2014 III Q Consolidated and Company's condensed interim financial information (unaudited)

2014

LIETUVOS ENERGIJA UAB CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine month period ended 30 September 2014

Translation note: This condenced interim financial information 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 this document takes precedence over this translation.

TABLE OF CONTENTS

3

Condensed interim statement of financial position

5

Condensed interim statement of profit and loss and other comprehensive income

7

Condensed interim statement of cash flows

8

Condensed interim statement of changes in equity

10

Notes to the condensed interim financial information

Condensed interim statement of financial position (unaudited) as of 30 September 2014 All amounts in LTL thousands unless otherwise stated

Notes

Group

Company

30 Sep 2014 31 Dec 2013 30 Sep 2014 31 Dec 2013

ASSETS Non-current assets Intangible assets

4

334,349

336,017

-

-

Property, plant, and equipment

5

7,700,131

7,318,650

22

33

Prepayments for non-current assets Investment property Subsidiaries and other investments

6

Investments in associates Amounts receivable after one year

7

Long-term investments

8

7,836

132

-

-

126,874

121,626

-

-

-

-

3,539,795

2 763 355

26,117

28,800

-

-

833,310

712,888

825,131

690 000

16,657

57,302

16,657

57 302

Other non-current assets

21,101

17,850

-

-

Deferred income tax assets

48,673

1,160

163

71

9,115,048

8,594,425

4,381,768

3,510,761

Total non-current assets Current assets Inventories

9

69,665

34,614

-

-

10

160,966

16,292

56

8

Trade receivables

365,259

304,437

2

2

Other receivables

70,169

85,641

199,541

38,537

Other current assets

562

227

-

-

Prepaid income tax

8,278

10,190

-

-

Prepayments

Short-term investments Cash and cash equivalents Non-current assets held for sale Total current assets

8

258

122,385

258

122,385

11

556,911

558,396

4,375

309,974

1,232,068

1,132,182

204,232

470,906

493

618

266

266

1,232,561

1,132,800

204,498

471,172

(continued on the next page)

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

3

Notes TOTAL ASSETS

Group

Company

30 Sep 2014 31 Dec 2013 30 Sep 2014 31 Dec 2013 10,347,609

9,727,225

4,586,266

3,981,933

EQUITY AND LIABILITIES Equity Share capital

12

4,179,849

4,067,164

4,179,849

4,067,164

Reserves

13

848,084

1,456,119

250

-

Retained earnings (deficit)

1,065,475

30,194

402,988

(87,060)

Equity attributable to owners of the parent

6,093,408

5,553,477

4,583,087

3,980,104

Non-controlling interest Total equity

280,344

699,228

-

-

6,373,752

6,252,705

4,583,087

3,980,104

865,868

805,826

-

-

Liabilities Non-current liabilities Non-current borrowings

14

Finance lease liabilities Grants and subsidies Deferred income tax liability Provisions

15

Deferred income Other non-current amounts payable and liabilities Total non-current liabilities

167

36

-

-

1,079,080

1,091,511

-

-

405,338

409,339

-

-

179,485

4,588

-

-

184,969

189,523

-

-

71,434

77,559

-

-

2,786,341

2,578,382

-

-

Current liabilities Current portion of long-term debts

14

370,406

302,656

-

-

Current borrowings

14

26,367

71,562

-

-

78

8

-

-

Current portion of finance lease liabilities Trade payables

195,470

268,561

458

409

Advance amounts received

126,138

69,470

-

-

Current income tax liabilities

26,906

7,765

67

-

147,027

12,437

-

-

295,124

163,679

2,654

1,420

Provisions

15

Other current amounts payable and liabilities Total current liabilities

1,187,516

896,138

3,179

1,829

Total liabilities

3,973,857

3,474,520

3,179

1,829

10,347,609

9,727,225

4,586,266

3,981,933

TOTAL EQUITY AND LIABILITIES

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

Dalius Misiūnas

Chief Executive Officer

Darius Kašauskas

Director of Finance and Treasury

Edita Steponavičienė

Head of Accounting Department

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

4

Condensed interim statement of profit and loss and other comprehensive income (unaudited) for a nine month period ended 30 September 2014 All amounts in LTL thousands unless otherwise stated

Group Notes

Company

1 January – 30 September 2014

1 July – 30 September 2014

1 January – 30 September 2013

1 July – 30 September 2013

1 January – 30 September 2014

1 July – 30 September 2014

1 January – 30 September 2013

1 July – 30 September 2013

2,093,670

765,630

2,053,426

669,848

-

-

-

-

108,027

45,513

85,603

34,795

6

2

6

2

2,201,697

811,143

2,139,029

704,643

6

2

6

2

Revenue Sales revenue Other operating income Total revenue Operating expenses Purchase of electricity and related services

(916,773)

(191,505)

(961,312)

(198,564)

-

-

-

-

Purchase of gas and fuel oil

(651,586)

(567,387)

(320,631)

(224,238)

-

-

-

-

Depreciation and amortisation

(336,836)

(117,504)

(359,494)

(111,470)

(11)

(2)

(13)

(5)

Wages and salaries and related expenses

(185,323)

(70,795)

(167,294)

(52,751)

(7,263)

(2,501)

(5,150)

(1,802)

(73,765)

(33,834)

(50,524)

(20,821)

-

-

-

-

Repair and maintenance expenses Other expenses

16

Total operating expenses Operating profit / (loss) Negative goodwill on acquisition of Lietuvos Dujos AB

19

Share of result of investment under equity method

19

Re-measurement of investment under equity method

19

(121,559)

(60,258)

(131,150)

(36,138)

(3,429)

(1,280)

(1,973)

(721)

(2,285,842)

(1,041,283)

(1,990,405)

(643,982)

(10,703)

(3,783)

(7,136)

(2,528)

(84,145)

(230,140)

148,624

60,661

(10,697)

(3,781)

(7,130)

(2,526)

154,203

-

-

-

-

-

-

-

149,194

-

-

-

-

-

-

-

(97,987)

-

-

-

-

-

-

-

Finance income

17

19,366

5,101

14,759

4,348

501,089

253,332

120,507

3,773

Finance costs

18

(20,381)

(4,809)

(21,050)

(7,315)

(413)

(192)

(3)

(3)

(992)

(691)

348

-

-

-

-

-

Share of results of other associates

(continued on the next page)

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

5

Profit / (loss) before income tax Current year income tax expense Deferred income tax income / (expense)

119,258

(230,539)

142,681

57,694

489,979

249,359

113,374

1,244

(35,011)

(10,477)

(29,805)

(8,697)

(67)

(42)

-

-

45,916

41,687

14,578

1,500

136

49

(630)

(191)

130,163

(199,329)

127,454

50,497

490,048

249,366

112,744

1,053

125,392

(193,088)

117,202

46,491

490,048

249,366

112,744

1,053

4,771

(6,241)

10,252

4,006

-

-

-

-

Gain (loss) on revaluation of non-current assets

-

-

(65)

-

-

-

-

-

Total items that will not be reclassified to profit or loss

-

-

(65)

-

-

-

-

-

250

61

-

-

250

61

-

-

Net profit / (loss) for the period Attributable to: Owners of the parent Non-controlling interest Other comprehensive income / (loss) Items that will not be reclassified to profit or loss

Items that will be reclassified to profit or loss Change in fair value of available-for-sale financial assets Total items that will be reclassified to profit or loss

250

61

-

-

250

61

-

-

Total other comprehensive income / (loss)

250

61

(65)

-

250

61

-

-

130,413

(199,268)

127,389

50,497

490,298

249,427

112,744

1,053

125,642

(193,027)

117,381

46,732

490,298

249,427

112,744

1,053

4,771

(6,241)

10,008

3,765

-

-

-

-

Total comprehensive income (loss) for the period Attributable to: Owners of the parent Non-controlling interest

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

Dalius Misiūnas

Chief Executive Officer

Darius Kašauskas

Director of Finance and Treasury

Edita Steponavičienė

Head of Accounting Department

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

6

Condensed interim statement of cash flows (unaudited) for a nine month period ended 30 September 2014 All amounts in LTL thousands unless otherwise stated

Group

Company

30 Sep 2014 30 Sep 2013 30 Sep 2014 30 Sep 2013 Cash flows from operating activities Net profit (loss) for the period Adjustments for non-monetary items: Depreciation and amortisation Revaluation of property, plant and equipment Impairment of assets (reversal of impairment) Share of the results of associates and joint ventures Income tax expense (Depreciation) of grants Increase (decrease) in provisions (Gain) / loss on disposal / write-off of property, plant and equipment Result on business acquisition Elimination of results of financing and investing activities: Interest income Interest expense Other finance (income) / costs Changes in working capital: (Increase) decrease in trade receivables and other amounts receivable (Increase) decrease in inventories, prepayments and other current assets Increase (decrease) in amounts payable, deferred income and advance amounts received Income tax (paid) Net cash generate from / (used in) operating activities Cash flows from investing activities (Acquisition) of PP&E and intangible assets Disposal of PP&E and intangible assets Loans (granted), loan repayments received Change in time deposits Acquisition of subsidiaries (associates) Grants received Bonds acquired Bonds disposed Interest received Dividends received Acquisition of LESTO AB shares from minority shareholders Acquisition of Lietuvos Dujos AB shares Other investing (income) / costs Net cash flows from / (used in) investing activities Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Finance lease payments Interest paid Dividends paid Acquisition of LESTO AB shares from minority shareholders Other cash flows from financing activities Net cash flows from / (used in) financing activities Increase (decrease) in cash and cash equivalents (including overdraft) Cash and cash equivalents (including overdraft) at the beginning of the period Cash and cash equivalents (including overdraft) at the end of the period

4,5 5

19 17 18

6 19

6

130,163

127,454

490,048

112,744

367,350 (10,645) 992 (10,905) (30,514) 309,487 8,405 (205,568)

389,686 77 (20) (348) 15,227 (30,611) (1,345) 9,214 -

11 (69) -

13 630 -

(11,806) 19,284 (6,463)

(11,573) 22,831 (4,967)

(11,320) 401 (489,757)

(11,2520 (109,252)

18,220

23,982

(27)

2,076

107,189

24,330

(48)

107

(35,293) (31,649) 618,247

100,064 (48,303) 615,698

1,327 (9,434)

(490) (5,424)

(289,108) 3,298 (100,851) 722 9,695 162,461 14,112 6,643 (354,763) 254 (547,537)

(344,042) 4,889 25,286 64,090 5,618 (160,941) 90,316 14,067 7 (300,710)

(100,131) (64,511) 162,461 13,618 292,043 (117,887) (481,357) (295,764)

(5,676) 25,000 61,070 (5) (160,941) 90,316 13,295 109,255 132,314

727,492 (598,723) 201 (19,160) (24,540) (117,887) 4,836 (27,781)

164,327 (155,092) (267) (20,101) (18,525) (39) (29,697)

(401) (401)

-

42,929

285,291

(305,599)

126,890

487,688

(3,215)

309,974

57,765

530,617

282,076

4,375

184,655

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

Dalius Misiūnas

Chief Executive Officer

Darius Kašauskas

Director of Finance and Treasury

Edita Steponavičienė

Head of Accounting Department

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

7

Condensed interim statement of changes in equity (unaudited) for a nine month period ended 30 September 2014 All amounts in LTL thousands unless otherwise stated

Equity attributable to owners of the Group Group

Notes

Balance at 1 January 2013 (restated) Revaluation of property, plant and equipment, net of deferred income tax effects Total other comprehensive income (loss) for the period Net profit (loss) for the period (restated) Total comprehensive income (loss) for the period Transfer of revaluation reserve to retained earnings (transfer of depreciation, net of deferred income tax) Transfer to reserves and movement in reserves Dividends Changes in non-controlling interest on the group‘s restructuring Balance at 30 September 2013 Balance at 1 January 2013 Change in fair value of available-for-sale financial assets, net of deferred income tax effects Total other comprehensive income (loss) for the period Net profit (loss) for the period Total comprehensive income (loss) for the period Transfer of revaluation reserve to retained earnings (transfer of depreciation, net of deferred income tax) Transfer to reserves and movement in reserves Dividends Increase in share capital Acquisition of shares from minority shareholders Acquisition of subsidiary Contribution of a non-controlling interest in the share capital of subsidiaries Balance at 30 September 2014

13 12 6 19

Share capital 4,067,164 -

Legal Revaluation reserve reserve 75,467 802,934 (62) (62) (62)

Other reserves 689,922 -

Noncontrolling Total Retained Subtotal interest earnings (207,569) 5,427,918 711,864 6,139,782 (62) (3) (65) (62) (3) (65) 117,202 117,202 10,252 127,454 117,202 117,140 10,249 127,389

4,067,164

1,595 12 77,074

(55,445) 164 747,591

(38,453) 651,469

55,445 36,858 (2,162) (1,986) (266) 5,543,072

(18,818) (18,818) (6,036) (8,022) 697,259 6,240,331

4,067,164

77,074

727,576

651,469

30,194 5,553,477

699,228 6,252,705

-

-

-

250 250 250

125,392 125,392

250 250 125,392 125,642

4,771 4,771

250 250 130,163 130,413

112,685 -

1,250 5,792 -

(60,808) 97,044 -

(651,556) (7) -

60,808 650,306 198,775 -

112,685 301,604 -

(36,690) (419,491) 27,762 4,764

(36,690) 112,685 (117,887) 27,762 4,764

4,179,849

84,116

763,812

156

1,065,475 6,093,408

280,344 6,373,752

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

Dalius Misiūnas

Chief Executive Officer

Darius Kašauskas

Director of Finance and Treasury

Edita Steponavičienė

Head of Accounting Department

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

8

Company

Notes

Share capital

Balance at 1 January 2013 Net profit (loss) for the period Balance at 30 September 2013 Balance at 1 January 2014 Increase in share capital Change in fair value of available-for-sale financial assets, net of deferred income tax effects Net profit (loss) for the period Balance at 30 September 2014

12

Legal reserve

Other reserves

4,067,164 4,067,164

-

4,067,164 112,685 4,179,849

Retained earnings

Total

-

-

(200,328) 112,744 (87,584)

3,866,836 112,744 3,979,580

-

250 250

(87,060) 490,048 402,988

3,980,104 112,685 250 490,048 4,583,087

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

Dalius Misiūnas

Chief Executive Officer

Darius Kašauskas

Director of Finance and Treasury

Edita Steponavičienė

Head of Accounting Department

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

9

Notes to condensed interim financial information (unaudited) for a nine month period ended 30 September 2014 All amounts in LTL thousands unless otherwise stated

1

General information

This financial information contains unaudited condensed interim financial information of Lietuvos Energija UAB (hereinafter referred to as “the Company”) and its subsidiaries (hereinafter collectively referred to as “the Group”) for a nine-month period ended 30 September 2014 (hereinafter referred to as “the financial information” or “the interim financial information”).

Lietuvos Energija UAB is a private limited liability company registered in the Republic of Lithuania. The address of the Company’s registered office is Žvejų g. 14, LT-09310, Vilnius, Lithuania. The Company is a limited liability profit-seeking entity registered on 28 August 2008 with the Register of Legal Entities managed by the public institution the Centre of Registers. The Company’s code 301844044, VAT payer’s code LT10004278519. The Company has been established for an unlimited period.

Lietuvos Energija UAB is a parent company, which is responsible for the management and coordination of activities of the Group companies engaged in electric power

and heat production and supply, electric power import and export, distribution and trade, as well as in service and development of electric energy industry.

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

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

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

30 September 2014 Company’s shareholder Share capital Republic of Lithuania represented by the Lithuanian Ministry of Finance

4,179,849

31 December 2013

Ownership interest, % 100.00

Share capital

4,067,164

Ownership interest, % 100.00

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

10

The Group consists of Lietuvos Energija UAB and subsidiaries directly or indirectly controlled by the Company:

Company name

Registered office address

Effective ownership interest at 30 September 2014, %

Share capital (‘000 LTL) at 30 September 2014

Profile of activities

Lietuvos Energijos Gamyba AB

Elektrinės g. 21, Elektrėnai

96.1

Electricity generation, 635,084 supply, import, export and trade

LESTO AB

Žvejų g. 14, Vilnius

94.4

603,945

Electricity supply and distribution to end users

Lietuvos Dujos AB

Aguonų g. 24, Vilnius

96.6

290,686

Supply and distribution of natural gas to end users

NT Valdos UAB

Geologų g. 16, Vilnius

94.7

Operation of real estate, 295,408 other related activities and provision of services

Duomenų Logistikos Centras UAB

A. Juozapavičiaus g. 13, Vilnius

79.6

Maintenance of 13,907 information technologies and telecommunications

ELEKTROS TINKLO PASLAUGOS UAB

Motorų g. 2, Vilnius

94.4

Construction, repair and maintenance of grid 18,904 and related equipment, connection of customers to the grid

Kauno Energetikos Remontas UAB

Chemijos g. 17, Kaunas

96.1

Repairs of energy 14,245 equipment, production of metal structures

LITGAS UAB

Gedimino pr. 33-2, Vilnius

66.7

Supply of liquid natural 45,000 gas via terminal and trade in natural gas

Gotlitas UAB

R.Kalantos g. 119, Kaunas

96.1

1,100

Energijos Tiekimas UAB

Jeruzalės g. 21, Vilnius

96.1

750

Public Institution Republican Centre of Training for Energy Specialists

Jeruzalės g. 21, Vilnius

79.6

Professional development 294 and continuing training of energy specialists

Geton Energy OÜ

Narva mnt 5, 10117 Tallinn

96.1

121 Supply of electric power

Geton Energy SIA

Bezdelingu 12, LV-1048, Riga

96.1

99 Supply of electric power

Technologijų ir Inovacijų Centras UAB

A. Juozapavičiaus g. 13, Vilnius

97.9

VAE SPB UAB

Žvejų g. 14, Vilnius

100

Business consultations 10 and other management activities

Verslo aptarnavimo centras UAB

P. Lukšio g. 5 b, Vilnius

50

Provision of public 100 procurement, accounting and HR services

Lietuvos dujų tiekimas UAB (share capital amounts to LTL 3 mln; Aguonų g. 24, on 30 September 2014 Vilnius was paid LTL 750 thousand)

100

As of 30 September 2014, the Group had 5,632 employees (31 December 2013: 4,378) and the Company had 73 employees (31 December 2013: 53).

Accommodation services, trade Supply of electric power and natural gas

Provision of IT, 20,000 telecommunication and other services

3 000 Supply of gas

The management of Lietuvos Energija UAB approved this financial information on 28 November 2014.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

11

2

Summary of significant accounting policies

This condensed interim financial information for a nine-month period ended 30 September 2014 has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

For a better understanding of data contained in the condensed interim financial information, this financial information should be read in conjunction with the consolidated and the Company’s financial statements for the year ended 31 December 2013, which were prepared in accordance with International Financial Reporting Standards as adopted by the EU. The accounting policies applied in the preparation of this condensed interim financial information are consistent with those of the annual financial statements for the year ended 31 December 2013.

Income tax

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.

Minority interest in the acquiree is initially recognised at the minority interest‘s proportionate share of the recognised amounts of net assets, liabilities and contingent liabilities.

Changes in ownership interests in subsidiaries without change of control

Accounting policies applied to significant transactions within the Group in relation to the Group‘s restructuring are set out below (as described in Notes 6 and 19).

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Business combinations

New standards, amendments and interpretations

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, 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. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The newly issued standards, amendments and interpretations that are effective from 1 January 2014 have been presented in the Company‘s and the Group‘s audited financial statements for the year ended 31 December 2013.

The newly issued standards, amendments and interpretations that are effective from 1 January 2014 and relevant for the Company‘s and the Group‘s condensed interim financial information for a six-month period ended 30 September 2014 are set out below.

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

IFRS 3 Business Combinations is not applied to business combinations involving entities under common control, therefore, for the purpose of this financial information business combinations involving entities under common control were accounted for using the ‘pooling of interest’ method.

Acquisition method is applied to account for acquisition of subsidiaries that are not part of the Company‘s group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred in a bargain purchase, the equity interests issued, and the liabilities assumed at the bargain purchase date. Acquisition-related costs are expensed as incurred. Identifiable net assets, liabilities and contingent liabilities acquired in the acquiree, which meet IFRS 3 Business Combinations criteria, are recognised at their fair values at the acquisition date.

IFRS 10 Consolidated financial statements (issued in May 2011). IFRS 10 changes the definition of control so that the same criteria are applied to all entities to determine control. This definition is supported by extensive application guidance. This standard had no impact on the measurement of transactions and balances in the Group’s consolidated financial information.

IFRS 11 Joint arrangements (issued in May 2011).

Changes in the definitions have reduced the number of types of joint arrangements to two: joint operations and joint ventures. The existing policy choice of proportionate consolidation for jointly controlled entities has been eliminated. Equity accounting is mandatory for participants in joint ventures. This standard had no impact on the measurement of transactions and ba-

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

12

lances; the Group applied this standard to the transactions conducted during 2014.

IFRS 12 Disclosure of interest in other entities (issued in May 2011). This standard applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. IFRS 12 sets out the required disclosures for entities reporting under the two new standards: IFRS 10 Consolidated financial statements and IFRS 11 Joint arrangements. This standard had no impact on the measurement of transactions and balances; the Company and the Group considered the requirements of this standard when making disclosures in this financial information.

IAS 27 Separate financial statements (revised in May 2011). Its objective is to prescribe the accounting and disclosure requirements for investments in subsi-

3

diaries, joint ventures and associates when an entity prepares separate financial statements. The guidance on control and consolidated financial statements was replaced by IFRS 10 Consolidated financial statements.

This standard had no impact on the measurement of transactions and balances; the Company and the Group considered the requirements of this standard when making disclosures in this financial information.

IAS 28 Investments in associates and joint ventures (revised in May 2011). The amendment of IAS 28 supplemented IAS 28 with the requirement to account for joint ventures using the equity method, because this method is applicable to both, joint ventures and associates. Save for this, other guidelines remained unchanged. The Group/Company is currently assessing the impact of this standard on its financial statements. The Group applied this standard to the transactions conducted during 2014.

Critical accounting estimates and judgements used in the preparation of the financial statements

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

The preparation of financial information according to International Financial Reporting Standards as adopted by the EU requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosures of contingencies. Changes in the underlying assumptions, estimates and judgements may have a material effect on this financial information. The accounting estimates applied in preparing the condensed interim financial information are consistent with those used in preparing the annual financial statements for the year ended 31 December 2013.

Revaluation and impairment of assets The Group accounts for property, plant and equipment (except for the assets of power plants, gas distribution pipelines and gas technological equipment) at revalued amount in accordance with International Accounting Standard 16 Property, plant and equipment. The fair value of most items of property, plant and equipment due to its specific nature was measured using a depreciated replacement cost approach as at 31 December 2008.

If the value of assets is measured based on a depreciated replacement cost method, International Valuation Standards require that an economic depreciation test is performed. Accounting standards require a periodical review of property, plant and equipment for impairment. When

the carrying amount of property, plant and equipment in the statement of financial position is higher than its value in use or fair value, less selling expenses, the carrying amount should be reduced. In other words, the carrying amount of property, plant and equipment recorded in the statement of financial position should be written down to the higher of the present value of future benefits expected by the Group from the use of the assets and the proceeds expected on disposal of the assets.

The previous version of the Lithuanian Law on Electricity effective as at 31 December 2008 stipulated that the price caps for electricity transmission services were determined based on the value of assets used in licensed activities of the service provider, with the value of such assets established with reference to data reported in the service provider’s financial statements (Regulated Assets Base).

According to the amendment to the above-mentioned Law effective from 1 June 2009, the price caps for electricity transmission services are to be determined based on the value of assets used in licensed activities of the service provider, with the value of such assets being estimated and approved by the National Control Commission for Prices and Energy (NCCPE) in accordance with the principles for determination of the value of assets used in licensed activities of the service provider that had been drafted by the Commission and approved by the Government.

According to the Government’s Resolution No. 1142 of 9 September 2009 On the methodology for determination of the value of assets used in licensed activities of the electricity service provider, the determination of

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

13

the price caps for electricity transmission services is to include the value of assets used in licensed activities of the service provider, which is equal to the book value (carrying amount) of property, plant and equipment as at 31 December 2002 increased by the amount of capital expenditures implemented and agreed with NCCPE and reduced by the depreciation amount calculated pursuant to the procedure stipulated in the Lithuanian Law on Corporate Income Tax. For the above-mentioned reasons, the values of property, plant and equipment reported in this financial information may significantly differ from those that would have been determined if the valuation of assets had been performed by independent valuers as required by International Valuation and Accounting Standards. It is probable that such valuation would have a negative impact on the Group’s result of operation and on the shareholders’ equity reported in the financial information as of 30 September 2014.

The Group companies expect to perform valuation of assets as of 31 December 2014.

Revaluation of assets As at 31 December 2013, independent valuation of assets was performed at the Group in respect of Lietuvos Energijos Gamyba AB (assets carried at revalued amount), ELEKTROS TINKLO PASLAUGOS UAB and NT Valdos UAB (buildings and structures). The valuation was carried out by independent valuation companies.

As at 31 December 2012, independent valuation of assets was performed at the Group in respect of NT Valdos UAB. The valuation was carried out by independent valuation company and the Group’s internal valuation experts.

As at 31 December 2011, valuation of property, plant and equipment in respect of Kauno Energetikos Remontas UAB was performed using the comparable price and income methods.

In 2010, independent property valuers carried out revaluation of non-current assets transferred as in-kind contribution to the formation of the share capital of Technologijų ir Inovacijų Centras UAB, Duomenų Logistikos Centras UAB and NT Valdos UAB. In 2013, Duomenų Logistikos Centras UAB and NT Valdos UAB performed valuation of selected items of assets and determined that there was no significant difference between the carrying amount and the fair value of property, plant and equipment.

Considering the date of the last revaluation of these assets and the periods of their acquisition, in the opinion of the management, the fair value of the Group’s property, plant and equipment stated at revalued amounts as at 30 September 2014 did not differ significantly from their carrying amount.

Impairment of assets The Group makes an assessment, at least annually, whether there are any indications that the carrying amount of property, plant and equipment has been impaired.

As of 30 June 2014 and 31 December 2013, the impairment test was performed for the property, plant and equipment of the Reserve Power Plant and Combined Cycle Block (classified in the category of assets of power plants), and it was determined that the recoverable amount of the assets of power plants exceeded their carrying amount of LTL 2,066m (31 December 2013: LTL 2,090m), and consequently, no impairment was recognised thereon.

The impairment test for property, plant and equipment was carried out as of 30 June 2014 with reference to the assumptions and methods described in the financial statements for the year ended 31 December 2013.

As of 30 September 2014 the impairment test wasn’t performed.

Valuation of investments in subsidiaries Although the shares of the Company’s subsidiaries LESTO AB and Lietuvos Energijos Gamyba AB are traded on Vilnius Stock Exchange, the Group‘s management believes this market is not active enough so that the quoted stock prices could be treated as equivalent to the fair value of investments in subsidiaries at the reporting date. Due to significant uncertainties, as described in Note 3 ‘Revaluation and impairment of assets’, related to the impact on future cash flows of the Group companies of amendments to legal acts regulating the establishment of upper limits of prices for electricity transmission, distribution and public supply services, the Company did not carry out impairment tests for its investment in subsidiary LESTO AB as of 30 June 2014 and 31 December 2013.

As of 31 December 2013, the Company‘s management performed the impairment test and determined no impairment in respect of the investment in subsidiary Lietuvos Energijos Gamyba AB. The Company‘s management believed there were no indications of impairment of the investment in Lietuvos Energijos Gamyba AB as of 30 June 2014.

As of 30 June 2014, the Company carried out valuation / impairment test in respect of its investment in subsidiary Lietuvos Dujos AB using the discounted cash flow method.

Discounted cash flows were estimated in line with the effective legal acts and methods regulating distribution activities, as well as based on the most probable scenario of supply business development and the existing uncertainties in gas industry sector. Discounted cash flows were calculated using a pre-tax discount rate of 7.09%, which is consistent with the rate of return used by NCCPE in regulation of prices. Based on the analysis, the Company‘s

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

14

management determined that there was no impairment of the investment in Lietuvos Dujos AB as of 30 June 2014.

The Company carried out impairment test in respect of its investment in subsidiary Duomenų Logistikos Centras UAB using the discounted cash flow method. Discounted cash flows were estimated in view of start of operations of a new data centre from the second half of 2014 and considering insignificant growth of other income. Direct and operating expenses are expected to remain at the same level expressed as percentage (i.e. a fixed percentage of revenue). Discounted cash flows were calculated using a pre-tax discount rate of 12.35%. Based on the analysis, the Company‘s management determined that there was no impairment of the investment in Duomenų Logistikos Centras UAB as of 30 June 2014. As of 30 September 2014 the impairment test wasn’t performed.

Cost of LITGRID AB disposal For the purpose of implementing the provisions of the Law on Electricity, on 4 July 2012 the Lithuanian Government adopted Resolution No 826 On the establishment of a private limited liability company and investment of state-owned capital, based on which the Ministry of Energy was assigned to establish a private limited liability company and adopt all the decisions necessary for the transfer of shares of LITGRID AB owned by Lietuvos Energija UAB to the newly established private limited liability company EPSO-G UAB in return for a consideration based on the market value of shares determined by independent valuers.

For the purpose of implementing the above-mentioned Resolution of the Lithuanian Government, the management initiated an independent valuation of the Company‘s shares held in LITGRID AB – an electricity transmission system operator controlled by the Company. The independent valuers determined the market value for 97.5% shares held in Litgrid AB using the income approach.

In view of the results of independent valuation, the assumptions used in valuation and uncertainties in relation to future changes in the methodology for the establishment of prices for services under regulated activities, the implementation of which is stipulated in the new provisions of the Lithuanian Law on Electricity adopted on 17 January 2012, the agreement on purchase and sale of shares of Litgrid AB provides for an extra charge on the final price, the realisation of which depends on possible changes in regulatory environment in future. The extra charge on the final price may be a positive or negative amount, and it largely depends on assumptions pertaining to regulatory environment in future periods. At the end of 2013, no decision had been made by the National Control Commission for Prices and Energy (NCCPE) as to the application of Long-run Average Incremental Costs (LRAIC) methodology. Accordingly, the Company was not able to determine reasonable assumptions necessary to estimate the extra charge on the final price, and the extra

charge on the final price estimated by the Company as at 31 December 2013 was equal to zero. At the end of 2014, the NCCPE plans to make a decision on the commencement of application of the LRAIC methodology. As a result of implementation of new changes in the price regulation methodology, the Company will be able to estimate the effects of possible changes in extra charge on the final price on its financial performance in 2014. As of 30 September 2014, the Company was not able to determine reasonable assumptions necessary to estimate the extra charge on the final price and estimated it as equal to zero.

Impairment of goodwill and intangible assets not subject to amortisation The consolidated financial information includes goodwill and licences with indefinite useful life that arose on acquisition of VST AB in 2008. Due to significant uncertainties, as described in Note 3 ‘Revaluation and impairment of assets’, related to the impact on future cash flows of the Group companies of amendments to legal acts regulating the prices for electricity distribution and supply services, the Group did not carry out impairment tests for goodwill and licences with indefinite useful life as at 30 September 2014 and 31 December 2013. The Group’s management believes the value of these assets could not be measured reliably as at 30 September 2014 and 31 December 2013 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 economic benefits embodied in the assets are consumed principally through their use. However, other factors, such as technical or commercial obsolescence, often result in the diminution of the economic benefits embodied in the assets. 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. The following key factors are considered: (a) expected usage of the assets; (b) expected physical wear and tear, which depends on operational factors and maintenance programme; and (c) technical or commercial obsolescence arising from changes in market conditions.

Accrued revenue Revenue received from private customers is recognised based on the payments received, therefore, at the end of each reporting period the amount of revenue earned but not yet paid by private customers is estimated and accrued by the management of the Group. Accrued revenue is estimated as 1/3 of total payments for electricity received in the last month of the reporting period. The accrued revenue is based on past experience and average term of payment by customers for electricity. The management has estimated that the majority of private customers declare and make payment for the electricity consumed

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

15

on approx. the 20th day of the month, while electricity is supplied for a full month (30 or 31 days). Consequently, the volume of electricity consumed over the remaining 10 days is estimated proportionally based on the volume of electricity provided to the electricity supply network during the whole month (the actually known variable) and the total volume of electricity declared by private customers during December, and the resulting difference multiplied by the average rate per 1 kWh.

vely assessed receivables for impairment, the Group takes into account the historical statistics, and reviews annually whether the provisioning rates used for collectively assessed receivables are in line with the historical data of impairment of receivables, and that the provisioning rates used for collectively assessed receivables are approved for the upcoming year.

Accounting for customer connection fees

The tax authorities may at any time inspect the books and records within 5 years subsequent to the reported tax year, and may assess additional tax amounts and penalties. The Group’s management is not aware of any circumstances that might result in a potential material liability in this respect.

Before 1 July 2009, the Group used to defer income received from new customer connections to the grid and recognise it as deferred income over the period of 31 years, which is the average useful life of electricity equipment constructed by the Group upon connection of new customers. The management of the Group believes that the period of provision of services to customers is indefinite, therefore, the average useful life of electricity equipment constructed by the Group upon connection of new customers was used as the best estimate of the period over which connection fees paid customers were recognised as income.

With effect from 1 July 2009 and based on IFRIC 18 interpretation, the newly connected customers to the grid do not obtain any additional future benefits as compared to all the remaining customers, consequently, the provision of connection service is treated as completed and income from connection is recognised upon the connection of a new customer.

Impairment of amounts receivable Impairment losses for amounts receivables are determined based on the management’s estimates on recoverability and timing relating to the amounts that will not be collectable according to the original terms of receivables.

This determination requires significant judgement. Judgement is exercised based on significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. Current estimates of the management could change significantly as a result of change in situation in the market and the economy as a whole.

Recoverability rate also highly depends on success rate and actions employed relating to recovery of significantly overdue amounts receivable.

Amounts receivable are assessed to determine their value and impairment individually or collectively in a group of similar receivables. In case of individually assessed receivables for impairment, the Group takes into account the available or accessible data from external sources of information on market trends and forecasts, the possible credit enhancements (collateral) provided for receivables and events providing evidence of impairment of receivables such as, for example, fulfilment of contractual terms, the borrower‘s actual performance, etc. In case of collecti-

Tax audits

Amortisation rates of licences Indefinite useful lives were established for the licences of distribution system operator and public supply services that were acquired on a business combination in 2008, because the validity term of these licences can be extended at no significant efforts or costs.

Provision for utilisation of emission allowances The Group estimates provision for utilisation of emission allowances based on actual emissions over the reporting period multiplied by the market price for one unit of emission allowances. Actual emissions are approved by a relevant regulating state over the period of 4 months after the year end. Based on its past experience, the Group’s management does not expect any significant differences between the estimated provisions as at 30 June 2014 and the emissions that will be approved for 2015.

Accrual of PSO service fees The variable part of PSO service fees is estimated with reference to variable costs incurred during the reporting period. The producers ensuring the security of electric power supply and reserves of energy system, submit their PSO service fee estimates to the National Commission for Control of Prices and Energy, which include breakdown of variable electric power production costs – natural gas, heavy fuel oil, emission allowance costs and costs for reagent desulphurisation. The variable part of PSO service fees for the upcoming calendar year is estimated with reference to the expected variable costs to be incurred in the production of the approved quota of electricity to be compensated.

Fair value of financial assets and financial liabilities The Group‘s and the Company‘s underlying financial assets and liabilities not measured at fair value include trade and other amounts receivable, trade and other amounts payable, non-current and current borrowings.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

16

The fair value is defined as 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. The fair value of financial assets and financial liabilities is not lower than the amount payable on demand, which is discounted starting from the first day on which its payment may be demanded.

The carrying amount of cash and cash equivalents, current trade and other amounts receivable, current trade and other amounts payable and current borrowings approximates their fair value.

The fair value of non-current borrowings is determined with reference to the market price of loans of the same or similar nature or interest rates payable at that time on similar maturity debts. The fair value of non-current borrowings with variable interest approximates their carrying amount in cases when margins payable on such loans are consistent with loan margins currently available in the market.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

17

4

Non-current intangible assets Group

Net book amount at 1 January 2013 Additions Reclassified from / to PP&E

Patents and licences

Computer software

Other intangible assets

Emission allowances

Goodwill

Total

118,873

6,587

55,413

2,677

178,103

361,653

16

2,720

1,222

1,105

-

5,063

652

-

-

71

-

723

Write-off / emission allowances utilised

-

-

(13,895)

(6)

-

(13,901)

Disposals

-

-

(4,041)

-

-

(4,041)

Revaluation of emission allowances

-

-

(9,411)

-

-

(9,411)

(571)

(3,272)

-

(44)

-

(3,887)

Net book amount at 30 September 2013

118,970

6,035

29,288

3,803

178,103

336,199

Net book amount at 1 January 2014

118,781

6,205

28,704

4,224

178,103

336,017

Acquisition of Lietuvos Dujos AB

1,079

1,084

-

1

-

2,164

Additions

2,552

163

-

912

-

3,627

Amortisation charge

Reclassified from / to PP&E

-

2,169

-

(916)

-

1,253

Write-off / emission allowances utilised

-

-

(10,042)

-

-

(10,042)

Disposals

-

-

-

(14)

-

(14)

Revaluation of emission allowances

-

-

3,639

-

-

3,639

Emission allowances grant received

-

-

1,358

-

-

1,358

(894)

(2,685)

-

(74)

-

(3,653)

121,518

6,936

23,659

4,133

178,103

334,349

Amortisation charge Net book amount at 30 September 2014

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

18

5

Property, plant and equipment

Group

Land

Gas distriStructubution res and pipelimachines and nery equipment

Buildings

Net book amount at 1 January 2013 6,190 383,536 4,228,702

-

Gas technological Assets Motor equipof power vehiment plants cles and facilities

Construction in progress

Other PP&E

Total

- 2,664,957 50,268 102,222

73,361 7,509,236

Additions

-

19

2,389

-

-

687

3,918

3,349

207,246

Revaluation

-

(77)

-

-

-

-

-

-

-

217,608 (77)

Disposals

-

(36)

(98)

-

-

(165)

(303)

(246)

-

(848)

Write-offs

-

(165)

(9,175)

-

-

(17)

(1)

(32)

(3)

(9,393)

Impairment

-

-

(25)

-

-

-

-

-

-

(25)

Reversal of impairment

-

-

20

-

-

-

-

-

25

45

Reclassifications from / to

-

2,382

198,874

-

-

1,703

-

6,679 (209,638)

-

Reclassified to assets, intangible assets

-

230

-

-

-

-

-

1

(724)

(493)

Reclassified to investment property

-

(4,968)

(40)

-

-

-

-

-

-

(5,008)

Reclassified from / to inventories

-

-

(5)

-

-

3,878

-

(9)

-

3,864

Depreciation charge

- (14,671) (260,479)

-

-

6,190 366,250 4,160,163

-

- 2,584,173 48,569

93,498

70,267 7,329,110

Net book amount at 1 January 2014 6,943 361,555 4,164,382

-

- 2,567,102 54,059

90,780

73,829 7,318,650

Net book amount at 30 September 2013

4,239 362,983

(86,870) (5,313) (18,466)

- (385,799)

Acquisition of Lietuvos Dujos AB

1

36,308

14,970

-

8,846

18,429

3,663

449,439

Additions

-

621

2,570

102

-

646

3,254

6,326

300,381

313,900

Disposals

-

(115)

(427)

-

(90)

(477)

(581)

(566)

-

(2,256)

Write-offs

-

(220)

(9,069)

(9)

(10)

(2)

-

(40)

(9)

(9,359)

Reclassifications from / to

-

3,600

219,809

9,815

1,438

4,084

-

12,230 (250,976)

-

Reclassified to assets, intangible assets

-

(68)

(42)

-

-

-

-

-

(1,253)

(1,363)

Reclassified to investment property

-

(5,473)

(387)

-

-

-

-

-

-

(5,860)

Reclassified from / to inventories

-

-

-

-

-

677

-

-

-

677

Depreciation charge

- (15,987) (233,709)

(2,585)

(367)

Net book amount at 30 September 2014

(86,092) (6,274) (18,683)

- (363,697)

6,944 380,221 4,147,366 370,306 15,941 2,485,938 59,304 108,476 125,635 7,700,131

Company

Other PP&E

Net book amount at 1 January 2013 Additions Depreciation charge Net book amount at 30 September 2013 Net book amount at 1 January 2014 Depreciation charge Net book amount at 30 September 2014

As of 30 September 2014 and 2013, the Group accounted for its property, plant and equipment (except for gas distribution pipelines and equipment, assets of

Construction in progress

Total

48

-

48 34

-

34

(13)

-

35

34

69

33

-

33

(11)

-

(11)

22

-

22

hydro power plant, pumped storage power plant, combined cycle block and reserve power plant) at revalued amount.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

19

6

Subsidiaries and other investments

During the first half of 2014, the Company acquired 96.64% shares of Lietuvos Dujos AB. These shares were acquired in three stages: • On 21 February 2014, the Ministry of Finance made an in-kind contribution of state-owned 51,454,638 (17.7%) shares of Lietuvos Dujos AB amounting to LTL 112,685,657 (Note 12) in order to increase the Company‘s share capital.

• On 21 May 2014, the Company and the German concern E.ON Ruhrgas International signed an agreement, based on which the Company acquired 113,118,140 (38.9%) shares of Lietuvos Dujos AB. The acquisition cost of shares amounted to LTL 219,008,617.

• On 19 June 2014, in line with Article 31 of the Lithuanian Law on Securities the Company announced a mandatory non-competitive takeover bid to buy up the remaining shares of Lietuvos Dujos AB, and from the Russian company Gazprom and minority shareholders the Company acquired 116,357,288 (40.03%) of shares. The acquisition cost of shares amounted to LTL 262,348,264.

On 21 May 2014, the Company and the German concern E.ON Ruhrgas International signed an agreement, under which the Company acquired 71,040,473 (11.76%) shares of LESTO AB. The acquisition cost of shares amounted to LTL 117,886,772.

2014 Carrying amount of non-controlling interest acquired Consideration paid to non-controlling interest Profit attributable to owners of the parent, recognised in equity

419,491 (117,887) 301,604

On 31 March 2014, the Company signed agreements for purchase/sale of shares with LESTO AB and Lietuvos Energijos Gamyba AB, under which the Company acquired 78.98%, i.e. 46,525,904 shares of Duomenų Logistikos Centras UAB. The acquisition cost of shares amounted to LTL 60,431,742. Following this transaction, the Company owns 79.64% shares of Duomenų Logistikos Centras UAB. On 17 July 2014, the share capital of Duomenų Logistikos Centras UAB was reduced to make payments to shareholders. Before reduction of share capital, the Company held 46,910,850 shares, and following annulment of 35,836,194 shares the Company held the remaining 11,074,656 shares. On 31 July 2014, Duomenų Logistikos Centras UAB paid LTL 30 million to the Company. The Company paid the remaining amount 5 836 194 Lt. in August.

On 10 July 2014, the share capital of Technologijų ir Inovacijų Centras UAB was increased by LTL 19,990,000. The Company acquired 11,105,556 shares, which were paid in May 2014 as additional cash contribution. Nominal value per share is equal to LTL 1. Payment for the shares was conducted as follows: amount of LTL 8,105,556 was paid as cash contribution, whereas amount of LTL 3,000,000 was offset against the loan repayable by Technologijų ir Inovacijų Centras UAB. On 11 July 2014, the Company‘s amounts receivable decreased, whereas investments in subsidiaries increased by LTL 11 million, respectively.

Following this transaction, the Company owns 97,89% shares of Technologijų ir Inovacijų Centras UAB. On 21 July 2014, the Company and other Group companies signed a memorandum in the establishment of Verslo Aptarnavimo Centras UAB. The purpose of the newly established company is to provide the Company‘s shareholders – the contracting authorities – with the services necessary to ensure operations of the Company‘s shareholders – the contracting authorities (to satisfy the needs and fulfil the functions of shareholders – the contracting authorities). The newly established company was registered with the Register of Legal Entities on 30 July 2014, and its authorised share capital amounts to LTL 100,000. The Company acquired 50% of its shares.

During the General Shareholders‘ Meeting of LITGAS UAB held on 27 June 2014, a decision was made to increase the share capital of LITGAS UAB by additional contributions of shareholders from LTL 3 million up to LTL 45 million, by issuing new ordinary registered shares with the nominal value of LTL 1 each and total value of LTL 42 million.

On 8 July 2014, the Company and LITGAS UAB signed the Agreement for Purchase of Shares, under which the Company is to acquire newly issued shares of LITGAS UAB with the total value of LTL 28 million. Following the transaction, the Company‘s shareholding in LITGAS UAB will amount to LTL 30 million.

On 21 July 2014, the Board of Lietuvos Dujos AB approved the separation of the Company‘s distribution and supply activities, whereby Lietuvos Dujos AB is to sell part of its business, i.e. natural gas supply business together with the accompanying assets, rights and obligations. On 28 August 2014, the Company signed the memorandum in the establishment of Lietuvos dujų tiekimas UAB, as the new company, which is in charge in gas supply. The Company is the promoter and shareholder of Lietuvos dujų tiekimas UAB. Lietuvos dujų tiekimas UAB was registered on 2 September 2014. Lietuvos dujų tiekimas UAB authorised share capital amounts to LTL 3 000 000. The Company has payed share capital amounts to LTL 750 000 until 30 September 2014.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

20

The Company‘s ownership interests in the Group companies as of 30 September 2014 were as follows: Group company

Acquisition cost

Subsidiaries: Lietuvos Energijos Gamyba AB LESTO AB Lietuvos Dujos AB Duomenų Logistikos Centras UAB LITGAS UAB Technologijų ir Inovacijų Centras UAB VAE SPB UAB Verslo aptarnavimo centras UAB Lietuvos dujų tiekimas UAB (share capital amounts to LTL 3 mln; on 30 September 2014 was paid LTL 750 thousand) Investments: NT Valdos UAB

Contribution to cover loss

Carrying amount

Ownership interest, %

1,017,997 1,860,624 594,043 25,096 30,000 11,110 10 50

15 -

1,017,997 1,860,624 594,043 25,096 30,000 11,110 25 50

96.13 94.39 96.64 79.64 66.67 97.89 100.00 50

750 3,539,680

15

750 3,539,695

100

100 100 3,539,780

15

100 100 3,539,795

0.03

The Company‘s ownership interests in the Group companies as of 31 December 2013 were as follows: Group company

Acquisition cost

Subsidiaries: Lietuvos Energijos Gamyba AB LESTO AB LITGAS UAB Technologijų ir Inovacijų Centras UAB VAE SPB UAB Investments: Duomenų Logistikos Centras UAB NT Valdos UAB

7

Contribution to cover loss

Carrying amount

Ownership interest, %

1,017,998 1,742,737 2,000 5 10 2,762,750

5 5

1,017,998 1,742,737 2,000 5 15 2,762,755

96.13 82.63 66.67 50.00 100.00

500 100 600 2,763,350

5

500 100 600 2,763,355

0.65 0.03

Amounts receivable after one year Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

Amount receivable on disposal of LITGRID AB

725,000

690,000

725,000

690,000

Loan granted

100,131

-

100,131

-

Other Carrying amount

8,179

22,888

-

-

833,310

712,888

825,131

690,000

In the management‘s opinion, the carrying amount of amount receivable from EPSO-G on disposal of LITGRID AB and of the loan granted and other amounts approximated their fair value as of 30 September 2014. In May 2014, a loan was granted and amendments were made to the agreement for purchase / sale of LITGRID AB shares: considering the changes in repayment dates, the interest rates were reviewed and set anew.

On 17 June 2014, a loan subordination agreement was signed between the bank, the Company and EPSO-G UAB, under which the Company subordinates a loan of LTL 179,546 thousand granted to EPSO-G UAB, in respect of the credit agreement signed between the bank and EPSO-G UAB.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

21

8

Investments and other financial assets

Long-term investments and other financial assets comprise as follows: Group 30 Sep 2014 Available-for-sale financial assets

Company 31 Dec 2013

16,657

30 Sep 2014 -

31 Dec 2013

16,657

-

Held-to-maturity financial assets: Lithuanian Government bonds Carrying amount

-

57,302

-

57,302

16,657

57,302

16,657

57,302

Short-term investments comprise as follows: Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

Held-to-maturity financial assets: Lithuanian Government bonds

-

40,131

-

40,131

Loans and amounts receivable: Bank bonds Interest receivable Carrying amount

As of 30 September 2014, the Group‘s and the Company‘s available-for-sale financial assets comprised Lithuanian Government securities denominated in LTL with redemption dates maturing in 2016. The weighted average annual interest rate on securities was 1.67% as of 30 September 2014.

In 2014, the Group and the Company sold prior to maturity some of its securities that were classified as held-to-maturity financial assets as of 31 December 2013, and classified the remaining securities as available-for-sale financial assets measured at fair value. The Company will not classify its securities as held-to-maturity for the period of 2 years, i.e. until 31 May 2016.

As of 30 September 2014, the Lithuanian Government bonds were accounted for at fair value, which is attributable to Level 1 in the fair value hierarchy. The fair value of debt securities was estimated with reference to the highest bid price (including accrued coupons) for relevant debt securities available from one of the three Lithuanian banks as at 30 September 2014. The nominal value of investments was multiplied by the best bid price (including accrued coupons) available as of 30 September 2014.

-

81,433

-

81,433

258

821

258

821

258

122,385

258

122,385

Fair value of investments As of 31 December 2013, the fair value of Lithuanian Government bonds was equal to LTL 98,284 thousand and it is attributable to Level 1 in the fair value hierarchy. The fair value of debt securities was estimated with reference to the highest average bid price (including accrued coupons) for relevant debt securities available from three Lithuanian banks as at 31 December 2013. The nominal value of investments was multiplied by the best bid price (including accrued coupons) available as of 31 December 2013.

As of 31 December 2013, the fair value of bank bonds was equal to LTL 81,587 thousand and it was estimated with reference to interest rate payable on redemption of bonds prior to maturity and the period for which the bank bonds were held by the Company.

As of 30 September 2014, the investments were accounted for at fair value.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

22

9

Inventories Group 30 Sep 2014

31 Dec 2013

Raw materials, consumables and spare parts

24,524

Goods for resale (including natural gas)

34,722

-

2,950

3,257

16,044

20,740

Electricity meters Heavy fuel oil

20,881

Other

5,376

4,222

Total

83,616

49,100

(13,951)

(14,486)

69,665

34,614

Less: write-down to net realisable value Carrying amount

Movement on the account of write-down of inventories to net realisable value during the period ended 30 September 2014 and 2013 was as follows: Group Carrying amount at 1 January 2013

17,341

Additional impairment

1,898

Reversal of impairment

(4,753)

Carrying amount at 31 December 2013

14,486

Carrying amount at 1 January 2014

14,486

Additional impairment

990

Reversal of impairment

(1,525)

Carrying amount at 31 September 2014

13,951

10

Prepayments

As of 30 September 2014, prepayments amounted to LTL 160,966 thousand (31 December 2013: LTL 16,292 thousand), whereof prepayments of LTL 138,098 thousand were related to retrospective reduction of natural gas import price for Lietuvos Dujos AB by OAO Gazprom

11

for the period from 1 January 2013 to 31 March 2014.

This amount of prepayments will be realised by the end of 2014 by offsetting it against amounts payable of OAO Gazprom, accordingly, it was classified as current assets.

Cash and cash equivalents

Cash and cash equivalents and bank overdraft include the following for the purpose of the cash flow statement: Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

Cash and cash equivalents

556,911

558,396

4,375

Bank overdraft

(26,294)

(70,708)

-

309,974 -

Carrying amount

530,617

487,688

4,375

309,974

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

23

12

Share capital

Based on Order No. 1K-060 of 21 February 2014 On increase of share capital of Lietuvos Energija UAB and amendment to the Finance Minister‘s Order No. 1K-251 of 16 July 2013 On amendments to the Articles of Association of Visagino Atominė Elektrinė UAB and formation of the Supervisory Board, the Ministry of Finance (“the Ministry“) made a decision to increase the Company‘s share capital by LTL 112.7 million.

On 21 February 2014, the Ministry and the Company signed the Agreement for Subscription of Shares, under which the Company assumed a commitment to provide 112,685,657 ordinary registered shares, whereas the Ministry assumed a commitment to subscribe for the shares and cover their full issue price by an in-kind contribution representing state-owned shares of Lietuvos Dujos AB.

13

As of 30 September 2014, the Company‘s share capital totalled LTL 4,179,849,289 (31 December 2013: LTL 4,067,163,632). As of 31 December 2013 and 30 September 2014, the share capital was divided into ordinary registered shares with the nominal value of LTL 1 each. All the shares have been fully paid up.

Reserves

The movement in other reserves pertains to the transfers made by the subsidiary Lietuvos Energijos Gamyba AB from the reserve related to assets and from the reserve intended for investments. Transfers to retained earnings

14

On 6 March 2014, the share capital of Lietuvos Energija UAB was increased from 4 billion 067 million to 4 billion 180 million. The nominal value and issue price of newly issued shares was equal to LTL 1. The value of the Ministry‘s 17.7% shareholding in Lietuvos Dujos AB was determined with reference to the provisions of the Law on Companies, and was equal to the weighted average 6 months‘ market price of LTL 112,685,657.

were made on the basis of the decision of the General Shareholders‘ Meeting in 2014. The amount of transfers attributable to the Company‘s shareholders was equal to LTL 651,555 thousand.

Borrowings Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

Non-current Bank borrowings

865,868

805,826

-

-

370,406

302,656

-

-

-

-

-

-

26,294

70,708

-

-

Current Current portion of long-term loans Other borrowings Bank overdraft Interest payable Total borrowings

73

854

-

-

1,262,641

1,180,044

-

-

Non-current borrowings analysed by maturity: Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

Between 1 and 2 years

125,292

113,352

-

-

Between 2 and 5 years

486,116

590,329

-

-

Over 5 years Total

254,460

102,145

-

-

865,868

805,826

-

-

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

24

The loan agreements contain certain financial and non-financial covenants that the individual Group companies are obliged to comply with. In the opinion of management, as at 31 December 2013 and 30 September 2014 the Group complied with these covenants.

amount, except for Lietuvos Energijos Gamyba AB borrowings with the carrying amount of LTL 563,911 thousand and LTL 555,390 thousand, respectively. The fair values of these borrowings as at 30 September 2014 and 31 December 2013 were approx. LTL 531,927 thousand and LTL 609,920 thousand, respectively. The fair values were estimated using a discount rate of 2.55% (31 December 2013: 2.9%).

As at 30 September 2014 and 31 December 2013, the fair value of borrowings approximated their carrying

15

Provisions Group 30 Sep 2014

Non-current

31 Dec 2013

179,485

Current Carrying amount

Group At 1 January 2013 Increase over the period

30 Sep 2014

4,588

31 Dec 2013 -

-

147,027

12,437

-

-

326,512

17,025

-

-

Commitments relating to emission limits

Provisions for employee benefits

Provisions for onerous contracts

Other provisions

13,895

3,227

-

305

8,379

6,399

-

-

14,778

-

(2,112)

-

(116)

(2,228)

Utilised during the period Decrease due to changes in assumptions

Company

Total 17,427

(13,895)

-

-

-

(13,895)

At 30 September 2013

8,379

7,514

-

189

16,082

At 1 January 2014

9,745

6,894

-

386

17,025

Increase over the period

7,162

193

282,350

179

289,884

(10,042)

(2,279)

-

(265)

(12,586)

297

-

-

-

297

-

31,892

Utilised during the period Decrease due to changes in assumptions Acquisition of Lietuvos Dujos AB At 30 September 2014

-

7,964

23,928

7,162

12,772

306,278

On 7 May 2014, Lietuvos Dujos AB entered into arrangement with natural gas supplier OAO Gazprom for a significant reduction of the import price for natural gas for the period from 1 January 2013 to 31 December 2015. Based on this arrangement, gas import price calculation formula was adjusted for the Company on a retrospective basis for the period from 1 January 2013 to 31 March 2014.

300 326,512

Lietuvos Dujos AB and NCCPE agreed that the tariffs of natural gas for household consumers for the period from the 2nd half of 2014 through to 2016 will be reduced by the effects of reduced gas import price, and the Group accounted for LTL 23.9 million provision for onerous contracts for the share of reduced price effects for 2015. The Group accounted for LTL 277,7 million provision for onerous contracts for the share of reduced price effects for business clients.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

25

16

Other expenses Group 30 Sep 2014

Company

30 Sep 2013

30 Sep 2014

30 Sep 2013

Utility services

4,872

4,717

219

105

Telecommunications and IT services

9,114

9,158

607

388

Business trips

1,024

1,003

132

159

Consultation services

3,089

3,812

775

89

HR development

1,020

1,131

115

70

Expenses of small-value inventory items

1,839

1,574

-

-

PR and marketing

1,457

1,656

172

52

Lease

7,401

6,158

421

353

11,760

9,963

338

433

Transport Customer service

6,336

6,280

-

-

Taxes

14,707

14,852

71

82

Subcontractor works and materials

32,264

24,566

-

-

Impairment of amounts receivable

4,608

5,048

-

-

Write-off of PP&E

9,334

9,364

-

-

Revaluation of emission allowances and provision expenses

(105)

23,640

-

-

Inventory write-down

(535)

194

-

-

13,374

8,034

579

242

121,559

131,150

3,429

1,973

Other expenses

17

Finance income Group 30 Sep 2014

Interest income Dividends received

18

30 Sep 2013

30 Sep 2014

30 Sep 2013

11,806

11,573

11,320

11,252

6,644

-

489,331

109,255 -

Foreign exchange positive effect Other finance income

Company

9

4

-

907

3,182

438

-

19,366

14,759

501,089

120,507

Finance costs Group 30 Sep 2014

Interest expenses Foreign exchange negative effect Other finance costs

19,284

Company

30 Sep 2013 22,831

30 Sep 2014

30 Sep 2013

401

-

16

18

1

-

1,081

(1,799)

11

3

20,381

21,050

413

3

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

26

19

Business combinations

Lietuvos Energija UAB initiated expansion to gas industry sector, which was continued by the Group company LITGAS (engaged in supply of liquefied natural gas (LNG) and trade in natural gas). This expansion was intensively pursued in the second quarter, and was supported in February 2014 with a designated supplier who is expected to ensure uninterrupted operations of LNG terminal in Lithuania. As the Ministries of Finance and Energy have implemented the Lithuanian Government Resolution No. 120 of 12 February 2014 On the investment of state-owned assets and increase of share capital of the companies, with effect from 21 February 2014 Lietuvos Energija UAB became a holder of 17.7% shares of Lietuvos Dujos AB. Core line of business of Lietuvos Dujos AB is purchase (import) and sale of natural gas, provision of distribution services, and rational development of natural gas distribution infrastructure.

In June 2014, the Company acquired control over Lietuvos Dujos AB. The acquisition was carried out in three stages that are described in Note 6.

The shareholding of 17.7% acquired by the Company in February 2014, entitled the Company to participate at the Board of Lietuvos Dujos AB. Accordingly, this investment was recognised as investment in associate using the equity method. Additional shareholding of 38.9%, which was acquired in May 2014, did not vest with any additional control rights. This investment met the definition of joint ventur, because significant decisions related to the activities of Lietuvos Dujos AB could be made under joint agreement with another shareholder. The investment was further accounted for using the equity method, as set out below:

Acquisition cost of investment (17,7%)

112,686

Fair value of net assets acquired

100,152

Identified goodwill

12,534

Share of results of investments under equity method for March-May 2014 Acquisition cost of investment (38,9%)

46,249 219,009

Fair value of net assets acquired

321,795

Identified goodwill posted to share of results of investments under equity method Share of results of investments under equity method for June 2014

102,786 159

Share of results of investments under equity method

149,194

Value of investment under equity method before acquisition of control

480,889

With a shareholding of 56.6% in Lietuvos Dujos AB the Company announced a mandatory non-competitive takeover bid to buy up the remaining shares, which was accomplished on 16 June 2014. The Company acquired 107,734,925 (one hundred and seven million, seven hundred and thirty-four thousand, nine hundred and twenty-five) shares of Lietuvos Dujos AB from OAO Gazprom and 8,622,363 (eight million, six hundred and twenty-two thousand, three hundred and sixty-three) shares of Lietuvos Dujos AB from minority shareholders.

Following a mandatory takeover bid, the Company holds 96.6% shares of Lietuvos Dujos AB, and minority shareholders hold 3.4% shares.

Fair value Property, plant and equipment

449,439

Intangible assets

2,164

Other non-current assets

6,180

Current assets

350,819

Cash

126,594

Grants

-

Deferred revenue

-

Other non-current liabilities

(7,964)

Current liabilities

(100,018)

Net assets acquired

827,214

Fair value of investment before acquisition of control

382,901

Non-controlling interest

(27,762)

Consideration paid on mandatory takeover bid

262,348

Goodwill on acquisition

(154,203)

Total cost of acquisition of control

645,249

Total cost of acquisition of control

645,249

The following assets and liabilities of Lietuvos Dujos AB were identified on acquisition with the following fair values at the date of acquisition:

The Group recognised LTL 97,988 thousand loss on re-measurement of investment in Lietuvos Dujos AB before acquisition of control at fair value through profit or loss.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

27

The Company determined the fair value using the discounted cash flow method in respect of supply and distribution activities; valuation assumptions are described in Note 3 Valuation of investments in subsidiaries.

The fair value of property, plant and equipment was determined with reference to value in use based on discounted cash flow method.

Deferred revenue and grants were written off on acquisition. The fair value of current assets and current liabilities approximated their carrying amount.

Non-controlling interest was estimated on a proportionate (pro rata) basis.

20

The consolidated statement of profit and loss and other comprehensive income includes revenue of Lietuvos Dujos AB dating from 20 June 2014 in amount of LTL 25,043 thousand, and profit (loss) in amount of LTL 0.

Had Lietuvos Dujos AB been controlled from 1 January 2014, the Group’s consolidated revenue would have amounted to LTL 2,065,792 thousand, and profit would have amounted to LTL 413,096 thousand.

Income tax expenses

Income tax expenses comprise current income tax and deferred income tax.

21

Acquisition-related costs were insignificant and they were included in other expenses in the statement of profit and loss and other comprehensive income.

Income tax at a rate of 15% is applied to profit for 2014 (the same as in 2013) in accordance with the Lithuanian regulatory legislation on taxation.

Dividends

In 2013 and for the period January-September 2014 the Company did not pay any dividends.

During the General Shareholders‘ Meeting of LESTO AB held on 30 June 2013, the decision was made to pay out dividends of LTL 102,670 thousand from profit for appropriation. The Company received dividends of LTL 84,834 thousand.

During the General Shareholders‘ Meeting of Lietuvos Energijos Gamyba AB held on 30 April 2013, the decision was made to pay out dividends of LTL 25,403 thousand from profit for appropriation. The Company received dividends of LTL 24,421 thousand.

During the General Shareholders‘ Meeting of LESTO AB held on 4 April 2014, the decision was made to pay out dividends of LTL 114,749 thousand from profit for appropriation. The Company received dividends of LTL 94,815 thousand.

During the General Shareholders‘ Meeting of Lietuvos Energijos Gamyba AB held on 4 April 2014, the decision was made to pay out dividends of LTL 150,000 thousand from profit for appropriation. The Company received dividends of LTL 144,197 thousand.

During the General Shareholders‘ Meeting of Duomenų Logistikos Centras UAB held on 30 April 2014, the decisi-

on was made to pay out dividends of LTL 1,933 thousand from profit for appropriation. The Company received dividends of LTL 1,539 thousand.

During the Extraordinary General Shareholder‘s Meeting of Lietuvos Dujos AB held on 22 July 2014, profit for appropriation for the year 2013 was approved and a decision was made to pay dividends of LTL 53,280 thousand.

The Company received dividends of LTL 51 492 thousand.

During the Extraordinary General Shareholders‘ Meeting of LESTO AB held on 30 September 2014, the decision was made to pay out dividends of LTL 66 434 thousand for the period shorter than financial year. For the Company was alocated dividends of LTL 62 707 thousand.

During the Extraordinary General Shareholders‘ Meeting of Lietuvos Energijos Gamyba AB held on 30 September 2014, the decision was made to pay out dividends of LTL 69 859 thousand for the period shorter than financial year. For the Company was alocated dividends of LTL 67 157 thousand.

During the Extraordinary General Shareholders‘ Meeting of Lietuvos Dujos AB held on 30 September 2014, the decision was made to pay out dividends of LTL 69 765 thousand for the period shorter than financial year. For the Company was alocated dividends of LTL 67 423 thousand.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

28

22

Transactions with related parties

As at 31 December 2013 and 30 September 2014, the parent company was the Republic of Lithuania represented by the Lithuanian Ministry of Finance. For the purpose of disclosure of related parties, the Republic of Lithuania does not include central and local government authorities. The disclosures comprise transactions and their ba-

lances with the parent company, subsidiaries, associates and management.

The following transactions were conducted with related parties:

Sales of goods and services Group 30 Sep 2014 LESTO AB

Group’s associates and joint ventures

30 Sep 2013 -

Technologijų ir Inovacijų Centras UAB EPSO-G UAB

Company 30 Sep 2014 -

30 Sep 2013 6

6

-

-

11

-

9,932

8,334

9,932

8,334

7,115

318

-

-

17,047

8,652

9,949

8,340

Purchase of goods and services Group 30 Sep 2014

Company 30 Sep 2013

30 Sep 2014

30 Sep 2013

LESTO AB

-

-

118

27

Lietuvos Energijos Gamyba AB

-

-

254

-

NT Valdos UAB

-

-

863

721

Technologijų ir Inovacijų Centras UAB

-

-

613

410

Group’s associates and joint ventures

42,700

4,280

-

-

42,700

4,280

1,848

1,158

Amounts receivable from related parties Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

AB LESTO

-

-

62,709

2

„Lietuvos energijos gamyba“, AB

-

-

67,157

-

AB „Lietuvos dujos“

-

-

67,423

-

Technologijų ir Inovacijų Centras UAB EPSO-G UAB Group’s associates and joint ventures

-

-

-

-

825,862

727,469

825,862

727,469

1,019

77

-

-

826,881

727,546

1,023,151

727,471

Amounts payable to related parties Group 30 Sep 2014

Company 31 Dec 2013

30 Sep 2014

31 Dec 2013

LESTO AB

-

-

Lietuvos Energijos Gamyba AB

-

-

40

-

NT Valdos UAB

-

-

106

194

Technologijų ir Inovacijų Centras UAB

19

-

-

-

116

124

-

-

281

318

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

29

Group 30 Sep 2014 Salaries and other benefits to management:

Company 30 Sep 2013

30 Sep 2014

30 Sep 2013

8,245*

6,896

1,573

707

992

401

240

-

74

55

10

7

Whereof: termination benefits and payments to board members Number of management staff

Management in the table above includes heads of administration, their deputies and chief accountants. * Lietuvos Dujos AB data from 1 July 2014.

23

Events after the end of the reporting period

Increase of share capital of Verslo aptarnavimo centras UAB During the General Shareholders‘ Meeting of Verslo aptarnavimo centras UAB held on 28 October 2014, the decision was made to increase the share capital by issuing new ordinary registered 11,074,656 shares with the nominal value of LTL 1 each. By issuing new shares Verslo aptarnavimo centras UAB share capital will be LTL 1500 000. The Company paid LTL 700 000 for its shares.

Increase of share capital of VAE SPB UAB On 17 September 2014, regarding the decision of the Company as the single Shareholder of VAE SPB UAB share capital increased LTL 1 000 000 by issuing new ordinary 1 000 000 shares with the nominal value of LTL 1 each. VAE SPB UAB share capital increase from LTL 10 000 up to LTL 1 010 000.

On 31 October 2014 the Company paid LTL 1 000 000 for issuing new shares.

The payment of dividends On 14 November 2014 the Lithuanian Ministry of Finance by its Order approved the Company interim 2014 Half-Year Financial Statements and made the decision to pay dividends 60 percent from the Company 2014 m. first half of the year profit (LTL 84 953 thousand) for the shares hold by the State.

Increase of share capital of Lietuvos dujų tiekimas UAB On 30 September 2014 The Company paid LTL 750 000 for the new issued shares with value LTL 3 000 000.

On 1 October 2014 The Company additionally paid LTL 800 000 for the issued shares.

Lietuvos energija UAB support fund On 29 August 2014 during the Company Board meeting

held on 2 October 2014, with the approval of Lithuanian Ministry of Finance the decision was made to establish and on 7 October 2014 to register Lietuvos energija UAB support fund. The Company is the founder of the fund.

The fund share capital is LTL 10 000. On 14 October 2014 the Company paid LTL 10 000.

Issued guarantees On 3 October 2014, the Company signed the agreement on sureties or guarantee limit with UAB LITGAS according to which the Company provides to UAB LITGAS the refundable security of EUR 100 million, which may be increased to EUR 25 million.

On 17 September 2014, the Company’s subsidiary UAB LITGAS concluded the credit agreement with Swedbank, AB for carrying out the designated supplier’s activities and for the financing of acquisition of the test cargo of LNG. The maximum amount of the credit, which may be granted under this agreement, is EUR 83.3 million.

On 14 October 2014, the Company issued the guarantee.

The beneficiary of the guarantee is Statoil ASA. The guarantee is aimed at securing payment for the test cargo of LNG acquired by UAB LITGAS. The maximum amount of this guarantee may not exceed USD 29,275,860; the guarantee expires on 15 December 2014.

On 17 November 2014, the Company signed the surety agreement with Swedbank, AB. The purpose of the surety agreement is to provide the surety for the part of obligations of UAB LITGAS arising from the credit agreement concluded with Swedbank, AB. The maximum amount of this surety may not exceed EUR 41.6 million.

Natural gas pricing procedures for subsequent periods By its Resolution No 1121 of 20 October 2014 the Government of the Republic of Lithuania established that once the principal terms and conditions of the contract for the supply of natural gas change, the gas supply companies

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

30

which had been given discount shall within two months draft the natural gas pricing procedure for the coming periods according to which the change in the price of natural gas shall be included in the natural gas price for the

period of two years. The aforementioned procedure shall be also coordinated with the National Control Commission for Prices and Energy within two months. The draft procedure is currently being coordinated with the NCCPE.

CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) for a nine-month period ended 30 September 2014

31

Lietuvos Energija UAB Žvejų str. 14, Vilnius www.le.lt