed interim financial statements are a translation from the original, which was prepared in Lithuanian. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of this document takes precedence over this translation.

Condensed interim financial information was approved by Chief Executive Officer, Finance and Treasury Director and Head of Accounting Service Center of Ignitis Grupės Paslaugų Centras UAB (acting under Order No IS-73-20 of 26 February 2020) at 28 February 2020:

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Darius Maikštėnas Darius Kašauskas Chief Executive Officer Finance and Treasury Director

Giedruolė Guobienė

Head of Accounting Service Center of Ignitis Grupės Paslaugų Centras UAB acting under Order No IS-73-20 of 26 February 2020

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION All amounts in thousands of euro unless otherwise stated

		Group	Group	Company	Company
Notes	2019.12.31	2018.12.31 (restated*)	2018 01 01 (restated*)	2019.12.31	2018.12.31
ASSETS Non-current assets Intangible assets 4 Property, plant and equipment 4 Right-of-use asset 5 Prepayments for non-current assets Investment property Investments in subsidiaries 6 Amounts receivable after one year Other financial assets Other non-current assets Deferred income tax asset Total non-current assets Current assets Inventories Prepayments and deferred expenses Trade receivables Other amounts receivable Other current assets Prepaid income tax Short-term loans Other financial assets Cash and cash equivalents 7 Non-current assets held for sale 8 Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital 9 Reserves Retained earnings (deficit) Equity attributable to owners of the parent Non-controlling interests Total equity Liabilities Non-current liabilities Non-current borrowings 10 Lease liabilities 11 Grants and subsidies Deferred income tax liabilities Provisions 12 Deferred revenue Other non-current amounts payable and liabilities Total non-current liabilities Current liabilities Current portion of long-term debts 10 Current borrowings 10 Current portion of lease liabilities 11 Trade payables Contract liabilities Income tax liabilities Provisions 12 Deferred revenue Other current amounts payable and liabilities Liabilities related to non-current assets held for sale Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES	142,737 2,347,348 61,044 27,809 5,530 - 164,991 3,735 5,087 10,937 2,769,218 46,970 50,409 117,376 30,252 8 2,317 - 5,698 131,378 384,408 40,528 424,936 3,194,154 1,212,156 259,652 (169,565) 1,302,243 49,068 1,351,311 821,929 33,818 267,949 38,321 35,123 149,900 1,325 1,348,365 37,453 196,737 8,401 78,040 40,724 6,295 15,157 9,750 96,685 489,242 5,236 494,478 1,842,843 3,194,154	106,330 2,090,864 - 23,621 6,494 - 160,606 2,008 6,094 14,468 2,410,485 43,137 30,655 143,120 25,436 2,147 4,192 - 656 127,835 377,178 65,706 442,884 2,853,369 1,212,156 212,802 (169,431) 1,255,527 47,588 1,303,115 735,410 14,334 208,874 36,321 35,446 135,411 1,803 1,167,599 61,819 47,727 5,220 93,237 49,766 4,544 5,553 9,110 102,693 379,669 2,986 382,655 1,550,254 2,853,369	36,360 1,771,438 - 21,911 14,878 - 170,488 426 3,239 5,530 2,024,270 56,866 38,119 112,563 27,511 1,093 2,102 - - 171,756 410,010 79,301 489,311 2,513,581 1,212,156 99,380 (13,555) 1,297,981 45,801 1,343,782 480,068 187 200,311 34,528 6,927 64,865 1,761 788,647 119,599 14,082 145 98,338 27,765 3,728 2,498 5,242 109,421 380,818 334 381,152 1,169,799 2,513,581	1,874 86 838 144 - 1,204,494 723,201 3,474 - 763 1,934,874 - 32 - 380 - - 270,949 - 144 271,505 7,141 278,646 2,213,520 1,212,156 80,720 36,525 1,329,401 - 1,329,401 639,465 563 - - - - - 640,028 32,901 196,737 277 259 52 - - - 13,865 244,091 - 244,091 884,119 2,213,520	1,874 427 - 816 - 1,206,921 679,593 2,008 - 1,077
					1,892,716
					- 62 - 631 - 15 189,324 - 231
					190,263 7,141
					197,404
					2,090,120
					1,212,156 19,811 78,231
					1,310,198
					-
					1,310,198
					671,245 - - - - - 378
					671,623
					57,401 47,721 - 947 51 - 806 - 1,373
					108,299 -
					108,299
					779,922
					2,090,120

*Certain amounts presented above do not correspond to the 2017 and 2018 Financial Statements but reflect corrections, disclosed in Note 3.

The accompanying notes form an integral part of this condensed interim financial information.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

All amounts in thousands of euro unless otherwise stated

Notes	Group	Group	Company	Company
	2019	*2018 (restated) **	2019	2018
Revenue from contracts with customers 13 Other income Dividend income 15 Operating expenses Purchases of electricity, gas for trade, and related services Purchases of gas and heavy fuel oil Depreciation and amortisation Wages and salaries and related expenses Repair and maintenance expenses Revaluation of property, plant and equipment (Impairment)/reversal of impairment of investments in subsidiaries Reversal (impairment) of amounts receivable and loans Impairment of property, plant and equipment Other expenses 14 Total operating expenses Operating profit (loss)) Finance income Finance costs Results of the revaluation and closing of derivative financial instruments Profit (loss) before tax Current year corporate income tax (expense)/benefit Deferred corporate income tax (expense)/benefit Net profit Attributable to: Owners of the parent Non-controlling interest Other comprehensive income (loss) Items that will not be reclassified to profit or loss Gain (loss) on revaluation of non-current assets Deferred income tax related to gain (loss) on revaluation of non-current assets Items that will not be reclassified to profit or loss, total Items that will be reclassified to profit or loss Change in fair value of available-for-sale financial assets Other income/(expenses) recognised directly in equity during the period Translation of net investments in foreign operations into the Group’s presentation currency Items that will be reclassified to profit or loss, total Attributable to: Owners of the parent Non-controlling interests	1,085,416 9,841 - 1,095,257 (497,483) (238,535) (113,638) (86,997) (29,797) (677) - 292 (4,591) (37,973) (1,009,339) 85,918 2,193 (18,810) - 69,301 (7,066) (1,376) 60,859 58,499 2,360 734 (30) 704 (26) (26) 678 61,537 59,167 2,370	1,044,207 45,782 - 1,089,989 (510,397) (304,027) (87,319) (79,741) (21,200) (67,671) (2,097) (9,876) (3,726) (24,048) (1,110,100) (20,111) 1,621 (14,899) (573) (33,962) (4,570) 16,998 (21,534) (22,028) 493 123,140 77 123,217 (26) (26) 123,191 101,657 95,376 6,279	3,283 25 25,918	3,188 703 67,378
			29,226 - - (273) (5,582) - - 13,047 (1,394) - (1,891)	71,269 - - (7) (5,067) - - (6,815) (11,198) - (1,357)
			3,907 33,133 15,502 (17,015) -	(24,444) 46,825 10,069 (12,169) (572)
			31,620	44,153
			- 583	7 528
			32,203	44,688
			32,203 - - -	44,688 - - -
			- -	- -
			-	-
			-	-
			32,203	44,688
			32,203 -	44,688 -

*Certain amounts presented above do not correspond to the 2018 Financial Statements but reflect corrections, disclosed in Note 3.

The accompanying notes form an integral part of this condensed interim financial information.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY

All amounts in thousands of euro unless otherwise stated

	Equity attributable to owners of the Company
Group Notes	Share capital Legal reserve Revaluation reserve Other reserves Retained earnings (restated*) Subtotal (restated*) Non- controlling interest Total (restated*)
Balance at 1 January 2018 Correction of error (Note 3) 3 Effect of change in accounting policies following the adoption of new IFRS Restated balance as at 1 January 2018 (restated*) Revaluation of non-current assets, net of deferred income tax effect Translation of net investments in foreign operations into the Group’s presentation currency Result of change in actuarial assumptions Total other comprehensive income (loss) Net profit for the reporting period (restated) Total comprehensive income for the period (restated) Transfer of revaluation reserve to retained earnings (transfer of depreciation, net of deferred income tax) Emission allowances utilised Emission allowances reserve amortisation Transfer to reserves and movement in reserves Dividends 15 Increase in share capital of UAB „Kauno kogeneracinė jėgainė” attributable to minority interest Acquisition of subsidiaries Increase in share capital by contribution of property, plant and equipment of AB „Ignitis Gamyba” attributable to minority interest Restated balance as at 31 December 2018 (restated) Balance at 1 January 2019 (restated) Revaluation of non-current assets, net of deferred income tax effect Revaluation of emission allowances Translation of net investments in foreign operations into the Group’s presentation currency Result of change in actuarial assumptions Total other comprehensive income (loss) Net profit for the reporting period Total comprehensive income for the period Transfer of revaluation reserve to retained earnings (transfer of depreciation, net of deferred income tax) Emission allowances utilised Transfer to reserves and movement in reserves Dividends 15 Other adjustments Balance at 31 December 2019**	1,212,156 46,512 52,826 42 (13,706) 1,297,830 45,796 1,343,626 - - - - 151 151 5 156 - - - - (59,647) (59,647) (3,145) (62,792)
	1,212,156 46,512 52,826 42 (73,202) 1,238,334 42,656 1,280,990 - - 117,357 - - 117,357 5,783 123,140 - - - (26) - (26) - (26) 75 75 4 79
	- - 117,357 (26) 75 117,406 5,787 123,193 - - - - (22,028) (22,028) 493 (21,535)
	- - 117,357 (26) (21,953) 95,378 6,280 101,658 - - (6,746) - 6,746 - - - - - (473) - 473 - - - - - (29) - 29 - - - - 3,339 - - (3,339) - - - - - - - (78,265) (78,265) (2,596) (80,861) - - - - - - 1,172 1,172 - - - - 82 82 - 82 - - - - - - 76 76
	1,212,156 49,851 162,935 16 (169,429) 1,255,529 47,588 1,303,117
	1,212,156 49,851 162,935 16 (169,429) 1,255,529 47,588 1,303,117 - - (2) - - (2) - (2) - - 723 - - 723 13 736 - - - (5) - (5) - (5) - - - - (27) (27) (3) (30)
	- - 721 (5) (27) 689 10 699 - - - - 58,499 58,499 2,360 60,859
	- - 721 (5) 58,472 59,188 2,370 61,558 - - (15,851) - 15,851 - - - - - (812) - 812 - - - - 62,797 - - (62,818) (21) - (21) - - - - (13,000) (13,000) (890) (13,890) - - - - 547 547 - 547
	1,212,156 112,648 146,993 11 (169,565) 1,302,243 49,068 1,351,311

*Certain amounts presented above do not correspond to the 2017 and 2018 Financial Statements but reflect corrections, disclosed in Note 3.

The accompanying notes form an integral part of this condensed interim financial information.

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY

All amounts in thousands of euro unless otherwise stated

Company	Notes	Share capital	Legal reserve	Other reserves	Retained earnings	Total
Balance at 1 January 2018 Net profit for the period Total comprehensive income for the period Transfer to legal reserves Dividends 15 Balance at 31 December 2018 Balance at 1 January 2019 Net profit for the period Total comprehensive income for the period Dividends Transfer to legal reserves Balance at 31 December 2019		1,212,156 14,516 - 117,103 1,343,775 - - - 44,688 44,688
		- - - 44,688 44,688 - 5,295 - (5,295) - - - - (78,265) (78,265)
		1,212,156 19,811 - 78,231 1,310,198
		1,212,156 19,811 - 78,231 1,310,198 - - - 32,203 32,203
		- - - 32,203 32,203 - 60,909 - (60,909) - - - - (13,000) (13,000)
		1,212,156 80,720 - 36,525 1,329,401

The accompanying notes form an integral part of this condensed interim financial information.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

All amounts in thousands of euro unless otherwise stated

Notes	Group	Group	Company	Company
	2019	2018 (restated*)	2019	2018
Cash flows from operating activities Net profit for the period Adjustments for non-monetary expenses (income): Depreciation and amortisation expenses 4,5,8 Impairment of property, plant and equipment Revaluation of derivative financial instruments Impairment of financial assets (reversal of impairment) Result of revaluation of property, plant and equipment Result of revaluation of investment property Impairment/(reversal of impairment) of investments in subsidiaries Income tax expenses (Depreciation) of grants Increase (decrease) in provisions 4 Inventory write-down to net realizable value/ (reversal) Non-current assets (except financial assets) write-off expenses 14 Expenses/(income) of revaluation of emission allowances 4 Emission allowances utilised 14 Elimination of results of investing activities: - Dividend (income) - (Gain)/loss on disposal/write-off of property, plant and equipment - Result of derivatives revaluation and closing - Other investment activity expenses (income) Elimination of results of financing activities: Interest (income) Interest expenses Other finance (income) expenses Changes in working capital: (Increase) decrease in trade receivables and other amounts receivable (Increase) decrease in inventories, prepayments and other current assets Increase (decrease) in amounts payable, deferred income and contract liabilities Income tax (paid) Net cash flows from (used in) operating activities Cash flows from investing activities (Acquisition) of property, plant and equipment and intangible assets Disposal of property, plant and equipment and intangible assets Loans (granted) Loans repaid (Acquisition) of subsidiaries Disposal of subsidiaries Grants received Interest received Dividends received Increase (decrease) of cash flows from other from investing activities Net cash flows from (used in) investing activities Cash flows from financing activities Proceeds from borrowings Issue of bonds Repayments of borrowings Lease payments Interest paid Dividends paid Increase in share capital of UAB “Kauno Kogeneracinė Jėgainė“ Derivatives closing result Other increases (decreases) in cash flows from financing activities Net cash flows from (used in) financing activities Increase (decrease) in cash and cash equivalents (including overdraft) Cash and cash equivalents (including overdraft) at the beginning of the period Cash and cash equivalents (including overdraft) at the end of the period 7	60,860 122,650 4,591 - (1,422) (292) 740 - - 8,382 (9,011) 9,246 (76) 368 894 - 3,087 - 292 (1,548) 15,290 2,875 12,355 (21,651) (17,283) (4,551) 185,796 (437,100) 39,536 - - (27,965) - 64,048 1,054 - 4,201 (356,226) 130,937 - (70,394) (7,605) (14,179) (13,817) - - - 24,942 (145,488) 85,575 (59,913)	(21,534) 96,589 3,726 (10,003) (354) 9,876 76,617 (18) - (12,428) (9,270) 7,560 (718) (8,933) 908 - 477 - 82 (1,427) 12,442 2,263 (21,603) 18,896 41,401 (6,309) 178,240 (415,913) 48,162 - - (23,509) - 25,523 1,105 - (1,582) (366,214) 57,810 294,346 (155,421) (544) (10,402) (80,608) 7,840 (573) - 112,448 (75,526) 161,101 85,575	32,203 273 - - - 1,394 - - (13,047) (583) - (806) - - - (25,918) - - - (15,500) 14,413 2,600 (1,714) 702 (2,127) 897 (7,213) (45) - (191,876) 67,579 (13,300) 39,748 - 14,017 25,918 - (57,959) - - (57,401) (239) (13,306) (13,000) - - (83,946) (149,118) (42,029) (191,147)	44,688 7 - - - 11,198 - - 6,815 (535) - (2,097) - - - (67,378) - 572 15 (10,040) 11,217 924 4,393 (20) (464) -
				(705)
				(6,454) - (351,160) 140,117 (46,254) - - 1,102 67,378 (1,582)
				(196,853)
				- 294,346 (95,052) - (7,746) (78,265) (572) (9,699)
				103,012
				(94,546) 52,517
				(42,029)

*Certain amounts presented above do not correspond to the 2018 Financial Statements but reflect corrections, disclosed in Note 3.

The accompanying notes form an integral part of this condensed interim financial information

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

1 General information

UAB Ignitis Grupė (hereinafter “the Company”) is a private limited liability company registered in the Republic of Lithuania. The Company’s registered office address is Žvejų str. 14, LT-09310, Vilnius, Lithuania. The Company is a limited liability profit-oriented entity registered on 28 August 2008 with the Register of Legal Entities managed by the public institution the Centre of Registers. Company code 301844044, VAT payer’s code LT10004278519. The Company has been founded for an indefinite period.

The Company is a parent company, which is responsible for the management and coordination of activities of Group companies engaged in electricity and heat generation (including electricity generation from renewable energy sources), supply, electricity import and export, distribution and trade, natural gas distribution and supply, as well as in service and development of electric energy industry.

The Company analyses the activities of Group companies, represents the whole group, implements its shareholders’ rights and obligations, defines operation guidelines and rules, and coordinates the activities in the fields of finance, law, strategy and development, human resources, risk management, audit, technology, communication, etc.

The Company seeks to ensure effective operation of Group companies, implementation of goals related to the Group’s activities set forth in the National Energetic Independence Strategy and other legal acts, ensuring that it builds a sustainable value in a socially responsible manner.

The Company is wholly owned by the State of the Republic of Lithuania.

	At 31 December 2019	At 31 December 2018
Company’s shareholder	Share capital, in EUR‘000 %	Share capital, in EUR‘000 %
Republic of Lithuania represented by the Lithuanian Ministry of Finance 1,212,156 100 As at 31 December 2019, the Group had 3,846 (31 December 2018 – 3,813).		1,212,156 100

These financial statements were authorised for issue at 28 February 2020.

2 Accounting principles

2.1 Basis of preparation

These financial statements, prepared for the period ended 31 December 2019, cover condensed interim financial statements of a parent company UAB Ignitis Grupė and consolidated Company‘s and its subsidiaries (collectively “the Group”) condensed interim financial statements. These financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applicable to interim financial reporting (International Accounting Standard (IAS) 34, 'Interim financial reporting'). This unaudited condensed interim financial information should be read together with the annual financial statements for the year ended 31 December 2018, which have been prepared in accordance with IFRS as adopted by the EU.

In year 2019 management of a Group have reviewed accounting methods applied for:

• presentation of revenue received from new consumers

• presentation of revenue relating to rendering of public service obligations and electricity transmission services

• presentation of incomes, of securities of Liquefied Natural Gas Terminal’s (LNGT) component, collected from customers and gas distribution services

The new methods for the Group's financial statements are applied retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors therefore the Group presents an additional statement of financial position for the 1 January 2018, when the revised accounting and presentation methods were applied retrospectively by restating items in the financial statements (see Note 3).

Other accounting methods applied in the preparation of the condensed interim financial information are the same as those applied in the preparation of the annual financial statements for 2018 except the matters relating to changes in accounting methods used (see Note 3). Financial year of Company and other Group companies coincides with the calendar year.

These financial statements are presented in euros and all values are rounded to the nearest thousands, except when otherwise indicated and include comparative information for the prior period ended 31 December 2018.

a) New and amended standards, and interpretations

• IFRS 16: Lease

During the financial year ended 31 December 2019, the Company and Group has applied IFRS 16 Leases for the first time, which had significant impact on the Company’s and Group’s financial statements. IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognize most leases on the statement of financial position. Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

The Company and Group has adopted IFRS 16 Leases using the modified retrospective approach of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard is recognized in retained earnings at the date of initial application and comparative information is not restated.

The impact of the first-time adoption of IFRS 16 Leases on the Group’s financial statements is shown in the table below:

At 31 December 2018	IFRS 16	At 1 January 2019
ASSETS Non-current assets Property, plant and equipment 35.969 (35.969) - Right-of-use asset - 50.523 50.523 EQUITY AND LIABILITIES Non-current liabilities Lease liabilities Current liabilities 14.334 12.291 26.625 Current portion of lease liabilities ASSETS 5.220 2.263 7.483

The impact of the first-time adoption of IFRS 16 Leases on the Company’s financial statements is shown in the table below:

	At 31 December 2018		IFRS 16		At 1 January 2019
ASSETS
Non-current assets
Right-of-use asset		-		847	847
EQUITY AND LIABILITIES
Non-current liabilities
Lease liabilities
Current liabilities		-		637	637
Current portion of lease liabilities
ASSETS		-		211	211

The impact of first-time adoption of IFRS 16 on the Company's and the Group's lease commitments is presented in the table below:

	Group Company
The future minimum lease payments under irrevocable operating lease agreements as at 31 December 2018 are as follows: Less: Commitments relating to short-term leases Less: Commitments relating to leases of low-value assets Pakoreguotos būsimosios minimalios įmokos pagal neatšaukiamas veiklos nuomos sutartis 2018 m. gruodžio 31 d. The weighted average interest rate as at 1 January 2019, % The lease liability is recognised on 1 January 2019 by applying the interest rate Lease liabilities as at 1 January 2019 Of which: Current lease liabilities Non-current lease liabilities	21,443 1,033 24 - 6 - 21,413 1,033 3.44 0.43 14,554 1,024
	14,554 1,024
	2,263 771 12,291 253

Applied practical transitional arrangements when the Company and the Group are lessees

Upon adoption of IFRS 16, the Company applied a single recognition and measurement approach for all leases except for short-term leases and leases of low-value assets. The following specific transition requirements and practical expedients that the standard provides were applied by the Company:

The Company also applied the available practical expedients wherein it:

• Used a single discount rate to a portfolio of leases with reasonably similar characteristics,

• Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date of initial application,

• • Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application,

• Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease.

• IFRS 9: Prepayment features with negative compensation (Amendment)

• The Amendment allows financial assets with prepayment features that permit or require a party to a contract either to pay or receive reasonable compensation for the early termination of the contract (so that, from the perspective of the holder of the asset there may be ‘negative compensation’), to be measured at amortized cost or at fair value through other comprehensive income. Management assessed that adoption of new standard amendment for the first time had no significant effect on financial statements of the Company and the Group.

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Consolidated and Company‘s condensed financial information for 2019 | 9

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

• IAS 28: Long-term Interests in Associates and Joint Ventures (Amendments)

The Amendments relate to whether the measurement, in particular impairment requirements, of long term interests in associates and joint ventures that, in substance, form part of the ‘net investment’ in the associate or joint venture should be governed by IFRS 9, IAS 28 or a combination of both. The Amendments clarify that an entity applies IFRS 9 Financial Instruments, before it applies IAS 28, to such long-term interests for which the equity method is not applied. In applying IFRS 9, the entity does not take account of any adjustments to the carrying amount of long- term interests that arise from applying IAS 28. Management assessed that adoption of new standard amendment for the first time had no significant effect on financial statements of the Company and the Group.

• IFRIC INTERPETATION 23: Uncertainty over Income Tax Treatments The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12. The Interpretation provides guidance on considering uncertain tax treatments separately or together, examination by tax authorities, the appropriate method to reflect uncertainty and accounting for changes in facts and circumstances. Management has assessed that adoption of interpretation for the first time had no significant effect on financial statements of the Company and the Group

• IAS 19: Plan Amendment, Curtailment or Settlement (Amendments)

The Amendments require entities to use updated actuarial assumptions to determine current service cost and net interest for the remainder of the annual reporting period after a plan amendment, curtailment or settlement has occurred. The Amendments also clarify how the accounting for a plan amendment, curtailment or settlement affects applying the asset ceiling requirements. Management assessed that adoption of new standard amendment for the first time had no significant effect on financial statements of the Company and the Group.

• The IASB has issued the Annual Improvements to IFRSs 2015 – 2017 Cycle, which is a collection of amendments to IFRSs:

• ➢ IFRS 3 Business Combinations and IFRS 11 Joint Arrangements: The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.

• ➢ IAS 12 Income Taxes: The amendments clarify that the income tax consequences of payments on financial instruments classified as equity should be recognized according to where the past transactions or events that generated distributable profits has been recognized.

• ➢ IAS 23 Borrowing Costs: The amendments clarify paragraph 14 of the standard that, when a qualifying asset is ready for its intended use or sale, and some of the specific borrowing related to that qualifying asset remains outstanding at that point, that borrowing is to be included in the funds that an entity borrows generally.

Management assessed that adoption of Annual improvements for the first time had no significant effect on financial statements of the Company and the Group.

b) Standards issued but not yet effective and not early adopted

• IFRS 17: Insurance Contracts (New)

IFRS 17, effective from 1 January 2021, changes IFRS 4, which permits entities to continue to use current practices in accounting for insurance contracts. This made it difficult for investors to compare the financial performance of similar insurance companies. IFRS 17 is a general principle-based standard that sets out accounting requirements for all types of insurance contracts, including reinsurance contracts held by an insurer. The Standard requires the recognition and measurement of classes of insurance contracts: (i) riskadjusted present value of future cash flows (cash flows from the performance of the contract), which reflects all available information about cash flows from the contract that is consistent with market observable data by adding (if the value is a liability) or subtracting (if the value is an asset); (ii) the amount reflecting unearned profit (contracted service margin) from the group of contracts. Profits from a group of insurance contracts will be recognized by insurers for the duration of the insurance coverage and the moment they transfer the risk. If a group of contracts is or becomes a loss, the entity will recognize the loss immediately. The standard has not yet been approved by the EU. This IFRS will not have any impact on the financial position or performance of the Company and the Group as insurance services are not provided.

• 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

• The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. 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. The amendments have not yet been endorsed by the EU. Management has assessed that adoption of new standard will have no significant effect on financial statements of the Company and the Group.

• Conceptual Framework in IFRS standards

• The IASB issued the revised Conceptual Framework for Financial Reporting on 29 March 2018. The Conceptual Framework sets out a comprehensive set of concepts for financial reporting, standard setting, guidance for preparers in developing consistent accounting policies and assistance to others in their efforts to understand and interpret the standards. IASB also issued a separate accompanying document, Amendments to References to the Conceptual Framework in IFRS Standards, which sets out the amendments to affected standards in order to update references to the revised Conceptual Framework. Its objective is to support transition to the revised Conceptual Framework for companies that develop accounting policies using the Conceptual Framework when no IFRS Standard applies to a particular transaction. For preparers who develop accounting policies based on the Conceptual Framework, it is effective for annual periods beginning on or after 1 January 2020.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

• IFRS 3: Business Combinations (Amendments)

• The IASB issued amendments in Definition of a Business (Amendments to IFRS 3) aimed at resolving the difficulties that arise when an entity determines whether it has acquired a business or a group of assets. The Amendments are effective for business combinations for which the acquisition date is in the first annual reporting period beginning on or after 1 January 2020 and to asset acquisitions that occur on or after the beginning of that period, with earlier application permitted. These Amendments have not yet been endorsed by the EU. At the moment Management is assessing the effect of new standard amendment on financial statements of the Company and the Group.

• IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of ‘material’ (Amendments)

• The Amendments are effective for annual periods beginning on or after 1 January 2020 with earlier application permitted. The Amendments clarify the definition of material and how it should be applied. The new definition states that, ’Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity’. In addition, the explanations accompanying the definition have been improved. The Amendments also ensure that the definition of material is consistent across all IFRS Standards. At the moment Management is assessing the effect of new standard amendment on financial statements of the Company and the Group.

• Interest Rate Benchmark Reform - IFRS 9, IAS 39 and IFRS 7 (Amendments) The amendments are effective for annual periods beginning on or after 1 January 2020 and must be applied retrospectively. Earlier application is permitted. In September 2019, the IASB issued amendments to IFRS 9, IAS 39 and IFRS 7, which concludes phase one of its work to respond to the effects of Interbank Offered Rates (IBOR) reform on financial reporting. Phase two will focus on issues that could affect financial reporting when an existing interest rate benchmark is replaced with a risk-free interest rate (an RFR). The amendments published, deal with issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative interest rate and address the implications for specific hedge accounting requirements in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, which require forward-looking analysis. The amendments provided temporary reliefs, applicable to all hedging relationships that are directly affected by the interest rate benchmark reform, which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate. There are also amendments to IFRS 7 Financial Instruments: Disclosures regarding additional disclosures around uncertainty arising from the interest rate benchmark reform. At the moment Management is assessing the effect of new standard amendment on financial statements of the Company and the Group.

2.2 Right-of-use asset

Right-of-use asset is an asset, that represents a Company’s/Group’s right to use an underlying asset for the lease term. Company/Group recognize right-of-use asset to all leases, including leases of right-of-use assets in a sublease, except for leases of intangible assets, short-term leases and leases for which the underlying asset is of low value.

Initial measurement of the right-of-use asset

At the commencement date, Company/Group measures the right-of-use asset at cost. The cost of the right-of-use asset shall comprise: the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received; any initial direct costs incurred by Company/Group; and an estimate of costs to be incurred by Company/Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. Company/Group incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period. Company/Group recognize the costs described as part of the cost of the right-of-use asset when it incurs an obligation for those costs.

Subsequent measurement of the right-of-use asset

After the commencement date, a Company/Group measure the right-of-use asset applying a cost model. To apply a cost model, Company/Group measure the right-of-use asset at cost: less any accumulated depreciation and any accumulated impairment losses; and adjusted for any remeasurement of the lease liability.

Company/Group apply the depreciation requirements in IAS 16 Property, Plant and Equipment in depreciating the right-of-use asset. If the lease transfers ownership of the underlying asset to Company/Group by the end of the lease term or if the cost of the right-of-use asset reflects that Company/Group will exercise a purchase option, Company/Group shall depreciate the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, Company/Group shall depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Company/Group presents right-of-use assets separately from intangible and tangible assets in the statement of financial position.

2.3 Lease liability

Initial measurement of the lease liability

At the commencement date, Company/Group measure the lease liability at the present value of the lease payments that are not paid at that date. The lease payments discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, Company/Group use the lessee's incremental borrowing rate.

At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date: fixed payments, less any lease incentives receivable; variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; amounts expected to be payable by Company/Group under residual value guarantees; the exercise price of a purchase option if the Company/Group is reasonably certain to exercise that option; and payments of penalties for terminating the lease, if the lease term reflects Company/Group exercising an option to terminate the lease.

Variable lease payments that depend on an index or a rate include, for example, payments linked to a consumer price index, payments linked to a benchmark interest rate (such as LIBOR) or payments that vary to reflect changes in market rental rates.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Subsequent measurement of the lease liability

After the initial measurement, Company/Group measure the lease liability by: increasing the carrying amount to reflect interest on the lease liability; reducing the carrying amount to reflect the lease payments made; and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

Interest on the lease liability in each period during the lease term shall be the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. The periodic rate of interest is the discount rate or if applicable the revised discount rate. After the commencement date, Company/Group shall recognise in profit or loss, unless the costs are included in the carrying amount of another asset applying other applicable Standards, both: interest on the lease liability; and variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payments occurs.

Reassessment of the lease liability

After the commencement date, Company/Group remeasure the lease liability to reflect changes to the lease payments. Company/Group recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, Company/Group recognise any remaining amount of the remeasurement in profit or loss.

Revised discount rate

Company/Group remeasure the lease liability by discounting the revised lease payments using a revised discount rate, if there is a change in the lease term. Company/Group determine the revised lease payments based on the revised lease term or there is a change in the assessment of an option to purchase the underlying asset, assessed considering the events and circumstances described in the context of a purchase option. Company/Group determine the revised lease payments to reflect the change in amounts payable under the purchase option.

If either there is a change in the lease term or there is a change in the assessment of an option to purchase, Company/Group determine the revised discount rate as the interest rate implicit in the lease for the remainder of 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.

Unchanged discount rate

Company/Group remeasure the lease liability by discounting the revised lease payments, if either:

• there is a change in the amounts expected to be payable under a residual value guarantee. Company/Group determine the revised lease payments to reflect the change in amounts expected to be payable under the residual value guarantee.

• there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments, including for example a change to reflect changes in market rental rates following a market rent review. Company/Group remeasure the lease liability to reflect those revised lease payments only when there is a change in the cash flows (i.e. when the adjustment to the lease payments takes effect). Company/Group determine the revised lease payments for the remainder of the lease term based on the revised contractual payments.

Discounting revised lease payments, Company/Group use an unchanged discount rate, unless the change in lease payments results from a change in floating interest rates. In that case, Company/Group use a revised discount rate that reflects changes in the interest rate.

Lease modifications

Company/Group account for a lease modification as a separate lease if both:

• the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

• the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification Company/Group:

• allocate the consideration in the modified contract;

• determine the lease term of the modified lease; and

• remeasure the lease liability by discounting the revised lease payments using a revised discount rate.

• For a lease modification that is not accounted for as a separate lease, Company/Group account for the remeasurement of the lease liability by:

• decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease. Company/Group recognise in profit or loss any gain or loss relating to the partial or full termination of the lease;

• making a corresponding adjustment to the right-of-use asset for all other lease modifications.

Company/Group present lease liabilities separately from other liabilities in the statement of financial position. Company/Group present interest expense on the lease liability separately from the depreciation charge for the right-of-use asset. Interest expense on the lease liability is a component of finance costs, presented in the statement of profit or loss and other comprehensive income.

2.4 Income tax

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

3 Significant accounting estimates and judgements used in the preparation of financial statements

Accounting estimates and judgments are continuously reviewed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The preparation of financial information according to International Financial Reporting Standards as adopted by the EU requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosures of contingencies. Changes in the underlying assumptions, estimates and judgments may have a material effect on this financial information.

In preparing these financial statements, the Group has made adjustments to prior periods.

Corrections of errors

i) The Group corrected the identified errors from the previous financial periods during the preparation of these interim financial statement. In 2019, the subsidiary AB „Ignitis gamyba“ of the Group reviewed financial statements accounting principles for revenues, receivables, and payables related to secondary power reserve, tertiary power reserve, and system restoration services (hereinafter – regulated activities), which are regulated by the National Energy Regulatory Council (NERC). Tariffs for these regulated activities for the next calendar year are set by NERC based on Group and AB „Ignitis gamyba“ forecasted expenses taking into account planned and factual revenue and expense variance in the prior financial year. In the financial statements, Group and AB „Ignitis gamyba“ reported regulated activities revenues using the accrual principle based on factual expenses incurred, i.e. regulatory activities revenues were recognized by Group and AB „Ignitis gamyba“ in such volume, which under NERC methodology, is permissible taking into consideration permissible return on investment and factual expenses for services provided incurred during the period. Due to variance between planned and factual revenues and expenses set by NERC, regulatory activities revenues and corresponding payables and other payables were corrected. Up until now, revenues were recognized in accordance to substance over form principle, following the assumption about NERC’s ability to promptly and based on unilateral decision initiate legal act amendments, that would be necessary in order to establish an obligation for the company to refund the difference between mentioned regulatory planned and actual service estimates even if Group and AB „Ignitis gamyba“ is no longer providing regulatory services mentioned above.

In 2019, by reviewing accounting of previously mentioned operations, it was noted that payable or refundable amounts in the future periods depend on whether or not the Group and AB „Ignitis gamyba“ will provide these services and will carry them out in the future, i.e. these amounts are related to currently uncompleted agreements, and in such case, provision, contingent liabilities and contingent assets should not be accounted (under IAS 37 “Provision, Contingent Liabilities and Contingent Assets”). See these restatements in columns 1 – 7 presented in table below.

ii) The Group company Ignitis Polska Sp. z. o. o. based in Poland, particiaptes in electricity trading exchange market through forward and futures contracts. The purpose of these deals is to earn profits from short-term fluctuations in electricity prices on the exchange. Ignitis Polska Sp. z. o. o. does not provides supply of electricity to final customers. Settlements are made by settling liabilities between the company and the other party to the exchange transaction, and by making a cash payment for the remaining outstanding debt. Ignitis Polska Sp. z. o. o. account for contract balances in the financial statements at fair value, and income and expenses are presented in the seperate items of Profit (loss) and other comprehensive income. After reviewing contracts of Ignitis Polska Sp. z. o. o. the Group has determined that income and expense should be reported in the item of cots in Profit (loss) and other comprehensive income as profit or loss. Management's decision to amend presentation of revenue and costs is based on the fact that, under IFRS 9, transactions made by Ignitis Polska Sp. z. o. o. cannot be classified under the own use' exception, and therefore only the result of those transactions should be recognized in profit or loss. See these restatements in column 8 presented in table below.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively corrected condensed interim statements of financial position:

N	21 12 1 1) Restatemen t of Other amounts il 2) Restatemen t of Other non-current amounts payable and liilii 3) Restatemen f f 4) Restatement 5) Reclassifica tion of Other amounts receivable and 6) Reclassifica tion of other non-current amounts 7) Error impact to 2018 12 31
Group otes	08 3 recevabe due to regulated services income abtes and Contract liabilities due to regulated services income t o deerred income tax liabilities of income tax liabilities contract liabilities to Other non- current amounts payable and liabilities payable and liabilities to Provisions non- controlling interests corrected
ASSETS Non-current assets Intangible assets 4 Property, plant and equipment 4 Prepayments for non-current assets Investment property Amounts receivable after one year Other financial assets Other non-current assets Deferred income tax asset Total non-current assets Current assets Inventories Prepayments and deferred expenses Trade receivables Other amounts receivable Other current assets Prepaid corporate income tax Other financial assets Cash and cash equivalents 7 Non-current assets held for sale 8 Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital 9 Reserves Retained earnings (deficit) FY 2018 result Equity attributable to owners of the parent Non-controlling interests Total equity Liabilities Non-current liabilities Non-current borrowings 10 Lease liabilities 11 Grants and subsidies Deferred corporate income tax liabilities Provisions 12 Deferred revenue Other non-current amounts payable and liabilities Total non-current liabilities Current liabilities Current portion of long-term debts 10 Current borrowings 10 Current portion of lease liabilities 11 Trade payables Contract liabilities Corporate income tax liabilities Provisions 12 Deferred revenue Other current amounts payable and liabilities Liabilities related to non-current assets held for sale Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES * Amendment for FY 2017 balance	106,330 - - - - - - - 106,330 2,091,590 - - - - - - - 2,091,590 23,621 - - - - - - - 23,621 6,494 - - - - - - - 6,494 160,606 - - - - - - - 160,606 2,008 - - - - - - - 2,008 6,094 - - - - - - - 6,094 14,468 - - - - - - - 14,468
	2,411,211 - - - - - - - 2,411,211
	43,137 - - - - - - - 43,137 30,655 - - - - - - - 30,655 143,120 - - - - - - - 143,120 25,436 (289) - - - 289 - - 25,436 2,147 - - - - - - - 2,147 4,192 - - - - - - - 4,192 656 - - - - - - - 656 127,835 - - - - - - - 127,835
	377,178 (289) - - - 289 - - 377,178 65,706 - - - - - - - 65,706
	442,884 (289) - - - 289 - - 442,884
	2,854,095 (289) - - - 289 - - 2,854,095
	1,212,156 - - - - - - - 1,212,156 212,802 - - - - - - - 212,802 (147,554) (289) 511 (33) (33) - - (6) (147,404) (9,209) - 7,168 (1,075) (1,075) - - (160) (4,351)
	1,268,195 (289) 7,679 (1,108) (1,108) - - (166) 1,273,203
	48,356 - - - - - - 166 48,522
	1,316,551 (289) 7,679 (1,108) (1,108) - - - 1,321,725
	735,410 - - - - - - - 735,410 14,334 - - - - - - - 14,334 208,874 - - - - - - - 208,874 38,688 - - 1,108 - - - - 39,796 30,571 - - - - - 4,875 - 35,446 115,261 - - - - - - - 115,261 11,274 - (5,396) - - 800 (4,875) - 1,803
	1,154,412 - (5,396) 1,108 - 800 - - 1,150,924
	61,819 - - - - - - - 61,819 47,727 - - - - - - - 47,727 5,220 - - - - - - - 5,220 93,237 - - - - - - - 93,237 55,325 - (2,283) - - (511) (2,765) - 49,766 3,436 - - - 1,108 - - - 4,544 2,788 - - - - - 2,765 - 5,553 7,912 - - - - - - - 7,912 102,682 - - - - - - - 102,682
	380,146 - (2,283) - 1,108 (511) - - 378,460 2,986 - - - - - - - 2,986
	383,132 - (2,283) - 1,108 (511) - - 381,446
	1,537,544 - (7,679) 1,108 1,108 289 - - 1,532,370
	2,854,095 (289) - - - 289 - - 2,854,095

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively corrected condensed interim statements of financial position (continued):

	2018.01.01 1) Restatement of Other amounts receivable due to regulated services income 2) Restatement of Other non-current amounts payable and liabilities and Contract liabilities due to regulated services income 3) Restatement of deferred income tax liabilities 4) Restatement of income tax liabilities 6) Reclassificati on of Other non-current amounts payable and liabilities to Provisions 7) Error impact to non- controlling interests 2018.01.01 corrected
Group Notes
ASSETS Non-current assets Intangible assets 4 Property, plant and equipment 4 Prepayments for non-current assets Investment property Amounts receivable after one year Other financial assets Other non-current assets Deferred income tax asset Total non-current assets Current assets Inventories Prepayments and deferred expenses Trade receivables Other amounts receivable Other current assets Prepaid corporate income tax Other financial assets Cash and cash equivalents 7 Non-current assets held for sale 8 Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital 9 Reserves Retained earnings (losses) Equity attributable to owners of the parent Non-controlling interests Total equity Liabilities Non-current liabilities Non-current borrowings 10 Lease liabilities 11 Grants and subsidies Deferred corporate income tax liabilities Provisions 12 Deferred revenue Other non-current amounts payable and liabilities Total non-current liabilities Current liabilities Current portion of long-term debts 10 Current borrowings 10 Current portion of lease liabilities 11 Trade payables Contract liabilities Corporate Income tax liabilities Provisions 12 Deferred revenue Other current amounts payable and liabilities Liabilities related to non-current assets held for sale Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES	36,360 - - - - - - 36,360 1,761,082 - - - - - - 1,761,082 21,911 - - - - - - 21,911 14,878 - - - - - - 14,878 170,488 - - - - - - 170,488 426 - - - - - - 426 3,239 - - - - - - 3,239 7,084 - - - - - - 7,084
	2,015,468 - - - - - - 2,015,468
	56,866 - - - - - - 56,866 38,119 - - - - - - 38,119 112,563 - - - - - - 112,563 27,800 (289) - - - - - 27,511 1,093 - - - - - - 1,093 2,102 - - - - - - 2,102
	171,756 - - - - - - 171,756
	410,299 (289) - - - - - 410,010 79,301 - - - - - - 79,301
	489,600 (289) - - - - - 489,311 2,505,068 (289) - - - - - 2,504,779
	1,212,156 - - - - - - 1,212,156 99,380 - - - - - - 99,380 (13,706) (289) 511 (33) (33) - (5) (13,555)
	1,297,830 (289) 511 (33) (33) - (5) 1,297,981
	45,796 - - - - - 5 45,801
	1,343,626 (289) 511 (33) (33) - - 1,343,782
	480,068 - - - - - - 480,068 187 - - - - - - 187 200,311 - - - - - - 200,311 36,049 - - 33 - - - 36,082 1,893 - - - - 5,034 - 6,927 54,509 - - - - - - 54,509 7,306 - (511) - - (5,034) - 1,761
	780,323 - (511) 33 - - - 779,845
	119,599 - - - - - - 119,599 14,082 - - - - - - 14,082 145 - - - - - - 145 98,338 - - - - - - 98,338 27,765 - - - - - - 27,765 3,695 - - - 33 - - 3,728 2,498 - - - - - - 2,498 5,242 - - - - - - 5,242 109,421 - - - - - - 109,421
	380,785 - - - 33 - - 380,818 334 - - - - - - 334
	381,119 - - - 33 - - 381,152
	1,161,442 - (511) 33 33 - - 1,160,997
	2,505,068 (289) - - - - - 2,504,779

* Amendments made have a rolling effect on FY 2018 financial statements (please refer to the Group‘s correction of error disclosures above)

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively corrected condensed interim statements of comprehensive income:

	2) Restatement of Other non-current amounts payable 3) Restatement of deferred 4) Restatement of 7) Errors impact to 8) Netting of income and expenses of
Group Notes	2018 and liabilities and Contract liabilities due to regulated services income income tax liabilities income tax liabilities non- controlling interests electricity transmission in market 2018 corrected
Revenue from contracts with customers 13 Other income Operating expenses Purchases of electricity, gas for trade, and related services Purchases of gas and heavy fuel oil Depreciation and amortisation Wages and salaries and related expenses Repair and maintenance expenses Revaluation of property, plant and equipment Reversal (impairment) of amounts receivable and loans Impairment of property, plant and equipment Other expenses 14 Total operating expenses (Loss) profit from operations Finance income Finance costs Results of the revaluation and closing of derivative financial instruments Profit (loss) before tax Current year corporate income tax (expense)/benefit Deferred corporate income tax (expense)/benefit Net profit Attributable to: Owners of the parent Non-controlling interest Other comprehensive income (loss) Items that will not be reclassified to profit or loss Gain (loss) on revaluation of non-current assets Deferred income tax related to gain (loss) on revaluation of non-current assets Items that will not be reclassified to profit or loss, total Items that will be reclassified to profit or loss Translation of net investments in foreign operations into the Group’s presentation currency Items that will be reclassified to profit or loss, total Total other comprehensive income/(loss) Total comprehensive income (loss) for the period Attributable to: Owners of the parent Non-controlling interests	1,208,444 7,168 - - - (36,252) 1,179,360 45,782 - - - - - 45,782
	1,254,226 7,168 - - - (36,252) 1,225,142 (947,989) - - - - 36,252 (911,737) (26,545) - - - - - (26,545) (87,460) - - - - - (87,460) (79,741) - - - - - (79,741) (21,200) - - - - - (21,200) (67,671) - - - - - (67,671) (9,876) - - - - - (9,876) 7,205 - - - - - 7,205 (26,143) - - - - - (26,143)
	(1,259,420) - - - - 36,252 (1,223,168) (5,194) 7,168 - - - - 1,974 1,621 - - - - - 1,621 (14,899) - - - - - (14,899) (573) - - - - - (573)
	(19,045) 7,168 - - - - (11,877)
	(3,495) - - (1,075) - - (4,570) 14,598 - (1,075) - - - 13,523
	(7,942) 7,168 (1,075) (1,075) - - (2,924)
	(9,209) - - - 4,858 - (4,351) 1,267 - - - 160 - 1,427 123,140 - - - - - 123,140 77 - - - - - 77
	123,217 - - - - - 123,217 (26) - - - - - (26)
	(26) - - - - - (26)
	123,191 - - - - - 123,191
	115,249 7,168 (1,075) (1,075) - - **120,267 **
	108,195 - - - 4,858 113,053 7,053 - - - 160 7,213

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| 16

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively corrected condensed interim statements of cash flows for 2018

Group Notes	2018	Corrections	2018 corrected
Cash flows from operating activities Net profit for the period Adjustments for non-monetary expenses (income): Depreciation and amortisation expenses Impairment of property, plant and equipment Revaluation of property, plant and equipment Revaluation of investment assets Revaluation of derivative financial instruments Grants related to property, plant and equipment, which is revaluated Impairment of financial assets (reversal of impairment) Corporate income tax expenses (Depreciation) of grants Increase (decrease) in provisions Inventory write-down to net realizable value/ (reversal) Expenses/(income) of revaluation of emission allowances Emission allowances utilised Elimination of results of investing activities: - (Gain)/loss on disposal/write-off of property, plant and equipment - (gain)/loss from other investing activities Elimination of results of financing activities: Interest (income) Interest expenses Other finance (income) expenses Changes in working capital: (Increase) decrease in trade receivables and other amounts receivable (Increase) decrease in inventories, prepayments and other current assets Increase (decrease) in amounts payable, deferred income and contract liabilities Corporate income tax (paid) Net cash flows from (used in) operating activities Cash flows from investing activities (Acquisition) of property, plant and equipment and intangible assets Disposal of property, plant and equipment and intangible assets (Acquisition)/disposal of subsidiaries Grants received Interest received Increase (decrease) of cash flows from other from investing activities Net cash flows from (used in) investing activities Cash flows from financing activities Received borrowings Bonds emission Repayments of borrowings Lease payments Interest paid Dividends paid Derivatives closing result Increase in share capital of UAB “Kauno Kogeneracinė Jėgainė” Net cash flows from (used in) financing activities Increase (decrease) in cash and cash equivalents (including overdraft) Cash and cash equivalents (including overdraft) at the beginning of the period 7 Cash and cash equivalents (including overdraft) at the end of the period 7	(7,942) 96,730 (7,205) 76,617 (18) (354) (10,003) 9,876 (11,103) (9,270) 404 (718) (8,933) 908 477 82 (1,427) 12,442 2,263 (21,603) 18,896 44,722 (6,309)	5,018 - - - - - - - 2,150 - 3,681 - - - - - - - - - - (10,849) -	(2,924) 96,730 (7,205) 76,617 (18) (354) (10,003) 9,876 (8,953) (9,270) 4,085 (718) (8,933) 908 477 82 (1,427) 12,442 2,263 (21,603) 18,896 33,873 (6,309)
	178,532	-	178,532
	(416,205) 48,162 (23,509) 25,523 1,105 (1,582)	- - - - - -	(416,205) 48,162 (23,509) 25,523 1,105 (1,582)
	(366,506)	-	(366,506)
	57,810 294,346 (155,421) (544) (10,402) (80,608) (573) 7,840	- - - - - - - -	57,810 294,346 (155,421) (544) (10,402) (80,608) (573) 7,840
	112,448	-	112,448
	(75,526) 161,101	- -	(75,526) 161,101
	85,575	-	85,575

Change in management judgment on applying accounting methods

Connection fees

On 1 January 2018, the Group adopted IFRS 15 Revenue from contracts with customers and its amendments for the first time and they had a significant impact on the Group’s financial statements. The Group accounted for the impact of the first-time adoption of IFRS 15 starting from 1 January 2018 using the modified retrospective approach.

Following the initial application of IFRS 15 with respect to revenue from new customer connection the Group assessed the existence of separate performance obligation through the legal point of view, i.e. if electricity distribution company had a new connection contract with the client and the distribution as a service was provided to the end customer through the client’s contract with supply company, the new connection contract was treated as separate performance obligation.

Following such judgment starting from 2018 the connection fees in gas segment were recognized when connection service was provided. In electricity segment from 1 January 2018 to 1 October 2018 connection fees were deferred over the period of estimated customer relationship, which is determined based on the useful life of the newly created connection infrastructure.

Following the transfer of electricity public supply activities as of 1 October 2018, new customer connection in electricity segment was reconsidered as a separate performance obligation under IFRS 15, accordingly related revenue from 1 October 2018 was recognized when connection service was fully provided.

Management of the Group has extensively analyzed IFRS 15 accounting methods, which were also reviewed by the Bank of Lithuania as an oversight body of listed entities, also auditors were involved in the discussions. The accounting methods applied upon initial adoption of IFRS 15 were assessed as appropriate after evaluating management judgement made in a number of areas. However, following the

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

review of relevant industry practice, more authoritative guidance on IFRS 15 application, analysis of relatively newly applied “implied contract” concept (as per IFRS 15 requirements), and consultations with incoming auditor, the Group has reconsidered its accounting treatment.

The Group changed the accounting treatment of new customer connection fees by deferring all gas and electricity fees over the useful lives of the related assets (which represents the best management estimate for customer relationship period). According to the management such accounting treatment would fairer reflect the Group’s financial performance and continuing involvement in securing the connection to the customer, as well as will allow the Group to be better comparable to its peers within the industry. This change in accounting treatment is accounted for retrospectively and comparative information is restated (see in the table below, 5 - 11).

Public Service Obligations and electricity transmission service

Public Service Obligations (PSO) and electricity transmission funds are an integral part of electricity tariff to the customer. The Group collects PSO and electricity transmission funds from business customers and end users, connected to electricity distribution grid. Collected amounts are transferred to Grid transmission operator. PSO funds are used to support and promote local production from renewable energy sources, to secure reserves of the electricity system at designated power plants, which is necessary for ensuring the state's energy security and to ensure other services related to public interest. The list of services supported by PSO is determined by the Government of the Republic of Lithuania.

Public Service Obligations (PSO) and electricity transmission funds as integral part of Electricity price, was not identified as a separate performance obligation. The distribution service as a whole, including transmission, distribution and PSO was treated as one performance obligation. Public Service Obligations (PSO) and electricity transmission price components generally are treated as a tax collected from customers, however this tax cannot be treated as sales tax, or value-added tax (VAT), since: (1) both components are charged based on production or distributed energy unit, rather than sales amount, as is applied in VAT case; (2) the Group cannot claim a refund of the tax in the event the related the customer fails to pay for the services being sold; (3) the Group is charged to price risk - in case of illegal consumption, the Group’s settlement amount will be determined based on current period’s prices, however, the client will be charged based on historical prices. Following the above, the Management treated the Group as Principal in relation to PSO and electricity transmission price components.

During year 2019 the Group elected to change the method of accounting for to PSO and electricity transmission price components by treating the Group as an Agent. Such decision has been taken after extensive analysis of relevant industry practice and taking into consideration the facts, that the Group is not responsible for PSO projects / initiatives and the development of the transmission grid and accordingly not responsible that the funds are used for their intended purpose. The Group is not charged to any inventory risk, as well as the Group has no legal power to establish pricing of this component.

The change in accounting methods does not mean the prior management’s judgment is erroneous, however allows the Group to be better comparable to its peers within the industry. This change in accounting treatment is accounted for retrospectively and comparative information is restated (see in the table below, 1).

Liquefied natural gas terminal security component fee and gas distribution service

Pursuant to Article 5.2 of the Law on the LNG Terminal, all users of the natural gas transmission system, including end-users, have to pay an additional security component along with other payments for natural gas transmission services. Payments shall be collected directly from customers, or natural gas suppliers, if the customers don’t have a direct contract with the Transmission System Operator. The Group company UAB Ignitis acts as a natural gas supplier that collects LNG security component from the users.

As part of its gas trading activities in Latvia, the Group collects funds from end users for the gas distribution service and transfers them to the Latvian gas distribution network operator.

LNG Fee and gas distribution service as integral part of natural gas price, was not identified as a separate performance obligation. Following the above, the Management treated the Group as Principal in relation to LNG Fee and gas distribution service price components.

During year 2019 the Group elected to change the method of accounting for to LNG Fee and gas distribution service price components by treating the Group as an Agent. Such decision has been taken after extensive analysis of relevant industry practice and taking into consideration the facts, that the Group is not responsible for LNG projects / initiatives and the development of the distribution grid in Latvia and accordingly not responsible that the funds are used for their intended purpose. The Group is not charged to any inventory risk, as well as the Group has no legal power to establish pricing of this component.

The change in accounting methods does not mean the prior management’s judgment is erroneous, however allows the Group to be better comparable to its peers within the industry. This change in accounting treatment is accounted for retrospectively and comparative information is restated (see below).

Security component revenues from TSO, following the activity of the designated supplier, are recognized as revenue in accordance with IAS 20 “Grants”, and the principles of this revenue accounting are not changed.

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively restated condensed interim statements of financial position: Restatement for the year 2018

	5) New electricity 6) New gas 7) Accounting for 8) Amend- ments of 9) Deferred corporate income tax 10) Changes 11) Reclasifi- cation of
Group Notes	2018.12.31 consumers connection consumers connection revenue from true value amendments related to impact to non- short term 2018.12.31 restated
	fees deferral fees deferral connection fee over- the-time of gas pipelines amendments of true value of gas pipelines controlling interests portion of deferred revenue
ASSETS Non-current assets Intangible assets 4 Property, plant and equipment 4 Prepayments for non-current assets Investment property Amounts receivable after one year Other financial assets Other non-current assets Deferred income tax asset Total non-current assets Current assets Inventories Prepayments and deferred expenses Trade receivables Other amounts receivable Other current assets Prepaid corporate income tax Other financial assets Cash and cash equivalents 7 Non-current assets held for sale 8 Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital 9 Reserves Retained earnings (losses) Result of financial year 2018 Equity attributable to owners of the parent Non-controlling interests Total equity Liabilities Non-current liabilities Non-current borrowings 10 Lease liabilities 11 Grants and subsidies Deferred corporate income tax liabilities Provisions 12 Deferred revenue Other non-current amounts payable and liabilities Total non-current liabilities Current liabilities Current portion of long-term debts 10 Current borrowings 10 Current portion of lease liabilities 11 Trade payables Contract liabilities Corporate income tax liabilities Provisions 12 Deferred revenue Other current amounts payable and liabilities Liabilities related to non-current assets held for sale Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES	106,330 - - - - - - - 106,330 2,091,590 - - - (726) - - - 2,090,864 23,621 - - - - - - - 23,621 6,494 - - - - - - - 6,494 160,606 - - - - - - - 160,606 2,008 - - - - - - - 2,008 6,094 - - - - - - - 6,094 14,468 - - - - - - - 14,468
	2,411,211 - - - (726) - - - 2,410,485
	43,137 - - - - - - - 43,137 30,655 - - - - - - - 30,655 143,120 - - - - - - - 143,120 25,436 - - - - - - - 25,436 2,147 - - - - - - - 2,147 4,192 - - - - - - - 4,192 656 - - - - - - - 656 127,835 - - - - - - - 127,835
	377,178 - - - - - - - 377,178 65,706 - - - - - - - 65,706
	442,884 - - - - - - - 442,884
	2,854,095 - - - (726) - - - 2,853,369
	1,212,156 - - - - - - - 1,212,156 212,802 - - - - - - - 212,802 (147,404) - - - - - - - (147,404) (4,351,00) (4,933,00) (7,371,00) 1,009,00 (10,790,00) 3,475,00 934,00 -(22,027,00)
	1,273,203 (4,933) (7,371) 1,009 (10,790) 3,475 934 - 1,255,527
	48,522 - - - - - (934) - 47,588
	1,321,725 (4,933) (7,371) 1,009 (10,790) 3,475 - - 1,303,115
	735,410 - - - - - - - 735,410 14,334 - - - - - - - 14,334 208,874 - - - - - - - 208,874 39,796 - - - - (3,475) - - 36,321 35,446 - - - - - - - 35,446 115,261 4,933 7,371 (1,009) 9,189 - - (334) 135,411 1,803 - - - - - - - 1,803
	1,150,924 4,933 7,371 (1,009) 9,189 (3,475) - (334) 1,167,599
	61,819 - - - - - - - 61,819 47,727 - - - - - - - 47,727 5,220 - - - - - - - 5,220 93,237 - - - - - - - 93,237 49,766 - - - - - - - 49,766 4,544 - - - - - - - 4,544 5,553 - - - - - - - 5,553 7,912 - - - 875 - - 323 9,110 102,682 - - - - - - 11 102,693
	378,460 - - - 875 - - 334 379,669 2,986 - - - - - - - 2,986
	381,446 - - - 875 - - 334 382,655
	1,532,370 4,933 7,371 (1,009) 10,064 (3,475) - - 1,550,254
	2,854,095 - - - (726) - - - 2,853,369

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Consolidated and Company‘s condensed financial information for 2019 | 19

➔ Contents

UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively restated condensed interim statements of financial position (continue): 1 January 2018 restatement

	6) New gas 9) Deferred corporate
Group Notes	2018.01.01 consumers i f income tax amendments ld d f 2018.01.01 restated
	connecton ees deferral reate to amenments o true value of gas pipelines
ASSETS Non-current assets Intangible assets 4 Property, plant and equipment 4 Prepayments for non-current assets Investment property Amounts receivable after one year Other financial assets Other non-current assets Deferred income tax asset Total non-current assets Current assets Inventories Prepayments and deferred expenses Trade receivables Other amounts receivable Other current assets Prepaid corporate income tax Other financial assets Cash and cash equivalents 7 Non-current assets held for sale 8 Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital 9 Reserves Retained earnings (losses) Equity attributable to owners of the parent Non-controlling interests Total equity Liabilities Non-current liabilities 10 Non-current borrowings 11 Lease liabilities Grants and subsidies Deferred corporate income tax liabilities 12 Provisions Deferred revenue Other non-current amounts payable and Total non-current liabilities Current liabilities 10 Current portion of long-term debts 10 Current borrowings 11 Current portion of lease liabilities Trade payables Contract liabilities Corporate income tax liabilities 12 Provisions Deferred revenue Other current amounts payable and liabilities Liabilities related to non-current assets held for sale Total current liabilities Total liabilities	36,360 - - 36,360 1,761,082 10,356 - 1,771,438 21,911 - - 21,911 14,878 - - 14,878 170,488 - - 170,488 426 - - 426 3,239 - - 3,239 7,084 - (1,554) 5,530
	2,015,468 10,356 (1,554) 2,024,270
	56,866 - - 56,866 38,119 - - 38,119 112,563 - - 112,563 27,511 - 27,511 1,093 - - 1,093 2,102 - - 2,102 - - - - 171,756 - - 171,756
	410,010 - - 410,010 79,301 - - 79,301
	489,311 - - 489,311 2,504,779 10,356 (1,554) 2,513,581
	1,212,156 - - 1,212,156 99,380 - - 99,380 (13,555) (13,555)
	1,297,981 - - 1,297,981
	45,801 - - 45,801
	1,343,782 - - 1,343,782
	480,068 - - 480,068 187 - - 187 200,311 - - 200,311 36,082 - (1,554) 34,528 6,927 - - 6,927 54,509 10,356 - 64,865 1,761 - - 1,761
	779,845 10,356 (1,554) 788,647
	119,599 - - 119,599 14,082 - - 14,082 145 - - 145 98,338 - - 98,338 27,765 - - 27,765 3,728 - - 3,728 2,498 - - 2,498 5,242 - - 5,242 109,421 - - 109,421
	380,818 - - 380,818 334 - - 334
	381,152 - - 381,152
	1,160,997 10,356 (1,554) 1,169,799
	2,504,779 10,356 (1,554) 2,513,581

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively restated condensed interim statements of comprehensive income:

Restatement of 2018

Group Notes	1) Netting of PSO income 2) Netting of electricity 3) Netting of gas distribution 4) Netting of LNGT 5) New electricity 6) New gas consumers 7) Accounting for revenue 8) Amend- ments of true 9) Deferred corporate income tax amendments 10)Changes
	2018 and expenses transmission income and expenses income and expenses security component consumers connection fees deferral connection fees deferral from connection fee over-the- time value of gas pipelines related to amendments of true value of gas pipelines impact to non- controlling interests 2018 restated
Revenue from contracts with customers 13 Other income Operating expenses Purchases of electricity, gas for trade, and related services Purchases of gas and heavy fuel oil Depreciation and amortisation Wages and salaries and related expenses Repair and maintenance expenses Revaluation of property, plant and equipment Reversal (impairment) of amounts receivable and loans Impairment of property, plant and equipment Other expenses 14 Total operating expenses (Loss) profit from operations Finance income Finance costs Results of the revaluation and closing of derivative financial instruments Profit (loss) before tax Current year corporate income tax (expense)/benefit Deferred corporate income tax (expense)/benefit Net profit Attributable to: Owners of the parent Non-controlling interest	1,179,360 (103,395) (224) (335) (19,904) (4,933) (7,371) 1,009 - - - 1,044,207 45,782 - - - - - - - - - - 45,782
	1,225,142 (103,395) (224) (335) (19,904) (4,933) (7,371) 1,009 - - - 1,089,989 (911,737) 103,395 224 335 19,904 - - - - - - (787,879) (26,545) - - - - - - - - - - (26,545) (87,460) - - - - - - - 141 - - (87,319) (79,741) - - - - - - - - - - (79,741) (21,200) - - - - - - - - - - (21,200) (67,671) - - - - - - - - - - (67,671) (9,876) - - - - - - - - - - (9,876) 7,205 - - - - - - - (10,931) - - (3,726) (26,143) - - - - - - - - - - (26,143)
	(1,223,168) 103,395 224 335 19,904 - - - (10,790) - - (1,110,100) 1,974 - - - - (4,933) (7,371) 1,009 (10,790) - - (20,111) 1,621 - - - - - - - - - - 1,621 (14,899) - - - - - - - - - - (14,899) (573) - - - - - - - - - - (573)
	(11,877) - - - - (4,933) (7,371) 1,009 (10,790) - - (33,962)
	(4,570) - - - - - - - - - - (4,570) 13,523 - - - - - - - - 3,475 - 16,998 (2,924) - - - - (4,933) (7,371) 1,009 (10,790) 3,475 - (21,534)
	(4,351) - - - - - - - - - (17,677) (22,028) 1,427 - - - - - - - - - (934) 493 Continued in other page

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively restated condensed interim statements of comprehensive income (continue): Restatement of 2018

	Continue
	1) Netting of PSO 2) Netting of electricity 3) Netting of gas 4) Netting 5) New electricity 6) New gas consumers 7) Accounting for revenue 8) Amend- ments of 9) Deferred corporate income tax amendments 10)Changes
Group Notes	2018 income transmission distribution income and of LNGT security consumers connection connection from true value related to impact to non- controlling 2018 restated
	and expenses income and expenses expenses component fees deferral fees deferral connection fee over- the-time of gas pipelines amendments of true value of gas pipelines interests
Other comprehensive income (loss) Items that will not be reclassified to profit or loss Gain (loss) on revaluation of non- current assets Deferred income tax related to gain (loss) on revaluation of non-current assets Items that will not be reclassified to profit or loss, total Items that will be reclassified to profit or loss Translation of net investments in foreign operations into the Group’s presentation currency Items that will be reclassified to profit or loss, total Total other comprehensive income/(loss) Total comprehensive income (loss) for the period Attributable to: Owners of the parent Non-controlling interests	123,140 - - - - - - - - - - 123,140 77 - - - - - - - - - - 77
	123,217 - - - - - - - - - - 123,217 (26) - - - - - - - - - - (26)
	(26) - - - - - - - - - - (26)
	123,191 - - - - - - - - - - 123,191
	120,267 - - - - (4,933) (7,371) 1,009 (10,790) 3,475 - 101,657
	113,053 - - - - - - - - - (17,677) 95,376 7,213 - - - - - - - - - (934) 6,279

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Retrospectively restated condensed interim statements of cash flows for 2018

Group Notes	2018	Restatement	2018 restated
Cash flows from operating activities Net profit for the period Adjustments for non-monetary expenses (income): Depreciation and amortisation expenses Impairment of property, plant and equipment Revaluation of property, plant and equipment Revaluation of investment assets Revaluation of derivative financial instruments Grants related to property, plant and equipment, which is revaluated Impairment of financial assets (reversal of impairment) Corporate income tax expenses (Depreciation) of grants Increase (decrease) in provisions Inventory write-down to net realizable value/ (reversal) Expenses/(income) of revaluation of emission allowances Emission allowances utilised Elimination of results of investing activities: - (Gain)/loss on disposal/write-off of property, plant and equipment - (gain)/loss from other investing activities Elimination of results of financing activities: Interest (income) Interest expenses Other finance (income) expenses Changes in working capital: (Increase) decrease in trade receivables and other amounts receivable (Increase) decrease in inventories, prepayments and other current assets Increase (decrease) in amounts payable, deferred income and contract liabilities Corporate income tax (paid) Net cash flows from (used in) operating activities Cash flows from investing activities (Acquisition) of property, plant and equipment and intangible assets Disposal of property, plant and equipment and intangible assets (Acquisition)/disposal of subsidiaries Grants received Interest received Increase (decrease) of cash flows from other from investing activities Net cash flows from (used in) investing activities Cash flows from financing activities Received borrowings Bonds emission Repayments of borrowings Lease payments Interest paid Dividends paid Derivatives closing result Increase in share capital of UAB “Kauno Kogeneracinė Jėgainė” Net cash flows from (used in) financing activities Increase (decrease) in cash and cash equivalents (including overdraft) Cash and cash equivalents (including overdraft) at the beginning of the period 7 Cash and cash equivalents (including overdraft) at the end of the period 7	(2,924) 96,730 (7,205) 76,617 (18) (354) (10,003) 9,876 (8,953) (9,270) 4,085 (718) (8,933) 908 477 82 (1,427) 12,442 2,263 (21,603) 18,896 33,873 (6,309)	(18,610) (141) 10,931 - - - - - (3,475) - 3,475 - - - - - - - - - - - 7,528 -	(21,534) 96,589 3,726 76,617 (18) (354) (10,003) 9,876 (12,428) (9,270) 7,560 (718) (8,933) 908 477 82 (1,427) 12,442 2,263 (21,603) 18,896 41,401 (6,309)
	178,532	(292)	178,240
	(416,205) 48,162 (23,509) 25,523 1,105 (1,582)	292 - - - - -	(415,913) 48,162 (23,509) 25,523 1,105 (1,582)
	(366,506)	292	(366,214)
	57,810 294,346 (155,421) (544) (10,402) (80,608) (573) 7,840	- - - - - - - -	57,810 294,346 (155,421) (544) (10,402) (80,608) (573) 7,840
	112,448	-	112,448
	(75,526) 161,101	- -	(75,526) 161,101
	85,575	-	85,575

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| 23

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

4 Intangible assets and property, plant and equipment

Movement on Group’s account of intangible assets and property, plant and equipment are presented below:

Group	Intangible asset Property, plant and equipment
Net book value at 31 December 2018 The impact of the first-time adoption of IFRS 16 – reclassification to Right-of-use asset Net book value at 1 January 2019 (recalculated) Acquisitions Sales Write-offs Revaluation Impairment Reversal of impairment Emission allowances utilised Emission allowances grants received Reclassification to/from Property, plant and equipment and Intangible assets Reclassification to/from Assets held for sale Reclassification to/from Investments asset Reclassification to/from Right of use asset Reclassification to/from Inventories Reclassification to Financial lease Asset identified by acquisition of subsidiaries Depreciation/amortisation Net book value at 31 December 2019	106,330 2,090,864 - (35,969) 106,330 2,054,895 40,645 413,818 - (1,411) - (4,216) 368 94 (35) (4,063) - 45 (987) - 4,131 - 169 (169) (15) (1,062) - (339) - (1,196) - 57 - (10,531) - 5,672 (7,869) (104,245)
	142,737 2,347,348

During 2019 The Group acquired Pomerania Invall Sp. z. o. o. and in the item of Intangible assets booked EUR 24,430 thousand other intangible asset related to Pomerania Invall Sp. z. o. o.’s right to sell the generated electricity applying the promotional rate.

Property, plant and equipment, which amounts to EUR 7,317 thousand, was taken over after the acquisition of indirectly controlled (100%) company Pomerania Invall Sp. z. o. o. during the 1[st] half of year 2019 (Note 18).

During the year of 2019 EUR 64,048 thousand of Property, plant and equipment acquisition were paid up utilising grants received (2018: EUR 25,523 thousand). Depreciation/amortisation attributable to grants received during the year 2019 amounts to EUR 9,011 thousand (2018: EUR 9,271 thousand).

The Group has significant acquisition liabilities of property, plant and equipment which will have to be fulfilled during the later years. Group’s acquisition and construction liabilities amounted to EUR 490,432 thousand as at 31 December 2018. Group’s acquisition and construction liabilities did not change significantly as at 31 December 2019.

Movement on Company’s account of intangible assets and property, plant and equipment are presented below:

	Intangible asset	Property, plant and equipment
Company
Net book value at 31 December 2018 Acquisition Assets paid up by the authorized capital Depreciation/amortisation Net book value at 31 December 2019	1,874 - - - **1,874 **	427 36 (364) (13)
		86

As at 31 December 2019 the Company accounted for EUR 1,874 thousand of intangible assets related to the assets of the Vilnius Thermal Power Plant (TE-3).

5 Right-of-use asset

Movement on Group’s account of right-of-use asset is presented below:

	Structures Wind power lants and Equipment’s of information Other Total
Group Land	Buildings and machinery p their installations Vehicles Group technologies and telecommunications tangible assets Right-of- use asset
Net book value at 1 January 2019 Acquisitions: from which is recognized as Right- of-use asset 2019-01-01 from which is recognized when reclassifying from Tangible assets 2019-01-01 – 2019-12-31 from which is signed lease agreements 2019-01-01 – 2019- 12-31 Write-offs Reclassification to/from Assets held for sale Depreciation Net book value at 31 December 2019	- - - - - - - 5,719 5,790 123 - 303 2,390 229 14,554 1,196 - 8,233 27,290 446 - - 37,165 9,248 10,829 157 - 162 1,976 88 22,460 - (1,448) (140) - (7) (2,098) - (3,693) - (909) (96) - - (1,967) - (2,972) (143) (2,744) (805) (2,246) (150) (301) (81) (6,469)
	16,020 11,518 7,472 25,044 754 - 236 61,044

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Movement on Company’s account of right-of-use asset is presented below:

	Buildings Motor vehicles Total Right-of- use asset
Group
Net book value at 1 January 2019 Acquisition from which is recognized as Right-of-use asset 2019-01-01 from which is recognized when reclassifying from Assets held for sale from which is signed lease agreements 2019-01-01 – 2019-12-31 Write-offs Reclassification to/from Assets held for sale Depreciation Net book value at 31 December 2019	- - - 847 177 1.024 - - - 53 21 74 - - - - - - (215) (45) (260)
	685 153 838

6 Investments in subsidiaries and other investments

Movement of the Company’s account of investments in subsidiaries during 2018 and 2019 is presented below:

Company	2019 2018
Net book amount at 1 January Increase in share capital of subsidiaries Decrease in share capital of subsidiaries Establishment of new subsidiaries Acquisition of companies Disposal of investments Coverage of losses Liquidation of subsidiaries Reclassification to assets held for sale (Impairment) of investments in subsidiaries Net book amount at 31 December	1,206,921 1,148,917 15,960 41,038 (36,386) - 44,700 - - 21,016 (39,747) - - 5,142 - (17) - (2,359) 13,046 (6,815)
	1,204,494 1,206,921

On 1 January 2019, the reorganisation of the Group companies UAB “Ignitis” (earlier name UAB “Lietuvos energijos tiekimas”) and UAB “Litgas” was finalised. The companies were reorganised by way of merger – UAB “Litgas”, which ceased its activities after the reorganisation, was merged with UAB “Ignitis”, which continues its activities. All assets, rights and obligations of UAB “Litgas” were taken over by UAB “Ignitis”. Company‘s carrying amount of investment to UAB “Ignitis” increased by EUR 8,631 thousand and the investment to UAB “Litgas” was written off by the same carrying amount.

On 1 June 2019, the reorganisation of the Group companies UAB “Ignitis” and UAB “Energijos Tiekimas” was finalised. The companies were reorganised by way of merger – UAB “Energijos Tiekimas”, which ceased its activities after the reorganisation, was merged with UAB “Ignitis”, which continues its activities. All assets, rights and obligations of UAB “Energijos Tiekimas” were taken over by UAB “Ignitis”. Company‘s carrying amount of investment to UAB “Ignitis“ increased by EUR 26,126 thousand and the investment to UAB “Energijos Tiekimas” was written off by the same carrying amount.

During the year of 2019 the authorized capital of the following Group’s companies was increased:

Subsidiary	Issue date	Amount of shares, pcs*	Nominal value per share, EUR	Total issue price	Paid amount	Amount outstanding		Date of articles amendment
UAB „Vilniaus kogeneracinė jėgainė“	2019-01-22	54,137,931	0.29	15,700	15,700		-	2019-01-30
UAB „Ignitis grupės paslaugų centras“	2019-06-13	847,149	0.29	260	260		-	2019-06-28
Total				15.960	15,960		-

* there is stated amount of shares that belong to the Company

On 14 January 2019, a decision was passed to increase the share capital of the Group’s company UAB „Vilniaus Kogeneracinė Jėgainė“ up to EUR 52,300 thousand. The initial contribution of EUR 15,314 thousand was paid by the Company in cash and was made a noncash contribution amounting to EUR 386 thousand (business consultations relating to engineering and construction preparatory works for Vilnius co-generation power plant). On 30 January 2019, the new version of the Articles of Association of the Group’s company UAB „Vilniaus Kogeneracinė Jėgainė“ related to increase in share capital was registered with the Register of Legal Entities.

On 28 February 2019, a decision of general meeting of shareholders was passed to increase the share capital of the Group’s company UAB „Ignitis grupės paslaugų centras“ (earlier name UAB „Technologijų ir inovacijų centras“) from EUR 6,440 to EUR 6,960 thousand. The right to acquire 897,326 shares par value of EUR 0.29 (total emission value – EUR 260,2 thousand) per share is granted to UAB „Ignitis gamyba“ (earlier name AB “Lietuvos energijos gamyba”). On 28 June 2019, the new version of the Articles of Association of the Group’s company UAB „Ignitis grupės paslaugų centras“ related to increase in share capital was registered with the Register of Legal Entities.

On 15 April 2019 the Company decided to reduce the authorized capital of the subsidiary UAB NT Valdos from EUR 41,385 thousand up to EUR 5,000 thousand. Eur, cancelling 1,256,400 shares with the nominal value of each of EUR 28.96, total nominal value of cancelled shared is EUR 36,385 thousand. The purpose of the reduction of the authorized capital is to pay out the funds to the shareholders. The subsidiary disbursed the share capital reduction to the Company during July – September of 2019 and the Company accounted for EUR 213 thousand reversal of investments in subsidiaries impairment. On 5 July 2019 a new version of the Articles of Association of the Subsidiary Company related to the reduction of the authorized capital was registered with the Register of Legal Entities.

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

During the year 2019 authorized capital of the Group’s companies reduced and reversed impairment of investments:

Subsidiary	Book value 31 December 2018	Authorized capital	Appropriation of loss	Reversal of impairment	Book value 31 December 2019
UAB „NT valdos“	36,173	(36,385)	-	9,035	8,823
UAB "Ignitis"	43,125	-	-	4,010	47,136
Total:	79,298	(36,385)	-	13,045	55,959

On 31 December 2018, the Company announced that in developing the green energy activity and aiming to optimise operations of the controlled companies engaged in renewable energy production it approved the establishment of a new company UAB „Ignitis renewables“ (earlier name UAB „Lietuvos energija renewables“), which will become a transferee of shares of all already controlled and developed wind power parks. This decision was approved by the holder of the Company’s shares – the Ministry of Finance of the Republic of Lithuania. The Articles of Association of UAB „Ignitis renewables“ were registered with the Register of Legal Entities on 14 January 2019.

During the year of 2019 new Group’s companies were established:

Subsidiary	Issue date	Amount of issued shares, pcs*	Nominal value per share, EUR	Total issued nominal price	Share premium	Paid amount	Amount outstanding	Date of articles amendment
UAB „Ignitis renewables“	2019-01-14	3,000	1	3	44,697	44,700	-	2019-01-14
Total:				3	44,697	44,700	-

On 28 March 2019, the share purchase and sale agreements were signed regarding the transfer of 100% of shares of the Company’s subsidiaries developing projects on renewable energy resources to UAB „Ignitis renewables“. Upon the transfer of shares of the renewable energy companies within the Group, the Company’s ownership interest in the companies remains unchanged. The shares of the renewable energy companies are transferred for the carrying amount of investments in shares and the related liabilities, therefore the impact of the transfer of shares on the financial performance of the Company and the Group is neutral.

During the year of 2019 the Company disposed these investments to its subsidiary UAB „Ignitis renewables“:

Subsidiary	Disposal date	Disposed shares, pcs	Investment EUR	value,	Paid amount*	Amount outstanding
UAB „Eurakras“	2019-03-28	159,549		18,735	18,735		-
UAB „Vėjo vatas“	2019-03-28	100,000		6,132	6,132		-
UAB „Vėjo gūsis“	2019-03-28	257,000		12,919	12,919		-
UAB „VVP investment“*	2019-03-28	8,640		1,962	1,962		-
Total:			39,748		39,748		-

*Company’s liability for unpaid shares of VVP Investment was transferred to UAB „Ignitis renewables“ as at 28 March 2019.

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

As at 31 December 2019 the Company‘s investments in subsidiaries comprised:

	Acquisition cost	Impairment	Contributions against losses	Carrying amount Company’s ownership interest, % Group's effective ownership interest, %
At 31 December 2019
Subsidiaries: AB „Energijos skirstymo operatorius“ AB „Ignitis gamyba“ UAB „NT Valdos“ UAB „Vilniaus kogeneracinė jėgainė“ UAB „Kauno kogeneracinė jėgainė“ UAB „Ignitis“ Tuuleenergia OÜ UAB „Ignitis grupės paslaugų centras“ UAB „Elektroninių mokėjimų agentūra“ UAB „Verslo aptarnavimo centras“ UAB „Energetikos paslaugų ir rangos organizacija“ Ignitis paramos fondas UAB „Gamybos optimizavimas" UAB „Ignitis renewables“	710,921 307,997 8,823 52,300 20,400 47,136 6,659 3,479 1,428 298 10,638 3 350 44,700 1,215,132	- - - - - - - - - - (22,711) - - - (22,711)	- - - - - - - - - - 12,073 - - - 12,073	710,921 94.98 94.98 307,997 96.82 96.82 8,823 100.00 100.00 52,300 100.00 100.00 20,400 100.00 100.00 47,136 51.00 51.00 6,659 100.00 100.00 3,479 50.00 97.94 1,428 100.00 100.00 298 100.00 100.00 - 51.00 98.41 3 100.00 100.00 350 100.00 100.00 44,700 100.00 100.00 1,204,494

As at 31 December 2018 the Company‘s investments in subsidiaries comprised:

	Acquisition cost	Impairment	Contributions against losses	Carrying amount Company’s ownership interest, % Group's effective ownership interest, %
At 31 December 2018
Subsidiaries: AB „Energijos skirstymo operatorius“ AB „Ignitis gamyba“ UAB „NT Valdos“ UAB "Energijos tiekimas" UAB „Vilniaus kogeneracinė jėgainė“ UAB „Kauno kogeneracinė jėgainė“ UAB "LITGAS" UAB „Ignitis“ Tuuleenergia OÜ UAB „Ignitis grupės paslaugų centras“ UAB „Elektroninių mokėjimų agentūra“ UAB „Verslo aptarnavimo centras“ UAB „Energetikos paslaugų ir rangos organizacija“ Ignitis paramos fondas UAB „Gamybos optimizavimas" UAB "Vėjo vatas" UAB "Vėjo gūsis" UAB "VVP investment" UAB "Eurakras"	710,921 307,997 45,209 26,126 36,600 20,400 12,641 8,369 6,659 3,219 1,428 298 10,637 3 350 12,919 6,132 1,962 18,734 1,230,604	- - (9,036) - - - (4,010) - - - - - (22,710) - - - - - - (35,756)	- - - - - - - - - - - - 12,073 - - - - - - 12,073	710,921 94.98 94.98 307,997 96.82 96.82 36,173 100.00 100.00 26,126 100.00 100.00 36,600 100.00 100.00 20,400 51.00 51.00 8,631 100.00 100.00 8,369 100.00 100.00 6,659 100.00 100.00 3,219 50.00 97.91 1,428 100.00 100.00 298 51.00 98.41 - 100.00 100.00 3 100.00 100.00 350 100.00 100.00 12,919 100.00 100.00 6,132 100.00 100.00 1,962 100.00 100.00 18,734 100.00 100.00 1,206,921

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Consolidated and Company‘s condensed financial information for 2019

➔ Contents

UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

7 Cash and cash equivalents

	Group	Group	Company	Company
	31 December 2019	31 December 2018	31 December 2019	31 December 2018
Cash at bank Cash, cash equivalents and a bank overdraft include the following for	131,378 131,378 the purposes of	127,835	144	231
		127,835	144	231
	Group		Company
	31 December 2019	31 December 2018	31 December 2019	31 December 2018
Cash and cash equivalents Bank overdraft Carrying amount	131,378 (191,291)	127,835 (42,260)	144 (191,291)	231 (42,260)
	**(59,913) **	**85,575 **	**(191,147) **	(42,029)

8 Non-current assets held for sale

The Group‘s and the Comapny‘s non-current assets held for sale as at 31 December 2019 and 31 December 2018 consist of as follows:

	Group	Group	Company	Company
	31 December 2019	31 December 2018	31 December 2019	31 December 2018
Property, plant and equipment and investment property Disposal group Investments in subsidiaries	4,753 35,775 -	35,589 30,117 -	77 - 7,064	77 - 7,064
	40,528	65,706	7,141	7,141

Within the Company’s line item of the ‘Disposal group’ the Company recognized investment of subsidiary UAB “Transporto Valdymas” of EUR 2,359 thousand and investment of subsidiary UAB “Duomenų Logistikos Centras of EUR 4,705 thousand.

The Group’s line item of the ‘Disposal group’ also includes assets of subsidiaries UAB “Transporto Valdymas” and UAB “Duomenų Logistikos Centras” amounting to EUR 35,775 thousand, which is intended to be disposed by the Group. Liabilities of EUR 5,236 thousand being disposed along with these assets were reported under the line item ‘Liabilities related to non-current assets held for sale’. Depreciation charge for the year 2019 is included in the Group’s line item of the ‘Disposal group’ amounted to EUR 4,067 thousand.

9 Share capital

As at 31 December 2019 and 31 December 2018 the Company‘s share capital comprised EUR 1,212,156,294. As at 31 December 2019 and 31 December 2018 the Company‘s share capital was divided in to 4,179,849,289 ordinary shares with par value of EUR 0.29 each.

As at 31 December 2019 and 31 December 2018 share capital was fully paid.

10 Borrowings

Borrowings of the Group and the Company as at 31 December 2019 and 31 December 2018 consist of as follows:

	Group	Group	Company	Company
	31 December	31 December	31 December 2019	31 December 2018
	2019	2018
31 December 2019 Non-current Bonds issued Bank borrowings Current Current portion of non-current borrowings Bank overdrafts Accrued interest Total borrowings	590,120 231,809 37,453 191,291 5,446	588,999 146,411 61,819 42,260 5,467	590,120 49,345 32,901 191,291 5,446	588,999 82,246 57,401 42,260 5,461
	1,056,119	844,956	869,103	776,367

All borrowings of the Group bear both fixed and variable interest rates. On 29 January 2019, the Company signed the new credit agreement with AB “SEB bankas”, based on which the Company is able to borrow EUR 100 million. The repayment term is in 2021.

On 16 September 2019 the Company signed a new credit agreement with AB “SEB bankas”, which provides an opportunity to borrow EUR 70 million with a maturity date of 16 September 2021.

As at 31 December 2019 Company‘s and Group‘s used bank overdraft part comprise EUR 191,291 thousand (Note 7).

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

11 Lease liabilities

The Group's and the Company's future lease payments under non-cancellable leases at 31 December 2019 and 31 December 2018:

	Group	Group	Company	Company
	31 December 2019	31 December 2018	31 December 2019	31 December
				2018
Minimum payments Within one year From one to five years After five years Total Future finance costs Within one year From one to five years After five years Total Carrying amount	8,928 19,466 29,497 57,890 (527) (1,348) (13,796) (15,671) 42,219	5,421 5,011 9,477 19,909 (201) (129) (25) (355)	280 565 - 845 (3) (2) - (5) **840 **	- - - - - - - -
		19,554		-

Lease payments during 2019 amounted to EUR 7,605 thousand (2018: EUR 239 thousand). Payments for less than 12 months leases and leases of low value assets are recognized in the statement of cash flows in operating cash flow section as working capital items.

12 Provisions

Provisions of the Group and the Company as at 31 December 2019 and 31 December 2018 consist of as follows:

	Group	Group	Company	Company
	31 December	31 December	31 December	31 December
		*** **
	2019	**2018 (restated) **	2019	2018
Non-current Current Carrying amount	35,123 15,157	35,446 5,553 40,999	- - -	- 806
	50,280			806

* Some of the amounts shown do not match the 2018 figures and 2017 financial statements and reflects the adjustments disclosed in Note 3.

Movement on Group’s account of provisions is presented below:

	Emission allowance liabilities	Provisions for employee benefits	Other provisions (restated*)	Total
At 31 December 2017 Increase during the period Utilised during the period Revaluation of utilised emission allowances Result of change in actuarial assumptions At 31 December 2018 Increase during the period Utilised during the period Revaluation of utilised emission allowances Result of change in actuarial assumptions Provisions for disassembly At 31 December 2019	529 894 (908) 380 - 895 (416) - - - - 479	3,862 1,222 (2,270) - 54 2,868 31 79 (988) 877 - 2,867	5,034 39,873 (5,777) - (1,894) 37,236 9,347 (8,571) - 5,918 3,004 46,934	9,425 41,989 (8,955) 380 (1,840) 40,999 8,962 (8,492) (988) 6,795 3,004 50,280

* Some of the amounts shown do not match the 2018 figures and 2017 financial statements and reflects the adjustments disclosed in Note 3.

As at 31 December 2018 the Company’s provisions consist of the guarantee issued to the subsidiary for the loans granted to UAB “Energetikos Paslaugų ir Rangos Organizacija” under cash-pool agreements. During period of 2019 the Company wrote-off this provision (note 14).

13 Revenue from contracts with customers

The Group‘s sales revenue from contracts with customers during 2019 and 2018 consist of as follows:

	Group	Group	Company	Company
	2019	2018	2019	2018
Revenue from sale of electricity and related services Revenue from sale of gas and related services Other sales revenue Total	790,493 274,425 20,498	703,803 321,342 19,062	- - 3,283	- - 3,188
	1,085,416	**1,044,207 **	3,283	3,188

The Company’s sales revenue from contracts with customer during 2019 and 2018 comprise revenue from advisory and management services provided to subsidiaries (Note 16).

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

14 Other expenses

The Group’s and the Company’s other expenses during 2019 and 2018 comprise:

	Group	Group	Company	Company
	2019	2018	2019	2018
Taxes Customer service Telecommunication and IT services Write-offs of property, plant and equipment Motor vehicles Utilities Expenses of low-value inventory items Write-offs of long term and short-term receivables Consultation expenses Personnel development Business trips Revaluation and provisions of emission allowances Rent Business support services Provision for guarantees for the fulfilment of obligations of the subsidiaries Impairment of inventories (reversal) Other expenses Carrying amount	6,181 4,562 4,241 4,235 4,033 2,682 1,672 1,507 1,448 903 620 368 188 - - (236) 5,569	6,329 4,367 4,041 3,065 2,351 2,012 1,159 1,538 1,179 1,003 408 - (8,933) (718) - 1,242 5,005	2019. 27 - 409 112 104 - - 444 - 120 44 717 - - (806) 720 -	2018 246 - 401 155 770 - 193 720 - 189 59 318 - - (2,097) 403 -
	37,973	24,048	1,891	1,375

15 Dividends

Group‘s companies declared dividends during 2019:

Announcement Date	Dividends declared by	Dividends distributed for the period	Dividends per share, Eur	Amount of dividends declared	The Company‘s dividend revenue	Dividends allocated to the non – controlling interest
5 Mar 2019	UAB „Duomenų logistikos centras“	the year of 2018	0,0290	405	324	81
30 Apr 2019	UAB „Ignitis grupės paslaugų centras“	the year of 2018	0,0150	327	164	4
30 Apr 2019	UAB „Verslo aptarnavimo centras“	the year of 2018	0,2100	123	63	1
30 Apr 2019	Tuuleenergia OÜ	the year of 2018	1,8000	899	899	-
29 Apr 2019	UAB „EURAKRAS“	the year of 2018	11,7200	1.870	-	-
12 Apr 2019	AB „Ignitis gamyba“	the 2ndhalf-year of 2018	0,0100	6.480	6.274	206
27 Sep 2019	AB „Ignitis gamyba“	the 1ndhalf-year of 2019	0,0290	18.792	18.194	598
				28.896	25.918	890

Group‘s companies declared dividends during 2018:

	The Dividends
Announcement Date Dividends declared by Dividends distributed for the period Dividends per share, Eur Amount of dividends declared Company‘s dividend revenue allocated to the non – controlling interest
13 Mar 2018 UAB „EURAKRAS“ the year of 2017 10.59000 1,690 1,690 - 20 Mar 2018 UAB „Energijos tiekimas“ the year of 2017 0.17401 3,000 3,000 - 26 Mar 2018 AB „Ignitis gamyba“ the 2ndhalf-year of 2017 0.01400 8,891 8,602 283 30 Mar 2018 AB „Energijos skirstymo operatorius“ the 2ndhalf-year of 2017 0.02535 22,679 21,541 1,138 4 Apr 2018 UAB „Lietuvos dujų tiekimas“ the year of 2017 0.15837 4,571 4,571 - 5 Apr 2018 UAB „Verslo aptarnavimo centras“ the year of 2017 0.00026 268 137 3 11 April 2018 UAB „Ignitis grupės paslaugų centras“ the year of 2017 0.00666 148 74 2 17 Apr 2018 UAB „LITGAS“ the year of 2017 0.02654 1,194 1,194 - 27 Apr 2018 UAB „Duomenų logistikos centras“ the year of 2017 0.02200 306 243 62 28 Sep 2018 AB „Energijos skirstymo operatorius“ the 1ndhalf-year of 2018 0.01400 12,525 11,896 628 27 Sep 2018 AB „Ignitis gamyba“ the 1ndhalf-year of 2018 0.02300 14,904 14,430 474
70,176 67,378 2,590

Company’s declared dividends

Company’s declared dividends during 2018 and 2019:

	2019	2018
	(EUR‘000) Dividends per share	(EUR‘000) Dividends per share
UAB „Ignitis grupė“	13,000 0.0031	78,265 0.0187

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

16 Transactions with related parties

As at 31 December 2019 and 2018 the parent company was the Republic of Lithuania represented by Ministry of Finance. For the purpose of disclosure of related parties, the Republic of Lithuania does not include central and local government authorities. The disclosures comprise transactions and their balances with the parent company, subsidiaries (Company‘s transactions), associates and all entities controlled by or under significant influence of the state (transactions with these entities are disclosed only if they are material), and management.

The Group’s transactions with related parties during the period of 2019 and balances arising on these transactions as at 31 December 2019 are presented below:

	Amounts Amount payable Sales Purchases Finance incomes
Related party
	receivable (expenses)
UAB „EPSO-G" AB „Litgrid AB“ UAB „BALTPOOL“ UAB "TETAS" AB „Amber Grid“ UAB „LITGRID Power Link Service“ UAB „GET Baltic“ Grupės asocijuotos įmonės ir kitos susijusios šalys Total	158,943 - 32 - 1,017 10,297 14,749 70,976 130,335 - 4,203 6,329 32,575 61,409 (1) 11,682 10,190 39,262 36,942 - 84 869 555 6,115 6 - - - - - 754 - 26,050 2,110 - 116 217 62 1,217 -
	186,079 32,355 169,512 239,128 1,022

The Group’s transactions with related parties during the period of 2018 and balances arising on these transactions as at 31 December 2018 are presented below:

	Amounts Finance
Related party	receivable Amount payable Sales Purchases incomes (expenses)
UAB „EPSO-G" AB „Litgrid AB“ UAB „BALTPOOL“ UAB "TETAS" AB „Amber Grid“ UAB „LITGRID Power Link Service“ UAB „GET Baltic“ Grupės asocijuotos įmonės ir kitos susijusios šalys Total	158,693 - 35 - 1,102 7,106 15,049 63,838 129,627 - 8,265 15,962 59,654 54,324 - 1,381 4,421 1,387 91,711 - 3,730 6,019 38,153 1,811 - 36 - 60 - - 724 12 11,436 6,103 - 279 120 380 394 -
	180,214 41,583 174,943 283,970 1,102

The Company’s transactions with related parties during the period of 2019 and balances arising on these transactions as at 31 December 2019 are presented below:

	Amounts receivable Loans recceivable Amounts payable Sales Purchases Finance income Finance expenses
Related parties
	31 Dec 2019 31 Dec 2019 31 Dec 2019 2019 2019 2019 2019
Subsidiaries AB „Energijos skirstymo operatorius“ AB „Ignitis gamyba“ UAB "Energetikos paslaugų ir rangos organizacija" UAB „Elektroninių mokėjimų agentūra“ UAB „Energijos tiekimas“ UAB „Duomenų logistikos centras“ UAB „NT valdos“ UAB "Transporto valdymas" UAB „Ignitis grupės paslaugų centras“ UAB „Ignitis“ UAB "Verslo aptarnavimo centras" UAB „Vilniaus kogeneracinė jėgainė“ UAB „EURAKRAS“ Tuuleenergia OÜ UAB „Kauno kogeneracinė jėgainė“ UAB „Vėjo gūsis“ UAB „Vėjo vatas“ UAB „Gamybos optimizavimas“ UAB „VVP investment“ UAB „Ignitis renewables“ Other related parties UAB "EPSO-G" Total	159 608,690 - 1,466 20 9,708 - 42 - - 482 4 - - - 1,484 - 4 - 45 - 4 - - 21 - - - - - - 96 - 91 - - - 1 5 - - - - - - 31 1 3 - - 25,539 10 - (100) 358 1 8 1,474 41 126 (407) 10 - 51 90,913 - 428 4 911 - 49 - 166 228 (971) 2 - 11 3,473 11,314 125 (20) 683 - - 24,754 - 10 - 709 - - 19,403 - 1 - 655 - 21 104 - 183 17 236 - - 7 - - - 75 - - 2,766 - - (1) 133 - 1 - - 7 - - - - 403 - - - 14 - 9 57,087 - 70 11 805 - 158,940 - - - 1,017 -
	159,094 836,298 11,532 3,283 (1,442) 15,455 1

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

The Company’s transactions with related parties during the period of 2018 and balances arising on these transactions as at 31 December 2018 are presented below:

	Amounts receivable Amounts payable Amounts payable Sales Purchases Finance income Finance expenses
Related parties
	31 Dec 2018 31 Dec 2018 31 Dec 2018 2018 2018 2018 2018
Subsidiaries AB „Energijos skirstymo operatorius“ AB „Ignitis gamyba“ UAB „EURAKRAS“ UAB „Ignitis“ UAB „NT valdos“ UAB „Ignitis grupės paslaugų centras“ UAB „Duomenų logistikos centras“ UAB „Energetikos paslaugų ir rangos organizacija“ Tuuleenergia OÜ UAB „Energijos tiekimas“ UAB „LITGAS“ UAB "Transporto valdymas" UAB „Elektroninių mokėjimų agentūra“ UAB „Verslo aptarnavimo centras“ UAB „VAE SPB“ UAB „Vilniaus kogeneracinė jėgainė“ UAB „Energijos sprendimų centras“ UAB „Kauno kogeneracinė jėgainė“ UAB „Vėjo gūsis“ UAB „Vėjo vatas“ Other related parties UAB "EPSO-G" Total	4,304 582,255 - 1,405 (17) 6,655 - 60 - - 542 8,086 - - 401 24,355 - 11 - 709 - 32 14,098 - 198 (11) 75 - 13 - - 93 184 186 - 16 1,668 107 99 390 10 - 1 - - 17 - - - 29 1,221 - 74 6,448 151 - 313 20,746 - 4 - 760 - 48 36,498 - 180 149 110 - 10 - - 102 - 11 - 272 21,336 8 - 79 225 - 3 - - 33 - - - 29 - 109 157 593 1 - - - - 3 - - - 29 - - 98 - 23 - - - - 31 - - - 69 - - 155 - 5 - 29 - - - - - - 146 2,547 - - - 8 - 158,658 - - - 1,102 -
	164,462 704,724 224 3,202 15,901 10,031 -

Company’s dividend income from the subsidiaries during 2019 and 2018 is disclosed in the Note 15.

Management’s benefits:

Group	Company
2019 2018 2019 2018
Salaries and other short-term benefits 4,578 3,681 1,170 815 Whereof: Termination benefits and benefits to Board Members 433 402 118 118 Number of management staff 54 55 12 10

Management includes heads of administration and their deputies.

17 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of directors that makes strategic decisions.

In year 2018 a new strategy of the Group was approved. This strategy sets out four main lines of business for the Group - strategic generation, green generation, commercial organization and distribution grid operator. Following the adoption of the new strategy, steps have been taken to refine the actions due. Following the changes in the Group's structure, which were completed in 2019 2[nd] quarter, management follows its performance by operating segments that are consistent with the line of business specified in the Group's strategy.

In management’s opinion, the Group has four operating segments:

• Distribution (carried out by AB “Energijos Skirstymo Operatorius”)

• Strategic generation (carried out by UAB “Ignitis Gamyba” (except Kaunas Algirdas' Brazauskas Hydroelectric Power Plant));

• Green generation (carried out by AB “Ignitis gamyba” Kaunas Algirdas' Brazauskas Hydroelectric Power Plant, UAB “Vilniaus Kogeneracinė Jėgainė“, UAB“ Kauno Kogeneracinė Jėgainė“, UAB “Eurakras”, Tuuleenergia OU, UAB “Vėjo Gūsis”, UAB “Vėjo Vatas”, UAB “VVP Investment”, UAB “Ignitis Renewables”, Pomerania Invall Sp.z.o.o)

• Commercial organization (carried out by UAB “Ignitis”, UAB “Energijos Tiekimas” (until 31 May 2019), Ignitis Eesti OÜ, Ignitis Latvija SIA, Ignitis Polska Sp.z o.o).

The following services and entities comprise the other segments:

• support services (UAB “NT Valdos”, UAB “Ignitis Grupės Paslaugų Centras”, UAB “Verslo Aptarnavimo Centras” and UAB “Transporto Valdymas”);

• non-core activities (UAB “Energetikos Paslaugų ir Rangos Organizacija”, UAB “Duomenų Logistikos Centras”);

• service entities (UAB “Elektroninių Mokėjimų Agentūra”);

• as well as parent company UAB “Ignitis grupė”, which does not constitute a separate operating segment, however it is disclosed separately, as its net profit exceeds 10% of profit of all profit generating segments. The Group’s support service entities and special purpose entities are aggregated to a single segment as none of them individually meet recognition criteria of an operating segment.

The Group has single geographical segment – the Republic of Lithuania, electricity sales in Latvia and Estonia are not significant for the Group. The chief operating decision-maker monitors the results with reference to the financial reports that have been prepared using the same accounting policies as those used for the preparation of the financial statements in accordance with IFRS, i.e. information on profit or loss, including the reported amounts of revenue and expenses. The primary performance measure is adjusted EBIDTA, which is calculated based on data presented in the financial statements prepared in accordance with IFRS as adjusted for selected items which are not recognized under IFRS. The Group’s Board does not analyze assets and liabilities of the segments.

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Consolidated and Company‘s condensed financial information for 2019

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Group information about operating segments for 2019 is provided below:

2019		Other segments Elimination of inter-company ’
	Distribution Strategic Green Commercial	transactions and General Managements Total Parent Other
	generation generation organisation	consolidation eliminations adjustments adjustments Company segments
Sales revenue from external customers	467,894 116,309 31,764 515,493 25 9,522 - 1,141,007 (45,750) 1,095,257
Sales revenue from contracts with customers Other income from which is dividend income Inter-segment revenue Sales revenue from contracts with customers Other income from which is dividend income Total revenue Purchases of electricity, gas for trade, and related services, gas and heavy fuel oil Wages and salaries and related expenses Repair and maintenance expenses Other expenses Adjusted EBITDA from which: Depreciation and amortization Impairment and write-offs of property, plant and equipment Impairment and write-offs of current and non-current amounts receivables, loans, goods and others Revaluation of emission allowances Operating profit (loss) Finance income Finance costs Profit (loss) before tax Income tax expense Net profit (loss) Property, plant and equipment, intangible and right-of-use asset Investments Net debt Adjusted EBITDA Management adjustments Management adjustments for impairment and write-offs of current and non-current amounts receivables, loans, goods and others Total EBITDA adjustments EBITDA****	466,992 108,845 31,764 528,594 2 5,448 - 1,141,645 (56,229) 1,085,416 902 7,464 - (13,101) 23 4,074 - (638) 10,479 9,841 - - - - - - - - - - (1,595) 689 1,953 6,383 29,201 37,018 (73,649) - - - (1,955) 563 81 5,691 3,281 16,618 (24,279) - - - 360 126 1,872 692 25,920 20,400 (49,370) - - - - - 1,870 12 25,918 4 (27,804) - - -
	466,299 116,998 33,717 521,876 29,226 46,540 (73,649) 1,141,007 (45,750) 1,095,257
	(183,335) (55,925) (168) (493,042) - (4,024) 477 (736,017) - (736,017) (46,000) (8,361) (2,346) (4,925) (5,582) (19,783) - (86,997) - (86,997) (21,745) (5,415) (1,837) (3) - (834) 37 (29,797) - (29,797) (34,732) (6,163) (3,164) (11,391) (1,890) (11,710) 39,895 (29,155) (3,822) (32,977)
	180,487 41,134 24,332 12,503 (4,164) 10,185 (5,436) 259,041 (49,572) 209,469
	(81,620) (16,331) (7,953) (6,560) (273) (7,441) 6,583 (113,595) - (113,595) (8,210) (276) - - - (1,039) - (9,525) - (9,525) (502) 1,059 3 (3,894) 11,653 100 (12,241) (3,822) 3,822 - - (431) - - - - - (431) - (431)
	90,155 25,155 18,252 2,061 33,134 1,809 (38,898) 131,668 (45,750) 85,918
	27 373 590 824 15,502 99 (15,222) 2,193 - 2,193 (9,973) (428) (2,859) (1,657) (17,015) (499) 13,621 (18,810) - (18,810)
	80,209 25,100 15,983 1,228 31,621 1,409 (40,499) 115,051 (45,750) 69,301
	23 (4,392) (2,802) (1,886) (314) 140 789 (8,442) - (8,442)
	80,232 20,708 13,181 (658) 31,307 1,549 (39,710) 106,609 (45,750) 60,859
	1,628,771 483,963 454,753 39,139 2,798 22,709 (81,004) 2,551,129 - 2,551,129 181,171 702 230,732 2,088 36 15,215 - 429,944 - 429,944 657,710 (27,022) 262,350 91,682 869,799 27,215 (914,774) 966,960 - 966,960
	180,487 41,134 24,332 12,503 (4,164) 10,185 (5,436) 259,041 (45,919) 14,581 (1) (15,005) - 594 - (45,750) (502) 1,059 3 (3,894) 11,653 100 (12,241) (3,822) (46,421) 15,640 2 (18,899) 11,653 694 (12,241) (49,572) 134,066 56,774 24,334 (6,396) 7,489 10,879 (17,677) 209,469

*EBITDA – Operating profit (loss) - Dividend + Depreciation and amortization (including depreciation related to 16 IFRS) + Revaluation of emission allowances + Impairment and write-offs of property, plant and equipment + Impairment and write-offs of current and non-current amounts receivables, loans, goods and others Adjusted EBITDA - EBITDA + management adjustments

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Consolidated and Company‘s condensed financial information for 2019

➔ Contents

UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Group information about operating segments for 2018 is provided below:

2018		Other segments Elimination of inter-company Managemen
	Distribution Strategic Green Commercial	transactions General t’s Total Parent Other
	generation generation organisation	and consolidation eliminations adjustments adjustments Company segments
Sales revenue from external customers	435,509 112,317 26,654 568,519 703 11,909 - 1,155,611 (65,622) 1,089,989
Sales revenue from contracts with customers Other income from which is dividend income Inter-segment revenue Sales revenue from contracts with customers Other income from which is dividend income Total revenue Purchases of electricity, gas for trade, and related services, gas and heavy fuel oil Wages and salaries and related expenses Repair and maintenance expenses Other expenses Adjusted EBITDA from which: Depreciation and amortisation Impairment and write-offs of property, plant and equipment Impairment and write-offs of current and non-current amounts receivables, loans, goods and others Revaluation of emission allowances Operating profit (loss) Finance income Finance costs Results of the revaluation and closing of derivative financial instruments Profit (loss) before tax Income tax expense Net profit (loss) Property, plant and equipment, intangible and right-of-use asset Investments Net debt Adjusted EBITDA Management adjustments Management adjustments for impairment and write-offs of current and non- current amounts receivables, loans, goods and others Total EBITDA adjustments EBITDA****	435,456 107,639 26,651 539,656 - 4,965 - 1,114,367 (70,160) 1,044,207 53 4,678 3 28,863 703 6,944 - 41,244 4,538 45,782 - - - - - - - - - - (2,929) (424) 946 67,371 70,566 53,087 (188,617) - - - (10,146) 8 946 62,207 3,188 29,830 (86,033) - - - 7,217 (432) - 5,164 67,378 23,257 (102,584) - - - - - - 20 67,378 10 (67,408) - - -
	432,580 111,893 27,600 635,890 71,269 64,996 (188,617) 1,155,611 (65,622) 1,089,989
	(184,564) (64,206) (189) (614,819) - (13,715) 63,069 (814,424) - (814,424) (41,542) (8,363) (989) (3,587) (5,067) (22,970) 2,777 (79,741) - (79,741) (13,810) (5,428) (1,157) - - (1,744) 941 (21,198) - (21,198) (31,378) (6,236) (1,542) (11,328) (3,454) (22,728) 49,239 (27,427) (1,407) (28,834)
	161,286 27,660 23,723 6,136 (4,630) 3,829 (5,183) 212,821 (67,029) 145,792
	(57,352) (16,594) (5,872) (1,122) (7) (6,515) 143 (87,319) - (87,319) (54,330) (501) - (5) (11,198) (2,591) (18,891) (87,516) - (87,516) 15 (382) (3) (869) (4,718) (76) 4,625 (1,408) 1,407 (1) - 8,933 - - - - - 8,933 - 8,933
	49,619 19,116 17,848 4,160 46,825 (5,343) (86,714) 45,511 (65,622) (20,111)
	89 168 12 380 10,069 42 (9,139) 1,621 - 1,621 (6,448) (1,445) (1,452) (880) (12,169) (999) 8,494 (14,899) - (14,899) - - - - (572) (1) - (573) - (573)
	43,260 17,839 16,408 3,660 44,153 (6,301) (87,359) 31,660 (65,622) (33,962)
	12,061 (5,402) (2,478) 4,393 535 (1,654) 4,973 12,428 - 12,428
	55,321 12,437 13,930 8,053 44,688 (7,955) (82,386) 44,088 (65,622) (21,534)
	1,506,852 498,749 223,984 42,651 2,301 22,369 (99,713) 2,197,193 - 2,197,193 271,283 4,956 92,220 354 1,887 10,892 - 381,592 - 381,592 625,213 (9,677) 81,475 38,838 776,137 15,385 (791,352) 736,019 - 736,019
	161,286 27,660 23,723 6,136 (4,630) 3,829 (5,183) 212,821 (40,306) 7,170 - (37,023) - 4,538 - (65,621) 15 (382) (3) (869) (4,718) (76) 4,625 (1,408) (40,291) 6,788 (3) (37,892) (4,718) 4,462 4,625 (67,029) 120,995 34,448 23,720 (31,756) (9,348) 8,291 (558) 145,792

*Certain amounts presented above do not correspond to the 2018 Financial Statements but reflect corrections, disclosed in Note 3.

**EBITDA – Operating profit (loss) - Dividend + Depreciation and amortization + Revaluation of emission allowances + Impairment and write-offs of property, plant and equipment + Impairment and write-offs of current and non-current amounts receivables, loans, goods and others

*Adjusted EBITDA - EBITDA + management adjustments

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

Adjustments made by management and adjusted EBITDA

Adjustments made by management in calculating the adjusted EBITDA are presented below:

Segment / adjustment made by management	2019	2018
Distribution Recalculation of regulated activity revenue of AB „Energijos Skirstymo Operatorius” Cash effect restatement new consumers connection of AB „Energijos skirstymo operatorius“ naujų vartotojų prijungimo piniginio efekto atstatymas Compensation received for the previous periods Result of disposal of non-current assets Strategic generation Recalculation of regulated activity revenue of AB „Ignitis gamyba“ Received compensation related to carried out projects in previous periods Commercial organisation Recalculation of regulated activity revenue of UAB „Ignitis“ Revaluation of derivative financial instruments of UAB „Ignitis“ and UAB „Energijos tiekimas“ (before 2019-05-31) Recalculation of regulated activity revenue of UAB „LITGAS“ Other segments Result of disposal of non-current assets	36,905 12,236 (2,613) (609) (5,736) (9,276) (32) 15,468 - (594)	36,782 3,524 - (7,170) - 47,396 (14,869) 4,496 (4,538)
	45,749	65,621

18 Business combinations

In accordance with Company’s Board of Directors and Company’s subsidiary UAB “Ignitis Renewables” decisions, UAB “Ignitis Renewables” entered into share purchase agreement for 100% shares and shareholder’s claim rights in Pomerania Invall Sp. z. o. o. on 2 May 2019. Thereafter, the Company acquired indirect 100% shareholding in Pomerania Invall Sp. z o. o. because Company’s subsidiary UAB “Ignitis Renewables” owns 100% of shares in Pomerania Invall Sp. z. o. o., and the Company owns 100% of shares in UAB “Ignitis Renewables”. As at 30 September 2019, the ownership property right was fully owned by the Company’s subsidiary UAB “Ignitis Renewables”. The total amount of the investment to Pomerania Invall Sp. z. o. o. is EUR 20,737 thousand. The investment was fully paid as at 31 December 2019.

As at 31 December 2019 all rights to the shares ownership are fully controlled Company’s subsidiary UAB “Ignitis Renewables” and overall investment in Pomerania Invall Sp. z. o. o. comprised EUR 20,737 thousand. As at 31 December 2019 the investment is fully paid.

The Group applied the purchase method to account for these business combinations according to the provisions of IFRS 3. Under the latter method, the acquisition cost is measured as the sum of the fair values, at the date of exchange, of assets given, liabilities incurred and equity instruments issued in exchange for control of the business being acquired.

During business combination the Group established that the difference between the acquisition cost of the businesses and the fair value of the net assets acquired represents goodwill and/or one and/or several items of assets have probably been acquired.

The Group’s management had not finalized the assessment of the initial accounting for business combinations as at 31 December 2019 as the period for the assessment of the business combination has not expired yet which will end when the necessary information about facts and circumstances that existed at the acquisition date will be obtained and which cannot be longer than one year after the acquisition date.

As at 31 December 2019, temporary values of assets and liabilities, the assessment of which was not completed, included as follows: fair value of net assets and value of assets and goodwill identified on business combination. During the assessment period the Group will recognize adjustments to the temporary values as if the accounting for business combination was completed at the acquisition date. Accordingly, the Group will review, if appropriate, comparative figures presented in the financial statements and also, if appropriate, will perform any changes in the impact of depreciation, amortization or other income that were recognized in nearing the completion of the initial accounting.

On business combination, assets and liabilities of Pomerania Invall Sp. z. o. o. were identified with the following fair values at the date of acquisition:

	Pomerania Invall Sp. Z o. o.
Property, plant and equipment Amount receivable within one year Cash and cash equivalents Borrowings, non-current liabilities Current liabilities Net assets Unrecognised goodwill in Group’s financial statement Identified other intangible assets Deferred corporate income tax liability Purchase consideration paid Net cash outflow on acquisition of subsidiaries: Cash paid to sellers of shares Cash paid for loans of the sellers of shares Cash and cash equivalents at acquired company Cash paid for expenses related to purchase Net cash flow	7,314 92 6 (7,385) (83) (56) 36 24,390 (3,900) 20,470 (20,470) (7,209) 6 (292)
	(27,965)

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

As at 10 October 2018 Competition Council of the Republic of Lithuania issued the permission to execute the concentration by acquiring 100% shares in UAB „Vėjo vatas“ and 100% shares in UAB „Vėjo gūsis“ and taking the control of the mentioned companies in accordance with the application of the concentration. As at 5 November 2018 the Company entered into share purchase agreement for acquisition of 100% of shares in UAB „Vėjo vatas” and UAB „Vėjo gūsis” and shareholder claim rights. Company’s investment in UAB „Vėjo vatas“ comprised EUR 6,132 thousand, and investment in UAB „Vėjo gūsis“ comprised EUR 12,919 thousand. Both investments were fully paid as at 31 December 2018.

The Group had 12 month period after purchase of UAB „Vėjo vatas“, UAB „Vėjo gūsis“ ir UAB „VVP investment“ for review and recognition the fair value of assets and liabilities. The fair value of assets and liabilities were recognized during the business combination and disclosed below:

	UAB "Vėjo vatas" UAB "Vėjo gūsis" UAB "VVP Investment" Total
Property, plant and equipment Other non-current assets Inventories and prepayments Amounts receivable within one year Cash and cash equivalents Non-current liabilities Current liabilities Net assets Recognised goodwill in Group’s financial statement Unrecognised goodwill in Group’s financial statement Identified other intangible assets Deferred corporate income tax liability Liabilities for shares purchase Purchase consideration paid Net cash outflow on acquisition of subsidiaries: Cash paid to sellers of shares Cash paid for loans of the sellers of shares Cash and cash equivalents at acquired company Net cash flow	16,488 20,117 7 36,612 267 389 2 658 53 22 48 123 259 373 - 632 172 357 - 529 (10,130) (9,258) (157) (19,545) (2,744) (589) (88) (3,421) 4,365 11,411 (188) 15,588 - - 2,150 2,150 42 244 - 286 1,990 1,490 - 3,480 (265) (226) - (491) - - (725) (725) 6,132 12,919 1,237 20,288 (6,132) (12,919) (1,237) (20,288) (2,547) - - (2,547) 172 357 - 734
	(8,507) (12,562) (1,237) (22,101)

UAB „Vėjo vatas“, UAB „Vėjo gūsis“ ir UAB „VVP investment“ net result and income less inter-company transactions with Group companies are accounted in Group’s financial statement in 2019:

	UAB "Vėjo vatas"	UAB "Vėjo vatas"	UAB "Vėjo gūsis"	UAB "Vėjo gūsis"	UAB "VVP Investment"		Total
Revenue from contracts with customers		1		-		-		1
Net profit (loss)		(2,097)		(2,658)		-		(4,755)

19 Events after the reporting period

On 31 December 2020, was completed the reorganisation of the Group companies UAB Verslo aptarnavimo centras and UAB „Ignitis grupės paslaugų centras“- UAB Verslo aptarnavimo centras was merged with UAB „Ignitis grupės paslaugų centras“. On 2 January 2020 UAB Verslo aptarnavimo centras was de-registered from the Register of Legal Entities. Along with the reorganization, a part of UAB Verslo aptarnavimo centras customer service activities was transferred to AB “Energijos skirstymo operatorius” and UAB “Ignitis”.

On 16 January 2020 UAB „Ignitis grupė“ paid the remaining EUR 11,313,819 of the unpaid share capital of UAB Vilniaus kogeneracinė jėgainė.

On 23 January 2020 occurred the real estate auction of UAB NT Valdos, a subsidiary of the Company, during which the last three properties were sold for a total of 180 thousand EUR, price excluding VAT. It was the 21st and the last auction completing the public sale of real estate since 2016 beginning, during which more than 100 real estate objects not used in the company's main activities were sold for 86 million EUR excluding VAT.

On 28 of January 2020 the National Energy Regulatory Council has approved the Company's 2019 investment projects in the electricity sector submitted for a commonly agreed list of investments, with a total value of up to EUR 91.3 million. In 2019 most of the investments in the electricity sector were for the renovation and / or modernization of the 35-6 kV power grid and 0.4 kV power grid, communication and control systems, software.

On 6 of February 2020 was extended the term of implementation of the project of UAB Vilnius kogeneracinė jėgainė with the Environmental Project Management Agency of the Ministry of Environment of the Republic of Lithuania until the 20 of April 2021. It was combined contract with VšĮ Lietuvos verslo paramos agentūra for the implementation of project activities as well as to extend the deadline to 20 April 2021.

On 19 February 2020 the guarantee agreement of UAB Vilniaus kogeneracinė jėgainė, a subsidiary of the Company, with Swedbank AB was extended till 22 February 2021. The guarantee agreement is intended to ensure the fulfillment of UAB Vilniaus kogeneracinė jėgainė’s obligations related to AB Vilniaus šilumos tinklai.

On 25 February 2020 the Company announced, that Pomerania Wind Farm Sp. z.o.o, which is part of the Group, intends to make a deal with the European Investment Bank (hereinafter “EIB”) for the loan of PLN 258 million (approx. EUR 60 million) for the implementation of

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UAB Ignitis Grupė, Company code 301844044, Žvejų g. 14, LT-09310 Vilnius, Lithuania

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

All amounts in thousands of euro unless otherwise stated

the Pomerania wind farm project which is being developed in Poland. On 24 February 2020, the Board of Group approved the first-call guarantee agreement for this loan between Pomerania Wind Farm Sp. z. o. o and EIB. Accordingly, the Company’s subsidiary UAB Ignitis Renewables, which owns all shares of Pomerania Wind Farm Sp. z. o. o. is planning to sign an agreement with EIB regarding the pledge of 100 percent shares of Pomerania Wind Farm Sp. z. o. o. in favour of EIB. Loan that is provided for the developing of the Wind Farm project is planned to be repaid by December 31, 2035.

Events regarding delisting of shares of AB „Energijos skirstymo operatorius“ and AB „Ignitis gamyba“

On 31 December 2019 District Court of Vilnius City announced that it received a claim from the few minority shareholders of AB „Energijos skirstymo operatorius“ asking to invalidate resolutions which were adopted at the Extraordinary General Meeting of Shareholders of AB „Energijos skirstymo operatorius“ on 4 December 2019. The Court applied the temporary protection measures and suspended the resolutions of the Extraordinary General Meeting of Shareholders of AB „Energijos skirstymo operatorius“ until final decision in this civil case becomes effective. It is noteworthy that further legal proceedings are ongoing.

On 3 January 2020 District Court of Vilnius City announced that it received the claim of the few minority shareholders of AB „Ignitis gamyba“ asking to invalidate resolutions which were adopted at the Extraordinary General Meeting of Shareholders of AB „Ignitis gamyba“ on 4 December 2019. The Court applied the temporary protection measures and suspended the resolutions of the Extraordinary General Meeting of Shareholders of AB “Ignitis gamyba” until final decision in this civil case becomes effective. It is noteworthy that further legal proceedings are ongoing.

On 10 January 2020 The Company announced that after consultation with the Bank of Lithuania, it discloses information that official tender circulars of AB „Energijos skirstymo operatorius“ and AB „Ignitis gamyba“, both the subsidiaries of Ignitis Group, were submitted to Bank of Lithuania (these circulars and the specified prices in these circulars are not approved by the Bank of Lithuania yet). It is specified that the price to be paid for one share of AB “Energijos skirstymo operatorius” amounts to EUR 0.880, for one share of AB “Ignitis gamyba” amounts to EUR 0.640. In the official tender circulars it is also specified that corporate shareholders who will sell their shares to the offeror, Ignitis Group, in the Offering will be paid an additional bonus equal to the amount of the dividend if a decision is made to pay such dividend, if he had been a shareholder of AB “Energijos skirstymo operatorius” and / or AB “Ignitis gamyba” on the date of the rights accounting.

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Consolidated and Company‘s condensed financial information for 2019