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Grigeo AB
INDEPENDENT AUDITOR’S REPORT,
CONSOLIDATED ANNUAL REPORT AND
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2
TABLE OF CONTENTS
Translation note: This version of the accompanying documents is 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 the accompanying documents takes precedence over this translation.
CEO’S FOREWORD ..............................................................................................................................3
CONSOLIDATED ANNUAL REPORT ....................................................................................................4
1. Business model .................................................................................................................................5
1.1. The future is circular ....................................................................................................................5
1.2. Scale of organization in 2023.......................................................................................................6
1.3. Our mission and values ...............................................................................................................7
2. Overview of operations ......................................................................................................................8
2.1. Executive summary of 2023 ........................................................................................................8
2.2. Financial and operating performance of the Group and the Company .........................................9
2.3. Employees ................................................................................................................................. 10
2.4. Environmental protection ........................................................................................................... 10
2.5. Risk management ...................................................................................................................... 11
3. Group companies ............................................................................................................................ 12
4. Data on the Issuer’s securities ......................................................................................................... 14
4.1. Contracts with intermediaries of public trading in securities ....................................................... 14
4.2. Main characteristics of the Company’s shares ........................................................................... 14
4.3. Trade in the Company’s shares ................................................................................................. 14
4.4. Capitalisation of the Company’s shares ..................................................................................... 15
5. Corporate governance report ........................................................................................................... 16
5.1. Significant directly or indirectly controlled shares ....................................................................... 16
5.2. Rules regulating the election and replacement of the management and supervisory bodies ...... 16
5.3. Management and supervisory bodies ........................................................................................ 18
5.4. Functions and responsibilities of the management and supervisory bodies ............................... 20
6. Remuneration report ........................................................................................................................ 21
6.1. Remuneration policy .................................................................................................................. 21
6.2. Remuneration paid to the management and supervisory bodies ................................................ 22
6.3. Compliance with the Remuneration Policy ................................................................................. 23
7. Sustainability (social responsibility) report ........................................................................................ 24
7.1. About sustainability report ......................................................................................................... 24
7.2. Impact and materiality assessment ............................................................................................ 26
7.3. Commitments and targets .......................................................................................................... 30
7.4. Group policies ........................................................................................................................... 33
7.5. EU taxonomy ............................................................................................................................. 35
7.6. List of datapoints in cross-cutting and topical standards that derive from other EU legislation ... 43
7.7. Environmental profile ................................................................................................................. 46
7.8. Social profile .............................................................................................................................. 60
7.9. Governance profile .................................................................................................................... 69
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ......................................................... 71
STATEMENTS OF FINANCIAL POSITION...................................................................................... 72
STATEMENTS OF COMPREHENSIVE INCOME ............................................................................ 74
STATEMENTS OF CHANGES IN EQUITY ...................................................................................... 75
STATEMENTS OF CASH FLOWS .................................................................................................. 77
NOTES TO THE FINANCIAL STATEMENTS .................................................................................. 78
STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE ......................... 128
CONFIRMATION OF RESPONSIBLE PERSONS .............................................................................. 143
INDEPENDENT AUDITOR’S REPORT .............................................................................................. 144
3
« Table of Contents
CEO’S FOREWORD
FOREWORD BY THE PRESIDENT
Dear members of the society,
Challenges in the global marketplace are becoming a
permanent state of international business. The year 2023
was no exception, when the prevailing global economic
stagnation challenged the Grigeo Group of Companies,
which we believe we have not only withstood, but also
entered 2024 stronger.
In a context of high inflation and high loan margins, demand
from many of our customers was lower than usual.
Particularly in the containerboard, packaging and hardboard
segment. The effects of the economic slowdown were visible
in all markets, most notably in Western Europe and
Scandinavia.
However, the Grigeo Group's current level of borrowing is low
and the Group itself has demonstrated its resilience to the
increased cost of borrowing. In addition, the triple
diversification of the business: production of tissue paper,
containerboard packaging and hardboard, has allowed us to
withstand the overall drop in demand with sufficient strength.
Demand fluctuated unevenly across business segments, and
when faced with challenges, businesses were able to react
on their own, reorient themselves and add new customers to
their portfolio.
We present to you a report with information on our Group's
key performance indicators for 2023 in the areas of finance,
environment, social responsibility and governance.
However, before we turn to the next year of this business
yearbook, we would like to highlight the key events and
trends of the past period.
On 26 September 2023, Grigeo AB signed a preliminary
share purchase and sale agreement with Głuchołaskie
Zakłady Papiernicze Sp. z o.o., a Polish producer of tissue
paper and cardboard, for the acquisition of 100% of the
shares in the subsidiary of GZP, which will operate a tissue
paper business located in Niedomice, Poland. This is a
significant strategic move that strengthens our position in
Eastern and Central Europe and will allow us to intensify the
development of our tissue paper business and expand the
geography of our product sales. We expect the transaction to
close by the end of March 2024.
KONSOLIDUOTAS METINIS
PRANEŠIMAS
On 27 November 2023, to ensure a more efficient management and
development of the Group's businesses, the Board of Directors of
Grigeo AB adopted a decision to change the structure of the Group.
The structural changes clarify the Group's business segments by
separating the tissue paper business from the packaging and
hardboard segments. Grigeo AB plans to transfer its current tissue
business as a complex of assets, rights and liabilities to its newly
established wholly owned subsidiary, and to combine the
management of this subsidiary with the management of the factory
to be acquired in Poland. We believe that the separation of the
Grigeo Group's activities, including the concentration of the tissue
paper business currently conducted by Grigeo AB in a separate
company, will provide greater clarity and efficiency in the
management of the Group's business. We expect to complete the
structural changes in the first half of 2024.
The Šiauliai Regional Court continues to consistently deal with the
pollution incident at one of the Group's companies, Grigeo Klaipėda,
which occurred four years ago. The company, on its own initiative,
undertook in court to remove all the contaminants from the Curonian
Lagoon and, in cooperation with environmentalists, has prepared a
detailed plan of environmental remediation measures, which it will
start to implement as soon as it receives the approval of the
Department of Environmental Protection.
Last year, we continued to focus on achieving our sustainability
goals. Energy efficiency, climate change, waste and wastewater
reduction remain our environmental priorities.
We have also focused on social issues to improve employee turnover
and retention rates, ensuring safe working conditions and reducing
accidents at work.
This year's Sustainability Report has already been prepared in line
with the new European Sustainability Reporting Standards (ESRS).
These standards will be mandatory for the Group's 2024
Sustainability Report, but the Group has taken a principled decision
to stay one step ahead. This is a consistent commitment to prepare
in advance for future requirements and to consolidate our ambition
to not only meet but also exceed the standards, ensuring the highest
quality and transparency in our disclosure.
In 2023, despite reduced consumption and continuing geopolitical
tensions, the Grigeo Group delivered a strong performance. In the
short term, the cheaper prices of raw materials, electricity and gas
had a negative impact on sales revenues, which remained at last
year's level, with a slight decrease of 4%, while EBITDA increased
by over 82%.
We are proud that in 2023 we have also taken decisions aimed at
improving the conditions of our employees, increasing the average
salary in the Grigeo Group by 16%, exceeding the overall salary
growth in Lithuania, which was 12% last year.
Going into 2024, we will continue to strategically strengthen our
position in the markets for tissue paper and containerboard
packaging and invest in increasing production volumes. We will also
deliver on our commitment to the environment and to you, society,
and consistently pursue our mission to build a circular future by
reducing waste per unit of production in the Grigeo Group’s
operations and protecting the environment and its resources.
Tomas Jozonis
Chief Executive Officer of Grigeo AB
CONSOLIDATED ANNUAL REPORT
5
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
1. Business model
Grigeo AB (hereinafter the “Company” or the “Issuer”) company group is the only paper and wood industry company
group in Lithuania and one of the largest groups in the Baltic countries. Grigeo AB company group consists of the
following entities: Grigeo AB, Grigeo Packaging UAB, Grigeo Baltwood UAB, Grigeo Klaipėda AB, Mena Pak AT,
Grigeo Recycling UAB and Grigeo Recycling SIA and Grigeo Investicijų Valdymas UAB (hereinafter the “Group”).
1.1. The future is circular
The Group operates following the principle of a circular economy. A part of paper used for the production of tissue
paper products and all raw materials designated for the production of corrugated cardboard, i.e., testliner (smooth
layered cardboard) and fluting (paper for corrugation and raw material for paper honeycomb), are produced by
recycling secondary raw materials, i.e., waste paper, thus contributing to the reduction of waste in Lithuania and
neighbouring countries as well as to the preservation of forests:
In the scope of its operational processes, the Group performs an almost complete cycle of processing of wood and
paper components, producing products with higher added value: tissue paper, i.e., toilet paper, tissues, paper towels,
paper to produce corrugated cardboard, honeycomb, corrugated cardboard and packaging, as well as solid
hardboard. Corrugated cardboard packaging has the following characteristics:
- Products are 100% recyclable, organic and biodegradable.
- The 2021 study conducted by Graz University of Technology in Austria concluded that corrugated cardboard
can be recycled up to 25 times.
- Recycled paper provides 76% of raw material for new corrugated cardboard packaging, ensuring the
continuous renewal of fibres while making a universal packaging for our customers.
Corrugated cardboard packaging is currently one of the most recycled paper products and the market of secondary
raw materials is well established. Efficient recycling processes allow reusing fibre to produce new packaging.
ESRS: SBM-1
Production of recycled containerboard
Collecting, sorting and recycling of waste paper
- Used paper comprises 99% of all materials
- 116,205 tonnes recycled into raw material for
packaging
Production of tissue paper
- Recycling of white waste paper
- 25,184 tonnes recycled into tissue
paper
- 141,389 tonnes of waste paper recycled
- 84% of waste paper used for packaging production
Converting paper to packaging
- 24% of paper made by Grigeo Klaipėda AB is further converted
to corrugated cardboard in our packaging plants.
- We cooperated closely with our clients, 100% of our packaging
is custom-made.
- Reducing food waste: corrugated cardboard packaging is hygienic and storing
fruits and vegetables for longer periods.
- Corrugated cardboard packaging is cost-efficient and highly versatile which
allows optimisation of pace for transport and storage.
Significant role in logistics
6
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
1.2. Scale of organization in 2023
Consolidated revenue: EUR 195.4m
Consolidated EBITDA: EUR 38.9m
Consolidated net profit: EUR 25.3m
Employee remuneration fund: EUR 28.5m
Taxes paid: EUR 13.3m
Purchases from local suppliers: 68.3%
Export share of total production: 68.7%
26% Women
860 EMPLOYEES
MEMBERSHIPS IN ASSOCIATIONS
ESRS: SBM-1, S1-6
3,414 t
1,245 t
31,134 t
11,194 t
12,692 t
4,798 t
49,011 t
62,559 t
331 GWh
6 GWh
113 GWh
4 GWh
100 GWh
141,389 t
98 t
786 thous. m
3
77,175 t
56,714 t
44,772 t
38,897 t
3,555 t
14,910 t
2,951 t
5,878 t
23,864 tCO
2
e
1,433 thous. m
3
825 thous. m
3
41 thous. m
3
Support provided: EUR 0.3m
Lithuania: 775
Ukraine: 67
Latvia: 18
7
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
1.3. Our mission and values
Our mission and its directions:
Responsible 360°
Agile
Whatever we do, let’s always think about the impact on our
environment because it’s our home.
We grow faster than the market.
The best measurement of our work is a satisfied client.
Even the best result can be better.
Working like for ourselves makes us proud with the work
done.
Every investor’s euro that is targeted makes us more
valuable.
Professional
Teamwork
A preconception is eliminated while considering proposed
ideas.
Good result is a merit of a good team.
Knowing everything is impossible – we improve by learning
and sharing a good practice.
The team is as strong as you are in it.
We speak the language of numbers and facts.
Before demanding from others, demand more from
ourselves.
ESRS: G1-1, SBM-1
8
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
2. Overview of operations
2.1. Executive summary of 2023
The Group’s revenue decreased by EUR 7.9 million (3.9%) and the Company’s revenue increased by EUR 11.3
million (12.5%). The Group’s and the Company’s EBITDA was higher by EUR 17.6 million (82%) and EUR 17.9 million
(176%), respectively. The Group’s and the Company’s EBT increased by EUR 18.0 million (154%) and EUR 11.6
million (67%), respectively.
Indicator, EUR million
Group
Company
2023
2022
Change
2023
2022
Change
Revenue
195.4
203.2
(3.9%)
101.7
90.5
12.5%
EBITDA
38.9
21.4
82%
28.0
10.1
176%
Profit before tax (EBT)
29.6
11.7
154%
28.7
17.2
67%
In 2023, the Group turnover stayed at the similar level – EUR 195.4 million (EUR 203.2 million in 2022).
The Group’s net profit for 2023 reached EUR 25.3 million (EUR 10.6 million in 2022). The Group’s profitability ratios
increased following the price stabilization of raw materials and energy resources (the comparison of ratios is presented
in section 2.2).
More detailed information on reasons of these changes is presented in the table and explanations below according to
business segments.
Revenue, gross profit, and gross margin of the business segments*:
Indicator, EUR
million
Tissue paper and
paper products
Wood hardboards
Raw materials for
corrugated
cardboard and
related products
Unallocated
TOTAL
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenue
92.3
77.7
26.9
27.7
72.2
93.0
4.0
4.9
195.4
203.2
Gross profit
31.1
11.1
3.8
2.3
15.6
16.8
1.2
0.7
51.6
30.8
Gross margin
33.7%
14.2%
13.9%
8.3%
21.7%
18.0%
29.1%
14.3%
26.4%
15.2%
*The data is presented after the elimination of the impact of transactions between the segments.
Segment of tissue paper and paper products
The segment's turnover in 2023 reached EUR 92.3 million (EUR 77.7 million in 2022). The main reason for the
increase were increasing sales prices as well as higher sales of final products.
The gross profit of the segment amounted to EUR 31.1 million – 3 times higher if compared to respective period of
previous year. The increase in gross margin was significantly influenced by decreased prices of energy resources.
Segment of wood hardboards
In 2023, the segment’s sales revenue amounted to EUR 26.9 million (EUR 27.7 million in 2022). The revenues
decreased mainly due to lower sales volumes.
During 2023, due to decreased prices of energy resources the gross profit of the segment reached EUR 3.8 million
and was 63% higher when compared to respective period of previous year.
Raw materials for corrugated cardboard and related products
In 2023, this segment’s revenue reached EUR 72.2 million. It was 22.4% lower than in 2022 (EUR 93.0 million). The
decrease of revenue was driven mainly by decreasing sales prices. However, due to decreased prices of energy
resources the gross profit of the segment was decreasing at a slower pace and reached EUR 15.6 million. Accordingly,
the gross profit margin of the segment increased from 18.0% to 21.7%.
140,0
129,6
163,2
203,2
195,4
13,6
13,3
12,4
10,6
25,3
2019 2020 2021 2022 2023
Rrevenue of the Group, EUR million Net profit of the Gruop, EUR million
9
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
2.2. Financial and operating performance of the Group and the Company
In 2023, the profitability indicators increased following the stabilisation in the prices of raw materials and energy
resources. The values of the liquidity and capital structure ratios continue to proof the financial stability as well as low
financial risk of the Group and the Company.
Indicator
Group
Company
2023
2022
2021
2023
2022
2021
Revenue, EUR million
195.4
203.2
163.2
101.7
90.5
67.6
Net profit, EUR million
25.3
10.6
12.4
25.4
16.4
3.2
EBITDA, EUR million
38.9
21.4
23.7
28.0
10.1
5.9
EBIT, EUR million
29.4
12.1
13.9
28.4
17.3
3.0
Profitability ratios
Gross profit margin
26.4%
15.2%
20.6%
30.5%
12.0%
13.4%
EBITDA margin
19.9%
10.5%
14.5%
27.5%
11.2%
8.8%
EBIT margin
15.1%
6.0%
8.5%
27.9%
19.1%
4.4%
Net profit margin
13.0%
5.2%
7.5%
24.9%
18.1%
4.8%
ROE margin
23.6%
11.0%
13.3%
33.4%
26.7%
5.5%
ROA margin
16.9%
7.6%
9.6%
25.2%
19.9%
4.2%
ROCE margin
23.3%
11.2%
13.8%
31.7%
24.6%
5.0%
Liquidity ratios
Current ratio
2.45
1.71
1.51
2.46
1.75
1.01
Quick ratio
1.98
1.13
1.07
2.19
1.22
0.72
Capital structure ratios
Debt to equity ratio
0.35
0.46
0.41
0.31
0.35
0.33
Debt to total assets ratio
0.26
0.31
0.29
0.24
0.26
0.25
Market value ratios*
P/E
5.69
8.79
9.92
5.67
5.64
37.83
Dividend pay-out ratio
26.0%
62.4%
64.3%
25.9%
40.1%
245.1%
Basic earnings per share, in EUR
0.193
0.080
0.093
0.193
0.125
0.024
Diluted earnings per share, in EUR
0.190
0.079
0.092
0.191
0.123
0.024
The above-mentioned indicators have been calculated in accordance with the formulas recommended by Nasdaq
Vilnius AB:
EBITDA margin = EBITDA / sales revenue. EBITDA to revenue ratio shows the overview of operational efficiency and cash flows.
Gross profit margin = Gross profit / sales revenue. Gross profit margin shows the ability to earn profit from operating activity, control
the level of sales revenue and cost.
EBIT margin = Profit from operations / sales revenue. A monetary value of the coefficient shows operating profit to EUR 1 of sales.
A higher ratio shows higher profitability.
Net profit margin = Net profit attributable to shareholders / sales revenue. The ratio describes the profitability of the final total
operating result.
ROE margin = Net profit attributable to shareholders / average equity. This ratio estimates shareholders’ return on investment.
ROA margin = Net profit attributable to shareholders / average assets. The return on assets shows how effectively assets are used
to generate profit.
ROCE margin = EBIT / capital used. The used capital return shows income generated by each euro invested in the capital.
Current ratio = Current assets / current liabilities. The ratio shows the ability to cover current liabilities with current assets.
Quick ratio = (Current assets – Inventories) / current liabilities. Liquidity describing the ability to fulfil current liabilities from quickly
realisable current assets.
Debt to equity ratio = Liabilities / equity. The ratio estimates the combination of fund resources in the balance and compares funds
from owners and those that were borrowed.
Debt ratio = Liabilities / assets. The ratio shows the asset share financed from borrowed funds. The lower the value, the more
borrowings are covered with assets.
P/E = the market price of share / total of attributable profit. The ratio shows how much investors pay for one EUR of profit.
Dividend pay-out ratio = Dividends / Net profit attributable to shareholders. The ratio shows the portion of earnings paid out as
dividends.
Basic earnings per share = (Net profit – preferred stock dividends) / weighted average number of ordinary shares in circulation.
The calculated profit shows the earned net profit per share.
Diluted earnings per share = (Net profit – preferred stock dividends) / (weighted average number of ordinary shares in circulation
+ weighted average number of dilutive shares, i.e. shares that can be converted to ordinary shares). The calculated profit shows
the diluted net profit per share.
10
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
2.3. Employees
There were no significant changes in the number of employees during 2023. Natural personnel turnover rates
prevailed in the Group companies in the reported period.
The average salary in the Company and in the Group increased for all categories of employees as compared to the
year 2022. The growth of the average salary was mostly driven by the consistent salary increase policy and
recruitment of workers with higher competences.
The number of employees in the Group and in the Company as at 31 December:
Employees
Group
Company
2023
2022
2023
2022
Women
224
228
70
70
Men
636
637
211
210
Total
860
865
281
280
The average salary in the Group and in the Company*, in euros:
Employees
Group
Company
2023
2022
2023
2022
Workers
2,308
1,973
2,576
2,143
Specialists
2,626
2,268
2,888
2,466
Managers
5,678
4,959
7,230
5,983
Total
2,778
2,394
3,195
2,673
*Information on the average salary does not include data of Mena Pak AT to show a more precise average salary in
the Group that is not affected by fluctuations in exchange rate of the Ukrainian hryvnia.
2.4. Environmental protection
The Group fully recognises that sustainable development embraces economic, environmental and social business
issues which remain relevant in the daily operations of the organization. In 2023, the Group consistently made
investments, the majority of which was aimed at the acquisition of modern, more efficient facilities and improvement
of processes of environmental protection. After the environmental incident in Grigeo Klaipėda AB that took place in
2020, in 2021 the Prosecutor’s Office completed the pre-trial investigation regarding the wastewater treatment carried
out by Grigeo Klaipėda AB, and the criminal case was referred to the court. The court hearings started in 2022. By
assuming moral responsibility we hope that the fact of damage to the natural environment will be established by the
court and, once it has been established, an objective scope of damage will be determined. This will allow Grigeo
Klaipėda AB to recover the impact made on the natural environment in a fair manner and in compliance with
international standards.
We have set clear targets for our future development. Our continuous sustainability targets include:
- reducing our GHG emission intensity,
- reduce number of accidents at work
- improve nature- and people-friendly product properties,
- select more environmentally friendly mix of energy sources,
- invest in energy efficiency,
- promote responsible collection of waste paper,
- better manage the wastewater quality,
- reduce the disposable waste.
More information on sustainability targets is disclosed in the section “Sustainability (social responsibility) report”.
Environmental management system certificates ISO 14001:2015 implemented at the companies of the Group are a
proof that we aim to control the environmental impact in our production and distribution processes. We responsibly
choose and use raw materials and energy sources, implement environmentally friendly technologies, and manage
production waste – these priorities will remain the focus of our Group entities future activities.
11
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
2.5. Risk management
Ecological risk
The Group is constantly exposed to ecological risks during its manufacturing activities. To properly manage
environmental risks, ISO 14001 (Environmental Management System) has been implemented in all manufacturing
companies of the Group in Lithuania, the effectiveness of which is constantly monitored with the help of external
certification consultants.
The Company follows the integrated pollution prevention and control principles in its economic activities. The
Company rationally uses energy and natural resources through the application of modern production technologies
and technologies for the treatment of environmental components without worsening the quality of the products
manufactured.
Product risk
The Group's hygiene paper segment manufactures products that come into contact with food or are used as personal
hygiene products. For these reasons, the Group must apply the highest quality standards.
In 2020, Grigeo AB was the first personal hygiene product manufacturer in Lithuania to receive an IFS HPC quality
certificate. It accredits that tissue paper products are manufactured in compliance with the highest quality and safety
standards and the products supplied to the market are safe to be in contact with food.
IFS HPC certificate is renewed on an annual basis.
Climate change risk
The management of the Group recognises the importance of analysis in disclosing climate-related risks and
opportunities. In 2021, the Group’s management decided to start with a qualitative analysis that will help explore a
possible range of effects of climate change. During 2023, the Group continued its analysis and used the reporting
principles of the Climate-Related Financial Disclosure Working Group (TCFD) to analyse the potential impact of the
climate change on the activities of the companies of the Group.
Although the physical risk to the Group is low, in the opinion of the management, the reputational risk and market risk
remain significant in the context of the climate change risk. During the production process, the Group's companies
emit greenhouse gases (GHGs) and the Group is sensitive to electricity needs. In order to ensure the Group's
transparency, the Group provides GHG emissions data and sets targets for reducing emissions and energy needs
through technological means, through the purchase of new and more energy-efficient equipment and upgrade of
existing ones.
Risk of prices of raw materials
The markets of raw materials relevant for the paper and wood industry are showing signs of stabilisation (cellulose,
white waste paper, starch), and in some markets (various types of paper, cardboard waste paper, wood chips) a
significant price decrease is seen. This is related to both the reduced demand for raw materials, as well as the
significantly increased availability of various logistics channels and the resulting drop in logistics costs.
To manage this risk, the companies of the Group renewed the annual supply contracts with the main suppliers of raw
materials, maintaining and, in some cases, significantly improving the supply conditions.
Risk of prices of energy resources
In 2023, the companies of the Group renewed electricity, gas and biofuel supply contracts, focusing on the reliability
and flexibility of the selected partners, i.e. the ability to ensure the necessary energy resources and respond promptly
to market changes. Decisions have been made to invest in renewable energy resources, thus reducing both the need
for their purchase and the costs incurred by the Group companies. The Group also invests in new technologies that
allow to increase energy efficiency and at the same time reduce the need for energy resources.
Risk related to the process of financial reporting
The Company’s financial accounting is performed, and financial statements are prepared in accordance with the
requirements of International Financial Reporting Standards, as adopted by the European Union effective at
31 December 2023. The annual financial statements are audited by the independent auditors elected by the General
Meeting of Shareholders. Independence of the auditors is assessed by the Company’s Audit Committee. This
procedure guarantees the relevance and transparency of the data presented in the Company’s financial statements.
Financial risk
The information on financial risks and their management is disclosed in Note 3 to the consolidated and separate
financial statements.
12
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
3. Group companies
As at 31 December 2023, the Group consisted of the Company and its ten subsidiaries as indicated below:
The Company has sales representatives operating in Latvia and Estonia. No new representative offices or branches
are planned to be opened in 2024.
Status
Parent company
Subsidiary
Subsidiary
Company name
Grigeo AB
Grigeo Klaipėda AB
Grigeo Packaging UAB
Code
110012450
141011268
302329061
Authorised share capital
EUR 38,106,000
EUR 11,890,550
EUR 15,202,900
Profile of activities
Production of tissue paper
Manufacture of raw material for
production of corrugated
cardboard
Manufacture of corrugated
cardboard and corrugated
cardboard products
Portion of shares
directly/indirectly controlled
by Grigeo AB
The Company has not
acquired own shares
97.68%
100%
LEI code
529900YXT3CDTZGS0R43
64880O4VY4HF60K96D17
-
Address
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality,
Lithuania
Nemuno g. 2, Klaipėda
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Telephone
+370 5 243 5801
+370 46 39 5601
+370 5 243 5838
Fax
-
+370 46 39 5600
-
E-mail
info@grigeo.lt
info.klaipeda@grigeo.lt
info.packaging@grigeo.lt
Website
https://www.grigeo.lt/en
https://www.grigeo.lt/en
https://www.grigeo.lt/en
Legal form
Public limited liability
company
Public limited liability
company
Private limited liability
company
Date of registration
23 May 1991
22 September 1994
10 April 2009
Manager of the register
State enterprise Centre of
Registers
State enterprise Centre of
Registers
State enterprise Centre of
Registers
13
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Status
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Company name
Grigeo Tissue UAB
Grigeo Baltwood UAB
Grigeo Recycling UAB
Grigeo Recycling SIA
Code
306639125
126199731
302529158
40203001091
Authorised share capital
EUR 200,000
EUR 4,000,000
EUR 2,960,000
EUR 500,000
Profile of activities
Production of tissue paper
Manufacture of uncoloured
hardboard and painted
hardboard panels
Collection of secondary
raw materials and
preparation of them for
recycling
Collection of secondary
raw materials and
preparation of them for
recycling
Portion of shares
directly/indirectly
controlled by Grigeo AB
100%
100%
100%
100%
Address
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Ēdoles iela 5, Riga,
Latvia
Telephone
+370 5 243 5801
+370 5 243 5900
+370 5 243 3393
+370 5 243 3393
E-mail
grigeotissue@grigeo.lt
info.baltwood@grigeo.lt
info.recycling@grigeo.lt
info.recycling@grigeo.lt
Website
-
https://www.grigeo.lt/en
https://www.grigeo.lt/en
-
Legal form
Private limited liability
company
Private limited liability
company
Private limited liability
company
Private limited liability
company
Date of registration
1 December 2023
10 April 2003
16 July 2010
16 June 2016
Manager of the register
State enterprise Centre
of Registers
State enterprise Centre
of Registers
State enterprise Centre
of Registers
Register of Enterprises
of the Republic of Latvia
Status
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Company name
Mena Pak AT
Grigeo Investicijų
Valdymas UAB
Naujieji Verkiai UAB
Grigeo Hygiene UAB
Code
00383260
302416687
300015674
302674488
Authorised share capital
UAH 4,011,470
EUR 19,329,776
EUR 28,962
EUR 200,000
Profile of activities
Manufacture of corrugated
cardboard and corrugated
cardboard products
Investment activities and
management of companies
Construction and
development of real
estate; the company was
dormant in 2023
Investment activities and
management of
companies
Portion of shares
directly/indirectly
controlled by Grigeo AB
100%
100%
100%
100%
Address
Koševovo g. 6, Chernihiv
region, Mena, Ukraine
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Popieriaus g. 15, Vilnius
Vilniaus g. 10, Grigiškės,
Vilnius City Municipality
Telephone
+380 4644 21341
+370 698 87433
+370 5 243 5933
+370 5 243 5933
E-mail
menapack@ukr.net
info.giv@grigeo.lt
info@grigeo.lt
grigeohygiene@grigeo.lt
Website
www.menapack.com.ua
-
-
-
Legal form
Public limited liability
company
Private limited liability
company
Private limited liability
company
Private limited liability
company
Date of registration
30 December 1993
10 July 2009
6 April 2004
7 October 2011
Manager of the register
Mena District State
Administration, Chernihiv
Region
State enterprise Centre of
Registers
State enterprise Centre
of Registers
State enterprise Centre
of Registers
The transactions between related parties are disclosed in Note 31 to the financial statements.
14
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
4. Data on the Issuer’s securities
The ordinary registered shares of Grigeo AB are listed on the Official Baltic List of Nasdaq Vilnius Stock Exchange
(trading code of shares is GRG1L).
The Company and the companies of the Group did not purchase own shares during the reporting period and have no
such shares acquired.
4.1. Contracts with intermediaries of public trading in securities
The Company has signed a contract with Šiaulių Bankas AB (telephone: 1813 (+370 37 301337 for calls from abroad),
kc@sb.lt) on payment of dividends to the shareholders for the previous financial year.
The Company has signed a contract with FMĮ Orion Securities UAB (A. Tumėno g. 4, Vilnius, tel. +370 5 231 3833,
info@orion.lt) on the bookkeeping of securities issued by the Company and on market making activities.
4.2. Main characteristics of the Company’s shares
Type of shares
Securities’
ISIN code
Number of shares,
units
Par value, EUR
Total par value, EUR
Ordinary registered
shares
LT0000102030
131,400,000
0.29
38,106,000
4.3. Trade in the Company’s shares
Reporting
period
Price, EUR
Turnover, EUR
Total turnover
Max.
Min.
Last
session
Average
Max.
Min.
Last
session
Units
EUR
2020
0.750
0.482
0.665
0.570
342,036
9
9,670
9,829,442
5,603,785
2021, Q1
0.753
0.630
0.673
0.676
178,553
77
3,085
2,120,000
1,432,306
2021, Q2
0.980
0.670
0.974
0.878
576,103
1,782
64,516
6,366,053
5,590,079
2021, Q3
0.998
0.964
0.964
0.986
2,079,207
3,054
12,209
6,960,462
6,862,103
2021, Q4
0.964
0.866
0.926
0.905
90,003
260
6,726
1,265,914
1,145,714
2021
0.998
0.630
0.926
0.899
2,079,207
77
6,726
16,712,429
15,030,202
2022, Q1
0.944
0.650
0.840
0.832
57,663
340
14,324
1,044,261
869,038
2022, Q2
0.908
0.782
0.788
0.856
34,250
97
2,406
562,634
481,777
2022, Q3
0.820
0.664
0.672
0.729
160,293
353
2,729
1,037,585
756,833
2022, Q4
0.766
0.674
0.704
0.720
155,835
343
3,831
634,139
456,842
2022
0.944
0.650
0.704
0.782
160,293
97
3,831
3,278,619
2,564,490
2023, Q1
0.860
0.710
0.860
0.823
300,835
320
654
994,544
818,344
2023, Q2
0.906
0.838
0.894
0.879
57,063
318
4,655
593,794
521,829
2023, Q3
0.950
0.884
0.946
0.927
52,027
121
4,532
802,325
743,660
2023, Q4
1.105
0.912
1.095
0.996
397,140
2,269
10,367
2,241,728
2,233,520
2023
1.105
0.710
1.095
0.932
397,140
121
10,367
4,632,391
4,317,354
15
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Price and turnover of shares over the period 01/01/2021 – 31/12/2023:
Share price benchmarked against the Baltic market index over the period 01/01/2021 – 31/12/2023:
4.4. Capitalisation of the Company’s shares
0
400
800
1 200
1 600
2 000
0,40
0,60
0,80
1,00
1,20
1,40
2021-01 2021-04 2021-07 2021-10 2022-01 2022-04 2022-07 2022-10 2023-01 2023-04 2023-07 2023-10
turnover, EUR thousand share price, EUR
50%
80%
110%
140%
170%
200%
2021-01 2021-04 2021-07 2021-10 2022-01 2022-04 2022-07 2022-10 2023-01 2023-04 2023-07 2023-10
OMX_Baltic_Benchmark_GI GRG1L - Grigeo
Last session date
Capitalisation, EUR
31/12/2020
87,381,000
31/03/2021
88,366,500
30/06/2021
127,983,600
30/09/2021
126,669,600
31/12/2021
121,676,400
31/03/2022
110,376,000
30/06/2022
103,543,200
30/09/2022
88,300,800
31/12/2022
92,505,600
31/03/2023
113,004,000
30/06/2023
117,471,600
30/09/2023
124,304,400
31/12/2023
143,883,000
16
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
5. Corporate governance report
The applied corporate governance code and information on compliance with the code are presented in the section
“Statement of compliance with the corporate governance code”.
5.1. Significant directly or indirectly controlled shares
As at 31 December 2023, the number of shareholders of Grigeo AB was 4,771 (31 December 2022: 4,676).
There are no shareholders holding special controlling rights at the Company. There are no limitations of voting rights
at the Company. Moreover, the Company is not aware of any agreements between the shareholders, including those
under which a transfer of securities and / or voting rights could be restricted.
Shareholders holding more than 5% of the Issuer’s authorised share capital by the right of ownership as at 31
December 2023 and 31 December 2022 are presented in the table below:
Shareholder’s name,
surname (company’s name,
type, registered office
address, company code)
31 December 2023
31 December 2022
Number of
ordinary
registered
shares owned
by the
shareholder,
units
Portion of
the
authorised
share
capital
held, %
Votes granted
by shares held
by the right of
ownership, %
Number of
ordinary
registered
shares owned
by the
shareholder,
units
Portion of
the
authorised
share capital
held, %
Votes granted
by shares held
by the right of
ownership, %
Ginvildos Investicija UAB*
Turniškių g. 10a-2, Vilnius,
125436533
61,838,179
47.06
47.06
60,809,151
46.28
46.28
Irena Ona Mišeikienė
17,578,342
13.38
13.38
17,578,342
13.38
13.38
*Gintautas Pangonis holds 67,00% of shares of Ginvildos Investicija UAB.
5.2. Rules regulating the election and replacement of the management and supervisory bodies
According to the Company’s Articles of Association, the Company’s bodies are the General Meeting of Shareholders,
the Supervisory Board (the collegial supervisory body), the Board (the collegial management body), and the
Company’s Manager (the Chief Executive Officer). The Audit Committee is formed at the Company, which is the
advisory body to the Company’s Supervisory Board.
The Company’s objective is to ensure diversity of qualifications, professional experience and competences as well as
gender equality of the elected members of the management and supervisory bodies.
17
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Supervisory Board
The Supervisory Board consists of five members. The members of the Supervisory Board are elected by the General
Meeting of Shareholders for a period of four years as defined by the Articles of Association of the Company. The
General Meeting of Shareholders may recall the entire Supervisory Board or its individual members before the end of
the term of office of the Supervisory Board. In the election of the members of the Supervisory Board, each shareholder
holds the number of votes which is equal to the number of votes conferred by the shares held by them multiplied by
the number of the Supervisory Board members to be elected. The shareholder distributes these votes at his own
discretion – in favour of one or several candidates. The candidates who have collected the largest number of votes
are elected. In case the number of candidates who collected equal number of votes exceeds the number of vacancies
on the Supervisory Board, a repeated voting is organised during which each shareholder may vote only for one of the
candidates who collected equal number of votes. The Supervisory Board performs its functions for a period defined
by the Articles of Association or until a new Supervisory Board is elected but no longer than until the Ordinary General
Meeting of Shareholders is held in the year in which the Supervisory Board’s term of office ends. The number of terms
of office of a member of the Supervisory Board is unlimited.
More than a half of the Supervisory Board members must have no employment relations with the Company, at least
1/3 of the Supervisory Board members must be independent and cannot be members of the Supervisory Board of the
Company for more than 10 years. The Supervisory Board or its members commence their activities after the end of
the General Meeting of Shareholders which elected the Supervisory Board or its members. The Supervisory Board is
chaired by its chairperson who is elected by the Supervisory Board from its members.
Audit Committee
The Audit Committee is formed at the Company, and it consists of three members. The Audit Committee is formed,
and its composition is approved by the decision of the Supervisory Board for the period defined therein but no longer
than for four years. Only a private individual may be a member of the Audit Committee. The Audit Committee must
include at least one Audit Committee member with knowledge of at least one of the following areas: finance,
accounting, audit of financial statements, or the sector in which the company operates; at least one member of the
Audit Committee must have at least three years’ working experience in accounting and (or) audit of financial
statements. The Manager of the Company and a person who has held this position for the past five years may not be
a member of the Audit Committee. More than a half of the Audit Committee members must be independent members
and may not serve as a member of the Company's Audit Committee for a total of more than 12 years. The chairperson
of the Audit Committee is elected by the members of the Audit Committee. An independent member is elected to be
the chairperson of the Audit Committee.
Board
The Company’s Board consists of five members. The Board is elected for a period of four years as defined by the
Articles of Association of the Company. The Board performs its functions for a period defined by the Articles of
Association or until a new Board is elected and starts to perform its functions but no longer than until the Ordinary
General Meeting of Shareholders is held in the year in which the Board’s term of office ends. The Board elects the
chairperson of the Board from its members. Only a private individual may be elected to be a member of the Board.
The number of terms of office of a member of the Board is unlimited. The Board or its members commence their
activities after the end of the meeting of the Supervisory Board which elected the Board or its members. The
Supervisory Board may recall the entire Board or its individual members before the end of their term of office.
Manager of the Company
The Manager of the Company is elected, recalled and dismissed by the Board of the Company. An employment
contract is signed with the Manager of the Company. The Company’s Manager starts to perform his/her duties from
the election day, unless otherwise provided by the agreement signed.
Articles of Association of the Company
The General Meeting of Shareholders has the exclusive right to amend the Articles of Association of the Company
subject to the exceptions provided by the Law on Companies of the Republic of Lithuania. The Articles of Association
of the Company are amended following the procedure established by the Law on Companies of the Republic of
Lithuania.
18
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
5.3. Management and supervisory bodies
Composition of the management and supervisory bodies
Name, surname
Position
Education
Term of office
Portion of
ownership
interest and
voting rights,
%
Supervisory Board
Vilius Oškeliūnas
Independent Member,
Chairman
Vilnius University, BA and MA in
Economics
From 28 April
2023
until the General
Shareholders’
Meeting, to be
held in 2027
-
Marius Stankevičius
Member
University of Liverpool, MA in
Management of Information Systems
2.92
Ignas Degutis
Independent Member
ISM University of Management and
Economics, MA in Economics
-
Arūnas Pangonis
Member
Vilnius Gediminas Technical
University, MA in Industrial
Engineering
Indirectly*
Daiva Duksienė
Independent Member
Vilnius University, Economist
-
Audit Committee
Daiva Duksienė
Independent Member,
Chairwoman
Vilnius University, Economist
From 28 April
2023
until the General
Shareholders’
Meeting, to be
held in 2027
-
Ignas Degutis
Independent Member
ISM University of Management and
Economics, MA in Economics
-
Vilius Oškeliūnas
Independent Member
Vilnius University, BA and MA in
Economics
-
Board
Gintautas Pangonis
Chairman
Kaunas University of Technology,
Telecommunications Engineer
From 28 April
2023
until the General
Shareholders’
Meeting, to be
held in 2027
Indirectly*
Algimantas Variakojis
Independent Member
Vilnius University, Economist
0.16**
Vigmantas Kažukauskas
Member
Kaunas University of Technology,
Telecommunications Engineer
0.88
Saulius Martinkevičius
Member
Vilnius University, MA in Business
Administration and Management
0.28
Tomas Jozonis
Member
ISM University of Management and
Economics, BA in Management and
Business Administration; Vilnius
University, MA in Business
-
Manager of the Company
Tomas Jozonis
Chief Executive Officer
ISM University of Management and
Economics, BA in Management and
Business Administration; Vilnius
University, MA in Business
-
-
*Ginvildos Investicija UAB holds 47.06% of the Company’s shares. 67.00% of shares of Ginvildos investicija UAB are owned by
Gintautas Pangonis and 10,00% by Arūnas Pangonis.
**The Board member holds 0.13% of the Company’s shares directly and 0.03% – through 100% owned company Alro Kapitalas
UAB.
Indicator
Value
Proportion of female and male board members
0:5
Percentage of independent board members
20%
Executive board members
2
Non-executive board members
3
Proportion of female and male members of the Supervisory Board
1:4
Percentage of independent Supervisory Board members
60%
Number of employee representatives on management and supervisory bodies
0
Participation of the management and supervisory bodies in the activities of other organisations
ESRS: GOV-1
19
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Name,
surname
Position
Name of the enterprise, institution and organisation
Vilius
Oškeliūnas
Chairman of the Supervisory Board,
Member of the Audit Committee
Grigeo AB
Wealth Manager
Gerovės Valdymas UAB
Director, Board Member
Atelier Investment Management UAB
Director
IM Investment UAB, Commody UAB
Deputy Director
WB Invest UAB
True Member
Gerovės Partneriai KŪB
Board Member
Invalda Privatus Kapitalas AB, ETA projektai UAB, Liv in LT UAB, V46 UAB
Marius
Stankevičius
Member of the Supervisory Board
Grigeo AB
Shareholder
Didma UAB
Shareholder
Statybų namai UAB
Shareholder
Technikos namai UAB
Ignas Degutis
Independent Member of the Supervisory
Board, Member of the Audit Committee
Grigeo AB
Independent Member of the Board
Amber Grid AB
General Director
Vilniaus viešojo transport (VVT) UAB
Arūnas
Pangonis
Member of the Supervisory Board
Grigeo AB
Director
Hendrixon UAB
Daiva
Duksienė
Independent Member of the Supervisory
Board, Chairperson of the Audit
Committee
Grigeo AB
Director
Amerigas UAB, Pasaulio skoniai UAB
Chief Financial Officer
Baltijos ir Amerikos terapijos ir chirurgijos klinika UAB, EM21 MB
Gintautas
Pangonis
President
Grigeo AB (until 06.05.2023)
Director
Ginvildos investicija UAB
Chairman of the Board
Grigeo AB
Board Member
Grigeo Klaipėda AB, Grigeo Packaging UAB, Grigeo Hygiene UAB, Grigeo Tissue
UAB, Grigeo Baltwood UAB, Grigeo Recycling UAB, Grigeo investicijų valdymas
UAB, Naujieji Verkiai UAB
Member of the Supervisory Board
Mena Pak AT
Vigmantas
Kažukauskas
Vice President for Business
Development
Grigeo AB (until 06.05.2023)
Board Member
Grigeo AB, Grigeo Klaipėda AB, Grigeo Baltwood UAB
Algimantas
Variakojis
Independent Board Member
Grigeo AB
Partner, True Member
Verslo Angelų fondas I KŪB, Mes Invest UAB
Director
Alro Kapitalas UAB, Verslo Praktika UAB
Board Member
Chipper Blades Center UAB
Chairman of the Board
Mes Invest UAB
Saulius
Martinkevičius
Director of Procurement and Logistics
Grigeo AB
Board Member
Grigeo AB, Grigeo Baltwood UAB, Grigeo Packaging UAB, Grigeo Klaipėda AB,
Naujieji Verkiai UAB, Grigeo Hygiene UAB, Grigeo Investicijų Valdymas UAB
Member of the Supervisory Board
Mena Pak AT
Deputy Chairman of the Supervisory
Board
Grigeo Recycling SIA
Tomas Jozonis
Chief Executive Officer
Grigeo AB (from 06.05.2023)
Board Member
Grigeo AB
Chairman of the Supervisory Board
Grigeo Recycling SIA
Chairman of the Board
Grigeo investicijų valdymas UAB, Grigeo Baltwood UAB, Grigeo Recycling UAB,
Naujieji Verkiai UAB, Grigeo Hygiene UAB, Grigeo Tissue UAB
20
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
5.4. Functions and responsibilities of the management and supervisory bodies
Supervisory Board
The Supervisory Board discusses and approves the business strategy of the Company, elects members of the Board of the
Company and recalls them from their positions, adopts decisions regarding transactions with related parties, supervises the
activity performed by the Board and the Manager of the Company, submits replies and proposals regarding the set of
financial statements, the proposed profit or loss appropriation and the annual report of the Company as well as the activity
of the Board and the Manager of the Company to the General Meeting of Shareholders; and resolves other issues assigned
to the competence of the Supervisory Board by the Articles of Association of the Company, by the decisions of the General
Meeting of Shareholders regarding the supervision of the activities of the Company and its management bodies.
Audit Committee
The functions of the Audit Committee are to inform the Manager or the supervisory body of the Company about the results
of the audit of the financial statements and to explain how this audit contributed to the reliability of the financial statements
and the role of the Audit Committee in doing that; to monitor the financial reporting process and submit recommendations
for ensuring the reliability thereof; to monitor the audit of the annual financial statements and the consolidated financial
statements; to review and monitor the independence of the auditors or the audit companies; to provide recommendations
regarding the appointment of statutory auditors or the audit companies; to submit opinions regarding the transactions
conducted by the Company with the related parties.
Board
The Board discusses and approves the Company’s annual and interim reports, the management structure of the Company;
elects and removes from the office the Manager of the Company, sets his/her remuneration and other terms and conditions
of the employment contract; analyses and assesses the information submitted by the Manager of the Company on the
organisation of the Company’s business activities, financial condition, the set of the Company’s annual financial statements,
proposed profit or loss appropriation and submits to the Supervisory Board and General Meeting of Shareholders together
with the responses and proposals in relation thereto and the Company’s annual report; analyses, assesses the draft
business strategy and information about the implementation of the Company’s business strategy submitted by the Manager
of the Company and adopts other decisions assigned to the competence of the Board by the Law on Companies of the
Republic of Lithuania, the Articles of Association or the decisions of the General Meeting of Shareholders of the Company.
The Articles of Association of the Company provide for the following competence of the Board in addition to those provided
by the Law on Companies of the Republic of Lithuania: the Board discusses and approves the employee payment systems;
elects and recalls employees directly reporting to the Manager of the Company, directors of the Company’s divisions, sets
their salaries, other terms and conditions of the employment contract, approves their job descriptions, allocates bonuses to
these employees; elects and recalls the accounting company providing accounting services to the Company, sets the
conditions of payment for the accounting services; approves the systems and procedures of bonuses, incentives to the
employees procedures; sets the non-current assets’ depreciation or amortisation rates and calculation methods applied in
the Company.
Manager of the Company
The Manager of the Company – the Chief Executive Officer – organises the Company’s economic commercial business
activities. The Manager of the Company has the right to unilaterally conclude transactions, except for the cases provided by
the Articles of Association of the Company where the Manager of the Company may conclude transactions subject to the
decision of the Board of the Company to conclude such transactions. The Manager of the Company is responsible for the
organisation of the Company’s business activities and for the implementation of its goals, preparation of the set of the annual
financial statements, preparation of the Company’s annual report, and for the fulfilment of other obligations provided by the
Law on Companies of the Republic of Lithuania and other legal acts as well as the Articles of Association of the Company.
Sustainability related matters
The management and supervisory bodies refer to internal resources (the Sustainability Manager, the Chief Executive
Officer) and engage external experts to gain expertise in the area of sustainability (including business ethics). Knowledge
acquired on sustainability, available resources and external expertise are used to determine and assess the Group’s material
impact, risks and opportunities and to develop a strategy integrating sustainability aspects in the Group’s overall business
strategy. The role of the management and supervisory bodies with regard to matters related to business ethics is performed
as appropriate.
Matters on sustainability, including business ethics, material impact, risks and opportunities, are discussed during the
Board’s meetings according to the need. When necessary, additional strategic or sessions of other type are organised,
during which relevant sustainability related matters are discussed.
The oversight and review functions in respect of the management and supervisory body or its member responsible for the
impact, risks and opportunities arising from sustainability matters have not been assigned nor described in the regulations,
authorisations or similar documents. This responsibility has been assigned to the Group’s Finance Director. Targets set for
significant aspects identified during reviews of impact, risks and opportunities related to sustainability matters and the results
achieved are consolidated at the Group level and presented to the Supervisory Council, the Audit Committee once a year.
Quarterly results of each company of the Group are presented to the Boards of the companies.
ESRS: GOV-1, GOV-2
21
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
6. Remuneration report
On 28 April 2023, the General Meeting of the Shareholders approved the remuneration report of 2022.
The remuneration report presents information about the remuneration paid to each member of the management and
supervisory bodies of the Company (including but not limited to, all of its components, i.e., fixed and variable
remuneration, bonuses, extra pays and other benefits and taxes related to all payments or calculated benefits) by the
Company and any other entity within the group of Grigeo AB.
The remuneration report includes personal data of the members of the management and supervisory bodies of the
Company (name, surname and other specified data) which is processed in order to enhance the Company’s
transparency, improve the accountability of the management and supervisory bodies, and monitor the remuneration
of the members of the management and supervisory bodies.
6.1. Remuneration policy
The Company’s remuneration policy (the “Remuneration Policy”), which was approved on 28 April 2023, is applicable
to the Company’s Manager, members of the Board and the Supervisory Board. The Remuneration Policy is published
on the Company’s website www.grigeo.lt. The main provisions of the Remuneration Policy of the Company are
presented below.
Manager of the Company
The remuneration to the Company’s Manager consists of the fixed (base) monthly salary in the amount defined by
the Board of the Company, bonuses, and other benefits. By the decision of the Board of the Company, the Company’s
Manager may be granted annual bonuses depending on the Company’s financial performance and calculated
following the bonus scheme approved by the Board of the Company. The amount of the annual bonus may not exceed
50% of the annual salary of the Company’s Manager. Following the Rules for Granting Shares of the Company, the
Manager of the Company may be remunerated by granting shares.
Board
A civil agreement on the provision of services is concluded with the member of the Board of the Company who has
no employment relations with the Company whereby a fixed monthly remuneration is set amounting to no more than
EUR 3,500 (before the applicable taxes). The member of the Board is paid an additional monthly remuneration for the
performance of the duties of the chairperson of the Board of the Company which cannot exceed 25% of the fixed
monthly remuneration agreed with the member of the Board in the agreement. No variable remuneration components,
bonuses or supplements are normally set to the member of the Board who has no employment relations with the
Company, and no remuneration is offered by granting shares, no specific remuneration criteria are predefined
depending on the financial and non-financial performance.
Тhe member of the Board who is the Company’s employee receives remuneration under the employment contract
signed with the Company. The remuneration of the member of the Board who is the Company’s employee consists
of a fixed (base) monthly salary, bonuses, and other benefits applicable to the employees of the Company. A specific
fixed (base) monthly salary is set by the Board of the Company. By the decision of the Board of the Company, a
member of the Board may be granted annual bonuses depending on the Company’s financial performance, calculated
in accordance with the bonus scheme approved by the Board of the Company. Following the Rules for Granting
Shares of the Company, the member of the Board who is the Company’s employee may be remunerated by granting
shares.
Following the procedure established by the Law on Companies of the Republic of Lithuania and by other legal acts,
by the decision and at the discretion of the General Meeting of Shareholders of the Company, the members of the
Board of the Company may be granted annual bonuses.
Supervisory Board
A civil agreement on the provision of services is concluded with the member of the Supervisory Board of the Company
whereby a fixed annual remuneration is set amounting to no more than EUR 4,000 (before the applicable taxes). In
case the member of the Supervisory Board has performed his/her activity for less than a calendar year, a proportionally
lower remuneration is paid thereto in view of the actual performance of the activity of the member of the Supervisory
Board. A member of the Supervisory Board shall be paid an annual additional remuneration of no more than 25% for
the performance of the duties of the Chairperson of the Supervisory Board of the Company, no more than 20% for
the performance of the duties of the member of the Audit Committee of the Company, and no more than 20% for the
performance of the duties of the Chairperson of the Audit Committee of the Company. No variable salary components,
bonuses or premiums depending on the Company’s performance are commonly set to the member of the Supervisory
Board, and no remuneration is offered by granting shares, no specific remuneration criteria are predefined depending
on the financial and non-financial performance.
22
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Following the procedure established by the Law on Companies of the Republic of Lithuania and by other laws, by the
decision and at the discretion of the General Meeting of Shareholders of the Company, a member of the Supervisory
Board may be granted annual bonuses. In case annual bonuses are granted to a member of the Supervisory Board,
they also comprise the remuneration payable to the member of the Supervisory Board.
6.2. Remuneration paid to the management and supervisory bodies
Position, name, surname
Reporting
period
Fixed salary component
Variable
salary
component
One-off
payments
Total
remune-
ration
Fixed to
variable
salary ratio,
%
Base salary
Other
benefits
Chairman of the Board
(President until 06.05.2023)
Gintautas Pangonis
2023
93
9
94
194
390
26% / 74%
2022
147
20
56
-
223
75% / 25%
Member of the Board
(CEO from 06.05.2023)
Tomas Jozonis
2023
150
3
70
-
224
69% / 31%
2022
111
3
34
-
149
77% / 23%
Member of the Board
Saulius Martinkevičius
2023
108
3
31
-
142
78% / 22%
2022
93
4
27
-
123
78% / 22%
Member of the Board
Vigmantas Kažukauskas
2023
64
2
44
124
233
28% / 72%
2022
94
4
25
-
124
79% / 21%
Independent Member of the Board
Algimantas Variakojis
2023
38
-
-
-
38
100% / 0%
2022
30
-
-
-
30
100% / 0%
No remuneration by granting the Company’s shares was allocated to the members of the management and
supervisory bodies of the Company. The Company has granted share options to the Members of the Board Tomas
Jozonis and Vigmantas Kažukauskas.
During the reporting period, variable remuneration was not recovered.
The annual remuneration paid to the members of the management bodies of the Company as compared to the
Group’s performance and the average salary of the employees:
Position, name, surname
2019
2020
2021
2022
2023
Chairman of the Board, (President until 06.05.2023)
Gintautas Pangonis
206
120
207
223
390
Member of the Board, (CEO from 06.05.2023)
Tomas Jozonis
64
141
170
149
224
Member of the Board Saulius Martinkevičius
48
97
109
123
142
Member of the Board Vigmantas Kažukauskas
148
104
112
124
233
Independent Member of the Board Algimantas Variakojis
-
14
30
30
38
The Group’s performance
2018
2019
2020
2021
2022
2023
EBITDA (-1 year)*
28,113
28,603
26,243
23,726
21,357
38,926
Average annual salary paid to full-time employees (EUR’000)
2019
2020
2021
2022
2023
Average annual salary paid to the Group’s employees**
22.2
23.8
25.9
28.4
32.7
Annual remuneration of the Chairman of the Board
compared to the annual salary paid to a full-time employee
9.3
5.1
8.0
7.9
11.9
*The EBITDA ratio is presented in each case for the previous year as the results of operations are assessed based
on the previous year’s financial performance.
**The presented data is related to employees working in the Group companies operating in Lithuania who are not
members of the management and supervisory bodies of the Company.
ESRS: S1-16
23
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
The annual remuneration paid to the members of the supervisory body of the Company as compared to the Group’s
performance and the average salary of the Group’s employees:
Position, name, surname
2019
2020
2021
2022
2023
Chairman of the Supervisory Board, Member of the Audit
Committee Vilius Oškeliūnas
2.2
-
7.2
3.6
4.2
Member of the Supervisory Board, Member of the Audit
Committee Norimantas Stankevičius (until 06.05.2023)
12.0
-
8.7
4.4
4.9
Member of the Supervisory Board
Romualdas Degutis (until 06.05.2023)
2.2
-
6.0
3.0
4.0
Independent Member of the Supervisory Board, Chairwoman of
the Audit Committee Daiva Duksienė
2.2
-
8.4
4.2
4.2
Member of the Supervisory Board
Normantas Paliokas (until 06.05.2023)
-
-
6.0
3.0
4.0
The Group’s performance
2018
2019
2020
2021
2022
2023
EBITDA (-1 year)*
28,113
28,603
26,243
23,726
21,357
38,926
Average annual salary paid to full-time employees (EUR’000)
2019
2020
2021
2022
2023
Average annual salary paid to the Group’s employees**
22.2
23.8
25.9
28.4
32.7
*The EBITDA ratio is presented in each case for the previous year as the operating results are assessed based on
the previous year’s financial performance.
**The presented data is related to employees working in the Group companies operating in Lithuania who are not
members of the management and supervisory bodies of the Company.
6.3. Compliance with the Remuneration Policy
The remuneration received by the members of the Company’s management and supervisory bodies complies with
the approved Remuneration Policy.
Two out of five members of the Board of the Company (except for the independent member of the Board) are the
Company’s employees holding the top-level management positions at the Company. They receive the remuneration
in the amount set by the Board under the employment contract signed with the Company. The amounts of
remuneration paid to the members of the Board who are the Company’s employees are set in view of the qualifications
and competence of each specific employee, the scope of functions and responsibilities assumed within the Company,
the aim to retain a specific person in the Company’s top management position, motivate him/her to work in good faith,
with due care, qualification and loyalty for the Company to achieve the Company’s goals, and implement the
Company’s strategy and interests, thereby increasing the Company’s profitability and ensuring a consistent
improvement of its financial performance in the long-term perspective. Following the bonus system approved by the
Board of the Company, annual bonuses were allocated to the members of the Board of the Company who are the
Company’s employees depending on the Group’s and/or the Company’s financial performance. When allocating
annual bonuses to the top-level employees, the Group’s and/or the Company’s profitability and EBITDA are the main
criteria that are taken into consideration when evaluating the employees’ performance.
The monthly remuneration paid to the independent member of the Board is set in accordance with the provisions of
the Remuneration Policy and is provided for in the agreement signed with the member of the Board on the provision
of management activities/services subject to remuneration by the member of the Board.
The remuneration paid to the Manager, members of the Board and the Supervisory Board of the Company complies
with the remuneration guidelines defined by the Remuneration Policy of the Company and enables better
accountability of members of the management and supervisory bodies to the Company and its shareholders as well
as encourages members of the management and supervisory bodies of the Company to focus on the long-term goals
and strategy rather than take high-risk decisions that may imply positive results only in the short-term.
Sustainability matters are not currently included in variable remuneration incentive schemes for all members of the
management body. It is planned to include sustainability issues for the remaining members. No variable remuneration
is set for the members of the supervisory bodies in accordance with the established remuneration policy.
ESRS: GOV-3
24
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7. Sustainability (social responsibility) report
7.1. About sustainability report
This report has been prepared in accordance with the version of the European Sustainability Reporting Standards
(ESRS) approved by the European Commission on 31 July 2023.
The ESRS specify the information that companies are required to disclose about their material impacts, risks and
opportunities in relation to environmental, social and governance topics. ESRS does not require companies to disclose
information on environmental, social and governance topics listed in ESRS if the company has assessed a particular
topic as not material. The obligation to report in accordance with the requirements of ESRS applies from 2024, but
the Group has taken the decision to prepare the 2023 report in accordance with ESRS and to ensure high quality
preparation in the future.
This report demonstrates our efforts to consolidate the Group's impact and disclose the extent of the impact of our
business on people and environment and is prepared on a consolidated basis together with the financial report.
Timeframe. Unless otherwise indicated, information represents 2023 calendar year, and data is accurate as at 31
December 2023. The reporting of employee and Health and Safety data reflects the situation at the end of 2023.
The definitions of periods used in the Sustainability Report are in line with ESRS standards:
• short-term: used in the financial statements as the reporting period;
• medium-term: from the end of the reporting period up to 5 years;
• long-term: more than 5 years.
Information disclosure in segments. The Group consists of different business segments, therefore, where relevant,
information is presented according to the following business segments:
Segment
Group companies forming the segment
Abbreviation
Tissue paper and paper
products*
Grigeo AB*
Tissue paper
Wood hardboards
Grigeo Baltwood UAB
Hardboard
Raw materials for corrugated
cardboard and related products
Grigeo Packaging UAB, Grigeo Klaipėda AB, Mena Pak AT,
Grigeo Recycling UAB and Grigeo Recycling SIA
Containerboard
and packaging
*Grigeo AB sells heat energy to the city of Vilnius. Where relevant, the data is disclosed in additional segment named “Sold heat” accordingly.
Management involvement. The Board of the Company and the Audit Committee review this report before submitting
it to the annual general meeting of shareholders.
External assurance. No external assurance was commissioned for this report.
Uncertainties. Due to the ongoing war and the high degree of uncertainty surrounding future events, only the key
indicators related to the Group's operations in Ukraine, Mena Pak AT, are disclosed. It has not been included in the
assessment of impacts, risks and opportunities, and dual materiality of sustainability issues.
Qualitative characteristics of information
Relevance This report does not omit relevant information that substantively influences stakeholders’ assessments
and decisions, or that reflects significant economic, environmental, and social impact.
Faithful representation We aim to cover both favourable and unfavourable results and topics in an unbiased manner.
Unless stated otherwise, all information provided is traceable to the accounting data. We strive for maximum accuracy
and present data on the basis of available accounting data, unless otherwise stated.
Comparability Our targets are measured against produced tonnes of products rather than absolute values. Other
information is reported in absolute figures, unless otherwise stated. We present results for at least 2 years..
Verifiability When preparing the report, we aim that any data is documented in our systems and can be traced to
primary sources so that external examinators can review them, if needed.
Understandability We aim to report in a concise way, avoiding abbreviations (or explaining them), in order that the
users with reasonable knowledge would fully understand the contents.
ESRS: BP-1, BP-2
25
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Value chain
When collecting data on the value chain, the Group aims to identify upstream and downstream data as accurately as
possible. In some cases, where sufficiently accurate data is not available, the Group uses average sector data or
other proxy data (e.g. in the case of GHG emissions calculations, emission factors provided by suppliers and publicly
available emission factors were used). A more detailed assessment of the value chain and the involvement of its
members is planned for the future, which would allow for higher accuracy.
Due diligence
Due diligence is the process by which a company identifies, prevents, mitigates and discloses how it manages actual
and potential negative impacts on the environment and on people affected by its activities. This includes negative
impacts related to the company's own operations, upstream and downstream parts of the value chain, including
through its products or services, as well as through its business relationships.
Identifying and assessing negative impacts on people and the environment, involving affected stakeholders, taking
action to reduce negative impacts on people and the environment, and monitoring the effectiveness of these efforts
are integral parts of due diligence.
List of Disclosure Requirements that are phased-in
In accordance with the list of phased-in disclosure requirements in Appendix C of ESRS 1, the Group has used the
exemption and has not disclosed information about the expected financial impact and opportunities (E1-9, E2-6,
E3-5, E4-6, E5-6) due to insufficient information currently available. This information is planned to be analysed and
assessed in the future as more information on the site and potential risks and opportunities related to climate change,
pollution, water resources, biodiversity and resource use becomes available. Due diligence is carried out by the Group
on an as-needed basis, but a formal due diligence procedure has not yet been formulated and approved.
Contacts:
Key contacts are Finance Director of the Company, Martynas Nenėnas, martynas.nenenas@grigeo.lt and
Sustainability Manager Ieva Martinaitytė, ieva.martinaityte@grigeo.lt.
We welcome any suggestions and encourage an open dialogue about opportunities to improve. Please contact us to
provide feedback or request more information about topics covered within this report.
ESRS: BP-1, GOV-4, GOV-5
26
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.2. Impact and materiality assessment
Stakeholders
To gain a better understanding of stakeholder interests and views, we take the time and effort to identify key
stakeholder groups. Stakeholder interests and views are analysed annually at the Group's strategy sessions to review
the Group's long-term objectives. A structured overview of key stakeholder groups, communication channels and
expectations are presented in the table below.
Communication channels
Their expectations
What we strive to achieve
Clients
• Sales relationships.
• Regular business meetings.
• Collaboration through the full packaging
value chain.
• Quality control.
• Media.
• Site visits.
• Surveys.
• Packaging solutions that enable safe delivery
of our customers’ products.
• Packaging solutions that cut waste and
improve recyclability.
• Tissue paper quality.
• Operational efficiency.
• Water stewardship.
• Recovered finer content.
• Air+GHG emissions.
• Good reputation.
• Optimal, high quality, sustainable design
packaging.
• Creating and fostering circular economy through
efficient waste-paper collection and recycling
process.
• Proactively disclose our social and environmental
impacts including GHG emissions.
• Setting ambitious yet realistic sustainability
agenda.
• Reporting consistently on our sustainability
efforts.
Investors
• Regular calls and in-person meetings.
• Business strategies.
• Financial returns.
• Risk mitigation.
• Audited annual reports.
• Public announcements via stock
exchange.
• Honest and transparent communication on our
sustainability efforts.
• Reducing reputational risk.
• Streamlining supply chains to reduce CO
2
emissions and minimise waste.
• Sustainable packaging innovations delivering
an attractive return on investment.
• Ensuring we do our part to address environmental
and social issues material to our business.
• Generate financial return in a most transparent
way.
• Consistently reporting on our non-financial
results.
• Improving our ESG assessment.
Employees
• Safety programmes.
• Employee training.
• Company-wide communication.
• Involving employees in sustainability
reporting.
• Fostering involvement in setting
sustainability goals.
• Daily face-to-face meetings.
• Intranet.
• Feeling proud of the company they work for.
• Safety.
• Personal development.
• Fair and transparent compensation.
• Consistent career development.
• We ensure our employees are fully aware of our
role within the circular value chain.
• Exchange of talent and ideas across Group
operations to share best practice.
• Facilitate the sharing of best practices.
• Empowering our people to lead the circular
economy.
• Fostering high employee engagement so that our
people would be confident they can make real
changes.
Suppliers
• Request for information.
• Supplier sustainability audits.
• Quality control.
• Negotiations.
• Contract terms.
• Steady demand.
• Business continuity.
• Highest compliance standards for our suppliers.
• Transparent and fair procurement process.
• Promote responsible best practices.
• Assess the feasibility social and environmental
and social auditing.
Communities
• Economic and charitable relationships.
• Employee-led fundraising.
• Plant tours.
• Media.
• Meetings and presentations.
• Air and other type emissions.
• Biodiversity.
• Fair neighborship.
• Economic impact.
• Community engagement.
• Sustainable and responsible business
practices.
• Water use and wastewater quality.
• Supporting local business ecosystems through
short supply chains.
• Proactively engaging with community
stakeholders to address water-related issues.
• Reducing our air emissions.
• Addressing odour issues.
• Enhancing our transparency.
Regulators
• Trade association meetings.
• Formal hearings.
• One-on-one meetings.
• Facility visits.
• Reports.
• Liaising with municipalities.
• Health and safety.
• Paper recycling and recovery.
• Taxes and environmental policy.
• Compliance.
• Fines and compensation.
• Legal processes.
• Biodiversity.
• Solving impending issues in the most sustainable
manner.
• Committing to meet or exceed legal requirements.
• Educating policy makers on our commitment to
circular economy.
• Educating policy makers on the strategic/critical
importance of our recycling infrastructure on the
national level.
ESRS: SBM-2, IRO-1, S3-2
27
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Assessment of critical topics and impacts
Materiality assessment
We are a vital infrastructure player in the circular economy, returning used paper and packaging to the manufacturing
cycle. We strive to integrate environmental, social and governance aspects into our business decisions. This ensures
that we properly assess risks, identify opportunities for more sustainable processes and meet growing market
demands.
By assessing impacts, risks and opportunities and their significance, we can identify and respond to stakeholder needs
and identify key topics. Some of these topics are critical to protecting and growing our revenues, while others have a
significant impact on our cost structure, supply chain and operational risks now and in the future.
We have assessed where the risks arise and/or could have an impact within our Group companies as well as in the
supply chain. Identified topics that involve key risks to the future and long-term success of the business and/or have
an impact on the people, the environment are considered to be highly important to the Group.
The results of the materiality assessment also contribute to our sustainability strategy guidelines and action plans
approved by the Group's corporate boards.
Double materiality
The materiality assessment allows the Group to adjust its commitments and identify areas for improvement, which is
why the Group conducted its first non-financial materiality assessment in 2021. This process was carried out by an
independent provider, co-led by the Sustainability and Finance managers, as well as involving key decision makers.
In 2023, we reviewed the results of the previous materiality assessment under the new concept of sustainability
disclosures - double materiality, which is described in the new standards. The double materiality assessment is the
starting point for sustainability reporting under ESRS, assessing material impacts, risks and opportunities. An
important difference from the previous concept of materiality is that it assesses financial materiality as well as impact
materiality. A sustainability issue becomes significant if it meets the criteria for one or both types of significance.
Impact materiality becomes significant in the context of sustainability when it relates to the company's actual or
potential, positive or negative impacts on people or the environment in the short, medium and long term. The
materiality assessment has been carried out for the sub-topics covered by the ESRS requirements, assessing the
Group-wide activities, the impact on stakeholders or the influence on business relationships. The assessment primarily
considered negative impacts (severity, prevalence, correctability and likelihood) and, where appropriate, positive
impacts (based on their relative magnitude, scope and likelihood), and identified which sustainability issues are
material for reporting purposes, including relevant quantitative or qualitative thresholds and other applicable criteria.
Thresholds: severity of impact (on a scale of 1 (minimal impact) to 4 (non-compliance with legislation, directives)),
scope of impact (on a scale of 1 (in the country/region/enterprise) to 4 (globally)), and remediability (on a scale of 1
(remediable impact) to 4 (non-remediable impact)). Each material topic identified is assigned one of four levels of
materiality: minimum, important, significant, critical.
Financial materiality becomes material in the context of sustainability if it has, or could reasonably be expected to
have, a significant financial effect on the Group. This is the case when a sustainability matter involves risks or
opportunities that have, or could reasonably be expected to have, a significant effect on the Group's changes in its
operations, financial position, financial performance, cash flows, access to finance or cost of capital in the short,
medium and long term. The determination of financial materiality is subject to uncertainties in the estimates and results
due to the availability and quality of value chain data depending on the likelihood and outcome of the event and other
considerations. As in the impact materiality analysis, the financial materiality considered all ESRS sub-subjects. For
the financial impact assessment, quantitative thresholds were chosen, a level of significance and a probability of
impact were assigned. As with impact materiality, each identified significant topic was assigned one of four levels of
significance: informative (less than EUR 87 774), important (between EUR 87 774 and EUR 500 000), significant
(between EUR 500 000 and EUR 877 000), critical (more than 877 000).
The table below shows the significant topics identified within the Group. The main significant impacts, risks and
opportunities are concentrated in the Group's operations. The most significant topics are prioritised without excluding
sustainability-related or other types of risks. Currently, the assessment of risks and opportunities within the Group is
not centralised and is carried out at the level of each area (production, procurement, financial management, etc.). The
Group plans to introduce centralised risk management at Group level, which would integrate the process of managing
sustainability risks and opportunities with other potential risks arising within the Group.
The results of the materiality assessment are evaluated and the outcome of the assessment is used to shape the
objectives of our sustainability strategy and the action plans approved by the Boards of Group companies. A detailed
description of the material topics and the required information is provided for each topic in accordance with the
requirements of ESRS.
ESRS: SBM-3, IRO-1, IRO-2
28
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Table of material topics
Topical ESRS
Sub-topic
Material/
Non-material
Index of content
ESRS E1 Climate
change
Climate change adaptation
Material
46-50
Climate change mitigation
Material
46-50
Energy
Material
46-50
ESRS E2 Pollution
Pollution of air
Material
51-53
Pollution of water
Material
51-53
Pollution of soil
Non-material
-
Pollution of living organisms and food resources
Non-material
-
Substances of concern
Non-material
-
Substances of very high concern
Non-material
-
Microplastics
Non-material
-
ESRS E3 Water
and marine
resources
Water consumption
Material
54-55
Water withdrawals
Material
54-55
Water discharges
Material
54-55
Water discharges in the oceans
Non-material
-
Extraction and use of marine resources
Non-material
-
ESRS E4
Biodiversity and
ecosystems
Climate Change
Material
56
Land-use change, fresh water-use change and sea-use change
Material
56
Direct exploitation
Non-material
-
Invasive alien species
Non-material
-
Pollution
Material
56
Impacts on the state of species
Non-material
-
Impacts on the extent and condition of ecosystems
Non-material
-
Impacts and dependencies on ecosystem services
Non-material
-
ESRS E5 Circular
economy
Resources inflows, including resource use
Material
57-59
Resource outflows related to products and services
Material
57-59
Waste
Material
57-59
ESRS S1 Own
workforce
Secure employment
Non-material
-
Working time
Non-material
-
Adequate wages
Material
60-66
Social dialogue
Non-material
-
Freedom of association, the existence of works councils and the
information, consultation and participation rights of workers
Material
60-66
Collective bargaining, including rate of workers covered by
collective agreements
Material
60-66
Work-life balance
Material
60-66
Health and safety
Material
60-66
Gender equality and equal pay for work of equal value
Material
60-66
Training and skills development
Material
60-66
Employment and inclusion of persons with disabilities
Non-material
-
Measures against violence and harassment in the workplace
Material
60-66
Diversity
Material
60-66
Child labour
Non-material
-
Forced labour
Non-material
-
Adequate housing
Non-material
-
Privacy
Material
60-66
ESRS: SBM-3
29
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Topical ESRS
Sub-topic
Material/
Non-material
Index of content
ESRS S2 Workers
in the value chain
Secure employment
Not evaluated
-
Working time
Adequate wages
Social dialogue
Freedom of association, including the existence of work councils
Collective bargaining
Work-life balance
Health and safety
Gender equality and equal pay for work of equal value
Training and skills development
The employment and inclusion of persons with disabilities
Measures against violence and harassment in the workplace
Diversity
Child labour
Forced labour
Adequate housing
Privacy
ESRS S3 Affected
communities
Adequate housing
Non-material
-
Adequate food
Non-material
-
Water and sanitation
Material
67-68
Land-related impacts
Non-material
-
Security-related impacts
Material
67-68
Freedom of expression
Non-material
-
Freedom of assembly
Non-material
-
Impacts on human rights defenders
Non-material
-
Free, prior and informed consent
Non-material
-
Self-determination
Non-material
-
Cultural rights
Non-material
-
ESRS S4
Consumers and
end- users
Privacy
Non-material
-
Freedom of expression
Non-material
Access to (quality) information
Non-material
Health and safety
Non-material
Security of a person
Non-material
Protection of children
Non-material
Non-discrimination
Non-material
Access to products and services
Non-material
Responsible marketing practices
Non-material
ESRS G1 Business
conduct
Corporate culture
Material
69-70
Protection of whistle-blowers
Material
69-70
Animal welfare
Non-material
-
Political engagement
Non-material
-
Management of relationships with suppliers including payment
practices
Material
69-70
Prevention and detection including training
Material
69-70
Corruption and bribery incidents
Material
69-70
Due to limited resources and the lack of good practice of the new standards, our 2023 double materiality assessment
did not cover the S2 topic "Value chain workers". Therefore, disclosures on this topic are not provided in this year's
report. The Group plans to carry out a new double materiality assessment in 2024, in accordance with the fully adopted
requirements, which will include an assessment of the materiality of the topic Value Chain Workers.
The Group has not carried out a resilience analysis of its strategy and business model in relation to its ability to
address material impacts and risks and to take advantage of its material opportunities.
ESRS: SBM-3
30
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.3. Commitments and targets
Commitments
The Group's business strategy includes non-financial targets and a sustainability agenda that are an integral part of
our overall strategy.
We consistently assess and review the Group's performance to ensure that we are focusing on critical topics and
significant impacts. All decision makers are actively involved in assessing the capabilities of our businesses to improve
the Group's performance. This report details our stakeholder and materiality assessment. The following sections are
dedicated to a detailed disclosure of the key resources, processes and ultimate impacts we use. Based on this data
and our experience in the business, we have been able to make corresponding sustainability commitments:
Agenda
Commitment
Direction
Environmental
Environment protection
Reducing our GHG emission intensity
Improving nature-and people-friendly product properties
Improving energy mix
Investing in energy efficiency
Promoting responsible collection of waste paper
Reducing chemical compound intensity
Wastewater quality management
Reducing disposable waste
Reliable supplier and partner
Responsible supply chain management
Reducing virgin plastic packaging consumption
Social
Meaningful activities based on trust
and cooperation
Accident-free workplace
Training and development
Pursuit of consistent feedback
Dialogue with local communities
Promoting healthier lifestyle of our employees
Governance
Ambition and transparency in the
market, ensuring competitive returns
Zero tolerance to compliance breaches
Increased transparency: sustainability reporting
Strong and widely accepted policies
Reliable supplier and partner
Supply chain transparency
Our sustainability commitments and directions include our key stakeholders.
Targets
The Group's long-term targets are set during top management strategy sessions using the X-matrix (strategic planning
tool). Targets cover the period of the Group's current strategy until 2026. The Group set specific performance
indicators (KPIs) for the commitments it has made, and the sustainability objectives are integrated with the Group's
other long-term strategic targets. Targets are delegated to the managers of each of the Group's companies, who
delegate them to all employees, from managers of corporate units to employees at all levels. At present, the objectives
do not cover the entire value chain, but focus on the operational boundaries of the Group companies. Each year we
review the objectives and monitor and report on progress.
The current sustainability targets are voluntary and cover activities in the Baltic region. The target for increasing waste
paper collection and sorting is for ongoing waste collection activities. The wastewater reduction target is relevant for
production activities that generate wastewater: tissue paper, hardboard and recycled paper production. Other
environmental and all social and governance objectives apply to all the Group's activities.
In 2024, we plan to review and update our sustainability targets and commitments in line with the new ESRS
sustainability requirements.
Our targets and policies are complementary documents that aim not only to meet national environmental, social or
governance requirements, but also to achieve continuous improvement.
Compared to the last Sustainability Report, compliance with integrated pollution prevention and control requirements
is no longer listed in the table of long-term targets, as it is Group’s daily work to ensure that there are no non-
compliances related with pollution. We have zero tolerance for breaches of the law and strive to ensure that our
internal policies are in line with the highest sustainability standards and modern practices. The long-term goals we set
are complementary to our efforts to move towards a more sustainable tomorrow.
ESRS: SBM-1, MDR-M
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
The Group has committed to pursue the following targets:
Target
Unit of measurement
No.
Base
year
2021
Interim
result in
2023
Change
Target for
2026
Environmental
targets
Reduction of GHG emission intensity
(Scope 1).
kgCO
2
/ton of production
1.
114.1
108.2
-5.2%
-5.0%
Increasing energy efficiency
MWh/ton of production
2.
2.56
2.52
-1.6%
-3.0%
Reduce waste that is directed to
disposal
kg/ton of production
3.
53.0
41.9
-20.9%
-9.0%
Effluent reduction
m
3
/ton of production
4.
7.1
6.4
-9.9%
-17.0%
Increasing waste-paper collection and
sorting
In thousands of tons
5.
53.0
75.2
+41.8%
+50.0%
Social
targets
Reduce the number of accidents at work
TRI ratio (number of incidents among
employees per 1 million hours worked)
6.
17.1
9.2
-7.9
8.0
Employee turnover
The ratio of retired employees to the
average number of employees
7.
30.8%
20.5%
-10.3pp
22.0%
Employee retention rate
Employees with 1+ years’ service to
total employees
8.
85.7%
91.2%
+5.5pp
91.0%
Governance
targets
We have identified 10 internal policies,
which we will update or create, aiming
for greater compatibility with the Group's
strategy, sustainability requirements and
modern practices.
The update of policies is carried out until
the end of 2024.
9.
-
9
9
10
Comments on progress
1. In 2022, the decrease in Scope 1 emissions intensity was higher than in 2023 (-11% in 2022, -5.2% in 2023),
due to a reduction in gas consumption, when production processes had to be temporarily stopped due to the
energy crisis, thus biofuel boilers were used more intensively. Also in 2023, the use of gas-fired boilers
increased due to the repair or maintenance of biofuel boilers.
2. The Group managed to increase energy efficiency through investments into new equipment by 1.6% (from
2.56 MWh/ton of production to 2,52 MWh/ton of production).
3. It was possible to reduce the amount of waste directed to disposal per ton of production (from 53.0 kg/ton in
2021 to 41.9 kg/ton in 2023) due to the improved operation of waste paper handling equipment and raw
material control process at Grigeo Klaipėda AB. The more sustainable use of ash from the Grigeo Klaipėda
AB biofuel boiler has also made a significant contribution - instead of being disposed of in landfill, it is used
for composting.
4. Effluents in m3/ton of production were reduced by 10% (from 7.1 to 6.4), which is primarily the result of
investments into evaporator of wastewater by Grigeo Baltwood UAB.
5. In 2023 The Group collected and sorted 75.2 thousand tonnes of waste paper (in 2021 – 53 thousand tonnes),
an increase of 42%.
6. Focusing on employee safety, the Group managed to reduce TRI ratio from 17.1 to 9.2. Better TRI indicator
was due to a greater focus on the implementation of measures to reduce occupational safety and health risks,
thereby reducing the risk of accidents. Registration of unsafe situations, incidents, and procedural risk
assessment helped to implement preventive measures.
7.
8.
9. The following policies have been reviewed/updated or developed and approved by the Group up to the
reporting date (5 policies in 2022, 4 policies in 2023):
• Environmental Policy - updated.
• Occupational Health and Safety Policy - new.
• Support Policy - new.
• Supplier Code of Conduct - new.
• Equal Opportunities Policy - new Group-wide, until now almost all companies had separate policies.
ESRS: MDR-M, MDR-T, E1-4, E2-3, E3-3, E5-3, S1-5, S3-5
Decrease in the employee turnover rate (No. 7) and the improvement in the retention rate (No. 8) were the
result of a combination of various measures. One of the most important factors is the competitive
remuneration and continuously reviewed remuneration policy. Other important measures are active actions
aimed at improving the results of the annual employee engagement survey, development of employee
competencies, their involvement in strategic projects, and other measures.
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Contributing to United Nations Sustainable Development Goals
As one of the largest groups of paper and wood industry companies in the Baltic countries, we aim to make a
significant contribution to the United Nations Sustainable Development Goals (SDGs). The SDGs define global
priorities and aspirations until 2030 with the mission of sustainable development of people and the planet. We have
identified the SDGs where we can contribute the most, both by reducing the negative impact and increasing the
positive impact on humanity and the planet:
SDG
SDG target
The activities and responsibilities of the Group
5.5
• Ensure that all employees and applicants for management
positions have equal opportunities.
• Track and disclose the percentage of women in leadership positions.
8.4
8.5
8.8
• Increasing the share of biofuel in the energy mix (Scope 1).
• Increasing the share of renewable packaging.
• Increasing waste-paper collection.
• Occupational Safety and Health (OSH) initiatives.
• Improving the TRI indicator (reduction of employee incidents).
9.4
• Evaporator of wastewater (Grigeo Baltwood UAB).
• Anaerobic bioreactor (Grigeo Klaipėda AB).
• Solar power plants.
12.2
12.4
12.5
12.6
• Reduce waste that is directed to disposal.
• Increasing waste-paper collection.
• Effluent reduction.
• Compliance with water cumulative pollution indicators.
• Preparation of annual sustainability reports.
13.2
• Reduction of GHG emission intensity (Scope 1).
• Increasing the share of biofuel in the energy mix (Scope 1).
• Solar power plants.
14.1
14.2
• Anaerobic bioreactor (Grigeo Klaipėda AB).
• Evaporator of wastewater (Grigeo Baltwood UAB).
• No direct entry of effluents into water bodies.
15.2
• Control of raw materials – ensuring that raw materials and biofuel
are supplied from sustainably managed forests.
• Supply chain traceability.
• Increasing energy efficiency.
ESRS: SBM-1
33
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.4. Group policies
We aimed to update or create key policies in order to improve alignment with the Group's strategy, sustainability
requirements and best practices. The Group's policies are reviewed annually and updated as necessary by those
responsible for them. The Group's policies are approved and updated by the Board of Directors of the Company.
Currently, the Group companies have separate policies on violence and prevention and it is planned to develop these
policies at Group level in the next year.
The Group's policies are publicly available and can be consulted at www.grigeo.lt.
Group Environmental Policy
The Group's Environmental Policy describes the key principles and commitments of the Group with regard to
significant environmental aspects. The purpose of the policy is to disclose the Group's efforts to manage its significant
impacts, risks and opportunities related to environmental matters. This document is an integral part of the Group's
strategy, whose mission is to create a circular future. The Group's strategic commitments to its stakeholders include
a significant focus on efficient, more sustainable recycling and manufacturing processes, the production and
performance improvement of environmentally friendly products, responsible supply chain management, and improving
energy efficiency.
In order to minimise its environmental impact, the Group focuses on environmental areas where there are significant
(critical and/or major) impacts on both the Group and its stakeholders, and the policy describes the most important
aspects related to:
1. climate change (mitigation, energy efficiency, renewable energy),
2. pollution (air and water pollution, avoiding incidents and emergencies),
3. water resources (responsible management of water resources),
4. biodiversity and ecosystems (conserving natural resources, maintaining ecosystem balance),
5. resource use and circular economy (increasing the use of secondary resources, use of sustainable
renewable resources).
Group companies have adopted the ISO 14001 standard and, in line with its principles, maintain and strive to
continuously improve their integrated environmental management system.
The Group's environmental policy covers all relevant issues and the Group has not developed individual policies
(sustainable land use/agriculture, sustainable use of oceans/seas etc.).
Group Code of Ethics
The Code of Conduct guides stakeholders on the principles and values that the Group's companies follow in building
and maintaining relationships with the Group's partners (customers, suppliers, government authorities, etc.), the
behaviour expected of the Group's partners and the way in which they manage significant impacts related to
employees.
The Group respects and guarantees human rights and freedoms as defined in the Universal Declaration of Human
Rights of the General Assembly of the United Nations, the Council of Europe's Convention for the Protection of Human
Rights and Fundamental Freedoms, the conventions of the International Labour Organisation and other human rights
and freedoms recognised in international and national legislation. The Group does not use the labour of children under
the age of 16, nor does it work with suppliers and subcontractors who use the labour of children under the age of 16,
and it shall immediately cease working with suppliers and subcontractors if it becomes known that they use the labour
of children under the age of 16. The Group also does not use forced or compulsory labour.
The core values and principles described in the Code of Ethics and which we aim to implement are:
• Respect for human rights and freedoms;
• Transparency, integrity and anti-corruption;
• Avoidance of conflicts of interest;
• Respect for the environment and society.
These principles and values guide our activities and create a sense of responsibility towards society and the
environment. We are committed to continuously reinforcing and promoting these values both within our organisation
and in wider society.
The Group encourages diversity in its workforce and applies the same selection criteria and conditions for recruitment,
based on job-specific requirements, and provides the same working conditions and guarantees during employment
for all individuals, in accordance with the principles of gender equality and non-discrimination on other grounds.
ESRS: MDR-P, E1-2, E2-1, E3-1, E4-2, E5-1, S1-1, S3-1
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Supplier code of conduct
In 2023, the Group developed and approved a Supplier Code of Conduct, which describes the values, principles and
performance standards we expect from our suppliers. The purpose of this Code is to promote fair, ethical and
sustainable business conduct among suppliers, customers and other business partners.
The Code describes key aspects and commitments in the areas of human rights, occupational health and safety,
environmental impact and responsible business.
Group Occupational Safety and Health (OSH) Policy
The policy describes the basic principles of occupational safety and health and the Group's commitment to OSH. The
Policy is an integral part of the Group's strategy, whose mission is to provide employees with safe and healthy working
conditions, to eliminate hazards and reduce risks to occupational health and safety and to implement control measures
to prevent injuries and fatalities.
The Group's companies operate in accordance with the ISO 45001 Occupational Health and Safety Management
System standard, which enables companies to manage risk factors, react promptly to changes, and involve employees
in the improvement of the working environment.
Equal opportunities policy
The Equal Opportunities Policy is focused on ensuring that all employees have equal opportunities, regardless of their
gender, race, age, religious or other beliefs. The Group's corporate policies describe equal opportunities - in the
selection processes, pay and career development, and in the performance and termination of employment contracts.
This policy seeks to create an environment in which each employee is evaluated on the basis of his or her skills,
talents and performance, rather than on the basis of personal attributes that are not directly related to the job.
Employees or applicants for a vacancy who believe that their equal opportunities are being violated or that they are
being discriminated against have the right to file a complaint. This complaint shall be investigated within one month
of its receipt at the latest or shall be referred immediately to the Office of the Equal Opportunities Ombudsman.
Violence and harassment prevention policy
The policy describes how to identify and deal with violence and harassment, the forms it may take, the procedures for
reporting and dealing with reports, the measures to protect and assist whistleblowers and victims, the rules of conduct
for employees, and other preventive measures relating to potential violence and harassment in the Group's
companies.
The purpose of the Policy is to provide for and implement effective and efficient actions to protect employees from the
risk of violence and harassment. The policy covers various aspects, from education and information to procedures for
recording and handling cases. It aims to create a safe and respectful environment for all employees and to ensure
that the organisation adheres to the highest ethical and safety standards.
The policy applies to all employees, regardless of their position or type of employment contract.
The Group's policies on social aspects do not currently list specific measures to remedy human rights impacts or the
possibility of remedying them. The Group takes responsibility for identified human rights impacts and seeks to remedy
them in accordance with the procedures established by law.
ESRS: MDR-P, S1-1
35
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.5. EU taxonomy
The European Union (EU) taxonomy disclosure requirements came into force on 1 January 2022. Taxonomy is a
classification system used by the EU that allows companies and investors to speak the same language when
determining which economic activities can be considered environmentally sustainable. This initiative is part of the
EU's efforts to contribute to sustainable economic growth through the European Green Deal and other sustainability
objectives.
The EU taxonomy defines the following environmental objectives:
- Climate change mitigation,
- Climate change adaptation,
- Sustainable use and protection of water and marine resources,
- Transition to a circular economy,
- Pollution prevention and control,
- Protection and restoration of biodiversity and ecosystems.
By November 2023, the taxonomy had only been approved for two of the six environmental objectives - climate change
mitigation and adaptation. In November 2023, the EU published criteria for economic activities that make a significant
contribution to the remaining four environmental objectives. The Climate Delegated Act has also been extended to
include additional activities in the manufacturing and transport sectors. These additions will apply from January 2024.
The Group has decided to report for 2023 in accordance with the latest approved requirements.
Taxonomic activities are activities that make a significant contribution to one of the six environmental objectives as
defined in the EU Taxonomy Regulation. The division of activities into taxonomic and non-taxonomic activities does
not in itself say anything about the sustainability or unsustainability of the activity.
Taxonomy Regulation sets out 4 overarching conditions that an economic activity must meet in order to be recognised
as environmentally sustainable:
- Making a substantial contribution to at least one environmental objective,
- Doing no significant harm to any of the other five environmental objectives,
- Complying with minimum safeguards; and,
- Complying with the technical screening criteria set out in the Taxonomy delegated acts.
Specification of key performance indicators (KPI) – turnover, capital expenditure (CapEx) and operating expenditure
(OpEx) derived from products or services related to qualifying taxonomic economic activities, are calculated and
presented in separate tables below, according to the Taxonomy requirements. All KPIs associated with the taxonomy
are evaluated and calculated to avoid double counting. In the case of contributions to several objectives, the KPIs are
included only once. The increase in the share of capital expenditure compared to the previous year in the bioenergy
heat production activity is due to the refurbishment of the boiler houses and the investment in equipment to reduce
particulate matter emissions to air.
The Group aims to contribute to the European Green Deal, and the Group's investment planning and execution takes
into account the EU Taxonomy Regulation, which is continuously updated, in order to ensure that as many of the
Group's activities as possible will be classified as qualifying taxonomic economic activities in the future. A solar power
generation project is planned for 2024 and will be aligned with the taxonomy. The possibility and expectation of future
alignment of heat production from bioenergy with the taxonomy is being monitored.
ESRS: BP-2, SBM-1, E1-1, E5-4
36
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
The Group's main activities are not yet included in the Taxonomy Regulation. However, the Group has identified secondary activities within its operations that are classified
as taxonomic economic activities:
No.
Activity
Technical screening criteria
Description of the evaluation
1.
Electricity generation using concentrated
solar power technology
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 4.1.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 4.1.).
The assessment of the technical screening criteria for this activity has led
to the conclusion that the activity with the technical screening criteria for
mitigation and adaptation to climate change, does not cause significant
harm to other environmental objectives, and is in line with the minimum
safeguards.
2.
Production of heat from biomass
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) (ES) 2021/2139 Annex I Clause 4.24.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 4.24.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria
as it does not comply with the emission limit values set out in Part 2 of
Annex II to Directive (EU) 2015/2193 (which will only enter into force at
national level from 2025).
3.
Construction, extension and operation of
water collection, treatment and supply
systems
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 5.1.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 5.1.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria,
as the average energy consumption for extraction and treatment is more
than 0.5 kWh per cubic metre of water produced.
4.
Collection and transport of non-hazardous
waste in source segregated fractions
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 5.5.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 5.5.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria,
because not all waste collected is suitable for reuse or recycling. A small
proportion of waste is sent to incineration or landfill.
5.
Transport by motorbikes, passenger cars
and light commercial vehicles
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 6.5.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 6.5.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria,
as specific emissions of CO
2
, (as defined in Article 3(1), point (h), of
Regulation (EU) 2019/631), are higher than 50 g CO
2
/km.
6.
Renovation of existing buildings
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 7.2.).
• Substantial contribution to climate change adaptation (Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 7.2.).
• Substantial contribution to the transition to a circular economy
(Commission Delegated Regulation (EU) 2023/2486 Annex II Clause
3.2.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria,
as renovated buildings do not have energy efficiency certificates of class A
or higher, because renovation of cultural heritage buildings involves
minimal renovation, preserving the cultural value and not always achieving
higher energy efficiency classes. Also, the activity does not comply with
technical screening criteria for the transition to a circular economy as the
life cycle global warming potential of the renovation activities has not been
calculated for each stage of the life cycle from the start of the renovation of
the building.
7.
Acquisition and ownership of buildings
• Substantial contribution to climate change mitigation (Commission
Delegated Regulation (EU) 2021/2139 Annex I Clause 7.7.)
• Substantial contribution to climate change adaptation Commission
Delegated Regulation (EU) 2021/2139 Annex II Clause 7.7.).
The assessment of the technical screening criteria indicated that the activity
does not comply with climate change mitigation technical screening criteria,
as renovated buildings do not have energy efficiency certificates of class A
or higher.
8.
Collection and transport of non-hazardous
and hazardous waste
• Substantial contribution to the transition to a circular economy
(Commission Delegated Regulation (EU) 2023/2486 Annex II Clause
2.3.).
The assessment of the technical screening criteria indicated that the activity
does not comply with transition to a circular economy technical screening
criterion, because not all waste collected is suitable for reuse or recycling.
A small proportion of waste is sent to incineration or landfill.
37
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities:
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Economic activities (1)
Code
(a)
(2)
Turnover (3)
Proportion of turnover,
year 2023 (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards
(17)
Proportion of
Taxonomy
aligned (A.1.) or
eligible (A.2.)
turnover, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
EUR
%
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
-
-
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
-
-
-
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1)
-
-
-
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Enabling
-
-
-
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Transitional
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
-
-
-
-
-
-
-
-
-
-
Production of heat from biomass
CCM 4.24 /
CCA 4.24
1 242
0.6%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
0.8%
-
-
Construction, extension and operation of water collection, treatment and
supply systems
CCM 5.1 /
CCA 5.1
-
-
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Collection and transport of non-hazardous waste in source segregated
fractions
CCM 5.5 /
CCA 5.5/
CE 2.3
830
0.4%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Transport by motorbikes, passenger cars and light commercial vehicles
CCM 6.5 /
CCA 6.5
-
-
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Renovation of existing buildings
CCM 7.2 /
CCA 7.2 /
CE 3.2
-
-
EL
EL
N/EL
N/EL
EL
N/EL
-
-
-
-
-
-
-
-
-
-
Acquisition and ownership of buildings
CCM 7.7 /
CCA 7.7
719
0.4%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Turnover of Taxonomy eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
2 790
1.4%
1.4%
-
-
-
-
-
-
-
-
-
-
-
-
0.8%
-
-
A. Turnover of Taxonomy eligible activities (A.1+A.2)
2 790
1.4%
1.4%
-
-
-
-
-
-
-
-
-
-
-
-
0.8%
-
-
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy non-eligible activities
192 562
98.6%
Total
195 352
100%
(a)
Climate change mitigation (CCM), climate change adaptation (CCA), water and marine resources (WTR), pollution (PPC), circular economy (CE), biodiversity and ecosystems (BIO).
(b)
Y - Yes, Taxonomy eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy eligible but not Taxonomy-aligned activity with the relevant environmental objective; EL - Taxonomy eligible activity for the relevant objective.
(c)
EL – Taxonomy-eligible activity for the relevant objective; N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
38
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities:
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Economic activities (1)
Code
(a)
(2)
CapEx (3)
Proportion of CapEx, year
2023 (4)
Climate change mitigation
(5)
Climate change adaptation
(6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change adaptation
(12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of
Taxonomy
aligned (A.1.) or
eligible (A.2.)
turnover, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
EUR
%
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
80
1.0%
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
-
-
-
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1)
80
1.0%
1.0%
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Enabling
80
1.0%
1.0%
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Transitional
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
-
-
-
-
-
-
-
-
-
-
Production of heat from biomass
CCM 4.24 /
CCA 4.24
354
4.3%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
0.1%
-
-
Construction, extension and operation of water collection, treatment and
supply systems
CCM 5.1 /
CCA 5.1
240
2.9%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Collection and transport of non-hazardous waste in source segregated
fractions
CCM 5.5 /
CCA 5.5/
CE 2.3
-
-
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Transport by motorbikes, passenger cars and light commercial vehicles
CCM 6.5 /
CCA 6.5
170
2.0%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Renovation of existing buildings
CCM 7.2 /
CCA 7.2 /
CE 3.2
1 939
23.4%
EL
EL
N/EL
N/EL
EL
N/EL
-
-
-
-
-
-
-
-
-
-
Acquisition and ownership of buildings
CCM 7.7 /
CCA 7.7
-
-
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Turnover of Taxonomy eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
2 702
32.6%
32.6%
-
-
-
-
-
-
-
-
-
-
-
-
0.1%
-
-
A. Turnover of Taxonomy eligible activities (A.1+A.2)
2 782
33.5%
33.5%
-
-
-
-
-
-
-
-
-
-
-
-
0.1%
-
-
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy non-eligible activities
5 438
65.5%
Total
8 300
100%
(a)
Climate change mitigation (CCM), climate change adaptation (CCA), water and marine resources (WTR), pollution (PPC), circular economy (CE), biodiversity and ecosystems (BIO).
(b)
Y - Yes, Taxonomy eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy eligible but not Taxonomy-aligned activity with the relevant environmental objective; EL - Taxonomy eligible activity for the relevant objective.
(c)
EL – Taxonomy-eligible activity for the relevant objective; N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
39
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities:
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Economic activities (1)
Code
(a)
(2)
OpEx (3)
Proportion of OpEx, year
2023 (4)
Climate change mitigation
(5)
Climate change adaptation
(6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change adaptation
(12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of
Taxonomy
aligned (A.1.) or
eligible (A.2.)
turnover, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
EUR
%
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y; N;
N/EL
(b)
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
-
-
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
-
-
-
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1)
-
-
-
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Enabling
-
-
-
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
-
-
Of which Transitional
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
EL;
N/EL
(c)
-
-
-
-
-
-
-
-
-
-
Production of heat from biomass
CCM 4.24 /
CCA 4.24
270
8.9%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
1.0%
-
-
Construction, extension and operation of water collection, treatment and
supply systems
CCM 5.1 /
CCA 5.1
16
0.5%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Collection and transport of non-hazardous waste in source segregated
fractions
CCM 5.5 /
CCA 5.5/
CE 2.3
271
8.9%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Transport by motorbikes, passenger cars and light commercial vehicles
CCM 6.5 /
CCA 6.5
117
3.9%
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Renovation of existing buildings
CCM 7.2 /
CCA 7.2 /
CE 3.2
123
4.1%
EL
EL
N/EL
N/EL
EL
N/EL
-
-
-
-
-
-
-
-
-
-
Acquisition and ownership of buildings
CCM 7.7 /
CCA 7.7
-
-
EL
EL
N/EL
N/EL
N/EL
N/EL
-
-
-
-
-
-
-
-
-
-
Turnover of Taxonomy eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
798
26.3%
26.3%
-
-
-
-
-
-
-
-
-
-
-
-
1.0%
-
-
A. Turnover of Taxonomy eligible activities (A.1+A.2)
798
26.3%
26.3%
-
-
-
-
-
-
-
-
-
-
-
-
1.0%
-
-
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy non-eligible activities
2 236
73.7%
Total
3 034
100%
(a)
Climate change mitigation (CCM), climate change adaptation (CCA), water and marine resources (WTR), pollution (PPC), circular economy (CE), biodiversity and ecosystems (BIO).
(b)
Y - Yes, Taxonomy eligible and Taxonomy-aligned activity with the relevant environmental objective; N - No, Taxonomy eligible but not Taxonomy-aligned activity with the relevant environmental objective; EL - Taxonomy eligible activity for the relevant objective.
(c)
EL – Taxonomy-eligible activity for the relevant objective; N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective.
40
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Disclosure tables for nuclear and fossil gas activities under the Taxonomy as specified in the Complementary Delegated Climate Act
Template 1 Nuclear and fossil gas related activities
Row
Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from
nuclear processes with minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of
district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
YES
Template 2 Taxonomy-aligned economic activities (denominator)
No turnover from taxonomic economic activities meeting the criteria was generated and no operating costs were incurred.
Capital expenditure KPIs for the taxonomic economic activity meeting the criteria:
Row
Economic activities
Proportion (the information is to be presented in monetary amounts and as
percentages)
(CCM + CCA)
Climate change
mitigation
Climate change adaptation
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
5.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
7.
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the
denominator of the applicable KPI
80
1.0%
80
1.0%
-
-
8.
Total applicable KPI
8 300
100%
8 300
100%
-
-
41
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Template 3 Taxonomy-aligned economic activities (numerator)
No turnover from taxonomic economic activities meeting the criteria was generated and no operating costs were incurred.
Capital expenditure KPIs for the taxonomic economic activity meeting the criteria:
Row
Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change
mitigation
Climate change adaptation
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
5.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the numerator of the applicable KPI
-
-
-
-
-
-
7.
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the
numerator of the applicable KPI
80
100%
80
100%
-
-
8.
Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI
80
100%
80
100%
-
-
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities
The proportion of turnover related to economic activities that are taxonomic but do not meet the criteria:
Row
Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change
mitigation
Climate change adaptation
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
7.
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to
in rows 1 to 6 above in the denominator of the applicable KPI
2 790
100%
2 790
100%
-
-
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the
denominator of the applicable KPI
2 790
100%
2 790
100%
-
-
42
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
The capital expenditure part relates to economic activities that are taxonomic but do not meet the criteria:
Row
Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change
mitigation
Climate change adaptation
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
7.
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to
in rows 1 to 6 above in the denominator of the applicable KPI
2 702
100%
2 702
100%
-
-
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the
denominator of the applicable KPI
2 702
100%
2 702
100%
-
-
The part of the operating expenditure that relates to economic activities that are taxonomic but do not meet the criteria:
Row
Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change
mitigation
Climate change adaptation
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section
4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
-
-
-
-
-
-
7.
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to
in rows 1 to 6 above in the denominator of the applicable KPI
798
100%
798
100%
-
-
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the
denominator of the applicable KPI
798
100%
798
100%
-
-
43
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.6. List of datapoints in cross-cutting and topical standards that derive from other EU legislation
Disclosure Requirement and related datapoint
SFDR reference
Pillar 3 reference
Benchmark Regulation reference
EU Climate Law
reference
Page
ESRS 2 GOV-1 Board's gender diversity paragraph 21
(d)
Indicator number 13 of Table #1 of
Annex 1
Commission Delegated Regulation
(EU) 2020/181627, Annex II
18
ESRS 2 GOV-1 Percentage of board members who are
independent paragraph 21 (e)
Delegated Regulation (EU)
2020/1816, Annex II
18
ESRS 2 GOV-4 Statement on due diligence paragraph
30
Indicator number 10 Table #3 of Annex 1
24
ESRS 2 SBM-1 Involvement in activities related to fossil
fuel activities paragraph 40 (d) i
Indicators number 4 Table
#1 of Annex 1
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/245328 Table 1: Qualitative
information on Environmental risk and Table
2: Qualitative information on Social risk
Delegated Regulation (EU)
2020/1816, Annex II
Not applicable
ESRS 2 SBM-1 Involvement in activities related to
chemical production paragraph 40 (d) ii
Indicator number 9 Table #2 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Not applicable
ESRS 2 SBM-1 Involvement in activities related to
controversial weapons paragraph 40 (d) iii
Indicator number 14 Table #1 of Annex 1
Delegated Regulation (EU)
2020/181829, Article 12(1) Delegated
Regulation (EU) 2020/1816, Annex II
Not applicable
ESRS 2 SBM-1 Involvement in activities related to
cultivation and production of tobacco paragraph 40 (d) iv
Delegated Regulation (EU)
2020/181829, Article 12(1) Delegated
Regulation (EU) 2020/1816, Annex II
Not applicable
ESRS E1-1 Transition plan to reach climate neutrality by
2050 paragraph 14
Regulation (EU)
2021/1119, Article 2(1)
Not available
ESRS E1-1 Undertakings excluded from Paris-aligned
Benchmarks paragraph 16 (g)
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 1: Banking book-
Climate Change transition risk: Credit
quality of exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
2020/1818, Article12.1 (d) to (g), and
Article 12.2
Not applicable
ESRS E1-4 GHG emission reduction targets paragraph
34
Indicator number 4 Table #2 of Annex 1
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 3: Banking book –
Climate change transition risk: alignment
metrics
Delegated Regulation (EU)
2020/1818, Article 6
31, 47
ESRS E1-5 Energy consumption from fossil sources
disaggregated by sources (only high climate impact
sectors) paragraph 38
Indicator number 5 Table #1 and
Indicator n. 5 Table #2 of Annex 1
48
ESRS E1-5 Energy consumption and mix paragraph 37
Indicator number 5 Table #1 of Annex 1
48
ESRS E1-5 Energy intensity associated with activities in
high climate impact sectors paragraphs 40 to 43
Indicator number 6 Table #1 of Annex 1
49
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG
emissions paragraph 44
Indicators number 1 and 2 Table #1 of
Annex 1
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 1: Banking book –
Climate change transition risk: Credit quality
of exposures by sector, emissions and
residual maturity
Delegated Regulation (EU)
2020/1818, Article 5(1), 6 and 8(1)
49
ESRS E1-6 Gross GHG emissions intensity paragraphs
53 to 55
Indicators number 3 Table #1 of Annex 1
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 3: Banking book –
Climate change transition risk: alignment
metrics
Delegated Regulation (EU)
2020/1818, Article 8(1)
49
ESRS E1-7 GHG removals and carbon credits
paragraph 56
Regulation (EU)
2021/1119, Article 2(1)
Not applicable
ESRS E1-9 Exposure of the benchmark portfolio to
climate-related physical risks paragraph 66
Delegated Regulation (EU)
2020/1818, Annex II Delegated
Regulation (EU) 2020/1816, Annex II
Exemption applied
ESRS: IRO-2, BP-2
44
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Disclosure Requirement and related datapoint
SFDR reference
Pillar 3 reference
Benchmark Regulation reference
EU Climate Law
reference
Page
ESRS E1-9 Disaggregation of monetary amounts by
acute and chronic physical risk paragraph 66 (a)
ESRS E1-9 Location of significant assets at material
physical risk paragraph 66 (c).
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 paragraphs 46 and 47; Template
5: Banking book - Climate change physical
risk: Exposures subject to physical risk.
Exemption applied
ESRS E1-9 Breakdown of the carrying value of its real
estate assets by energy-efficiency classes paragraph 67
(c).
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 paragraph 34; Template
2:Banking book -Climate change transition
risk: Loans collateralised by immovable
property - Energy efficiency of the collateral
Exemption applied
ESRS E1-9 Degree of exposure of the portfolio to
climate- related opportunities paragraph 69
Delegated Regulation (EU)
2020/1818, Annex II
Exemption applied
ESRS E2-4 Amount of each pollutant listed in Annex II of
the E-PRTR Regulation (European Pollutant Release
and Transfer Register) emitted to air, water and soil,
paragraph 28
Indicator number 8 Table #1 of Annex 1
Indicator number 2 Table #2 of Annex 1
Indicator number 1 Table #2 of Annex 1
Indicator number 3 Table #2 of Annex 1
52
ESRS E3-1 Water and marine resources paragraph 9
Indicator number 7 Table #2 of Annex 1
33
ESRS E3-1 Dedicated policy paragraph 13
Indicator number 8 Table 2 of Annex 1
Not applicable
ESRS E3-1 Sustainable oceans and seas paragraph 14
Indicator number 12 Table #2 of Annex 1
Not applicable
ESRS E3-4 Total water recycled and reused paragraph
28 (c)
Indicator number 6.2 Table #2 of Annex
1
55
ESRS E3-4 Total water consumption in m3 per net
revenue on own operations paragraph 29
Indicator number 6.1 Table #2 of Annex
1
55
ESRS 2- IRO 1 - E4 paragraph 16 (a) i
Indicator number 7 Table #1 of Annex 1
56
ESRS 2- IRO 1 - E4 paragraph 16 (b)
Indicator number 10 Table #2 of Annex 1
56
ESRS 2- IRO 1 - E4 paragraph 16 (c)
Indicator number 14 Table #2 of Annex 1
56
ESRS E4-2 Sustainable land / agriculture practices or
policies paragraph 24 (b)
Indicator number 11 Table #2 of Annex 1
Not applicable
ESRS E4-2 Sustainable oceans / seas practices or
policies paragraph 24 (c)
Indicator number 12 Table #2 of Annex 1
Not applicable
ESRS E4-2 Policies to address deforestation paragraph
24 (d)
Indicator number 15 Table #2 of Annex 1
Not applicable
ESRS E5-5 Non-recycled waste paragraph 37 (d)
Indicator number 13 Table #2 of Annex 1
58, 59
ESRS E5-5 Hazardous waste and radioactive waste
paragraph 39
Indicator number 9 Table #1 of Annex 1
Not applicable
ESRS 2- SBM3 - S1 Risk of incidents of forced labour
paragraph 14 (f)
Indicator number 13 Table #3 of Annex I
Not applicable
ESRS 2- SBM3 - S1 Risk of incidents of child labour
paragraph 14 (g)
Indicator number 12 Table #3 of Annex I
Not applicable
ESRS S1-1 Human rights policy commitments
paragraph 20
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of Annex I
33, 34
ESRS S1-1 Due diligence policies on issues addressed
by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 21
Delegated Regulation (EU)
2020/1816, Annex II
Not available
ESRS S1-1 processes and measures for preventing
trafficking in human beings paragraph 22
Indicator number 11 Table #3 of Annex I
Not applicable
ESRS S1-1 workplace accident prevention policy or
management system paragraph 23
Indicator number 1 Table #3 of Annex I
34
ESRS S1-3 grievance/complaints handling mechanisms
paragraph 32 (c)
Indicator number 5 Table #3 of Annex I
69
ESRS S1-14 Number of fatalities and number and rate of
work-related accidents paragraph 88 (b) and (c)
Indicator number 2 Table #3 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II
66
ESRS S1-14 Number of days lost to injuries, accidents,
fatalities or illness paragraph 88 (e)
Indicator number 3 Table #3 of Annex I
66
ESRS: IRO-2, BP-2
45
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Disclosure Requirement and related datapoint
SFDR reference
Pillar 3 reference
Benchmark Regulation reference
EU Climate Law
reference
Page
ESRS S1-16 Unadjusted gender pay gap paragraph 97
(a)
Indicator number 12 Table #1 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II
63
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)
Indicator number 8 Table #3 of Annex I
22
ESRS S1-17 Incidents of discrimination paragraph 103
(a)
Indicator number 7 Table #3 of Annex I
66
ESRS S1-17 Non-respect of UNGPs on Business and
Human Rights and OECD paragraph 104 (a)
Indicator number 10 Table #1 and
Indicator n. 14 Table #3 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818 Art 12 (1)
66
ESRS 2- SBM3 – S2 Significant risk of child labour or
forced labour in the value chain paragraph 11 (b)
Indicators number 12 and n. 13 Table #3
of Annex I
Not applicable
ESRS S2-1 Human rights policy commitments paragraph
17
Indicator number 9 Table #3 and
Indicator n. 11 Table #1 of Annex 1
Not applicable
ESRS S2-1 Policies related to value chain workers
paragraph 18
Indicator number 11 and n. 4 Table #3 of
Annex 1
Not applicable
ESRS S2-1 Non-respect of UNGPs on Business and
Human Rights principles and OECD guidelines
paragraph 19
Indicator number 10 Table #1 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818, Art 12
(1)
Not applicable
ESRS S2-1 Due diligence policies on issues addressed
by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 19
Delegated Regulation (EU)
2020/1816, Annex II
Not applicable
ESRS S2-4 Human rights issues and incidents
connected to its upstream and downstream value chain
paragraph 36
Indicator number 14 Table #3 of Annex 1
Not applicable
ESRS S3-1 Human rights policy commitments paragraph
16
Indicator number 9 Table #3 of Annex 1
and Indicator number 11 Table #1 of
Annex 1
67
ESRS S3-1 non-respect of UNGPs on Business and
Human Rights, ILO principles or and OECD guidelines
paragraph 17
Indicator number 10 Table #1 Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818, Art 12
(1)
Not applicable
ESRS S3-4 Human rights issues and incidents
paragraph 36
Indicator number 14 Table #3 of Annex 1
51, 67
ESRS S4-1 Policies related to consumers and end-users
paragraph 16
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of Annex 1
Not applicable
ESRS S4-1 Non-respect of UNGPs on Business and
Human Rights and OECD guidelines paragraph 17
Indicator number 10 Table #1 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818, Art 12
(1)
Not applicable
ESRS S4-4 Human rights issues and incidents
paragraph 35
Indicator number 14 Table #3 of Annex 1
Not applicable
ESRS G1-1 United Nations Convention against
Corruption paragraph 10 (b)
Indicator number 15 Table #3 of Annex 1
69
ESRS G1-1 Protection of whistle- blowers paragraph 10
(d)
Indicator number 6 Table #3 of Annex 1
69, 70
ESRS G1-4 Fines for violation of anti-corruption and
anti-bribery laws paragraph 24 (a)
Indicator number 17 Table #3 of Annex
Delegated Regulation (EU)
2020/1816, Annex II)
69, 70
ESRS G1-4 Standards of anti- corruption and anti-
bribery paragraph 24 (b)
Indicator number 16 Table #3 of Annex 1
70
ESRS: IRO-2, BP-2
46
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
7.7. Environmental profile
ESRS E1 Climate change
The Group is one of the largest paper and wood industry groups in the Baltics. Paper production is a resource- and
energy-intensive industry. It is our responsibility to ensure production efficiency in order to minimise negative impacts.
In order to reduce environmental impacts, the Group sets targets in areas where there are significant (critical and/or
major) impacts on both the Group and its stakeholders. Climate change and energy efficiency are identified as critical
areas at Group level. Our key commitments in these areas are described in the Group's Environmental Policy.
Addressing climate change risks
We acknowledge the gravity of scenario analysis in disclosure of climate-related risks and opportunities. Climate
change impacts are primarily assessed through our Group's GHG emissions calculations (Table Consolidated GHG
emissions).
We use the TCFD guidelines to analyse the potential impacts of climate change on business. Based on the TCFD
climate scenarios for 2022, an assessment of the Group's business transformation and physical risks related to climate
change and their potential impacts on both our operations and our value chain in the short and long term was carried
out. The assessment started with a qualitative analysis to help management assess the potential range of climate
change impacts. Accurate quantitative modelling is currently limited by the lack of reliable and accessible information
on the industry and location, and therefore our internal resources are not sufficient to carry out quantitative modelling.
To manage the identified potential impacts and risks, guidelines for our activities have been established.
Climate change risks and potential impact on our business lines by category:
Relevant short- and long-term
physical climate impacts
Illustrative effects on value chain
Approach guidelines
Transition risks
Technology and
market shifts
• Policies and investments to ensure a low
carbon emissions economy.
• Increased demand for energy-
efficient lower-carbon products.
• Modern technologies that disrupt
markets.
• Shift to renewable energy to eliminate
GHG scope 2 emissions.
• Increase energy consumption efficiency.
• Refurbishing of machinery.
Reputation
• Raising awareness of climate change.
• Growing expectations for responsible
manufacturing.
• Public attention to deforestation.
• Concerns about manufacturing waste.
• Concerns about water usage.
• Threats to securing social license to
operate.
• Opportunity to enhance reputation
and brand value.
• Opportunity to engage with
stakeholders consistently.
• Improving company transparency.
• Our impact assessment and
measurement.
• Updating our procurement policies.
• Active engagement with stakeholders.
• Regular reporting.
• Increasing contribution to other
environmental objectives, such as
circular economy.
• Improving transparency.
Policy and
legal
• Evolving requirements.
• Regulatory changes on the national and
EU level.
• Threats to securing legal license to
operate.
• Increased operating costs.
• Increased tax.
• Emerging concern about liability.
• Closely monitoring the development of
industry-specific regulations.
• Monitoring changes in regulation through
supply chain.
Physical risks
Acute and chronic
• Increased intensity and duration of
extreme weather events, such as heat
waves, storms, and floods.
• Precipitation extremes and flooding.
• Increased evaporation of surface water.
• Increased mineral content of surface
water.
• Rising sea level.
• Rising temperatures.
• Increased wildfires.
• Increased business interruption.
• Damage across operations and
supply chains.
• Compromised reliability of material
supply.
• Volatility of input costs and revenues.
• Unpredictable asset values and
insurance claims.
• Increased cost of capital.
• Share price volatility.
• Increase in CAPEX.
• Monitoring.
• Climate change adaptation plans.
• Continuous engagement with suppliers.
• Improving climate change scenario
analysis.
• Regular review of the climate change
scenario.
The Group has not carried out a full assessment of the resilience of its strategy and business model to climate change.
The Group plans to conduct a resilience analysis within the next two years.
ESRS: BP-2, IRO-1, SBM-3
47
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Table of significant ESRS sub-topics
The assessment of climate change impacts, risks and opportunities has identified material topics for the Group's
companies and has been subject to an assessment of impacts and financial materiality in line with the new ESRS
requirements. All climate change sub-topics were identified as critically significant in both impact and financial terms.
Subtopic
Impact materiality
Financial materiality
Climate change adaptation
Critical
Critical
Climate change mitigation
Critical
Critical
Energy
Critical
Critical
Climate change and energy efficiency commitments
In addition to reducing GHG emissions, energy efficiency is also a key objective for implementing policy commitments,
managing and tracking progress. These targets are part of the current strategy and are all subject to the 2021 base
year values on which the change is monitored. The current climate change related GHG reduction target only covers
Scope 1 emissions, which is a large proportion of total emissions, and within this scope the Group is likely to make
decisions that will help reduce emissions. In setting the targets, market trends and current opportunities to reduce
GHG emissions and increase energy efficiency in our operations were assessed. The Group is investing in climate
change mitigation actions to achieve its GHG emission reduction targets, such as energy efficiency improvements,
electrification and the use of renewable energy.
Target
Unit of measurement
Base year
2021
Interim
result in
2023
Change
Target for
2026
1.
Reduction of GHG emission intensity (Scope 1)
kgCO
2
/ton of production
114.1
108.2
-5.2%
-5.0%
2.
Increasing energy efficiency
MWh/ton of production
2.56
2.52
-1.6%
-3.0%
Reducing GHG intensity is one of our strategic objectives and Group companies have set targets and measures to
achieve this goal. For a number of years, investments have been made in technologies and processes that contribute
to climate change mitigation and adaptation.
In terms of mitigation and adaptation decarbonisation levers, the Group focuses on:
• Improving energy efficiency – energy consumption monitoring system, equipment upgrades, process
efficiency and many other initiatives. To improve energy efficiency, the implementation of a steam generator
is planned (this investment is worth around € 0,6 million euros). The installation of the generator is expected
to increase energy efficiency and reduce electricity consumption by 3 628 GWh per year as well as reducing
GHG emissions by 664 t per year. This project will contribute to both objectives.
• Fuel switching – the majority (more than 75%) of the thermal energy required is already produced by burning
biofuels, which have replaced the natural gas used. This also allows to reduce Scope 1 GHG emissions and
meet the targets.
• Renewable energy – the finishing and commissioning of the solar power plants and the anaerobic bioreactor
are planned for the coming year (investments of around € 5 million euros). These innovations are expected
to contribute to a reduction of about 1 300 t/year of Scope 2 GHG emissions (market-based approach).
The main investments related to climate change mitigation and adaptation are made using the Group's existing
resources. Given the current market and financial situation of the Group, there are no constraints on the ability to
implement the actions envisaged, including adapting to changes in supply/demand, making related acquisitions, and
investing in research and development.
Currently, there is no Group-wide transformation plan to mitigate climate change, but targets are set and progress is
monitored each year, investments and innovations are made and other opportunities to reduce GHG emissions are
explored. The Group is also subject to EU benchmarks aligned with the Paris Agreement. GHG reduction targets are
planned for 2024 for other emission levels, revising the current targets to be in line with the emission reduction plan
and consistent with limiting global warming to 1.5°C and covering the 2030 targets. This is to be done in cooperation
with the Science Based Targets initiative (SBTi). A transformation plan to mitigate climate change is also planned.
ESRS: IRO-1, E1-1, E1-3, E1-4, E1-5
48
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for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
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CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Energy mix in our operations
The Group produces energy from biofuels and natural gas. All biofuels and natural gas are used to produce energy,
which is then used in the Group's operations and sold to meet the heating needs of the town of Grigiškės. In 2023,
our energy consumption almost reached 555 GWh per year. The Group is one of the largest wood chip consumers in
the market. In 2023, we consumed 28 thousand tonnes of oil equivalent of wood chips, which converts to 331 GWh
or 57% of total energy mix within the Group.
Our consumption of electricity amounted to 119 GWh in 2023, making electricity the second-largest energy resource
used for our production lines. Currently, all the electricity is purchased, but the Group is investing in renewable energy
generation capacity and plans to start using green electricity from its own solar power plants as early as next year to
meet part of its demand. According to electricity distributor Litgrid AB, final electricity consumption in Lithuania in 2023
was 11 TWh, so we estimate that the Group consumed 1% of total electricity in Lithuania.
Energy consumption in MWh
Tissue paper
Sold heat
Hardboard
Containerboard
and packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Renewable energy
Biofuel
63 723
63 653
31 503
37 616
78 292
86 848
157 275
145 897
330 793
334 014
Electricity
5 881
31 451
-
-
-
14 136
-
47 809
5 881
93 396
Renewable energy
63 723
95 104
31 503
37 616
78 292
100 984
157 275
193 706
336 673
427 410
Non-renewable energy
Natural gas
46 906
31 759
121
478
-
242
52 938
61 338
99 965
93 817
Electricity
37 140
10 688
-
-
15 980
2 644
59 756
9 877
112 876
23 209
Diesel for transportation
21
26
-
-
851
1 054
2 510
2 357
3 382
3 437
Petrol for transportation
366
375
-
-
140
148
574
526
1 079
1 049
Liquid gals for transportation
331
329
-
-
-
-
693
731
1 024
1 059
Non-renewable energy
90 644
43 176
121
478
16 971
4 089
116 471
74 829
218 326
122 572
Energy in total
154 368
138 280
31 624
38 094
95 263
105 073
273 746
268 535
555 001
549 982
Renewable energy, %
41%
69%
100%
99%
82%
96%
57%
72%
60%
78%
Self-generated energy (MWh):
- from non-renewable sources – 99 965,
- from renewable sources – 330 793.
Energy efficiency
We understand that our product energy impact is managed via energy mix (shifting to renewable energy sources) and
improving energy efficiency.
Energy efficiency is a key indicator of the economic and environmental performance of our production facilities.
Considering all circumstances, the investments in energy efficiency improvements will remain our key investment
direction.
Energy
consumption KWh/t
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Renewable energy
Biofuel
1 334
1 415
1 380
1 368
1 355
1 356
1 500
1 546
Electricity
123
699
-
223
-
444
27
432
Non-renewable energy
Natural gas
982
706
-
4
456
570
453
434
Electricity
777
238
282
42
515
92
512
107
Diesel for transportation
-
1
15
17
22
22
15
16
Petrol for transportation
8
8
2
2
5
5
5
5
Liquid gals for transportation
7
7
-
-
6
7
5
5
Total
3 231
3 074
1 680
1 655
2 358
2 496
2 516
2 545
The Group managed to reduce energy consumption per tonne of production from 2 545 KWh to 2 516 KWh (1.6%).
ESRS: E1-5
49
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Grigeo AB, company code 110012450
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for the year ended 31 December 2023
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CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Energy intensity by net income:
Energy intensity per net revenue
2023
2022
Total energy consumption from activities in high climate impact sectors per net revenue from
activities in high climate impact sectors (MWh/ million EUR)
2 840.33
2 706.48
Electricity consumption and net income are taken for all companies in the Group, as their activities are categorized
as high climate impact sectors.
Greenhouse gas (GHG) emissions
Calculating our impact
GHG emissions for all Grigeo Group companies and the consolidated report have
been prepared in accordance with the GHG Protocol methodology using the control
approach. Under this approach, the Group's emissions represent 100 per cent of
the GHG emissions from the activities it controls. National, DEFRA, supplier-
supplied and other publicly available factors were used to calculate GHG emissions. The Group has no unconsolidated
investments (associates, joint ventures or similar).
Emissions by scopes
Scope 1: direct GHG emissions occur from sources that are owned or controlled by the company, such as emissions
from our combustion boilers. Group’s main Scope 1 emissions comprise mainly natural gas combustion in our facilities
located in Klaipėda and Grigiškės. GHG emissions not covered by the Kyoto Protocol, e.g., CFCs, NOx, etc., are not
included in Scope 1. In 2023, 33% of the Group's Scope 1 GHG emissions are covered by the Emissions Trading
Scheme (ETS).
Scope 2: indirect GHG emissions caused by generation of externally produced energy such as electricity.
Scope 3: all emissions from the Group's activities over which the Group has no management or control. These relate
to the Group's supply chain, from the purchase of raw materials and production of goods to the transport and sale of
the finished goods produced. This level of GHG emissions consists of 15 different categories, and the Group has
identified the most relevant categories and carried out GHG emission calculations. Due to unavailability or lack of data
or lack of relevant activities, the calculations exclude capital goods, employee commuting, upstream and downstream
leased assets, use of sold products, processing of sold products, end-of-life treatment of sold products, franchises
and investments.
Scope 3 emissions calculations are less reliable as they require a proper estimation of the GHG emissions of own
suppliers (about 30% of Scope 3 emissions are calculated on the basis of emission factors provided by suppliers).
Consolidated GHG emissions in thousand tons:
Scope
2023
2022
Total tCO
2
e
Biogenic tCO
2
e
Total tCO
2
e
Biogenic tCO
2
e
Scope 1
23.9
115.5
22.9
120.7
Scope 2 (location-based)
28.4
-
28.2
-
Scope 2 (market-based)
52.7
-
9.3
-
Scope 3
81.9
311.6
80.4
304.4
Total location-based
134.2
427.0
131.5
425.1
Total market-based
158.5
427.0
112.6
425.1
Biogenic carbon dioxide (CO
2
) is carbon dioxide released during the combustion or decomposition of biomass and
other organic materials. Only if biomass used for biofuel is cultivated in a sustainable way, biogenic CO
2
is not
recognised as a greenhouse gas emission.
GHG emissions intensity by net income (Net Income 2.2 Financial and operating performance of the Group and the
Company):
GHG intensity per net revenue
2023 m.
2022 m.
Thousand t CO2e /
million EUR
Thousand t CO2e /
million EUR
Total GHG emissions (location-based) per net revenue
0.687
0.647
Total GHG emissions (market-based) per net revenue
0.811
0.554
ESRS: E1-6
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Tissue paper produced from virgin cellulose requires the most energy per tonne; therefore, its GHG emissions are
substantially higher compared to the emissions of recycled paper production. Scope 3 in tissue category is inflated by
two main factors: manufacturing of cellulose and both upstream and downstream transportation.
Average GHG emissions, kgCO
2
e per ton of production:
Average GHG
emissions, kgCO
2
e/t
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Scope 1
167.3
133.2
54.0
29.1
80.8
131.5
90.1
101.8
Scope 2 (location-based)
217.4
227
29.0
38.5
91.4
129.2
107.3
130
Scope 2 (market-based)
368.5
76.6
123.4
18.6
180.1
44.4
200.7
43.5
Scope 3
840.3
882.8
182.4
173.7
205.6
286.1
313.4
377.3
Total location-based
1 224.9
1 243.0
265.4
221.4
377.8
546.8
510.9
609.1
Total market-based
1 376.1
1 092.6
359.8
241.2
466.5
462.1
598.7
522.6
Within the Group, heat energy is sold between segments. For example, Grigeo AB sells heat energy to Grigeo
Baltwood UAB. The emissions of heat energy purchased by Grigeo Baltwood UAB fall under Scope 2. Meanwhile,
from the Group's point of view, these emissions remain in Scope 1. For a clearer representation by segments, this
type of emissions in a segment is moved from Scope 2 to Scope 1 to match the representation of Group emissions.
In 2023, more than 50% of the Group's Scope 3 emissions are related to the production of purchased raw materials.
Our products are delivered by truck, sea and rail, which account for almost 40% of Scope 3 GHG emissions in 2023.
Scope 3 GHG emission categories:
Category
Source of emission
2023
2022
tCO
2
e
%
tCO
2
e
%
1
Purchased goods and services
43 311
52.9%
44 285
55.1%
3
Fuel- and energy-related activities
13 450
16.4%
12 897
16.0%
4
Upstream transportation and distribution
6 088
7.4%
4 824
6.0%
5
Waste generated in operations
1 353
1.7%
1 316
1.6%
6
Business travel
42
0.1%
40
0.1%
9
Downstream transportation and distribution
17 683
21.6%
17 068
21.2%
Total
81 927
100%
80 430
100%
Scope 3 emissions accounted for 52% of total emissions in 2023 (70% in 2022). Transport (sales of products,
purchases of raw materials, as well as transport of intermediate products and raw materials between Group
companies) accounts for a significant share of emissions (15% in 2023, 16% in 2022).
The Group did not finance any mitigation-related projects outside its value chain during the financial year and did not
purchase carbon credits. The Group does not use carbon pricing.
ESRS: E1-6, E1-7, E1-8
51
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CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
ESRS E2 Pollution
The Group's main activities are carried out in Lithuania, in the cities of Grigiškės and Klaipėda. In accordance with the
established legal requirements, our production sites are subject to Environmental Impact Assessment (EIA) screening
procedures, which assess the potential impacts and risks related to pollution. The EIA procedures involve
consultations with interested parties such as local communities, public authorities, etc. During the reporting year, a
public presentation on the planned construction of the anaerobic reactor was organised, during which the affected
communities were able to express their views and comments. In addition, in accordance with the requirements, the
responsible authorities have issued Integrated Pollution Prevention and Control (IPPC) or Pollution Permits for the
sites concerned. These documents and the Group's Environmental Policy describe how the impacts and risks
associated with the prevention and control of significant topics such as air or water pollution are managed.
Table of significant ESRS sub-topics
The assessment of pollution-related impacts, risks and opportunities identified material topics for the Group's
companies and assessed the impact and financial materiality. Air and water pollution have been identified as
significant topics for the Group. Five sub-topics (pollution of soil, pollution of living organisms and food resources,
substances of concern, substances of very high concern, microplastics) were not identified as significant after the
assessment.
Subtopic
Impact materiality
Financial materiality
Pollution of air
Important
Significant
Pollution of water
Critical
Critical
Water pollution is a critical topic for the Group. The commitment to reduce water pollution, i.e. to improve the quality
of wastewater by reducing wastewater per unit of production, is included as one of the Group's objectives in its
strategy.
Target
Unit of measurement
Base year
2021
Interim result
in 2023
Change
Target for 2026
Effluent reduction
m
3
/ton of production
7.1
6.4
-9.9%
-17.0%
To monitor progress and to involve and inform stakeholders, we have introduced public monitoring platforms where
information can be tracked not only on discharges, but also on the results of direct, periodic air measurements by an
independent supplier. In order to achieve the highest environmental standards, we have added automated processes
to our existing environmental systems, which not only make it easier to track data, but also make it available to the
public. The monitoring platforms allow residents to see periodic updates of air test data showing the carbon emissions
from boiler plants.
GRIGEO AB MONITORING PLATFORM
GRIGEO KLAIPĖDA AB MONITORING PLATFORM
Emergency and non-standard emergency response plans are publicly available on the Group’s website
(www.grigeo.lt).
Immediate and properly managed wastewater management is an essential step in reducing the impact of water
pollution. Innovative wastewater treatment technologies contribute to safer and more sustainable water use. The
Group has invested in a wastewater evaporator in Vilnius, which treats wastewater and reduces the level of
contamination of wastewater. After treatment, the concentration of suspended solids (SS) is <350 mg/l, the
concentration of BOD
7
is <800 mg/l, and the concentrated organic matter is returned to the production process of
hardboard, reducing the amount of process water used in the process.
The Group's activities involve the combustion of fuels to generate thermal energy. During the combustion process,
various substances are released into the air, the quantities of which are monitored and recorded. To reduce air
emissions, the Group already uses condensing economizers, which not only reduce emissions but also recover some
of the thermal energy. In the coming year, the Group is also planning to invest in electrostatic precipitators (around
EUR 1.2 million), which will further reduce particulate emissions, contributing to better air quality and reducing potential
adverse health effects.
Investments in environmental research are essential for sustainable, efficient and future-proof environmental
management. Back in 2020, in order to fulfil its promise to the public to fund research to determine the condition of
the Curonian Lagoon water and to carry out environmental social initiatives, Grigeo Klaipėda AB signed a support
agreement with Klaipėda University for a targeted EUR 500,000 support for the development of solutions to reduce
environmental pollution in the Klaipėda region and for the training of environmental professionals. Under the terms of
the agreement, a five-year programme of environmental action is being implemented, focusing on long-term value
ESRS: IRO-1, E2-2, E2-3, S3-4, E4-3
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All amounts are in EUR thousands unless otherwise stated
creation. On the basis of this programme, three separate programmes have been agreed to be developed. The first
is the development and implementation of a monitoring system for ambient air pollution (industrial and transport
pollutants, volatile organic compounds) in the city of Klaipeda. The second is the application of advanced treatment
technologies for the containment and removal of hazardous organic micro-pollutants in the city's wastewater treatment
plants. The third is the provision of support for undergraduate and postgraduate projects for the preparation of theses.
Pollution of water
The quality of the wastewater generated by production processes is significantly influenced by the raw materials used.
98% of all materials used are obtained from renewable sources in the form of fiber.
A long and strong fibre is required to produce high-quality tissue paper, cardboard, and wood panels. The fibre in
paper products going through repetitive recycling cycles deteriorates over time becoming weaker, shorter and
unsuitable for papermaking, i.e., during paper web formation, a large part of the fibre enters the wastewater as SS
and settles as sludge. In 2023, we recycled 140,000 tonnes of recovered paper, which contains various additives and
impurities. All these impurities become our waste and water pollution.
Water is used in almost all stages of paper (both tissue and containerboard) production. In addition, hardboard
production process also heavily depends on water supply. The quality of industrial wastewater is characterized by
biochemical oxygen consumption (BOD
7
), suspended solids (SS), total nitrogen (N), total phosphorus (P). BOD
7
represents the amount of dissolved oxygen needed (i.e., demanded) by aerobic biological organisms to break down
organic material present in each water sample at a certain temperature over a specific time. This is an indicator of
organic contamination.
Monitoring of emissions to water is carried out in accordance with an approved environmental monitoring programme
once a year. Samples of wastewater are analysed in accredited laboratories to determine their pollution parameters.
A significant decrease in both the absolute amount and the amount of BDS
7
per ton of production is related to Grigeo
Baltwood UAB’s investment in a wastewater evaporator. Pollution by operating sites in tonnes:
Pollutant, t
Grigiškės*
Klaipėda**
2023
2022
2023
2022
BOD
7
307.9
606.8
2 704.4
2,404.8
Nitrogen (N)
-
-
35.2
21.4
Phosphorus (P)
-
-
3.3
3.0
Suspended solids (SS)
193.6
260.4
262.0
199.0
Total
501.5
867.2
3 005.0
2 628.3
*AB „Grigeo“, UAB „Grigeo Baltwood“, UAB „Grigeo Packaging“, UAB „Grigeo Recycling
**AB „Grigeo Klaipėda”
Pollution of air
Grigeo AB and Grigeo Klaipėda AB are key emitters, as these two companies operate boiler houses. Grigeo AB
supplies steam to Grigeo Baltwood UAB which does not burn any sort of fuels needed to produce hardboard.
Emissions from stationary sources of air pollution are monitored at specified intervals by a certified laboratory.
Monitoring of air emissions shall be carried out in accordance with an approved Environmental Monitoring Programme.
Depending on the pollutant, measurements shall be carried out between 1 and 4 times a year, the method of
measurement being chosen according to the type of pollutant (counting, gas chromatography, etc.). At Grigeo AB, a
reduction in air pollution is observed due to a reduction in the amount of biofuel consumed. The increase in production
volumes has had an impact on the increase in air pollution at Grigeo Klaipėda AB.
Air emissions in tonnes per year (according to the Air Pollution Accounting Report 2023):
Pollutant, t
UAB “Grigeo Baltwood“
AB “Grigeo”
AB “Grigeo Klaipėda“
2023
2022
Legal
limit*
2023
2022
Legal
limit*
2023
2022
Legal
limit*
Nitrogen oxides (NO
2
)
-
-
-
123.4
135.6
248.2
120.2
112.4
185
Sulphur dioxide (SO
2
)
-
-
-
6.2
6.9
10.9
6
5.5
8.9
Carbon monoxide (CO)
-
-
-
172.6
191
322.2
166.9
154.9
252.9
Particulate matter from the
combustion of solid, liquid or
gaseous fuels or waste
-
-
-
22.5
25.1
38.7
0.9
1.1
1.4
Particulate matter (other)
1.7
1.2
4.6
8.9
12.9
14.6
3.6
3.3
8.1
Non-methane volatile organic
compound (NMVOC)
8.6
19.7
30.6
0.001
0.001
0.001
11.9
5.6
14.7
Ammonia (NH3)
2.1
2.3
4.3
-
-
2.4
1.9
2
9.9
*Permitted pollution in tons per year according to the Integrating Pollution Prevention and Control Permit.
ESRS: E2-4
53
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Grigeo Klaipėda AB environmental incident in 2020
The environmental incident occurred in 2020, when it was announced that Grigeo Klaipėda AB released partially
biologically treated wastewater into the Curonian Lagoon through the treated wastewater collector of municipal
company Klaipėdos vanduo AB.
Grigeo Klaipėda AB assumed legal responsibility for this incident, carried out internal inspections and commissioned
international expert investigations to establish, through scientific research, the fact and extent of possible
environmental damage. It also started implementing environmental remedial measures on its own initiative to remove
the pollutants discharged with its wastewater from the natural environment.
Pollutants released into the natural environment with the wastewater of Grigeo Klaipėda AB that was only partially
biologically treated were nitrogen and phosphorus (i.e., water-soluble nutrients of organic origin that are necessary
for every living organism) and BOD
7
(biochemical oxygen demand per 7 days). Pollutants contained in the biologically
untreated wastewater of Grigeo Klaipėda AB are attributable to non-hazardous pollutants that have not had a
significant negative impact on (significant damage to) the water state, biota, and ecosystem of the Curonian Lagoon.
Grigeo Klaipėda AB seeks to cooperate with state authorities in implementing wastewater management solutions and
environmental remedial measures that would remove the allegedly released pollutants from the natural environment,
implement environmental remedial measures (improvement of the state of water of the Curonian Lagoon), restore lost
public confidence, and ensure business resilience in the long run. It is very important to the management of Grigeo
Klaipėda AB that this incident not only becomes a painful lesson for the company, but also prevents the recurrence
of such cases in the future in all economic activities of the country.
Grigeo Klaipėda AB environmental restoration actions after the 2020 environmental incident
In 2021 and in 2022 Grigeo Klaipėda AB assessed scientifically based environmental restoration measures, which
would aim to remove the amount of pollutants (phosphorus, nitrogen and BOD
7
) from the Curonian Lagoon and
contribute to more favourable conditions for the recovery of biological diversity, thereby reducing eutrophication
processes in the Curonian Lagoon. It was determined that the environmental restoration criteria set by the
Environmental Protection Department is best met by the following two environmental restoration measures: reed
removal in the Curonian Lagoon and installation of surface wastewater treatment facilities in Klaipėda city.
The first measure: Cutting and removing reed biomass on the shores of the Curonian Lagoon.
With this measure, the pollutants that Grigeo Klaipėda AB may have allegedly released into the natural environment
would be removed from the Curonian Lagoon. Also, removing the biomass of cut reeds would restore the sandy
shores of the Curonian Spit and the habitats of rare plant and animal species, reduce the amount of organic matter
entering the Curonian Lagoon, mitigating the negative effects of eutrophication. After the restoration of open bays and
the formation of canals, the swamping processes of the shores of the Curonian Lagoon would be eliminated,
recreational space and views of the Curonian Lagoon would open up, and this would increase the area's biological
diversity and recreational potential. Reed cutting would be carried out over 4 years from whenever the program is
approved by the Environmental Protection Department.
The harvested reeds are used in sustainable ways, in such order of priority:
• Roofing (a new product is being developed, with a service life of about 50 years).
• Biofuel – helps reduce the need for fossil fuels, biogenic CO
2
is released.
• Compost – returned to the natural environment as green waste.
Grigeo Klaipėda AB hopes that the Environmental Protection Department will approve the plan of environmental
restoration measures, and after its implementation, the incriminated volume of pollutants would be removed from the
natural environment of the Curonian Lagoon.
The second measure. Modernization of treatment facilities of Klaipėdos vanduo AB (preventive measure).
A trilateral cooperation agreement was concluded between Klaipėda City Municipality, Klaipėdos vanduo AB and
Grigeo Klaipėda AB, in which the parties agreed to prepare and implement the construction and operation program
of Klaipėdos vanduo AB surface wastewater treatment facilities. This measure would reduce the entry of oil products,
floating substances, and organic matter into the Klaipėda Strait. This would have a positive impact on reducing the
eutrophication of the Curonian Lagoon.
According to the signed contract, if the Environmental Protection Department approves the plan of environmental
restoration measures, Grigeo Klapėda AB will finance the modernization of No. 7 and No. 8 outlets of the surface
sewage networks managed by Klaipėdos vanduo AB. The surface sewage networks, which need to be modernized,
were chosen considering the position of Klaipėdos vanduo AB, according to which sewage basins No. 7 and No. 8
are among the largest, both in terms of their total area and the area of their surfaces intended for road transport
(streets, driveways, parking lots). The amount of pollutants released through the outlets of these basins is one of the
highest, compared to other basins where treatment facilities have not yet been built. From an environmental point of
view, it is appropriate (necessary) to reduce pollution where it is generated the most. The preliminary value of the
project amounts to EUR 2 million, which would be financed free of charge by Grigeo Klaipėda AB.
ESRS: E2-6, SBM-3
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for the year ended 31 December 2023
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ESRS E3 Water and marine resources
Water is an essential resource in the paper industry and is used in almost all stages of paper production (both tissue
and paperboard). Similarly, the production process of hardboard is highly dependent on water supply. Despite the
need to use water in the paper industry, it is important to look for sustainable water use strategies and efficient
technologies to minimise the impact on the environment and water resources. The production process uses large
volumes of water and abstraction procedures are subject to Environmental Impact Assessment (EIA) screening
procedures, where necessary, to assess the potential impacts and risks.
Table of significant ESRS sub-topics
The impact, risk and opportunity assessment identified significant themes for the Group's companies and the
assessment of impact and financial materiality is presented in the table below. Water discharges into the oceans and
extraction and use of marine resources were not identified as material due to the non-existence of such activities in
the Group.
Subtopic
Impact materiality
Financial materiality
Water consumption
Significant
Critical
Water withdrawals
Minimum
Important
Water discharges
Significant
Critical
Production of tissue paper as well as containerboard and hardboard are highly dependent on water:
• Needed for pulping both waste paper and cellulose.
• Used for softening timber.
• Steam carries heat energy for production.
• Water embedded in final product holds fibre together.
We are looking for more efficient water management methods to reuse water and reduce the amount of water
withdrawn by our Group. We are also working to ensure responsible management of water as a key resource in the
supply chain. Surface water is used subject to additional treatment as required and used in technological processes.
Our aim to conserve water as much as possible and to reduce its use in our production processes is reflected in our
environmental policy. Processes related to water use and wastewater management are described in our operational
documents (such as the IPPC), subject to continuous monitoring and control, and reported to the responsible
authorities.
The Group's strategic objectives do not have a separate target for water consumption, water consumption reduction
is one of the elements of the wastewater reduction target.
In order to reduce water use, it is important to promote conscious consumption and sustainable habits at both personal
and business level. It is also necessary to invest in advanced technologies to improve water efficiency in industry,
agriculture and other sectors.
Currently, the Group's companies located in Grigiškės use surface water from the Grigiškės Pond for technological
processes. Next year, the current water intake from the Vokė dam is planned to be abandoned and a new intake from
the Neris River is planned. After the project is implemented, the water abstraction from the Grigiškės Pond will be
discontinued. The dismantling of this dam and the discontinuation of the abstraction will have a positive impact on the
natural environment of the Vokė River.
Water consumption
Compared to 2022, total water abstraction in 2023 decreased by 2%, with a total Group consumption of 1.7 million
cubic metres.
The Vokė River and the Curonian Lagoon are our main sources of water. Drinking water accounts for only up to 3%
of the Group's total water demand.
ESRS: E3-2, E3-3
55
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for the year ended 31 December 2023
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Group's water consumption (thousand m
3
):
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Water withdrawals
565
588
232
347
856
760
1 653
1 695
Water consumption
114
105
25
23
79
79
218
207
Water consumption in areas at water risk
-
-
-
-
-
-
-
-
Water stored and changes in storage
-
-
-
-
-
-
-
-
Water intensity, m
3
per million EUR net revenue
0.001
0.001
Meter data or other measurements are used to calculate water consumption data. Water is reused in the processes,
but this data is not currently registered.
Water discharge (in thousands of m
3
):
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Untreated effluent to Klaipėdos vanduo AB
treatment plant
-
-
-
-
767
672
767
672
Treated effluent to Vilniaus vandenys UAB
treatment plant
451
475
207
324
8
9
666
816
Total
451
475
207
324
775
681
1 433
1 488
Effluent, m
3
per ton of production
9.6
10.6
3.4
5.1
5.2
6.3
5.6
6.8
Water use balance
The surface water we use must be filtered and purified before the production cycle begins. In addition, treating the
water and discharging it to third-party treatment facilities is costly and strictly regulated. We are continuously improving
the recycled water cycle during production so that we can reuse water several times. The frequency of reuse varies
depending on product specifications.
ESRS: E3-4
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ESRS E4 Biodiversity and ecosystems
Biodiversity and ecosystems are important from a business perspective, not only as ecological assets, but also as key
factors influencing the long-term sustainability of a business. Businesses depend on global biodiversity and ecosystem
services. This includes both natural resources such as food, water and raw materials, as well as regulatory services
such as climate regulation and disease control. Investing in biodiversity conservation and ecosystem maintenance is
also crucial, as it can help companies to reduce the risks associated with natural losses. This includes commitments
not only to use natural resources equitably, but also to contribute to reducing emissions and addressing environmental
challenges. Corporate understanding and commitment to biodiversity conservation and ecosystem stability is
becoming an essential aspect of balancing economic activity with the protection of the natural environment.
Assessing impacts, risks and opportunities from a biodiversity and ecosystem perspective is an important step towards
the Group's sustainability and ownership of its activities. In this context, the assessment provides insights into the
potential threats and impacts that the Group may face as a result of biodiversity reduction or ecosystem loss, but the
relevance and usefulness of the assessment results are currently limited due to the lack of certain data, best practices
and market experience. Insufficient information makes it challenging to correctly identify and understand risks and
identify appropriate solutions. It has been identified that most of the impacts related to biodiversity and ecosystems
are concentrated in the value chain.
In our assessment of significant impacts, risks and opportunities, we have determined that the Group's sites do not
fall within the European Union's Natura 2000 network of special areas of conservation and no mitigation measures
are required. The sites are only adjacent to the Natura 2000 sites of the Neris River and the Curonian Lagoon. These
are areas of importance for habitat conservation, where habitats and fish species are protected.
This improvement in the assessment of impacts, risks and opportunities will be a step towards better management of
the Group in the future, in line with sustainability and environmental responsibility standards. This includes better data
collection, analysis and presentation to better identify the importance of biodiversity and ecosystem conservation,
risks and assess the impact of actions.
Table of significant ESRS sub-topics
In assessing impacts, risks and opportunities related to biodiversity and ecosystems, significant themes for Group
companies were identified and an assessment of impacts and financial materiality was carried out. The Group's
operations do not have significant impacts related to land degradation, desertification, soil sealing or threatened
species.
Sub-topic
Sub-sub-topics
Impact materiality
Financial materiality
Direct impact drivers of
biodiversity loss
Climate Change
Critical
Critical
Land-use change, fresh water-
use change and sea-use change
Significant
Minimum
Pollution
Critical
Critical
Biodiversity and ecosystem themes are closely linked and intertwined with other themes highlighted in this report,
such as climate change, pollution and the circular economy.
The Group has not carried out a systematic risk assessment of the resilience of its strategy and business model with
respect to biodiversity and ecosystems and has not currently developed a transformation plan. This is planned to be
done within the next three years.
The main significant impacts on biodiversity and ecosystems are concentrated in the value chain and not in the
Group's own operations. When selecting suppliers, we give preference to those whose operations meet the
requirements of quality, environmental and sustainable forestry standards. Most of the raw materials we purchase are
FSC
®
certified. This standard for responsible forest management requires forest managers to maintain the existence
of natural native species and genotypes and to prevent the loss of biodiversity, particularly in the management of
forest habitats.
In the future, it is planned to increase the focus on biodiversity and ecosystem themes in value chain analysis.
ESRS: SBM-3, IRO-1, E4-1
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ESRS E5 Circular economy
Circular economy is a commitment to sustainable development, reducing environmental impacts and making efficient
use of productive resources. The Group's activities are oriented towards the circular economy. We strive to use
resources as efficiently as possible and promote recycling processes by recycling collected waste paper and returning
it to the life cycle as a new product, thus reducing the negative impact. We also invest in energy efficiency solutions,
such as retrofitting and the use of energy-efficient technologies, to reduce carbon emissions and energy consumption.
We operate in accordance with an emissions or IPPC permit, through which we assess the risks and impacts of our
activities. The increasing focus on environmental issues and the circular economy allows us to assess and take
advantage of opportunities in the areas of recycling and renewable resources.
Table of significant ESRS sub-topics
In assessing the impacts, risks and opportunities related to the circular economy, significant themes have been
identified for the Group's companies and an assessment of the impact and financial materiality has been carried out.
All ESRS Circular Economy sub-topics have been identified as significant at Group level. The most significant themes
were identified as waste diversion reduction and waste collection/recycling, for which we set targets at Group level.
Subtopic
Impact materiality
Financial materiality
Resources inflows, including resource use
Important
Critical
Resource outflows related to products and services
Important
Critical
Waste
Important
Critical
Our activities follow the principles of the waste hierarchy (prevention – reuse – recycling – other recovery (e.g. energy
recovery) and disposal), with waste prevention or reduction taking priority, and waste disposal taking lowest priority.
At the Group level, waste disposal is identified as one of the most important topics and included as a strategic objective
to reduce waste that is diverted to disposal.
We also strive to find the best use for the waste we generate, not only in our own operations, but also by encouraging
others to sort and recycle waste properly. This allows us to increase the collection rate of waste paper. By collecting
more recovered paper, we can contribute to reducing the amount of virgin materials, thereby also contributing to
reducing biodiversity loss and increasing the circularity of material use. We have set ourselves the objective of
increasing the collection and sorting of waste paper in these respects.
Target
Unit of measurement
Base year
2021
Interim
result in
2023
Change
Target for
2026
1.
Effluent reduction
m
3
/ton of production
53.0
41.9
-20.9%
-9.0%
2.
Increasing waste-paper collection and sorting
In thousands of tons
53.0
75.2
+41.8%
+50.0%
We are investing in a centralised waste collection system for tissue paper production, with automatic collection and
compression of the resulting offcuts. This not only contributes to the circular economy, but also improves workplace
safety and saves space on the factory floor.
All recyclable paper/cardboard waste generated in our operations is recycled and used in the production of new
products. We reuse or return suitable packaging materials such as cardboard tubes, IBC containers, etc. to our
suppliers.
Raw materials
We work to ensure sustainable and responsible sourcing of raw materials and supplies. Almost all of the fibre (pulp,
wood) we produce and buy is FSC
®
(The Forest Stewardship Council) Chain of Custody certified. FSC
®
is an
independent international certification organisation that promotes environmentally sound, socially responsible and
economically viable forest management. We prefer the FSC® certification system and encourage all our suppliers to
seek this certification.
The recovered paper used in recycling processes is an important raw material for our Group as a whole, and this is
reflected in our strategic objectives. In total, the Group's waste paper collectors have increased the amount of collected
and sorted waste paper by 41% (from 60,000 tonnes in 2022 to 75,000 tonnes in 2023).
ESRS: IRO-1, MDR-A, E5-2, E5-3
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CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
Raw materials used (in thousands of tonnes):
Tissue paper
Hardboard
Containerboard
and packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Renewable materials
Raw materials
-
-
112
112
-
-
112
112
Process materials
57
54
-
-
136
120
193
174
Semi-manufactured goods or parts,
-
-
-
-
-
-
0
-
Packaging and packaging materials
10
9
2
2
3
3
14
14
Total renewable
67
63
113
114
138
123
319
300
Non-renewable materials
Raw materials
-
-
-
-
-
-
-
-
Process materials
-
-
-
-
-
-
-
-
Semi-manufactured goods or parts,
1
1
2
1
2
2
4
4
Packaging and packaging materials
1
1
-
-
-
-
1
1
Total non-renewable
2
2
2
1
2
1
5
5
Total materials used
69
65
115
115
140
125
324
305
% Of renewables
97%
97%
99%
99%
99%
99%
98%
98%
Data extracted from accounting documents.
On the Group level, only 1% of all raw materials used were non-renewable. All tissue paper and manufactured
corrugated paper boxes come in some plastic packaging. This packaging makes a large proportion of non-renewable
materials in our Group. We are cooperating closely with our packaging suppliers to reduce the total impact of non-
renewable packaging.
Both new and recovered fibre are necessary to sustain an efficient supply chain. After several lifecycles of reuse and
reprocessing, recovered fibre eventually begins to break down and is no longer suitable for use in paper and
paperboard production. Although this fibre can no longer be used in our products, it can be beneficially reused in
many other ways, such as for energy or as a fertilizer. The ability to use recovered fibre would cease to exist if
responsibly managed new fibres were not introduced to the fibre cycle. With high recovery rates and well-managed
forests to source from, fibre-based products are among the most sustainable products in the world.
Composition materials used on a Group level:
2023
2022
Waste paper
48%
43%
Wood
35%
37%
Cellulose
10%
10%
Renewable packaging
4%
4%
Other renewable materials
2%
5%
Non-renewable materials
1%
2%
Total
100%
100%
Products and materials
Our mission is to build a circular future. We participate in the circular economy model
not only as producers who create sustainable products, but also as collectors and
recyclers of secondary raw materials who bring valuable raw materials back into the
life cycle.
Recycled paper is produced in a circular way, by recycling waste (recovered paper)
to produce paper, which is the basis for cardboard packaging. The end product is
cardboard boxes, which are recycled and can return to the cycle as packaging.
Some of the recovered waste paper is also used to make hygiene paper. The Group
is also continuously looking for ways to contribute more actively to the circular
economy in its operations. One of the projects for 2023 is product substitution. The
new product is Blossom toilet paper, an innovative product that uses two different
paper bases (cellulose and recovered paper) in one 3-ply product. This change was
made to:
• use recycled materials as much as possible,
• to create a more environmentally friendly product, while maintaining the best
qualities of cellulose: whiteness, softness, strength.
Previously made entirely from cellulose, the change has resulted in 38% of the
product's raw material being recycled waste paper. This change will reduce the usage of virgin pulp by more than
1 000 tonnes per year.
ESRS: E5-4, E5-5
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Our hardboard is made from 99% renewable materials and offers high strength, maximum durability and great
versatility.
Our products meet the durability requirements set by the market, but specific durability indicators are not calculated
at Group level.
Waste
In 2023, we processed 324 thousand tonnes of materials, our activities generated 23 thousand tonnes of waste. Our
production process is unique in a way that most of the waste generated can be returned to the production cycle. In
2023, 60% of all waste was returned to production in the form of material.
Waste that cannot be avoided and cannot be used in our production processes is managed according to the principles
of the waste hierarchy, but waste destined for disposal is also unavoidable. The largest share of waste diverted to
disposal is waste from sorting waste paper from Grigeo Klaipėda AB (72% of the total waste diverted to disposal),
which arrives together with the waste paper received. The incineration of this waste generates energy. We see the
total amount of waste destined for disposal as one of our strategic challenges. Therefore, we aim to continuously
improve our waste paper handling facilities and the quality control processes for the raw materials collected. It is also
important for us to contribute to public education on waste sorting in order to improve the quality of paper waste
collected. The high quality of the raw materials ensures that what we collect for recycling can actually be recycled. In
this way, we waste fewer resources, reduce waste and pollution and contribute to the circular economy.
Sludge, an organic material, is naturally formed during wastewater treatment. Currently, all wastewater generated by
Grigeo Klaipėda AB is transferred to Klaipėdos vanduo AB for treatment in accordance with the contract. All the sludge
produced in the waste water treatment process is broken down, dried and transferred to the waste manager by
Klaipėdos vanduo AB. Sludge generated from factory wastewater is composted in a biodegradable waste composting
site in the Grigiškės production area. In 2023, 8.0 thousand tonnes of sewage sludge were generated (8.3 thousand
tonnes in 2022).
Waste generated (tonnes):
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Hazardous waste
-
-
-
-
-
-
-
-
Non-hazardous waste
1 885
1 801
8 362
9 170
13 492
12 327
23 739
23 299
Waste diverted to other operations (tonnes):
2023
2022
Waste recovery operation
Preparation for reuse
-
-
Recycling
4 965
4 347
Other recovery operations
9 946
9 636
Total recover
14 910
13 982
Waste treatment
Incineration
2 951
941
Landfill
5 878
8 375
Other disposal operations
-
-
Total treated
8 828
9 316
Non-recycled waste
37%
40%
Data from direct measurement, weighing of waste delivered (using GPAIS data)
The Group is looking at ways to reduce the amount of waste going to disposal, but there are still significant amounts
of waste going to disposal (incineration or landfill). One of the reasons for this is that not all the waste generated is
recycled in our market or in the surrounding regions, and the cost-effectiveness of transporting large quantities of
waste over long distances is being assessed.
It was possible to reduce the amount of waste directed to disposal per ton of production (from 50.8 kg/ton in 2022 to
41.9 kg/ton in 2023) thanks to Grigeo Klaipėda AB’s improved work of waste paper handling facilities and raw material
control processes. The more sustainable use of waste from the thermal processes of Grigeo Klaipėda AB – the ash
produced in the biofuel boiler – also had a significant impact. From November 2022 the ash is not sent to the landfill
but is composted by the waste manager and used to make another product (organic fertilizers and compost).
The reduction of waste going to landfill is planned to be obtained by investing in a wire cutting and extraction
mechanism for recycled paper bales (an investment of around EUR 0.5 million). This project is expected to divert 400
t of wire per year from disposal to recycling.
ESRS: E5-2, E5-3, E5-5
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7.8. Social profile
ESRS S1 Own workforce
Employees are a vital part of any organisation, as their contribution directly influences the efficiency and overall
success of the company. These people not only deliver the organisation's objectives but also contribute to its growth
and innovation. A successful company is only as successful as the commitment, talent and motivation of its workforce.
In addition to their specific roles, employees shape the company's culture and work environment. Their cooperation,
ability to overcome challenges and willingness to learn new things are essential for the success of the organisation.
For optimal performance and long-term success, it is important to emphasise employee well-being, promote their
professional development and create a supportive working environment. In order to ensure the well-being of
employees, the Group continuously monitors and assesses the impacts, risks and opportunities relating to employees.
An employee engagement survey is conducted each year to identify areas of strength or areas for improvement. The
Group also prioritises the health and safety of its employees in its operational activities and continuously assesses
the impacts and risks to prevent accidents.
Table of significant ESRS sub-topics
The assessment of impacts, risks and opportunities identified significant topics for the Group's companies and carried
out an impact and financial materiality assessment. Health and safety have been identified as the most critical sub-
topic for the Group's operations in the assessment of the sub-topics and sub-sub-topics of the own workforce. Training
and skills development, decent wages, privacy sub-topics are highlighted as very important for the Group.
Topic
Sub-topic
Impact materiality
Financial materiality
Working conditions
Adequate wages
Important
Critical
Freedom of association, the existence
of works councils and the information,
consultation and participation rights of
workers
Important
Informative
Collective bargaining, including rate of
workers covered by collective
agreements
Important
Informative
Work-life balance
Important
Informative
Health and safety
Critical
Critical
Equal treatment and
opportunities for all
Gender equality and equal pay for work
of equal value
Important
Informative
Training and skills development
Important
Significant
Measures against violence and
harassment in the workplace
Important
Informative
Diversity
Important
Informative
Other work-related rights
Privacy
Important
Important
The Group's commitment and targeted management of material topics is described in the Code of Conduct, the
Occupational Health and Safety, Equal Opportunities and the Prevention of Violence and Harassment policies.
Internal communication and training are in place to ensure that employees understand and adhere to the
organisation's objectives, values and policies, thereby contributing to the success of the organisation.
The Group's strategic targets include three social aspects related to its workforce. These reflect the identified
significant impact of the Group's activities on its employees. The objectives help to meet the expectations of
stakeholders (such as employees, the community or policy makers), mitigate risks, and increase the positive impact
on employees, which helps to ensure the Group's success.
ESRS: SBM-2, SBM-3, S1-5
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Target
Unit of measurement
Base year
2021
Interim
result in
2023
Change
Target for
2026
1.
Reduce the number of accidents at
work
TRI ratio (number of incidents among
employees per 1 million hours worked)
17.1
9.2
-7.9
8.0
2.
Employee turnover
The ratio of retired employees to the average
number of employees
30.8%
20.5%
-10.3pp
22.0%
3.
Employee retention rate
Employees with 1+ years’ service to total
employees
85.7%
91.2%
+5.5pp
91.0%
Employee characteristics
For the purposes of this report, the own workforce includes persons employed by, or in an employment relationship
with, the Group companies. The majority of employees of the Group companies are male (more than 70%). Our priority
is full-time employees with permanent contracts and long-term employees. We offer fixed-term contracts to students,
for whom we provide internships. We do not have any employees with non-guaranteed working hours.
Number of staff as at the end of the reporting period (see also Activity Overview 2.4 Employees):
Employees
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Under 30 years old
Women
5
4
2
3
11
13
18
20
Men
31
35
13
12
34
41
83
94
Other*
-
-
-
-
-
-
-
-
30-50 years old
Women
41
38
19
18
64
67
117
116
Men
123
117
53
54
227
219
390
371
Other*
-
-
-
-
-
-
-
-
Over 50 years old
Women
24
28
20
19
38
37
90
92
Men
57
58
30
31
68
71
157
138
Other*
-
-
-
-
-
-
-
-
Total
281
280
137
137
442
448
860
865
*Included in accordance with ESRS requirements
Gender distribution of employees at top management level (unit directors), in numbers and percentages:
Employees
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Women
2
1
-
-
2
1
4
2
Women %
22%
11%
0%
0%
15%
8%
15%
8%
Men
7
8
4
4
11
11
22
23
Men %
78%
89%
100%
100%
85%
92%
85%
92%
Total
9
9
4
4
13
12
26
25
The Group takes care of its employees and devotes particular attention and resources to reducing and maintaining
staff turnover, and improving these indicators is included in the Group's strategic objectives. The factors that have led
to the positive change in retention and turnover rates are complex. Competitive remuneration is one of the most
important factors in retaining existing staff and attracting new talent. The Group continuously monitors the labour
market situation, remuneration forecasts, takes into account the analytics of the available data and reviews the
remuneration system during the year. Other important factors include interesting and meaningful work, opportunities
for employees to develop their competences, involvement of employees in ongoing projects, implementation of
strategic objectives and recognition of employees for their achievements.
Employees turnover and retention rates:
Employees
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Women
20%
18%
13%
25%
18%
12%
18%
16%
Men
20%
22%
26%
33%
21%
26%
22%
26%
Total turnover*
20%
21%
22%
32%
20%
23%
21%
23%
Retention rate
92.2%
87.5%
88.3%
82.5%
89.9%
87.3%
91.2%
87.0%
*Calculated as the number of total employees leaving the company divided by the average annual number of employees in the current calendar
year
ETAS: S1-2, S1-6, S1-9, S1-15
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Work-life balance not only contributes to the well-being of the individual employee, but also has a positive impact on
the Group's overall performance and long-term success. The Group ensures that all employees have the right to take
leave for family reasons, the table below shows data on employees who are entitled to and have taken parental leave:
Employees
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Employees entitled to parental leave
Women
0
1
0
1
0
1
0
3
Men
1
12
1
4
10
15
12
31
Employees that took parental leave (of those entitled to do so), %
Women
0%
100%
0%
100%
0%
100%
0%
100%
Men
0%
17%
0%
25%
0%
7%
0%
13%
Employee engagement survey
Our long-term success is based on engaged and motivated people. As an employer, we strive to grow with our people.
Each year we conduct an employee engagement survey to determine the current level of engagement of our
employees, to assess how well our employees feel we are using employee engagement opportunities in the
organisation, to identify the strengths of our employees' experiences and to identify areas for improvement that are a
priority to maintain and strengthen employee engagement. Employee engagement is the responsibility of the HR
department.
Results of the annual survey:
Engaged
Satisfied
Not engaged
2023
2022
2023
2022
2023
2022
Tissue paper
60%
52%
90%
80%
2%
2%
Hardboard
51%
44%
69%
74%
5%
1%
Paper and packaging
65%
48%
87%
73%
2%
4%
Group
57%
49%
82%
76%
3%
3%
Average of external organisations
47%
46%
76%
76%
4%
4%
In 2023 the Group’s overall employee engagement rate is 57%, i.e., 10% higher in comparison with other
organizations, participating in this survey, as well as 8% higher in comparison to the Group’s rate for the year
2022. The results of engagement survey are presented and discussed with employees, which:
• Sets a direction of working conditions’ improvement.
• Helps prepare/develop training programs.
• Provides valuable insights on wage and benefit system modification.
• Gives us a better understanding on the competence of a manager.
We encourage and strive to create the conditions to our employees to express their observations, complaints, and
deal with any work-related issues as soon as they occur.
Improving the employee engagement
According to the results of the survey, the most positive employee experiences highlight the strengths of our
organisational culture. The survey also identified 3 priority areas for improvement, which are the focus of the Group
companies to increase employee engagement. The results of the survey show that both the most positive evaluations
and the results of areas for improvement have improved over the year. Group companies continue with a performance
improvement plan that helps both maintain and grow employee engagement.
Most positive evaluations and areas for improvement:
Positive
Negative
2023
2022
2023
2022
Most positive evaluations
My colleagues are always ready to help with work-related questions when needed
85%
78%
4%
6%
I believe that our organisation will be successful in the future
82%
84%
5%
3%
I have enough freedom to independently solve issues directly related to the performance of
my work.
75%
74%
8%
9%
The goals and tasks thar are set for me are realistic
75%
72%
6%
9%
A positive and friendly atmosphere prevails in my department
73%
74%
8%
8%
ESRS: S1-2, G1-1
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Positive
Negative
2023
2022
2023
2022
Areas for improvement
The organization has attractive professional growth opportunities for me
50%
44%
28%
30%
To achieve organizational goals, departments/groups cooperate effectively
47%
42%
24%
25%
My salary is fair compared to the salary received by specialists in a similar field in our country
45%
37%
31%
34%
Wages and benefits
A transparent and clear wage management system, approved in 2020, helps to retain and attract talents, promotes
productive and efficient work, and allows fair renumeration for work performed and results achieved.
The payment system is based on the following principles and foundations:
• gender equality and non-discrimination on other basis,
• transparency of the payment system within the Group,
• fair calculation and determination of payment,
• the determination of an appropriate level of payment for all employees of the Group,
• the encouragement of employees to develop and improve their skills,
• appropriate recognition of employee performance and additional monetary incentives and bonuses for
achieving targets.
In all our companies of the Group, positions are divided into three main groups: managers (2 levels), specialists (4
levels) and workers (3 levels). Additional monetary incentive systems are applied to all groups of positions or certain
individual positions.
We respect the right of workers to join, organise or not, including the right to form and join trade unions to defend their
interests. Workers have the right to bargain collectively freely. Workers shall not be discriminated against, intimidated
or harassed in the exercise of these rights.
The social dialogue between the employer and the employees of the Group companies is ensured together with the
existing trade unions and/or work councils. The relations of Grigeo AB and Grigeo Klaipėda AB with the employees
are defined by the provisions of the collective agreement. 50% of the Group's employees are covered by a collective
agreement. There are no collective agreements outside of Lithuania.
The basic wage is determined based on the category and level of position as well as objective criteria relating to
employee‘s education, experience, competencies, abilities in relation of responsibility degree, the nature and
complexity of work performed, and the results obtained, the market situation is also taken into account to ensure a
fair wage.
Average wage ratio between women and men*:
Employees
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Women/Men
19%
13%
35%
32%
11%
0%
19%
11%
* (Average hourly pay level of male employees – average gross hourly pay level of female employees) / Average gross hourly pay level of male
employees x 100
We take care of our employees, ensuring that they feel engaged, motivated and secure. We provide all the social
guarantees such as retirement benefits, parental leave, sickness, unemployment, accident and acquired disability
benefits, etc. We also give employees access to additional benefits. Employees of Group companies are covered by
accident insurance, accident benefits, critical illness benefits or supplementary health insurance. The list of fringe
benefits is regularly reviewed in line with employee needs. Employees are very appreciative of the fringe benefits and
actively take advantage of them.
Trainings
Operating in paper and wood industry means running powerful, complex, and often potentially hazardous equipment.
To reduce the likelihood of potential risks, the control and operation of the machines mentioned in the production
process descriptions can only be entrusted to highly skilled operators.
ESRS: S1-2, S1-4, S1-8, S1-10, S1-11, S1-16
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So that we remain capable to deliver production to our clients and to ensure our business is operational, we need a
robust array of skills, experience, and knowledge. Our employee training and education programme is designed to
maximise the potential of all employees and provide them with professional growth opportunities.
Considering a wide range of responsibilities and functions, we designed and keep on improving three different
frameworks for training and education:
• Training programmes for production workers.
• Professional growth programmes for specialists.
• Need-based professional improvement training for the management.
It is in our best interest to encourage employees to seek career development within our Group. Our dedicated training
coordinators oversee collecting emerging demand for training, both bottom up and top down. This process helps us
to ensure:
• The number of Qualified Employees required to deliver our products and services.
• Improvement of employees' qualification.
• Act along the company's values in daily activities.
• Fair remuneration for each employee, considering acquired qualifications.
Supervision & management of training programmes:
• Dedicated personnel consult the leadership and heads of departments to assess the demand and possibilities
for training.
• Training coordinators monitor the market for third-party trainings and provide suggestions to relevant
managers.
• Special attention is devoted to professional attestation subject to expiration and re-attestation.
• COVID-19 pandemic led us to consider personal wellbeing and emotional support seminars and trainings.
Formal training in numbers:
Average number of training hours per employee
Tissue paper
Hardboard
Containerboard
and packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
Women
13
27
32
43
18
31
19
32
Men
49
75
47
48
19
19
35
45
The change in the calculation methodology has led to a significant decrease in the average number of training hours
per staff member. In 2022, the number of training hours of staff who were trained internally and did not complete the
training was included, while in 2023 these figures were not included.
Dialogue and feedback
We understand the meaning of feedback as a very important and significant work for the manager, the employee, and
the company. The feedback is given to employees at all levels and is always based on gender equality and other non-
discrimination grounds at the Group companies. The feedback is provided in the form of performance discussion,
which aims to discuss employee performance, career perspectives and development expectations, strengthening
employee motivation to pursue new goals actively, thus contributing to the good performance of the Group.
The performance objectives of the Group companies are set for the year, usually during the strategic session of the
top management while using X matrix strategy development tool. Objectives are delegated in departments to
employees of all levels. Objectives are measured by setting KPIs (key performance indicators) and performance is
periodically reviewed. The periodicity of the discussion is determined by the nature of the objectives at different levels
of organisation, in the position groups: for managers, the performance is discussed during the annual performance
evaluation, for specialists – quarterly, for workers – daily and monthly during the meetings, while training and
instructing. The results of the performance evaluation and feedback interview are completed and confirmed in the
goal evaluation forms.
ESRS: S1-4, S1-13
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Occupational safety and health
General safety guidelines for every employee:
In 2016, our companies, with an exception of Mena PAK AT, implemented the OHSAS 18001:2007 Occupational
Health and Safety Management Standard (ISO 45001 from 2021). This standard helps ensure the Group's
occupational health and safety, reducing the likelihood of accidents at work and occupational morbidity. Group-wide
we strive to achieve a zero-accident workplace.
Key features of our occupational safety and health (hereafter – OSH) system:
• Compliance with legal requirements and the code of Business Ethics.
• Fostering high awareness and personal interest.
• Encouraging initiative to actively contribute.
• Providing workers with safe and healthy working conditions to prevent work-related injuries and illness.
• Identifying and eliminating hazards in a timely manner.
• Prioritising OSH standards in procurement processes and selecting suppliers.
• Constantly analysing, assessing, and implementing the needs of stakeholders; looking for ways to implement
their requirements more effectively.
• Strict control over any contractor operating within our facilities.
• OSH management applies to all employees and contractors, visitors, suppliers, interns.
• Constant training and timely certification of people in charge.
We continuously monitor and identify risk factors and hazards to ensure a safe and healthy working environment.
Hazard identification
Key risk factors
• In 2023, we operated without a single life-changing accident. No workers (both our
employees and those employed by our contractors) suffered a major injury.
• We are dedicated to maintaining a safe and reliable workplace for everybody performing
their duties within our Group.
• Occupational risk assessment is performed by an external company.
• The risk assessment of production processes performed internally involves OSH
specialists, production management, employees, and the quality department.
• Incident investigation – through a register of unsafe situations or in the event of a more
serious incident, a team is selected to investigate the incident.
• Constantly evaluating risk factors.
• Close cooperation with production workers daily.
• Rotating parts of equipment.
• Moving transport, loading
works.
• Night work.
• Work at height.
• Works in wells.
• Manual lifting of loads.
• Working with chemicals.
• Use of potentially dangerous
equipment (cranes, pressure
vessels, elevators).
Accident prevention
To avoid negative impacts and risks to our own workforce, continuous employee involvement is essential. All workers
must report potentially hazardous work situations. All identified situations are recorded and managed in a register of
unsafe work situations.
ESRS: S1-4, S1-14
Wear protective
clothing that has been
provided
Take your work
seriously, always be
sober
If you are involved in
an accident, report it
immediately
Discuss any concerns
you may have with
your seniors
If you have an illness or
condition, inform your
supervisor
Report any
hazards
Keep your work area
clean and tidy
Follow 6S standard
Insist on receiving
proper training
Follow all safety
procedures and
rules your employer
has in place
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• A mobile application is designed to log technical problems. Registered problems travel to the system, where
technical staff plans repairs or reacts quickly to the problem.
• In case an employee is not willing or able to use a mobile app, paper form might be used.
• Safety issues are addressed during daily shift meetings.
• All employees have access to OSH specialists.
• Nobody is allowed to solve technical problems independently.
• Employees are represented in occupational health and safety committee.
• Employees are involved evaluating risks and hazards.
• All personal and group protective gear is tested and approved by production workers.
• We promote employees’ responsibility, and it is always emphasised that, although the employer is responsible
for the safety and health of workers, all safety remains in the hands of the workers themselves.
OSH committees composed of employer and employee representatives have been set up in the companies
of the Group. Main responsibilities:
• Analysis and assessment of the state of safety and health of employees.
• Consideration of preventive measures to prevent accidents at work and occupational diseases.
• Analysis of safety training and instruction of employees in every company.
• Observation of the established procedure and the provision of employees with collective and personal
protective equipment and the supervision of these measures.
To follow up on the Group's social strategic target, data on accidents at work are collected and recorded, and progress
is monitored. The TRI indicator is used to monitor occupational accidents:
Tissue paper
Hardboard
Containerboard and
packaging
Group
2023
2022
2023
2022
2023
2022
2023
2022
High-consequence injuries
-
-
-
-
-
-
-
-
Minor injuries
4
5
4
6
6
6
14
17
Hours worked
507 191
505 663
241 441
251 457
775 520
730 124
1 524 152
1 487 244
TRI rate*
7.9
9.9
16.6
23.9
7.7
8.2
9.2
11.4
*Number of incidents among our own employees per 1 000 000 hours worked.
Number of working days lost due to injury, accident or illness: 437.
In 2023, the Group did not receive any complaints from employees regarding discriminatory behaviour at work. No
other major human rights incidents (such as forced labour, child labour, etc.) were identified.
ESRS: S1-4, S1-14, S1-17
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ESRS S3 Affected communities
The Group's corporate activities have many points of contact with local communities, which are one of our important
stakeholders. We want to be a valuable part of the community and we assess our impact, risks and opportunities
related to this. We strive to avoid and minimise our negative impacts.
The Group's impacts and opportunities relating to affected communities are described in our Code of Ethics and
Environmental Policy. The Group's businesses adhere to important internationally recognised instruments such as
the United Nations Guiding Principles on Business and Human Rights.
The Group respects and guarantees human rights and freedoms as defined in the Universal Declaration of Human
Rights of the General Assembly of the United Nations, the Convention for the Protection of Human Rights and
Fundamental Freedoms of the Council of Europe, the Conventions of the International Labour Organisation and other
international and national legislation.
Table of significant ESRS sub-topics
The assessment of the impacts, risks and opportunities related to the affected communities identified two significant
themes and carried out an impact and financial materiality assessment. Two sub-themes were identified: water and
sanitation and security-related impacts, which were assessed at the level of significant materiality.
Sub-topic
Sub-sub-topics
Impact materiality
Financial materiality
Communities’ economic, social
and cultural rights
Water and sanitation
Important
Important
Security-related impacts
Important
Important
The Group's companies do not have specific targets related to communities, but we work closely together and look
for opportunities to improve or eliminate the impacts on local communities related to our activities.
The Group respects the local environment in which it operates and seeks to maintain good relations with local
communities and engage with affected communities. Affected communities are involved in impact assessment
processes. Each time an EIA procedure is carried out, a consultation process is carried out, during which changes
and news are presented and interested parties are given the opportunity to make comments, observations and ask
questions. There is no specific function assigned to ensure the involvement of affected communities. This depends
on the project and the responsibilities assigned. The main affected communities are located in the areas close to the
production sites - Grigiškės and Klaipėda. The report did not assess the affected communities in the value chain.
Group companies have not received any reports of major human rights problems or incidents involving affected
communities.
Odour management
Located in the centre of Klaipėda city, we recycle paper waste. We find various microorganisms (molds, fungi,
bacteria) in paper raw material – waste paper, which can cause a strong odour under certain conditions. Based on
our research, the intensity of the odour is dependent on the quality of paper being recycled. Recycled paper is made
up of a larger amount of short fibres and is often tainted with chemicals, glues and other substances, which directly
increase water pollution. In addition, we use raw water from the Curonian Lagoon, which adds contamination to the
process and accelerates the reproduction of microbes.
Our actions:
• Improved working environment: the sewer at the factory cleaned, disinfected.
• Portable constant measurement station for ammonia and hydrogen sulphide emissions.
• Chemical dosing equipment and an online monitoring and management platform are installed. We monitor all
data in real time, online, so we can respond immediately to any incidents of increased pollution, thus
preventing more pollution from entering residential areas.
Compliance:
• In 2023 Grigeo Klaipėda AB received 3 requests from the National Public Health Center and the
Environmental Protection Department (EPD) regarding odours possibly related to the activities of Grigeo
Klaipėda AB.
• In 2023, inspections carried out by the EPD and other environmental authorities found ammonia emissions
above the permissible limit at one air pollution source. The infringement has been corrected and the conditions
of the IPPC permit have been revised.
ESRS: SBM-3, S3-1, S3-2, S3-4
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• According to Grigeo Klaipėda AB’s environmental protection monitoring program, emissions from stationary
sources of pollution and the concentration of hydrogen sulphide in the living environment did not exceed the
norms established in integrated pollution prevention and control requirements.
Further steps:
• Analysing potential solutions to collect and ozonate the air flow from the production premises ducts.
• Analysing potential solutions to install carbon filters at the production facilities, which will reduce emissions of
pollutants, including odours.
• We analyse the content of sulphates in the water of the Curonian Lagoon. This water is used in our production
cycle and bacteria decompose sulphates to hydrogen sulphide (H
2
S) under anaerobic conditions.
• Odour dispersion modelling is planned to assess the effectiveness of the measures to be implemented.
• We cooperate and consult with Lithuanian and foreign universities and experts on odour removal solutions.
The Group contributes to a positive impact on the communities by creating jobs and supporting communities. Not only
do we support local communities in Klaipėda and Grigiškės, but we also work with other organisations. The Group's
companies provide financial support for the implementation of environmental and social projects and initiatives of
various external organisations. Since the beginning of the war in Ukraine, the Group has been supporting Ukraine by
providing humanitarian and financial support to charities and aid organisations. In 2023, the implementation of the
support agreement between AB Grigeo Klaipėda and Klaipėda University continued in order to develop solutions to
reduce environmental pollution in the Klaipėda region (see more in the E2 Pollution section), and the Group also
cooperates with and supports the charitable foundation Mamų unija.
Group’s direct charity contributions to local communities:
2023
2022
City of Vilnius
159
47
City of Klaipėda
114
149
Donations to Ukraine
20
95
Total
278
291
ESRS: S3-4
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7.9. Governance profile
ESRS G1 Business conduct
Our values are based on the Group's long history and business experience. We create a motivating company culture,
which is why it is important to us how we behave and the principles on which we base our business. Our core values
inspire and engage our employees to achieve higher goals in their daily activities and efforts to build a successful
company. When we design and manufacture, we always think about our employees, customers, partners and
colleagues, what is important to them and how we can contribute to the well-being of the environment around them.
Our mission and values (section 1.3) are based on the company's long history and business experience. In 2023, we
held a Group Values Behaviours Workshop, attended by employees from all Group companies. During the workshop,
discussions took place in working groups on how we should behave in line with our values and which behaviours
reflect the Group's values. Following the workshop, the behaviours were presented to the Group's team of directors,
where they were reviewed and approved. The updated values behaviours were presented to all employees.
Table of significant ESRS sub-topics
The assessment of business ethics impacts, risks and opportunities has identified material topics for Group companies
and assessed impact and financial materiality. Animal welfare and political engagement were not identified as material
due to the absence of such activities.
Sub-topic
Sub-sub-topics
Impact materiality
Financial materiality
Corporate culture
Important
Informative
Protection of whistle-blowers
Important
Informative
Management of relationships
with suppliers including payment
practices
Important
Critical
Corruption and bribery
Prevention and detection
including training
Important
Important
Incidents
Important
Informative
Transparency, integrity and anti-corruption are core principles in business and society that form an integrated and
healthy organisational and social framework. The Group's activities are guided by these principles:
• Our relationships with employees, customers, partners and the state are based on integrity and transparency.
• We report transparently to our employees and encourage other market participants to do the same.
• Any payments or other expenses that are not recorded in the relevant documents are unacceptable.
• We strongly oppose all forms of corruption.
• In order to ensure transparency and objectivity in our dealings with suppliers and business partners, we do
not accept any commercial offers that raise suspicions about their legality.
• We openly state our requirements and evaluation criteria to potential partners and define the terms of
cooperation in our contracts.
• We comply with the law and pay the required taxes.
• The Group complies with the applicable tax laws and the principles of the tax legislation, and meets its tax
obligations in a timely and accurate manner.
• The Group has a low tolerance for tax risks in its risk assessment.
• The Group's processes are clearly regulated by approved clear and transparent procedures.
• The Group has an approved gift policy which prohibits the acceptance and giving of any type of gratuitous
items, services or other benefits of any value by employees of the Group in the course of their employment
functions. This policy is communicated to and adhered to by all employees.
Enforcement of the Code of Business Ethics and Communication of critical concerns
Ensuring the effectiveness of business ethics is an important organisational task that helps to ensure that high ethical
standards and values are upheld. The Group wants to ensure that ethical principles are adhered to, and encourages
employees, customers and partners to adhere to high ethical standards too.
• Employees can report infringements as well as post questions and complaints related to this Code of Business
Ethics or any other critical concerns to their direct supervisors, the Personnel Manager, the Head of the
Company.
• In order to comply with the requirements of Directive (EU) 2019/1937 of the European Parliament and of the
Council, the Group has adopted procedures for the reporting, investigation and confidentiality of breaches.
• In accordance with the requirements of Directive (EU) 2019/1937 applicable to the Group notifications about
a criminal act, administrative offense, violation of work duties, as well as gross violation of mandatory norms
ESRS: IRO-1, G1-1, G1-3, G1-4, S1-3, S3-3
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Grigeo AB, company code 110012450
CONSOLIDATED ANNUAL REPORT
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
of professional ethics or other violation of the law posing a threat to or violating the public interest in any of
the companies of the Group may be submitted using internal channel of providing information about violations
by e-mail pranesejuapsauga@grigeo.lt.
• If information is received about violations, complaints and other negative impacts in the governance,
environmental or social area, they are examined in accordance with the procedure established by the Group's
internal policies. To examine information, the head of particular company of the Group can appoint responsible
persons or form an ad hoc committee consisting of employees with competence and responsibilities in a
specific problematic situation.
• The management of each company of the Group is responsible for the implementation of the provisions of
the Code, for the censure and the prompt and honest correction of actions that are not in compliance with the
provisions of the Code.
• The Group supports employees who honestly adhere to the provisions of the Code and encourages others to
adhere to them.
• The internal whistleblowing channel is publicly available on the Group's website www.grigeo.lt. To ensure the
effectiveness of this channel, internal communication to staff is also carried out annually.Training is organised
as required.
The Group does not have a separate anti-corruption/bribery prevention and detection procedure and policy. It is
planned to develop one within the next two years.
There were no corruption and/or bribery irregularities detected during the reporting period.
Our procurement practices
The Group is committed to a responsible and sustainable purchasing policy to ensure effective supply chain
management and long-term relationships with suppliers. Our priority is to build long-term partnerships with trusted
suppliers based on integrity, transparency and mutual efficiency. The principles and guidelines for the Group's
procurement are described in the Procurement Policy:
• The Group undertakes to carry out procurement activities responsibly. Long-term, good business relations
and beneficial cooperation are the most important for the Group.
• All employees of the Group engaged in procurement activities must comply with the rules of the Group's Code
of Business Ethics. The Group's suppliers are also expected to comply with the Group's Code of Business
Ethics.
• All procurement activities must be conducted in such a way that the Group meets ethical, environmental and
social sustainability requirements in all parts of the supply chain.
• The Group communicates with suppliers in such a way that it is considered as honest, professional and
working by the highest standards of business ethics and procurement.
• To maintain constant competitive ability and lower risk, whenever possible the Group avoids purchases from
the single supplier and assesses all risks associated with the purchase.
• In 2023, the Group developed and approved a Supplier Code of Conduct describing the environmental and
social requirements and obligations of suppliers.
ESRS: S1-3, S3-3, G1-1, G1-2, G1-4
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
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Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
STATEMENTS OF FINANCIAL POSITION

|  | Group |  |  | Company
| Notes | At 31 | At 31 | At 31 | At 31
|  | December | December | December | December
|  | 2023 | 2022 | 2023 | 2022
ASSETS |  |  |  |  |
Non-current assets |  |  |  |  |
Property, plant and equipment | 5 | 68,596 | 71,194 | 25,891 | 27,015
Right-of-use assets | 6 | 4,315 | 4,277 | 1,585 | 1,295
Intangible assets | 7 | 4,271 | 3,764 | 705 | 380
Investment property | 8 | 4,621 | 4,410 | 4,638 | 4,431
Investments in subsidiaries | 1 | - | - | 23,617 | 23,126
Other amounts receivable | 10 | - | 3 | - | -
Total non-current assets |  | 81,803 | 83,648 | 56,436 | 56,247
Current assets |  |  |  |  |
Inventories | 9 | 14,410 | 19,963 | 6,122 | 9,985
Trade and other amounts receivable | 10 | 21,019 | 23,904 | 13,255 | 15,609
Prepaid income tax |  | - | 97 | - | -
Other current assets |  | 507 | 348 | 235 | 169
Other financial assets at amortised cost | 11 | 20,192 | - | 20,192 | -
Cash and cash equivalents | 12 | 18,952 | 14,840 | 15,669 | 7,544
Total current assets |  | 75,080 | 59,152 | 55,473 | 33,307
TOTAL ASSETS |  | 156,883 | 142,800 | 111,909 | 89,554

(Cont'd on the next page)
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Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
STATEMENTS OF FINANCIAL POSITION (CONTINUED)

|  |  | Group |  | Company
| Notes | At 31 | At 31 | At 31 | At 31
|  | December | December | December | December
|  | 2023 | 2022 | 2023 | 2022
EQUITY AND LIABILITIES |  |  |  |  |
Equity |  |  |  |  |
Authorised share capital | 13 | 38,106 | 38,106 | 38,106 | 38,106
Share premium | 13 | 1,119 | 1,119 | 1,119 | 1,119
Legal reserve | 13 | 2,886 | 2,066 | 2,886 | 2,066
Reserve for granting own shares | 13 | 500 | 500 | 500 | 500
Foreign currency translation reserve | 13 | (2,821) | (2,697) | - | -
Retained earnings | 13 | 76,184 | 58,066 | 42,752 | 24,582
Equity attributable to shareholders of the Company |  | 115,974 | 97,160 | 85,363 | 66,373
Non-controlling interest |  | 615 | 693 | - | -
Total equity |  | 116,589 | 97,853 | 85,363 | 66,373
Liabilities |  |  |  |  |
Non-current liabilities |  |  |  |  |
Borrowings | 14 | 2,497 | 4,644 | 796 | 1,868
Lease liabilities | 15 | 3,663 | 3,477 | 1,294 | 1,017
Grants | 16 | 1,293 | 783 | 1,199 | 678
Deferred income tax liability | 26 | 1,652 | 903 | 612 | 442
Long-term employee benefits | 17 | 296 | 248 | 112 | 103
Other amounts payable |  | 280 | 281 | - | -
Total non-current liabilities |  | 9,681 | 10,336 | 4,013 | 4,108
Current liabilities |  |  |  |  |
Borrowings | 14 | 2,147 | 2,363 | 1,072 | 989
Lease liabilities | 15 | 559 | 408 | 340 | 331
Income tax payable |  | 3,057 | - | 3,106 | 204
Trade and other amounts payable | 18 | 24,850 | 31,840 | 18,015 | 17,549
Total current liabilities |  | 30,613 | 34,611 | 22,533 | 19,073
Total liabilities |  | 40,294 | 44,947 | 26,546 | 23,181
TOTAL EQUITY AND LIABILITIES |  | 156,883 | 142,800 | 111,909 | 89,554

The accompanying notes are an integral part of these financial statements.
The financial statements were prepared by the management on 28 March 2024 and signed with a qualified
electronic signature on its behalf by:
Tomas Jozonis
Chief Executive Officer
Martynas Nenėnas
Finance Director
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Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
STATEMENTS OF COMPREHENSIVE INCOME

| Notes | Group |  | Company |
|  | 2023 | 2022 | 2023 | 2022
Revenue | 19 | 195,352 | 203,209 | 101,728 | 90,457
Cost of sales | 20 | (143,715) | (172,364) | (70,668) | (79,594)
Gross profit |  | 51,637 | 30,845 | 31,060 | 10,863
Selling and distribution expenses | 21 | (15,254) | (14,846) | (6,226) | (5,497)
Administrative expenses | 22 | (11,620) | (9,379) | (4,824) | (3,813)
Other income | 23 | 755 | 636 | 5,146 | 11,949
Other gains/(losses) – net | 24 | 3,893 | 4,860 | 3,208 | 3,819
Operating profit |  | 29,411 | 12,116 | 28,364 | 17,321
Finance income | 25 | 686 | 22 | 524 | 3
Finance costs | 25 | (460) | (459) | (161) | (165)
Finance income/(costs) – net |  | 226 | (437) | 363 | (162)
Profit before income tax |  | 29,637 | 11,679 | 28,727 | 17,159
Income tax | 26 | (4,316) | (1,058) | (3,373) | (770)
PROFIT FOR THE PERIOD |  | 25,321 | 10,621 | 25,354 | 16,389
Profit for the period attributable to: |  |  |  |  |
Shareholders of the Company |  | 25,306 | 10,525 | 25,354 | 16,389
Non-controlling interest |  | 15 | 96 | - | -
Other comprehensive income/(expenses) |  |  |  |  |
Items that will not be reclassified |  | - | - | - | -
subsequently to profit or loss |  |  |  |  |
Items that may be reclassified subsequently |  |  |  |  |
to profit or loss |  |  |  |  |
Exchange differences on translation of foreign |  | (124) | (536) | - | -
operations |  |  |  |  |
Cash flow hedges – effective portion of changes |  | - | - | - | -
in fair value |  |  |  |  |
Total items that may be reclassified |  | (124) | (536) | - | -
subsequently to profit or loss |  |  |  |  |
Other comprehensive income/(expenses) for the period |  | (124) | (536) | - | -
Total comprehensive income for the period |  | 25,197 | 10,085 | 25,354 | 16,389
Total comprehensive income for the period |  |  |  |  |
attributable to: |  |  |  |  |
Shareholders of the Company |  | 25,182 | 9,989 | 25,354 | 16,389
Non-controlling interest |  | 15 | 96 | - | -
Basic earnings per share (EUR) | 27 | 0.193 | 0.080 | 0.193 | 0.125
Diluted earnings per share (EUR) | 27 | 0.190 | 0.079 | 0.191 | 0.123

The accompanying notes are an integral part of these financial statements.
Tomas Jozonis
Chief Executive Officer
Martynas Nenėnas
Finance Director
75
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Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
STATEMENTS OF CHANGES IN EQUITY

|  |  |  |  | Equity attributable to owners of the Company |  |  |  |  | Non- |
Group |  |  |  |  | Reserve for |  | Foreign currency |  |  | controlling | Total equity
| Authorised | Share | Legal reserve | Hedging | granting |  | translation | Retained | Total | interest |
| share capital | premium |  | reserve | shares |  | reserve | earnings |  |  |
At 1 January 2022 | 38,106 | 1,119 | 1,905 |  | - | - | (2,161) | 54,607 | 93,576 | 713 | 94,289
Profit for the period | - | - | - |  | - | - | - | 10,525 | 10,525 | 96 | 10,621
Other comprehensive income/(expenses) | - | - | - |  | - | - | (536) | - | (536) | - | (536)
Total comprehensive income/(expenses) | - | - | - |  | - | - | (536) | 10,525 | 9,989 | 96 | 10,085
Reserve for granting own shares | - | - | - |  | - | 500 | - | (500) | - | - | -
Increase in legal reserve | - | - | 161 |  | - | - | - | (161) | - | - | -
Allocated dividends | - | - | - |  | - | - | - | (6,570) | (6,570) | (116) | (6,686)
Share-based remuneration | - | - | - |  | - | - | - | 165 | 165 | - | 165
Transactions with the Company’s shareholders | - | - | 161 |  | - | 500 | - | (7,066) | (6,405) | (116) | (6,521)
At 31 December 2022 | 38,106 | 1,119 | 2,066 |  | - | 500 | (2,697) | 58,066 | 97,160 | 693 | 97,853
At 1 January 2023 | 38,106 | 1,119 | 2,066 |  | - | 500 | (2,697) | 58,066 | 97,160 | 693 | 97,853
Profit for the period | - | - | - |  | - | - | - | 25,306 | 25,306 | 15 | 25,321
Other comprehensive income/(expenses) | - | - | - |  | - | - | (124) | - | (124) | - | (124)
Total comprehensive income/(expenses) | - | - | - |  | - | - | (124) | 25,306 | 25,182 | 15 | 25,197
Increase in legal reserve | - | - | 820 |  | - | - | - | (820) | - | - | -
Allocated dividends | - | - | - |  | - | - | - | (6,570) | (6,570) | (93) | (6,663)
Share-based remuneration | - | - | - |  | - | - | - | 202 | 202 | - | 202
Transactions with the Company’s shareholders | - | - | 820 |  | - | - | - | (7,188) | (6,368) | (93) | (6,461)
At 31 December 2023 | 38,106 | 1,119 | 2,886 |  | - | 500 | (2,821) | 76,184 | 115,974 | 615 | 116,589

76
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
Company
Authorised
share capital
Share premium
Legal reserve
Reserve for
granting
shares
Hedging
reserve
Retained
earnings
Total equity
At 1 January 2022
38,106
1,119
1,905
-
-
15,259
56,389
Profit for the period
-
-
-
-
-
16,389
16,389
Total comprehensive income
-
-
-
-
-
16,389
16,389
Allocated dividends
-
-
-
-
-
(6,570)
(6,570)
Increase in legal reserve
-
-
161
-
-
(161)
-
Reserve for granting own shares
-
-
-
500
-
(500)
-
Share-based remuneration
-
-
-
-
-
165
165
Transactions with the Company’s
shareholders
-
-
161
500
-
(7,066)
(6,405)
At 31 December 2022
38,106
1,119
2,066
500
-
24,582
66,373
At 1 January 2023
38,106
1,119
2,066
500
-
24,582
66,373
Profit for the period
-
-
-
-
-
25,354
25,354
Total comprehensive income
-
-
-
-
-
25,354
25,354
Allocated dividends
-
-
-
-
-
(6,570)
(6,570)
Increase in legal reserve
-
-
820
-
-
(820)
-
Share-based remuneration
-
-
-
-
-
206
206
Transactions with the Company’s
shareholders
-
-
820
-
-
(7,184)
(6,364)
At 31 December 2023
38,106
1,119
2,886
500
-
42,752
85,363
The accompanying notes are an integral part of these financial statements.
Tomas Jozonis
Chief Executive Officer
Martynas Nenėnas
Finance Director
77
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, LT-27101, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
STATEMENTS OF CASH FLOWS

| Notes | Group |  | Company |
Cash flows from operating activities |  | 2023 | 2022 | 2023 | 2022
Profit before income tax |  | 29,637 | 11,679 | 28,727 | 17,159
Adjustments for non-cash items: |  |  |  |  |
Depreciation and amortisation |  | 9,515 | 9,241 | 4,032 | 4,114
Dividends received |  | - | - | (4,385) | (11,300)
Interest expenses on borrowings and lease | 25 | 420 | 244 | 137 | 111
Interest income | 25 | (668) | (15) | (522) | (3)
Other finance (income)/costs – net | 25 | 22 | 208 | 22 | 54
Gain on disposal of non-current assets |  | (56) | (124) | (95) | (171)
Share-based remuneration |  | 202 | 90 | 111 | 90
Changes in working capital |  | 39,072 | 21,323 | 28,028 | 10,054
(Increase)/decrease in inventories |  | 5,694 | (5,543) | 3,863 | (5,197)
(Increase)/decrease in trade and other amounts receivable |  | 3,639 | (1,905) | 3,022 | (3,890)
(Increase)/decrease in other current assets |  | (158) | (93) | (65) | (44)
Increase/(decrease) in trade and other amounts payable |  | (7,171) | 744 | 333 | 3,310
|  | 2,004 | (6,797) | 7,153 | (5,821)
Interest paid |  | (427) | (221) | (143) | (101)
Income tax paid |  | (488) | (296) | (206) | -
Net cash inflow from operating activities |  | 40,161 | 14,009 | 34,832 | 4,132
Cash flows from investing activities |  |  |  |  |
Acquisition of property, plant and equipment and intangible assets | 5 / 7 | (6,962) | (8,762) | (3,021) | (2,046)
Acquisition of investment property | 8 | (443) | (275) | (443) | (274)
Disposal of property, plant and equipment |  | 482 | 232 | 357 | 183
(Increase)/decrease in investments in subsidiaries | 1 | - | - | (397) | -
Loans granted to subsidiaries |  | - | - | - | (1,200)
Interest received |  | 489 | 14 | 358 | -
Payments for financial assets at amortised cost | 11 | (20,050) | - | (20,050) | -
Dividends received | 23 | - | - | 4,385 | 11,300
Net cash inflow/(outflow) from investing activities |  | (26,484) | (8,791) | (18,811) | 7,963
Cash flows from financing activities |  |  |  |  |
Dividends paid |  | (6,620) | (6,436) | (6,566) | (6,345)
Repayments of borrowings |  | (2,363) | (2,197) | (989) | (1,298)
Proceeds from borrowings |  | - | 6,246 | - | 2,600
Lease payments |  | (582) | (434) | (341) | (326)
Net cash (outflow) from financing activities |  | (9,565) | (2,821) | (7,896) | (5,369)
Net increase/(decrease) in cash flows |  | 4,112 | 2,397 | 8,125 | 6,726
Cash and cash equivalents at the beginning of the period |  | 14,840 | 12,443 | 7,544 | 818
Cash and cash equivalents at the end of the period |  | 18,952 | 14,840 | 15,669 | 7,544

The accompanying notes are an integral part of these financial statements.
Tomas Jozonis
Chief Executive Officer
Martynas Nenėnas
Finance Director
NOTES TO THE FINANCIAL STATEMENTS
79
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
1. General information
Grigeo AB (hereinafter the “Company”) is a public limited liability company registered in the Republic of Lithuania on
23 May 1991. The Company is engaged in the production of toilet paper, paper towels and paper napkins. The paper
mill in Grigiškės was established in 1923.
The address of the Company’s registered office is as follows: Vilniaus g. 10, Grigiškės, Vilniaus sav., Lithuania.
The Company’s shares are listed on the Baltic Main List of Nasdaq AB Vilnius Stock Exchange (ISIN code of shares
is LT0000102030). The trading code of shares on Nasdaq AB Vilnius stock exchange is GRG1L.
As at 31 December 2023 and 2022, the Company’s authorised share capital was divided into 131,400,000 ordinary
registered shares with a nominal value of EUR 0.29 each. All shares were fully paid.
Three major shareholders as at 31 December 2023 and 2022 are listed below:

|  | At 31 December 2023 |  |  | At 31 December 2022 |
| Number of | % |  | Number of | % |
| shares |  |  | shares |  |
Ginvildos Investicija UAB | 61,838,179 |  | 47.06 | 60,809,151 |  | 46.28
Mišeikienė Irena Ona | 17,578,342 |  | 13.38 | 17,578,342 |  | 13.38
Norimantas Stankevičius | 5,869,756 |  | 4.47 | 5,869,756 |  | 4.47
TOTAL | 85,286,277 |  | 64.91 | 84,257,249 |  | 64.12

As at 31 December 2023, the number of the Group’s employees was 860 (31 December 2022: 865). As at 31
December 2023, the number of the Company’s employees was 281 (31 December 2022: 280).
The shareholders of the Company have a statutory right to approve these financial statements or not to approve them
and to require preparation of a new set of the financial statements.
Structure of the Group
As at 31 December 2023 and 2022, the Grigeo group consisted of Grigeo AB and the following subsidiaries
(hereinafter the “Group”):

| At 31 December 2023 At 31 December 2022 |  |  |  |  |  |
| Ownership |  | Amount | Ownership | Amount |  |
| interest |  | (cost) of | interest | (cost) of | Address | Principal activities
| held by |  |  |  | investment held by the investment | Date of acquisition (establishment)
| the Group |  |  | Group |  |  |
| Subsidiaries directly controlled by the Company: |  |  |  |  |  |
Grigeo Baltwood | Vilniaus g. 10, Grigiškės, | 100% | 2,555 | 100% | 2,555 |  | Manufacturing of wood hardboards.
UAB | Vilniaus sav., Lithuania |  |  |  |  |  | 10 April 2003
Grigeo Recycling | Vilniaus g. 10, Grigiškės, |  |  |  |  |  | Collection of secondary raw materials and
UAB | Vilniaus sav., Lithuania | 100% | 1,066 | 100% | 1,066 |  | preparation for recycling.
|  |  |  |  |  |  | 16 July 2010
|  |  |  |  |  |  | Building and development of real estate.
Naujieji Verkiai | Popieriaus g. 15, Vilnius, | 100% | - | 100% | - |  | The company was dormant in 2023 and
UAB |  |  |  |  |  | Lithuania | 2022.
|  |  |  |  |  |  | 6 April 2004
Grigeo Investicijų | Vilniaus g. 10, Grigiškės, |  |  |  |  |  | Investment activities and management of
Valdymas UAB | Vilniaus sav., Lithuania | 100% | 19,427 | 100% | 19,427 |  | companies.
|  |  |  |  |  |  | 10 July 2009
|  |  |  |  |  |  | Investment activities and management of
Grigeo Hygiene | Vilniaus g. 10, Grigiškės, | 100% | 200 | 100% | 3 |  | companies.
UAB | Vilniaus sav., Lithuania |  |  |  |  |  | (former Grigiškių Energija UAB)
|  |  |  |  |  |  | 7 October 2011
Grigeo Tissue | Vilniaus g. 10, Grigiškės, | 100% | 200 | - | - |  | Manufacturing of tissue paper.
UAB | Vilniaus sav., Lithuania |  |  |  |  |  | 1 December 2023
|  |  |  |  | Share options granted to employees of subsidiaries (Note 13) |
Share options |  |  | 169 |  | 75 |  |
Total |  |  | 23,616 |  |  |  |

23,126
80
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
1. General information (continued)

| At 31 December 2023 |  | At 31 December 2022 |  |
| Ownership | Amount | Ownership | Amount |
| interest |  | interest |  | Principal activities
| (cost) of | (cost) of | Address
| held by |  | held by | the Group investment the Group investment | Date of acquisition (establishment)
|  |  | Subsidiaries indirectly controlled by the Company: |
Grigeo Klaipėda |  |  |  | Nemuno g. 2, Klaipėda, | Manufacturing of cardboard and cardboard
| 97.68% | - | 97.68% | - | paper honeycomb.
AB* |  |  |  |  | Lithuania
|  |  |  |  | 1 March 2010
Grigeo Packaging |  |  |  | Vilniaus g. 10, Grigiškės, | Manufacturing of corrugated cardboard and
| 100% | - | 100% | - | packaging.
UAB* |  |  |  | Vilniaus sav., Lithuania | 10 April 2009
|  |  |  | Koševovo g. 6, Černigovo Manufacturing of corrugated cardboard and
Меna Pak AT** | 100% | - | 100% | - | packaging.
|  |  |  | raj., Mena, Ukraine | 1 March 2010
Grigeo Recycling |  |  |  |  | Collection of secondary raw materials and
SIA*** | 100% | - | 100% | - Ēdoles iela 5, Riga, Latvia | preparation for recycling.
|  |  |  |  | 16 June 2016

*Controlled by Grigeo Investicijų Valdymas UAB; **Controlled by Grigeo Klaipėda AB; ***Controlled by Grigeo
Recycling UAB.
The non-controlling interest consists of 2.32% of shares of Grigeo Klaipėda AB, which are not owned by the
Company’s shareholders.
There were no significant changes in 2023 and 2022.
Climate change-related matters
The management of the Group recognises the importance of analysis in disclosing climate-related risks and their
significance to the financial statements. In 2021, the management of the Group decided to start with a qualitative
analysis to help explore a possible range of effects of climate change. In 2023, the Group continued its analysis and
used the reporting principles of the Climate-Related Financial Disclosure Working Group (TCFD) to analyse the
potential impacts of climate change.
Based on the Group management’s analysis, the direct risk of climate change in the Group's operations is insignificant,
but the indirect risk related to the transition to more environmentally friendly technological solutions in the long term
may affect the Group's financial performance due to additional investments for the acquisition of new equipment or
upgrade of existing one.
During the transition period, the management will additionally assess the projected cash flows due to the amount and
timing of potential investments, as well as assess the risks of impairment of existing non-current assets and review
the useful lives of renewed or newly acquired assets.
For the current and previous reporting years, such potential risks and their impact on the significant accounting
estimates and assumptions used in the preparation of the financial statements were assessed as not significant. The
qualitative analysis is continued by including the climate change risk assessment in the periodic review and updates
of the assumptions used by management.
81
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information
The principal accounting policies applied in the preparation of these financial statements are set out below. These
principles were applied consistently for the reported periods unless stated otherwise (adoption of new and/or amended
standards).
2.1 Basis of preparation
The financial statements of the Group and the Company have been prepared in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union (EU) effective at 31 December 2023. All
references to IFRS used below are references to IFRS approved by the EU.
These financial statements of the Group and the Company have been prepared on a historical cost basis, except of
financial instruments used for hedging that are accounted for at fair value.
These financial statements of the Group and the Company for the year ended 31 December 2023 have been prepared
under the assumption that the Group and the Company will continue as a going concern.
All amounts in these financial statements of the Group and the Company are presented in the euros. Amounts are
rounded to the nearest thousand (EUR thousands), unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires the management to make judgements,
assumptions and estimates that are related to the application of the Group’s and the Company’s accounting policies.
Estimates and judgements are based on the management’s experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
2.2 Amendments to standards and their interpretations
Adoption of new and/or amended IFRS and interpretations of the International Financial Reporting Interpretations
Committee (IFRIC).
a) The following IFRSs, amendments thereto were adopted by the Company for the first time in the financial
year ended 31 December 2023:
Disclosure of Accounting policies – Amendments to IAS 1 and IFRS Practice Statement 2.
IAS 1 was amended to require companies to disclose their material accounting policy information rather than their
significant accounting policies. The amendment provided the definition of material accounting policy information. The
amendment also clarified that accounting policy information is expected to be material if, without it, the users of the
financial statements would be unable to understand other material information in the financial statements. Further,
the amendment to IAS 1 clarified that immaterial accounting policy information need not be disclosed. To support this
amendment, IFRS Practice Statement 2, ‘Making Materiality Judgements’ was also amended to provide guidance on
how to apply the concept of materiality to accounting policy disclosures.
Based on the Company’s estimate, these amendments had no material impact on the Company’s financial
statements.
Definition of Accounting Estimates – Amendments to IAS 8.
The amendment to IAS 8 clarified how companies should distinguish changes in accounting policies from changes in
accounting estimates.
Based on the Company’s estimate, these amendments had no material impact on the Company’s financial
statements.
Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12.
The amendments to IAS 12 specify how to account for deferred tax on transactions such as leases and
decommissioning obligations. In specified circumstances, entities are exempt from recognising deferred tax when
they recognise assets or liabilities for the first time.
Based on the Company’s estimate, these amendments had no material impact on the Company’s financial
statements.
b) Standards, interpretations and amendments thereto that are not yet effective and have not been early
adopted by the Company
- Lease Liability in a Sale and Leaseback – Amendments to IFRS 16.
-Classification of liabilities as current or non-current – Amendments to IAS 1.
Based on the Company’s estimate, these amendments will have no material impact on the Company’s financial
statements.
82
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
c) Standards, interpretations and amendments that have not been adopted by the European Union and that
have not been early adopted by the Group and the Company:
- Statement of Cash Flows – Amendments to IAS 7;
- Financial Instruments: Disclosures: Supplier Finance Arrangements – Amendments to IAS 7;
- Lack of Exchangeability – Amendments to IAS 21;
- Regulatory Deferral Accounts – Amendments to IFRS 14;
- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS
10 and IAS 28.
The Company is currently assessing the impact of these amendments on the Company’s financial statements.
There are no other new standards, amendments to the existing standards or interpretations that are not yet effective
and that could have a material impact on the Company.
2.3 Principles of consolidation
The Group’s consolidated financial statements include Grigeo AB and its subsidiaries.
Subsidiaries
Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is
exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The control of an entity is normally evidenced when the Company owns more than
50% of the shares granting voting rights. Subsidiaries are consolidated from the date on which effective control is
transferred to the Company or the Group, and they are no longer consolidated from the date on which control is
transferred out of the Group.
Inter-company transactions
The financial statements of the subsidiaries are prepared for the same reporting year using consistent accounting
policies. All inter-company transactions, balances and unrealised gains or losses and dividends on transactions
between the Group companies are fully eliminated.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if that results in a
deficit balance of the non-controlling interest. A change in the ownership interest of a subsidiary that does not result
in a loss of control is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
- Derecognises the assets (including goodwill) and liabilities of the subsidiary;
- Derecognises the carrying amount of any non-controlling interest;
- Derecognises the cumulative foreign exchange differences, recorded in equity;
- Recognises the consideration received at fair value;
- Recognises any investment retained at fair value;
- Recognises any surplus or deficit in the statement of comprehensive income;
- Reclassifies the parent’s share of components previously recognised in other comprehensive income to the
statement of comprehensive income or retained earnings, as appropriate.
Business combinations and accounting for goodwill
Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at the acquisition-date fair value and the
amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the
non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable
net assets. Acquisition costs incurred are expensed and included in administrative expenses.
If the business combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date in the statement of comprehensive
income. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability,
will be recognised in accordance with IFRS 9 either in profit or loss or as a change to other comprehensive income.
83
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted
for within equity.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed.
If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised
in the statement of comprehensive income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposes of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquired entity are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based
on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
Split of companies
When a company is split by way of a spin-off or split-off, its assets and liabilities are transferred to newly established
or other operating companies, and a decrease in assets, liabilities and equity is registered in the accounting of the
split company.
The difference in value of assets and liabilities of the spin-off or split-off companies provided in the conditions of the
split determines the equity amount of the newly established or operating companies, and in their accounting equity is
registered in the account of the authorised share capital and other equity accounts as at the date of reception and
transfer according to the conditions of the split. If the conditions of the split do not provide in which equity accounts
the difference in value of assets and liabilities should be registered, it is registered in the account of the formed share
capital and share premium or the account of retained earnings (loss).
2.4 Presentation currency
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (the “functional currency”). All amounts in the financial
statements are presented in the euros, which is the Group’s and the Company’s functional and presentation currency.
The functional currency of the Company and its subsidiaries operating in Lithuania is the euro. The functional
currencies of foreign subsidiaries are the respective currencies of the foreign countries in which their registered offices
are based. The amounts in the financial statements of these subsidiaries are presented in their functional currencies.
Assets and liabilities of the foreign subsidiaries are translated into euros at the reporting date using the exchange rate
prevailing at the date of the statement of financial position, whereas the statements of comprehensive income of the
foreign subsidiaries are translated using the weighted average exchange rate for the year. Exchange differences
arising on translation are recognised in other comprehensive income.
On disposal of a foreign subsidiary, the result of foreign currency translation accumulated in other comprehensive
income is reclassified to the statement of comprehensive income.
Transactions and balances
Foreign currency transactions are initially measured using the functional currency at the date of the transaction.
Monetary assets and liabilities denominated in foreign currency are translated into the functional currency at the date
of the statement of financial position using the exchange rate prevailing at the date of the statement of financial
position. All non-monetary items that are measured at amortised cost are translated using the exchange rates at the
date of the transactions.
2.5 Investments in subsidiaries (the Company)
Investments in subsidiaries in the Company’s separate financial statements are carried at cost, less impairment.
2.6 Discontinued operations
A discontinued operation is a component of the Group’s or the Company’s business, the operations and cash flows
of which can be clearly distinguished from the rest of the Group and the Company and which:
- represents a separate major line of business or geographical area of operation;
84
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
- is part of a single co-ordinated plan to dispose of a separate major line of business or major geographical area
of operations; or
- is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to
be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is
re-presented as if the operation had been discontinued from the start of the comparative year.
2.7 Intangible assets (other than goodwill)
Intangible assets acquired separately are stated initially at cost. The cost of intangible assets acquired in a business
combination is its fair value at acquisition date. Intangible assets are recognised when it is probable that economic
benefits will flow to the enterprise in relation to these assets in the future and the value of these assets can be
measured reliably.
The useful lives of intangible assets are assessed to be either finite or indefinite.
After initial recognition, intangible assets with finite lives are carried at cost, less accumulated amortization and
accumulated impairment losses, if any. Intangible assets are amortised using the straight-line method over the
estimated useful lives:

Licences, patents, etc. | 3–8 years
Software | 3–8 years
Other intangible assets | 3–10 years

Intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be
impaired.
The useful lives, residual values and amortisation method are reviewed annually to ensure that they are consistent
with the expected pattern of economic benefits from intangible assets other than goodwill.
The Group and the Company do not have any intangible assets (excluding goodwill) with indefinite useful life.
Accounting principles for goodwill are presented in section 2.3.
The Group and the Company have no capitalised internally created intangible assets.
2.8 Property, plant, and equipment
Property, plant and equipment is stated at cost (or deemed cost – see below) less accumulated depreciation and
impairment losses.
Before 31 December 2010, buildings were accounted for as follows:
- The Company’s buildings, acquired before 1 January 1996, were stated at the indexed value less indexed
accumulated depreciation and estimated impairment losses.
- The Company’s buildings, acquired after 1 January 1996, were stated at acquisition cost less accumulated
depreciation and estimated impairment losses.
On 31 December 2010, according to the exception available under IFRS 1, a part of the buildings acquired before
1 January 1996 were measured at fair value which was determined at that date by the independent property valuers,
and these values were used as deemed cost from that date.
After 31 December 2010, property, plant and equipment is stated at cost less accumulated depreciation and
impairment losses.
The initial value of property, plant and equipment comprises the acquisition cost including not refundable acquisition
taxes and all directly attributable costs associated with the preparation for use or transportation to the place of use of
assets concerned. Repair and maintenance costs incurred after property, plant and equipment has been made
available for intended use are normally charged to the statement of comprehensive income in the period when such
costs are incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives:

Buildings and structures of reinforced concrete | 40-80 years
Lightweight buildings and structures | 8-25 years
Machinery and equipment | 5–33 years
Motor vehicles | 4–7 years
Other fixtures and equipment | 3–13 years

85
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
The useful lives, residual values and the depreciation method are reviewed annually to ensure that they are consistent
with the expected pattern of economic benefits from property, plant and equipment. In the reporting and previous
financial years, the useful live of the items of property, plant and equipment was reviewed and adjusted accordingly.
Property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in
the year in which the asset is derecognised.
Construction in progress is stated at cost which comprises the value of building, constructions and facilities and other
directly attributable costs. Construction in progress is not depreciated until the completion of construction and until
the assets are ready for use.
2.9 Investment property
Investment property, including part of buildings and structures, is held for earning rentals and/or for capital
appreciation rather than for use in the production, provision of services, or for administration purposes or sale.
Investment property is stated at historical cost less accumulated depreciation and impairment losses, if any.
Depreciation is calculated on a straight-line basis over the following estimated useful lives: buildings – 62-91 years,
structures (infrastructure objects) – 9-12 years.
Transfers to and from investment property are made only when there is an evidence of change in an asset’s use.
When the asset is transferred from investment property to owner-occupied property, plant and equipment, the cost of
that asset is deemed to be the carrying amount of investment property at the date of transfer. If property, plant and
equipment are transferred to investment property, the Company and the Group account for such assets in accordance
with the accounting principles applicable to property, plant and equipment until the date of transfer. The deemed cost
of the transferred investment property is considered to be the carrying amount of that asset at the date of transfer.
2.10 Impairment of non-financial assets
Non-financial assets, except for goodwill, inventories and deferred income tax, are assessed for impairment when
events or circumstances indicate that the value of assets may not be recoverable. If such circumstances exist, the
asset’s recoverable amount is estimated. Where the carrying amount of an asset exceeds its recoverable amount,
impairment loss is accounted for in the statement of comprehensive income. A reversal of an impairment loss
recognised in prior periods is recorded when there is an indication that the impairment loss recognised for the asset
no longer exists or has materially decreased. Reversal is accounted for in the statement of comprehensive income
under the same item as impairment loss. Impairment of goodwill is recorded in the statement of comprehensive
income.
The recoverable amount of other assets is the higher of an asset’s or cash-generating unit’s (CGU) fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and impairment is recognised for a
part of its value in excess of the recoverable amount.
2.11 Emission allowances
Based on Directive 2003/87/EC of the European Union, the greenhouse gas emissions trading (EU ETS) scheme was
developed which came into force on 1 January 2005. The first operating phase of this system covered the period of 3
years which started in 2005 and ended in 2007; the second phase covered the period of 5 years which started in 2008
and ended in 2012, thus coinciding with the period detailed in the Kyoto Agreement. The third phase covered the
period of 8 years which started in 2013 and ended in 2020. The fourth phase started on 1 January 2021 and it will
end in 2030. The system works on the ‘cap and trade’ principle. The governments of the EU Member States are
required to set caps for each emission unit in the scheme and for the period of implementation.
This cap is established in the National Allocation Plan (NAP), which is issued by the relevant authority in each Member
State. The NAP determines the amount of yearly emissions (measured in tonnes of carbon dioxide equivalent) for
each emission unit and for each operating phase and allocates allowances on an annual basis.
A Member State has an obligation to allocate emission allowances by 28 February of each year in accordance with
the NAP (a part of emission allowances is set aside for new units).
A Member State is to assure that an operator of each emission unit submits data on actual amount of gas emitted to
the environment by the unit during the current calendar year not later than by 30 April of the next year.
86
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
The Group and the Company apply the net liability approach in accounting for the emission allowances received.
Under this method emission allowances are recorded at a nominal (nil) value. When actual emissions exceed
allocated emission allowances, the obligation of purchasing additional allowances is recognised as a provision
measured at the market value of the allowances as at the reporting date. The Group and the Company assess the
shortage of emission allowances by comparing the annual quantity of emission allowances obtained with the actual
annual emissions.
Disposals of emission allowances are recorded at the fair value of the disposal transaction. Any differences between
the actual selling price and the carrying amount of emission allowances obtained are recognised as profit or loss,
irrespective of whether such transaction results in the actual or possible shortage of emission allowances. Income
from emission allowances is presented in the statement of cash flows as cash flows from operating activities. If the
disposal of emission allowances results in an actual shortage of emission allowances, an additional provision is
recognised in the statement of financial position.
2.12 Borrowing costs
Borrowing costs comprise interest and other expenses (currency exchange differences) that the Company and the
Group incur when borrowing funds. Borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as expenses
as incurred.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale.
Capitalisation of borrowing costs is ceased when substantially all the activities necessary to prepare the qualifying
asset for its intended use or sale are complete.
2.13 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Recognition and initial measurement
The Group and the Company recognise a financial asset or a financial liability in their statement of financial position
when, and only when, the entity becomes a party to the contractual provisions of the instrument. Financial instruments
are initially recognised at fair value which is equal to the fair value of consideration paid plus transaction costs for all
financial assets not carried at fair value in the statement of comprehensive income.
Classification and subsequent measurement
The Group and the Company classify financial assets into the following categories:
- measured at amortised cost;
- measured at fair value through other comprehensive income;
- measured at fair value through profit or loss;
- hedging financial instruments.
The Group and the Company classify financial assets into the appropriate category depending on the business model
for managing financial assets and on the characteristics of contractual cash flows for a respective financial asset.
The Group and the Company classify trade receivables, loans granted, other accounts receivable of financial assets
and cash and cash equivalents as assets measured at amortised cost.
At the initial recognition the Group and the Company attribute equity instruments, i.e. shares of other entities, to
financial instruments measured at fair value through other comprehensive income.
The Group and the Company attribute financial derivatives not used for hedge accounting and hedging instruments
measured in accordance with the hedge accounting principles to assets measured at fair value in the statement of
comprehensive income.
The Group and the Company classify financial liabilities into the following categories:
- measured at amortised cost;
- measured at fair value through profit or loss;
- hedging financial instruments.
87
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
The Group and the Company attribute trade liabilities, other accounts payable and borrowings to financial liabilities
measured at amortised cost.
Liabilities of derivative financial instruments not designated for hedge accounting are measured by the Group and the
Company at fair value in the statement of comprehensive income.
Measurement of financial assets at amortised cost
The Group and the Company apply the effective interest rate method to measure financial assets at amortised cost.
After initial recognition trade receivables are measured at amortised cost using the effective interest rate method,
including impairment losses, while trade receivables with maturities less than 12 months from the date of recognition
(i.e., not containing a financing element) and not classified as factoring, are not discounted and are measured at a
nominal value.
The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial
liability and of allocating the interest income or interest expenses over the relevant period. The effective interest rate
exactly discounts future cash payments over the expected life of the financial liability, or (where appropriate) a shorter
period.
Measurement of financial assets at fair value through other comprehensive income
Gains and losses on a financial asset constituting an equity instrument classified as at fair value through other
comprehensive income are recognised in other comprehensive income, except for income from received dividends.
Other financial assets measured at amortised cost
Other financial assets measured at amortised cost comprise a deposit over a 3-month period or a deposit of less
than 3 months, but the money is otherwise restricted. In 2023, I Company had deposits for a period longer than 3
months
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value
of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. Any
ineffective portion of changes in the fair value of the derivative is recognised immediately in the statement of
comprehensive income.
The amount accumulated in equity is retained in other comprehensive income and reclassified to profit or loss in the
same period or periods during which the hedged forecast cash flows affect profit or loss or the hedged item affects
profit or loss.
If the forecast transaction is no longer expected to occur, the hedge no longer meets the criteria for the hedge
accounting, the hedging instrument expires or is sold, terminated or exercised, or the designation is revoked, then
hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the
amount accumulated in equity is reclassified to profit or loss.
Derecognition of a financial instrument in the statement of financial position
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is
derecognised when:
- the rights to receive cash flows from the asset have expired;
- the Group/Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay
them in full without material delay to a third party under a “pass through” arrangement; or
- the Group/Company has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
Where the Group/Company has transferred its rights to receive cash flows from the asset and has neither transferred
nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is
recognised to the extent of the Group’s/Company’s continuing involvement in the asset. Continuing involvement that
takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of
the asset and the maximum amount of consideration that the Group/Company could be required to repay.
A financial liability is derecognised when the obligation under the liability is settled, cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised
in the statement of comprehensive income.
88
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis, or realise the asset and settle the liability simultaneously.
Impairment of financial assets
IFRS 9 contains a new model for calculation of impairment of financial assets measured at amortised cost or at fair
value through other comprehensive income (except for investments in equity instruments and contract assets). The
impairment model is based on calculated expected losses.
In determining impairment losses, the Group and the Company apply the following models:
- general model (basic);
- simplified model.
The Group and the Company apply the general model for financial assets measured at amortised cost, except for
trade receivables and assets measured at fair value through other comprehensive income.
By applying the general model, the Group and the Company monitor changes in the level of credit risk associated
with a respective financial asset and classify financial assets to one of three stages for determining impairment losses
based on changes in the credit risk level after the initial recognition of the instrument.
Depending on the categorisation to individual stages, impairment is measured at an amount equal to a 12-month
period (stage 1) or the lifetime of the instrument (stage 2 and stage 3).
On each end day of the reporting period, the Group and the Company analyse indications, based on which financial
assets are categorised to individual stages for measuring impairment losses. Indications may include changes in the
debtor’s creditworthiness, serious financial problems of the debtor, significant adverse changes in the debtor’s
economic, legal or market environment.
For the purpose of estimating expected credit losses, the Group and the Company apply default probability levels
implicit in market quotes of credit derivatives, for entities with a granted credit rating and from a respective sector.
The Group and the Company include forward looking information in the parameters of the expected credit loss
estimation model by calculating the probability of insolvency parameters based on current market quotes.
The simplified model is applied by the Group and the Company for trade receivables.
By applying the simplified model, the Group and the Company do not monitor changes in the credit risk level during
the lifetime of the instrument and estimate expected credit losses for the period until the end of the use of the
instrument.
For the purpose of estimating expected credit losses, the Group and the Company use the provision matrix calculated
referring to historical levels of repayment and recovery of amounts receivable from clients.
The Group and the Company include information about the future periods in the parameters used in the expected loss
estimation model by adjusting the key insolvency probability parameters.
For the purpose of calculating expected credit losses, the Group and the Company determine default probability
parameters for liabilities of accounts receivable that are calculated based on historical analysis of the number of
unpaid invoices, and default probability parameters that are calculated based on historical analysis of the value of
unpaid invoices.
Expected credit losses are calculated when the amount receivable is recognised in the statement of financial position
and is updated on each subsequent end day of the reporting period depending on the number of overdue days of the
amount receivable.
Impairment losses (reversal of impairment losses) on financial instruments
Impairment losses (reversal of impairment losses) on financial instruments include, in particular, losses (reversal of
losses) due to impairment of trade receivables and losses (reversal of losses) due to impairment of loans granted.
2.14 Inventories
Inventories are recognised at the lower of cost or net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the costs of completion, marketing and distribution. The cost of
inventories is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress
includes the applicable allocation of fixed and variable overhead costs (cost of raw materials, electricity, heat (steam)
energy production, depreciation, salaries and other costs) based on a normal operating capacity.
89
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
2.15 Leases – where the Group is a lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. The contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of
time, the Group follows IFRS 16 Leases.
At the commencement or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of its relative stand‑alone price.
The lease contract, when the right to control the use of an identified asset for a period of time is acquired in exchange
for consideration, is recognised by the lessee as right-of-use assets and is measured at a discounted cost at the
commencement date.
The Group and the Company recognise right-of-use assets and lease liabilities at the lease inception date, i.e. the
date when the Group or the Company can start to use the leased assets. The right‑of‑use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee
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, less any lease incentives received.
The right-of-use asset is subsequently measured at cost, less accumulated depreciation and impairment losses, and
adjusted for any remeasurement of the lease liability. The right‑of‑use asset is depreciated using the straight‑line
method from the commencement date until the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the right‑of‑use asset reflects that the Group
will exercise a purchase option. In that case the right‑of‑use asset will be depreciated over the useful life of the
underlying asset, which is determined on the same basis as those of property, plant and equipment. In addition, the
right‑of‑use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, using the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate. In 2023 (as well as in 2022), the Group applied a discount rate of 4.0% to land and buildings
(new leases for buildings – 6.0%) used under the lease rights and the discount rate of 4.0% was applied to machinery
and equipment. The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of a lease liability include:
- fixed payments, including in‑substance fixed payments;
- variable lease payments that depend on an index or rate initially measured using an index or a rate as at the
commencement date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in
an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for
early termination of a lease unless the Group is reasonably certain not to terminate early.
Lease liabilities are subsequently measured at amortised cost using the effective interest rate method. The lease term
is a non-cancellable term; the periods covered by an option to extend or terminate the lease (if any) are included in
the lease term only if it is reasonably certain that the lease will be extended or terminated.
The lease liability is subsequently increased by the amount of interest on the lease liability and reduced by the amount
of lease payments made. It is remeasured when there is a change in future lease payments arising from a change in
an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual
value guarantee (there were no guaranteed residual values as at 31 December 2023 and 31 December 2022), if the
Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a
revised in‑substance fixed lease payment (no extension options under the lease contracts were accounted for as at
31 December 2023 and 31 December 2022 due to uncertainty). When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right‑of‑use asset, or is recorded in the statement of
comprehensive income if the carrying amount of the right‑of‑use asset has been reduced to zero.
90
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
The cost of right-of-use assets comprises: the amount of the initial measurement of the lease liability; additional lease
payments or concessions made before the commencement date of the contract; direct contract costs; additional costs
associated with the asset’s preparation for use. As at 31 December 2023 and 31 December 2022, the Group did not
recognise any lease incentives, initial direct expenses, renewal expenses or other expenses in respect of the leased
assets.
The depreciation period of right-of-use assets is normally the shorter of the useful life of the assets or the lease term.
Depreciation is calculated using the straight-line method. As at 31 December 2023 and 31 December 2022, the
straight-line method was applied to the Company’s leased right-of-use assets.
Interest expenses of lease liabilities and depreciation of right-of-use assets are accounted for separately in the
statement of comprehensive income. Right-of-use assets and lease liabilities are disclosed separately in the statement
of financial position.
Payments related to short-term lease of equipment and lease of all low-value assets are recognised as expenses in
the statement of comprehensive income using the straight-line method.
2.16 Leases – where the Group is a lessor
Classification
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the
risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease;
if not, i.e., the lessor retains substantially all risks and rewards, then it is an operating lease. As part of this assessment,
the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
Initial recognition
The underlying assets leased under the operating lease contracts are accounted for in the lessor’s balance sheet.
Subleases
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately.
A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental to right-of-use
assets; otherwise it is classified as an operating lease. The Group’s subleases are classified as an operating lease. It
assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease,
not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the
exemption described above, then it classifies the sub-lease as an operating lease. The Group and the Company had
no sublease contracts in 2023 and 2022.
Accounting for non-lease components
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease component on the basis of their relative stand-alone prices. If an arrangement contains
lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract and to
account for a non-lease component.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The
Group further regularly reviews estimated unguaranteed residual values used in calculating the net investment in the
lease.
Rental income
The Group recognises lease payments received under the operating leases as income on a straight-line basis over
the lease term when it is earned as part of ‘other income’. All contracts for the lease of real estate contain a fixed,
periodic lease payment.
2.17 Long-term employee benefits
Each employee of retirement age who terminates his/her employment with the Group or the Company upon retirement
is entitled to receive a one-off payment equal to 2 monthly salaries as stipulated in the Lithuanian Labour Code.
The past service costs are recognised as an expense in the statement of comprehensive income immediately after
the assessment of such liability. Gain or loss resulting from changes in employee benefits (decrease or increase) is
recognised immediately in the statement of comprehensive income.
91
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
Employee benefit obligation is calculated with reference to actuarial valuations using the projected unit credit
method. Liability is recognised in the statement of financial position and it reflects the present value of these benefits
at the date of the preparation of the statement of financial position.
The present value of employee benefit obligation is determined by discounting the estimated future cash flows using
the interest rates set for government bonds denominated in the same currency as the benefits and with a maturity
similar to the expected timing of benefits settlement. Actuarial gains and losses are recognised in other comprehensive
income
2.18 Rules on granting of shares
By the decision of 29 April 2022 of the Ordinary General Meeting of Shareholders of Grigeo AB, the rules on granting
of shares of Grigeo AB were approved. The rules establish the conditions and the procedure for the granting of shares
for no consideration to employees of the Company and its subsidiaries.
According to the list approved by the Board, the option recipients are granted the right to use the possibility to acquire
the Company’s shares for no consideration. Share options only vest if the employee fulfils the condition of working at
the Group for the period of three years and a respective company of the Group generates profit and the employee
achieves the targets set according to a variable remuneration system. If the recipient does not fulfil at least one
condition established by the Option Agreement, the option does not vest, and the employee does not have the right
to exercise that option.
The rights granted to the option recipient employed at the Company to acquire shares are forfeit, if the bankruptcy
proceedings are initiated against the Company or a decision on its liquidation is adopted, or the option recipient ceases
to be employed by the Company, unless the option recipient and the Company agree otherwise.
These share-based payments to employees are made only in equity securities (shares). No amounts of social security
contributions or income tax are payable by the Company on the exercise of the option (or at any other time before the
exercise date) and accrued in liabilities. The option recipient is responsible for all fees relating to the fulfilment of the
conditions stipulated in the Option Agreement.
Shares are granted by issuing a new share issue through the increase of the authorised share capital of the Company.
For this purpose, the reserve for the granting of shares has already been formed at the Company. Each option
transaction will be implemented by converting it to the agreed number of ordinary shares of the Company.
Option expenses incurred under the share option programme are reported in the Company’s statement of
comprehensive income and are offset against the equity line item in the balance sheet, referring to the number of
days between the vest date of the option and the exercise date of the option. Each year the Company reviews the
valid agreements on vested options in order to reflect, as far as possible, the most accurate number of equity
instruments expected to be transferred to employees. All expenses related to share options are calculated on the
basis of the share price at the grant date, the number of shares, the period until the exercise date of the option, the
turnover of respective job positions and the probability that the option recipient will fulfil the option conditions.
2.19 Financial guarantees contracts
Financial guarantees provided for the liabilities of the Group companies (i.e., companies controlled by the same
parent) during the initial recognition are accounted for at fair value as equity contribution and as financial liability in
the balance sheet.
Subsequent to initial recognition this financial liability is amortised and recognised as income depending on the related
amortisation/settlement of the Group company’s financial liability to the bank. If there is a possibility that the Group
company may fail to fulfil its obligations to the bank, a financial liability of the Group company is accounted for at the
higher of the amortised value and the value estimated according to IAS 9 Financial instruments.
2.20 Grants and subsidies
Grants and subsidies (hereinafter “grants”) allocated for the purchase, construction or any other acquisition of non-
current assets are defined as grants related to assets. Grants related to assets are recognised in the statement of
comprehensive income in the proportions in which depreciation expense on those assets is recognised, and a relevant
line item of expenses is reduced in the statement of comprehensive income.
Grants received as a compensation for expenses or unearned income of the current or previous reporting period,
also, all the grants, which are not grants related to assets, are defined as grants related to income. Grants related to
income are recognised as used in parts to the extent of expenses incurred during the reporting period or unearned
income to be compensated by that grant.
92
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
2.21 Income tax and deferred income tax
The Group companies are taxed individually, irrespective of the overall results of the Group. Income tax charge is
based on profit for the year and considers deferred taxation. Corporate income tax is included in these financial
statements based on the management’s calculations prepared in accordance with the respective tax legislation
applied in the Republic of Lithuania and Ukraine.
In 2023 and 2022, a 15% income tax rate was established and applied to the Group companies operating in the
Republic of Lithuania. A standard income tax rate applied to the Ukrainian companies for the year 2023 was 18%
(2022: 18%).
Tax losses can be carried forward for an indefinite period, except for losses incurred as a result of disposal of securities
and/or derivative financial instruments and for the losses accumulated in the Ukrainian company (losses can be
carried forward for 4 years according to the Ukrainian regulatory legislation). Such carrying forward is disrupted if the
Company changes its activities due to which these losses were incurred except when the Company does not continue
its activities due to reasons which do not depend on the Company itself. The losses from disposal of securities and/or
derivative financial instruments can be carried forward for 5 consecutive years and can only be used to reduce the
taxable income earned from the transactions of the same nature.
With effect from 2014, according to the Lithuanian regulatory legislation deductible tax losses available for carry
forward can be used to reduce taxable income of the current tax year by maximum 70%.
Deferred taxes are calculated using the balance sheet liability method. Deferred tax represents a net tax effect of
temporary differences arising between the tax bases of assets and liabilities and their carrying amounts reported in
the financial statements. Deferred tax assets and liabilities are measured using a tax rate that is expected to be
used when deferred tax assets are utilised or deferred tax liability is settled taking account of tax rates adopted or
actually effective at the date of the statement of financial position.
Deferred tax assets are recognised in the statement of financial position to the extent that the management expects
to utilise such assets in the near future taking into consideration forecasts of taxable profit. When it is probable that a
portion of deferred tax will not be utilised, this portion of deferred tax is not recognised in the financial statements.
2.22 Revenue recognition
The Group’s and the Company’s revenue is recognised in accordance with the provisions of IFRS 15, i.e. the Group
and the Company recognise revenue at the time and to such an extent so that the transfer of goods or services to
customers would show the amount which reflects to the consideration that the Company expects to receive in
exchange for the goods or services. When applying this standard, the Company takes into consideration the terms of
the contract and all significant facts and circumstances. Revenue is recognised in the Company using the five-step
model.
Identification requirements for contracts with customers
A contract with a costumer meets the definition if all of the following criteria are met: the contract has been approved
by the parties to the contract and they committed to perform their obligations; the Group and the Company can identify
each party’s rights in relation to the goods and services to be transferred; the Group and the Company can identify
the payment terms for the goods and services to be transferred; the contract has commercial substance and it is
probable that the Group and the Company will collect the consideration to which they will be entitled to in exchange
for the goods or services that will be transferred to the costumer. Contracts with customers can be combined or
separated into several contracts by maintaining the criteria of the previous contracts. Such combination or separation
is treated as a contract modification.
Identification of performance obligations
At the inception of the contract, the Group and the Company assess the goods and services promised in the contract
with the client and identify as an obligation to perform any promise to transfer to the client: a good or service (or bundle
of goods or services)
that is distinct or a series of distinct goods or services that are substantially the same and that have the same pattern
of transfer to the customer.
Determination of the transaction price
In order to determine the transaction price, the Group and the Company take into account the terms of the contract
and the customary business practices. The transaction price is the amount of consideration to which the Group and
the Company expect to be entitled in exchange for the transfer of promised goods and services to the customer,
except for the amounts collected on behalf of third parties. The consideration specified in the contract with the
customer may include fixed amounts, variable amounts or both.
93
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
When calculating variable amounts, the Group and the Company decided to apply the most probable value method
for contracts with one threshold or the expected value method for contracts with more value thresholds from which
the customer receives a discount.
Allocation of the transaction price for each performance obligation
The Group and the Company allocate the transaction price to each performance obligation at an amount that reflects
the amount of consideration to which the Group and the Company expect to be entitled in exchange for the transfer
of the promised goods or services to the customer.
Revenue recognition when performance obligations are satisfied
The Group and the Company recognise revenue when the Group and the Company satisfy a performance obligation
by transferring to the customer a promised good or service (i.e., the customer obtains control of the asset). Revenue
is recognised as amounts equal to the transaction price that was allocated to a given performance obligation.
The Group and the Company transfer the right to control goods or services over time and thus satisfy the performance
obligation and recognise revenue over time, if one of the following criteria is met:
− the customer simultaneously receives and consumes the benefits provided by the Group and the Company as
they perform;
− the Group’s and the Company’s performance creates or enhances an asset that the customer controls as the asset
is created or enhanced; or
the Group’s and the Company’s performance does not create an asset with an alternative use to the Group and the
Company and the Group and the Company have an enforceable right to payment for performance completed to
date.

Type of goods sold and | Nature and timing of the fulfilment of | Revenue recognition
services rendered | performance obligations and payment terms | under IFRS 15
|  | Revenue is recognised when goods are delivered
Paper and paper |  | to the customer or when goods are removed from
products | The customer takes over the control of | the warehouse.
| goods when goods are delivered. Invoices |
Wood hardboards | for goods are issued at the time when goods | Related expenses are recognised in the statement
| are delivered to the customer or when goods | of comprehensive income when incurred.
Raw materials for | are removed from the warehouse. Invoices |
corrugated cardboard | are usually paid within 30-45 calendar days. | Marketing expenses that are directly related to
(test liner and fluting), |  | earning of revenue are accounted for in the
corrugated cardboard | Turnover discounts are applied to goods sold | statement of comprehensive income as a
and its products | which are calculated the end of each month, | reduction of revenue.
Other goods | quarter and year for the previous period. | Possible loss for the contract is recognised
|  | immediately in the statement of comprehensive
Sales of heat energy | Invoices for the serviced rendered during the | income.
and other utility | month are issued on the last day of the | Revenue is recognised over a period of time when
| month. A standard established payment term | the services are rendered.
services | is 10-30 calendar days. |

2.23 Recognition of expenses
Expenses are recognised on an accrual basis and following the matching principle during the reporting period in which
revenue associated with such expenses is earned, regardless of the timing of the cash payments. Expenses incurred
during the reporting period, which cannot be attributed directly to specific revenue earned and will not generate any
revenue in subsequent reporting periods, are recognised as expenses in the period in which they were incurred.
Expenses are usually measured at the amount paid or payable, net of VAT. When a long term of settlement is
established and no interest is charged, expenses are determined by discounting the amount of settlement at the
market interest rate.
2.24 Fair value measurement
Certain accounting policies and disclosures of the Group and the Company require the fair value measurement for
financial and non-financial assets and liabilities.
94
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
2. Summary of material accounting policy information (continued)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in the principal, or in its absence, the most advantageous
market to which the Group and the Company have access at that date. The fair value of a liability reflects its non-
performance risk.
In determining the fair value of assets or liabilities the Group and the Company use as much as possible inputs that
are observable in the market. A fair value hierarchy categorises into three levels the inputs to valuation methods used
to measure fair value:
- quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2);
- inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the
fair value hierarchy. In those cases, the fair value measurement is categorised in its entirety in the same level of the
fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group and the Company recognise the amounts transferred within the fair value hierarchy levels at the end of
the reporting period in which the change occurred.
When applicable, further information on assumptions used in determining fair values is disclosed in the note related
to specific assets or liabilities:
Note 8 – Investment property
Note 3 – Financial risk management – Interest rate risk
2.25 Contingencies
Contingent liabilities are not recognised in the financial statements, except for contingent liabilities related to business
combinations. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is
remote.
A contingent asset is not recognised in the financial statements but disclosed when an inflow of income or economic
benefits is probable.
2.26 Events after the end of the reporting period
Events after the reporting period that provide additional information about the Group’s/Company’s position at the date
of the statement of financial position (adjusting events) are reflected in the financial statements. Events after the
reporting period other than adjusting events are disclosed in explanatory notes to the financial statements when such
events are significant.
2.27 Comparative figures
New accounting estimates do not affect reliability of information disclosed in the financial statements, therefore they
are corrected in the accounting records and presented in the financial statements prospectively.
2.28 Inter-company offsetting
For the purpose of preparing the financial statements, assets and liabilities, income and expenses are not offset,
unless such offsetting is required by a specific standard.
95
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
3. Financial risk management
The Group and the Company are exposed to financial risks in their operations, i.e., credit risk, liquidity risk and market
risk (foreign exchange risk, interest rate risk). In managing these risks, the Group and the Company seek to mitigate
the effect of factors which could make a negative effect on the financial performance of the Group and the Company.
Credit risk
The largest exposure to credit risk is represented by the carrying amount of each financial asset. Consequently,
the Company’s management considers that its maximum exposure is reflected by the amount of current and non-
current trade and other receivables, net of recognised impairment losses and cash and cash equivalents at the date
of the statement of financial position. Credit risk or the risk of counterparties defaulting, is controlled by the application
of credit terms and monitoring procedures using services of external credit insurance and debt recovery agencies.
The Company’s objective is to maximise the number of insured clients and with regard to the clients who are not
insured by a credit insurance company the advance payment basis is usually applied.
Maximum exposure to credit risk
The table below summarises all credit risk exposures relating to on-balance sheet items of the Group and the
Company.

|  | Group |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Trade receivables | 18,757 | 22,247 | 10,413 | 12,215
Trade receivables from related parties | - | - | 1,906 | 1,803
Other amounts receivable | 919 | 383 | 733 | 189
Other financial assets at amortised cost | 20,192 | - | 20,192 | -
Cash and cash equivalents | 18,952 | 14,840 | 15,669 | 7,544
Total | 58,820 | 37,470 | 48,913 | 21,751

Trade receivables
As at 31 December 2023 and 2022, the Company and the Group carried out the assessment of a loss allowance for
expected losses according to IFRS 9. For trade receivables, the Company and the Group apply a simplified approach
to measure the amount of lifetime expected credit losses. The amount of the allowance for expected losses for trade
receivables is calculated on the basis of the profile of payments for sales in 2021-2023. Historical loss rates are
adjusted with reference to the present and future-oriented information on the macroeconomic factors affecting the
customers’ ability to settle the amounts due. The Company has established that the growth rate of the Lithuanian
GDP is the major factor and adjusts historical loss rates accordingly referring to expected changes in these factors.
Based on the impairment tests performed with respect to trade receivables, an individually assessed loss allowance
of EUR 24 thousand was recognized for the Group in 2023 (EUR 5 thousand in 2022). Movements in the loss
allowance for amounts receivable were as follows:

|  |  | Group |  |  |  | Company |
| Individually Individually | Collectively | Collectively | Individually | Individually | Collectively | Collectively
| assessed | assessed | assessed | assessed | assessed | assessed | assessed | assessed
| impairment impairment | impairment | impairment | impairment | impairment | impairment | impairment
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
At 1 January | 85 | 146 | - | - | 72 | 72 | - | -
Increase in allowance | 24 | 5 | - | - | 4 | - | - | -
Receivables |  |  |  |  |  |  |  |
written off | (72) | (66) | - | - | (72) | - | - | -
At 31 | 37 | 85 | - | - | 4 | 72 | - | -
December |  |  |  |  |  |  |  |

Change in the loss allowance for trade receivables in 2023 and 2022 is included in administrative expenses.
96
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
3. Financial risk management (continued)
Expected credit losses:

| Not |  | Trade receivables past due |  |  |  |
Group | past | < 30 | 30–60 | 60–90 | 90–360 | > 360 | Total
| due | days | days | days | days | days |
Trade receivables – net (2023) | 16,875 | 1,815 | 58 | 9 | - | - | 18,757
Trade receivables – gross | 16,875 | 1,815 | 58 | 9 | 4 | 33 | 18,794
Recognised loss allowance | - | - | - | - | (4) | (33) | (37)
Expected loss coefficient | - | - | - | - | 100% | 100% | -
Trade receivables – net (2022) | 20,789 | 1,329 | 19 | 6 | 6 | 99 | 22,248
Trade receivables – gross | 20,789 | 1,329 | 19 | 6 | 11 | 179 | 22,333
Recognised loss allowance | - | - | - | - | (5) | (80) | (85)
Expected loss coefficient | - | - | - | - | 45% | 45% | -

Company
Not
past
due
Trade receivables past due
Total
< 30
days
30–60
days
60–90
days
90–360
days
> 360
days
Trade receivables – net (2023)
9,799
614
-
-
-
-
10,413
Trade receivables – gross
9,799
614
-
-
4
-
10,417
Recognised loss allowance
-
-
-
-
(4)
-
(4)
Expected loss coefficient
-
-
-
-
100%
-
-
Trade receivables – net (2022)
11,614
583
17
1
-
1
12,215
Trade receivables – gross
11,614
583
17
1
-
72
12,287
Recognised loss allowance
-
-
-
-
-
(72)
(72)
Expected loss coefficient
-
-
-
-
-
100%
-
The concentration of trade partners of the Group and the Company is not high. As at 31 December 2023, the Group’s
trade receivables from two major customers accounted for respectively 9.12% and 5.67% of the total trade receivables
(31 December 2022: 12.5% and 5.5%, respectively). As at 31 December 2023, the Company’s amounts receivable
from two major customers accounted for respectively 16.43% and 10.22% of the total trade receivables (31 December
2022: 22.7% and 10.0%, respectively).
Amounts receivable from related parties and other amounts receivable
The Group’s other amounts receivable comprise amounts receivables of the recovery of a part of the PSO (services
under public service obligation (PSO) scheme) fee and other amounts receivable. The recovery amount of a part of
the PSO service fee is the amount receivable from the state authority. Based on the management’s estimate, risk
arising from amounts receivable from the state enterprises is minimal and the credit rating of the Republic of Lithuania
is applied to them. The Group’s and the Company’s other amounts receivable are not analysed due to their
immateriality. The risk of recovery of the Company’s amounts receivable from the related parties is not significant
because the operations of the subsidiaries are profitable and amounts receivable from the related parties are not
material.
Cash, cash equivalents and other short-term financial instruments
The maximum exposure to credit risk of the Group’s and the Company’s cash, cash equivalents and other short-term
financial assets measured at amortised cost is equal to the fair value of the corresponding financial assets at the date
of the preparation of the statements of financial position. The Group’s and the Company’s management considers
that the risk arising from financial instruments held in bank accounts is not significant as all these instruments are
held only in those commercial banks that have high credit ratings.
97
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
3. Financial risk management (continued)
The credit quality of cash and other short-term financial instruments held in bank accounts is evaluated based on the
long-term borrowing ratings assigned by Standard & Poor’s (or an equivalent rating assigned by Moody’s):

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
AA- | 5,094 | 227 | 5,083 | -
A+ | 22,695 | 14,596 | 22,190 | 7,544
Baa1 | 11,316 | - | 8,589 | -
Other | 38 | 17 | - | -
Total | 39,144 | 14,840 | 35,862 | 7,544

Liquidity risk
The table below summarises the maturity profile of the Group’s financial liabilities as at 31 December 2023 and 2022
based on contractual undiscounted payments.

Group | Less than 3 | 3 to 12 | 1 to 5 | Over 5 | Total | Carrying
| months | months | years | years |  | amount
Borrowings | 567 | 1,802 | 2,599 | - | 4,968 | 4,644
Lease liabilities | 178 | 537 | 915 | 5,264 | 6,894 | 4,222
Trade payables | 18,477 | - | - | - | 18,477 | 18,477
Other amounts payable | 1,814 | - | - | - | 1,814 | 1,814
At 31 December 2023 | 21,036 | 2,339 | 3,514 | 5,264 | 32,153 | 29,157
Borrowings | 833 | 1,755 | 4,863 | - | 7,451 | 7,007
Lease liabilities | 122 | 359 | 706 | 5,349 | 6,536 | 3,885
Trade payables | 25,979 | - | - | - | 25,979 | 25,979
Other amounts payable | 2,208 | - | - | - | 2,208 | 2,208
At 31 December 2022 | 29,142 | 2,114 | 5,569 | 5,349 | 42,174 | 39,079

The table below summarises the maturity profile of the Company’s financial liabilities as at 31 December 2023 and
2022 based on contractual undiscounted payments.
Company
Less than 3
months
3 to 12
months
1 to 5
years
Over 5
years
Total
Carrying
amount
Borrowings
273
885
817
-
1,975
1,868
Lease liabilities
74
223
441
2,738
3,476
1,634
Amounts payable to related
parties
6,404
-
-
-
6,404
6,404
Trade payables
9,043
-
-
-
9,043
9,043
Other amounts payable
852
-
-
-
852
852
At 31 December 2023
16,646
1,108
1,258
2,738
21,750
19,801
Borrowings
364
716
1,938
-
3,018
2,857
Lease liabilities
97
282
175
2,799
3,353
1,348
Amounts payable to related
parties
605
-
-
-
605
605
Trade payables
14,434
-
-
-
14,434
14,434
Other amounts payable
919
-
-
-
919
919
At 31 December 2022
16,419
998
2,113
2,799
22,329
20,163
Interest payments on borrowings bearing variable interest rates in the table above indicate average market interest
rates at the period end, and these amounts may change as market interest rates change. It is not expected that the
cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
As disclosed in Note 14, the Group and the Company have secured bank borrowings that are subject to loan
covenants. In case of breach of covenants, the Group may be required to repay the borrowing earlier than it is
indicated in the above table. The finance team regularly monitors compliance with the loan covenants. To ensure the
fulfilment of contractual obligations reports on compliance with the terms are regularly provided to management.
98
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
3. Financial risk management (continued)
Market risk
Interest rate risk
A major part of the Group’s and the Company’s borrowings comprises borrowings and lease liabilities that bear a
variable interest rate linked with EURIBOR and expose them to the interest rate risk (Note 14).
The following table demonstrates the sensitivity of the Group’s and the Company’s profit before tax to possible
changes in interest rates with all other variables held constant (through the impact on variable interest rate
borrowings):

|  | Increase/decrease in | Group |  | Company |
| basis points |  | Effect on profit |  | Effect on profit |
2023 |  |  | before tax |  | before tax |
EUR |  | +100 |  | (46) |  | (19)
EUR |  | -100 |  | 46 |  | 19
2022 |  |  |  |  |  |
EUR |  | +100 |  | (70) |  | (29)
EUR |  | -100 |  | 70 |  | 29

Foreign exchange risk
The Company’s financial assets and liabilities as at 31 December 2023 and 2022 are denominated in the euros. The
Group’s financial assets and liabilities as at 31 December 2023 and 2022 are denominated in the euros and the
Ukrainian hryvnias. The table below shows the sensitivity of the Group’s profit before tax to possible changes in the
exchange rate of the Ukrainian hryvnia:

| 2023 | 2022
Reasonably possible change in the EUR/UAH exchange rate, % | +/-20% | +/-20%
Financial assets denominated in the Ukrainian hryvnias | 553 | 625
Financial liabilities denominated in the Ukrainian hryvnias | 201 | 99
Estimated negative effect on profit before tax | (59) | (88)
Estimated positive effect on profit before tax | 88 | 132

Fair value of financial instruments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in the principal, or in its absence, the most advantageous
market to which the Group and the Company have access at that date. The fair value of a liability reflects its non-
performance risk.
The carrying amount of the Group’s and the Company’s trade and other receivables, cash and cash equivalents,
borrowings, lease liabilities, trade and other payables approximates their fair value. The fair value of financial
instruments is measured at the Group and the Company using the following hierarchy levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. The Group’s and the
Company’s financial assets attributed to this level comprise cash and cash equivalents.
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The
Group’s and the Company’s assets and liabilities attributed to this level comprise:
• Trade and other amounts receivable, trade and other amounts payable. The average payment term of these
financial instruments is less than 3 months (7-90 days for trade receivables, 10-120 days for trade payables),
therefore their fair value approximates the carrying amount.
Borrowings and lease liabilities. The fair value of these financial instruments approximates the carrying amount as
they are stated at the amortised cost and interest rates applicable to them are similar to the market interest rates at
the balance sheet date.
99
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
3. Financial risk management (continued)
Capital risk management
The main objective of the Group’s and the Company’s capital management is to ensure that the Group and the
Company comply with externally imposed capital requirements and that the Group and the Company maintain healthy
capital ratios in order to support their business and to maximise shareholders’ value (capital in the meaning of IAS 1
corresponds to equity presented in the financial statements and attributable to the Company’s owners).
The Group and the Company manage the capital structure and make adjustments to it in the light of changes in
economic conditions and the operating risks. In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to shareholders, return capital to shareholders, or issue new shares. No changes
were made concerning risk management objectives, policies or processes during the year ended 31 December 2023.
Pursuant to the Lithuanian Law on Companies, the Group’s and the Company’s equity must be not less than 50% of
their authorised share capital. As at 31 December 2023 and 2022, the Company complied with this requirement.
The Group and the Company use the debt-to-equity ratio to evaluate their capital. Capital includes ordinary shares,
reserves, retained earnings attributable to the equity holders of the parent. It is aimed that the debt-to-equity ratio
should not be higher than 50%-60%. As at 31 December 2023 and 2022, neither the Group nor the Company
exceeded the maximum debt-to-equity ratio.

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Non-current liabilities (excluding subsidies, grants and deferred income tax liability) | 6,736 | 8,650 | 2,202 | 2,988
Current liabilities | 30,613 | 34,611 | 22,533 | 19,073
Total liabilities | 37,349 | 43,261 | 24,735 | 22,061
Equity attributable to shareholders of the Company | 115,974 | 97,160 | 85,363 | 66,373
Debt-to-equity ratio | 32% | 45% | 29% | 33%

4. Significant accounting estimates and assumptions
Set out below are the areas significant to the Group’s and the Company’s financial statements that involve complex
judgements, assumptions and accounting estimates.
Useful lives of property, plant and equipment
The estimation of the useful lives of items of property, plant and equipment is a matter of judgment based on the
experience with similar assets. The management assesses the remaining useful lives in accordance with the current
technical conditions of the assets and estimated period during which the assets are expected to earn benefits for the
Group. In assessing the remaining useful life of property, plant and equipment, the management takes into account
conclusions presented by the employees responsible for technical maintenance of assets.
Impairment of goodwill
Goodwill is tested for impairment annually by calculating the recoverable value. The recoverable value of goodwill is
calculated by discounting future cash flows to their present value. The management tested goodwill of EUR 3,001
thousand, which was recognised upon the acquisition of subsidiary Grigeo Klaipėda AB, for impairment and did not
establish any indications of impairment (Note 7).
Legal processes
Subsidiary Grigeo Klaipėda AB has received a claim in relation to indemnification for damage to the environment.
Based on the management’s estimate, the outcome of the claim involves a high degree of uncertainty (Note 33).
100
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
5. Property, plant and equipment

| Buildings | Machinery |  |  | Construction |
Group | and | and | Motor | Other | work in | Total
| structures | equipment | vehicles | assets | progress and |
|  |  |  |  | prepayments |
At 1 January 2022 |  |  |  |  |  |
Cost | 46,700 | 119,730 | 2,468 | 2,514 | 10,018 | 181,430
Accumulated depreciation | (21,608) | (84,910) | (1,640) | (1,708) | - | (109,866)
Net book amount | 25,092 | 34,820 | 828 | 806 | 10,018 | 71,564
Opening net book amount | 25,092 | 34,820 | 828 | 806 | 10,018 | 71,564
at 1 January 2022 |  |  |  |  |  |
Additions | 71 | 420 | 466 | 163 | 7,407 | 8,527
Disposals and write-offs | (2) | (30) | (1) | (1) | - | (34)
Transfer from/to inventory | - | 8 | - | - | - | 8
Transfer from construction work in progress to property, plant and equipment | 1,061 | 9,816 | 65 | 221 | (11,163) | -
Reclassification to intangible assets | - | - | - | - | (250) | (250)
Reclassification from investment | 21 | - | - | - | - | 21
property |  |  |  |  |  |
Foreign exchange effect | (34) | (99) | - | (3) | (23) | (159)
Depreciation charge | (1,902) | (5,964) | (268) | (349) | - | (8,483)
Closing net book amount | 24,307 | 38,971 | 1,090 | 837 | 5,989 | 71,194
at 31 December 2022 |  |  |  |  |  |
At 31 December 2022 |  |  |  |  |  |
Cost | 47,969 | 127,100 | 2,803 | 2,522 | 5,989 | 186,383
Accumulated depreciation | (23,662) | (88,129) | (1,713) | (1,685) | - | (115,189)
Net book amount | 24,307 | 38,971 | 1,090 | 837 | 5,989 | 71,194
Opening net book amount | 24,307 | 38,971 | 1,090 | 837 | 5,989 | 71,194
at 1 January 2023 |  |  |  |  |  |
Additions | 67 | 1,096 | 314 | 173 | 4,986 | 6,636
Disposals and write-offs | - | (52) | (288) | (2) | - | (342)
Transfer from/to inventory | - | (7) | - | - | (134) | (141)
Transfer from construction work in progress to property, plant and equipment | 1,334 | 3,511 | 20 | 608 | (5,473) | -
Reclassification to investment property | - | - | - | (17) | - | (17)
Reclassification to intangible assets | - | - | - | - | (16) | (16)
Foreign exchange effect | (9) | (22) | - | (1) | (1) | (33)
Depreciation charge | (1,875) | (6,136) | (315) | (359) | - | (8,685)
Closing net book amount | 23,824 | 37,361 | 821 | 1,239 | 5,351 | 68,596
at 31 December 2023 |  |  |  |  |  |
At 31 December 2023 |  |  |  |  |  |
Cost | 49,245 | 131,451 | 2,510 | 3,055 | 5,351 | 191,612
Accumulated depreciation | (25,421) | (94,090) | (1,689) | (1,816) | - | (123,016)
Net book amount | 23,824 | 37,361 | 821 | 1,239 | 5,351 | 68,596

The Group’s prepayments amounted EUR 994 thousand as at 31 December 2023 (31 December 2022:
EUR 348 thousand).
101
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
5. Property, plant and equipment (continued)
Company
Buildings
and
structures
Machinery
and
equipment
Motor
vehicles
Other
assets
Construction
work in
progress and
prepayments
Total
At 1 January 2022
Cost
16,364
57,714
654
1,028
5,206
80,966
Accumulated depreciation
(7,005)
(43,829)
(385)
(727)
-
(51,946)
Net book amount
9,359
13,885
269
301
5,206
29,020
Opening net book amount
at 1 January 2022
9,359
13,885
269
301
5,206
29,020
Additions
-
80
184
65
1,216
1,545
Disposals and write-offs
(1)
(12)
-
-
-
(13)
Transfer from/to inventory
-
8
-
-
-
8
Transfer from construction work in
progress to property, plant and
equipment
249
4,329
-
18
(4,596)
-
Depreciation charge
(692)
(2,615)
(96)
(142)
-
(3,545)
Closing net book amount
at 31 December 2022
8,915
15,675
357
242
1,826
27,015
At 31 December 2022
Cost
16,530
61,524
705
901
1,826
81,486
Accumulated depreciation
(7,615)
(45,849)
(348)
(659)
-
(54,471)
Net book amount
8,915
15,675
357
242
1,826
27,015
Opening net book amount
at 1 January 2023
8,915
15,675
357
242
1,826
27,015
Additions
10
66
153
44
2,365
2,638
Disposals and write-offs
-
-
(260)
(2)
-
(262)
Transfer from construction work in
progress to property, plant and
equipment
393
1,137
17
576
(2,123)
-
Reclassification to investment property
-
-
-
(17)
-
(17)
Reclassification to intangible assets
-
-
-
-
(16)
(16)
Depreciation charge
(695)
(2,542)
(87)
(143)
-
(3,467)
Closing net book amount
at 31 December 2023
8,623
14,336
180
700
2,052
25,891
At 31 December 2023
Cost
16,843
62,726
374
1,419
2,052
83,414
Accumulated depreciation
(8,220)
(48,390)
(194)
(719)
-
(57,523)
Net book amount
8,623
14,336
180
700
2,052
25,891
The Company’s prepayments amounted EUR 551 thousand as at 31 December 2023 (31 December 2022:
EUR 119 thousand).
102
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
5. Property, plant and equipment (continued)
The depreciation charge of the Group’s and the Company’s property, plant and equipment is included in the following
line items of the statement of comprehensive income and the statement of financial position:

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Cost of sales | 8,323 | 8,128 | 3,260 | 3,336
Administrative expenses | 263 | 254 | 141 | 141
Selling and distribution expenses | 99 | 101 | 66 | 68
Statement of comprehensive income | 8,685 | 8,483 | 3,467 | 3,545
– total |  |  |  |

As at 31 December 2023, the Group’s and the Company’s property, plant and equipment with the carrying amount of
respectively EUR 12,237 thousand and EUR 6,132 thousand (31 December 2022: EUR 13,288 thousand and EUR
6,565 thousand, respectively) was pledged to the banks as security for borrowings (Note 14).
A part of the Group’s and the Company’s property, plant and equipment was fully depreciated but still in use.
Information by category of assets is presented below:

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Buildings and structures | 843 | 821 | 142 | 260
Machinery and equipment | 4,887 | 5,130 | 1,371 | 1,372
Motor vehicles | 590 | 637 | 23 | 44
Other assets | 440 | 405 | 121 | 127
Total | 6,760 | 6,993 | 1,657 | 1,803

The Group’s and the Company’s commitments for the acquisition of property, plant and equipment under the signed
agreements amounted to respectively EUR 1,987 thousand and EUR 1,451 thousand as at 31 December 2023
(31 December 2022: EUR 1,988 thousand and EUR 363 thousand, respectively).
103
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
6. Right-of-use assets

Group | Land | Buildings and | Machinery and | Total
|  | structures | equipment |
At 1 January 2022 |  |  |  |
Cost | 3,948 | 416 | 823 | 5,187
Accumulated depreciation | (533) | (222) | (463) | (1,218)
Net book amount | 3,415 | 194 | 360 | 3,969
Opening net book amount | 3,415 | 194 | 360 | 3,969
at 1 January 2022 |  |  |  |
Change in value-in-use | 208 | 376 | 279 | 863
Foreign exchange effect | (3) | - | - | (3)
Disposals and write-offs | - | - | (75) | (75)
Amortisation charge | (67) | (122) | (288) | (477)
Closing net book amount | 3,553 | 448 | 276 | 4,277
at 31 December 2022 |  |  |  |
At 31 December 2022 |  |  |  |
Cost | 4,148 | 792 | 780 | 5,720
Accumulated depreciation | (595) | (344) | (504) | (1,443)
Net book amount | 3,553 | 448 | 276 | 4,277
Opening net book amount | 3,553 | 448 | 276 | 4,277
at 1 January 2023 |  |  |  |
Change in value-in-use | (11) | 83 | 575 | 647
Foreign exchange effect | - | - | - | -
Disposals and write-offs | (5) | - | (78) | (83)
Amortisation charge | (59) | (152) | (315) | (526)
Closing net book amount | 3,478 | 379 | 458 | 4,315
at 31 December 2023 |  |  |  |
At 31 December 2023 |  |  |  |
Cost | 3,902 | 625 | 569 | 5,096
Accumulated depreciation | (424) | (246) | (111) | (781)
Net book amount | 3,478 | 379 | 458 | 4,315

104
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
6. Right-of-use assets (continued)
Company
Land lease
rights
Buildings and
structures
Machinery and
equipment
Total
At 1 January 2022
Cost
1,014
1,154
243
2,411
Accumulated depreciation
(40)
(697)
(140)
(877)
Net book amount
974
457
103
1,534
Opening net book amount
at 1 January 2022
974
457
103
1,534
Change in value-in-use
17
-
93
110
Disposals, write-offs
-
-
(15)
(15)
Amortisation charge
(14)
(228)
(92)
(334)
Closing net book amount
at 31 December 2022
977
229
89
1,295
At 31 December 2022
Cost
1,029
1,154
284
2,467
Accumulated depreciation
(52)
(925)
(195)
(1,172)
Net book amount
977
229
89
1,295
Opening net book amount
at 1 January 2023
977
229
89
1,295
Change in value-in-use
(12)
459
180
627
Disposals, write-offs
-
-
-
-
Amortisation charge
(8)
(229)
(100)
(337)
Closing net book amount
at 31 December 2023
957
459
169
1,585
At 31 December 2023
Cost
1,017
1,613
242
2,872
Accumulated depreciation
(60)
(1,154)
(73)
(1,287)
Net book amount
957
459
169
1,585
The amortization charge of the Group’s and the Company’s right-of-use assets is included in the following line items
of the statement of comprehensive income:

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Cost of sales | 382 | 352 | 67 | 68
Administrative expenses | 60 | 67 | 7 | 14
Selling and distribution expenses | 84 | 58 | 263 | 252
Total | 526 | 477 | 337 | 334

As at 31 December 2023, the Group’s and the Company’s land lease rights with the carrying amount of respectively
EUR 995 thousand and EUR 340 thousand (31 December 2022: EUR 1,016 thousand and EUR 353 thousand,
respectively) were pledged to the banks as security for borrowings (Note 14).
105
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
7. Intangible assets

Group | Goodwill | Licences, | Software | Other assets | Total
|  | patents |  |  |
At 1 January 2022 |  |  |  |  |
Cost | 3,001 | 169 | 2,243 | 553 | 5,966
Accumulated amortisation | - | (123) | (1,800) | (530) | (2,453)
Net book amount | 3,001 | 46 | 443 | 23 | 3,513
Opening net book amount | 3,001 | 46 | 443 | 23 | 3,513
at 1 January 2022 |  |  |  |  |
Additions | - | 6 | 9 | 177 | 192
Transfer from development work in progress to intangible assets | - | - | 18 | (18) | -
Reclassification from property, plant and equipment | - | - | 250 | - | 250
Foreign exchange effect | - | - | (1) | - | (1)
Amortisation charge | - | (39) | (149) | (2) | (190)
Closing net book amount | 3,001 | 13 | 570 | 180 | 3,764
at 31 December 2022 |  |  |  |  |
At 31 December 2022 |  |  |  |  |
Cost | 3,001 | 61 | 2,510 | 691 | 6,263
Accumulated amortisation | - | (48) | (1,940) | (511) | (2,499)
Net book amount | 3,001 | 13 | 570 | 180 | 3,764
Opening net book amount | 3,001 | 13 | 570 | 180 | 3,764
at 1 January 2023 |  |  |  |  |
Additions | - | 1 | 2 | 668 | 671
Transfer from development work in progress to intangible assets | - | 6 | 34 | (40) | -
Reclassification from property, plant and equipment | - | 16 | - | - | 16
Disposals, write-offs | - | (1) | - | - | (1)
Amortisation charge | - | (7) | (170) | (2) | (179)
Closing net book amount | 3,001 | 28 | 436 | 806 | 4,271
at 31 December 2023 |  |  |  |  |
At 31 December 2023 |  |  |  |  |
Cost | 3,001 | 84 | 2,527 | 1,176 | 6,788
Accumulated amortisation | - | (56) | (2,091) | (370) | (2,517)
Net book amount | 3,001 | 28 | 436 | 806 | 4,271

Goodwill
On 1 March 2010, the Company acquired the Grigeo Investicijų Valdymas UAB group consisting of Grigeo Investicijų
Valdymas UAB, Avesko UAB (in 2010, Avesko UAB was reorganised by merging it with Grigeo Klaipėda AB), Grigeo
Klaipėda AB and Mena Pak AT.
A goodwill of EUR 3,001 thousand was recognised on the acquisition of these subsidiaries. The goodwill arose on
expected synergies of the activities of the Group companies. Goodwill is not amortised but is tested annually for
possible impairment.
For the purpose of impairment testing as at 31 December 2023 and 2022, goodwill was allocated to the Grigeo
Klaipėda AB cash-generating unit. As at 31 December 2023 and 2022, the recoverable amount of the cash-generating
unit was determined based on projected future discounted cash inflows according to the five-year financial forecasts
approved by the management.
106
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
7. Intangible assets (continued)
Forecasts as at 31 December 2023:

Revenue |  |  |  | Projected annual revenue growth (decrease), % |
2023 | 2024 | 2025 | 2026 | 2027 | 2028
45,974 | (0.6) | 8.5 | 4.6 | 0.5 | 0.5
|  |  | Gross profit margin, % |
2023 | 2024 | 2025 | 2026 | 2027 | 2028
13.1 | 12.7 | 20.5 | 24.5 | 24.7 | 24.5

In 2023, due to the slowing global economy and declining prices, Grigeo Klaipėda AB failed to achieve its revenue
targets. In 2024, a slight decline in revenue is expected to continue due to the same reasons. The projected revenue
growth in 2025 and 2026 is linked to the projected recovery of the global economy and the associated increase in
sales prices. Accordingly, historical multi-year average gross profit margins are projected in the future.

Revenue |  |  |  | Projected annual revenue growth (decrease), % |
2022 | 2023 | 2024 | 2025 | 2026 | 2027
68,800 | (11.0) | 5.8 | (19.2) | 0.5 | 0.5
|  |  | Gross profit margin, % |
2022 | 2023 | 2024 | 2025 | 2026 | 2027
14.1 | 9.8 | 5.8 | 23.9 | 24.1 | 23.8

Revenue was projected based on the management’s assumptions as at 31 December 2023 and 31 December 2022,
respectively, which forecast that future revenue will increase due to investments in the enhancement of operational
efficiency of the production facilities and intensification of sales actions. As at 31 December 2023, projected
investments for the upcoming period of 5 years amounted to EUR 2,443 thousand on average annually (31 December
2022: EUR 2,072 thousand). Expenses were projected in view of actual expenses taking into consideration the
projected level of inflation. In 2023 and 2022, cash flows beyond the five-year period were extrapolated using a 1%
annual growth rate that reflects the management’s best estimate in view of the current situation in this industry. The
discount rate used by the management for a specific cash-generating unit was calculated as a weighted average cost
of capital which is equal to 9.5% after tax for the cash generating units located in Lithuania as at 31 December 2023
(31 December 2022: 9.5%).
The calculation of the recoverable amount of the cash-generating unit as at 31 December 2023 and 2022 did not
indicate any impairment of goodwill. The assessment was performed without taking into consideration the legal
process described in Note 33 of the financial statements. Regarding the assessment of the recoverable amount of
the above-mentioned cash-generating unit as at 31 December 2023 and 2022, the management believes that no
possible change in any of the above key assumptions would cause the carrying amount of the cash-generating unit
to materially exceed its recoverable amount.
The sensitivity analysis of the calculation of the recoverable amount of the investment in Grigeo Klaipėda AB shows
the impact of change in the assumptions used in the impairment testing on the assessment result:

Changes in assumptions | Effect as at 31 December
| 2023 and 2022
Decrease in revenue and cost of sales for each forecast year by 10% | -
Decrease in gross profit margin by 500 basis points | -
Increase in discount rate by 100 basis points | -

Considering the above changes in the assumptions, no additional impairment indicators of goodwill were identified in
the sensitivity analysis.
107
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
7. Intangible assets (continued)
Company
Licences,
patents
Software
Other assets
Total
At 1 January 2022
Cost
169
1,025
33
1,227
Accumulated amortisation
(124)
(720)
(9)
(853)
Net book amount
46
305
23
374
Opening net book amount
at 1 January 2022
46
305
23
374
Additions
6
-
121
127
Transfer from development work in
progress to intangible assets
-
18
(18)
-
Amortisation charge
(39)
(80)
(2)
(121)
Closing net book amount
at 31 December 2022
13
243
124
380
At 31 December 2022
Cost
64
1,039
135
1,238
Accumulated amortisation
(51)
(796)
(11)
(858)
Net book amount
13
243
124
380
Opening net book amount
at 1 January 2023
13
243
124
380
Additions
-
-
397
397
Transfer from development work in
progress to intangible assets
5
34
(39)
-
Reclassification from property, plant and
equipment
16
-
-
16
Amortisation charge
(6)
(80)
(2)
(88)
Closing net book amount
at 31 December 2023
28
197
480
705
At 31 December 2023
Cost
85
1 062
493
1,640
Accumulated amortisation
(57)
(865)
(13)
(935)
Net book amount
28
197
480
705
Amortisation expenses of intangible assets are included in the following line items of the statement of comprehensive
income:

|  | Group |  | Company
| At 31 December | At 31 December | At 31 December | At 31 December
| 2023 | 2022 | 2023 | 2022
Cost of sales | 166 | 166 | 75 | 97
Administrative expenses | 10 | 18 | 10 | 18
Selling and distribution |  |  |  |
expenses | 3 | 6 | 3 | 6
Total | 179 | 190 | 88 | 121

108
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
7. Intangible assets (continued)
A part of the Group’s and the Company’s intangible assets was fully amortised but still in use. Information by category
of assets is presented below:

|  | Group |  | Company
| At 31 December | At 31 December | At 31 December | At 31 December
| 2023 | 2022 | 2023 | 2022
Licences, patents | 7 | 7 | 7 | 7
Software | 194 | 190 | 78 | 78
Other assets | 520 | 520 | - | -
Total | 721 | 717 | 85 | 85

8. Investment property

Group | Buildings and | Other assets | Construction | Total
| structures |  | work in progress |
At 1 January 2022 |  |  |  |
Cost | 5,203 | - | 328 | 5,531
Accumulated depreciation | (1,114) | - | - | (1,114)
Net book amount | 4,089 | - | 328 | 4,417
Opening net book amount at 1 | 4,089 | - | 328 | 4,417
January 2022 |  |  |  |
Additions | - | 3 | 259 | 262
Reclassification from construction | 251 | - | (251) | -
Reclassification from property, plant and equipment | (21) | - | - | (21)
Depreciation charge | (247) | (1) | - | (248)
Closing net book amount at 31 | 4,072 | 2 | 336 | 4,410
December 2022 |  |  |  |
At 31 December 2022 |  |  |  |
Cost | 4,963 | 2 | 336 | 5,301
Accumulated depreciation | (891) | - | - | (891)
Net book amount | 4,072 | 2 | 336 | 4,410
Opening net book amount at 1 | 4,072 | 2 | 336 | 4,410
January 2023 |  |  |  |
Additions | 32 | - | 422 | 454
Reclassification from construction | 68 | - | (68) | -
Reclassification from property, plant and equipment | - | 17 | - | 17
Depreciation charge | (257) | (3) | - | (260)
Closing net book amount at 31 | 3,915 | 16 | 690 | 4,621
December 2023 |  |  |  |
At 31 December 2023 |  |  |  |
Cost | 5,063 | 19 | 690 | 5,772
Accumulated depreciation | (1,148) | (3) | - | (1,151)
Net book amount | 3,915 | 16 | 690 | 4,621

109
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
8. Investment property (continued)
Company
Buildings and
structures
Other assets
Construction
work in progress
Total
At 1 January 2022
Cost
5,203
-
328
5,531
Accumulated depreciation
(1,114)
-
-
(1,114)
Net book amount
4,089
-
328
4,417
Opening net book amount
at 1 January 2022
4,089
-
328
4,417
Additions
-
3
259
262
Reclassification from construction work
in progress
251
-
(251)
-
Depreciation charge
(247)
(1)
-
(248)
Closing net book amount
at 31 December 2022
4,093
2
336
4,431
At 31 December 2022
Cost
5,454
2
336
5,792
Accumulated depreciation
(1,361)
-
-
(1,361)
Net book amount
4,093
2
336
4,431
Opening net book amount
at 1 January 2023
4,093
2
336
4,431
Additions
32
-
422
454
Reclassification from construction work
in progress
68
-
(68)
-
Reclassification from property, plant and
equipment
-
17
-
17
Depreciation charge
(261)
(3)
-
(264)
Closing net book amount
at 31 December 2023
3,932
16
690
4,638
At 31 December 2023
Cost
5,554
19
690
6,263
Accumulated depreciation
(1,622)
(3)
-
(1,625)
Net book amount
3,932
16
690
4,638
As at 31 December 2023, the Group’s and the Company’s investment property (buildings and structures) with the
acquisition cost of respectively EUR 7 thousand and EUR 7 thousand (31 December 2022: EUR 7 thousand and
EUR 7 thousand, respectively) was fully depreciated but still in use.
The were no commitments for the acquisition of investment property as at 31 December 2023 and 31 December 2022.
Investment property comprises the buildings, structures and other assets located at Popieriaus street 15 and
Popieriaus street 25 in Naujieji Verkiai and the leased site at Vilniaus street 10 in Grigiškės. A part of the investment
property (84% as at 31 December 2023 and 83% as at 31 December 2022 at the carrying amount) is leased to third
parties. The lease term under the contracts is between 1 to 9 years. As at 31 December 2023, future annual revenue
amounted to EUR 630 thousand (31 December 2022: EUR 604 thousand) in the period from 2024 to 2033.
Depreciation expenses are included in administrative expenses.
Fair value measurement
The fair value of the investment property was measured based on the cash flows from the investment property for a
10-year period with reference to forecast revenue and expenses. Cash flows were calculated using a discount rate of
11% (in 2022 – 11%), a rental yield at the end of the assessed period was equal to 9% (in 2022 – 9%). According to
the calculation, the fair value of the investment property is equal to EUR 4,582 thousand (31 December 2022: EUR
4,507 thousand).
110
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
8. Investment property (continued)
The fair value measurement of investment property does not include construction work in progress and prepayments.
Based on the estimate of the management of the Group, the carrying amount of construction work in progress and
prepayments approximates their fair value.
The sensitivity of the value measurement considering reasonably possible changes in the discount rate and the rental
yield is presented below:

| At 31 | At 31
| December | December
| 2023 | 2022
Change in the discount rate (+100 basis points) | 4,266 | 4,207
Change in the discount rate (-100 basis points) | 4,931 | 4,838
Change in the rental yield (+100 basis points) | 4,214 | 4,157
Change in the rental yield (-100 basis points) | 5,043 | 4,944

9. Inventories

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Materials | 6,201 | 7,476 | 1,856 | 2,483
Work in progress | 1,963 | 2,567 | 1,284 | 1,826
Finished products | 5,584 | 7,756 | 2,825 | 3,807
Inventories in transit | 289 | 1,911 | 89 | 1,809
Prepayments | 373 | 254 | 68 | 61
Total | 14,410 | 19,963 | 6,122 | 9,985

As at 31 December 2023, the acquisition value (cost) of the Group’s and the Company’s inventories was decreased
by respectively EUR 1,128 thousand and EUR 510 thousand (31 December 2022: EUR 943 thousand and EUR
388 thousand, respectively) to net realisable value. The net realisable value adjustment was accounted for under cost
of sales.
In 2023, inventories of EUR 102 million (2022: EUR 135 million) for the Group and inventories of EUR 56 million
(2022: EUR 67 million) for the Company were included in cost of sales.
As described in the Note 14, as at 31 December 2023 and at 31 December 2022, the inventories of the Group and
the Company were not pledged to secure repayment of bank borrowings.
10. Trade and other amounts receivable

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December | December | December | December
| 2023 | 2022 | 2023 | 2022
Trade receivables – gross | 18,794 | 22,333 | 10,417 | 12,287
Loss allowance | (37) | (86) | (4) | (72)
Trade receivables – net | 18,757 | 22,247 | 10,413 | 12,215
Amounts receivable from related parties |  |  |  |
(Note 31) | - | - | 1,906 | 3,005
Amount receivable of the recovery of a part of the PSO* service fee | - | 141 | - | 49
VAT receivable | 1,343 | 1,277 | 203 | 200
Subsidies receivable | 646 | - | 646 | -
Other amounts receivable – gross | 273 | 242 | 87 | 140
Total trade and other amounts | 21,019 | 23,907 | 13,255 | 15,609
receivable – net |  |  |  |
Of which: |  |  |  |
Non-current amounts receivable | - | 3 | - | -
Current amounts receivable | 21,019 | 23,904 | 13,255 | 15,609

*PSO – services under public service obligation scheme.
111
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
10. Trade and other amounts receivable (continued)
As disclosed in Note 14, as at 31 December 2023 and at 31 December 2022, the Company and subsidiaries Grigeo
Packaging UAB and Grigeo Baltwood UAB had pledged future inflows to secure the repayment of bank borrowings.
11. Other financial assets at amortised cost
As at 31 December 2023, other financial assets measured at amortised cost consisted of the Company's three term
deposits in banks. Other group companies had no deposits. As at 31 December 2022, the Company and the Group
had no other financial assets measured at amortised cost. Data on the Company’s and Group’s deposits as at 31
December 2023 is presented in the table below:

|  | Deposit | Accrued | Total |  | Maturity
|  | value | interest |  | From | Until
Deposit |  | 5,000 | 57 | 5,057 | 12.09.2023 | 12.03.2024
Deposit |  | 5,050 | 32 | 5,082 | 30.10.2023 | 31.01.2024
Deposit |  | 10,000 | 53 | 10,053 | 10.11.2023 | 08.02.2024
| Total | 20,050 | 142 | 20,192 | - | -

12. Cash and cash equivalents

|  | Group |  | Company
| At 31 December | At 31 December | At 31 December | At 31 December
| 2023 | 2022 | 2023 | 2022
Cash at bank | 6,905 | 14,840 | 3,622 | 7,544
Cashpool | 12,047 | - | 12,047 | -
TOTAL | 18,952 | 14,840 | 15,669 | 7,544

As at 31 December 2023, cash held in bank accounts amounting to EUR 9,921 thousand (2022: EUR 8,363 thousand)
for the Group and EUR 6,756 thousand (2022: EUR 7,463 thousand) for the Company was pledged as collateral
against borrowings as further described in Note 14. As at 31 December 2023 and 2022, there were no restrictions on
the use of cash balances held in the pledged bank accounts.
A cashpool agreement was signed with the bank in 2023. All Group companies operating in Lithuania have been
included in the cashpool agreement.
13. Authorised share capital and reserves
Authorised share capital

Type of shares | Securities’ | Number of | Par value, | Total par value,
| ISIN code | shares, units | EUR | EUR
Ordinary registered shares | LT0000102030 | 131,400,000 | 0.29 | 38,106,000

All the shares of the Company have been fully paid up. The Company does not have any other categories of shares
than ordinary shares mentioned above. The Company’s Articles of Association do not establish any restrictions on
rights to shares or special control rights for the shareholders. The Company and its subsidiaries do not hold the
Company’s shares. The Company has not issued any convertible securities, exchangeable securities or guarantee
securities, neither has unfulfilled acquisition rights or commitments to increase share capital as at 31 December 2023
and 2022.
Share premium
The Company’s authorised share capital was increased after the additional issue of shares with the total nominal
value of EUR 1,650,834 in accordance with the decisions of the Ordinary General Meeting of the Shareholders of the
Company held on 26 April 2013. The nominal value per share is EUR 0.29, while the shares were issued for EUR
0.51 per share. Share premium is the difference between the issue price and the nominal value of shares, less
expenses related to the issue of shares.
Reserves
A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of at least 5% of profit to
be appropriated calculated in accordance with the accounting principles established by laws are required until the
reserve reaches 10% of the authorised share capital. In accordance with the procedure prescribed by the laws, the
reserve can be used to cover the company’s losses.
In 2023, the Company increased the legal reserve by EUR 820 thousand (in 2022 by EUR 161 thousand). The
Company’s legal reserve represents 7.6% of the authorised share capital as at 31 of December 2023 (31 December
2022: 5.4%).
112
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
13. Authorised share capital and reserves (continued)
The foreign currency translation reserve arises from exchange differences that occur on consolidation of the financial
statements of the foreign subsidiary (Note 2.4).
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of the hedging
instruments used in cash flow hedges that will be subsequently recognised in the statement of comprehensive income.
On 29 April 2022, the General Meeting of Shareholders adopted the decision on the appropriation of the profit of the
Company and the allocation of EUR 500 thousand to the reserve for granting own shares. On 17-22 June 2022, the
Company concluded the option agreements with the senior management employees of the Group and the Company
for the possibility to acquire 1,660,000 units of the Company’s shares for no consideration upon a full implementation
of all conditions specified in the agreements on the share option programme.

Reserve for granting own shares | Number of shares, | Value
| thousands of units |
Share options to employees at 31 December 2023 | 1,660 | 481
Unallocated shares at 31 December 2023 | 64 | 19
At 31 December 2023 | 1,724 | 500

During 2023, the Group and the Company recognized remuneration expenses of EUR 205 thousand and EUR 111
thousand, respectively, as part of the cost of the share option program (2022: EUR 165 thousand and EUR 90
thousand, respectively).
Dividends
During the Ordinary General Meeting of Shareholders of the Company held in 2023, a decision was made to allocate
dividends equal to EUR 0.05 per share (Note 28) (in 2022 dividends equal to EUR 0.05 per share were allocated).
14. Borrowings

|  | Group |  | Company
| At 31 | At 31 | At 31 | At 31
Non-current borrowings: | December 2023 | December 2022 | December 2023 | December 2022
Bank borrowings | 2,497 | 4,644 | 796 | 1,868
Current borrowings: | 2,497 | 4,644 | 796 | 1,868
Bank borrowings | 2,147 | 2,363 | 1,072 | 989
| 2,147 | 2,363 | 1,072 | 989
TOTAL | 4,644 | 7,007 | 1,868 | 2,857

Movements in bank borrowings during the year are presented in the table below:

|  | Group |  | Company
| At 31 | At 31 | At 31 | At 31
| December 2023 | December 2022 | December 2023 | December 2022
Opening balance | 7,007 | 2,958 | 2,857 | 1,555
Proceeds from borrowings | - | 6,246 | - | 2,600
Repayments | (2,363) | (2,197) | (989) | (1,298)
Interest charged | 244 | 93 | 111 | 51
Interest paid | (244) | (93) | (111) | (51)
Closing balance | 4,644 | 7,007 | 1,868 | 2,857

Borrowings outstanding at the year-end by currency:

| Group |  |  | Company |
| 2023 | 2022 | 2023 |  | 2022
EUR | 4,644 | 7,007 |  | 1,868 | 2,857
TOTAL | 4,644 | 7,007 |  | 1,868 | 2,857

The unwithdrawn balance under the credit agreements amounted to EUR 38 thousand for the Group and EUR 25
thousand for the Company as at 31 December 2023 (31 December 2022: EUR 28 thousand and EUR 20 thousand,
respectively) .
113
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
14. Borrowings (continued)
Compliance with loan covenants
The Company’s borrowings
Under the loan and overdraft agreements, the Group and the Company must comply with certain financial and non-
financial covenants, such as: debt service coverage ratio, the Company’s EBITDA to financial liabilities ratio, equity
to the Company’s liability ratio, free cash flow indicator. The Company and its certain subsidiaries are also required
to conduct a certain number of settlements through the bank that provided the loan.
Indicators of the Company’s borrowings:

|  |  | Indicators of the Group |  | Indicators of the Company |
Indicator | Established | At 31 | At 31 | At 31 | At 31
| ratio | December | December | December | December
|  | 2023 | 2022 | 2023 | 2022
Borrowings/EBITDA | < 3.0 | (0.36) | (0.37) | (0.49) | (0.46) |
Debt service coverage ratio |  |  |  |  |  |
(DSCR) | > 1.2 | 13.9 | 8.8 | 24.7 | 7.2 |

As at 31 December 2023 and 31 December 2022, the Company complied with all financial and non-financial
requirements established in the bank agreements.
Loans received by the subsidiaries
As at 31 December 2023 and 31 December 2022, the subsidiaries complied with all financial and non-financial
requirements established in the bank agreements.
Interest rates
As at 31 December 2023 and 31 December 2022, the Company’s and the Group's borrowings were subject to variable
interest rates. They are linked with the EURIBOR interest rate base and with the margin agreed with the bank. In 2023
and 2022, the period of re-pricing variable interest rates on borrowings ranged from 3 to 6 months.
The weighted average interest rate applicable to the Group’s and the Company’s bank borrowings is presented in the
table below:

| Group |  |  | Company
| At 31 | At 31 | At 31 | At 31
| December 2023 | December 2022 | December 2023 | December 2022
Weighted average interest rate | 5.68% | 3.78% | 5.70% | 3.72%

Pledged assets
The Group and the Company have pledged to the banks property, plant and equipment (Note 5), right-of-use assets
(Note 6), inventories (Note 9), cash balances in bank accounts (Note 12) and future inflows (Note 10) as security for
borrowings.
15. Lease liabilities

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Non-current | 3,663 | 3,477 | 1,294 | 1,017
Current | 559 | 408 | 340 | 331
TOTAL | 4,222 | 3,885 | 1,634 | 1,348

The assets leased by the Group and the Company under lease contracts comprised motor vehicles, equipment, and
lease of premises and land. The lease terms of the lease contracts: between 8 and 79 years for the lease of land;
between 2 and 3 years for the lease of buildings; and between 1 and 4 years for the lease of machinery and equipment.
The lease contracts are denominated in the euros.
Movements in liabilities related to lease over the year are provided in the table below:

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Balance at 1 January | 3,885 | 3,537 | 1,348 | 1,579
New lease liabilities | 1,005 | 863 | 627 | 110
Interest charged | 158 | 146 | 32 | 56
Lease payments | (741) | (574) | (373) | (380)
Lease terminations | (85) | (87) | - | (17)
Balance at 31 December | 4,222 | 3,885 | 1,634 | 1,348

The Group’s and the Company’s lease liabilities are secured by right-of-use assets (Note 6).
114
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
16. Grants

| Group | Company
Balance at 1 January 2022 | 939 | 811
Amortisation charge | (156) | (133)
Balance at 31 December 2022 | 783 | 678
Obtained grants | 646 | 646
Amortisation charge | (136) | (125)
Balance at 31 December 2023 | 1,293 | 1,199

The grants consist of the support received from the EU funds for the construction of structures, acquisition of
machinery and equipment (non-current assets).
In 2023, a new contract was signed with the Environmental Project Management Agency of the Ministry of the
Environment of the Republic of Lithuania regarding the acquisition of solar power plants. No new agreements were
signed in 2022.
Amortisation of grants is recognised in the statement of comprehensive income within the cost of sales and reduces
depreciation expenses of the related assets.
17. Long-term employee benefits
As at 31 December 2023 and 2022, the Group and the Company accounted for long-term employee benefits for
employees leaving the Group or the Company after reaching the retirement age. Expenses related to the accounting
for these liabilities are included in the statement of comprehensive income.

| Group | Company
At 1 January 2022 | 173 | 71
Change during the year 2022 | 75 | 32
At 31 December 2022 | 248 | 103
Change during the year 2023 | 48 | 9
At 31 December 2023 | 296 | 112

Actuarial gains and losses during 2023 and 2022 were insignificant, therefore they were not separately disclosed in
other comprehensive income.
The main assumptions applied in evaluating the Group’s and the Company’s long-term employee benefits are as
follows:

| At 31 | At 31
| December 2023 | December 2022
Discount rate | 2.88% | 2.88%
Expected annual salary growth rate | 5% | 5%

18. Trade and other amounts payable

|  | Group |  | Company
| At 31 | At 31 | At 31 | At 31
| December 2023 | December 2022 | December 2023 | December 2022
Trade payables | 18,477 | 25,979 | 10,067 | 15,039
Wages and salaries and social |  |  |  |
security contributions | 4,324 | 3,328 | 1,628 | 1,508
Advance amounts received | 235 | 325 | 88 | 83
Accrued expenses | 328 | 723 | 106 | 92
Amounts payable to group |  |  |  |
companies under cashpool | - | - | 5,380 | -
agreement |  |  |  |
Other amounts payable | 1,486 | 1,485 | 746 | 827
TOTAL | 24,850 | 31,840 | 18,015 | 17,549
Of which: |  |  |  |
Attributable to financial liabilities |  |  |  |
(Note 3) | 20,291 | 28,187 | 16,299 | 15,958
Not attributable to financial liabilities | 4,559 | 3,653 | 1,716 | 1,591

115
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
19. Segment information
Segment reporting
For decision making purposes, the Group is organised into three operating business units based on its products
produced and has three reportable segments: paper and paper products, wood hardboards and wood products, raw
materials for corrugated cardboard and related products. The Group analyses segment information only up to gross
profit, as other operating income and finance income and expenses are not attributed to any segment. Assets and
liabilities of the Group are not divided into segments for decision-making purposes. However, information about
property, plant and equipment and intangible assets, investment property and right-of-use assets is disclosed
according to the segments.
Segment information about these three business segments is presented below:

|  |  | Raw materials |  |  |  |
Group | Paper and | Wood | for corrugated | Total |  |  |
| paper |  | cardboard and | reportable |  | Unallocated Elimination | TOTAL
2023 | products | hardboards | related | segments |  |  |
|  |  | products |  |  |  |
Unconsolidated segment | 97,363 | 27,979 | 92,488 | 217,830 | 16,545 | (39,023) | 195,352
sales |  |  |  |  |  |  |
Inter-segment sales | (5,053) | (1,080) | (20,312) | (26,445) | (12,578) | 39,023 | -
Sales to third parties | 92,310 | 26,899 | 72,176 | 191,385 | 3,967 | - | 195,352
Cost of sales | (61,228) | (23,149) | (56,527) | (140,904) | (2,811) | - | (143,715)
Gross profit | 31,082 | 3,750 | 15,649 | 50,482 | 1,156 | - | 51,637
Depreciation and amortisation | 3,361 | 1,063 | 4,317 | 8,741 | 909 | - | 9,650
Property, plant and equipment of the segment | 23,231 | 5,529 | 35,770 | 64,530 | 4,066 | - | 68,596
Intangible assets of the segment | 174 | 41 | 507 | 722 | 548 | - | 1,270
Investment property of the segment | - | - | - | - | 4,621 | - | 4,621
Right-of-use assets of the segment | 297 | 856 | 2,024 | 3,177 | 1,138 | - | 4,315
Goodwill | - | - | 3,001 | 3,001 | - | - | 3,001
Investments of the segment | 2,067 | 540 | 3,161 | 5,768 | 1,993 | - | 7,761

|  |  | Raw materials |  |  |  |
Group | Paper and | Wood | for corrugated | Total |  |  |
| paper |  | cardboard and | reportable |  | Unallocated Elimination | TOTAL
2022 | products | hardboards | related | segments |  |  |
|  |  | products |  |  |  |
Unconsolidated segment | 84,462 | 28,722 | 123,440 | 236,624 | 14,945 | (48,360) | 203,209
sales |  |  |  |  |  |  |
Inter-segment sales | (6,743) | (1,070) | (30,488) | (38,301) | (10,059) | 48,360 | -
Sales to third parties | 77,718 | 27,652 | 92,953 | 198,323 | 4,886 | - | 203,209
Cost of sales | (66,652) | (25,347) | (76,176) | (168,175) | (4,189) | - | (172,364)
Gross profit | 11,066 | 2,305 | 16,777 | 30,148 | 697 | - | 30,845
Depreciation and amortisation | 3,400 | 747 | 4,417 | 8,564 | 834 | - | 9,398
Property, plant and equipment of the segment | 24,505 | 6,063 | 37,299 | 67,867 | 3,327 | - | 71,194
Intangible assets of the segment | 292 | 9 | 370 | 671 | 92 | - | 763
Investment property of the segment | - | - | - | - | 4,410 | - | 4,410
Right-of-use assets of the segment | 280 | 872 | 2,086 | 3,238 | 1,039 | - | 4,277
Goodwill | - | - | 3,001 | 3,001 | - | - | 3,001
Investments of the segment | 1,507 | 1,868 | 4,938 | 8,313 | 668 | - | 8,981

1
Unallocated sales comprise sales not attributable to either of the listed segments, mainly, sales of heating energy (steam) (as the
Company has its own steam house) and sales of other utilities.
2
Unallocated cost of sales comprises cost related to unallocated sales, mainly, the cost of wood and gas necessary for the energy
generation.
3
Unallocated depreciation and amortisation, property, plant and equipment, investment property, intangible assets and capital
expenditure are related to sales of thermal energy and other utilities.
116
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
19. Segment information (continued)
Breakdown by region
The following table shows a breakdown of revenue by region for the year ended 31 December:

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Domestic market (Lithuania) | 61,176 | 74,115 | 36,543 | 36,647
European Union | 114,002 | 110,003 | 60,919 | 50,581
Other countries | 20,174 | 19,091 | 4,266 | 3,229
TOTAL | 195,352 | 203,209 | 101,728 | 90,457

Breakdown of property, plant and equipment, intangible assets, right-of-use assets and investment property by
geographical location:

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Lithuania | 80,690 | 82,751 | 32,819 | 33,121
Latvia | 755 | 379 | - | -
Ukraine | 358 | 515 | - | -
TOTAL | 81,803 | 83,645 | 32,819 | 33,121

20. Cost of sales

| Group |  |  | Company
| 2023 | 2022 | 2023 | 2022
Raw materials and consumables | 75,568 | 88,994 | 44,542 | 47,288
Energy | 26,561 | 46,313 | 11,157 | 19,475
Wages and salaries and social security contributions | 20,638 | 17,259 | 7,670 | 6,375
Other expenses | 12,213 | 11,309 | 4,022 | 3,088
Depreciation and amortisation of non-current assets, including | 8,735 | 8,489 | 3,277 | 3,368
grants |  |  |  |
TOTAL | 143,715 | 172,364 | 70,668 | 79,594

21. Selling and distribution expenses

| Group |  |  | Company
| 2023 | 2022 | 2023 | 2022
Fuel and transport services | 10,640 | 11,096 | 3,548 | 3,421
Wages and salaries and social security contributions | 2,932 | 2,588 | 1,456 | 1,309
Other selling expenses | 729 | 622 | 264 | 208
Intermediation, marketing, advertising and representation | 501 | 115 | 496 | 108
Property maintenance and servicing | 266 | 258 | 130 | 125
Depreciation and amortisation of non-current assets | 186 | 167 | 332 | 326
TOTAL | 15,254 | 14,846 | 6,226 | 5,497

ESRS: SBM-1
117
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
22. Administrative expenses

| Group |  |  | Company
| 2023 | 2022 | 2023 | 2022
Wages and salaries and social security contributions | 4,950 | 4,002 | 2,136 | 1,683
Legal services | 960 | 553 | 22 | 9
Taxes (other than income tax) | 791 | 675 | 344 | 236
Property maintenance and servicing | 741 | 772 | 504 | 523
Social expenses | 697 | 525 | 340 | 198
Depreciation and amortisation of non-current assets | 594 | 587 | 422 | 421
Insurance services | 578 | 359 | 188 | 125
Consultation services | 452 | 330 | 31 | 50
Security services | 392 | 368 | 51 | 44
Support | 294 | 292 | 165 | 64
Bonuses and other similar payments | 197 | 48 | 121 | 48
Audit services | 182 | 163 | 91 | 67
Advertising and representation | 150 | 112 | 86 | 36
Personnel training and recruitment expenses | 93 | 71 | 57 | 34
Impairment of doubtful amounts receivable/(reversal of impairment) | 91 | (1) | 72 | -
Fuel and transport services | 62 | 66 | 24 | 26
Expenses for the listing of securities and related expenses | 38 | 40 | 38 | 40
Other administrative expenses | 358 | 417 | 132 | 209
TOTAL | 11,620 | 9,379 | 4,824 | 3,813

Under the agreements with the audit firm, PricewaterhouseCoopers UAB provided audit services of the year 2023
audit to the Group and the Company for the amount of EUR 133 thousand and EUR 51 thousand, respectively
(2022: EUR 136 thousand and EUR 47 thousand, respectively); non-audit services provided amounted to respectively
EUR 13.5 thousand and EUR 6.5 thousand (2022: EUR 11 thousand and EUR 6 thousand, respectively).
23. Other income

| Group |  |  | Company |
| 2023 | 2022 | 2023 |  | 2022
Rental income | 755 | 636 |  | 761 | 649
Dividend income | - | - |  | 4,385 | 11,300
TOTAL | 755 | 636 |  | 5,146 | 11,949

In 2023, the Company received dividends of EUR 385 thousand from Grigeo Recycling UAB, dividends of EUR 4,000
thousand from Grigeo Investicijų Valdymas UAB. In 2022, the Company received dividends of EUR 1,000 thousand
from Grigeo Baltwood UAB, dividends of EUR 400 thousand from Grigeo Recycling UAB, dividends of EUR 9,900
thousand from Grigeo Investicijų Valdymas UAB.
24. Other gains/(losses) – net

| Group |  |  | Company |
Net gain from turnover of emission | 2023 | 2022 | 2023 |  | 2022
allowances | 3,744 | 4,662 |  | 3,064 | 3,602
Result of disposal of assets | 117 | 188 |  | 95 | 171
Other gain/(losses) | 32 | 10 |  | 49 | 46
TOTAL | 3,893 | 4,860 |  | 3,208 | 3,819

118
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
25. Finance income and costs

| 2023 | Group | 2022 | 2023 | Company | 2022
Interest income |  | 668 | 15 |  | 522 | 3
Foreign exchange gain – net |  | - | - |  | - | -
Other finance income |  | 17 | 7 |  | 2 | -
Total finance income |  | 685 | 22 |  | 524 | 3
Interest on loans and lease |  | (420) | (244) |  | (137) | (111)
Foreign exchange loss – net |  | (15) | (47) |  | (1) | (1)
Default charges and other finance costs |  | (24) | (168) |  | (23) | (53)
Total finance costs |  | (459) | (459) |  | (161) | (165)
Net finance costs |  | 226 | (437) |  | 363 | (162)

Capitalisation of interest on loans and lease
In 2023, interest of EUR 8 thousand for the Group and interest of EUR 6 thousand for the Company were capitalised.
(2022: EUR 42 thousand and EUR 5 thousand, respectively).
26. Income tax and deferred income tax

| Group |  | Company |
Income tax expense components: | 2023 | 2022 | 2023 | 2022
Current year income tax | 3,595 | 800 | 3,208 | 205
Adjustments to previous year income tax | (28) | (66) | (5) | -
Deferred income tax (benefit) | 749 | 324 | 170 | 565
Income tax expenses recognised in the statement of comprehensive income | 4,316 | 1,058 | 3,373 | 770

The amount of income tax expenses attributable to the operating result for the year can be reconciled against the
amount of income tax expenses that would result from applying the statutory income tax rate to profit before income
tax:

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Profit before income tax | 29,637 | 11,679 | 28,727 | 17,159
Income tax expenses calculated at the tax |  |  |  |
rate of 15% | 4,446 | 1,752 | 4,309 | 2,574
Effect of a higher income tax rate applied in Ukraine | 9 | 1 | - | -
Effect of a tax rate due to taxation in Latvia | (4) | (20) | - | -
Effect of investment relief | (82) | (173) | (87) | (125)
Support | (55) | (24) | (50) | (19)
Adjustments of income tax in respect of prior periods | (28) | (66) | (5) | -
Transfer of tax losses between group |  |  |  |
companies | - | - | (179) | -
Non-allowable deductions | 52 | (398) | 49 | 40
Income not subject to tax | (22) | (14) | (664) | (1,700)
Income tax expenses recognised in the statement of comprehensive income | 4,316 | 1,058 | 3,373 | 770

119
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
26. Income tax and deferred income tax (continued)

|  | Group |  | Company
| At 31 December | At 31 December | At 31 December | At 31 December
Deferred income tax assets | 2023 | 2022 | 2023 | 2022
Decrease in net realisable value |  |  |  |
of amounts receivable | 5 | 12 | - | 11
Investment relief | 235 | 575 | - | -
Write-downs of inventories to net | 168 | 142 | 77 | 51
realisable value |  |  |  |
Long-term employee benefits | 45 | 37 | 17 | 15
Vacation reserve | 237 | 210 | 120 | 107
Right-of-use assets and liabilities | 14 | 9 | 8 | 9
Tax losses carried forward | 10 | - | - | -
Other accruals | 48 | 21 | 30 | 13
Grants | 60 | 71 | 60 | 71
Deferred income tax assets | 822 | 1,077 | 312 | 277
Less: unrecognised part | - | (11) | - | (11)
Deferred income tax assets – | 822 | 1,066 | 312 | 266
net |  |  |  |
Deferred income tax liability |  |  |  |
Property, plant and equipment | (2,474) | (1,969) | (924) | (708)
Deferred income tax liability | (2,474) | (1,969) | (924) | (708)
Deferred income tax – net | (1,652) | (903) | (612) | (442)

The Group’s deferred income tax assets and liabilities were offset at the amount which is related to the same tax
administration authority and the same taxable entity.
Movements in the Group’s deferred income tax differences before and after tax were as follows:

| At 31 |  | At 31 |  | At 31
Group | December | Change | December | Change | December
| 2021 |  | 2022 |  | 2023
Non-current assets | (1,413) | (556) | (1,969) | (505) | (2,474)
Investment relief | 409 | 166 | 575 | (340) | 235
Long-term employee benefits | 26 | 11 | 37 | 8 | 45
Decrease in net realisable value of amounts receivable | 20 | (8) | 12 | (7) | 5
Write-downs of inventories to net | 116 | 26 | 142 | 26 | 168
realisable value |  |  |  |  |
Vacation reserve | 196 | 14 | 210 | 27 | 237
Right-of-use assets and liabilities | 9 | - | 9 | 5 | 14
Tax losses carried forward | - | - | - | 10 | 10
Grants | 69 | 2 | 71 | (11) | 60
Other | - | 21 | 21 | 27 | 48
Total deferred income tax | (568) | (324) | (892) | (760) | (1,652)
Unrecognised part | (11) | - | (11) | 11 | -
Deferred income tax – net | (579) | (324) | (903) | (749) | (1,652)

As at 31 December 2022 and as at 31 December 2021, the amount of the Group’s unrecognised deferred income tax
related to decrease in net realisable value of amounts receivable was equal to EUR 11 thousand. As at 31 December
2023, there was no such amount.
120
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
26. Income tax and deferred income tax (continued)
Movements in the Company’s deferred income tax differences before and after tax were as follows:
Company
At 31
December
2021
Recognised in
the statement
of comprehen-
sive income
At 31
December
2022
Recognised in
the statement
of comprehen-
sive income
At 31
December
2023
Property, plant and equipment
(470)
(238)
(708)
(216)
(924)
Investment relief
366
(366)
-
-
-
Long-term employee benefits
11
4
15
2
17
Decrease in net realisable value
of amounts receivable
11
-
11
(11)
-
Write-downs of inventories to net
realisable value
45
6
51
26
77
Vacation reserve
95
12
107
13
120
Grants
69
2
71
(11)
60
Right-of-use assets and liabilities
7
2
9
(1)
8
Other
-
13
13
17
30
Total deferred income tax
134
(565)
(431)
(181)
(612)
Unrecognised part
11
-
11
(11)
-
Deferred income tax – net
123
(565)
(442)
(170)
(612)
Deferred income tax assets and liabilities related to the companies operating in Lithuania were accounted for at a
rate of 15% in 2023 and 2022. Deferred taxes related to the company operating in Ukraine were calculated at a rate
of 18% in 2023 and 2022. Deferred income tax assets arising from the investment relief can be realised by the
companies operating in Lithuania over the current and subsequent four years.
27. Basic and diluted earnings per share
Earnings per share are calculated by dividing the net profit attributable to the shareholders by the annual number of
ordinary shares issued and paid. Diluted earnings per share are calculated by dividing the net profit attributable to the
shareholders by the weighted average of ordinary shares and share options. The calculation of the basic and diluted
earnings per share is presented below:

| Group |  | Company |
Net profit for the year attributable to the | 2023 | 2022 | 2023 | 2022
Company’s shareholders | 25,306 | 10,525 | 25,354 | 16,389
Number of ordinary shares | 131,400,000 | 131,400,000 | 131,400,000 | 131,400,000
Share options | 1,660,000 | 1,660,000 | 1,660,000 | 1,660,000
Weighted average number of ordinary shares | 133,060,000 | 133,060,000 | 133,060,000 | 133,060,000
Earnings per share (in EUR) | 0.193 | 0.080 | 0.193 | 0.125
Diluted earnings per share (in EUR) | 0.190 | 0.079 | 0.191 | 0.123

28. Dividends per share

| 2023 | 2022
Allocated dividends | 6,570 | 6,570
Number of shares | 131,400,000 | 131,400,000
Allocated dividends per share (in EUR) | 0.05 | 0.05

29. Adjusted EBITDA
The management of the Group and the Company calculate the adjusted EBITDA – they monitor this performance
indicator both at the consolidated level and at the individual company level. The management believes that this
indicator is important for understanding the Group’s and the Company’s financial performance. The adjusted EBITDA
is calculated by adjusting profit from continuing operations to exclude the impact of taxation, net finance costs,
depreciation, amortisation, impairment losses/reversals related to goodwill, intangible assets, property plant and
equipment. The calculation also includes amortisation of subsidies related to non-current assets which affects the
profit for the period.
121
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
29. Adjusted EBITDA (continued)
The adjusted EBITDA as a performance indicator is not established by IFRS. The Group’s definition of the adjusted
EBITDA may not match with similarly named performance indicators and disclosures of other entities.

| Group |  | Company |
| 2023 | 2022 | 2023 | 2022
Profit for the period | 25,321 | 10,621 | 25,354 | 16,389
Income tax | 4,316 | 1,058 | 3,373 | 770
Profit before income tax | 29,637 | 11,679 | 28,727 | 17,159
Adjustment: |  |  |  |
Finance costs – net (Note 25) | (226) | 437 | (363) | 162
Dividends received (Note 23) | - | - | (4,385) | (11,300)
Depreciation (Notes 5 and 8) | 8,946 | 8,730 | 3,731 | 3,792
Amortisation (Notes 6 and 7) | 704 | 667 | 426 | 455
Amortisation of grants (Note 16) | (135) | (156) | (124) | (133)
Adjusted EBITDA | 38,926 | 21,357 | 28,011 | 10,135

30. Financial instruments by category

Group | Notes | At 31 December 2023 | At 31 December 2022
Financial assets at amortised cost |  |  |
Trade receivables | 10 | 18,757 | 22,247
Other amounts receivable | 10 | 273 | 383
Cash and cash equivalents | 12 | 18,952 | 14,840
Total financial assets at amortised cost |  | 37,982 | 37,470
Financial liabilities at amortised cost |  |  |
Borrowings | 14 | 4,644 | 7,007
Lease liabilities | 15 | 4,222 | 3,885
Trade payables | 18 | 18,477 | 25,979
Other amounts payable | 18 | 1,814 | 2,208
Total financial liabilities at amortised |  | 29,157 | 39,079
cost |  |  |

Company
Notes
At 31 December 2023
At 31 December 2022
Financial assets at amortised cost
Trade receivables
10
10,413
12,215
Amounts receivable from related parties
10
1,906
3,005
Other amounts receivable
10
87
189
Cash and cash equivalents
12
15,669
7,544
Total financial assets at amortised cost
28,075
22,953
Financial liabilities at amortised cost
Borrowings
14
1,868
2,857
Lease liabilities
15
1,634
1,348
Trade payables
18
9,043
14,434
Trade payable to related parties
18
6,404
605
Other amounts payable
18
852
919
Total financial liabilities at amortised
cost
19,801
20,163
Risks associated with the financial instruments relevant to the Company and the Group are disclosed in Note 3.
122
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
31. Related-party transactions
The Group’s related parties are as follows:
− Companies having significant influence – Ginvildos Investicija UAB – the main shareholder of Grigeo AB;
− Other related parties – the companies related to the members of the Supervisory Board (transactions were
conducted with the following companies: Elnorma UAB).
The Company’s related parties are as follows:
- Companies having significant influence – Ginvildos Investicija UAB – the main shareholder of the Company;
- Subsidiaries – subsidiaries of Grigeo AB (the list of the subsidiaries is presented in Note 1);
- Other related parties – the companies related to the members of the Supervisory Board (transactions were
conducted with the following companies: Elnorma UAB).
Transactions with the related parties comprise regular sales and purchases of goods and services related to the
Company's activity.
As at 31 December 2023 and 2022, there were no guarantees or pledges given or received in respect of the related-
party payables and receivables at the Group.
At the date of the issue of these financial statements, the Company had provided the letter to Grigeo Klaipėda AB
confirming that it had assumed the obligation to grant financial support to Grigeo Klaipėda AB, if a need arises, for
the next 12 months from the date of the letter.
Related-party payables and receivables are expected to be settled in cash or by set-off against payables/receivables
to/from a respective related party.
Related-party payables and receivables are subject to the same terms and conditions that are applicable to
payables/receivables to/from the external customers/suppliers.

| Sales of |  | Purchases of |  | Amounts |  | Amounts |
Group (the year 2023) | goods and |  | goods and |  |  |  |  |
Companies having significant influence | services | - | services | - | receivable | - | payable | -
Other related parties |  | 1 |  | - |  | - |  | -
TOTAL |  | 1 |  | - |  | - |  | -

| Sales of |  | Purchases of | Amounts |  | Amounts |
Group (the year 2022) | goods and |  | goods and |  |  |  |
| services |  | services | receivable |  | payable |
Companies having significant influence |  | - | 12 |  | - |  | 2
Other related parties |  | 3 | - |  | - |  | -
TOTAL |  | 3 | 12 |  | - |  | 2

Company (the year 2023)
Sales of
goods and
services
Purchases of
goods and
services
Amounts
receivable*
Amounts
payable**
Companies having significant influence
-
-
-
-
Subsidiaries
7,764
9,486
1,398
6,001
Other related parties
1
-
-
-
TOTAL
7,765
9,486
1,398
6,001
Company (the year 2022)
Sales of
goods and
services
Purchases of
goods and
services
Amounts
receivable*
Amounts
payable**
Companies having significant influence
-
8
-
-
Subsidiaries
10,742
8,473
3,005
605
Other related parties
1
-
-
-
TOTAL
10,743
8,481
3,005
605
* Amounts receivable comprise prepayments for good, services and loans granted.
** Amounts payable also comprise loans received from the subsidiaries.
123
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
31. Related-party transactions (continued)
Key management personnel compensation
Compensation calculated to the key management personnel for the year ended 31 December:

| Group |  |  | Company |
| 2023 | 2022 | 2023 |  | 2022
Key management personnel compensation | 1,470 | 1,431 |  | 738 | 699
Average annual number of management personnel | 11 | 11 |  | 5 | 5

In 2023 and 2022, no loans, guarantees or any other benefits were paid or calculated, nor any assets were transferred
to the Company’s key management personnel. Amounts paid to the Board Members in 2023 for provision of services
were EUR 118 thousand at the Group and EUR 68 thousand at the Company. Amounts paid to the Board Members
in 2022 were EUR 18 thousand at the Company. Bonuses paid to the Supervisory Board by the Company totalled
EUR 13 thousand in 2023 (2022: EUR 11 thousand).
Shares (directly and indirectly held ownership interest) and job positions held by the Group’s and the Company’s key
management personnel at the Company are disclosed below:

Full name | Job position | Percentage of share capital
|  | and voting rights held at the Company, %
Gintautas Pangonis | President (until 06.05.2023) | 47.06
Vigmantas Kažukauskas | Vice-President for Business Development | 0.88
| (until 06.05.2023) |
Saulius Martinkevičius | Director for Purchase and Logistics | 0.28
Tomas Jozonis | Chief Executive Officer (from 06.05.2023) | -

32. Contingent liabilities
Taxes
The Tax Authorities have not carried out a full-scope tax audit at the Group companies. The Tax Authorities may inspect
accounting, transaction and other documents, accounting records and tax returns for the current and previous 3 calendar
years at any time, and in certain cases, for the current and previous 5 or 10 calendar years and impose additional taxes and
penalties. The Group’s management is not aware of any circumstances which may give rise to a potential material liability
in respect of taxes not paid.
Legal processes
A claim has been filed against Grigeo Klaipėda AB, subsidiary of Grigeo AB, regarding compensation for damage caused
to the environment. In the management’s opinion, numerous uncertainties exist in relation to the outcome of the claim (Note
33).
33. Legal processes
Background information
In 2021, the pre-trial investigation regarding wastewater management by Grigeo Klaipėda AB, subsidiary of Grigeo AB
(hereinafter the “Subsidiary”), was completed by the Klaipėda District Prosecutor’s Office of the Klaipėda Regional
Prosecutor’s Office (hereinafter the “Prosecutor’s Office”) and the criminal case was referred to the Šiauliai Regional Court.
The Subsidiary is charged in the criminal case under Articles 270(2), 228(2) and 300(3) of the Criminal Code of the Republic
of Lithuania. The Subsidiary is suspected of its actions related to improper operation of its wastewater treatment plant
(hereinafter the “WWTP”) during the period from 1 January 2012 to 13 February 2020 when partially biologically treated
wastewater would be discharged through the treated wastewater collector of municipal company Klaipėdos Vanduo AB to
the Curonian Lagoon. The trial of the case began in September 2022.
According to the Prosecutor’s Office’s indictment act of 31 December 2021 in the criminal case No 04-2-00154-19,
(hereinafter the “Indictment Act”), the Subsidiary abused the office, forged documents and violated the legal acts in order to
seek material gain (to avoid a pollution tax in the amount of at least EUR 37,863,706) and caused significant damage to the
environment. No claim has been brought against the Subsidiary for unpaid related taxes.
The Environmental Protection Department (hereinafter the “EPD”) filed a civil claim against the Subsidiary regarding the
compensation for material damage caused to the environment in the criminal case in the amount of EUR 48,257,676.57. In
establishing the fact of the damage and calculating the amount of the damage, the EPD referred to the Methodology for
estimation of the amounts of compensation for damage caused to the environment approved by Order No 471 of the Minister
of Environment of the Republic of Lithuania of 9 September 2002 (hereinafter the “Methodology”). The fact and amount of
significant damage to the environment referred to in the civil action is not based on a significant adverse change
(deterioration of the water status and/or ecological potential of the Curonian Lagoon) but on the Methodology, which derives
124
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
33. Legal processes (continued)
the fact of damage to the environment from the fact and amount of the pollutants allegedly released by the Subsidiary into
the natural environment.
The Subsidiary is not denying its legal liability and it expressed its standpoint in writing to the Prosecutor’s Office that it was
and still is prepared to compensate for the objectively calculated damage if such damage is to be determined on the basis
of unbiased expert calculations.
The Subsidiary is ready to implement the plan of environmental remedial measures as soon as possible with the aim of
restoring the original condition of the environment and compensating for the damage that it has caused, objectively
determined and proceeding from unbiased expert calculations.
Scientific research
In order to expedite the determination of the fact and scope of damage caused to the environment (the water of the Curonian
Lagoon) the Subsidiary has organised on its own initiative a tender process in order to select international experts to assess
potential environmental damage caused by the Subsidiary. As a result, a group of the expert organisations of the USA and
Italian companies providing consultative expert services in the environmental area (i.e. TIG Environmental (leading expert
Dr. Carlo Monti (the Italian scientist and the Executive Director of TIG Environmental Forensic Examination), Veritas
Economic Consulting and Hydrodata S.p.A (hereinafter “TIG”) was engaged to determine and calculate the damage to the
water status of the Curonian Lagoon inflicted by the incriminated illicit activities of the Subsidiary.
The TIG’s environmental assessment has been performed according to Directive 2004/35/EC of the European Parliament
and of the Council of 21 April 2004 on environmental liability regarding the prevention and remedying of environmental
damage (hereinafter “Directive 2004/35/EC”) and according to the guideline published by the European Commission
(European Commission, Eftec and Stratus Consulting, 2013) which provides specific guidelines for damage assessment.
The guideline is in line with the principles of Directive 2004/35/EC which stipulate that compensatory remediation is carried
out by compensating for the temporary loss of natural resources and / or functions until such resources and functions are
restored. Such compensation is to consist of additional improvements to protected natural habitats and species or water,
either in the damaged area or in an alternative area. Directive 2004/35/EC does not provide for punitive damages.
On 28 October 2020, TIG delivered the final report on the environmental damage assessment for the Curonian Lagoon
which analysed the composition of the combined wastewaters of Grigeo Klaipėda AB and municipal company Klaipėdos
Vanduo AB (because they get mixed before entering the Lagoon), their impact on the local environment, the biodiversity,
the ecological condition of the Curonian Lagoon, and the landscape. During the assessment the above-mentioned
monitoring data from the Environmental Protection Agency (hereinafter the “EPA”), municipal company Klaipėdos Vanduo
AB, the Klaipėda Seaport Authority were used, a survey of the Curonian Lagoon’s condition performed by the University of
Klaipėda, analysis results from the State Food and Veterinary Service as well as Grigeo Klaipėda AB’s wastewater test
results rendered by the independent laboratories were taken into consideration.
TIG did not identify any significant damage to the water status of the Curonian Lagoon by the discharge of biologically
partially untreated wastewater. In the worst-case scenario (if only 15% of the wastewaters were treated biologically in the
Subsidiary’s WWTP) a very low ecological impact (i.e., not damage) from the releases of untreated wastewater could have
been caused.
The plan of environmental restoration measures
On 26 June 2020, the EPD submitted to the Subsidiary the assessment of the ecological status or ecological potential and
deterioration of chemical status of the surface water body – the Curonian Lagoon – performed by the EPA, dated 11 May
2020, and requested the Subsidiary to submit a plan of environmental restoration measures (hereinafter the “PERM”). On
25 April 2023, the experts engaged by the Subsidiary prepared a report entitled 'Potential impact of the discharge of partially
untreated wastewater by AB Grigeo Klaipėda on the deterioration of the ecological potential of the Klaipėda Strait within one
class (at State monitoring stations 2 and 3B)', which denied the deterioration of the water status of the Curonian Lagoon
due to the Subsidiary’s partially biologically treated wastewater, allegedly identified by the EPA in its assessment report
dated 11 May 2020.
The Subsidiary has submitted the PERM several times, but on 6 December 2021, the EPD refused to approve the PERM
submitted by the Subsidiary. On 18 October 2022, the Vilnius Regional Administrative Court upheld the Subsidiary’s claim
against the decision of the EPD whereby the EPD refused to approve the PERM submitted by the Subsidiary, the purpose
of which is to remove the amount of incriminated pollutants from the Curonian Lagoon, finding that the decision taken by
the EPD could not be regarded as reasoned, substantiated and in compliance with the requirements of the Law on Public
Administration.
On 3 February 2023, the Subsidiary submitted a new PERM to the EPD, the aim of which, should the EPD approve the
plan, is to remove the negative impact of the incriminated pollutants from the natural environment of the Curonian Lagoon.
By the decision of 26 April 2023, the EPD did not approve this PERM. On 28 October 2023, the Subsidiary submitted an
updated PERM to the EPD, which was rejected by the EPD as incomplete on 14 February 2024.
125
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
33. Legal processes (continued)
Civil claim
On 3 March 2020, the EPD filed a civil claim against the Subsidiary for compensation of a EUR 3,982,184 damage caused
to the environment in the pre-trial investigation case (the civil claim was received by the Subsidiary on 17 July 2020). On 26
January 2021, the Subsidiary received from the Prosecutor’s Office a revised civil claim of the EPD regarding the
compensation of a material damage caused to the environment in the criminal case in the amount of EUR 48,257,676.57.
The amount of damage caused to the environment specified in the civil claim corresponds to the amount indicated in the
Indictment Act delivered against the Subsidiary.
The damage caused to the water body (the Curonian Lagoon) was estimated in the civil claim according to the general
mathematical formula specified in the Methodology using the following information and documentation:
- the quantities of sewage discharged to the collector of municipal company Klaipėdos Vanduo AB;
- the biochemical composition of sewage discharged to the collector of municipal company Klaipėdos Vanduo AB which is
supported by the documents evidencing the data for exceedingly limited period (November 2019 to 7 January 2020), which
could not be construed as sufficient and representative time-basis to substantiate findings for the entire incriminated period
(from 1 January 2012 to 7 January 2020);
- the statement that a substantial amount of wastewater was not treated, whereas the said conclusion casts doubt caused
by substantively contradicting findings of experts of both parties (the Prosecutor’s Office and the Company) in relation to
technical capabilities of the Company’s waste treatment facilities as regards quantities and composition of pollution (partially
untreated wastewater) reportedly released to the environment (the Curonian Lagoon);
- the unsupported statement that the damage done to the environment occurs by diminution or loss of certain values without
indication which specific environmental element was negatively affected and what values and to what extent were lost due
to the Subsidiary's actions.
No claim has been brought against the Subsidiary for unpaid related taxes. According to the Subsidiary’s management,
such a claim seeking the award of unpaid taxes, in all likelihood, could not be brought against the Subsidiary, as the purpose
of the environmental pollution tax and the compensation (remedy) of environmental damage differs. In case of environmental
pollution, the environment is polluted in a place agreed with responsible authorities by measuring the quantity of pollutants
and paying a respective environmental tax, whereas the amount of environmental damage is calculated on the basis
environmental pollution with pollutants prohibited by the legal acts and (or) environmental pollution in a prohibited manner
or in a prohibited location. If there is a claim lodged for compensation of environmental damage made, as result of release
of the specified pollutants in violation of the requirements of the legal acts, in the view of the Subsidiary’s management, it is
not possible at the same time (concurrently) to claim the payment of an applicable pollution tax for the same pollutants
released.
Key considerations of the civil claim of the EPD
The following was not considered and/or indicated in the civil claim:
- the requirements of Article 32 of the Environment Protection Law whose provisions are implemented by the
Methodology. Article 32 of the Environment Protection Law indicates that the damage to the environment is assessed
and the amount of compensation is calculated in accordance with the methodology approved by the Minister of the
Environment, assessing the initial condition of the environment, significance of negative impact on the environment,
natural recovery possibilities and time, as well as adopted remediation measures;
- identification of specific environmental element(s) which was(were) affected and assessment of the significance of the
negative impact of Subsidiary's actions on the environment (Curonian Lagoon);
- data on the fact and extent of the damage caused by the Subsidiary's actions;
- the causal link between the identified significant negative impact on the environment and the Subsidiary's actions.
The Subsidiary’s management considers the above list to remain conclusive notwithstanding the pre-trial investigation files
that the Subsidiary became acquainted with in September 2021. Different expert reports within the pre-trial investigation of
the case deliver inconsistent findings and conclusions which further substantiate the fact of numerous uncertainties in
relation to the outcome of court proceedings and the amount of expenditure required to settle related outstanding obligations
of the Subsidiary.
126
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
33. Legal processes (continued)
Summary of uncertainties
At the date of approval of these consolidated financial statements the management faces the following uncertainties in
relation to the amount of the civil claim or determination of the timing of any possible outcome of the civil claim:
- The Subsidiary does not currently possess any objective, complete and comprehensive factual data in relation to the
period, extent, frequency and biochemical composition of its sewage discharged to the collector of municipal company
Klaipėdos Vanduo AB.
- The damage caused to the environment was determined in the civil claim according to the general mathematical formula
specified in the Methodology without identifying initial condition of the environment, significance of negative impact on
the environment and not taking into account that a plan of measures for the environment restoration is not prepared
and applied as required by legal acts.
- The fact and scope of damage caused to the environment were not determined in the civil claim by special scientific
and other valid studies aimed at individual approach to a particular case in line with methods entrenched in Directive
2004/35/EC and Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing
a framework for Community action in the field of water policy (hereinafter the “Directives”), instead, a general
mathematical formula specified in the Methodology was used.
- The fact of pollution by the Subsidiary is mistakenly equated with the fact of environmental damage. The fact and extent
of the actual environmental damage made by the Subsidiary is not established and determined.
- Uncertainties of the damage calculated in the civil claim are also related to the fact that it is not clear why the EPD did
not apply the mandatory legal act Description of the procedure for selecting environmental remediation measures and
obtaining prior approval (hereinafter the “Legal Act on ERM”) approved by the Minister of Environment by Order No
D1-228 of 16 May 2006 to implement the principles and legal requirements of Directive 2004/35/EC. Clause 10 of the
Legal Act on ERM states that environmental damage related to water (the Curonian Lagoon) is to be remedied by
restoring the baseline condition of environment by choosing the following methods of environmental restoration:
primary, supplementary and compensatory.
Conclusion
The Subsidiary is not denying its legal liability and is prepared to compensate for objectively calculated damage. The
Subsidiary’s management, following the scientific research performed by the independent TIG Environmental experts,
estimates that the potential costs of offsetting ecological impact from the releases of biologically untreated wastewater are
limited. On the upper limit of the range the assessment of the EPD, the claim filed amounts to EUR 48,257,676.57 which is
uncertain in the following areas:
- The claim amount is based on the mathematical formula specified in the Methodology with the key components of the
formula – quantities and biochemical composition of sewage – being uncertain. The management thus far does not
possess objective information to reliably estimate quantity of the pollutants (BOD
7
, nitrogen, phosphorus or any other
elements) in the biologically partially untreated wastewater released.
- The management considers that the claim is not in line with the methods entrenched in the above-mentioned local legal
acts and the Directives.
International Accounting Standard 37 requires measuring the provision in the amount of the best estimate of the expenditure
required to settle the present obligation. As there is a wide range of estimates depending on the source of information and
significant uncertainties relating to them, as described above, it is difficult to estimate probability of any outcome as well as
to assess the amount of expenditure required to settle this obligation. Having no objective information on the quantities and
biochemical composition of the sewage discharged to the collector of municipal company Klaipėdos Vanduo AB, the
management could not reliably estimate the amount of provision and the provision was not recognised in the financial
statements, but instead is disclosed as a contingent liability. At the date of this report, the trial that started in 2022 did not
change the management’s estimations over the general situation and the outcome of the case. The management remains
to hold an opinion that any compensation for the potential damage should be scientifically based and estimated following
the legal acts and in accordance with the legal framework of the Republic of Lithuania and the European Union.
127
Grigeo AB, company code 110012450, Vilniaus g. 10, Grigiškės, 27101 Vilnius City Municipality
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
All amounts are in EUR thousands unless otherwise stated
« Table of Contents
34. Material uncertainties
Russia’s invasion of Ukraine on 24 February 2022 has a negative impact on the Group’s financial performance for the
year 2023. The Group’s subsidiary Grigeo Klaipeda AB has investments in Ukrainian subsidiary Mena Pak AT, which
ceased its operations completely after the start of the war. The operations were restored in May 2022.
Uncertainties related to the investment in Mena Pak AT
The Group’s statement of financial position includes the following consolidated assets and liabilities of Mena Pak AT:

Mena Pak AT |  | At 31 | At 31
|  | December 2023 December 2022 |
Non-current assets | 436 | 609 |
Current assets | 2,116 | 1,790 |
TOTAL ASSETS | 2,552 | 2,399 |
Shareholders’ equity | 2,306 | 2,168 |
Non-current liabilities | 4 | 12 |
Current liabilities | 242 | 219 |
TOTAL EQUITY AND LIABILITIES | 2,552 | 2,399 |

The Group’s statement of comprehensive income for the year 2023 includes the following consolidated results of
Mena Pak AT:

Mena Pak AT | 2023
Revenue | 4,800
Profit before tax | 297
Net profit | 252
EBITDA |

472
Mena Pak AT did not incur any damage during the war. However, the Group’s management estimates that a high
uncertainty exists in relation to Mena Pak AT’s assets of EUR 2.6 million and liabilities of EUR 0.2 million due to the
ongoing war and high uncertainty of future events.
Although the company Mena Pak AT was profitable in 2023 and 2022, due to a significant decrease in profitability
and future uncertainties, the parent company Grigeo Klaipėda AB had to account for the investment impairment of
EUR 1.6 million in year 2022. The determined value of Mena Pak AT approximates the carrying amount of its assets
reported in the balance sheet, therefore the Group's management did not determine an additional impairment for the
consolidated assets of Mena Pak AT.
Amounts receivable from countries participating in the war
Since the beginning of the war, the Group stopped sales to Belarus and Russia.
The Group had no sales to Belarus and Russia in the year 2023. In 2023, the Group's sales to Ukraine amounted to
EUR 3,243 thousand (1.7% of the Group’s total sales). In 2023, the Company's sales to Ukraine amounted to EUR
921 thousand (0.9% of the Company's total sales).
Before the war, in 2022, the Group's sales to Belarus and Russia amounted to EUR 984 thousand (0.5% of the
Group’s total sales). In 2022, the Group's sales to Ukraine amounted to EUR 8,472 thousand (4.2% of the Group’s
total sales). Before the war, in 2022, the Company's sales to Belarus and Russia amounted to EUR 231 thousand
(0.3% of the Company's total sales). In 2022, the Company's sales to Ukraine amounted to EUR 1,009 thousand
(1.1% of the Company's total sales).
Amounts receivable from customers in Belarus, Russia and Ukraine:

|  | Group |  | Company
| At 31 December | At 31 December | At 31 December | At 31 December
| 2023 | 2022 | 2023 | 2022
Ukraine | 201* | 255* | - | -
Russia | - | - | - | -
Belarus | - | - | - | -
TOTAL | 201 | 255 | - | -

*In 2023 and 2022, the total amount receivable consists of the amount receivable of subsidiary Mena Pak AT from
Ukrainian customers.
35. Events after the end of the reporting period
On 5 March 2024 the Group’s subsidiary Grigeo Hygiene UAB registered authorised share capital increase by
issuing 21,000,000 ordinary shares with a nominal value of EUR 1.00 each. The shares have been paid up in cash.
S
STATEMENT OF COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE FOR THE YEAR 2023
129
STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
for the year ended 31 December 2023
« Table of Contents
STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
Grigeo AB (hereinafter the “Company”), acting in compliance with Article 12(3) of the Republic of Lithuania Law on Securities and
paragraph 24.4 of the Listing Rules of Nasdaq Vilnius AB, hereby discloses how it complies with the Corporate Governance Code
for the Companies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In case of non-compliance with
this Code or some of its provisions or recommendations, the specific provisions or recommendations that are not complied with
are indicated and the reasons for such non-compliance are specified. In addition, other explanatory information indicated in this
form is provided.
PRINCIPLES/ RECOMMENDATIONS
YES /NO /NOT
APPLICABLE
COMMENTARY
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance
framework should protect the rights of shareholders.
1.1. All shareholders should be provided with access
to the information and/or documents established in
the legal acts on equal terms. All shareholders should
be furnished with equal opportunity to participate in
the decision-making process where significant
corporate matters are discussed.
Yes
The Company fully complies with this
recommendation and provides the information and/or
documents established in the legal acts to the
shareholders in accordance with the requirements
established by the Republic of Lithuania Law on
Securities and other legal acts.
1.2. It is recommended that the company’s capital
should consist only of the shares that grant the same
rights to voting, ownership, dividend and other rights
to all of their holders.
Yes
The authorised share capital of the Company
consists of 131,400,000 ordinary registered shares,
each with a nominal value of EUR 0.29. All
shareholders of the Company are granted equal
rights.
1.3. It is recommended that investors should have
access to the information concerning the rights
attached to the shares of the new issue or those
issued earlier in advance, i.e. before they purchase
shares.
Yes
The Company fully complies with this
recommendation.
1.4. Exclusive transactions that are particularly
important to the company, such as transfer of all or
almost all assets of the company which in principle
would mean the transfer of the company, should be
subject to approval of the general meeting of
shareholders.
Yes
The Company will comply with this recommendation.
1.5. Procedures for convening and conducting a
general meeting of shareholders should provide
shareholders with equal opportunities to participate
in the general meeting of shareholders and should
not prejudice the rights and interests of shareholders.
The chosen venue, date and time of the general
meeting of shareholders should not prevent active
participation of shareholders at the general meeting.
In the notice of the general meeting of shareholders
being convened, the company should specify the last
day on which the proposed draft decisions should be
submitted at the latest.
Yes
The procedures for convening and attending general
meetings of shareholders of the Company provide
equal opportunities for shareholders to attend a
meeting and do not prejudice their rights and
interests. The notice of the general meeting of
shareholders is published in the central database of
regulated information managed by Nasdaq Vilnius
AB and on the Company’s website in accordance
with the procedure prescribed by the Law on
Securities. General meetings of shareholders of the
Company are convened at the registered office and
business address of the Company at Vilniaus str. 10
Grigiškės, Vilnius city municipality. The chosen
location of the general meeting of shareholders does
not prevent active participation of the shareholders in
the meeting. In the notice of the general meeting of
shareholders being convened, the Company
specifies that the shareholders may submit the
proposed draft resolutions at any time prior to the
general meeting.
130
STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
for the year ended 31 December 2023
« Table of Contents
1.6. With a view to ensure the right of shareholders
living abroad to access the information, it is
recommended, where possible, that documents
prepared for the general meeting of shareholders in
advance should be announced publicly not only in
Lithuanian language but also in English and/or other
foreign languages in advance. It is recommended
that the minutes of the general meeting of
shareholders after the signing thereof and/or adopted
decisions should be made available publicly not only
in Lithuanian language but also in English and/or
other foreign languages. It is recommended that this
information should be placed on the website of the
company. Such documents may be published to the
extent that their public disclosure is not detrimental to
the company or the company’s commercial secrets
are not revealed.
Yes
The Company complies with this recommendation.
The Company publishes documents prepared for the
general meeting of shareholders in advance in the
Lithuanian and English languages. The Company
also publicly announces information about the
resolutions adopted by the general meeting of
shareholders in the Lithuanian and English
languages. The Company also announces the
aforementioned information on the Company’s
website.
1.7. Shareholders who are entitled to vote should be
furnished with the opportunity to vote at the general
meeting of shareholders both in person and in
absentia. Shareholders should not be prevented from
voting in writing in advance by completing the general
voting ballot.
Yes
The Company complies with this recommendation.
The notice of the general meeting of shareholders
being convened always indicates the possibility for
the shareholders to vote in writing by filling in the
attached voting ballot form.
1.8. With a view to increasing the shareholders’
opportunities to participate effectively at general
meetings of shareholders, it is recommended that
companies should apply modern technologies on a
wider scale and thus provide shareholders with the
conditions to participate and vote in general meetings
of shareholders via electronic means of
communication. In such cases the security of
transmitted information must be ensured and it must
be possible to identify the participating and voting
person.
No
The Company does not comply with this
recommendation due to legal uncertainties and
obstacles regarding the participation and voting of
shareholders in general meetings of shareholders via
electronic means of communication. The notice of the
general meeting of shareholders being convened
always states that the Company does not provide the
shareholders with the conditions to participate and
vote in the general meeting of shareholders via
electronic means of communication.
1.9. It is recommended that the notice on the draft
decisions of the general meeting of shareholders
being convened should specify new candidatures of
members of the collegial body, their proposed
remuneration and the proposed audit company if
these issues are included into the agenda of the
general meeting of shareholders. Where it is
proposed to elect a new member of the collegial
body, it is recommended that the information about
his/her educational background, work experience
and other managerial positions held (or proposed)
should be provided.
Yes
The Company complies with this recommendation.
The Company discloses information about the
candidates for the collegial body of the Company to
the shareholders immediately upon the receipt of the
proposals for the candidates for the collegial body.
The Company has only paid to the members of the
collegial body annual bonuses for their work that
were granted by the general meeting of
shareholders, and therefore, the proposed
remuneration was not indicated in the information
about the candidates for the collegial body. The
Company also provides information on the proposed
audit firm and the proposed remuneration for the
services when this issue is included in the agenda of
the general meeting of shareholders.
1.10. Members of the company’s collegial
management body, heads of the administration or
other competent persons related to the company who
can provide information related to the agenda of the
general meeting of shareholders should take part in
the general meeting of shareholders. Proposed
candidates to member of the collegial body should
also participate in the general meeting of
shareholders in case the election of new members is
included into the agenda of the general meeting of
shareholders.
Yes
The Company complies with this recommendation.
Relevant competent persons who can provide
information relating to the agenda of the general
meeting of shareholders always attend the general
meeting of shareholders. Proposed candidates for
the members of the collegial body attend the general
meetings of shareholders as far as possible.
131
STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
for the year ended 31 December 2023
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f
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its shareholders,
accountability of this body to the shareholders and objective monitoring of the company’s operations and its management bodies
as well as constantly provide recommendations to the management bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system.
2.1.1. Members of the supervisory board should act in
good faith, with care and responsibility for the benefit and in
the interests of the company and its shareholders and
represent their interests, having regard to the interests of
employees and public welfare.
Yes
According to the knowledge of the Company, all
members of the supervisory board act in good faith
for the benefit of the Company and its
shareholders.
2.1.2. Where decisions of the supervisory board may have
a different effect on the interests of the company’s
shareholders, the supervisory board should treat all
shareholders impartially and fairly. It should ensure that
shareholders are properly informed about the company’s
strategy, risk management and control, and resolution of
conflicts of interest.
Yes
The supervisory board treats all shareholders fairly
and impartially.
2.1.3. The supervisory board should be impartial in
passing decisions that are significant for the company’s
operations and strategy. Members of the supervisory board
should act and pass decisions without an external influence
from the persons who elected them.
Yes
The supervisory board is independent in passing
decisions that are significant for the Company’s
operations and strategy.
2.1.4. Members of the supervisory board should clearly
voice their objections in case they believe that a decision of
the supervisory board is against the interests of the
company. Independent1 members of the supervisory board
should: a) maintain independence of their analysis and
decision-making; b) not seek or accept any unjustified
privileges that might compromise their independence.
Yes
The supervisory board members are impartial in
passing decisions and clearly voice their will
regarding the decisions passed.
2.1.5. The supervisory board should oversee that the
company’s tax planning strategies are designed and
implemented in accordance with the legal acts in order to
avoid faulty practice that is not related to the long-term
interests of the company and its shareholders, which may
give rise to reputational, legal or other risks.
Yes
The supervisory board oversees that the
Company’s tax planning strategies are designed
and implemented in accordance with the legal acts.
2.1.6. The company should ensure that the supervisory
board is provided with sufficient resources (including
financial ones) to discharge their duties, including the right
to obtain all the necessary information or to seek
independent professional advice from external legal,
accounting or other experts on matters pertaining to the
competence of the supervisory board and its committees.
Yes
Meetings of the supervisory board are provided
with premises and all necessary information and
the supervisory board has the right to seek
independent professional advice from external
legal, accounting, or other experts on matters
falling within their competence.
1
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of
unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
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2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective and
fair corporate governance.
2.2.1. The members of the supervisory board elected by
the general meeting of shareholders should collectively
ensure the diversity of qualifications, professional
experience and competences and seek for gender equality.
With a view to maintain a proper balance between the
qualifications of the members of the supervisory board, it
should be ensured that members of the supervisory board,
as a whole, should have diverse knowledge, opinions and
experience to duly perform their tasks.
Yes
The members of the supervisory board elected by
the general meeting of shareholders of the
Company ensure the diversity of qualifications,
professional experience and competences, and the
supervisory board has members of both genders.
2.2.2. Members of the supervisory board should be
appointed for a specific term, subject to individual re-election
for a new term in office in order to ensure necessary
development of professional experience.
Yes
According to the Articles of Association of the
Company, the supervisory board is elected by the
general meeting of shareholders for a period of 4
years, i.e. the maximum period permitted by the
legislation of the Republic of Lithuania.
2.2.3. Chair of the supervisory board should be a person
whose current or past positions constituted no obstacles to
carry out impartial activities. A former manager or
management board member of the company should not be
immediately appointed as chair of the supervisory board
either. When a company decides to depart from these
recommendations, it should furnish information on the
measures it has taken to ensure the impartiality of
supervision.
Yes
Chair of the supervisory board is a person whose
current or past positions constitute no obstacles to
carry out impartial activities. Former managers or
management board members of the Company
were not appointed as chairs of the supervisory
board.
2.2.4. Each member should devote sufficient time and
attention to perform his duties as a member of the
supervisory board. Each member of the supervisory board
should undertake to limit his other professional obligations
(particularly the managing positions in other companies) so
that they would not interfere with the proper performance of
the duties of a member of the supervisory board. Should a
member of the supervisory board attend less than a half of
the meetings of the supervisory board throughout the
financial year of the company, the shareholders of the
company should be notified thereof.
Yes
Each member devotes sufficient time and attention
to perform his/her duties as a member of the
supervisory board and his/her other professional
obligations do not interfere with the proper
performance of the duties of a member of the
supervisory board.
2.2.5. When it is proposed to appoint a member of the
supervisory board, it should be announced which members
of the supervisory board are deemed to be independent. The
supervisory board may decide that, despite the fact that a
particular member meets all the criteria of independence,
he/she cannot be considered independent due to special
personal or company-related circumstances.
No
The Company submits to the shareholders
received proposals concerning the candidates for
the members of the supervisory board.
2.2.6. The amount of remuneration to members of the
supervisory board for their activity and participation in
meetings of the supervisory board should be approved by
the general meeting of shareholders.
Yes
The amount of remuneration to members of the
supervisory board for their activity and participation
in meetings of the supervisory board is approved by
the general meeting of shareholders. Guidelines for
the determination of remuneration of the members
of the supervisory board of the Company and the
procedure for payment of remuneration is
established by the Company’s remuneration policy
approved by the Resolution of the Ordinary General
Meeting of Shareholders on 28 April 2023.
2.2.7. Every year the supervisory board should carry out
an assessment of its activities. It should include evaluation
of the structure of the supervisory board, its work
organization and ability to act as a group, evaluation of the
competence and work efficiency of each member of the
supervisory board, and evaluation whether the supervisory
board has achieved its objectives. The supervisory board
should, at least once a year, make public respective
information about its internal structure and working
procedures.
No
The supervisory board has not carried out an
assessment of its activities.
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Principle 3: Management board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate governance with due
regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the
implementation of the company’s strategy approved by the
supervisory board if the latter has been formed at the
company. In such cases where the supervisory board is not
formed, the management board is also responsible for the
approval of the company’s strategy.
No
The supervisory board has not approved the
Company’s strategy.
3.1.2. As a collegial management body of the company,
the management board performs the functions assigned to
it by the Law and in the Articles of Association of the
company, and in such cases where the supervisory board is
not formed in the company, it performs inter alia the
supervisory functions established in the Law. By performing
the functions assigned to it, the management board should
take into account the needs of the company’s shareholders,
employees and other interest groups by respectively striving
to achieve sustainable business development.
Yes
The management board, as a collegial
management body of the Company, performs the
functions assigned to it by the Law on Companies
and in the Articles of Association of the Company.
By performing the functions assigned to it, the
management board takes into account the needs of
the Company’s shareholders, employees and other
interest groups and, respectively, strives to achieve
sustainable business development.
3.1.3. The management board should ensure compliance
with the laws and the internal policy of the company
applicable to the company or a group of companies to which
this company belongs. It should also establish the respective
risk management and control measures aimed at ensuring
regular and direct liability of managers.
Yes
The management board, within the limits of its
competence and functions assigned to it, aims to
ensure the compliance with the provisions of the
laws and the internal policy of the Company.
3.1.4. Moreover, the management board should ensure
that the measures included into the OECD Good Practice
Guidance
2
on Internal Controls, Ethics and Compliance are
applied at the company in order to ensure adherence to the
applicable laws, rules and standards.
Yes
The Company applies a variety of documents
ensuring the highest level of internal control, ethics
and measures of compliance management.
3.1.5. When appointing the manager of the company, the
management board should take into account the appropriate
balance between the candidate’s qualifications, experience
and competence.
Yes
When appointing the manager of the Company, the
management board considers the appropriate
balance between the candidate’s qualifications,
experience and competence.
3.2. Formation of the management board
3.2.1. The members of the management board elected by
the supervisory board or, if the supervisory board is not
formed, by the general meeting of shareholders should
collectively ensure the required diversity of qualifications,
professional experience and competences and seek for
gender equality. With a view to maintain a proper balance in
terms of the current qualifications possessed by the
members of the management board, it should be ensured
that the members of the management board would have, as
a whole, diverse knowledge, opinions and experience to duly
perform their tasks.
Yes
The management board members elected by the
supervisory board of the Company ensure the
diversity of qualifications, professional experience
and competences. During the election of the
members of the management board, the Company
aims to ensure gender equality and the
management board has had members of both
genders for a number of years.
2
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
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3.2.2. Names and surnames of the candidates to become
members of the management board, information on their
educational background, qualifications, professional
experience, current positions, other important professional
obligations and potential conflicts of interest should be
disclosed without violating the requirements of the legal acts
regulating the handling of personal data at the meeting of
the supervisory board in which the management board or
individual members of the management board are elected.
In the event that the supervisory board is not formed, the
information specified in this paragraph should be submitted
to the general meeting of shareholders. The management
board should, on yearly basis, collect data provided in this
paragraph on its members and disclose it in the company’s
annual report.
Yes
Names and surnames of the candidates to become
members of the management board, information on
their educational background, qualifications,
professional experience, current positions, other
important professional obligations and potential
conflicts of interest are disclosed at the meeting of
the supervisory board in which the management
board or individual members of the management
board are elected. The data on the members of the
management board referred to in this paragraph is
also disclosed in the Company’s annual report.
3.2.3. All new members of the management board should
be familiarized with their duties and the structure and
operations of the company.
Yes
Members of the management board are
familiarised with their duties and the structure and
operations of the Company, and the main corporate
documents of the Company are shared.
3.2.4. Members of the management board should be
appointed for a specific term, subject to individual re-election
for a new term in office in order to ensure necessary
development of professional experience and sufficiently
frequent reconfirmation of their status.
Yes
Members of the management board are appointed
for a term of four years, subject to re-election for a
new term in office. The number of terms in office of
a member of the management board is unlimited.
3.2.5. Chair of the management board should be a person
whose current or past positions constitute no obstacles to
carry out impartial activity. Where the supervisory board is
not formed, the former manager of the company should not
be immediately appointed as chair of the management
board. When a company decides to depart from these
recommendations, it should furnish information on the
measures it has taken to ensure the impartiality of
supervision.
Yes
A person whose current or past positions constitute
no obstacles to impartially carry out the functions of
the chair of the management board is appointed as
the chair of the management board.
3.2.6. Each member should devote sufficient time and
attention to perform his duties as a member of the
management board. Should a member of the management
board attend less than a half of the meetings of the
management board throughout the financial year of the
company, the supervisory board of the company or, if the
supervisory board is not formed at the company, the general
meeting of shareholders should be notified thereof.
Yes
Each member devotes sufficient time and attention
to perform their duties as a member of the
management board.
3.2.7. In the event that the management board is elected
in the cases established by the Law where the supervisory
board is not formed at the company, and some of its
members will be independent
3
, it should be announced
which members of the management board are deemed as
independent. The management board may decide that,
despite the fact that a particular member meets all the
criteria of independence established by the Law, he/she
cannot be considered independent due to special personal
or company-related circumstances.
Not
applicable
The supervisory board has been formed at the
Company.
3
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated
persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
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3.2.8. The general meeting of shareholders of the
company should approve the amount of remuneration to the
members of the management board for their activity and
participation in the meetings of the management board.
Yes
The general meeting of shareholders of the
Company approves the amount of remuneration to
the members of the management board for their
activity and participation in the meetings of the
management board. Guidelines for the
determination of remuneration of the members of
the management board of the Company and the
procedure for payment of remuneration is
established by the Company’s remuneration policy
approved by the Resolution of the Ordinary General
Meeting of Shareholders of 28 April 2023.
3.2.9. The members of the management board should act
in good faith, with care and responsibility for the benefit and
the interests of the company and its shareholders with due
regard to other stakeholders. When adopting decisions, they
should not act in their personal interest; they should be
subject to no-compete agreements and they should not use
the business information or opportunities related to the
company’s operations in violation of the company’s
interests.
Yes
According to the information available to the
Company, all members of the management board
act in good faith, with care and responsibility for the
benefit and the interests of the Company and its
shareholders and put an effort to maintain their
independence in decision-making. In accordance
with the provisions of the Republic of Lithuania Law
on Companies, all members of the management
board must protect the Company’s commercial
(industrial) secrets and confidential information that
they got acquainted with when they were members
of the management board.
3.2.10. Every year the management board should carry out
an assessment of its activities. It should include evaluation
of the structure of the management board, its work
organisation and ability to act as a group, evaluation of the
competence and work efficiency of each member of the
management board, and evaluation whether the
management board has achieved its objectives. The
management board should, at least once a year, make
public the respective information about its internal structure
and working procedures in observance of the legal acts
regulating the processing of personal data.
No
The management board has not carried out an
assessment of its activities.
Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure
efficient operation and decision-making of these bodies and promote active cooperation between the company’s management
bodies.
4.1. The management board and the supervisory board, if
the latter is formed at the company, should act in close
cooperation in order to attain benefit for the company and its
shareholders. Good corporate governance requires an open
discussion between the management board and the
supervisory board. The management board should regularly
and, where necessary, immediately inform the supervisory
board about any matters significant for the company that are
related to planning, business development, risk
management and control, and compliance with the
obligations at the company. The management board should
inform the supervisory board about any derogations in its
business development from the previously formulated plans
and objectives by specifying the reasons for this.
Yes
The management board and the supervisory board
act in close cooperation.
4.2. It is recommended that meetings of the company’s
collegial bodies should be held at the respective intervals,
according to the pre-approved schedule. Each company is
free to decide how often meetings of the collegial bodies
should be convened but it is recommended that these
meetings should be convened at such intervals that
uninterruptable resolution of essential corporate governance
issues would be ensured. Meetings of the company’s
collegial bodies should be convened at least once per
quarter.
Yes
Meetings of the Company’s collegial bodies are
convened at such intervals that uninterruptable
resolution of essential Company’s management
and supervision issues is ensured.
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4.3. Members of a collegial body should be notified of the
meeting being convened in advance so that they would have
sufficient time for proper preparation for the issues to be
considered at the meeting and a fruitful discussion could be
held and appropriate decisions could be adopted. Along with
the notice of the meeting being convened all materials
relevant to the issues on the agenda of the meeting should
be submitted to the members of the collegial body. The
agenda of the meeting should not be changed or
supplemented during the meeting, unless all members of the
collegial body present at the meeting agree with such
change or supplement to the agenda, or certain issues that
are important to the company require immediate resolution.
Yes
Members of a collegial body are notified of the
meeting being convened and all materials relevant
to the issues on the agenda of the meeting are
submitted to them in advance, so that members of
a collegial body would have sufficient time for
proper preparation for the issues to be considered
at the meeting and a fruitful discussion could be
held and appropriate decisions could be adopted.
4.4. In order to coordinate the activities of the company’s
collegial bodies and ensure effective decision-making
process, the chairs of the company’s collegial supervision
and management bodies should mutually agree on the dates
and agendas of the meetings and closely cooperate in
resolving other matters related to corporate governance.
Meetings of the company’s supervisory board should be
open to members of the management board, particularly in
such cases where issues concerning the removal of the
management board members, their responsibility or
remuneration are discussed.
Yes
In order to coordinate the activities of the
Company’s collegial bodies and ensure effective
decision-making process, the chairs of the
Company’s collegial supervision and management
bodies mutually agree on the dates and agendas of
the meetings and cooperate closely in resolving
other matters related to the Company’s
management.
Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory
board is not formed, of the management board which performs the supervisory functions by ensuring that decisions are based
on due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of
interest.
Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body
with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by the
collegial body.
5.1.1. Taking due account of the company-related
circumstances and the chosen corporate governance
structure, the supervisory board of the company or, in cases
where the supervisory board is not formed, the management
board which performs the supervisory functions, establishes
committees. The collegial body is recommended to form the
nomination, remuneration and audit committees
4
.
Yes
The Audit Committee has been formed at the
Company.
5.1.2. Companies may decide to set up less than three
committees. In such case companies should explain in detail
why they have chosen the alternative approach, and how the
chosen approach corresponds with the objectives set for the
three different committees.
Yes
The nomination and remuneration committees
have not been formed at the Company. Candidates
proposed for the members of a collegial body in
accordance with the procedure established by the
legal acts are submitted for consideration to the
electing general meeting of shareholders or
collegial body, and candidates to the top-level
management positions are considered and
approved by the management board of the
Company. The remuneration of the employees who
hold top-level management positions is determined
by the management board of the Company.
4
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial
Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability
companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are
under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit
committee may be carried out by the collegial body performing the supervisory functions).
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5.1.3. In the cases established by the legal acts, the
functions assigned to the internal committees of the
companies may be performed by the collegial body itself. In
such case the provisions of this Code pertaining to the
committees (particularly those related to their role, operation
and transparency) should apply, where relevant, to the
collegial body as a whole.
Yes
Provisions of the Code pertaining to the
committees (particularly those related to their
role, operation and transparency) apply to the
collegial body performing the functions of the
committees.
5.1.4. Committees established by the collegial body
should normally be composed of at least three members.
Subject to the requirements of the legal acts, committees
could be comprised only of two members as well. Members
of each committee should be selected on the basis of their
competences by giving priority to independent members of
the collegial body. The chair of the management board
should not serve as the chair of committees.
Yes
The Company has formed the Audit Committee
consisting of three members of the supervisory
board of the Company. The chair of the
management board is not a member of the Audit
Committee.
5.1.5. The authority of each committee formed should be
determined by the collegial body itself. Committees should
perform their duties according to the authority delegated to
them and regularly inform the collegial body about their
activities and performance on a regular basis. The authority
of each committee defining its role and specifying its rights
and duties should be made public at least once a year (as
part of the information disclosed by the company on its
governance structure and practice on an annual basis). In
compliance with the legal acts regulating the processing of
personal data, companies should also include in their annual
reports the statements of the existing committees on their
composition, the number of meetings and attendance over
the year as well as the main directions of their activities and
performance.
Yes
The supervisory board of the Company has
established the authority of the Audit Committee
in the internal rules of the Audit Committee
approved by the supervisory board itself.
5.1.6. With a view to ensure the independence and
impartiality of the committees, the members of the collegial
body who are not members of the committees should
normally have a right to participate in the meetings of the
committee only if invited by the committee. A committee may
invite or request that certain employees of the company or
experts would participate in the meeting. Chair of each
committee should have the possibility to maintain direct
communication with the shareholders. Cases where such
practice is to be applied should be specified in the rules
regulating the activities of the committee.
Yes
In accordance with the internal rules of the Audit
Committee, it has the right to invite the chair of
the supervisory board and certain employees of
the Company, as well as external auditors, to its
meetings.
5.2. Nomination committee
5.2.1. The key functions of the nomination committee
should be the following:
1) to select candidates to fill vacancies in the membership of
supervisory and management bodies and the administration
and recommend the collegial body to approve them. The
nomination committee should evaluate the balance of skills,
knowledge and experience in the management body,
prepare a description of the functions and capabilities
required to assume a particular position and assess the time
commitment expected;
2) to assess, on a regular basis, the structure, size and
composition of the supervisory and management bodies as
well as the skills, knowledge and activity of its members, and
provide the collegial body with recommendations on how the
required changes should be sought;
3) to devote the attention necessary to ensure succession
planning.
No
To date, the nomination committee has not been
formed at the Company.
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5.2.2. When dealing with issues related to members of the
collegial body who have employment relationships with the
company and the heads of the administration, the manager
of the company should be consulted by granting him/her the
right to submit proposals to the nomination committee.
No
To date, the nomination committee has not been
formed at the Company.
5.3. Remuneration committee
The main functions of the remuneration committee should be as
follows:
1) to submit to the collegial body proposals on the remuneration
policy applied to members of the supervisory and management
bodies and the heads of the administration for approval. Such policy
should include all forms of remuneration, including the fixed-rate
remuneration, performance-based remuneration, financial incentive
schemes, pension arrangements and termination payments as well
as conditions which would allow the company to recover the
amounts or suspend the payments by specifying the circumstances
under which it would be expedient to do so;
2) to submit to the collegial body proposals regarding individual
remuneration for members of the collegial bodies and the heads of
the administration in order to ensure that they would be consistent
with the company’s remuneration policy and the evaluation of the
performance of the persons concerned;
3) to review, on a regular basis, the remuneration policy and its
implementation.
No
To date, the remuneration committee has
not been formed at the Company.
5.4. Audit committee
5.4.1. The key functions of the audit committee are defined in the
legal acts regulating the activities of the audit committee
5
.
5.4.2. All members of the committee should be provided with detailed
information on specific issues of the company’s accounting system,
finances and operations. The heads of the company’s administration
should inform the audit committee about the methods of accounting for
significant and unusual transactions where the accounting may be
subject to different approaches.
5.4.3. The audit committee should decide whether the participation
of the chair of the management board, the manager of the company,
the chief finance officer (or senior employees responsible for finance
and accounting), the internal and external auditors in its meetings is
required (and, if required, when). The committee should be entitled,
when needed, to meet the relevant persons without members of the
management bodies present.
5.4.4. The audit committee should be informed about the internal
auditor’s work program and should be furnished with internal audit
reports or periodic summaries. The audit committee should also be
informed about the work program of external auditors and should
receive from the audit firm a report describing all relationships between
the independent audit firm and the company and its group.
5.4.5. The audit committee should examine whether the company
complies with the applicable provisions regulating the possibility of
lodging a complaint or reporting anonymously his/her suspicions of
potential violations committed at the company and should also ensure
that there is a procedure in place for proportionate and independent
investigation of such issues and appropriate follow-up actions.
5.4.6. The audit committee should submit to the supervisory board
or, where the supervisory board is not formed, to the management
board its activity report at least once in every six months, at the time
that annual and half-yearly reports are approved.
Yes
The Company has the Audit Committee the
main functions of which comply with these
recommendations.
5
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the
Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of
Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the
Bank of Lithuania.
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Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management bodies to
avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to
members of the supervisory and management bodies.
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws and encourage active
cooperation between companies and stakeholders in creating the company value, jobs and financial sustainability. In the
context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community
and other persons having certain interests in the company concerned.
Any member of the company’s supervisory and management body
should avoid a situation where his/her personal interests are or may
be in conflict with the company’s interests. In case such a situation
did occur, a member of the company’s supervisory or management
body should, within a reasonable period of time, notify other
members of the same body or the body of the company which
elected him/her or the company’s shareholders of such situation of
a conflict of interest, indicate the nature of interests and, where
possible, their value.
Yes
The Company fully complies with these
recommendations.
Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent
potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the
administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long-
term strategy.
7.1. The company should approve and post the remuneration policy
on the website of the company; such policy should be reviewed on
a regular basis and be consistent with the company’s long-term
strategy.
Yes
The Company has approved its
remuneration policy and published it on the
Company’s website. The remuneration
policy is reviewed on a regular basis.
7.2. The remuneration policy should include all forms of
remuneration, including the fixed-rate remuneration, performance-
based remuneration, financial incentive schemes, pension
arrangements and termination payments as well as the conditions
specifying the cases where the company can recover the disbursed
amounts or suspend the payments.
Yes
The remuneration policy of the Company
includes all forms of remuneration.
7.3. With a view to avoid potential conflicts of interest, the
remuneration policy should provide that members of the collegial
bodies which perform the supervisory functions should not receive
remuneration based on the company’s performance.
Yes
The remuneration policy of the Company
provides that the remuneration of the
members of its supervisory board is not
based on the Company’s performance.
7.4. The remuneration policy should provide sufficient information
on the policy regarding termination payments. Termination
payments should not exceed a fixed amount or a fixed number of
annual wages and in general should not be higher than the non-
variable component of remuneration for two years or the equivalent
thereof. Termination payments should not be paid if the contract is
terminated due to inadequate performance.
Yes
The Company fully complies with this
recommendation.
7.5. In the event that the financial incentive scheme is applied at the
company, the remuneration policy should contain sufficient
information about the retention of shares after the award thereof.
Where remuneration is based on the award of shares, shares
should not be vested at least for three years after the award thereof.
After vesting, members of the collegial bodies and heads of the
administration should retain a certain number of shares until the end
of their term in office, subject to the need to compensate for any
costs related to the acquisition of shares.
Yes
The Company applies a share award
scheme. The remuneration policy states
that according to the rules for granting
shares, the granting of shares is postponed
for a period of 3 years - the Company's
shares are granted (the share option can be
exercised) no earlier than 3 years after the
conclusion of the option agreement.
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7.6. The company should publish information about the
implementation of the remuneration policy on its website, with a key
focus on the remuneration policy in respect of the collegial bodies
and managers in the next and, where relevant, subsequent financial
years. It should also contain a review of how the remuneration
policy was implemented during the previous financial year. The
information of such nature should not include any details having a
commercial value. Particular attention should be paid on the major
changes in the company’s remuneration policy, compared to the
previous financial year.
Yes
The Company complies with this
recommendation.
7.7. It is recommended that the remuneration policy or any major
change of the policy should be included on the agenda of the
general meeting of shareholders. The schemes under which
members and employees of a collegial body receive remuneration
in shares or share options should be approved by the general
meeting of shareholders.
Yes
The Company complies with this
recommendation.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements
and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial
sustainability. In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers,
clients, local community and other persons having certain interests in the company concerned.
8.1. The corporate governance framework should ensure that the
rights and lawful interests of stakeholders are protected.
Yes
The Company complies with all statutory
requirements ensuring the rights of
stakeholders.
8.2. The corporate governance framework should create conditions
for stakeholders to participate in corporate governance in the
manner prescribed by law. Examples of participation by
stakeholders in corporate governance include the participation of
employees or their representatives in the adoption of decisions that
are important for the company, consultations with employees or
their representatives on corporate governance and other important
matters, participation of employees in the company’s authorized
capital, involvement of creditors in corporate governance in the
cases of the company’s insolvency, etc.
Yes
The Company complies with all statutory
requirements ensuring the rights of
stakeholders.
8.3. Where stakeholders participate in the corporate governance
process, they should have access to relevant information.
Yes
The Company complies with all statutory
requirements ensuring the rights of
stakeholders.
8.4. Stakeholders should be provided with the possibility of
reporting confidentially any illegal or unethical practices to the
collegial body performing the supervisory function.
No
Pursuant to the legislation of the Republic of
Lithuania, the Company has established an
internal whistleblowing channel and
individuals have also been informed about
this on the Company’s website.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues,
including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure on confidential
information and commercial secrets and the legal acts regulating
the processing of personal data, the information publicly disclosed
by the company should include but not be limited to the following:
9.1.1. operating and financial results of the company;
Yes
The Company complies with this
recommendation.
9.1.2. objectives and non-financial information of the company;
Yes
The Company complies with this
recommendation.
9.1.3. persons holding a stake in the company or controlling it
directly and/or indirectly and/or together with related persons as well
as the structure of the group of companies and their relationships
by specifying the final beneficiary;
Yes
The Company complies with this
recommendation.
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9.1.4. members of the company’s supervisory and management
bodies who are deemed independent, the manager of the company,
the shares or votes held by them at the company, participation in
corporate governance of other companies, their competence and
remuneration;
Yes
The Company complies with this
recommendation.
9.1.5. reports of the existing committees on their composition,
number of meetings and attendance of members during the last
year as well as the main directions and results of their activities;
No
To date, the Company has not published
this information.
9.1.6. potential key risk factors, the company’s risk management
and supervision policy;
Yes
The Company complies with this
recommendation.
9.1.7. the company’s transactions with related parties;
Yes
The Company complies with this
recommendation by disclosing information
about transactions with related parties that
are not a part of the Company’s normal
economic activities and/or exert a significant
influence on the Company.
9.1.8. main issues related to employees and other stakeholders
(for instance, human resource policy, participation of employees in
corporate governance, award of the company’s shares or share
options as incentives, relationships with creditors, suppliers, local
community, etc.);
Yes
The Company complies with this
recommendation.
9.1.9. structure and strategy of corporate governance;
No
The Company has not published its
structure and strategy of corporate
governance.
9.1.10. initiatives and measures of social responsibility policy and
anti-corruption fight, significant current or planned investment
projects.
This list is deemed minimum and companies are encouraged not to
restrict themselves to the disclosure of information included into this
list. This principle of the Code does not exempt companies from
their obligation to disclose information as provided for in the
applicable legal acts.
Yes
The Company complies with this
recommendation.
9.2. When disclosing the information specified in paragraph 9.1.1 of
recommendation 9.1, it is recommended that the company which is
a parent company in respect of other companies should disclose
information about the consolidated results of the whole group of
companies.
Yes
The Company complies with this
recommendation.
9.3. When disclosing the information specified in paragraph 9.1.4 of
recommendation 9.1, it is recommended that the information on the
professional experience and qualifications of members of the
company’s supervisory and management bodies and the manager
of the company as well as potential conflicts of interest which could
affect their decisions should be provided. It is further recommended
that the remuneration or other income of members of the company’s
supervisory and management bodies and the manager of the
company should be disclosed, as provided for in greater detail in
Principle 7.
Yes
The Company complies with this
recommendation.
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9.4. Information should be disclosed in such manner that no
shareholders or investors are discriminated in terms of the method
of receipt and scope of information. Information should be disclosed
to all parties concerned at the same time.
Yes
The Company discloses the information in
the Lithuanian and English languages
simultaneously through the information
disclosure system used by Nasdaq Vilnius
AB Stock Exchange. The Company usually
publishes information before or after the
trading session of Nasdaq Vilnius AB Stock
Exchange and presents it simultaneously to
all markets where the Company’s securities
are traded. The Company does not disclose
any information that may affect the price of
its issued securities in comments, interviews
or otherwise until such information is made
public through the information disclosure
system of the Stock Exchange. This
information is also disclosed on the
Company’s website www.grigeo.lt.
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.
10.1. With a view to obtain an objective opinion on the
company’s financial condition and financial results, the company’s
annual financial statements and the financial information provided
in its annual report should be audited by an independent audit firm.
Yes
The Company complies with this
recommendation.
10.2. It is recommended that the audit firm would be proposed to
the general meeting of shareholders by the supervisory board or, if
the supervisory board is not formed at the company, by the
management board of the company.
Yes
The Company complies with this
recommendation.
10.3. In the event that the audit firm has received remuneration
from the company for the non-audit services provided, the company
should disclose this publicly. This information should also be
available to the supervisory board or, if the supervisory board is not
formed at the company, by the management board of the company
when considering which audit firm should be proposed to the
general meeting of shareholders.
Yes
When considering which audit firm should
be proposed to the general meeting of
shareholders, the Company’s supervisory
board had information on whether the audit
firm has received remuneration from the
Company for the non-audit services
provided.
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CONFIRMATION OF RESPONSIBLE PERSONS
CONFIRMATION OF RESPONSIBLE PERSONS
In accordance with the Law on Securities of the Republic of Lithuania, and the Rules on
the Disclosure of Information of the Bank of Lithuania, we, Chief Executive Officer of Grigeo AB
Tomas Jozonis and Finance Director of Grigeo AB Martynas Nenėnas, hereby confirm that, to the
best of our knowledge, the consolidated financial statements of Grigeo AB for the year ended 31
December 2023, prepared in accordance with the International Financial Reporting Standards as
adopted by the European Union, give a true and fair view of the issuer’s and of the consolidated
companies’ assets, liabilities, financial position, profit or loss and cash flows, and also that the
consolidated annual report includes a fair overview of the business development and operations.
Chief Executive Officer of Grigeo AB
Tomas Jozonis
Finance Director of Grigeo AB
Martynas Nenėnas
INDEPENDENT AUDITOR’S REPORT