Regarding the claim for the compensation of damage caused to the environment received by AB Grigeo Klaipėda from the Environmental Protection Department

AB Grigeo (hereinafter - the Company) hereby confirms public information that the subsidiary of the Company, AB Grigeo Klaipėda, received a Civil Claim of the Environmental Protection Department (hereinafter - the EPD) regarding compensation of damage caused to the environment in the amount of EUR 48,257,676.57 from the Klaipėda District Prosecutor's Office of Klaipėda County Prosecutor's Office on 26 January 2021. The claim was filed within the framework of pre-trial investigation conducted by Klaipėda District Prosecutor's Office of Klaipėda County Prosecutor's Office related to actions of AB Grigeo Klaipėda concerning wastewater management.

The damage caused to the water body (Curonian Lagoon) was estimated in the claim according to the Methodology for Estimation of the Amounts of Compensation for Damage Caused to the Environment approved by Order No 471 of the Minister of Environment of the Republic of Lithuania of 9 September 2002 (hereinafter - the Methodology). However, the EPD's claim was received at AB Grigeo Klaipėda without documents listed in the claim, which would support the estimation of damage caused to the environment. Therefore, it is difficult to provide a more detailed comment (assessment) on the reasonability of the claim as of today.

The management of AB Grigeo Klaipėda believes that in the course of determining the damage caused to the condition of water in the Curonian Lagoon, the EPD ought to follow, first of all, provisions of Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, Directive 2000/60/EC of the European parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (hereinafter – the Directives), as well national legal acts that implement the said Directives.

In the opinion of AB Grigeo Klaipėda management, the fact and scope of damage caused to the environment should be determined by special scientific and other valid studies aimed at individual approach to a particular case in line with methods entrenched in the Directives rather than a general mathematical formula specified in the Methodology.

In 2020, AB Grigeo Klaipėda organised an international tender and selected foreign experts, TIG Environmental, who performed (further to the principles and methods of determining damage caused to water, as specified in Directive 2000/60/EC and Directive 2004/35/EC) a long-run expert study aimed at determining a possible damage caused to the condition of water in the Curonian Lagoon by an allegedly illegal discharge of partially treated wastewater by AB Grigeo Klaipėda. The study was headed by Italian scientist Dr. Carlo Monti, the managing director of forensics at TIG Environmental, who has conducted environmental impact studies in various European Union and other countries around the globe. Pursuant to expert conclusions, the area of the Curonian Lagoon affected by wastewater from AB Grigeo Klaipėda had to be limited in scope and no impact caused to fish and zooplankton. For more information, see the Company's notice of 16 December 2020.

With regard to that the experts of TIG Environmental retained by AB Grigeo Klaipėda have not identified significant negative effect on the water condition of in the Curonian Lagoon, whereas the damage caused to the environment was estimated by the EPD according to the Methodology (ignoring the methods stated in the aforementioned Directives), and to that AB Grigeo Klaipėda did not receive the documents which would support the estimation of alleged damage caused to the environment from the EPD, the management of the Company is currently unable to objectively estimate the possible impact of the damage compensation to the AB Grigeo group.

Gintautas Pangonis
President of AB Grigeo
+370 5 243 5801