Kauno Energija

Audit Report / Information • Apr 29, 2025

INDEPENDENT AUDITOR'S REPORT

To the shareholders of Kauno energija AB:

Report on the Audit of the Separate and the Consolidated Financial Statements

Opinion

We have audited the separate financial statements of Kauno energija AB (hereinafter – "the Company") and the consolidated financial statements of Kauno energija AB and its subsidiary (hereinafter – "the Group") as contained in electronic data file abkaunoenergija-2024-12-31-en.zip (SHA Checksum: c23b00785ccb29f0ecc0c8750d7c79f811e1d29a3334703233d0b73f47871fb9), which comprise the separate and the consolidated statements of financial position of the Company and the Group as at 31 December 2024, the separate and the consolidated profit (loss) and other comprehensive income statements, the separate and the consolidated statements of changes in equity, the separate and the consolidated statements of cash flows for the year then ended, and the notes to the separate and the consolidated financial statements, comprising significant accounting policies and other explanatory information.

In our opinion, the separate and consolidated financial statements present fairly, in all material respects, the unconsolidated financial position of the Company and the consolidated financial position of the Group as at 31 December 2024, and their respective unconsolidated and consolidated financial performance and their respective unconsolidated and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the requirements of the Law on Audit of Financial Statements and Other Assurance Services of the Republic of Lithuania that are relevant to audit in the Republic of Lithuania, and we have fulfilled our other ethical responsibilities in accordance with the Law on Audit of Financial Statements and Other Assurance Services of the Republic of Lithuania and the IESBA Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the current period. These matters were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Each audit matter and our respective response are described below.

The key audit matter	How the matter was addressed in our audit
	Property, plant and equipment (in the separate and consolidated financial statements, see Notes 3.5 and 5 in
the financial statements)
The carrying amount of property, plant and	We conducted these audit procedures, among others:
equipment accounted for by the Company and the
Group in the statement of financial position as at 31	We have considered the appropriateness of the
December 2024 amounted to EUR 194,725 thousand	Company's and the Group's accounting policy, related to
and EUR 196,083 thousand, respectively (86% of	the assessment of useful life of property, plant and
total assets of the Company and the Group).	equipment and whether this policy complies with
	applicable financial reporting standards.
Determining the value of property, plant and
equipment requires significant management	We have identified, understood and evaluated the
judgement based on assets useful lives. The key	principles, processes, methods and assumptions used by
assumptions used are described in Note 3.5	the management of the Company and the Group in
"Property, plant and equipment".	determining the useful life, residual values and
	depreciation methods for property, plant and
	equipment.

Assessment of useful lives of property, plant and equipment requires subjective assumptions from the Company and the Group, changes to which can determine significant change in depreciation expenses and result for the period, thereof. Due to the significance of Property, plant and equipment to the financial statements as a whole, we believe this area to be a key audit matter.	We have reviewed a sample of property, plant and equipment acquisitions and evaluated whether they meet the recognition criteria under the IFRS and if they were accounted for properly based on the agreements and other documents from suppliers. We have also checked the depreciation of property, plant and equipment attributable to 2024. We have considered completeness and appropriateness of related property, plant and equipment disclosures in the Company's separate and the Group's consolidated financial statements.
Impairment of trade receivables (in separate and consolidated financial statements, see Notes 3.7 and 10 in the financial statements)
Trade receivables, stated at amortised cost by the Company and the Group as at 31 December 2024 amounted to EUR 15,482 thousand and EUR 15,698 thousand, respectively. The Company and the Group recognises trade receivables at amortised cost based on IFRS 9 "Financial instruments" requirements. Based on IFRS 9, the Company and the Group evaluates impairment losses for trade receivables based on expected credit losses (ECL) that are determined through modelling methods and are calculated based mostly on historic data on losses and changes in credit risk, based on available quantitative and qualitative data, for example probability of default and expected losses at such default.	We conducted these audit procedures, among others: We have considered the appropriateness of the Company's and the Group's accounting policy, related to the valuation of trade receivables and whether this policy complies with applicable financial reporting standards. We have reviewed the main controls related to the process of recovery of bad debts and the process of impairment calculation. We have reviewed the key data used in the ECL model, evaluated the main assumptions used by the management and their appropriateness in terms of available historical and forward looking information.
Determining these parameters requires significant judgements from the management of the Company and the Group, therefore we believe this area to be a key audit matter.	We have considered completeness and appropriateness of related valuation of trade receivables disclosures in the Company's separate and the Group's consolidated financial statements.

Other Information

The other information comprises the information included in the consolidated management report, including the requirements for the information on corporate governance matters and remuneration, but it does not include the separate and consolidated financial statements and our auditor's report thereon. Management is responsible for the other information.

Our opinion on the separate and consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except as specified below.

In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

In addition, our responsibility is to consider whether information included in the consolidated management report, for the financial year for which the separate and consolidated financial statements are prepared is consistent with the separate and consolidated financial statements and whether management report, including the requirements for the information on corporate governance matters and remuneration, has been prepared in compliance with applicable legal requirements. Based on the work carried out in the course of audit of the separate and consolidated financial statements, in our opinion, in all material respects:

• The information given in the consolidated management report for the financial year for which the separate and consolidated financial statements are prepared is consistent with the separate and consolidated financial statements; and

• The consolidated management report, including the requirements for the information on corporate governance matters and remuneration, has been prepared in accordance with the requirements of the Law on Reporting by Undertakings and Groups of Undertakings of the Republic of Lithuania.

Responsibilities of Management and Those Charged with Governance for the Separate and Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the separate and consolidated financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group's or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's and the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Separate and Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Regulatory and Supervisory Requirements

By the decision of the shareholder's meeting on 5 October 2023 we were re-elected to audit the separate and consolidated financial statements of the Company and the Group for another two years. The total uninterrupted term of appointment is 4 years.

We confirm that our audit opinion expressed in the Opinion section of our report is consistent with the audit report for the separate and consolidated financial statements presented to the Company and the Group and their Audit Committee.

We confirm that to the best of our knowledge and belief, we have not provided any prohibited non-audit services referred to in Article 5(1) of the Regulation (EU) No 537/2014 of the European Parliament and of the Council.

During the audit period we have also provided the review of regulatory activity report service to the Company and the Group.

Report on the compliance of format of the consolidated financial statements with the requirements for European Single Electronic Reporting Format

We have been engaged based our agreement by the management of the Company to conduct a reasonable assurance engagement for the verification of compliance with the applicable requirements of the European single electronic reporting format of consolidated financial statements, including consolidated annual report, for the year ended 31 December 2024 (the "Single Electronic Reporting Format of the consolidated financial statements") contained in the file abkaunoenergija-2024-12-31-en.zip (SHA Checksum: c23b00785ccb29f0ecc0c8750d7c79f811e1d29a3334703233d0b73f47871fb9).

Description of a subject and applicable criteria

The Single Electronic Reporting Format of the consolidated financial statements has been applied by the management of the Company to comply with the requirements of art. 3 and 4 of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the "ESEF Regulation"). The applicable requirements regarding the Single Electronic Reporting Format of the consolidated financial statements are contained in the ESEF Regulation.

The requirements described in the preceding paragraph determine the basis for application of the Single Electronic Reporting Format of the consolidated financial statements and, in our view, these requirements constitute appropriate criteria to form a reasonable assurance conclusion.

Responsibilities of management and those charged with governance

The management of the Company is responsible for the application of the Single Electronic Reporting Format of the consolidated financial statements that complies with the requirements of the ESEF Regulation.

This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF taxonomy and designing, implementing and maintaining internal controls relevant for the preparation of the Single Electronic Reporting Format of the consolidated financial statements which is free from material non-compliance with the requirements of the ESEF Regulation.

Those charged with governance are responsible for overseeing the financial reporting process.

Our responsibility

Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic Reporting Format of the consolidated financial statements complies with the ESEF Regulation.

We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) 'Assurance Engagements other than Audits and Reviews of Historical Financial Information' (hereafter ,,ISAE 3000 (R)"). This standard requires that we comply with ethical requirements, plan and perform procedures to obtain reasonable assurance whether the Single Electronic Reporting Format of the consolidated financial statements is prepared, in all material aspects, in accordance with the applicable requirements. Reasonable assurance is a high level of assurance, but it does not guarantee that the service performed in accordance with ISAE 3000 (R) will always detect the existing material misstatement (significant non-compliance with the requirements).

Summary of the work performed

Our planned and performed procedures were aimed at obtaining reasonable assurance that the Single Electronic Reporting Format of the consolidated financial statements was applied, in all material respects, in accordance with the applicable requirements and such application is free from material errors or omissions. Our procedures included in particular:

• obtaining an understanding of the internal control system and processes relevant to the application of the Single Electronic Reporting Format of the consolidated financial statements, including the preparation of the XHTML format and marking up the consolidated financial statements;

• verification whether the XHTML format was applied properly;

• evaluating the completeness of marking up the consolidated financial statements using the iXBRL markup language according to the requirements of the implementation of single electronic format as described in the ESEF Regulation;

• evaluating the appropriateness of the Company's and the Group's' use of XBRL markups selected from the ESEF taxonomy and the creation of extension markups where no suitable element in the ESEF taxonomy has been identified; and

• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Conclusion

In our opinion, the Single Electronic Reporting Format of the consolidated financial statements for the year ended 31 December 2024 complies, in all material respects, with the ESEF Regulation.

The audit engagement partner for this independent auditor's report is Romanas Skrebnevskis.

Auditor Romanas Skrebnevskis Auditor's certificate No. 000471

ROSK Consulting UAB Audit company's certificate No. 001514

Vilnius, Lithuania 2 April 2025