Corporate Governance: Is it important?

23 April 2019Guntars Baļčūns, CFO

Latvenergo Group Profile

2

Governance structure Diversified sources of financing

• Vertically integrated utility• Wholly-owned by the Republic of Latvia• Credit rating: Moody`s – Baa2/stable• Total assets – 3.8 billion EUR• Investments – 200 million EUR/year on AVG• Retail customers – 800 thsd.• 3,508 employees

46%37%

17% International investmentbanks

Commercial banks

Bonds

814.3 MEUR

Electricity distribution

55%Generation and trade

Lease of transmission system assets

46%

Segment Revenues EBITDA

35%

5%

37%

13%

MEUR 878 322

3

Elements of Corporate Governance

4

Elements of Corporate Governance

5

clear vision of the company's development and priorities

timely indentification and mitigation of risks

independent members

transparency and trust professional assurance on the reliability of financial statements

professional decision making

Strategy

SustainabilityReport

Risk Management

Supervisory Board

Audit Commitee

40

86 90 90 91 94 94

1.25

1.13

1.3

1.07

1.31

1.75 1.7

0

0.4

0.8

1.2

1.6

2

0

20

40

60

80

100

2012 2014 2016 2018

% billion EUR

CG coeficcient company value

What affects company value?TOP101: methodology TOP101: Latvenergo

6

Company Value

CorporateGovernance

Practices

Economic Value(financial results)

20%

80%

Why is it important?TOP101: methodology

Improvedfinancials

clearstrategic

vision

motivatedemployees

loyalcustomers

morecooperation

offers

less risk exposure

lowerborrowing

costs

7

Company Value

CorporateGovernance

Practices

Economic Value(financial results)

20%

80%

Contact information

AS “Latvenergo”Pulkveža Brieža 12, Riga, LV-1230

www.latvenergo.lv

info@latvenergo.lv

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