Consolidated interim report of the Company and

Transcription

Consolidated interim report of the
Company and the Group
1 January 2014 – 31 March 2014
1
Contents
3
About the Group and the Company
6
Analysis of the Group’s operating results
Review of activities
13
Corporate governance
20
Social responsibility
24
Key information about the Company and the Group
28
2
1
The Lietuvos Energija group is one of the largest state-owned
groups of energy companies in the Baltic States. The main
activities of the Group include electricity and heat generation
and supply, sales and distribution of electricity, also service and
development of the energy sector. In Q 1 of 2014, we were also
engaged in the preparation for trade and supply of natural gas.
The rights and obligations of the shareholder of Lietuvos Energija
group are exercised by the Ministry of Finance of the Republic of
Lithuania.
The Lietuvos Energija group with more than 4 300 employees
manages and operates the key energy generation capacities of
Lithuania ensuring security of energy supply, the distribution
network covering the territory of the entire country, services more
than 1.6 million of customers throughout Lithuania, provides
electricity supply services to customers abroad, implements
development projects of strategic value and pursues the goals
of the National Energy Strategy. During the first three months of
2014, it generated 0.25 TWh of electricity and transmitted 2.21
TWh of electricity to its customers.
The total value of assets owned by the Lietuvos
Energija group is LTL 9 895 mln. Consolidated
revenue for three months of 2014 amounted to LTL
721.4 million, while the Group’s EBITDA was LTL 195.9
million. Net profit of three months amounted to LTL
66.3 million.
The parent company of the Group Lietuvos Energija, UAB
(hereinafter referred to as Lietuvos Energija or the Company) is
responsible for transparent management and coordination of
activities of the entire Group, improvement of the efficiency
with a view to providing competitive services to customers and
for the socially responsible creation of the long-term value for
shareholders. The Company analyses the activities of the Group,
represents the Group, implements the rights and obligations of
the shareholder, establishes operational guidelines and rules, and
coordinates the activities in the areas of generation, commerce,
finance, law, strategy and development, human resources, risk
management, audit, technology, communication and other areas.
3
Structure of the Group
At the end of the reporting period, the Lietuvos Energija group
consisted of 15 companies: the parent Company and 14 directly
and indirectly managed companies. The main activities of the
Group include the generation of electricity and heat, sales,
distribution and supply of electricity. Operations of the companies
of the Group companies servicing these core activities comprise
the ITT, real estate, transport, repairs and construction of energy
facilities, staff training and other services.
A detailed list of the Group companies is presented on p. 29 of this
document.
The structure of the Group as at the end of reporting period (31th May 2014)
„Lietuvos energija“, UAB
„Lietuvos energijos
gamyba“, AB
AB LESTO
UAB
„Elektros
tinklo
paslaugos“
NT Valdos,
UAB
UAB
VAE SPB
UAB
LITGAS
UAB
Duomenų
logistikos
centras
UAB
Technologijų
ir inovacijų
centras
Energijos
tiekimas
UAB
UAB
„Kauno
energetikos
remontas“
VŠĮ
Respublikinis
energetikų
mokymų
centras
Geton
Energy SIA
Geton
Energy OU
Gotlitas
UAB
Supervisory Board consists of 7 members (3 of them independent). Board consists of 5 members.
Chief Executive Officer is the Chairman of the Board.
Supervisory Board consists of 5 members (1 independent). Board consists of 5 members.
Chief Executive Officer is the Chairman of the Board.
Board* consists of 3 members (2 from the shareholder).
Chief Executive Officer is not a member of the Board.
Chief Executive Officer, Board is not formed.
*In case of TIC, 5 members Board is formed; in case of VAE SPB the Board is not formed.
This complies with the provision of the corporate governance guidelines approved by
the Minister of Finance
4
Strategy of the Group
The main goal of the strategy of the Lietuvos Energija group is
to double the value of the Group and to become the most
valuable energy company in the Baltic States by 2020. This
value is understood as a sustainable balance between three
elements: return on assets, improvement of competitiveness and
responsibility to employees, society and the environment. The
growth of return on assets of the Group will be achieved through
the development - diversification of activities, development
of new economically viable projects and activities, acquisition
of enterprises, ensuring the efficiency of daily operations and
achieving the goals set by the shareholder. The Group will
contribute to the improvement of economic competitiveness by
ensuring a stable supply of electricity and offering new products.
MisSiON –
to create sustainable value in the
energy sector by promoting economic
and social development of the country.
The main strategic directions of the Group:
Ensurance of the provision of quality services to customers.
Care will be taken to improve services provided to customers, create
electronic (saving customer time) and new services responding to
customer needs, to expand possibilities of customers’ choice and
to ensure the reliability of electricity generation, distribution and
supply.
Diversification of activities covers the implementation of
investment projects in the sector of electricity, heat and natural
gas. The projects would increase the competitiveness of the
Group and the sector of economy at large, as well as the energy
independence of the country, also the optimisation of the
production and trading portfolio, development of new activities
by extending the value chain of the Lietuvos Energija group.
These goals will be achieved using available resources and
infrastructure, investing in the creation of new infrastructure and
effective management through acquisitions.
VISION –
to become the highestvalue energy company
in the Baltic States.
Values –
responsibility,
cooperation,
result.
Enhancement of operating efficiency. Efficiency will be
pursued in key activities of the Group as well as in the provision
of support functions, management of assets and other
resources in all Group companies. In order to achieve higher
efficiency, the system of management and control of the Group
companies will be integrated by setting common principles
of business management, division, coordination and control
of responsibilities. Efficiency improvement measures covering
all Group companies or identical or very similar activities at the
individual company level will also be continued. Active sharing of
best practices between companies will be promoted and sought.
Formation of new organizational culture. The aim is to
create a modern, effective and dynamic organization, building
its operations on common values, developing in consistent and
targeted manner the successors for the required competences
and key personnel, and promoting the employee involvement
through the internal environment.
5
2
Key operational and financial indicators
During Q 1 of 2014, the Lietuvos Energija group generated 0.25
TWh of electricity (the change of -18.4 per cent and -0.06 TWh as
compared to the result of Q1 of 2013). Reduction in the volumes
of electricity produced was mainly caused by non-performance
of the quota-based production in the first quarter of the year in
Elektrėnai complex. However, an actual decline in the reporting
period was compensated by increased volumes of electricity
generation at Kruonis Pumped Storage Power Plant and Kaunas
Hydro Power Plant.
During Q1 of this year, the Group’s electricity distribution to customers via medium and low voltage networks amounted to 2.21
TWh (-0.2 per cent, -0.004 TWh) and, compared to Q 1 of 2013,
remained stable.
Public and guaranteed electricity supply services of the Lietuvos
Energija group was 0.91 TWh (-+5.1 per cent, +0.04 TWh) during
the reporting period. The increase in the volumes of this activity
was mainly determined by higher volumes of guaranteed supply,
when a few independent electricity suppliers unexpectedly
terminated their operations at the end of 2013. Electricity sales
of the Group in the open market amounted to 0.30 TWh and
remained the same as last year.
Regardless of the impact of natural disasters (force majeure),
during Q1 of 2014, the average outage duration for each customer served (SAIDI) was equal to 15.77 minutes, while the
average number of long unplanned interruptions per customer
(SAIFI) was equal to 0.19 times. During the first three months of
this year, LESTO electricity supply quality indicators, compared
to a respective period of 2013, decreased (in Q 1 of 2013 SAIDI
amounted to 11.68 minutes, while SAIFI was 0.16 times). The main
reason for deteriorating indicators is related to different weather
conditions in the first quarter of this year compared with last
year’s first quarter.
6
Key indicators of the Lietuvos Energija group
3 months 3 months
of 2014 of 2013
Thousand LTL
Change
+/-
%
Financial indicators
Generated electricity
Distributed electricity
via medium- and lowvoltage grids
Public and guaranteed
supply
Sale of electricity on the
market
TWh
0.25
0.30
-0.06
-18.4
TWh
2.21
2.21
0.00
-0.2
TWh
0.91
0.86
0.04
5.1
TWh
0.30
0.30
0.00
0.7
Quality indicators of electricity supply
SAIDI
(incl. force majeure)
min
51.07
SAIFI
(incl. force majeure)
units
0.32
Key indicators of the Lietuvos Energija group (continued)
Thousand LTL
14.68
721.416
0.19
755.997 -34.581
-4.6
Costs of purchase of
electricity, fuel and
related services
(423.585) (483.831)
60.246
-12.5
Operating expenses
(101.975) (100.688)
-1.287
1.3
21.415
12.3
48.529
273.9
1
EBITDA2
%
Net profit
Change
+/-
%
Total assets
9.895.336
9.727.225
168.111
1.7
Equity
6.435.631
6.252.705
182.926
2.9
Financial debt
1.278.156
1.180.088
98.068
8.3
381.412
442.005
4.1
2.3
54.4
65.0
5.9
7.1
Net financial debt4
Revenue
3 months of 3 months of
2014
2013
Financial indicators (continued)
Financial indicators
EBITDA margin3
During Q 1 of 2014, changes in the Group’s assets and equity
accounted for +1.7 per cent (LTL +168.1 million) and +2.9 per
cent (LTL 182.9 million). Positive change in assets and equity was
mainly determined by net profit generated during the reporting
period and the increase of authorized capital of Lietuvos Energija,
which took place on 6 March 2014, paid by a contribution in kind
- state-owned shares of AB Lietuvos Dujos. 6
195,879
174,464
27.2
23.1
66.247
17.718
Return on equity (ROE)5 %
Net financial debt /
EBITDA 12 months
%
Net financial debt /
Equity
%
-60.593 -13.7
1
Operating expenses (OPEX) = operating expenses, excluding purchase expenses of
electricity and related services, depreciation and amortization, impairment and write-off of non-current tangible assets;
4
Net financial debt= borrowings - cash and cash equivalents - short-term investments
and fixed-term deposits –a share of other non-current financial assets comprising investments into debt securities;
2
EBITDA (earnings before interest, taxes, depreciation and amortization) = profit (loss)
before taxes + interest expenses - interest income - dividends received + depreciation
and amortization expenses + impairment expenses + write-off of non-current tangible
assets;
5
Return on equity (ROE) = net profit (loss), recalculated annual expression/ equity at
the end of the period
3
EBITDA margin = EBITDA /Revenue;
6
The transfer of 17.7 per cent of state-owned shares of this company from the Ministry
of Energy to the Ministry of Finance with the right to manage, use and dispose of them
was recorded on 20 February 2014.
7
Revenue
In Q 1 of 2014, revenue of Lietuvos Energija group amounted to
LTL 721.4 million (a change of -4.6 per cent and LTL - 34.6 million
as compared to the result of 2013). Main reasons, which led to
the reduction of revenue, was lower electricity transmission tariff
set in 2014 and non-performance of quota-based generation of
electricity in Elektrėnai complex.
2% 1% 1%
LTL million
820
30
4,7
1,1
(0,7)
(7,3)
(9,7)
780
5%
5%
(53)
756
740
3 months of 2014
721
34%
700
LTL 721 million
52%
660
Revenue 3 months 2014
Transmission
Balancing, regulating and
power reserve
PSO service of LEG
Heat energy revenue
Revenue from connection of new
customers
Other revenue
Sale of electricity produced,
electricity trade and supply
Revenue 3 months 2013
620
Transmission
Sale of electricity produced,
electricity trade and supply
Other revenue
PSO service of LEG
Balancing, regulating and power
reserve
Revenue from connection of new
customers
Heat energy revenue
8
Operating and purchase expenses
Operating expenses of the Group for Q 1 of 2014 amounted to
LTL 102 million and, compared to the results of the same period
of last year, remained at the same level (+1,3 per cent and LTL
+1.3 million).
During the reporting period, expenses for the purchase of electricity, fuel and related services decreased by -12.5 per cent (LTL
- 60.2 million) as compared to Q 1 of 2013. This came as a result of
declined volumes of electricity production in Elektrėnai complex.
Operating expenses LTL million
Expenses for the purchase of electricity, fuel and related
services LTL million
120
101
1,3%
102
600
484
100
80
-12,5%
424
400
60
200
40
20
0
0
3 months 2013
3 months 2014
3 months 2013
3 months 2014
9
Investments
Investments made by the Group in Q 1 of 2014 amounted to LTL
48.1 million (+11.3 per cent or LTL + 4.9 million). Investments into
the development of the distribution network were LTL 33.6 million,
which was by 26.2 per cent more as compared to the investments
into the electricity network made in Q 1 of 2013 (LTL 26.6 million).
During Q 1 of 2014, LESTO connected 3 951 new customer object
- 23.7 per cent more than during the respective period of 2013.
3% 0,01%
7%
15%
4%
3 months of 2014
LTL 48,1 million
70%
Development of the distribution network
Maintenance of the distribution network
ITT (IT, telecommunications and
management systems)
Electricity generation capacities
Other investments
Heat energy generation capacities
10
EBITDA and net profit
In Q 1 of 2014, the Group’s EBITDA amounted to LTL 195.9 million
(+12.3 per cent, LTL +21.4 million). The growth of EBITDA of the
Lietuvos Energija group was mainly affected by more profitable
commercial activities of sale and supply of electricity and increased
revenues from guaranteed electricity supply. The EBITDA margin
of the reporting period accounted for 27.2 per cent (in Q 1 of 2013,
the EBITDA margin was 23.1 per cent).
Net profit of the Group totalled LTL 66.3 million and, compared
to the result of Q 1 of 2013 (LTL 17.7 million), increased by LTL
48.5 million. The growth of net profit of the Group essentially
reflected the dynamics of the increase of EBITDA. Net profit
results were also greatly affected by increased market price of
environmental pollution permits resulting in restored impairment
of environmental pollution permits.
EBITDA LTL million
Net profit LTL million
250
70
200
+12,3 %
174
196
60
50
150
66
+274 %
40
30
100
20
50
18
10
0
0
3 months 2013
3 months 2014
3 months 2013
3 months 2014
11
Financial debt
At the end of Q 1 of 2014, the Group’s net financial debt amounted
to LTL 381 million (change of -13.7 per cent and LTL 60.6 million
as compared to the level of debts as at the end of 2013). During
the first quarter of this year, the level of the Group’s borrowings
increased by LTL 98 million, yet a substantial increase in cash
and current investments decreased the Group’s net financial
debt by 13.7%. Thus, in Q 1 of 2014, the Group maintained and
strengthened its financial capacity.
The current level of financial debt remains low both with respect
to revenue earned and the capital structure. The Group’s level
of financial debt, compared to average debt indicators of the
European energy companies, reflects a solid financial position of
the Group.
LTL million
500
450
442
159
98
400
381
80 %
65,0
350
54,4
300
250
40 %
200
150
100
Net financial debt/
EBITDA for 12
months
50
0
Net financial debt as
at 31.03.2014
Financial debt
Cash and
current investments
Net financial debt as
at 31.12.2013
0%
31 12 2013
31 03 2014
8%
7%
7,1
5,9
6%
5%
4%
3%
2%
Net financial debt/
Equity ratio
1%
0%
31 12 2013
31 03 2014
12
3
Review of activities of the Lietuvos Energija group includes events
from 1 January 2014 till the end of the reporting period (31 March
2014) and after the reporting period - till the day of the report.
Ensurance of quality services
The Group company LESTO serving more than 1.6 million
customers devotes great attention to the development and
modernization of electric power grid; in light of changing needs
of its customers the company is consistently expanding and
improving the services provided, thus providing both economic
and social benefits to society, increasing the reliability and quality
of electricity supply, and facilitating more rational use of electricity.
During Q 1 of 2014, LESTO connected 3 951 new consumer objects, or by 23.7 per cent more than in Q 1 of 2013. Also, LESTO
continued the redemption of electric power networks of
gardeners’ communities thus ensuring a reliable and secure
electricity supply, and carried out the projects of network
modernization co-funded from the EU structural funds - during
Q 1 the company completed works in five objects of gardeners’
communities, modernized seven transformer stations, replaced
overhead power transmission lines by cable lines.
In Q1 of 2014, LESTO replaced 38 504 units metrologically obsolete
electricity measurement devices, installed 4 291 units of electricity
measuring devices for new customers, carried out inspections
of more than 253 thousand units electricity measuring devices
and works of readings control. Investing into the modernization
and automation of electricity measuring devices, 1 487 units of
electricity measuring devices were connected to automated data
reading system during Q 1 of 2014. The automation of electricity
measuring devices allows for an automated presentation of bills
to customers for electricity volumes used during the period,
without the need for customers to declare consumed electricity
volumes themselves.
The number of LESTO customers using remote service channels
(self-service ManoElektra and customer service line 1802)
continued to grow - as at 31 March 2014 there were 422 thousand
users registered on self-service www.manoelektra.lt, while
information over the customer service line 1802 was provided to
more than 267 thousand customers, and more than 113 thousand
appeals on various issues were received and resolved. The number
of customers using various electronic payment methods increased
as well. At the end of the reporting period, about 41 per cent of
all payments for electricity consumed were made electronically.
The Group company Energijos Tiekimas is engaged in the creation
of flexible pricing services to customers. In the beginning of 2014,
the company offered to customers a pricing model linked to Nord
Pool Spot Power Exchange prices, which was selected by 200
enterprises.
13
Diversification of activities
Preparation for the supply and sale of gas, expansion into
the gas market
Diversification of activities of the Group is one of the main preconditions for improving the value of the Group. By 2020, the Group
plans to invest LTL 2-3 billion in the following areas: heat sector by
constructing new or upgrading the existing co-generation power
plants, supply and sales of natural gas utilising the potential of the
LNG terminal, renewable energy sources and, upon the adoption
of respective decisions, to participate in the implementation of
the nuclear power plant project.
In February 2014, the Group company LITGAS engaged in the
supply of liquefied natural gas (LNG) and sale of natural gas was
approved as the designated supplier, who will have to supply the
LNG terminal with the minimum necessary quantity of natural gas
of 540 MCM, which is necessary for maintaining uninterrupted
operations of the LNG terminal.
Investments into the heat production from biofuel, analysis
of wind power plant potential in Kruonis PSHP
In Q 1 of 2014, Lietuvos Energijos Gamyba continued the development project of new heat production capacities in Elektrėnai
complex started back in 2011. In February, the project contractor
Consortium Filter and Vapor and UAB Kaunos Energetikos Remontas obtained a construction permit and started the construction
of the biofuel boiler-room.
In Q 1 of 2014, LITGAS completed the first stage of direct negotiations with potential LNG suppliers on a long-term supply
agreement for the period of 5 years. During this stage, meeting with
all three selected potential suppliers were held, tender conditions
and their interpretations were being cleared up, positions were
being coordinated in order to receive most favourable conditions
for Lithuania.
On 21 February 2014, the Ministry of Finance of the Republic of
Lithuania transferred to Lietuvos Energija 51 454 638 state-owned
ordinary registered shares entitling to 17.7 per cent of votes at AB
Lietuvos Dujos general meeting of shareholders.
First plants producing heat from biofuel should be launched in
the heating season of 2014-2015, while the completion of the
construction of the entire 40 MW capacity biofuel boiler-room is
planned at the end of 2014. Also a new 50 MW capacity steam
boiler-room, which will ensure the maintenance of heat reserves,
generation of heat during peak of low temperatures and the
possibility of launching the reserve units of the old power plant,
will be installed. The new boiler-rooms will provide the required
power and steam to the town of Elektrėnai, the company
Kietaviškių Gausa and the reserve power plant managed by
Lietuvos Energijos Gamyba, and will help reduce the need for
PSOP funds.
On 21 May 2014, Lietuvos Energija UAB signed agreements with
the German company E.ON Ruhrgas International, in accordance
with which it took over 38.9 per cent of shares of public company
Lietuvos Dujos and 11.76 per cent of shares of AB LESTO. The total
value of the share package amounts to LTL 336.9 million. Having
concluded this transaction, the Group will own more than half of
shares of Lietuvos Dujos.
Complex measurements of wind speed, directions and other
meteorological conditions were started in the territory of Kruonis
PSHP in the beginning of 2014 in order to carry out the initial
assessment of the potential of the land plot for the installation
of the wind power plant park. Based on measurement results
Lietuvos Energijos Gamyba will make decisions on possible works
of the installation of wind power plants.
Having acquired additional 38.9 per cent of shares of Lietuvos
Dujos, state-owned group Lietuvos Energija will own two
companies providing services to residents and businesses - the
synergy will allow offering electricity and gas consumers better
services and service, coordinated activities of the companies will
allow seeking for a higher efficiency and increasing operating
results. The remaining shareholders of Lietuvos Dujos will be
offered to sell their shares.
Pursuant to the Law on Securities, having exceeded the threshold
of one-third of votes after this transaction, Lietuvos Energija
will make a take-over bid to purchase all the remaining shares
of AB Lietuvos Dujos owned by OAO Gazprom and minority
shareholders.
14
Installation of the industrial park in Kruonis PSHP territory
In Q 1 of 2014, Lietuvos Energijos Gamyba completed the planned
works of the project for the installation of engineering equipment
of the industrial park set up in the territory of Kruonis PSHP. Now
the territory is better prepared for direct foreign investments,
which will allow developing high tech activities in this appealing
area equipped with all the necessary infrastructure.
In the implementation of the project, about 5 km of roads were
reconstructed, also engineering infrastructure was set up: water
supply with water wells and rainwater drainage networks. Works
of reconstruction of the road, also the installation of rain water
collector were completed in the end of December of 2013, while
in February 2014 the last part of the project - set-up of a watering
place - was completed. Currently, the second stage of the project
is being planned.
Most efficient data centre in the Eastern Europe started its
operations
One of the largest data transmission and data centre operators
in the Baltic States owned by the Group Duomenų Logistikos
Centras started the construction of Data Inn - one of the most
modern data centres in the Baltic States - back in 2013. This data
centre is the only centre in Lithuania with Uptime Institute Tier III
certification. Officially this centre was opened up on 6 May 2014.
Energy efficient Data Inn will allow reducing costs for information
technologies, improving the reliability of the operations thereof
and increasing the competitiveness of Lithuania and its businesses
in the international environment. Its power usage effectiveness
(PUE) is as low as 1.3 and is well ahead of the global average
accounting for about 1.65.
The new data centre is the first stage of the entire Data Inn project.
Currently, its useful floor space covers 500 m², power reaches 100
kilowatts and its capacity is 100 server stands. Investments into
the project amount to about LTL 10 million.
Design and construction works of new Data Inn stages and the
expansion of its capacities are planned in the nearest future.
The plan is to have the useful floor space of Data Inn expanded
to 3 200 m², capacity increased to 6 000 kilowatts and 600 server
stands fitted therein upon the completion of the development.
The total value of the project will amount to LTL 42 million.
Surveys of Syderiai geological structure
In Q 1 of 2014, analysing the possibilities for the installation of
the underground natural gas storage in Telšiai region, Lietuvos
Energijos Gamyba finished processing data collected during all
seismic and geological surveys, and prepared the simulation model
of the storage reservoir. This model allows assessing geological
suitability of the storage, its behaviour during gas pumping and
extraction processes, also, setting operational parameters of the
storage activities. All results received and conclusions made after
the surveys were provided to the Ministry of Energy. In order to
ensure that the Government having initiated the project is able
to make a reasonable decision on further course of the project,
specialists of Lietuvos Energijos Gamyba are carrying out the
project cost-benefit analysis upon the assignment of the Ministry.
Preparatory works of the nuclear power plan object
At the beginning of 2014, a positive conclusion was received
from SNPSI on the nuclear power plant site assessment report.
SNPSI found no irregularities, and possible conclusions were also
obtained in respect of the updated report from all coordination
authorities. This conclusion completed an important stage of
the project that has lasted for several years. Summarizing the
completed site assessment surveys and the amount of data
obtained in the course thereof, it has been concluded that the sites
are suitable for the construction of the power plant, moreover,
most detailed geological surveys of the territory of the sites were
conducted in both Lithuania and the Baltic States.
Enhancement of the operating efficiency
Higher efficiency of activities of the Group means both higher
profit and return for shareholders as well as lower tariffs for
consumers. The strategy of Lietuvos Energija for 2014-2020
establishes that higher operating efficiency will be achieved by
adapting the most advanced management practices in corporate
management, planning and monitoring of activities, finance,
procurement, risk managements and internal audit areas.
15
Solid foundation for enhancing the operating efficiency was laid
back in 2013 when management of Lietuvos Energija group was
rearranged in accordance with a new model. The parent company
Lietuvos Energija concentrated the coordination of the activities of
the Group companies, elected the supervisory and management
boards, and separated the responsibilities of management and
supervisory bodies. Currently, a uniform governance and control
system aimed at defining the principles of governance and control
responding to common needs of the Lietuvos Energija group, the
division of responsibilities for individual activities and processes,
risk management and control, the principles of supervision and
control of activities and processes at the Group and individual
company level is under implementation. This system will
contribute to achieving the efficiency and synergy in the activities
of the Group companies and the realisation of the goals set.
Trade under the Gross Bidding principle
In March of 2014, Lietuvos Energijos Gamyba started trading
electricity on the Nord Pool Spot Exchange under the Gross
Bidding principle. This means that the company carries out all
its electricity purchase and sale transactions separately, which
allows increasing the transparency of non-regulated market and
enhancing the efficiency thereof. Now Lietuvos Energijos Gamyba
is able to easier assess benefits of fixed price transactions, which
in turn creates better preconditions for enhancing the efficiency
of commercial activities. At the same time the company is
contributing to the development of transparent wholesale
electricity market in the Baltic States.
Signing a credit agreement
On 21 February 2014, Lietuvos Energijos Gamyba signed a
credit agreement with SEB bank for granting a 10-year loan of
up to EUR 158 million (LTL 546 million). Funds will be allocated
for refinancing three long-term loans, which were disbursed to
the company by consortiums of banks operating in Lithuania
and the European Bank for Reconstruction and Development.
This transaction contributes to the optimization of investments
of strategic national company aimed at the implementation of
projects in Elektrėnai complex, because after the refinancing of
the existing loans, regulated operating expenses of the company
will decline and the administration of assumed obligations
will become easier. Moreover, the decreasing credit risk of the
company will allow expecting favourable funding conditions in
the future.
Organisational culture
Lietuvos Energija believes that the company’s employees
constitute the key element in implementing the operating
strategy of the Group. The aim is to build and maintain valuebased organizational culture, motivating employees to assume
responsibility, cooperate and unitedly strive for the best result.
Upon the reorganization of the corporate governance model of
Lietuvos Energija group, the focus on coordinated organizational
development, human resources management, building new
organization culture, efficiency of the organization of activities,
enhancement and retention of competencies will be increased
further more. In further development of the organization in
2014 and upcoming years, the greatest attention will be paid
to the improvement of remuneration of the Group’s employees,
evaluation of activities and management systems, the creation
of talent identification system, improvement of leadership,
management and professional competencies, the development of
personnel successor system, communication and implementation
of values as well as optimization of management processes of
human resources.
Employees
While implementing the goals set by the shareholder and pursuing
socially responsible business, we aim to attract and retain skilled
specialists in the Group and, ensuring mutual benefit, to engage
with them in the long-term partnership relationships and joint
successful future.
There were 4 3391 employees working in the Group as at 31 March
2014. The number of the Lietuvos Energija group employees
did not experience any significant changes as compared to 31
December 2013.
1
Number of effective employment agreements.
16
As at 31 March 2014, Lietuvos Energija had 58 employees. 91.38
per cent of employees working in the Company have a higher
university education, of which 8 are doctors of science. The
Company employs 2 certified professional project managers
(PMP and PRINCE2), 1 expert holding 2 CFA levels, and nuclear
energy specialists. Employees are active members of associations
and unions (TBTA, EGIA, LBEA, FAA, LSIS, LGS), participants in
academic society (KTU Business Council, LEI Supervisory Board,
VU FF Council, Technological Development Committee under the
Agency for Science, Innovation and Technology, etc.).
Total number of
employees
Lietuvos Energija, UAB
AB LESTO
Lietuvos Energijos Gamyba, AB
UAB Technologijų ir Inovacijų Centras
UAB Duomenų Logistikos Centras
Energijos Tiekimas UAB
Geton Energy SIA
UAB Kauno Energetikos Remontas
UAB Gotlitas
UAB ELEKTROS TINKLO PASLAUGOS
NT Valdos, UAB
VšĮ Republikinis energetikų mokymo centras
UAB LITGAS
UAB VAE SPB
Total
58
2409
502
161
19
20
1
230
9
516
235
166
12
1
4 339
Structure of education of the Company’s employees, per cent
91,38
6,90
1,7
10
20
Higher
30
40
50
Post-secondary
60
70
80
90
100
The total salary fund of the Group for January - March of 2014 was
LTL 43.75 million.
The following was the average salary of the Group’s employees
in January - March of 2014
Professional category
CEOs
Top level managers
Mid-level managers
Experts, specialists, workers
Average monthly salary, LTL
11.975
11.062
6.158
3.103
The total salary fund of the Company for January - March 2014
equalled to LTL 1 573 thousand.
The following was the average salary of the Company’s employees
in January - March 2014
Professional category
CEO
Top level managers
Mid-level managers
Experts, specialists
Average monthly salary, LTL
18.000
13.593
11.644
6.420
Creation of organizational culture - together with the
employees
In the beginning of 2014, new Group values were approved along
with the operating strategy of the Group. Intensive preparation
for the implementation of values of the Group companies took
place in Q 1 of 2014. Having involved all Group employees, these
values will be instilled in all companies of the Group. In the
continuation of the project started in 2013, the goal of which is
the development and implementation of new work behaviours
in line with the Company’s values and key operating goals and
models, events for communicating values were held for mid-level
managers and employees of Lietuvos Energijos Gamyba.
Secondary
17
In the beginning of 2014, employees of Lietuvos Energijos
Gamyba signed a new version of the collective agreement with
employer representatives, which was drawn up having held joint
discussions, covering, on the basis of mutual interests, various
matters of work organization, work conditions and remuneration,
professional, social and economic guarantees for employees.
In Q 1 of 2014, a new version of the collective agreement was
approved in the conference of LESTO employees, which will
ensure greater protection for LESTO employees and grant them
additional benefits unprovided for in the Labour Code of the
Republic of Lithuania.
Development of competencies
At the beginning of 2014, the Group conducted a 360° assessment
of competences of (top and mid-level) managers of all Group
companies and of all employees of Lietuvos Energija, Lietuvos
Energijos Gamyba and Technologijų ir Inovacijų Centras. The aim
of this assessment was to obtain a comprehensive evaluation of
competences of co-workers, direct managers and subordinates,
to define the areas of improvement based on results and to set
targets for upcoming years.
The Lietuvos Energija group takes consistent care of qualification
development of its employees and ensures that employees have
all the mandatory certificates provided for by laws. In Q 1 of 2014,
2 218 employees took part in Lietuvos Energija group trainings.
In the implementation of the EU funded project Development of
Social Dialogue, Lietuvos Energijos Gamyba together with trade
unions held cooperation and conflict management trainings
for power plant employees. NT Valdos singed a joint venture
agreement in accordance with which six companies - partners
agreed on joint implementation of the project Improvement
of Professional Skills of Group Employees Seeking for Increased
Competitive Advantage. Representatives of Kauno Energetikos
Remontas took part in Innovation Management and Economy
training programme intended for mid and top level managers
of enterprises belonging to the Lithuanian Confederation of
Industrialists. This company also arranged EU funded first aid
trainings for three groups of employees and, in cooperation
with Respublikinis energetikų mokymo centras, conducted an
additional training and certification of employees working with
lifting equipment.
The Group company LESTO devotes great attention to its best
employees, thus a talent management system has been developed
for several years. During Q 1 of 2014, employees included into
the approved list of the company’s talents took part in various
educational programmes - in skills development centres and
trainings. Seeking for comprehensive education of the company’s
talents, LESTO also contributed to funding studies of 4 talents in
schools of higher education in Q 1 of this year.
Number of participants in trainings
1565
1600
1400
1200
1000
800
600
400
226
200
0
1
0
0
ET
ET LV
ET EE
200
48
ETP
KER
LE
92
LEG
LESTO
0
42
14
25
5
0
LITGAS
NTV
REMC
TIC
DLC
VAE spb
18
Internship
In order to attract qualified specialists into the Group, Lietuvos
Energija group actively cooperates with educational institutions
and academic community. This year Lietuvos Energija group took
part in four career day events arranged by Kaunas University of
Technology, Vilnius Gediminas Technical University, University
of Management and Economics (ISM), Riga Higher School of
Economics (Stockholm School of Economics). The group company
Kauno Energetikos Remontas signed a cooperation agreement
with Kaunas Technical College and participated in a career day
event held by this college, in a scientific - practical conference
organized by Kaunas Technical College and Schmalkalden
University of Applied Sciences Interaction between Sustainable
Engineering and Modern Studies in the Context of Preparation
of Specialists in the Area of Technology Science, where it made
a presentation on the subject Interaction between Theory and
Practice. Representatives of Kauno Energetikos Remontas also
participated in international assessment of Electric Energy
Study Programme at Kaunas Technical College and delegated its
representative to the activities of a technical committee Welding
and Material Science.
The Group companies create conditions for students of schools of
higher education and vocational schools to apply their theoretical
knowledge and gain practical skills. During three months of
2014, 78 students had internship in Group companies Lietuvos
Energijos Gamyba, LESTO, Kauno Energetikos Remontas, Elektros
Tinklo Paslaugos, and the Respublikinis energetikų mokymo
centras. After their internship in Kauno Energetikos Remontas and
Elektros Tinklo Paslaugos, 4 interns were employed under a fixed
term and open-ended employment agreements.
19
4
The Lietuvos Energija group, the shareholder of which is the state
of Lithuania, aims at ensuing efficient and transparent operations.
In order to achieve this goal, the Group reorganized its governance in 2013, and rearranged and improved its corporate governance.
The new governance structure and model of the Group has been
developed in the application of the most advanced international
and national practices, following recommendations published by
the Organization for Economic Cooperation and Development,
having regard to the Corporate Governance Code for companies
listed on the NASDAQ OMX Vilnius exchange, Guidelines on the
Governance of State-owned Enterprises recommended by the
Baltic Institute of Corporate Governance. The corporate governance model of the power generation companies’ group was implemented in observance of the Corporate Governance Guidelines
approved by the Ministry of Finance of the Republic of Lithuania
of 7 June 2013 (the Guidelines are available at www.le.lt).
The main goal of corporate management is to achieve a synergy
effect combining different activities of the Lietuvos Energija group companies and directing them towards the achievement of
common goals of the entire Group.
The Group’s governance structure has been formed following
the principles of corporate governance and contributes to the
implementation thereof. The company’s shareholder is the state, holding 100% of its shares. The rights and obligations of the
shareholder are implemented by the Ministry of Finance of the
Republic of Lithuania, which adopts the main decisions related to
the implementation of ownership rights and obligations.
20
Supervisory bodies
Supervisory Board
The Supervisory Board is a collegiate supervisory body provided
for in the articles of association of the Company and elected by
the general meeting of shareholders for a term of four years. The
Supervisory Board of Lietuvos Energija consists of 7 members -
Šarūnas Kliokys
(born in 1959)
Antanas Danys
(born in 1975)
Chairman, independent Independent member
member
persons representing the Ministry of Finance, the Ministry of Economy, the Office of the Government of the Republic of Lithuania,
and 3 independent members. The Chairman of the Supervisory
Board is elected by the Supervisory Board from among its members. Such the model of formation of the Supervisory Board complies with the principles of corporate governance.
The Supervisory Board of Lietuvos Energija operating since 16 July 2013
and at the end of the reporting period (until 31 March 2014) was as follows:
Dr. Virginijus Lepeška
(born in 1955)
Tomas Garasimavičius Aloyzas Vitkauskas
(born in 1978)
(born in 1954)
Žydrūnė Juodkienė
(born in 1974)
Rasa Noreikienė
(born in 1959)
Independent member
Member
Member
Member
Member
Educational
background
Vytautas Magnus University, Baltic Management
Institute,
Degree in Business Administration (EMBA)
Vilnius University,
Economist’s Diploma.
Vilnius University
Vilnius University
Master’s Degree in BusiDoctor of Social Sciences.
ness Administration (MBA)
Boston College
Bachelor’s degree.
Creighton University
Political Science Master’s
Studies
Vilnius University IIRPS
Political Science Master’s
Studies
Vilnius University TSPMI
Bachelor’s Degree in
Political Science.
Vilnius Civil Engineering
Institute
Post-graduate studies of
technical sciences
Vilnius Civil Engineering
Institute
Master’s Degree in Civil
Engineering.
ISM University of
Management and
Economics
Bachelor’s Degree
in Management and
Business Administration
Mykolas Romeris
University Master’s
Degree in Law
Vilnius Pedagogical
University Diploma of
History and Political
Sciences.
Kaunas University of
Technology
Master’s Degree in Public
Administration
Vilnius University
Lawyer’s Speciality.
Participation in the
capital of the Company and Group
companies , %
–
–
–
–
–
–
Workplace,
position
Chairman of the Board of
UAB Ekonovus
Chairman of the Board
and Director of UAB
Avestis
Chairman of the Board of
UAB Šiaulių plento grupė.
Board Member of PE LieChairman of the Board of
Advisor to the Prime
Vice-minister of Finance of Vice-minister of Energy of
tuvos Junior Achievement UAB Organizacijų vystymo Minister of the Republic of the Republic of Lithuania. the Republic of Lithuania.
Partner of United partners. centras
Lithuania for Energy.
Board Member of the association Mentor Lietuva
Board Member of PE Children’s Support Centre.
–
Vice-minister of Economy of the Republic of
Lithuania.
21
The main functions and responsibilities of the Supervisory Board
cover the following areas: election and recall of members of the
Board, supervision of activities of the Board and the CEO, provision of feedback on the Company’s strategy, a set of financial statements, allocation of profit (loss), and annual report for the general
meeting of shareholders. The Supervisory Board also addresses
other matters attributed to its competence.
The Supervisory Board is functioning at the Group level, .e. where
appropriate, it addresses the issues related to the activities of the
Company, its subsidiaries or their management and supervisory
bodies.
Committees of the Supervisory Board
For the purpose of effective fulfilment of its functions and duties,
the Supervisory Board forms committees. The committees of the
Supervisory Board provide their conclusions, opinions and proposals to the Supervisory Board according to their competence. The
committee shall consist of at least three members, of whom at last
one member must be a member of the Supervisory Board and at
least one independent member.
The following committees function in Lietuvos Energija:
• Risk Management Supervision Committee is responsible for
the submission of conclusions or proposals to the Supervisory
Board on the functioning of management and control system
in the Group and (or) main risk factors and implementation of
risk management or prevention measures;
the Supervisory Board, also for the assessment of activities of
the Board and its members for issuing the respective opinion.
The functions of the Committee also cover the formation of
the common remuneration polity at the Group level, establishment of the amount and composition of remuneration,
incentive principles, etc.
Where appropriate, other committees may also be formed ad hoc
(for example, for addressing specific matters, preparation, supervision and coordination of strategic projects, etc.).
Detailed description of supervisory bodies of the Company and
listed companies of the Group is provided on p. 30-33.
• Audit Committee is responsible for the submission of objective and impartial conclusions or proposals to the Supervisory
Board on the functioning of the audit and control system in
the Group;
• Nomination and Remuneration Committee is responsible
for the submission of conclusions or proposals on the matters
of nomination, recall or promotions of the Board members of
22
Management bodies
Board
The Board is a collegiate management body provided for in the
articles of association of the Company. Members of the Board are
elected for the term of four and recalled by the Supervisory Board
on the proposal of the Nomination and Remuneration Committee.
The Board comprising 5 members elects from its members the
Chairman of the Board -the Chief Executive Officer of the Company. Members of the Board acting according to their competence
must ensure the proper performance of the Company’s activities/
supervision of respective areas at the Group level.
The Board of Lietuvos Energija operating since 22 July 2013 and at
the end of the reporting period (until 31 March 2014) was as follows:
Dr. Dalius Misiūnas
(born in 1978)
Ilona Daugėlaitė
(born in 1970)
Darius Kašauskas
(born in 1972)
Mindaugas Keizeris
(born in 1980)
Liudas Liutkevičius
(born in 1980)
Educational
background
Lund University
Doctor’s degree in
Technological Sciences
Lund University
Master’s Degree in Industrial
Electrical Engineering and
Automatics
Kaunas University of
Technology
Bachelor’s Degree in Electrical
Engineering.
Vilnius University
Master’s Degree in
Hydrogeology and
Engineering Geology.
ISM University of Management
and Economics
Doctoral Studies of Social Sciences, Course of Economics
ISM University of Management
and Economics, BI Norwegian
Business School
Master’s Degree in Management
Vilnius University
Master’s Degree in Economics.
Vilnius University
International Business
Master’s Degree
Vilnius University
Business Administration and
Management Bachelor’s
Degree.
Vilnius University, International
Business School
International Business Finance
Master’s Degree
Vilnius University, International
Business School
International Business
Bachelor’s Degree.
Participation in
the capital of the
Company and Group companies, %
–
–
–
–
–
Workplace,
position, participation in activities of other
enterprises and
organisations
Lietuvos Energija, UAB, Board
Chairman, CEO
Lietuvos Energijos Gamyba, AB,
Supervisory Board Chairman
Association Eurelectric , Member of the Board of Directors
National Lithuanian Electricity
Association
President
KTU Alumni Association
President.
Board Member, Organisational Development Council
Director
LESTO AB, Supervisory Board
Member
UAB Technologijų ir inovacijų
centras, Chairwoman of the
Board
UAB Elektros tinklo paslaugos, Board Member.
Lietuvos Energija, UAB Board
Member, Finance and Treasury
Service Director
LESTO AB, Supervisory Board
Chairman
NT Valdos UAB, Board Member
UAB Kauno energetikos
remontas, Board Member
UAB LITGAS, Board Member.
Member, Strategy and Development Service Director
UAB Elektros tinklo paslaugos,
Board Member
Energijos tiekimas UAB, Board
Member.
Member, Production and
Service Director
NT Valdos, UAB, Board
Member
Energijos tiekimas UAB,
Board Member
UAB Kauno energetikos
remontas, Board Member
UAB LITGAS, Board Member.
23
5
The Lietuvos Energija group devotes special attention to the social responsibility and seeks to ensure that activities of the Group are based on principles of responsible activities enshrined in
the Global Compact initiated by the United Nations. The Global
Compact includes the implementation of 10 principles of responsible activities and encourages companies to avoid damage
to the environment, community and other businesses, and to
join their efforts with the United Nations, public authorities and
non-governmental organizations in dealing with social and envi-
Environmental
protection
ronmental issues, thereby contributing to the development of the
society and economic growth. The Global Compact is based on
the principles of human rights, employee rights, environmental
and anti-corruption principles.
The model of socially responsible business of the Lietuvos Energija group is implemented through targeted and consistent activities in the following areas:
Relationships with
employees and the society
The Association Investor’s Forum, which has been assessing and
awarding companies, organizations and media representatives
having contributed to the improvement of the country’s climate
and business environment the most for the third consecutive year,
declared LESTO the most responsible company in 2013. The Group company was awarded for its implemented social and public
educational projects, targeted aspirations to foster relationships
with its customers, promote transparency and conscious and responsible energy consumption.
Market
operations
In Q 1 of 2014, LESTO was elected a member of the Lithuanian
Association of Responsible Business (LAVA) Congress. The mission
of LAVA is to promote the development of responsible activities
as a condition of sustainable development in Lithuania. Collegiate
bodies - a 3-member Council, a 7-member Congress and general
meeting of members - lead the Association.
24
Environmental protection
The Lietuvos Energija group encourages the use of work equipment reducing costs and pollution as well as sustainable use of
natural resources, is actively looking for ways for minimising the
impact of energy objects on people and the environment, and investing in the environmentally friendly modern technologies. By
implementing various environmental projects, the Group companies aim at minimising adverse effects of energy objects on people and the environment and encouraging the participation of the
society in different initiatives related to environmental protection.
Waste management and sorting, moderate use of resources
Waste sorting initiatives are carried out in the Lietuvos Energija
group companies; there are special sorting containers intended
for sorting plastic and paper. In cooperation with the association of purchasers of electronic equipment, LESTO also collects
energy-saving light bulbs, small electronic devices and batteries
at customer service centres, special containers for the disposal of
small electronic devices and batteries were also set up in Lietuvos Energijos Gamyba divisions in Elektrėnai, Kruonis, Kaunas and
Vilnius. Since 2013, the Group company UAB Kauno Energetikos
Remontas has been participating in the environmental project We
Sort Waste in the Company aimed at sorting and collecting waste
of electronic equipment, domestic appliances and accumulators
generated in the process of operations of the companies and in
households of their employees, reducing the discharge of such
waste into the environment, educating and informing the society
about waste sorting.
and protection measures provided for in the Integrated Pollution
Prevention and Control (IPPC) permits.
In Q 1 of 2014, the Lithuanian Power Plant handed over for utilization 350 t of sewage sludge hazardous waste, 168.7 t of liquid
fuel ash, 1180 t of construction debris, sold 163.8 t of electrical
scrap, 691.7 t of ferrous metal scrap, 2.8 t of copper, 7.7 t of aluminium waste. During the first quarter of this year, about 60 MCM of
household waste was generated, which was removed by a specialized company.
The Group’s company LESTO keeps encouraging its customers to
give up paper bills and pay-books. More than 90 per cent of business customers of LESTO already use electronic bills.
During Q 1 of 2014, the Kruonis PSP handed over for utilization
4.018 t of hazardous waste, 0.574 t of non-hazardous waste, and
sold 5.12 t of ferrous scrap. In Q 1 of 2014, about 8.32 of household
waste was generated in the company; a specialized company removes collected household waste.
The Environmental Management System complying with requirements of LST EN ISO 14001:2005 has been implemented in objects
of Lietuvos Energijos Gamyba. Also, subdivisions of Lietuvos Energijos Gamyba are implementing the requirements for the atmospheric, surface water, groundwater and oil pollution monitoring
During Q 1 of 2014, Kaunas HPP handed over for utilization 0.02
t of hazardous waste. A specialized company removes household
waste collected in the territory of the object on the basis of a signed agreement; about 1.62 t of household waste was generated
during the quarter.
25
Initiatives for the society
sing negative consequences arising from irresponsible or malicious behaviour of residents.
The Group companies have actively contributed to the event of
the traditional Days of Energy Professionals organized by the National Lithuanian Electricity Association (NLEA). On 17-18 April
2014, free educational events took place in the Lithuanian Energy
and Technology Museum - field trips for the public, concert of the
group Saulės Kliošas. During the field trips, visitors were able to
get familiar with the Lithuanian energy system and relevant issues
related thereto, find out more about the profession of an energy
specialist.
In 2014, LESTO has been continuing its active cooperation with
the Association of the Wardens of Municipalities of Lithuania,
attended its meetings and conferences. The greatest support in
fighting against thefts is the sense of community of residents - reports of residents help to quickly identify offenders, repair damaged transformers before they get burnt and supply of electricity
to residents is interrupted. In Q 1 of 2014, upon the intensification
of thefts from distribution grid installations in districts of Panevėžys, Pasvalys and Biržai, searches were conducted in active cooperation with police and local residents, 5 persons were arrested,
and pre-trial investigations were initiated. In the assessment of
identified theft cases it can be stated that 50 per cent of thefts are
disclosed with the help of residents.
In order to contribute to educating the society, especially the
young generation, on energy-related issues Lietuvos Energijos
Gamyba willingly allows free field trips to objects managed by it:
the combined-cycle unit, Kruonis Pumped Storage Power Plant
and Kaunas Hydroelectric Power Plant. During the first quarter of
2014, 15 field trips were arranged, more than 250 representatives
from various organizations and educational institutions, students
and pupils visited the power plants.
Together with Elektrėnai library Lietuvos Energijos Gamyba has
been arranging traditional events for the community of Elektrėnai
region, where its core activity is based. A meeting with singing
actors, a father and son duo Saulius and Jokūbas Bareikis, held in
March of 2014 was already the sixth event in this cycle. The Company aims to gather the city and region community as well as its
employees in one place providing them with an opportunity of
meeting well-known, interesting and original people.
Long-term projects
Large scale long-term social responsibility projects for children,
youth and general public implemented by the Group company
LESTO are characterized by active involvement of communities
and different social groups, and ideas of safety, energy efficiency
and conservation of the environment. The implementation of these projects was actively continued in Q 1 of 2014.
Operation 2020. This project is aimed at promoting responsible
behaviours with power grid installations, raising awareness of people about safe behaviour with electrical equipment and minimi-
To the extent required. The project is aimed at the development
of reasonable energy use traditions of the society.
Green Protocol and Energy Efficiency Conference for Business.
For the fourth year companies are invited to join the Green Protocol. This is the only agreement of such nature in the country initiated by LESTO, whereby companies and organizations confirm
that they have been introduced with the ideas of conservation
of the environment promoting reasonable use of electric energy,
approve these ideas and promise to apply them in practice. About
230 participants from more than 160 national companies seeking
to get familiar with most relevant energy consumption efficiency trends and latest solutions allowing to decrease energy costs
attended the annual conference on the rational use of energy
held on 14 February 2014. A nomination of a Green Ambassador,
which can be awarded to an employee of the Green Protocol company, who had promoted energy saving ideas in the company in
the most creative and effective way, involved other employees or
encouraged the implementation of innovative technologies, was
introduced in the conference for the first time.
National education programme Sustainable School. In order to
promote awareness of school communities and contribute to the
creation of a sustainable, energy efficient and environmentally
friendly Lithuanian society, LESTO and the Lithuanian Youth Cen-
26
tre together with partners invited the country’s educational institutions to participate in an all-year-long educational programme
Sustainable School. 70 educational institutions geographically
located in various regions of Lithuania participating in the programme will carry out the first study of ecological footprint in Lithuania designed specifically for schools. An ecological footprint
is a measure, which shows the quantity of planet resources required for meeting the needs of human consumption. The aim of
the Sustainable School project is to contribute to the creation of
communities of sustainable educational institutions able to efficiently manage and use the resources combining the environmental protection, social justice and economic development. PI
Pakuočių tvarkymo organizacija, UAB Schneider Electric Lietuva,
UAB Mano Būstas and the National Consumer Federation have
been assisting in the implementation of this project.
Electromagic. This educational initiative of LESTO is aimed at rai-
sing awareness of children and youth about the benefits, threats
and safety of electric energy. The purpose of this initiative is to
teach youth safe behaviour with electricity and electrical equipment, stimulate their interest in responsible use of electricity, environmental protection and ideas of sustainable development.
Various initiatives aimed at educating children about safe behaviour with electricity are continued in 2014. In the beginning of
this year, pre-school and school-age children were invited to take
part in the board game design competition aimed at deepening
electricity-related knowledge of physics; the game develops logical thinking skills, encourages the knowledge of electricity and
technology world and, among all other things, develops creativity and drawing skills. The project Electromagic.lt was also introduced in a new way of interactive lessons aimed at school-age
children. LESTO representatives held the first interactive lesson
Electrified Ideas for seventh grade students of Vilnius Jesuit High
School. During the lesson, not only did children learn about safe
and unsafe methods of the use of electricity, but also played games and quizzes encouraging efficient use of electricity. Students
having the best knowledge of rational consumption were awarded special prices, while all remaining students in the class received manuals on the rational use of electricity A Book of Recipes
published by LESTO.
27
6
Key information about the Company
and the Group
The interim report of Lietuvos Energija and its subsidiaries is prepared in observance of Resolution No. 1052 of the Government
of the Republic of Lithuania of 14 July 2010 On the Approval of
the Guidelines for Ensuring the Transparency of Activities of State-Owned Enterprises and Appointment of the Coordinating Authority, and published on the Company’s website at www.le.lt.
Company’s name
Company’s code
301844044
Authorised capital
LTL 4 179 849 289
Paid up authorized capital
LTL 4 179 849 289
Address
Žvejų str. 14, LT-09310, Vilnius, Lithuania
Phone
(8 5) 278 2998
Fax
(8 5) 278 2115
E-mail
[email protected]
Website
www.le.lt
Legal form
Private Limited Liability Company
Date and place of
registration
28 August 2008, in the Register of
Legal Entities
Register, where data about
the Company are collected
and kept
Register of Legal Entities, SE Centre
of Registers
On 13 February 2013, the Company’s shares were transferred to
the Ministry of Finance by the right of trust.
As at 31 March 2014, the Company’s share capital totalled LTL
4 179 849 289 (as at 31 December 2013 it was LTL 4 067 163 632).
On 31 December 2013 and 31 March 2014 the authorised capital
was divided into ordinary registered shares of LTL 1 par value per
share. All shares are fully paid up.
Shareholders of the Company
Republic of Lithuania represented
by the Ministry of Finance of the
Republic of Lithuania
Share capital (LTL
thousand)
4 179 849
%
100
28
Information on subsidiaries, branches and representative offices
At the end of the reporting period (31 March 2014) Lietuvos Energija, UAB directly or indirectly controlled the following companies:
Company
Head office address of
the Company
Effective
shareholding, 31
31 03 2014 (%)
Authorised capital (LTL thou.)
31 03 2014
Main activity
Elektrinės str. 21,
Elektrėnai
96.1
635.084
Electricity generation, supply, import,
export and trade
AB LESTO
Žvejų str. 14, Vilnius
82.6
603.945
Electricity supply and distribution to
consumers
NT Valdos, UAB
Geologų str. 16, Vilnius
88.0
314.001
Disposal of real property, other related
activities and provision of services
UAB Duomenų logistikos centras
A. Juozapavičiaus str. 13,
Vilnius
79.3
58.907
UAB Technologijų ir inovacijų centras
A. Juozapavičiaus str. 13,
Vilnius
85.8
10
VšĮ Respublikinis energetikų mokymo centras
A. Jeruzalės str. 21,
Vilnius
79.6
294
UAB ELEKTROS TINKLO PASLAUGOS
Motorų str. 2, Vilnius
82.6
18.904
UAB Kauno energetikos remontas
Chemijos str. 17, Kaunas
96.1
14.245
Repairs of electric installations,
manufacture of metal structures
Gotlitas UAB
R. Kalantos str. 119,
Kaunas
96.1
1.450
Accommodation services, trade
Energijos tiekimas UAB
Jeruzalės str. 21, Vilnius
96.1
750
Supply of electricity and natural gas
Geton Energy OŪ
Narva mnt 5, 10117
Tallinn
96.1
121
Supply of electricity
Geton Energy SIA
Bezdelingu 12, LV-1010
Rīga
96.1
99
Supply of electricity
UAB VAE SPB
Žvejų str. 14, Vilnius
100
10
Advisory business and other management
activities
UAB LITGAS
Gedimino av. 33-2,
Vilnius
66.7
3.000
ITT maintenance services
Provision of ITT and other services
Professional development and continuing
vocational education and training of
energy sector specialists
Construction, repairs, technical
maintenance of power grids and related
installations, connection of consumers to
power grids
Supply LNG via terminal and trade in
natural gas
29
Key events related to changes in the Group having occurred
before the report date
• UAB Duomenų logistikos centras Director of Sales Department
Tomas Vitkus was appointed as a CEO at interim of UAB Duomenų logitikos centras (17 April 2014).
• In the implementation of Resolution No. 120 of the Government of the Republic of Lithuania On Investing the State Property and Increasing the Companies’ Authorised Capital of
12 February 2014, the Ministry of Finance of the Republic of
Lithuania transferred to Lietuvos Energija ,UAB 51 454 638 state-owned registered ordinary shares of public company Lietuvos Dujos with a par value of LTL 1, entitling to 17.7 per cent
of votes at the general meeting of shareholders of AB Lietuvos
Dujos (21 February 2014).
• Lina Paukštė was elected as an independent Board member of
NT Valdos, UAB (17 April 2014).
• Appointed new Board members of UAB Duomenų logistikos
centras - Production and Service Director at Lietuvos Energija,
UAB Liudas Liutkevičius and Strategy and Development Director at Lietuvos Energija, UAB Mindaugas Keizeris (18 March
2014).
• Rimvydas Štilinis was appointed as a CEO at interim of UAB VAE
SPB (10 May 2014).
• The meeting of shareholders of Nordic Energy Link AS (hereinafter - NEL), the shareholder of which is Lietuvos Energija,
UAB, made a decision to liquidate NEL. The company established in 2004 had a task to implement the project of connecting energy systems of the Baltic States and Finland by laying
an electricity cable Estlink 1. The cable was transferred to Estonian and Finish transmission system operators Elering and
Fingrid on 30 December 2013, thus shareholders of NEL made
a decision on the liquidation of the company, as provided for
in the incorporation agreement of NEL. Lietuvos Energijos Gamyba, AB owns a package of 25 per cent of shared of NEL (19
March 2014).
• Lietuvos energija, UAB acquired from Group companies Lietuvos Energijos Gamyba, AB and AB LESTO their owned packages of 54.04 per cent and 24.94 per cent, respectively, of shares
of UAB Duomenų Logistikos Centras. Having concluded this
transaction, Lietuvos Energija, UAB now owns 79.34 per cent
of shares of UAB Duomenų Logistikos Centras (31 March 2014).
• Remigijus Štaras was elected as an independent Board member of Energijos tiekimas, UAB (1 April 2014).
• Nerijus Stasiulionis was elected as an independent Board
member of UAB Kauno Energetikos Remontas (2 April 2014).
• Vilius Nikitinas was elected as an independent Board member
of UAB ELEKTROS TINKLO PASLAUGOS (17 April 2014).
• Kęstutis Betingis was elected as an independent Board member of UAB LITGAS (18 April 2014).
• Aurimas Bakas was elected as an independent member of the
Board of UAB Duomenų Logistikos Centras (30 April 2014).
• Lietuvos Energija, UAB signed agreements with the German
company E.ON Ruhrgas International, whereby it took over
38.9 per cent of shares of public company Lietuvos Dujos and
11.76 per cent of shares of AB LESTO (21 May 2014).
Supervisory bodies
As of 31 March 2014, the Supervisory Board of Lietuvos Energijos
Gamyba, AB comprised:
Full name,
position
capital of
the Company and of
the Group
companies,
%
Chairman
-
05-08-2013- CEO and Chairman of
05-08-2017 the Board of Lietuvos
Energija, UAB
Pranas Vilkas
Independent
member
-
05-08-2013- 05-08-2017
Liudas Liutkevičius
Member
-
05-08-2013- Production and
05-08-2017 Services Director of
Period of
tenure
Workplace
30
As of 31 March 2014, the Supervisory Board of AB LESTO comprised:
Full name,
position
Participation
in the capital
of the Company and of
the Group
companies,
%
Darius Kašauskas
Chairman
-
Petras Povilas Čėsna
Independent
member
-
Ilona Daugėlaitė
Member
-
Period of
tenure
Workplace
31-07-2013- Finance and Treasury
31-07-2017 Director of Lietuvos
Energija, UAB
30-09-2013- LITEXPO Board
31-07-2017 Chairman
31-07-2013- Organisational Deve31-07-2017 lopment Director of
Committees of the Supervisory Board
As of 31 March 2014, the Supervisory Board committees formed
in the Company, as a parent company of the Group, included the
Audit, Risk Management Supervision, Nomination and Remuneration Committees.
Audit Committee
Full name,
position
Number of shares
held in the Company and in the
Group companies
Rasa Noreikienė
Chairwoman of the
Committee
Danielius Merkinas
Independent member
-
Aušra Vičkačkienė
Member
-
Gintaras Adžgauskas
Member
-
-
Workplace
Ministry of Economy
of the Republic of
Lithuania, Vice-minister
UAB Nordnet, Finance
Director
Ministry of Finance of the
Republic of Lithuania,
Asset Management
Department Director
Director of the
Lithuanian Member
Committee, World
Energy Council
Main functions of the Committee:
• Monitoring the process of preparation of financial statements
of the Company and Group companies, with a special focus on
the adequacy and consistency of used accounting methods;
• Monitoring the efficiency of the internal control and risk management systems of the Company and Group companies,
analysis of the need for, and adequacy of, these systems and
perform the review of the existing internal control management systems;
• Monitoring the adherence to the principles of independence
and objectivity by the certified auditor and audit company,
provision of related recommendations, as well as proposals for
the selection of an audit company;
• Monitoring the audit performance processes of the Company
and Group companies, examining the effectiveness of audit
and response of the administration to the recommendations
provided by the audit company in the management letter;
• Monitoring the effectiveness of the internal audit function of
the Company and Group companies, analysis of the need for,
and adequacy of, this function, provision of recommendations
on the need for, effectiveness of, the internal audit function,
and on other internal audit related matters;
• Providing proposals for the internal audit plans of the Company and Group companies, recommendations for the regulations of the internal audit units of the Company and Group companies, appointment and dismissal of the head of a structural
unit performing the functions of the internal audit, approval
of his (her) job description, imposition of incentives and penalties;
• Monitoring the compliance of activities of the Company and
Group companies with laws and other legal acts of the Republic of Lithuania, articles of association and business strategy;
• Assessment and analysis of other issues attributed to the competence of the Committee by decision of the Supervisory Board;
• Performance of other functions related to the functions of the
Committee set forth by legal acts of the Republic of Lithuania
and in the Corporate Governance Code of companies listed on
NASDAQ OMX Vilnius stock exchange.
31
Nomination and Remuneration Committee
Risk Management Supervision Committee
Full name, position
Number of shares
Group companies
Antanas Danys
Chairman of the
Committee
Raimundas Petrauskas
Independent member
Donatas Kaubrys
Independent member
-
Žydrūnė Juodkienė
Member
-
Tomas Garasimavičius
Member
-
-
Workplace
Full name, position
PE Lietuvos Junior
Achievement, Board
Member
CEO of Schmitz
Cargobull Baltic, UAB
Director of Dovirma, UAB
Aloyzas Vitkauskas
Chairman of the
Committee
Virginijus Lepeška
Independent member
Ministry of Energy of the
Vice-minister
Minister of the Republic
of Lithuania for Energy
Tomas Garasimavičius
Member
Number of shares
Group companies
-
Workplace
Ministry of Finance of the
Vice-minister
Board Chairman of UAB
Organizacijų vystymo
centras
Minister of the Republic
of Lithuania for Energy
Main functions of the Committee
• Monitor the identification, assessment and management of risks relevant for the accomplishment of goals of the Company
and Group companies;
• Assess and provide proposals on the long-term remuneration
policy of the Company and Group companies (the main fixed
part of the remuneration, performance based remuneration,
pension insurance, other guarantees and forms of remuneration, compensations, severance pays, other parts of the remuneration package), other principles of compensation for costs
related to the individual’s performance;
• Assess the adequacy of internal control procedures and risk
management measures to the identified risks;
• Assess and provide proposals on the policy of bonuses of the
Company and Group companies;
Main functions of the Committee:
• Assess the status of implementation of risk management measures;
• Monitor the implementation of risk management process;
• Analyse financial possibilities for the implementation of risk
management measures;
• Assess the risks and risk management plan of the Company
and Group companies;
• Assess the regular risk identification and assessment cycle;
• Control the establishment of risk registers, analyse their data
and provide proposals;
• Monitor the drafting of risk management related internal documents;
• Perform other functions attributed to the competence of the
Committee by decision of the Supervisory Board.
• Monitor the compliance of the policy of remunerations and
bonuses of the Company and Group companies with the international practice and good governance practice recommendations, and provide respective proposals for the improvement of the policy of remunerations and bonuses;
• Provide proposals concerning bonuses upon distribution of
distributable profit (losses) of the Company and Group companies of the respective financial year;
• Assess the terms and conditions of agreements of the Company and Group companies with members of management
bodies of the Company and Group companies;
• Assess the procedures of recruitment and selection of candidates to members and senior management of the Company
and Group companies and establishment of the qualification
requirements;
• Perform regular reviews of the structure, size, composition and
activities of the management and supervisory bodies of the
Company and Group companies;
32
• Upervise how members of management bodies and employees of the Company and Group companies are notified of the
professional development possibilities and how they upgrade
their skills regularly;
• Supervise and assess the implementation of measures ensuring the continuity of operations of the management bodies
and employees of the Company and Group companies;
• Perform other functions attributed to the competence of the
Committee by decision of the Supervisory Board.
Management bodies
As of 31 March 2014, the Board of Lietuvos Energijos Gamyba, AB
comprised:
capital of
the Company and of
the Group
companies,
%
Period of
tenure
Juozas Bartlingas
Chairman
-
17-09-201317-09-2017
CEO of Lietuvos
Energijos Gamyba, AB
Adomas Birulis
Member
-
17-09-201317-09-2017
Eglė Čiužaitė
Member
-
17-09-201317-09-2017
Darius Kucinas
Member
-
17-09-201317-09-2017
Vidmantas Salietis
Member
-
17-09-201317-09-2017
Business
Development
Department Director
of Lietuvos Energijos
Gamyba, AB
Finance and Legal
Department Director
Gamyba, AB
Production
Department Director
Gamyba, AB
Wholesale Electricity
Trade Department
Director of Lietuvos
Full name,
position
As of 31 March 2014, the Board of AB LESTO comprised:
Full name,
position
capital of
the Company and of
the Group
companies,
%
Period of
tenure
Aidas Ignatavičius
Chairman
-
17-09-201317-09-2017
CEO of AB LESTO
Andrius Bendikas
Member
-
17-09-201317-09-2017
Dalia Andrulionienė
Member
-
17-09-201317-09-2017
Sergejus Ignatjevas
Member
-
17-09-201317-09-2017
Finance and
Administration
Depart met Director
of AB LESTO
Personnel and
Communication
Division Director of
AB LESTO
Customer Service
Division Director of
AB LESTO
Workplace
Workplace
Manager: Aidas Ignatavičius, Chief Executive Officer of AB LESTO
Manager: Juozas Bartlingas, Chief Executive Officer of Lietuvos
33
Information about agreements with
intermediaries of public trading in securities
Lietuvos Energija has not concluded any agreements with intermediaries of public trading companies, because its securities are
not traded on the stock exchange.
Group companies:
On 1 September 2011, the shares of Lietuvos Energijos Gamyba
were included into the Main List of the NASDAX OMX Vilnius
stock exchange. The Company’s shares are traded on NASDAQ
OMX Vilnius stock exchange (hereinafter referred to as the VSE).
As at 31 March 2014, the Company had issued 635 083 615 ordinary registered shares of LTL 1 par value.
Issue ISIN code: LT0000128571.
Lietuvos Energijos Gamyba has concluded the securities accounting agreement on the accounting of securities issued by the
issuer and management of personal securities accounts with Swedbank, AB.
AB LESTO
AB LESTO
As at 31 March 2014, the Company had issued 603 944 593 ordinary registered shares of LTL 1 par value.
The authorized manager of securities accounts of LESTO is Swedbank, AB.
Ordinary registered shares of LESTO have been listed on the Main
List of the NASDAX OMX Vilnius stock exchange since 17 January
2011.
Issue ISIN code LT0000128449.
Trading in securities of the Group companies on regulated markets.
Chief Executive Officer
30 May 2014
34

Consolidated interim report of the Company and

Transcription

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