Snaige AB

Annual Report (ESEF) • Apr 27, 2023

48510000RTKGDN3E5X152022-01-012022-12-31iso4217:EUR48510000RTKGDN3E5X152021-01-012021-12-31iso4217:EURxbrli:shares48510000RTKGDN3E5X152022-12-3148510000RTKGDN3E5X152021-12-3148510000RTKGDN3E5X152020-12-31ifrs-full:IssuedCapitalMember48510000RTKGDN3E5X152020-12-31ifrs-full:StatutoryReserveMember48510000RTKGDN3E5X152020-12-31ifrs-full:RevaluationSurplusMember48510000RTKGDN3E5X152020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember48510000RTKGDN3E5X152020-12-31ifrs-full:RetainedEarningsMember48510000RTKGDN3E5X152020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember48510000RTKGDN3E5X152020-12-31ifrs-full:NoncontrollingInterestsMember48510000RTKGDN3E5X152020-12-3148510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:IssuedCapitalMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:StatutoryReserveMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:RevaluationSurplusMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:RetainedEarningsMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember48510000RTKGDN3E5X152021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember48510000RTKGDN3E5X152021-12-31ifrs-full:IssuedCapitalMember48510000RTKGDN3E5X152021-12-31ifrs-full:StatutoryReserveMember48510000RTKGDN3E5X152021-12-31ifrs-full:RevaluationSurplusMember48510000RTKGDN3E5X152021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember48510000RTKGDN3E5X152021-12-31ifrs-full:RetainedEarningsMember48510000RTKGDN3E5X152021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember48510000RTKGDN3E5X152021-12-31ifrs-full:NoncontrollingInterestsMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:IssuedCapitalMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:StatutoryReserveMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:RevaluationSurplusMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:RetainedEarningsMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember48510000RTKGDN3E5X152022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember48510000RTKGDN3E5X152022-12-31ifrs-full:IssuedCapitalMember48510000RTKGDN3E5X152022-12-31ifrs-full:StatutoryReserveMember48510000RTKGDN3E5X152022-12-31ifrs-full:RevaluationSurplusMember48510000RTKGDN3E5X152022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember48510000RTKGDN3E5X152022-12-31ifrs-full:RetainedEarningsMember48510000RTKGDN3E5X152022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember48510000RTKGDN3E5X152022-12-31ifrs-full:NoncontrollingInterestsMember UNDER RESTRUCTURING SNAIGĖ AB CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS AND ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 PRESENTED TOGETHER WITH INDEPENDENT AUDITOR’S REPORT Confirmation of responsible persons 19-04-2023 Alytus Following the Article 22 of the Law on Securities of the Republic of Lithuania and the Bank of Lithuania Information Disclosure Rules, we, Mindaugas Sologubas, Managing Director, and Vytautas Adomaitis, Chief of the Accounting and Finance Department, confirm that, to our knowledge, the added SNAIGĖ AB, audited consolidated and company‘s financial statements of year 2022, prepared in accordance with International Financial Reporting Standards as adopted by the European Union are fair and present fairly the assets, liabilities, financial position, profit or loss and cash flows of the company and group, and the consolidated annual report fairly presents an overview of the business development and operations, the state of the company and the group of companies together with a description of the main risks and uncertainties we face. CONTENTS Independent Auditor’s Report 4 Consolidated and separate statement of comprehensive income 9 Consolidated and separate statement of financial position 11 Consolidated statement of changes in equity 13 Separate statement of changes in equity 14 Consolidated and separate statement of cash flows 15 Notes to the financial statements 17 Under restructuring Snaigė AB and group Consolidated Annual Report, Corporate Governance Report and Corporate Remuneration Report 57 Under restructuring Snaigė AB and group Consolidated Social Resposnsibility Report 106 Sustainability Report 123 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 9 Consolidated and separate statement of comprehensive income Notes Group Company 2022 2021 2022 2021 Sales 3 21,220 33,538 20,359 32,852 Cost of sales 4 (21,829) (30,289) (21,196) (29,780) Gross profit (609) 3,249 (837) 3,072 Selling and distribution expenses 5 (1,352) (2,636) (1,353) (2,655) General and administrative expenses 6 (3,365) (2,104) (3,233) (1,990) Other income 7 252 464 378 565 Other expenses 8 (162) (442) (245) (505) Operating profit (loss) (5,236) (1,469) (5,290) (1,513) Finance income 9 8 64 8 64 Finance costs 10 (508) (543) (508) (543) Profit (loss) before income tax (5,736) (1,948) (5,790) (1,992) Income tax 11 566 (26) 578 (26) Net profit (loss) (5,170) (1,974) (5,212) (2,018) Other comprehensive income Items that will never be reclassified to profit or loss - - - - Revaluation of property, plant and equipment - - - - Related tax - - - - Items that are or may be reclassified to profit or loss (2) 2 - - Exchange differences on translation of foreign operations (2) 2 - - Total other comprehensive income, net (2) 2 - - of tax Total comprehensive income, net of tax (5,172) (1,972) (5,212) (2,018) (continued on the next page) The notes on pages 17–56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 10 Consolidated and separate statement of comprehensive income (continued) Notes Group Company 2022 2021 2022 2021 Net profit (loss) attributable to: The shareholders of the Company (5,170) (1,974) (5,212) (2,018) Non-controlling interest - - - - Total comprehensive income, net of tax, attributable to: (5,170) (1,974) (5,212) (2,018) The shareholders of the Company (5,172) (1,972) - - Non-controlling interest - - - - Profit (loss) per share (5,172) (1,972) (5,212) (2,018) Basic and diluted profit (loss) per share 28 (0.13) (0.05) (0.13) (0.05) The value of comprehensive income of EUR 890 thousand (as at 2021 EUR 846 thousand) was transferred directly to retained earnings, transferring depreciation of revalued assets less deferred income tax, and is disclosed in Note 20 and in the statement of changes in equity of the Company and the Group. The notes on pages 17–56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 11 Consolidated and separate statement of financial position (continued on the next page) The notes on pages 17-56 are an integral part of these financial statements. Group Company As at 31 As at 31 As at 31 As at 31 December December December December Notes 2022 2021 2022 2021 ASSETS Non-current assets Intangible assets 12 1,345 1,567 1,344 1,567 Property, plant and equipment 13 12,080 13,366 12,026 13,295 Assets managed under lease right 25 84 109 84 109 Investments into subsidiaries 1 - - 424 424 Total non-current assets 13,509 15,042 13,878 15,395 Current assets Inventories 15 3,793 6,142 3,790 6,127 Trade receivables 16, 29 2,025 4,247 1,965 4,181 Prepayments 580 493 579 493 Other amounts receivable 14, 17 151 250 151 248 Cash and cash equivalents 18 179 129 17 53 Total current assets 6,728 11,261 6,502 11,102 Total assets 20,237 26,303 20,380 26,497 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 12 Consolidated and separate statement of financial position (continued) The notes on pages 17-56 are an integral part of these financial statements. Group Company As at 31 As at 31 As at 31 As at 31 December December December December Notes 2022 2021 2022 2021 EQUITY AND LIABILITIES Equity Share capital 19 6,736 6,736 6,736 6,736 Legal reserve 20 718 718 674 674 Revaluation reserve of property, plant and equipment 20 6,785 7,675 6,785 7,675 Foreign currency translation reserve (54) (52) - - Retained earnings (loss) (15,787) (11,507) (15,576) (11,254) Equity attributable to equity holders of the Company (1,602) 3,570 (1,381) 3,831 Non-controlling interest - - - - Total equity (1,602) 3,570 (1,381) 3,831 Liabilities Non-current liabilities Grants 21 234 289 234 289 Provisions 22 94 118 94 117 Deferred income tax liability 11 1,063 1,628 1,061 1,639 Non-current borrowings 23 10,053 8,005 10,053 8,005 Non-current employee benefits 24 209 326 187 300 Other non-current liabilities 24 8,298 - 8,464 - Total non-current liabilities 19,951 10,366 20,093 10,350 Current liabilities Current portion of non-current borrowings 23 9 2,502 9 2,502 Trade payables 835 8,204 677 8,229 Current rent liabilities 25 86 111 86 111 Prepayments received 121 93 120 85 Provisions 22 147 182 146 180 Employees related liabilities 26 597 893 546 846 Other current liabilities 27 93 382 84 363 Total current liabilities 1,888 12,367 1,668 12,316 Total liabilities 21,839 22,733 21,761 22,666 Total equity and liabilities 20,237 26,303 20,380 26,497 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 13 Consolidated statement of changes in equity Foreign currency Non- Revalua- transla- Retained control- Share Legal tion tion earnings ling Total Notes capital reserve reserve reserve (loss) Total interest equity Balance as at 1 January 2021 6,736 991 8,521 (54) (10,652) 5,542 - 5,542 Profit (loss), not recognized in comprehensive income 20 - - (846) - 846 - - - Other changes - (273) - - 273 - - - Net profit (loss) for the year - - - - (1,974) (1,974) - (1,974) Other comprehensive income - - - 2 - 2 - 2 Total comprehensive income - - - 2 (1,974) (1,972) - (1,972) Share capital decrease - - - - - - - - Balance as at 31 December 2021 6,736 718 7,675 (52) (11,507) 3,570 - 3,570 Profit (loss), not recognized in comprehensive income 20 - - (890) - 890 - - - Other changes - - - - - - - - Net profit (loss) for the year - - - - (5,170) (5,170) - (5,170) Other comprehensive income - - - (2) - (2) - (2) Total comprehensive income - - - (2) (5,170) (5,172) - (5,172) Share capital decrease - - - - - - - - Balance as at 31 December 2022 6,736 718 6,785 (54) (15,787) (1,602) - (1,602) The notes on pages 17-56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 14 Separate statement of changes in equity Notes Share capital Legal reserve Revaluation reserve Retained earnings (loss) Total Balance as at 1 January 2021 6,736 946 8,521 (10,354) 5,849 Profit (loss), not recognized in comprehensive income 20 - - (846) 846 - Other changes - - - - - Net profit (loss) for the year - - - (2,018) (2,018) Other comprehensive income (expenses) - (272) - 272 - Total comprehensive income - (272) - (1,746) (2,018) Share capital decrease - - - - - Balance as at 31 December 2021 6,736 674 7,675 (11,254) 3,831 Profit (loss), not recognized in comprehensive income 20 - - (890) 890 - Net profit (loss) for the year - - - (5,212) (5,212) Other comprehensive income - - - Total comprehensive income - - - (5,212) (5,212) Share capital decrease - - - - - Balance as at 31 December 2022 6,736 674 6,785 (15,576) (1,381) The notes on pages 17-56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 15 Consolidated and separate statement of cash flows Group Company Notes 2022 2021 2022 2021 Cash flows from (to) operating activities Net result for the year (5,170) (1,974) (5,212) (2,018) Adjustments for non-cash items: Depreciation and amortisation 1,909 1,980 1,893 1,950 Grants (related to assets) (55) (105) (55) (105) Grants (related to income) - (118) - (91) Income tax expense (income) (566) 7 (578) 7 Write-off of non-current assets 240 54 239 4 Impairment allowance for trade receivables and inventories 562 (68) 565 (32) Change in provisions (59) (19) (57) (13) Dividends income (2) (1) (2) (1) Interest expenses 502 478 502 502 Elimination of other non-cash items - (119) - 45 Changes in working capital: (2,639) 115 (2,705) 248 (Increase) decrease in inventories 2,287 (1,939) 2,275 (2,013) (Increase) decrease in trade and other receivables 1,734 (77) 1,724 (273) Increase (decrease) in trade and other payables (41) 2,290 (15) 2,414 Advance income tax returned (paid) - (31) - (31) Net cash flows from operating activities 1,341 358 1,279 345 Cash flows from (to) investing activities (Acquisition) of property, plant and equipment (54) (1,240) (81) (1,240) (Acquisition) of intangible assets (265) (402) (264) (402) Interest received - 27 - 27 Loan recovery - 192 - 192 Others - - - - Lending/ Provision of loans - (103) - (103) Net cash flows from investing activities (319) (1,526) (345) (1,526) (continued on the next page) The notes on pages 17-56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 16 Consolidated and separate statement of cash flows (continued) Group Company Notes 2022 2021 2022 2021 Cash flows from (to) financing activities Proceeds from non-current borrowings and other financial sources - 2,105 - 2,105 Interest (paid) (83) (478) (83) (478) (Repayment) of borrowings (864) (757) (864) (733) Grants received - 118 - 91 Rent payments (25) - (25) - Net cash flows from (to) financing activities (972) 988 (972) 985 Net increase (decrease) in cash and cash 50 (180) (38) (196) equivalents Effect of currency exchange rate on the balance of cash - - 2 - Cash and cash equivalents at the beginning 129 309 53 249 of the year Cash and cash equivalents at the end of the year 18 179 129 17 53 The notes on pages 17-56 are an integral part of these financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 17 Notes to the financial statements 1. General information Snaigė AB (hereinafter “the Company”) is a public company registered in the Republic of Lithuania. Legal status of the Company at the reporting date – under restructuring (Note 33). The address of its registered office is as follows: Pramonės str. 6, Alytus, Lithuania. The Company is engaged in production of refrigerators, freezers and metal products. The Company was registered on 1 April 1963. The Company’s shares are traded on the Baltic Secondary List of the NASDAQ OMX Vilnius stock exchange. As at 31 December 2022 and 2021 the shareholders of the Company were: 2022 2021 Number of Ownership Number of Ownership shares held (in shares held (in thousand units) share thousand units) share SEKENORA HOLDINGS LIMITED 36,096 91.10% 36,096 91.10% Other shareholders 3,526 8.90% 3,526 8.90% Total 39,622 100% 39,622 100% All the shares of the Company are ordinary shares with the par value of EUR 0.17 (EUR 0.17 in 2021) each and were fully paid as at 31 December 2022 and 2021 (Note 19). As at 31 December 2022 and 2021, the Company did not hold its own shares. As at 31 December 2022, the Group had 397 employees, and Company had 372 employees (as at 31 December 2021, 536 and 513 correspondingly). As at 31 December 2022, the Board of the Company consisted of 3 members (in 2021 it consisted of 4 members). The board does not have representatives of Snaigė AB. Members of the Board are disclosed in Group‘s annual report. The Group consisted of Snaigė AB and the following subsidiaries as at 31 December 2022 (hereinafter “the Group”): Shareholder Cost of Percentage of Profit (loss) for s’ equity investment (EUR the shares held the reporting year (EUR Company Country thousand) by the Group (EUR thousand) thousand) Snaige Ukraina TOB Ukraine 26 99% 13 Almecha UAB Lithuania 398 100% 43 217 Total 424 The Group consisted of SNAIGĖ AB and the following subsidiaries as at 31 December 2021 (hereinafter “the Group”): Shareholder Cost of Percentage of Profit (loss) for s’ equity investment (EUR the shares held the reporting year (EUR Company Country thousand) by the Group (EUR thousand) thousand) Snaige Ukraina TOB Ukraine 26 99% 1 4 Almecha UAB Lithuania 398 100% 55 174 Total 424 Snaige Ukraina TOB (Kiev, Ukraine) was established in 2002. Since the acquisition in 2002, the Company holds 99% shares of this subsidiary. The subsidiary provides sales and marketing services in the Ukrainian market. Almecha UAB (Alytus, Lithuania) was established on 9 November 2006. The main activities of the company are production of refrigerating components and equipment. The Group’s and the Company’s management approved these financial statements on 19 April 2023 The shareholders of the Company have a statutory right to either approve these financial statements or not approve them and require the management to prepare a new set of financial statements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 18 2. Accounting principles The principal accounting policies adopted in preparing the Group’s and the Company’s financial statements for 2022 are as follows: 2.1. Basis of preparation of the financial statements The financial statements of the Company and the are prepared in accordance with International Financial Reporting Standards (IFRS) that have been adopted for use in the European Union. Due to the rounding of individual amounts to thousands of euros in the tables, the figures may not coincide; such rounding errors are insignificant in these financial statements. These financial statements are prepared under the historical cost convention, except for property, plant and equipment, which are carried at revalued amounts. Adoption of new and/or changed IFRS and International Financial Reporting Interpretations Committee (IFRIC) interpretations Application of the Conceptual Framework to International Financial Reporting Standards (IFRS) In the current year, the Company and the Group has adopted all of the new and revised Standards and Interpretations that are relevant to its operations and effective for accounting periods beginning on 1 January 2021 (a) Standards, amendments and interpretations effective on or after 1 January 2022. Amendments to IFRS 3 Business Combinations, IAS 16 Property, Plant and Equipment, IAS 37 Provisions, Contingent Liabilities and Assets, and the 2018-2020 Annual Improvements to IFRSs (all published on 14 May 2020, effective from 1 January 2022) The IASB has issued the following amendments to narrow-scope IFRS standards: • The amendments to IFRS 3 Business Combinations update the reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. • The amendments to IAS 16 Property, Plant and Equipment prohibit an entity from deducting from the cost of property, plant and equipment the proceeds from the sale of an item of property, plant and equipment while the entity is preparing the asset for its intended use. Instead, the company will recognise such sales proceeds and related costs in profit or loss in the statement of profit or loss and other comprehensive income. • The amendments to IAS 37 Provisions, Contingent Liabilities and Assets specify the costs that an entity should include in determining the cost of performing a contract to assess whether the contract is loss-making. • The 2018-2020 annual improvements to IFRSs make minor changes to the illustrative examples in IFRS 1 First- time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and IFRS 16 Leases. These amendments are to be applied in the EU for annual periods beginning on or after 1 January 2022. Management has assessed that these amendments do not have a material impact on these financial statements. (b) Standards and amendments to standards that have been endorsed but have not yet entered into force and have not been applied in advance New standards, amendments and interpretations that are not effective for the period beginning 1 January 2022 and that have not been previously adopted in the preparation of these financial statements are set out below: Amendments to IFRS 17 and IFRS 4: Deferral of the effective date of IFRS 17 and IFRS 9 for insurers (published on 25 June 2020, effective from 1 January 2023, but not before EU endorsement) The amendments to IFRS 17 shall be applied retrospectively for financial years beginning on or after 1 January 2023, although earlier application is permitted. The amendments are intended to assist entities in applying this standard. In particular, the amendments are designed to reduce costs by simplifying the application of some of the requirements of the standard, simplifying the interpretation of financial results and the transition to the application of the standard by delaying the effective date to 2023 and by providing an additional exemption that can be used for the first-time application of IFRS 17. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 19 The amendments to IFRS 4 change the expiry date of the temporary exemption from IFRS 9 Financial Instruments in IFRS 4 Insurance Contracts, after which entities would be required to apply IFRS 9 in financial years beginning on or after 1 January 2023. Management has assessed that the application of these amendments will have no impact on the financial statements of the Group and the Company. IFRS 17 "Insurance Contracts" (published on 18 May 2017, effective from 1 January 2023 but not before EU endorsement). The Standard shall be applied for annual periods beginning on or after 1 January 2021, although earlier application is permitted if IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments are also applied. At its meeting in March 2020, the Board decided to postpone the effective date to 2023. IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts entered into. It also requires similar principles to apply to existing reinsurance contracts and investment contracts with elements of discretionary participation. The aim is to ensure that entities report relevant information in a way that gives a fair presentation of those transactions. On the basis of such information, users of financial statements can assess the impact of such transactions on the entity's financial position, financial performance and cash flows when IFRS 17 is applied. This standard will not have an impact on the financial position or performance of the Group and the Company because the Group and the Company do not provide insurance services. Amendments to IAS 12 Income Taxes - Deferred Tax on Assets and Liabilities Arising from a Single Transaction (published on 7 May 2021, effective from 1 January 2023) The amendments require entities to recognise deferred tax on transactions that create equal amounts of taxable and deductible temporary differences at the time of initial recognition. The amendments are effective for financial years beginning on or after 1 January 2023. Earlier application is permitted. The EU has not yet approved these amendments. Management has not yet assessed the impact of applying these amendments. Amendments to IAS 1 Presentation of Financial Statements and IFRS 2 Statement of Practice Disclosure of Accounting Policies (Amendments) (published on 12 February 2021, effective from 1 January 2023) The amendments are effective for annual periods beginning on or after 1 January 2023. Earlier application is permitted. The amendments provide guidance for making significant accounting policy disclosure decisions. It should be noted that the amendments to IAS 1 replace the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. In addition, the statement of practice provides guidance and an example to support the application of the concept of materiality in deciding whether to disclose an accounting policy. Management has not yet assessed the impact of applying these amendments. Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and mistakes - Definition of Accounting Estimates (published on 12 February 2021, effective from 1 January 2023) The Amendments introduce a new definition of accounting estimates, which are defined as monetary amounts reported in the financial statements that are subject to measurement uncertainty. The Amendments also clarify which and how changes in accounting estimates differ from changes in accounting policies and corrections of mistakes. The amendments, which are effective for financial years beginning on or after 1 January 2023 (earlier application is permitted), apply to changes in accounting policies and accounting estimates that occur in that period or thereafter. The EU has not yet endorsed these amendments. Management has not yet assessed the impact of applying these amendments. Amendments to IAS 1 - Classification of liabilities as current or non-current' (published on 23 January 2020, effective from 1 January 2023 but not before EU endorsement). The amendments aim to promote consistent application of the requirements by helping companies to decide whether debts and other liabilities with uncertain settlement dates should be classified as current or non-current in the statement of financial position. The amendments affect the presentation of liabilities in the statement of financial position and do not change the existing requirements relating to the measurement or recognition of assets, liabilities, income or expenses and the disclosures that entities make about those items. The amendments also clarify the requirement to classify debts when an entity can settle such debts using its own equity instruments. These amendments have not yet been approved by the EU. Management has not yet assessed the impact of applying these amendments. Amendments to IAS 1 Presentation of Financial Statements and IFRS 2 Statement of Practice Disclosure of Accounting Policies (Amendments) (published on 12 February 2021, effective from 1 January 2023 but not before EU endorsement) . SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 20 The amendments are effective for annual periods beginning on or after 1 January 2023. Earlier application is permitted. The amendments provide guidance for making significant accounting policy disclosure decisions. It should be noted that the amendments to IAS 1 replace the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. In addition, the Statement of Practice provides guidance and an example to support the application of the concept of materiality in deciding whether to disclose an accounting policy. The EU has not yet endorsed these amendments. Management has not yet assessed the impact of applying these amendments. Amendments to IFRS 16 'Lease Liability on Sale and Leaseback', as amended, which clarifies how a seller-lessee subsequently measures sale and leaseback transactions that meet the requirements of IFRS 15 to be accounted for as a sale (published on 22 September 2022, effective from 1 January 2024, but not before EU endorsement). The amendment to IFRS 6 on the sale and leaseback of a lease liability, which requires the seller-lessee to subsequently measure the lease liability arising from the leaseback so that it does not recognise any amount of gain or loss in respect of its right-of-use remains. The new requirements do not prohibit a vendor-lessee from recognising in profit or loss any gain or loss arising on the partial or complete termination of a lease. The amendments are effective for financial years beginning on or after 1 January 2024. Earlier application is also permitted. For sale and leaseback transactions entered into after the date of initial application, a vendor-lessee shall apply the amendments retrospectively in accordance with IAS 8 Accounting policies, changes in accounting estimates and mistakes. The EU has not yet endorsed these amendments. Management has not yet assessed the impact of applying these amendments. 2.2. Going concern These financial statements for the year 2022 have been prepared on the assumption that the Group and the Company will be able to continue as a going concern for a period of not less than one year, evaluating the following assumptions and risks: - To finance working capital, the Company plans successful sales of finished products and to continue cooperation only with reliable partners. Debts to suppliers are planned to be reduced from free circulating funds. - In the opinion of the Company's and the Group's management, the impact of the military conflict in Ukraine which began at the end of February 2022 (Note 32) is significant but not critical. Although, due to this conflict, the sale of the Company's products in one of the largest markets (Ukraine) was temporarily stopped and is now limited, new product groups and the Company's active actions will offset the negative impact of the war in other markets. War-related sanctions do not apply to the company or its managers or shareholders. - The Company's negative operating results and the related liquidity challenges caused by the increase in prices of raw materials and energy resources and the decline in consumption expectations due to the war in Ukraine are temporary, and the management of the Company and the Group expects to overcome them with the available resources. Not wishing to risk the future of a viable and potential Company, and in order to secure the jobs and social security of its employees, the management of the Company decided to initiate a process of restructuring of the Company (Note 33). Management agrees that the above assumptions are affected by significant uncertainties that could cast significant doubt upon the Company's ability to continue as a going concern, which would prevent the Company from realizing its assets and meeting its obligations in the ordinary course of business. Nevertheless, and given the significant uncertainties, management expects the Company to have sufficient resources to continue as a going concern in the foreseeable future. Therefore, the Company has continued to apply the going concern principle in preparing these financial statements 2.3. Presentation currency The Group’s financial statements are presented in the currency of the European Union, the euro (EUR), which is the Company’s functional and the Group’s and the Company’s presentation currency. Transactions in foreign currencies are initially recorded at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the statement of financial position date. All differences are included in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the date of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign entity and translated at the rate of exchange ruling at the statement of financial position date. The functional currency of a foreign entity Snaige Ukraina, TOB, is Ukrainian hryvnia (UAH). As at the reporting date, the assets and liabilities of this subsidiary are translated into the presentation currency of Snaigė AB (EUR) at the rate of exchange at the statement of financial position date and their items of the statement of profit or loss and other comprehensive income are translated at the average monthly exchange rates for the reporting period. The exchange SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 21 differences arising on the translation are stated in other comprehensive income. On disposal of a foreign entity, the deferred cumulative amount recognised in the shareholders’ equity caption relating to that particular foreign operation is transferred to profit or loss. The performance results of the subsidiaries the control of which is lost are presented in the consolidated financial statements only for the period when control belonged to the Group. The applicable exchange rates in relation to euro as at the 31 December 2022 and 2021 were as follows: 31 December 2022 31 December 2021 UAH 39.34128 30.99338 USD 1.0666 1.1334 All amounts in these financial statements are in EUR thousand unless otherwise stated. 2.4. Use of estimates in the preparation of financial statements The preparation of the financial statements in accordance with IFRS, as adopted by the European Union, requires the management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of the estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are reviewed if they affect only this period, or in the period in which the estimates are reviewed and any future periods if they affect both the review and future periods. The significant areas of estimation used in the preparation of these financial statements relate to the fair value of property, plant and equipment, estimated useful life time of the property, plant and equipment, recoverability of loans provided to the shareholder and provisions related to guarantees and warrantees. Fair value of the property, plant and equipment Fair value of property, plant and equipment was determined by independent valuators, and management used this valuation as sufficient basis for asset revaluation. The significant unobservable inputs used in the fair value determination are disclosed in Note 13. Useful life of property, plant and equipment The main assumptions when evaluating useful life of property, plant and equipment are: the intensity of use and tear of property, plant and equipment. Technical staff evaluated property, plant and equipment and indicated expected time of further usage, and new, longer depreciation terms were applied together with assets revaluation. Provisions Recognition of provisions requires estimate of the probable outflow of economic benefits and defining the best estimate of the expenditure required to settle the present obligation at the end of reporting period. The Group and the Company estimate at the end of the reporting period if they have the present obligation from the past event, that should be registered as a liability as at the end of reporting period. Warrantees The warranty provision relates primarily to production sold in 2022 and 2021, with a 2-year warranty from 2017 and a 5- year warranty for promotional products. The provision is estimated on the basis of historical data related to the products. Future events may occur which may cause the assumptions used in arriving at the estimates to change. The effect of any changes in estimates will be recorded in the financial statements, when determinable. 2.5. Consolidation and Business Combinations Business combinations are accounted for using the acquisition method. Acquisition cost is determined by adding the fair value of the consideration at the date of acquisition and the amount of the non-controlling interest in the acquiree if any. For each business acquisition, the acquirer shall measure the non-controlling interest in the acquiree either at fair value or in proportion to the identifiable net assets of the acquiree. Acquisition costs incurred are written off to administrative costs. If the business combination is carried out in stages, the acquirer's previously held interest in the acquiree is measured at fair value at the acquisition date through the statement of comprehensive income. The contingent consideration that the acquirer will have to pay is recognized at fair value at the acquisition date. Subsequent valuations of the contingent consideration that is treated as an asset or liability will be recognized at fair value in accordance with IFRS 9: either through SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 22 profit/loss or as a change in other comprehensive income. If the contingent consideration is classified as equity, it is not reassessed and its subsequent payment is accounted for in equity. Goodwill is recognized at cost and is equal to the amount by which the total consideration, including the amount of the non-controlling interest recognized, exceeds the net amount of the assets and liabilities acquired. If this consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in the statement of comprehensive income. After initial recognition, goodwill is measured at cost less any accumulated impairment losses, and the date of the financial statements is then assessed for impairment. 2.6. Investments in subsidiaries Investments in subsidiaries are stated in the separate statement of financial position of the Compny at cost less impairment. The acquisition cost is equal to the fair value of the consideration paid. An assessment of the carrying amount of an investment for impairment is made when events or changes in circumstances indicate that the carrying amount of the investment may exceed its recoverable amount. In such circumstances, the Company assesses the return on investment. If the carrying amount of an investment exceeds its recoverable amount, the investment is written down to its recoverable amount (the higher of fair value less costs to sell and value in use). Impairment is recognized in profit or loss under finance costs. Profit (loss) from disposal of investments is accounted for in profit or loss under financing activities. 2.7. Intangible assets, except for goodwill Intangible assets are measured initially at cost. Intangible assets are recognised if it is probable that future economic benefits that are attributable to the asset will flow to the Group and the Company and the cost of asset can be measured reliably. After initial recognition, intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. Intangible assets are amortised on a straight-line basis over their estimated useful lives (1–8 years). The useful lives and amortisation method are reviewed annually to ensure that they are consistent with the expected pattern of economic benefits from items in intangible assets other than goodwill. Research and development Research costs are expensed as incurred. Development expenditure on individual projects is recognised as an intangible asset when the Group and the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, their intention to complete and their ability to use or sell the asset so that the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortization periods from 1 to 8 years are applied. During the period of development, the asset is tested for impairment annually. Licenses Amounts paid for licences are capitalised and amortised over their validity period. Software The costs of acquisition of new software are capitalised and treated as an intangible asset if these costs are not an integral part of the related hardware. Software is amortised over a period not exceeding 3 years. Costs incurred in order to restore or maintain the future economic benefits that the Group and the Company expect from the originally assessed standard of performance of existing software systems are recognised as an expense when the restoration or maintenance work is carried out. The Company and the Group have no intangible assets with indefinite useful lifetime. 2.8. Property, plant and equipment, investment property SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 23 Property, plant and equipment are shown at revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which is determined using fair value at the date of statement of financial position. The fair value of the property, plant and equipment is determined by appraisals undertaken by certified independent valuators. Any accumulated depreciation and impairment losses at the date of revaluation were eliminated against the gross carrying amount of the asset, instead the historical acquisition cost was increased by the surplus of the revaluation. Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to other comprehensive income and shown as revaluation reserve in shareholders’ equity. The revaluation reserve for property, plant and equipment is being reduced each period by the difference between depreciation based on the revalued carrying amount of the asset and that based on its original cost, which is transferred directly to retained earnings. The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Decreases that offset previous increases of the same asset are charged to other comprehensive income and debited against revaluation reserve in equity; all other decreases are charged to the profit or loss. Revaluation increases that offset previous decreases charged to the profit or loss are recognised in the profit or loss. Each year the difference between depreciation based on the revaluated carrying amount of the asset charged to the profit or loss, and depreciation based on the asset’s original cost is transferred from revaluation reserve to retained earnings net of deferred income tax. Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred. Depreciation is computed on a straight-line basis over the following estimated useful lives from 1 October 2016: Buildings and structures (incl. investment property) 15–73 years, Machinery and equipment 5–63 years, Vehicles 4–20 years, Other property, plant and equipment 3–30 years. Weighted average useful lives from 1 October 2016 are as follows: Buildings and structures (incl. investment property) 55 years, Machinery and equipment 21 years, Vehicles 16 years, Other property, plant and equipment 12 years. The asset's carrying amounts, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount of property, plant and equipment and are recognised within other income or other expenses in the statement of comprehensive income. When revalued assets are sold, the amounts included in revaluation reserve are transferred to retained earnings. Borrowing costs that are directly attributable to the acquisition, construction or production of non-current assets are capitalised, otherwise – expensed as incurred. No borrowing costs were capitalised in 2022 and 2021. 2.9. Inventories Inventories are valued at the lower of cost or net realisable value, after write-down of obsolete and slow moving items. Net realisable value is the selling price in the ordinary course of business, less the costs of completion, marketing and distribution. Cost is determined by the first-in, first-out (FIFO) method. The cost of finished goods and work in progress includes the applicable allocation of fixed and variable overhead costs based on a normal operating capacity. Unrealisable inventory is fully written-off. 2.10. Cash and cash equivalents Cash and cash equivalents are carried at par value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and in a bank, demand deposits with banks and other highly liquid short-term investments with original maturities of up to 3 months. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 24 2.11. Financial assets and financial liabilities IFRS 9 Financial Instruments A financial instrument is any contract that gives rise to a financial asset to one entity and a financial liability or equity instrument to another. a) Financial assets Initial recognition and evaluation: Financial assets are initially allocated at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss. Assigning financial assets at initial recognition depends on the contractual cash flow characteristics of the financial asset and the Group/Company's business model that defines the management of the financial asset. Except for trade receivables and contract assets that do not have a significant funding component, the Group/Company recognizes financial assets at fair value through initial recognition plus, when financial assets are not measured at fair value through profit or loss, transaction costs. Trade receivables and contract assets that do not include a significant funding component are measured at the transaction price determined in IFRS 15. For a financial asset to be designated and measured at amortized cost or fair value through other comprehensive income, the cash flows arising from the financial asset should be only principal and interest payments (SPPI) on the principal uncovered amount. This assessment is called the SPPI test and is performed for each financial instrument. The Group/Company's financial asset management model specifies how the Group/Company manages its financial assets to generate cash flows. The business model determines whether cash flows will be generated by collecting contractual cash flows, by selling this financial asset or by using both options. Ordinary purchases or sales of financial assets are recognized on the trade date, i.e. the date the Group/Company undertakes to purchase or sell the financial asset. Subsequent evaluation After initial recognition, the Company/Group assesses financial assets: a) Amortized cost (debt financial instruments); b) At fair value through other comprehensive income when the cumulative gain or loss after the derecognition is transferred to profit or (loss) (debt financial instruments). As of 31 December 2022 and 2021, the Group/Company did not have such instruments; c) Fair value through other comprehensive income when the cumulative gain or loss on discontinuance is not transferred to profit or (loss) (equity). As of 31 December 2022 and 2021, the Group/Company did not have such instruments; d) At fair value through profit or loss. Financial assets at amortized cost (debt financial instruments) The Group/Company assesses financial assets at amortized cost if both of the following conditions are met: i) Financial assets are considered to be a business model designed to hold financial assets to collect contractual cash flows; and ii) Due to contractual terms of financial assets, cash flows that occur only on the principal amount and on the principal outstanding amount may arise on specified dates. Financial assets at amortized cost are subsequently measured using the effective interest rate method (EIR) less impairment losses. Gains and losses are recognized in the statement of comprehensive income when the asset is derecognised, the asset is replaced or impaired. The Group/Company's financial assets at amortized cost include trade receivables, other current and non-current receivables, loans issued, and assets arising from customer contracts (if any). Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets classified as at fair value through profit or loss, or financial assets at fair value through initial recognition. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near future. Derivatives, including segregated embedded derivatives, are also classified as held for trading unless they are classified as effective hedging instruments (in accordance with IFRS 9). Financial assets related to cash flows that are not only principal and interest payments are classified and measured at fair value through profit or loss, irrespective of the business model. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 25 Notwithstanding the criteria described above, under which debt instruments are classified as amortized cost or fair value through other comprehensive income, debt instruments may be classified as at fair value through profit or loss at initial recognition if it eliminates or significantly reduces accounting inconsistencies. Financial assets are carried at fair value through profit or loss in the statement of financial position at fair value through profit or loss in the statement of comprehensive income. Impairment of financial assets In accordance with IFRS 9, the Group/Company generally recognizes expected credit loss (ECL) for all debt instruments that are not measured at fair value through profit or loss. The ECL is based on the difference between the contractual receivables and cash flows expected to be received by the Group/Company, discounted at an approximate initial effective interest rate. ECL is recognized in two stages. For credit exposures whose credit risk on initial recognition is not materially increased, ECL is calculated for credit losses arising from default events occurring within the next 12 months (12-month ECL). For those credit exposures that have significantly increased their credit risk from initial recognition, the impairment loss is formed for the amount of credit losses expected during the remaining life of the credit exposure, irrespective of the maturity (ECL). (a) Evaluation of impairment of trade receivables The Group/Company uses the simplified method for calculating ECL for trade receivables and assets arising from contracts with customers. Therefore, the Group/Company does not observe changes in credit risk but recognizes impairment for each financial statement date on the basis of the validity of the ECL. The Group/Company has created a matrix of expected loss rates based on historical credit loss analysis and adjusted to reflect future factors specific to debtors and the economic environment. The Group/Company considers that the debtor has failed to fulfil its obligations relating to financial assets if the contractual payments are overdue, or when there are indications that the debtor or group of debtors are experiencing severe financial difficulties, default (principal or interest), that they will initiate bankruptcy or reorganization procedures, and in cases where the observed data suggest a reduction in future cash flows, such as changes in the past due to arrears or changes in economic conditions that correlate with default. Financial assets are derecognised when there is no reasonable expectation of recovering contractual cash flows. The Company/Group also calculates impairment individually by assessing the debt position separately by the debtor. The Company has determined that the average level of historically unpaid bad debts is less than 0% of its outstanding debt. For this reason, and having assessed future estimates, the Company has not changed the principles for calculating the current loss matrix. b) Evaluation of impairment of loans granted The Company grants loans to Group companies with a maturity term as disclosed in Note 14. In the case of a loan, in general, the expected credit loss for 12 months is assessed and accounted for. In subsequent reporting periods, in the absence of a significant increase in the credit risk associated with the debtor, the Company adjusts the balance of 12- month expected credit loss on the outstanding loan amount outstanding at the valuation date. Having determined that the debtor’s financial situation has significantly deteriorated compared to the situation at the time of the loan, the Company accounts for all expected credit losses during the loan term . b) Financial liabilities Initial recognition and evaluation: Financial liabilities at initial recognition are classified as financial liabilities at fair value through profit or loss, loan receivables and payables. All financial liabilities at initial recognition are recognized at fair value and, for loans and receivables, less directly attributable transaction costs. The Group/Company's financial liabilities include trade and other payables, loans received, including bank overdrafts and financial leasing liabilities, and financial derivatives. Subsequent evaluation The measurement of financial liabilities depends on their classification as described below. Financial liabilities are carried at fair value through profit or loss Financial liabilities carried at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated at fair value through profit or loss at initial recognition valuating through profit or loss. Financial liabilities are classified as held for trading if they are held for repurchase purposes in the near future. This category also contains derivatives of Group/Company, not classified as hedge derivatives under IFRS 9. Individual embedded derivatives are also classified as held for trading unless they are classified as effective hedging instruments. Gains or losses arising from financial liabilities held for trading are recognized in the statement of comprehensive income. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 26 Loans received and other amounts due After initial recognition, loans and other payables are carried at amortized cost using the effective interest rate method (EIR). Gains and losses are recognized in the statement of comprehensive income when the liabilities are derecognised or amortized. Amortized cost is calculated by reference to the discount or premium on the acquisition, as well as taxes or costs that are an integral part of the EIR. EIR amortization is included in financial expenses in the statement of comprehensive income. Coverage of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is an enforceable right to settle the amounts recognized and is intended to be settled net, i.e. to realize the assets and fulfil their obligations at the same time. Derecognition of financial assets and financial liabilities Financial asset A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised (i.e. it is derecognised from the financial statements of the Group/Company) when: i) the contractual rights to the cash flows of the financial asset expire; or ii) the Group/Company transfers the contractual rights to receive cash flows from financial assets; or assumes the obligation to pay all cash flows received to the third party without a significant delay in the transfer agreement; or (b) the Group/Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, but disposes of control of that financial asset. Financial liabilities A financial liability is derecognised when it is settled, cancelled or expires. When one existing financial liability is replaced by another liability to the same lender but in other circumstances, or when the terms of an existing obligation are substantially changed, such a change is considered to be a termination of the original liability and a new liability occurs. The difference between the respective carrying amounts is recognized in the statement of comprehensive income. 2.12 Authorized capital (a) Ordinary shares Ordinary shares are stated at their nominal value. The amount by which the consideration received for the shares sold exceeds their nominal value is recognized as share premium. Additional external costs directly related to the issue of new shares are accounted for by reducing the share premium. (b) Own shares When the Company or its subsidiaries acquire the Company's equity, the consideration paid, including any additional external costs attributable to it, is deducted from equity as own shares until they are sold, reissued or cancelled. No gain or loss on the sale, issue or cancellation of own shares is recognized. If such shares are subsequently sold or reissued, the consideration received is recorded in the consolidated financial statements as a change in equity. (c) Mandatory reserve The legal reserve is mandatory under the laws of the Republic of Lithuania. Annual transfers of 5%. The net result is required until the reserve reaches 10% of the authorized capital. The legal reserve cannot be used to pay dividends, and it is determined only to cover future losses. (d) Revaluation reserve The revaluation reserve is recognized in other comprehensive income and is included in the revaluation reserve in equity. In cases where the revalued amount of the revalued asset exceeds the carrying amount of that asset and previously recognized an impairment loss on that asset in the statement of comprehensive income as a loss, the revaluation increase in excess of previous depreciation is recognized in the statement of comprehensive income as profit. If, after the reversal, the revaluation surplus is still present, it is accounted for as other comprehensive income in the statement of comprehensive income (and in the statement of financial position in equity). SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 27 The revaluation of revalued assets equivalent to the depreciation of the revalued assets of the current year on the revalued amount is carried forward to retained earnings in the statement of changes in equity at the end of the financial year. When transferring or reversing revalued assets, the related revaluation surplus is transferred to retained earnings in the statement of changes in equity. (e) Reserve for own shares This reserve is created on the basis of the shareholders' decision to acquire their own shares. (f) Foreign exchange translation reserve Foreign currency translation reserve is formed by currency translation differences arising from the consolidation of financial statements of foreign subsidiaries. Currency translation differences in the consolidated financial statements are recognized in equity until the investment is sold. When the relevant asset is sold, the cumulative revaluation surplus is recognized as income or expense in the same period in which the gain or loss on sale is recognized. 2.13. Lease (a) the Company and the Group is the lessee Policy, adopted from 1 January 2019. At the beginning of the contract, the Company and the Group assess whether the contract is a lease or includes a lease. This means assessing whether the contract confers a right to manage the use of the identified asset for a period of time in return for remuneration. The Company and the Group apply a single recognition and measurement method to all leases, except for short-term and low-value leases. The Company and the Group recognize a lease obligation to pay lease payments and a right-of-use asset that entitles the holder to use the leased asset. Assests managed under lease right The Company and the Group recognize the right-of-use asset at the inception date (ie the date from which the underlying asset is available for use). Assets held under usable rights are carried at cost less any accumulated depreciation and any accumulated impairment losses. The cost of an asset held for use includes the amount of the initial measurement of the lease liability, the initial direct costs, the lease payments at or before the inception date, less any lease incentives received. Depreciation is calculated on a straight-line basis over the lease term or over the estimated useful lives of the assets, whichever is shorter: Land 58 years Vehicles 3 years If the ownership of the leased property is transferred to the Company and the Group before the end of the lease term or if the price of the asset managed by the right of use indicates that the lessee will exercise the call option, depreciation is calculated based on the estimated useful life of the asset. Assets held for use are also assessed for impairment. Lease obligations At the beginning date, the Company / Group recognizes lease liabilities at the present value of the lease payments due during the lease term. Lease payments include fixed payments (including equivalent payments) less any rental incentives receivable, variable rents that depend on an index or rate, and amounts that would be payable under residual value guarantees. Such lease payments also include the exercise price of the call option if it is reasonably known that the Company / Group will exercise that option, and penalties for terminating the lease if it is assumed that the Company / Group will exercise the option to terminate the lease during the lease term. Variable lease payments that are independent of an index or a rate are recognized as an expense (unless they are incurred to produce inventories) in the period in which the event occurs or the condition that gives rise to the tax arises. In calculating the present value of the lease payments, the Company / Group applies the borrowing rate accrued at the beginning of the lease, as the interest rate specified in the lease cannot be readily determined. After the commencement date, the amount of the lease liability is increased by the estimated interest and the amount of lease payments paid is reduced. In addition, the carrying amount of a lease is remeasured if certain adjustments are made, the lease term or lease payments change (for example, changes in future lease payments due to a change in the index or rate used to determine such lease payments) or a change in the option to purchase the lease. evaluation. Short-term and low-value property lease SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 28 The Company and the Group apply the recognition exemption to their current assets (ie leases with a term of less than 12 months at the inception date that do not include an option to purchase the asset). It also observes this exception by recognizing the lease of low-value assets consisting of office inventory. Lease payments for short-term and low-value assets are recognized as an expense on a straight-line basis over the lease term. b) Lease – the Company and the Group are the lessee or the lessor As a lessor, the Company and the Group determine at the begining of a lease whether the contract is a finance lease or an operating lease. If the Company and the Group determine that substantially all the risks and rewards of ownership of a leased asset are transferred under a lease, it classifies the lease as a finance lease. Leases under which the Company and the Group do not transfer substantially all the risks and rewards incidental to ownership of a leased asset are classified as operating leases. Lease income is recognized on a straight-line basis over the term of the lease and is recognized in the statement of comprehensive income on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging a lease shall be included in the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. Contingent contributions are recognized as income in the period in which they are earned. The Group's accounting policies as a lessee for the comparative period did not differ from the requirements of IFRS 16. 2.14. Grants and subsidies Grants and subsidies (hereinafter “the grants”) received in the form of non-current assets or intended for the purchase, construction or other acquisition of non-current assets are considered as asset-related grants (mainly received from the EU and other structural funds). Assets received free of charge are also allocated to this group of grants. The amount of the grants related to assets is recognised in the financial statements as used in parts according to the depreciation of the assets associated with this grant. In profit or loss, a relevant expense account is reduced by the amount of grant amortisation. Grants received as a compensation for the expenses or unearned income of the current or previous reporting period, also, all the grants, which are not grants related to assets, are considered as grants related to income. The income-related grants are recognised as used in parts to the extent of the expenses incurred during the reporting period or unearned income to be compensated by that grant. 2.15. Provisions Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The provisions are reviewed at each date of the statement of financial positions and adjusted in order to present the most reasonable current estimate. If the effect of the time value of money is material, the amount of provision is equal to the present value of the expenses, which are expected to be incurred to settle the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as interest expenses. 2.16. Employee benefits (a) Social security contributions The Company and the Group pay social security contributions to the State Social Insurance Fund (hereinafter referred to as the Fund) for its employees in accordance with the defined contribution plan and in accordance with the requirements of national law. The defined contribution plan is a plan by which the Company and the Group pays a fixed contribution and will in the future have no legal or constructive obligation to continue to pay these contributions if the Fund does not have sufficient assets to pay all employees benefits related to the service in current or past periods. Social security contributions are recognized as an expense on an accrual basis, and attributed to employee costs. (b) Bonus plans The Company and the Group recognize a liability and an expense for bonuses when it has a contractual liability or a past practice that has created a constructive liability. (c) Long-term employee benefits According to the requirements of the Labour Code of the Republic of Lithuania, every employee leaving the Company at the age of retirement is entitled to a one-off payment, which amounts to 2-month period salary. Commitments to employees for the current year are recognized as an expense immediately in the statement of comprehensive income. Expenses previously incurred are recognized as an expense in the average over the period until the payment becomes mandatory. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 29 Any gain or loss arising from the amendment (reduction or increase) of the benefit conditions is recognized immediately in the statement of comprehensive income. Employee benefits liability is calculated on the basis of actuarial estimates using the projected unit credit method. Reassessments consisting of actuarial gains and losses are recognized immediately in the statement of financial position with the corresponding debit or credit in retained earnings in other comprehensive income in the period in which they occur. Reassessments in subsequent periods are not carried forward to profit or loss. The liability is recorded in the statement of financial position and reflects the present value of those benefits at the date of the statement of financial position. The present value of employee benefits obligations is determined by discounting the estimated future cash flows on the basis of the interest rate on government securities denominated in the same currency as the benefits and the payout period similar to the expected payout period. 2.17. Income tax Group companies are taxed individually regardless of the Group's overall performance. Income tax expense recognized in these financial statements is determined on the basis of management's estimates in accordance with the tax laws of the Republic of Lithuania and the Republic of Ukraine. The profit of the Group companies operating in Lithuania for the year 2022 is subject to a 15% corporate income tax rate (15% in 2021). In Ukraine, corporate income tax is 18% (18% in 2021). According to the tax laws of the Republic of Lithuania, tax losses other than losses related to the transfer of securities and/or financial instruments may be carried forward for an indefinite period. Tax losses carried forward from 1 January 2014 may not exceed 70% of taxable profit for the current year. Losses on the sale of securities and/or derivative financial instruments may be carried forward for 5 years and are used only to reduce taxable profits from similar transactions. As of 1 January 2012, tax losses carried forward under the tax laws of the Republic of Ukraine may not exceed 25% of the taxable profit for the current year. Deferred income tax Deferred income tax is accounted for using the liability method for temporary differences arising between the tax bases of assets and liabilities, and their carrying amounts in the consolidated financial statements. However, deferred income tax is not recognized if it arises from the initial recognition of assets or liabilities other than those resulting from a business combination that at the time of the transaction had no effect on either accounting or taxable profit or loss. Deferred income tax is calculated using tax rates (and laws) approved or substantially enacted at the date of the financial statements that are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is recognized for temporary differences arising on investments in subsidiaries, except when the Group controls the timing of the elimination of the temporary difference and it is probable that the temporary difference will not disappear in the near future. 2.18. Revenue recognition Revenue from Contracts with Customers Revenue from contracts with customers is recognized when the control of the goods or services passes to the customer, the amount the Company and the Group expect to receive in exchange for the goods or services. The Company and the Group have determined that they control goods or services before they are transferred to the customer, therefore the Company and the Group act as the principal party to the income transaction. The Company and the Group allocate the transaction price over the production period of the product based on the relative selling prices of the individual production levels. Management has performed an analysis and determined that the Company and the Group meet their operating obligations under contracts with customers during the period (rather than at a specific point in time) for the following reasons: - The Company and the Group do not create alternative assets by providing product manufacturing services; - The Company and the Group have an executive right to remuneration for the partial production work performed. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 30 In calculating the portion of revenue and its cost, management relies on the expected cost method, adding the expected margin. Based on the management and production accounting data, the state of the production of the order at each stage of production is deducted (in the Company, respectively, calculating the share of the expected cost of the product at which stage of production is achieved). The calculations are completed by adding the applicable margin to the estimated relative work-in-progress at the various stages of production. The amount of revenue so calculated is recognized and recognized in the statement of comprehensive income under in current assets, in the contractual asset item. The cost associated with this amount of revenue is recognized in the statement of comprehensive income under cost of sales. The preparation of financial statements in conformity with IFRS and the application of IFRS 15 requires management and the Group to apply certain assumptions and estimates that have a significant effect on the amounts presented in the financial statements. In the opinion of management, the most significant estimates and related uncertainties in the calculation and recognition of revenue from contracts with customers relate to: - The expected profit margin of the product is used (percentage); - The application of historical management and production accounting data to calculate the value factors associated with each stage of production. In addition to those discussed above, management also considered the impact of other matters on revenue recognition, such as the presence of significant financing components, non-cash settlements, and so on. The Company's and the Group's contracts with customers do not contain these listed contractual terms or, in the opinion of management, are insignificant in the context of the application of IFRS 15. Dividend distribution Dividend distribution to the Company's shareholders is recognized as a liability in the Company's and the Group's financial statements in the period in which the dividends are approved by the Company's shareholders. 2.19. Contingencies Contingent liabilities are not recognized in the financial statements. They are disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when it is probable that future economic benefits potentially will flow to the entity. 2.20. Subsequent events Subsequent events that provide additional information about the Group’s and the Company’s position at the date of the statement of financial position (adjusting events) are reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the notes when material. 2.21. Offsetting and comparative figures When preparing the financial statements, assets and liabilities, as well as revenue and expenses are not set off, except the cases when a certain International Financial Reporting Standard specifically requires such set-off. 2.22. Segments An operating segment is a component of the Group and the Company that engages in business activities from which it may earn revenues and incur expenses. An operating segment’s operating results are reviewed regularly by management of the Group and the Company to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to management include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 2.23. Earnings per share The Group present basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to the Group’s shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, such as the impact of convertible notes and share options transactions. 2.24. Fair value measurement Some of the Group’s and the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 31 Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal, or in its absence, the most advantageous market to which the Group and the Company have access at that date. The fair value of a liability reflects its non-performance risk. When measuring the fair value of an asset or a liability, the Group and the Company use market observable data as far as possible. Fair values are categorised within different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group and the Company recognize transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Fair values have been determined for measurement and / or disclosure purposes based on the described methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability (related note). 2.25 Classification into short-term and long-term In the financial statements, the Group and the Company present assets and liabilities by classifying them into current and non-current. An asset is considered current if: • It is expected to be sold or sold or consumed in the ordinary course of business • Held for sale • Expected to be realized within 12 months after the end of the financial year Or • Cash or cash equivalents, except for limited uses, that will not be able to settle or settle liabilities in the next 12 months. All other assets are classified as non-current. A liability is current if: • It is expected to be paid during the normal operating cycle • Held for sale • It is expected to be paid within 12 months after the end of the financial year • There is no unconditional right to defer payment for at least 12 months after the end of the financial year. The Group and the Company classify all other liabilities as non-current. Deferred income tax assets and liabilities are classified as non-current assets and non-current liabilities. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 32 NOTES TO THE EXPLNATORY STATEMENT 3. Revenue from customer contracts and sale revenue The Group The Group’s sole business segment identified for the management purposes is the production of refrigerators and specialised equipment. Group Company 2022 2021 2022 2021 Refrigerators and related equipment 21,220 33,538 20,359 32,852 21,220 33,538 20,359 32,852 The Group’s and the Company’s management analyses only sales information per country. Total Inter-group sales Sales revenue sales revenue 2022 2021 2022 2021 2022 2021 Western Europe 10,870 15,433 - - 10,870 15,433 Ukraine 1,521 3,660 - - 1,521 3,660 Central Europe 5,102 6,731 - - 5,102 6,731 Lithuania 2,992 4,893 (226) (289) 2,766 4,604 Other CIS countries 381 652 - - 381 652 Other Baltic states 179 546 - - 179 546 Russia - 441 - - - 441 Other countries 401 1,471 - - 401 1,471 Total 21,446 33,827 (226) (289) 21,220 33,538 Transactions between the group companies are made on commercial terms and conditions. Inter-group sales are eliminated on consolidation. The Company Sales 2022 2021 Western Europe 10,870 15,427 Ukraine 1,521 3,660 Central Europe 5,102 6,732 Lithuania 1,906 3,923 Other CIS countries 381 652 Other Baltic states 178 546 Russia - 441 Other countries 401 1,471 20,359 32,852 4. Cost of sales Group Company 2022 2021 2022 2021 Raw materials 14,821 21,079 14,617 20,704 Salaries and wages 2,250 3,426 2,046 3,365 Depreciation and amortisation 1,264 1,466 1,234 1,435 Other indirect costs 3,494 4,318 3,299 4,276 21,829 30,289 21,196 29,780 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 33 5. Selling and distribution expenses Group Company 2022 2021 2022 2021 Transportation 642 1,037 642 1,037 Salaries and social security 393 540 393 540 Market research, sales promotion and commissions to third parties 149 446 150 459 Advertising, marketing 44 258 44 257 Warranty service expenses 72 155 72 162 Rent of warehouses and storage expenses 51 58 51 58 Certification expenses 41 46 41 46 Insurance 27 33 27 33 Business trips 2 14 2 14 Other (69) 49 (69) 49 1,352 2,636 1,353 2,655 6. General and administrative expenses Group Company 2022 2021 2022 2021 Salaries and social security 1,456 1,171 1,348 1,085 Depreciation and amortisation 323 346 323 346 Rent and utilities 168 146 169 146 Bank services 49 75 48 74 Insurance 58 58 58 56 Non-current employee benefits (50) 70 (47) 53 Taxes, other than income tax 30 28 30 28 Consultants' costs 42 16 42 14 Business trips 4 7 4 7 Security costs 5 8 5 7 Impairment of intangible fixed assets 210 - 210 - Impairment of property, plant and equipment 61 (63) 62 (33) Subsidies received for job preservation - (69) - (42) Downtime subsidies received - (49) - (49) Change in the impairment allowance for receivables 255 (115) 255 (115) Other 754 475 726 413 3,365 2,104 3,233 1,990 7. Other income Group Company 2022 2021 2022 2021 Income from transportation services 93 359 93 359 Income from sale of other services 121 79 228 171 Income from rent of premises 38 26 57 35 252 464 378 565 8. Other expenses Group Company 2022 2021 2022 2021 Transportation expenses 92 377 92 377 Other services 70 65 137 112 Other - - 16 16 162 442 245 505 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 34 9. Finance income Group Company 2022 2021 2022 2021 Foreign currency exchange gain 2 56 2 56 Other 6 8 6 8 8 64 8 64 10. Finance costs Group Company 2022 2021 2022 2021 Interest expenses 502 477 502 477 Loss of foreign currency translation transactions - 12 - 12 Other expenses 6 54 6 54 508 543 508 54 3 11. Income tax Group Company Components of the income tax (expense) income 2022 2021 2022 2021 Deferred income tax income (expenses) 566 (26) 578 (26) Income tax income (expenses) recorded in profit or loss from continuing operations 566 (26) 578 (26) As at 31 As at 31 As at 31 As at 31 December December December December Deferred income tax asset 2022 2021 2022 2021 Impairment allowance for receivables and write-down of inventories 85 86 85 93 Accrued liabilities 36 52 33 48 Warranty provisions 36 45 36 45 Other - (30) - (30) Deferred income tax asset 157 153 154 156 Less: not recognised part Deferred income tax asset, net 157 153 154 156 Deferred income tax liability Revaluation of property, plant and equipment (1,010) (1,391) (1,010) (1,391) Capitalised development costs (210) (390) (205) (404) Deferred income tax liability (1,220) (1,781) (1,215) (1,795) Deferred income tax, net (1,063) (1,628) (1,061) (1,639) SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 35 12. Intangible assets Group Software, Cost: Development cost licenses Total Balance as at 1 January 2022 7,052 682 7,734 Additions 264 1 265 Disposals and write-offs (209) (4) (213) Reclassification - - - Depreciation - - - Balance as at 31 December 2022 7,107 679 7,786 Amortisation: Balance as at 1 January 2022 5,492 675 6,167 Charge for the year 275 3 278 Disposals and write-offs - (4) (4) Reclassification - - - Balance as at 31 December 2022 5,767 674 6,441 Carrying amount as at 31 December 2022 1,340 5 1,345 Carrying amount as at 1 January 2022 1,560 7 1,567 Software, Cost: Development cost licenses Total Balance as at 1 January 2021 6,808 770 7,578 Additions 319 6 325 Disposals and write-offs - - - Reclassification (75) (94) (169) Depreciation - - - Balance as at 31 December 2021 7,052 682 7,734 Amortisation: Balance as at 1 January 2021 5,279 762 6,041 Charge for the year 288 7 295 Disposals and write-offs - - - Reclassification (75) (94) (169) Balance as at 31 December 2021 5,492 675 6,167 Carrying amount as at 31 December 2021 1,560 7 1,567 Carrying amount as at 1 January 2021 1,529 8 1,537 Total amount of amortisation expenses is included into general and administrative expenses in the statement of comprehensive income. Part of the Group's intangible non-current assets with an acquisition value of EUR 5,296 thousand were fully amortised as at 31 December 2022 (EUR 5,160 thousand as at 31 December 2021), but are still used in operations. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 36 12. Intangible assets (continued) Company Development cost Software, licenses Total Cost: Balance as at 1 January 2022 7,051 648 7,699 Additions 264 - 264 Disposals and write-offs (209) (4) (213) Balance as at 31 December 2022 7,106 644 7,750 Amortisation: Balance as at 1 January 2022 5,491 641 6,132 Charge for the year 275 3 278 Disposals and write-offs - (4) (4) Balance as at 31 December 2022 5,766 640 6,406 Carrying amount as at 31 December 2022 1,340 4 1,344 Carrying amount as at 1 January 2022 1,560 7 1,567 Development cost Software, licenses Total Cost: Balance as at 1 January 2021 6,731 643 7,374 Additions 320 5 325 Disposals and write-offs - - - Balance as at 31 December 2021 7,051 648 7,699 Amortisation: Balance as at 1 January 2021 5,203 634 5,837 Charge for the year 288 7 295 Disposals and write-offs - - - Balance as at 31 December 2021 5,491 641 6,132 Carrying amount as at 31 December 2021 1,560 7 1,567 Carrying amount as at 1 January 2021 1,528 9 1,537 Total amount of amortisation expenses is included into administrative expenses in the statement of comprehensive income. Part of the Company's intangible non-current assets with an acquisition value of EUR 5,261 thousand were fully amortised at 31 December 2022 (EUR 5,160 thousand at 31 December 2021), but are still used in operations SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 37 13. Property, plant and equipment Land, Machinery Construction Group buildings and Vehicles and in progress Total and other and Cost: structures equipment prepayments Balance as at 1 January 2022 4,252 36,005 5,665 1,302 47,224 Additions - 339 13 - 352 Disposals and write-offs - (9) (17) - (26) Reclassifications - 1,302 - (1,302) - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2022 4,252 37,637 5,661 - 47,550 Accumulated depreciation: Balance as at 1 January 2022 2,767 35,068 5,297 - 43,132 Charge for the year 83 373 136 - 592 Disposals and write-offs - (11) (16) - (27) Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2022 2,850 35,430 5,417 - 43,697 Revalued value: Balance as at 1 January 2022 4,206 7,677 1,472 - 13,355 Additions - - - - - Disposals and write-offs - (2) (1) - (3) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2022 4,206 7,675 1,471 - 13,352 Depreciation of revalued value: Balance as at 1 January 2022 454 2,739 888 - 4,081 Charge for the year 143 794 107 - 1,044 Disposals and write-offs - - - - - Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2022 597 3,533 995 - 5,125 Carrying amount as at 31 5,011 6,349 720 - 12,080 December 2022 Carrying amount as at 1 January 2022 5,237 5,875 952 1,302 13,366 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 38 13. Property, plant and equipment (continued) Land, Machinery Construction Group buildings and Vehicles and in progress Total and other and Cost: structures equipment prepayments Balance as at 1 January 2021 4,252 35,938 5,553 168 45,911 Additions - 158 133 1,134 1,425 Disposals and write-offs - (91) (21) - (112) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2021 4,252 36,005 5,665 1,302 47,224 Accumulated depreciation: Balance as at 1 January 2021 2,668 34,674 5,186 - 42,528 Charge for the year 99 436 132 - 667 Disposals and write-offs - (42) (21) - (63) Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2021 2,767 35,068 5,297 - 43,132 Revalued value: Balance as at 1 January 2021 4,206 7,679 1,475 - 13,360 Additions - - - - - Disposals and write-offs - (2) (3) - (5) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2021 4,206 7,677 1,472 - 13,355 Depreciation of revalued value: Balance as at 1 January 2021 327 2,020 743 - 3,090 Charge for the year 127 719 145 - 991 Disposals and write-offs - - - - - Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2021 454 2,739 888 - 4,081 Carrying amount as at 31 December 2021 5,237 5,875 952 1,302 13,366 Carrying amount as at 1 January 2021 5,463 6,923 1,099 168 13,653 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 39 13. Property, plant and equipment (continued) Land, Machinery Construction Company buildings and Vehicles and in progress Total and other and Cost: structures equipment prepayments Balance as at 1 January 2022 4,252 33,375 5,652 1,300 44,579 Additions - 336 4 - 340 Disposals and write-offs - (9) (11) - (20) Reclassifications - 1,300 - (1,300) - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2022 4,252 35,002 5,645 - 44,899 Accumulated depreciation: Balance as at 1 January 2022 2,767 32,498 5,292 - 40,557 Charge for the year 83 345 134 - 562 Disposals and write-offs - (10) (10) - (20) Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2022 2,850 32,833 5,416 - 41,099 Revalued value: Balance as at 1 January 2022 4,206 7,677 1,472 - 13,355 Additions - - - - - Disposals and write-offs - (2) (1) - (3) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2022 4,206 7,675 1,471 - 13,352 Depreciation of revalued value: Balance as at 1 January 2022 454 2,739 889 - 4,082 Charge for the year 143 794 107 - 1,044 Disposals and write-offs - - - - - Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2022 597 3,533 996 - 5,126 Carrying amount as at 31 December 2022 5,011 6,311 704 - 12,026 Carrying amount as at 1 January 5,237 5,815 943 1,300 13,295 2022 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 40 13. Property, plant and equipment (continued) Company Land, Machinery Construction buildings and Vehicles and in progress Total and other and Cost: structures equipment prepayments Balance as at 1 January 2021 4,252 33,209 5,532 169 43,162 Additions - 166 131 1,131 1,428 Disposals and write-offs - - (11) - (11) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2021 4,252 33,375 5,652 1,300 44,579 Accumulated depreciation: Balance as at 1 January 2021 2,668 32,091 5,174 - 39,933 Charge for the year 99 407 130 - 636 Disposals and write-offs - - (12) - (12) Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2021 2,767 32,498 5,292 - 40,557 Revalued value: Balance as at 1 January 2021 4,206 7,679 1,475 - 13,360 Additions - - - - - Disposals and write-offs - (2) (3) - (5) Reclassifications - - - - - Elimination of accumulated - - - - - depreciation Balance as at 31 December 2021 4,206 7,677 1,472 - 13,355 Depreciation of revalued value: Balance as at 1 January 2021 327 2,020 743 - 3,090 Charge for the year 127 719 146 - 992 Disposals and write-offs - - - - - Impairment loss - - - - - Elimination of accumulated - - - - - depreciation Depreciation after revaluation - - - - - Balance as at 31 December 2021 454 2,739 889 - 4,082 Carrying amount as at 31 December 2021 5,237 5,815 943 1,300 13,295 Carrying amount as at 1 January 5,463 6,777 1,090 169 13,499 2021 The depreciation charge of the Group’s property, plant and equipment for 2022 amounts to EUR 1,645 thousand (EUR 1,658 thousand for 2021). After the assessment of amortisation of grants, the amount of EUR 1,566 thousand for 2022 (EUR 1,584 thousand for 2021) was included into production cost and the amount of EUR 79 thousand (EUR 74 thousand for 2021) was included into general and administrative expenses in the Group’s statement of comprehensive income. The depreciation charge of the Company’s property, plant and equipment for 2022 amounts to EUR 1,615 thousand (EUR 1,628 thousand for 2021). The amount of EUR 79 thousand for 2022 (EUR 74 thousand for 2021) was included into general and administrative expenses in the Company’s statement of comprehensive income. The remaining amount of depreciation, after having assessed the amortisation of grants amounting to EUR 1,536 thousand (EUR 1,554 thousand for 2021) was included in the production cost. As at 31 December 2022 The Group's and the Company's buildings, machinery and equipment are pledged to banks as collateral for loans (Note 23). As at 31 December 2022, fully depreciated but still usable Group and Company material assets purchase values were EUR 5,163 thousand and EUR 4,795 thousand (at 31 December 2021 – EUR 3,780 thousand and EUR 3,480 thousand) . SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 41 Revaluation of property, plant and equipment Starting from 30 September 2016 the Group and the Company decided to revaluate the non-current assets, including buildings, structures, machinery and equipment as well as other production equipment. The valuation of non-current assets for financial reporting purposes has been carried out by external, independent valuator, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The valuation of real estate was based on the comparable method by comparing sales prices of similar real estate in Lithuania. The valuation of machinery and equipment and other non-current assets was based on comparable or depreciated replacement cost (DRC) methods. The estimated fair value was valued by independent valuators - Corporation „Matininkai“. Building and structures were attributed to Level 3 of fair value hierarchy. Under the Market method, the sale transactions or offer examples in respect of the real estate and constructions were observed in the market. The comparable real estate objects were selected due to the similarity with the object being measured with respect to size, nature, location, intended use, condition and other parameters. The valuation of real estate required adjustments to reflect differences between the objects being measured and comparable objects. Machinery and equipment, vehicles and other assets were also attributed to Level 3 of fair value hierarchy. Part of the machinery was valued based on at least two or three comparable inputs. Comparable inputs selected were similar to the assets subject to valuation. This method was used for the measurement of a part of equipment in respect of which sale or offer market data was available. The remaining part of machinery and equipment were valued by DRC method. The replacement values of these non-current assets were based on their acquisition costs and comparable price changes provided by the Statistics Department. When establishing physical obsolescence it is assumed that the value of property being measured is written off in proportion to the number of years. The assets subject to valuation were classified into categories in respect of which the useful life up to 20 years depending on the group of asset was established based on the expert opinion of the valuer. Asset were valued under this scheme: 1. All Company long-term assets were valued using discounted cash flows model. 2. From this value, intangible assets at balance value and buildings at market value were taken off. 3. Other movable assets were valuated using comparison method, while special movable assets and other assets, not possible to value at comparison model, were valuated at DRC model. Some assets, not possible to value by methods described above, were valuated at disposal rate. 4. The remaining value was allocated to all valued items, by using correction coefficients. Only assets, valued by DRC and disposal methods, were corrected using coefficients. The increase in value of non-current tangible assets was registered by increasing the acquisition cost of the asset and was accounted as follows as at 30 September 2018: The Company Book value Revalued amounts Revaluation surplus Buildings and structures 5,404 5,975 571 Machinery and equipment 8,089 9,160 1,071 Vehicles and other assets 1,435 1,759 324 Total: 14,928 16,894 1,966 Furthermore, the estimated fair value of PPE was tested for impairment by comparing it to the recoverable amount of PPE determined based on the income method. The revenue approach model was based on management's 2018-2022 forecasts, which assumed the following assumptions for cash flow projections based on the market situation: - Maintaining current product turnover in a more or less constant level of recent years. In the following years, a gradual slowdown in western markets is planned due to the increasing influence of Chinese manufacturers on the production of private brands in the home appliance sector. One of the most important reasons for the company's sales of own brand Snaigė is the continuous and consistent development of technologies, brand support, and development of new products, therefore no decrease in sales of this category is planned. - Starting production of a new product – industrial refrigeration equipment. This step has been chosen due to the fact that the existing domestic refrigerating appliance markets are shrinking and oligopolizing, thus reducing the niche of the Company's type manufacturers, while the industrial refrigeration equipment is less standardized, and very large manufacturers cannot gain a competitive advantage through economies of scale and in that way reduce potential niches. In addition, the Company has many years of experience in trading such products, and the technological process is very close to existing production. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 42 The evaluators also performed an analysis of the dependence of variable and fixed costs on production volumes, and the average product price and its variation. The main components of working capital (stock requirements, receivables, and trade payables) are calculated on the basis of average values (parts of income and expenses) from actual data from 2012- 2018 (non-typical current liabilities and receivables are excluded from working capital) In preparing the 2022 and the 2021 financial statements, no independent determination of the fair value of the assets was made because there was no reason to believe that the carrying amount of the assets would not reflect fair value. The assumptions largely reflect the current situation and strategy, and their slight shift in time does not significantly affect the fair value of the assets calculated according to a similar model. Change in estimates 2022 The Group performed a test of the useful life and residual value of its non-current assets, but did not identify any changes in the applicable useful lives and residual values. As the Company has acquired the status of a company under restructuring in 2022 and the Company's Restructuring Plan provides for the possibility to sell part of its tangible assets with a prior valuation, the market values of the Company's non- current assets will be subject to adjustments (if necessary) following the valuation of the assets during the course of the restructuring plan. 14. Current loans to related companies Group Company 31 December 31 December 31 December 31 December 2022 2021 2022 2021 Loans granted 8,068 8,068 8,068 8,068 Interest calculated 2,262 2,262 2,262 2,262 Total receivables 10,330 10,330 10,330 10,330 Minus: (8,068) (8,068) (8,068) (8,068) Provisions for doubtfull loans Provisions for doubtfull interest (2,262) (2,262) (2,262) (2,262) Minus: total provisions (10,330) (10,330) (10,330) (10,330) Net receivables - - - - The agreement, for the assignment claim right towards Hymana Holdings Ltd., arising from the Agreement for the Assignment (Cession) dated 24 November 2015 concluded between the Company and Hymana Holdings Ltd., was concluded with the Company’s Board member K.A. Kovalchuk (Assignee). The Claim Right shall be assigned by installments and when the Assignee makes a payment and funds are credited to the Company’s bank account, respective part of the Claim Right in amount corresponding to the amount of funds received shall be considered to be assigned to the Assignee by the Company. The Assignee shall not in any case be considered as acquired the whole Claim Right if the amount paid by the Assignee and credited in the Company’s bank account is lower than an amount of the Claim Right. The Company shall have a right to terminate the Agreement unilaterally at any time. 15. Inventories Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Raw materials and spare parts 1,673 3,288 1,653 3,259 Production in progress 309 274 309 274 Finished goods 1,739 1,867 1,719 1,843 Goods for resale 302 882 302 882 Minus: impairment (230) (169) (193) (131) Total inventories 3,793 6,142 3,790 6,127 Raw materials and materials consist of compressors, components, plastics, wires, metals and other materials used in the production. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 43 Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 At the beginning of the year (169) (237) (131) (164) Impairment (61) - (62) - Recovery - 68 - 33 At the end of the year (230) (169) (193) (131) As at 31 December 2022, the Group and the Company have no legal restrictions on inventories. Raw materials included to cost of sales by the Group and the Company amounted to EUR 14,821 thousand and EUR 14,821 thousand respectively (As at 31 December 2021 respectively EUR 21,079 thousand and EUR 20,704 thousand). 16. Trade receivables Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Receivables from not related customers 3,196 4,918 3,011 4,764 Receivables from related customers - - 63 23 Gross receivables 3,196 4,918 3,074 4,787 Less: impairment allowance for doubtful (1,171) (671) (1,109) (606) receivables Net receivables 2,025 4,247 1,965 4,181 Including: Current receivables 2,025 4,247 1,965 4,181 Total 2,025 4,247 1,965 4,181 Movements in the individually assessed impairment of trade receivables were as follows: Group Company 2022 2021 2022 2021 Balance at the beginning of the period (671) (1,259) (606) (1,191) Impairment Charge for the year (503) - (503) - Effect of the change in foreign currency 3 (2) - - exchange rate Amounts paid - 6 - 1 Amounts written off - 584 - 584 Balance at the end of the period (1,171) (671) (1,109) (606) As at 31 December 2022 100% impairment was accounted for trade receivables of the Group and the Company in gross values of EUR 1,171 thousand and EUR 1,109 thousand (as at 31 December 2021 – EUR 671 thousand and EUR 606 thousand respectively). Change in impairment allowance for receivables was accounted for within general and administrative expenses. The receivables are written-off when it becomes obvious that they will not be recovered. The impairment allowance for receivables of the Group and the Company in 2022 and 2021 was stated under general and administrative expenses. 17. Other amounts receivable Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 VAT receivable 101 192 101 192 Other receivables 40 44 40 42 Restricted cash 10 14 10 14 151 250 151 248 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 44 18. Cash and cash equivalents Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Cash at bank 175 126 14 51 Cash on hand 4 3 3 2 179 129 17 53 As at 31 December 2022 and 2021 no restrictions were imposed on the Group’s and the Company’s cash, except of those in Note 23. 19. Share capital As at 31 December 2022 and 31 December 2021, share capital of the Company and the Group was EUR 6,736 thousand. On 31 December 2022, the share capital of the Company and the Group was divided into 39,622 thousand ordinary registered shares with the par value of EUR 0.17 each as at 31 December 2022 and 2021. All shares of the Company are fully paid. The Company does not have any other classes of shares than ordinary shares mentioned above, there are no restrictions of share rights or special control rights for the shareholders set in the Articles of Association of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital as at 31 December 2022 and 2021. According to the Law on Companies of the Republic of Lithuania, the company's total equity cannot be less than 1/2 of its share capital specified in the company’s by-laws. As at 31 December 2022 and the Company did not comply with this requirement. The Company's equity capital is negative. The issue of compliance with the share capital will be resolved during the restructuring of the Company. 20. Reserves Legal reserve As at 31 December 2022, the legal reserve of the Group and the Company was EUR 674 thousand and EUR 718 thousand (As at 31 December 2021 it was EUR 674 thousand and EUR 718 thousand). The Company’s legal reserve is compulsory under Lithuanian legislation. Annual transfers of not less than 5% of net profit are compulsory until the reserve reaches 10% of the share capital. The Group’s legal reserve is formed from the legal reserve of the Company and the subsidiaries. As at 31 December 2022 and 31 December 2021 the legal reserve of the Group and the Company was fully formed. Revaluation reserve for property, plant and equipment Group Company Revaluation reserve carrying amount as at 31 December 2021 7,675 7,675 Positive Revaluation result - - Deferred income tax liability - - Decrease of revaluation reserve through statement of comprehensive income - - Share capital decrease - - Revaluation reserve net value at 1 January 2022 7,675 7,675 Profit (loss), not recognized in statement of comprehensive income, resulted from annual depreciation of revaluated assets (890) (890) Revaluation reserve carrying amount as at 31 December 2022 6,785 6,785 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 45 Group Company Revaluation reserve carrying amount as at 31 December 2020 8,521 8,521 Positive Revaluation result - - Deferred income tax liability - - Decrease of revaluation reserve through statement of comprehensive income - - Share capital decrease - - Revaluation reserve net value at 1 January 2021 8,521 8,521 Profit (loss), not recognized in statement of comprehensive income, resulted from annual depreciation of revaluated assets (846) (846) Revaluation reserve carrying amount as at 31 December 2021 7,675 7,675 21. Grants Group and Company Balance as at 31 December 2021 5,138 Received during the period - Balance as at 31 December 2022 5,138 Amortisation during the period Accumulated amortisation as at 31 December 2021 4,849 Amortisation during the period 55 Accumulated amortisation as at 31 December 2022 4,904 Net carrying amount as at 31 December 2022 234 Net carrying amount as at 31 December 2021 289 The grants were received for the renewal of production machinery and repairs of buildings in connection with the elimination of CFC 11 element from the production of polyurethane insulation and filling foam, and for elimination of greenhouse gases in the manufacturing of domestic refrigerators and freezers. In 2021, grants were also received to reimburse salary costs (EUR 1,002 thousand) to reduce the negative effects of COVID-19. Grants are amortised over the same period as the machinery and other assets for which grants were designated when compensatory costs are incurred. The amortisation of grants is included in production cost against depreciation of machinery and reconstruction of buildings for which the grants were designated. 22. Provisions The Group provides a warranty of 2 years for the production sold and 5 years warranty on promotional products. The provision for warranty repairs was accounted for based on the expected cost of repairs and statistical warranty repair rates and divided respectively into non-current and current provisions. Difference between years depends on product and warranty period mix. Group Company 2022 2021 2022 2021 As at 1 January 300 320 297 310 Additions during the year 60 165 60 165 Utilised (119) (185) (117) (178) As at 31 December 241 300 240 297 Including: Non-current 94 118 94 117 Current 147 182 146 180 Total 241 300 240 297 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 46 23. Non-current and current borrowings Group Company As at 31 As at 31 As at 31 As at 31 December December December December 2022 2021 2022 2021 Non-current borrowings Non-current borrowings with a fixed interest rate 1,259 888 1,259 888 Accrued interest 104 - 104 - Non-current borrowings with variable interest rate 8,376 7,108 8,376 7,108 Accrued interest 314 - 314 - Non-current liabilities to lease companies - 9 - 9 10,053 8,005 10,053 8,005 Current borrowings Current borrowings with a fixed interest rate - 437 - 437 Current borrowings with variable interest rate - 1,270 - 1,270 Other debt liabilities - 777 - 777 Current liabilities to lease companies 9 18 9 18 9 2,502 9 2,502 10,062 10,507 10,062 10,507 The main information on individual borrowings is disclosed below: Group Company As at 31 As at 31 As at 31 As at 31 December December December December Type Maturity 2022 2021 2022 2021 Under the Borrowing 1 Loan restructuring plan 8,690 - 8,690 - 31-01-2023 - 8,378 - 8,378 Under the Borrowing 2 Loan restructuring plan 1,363 - 1,363 - 11-08-2024 - 1,325 - 1,325 Factoring 05-03-2022 - 777 - 777 Lease 1 26-03-2021 - - - - Lease 2 26-05-2021 - - - - Lease 3 26-08-2021 - - - - Lease 4 11-07-2022 - - - - Lease 5 25-06-2023 3 9 3 9 Lease 6 25-06-2023 2 6 2 6 Lease 7 25-06-2023 2 6 2 6 Lease 8 25-06-2023 2 6 2 6 10,062 10,507 10,062 10,507 As at 31 December 2022 annual interest rate of the loan 1 is 1 month EURIBOR + 5.25% (as at 31 December 2021 1 month EURIBOR + 5.25% annual interest rate). As at 31 December 2022, loan 2 is set at 0.67% for a 30-day period and 0.23% compensatory interest per day. As of 31 December 2022 the Company’s buildings with the carrying amount of EUR 4,919 thousand (EUR 5,124 thousand as at 31 December 2021), the Group’s and Company’s machinery and equipment with the carrying amount of EUR 6,187 thousand (EUR 5,181 thousand as at 31 December 2021) were pledged to the banks for the loans. The claim rights on Loan 1 and Loan 2 were transferred to the new creditors after the start of the restructuring process, while the other terms of the loans remained in force. According to the list of creditors approved by the Court, loans are recorded in long-term or short-term liabilities. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 47 Borrowings at the end of the year in currencies: Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Borrowings denominated in: Euro 10,062 10,507 10,062 10,507 10,062 10,507 10,062 10,507 The fixed interest rates of 3.9% were set to liabilities under lease (financial lease) of the Group. Future lease payments under lease agreements as at 31 December 2022 and 31 December 2021 are as follows: As at 31 As at 31 December 2022 December 2021 2021 - - 2022 19 2023 10 9 Total liabilities under financial leases 10 28 Interest (1) (1) Present value of liabilities under financial leases 9 27 Liabilities under financial leases are accounted for as: 9 Current liabilities 9 Non-current liabilities - The Group’s assets leased under Financial lease agreements comprise machinery and equipment (in Subsidiary). The leasing period is 5 years. The carrying amount of the assets acquired under finance lease: As at 31 As at 31 December 2022 December 2021 Machinery and equipment 43 60 Cars 11 32 54 92 24. Other non-current liabilities and long-term employee benefits In the course of the restructuring proceedings, the court approved the list of payables as at 20 September 2022, which the Company recorded as long-term liabilities. Non-current liabilities to credit institutions Group Company Loan 1 8,690 8,690 Loan 2 1,363 1,363 31 December 2022 10,053 10,053 Other long-term liabilities Group Company Debts to suppliers 8,186 8,186 Debts to subsidiaries - 166 Amounts payable to the State Social Insurance Fund 63 63 Dividends payable and deposited 49 49 31 December 2022 8,298 8,464 04 April 2023 The Kaunas District Court has not approved the restructuring plan of AB Snaigė. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 48 The Company's management does not agree with such a decision of the court, as such a decision does not protect the interests of the Company nor the interests of the company's non-mortgage creditors. Taking into account the fact that the Company is a viable company, which pays taxes to the State and SoDra on time, wages to its employees, makes current payments to its creditors, has all the possibilities to continue to operate and develop, and that these are only temporary financial difficulties, the Company has appealed the decision of the Kaunas District Court. As at 31 December 2022 of the Group’s and the Company’s, the expenses of the one-time payments for leaving employees at a retirement age amounted to EUR 120 thousand and EUR 116 thousand (EUR 33 thousand and EUR 27 thousand as at 31 December 2021). Long-term employee benefits Group Company 31 December 2021 326 300 Used in 2022 (120) (116) Accumulated in 2022 3 3 31 December 2022 209 187 Actuarial gains and losses in 2022 and 2021 were insignificant; therefore, they were not separated and presented in other comprehensive income. 25. Lease The carrying amounts of assets held under a recognized right of use and their movements during the period are as follows: Company Land Vehicles Total 1 January 2022 95 14 109 Acquisitions Depreciation expenses (11) (14) (25) 31 December 2022 84 - 84 Land Vehicles Total 1 January 2021 105 31 136 Acquisitions Depreciation expenses (10) (17) (27) 31 December 2021 95 14 109 Group Land Vehicles Total 1 January 2022 95 14 109 Acquisitions Depreciation expenses (11) (14) (25) 31 December 2022 84 - 84 Land Vehicles Total 1 January 2021 105 31 136 Acquisitions Depreciation expenses (10) (17) (27) 31 December 2021 95 14 109 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) The carrying amounts of lease liabilities and their movements during the period are as follows: Company Group 1 January 2022 95 95 Acquisitions Interest increase Payments (11) (11) 31 December 2022 84 84 Company Group 1 January 2021 105 105 Acquisitions Interest increase Payments (10) (10) 31 December 2021 95 95 The Company and the Group do not have any agreements that provide for the possibility of extension or termination and which are not expected to be exercised or are expected to be exercised. 26. Employee related liabilities Group Company As at 31 As at 31 As at 31 As at 31 December December December December 2022 2021 2022 2021 Provisions for Holliday payment 199 451 175 431 Salaries payable 260 230 245 216 Bonus accumulations - - - - Social tax payables 97 133 89 125 Personal Income tax payables 41 79 37 74 597 893 546 846 27. Profit tax and other current liabilities Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Other taxes: 9 9 4 9 Other payables and accrued expenses 84 373 80 354 93 382 84 363 28. Basic and diluted profit (loss) per share Calculation of basic and diluted earnings per share is presented below: Group Company 2022 2021 2022 2021 Weighted average number of ordinary shares 39,622 39,622 39,622 39,622 Net profit (loss) for the year, attributable to the shareholders of Company (5,170) (1,974) (5,212) (2,018) Basic profit (loss) per share, in EUR (0.13) (0.05) (0.13) (0.05) 29. Financial instruments 49 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 50 Overview The Group and the Company have exposure to the following risks: credit risk, liquidity risk and market risk. This note presents information about the Group’s and the Company’s exposure to each of these risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these financial statements. The Board has overall responsibility for the establishment and oversight of the Group and the Company’s risk management framework. The Group’s and Company’s risk management policies are established to identify and analyse the risks faced by the Group and the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s and the Company’s activities. The Group and the Company aim to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. Credit risk As at 31 December 2022 and 2021, the maximum exposure to credit risk is represented by the carrying amount of each financial asset, consequently, the Group’s and the Company’s management considers that its maximum exposure is reflected by the amount of loans receivable from related parties, trade and other receivables, net of impairment allowance, and the amount of cash and cash equivalents recognised at the date of the statement of financial position. Credit risk or risk that a counterparty will not fulfil its obligations, is controlled by credit terms and monitoring procedures, using services of external credit insurance and debt recovery agencies. As at 31 December, the credit risk was related to: Group Company As at 31 As at 31 As at 31 As at 31 December 2022 December 2021 December 2022 December 2021 Trade receivables 2,025 4,247 1,965 4,181 Cash and cash equivalents 179 129 17 53 2,204 4,376 1,982 4,234 The concentration of the Group’s and the Company’s trade partners and the largest credit risk related to trade receivables as at the reporting date are disclosed below: Group Company 2022 % 2021 % 2022 % 2021 % Client 1 651 20 852 17 651 21 852 18 Client 2 345 11 699 14 345 11 699 15 Client 3 155 5 347 7 155 5 347 7 Client 4 135 4 221 5 135 4 221 5 Client 5 105 3 192 4 105 3 192 4 Client 6 73 2 161 3 73 2 161 3 Client 7 69 2 160 3 69 2 160 3 Other clients 1,663 53 2,286 47 1,541 52 2,155 45 Impairment (1,171) - (671) - (1,109) - (606) - Total 2,025 100 4,247 100 1,965 100 4,181 100 Trade receivables according to geographic regions: Group Company 2022 2021 2022 2021 Western Europe 1,288 1,904 1,288 1,904 Central Europe 247 1,263 247 1,263 Ukraine 108 445 108 445 Lithuania 363 228 304 162 Other CIS countries - 86 - 86 Other Baltic States 19 14 18 14 Russia - 307 - 307 Other - - - - 2,025 4,247 1,965 4,181 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 51 Central Europe comprises Poland, the Czech Republic, Bulgaria; Western Europe comprises France, Germany, Norway, Portugal; other CIS countries include Uzbekistan, Moldova, and Azerbaijan. In 2022, 49,8% and 53,9% of sales of the Group and the Company respectively were directed to Western Europe (in 2021, respectively 45,6% and 49,6%) and 6,97% and 7,47% were directed to Ukraine (in 2021 respectively 10,8% and 11,1% of sales). As at 31 December 2022, the Group’s and the Company’s amounts receivable for items sold in Western Europe and Ukraine, less impairment losses were equal to EUR 1,288 thousand and EUR 1,288 thousand, and in Ukraine respectively EUR 108 thousand and EUR 108 thousand (as at 31 December 2021, EUR 1,904 thousand and EUR 1,904 thousand and Ukraine EUR 445 thousand and EUR 445 thousand respectively). Although management considers that it takes all necessary measures under current circumstances to maintain stable business of the Group and the Company, the persistent instability of business environment could unpredictably affect the performance of the Group and the Company and their financial position. As at 31 December 2022, having assessed the risks, the Group and the Company recognised impairment allowance of EUR 1,171 thousand and EUR 1,109 thousand for receivables (as at 31 December 2021, EUR 671 thousand and EUR 606 thousand). These financial statements reflect the current management’s estimate related to the effect of the business environment on the Group’s and the Company’s activities and financial position. The future business environment might differ from the management’s estimates. The Group’s and the Company’s management believes that the maximum risk equals to trade receivables, less recognised impairment losses at the reporting date. The Group and the Company do not provide guarantees for obligations of other parties. The Group and the Company have credit policies in place and credit risk is constantly controlled. Credit risk assessment is applied to all clients willing to get a payment deferral. Trade receivables from the Group in the amount of EUR 1,645 thousand as at 31 December 2022 (EUR 2,718 thousand as at 31 December 2021) were insured with credit insurance by Atradius Sweden Kreditförsäkring Lithuanian branch. Trade receivables from Ukraine, Moldova, Russia and other CIS countries were not insured. The delay analysis of trade receivables, less impairment losses, as at 31 December 2022 and 2021 is as follows: Group, debt limitation Trade receivables past due but not impaired Trade receivables Less neither past due nor than 30 30–60 60–90 90–120 More than impaired days days days days 120 days Total 2022 1,731 142 18 8 35 91 2,025 2021 3,759 74 60 8 0 346 4,247 Company, debt limitation Trade receivables past due but not impaired Trade receivables Less neither past due nor than 30 30–60 60–90 90–120 More than impaired days days days days 120 days Total 2022 1,712 120 23 0 19 91 1,965 2021 3,735 53 44 4 0 345 4,181 Solvency / Liquidity risk The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents by using cash flows statements with liquidity forecasting for future periods. The statement comprises predictable operating cash flows and effective planning of cash utilisation. The Group’s liquidity (total current assets / total current liabilities) and quick ((total current assets - inventory) / total current liabilities) ratios as at 31 December 2022 were 3.6 and 1.5 respectively (0.91 and 0.41 as at 31 December 2021 respectively). The purpose of the Group’s and the Company’s liquidity risk management policy is to maintain the ratio between continuous financing and flexibility in using overdrafts, bank loans, bonds, and lease agreements. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 52 The table below summarises the maturity profile of the financial liabilities as at 31 December 2022 and 2021 based on contractual undiscounted payments. Group Less More On than 3 3 to 12 1 to 5 than 5 Carrying demand months months years years Total amount Interest bearing loans and borrowings - 5 4 10,053 - 10,062 10,062 Trade and other payables 437 397 - 8,186 - 9,020 9,020 Balance as at 31 December 2022 437 402 4 18,239 - 19,082 19,082 Interest bearing loans and borrowings - 1,002 1,510 8,004 - 10,516 10,516 Trade and other payables 4,695 3,056 69 384 - 8,204 8,204 Balance as at 31 December 2021 4,695 4,058 1,579 8,388 - 18,720 18,720 Company Less More On than 3 4 to 12 1 to 5 than 5 Carrying demand months months years years Total amount Interest bearing loans and borrowings - 5 4 10,053 - 10,062 10,062 Trade and other payables 256 421 - 8,352 - 9,029 9,029 Balance as at 31 December 2022 256 426 4 18,405 - 19,091 19,091 Interest bearing loans and borrowings - 1,002 1,510 8,004 - 10,516 10,516 Trade and other payables 4,719 3,057 69 384 - 8,229 8,229 Balance as at 31 December 2021 4,719 4,059 1,579 8,388 - 18,745 18,745 The presentation of interest bearing loans and borrowing were restated by the Group and the Company due to regulator requirements. The loans were presented as payable on demand. The interest payments on variable interest rate loans in the table above are calculated based on the average market interest rates at the period end and these amounts may change as market interest rates change. The solvency/liquidity risk is exacerbated by the Company's ongoing restructuring process, in which most financial institutions are avoiding or restricting the Company's ability to use any financial instruments, resulting in a lack of working capital and an inability to fully execute the Company's orders. Interest rate risk The Group’s and the Company’s borrowings are subject to variable interest rates related to EURIBOR. As at 31 December 2022 and 2021, the Group and the Company did not use any financial instruments to hedge against interest rate risk. Sensitivity of the Group and the Company profit before taxes with respect to possible interest rate movements is not substantial. Other effect to Company and Group equity is not possible except via profit. In the course of restructuring proceedings, interest is not permitted to accrue on liabilities incurred prior to the commencement of the restructuring proceedings in accordance with applicable law. Foreign exchange risk There were no derivative foreign currency transactions made in 2022 and 2021. Monetary assets and liabilities of the Group denominated in various currencies as at 31 December 2022 and 2021 were as follows: SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 53 2022 2021 Assets Liabilities Assets Liabilities EUR 2,203 19,082 4,375 18,646 USD - - - 66 Other 1 - 1 - Total 2,204 19,082 4,376 18,712 Monetary assets and liabilities of the Company denominated in various currencies as at 31 December 2022 and 2021 were as follows: 2022 2021 Assets Liabilities Assets Liabilities EUR 1,982 19,091 4,233 18,671 USD - 1 66 Total 1,982 19,091 4,234 18,737 Capital management The Group and the Company manage share capital, legal reserves, reserves, foreign currency translation, revaluation reserves and retained earnings as capital. The primary objective of the Group’s and the Company’s capital management is to ensure that the Group and the Company comply with the externally imposed capital requirements and to maintain appropriate capital ratios in order to ensure their business and to maximise the shareholders’ benefit. The Group and the Company manage their capital structure and make adjustments to it in the light of changes in the economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Law on Joint-Stock Companies of the Republic of Lithuania requires that the Company's equity capital shall be at least 50% of its share capital. As at 31 December 2022, the Company did not comply with this requirement. The Company's equity capital is negative. The issue of compliance with the share capital will be resolved during the restructuring of the Company. 30. Commitments and contingencies The tax authorities may at any time perform investigation of the Company’s accounting registers and records for the period of five years preceding the accounting tax period, as well as calculate additional taxes and penalties. Management of the Company is not aware of any circumstances, which would cause calculation of additional significant tax liabilities. Kaunas District Court by the order of 8 September 2022 in civil case No. eB2-1226-555/2022 has opened restructuring proceedings in respect of Snaigė AB (The Company). The order of Kaunas District Court to initiate of restructuring proceedings came into force and Snaigė AB obtained the status of company under restructuring on 20 September 2022. The Company under restructuring continue commercial activities. The corporate commercial activities managed by the Company's management bodies in accordance with their competence and in compliance with the restrictions set out in the order of the Kaunas District Court of 8 September 2022. However, in the course of the process, legal disputes may arise between the Company, its shareholders, creditors or other interested parties concerning the restructuring plan itself or its implementation, which may directly or indirectly affect the Company. 31. Related party transactions According to IAS 24 Related Party Disclosures, the parties are considered related when one party can unilaterally or jointly control other party or have significant influence over the other party in making financial or operating decisions or operation matters, or when parties are jointly controlled and if the members of management, their relatives or close persons who can unilaterally or jointly control the Company or the Group or have influence on it. To determine whether the parties are related the assessment is based on the nature of relation rather than the form. The controlling parties of the Group during 2022 and 2021 were as follows: Vaidana UAB (former controlling party); Hymana Holdings Ltd. (former controlling party); Sekenora Holdings Limited (the parent). SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 54 The Group has a policy to conduct related party transactions on commercial terms and conditions. Outstanding balances at the year-end are unsecured, interest-free, except the loan granted. As at 31 December 2022 and 31 December 2021 the Group has not formed any impairment allowances for doubtful debts, related to receivables from related parties for sales and provided services. Doubtful receivables are tested each year by inspecting the financial position of the related party and assessing the market in which the related party operates. Financial and investment transactions with the related parties over the year: 2022 2021 Loans Interest Loans Interest Loans Interest Loans Interest Companies, received expenses granted income received expenses granted income controlled by ultimate - - - - - - - - shareholders Controlling - - - - - - - - parties - - - - - - - - 2022 Purchases Sales Receivables Payables Companies, controlled by ultimate shareholders 72 22 494 - Controlling parties - - - - Total 72 22 494 - 2021 Purchases Sales Receivables Payables Companies, controlled by ultimate shareholders 203 83 638 94 Controlling parties - - - - Total 203 83 638 94 The Company’s transactions carried out with subsidiaries: Purchases Sales 2022 2021 2022 2021 Subsidiaries 207 284 147 99 The Company has a policy to conduct transactions with subsidiaries on contractual terms. The Company’s transactions with subsidiaries represent acquisitions and sales of raw materials and finished goods and acquisitions of marketing services, as well as acquisitions of property, plant and equipment. Outstanding balances at the year-end are unsecured, receivables are interest-free and settlement occurs at bank accounts. There were no pledged significant amounts of assets to ensure the repayment of receivables from subsidiaries. The carrying amount of loans and receivables from subsidiaries as at 31 December in the statement of financial position: 2022 2021 Current receivables Subsidiaries 63 23 Total current receivables 63 2 3 SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 55 The delay analysis of receivables from subsidiaries and granted loans during the period as at 31 December: Receivables from Receivables from subsidiaries and granted loans past due subsidiaries and granted Less but not impaired Total loans neither past due 30–60 60–90 90–120 More than nor impaired than 30 days days days days 120 days 2022 30 15 18 - - - 63 2021 23 - - - - - 23 Payables to subsidiaries as at 31 December (included under the trade payables caption in the Company’s statement of financial position): 2022 2021 Subsidiaries 170 89 Remuneration of the management and other payments Remuneration of the Group’s management amounted to EUR 922 thousand (21 employees) during the twelve months of 2022, in 2021 – EUR 1,091 thousand (24 employees). The management of the Group did not receive any other loans, guarantees; no other payments or property transfers were made or accrued. 32. The Impact of the Military Conflict in Ukraine In response to the geopolitical situation, Snaigė AB has taken all necessary measures to preserve the continuity of the company's operations, employees, clients and partners. At the time of issuing the Statements, the Company continues to operate. Snaigė AB is able to fulfil the placed orders and fulfils them to the best of its ability; however, there are additional potential risks to the Company's operations: - At the time of preparing the Statements, no sanctions related to the military conflict have been imposed on the Company, its management or shareholders. - At the time of preparing the Statements, exports of production to Ukraine are partially resumed. An impairment loss was recognised for receivables from Ukrainian customers. Raw material supplies from Ukraine have partially resumed, but their volumes in 2022 were insignificant (about 1% of total purchases) and the suspension of supplies from Ukraine does not have a direct impact on the Company's operations. - Exports of products to Russia and Belarus are suspended, although there are no trade restrictions or sanctions on the products or the Company’s customers at the time of preparing the Statements. The Company’s revenue in 2022 from sales in Russia and Belarus amounted about 2% of the Company's total turnover. As at 22 August 2022, receivables from Russian and Belarusian customers were insignificant. Raw material supplies from Belarus and Russia are not ongoing, but their volumes in 2022 were insignificant (less than 1% of total purchases). The suspension of supplies from Russia and Belarus does not directly affect the Company's operations. - The indirect impact of the conflict on the Company's and the Group's operations is very negative because: o Due to the resulting tensions, a significant slowdown in trade is observed in almost all of the company's markets (up to 50% of normal volumes in different markets, according to expert estimates). o Significant increases in raw material, transport and energy prices due to the uncertainties caused by the war in Ukraine, and the opportunities to purchase them are decreasing, which has a negative impact on the Company's and the Group's operating results. - There is a risk that the estimates used in the Company's and the Group's accounting, due to the market value of assets, the fair market value of financial instruments and going concern assumptions, may be inaccurate, as it is not yet possible to predict the exact consequences of military conflict for these sizes. At present, it is quite difficult to reasonably estimate the impact on the financial results due to various uncertainties. However, Snaigė AB exports its products to more than 30 countries in Europe, Asia and Africa, therefore, the company expects to compensate for poor sales in Ukraine and other markets. 33. The process of Company restructuring In order to implement the restructuring according to the draft restructuring plan of the Company approved by the extraordinary general meeting of the Company's shareholders on 23 July 2022, Snaigė AB on 1 July 2022 applied to the Kaunas District Court with a request to initiate the Company's restructuring case. Kaunas District Court by the order of 8 September 2022 in civil case No. eB2-1226-555/2022 has opened restructuring proceedings in respect of Snaigė AB (The Company). UAB Įmonių Bankroto Administravimo ir Teisinių Paslaugų Biuras (UAB Office of Enterprise Bankruptcy Administration and Legal Services) was appointed as the Administrator (No N-JA0027), authorised person – Aurimas Valaitis. SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (all amounts are in EUR thousand unless otherwise stated) 56 The order to initiate of restructuring proceedings came into force and Snaigė AB obtained the status of company under restructuring on 20 September 2022. Pursuant to the Article 28 of the Law on Insolvency of Legal Entities, from the date of entry into force of the decision to open restructuring proceedings, i.e. from 20 September 2022, and until entry into force of the court's order to approve the Restructuring Plan or to terminate the insolvency proceedings, Snaigė AB is prohibited the following: 1. To execute financial obligations of the company which have not been fulfilled before the date of entry into force of the of the court's order to open restructuring proceedings, including the payment of taxes, interest and penalties; 2. To recover debts from the company; 3. To set off claims other than homogeneous counter-claims which satisfy both of the following conditions: arose before the date of entry into force of the court's order to open restructuring proceedings and such set-off is possible in accordance with the provisions of the tax legislation on off-setting of tax overpayment (arrears); 4. To calculate penalties and interest on the Company’s obligations arising before the date of entry into force of the court's order to open restructuring proceedings; 5. To fix forced mortgage, easements, usufruct; 6. To pledge the property, guarantee, ensure or otherwise guarantee the fulfilment of obligations of other persons; 7. To sell or otherwise transfer the assets of the company necessary to maintain its viability. The company under restructuring pays all current contributions, i.e. all payments and contributions necessary to ensure the business activities of the company, including the compulsory contributions, which are made during the restructuring proceedings, starting from the date of entry into force of the court's order to open restructuring proceedings. The Company's obligations to creditors, arising before the date of entry into force of the court's order to open restructuring proceedings, i.e. before 20 September 2022, will be executed with the terms and conditions set out in the restructuring plan. Meeting of the Company's creditors, at which the draft restructuring plan will be discussed, will be convened in March 2023 (Note 34). The company under restructuring continue commercial activities. The corporate commercial activities managed by the company's management bodies in accordance with their competence, as set out in the Company's statutes and other documents governing the Company's activities, and in accordance with the restrictions laid down in the Law on Insolvency of Legal Entities and in the order of Kaunas District Court of 8 September 2022. On 2 January 2023, Snaigė AB held an Extraordinary General Meeting of Shareholders, at which the shareholders approved the Company's restructuring plan. On 20 January 2023, by the decision of the Kaunas District Court, the deadline for submitting the restructuring plan of Snaigė AB to the court was extended until 20 March 2023. On 27 February 2023, an Extraordinary General Meeting of Shareholders approved the revised restructuring plan. On 20 March 2023, a request for approval of the restructuring plan was submitted to the Kaunas District Court. On 4 April 2023, the Kaunas District Court did not approve the restructuring plan of AB Snaigė. On 12 April 2023, a decision was taken to appeal against the decision of the Kaunas District Court not to approve the restructuring plan. 34. Subsequent events On 28 April 2023 the ordinary General Meeting of Shareholders of Snaigė AB is convened. Agenda of the Meeting: The agenda question 1: Consolidated annual report of “Snaigė” AB on the company’s activity for 2022 with information about the Company strategy and its implementation; The agenda question 2: Auditor's report on the company's 2022 financial statements; The agenda question 3: Approval of the set of financial statements of the company for 2022; The agenda question 4: Approval of distribution of profit (loss) of Snaigė AB for 2022; The agenda question 5: Election of the Board for a new term; The agenda question 6: Election of the Audit Committee for the new term. The agenda question 7: Approval of an amendment to the Company's restructuring plan. Consolidated annual report for 2022 57 UNDER RESTRUCTURING SNAIGĖ AB AND GROUP CONSOLIDATED ANNUAL REPORT, CORPORATE GOVERNANCE REPORT AND CORPORATE REMUNERATION REPORT 2023-04-19 Consolidated annual report for 2022 58 Confirmation of responsible persons Members of the Company's management bodies, employees and the head of administration and the Company's consultants, responsible for preparation of the consolidated annual report and the consolidated financial statements for 2022, confirm that, to their knowledge, the annual consolidated financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union are accurate and present fairly the assets, liabilities, financial position, profit or loss of the Company and the consolidated entities, and that the consolidated annual report correctly presents an overview of business development and operations, the condition of the Company and its consolidated companies together with a description of main risks and uncertainties encountered. Report prepared 19 of April, 2023 Place of preparation of the report: Snaigė AB, Pramonės str. 6, Alytus Consolidated annual report for 2022 59 Contents 1 GENERAL INFORMATION ............................................................................................................................... …...60 1.1 Reporting period for which the annual report is prepared .................................................................................. 60 1.2 Basic information about the company ................................................................................................................ 60 1.3 The type of the Company’s main business activities ......................................................................................... 60 1.4 The Company’s group structure ........................................................................................................................ 60 1.5 Information about the Company’s offices and affiliates ...................................................................................... 60 1.6 Short history of the Company’s activities ........................................................................................................... 61 1.7 Mission. Vision. Values ...................................................................................................................................... 62 1.8 List of the most important events in 2022 .......................................................................................................... 63 2. CORPORATE GOVERNANCE REPORT 2.1 AB SNAIGĖ GOVERNANCE AND MANAGEMENT ............................................................................................. 63 2.1.1 The Company’s Management bodies ............................................................................................................. 63 2.1.2 Corporate governance bodies ........................................................................................................................ 63 2.1.3 The Company’s group’s management structure ............................................................................................. 65 2.1.4 Procedures of changing the Company’s articles of association ...................................................................... 65 2.2 AB SNAIGĖ AUTHORISED CAPITAL, SHAREHOLDERS, INFORMATION ABOUT SECURITIES .................... 66 2.2.1 Issuer’s authorized capital .............................................................................................................................. 66 2.2.2 Shareholders .................................................................................................................................................. 66 2.2.3 Information about trading of issuer’s securities in the regulated markets ....................................................... 67 2.2.4 Information about the repurchase of own shares ............................................................................................ 69 2.2.5 Dividends ........................................................................................................................................................ 69 2.2.6 Contracts with public circulation of securities dealers ..................................................................................... 69 2.2.7 Restrictions on transfer of securities ............................................................................................................... 69 2.3 SNAIGĖ OPERATING REVIEW ........................................................................................................................... 70 2.3.1 General rates, describing the Company's business performance, their behaviour ......................................... 70 2.3.2 Production ...................................................................................................................................................... 70 2.3.3 Sales ............................................................................................................................................................... 71 2.3.4 Supply ............................................................................................................................................................. 74 2.3.5 Employees and human resource policy .......................................................................................................... 74 2.3.6 Investment policy ............................................................................................................................................ 76 2.3.7 Environment protection ................................................................................................................................... 77 2.3.8 Risk factors related to the business of the Company ...................................................................................... 77 2.3.9 Related party transactions .............................................................................................................................. 78 2.4 DISCLOSURE FORM CONCERNING THE COMPLIANCE WITH THE GOVERNANCE CODE FOR THE COMPANIES LISTED ON THE REGULATED MARKET….…………………………………………….........................78 3 OTHER INFORMATION ABOUT SNAIGĖ AB ......................................................................................................... 93 3.1 Membership in associated organizations ........................................................................................................... 93 3.2 Patents, licenses................................................................................................................................................ 93 3.3 Recent and the most important events of the Company .................................................................................... 93 3.4 Strategies and plans ........................................................................................................................................ 104 4 CORPORATE REMUNERATION REPORT ……………...……………………………..............................................105 Consolidated annual report for 2022 60 1. GENERAL INFORMATION ABOUT AB SNAIGĖ 1.1 Reporting period for which the annual report is prepared Annual report is prepared for year 2022. 1.2 Basic information about the company The name of the Company – SNAIGĖ AB (hereinafter referred to as “the Company”) Authorised capital as of 31 December 2022 – EUR 6,735,807.15 Address – Pramonės str. 6, LT-62175 Alytus Phone – (+370 315) 56 206 Fax – (+370 315) 56 207; (+370 315) 56 269 E-mail – snaige@snaige.lt Internet web page – http://www.snaige.lt Legal organisation status – legal entity, public limited company Registered as a Public Enterprise of the Republic of Lithuania (hereinafter referred to as LR) on 1 December 1992 in the Municipality Administration of Alytus; registration number AB 92-119; enterprise register code 249664610. The latest Articles of Association of Snaigė AB were registered on 24 November 2021 in the Register of Legal Entities of the Republic of Lithuania. 1.3 The type of the Company’s main business activities The main business activities of the Company are manufacture of refrigerators and freezers, the manufacture of household electrical appliances and other activities permitted by the laws of Lithuania as indicated in the Articles of Association. 1.4. The Company’s group structure 1.4.1 Information about the Company‘s subsidiaries The Company’s group consists of the refrigerator manufacturer Snaigė AB, based in Alytus, and the following subsidiaries: • Almecha UAB. Main activity – manufacturing of miscellaneous machinery and equipment. The enterprise was registered in November 2006. Address: Pramonės str. 6, Alytus, Lithuania. • Snaigė-Ukraine OOO. Main activity – sales of refrigeration appliances, sales, consulting and services. The enterprise was registered in November 2002. Address: Grushevski str. 28-2a/43 Kiev, Ukraine 1.5 Information about the Company’s offices and affiliates The Company has no offices and affiliates. Consolidated annual report for 2022 61 1.6 Short history of the Company’s activities • 1963 – The first household refrigerators in Lithuania are manufactured in Alytus. • 1975 – Over 1 million refrigerators manufactured by this year. • 1983 – The Company started export to foreign countries. • 1990 – The Company has come under the control of the Republic of Lithuania. • 1992 – The Company has been privatised and registered as a public limited liability the Company. • 1995 – The Company was retooled. Use of Freon in the manufacture of refrigerators is discontinued. All the Company's products are manufactured only from ecologically clean materials. • 1997 – The Company has achieved ISO 9001 certification for implementing international quality management standards. • 2000 – The Company's quality management system was successfully re-certified for ISO 9001. • 2001 – The Company has achieved ISO 14001 certification for implementing an environmental management system. • 2002 – The Company started to produce a refrigerator with R600a environmentally friendly refrigerant; Started A + energy efficiency refrigerator production; Snaigė become EU project "Energy +" participant. • 2003 – A + Grade energy efficiency fridge Snaigė RF310 won the LCI contest "Product of the Year” Gold Medal. • 2004 – The Company opened its new plant in Kaliningrad. • 2006 – The Company acquired 100% of the capital of the Russian wholesale and retail Company Liga Service. • 2006 – Snaigė has made its 10 millionth refrigerator. • 2006 – Display-Cooler Snaigė CD480 awarded by golden medal in annual competition "Lithuanian product of the Year". • 2006-2007 Snaigė recognised as the most innovative Lithuanian Company. • 2007 – The Company's environmental management system ISO 14001 successfully certificated. • 2007 – Snaigė Alytus plant started serial production of new line models “Snaigė ICE LOGIC” production. • 2007 – Refrigerator Snaigė ICE LOGIC RF34SH A+ awarded "Product of the Year" gold medal. • 2008 Snaigė ICE LOGIC RF31SM A+ was assesed as the "Product of the Year" and awarded a gold medal. • 2008 – Snaigė awarded for "Innovation Award“. • 2009 – The loss of production and devaluation of the ruble conditioned to close the Company's factory in Kaliningrad. • 2010 – AB Snaigė's environmental protection and occupational safety and health management systems have been successfully re-certified for a new three-year period. • 2010 – Refrigerator Snaigė ICE LOGIC RF34SM A++ awarded by golden medal in annual competition "Lithuanian product of the Year". • 2011 – Refrigerator Snaigė ICE LOGIC Glassy RF34SM A++ awarded by golden medal in annual competition "Lithuanian product of the Year". • 2011 Russian company Polair, indirectly acting through UAB VAIDANA, acquired 59.86% of all shares of the Company. • 2013 – Snaigė received the Lithuanian Exporter of the Year Award. • 2013 – Snaigė won within category „The Innovative company“ and was awarded with the „Innovation Prize 2013“. • 2013 – the first Lithuanian refrigerator RF34NM with frost-free "No Frost" refrigeration system is ready and launched on the market. • 2013 – Snaigė ICE LOGIC Glassy "Side by side" refrigerator C 29SM - freezer F 22SM A++ is awarded by golden medal in annual competition "Lithuanian product of the Year. • 2013 – Production of the highest energy efficiency class A +++ refrigerator Snaigė ICE LOGIC RF34SM is ready. • 2013 – AB Snaigė participated in the project for small and medium business "Gazelė 2013" organized by "Verslo žinios" and is recognized as one of the most successful and fastest growing Lithuanian companies. • 2014 – Refrigerator Snaigė NO FROST RF34 awarded by golden medal in annual competition "Lithuanian product of the Year". • 2015 – In September, the Company attended the international trade show for home appliances IFA 2015 in Berlin where it presented its latest products. SNAIGĖ’s stand attracted much interest from both the attendees of the trade fair Consolidated annual report for 2022 62 and the potential clients. What is more, a fridge upholstered in faux crocodile leather raised great interest from the journalists of the international newspaper and portal USA TODAY. • In 2015, the Company launched a new commercial display fridge CD40. • In 2015, Snaigė AB launched its trading operations and successfully positioned itself in Norway, Sweden, Israel, Georgia and Azerbaijan. • In 2015, the Company introduced its customers to a few new and unique products: luxurious double fridge-freezers with glass surface doors RF34TWINS and a single-door fridge C31 welcomed by the buyers in France and across the Scandinavian countries, along with new products: cooler C 31 and freezer F 27 combination with glass surface doors. • In 2015, existing fridges had enhancements: electronic controls in SNAIGĖ Ice Logic fridge-freezers, introduced. • In 2015, the mass production of fridges with a freezer at the bottom RF31/RF36 A++ with partial NO FROST system was launched. • In 2015, the design of the Young and the Premium refrigerators was implemented for Polish manufacturer AMICA. • In 2016, AB Snaigė fridges climbed to the top of the Lithuanian market. The Company had an 18% share of the refrigerator market. • In 2016, the Company launched its export operations to Jordan. • In 2016, the Company launched its cooperation with one the major Czech home appliance retail chain FAST. • In 2016, the Company’s products were presented in three trade shows in the Czech Republic held by the Company’s trade partners. • In 2017, AB Snaigė developed two new refrigerator design lines SNAIGĖ Fresh Inn and SNAIGĖ Retro and prepared them for mass production. • In 2017, AB Snaigė took part in a trade show for home appliances in the Czech Republic. • In 2017, the Company began trading in Belarus. • In 2018, the Company's business was repeatedly awarded the ISO 9001 certificate. • In 2018, the mass production of the new design lines SNAIGĖ Fresh INN and SNAIGĖ Retro was launched. • In 2018, Snaigė's own stand was opened in a store owned by the Bulgarian home appliance chain Technopolis. • 2019 – a 700 l commercial refrigerator was developed. • 2019 – an inverter compressor has been introduced in refrigerators with a frost-free refrigeration system. • 2020 – Serial production of professional refrigeration equipment "block system" has started. • 2020 – Developed and launched serial production of new refrigerators with the freezer on top (FR25, FR26, FR27). • 2021 – The SNAIGĖ medical refrigerator has received DIN13277 certification. • 2021 – The Company started serial production of medical refrigerators. • 2021 – A refrigerator for a professional kitchen has been developed. • 2022 – The freezer CF70 MF was designed for professional kitchens • In 2022, the Company began a restructuring process. 1.7 Mission. Vision. Values. Mission Our Mission is to develop financially disciplined business that provides consumers with good value and quality products and our shareholders with top-tier returns on their investments. Vision To become the most reliable home appliances brand for consumers in the Eastern Europe and the preferred choice for OEM supplier in the Western Europe. Values Open minded Trustworthy Teamwork Flexibility Consolidated annual report for 2022 63 1.8 List of the most important events in 2022 • 2022 – The freezer CF70 MF was designed for professional kitchens. • 2022 – The black refrigerator CD35DM has been released. • 2022 – New colours added to the retro design line: apple green, yellow and cobalt blue. • In 2022, RF27SM launched with a higher energy class E. • 2022 – The company started the restructuring process. • 2022 – The company started selling its products in Greece. • 2022 – SNAIGE AB started selling monoblocks in Germany. 2. CORPORATE GOVERNANCE REPORT 2.1 AB SNAIGĖ GOVERNANCE AND MANAGEMENT 2.1.1 The Company’s Management bodies 2.1.1.1 Management bodies Management bodies: • General shareholders meeting; • The management board is formed of five members and elected for the period of 4 years; • Head of the Company – Managing Director. The calling of general shareholder meeting, the competence of the meeting has no differences from the procedures and competences indicated in the Law on Companies of Republic of Lithuania. The management board is elected and resigned by general shareholders meeting according to the procedures indicated by the Law on Companies. The management board has a right to take decision to issue bonds. The competence of the management board has no other differences from the competences indicated in the Law on Companies. The work procedures of the management board are set by the board’s work rules of procedure. The competence of the head of the Company, his nomination and resignation procedures are not different from those indicated in the Law on Companies. The Company has the audit committee which is the operating collegial administrative body and which was elected by shareholders in 2009. The audit committee is operating by audit committee’s labour regalement. During the General Meeting of Shareholders held in 2019, the shareholders appointed two elected independent members of the Board to the Audit Committee and authorized the Board of the Company to appoint members to the Audit Committee in the future. 2.1.1.2 Legal basis of the Company’s operations Snaigė AB uses the Company’s articles of association, Law on Companies of the Republic of Lithuania, other legal acts issued by the Republic of Lithuania and European Union as legal guidelines for operations. 2.1.2 Corporate governance bodies 2.1.2.1 Information about the members of management bodies with regard to the share of the Company’s authorized capital NAME Position Available number of shares, units Share capital, per cent Votes, per cent BOARD Aleksey Kovalchuk Snaigė AB chairman of the board - - - Konstantin Kovalchuk Snaigė AB member of the board - - - Anna Korneeva Snaigė AB member of the board - - - ADMINISTRATION (Managing Director and Chief Financial Officer) Mindaugas Sologubas Snaigė AB Managing Director - - - Vytautas Adomaitis Snaigė AB Chief of the Accounting and Finance Department - - - Consolidated annual report for 2022 64 2.1.2.2 Information on the management bodies involvement in other companies, institutions and organizations Participating in other companies activities and interests (31 December 2022): Name Name of organisation, position Share of the capital and votes available in other companies, in percentage Aleksey Kovalchuk Does not participate in other Lithuanian companies activities and interests - Konstantin Kovalchuk Does not participate in other Lithuanian companies activities and interests - Anna Korneeva Does not participate in other Lithuanian companies activities and interests - Mindaugas Sologubas Almecha UAB member of the board - Verslo Architektūra UAB Managing Director 100% Vytautas Adomaitis Does not participate in other Lithuanian companies activities and interests - 2.1.2.3 Chairman of the board, head of administration and chief financial officer Name Education, profession Workplaces in the last 10 years and positions in them Aleksey Kovalchuk Finance Academy under the Government of the Russian Federation Managing Director of OAO Polair 2009–2013 Managing Director of ZAO Polair-Nedvizhimost Advisor JSC AVIKON Mindaugas Sologubas Stockholm School of Economics in Riga, Bachelor of Economics and Business Vytautas Magnus University, Master of Finance and Banking Managing Director of SNAIGE AB from 21 September 2019. Finance Director of SNAIGE AB from September 2014. Director of Verslo Architektūra UAB from August 2013. Director of ZAO LIGRIS, Nikolaev, Ukraine, from October 2011 to July 2013. Chief Financial Officer of GRANEX UAB from June 2008 to October 2011. Vytautas Adomaitis Vilnius State University, Faculty of Economic Cybernetics and Finance, specialization of economist- accountant Head of the Accounting and Finance Department SNAIGE AB from 03 October 1983. 2.1.2.4 Information about start date and end date of the office term of each member of the management body NAME Start date of the office term End date of the office term BOARD Aleksey Kovalchuk 14/12/2011 Until February 2023 Oleg Tsarkov 30/04/2015 13/10/2022 Konstantin Kovalchuk 30/04/2018 Until February 2023 Anna Korneeva 15/05/2019 Until February 2023 ADMINISTRATION (Managing Director and Chief Accountant) Mindaugas Sologubas 21/09/2019 Term less agreement (23/09/2014 – 20/09/2019 Finance Director Snaige AB) Vytautas Adomaitis 03/10/1983 Term less agreement Consolidated annual report for 2022 65 2.1.2.5 Information regarding valid conviction of the members of the management bodies for the offences against property, farming procedure and finance There is no such information. 2.1.2.6 Information about benefits and loans granted to governing bodies No benefits and loans granted to governing bodies in 2022. 2.1.2.7 Information about the total amounts and average amounts of the salaries, tantiemes and other profit benefits paid by the Company during the reporting period per person During 2022, no salaries were paid to the board members. 2.1.2.8 Information about the salaries, tantiemes and other profit benefits paid to the members of the Company’s Supervisory Board and the Board sourced from the enterprises where the share of the authorized capital owned by the Company amounts to more than 20 percent No such payments were made during the accounting period. 2.1.2.9 Information about loans, warranties and securities of the performance of liabilities granted to the members of the management bodies during the accounting period No loans, guarantees or securities were issued for the members of managements bodies during the accounting period. 2.1.2.10 Important agreements, the party of which is the Company and which would take effect, change, or would stop being valid in case the control of the Company changes, also the effect of such agreements, except from the cases when the disclosure of such agreements would result in large damage to the Company As far as it is known to the Company, there are no such agreements. 2.1.2.11 The Company’s and its management bodies members or employees agreements, describing compensation in case the members or employees resign, or are fired without grounded reason, or if their employment ends because of change of control of the Company As far as it is known to the Company, there are no such agreements. 2.1.3 The Company’s group’s management structure Mindaugas Sologubas – Managing Director. Rūta Petrauskaitė – Marketing Director. Ruslanas Lugovik - Executive Director. Vytautas Adomaitis – Chief of the Accounting and Finance Department. 2.1.4 Procedures of changing the Company’s articles of association The articles of association of the Company can be modified by the decision of general shareholders meeting, with the qualified majority of 2/3, except from the cases described in the Law on Companies. After the general meeting of the shareholders takes a decision to modify the articles of association, the list of all the modified text in the articles is made and signed by the attorney of the general meeting. Modified articles and documents confirming the decisions to modify the articles have to be submitted to the register of the enterprises during the period specified by the law. In other cases, not described by the Company’s articles of association the Company follows the Civil Code of the Republic of Lithuania, Law on Companies and other legal acts of the Republic of Lithuania. Consolidated annual report for 2022 66 2.2 AB SNAIGĖ AUTHORISED CAPITAL, SHAREHOLDERS, INFORMATION ABOUT SECURITIES 2.2.1 Issuer’s authorized capital 2.2.1.1 The authorized capital registered in the enterprise register Name of the securities Amount of the securities Nominal value, EUR Total nominal value, EUR Share of the authorized capital, in percentage Ordinary registered shares, ISIN LT0000109274 39,622,395 0.17 6,735,807.15 100 2.2.1.2 Changes in authorized capital during the last 5 years Registration of changed authorized capital The size of the authorized capital before the change Change Reason for change The size of the authorized capital after the change 24/09/2019 11,886,718.50 EUR - 1,584,895.80 The reduction of the authorised capital by reducing nominal value, in order to comply with the provisions of the Law on Companies of the Republic of Lithuania 10,301,822.70 EUR 19/08/2020 10,301,822.70 EUR - 3,566,015.55 Reduction of the authorized capital by reducing the nominal value by transferring this amount to the revaluation reserve. 6,735,807.15 EUR 2.2.1.3 Information with regard to prospective increase of the authorized capital by converting or trading the issued loans or secondary securities for the shares There are no issued debts or secondary securities. 2.2.2 Shareholders 2.2.2.1 Largest shareholders 4.09% of the Company’s authorized capital is owned by the companies and individuals registered in Lithuania, 95.91% for non-residents. As of 31 December 2022, the total number of the Company’s shareholders comprised 1153 (as of 31 December 2021 – 1080). The major shareholder of the Company is Sekenora Holdings Limited, which controls 91.10% of shares. The major shareholders who own or control more than five percent of the issuer’s authorized capital as of 31 December 2022 are listed below: Names (company names, addresses, enterprise register codes) of the shareholders Amount of the ordinary registered shares available, in pcs. Share of the authorized capital and votes available, in percentage Total incl. the ones owned by the shareholder Total incl. the ordinary registered shares owned by the shareholder Total incl. the share of the entities group operating jointly, in percentage share of the votes share of the capital share of the appointed votes share of the capital Sekenora Holdings Limited, 32 Kritis str., Papachristoforou Building, Cyprus, HE371000 36,096,193 36,096,193 91.10 91.10 91.10 91.10 - Consolidated annual report for 2022 67 2.2.2.2 Shareholders with special control rights There are no shareholders with special control rights. 2.2.2.3 Restrictions of shareholders voting rights All the shareholders have equal voting rights. 2.2.2.4 Shareholders agreements, about which the Issuer is informed and due to which the transfer of securities or voting rights can be restricted The issuer has no information about any shareholder agreements of such type. 2.2.3 Information about trading of issuer’s securities in the regulated markets 2.2.3.1 Securities included in the trading lists of regulated markets 39,622,395 ordinary registered shares of Snaigė AB are included into the Secondary trading list of the NASDAQ OMX Vilnius Stock Exchange. The total nominal value of the shares is EUR 6,735,807.15. ISIN LT0000109274. The nominal value of one share is EUR 0.17. 2.2.3.2 Trade of the issuer’s securities in stock exchanges and other organized markets Trade of the Company’s ordinary registered shares in the securities stock exchange was started on 11 August 1995. The ordinary registered shares of Snaigė AB have been listed in the Official trading list of NASDAQ OMX Vilnius Stock Exchange since 9 April 1998 until 8 May 2009. Since 8 May 2009, the Company on its own initiative requested NASDAQ OMX to switch its shares from NASDAQ OMX Vilnius Official listing and add them to the NASDAQ OMX Vilnius Secondary listing. 2.2.3.2.1 Trade on NASDAQ OMX Vilnius stock exchange Trade in the Company’s shares during 2019-2022 (EUR) Price 2022 2021 2020 2019 Open 0.19 0.22 0.15 0.13 High 0.194 0.28 0.24 0.2 Low 0.1 0.178 0.102 0.116 Last 0.12 0.19 0.19 0.151 Traded volume 248,731 745,301 280,479 200,011 Turnover, million 0.04 EUR 0.16 EUR 0.05 EUR 0.03 EUR Capitalisation, million 4.75 EUR 7.53 EUR 7.53 EUR 5.98 EUR Below you can find the graphs of the Company’s shares turnover and prices during last 5 years. The data from AB NASDAQ OMX Vilnius webpage: https://nasdaqbaltic.com/statistics/lt/instrument/LT0000109274/trading Consolidated annual report for 2022 68 The price of share is in EUR because the trade of shares is in EUR from 22 November 2010. The price of share during the reporting year (information from AB NASDAQ OMX Vilnius webpage): https://nasdaqbaltic.com/statistics/lt/instrument/LT0000109274/trading The share prices graphs of OMX Baltic Benchmark, OMX Vilnius indexes and Snaigė AB for the period from 31 December 2021 until 31 December 2021 are presented below. The information is from AB NASDAQ OMX Vilnius webpage: https://www.nasdaqbaltic.com/statistics/lt/charts Consolidated annual report for 2022 69 Baltic Market indexes 2.2.3.2.2 Trade on other regulated markets The securities are not traded on other regulated markets. 2.2.3.3 Capitalization of securities Capitalisation of Snaigė AB shares and the total capitalisation of shares listed on AB NASDAQ Vilnius on the last trading days of the last year: Baltic equity list 2022 2021 2020 2019 Capitalization, million 4.75 EUR 7.53 EUR 7.53 EUR 5.98 EUR 2.2.4 Information about the repurchase of own shares During 2022, no repurchase of own shares was made. The Company had no own shares at the end of 2022. 2.2.5 Dividends The Company does not have an established procedure for allocation of dividends. The General Shareholders’ Meeting decides whether to pay dividends. 2.2.6 Contracts with public circulation of securities dealers On 20 May 2013, Snaigė AB entered into a contract with UAB FMĮ Orion securities (A. Tumėno str. 4, Vilnius) on the accounting of the financial instruments issued by the Company and management of private securities accounts. 2.2.7 Restrictions on transfer of securities There are no restrictions on the transfer of securities issued. Consolidated annual report for 2022 70 2.3. SNAIGĖ OPERATIONS REVIEW 2.3.1 General rates, describing the Company's business performance, their behaviour The financial figures for the last year are presented in general. (consolidated data): 2022 2021 2020 Turnover (continuing operations), EUR thousand 21,220 33,538 29,418 Gross profit (continuing operations), EUR thousand (609) 3,249 3,150 Net profit (loss) from continuing operations, EUR thousand (5,170) (1,974) 158 Net (loss) from discontinued operations, EUR thousand - - - Net profit (loss), EUR thousand (5,170) (1,974) 158 Average share price, EUR 0.147 0.215 0.163 Financial figures 2022 2021 2020 Profit before tax indicator, % (current year profitability of continuing operations) -27.02% -5.81% 0.42% General mark-up (continuing operations), % -2.87% 9.69% 10.71% EBITDA mark-up (continuing operations), % -12.95% 1.50% 9.2% Solvency ratio, % (general short-term solvency) 333.93% 91.06% 112.79% Debt to assets ratio, % (general debt ratio) 108.01% 86.43% 77.65% Return on average shareholders’ equity (continuing operations), % -357.93% -55.29% 2.85% Shares indicators 2022 2021 2020 Net profit per share (continuing operations), EUR -0.13 -0.05 0.004 Net loss per share (discontinued operations), EUR - - - Net profit per share (total), EUR -0.13 -0.05 0.004 Average annual share market price, EUR 0.147 0.215 0.163 EBITDA per share (continuing operations), EUR -0.07 0.01 0.07 EBITDA multiplier (EBITDA per share / Average annual share market price) -0.48 0.05 0.43 Total dividends, EUR thousand - - - Dividends per share, EUR - - - Average net book share value (continuing operations), EUR -0.04 0.09 0.14 2.3.2 Production 2.3.2.1 The Company's product portfolio Snaigė AB specialises in high-quality household refrigerators and freezers. It also produces refrigerators for commercial use and for hotels and restaurants, as well as industrial refrigeration units. Spare parts for refrigerators, tools and equipment are also produced. The Company produces various high quality models of household refrigerators, refrigerator-showcases, wine refrigerators, freezers and their spare parts. The Company’s main products is refrigerators. They are classified in several main categories: • Combined refrigerators with separate external doors; • Single cooler refrigerators; • Freezers; • Commercial and medical refrigerators. The industrial refrigeration segment - monoblocks - continues to develop. Combination refrigerators with separate external doors were the most produced and sold in 2022. Consolidated annual report for 2022 71 The consolidated sales figures for the last three years are as follows: Type of activities 2022 2021 2020 units % units % units % Company’s produced refrigerators sold, units 77,633 100 155,259 100 147,913 100 including: Combined refrigerators with separate external door 35,290 45.5 82,104 52.9 77,064 52.1 Domestic refrigerators (single cooler) 12,000 15.4 25,188 16.2 17,728 12.0 Freezers 6,061 7.8 18,660 12.0 32,950 22.3 Commercial refrigerators 23,520 30.3 29,097 18.7 20,171 13.6 Monoblocks 762 1.0 210 0.1 2.3.2.2 Termination or reduction of production volume with the critical effect on the Company’s performance during the recent 3 economical years During the recent 3 economical years no termination or reduction of production volumes with a critical effect on the Company’s performance occurred. 2.3.3 Sales The company divides its sales markets into the following main groups by importance of sales markets and geographic distribution: Baltic market (Lithuania, Latvia and Estonia), Eastern market (Ukraine, Moldova, Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan), European market (Germany, Italy, Poland, France, Belgium, the Netherlands, Portugal, the Czech Republic, Norway, other countries of Western and Central Europe). In 2022, Snaigė AB sold over 77 thousand refrigerators of its own production. Revenue from sales of main production was over EUR 19.2 million, 38 percent less than last year. Sales on the European market accounted for the majority of sales revenue (82.4 percent). Lower figures (9.7 percent) were on the Eastern market. The lowest sales revenue (8 percent) was on the Baltic market. Exports accounted for 92 percent of total product sales, i.e. EUR 17.7 million. On 2020, the Company started production of monoblocks and cold rooms, the sales of which in 2022 amounted to 762 units and EUR 589 thousand. 2022 m. 2021 m. 2020 m. Monoblocks Commercial refrigerators Freezers Domestic refrigerators (single cooler) Combined refrigerators with separate external door Consolidated annual report for 2022 72 Company’s sales in 2022 (according to sales revenue): European market In 2022, Snaigė AB sold 63 thousand units of refrigerators on the European market and generated revenues of EUR 15.9 million, 30.5% less than in 2021. The largest sales and revenues were in Germany (21.1 thousand units, EUR 5.2 million), Poland (7.5 thousand units, EUR 2.2 million) and the Czech Republic (7.1 thousand units, EUR 1.8 million). Sales in the European market in 2022 (according to income): Eastern market In 2022, the Company sold 8.5 thousand units of refrigerators on the Eastern market and earned sales revenue of EUR 1.86 million in, i.e. in 60 percent less than 2021. The main factor contributing to the decline in sales was the military situation in Ukraine. Sales in Ukraine decreased to - 6.9 thousand units and sales revenue of EUR 1.5 million. In 2022, Snaigė AB has terminated trade relations with Russia. Trade relations with Moldova, Kyrgyzstan and Tajikistan continued to develop. In 2022, the Company sold 1,500 units of refrigerators in these markets and generated revenues of EUR 0.36 million. East; 9,7% Baltic; 8,0% Europe; 82,4% Germany; 32,84% Poland; 14,07% Czech Republic; 11,40% Austria; 6,93% Switzerland; 6,10% Italy; 6,10% Norway; 3,47% Romania; 4,14% Morocco; 2,49% France; 1,66% Bulgaria; 1,48% Finland; 1,65% Portugal; 1,62% Sweden; 1,32% Netherlands; 1,06% Hungary; 0,72% Serbia; 0,62% Croatia; 0,67% Malta; 0,45% Bosnia and Herzegovina; 0,32% Slovenia; 0,42% Slovakia; 0,22% Consolidated annual report for 2022 73 Sales in the Eastern market in 2022 (according to sales revenue): Baltic market In 2022, Snaigė AB sold more than 6.08 thousand refrigerators in the Baltic States market and generated revenues of EUR 1.5 million. This is 56.6 percent less in revenue as compared to the previous year. In 2022, Snaigė AB sold about 5.7 thousand refrigerators in Lithuania, generating sales revenues of more than EUR 1.4 million. In Estonia, 387 refrigerators were sold in 2022, generating revenue of over EUR 0.1 million. Sales in the Baltic market in 2022 (according to income): SNAIGĖ brand portfolio In 2022, the Company sold 31.2 percent of the products with its own brand SNAIGĖ. Besides these, the Company produced refrigerators under other brands of trade partners and retail networks such as Severin, Whirlpool, Nabo, KBS, Point, Cool, Exquisit, Bomann, Essentiel and others. The Company's brand portfolio in 2022 (according to income): Ukraine; 80,5% Moldavia; 9,3% Kyrgyzstan; 7,3% Belarus; 2,5% Tajikistan; 0,4% Lithuania; 92,5% Estonia; 6,6% Latvia; 0,85% Other brands; 68,8% SNAIGĖ; 31,2% Consolidated annual report for 2022 74 2.3.4 Supply The materials and completing parts are supplied to the Company from more than 20 countries worldwide. European manufacturers and raw materials suppliers constitute the major part of them. The strategic suppliers are the following: SECOP GmbH, Nidec Global Appliances Europe S.r.l., Depsol Technologies, Voestalpine Eurostahl GmbH, LU-VE Group, Danfoss Appliance Controls, Ebm-papst Landshut GmbH, Coprel srl, SINTUR Sp. z o.o., MARCEGAGLIA POLAND sp. z o.o., Lisiplast UAB, Hoda UAB, Profilita UAB, Vilkritis UAB, REHAU. The priorities set in the purchase strategy of the Company are high quality assurance and effective logistics, competition between suppliers and continuous search for alternative raw materials. Competition between the suppliers and search for alternative raw materials stimulate continuous improvement of the purchased product. The technical servicing teams of Snaigė AB suppliers closely cooperate with the technicians and engineers of the Company in search for common technical solutions increasing quality and decreasing costs of the product. 2.3.5 Employees and human resource policy 2.3.5.1 The Company’s human resource policy The Company’s success depends not only on its size, image, strategy, but also largely on how it treats its employees. All the challenges and changes faced by the Company are related to the employees, so business effectiveness firstly depends on the ability to manage human resources. The Company’s human resource policy and management is comprised of human resource planning, employees’ staffing (recruiting, selection, admission, and retention), employees’ development, evaluation, motivation, norms of actions, assurance of occupational safety and social conditions. While facing changes and new challenges, it is most important for the Company to retain qualified, skilled, motivated personnel, able to implement set tasks and help the Company achieve its strategic goals, with as low costs as possible. Strategic management of human resources. The aim of the personnel policy is to help the Company to adapt to new requirements of business environment and accomplish strategic goals while increasing administration effectiveness, connecting human resource practice with the Company’s common business strategy, evaluating human resources. Human resource planning. To ensure effective number of employment positions and structure planning, to ensure human resource demand planning, evaluation of planning quality. Analysis of operations. In order to ensure more effective management of human resources it is necessary to evaluate new operation tasks, to spin off ineffective operations, doubling of functions, regroup and reassign functions. Evaluation of activities and career. The goal of activities evaluation – to align personnel activities with the Company’s goals to a maximum extent. The process of activities management is the setting of clear and achievable goals, monitoring of the progress, coordination of employee’s goals, correction of set goals, annual evaluation of personnel activities. While planning a career, it is important that it is not only directed to the past i.e. results of person’s work, but also to the future – a person’s abilities, their capacity to change, their ability to implement more complex tasks – into his potential. Personnel motivation. In current difficult conditions, it is necessary to pay more attention to strengthening social motives: encourage personal goals, increase responsibility taken, increase association with a group or a team, form conditions to realize management, self-expression skills. 2.3.5.2 The employees of the Company in 2020–2022 according to the personnel groups: Employees 2022 2021 2020 Amount % Average salary, EUR Amount % Average salary, EUR Amount % Average salary, EUR Managers 20 4.7 3,504 21 4.0 3,485 21 4.2 3,397 Specialists 74 17.3 1,392 87 16.8 1,352 85 17.3 1,259 Workers 334 78.0 912 411 79.2 907 386 78.5 820 In total: 428 100 1,123 519 100 1,100 492 100 1,012 * Average annual data Consolidated annual report for 2022 75 2.3.5.3 The structure of the Company’s employees in according to education level: Education level of the employees 2022 2021 2020 Amount % Amount % Amount % University education 86 20.1 100 19.3 98 19.9 Professional high school education 287 67.0 348 67 325 66.1 Secondary education 55 12.9 67 12.9 65 13.2 Uncompleted secondary education 0 0 4 0.8 4 0.8 Total: 428 100 519 100 492 100 * Average annual data 2.3.5.4 The employees of the Company and its subsidiaries in 2020–2022 according to personnel groups: Employees 2022 2021 2020 Amount % Amount % Amount % Managers 22 4.9 22 4.1 23 4.3 Specialists 81 17.9 94 17.3 95 17.7 Workers 349 77.2 427 78.6 418 78 Total: 452 100 543 100 536 100 * Average annual data 2.3.6 Investment policy 2.3.6.1 Subsidiary companies’ names, head office addresses, type of activities, the authorised capital, share of the authorized capital unpaid by the Company, net profit (loss), ratio of short- term liabilities and current assets, ratio of total liabilities and total assets SNAIGE – UKRAINE ALMECHA Registration date, head-office address Registration date: November, 2002. Address: Gruševskio str. 28-2a/43, Kiev, Ukraine Registration date: November, 2006. Address: Pramonės str. 6, Alytus, Lithuania Type of activities Sales and marketing services Production of other equipment and machinery Share of the authorized capital available to Snaigė AB, % 99 100 Authorized capital (EUR) 4,223 398,978 Share of the authorized capital unpaid by the Company Fully paid Fully paid 2022 profit (loss) (EUR thousand) 0 43 2.3.6.2 The most significant investment projects implemented in the last financial / economic year: types of investments, investment volumes, sources of investment financing, geographic distribution of investments The total amount, spent for implementation of investment programs in 2022, was EUR 2,037 thousand. Within the year 2022, EUR 397 thousand was spent on the development of new products. Constructive and technological documentation has been created for new projects. The following projects were implemented during the year: 1. Energy class "E" refrigerator CC31-CC29; 2. Laboratory refrigerators LD40; 3. FR RETRO refrigerators left-hand opening; 4. CD70 glass door refrigerators; 5. Professional freezer CF70; 6. Manufacturing of glass doors for commercial CD-type refrigerators. Consolidated annual report for 2022 76 For the preparation of the production of new products were spent EUR 1,597 thousand: multi-purpose equipment and devices were purchased and mastered in production. The largest part of the investment funds was for the purchase of production equipment for the CF70 industrial freezer, the LD40 laboratory refrigerator and the SGL and SGM monoblocks. A metal cutting laser "Prima Power" was purchased and installed with a set of necessary equipment and a safety system for the precise cutting of metal cladding. The Panel Bender, an automatic metal bending centre for the bending of large-sized and precise-dimensioned parts, is purchased and installed. The Krauss Maffei foam polyurethane filling equipment complex was purchased and installed with a set of equipment and a safety system for filling industrial refrigerator cabinets with polyurethane foam insulation. A production bar for glass doors for commercial refrigerators was designed and started to be installed. It was allocated EUR 2 thousand in 2022 for the development of technologies, mastering of specifically important and effective new technological projects, improvement of work places. EUR 41 thousand was spent on technical support of the production and renewal of the equipment worn-out during the year. This amount was used to purchase and replace the worn-out mould D024083 for moulding plastic parts. 2.3.7 Environment protection 2.3.7.1 Environmental policy The Company's environmental vision is organic products, clean technology and clean environment. The Company's products, production technology and services cannot do the illegal exposure of atmospheric air, water, employees, consumers and environment. Environment must not be contaminated by waste products of production more than is inevitable and allowed. The Company's management trying to implement a vision and having a clear understanding of environmental importance assumes the following responsibilities: • Comply with the effective legislative and other requirements applicable to the Company and related to the aspects of environmental protection; • Include the consideration of environmental issues into the Company’s operating strategy; • Protect the environment focusing on the reduction of pollution, consumption of electric power in production and exploitation of refrigerators and coolers; • Continually improve environmental performance; • Increase our staff approach to environmental protection; • Explain the importance of environmental protection policies to the employees and allow access to the policies to all stakeholders; • Analyse the possibilities of impact on suppliers, clients and contractors, suggest them to implement environmental protection principles in their activities, protect the environment with regard to their aspects and life cycle of their operations. 2.3.7.2 Environmental report Snaigė AB is one of the most advanced manufacturing companies of Lithuania in the field of environment protection. Our vision is organic products, clean technology and clean environment. The activities of the Company are regulated by environment protection management system, which complies with international ISO 14001 standard requirements. The system is working since 2001. The Company is currently recertified under international standard ISO 14001, version of 2015. In 2022, the Company’s pollutant emission was in line with the permitted levels; therefore, it received no comments or claims from controlling institutions or business partners. Since 1 January 2015 Snaigė AB, in accordance with Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 “On substances that deplete the ozone layer” has committed itself to the requirements and does not buy and does not use single or in a mixture with pure and impure (that is recycled and reclaimed), hydro chlorofluorocarbons (HCFC). When developing a new product, the Company gives a priority for the manufacturing processes, which save raw materials and resources, for safe transportation, waste elimination and quality of products. In manufacturing the Company tries to use materials that later can be recycled. The Company complies with Directive 2009/125/EC of 21 October 2009 of the European Parliament and European Commission, which regulates design of the products. Snaigė refrigerators are manufactured from ecological materials, which do not contain any harmful elements. For example, every plastic part of a refrigerator is marked (according to ISO 1043:1:1997), so that it can be reused one Consolidated annual report for 2022 77 more time, recycled according to Directive 2002/96/EC describing electrical and electronic equipment waste requirements. When designing and producing Snaigė refrigerators, the Company uses various means to reduce the harmful effect on the environment: − No materials are used causing greenhouse effect or deteriorating ozone; − No materials are used which are harmful for human health; − Analysis of materials usage is performed. All the products manufactured by the Company meet the requirements of the following directives and regulation of the European Community: • Regarding non-usage of harmful materials: ▪ RoHS2 Directive 2011/65/EU of the European Parliament and of the Council on the restriction of the use of certain hazardous substances in electrical and electronic equipment. ▪ REACH Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the non-use of high-risk substances (151) which refrigerators may release into the environment; ▪ PAH Decision AFPS-GS-2019:01 PAK of the Government of Germany, which means that SNAIGĖ products meet the polycyclic aromatic hydrocarbons concentration limit for 18 carcinogenic materials; • Regarding contact with food (these regulations mean that the materials applied during the manufacture of Snaigė refrigerators are allowed to contact with food): ▪ Regulation (EC) No 1935/2004 of the European Parliament and of the Council on materials and articles intended to come into contact with food (general); ▪ Commission Regulation (EU) No 10/2011 on plastic materials and articles intended to come into contact with food (for plastics). The purchasers of a refrigerator are also provided with information regarding ecology. They are advised how to install, use, and maintain their refrigerator so that its service life would be extended as much as possible and the effect on the environment would be reduced as much as possible. In addition to this, purchasers are advised how to return the refrigerator after the expiry of its service life. The company has a system for utilizing old refrigerators. Since mid-2008, the company has been handling waste from large household appliances - refrigerators and freezers. Snaigė AB consistently complies with the requirements of the Kyoto Protocol regarding global warming and climate change. The Company saves electricity, water and heat: the use of these resources has been reduced threefold in ten years. 2.3.8 Risk factors related to the business of the Company Macroeconomic Risk. As the Lithuanian economy overcomes the evolving challenges, private consumption and domestic demand are expected to remain relatively stable, mainly driven by a reduction in policy uncertainties and growth in real disposable income. As export markets are sufficiently diversified, country-specific problems would not have a material impact on the company’s business. However, following the protracted COVID-19 pandemic the outbreak of hostilities in Ukraine, there is a reasonable risk of a worldwide recession, which could have a negative impact on the Company's operations and results. The impact of the effects of the COVID-19 pandemic and the ongoing military conflict in Ukraine on macroeconomic processes is constantly evolving, but it affects both the risk of inflation and changes in supply chains, as well as changes in other macroeconomic factors. The risk of higher inflation is related to global commodity and energy prices and potential shortages, which are difficult to predict due to ongoing uncertainties. The risk of exchange rate fluctuations for the Company is minimal due to small trading volumes in foreign currencies and balanced buying and selling flows in different currencies (mainly EUR and USD). Credit Market Risk. Uncertainty about the global pandemic, the geopolitical situation and the availability of resources prevails in both the Lithuanian and global credit markets, but is expected to intensify and improve access to credit for individual countries and central banks to at least partially offset business losses and liquidity. Although the Company's internal financial resources are limited due to the ongoing restructuring processes, it can be assumed that the Company will be able to secure short-term and long-term credit facilities to finance its operations in the future. The Company’s Financial Accounting Accuracy Risk. On 27 April 2023 the Company’s auditor expressed a qualified audit opinion on the Company’s separate and consolidated financial statements. International Trade Restrictions Risk. The Company exports a portion of its production to third countries (outside the European Union). There is a risk that changes in foreign trade policies of third countries could aggravate export conditions to those countries. Any such change would negatively impact export opportunities for the Company and its financial situation. Due to the geopolitical tensions caused by the military conflict in Ukraine, there are possible sanctions and restrictions for the company and its individual trading partners due to political risks. Consolidated annual report for 2022 78 Market Risk. The Company is engaged in the manufacturing of a variety of commercial and household refrigerators and freezers and their sale. Investors assume the risk that the Company may suffer losses aggravating financial situation of the Company in the event of negative changes in product markets and markets of raw materials needed in production processes. Policy Risk. The Company is engaged in manufacturing activities that generate chemical substances harmful to the environment. Environmental matters both at Lithuanian and European Union levels are policy-regulated. There is a risk that in the event of changes in existing environmental requirements and restrictions the Company might need additional investments to ensure compliance of production processes with new requirements. However, such investments should not negatively affect the financial situation of the Company. Due the military conflict in Ukraine, there is a risk that the government of Lithuania or other countries to which the products are exported may adopt various operating restrictions that may adversely affect the company's operations and results. The wider impact of the war in Ukraine is disclosed in Note 32 to the 2022 consolidated audited financial statements. Business Continuity Risk. Business continuity presumptions are disclosed under Note 2.2 of the consolidated audited financial statements of 2022. The wider impact of the Restructuring process is disclosed in Note 33 to the 2022 consolidated audited financial statements. Operational Risk. This is the risk that includes both direct and indirect losses resulting from improper or inoperative internal processes, systems or technologies, actions by staff and agents, and external factors. Constituent part of the operational risk is legal risk, i.e. risk of losses potentially occurring as a result of the Company’s present or past obligations under various contracts and agreements, legal actions or laws, non-performance or improper performance. Technical and Technological Factors. This includes physical and moral depreciation of a variety of technical means. Risk factors of this type could affect operations of the Company both directly and indirectly. Technological factors can affect the Company directly through physical and moral depreciation of technical base. More detailed disclosures of the Company’s risk management and interest rate, exchange rate, credit and liquidity risks can be found under Note 29 of the consolidated financial statements. 2.3.8.1 The main indications about internal control and risk management systems related to the preparation of consolidated financial statements The Audit Committee supervises preparation of the consolidated financial statements, systems of internal control and financial risk management and how the Company follows legal acts that regulate preparation of consolidated financial statements. The Chief Accountant of the Company is responsible for the preparation supervision and the final revision of the consolidated financial statements. Moreover, he constantly reviews International Financial Reporting Standards (IFRS), as adopted by European Union in order to implement IFRS changes in time, analyses the Company’s and the Group’s significant deals, ensures collecting information from the Group companies and timely and fair preparation of this information for the financial statements. The Company’s Chief Accountant periodically informs the Board about the financial statements preparation process. 2.3.9 Related party transactions The information about related party transactions is disclosed under Note 31 of the consolidated financial statements. 2.4 DISCLOSURE FORM CONCERNING THE COMPLIANCE WITH THE GOVERNANCE CODE FOR THE COMPANIES LISTED ON THE REGULATED MARKET The public limited liability company AB Snaigė (hereinafter referred to as the “Company”), acting in compliance with Article 22 (3) of the Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB Nasdaq Vilnius, hereby discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific provisions or recommendations that are not complied with and for what reasons, as well as other explanatory information is provided in this form. 2.4.1 Summary of the Corporate Governance Report: According to the Articles of association of AB Snaigė, the governing bodies of the Company are the General Shareholder’s Meeting, the Board and CEO. The Company does not have a Supervisory Council, but supervision functions set by the Law on Companies of the Republic of Lithuania are performed by the Board, which is comprised of 5 members and is elected for 4 years term. During of 2019 year General meeting of shareholders Shareholders elected The Board from three representatives of the largest shareholder and two independent members of the Board and appointed two independent members of the Board to Audit Committee and authorized the Board in the future to appoint members to the Audit Committee. The Company does not have Remuneration and a Nomination Committee as its functions, if necessary, will be performed Consolidated annual report for 2022 79 by the Board by making decisions. The Board elects and recalls CEO of the Company, sets his/her remuneration and other conditions of the employment agreement. The remuneration policy of the Company was approved during the Extraordinary General Meeting of Shareholders held in 15 October 2021. More information about the corporate governance, shareholders’ rights, activities of the Board and the Audit Committee as well as other key points related to the Company’s management are provided in the Consolidated Annual Report of AB Snaigė, for the year ended 31 December 2022. 2.4.2 Structured table for disclosure: PRINCIPLES/ RECOMMENDATIONS YES/NO /NOT APPLICABLE COMMENTARY Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance framework should protect the rights of shareholders. 1.1. All shareholders should be provided with access to the information and/or documents established in the legal acts on equal terms. All shareholders should be furnished with equal opportunity to participate in the decision-making process where significant corporate matters are discussed. YES Information about convening shareholders meetings is provided publicly in English and Lithuanian languages through the Nasdaq Vilnius Stock Exchange Central Regulation Base https://www.nasdaqbaltic.com and on Company’s site www.snaige.lt 1.2. It is recommended that the company’s capital should consist only of the shares that grant the same rights to voting, ownership, dividend and other rights to all of their holders. YES 1.3. It is recommended that investors should have access to the information concerning the rights attached to the shares of the new issue or those issued earlier in advance, i.e. before they purchase shares. YES Company’s articles of association are provided publicly on Company’s site. There are all information concerning the rights attached to earlier issued shares. 1.4. Exclusive transactions that are particularly important to the company, such as transfer of all or almost all assets of the company which in principle would mean the transfer of the company, should be subject to approval of the general meeting of shareholders. YES The Company would follow the applicable legal acts and the Company's Articles of Association. Currently for concluding such transactions. In accordance with currently applicable laws and the Company's Articles of Association, the Board makes decisions on the investment, transfer and lease of fixed assets with a book value exceeding 1/20 of the Company's authorized capital. 1.5. Procedures for convening and conducting a general meeting of shareholders should provide shareholders with equal opportunities to participate in the general meeting of shareholders and should not prejudice the rights and interests of shareholders. The chosen venue, date and time of the general meeting of shareholders should not prevent active participation of shareholders at the general meeting. In the notice of the general meeting of shareholders being convened, the company should specify the last day on which the proposed draft decisions should be submitted at the latest. YES 1.6. With a view to ensure the right of shareholders living abroad to access the information, it is recommended, where possible, that documents prepared for the general meeting of shareholders in advance should be announced publicly not only in Lithuanian language but also in English and/or other foreign languages in advance. It is recommended that the minutes of the general meeting of shareholders after the signing thereof and/or adopted decisions should be made available publicly not only in YES Documents prepared for the general meeting of shareholders and adopted decisions are announced publicly in Lithuanian and English languages. Consolidated annual report for 2022 80 Lithuanian language but also in English and/or other foreign languages. It is recommended that this information should be placed on the website of the company. Such documents may be published to the extent that their public disclosure is not detrimental to the company or the company’s commercial secrets are not revealed. 1.7. Shareholders who are entitled to vote should be furnished with the opportunity to vote at the general meeting of shareholders both in person and in absentia. Shareholders should not be prevented from voting in writing in advance by completing the general voting ballot. YES 1.8. With a view to increasing the shareholders’ opportunities to participate effectively at general meetings of shareholders, it is recommended that companies should apply modern technologies on a wider scale and thus provide shareholders with the conditions to participate and vote in general meetings of shareholders via electronic means of communication. In such cases the security of transmitted information must be ensured and it must be possible to identify the participating and voting person. NO Shareholders may vote in advance in writing by filling a general ballot paper. The Company does not make it possible to participate and vote at the Meeting by means of electronic communications. 1.9. It is recommended that the notice on the draft decisions of the general meeting of shareholders being convened should specify new candidatures of members of the collegial body, their proposed remuneration and the proposed audit company if these issues are included into the agenda of the general meeting of shareholders. Where it is proposed to elect a new member of the collegial body, it is recommended that the information about his/her educational background, work experience and other managerial positions held (or proposed) should be provided. YES 1.10. Members of the company’s collegial management body, heads of the administration 1 or other competent persons related to the company who can provide information related to the agenda of the general meeting of shareholders should take part in the general meeting of shareholders. Proposed candidates to member of the collegial body should also participate in the general meeting of shareholders in case the election of new members is included into the agenda of the general meeting of shareholders. YES The Manager of Company attends the general meeting of shareholders. The opportunity to attend the general meeting of shareholders are also given to Members of the Board and candidates to the Board. Principle 2: Supervisory board 2.1. Functions and liability of the supervisory board The supervisory board of the company should ensure representation of the interests of the company and its shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations and its management bodies as well as constantly provide recommendations to the management bodies of the company. The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system. 1 For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions. Consolidated annual report for 2022 81 2.1.1. Members of the supervisory board should act in good faith, with care and responsibility for the benefit and in the interests of the company and its shareholders and represent their interests, having regard to the interests of employees and public welfare. NOT APPLICABLE The Supervisory Board is not formed 2.1.2. Where decisions of the supervisory board may have a different effect on the interests of the company’s shareholders, the supervisory board should treat all shareholders impartially and fairly. It should ensure that shareholders are properly informed about the company’s strategy, risk management and control, and resolution of conflicts of interest. NOT APPLICABLE 2.1.3. The supervisory board should be impartial in passing decisions that are significant for the company’s operations and strategy. Members of the supervisory board should act and pass decisions without an external influence from the persons who elected them. NOT APPLICABLE 2.1.4. Members of the supervisory board should clearly voice their objections in case they believe that a decision of the supervisory board is against the interests of the company. Independent 2 members of the supervisory board should: a) maintain independence of their analysis and decision-making; b) not seek or accept any unjustified privileges that might compromise their independence. NOT APPLICABLE 2.1.5. The supervisory board should oversee that the company’s tax planning strategies are designed and implemented in accordance with the legal acts in order to avoid faulty practice that is not related to the long-term interests of the company and its shareholders, which may give rise to reputational, legal or other risks. NOT APPLICABLE 2.1.6. Bendrovė turėtų užtikrinti, kad The company should ensure that the supervisory board is provided with sufficient resources (including financial ones) to discharge their duties, including the right to obtain all the necessary information or to seek independent professional advice from external legal, accounting or other experts on matters pertaining to the competence of the supervisory board and its committees. NOT APPLICABLE 2.2. Formation of the supervisory board The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective and fair corporate governance. 2.2.1. The members of the supervisory board elected by the general meeting of shareholders should collectively ensure the diversity of qualifications, professional experience and competences and seek for gender equality. With a view to maintain a proper balance between the qualifications of the members of the supervisory board, it should be ensured that members of the supervisory board, as a whole, should have diverse knowledge, opinions and experience to duly perform their tasks. NOT APPLICABLE 2 For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania. Consolidated annual report for 2022 82 2.2.2. Members of the supervisory board should be appointed for a specific term, subject to individual re- election for a new term in office in order to ensure necessary development of professional experience. NOT APPLICABLE 2.2.3. Chair of the supervisory board should be a person whose current or past positions constituted no obstacle to carry out impartial activities. A former manager or management board member of the company should not be immediately appointed as chair of the supervisory board either. Where the company decides to depart from these recommendations, it should provide information on the measures taken to ensure impartiality of the supervision. NOT APPLICABLE . 2.2.4. Each member should devote sufficient time and attention to perform his duties as a member of the supervisory board. Each member of the supervisory board should undertake to limit his other professional obligations (particularly the managing positions in other companies) so that they would not interfere with the proper performance of the duties of a member of the supervisory board. Should a member of the supervisory board attend less than a half of the meetings of the supervisory board throughout the financial year of the company, the shareholders of the company should be notified thereof. NOT APPLICABLE 2.2.5. When it is proposed to appoint a member of the supervisory board, it should be announced which members of the supervisory board are deemed to be independent. The supervisory board may decide that, despite the fact that a particular member meets all the criteria of independence, he/she cannot be considered independent due to special personal or company-related circumstances. NOT APPLICABLE 2.2.6. The amount of remuneration to members of the supervisory board for their activity and participation in meetings of the supervisory board should be approved by the general meeting of shareholders. NOT APPLICABLE 2.2.7. Every year the supervisory board should carry out an assessment of its activities. It should include evaluation of the structure of the supervisory board, its work organization and ability to act as a group, evaluation of the competence and work efficiency of each member of the supervisory board, and evaluation whether the supervisory board has achieved its objectives. The supervisory board should, at least once a year, make public respective information about its internal structure and working procedures. NOT APPLICABLE Principle 3: Management Board 3.1. Functions and liability of the management board The management board should ensure the implementation of the company’s strategy and good corporate governance with due regard to the interests of its shareholders, employees and other interest groups. 3.1.1. The management board should ensure the implementation of the company’s strategy approved by the supervisory board if the latter has been formed at the company. In such cases where the supervisory board is not formed, the management board is also responsible for the approval of the company’s strategy. YES The Company’s Board performs supervisory functions set by Law on Companies of the Republic of Lithuania. Consolidated annual report for 2022 83 3.1.2. As a collegial management body of the company, the management board performs the functions assigned to it by the Law and in the articles of association of the company, and in such cases where the supervisory board is not formed in the company, it performs inter alia the supervisory functions established in the Law. By performing the functions assigned to it, the management board should take into account the needs of the company’s shareholders, employees and other interest groups by respectively striving to achieve sustainable business development. YES By performing the functions assigned to it, the management board takes into account the needs of the company’s shareholders, employees and other interest groups striving to achieve sustainable business development. 3.1.3. The management board should ensure compliance with the laws and the internal policy of the company applicable to the company or a group of companies to which this company belongs. It should also establish the respective risk management and control measures aimed at ensuring regular and direct liability of managers. YES 3.1.4 Moreover, the management board should ensure that the measures included into the OECD Good Practice Guidance 3 on Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to the applicable laws, rules and standards. YES 3.1.5. When appointing the manager of the company, the management board should take into account the appropriate balance between the candidate’s qualifications, experience and competence. YES 3.2. Formation of the management board 3.2.1. The members of the management board elected by the supervisory board or, if the supervisory board is not formed, by the general meeting of shareholders should collectively ensure the required diversity of qualifications, professional experience and competences and seek for gender equality. With a view to maintain a proper balance in terms of the current qualifications possessed by the members of the management board, it should be ensured that the members of the management board would have, as a whole, diverse knowledge, opinions and experience to duly perform their tasks. YES 3.2.2. Names and surnames of the candidates to become members of the management board, information on their educational background, qualifications, professional experience, current positions, other important professional obligations and potential conflicts of interest should be disclosed without violating the requirements of the legal acts regulating the handling of personal data at the meeting of the supervisory board in which the management board or individual members of the management board are elected. In the event that the supervisory board is not formed, the information specified in this paragraph should be submitted to the general meeting of shareholders. The management board should, on yearly basis, collect data provided in this paragraph on its members and disclose it in the company’s annual report. YES Candidates to the Board members introduce to shareholders specifying working positions in other companies, relations with Company if such has. Company’s annual report discloses all known information. 3 Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti- bribery/44884389.pdf Consolidated annual report for 2022 84 3.2.3. All new members of the management board should be familiarized with their duties and the structure and operations of the company. YES 3.2.4. Members of the management board should be appointed for a specific term, subject to individual re- election for a new term in office in order to ensure necessary development of professional experience and sufficiently frequent reconfirmation of their status. YES 3.2.5. Chair of the management board should be a person whose current or past positions constitute no obstacle to carry out impartial activity. Where the supervisory board is not formed, the former manager of the company should not be immediately appointed as chair of the management board. When a company decides to depart from these recommendations, it should furnish information on the measures it has taken to ensure the impartiality of supervision. YES The Chairman of the Company’s Board is not and never was the manager of the Company. The Board is elected by shareholders. 3.2.6. Each member should devote sufficient time and attention to perform his duties as a member of the management board. Should a member of the management board attend less than a half of the meetings of the management board throughout the financial year of the company, the supervisory board of the company or, if the supervisory board is not formed at the company, the general meeting of shareholders should be notified thereof. YES 3.2.7. In the event that the management board is elected in the cases established by the Law where the supervisory board is not formed at the company, and some of its members will be independent 4 , it should be announced which members of the management board are deemed as independent. The management board may decide that, despite the fact that a particular member meets all the criteria of independence established by the Law, he/she cannot be considered independent due to special personal or company-related circumstances. YES Candidates to the Board members introduce themselves to the shareholders, indicating their positions in other companies, relations with the Company, if any. 3.2.8. The general meeting of shareholders of the company should approve the amount of remuneration to the members of the management board for their activity and participation in the meetings of the management board. YES At present, the remuneration for members of the Board is not paid. If it were considered to pay a fee to the Board members, shareholders would be asked to confirm the amount of remuneration. This is also provided for in the Articles of Association of the Company. 3.2.9. The members of the management board should act in good faith, with care and responsibility for the benefit and the interests of the company and its shareholders with due regard to other stakeholders. When adopting decisions, they should not act in their personal interest; they should be subject to no- compete agreements and they should not use the business information or opportunities related to the company’s operations in violation of the company’s interests. YES According information available to the Company, the members of the Board are guided by the interests of the Company and act for the benefit of Shareholders in performing their duties. 4 For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania. Consolidated annual report for 2022 85 3.2.10. Every year the management board should carry out an assessment of its activities. It should include evaluation of the structure of the management board, its work organization and ability to act as a group, evaluation of the competence and work efficiency of each member of the management board, and evaluation whether the management board has achieved its objectives. The management board should, at least once a year, make public respective information about its internal structure and working procedures in observance of the legal acts regulating the processing of personal data. NO There is no such practice yet. Principle 4: Rules of procedure of the supervisory board and the management board of the company The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure efficient operation and decision-making of these bodies and promote active cooperation between the company’s management bodies. 4.1. The management board and the supervisory board, if the latter is formed at the company, should act in close cooperation in order to attain benefit for the company and its shareholders. Good corporate governance requires an open discussion between the management board and the supervisory board. The management board should regularly and, where necessary, immediately inform the supervisory board about any matters significant for the company that are related to planning, business development, risk management and control, and compliance with the obligations at the company. The management board should inform he supervisory board about any derogations in its business development from the previously formulated plans and objectives by specifying the reasons for this. NOT APPLICABLE The Supervisory board is not formed at the Company. 4.2. It is recommended that meetings of the company’s collegial bodies should be held at the respective intervals, according to the pre-approved schedule. Each company is free to decide how often meetings of the collegial bodies should be convened but it is recommended that these meetings should be convened at such intervals that uninterruptable resolution of essential corporate governance issues would be ensured. Meetings of the company’s collegial bodies should be convened at least once per quarter. YES Board meetings are called at appropriate intervals to ensure continuity of essential corporate governance issues. Extraordinary meetings are convened to deal with urgent matters. 4.3. Members of a collegial body should be notified of the meeting being convened in advance so that they would have sufficient time for proper preparation for the issues to be considered at the meeting and a fruitful discussion could be held and appropriate decisions could be adopted. Along with the notice of the meeting being convened all materials relevant to the issues on the agenda of the meeting should be submitted to the members of the collegial body. The agenda of the meeting should not be changed or supplemented during the meeting, unless all members of the collegial body present at the meeting agree with such change or supplement to the agenda, or certain issues that are important to the company require immediate resolution. YES Agenda and all materials required according to the agenda are sent to the Members of the Board by electronic mail in advance; normally the agenda is not changed during meetings unless it is a necessity to solve additional important issues. Consolidated annual report for 2022 86 4.4. In order to coordinate the activities of the company’s collegial bodies and ensure effective decision-making process, the chairs of the company’s collegial supervision and management bodies should mutually agree on the dates and agendas of the meetings and close cooperate in resolving other matters related to corporate governance. Meetings of the company’s supervisory board should be open to members of the management board, particularly in such cases where issues concerning the removal of the management board members, their responsibility or remuneration are discussed. NOT APPLICABLE The Supervisory board is not formed at the Company. Principle 5: Nomination, remuneration and audit committees 5.1. Purpose and formation of committee The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory board is not formed, of the management board which performs the supervisory functions by ensuring that decisions are based on due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of interest. Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by the collegial body. 5.1.1. Taking due account of the company-related circumstances and the chosen corporate governance structure, the supervisory board of the company or, in cases where the supervisory board is not formed, the management board which performs the supervisory functions, establishes committees. It is recommended that the collegial body should form the nomination, remuneration and audit committees 5 . YES/NO An audit committee has been formed. The nomination and remuneration committees are not formed. If necessary functions of these committees will perform by the collegial body himself by making decisions. 5.1.2. Companies may decide to set up less than three committees. In such case companies should explain in detail why they have chosen the alternative approach, and how the chosen approach corresponds with the objectives set for the three different committees. 5.1.3. In the cases established by the legal acts the functions assigned to the committees formed at companies may be performed by the collegial body itself. In such case the provisions of this Code pertaining to the committees (particularly those related to their role, operation and transparency) should apply, where relevant, to the collegial body as a whole. YES Provisions of this Code relating to committees are applicable to the collegial body as far as possible in specific circumstances 5.1.4. Committees established by the collegial body should normally be composed of at least three members. Subject to the requirements of the legal acts, committees could be comprised only of two members as well. Members of each committee should be selected on the basis of their competences by giving priority to independent members of the collegial body. The chair of the management board should not serve as the chair of committees. NO The Audit Committee is consisted of two members. Following the resignation of a member of the Board as a member of the Company's Board and of the Audit Committee, the Board plans to elect a new Board member to perform these duties. 5 The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit committee may be carried out by the collegial body performing the supervisory functions). Consolidated annual report for 2022 87 5.1.5. The authority of each committee formed should be determined by the collegial body itself. Committees should perform their duties according to the authority delegated to them and regularly inform the collegial body about their activities and performance on a regular basis. The authority of each committee defining its role and specifying its rights and duties should be made public at least once a year (as part of the information disclosed by the company on its governance structure and practice on an annual basis). In compliance with the legal acts regulating the processing of personal data, companies should also include in their annual reports the statements of the existing committees on their composition, the number of meetings and attendance over the year as well as the main directions of their activities and performance. YES/NO The collegial body is determined authority the audit committee formed on 2019 year. Till 2019 year the shareholders meeting approved audit committee regulations and after first approving these regulations was published. 5.1.6. With a view to ensure the independence and impartiality of the committees, the members of the collegial body who are not members of the committees should normally have a right to participate in the meetings of the committee only if invited by the committee. A committee may invite or request that certain employees of the company or experts would participate in the meeting. Chair of each committee should have the possibility to maintain direct communication with the shareholders. Cases where such practice is to be applied should be specified in the rules regulating the activities of the committee. YES 5.2. Nomination committee 5.2.1. The key functions of the nomination committee should be the following: 1) to select candidates to fill vacancies in the membership of supervisory and management bodies and the administration and recommend the collegial body to approve them. The nomination committee should evaluate the balance of skills, knowledge and experience in the management body, prepare a description of the functions and capabilities required to assume a particular position and assess the time commitment expected; 2) assess, on a regular basis, the structure, size and composition of the supervisory and management bodies as well as the skills, knowledge and activity of its members, and provide the collegial body with recommendations on how the required changes should be sought; 3) devote the attention necessary to ensure succession planning. NO The nomination committee is not formed. 5.2.2. When dealing with issues related to members of the collegial body who have employment relationships with the company and the heads of the administration, the manager of the company should be consulted by granting him/her the right to submit proposals to the Nomination Committee. NO The nomination committee is not formed. 5.3. Remuneration committee Consolidated annual report for 2022 88 The main functions of the remuneration committee should be as follows: 1) submit to the collegial body proposals on the remuneration policy applied to members of the supervisory and management bodies and the heads of the administration for approval. Such policy should include all forms of remuneration, including the fixed- rate remuneration, performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well as conditions which would allow the company to recover the amounts or suspend the payments by specifying the circumstances under which it would be expedient to do so; 2) submit to the collegial body proposals regarding individual remuneration for members of the collegial bodies and the heads of the administration in order to ensure that they would be consistent with the company’s remuneration policy and the evaluation of the performance of the persons concerned; 3) review, on a regular basis, the remuneration policy and its implementation. NO The remuneration committee is not formed. 5.4. Audit committee 5.4.1. The key functions of the audit committee are defined in the legal acts regulating the activities of the audit committee 6 . YES 5.4.2. All members of the committee should be provided with detailed information on specific issues of the company’s accounting system, finances and operations. The heads of the company’s administration should inform the audit committee about the methods of accounting for significant and unusual transactions where the accounting may be subject to different approaches. YES 5.4.3. The audit committee should decide whether the participation of the chair of the management board, the manager of the company, the chief finance officer (or senior employees responsible for finance and accounting), the internal and external auditors in its meetings is required (and, if required, when). The committee should be entitled, when needed, to meet the relevant persons without members of the management bodies present. YES 5.4.4. The audit committee should be informed about the internal auditor’s work program and should be furnished with internal audit reports or periodic summaries. The audit committee should also be informed about the work program of external auditors and should receive from the audit firm a report describing all relationships between the independent audit firm and the company and its group. YES 6 Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania. Consolidated annual report for 2022 89 5.4.5. The audit committee should examine whether the company complies with the applicable provisions regulating the possibility of lodging a complaint or reporting anonymously his/her suspicions of potential violations committed at the company and should also ensure that there is a procedure in place for proportionate and independent investigation of such issues and appropriate follow-up actions. NO This question will be solved in future. 5.4.6. The audit committee should submit to the supervisory board or, where the supervisory board is not formed, to the management board its activity report at least once in every six months, at the time that annual and half-yearly reports are approved. YES Principle 6: Prevention and disclosure of conflicts of interest The corporate governance framework should encourage members of the company's supervisory and management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism for disclosing conflicts of interest related to members of the company's supervisory and management bodies The corporate governance framework should recognize the rights of shareholders as enshrined in law and promote active cooperation between the company and its shareholders in creating the company's well-being, jobs and financial stability. In the context of this principle, the term shareholders includes investors, employees, creditors, suppliers, customers, the local community and other persons with an interest in a particular company. Any member of the company’s supervisory and management body should avoid a situation where his/her personal interests are or may be in conflict with the company’s interests. In case such a situation did occur, a member of the company’s supervisory or management body should, within a reasonable period of time, notify other members of the same body or the body of the company which elected him/her or the company’s shareholders of such situation of a conflict of interest, indicate the nature of interests and, where possible, their value. YES Members of the Company's management body are trying to follow the recommendations listed in this article. Principle 7: Remuneration policy of the company The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long-term strategy. 7.1. The company should approve and post the remuneration policy on the website of the company; such policy should be reviewed on a regular basis and be consistent with the company’s long-term strategy. YES The Company's remuneration policy was approved during the Extraordinary General Meeting of Shareholders on 15 October 2021. 7.2. The remuneration policy should include all forms of remuneration, including the fixed-rate remuneration, performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well as the conditions specifying the cases where the company can recover the disbursed amounts or suspend the payments. YES 7.3. With a view to avoid potential conflicts of interest, the remuneration policy should provide that members of the collegial bodies which perform the supervisory functions should not receive remuneration based on the company’s performance. YES The remuneration for the work in the Board is not paid to the members of the Board of the Company, unless the remuneration to be paid to the independent members of the board is determined by the shareholders who elect it. Consolidated annual report for 2022 90 7.4. The remuneration policy should provide sufficient information on the policy regarding termination payments. Termination payments should not exceed a fixed amount or a fixed number of annual wages and in general should not be higher than the non- variable component of remuneration for two years or the equivalent thereof. Termination payments should not be paid if the contract is terminated due to inadequate performance. YES 7.5. In the event that the financial incentive scheme is applied at the company, the remuneration policy should contain sufficient information about the retention of shares after the award thereof. Where remuneration is based on the award of shares, shares should not be vested at least for three years after the award thereof. After vesting, members of the collegial bodies and heads of the administration should retain a certain number of shares until the end of their term in office, subject to the need to compensate for any costs related to the acquisition of shares. YES/NO The company does not have an incentive system for financial instruments. 7.6. The company should publish information about the implementation of the remuneration policy on its website, with a key focus on the remuneration policy in respect of the collegial bodies and managers in the next and, where relevant, subsequent financial years. It should also contain a review of how the remuneration policy was implemented during the previous financial year. The information of such nature should not include any details having a commercial value. Particular attention should be paid on the major changes in the company’s remuneration policy, compared to the previous financial year. YES 7.7. It is recommended that the remuneration policy or any major change of the policy should be included on the agenda of the general meeting of shareholders. The schemes under which members and employees of a collegial body receive remuneration in shares or share options should be approved by the general meeting of shareholders. YES Principle 8: Role of stakeholders in corporate governance The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial sustainability. In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community and other persons having certain interests in the company concerned. 8.1. The corporate governance framework should ensure that the rights and lawful interests of stakeholders are protected. YES 8.2. The corporate governance framework should create conditions for stakeholders to participate in corporate governance in the manner prescribed by law. Examples of participation by stakeholders in corporate governance include the participation of employees or their representatives in the adoption of decisions that are important for the company, consultations with employees or their representatives on corporate governance and other important matters, participation of employees in the company’s authorized capital, involvement of creditors in corporate governance in the cases of the company’s insolvency, etc. YES Consolidated annual report for 2022 91 8.3. Where stakeholders participate in the corporate governance process, they should have access to relevant information. YES 8.4. Stakeholders should be provided with the possibility of reporting confidentially any illegal or unethical practices to the collegial body performing the supervisory function. YES The supervisory function performs the Board of the Company. The Company transfers information concerns to the Board in accordance with confidentiality requirements. Principle 9: Disclosure of information The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues, including the financial situation, operations and governance of the company. 9.1. In accordance with the company’s procedure on confidential information and commercial secrets and the legal acts regulating the processing of personal data, the information publicly disclosed by the company should include but not be limited to the following: YES The Company follows this requirement and discloses available information, in accordance with the company’s procedure on confidential information and commercial secrets and the legal acts regulating the processing of personal data. 9.1.1. operating and financial results of the company; YES 9.1.2. objectives and non-financial information of the company; YES 9.1.3. persons holding a stake in the company or controlling it directly and/or indirectly and/or together with related persons as well as the structure of the group of companies and their relationships by specifying the final beneficiary; YES 9.1.4. members of the company’s supervisory and management bodies who are deemed independent, the manager of the company, the shares or votes held by them at the company, participation in corporate governance of other companies, their competence and remuneration; YES 9.1.5. reports of the existing committees on their composition, number of meetings and attendance of members during the last year as well as the main directions and results of their activities. YES 9.1.6. potential key risk factors, the company’s risk management and supervision policy. YES 9.1.7. the company’s transactions with related parties. YES 9.1.8. main issues related to employees and other stakeholders (for instance, human resource policy, participation of employees in corporate governance, award of the company’s shares or share options as incentives, relationships with creditors, suppliers, local community, etc.). YES 9.1.9. structure and strategy of corporate governance. YES Consolidated annual report for 2022 92 9.1.10. initiatives and measures of social responsibility policy and anti-corruption fight, significant current or planned investment projects. This list is deemed minimum and companies are encouraged not to restrict themselves to the disclosure of information included into this list. This principle of the Code does not exempt companies from their obligation to disclose information as provided for in the applicable legal acts. YES 9.2. When disclosing the information specified in paragraph 9.1.1 of recommendation 9.1, it is recommended that the company which is a parent company in respect of other companies should disclose information about the consolidated results of the whole group of companies. YES 9.3. When disclosing the information specified in paragraph 9.1.4 of recommendation 9.1, it is recommended that the information on the professional experience and qualifications of members of the company’s supervisory and management bodies and the manager of the company as well as potential conflicts of interest which could affect their decisions should be provided. It is further recommended that the remuneration or other income of members of the company’s supervisory and management bodies and the manager of the company should be disclosed, as provided for in greater detail in Principle 7. YES 9.4. Information should be disclosed in such manner that no shareholders or investors are discriminated in terms of the method of receipt and scope of information. Information should be disclosed to all parties concerned at the same time. YES The information which is disclosed to all parties concerned at the same time. Principle 10 : Selection of the company’s audit firm The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm 10.1. With a view to obtain an objective opinion on the company’s financial condition and financial results, the company’s annual financial statements and the financial information provided in its annual report should be audited by an independent audit firm. YES 10.2. It is recommended that the audit firm would be proposed to the general meeting of shareholders by the supervisory board or, if the supervisory board is not formed at the company, by the management board of the company.. YES 10.3. In the event that the audit firm has received remuneration from the company for the non-audit services provided, the company should disclose this publicly. This information should also be available to the supervisory board or, if the supervisory board is not formed at the company, by the management board of the company when considering which audit firm should be proposed to the general meeting of shareholders. YES Consolidated annual report for 2022 93 3. OTHER INFORMATION ABOUT SNAIGĖ AB 3.1 Membership in associated organizations Snaigė AB is a member of the EEPA association. The EEPA is an association established by manufacturers and importers of electrical equipment and batteries and accumulators. The main objective of the association is the implementation of waste management obligations by the association members stipulated in both the EU and Lithuanian legislation. As of 2006, the association organizes waste from electrical and electronic equipment management and as of the end of 2009 – management of waste from batteries and accumulators. 3.2 Patents, licenses The Company’s activities are independent of patents or licences. 3.3 Recent and the most important events of the Company The most important post balance sheet events are presented in the consolidated financial statements. 3.3.1 Recent publicly disclosed information 14-04-2023 Information for the Ordinary General Meeting of Shareholders of SNAIGE AB Additional information for the Ordinary General Meeting of Shareholders of AB "Snaigė" (hereinafter referred to as the "Meeting") to be convened on 28 April 2023 at 10 a.m. The agenda of the meeting is supplemented by item No. 7: Approval of an amendment to the Company's restructuring plan. 12-04-2023 AB SNAIGĖ decided to appeal against the decision of Kaunas Regional Court not to approve the restructuring plan According to Mindaugas Sologubas, general director of AB SNAIGĖ, the company does not agree with the court's decision not to approve the restructuring plan, since such a decision does not protect the interests of either the company or the company’s non-mortgage creditors. It can only be favorable to one side – the mortgage creditor UAB Easy debt service, who, without risking anything, regardless of whether the company continues to operate or is closed. "I cannot accept the fact that a viable company that pays taxes and salaries and counts insist years anniversary may be doomed to closure in the interests of the mortgage creditor. “- said M. Sologubas. – “-350 SNAIGĖ employees would remain without work. Those companies that supply SNAIGE with goods and services would also could be closed or will experience difficulties.” The state would also suffer losses: instead of the 2 million EUR received annually from SNAIGĖ as a tax, it will have to pay social benefits to people who will become unemployed. In 2022, the total salary fund of SNAIGĖ amounted to EUR 5,615,385.09, and the total amount of contributions charged to SODRA in 2022 amounted to EUR 1,393,718.33. The company has paid €723,656.88 in personal income tax alone in the year from 1 March 2022 to 28 March 2023. According to M. Sologubas, the restructuring plan is an opportunity for the company to resolve its temporary financial difficulties, to optimize and restructure the company's activities in such a way that the company can meet its obligations to all creditors as soon as possible. "- In its order, the court did not express doubts about the validity of the restructuring plan, therefore, UAB Easy debt service’s assertions that the company's restructuring plan does not correspond to reality," - said M. Sologubas. –“In this way, the mortgage creditor selfishly forms the opinion that AB SNAIGE will not be able to implement the restructuring plan.” AB SNAIGĖ has every opportunity to operate and develop further. Even in difficult conditions, the company designed and introduced the market a new product: a double refrigerating unit-monobloc TWIN SGL017P2AAX1XSN - an efficient refrigerating unit for refrigerating storage facilities; 585 l capacity professional freezer CF70M; 350 l refrigerator- showcase CD35DM black color modification; 585 l capacity professional refrigerator with glass door CD70MF. Also, the AB SNAIGĖ supplemented its line of medical refrigerators with several important products: Company created a prototype of the MD40 refrigerator with metal doors, and prepared the MD35 refrigerator cabinet for further development. Not only the existing customers of the company were interested in these products, but also number of new ones. AB SNAIGĖ is supported not only by the company's non-mortgage creditors, but also by customers. One of them is world-class manufacturer Whirlpool, who recently signed a factoring agreement with the company. Consolidated annual report for 2022 94 07-04-2023 Convocation of the ordinary General Meeting of Shareholders of Snaigė AB On 28 April 2023 the ordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened (hereinafter, the “Meeting”). The place of the meeting –at AB “Snaige” office, at the address Kareiviu str. 6, Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.). The Meeting’s accounting day – 21 April 2023 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The meeting is initiating and convening by the decision of the Managing Director of the Company. Agenda of the Meeting: The agenda question 1: Consolidated annual report of “Snaigė” AB on the company’s activity for 2022 with information about the Company strategy and its implementation; The agenda question 2: Auditor's report on the company's 2022 financial statements; The agenda question 3: Approval of the set of financial statements of the company for 2022; The agenda question 4: Approval of distribution of profit (loss) of Snaigė AB for 2022; The agenda question 5: Election of the Board for a new term; The agenda question 6: Election of the Audit Committee for the new term. 04-04-2023 The Kaunas Regional Court did not approve the restructuring plan of AB SNAIGĖ On 4 April. the Kaunas Regional Court did not approve the restructuring plan of AB SNAIGĖ. Although it was approved by a majority of both the company's shareholders and the majority of the company's non-mortgage creditors, the mortgage creditor UAB Easy Debt Service voted against this plan. In the opinion of Mindaugas Sologubas, manging director of AB SNAIGĖ, the restructuring plan is an opportunity for the company to solve temporary financial difficulties, optimize and restructure the company's activities so that the company can meet its obligations to all creditors as soon as possible. "The restructuring plan was in the interests of all creditors." - says M. Sologubas. "The failure to approve this plan means that in reality, non-mortgage creditors can hardly count on the recovery of their debt, the beneficiary will only be the mortgage creditor." According to Mindaugas Sologubas, "AB SNAIGĖ is now a functioning, viable company that pays taxes to state and salaries to its employees on time, makes current payments to its creditors, and exports its products to almost 30 European countries. "If the restructuring plan will not be approved, the legendary Lithuanian company, which is counting for sixty years this year, will cease to exist," said M. Sologubas. “-350 employees would be left without work, whose total salary fund in 2022 amounted to EUR 5,615,385.09, and the total amount of contributions charged to SODRA'i in 2022 amounted to EUR 1,393,718.33. Not only the company's creditors, but also the company's suppliers (about 100 companies) and the company's customers would be affected. AB SNAIGĖ, according to Mindaugas Sologubas the Director General, will consider the possibility of appealing against this court decision in accordance with the procedure provided for by legal acts. 20-03-2023 AB SNAIGĖ submitted a request for approval of the restructuring plan AB SNAIGĖ insolvency administrator Aurimas Valaitis applied to Kaunas Regional Court to approve the company’s restructuring plan. The basis of this application is the meeting of creditors of the company held on 16.03.2023 at which this issue was discussed. The decision to approve the restructuring plan in the group of non-mortgage creditors was taken by a majority vote (79%), and was not taken in the group of mortgage creditors. According to Mindaugas Sologubas, general director of AB "SNAIGĖ", the company respects the opinion of all creditors, is grateful to those who approved the draft restructuring plan and hopes that Kaunas regional court will approve this plan. In the opinion of Mindaugas Sologubas, the company's restructuring plan is in the interests of both the company and its creditors and gives optimism that the company will be able to resolve temporary financial problems. "The main strategic goal during the restructuring period is to optimize and restructure the company's activities so that the company can meet its obligations to creditors as soon as possible," said M. Sologubas. Currently, the company has more orders than it can produce due to lack of working capital, develops new refrigeration appliances, pays with employees and the state on time. Since the start of the restructuring, the company has paid over EUR 0.5 million to Sodra and more than EUR 0.6 million in taxes to the state. According to M. Sologubas, AB SNAIGĖ is not only a significant company in the region, employing almost 400 people, but also the only manufacturer of refrigerators in the Baltic States More than a hundred different Lithuanian companies Consolidated annual report for 2022 95 supply AB SNAIGĖ with their products, therefore, in the opinion of M. Sologubas, approval of the restructuring plan will preserve jobs for employees and income for related companies. During the restructuring plan, the company will implement the measures envisaged, which will help to increase the production and sales of professional and medical refrigeration appliances with a higher added value, as well as the production and sales of more profitable household refrigeration appliances. According to M. Sologubas, the company is already continuing its activities in the chosen direction. "Industrial products account for more than half of our turnover. Our goal is to have a fundamentally changed product portfolio in 2025, where professional refrigeration equipment will account for more than 70%. We're working on it at full capacity, we have a plan for how to do it, so I have reason to believe we'll succeed." 28-03-2023 Consolidated Interim Report for Year 2022 According to unaudited consolidated data, in 2022 the company reached 21 million. EUR turnover, i.e. one and a half times less than in 2021. According to Mindaugas Sologubas, general director of AB "Snaigė", the decreased turnover of the company is also a consequence of war and the cost raise of resources, transport and energy. “In the first half of last year, the war not only closed Ukraine, one of our largest markets, but also significantly frightened many our customers in Central and Western Europe." – says M. Sologubas. - "The uncertainty of the situation has prompted many of them to postpone their orders, to put their development plans on hold. In almost all of our markets, sales slowed down or even stopped in the first half of the year. Increase of energy prices in the second half of the year also affected significantly to the drop in sales." In order to ensure business continuity, the company prepared restructuring plan for the company's activities and began the restructuring process, which became effective in September. According to the Court, the prospects of the company's activities provided for in the draft restructuring plan lead to the conclusion that the company has real opportunities to restore solvency, which is why it was allowed to restructure. According to Mindaugas Sologubas, general director of AB "Snaigė “, currently the company is continuing to operate, producing refrigerators, developing its new category of industrial refrigeration products and has no intention of stopping. "We are trying to get out of this unfavourable for the company situation on our own," says M. Sologubas. "The biggest internal obstacle to our activity is the lack of working capital. We have many more orders than we can and actually produce. We cannot borrow yet, we pay for raw materials in advance, which also negatively affects the company's result". The company suffered of 2.7 million. EUR unaudited consolidated EBITDA loss. Mr Sologubas points out that almost half of this loss was due to the re-calculation of reserves, provisions and accumulations. This recalculation had to be done by the company following IFRS, due to the restructuring process and the assessment of the consequences of the war in Ukraine. Therefore, according to M. Sologubas, the real results of the company's everyday activities are better. In 2022, AB "Snaigė" exported 93% of its production. Sekenora Holdings Limited, a Cypriot investment company, is the main shareholder of SNAIGĖ. The SNAIGĖ group of companies includes two subsidiaries TOB SNAIGĖ UKRAINA and UAB ALMECHA. AB "Snaigė" is one of the largest employers of Alytus city and district, employing over 360 employees. The company supplies orders and works to many Lithuanian companies, annually pays the State of Lithuania about EUR 3 million in taxes. 27-02-2023 Resolutions of Snaige AB the Extraordinary Meeting of Shareholders The Extraordinary Meeting of shareholders of Snaige AB (further - the Company) was held on 27 February 2023. The following decisions on the agenda questions were adopted at the Extraordinary Meeting of the shareholders: The agenda question: 1. Approval of the Company’s restructuring plan. The decision: Approve the Company’s restructuring plan. 06-02-2023 Convocation of the Extraordinary General Meeting of Shareholders of Snaigė AB On 27 February 2023 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened (hereinafter, the “Meeting”). The Company will present the restructuring plan to the shareholders, which changed insignificantly when one of the mortgage creditors of AB SNAIGĖ transferred the claim rights to a new creditor, and the latter wanted to adjust the restructuring plan. According to the Company's restructuring plan, AB SNAIGĖ should resolve the temporary difficulties that arose due to the crisis of raw materials in, the increase in the price of energy resources and the war in Ukraine. Consolidated annual report for 2022 96 Before the change of the mortgage creditor, the Company's other creditors approved the Company's restructuring plan by a majority of votes during the first creditors' meeting. According to Mindaugas Sologubas, the Company's general director, the shareholders' meeting should approve the new restructuring plan because the changes made are not essential. Currently, AB SNAIGĖ continues its activities by manufacturing refrigeration appliances for domestic and professional purposes, paying employees and taxes to the state on time, and developing new projects. The place of the meeting –at AB “Snaige” office, at the address Kareiviu str. 6, Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.). The Meeting’s accounting day – 20 February 2023 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The meeting is initiating and convening by the decision of the Managing Director of the Company. Agenda and draft decisions of the Meeting: The agenda question 1. Regarding the approval of the restructuring plan of the Company. Draft of the decision: To approve the restructuring plan of the Company. The Company shall not provide the possibility to participate and vote in the Meeting through electronic communication channels. 27-01-2023 The deadline for submitting AB SNAIGĖ's restructuring plan has been extended (additional information provided) In 2023 January, 20, The Kaunas District Court granted the request of AB Snaigė's insolvency administrator Aurimas Valaitis to extend the deadline for submitting the Company's restructuring plan to the court until 2023 March 20 According to the Company's general director, Mindaugas Sologubas, this decision was made because one of the Company's mortgage creditors started transferring claim rights to a new creditor. Since the new creditor needed more time to enter the restructuring process due to the ongoing formalities, it was decided to postpone the consideration of the draft restructuring plan. (Additional information: AB SNAIGĖ's creditor, AO UniCredit Bank, transferred ownership of claim rights to a new creditor, UAB Easy Debt Service) The Company's other creditors approved the Company's restructuring plan by a majority of votes during the voting. In M. Sologubas's opinion, the Company's restructuring plan meets the interests of the Company and its creditors. It gives optimism that the Company will be able to resolve temporary financial problems. "The main strategic goal of the Company during the restructuring period is to optimize and reorganize the company's activities in such a way that the company can fulfil its obligations to creditors as soon as possible," said M. Sologubas. During the restructuring plan, the Company will implement the planned measures that will help increase the production volume and sales of industrial and medical refrigerating devices with higher added value, as well as the production and sales of more profitable exclusive domestic refrigerating devices. 23-01-2023 The deadline for submitting AB SNAIGĖ‘s restructuring plan has been extended In 2023 January, 20, The Kaunas District Court granted the request of AB Snaigė's insolvency administrator Aurimas Valaitis to extend the deadline for submitting the Company's restructuring plan to the court until 2023 March 20 According to the Company's general director, Mindaugas Sologubas, this decision was made because one of the Company's mortgage creditors started transferring claim rights to a new creditor. Since the new creditor needed more time to enter the restructuring process due to the ongoing formalities, it was decided to postpone the consideration of the draft restructuring plan. The Company's other creditors approved the Company's restructuring plan by a majority of votes during the voting. In M. Sologubas's opinion, the Company's restructuring plan meets the interests of the Company and its creditors. It gives optimism that the Company will be able to resolve temporary financial problems. "The main strategic goal of the Company during the restructuring period is to optimize and reorganize the company's activities in such a way that the company can fulfil its obligations to creditors as soon as possible," said M. Sologubas. During the restructuring plan, the Company will implement the planned measures that will help increase the production volume and sales of industrial and medical refrigerating devices with higher added value, as well as the production and sales of more profitable exclusive domestic refrigerating devices. Consolidated annual report for 2022 97 02-01-2023 Resolutions of Snaige AB the Extraordinary Meeting of Shareholders The Extraordinary Meeting of shareholders of Snaige AB (further - the Company) was held on 2 January 2023. The following decisions on the agenda questions were adopted at the Extraordinary Meeting of the shareholders: The agenda question: 1. Approval of the Company’s restructuring plan. The decision: Approve the Company’s restructuring plan. 5.3.2 Significant events in the company's activities on 2022 Significant events were reported to the Financial Services and Markets Supervision Department of the Bank of Lithuania, NASDAQ OMX Vilnius and published on the Company's website www.snaige.lt. 25-02-2022 The increase in sales for the three quarters did not compensate for the losses caused by higher raw materials, energy and transport prices. According to unaudited consolidated data, AB SNAIGĖ reached almost LTL 33.5 million in 2021. EUR turnover, i.e. 14 percent higher than the same period last year. However, more extensive sales did not compensate for increased costs due to higher raw materials, energy, and transport prices. Last year the company earned 0.5 million EUR unaudited consolidated EBITDA. According to Mindaugas Sologubas, General Manager of AB SNAIGĖ, the rise in prices of raw materials, their shortage and the disruption of the supply chain have negatively affected the quality of sales and the final result of the company. "Due to the lack of raw materials and their delivery delays, we were unable to place some orders on time. We often have produced what we could, rather than what we needed,"- said M. Sologubas. -"Late payments by some of our customers increased the shortage of working capital. In addition, rising energy costs aggravated the situation in the fourth quarter of last year. It has been increased several times and has become a daunting burden. All of this directly affected the company's results." However, despite the challenges and difficulties, AB SNAIGĖ is working stably, trying to survive this difficult stage and developing new products and even entering new categories. In 2021 the company continued to develop its professional and commercial equipment product lines. AB SNAIGĖ has developed new refrigerators for medical purposes that meet the highest industry requirements, including the DIN13277 standard. Preparations are also underway to produce industrial refrigerators for professional kitchens. The company has already made the first examples of these products. According to Mindaugas Sologubas, professional and commercial equipment is a strategic direction of the company and in the future, sales in this segment will account for almost half of SNAIGĖ's total sales. In 2021, AB SNAIGĖ exported to almost 30 countries in Europe, Asia and Africa. Exports accounted for 91 percent total turnover of the company. The company's most significant foreign sales markets in 2021 were Germany (25%), Ukraine (11%), Norway (7%), Austria (7%) and the Czech Republic (6%). Sekenora Holdings Limited, a Cypriot investment company, is the main shareholder of SNAIGĖ. SNAIGĖ Group owns two subsidiaries TOB SNAIGĖ UKRAINA and UAB ALMECHA. 28-02-2022 Information on the impact of the problematic political situation AB Snaigė, the only manufacturer of refrigerators in the Baltic States, has temporarily suspended the activities of its subsidiary ZAO Snaigė Ukraina. The investment in this company was 5 th. Eur. According to unaudited consolidated data, the company's revenue from sales in Ukraine amounted to 3.5 million. EUR, which is 11 percent total turnover of the company. It's also reflected in the company's consolidated unaudited financial statements for 2021. Currently, it is difficult to reasonably estimate the impact on the financial results due to various uncertainties. However, AB Snaigė exports its products to more than 30 European, Asian and African countries; therefore, the company hopes to compensate for lost sales in Ukraine in other markets. Consolidated annual report for 2022 98 07-04-2022 Convocation of the ordinary General Meeting of Shareholders of Snaigė AB On 29 April 2022 the ordinary General Meeting of Shareholders of Snaigė AB (hereinafter, the “Meeting”), the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened. The place of the meeting – at AB “Snaige” office, at the address Kareiviu str. 6 (5 th floor), Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.) Based on the COVID-19 morbidity rates in the country and the Company's concern for the health of its shareholders and employees, shareholders are invited to vote on the issues on the agenda of the General Meeting of Shareholders by submitting all General Voting Ballots to the Company in advance. It is recommended to firstly consider the possibilities of receiving the General Voting Ballot and advance voting remotely, and to come to the Company's office only in exceptional cases when there is no other possibility. The Meeting’s accounting day – 22 April 2022 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The Board of directors of the Company initiates and convenes the meeting. Agenda of the Meeting and drafts of resolutions: 1.Consolidated annual report of “Snaigė” AB on the company’s activity for 2021; Taken for information the consolidated annual report of “Snaigė” for 2021. A decision on approval of the remuneration statement for year 2021, which is in the annual report, could be taken at the choice of the shareholders; 2.Auditor’s conclusion on the company’s financial statements for 2021; Taken for information the auditor’s conclusion on the company’s financial statements for 2021. 3.Approval of the set of financial statements of the company for 2021; To approve the set of financial statements of the company for 2021. 4.Approval of distribution of profit (loss) of “Snaigė” AB for 2021; To approve the distribution of profit (loss) of “Snaigė” AB for 2021. 16-04-2022 SNAIGĖ AB information for the ordinary General Shareholders Meeting SNAIGĖ AB is providing the audited Company’s financial statements for 2021, the Auditor’s report, the annual report and the project of distribution of profit (loss) for the ordinary General Shareholders Meeting of the Company which will be held on 29 April 2022. The Company's shareholders are invited to participate in the ordinary General Shareholders Meeting and vote on the agenda items in writing, by filling voting ballot in advance and submitting to the Company (by address Pramones str. 6, Alytus, Lithuania. The document confirming the right to vote must also be sent together with voting ballot. Based on the COVID-19 morbidity rates in the country it is recommended to firstly consider the possibilities of receiving the General Voting Ballot and advance voting remotely, and to come to the Company's office only in exceptional cases when there is no other possibility. According to audited consolidated data, AB SNAIGĖ reached almost LTL 33.5 million in 2021 EUR turnover, i.e. 14 percent higher than the same period last year. However, more extensive sales did not compensate for increased costs due to higher raw materials, energy, and transport prices. Last year the company earned 0.5 million EUR unaudited consolidated EBITDA. According to Mindaugas Sologubas, General Manager of AB SNAIGĖ, the rise in prices of raw materials, their shortage and the disruption of the supply chain have negatively affected the quality of sales and the final result of the company. "Due to the lack of raw materials and their delivery delays, we were unable to place some orders on time. We often have produced what we could, rather than what we needed,"- said M. Sologubas. -"Late payments by some of our customers increased the shortage of working capital. In addition, rising energy costs aggravated the situation in the fourth quarter of last year. It has been increased several times and has become a daunting burden. All of this directly affected the company's results." However, despite the challenges and difficulties, AB SNAIGĖ is trying to survive this difficult stage and developing new products and even entering new categories. In 2021 the company continued to develop its professional and commercial equipment product lines. AB SNAIGĖ has developed new refrigerators for medical purposes that meet the highest industry requirements, including the DIN13277 standard. The company has developed and manufactured the first examples of industrial refrigerators for professional kitchens. Their series production will start in 2022. Consolidated annual report for 2022 99 According to Mindaugas Sologubas, professional and commercial equipment is a strategic direction of the company. In the future, this segment's sales will account for almost half of all sales of SNAIGĖ. The company plans to expand its medical refrigeration equipment further: there will be more refrigerator models for storing medicines and preparations, and we will introduce refrigerators to laboratories. There will be more modifications and a line of professional kitchen refrigerators. In 2021, AB SNAIGĖ exported to almost 30 countries in Europe, Asia and Africa. Exports accounted for 91 percent total turnover of the company. The company's most significant foreign sales markets in 2021 were Germany (25%), Ukraine (11%), Norway (7%), Austria (7%) and the Czech Republic (6%). Sekenora Holdings Limited, a Cypriot investment company, is the main shareholder of SNAIGĖ. SNAIGĖ Group owns two subsidiaries TOB SNAIGĖ UKRAINA and UAB ALMECHA. 26-04-2022 Correction: Convocation of the ordinary General Meeting of Shareholders of Snaigė AB Correction: the format of the annex has been adjusted. Annual reports are provided in the new ESEF zip format. On 29 April 2022 the ordinary General Meeting of Shareholders of Snaigė AB (hereinafter, the “Meeting”), the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened. The place of the meeting – at AB “Snaige” office, at the address Kareiviu str. 6 (5 th floor), Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.) Based on the COVID-19 morbidity rates in the country and the Company's concern for the health of its shareholders and employees, shareholders are invited to vote on the issues on the agenda of the General Meeting of Shareholders by submitting all General Voting Ballots to the Company in advance. It is recommended to firstly consider the possibilities of receiving the General Voting Ballot and advance voting remotely, and to come to the Company's office only in exceptional cases when there is no other possibility. The Meeting’s accounting day – 22 April 2022 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The Board of directors of the Company initiates and convenes the meeting. Agenda of the Meeting and drafts of resolutions: 1.Consolidated annual report of “Snaigė” AB on the company’s activity for 2021; Taken for information the consolidated annual report of “Snaigė” for 2021. A decision on approval of the remuneration statement for year 2021, which is in the annual report, could be taken at the choice of the shareholders; 2.Auditor’s conclusion on the company’s financial statements for 2021; Taken for information the auditor’s conclusion on the company’s financial statements for 2021. 3.Approval of the set of financial statements of the company for 2021; To approve the set of financial statements of the company for 2021. 4.Approval of distribution of profit (loss) of “Snaigė” AB for 2021; To approve the distribution of profit (loss) of “Snaigė” AB for 2021. 29-04-2022 Resolutions of Snaigė AB the General Meeting of Shareholders The General Meeting of shareholders of Snaige AB was held on 29 April 2022. The following resolutions were made on the meeting: 1. Consolidated annual report of “Snaigė” AB on the company’s activity for 2021; Taken for information the consolidated annual report of “Snaigė”, shareholders approved remuneration report; 2. Auditor’s conclusion on the company’s financial statements for 2021; Taken for information the auditor’s conclusion on the company’s financial statements for 2021 year; 3. Approval of the set of financial statements of the company for 2021; Approved the set of consolidated and the company’s financial statements for 2021 year; 4. Approval of distribution of profit (loss) of “Snaigė” AB for 2021; Approved the distribution of profit (loss) of “Snaigė” AB for 2021 year: Consolidated annual report for 2022 100 Article EUR Non-distributed profit (loss) at the end of the last financial year (10,080,925) Net result - profit (loss) of financial year (2,018,571) Profit (loss) for the reporting financial year not recognized in the income statement 845,784 Distributable result- profit (loss) of financial year (11,253,712) Transfers from reserves: 673,581 For the acquisition of own shares ----------- Transfers from mandatory reserve 673,581 Distributable profit (10,580,131) Distribution of profit 673,581 To reserve foreseen by law 673,581 Non-distributed result - profit (loss) at the end of financial year (11,253,712) 29-04-2022 Snaigė AB annual information for the year 2021 Snaigė, AB is presenting annual consolidated and Company‘s financial statements for the year 2021 (consolidated and Company’s financial statements together with independent auditor‘s report, consolidated annual report, social responsibility report, confirmation of the responsible persons) approved by the Annual General Meeting shareholders on 29 April 2022. 27-05-2022 The war affected the first quarter results of AB SNAIGE. According to unaudited consolidated data, in the first quarter of 2022, the Company reached almost 6 million EUR turnover, i.e. 20 percent less compared to the same period last year. The Company incurred a 0.7 million EUR unaudited consolidated EBITDA loss. According to Mindaugas Sologubas, General Manager of AB Snaige, the results of the first quarter were directly and indirectly affected by the war. "We lost one of the most important markets - Ukraine, for obvious reasons we transported very few refrigerators to this country. In January-February, even before Russia invaded Ukraine, sales were very low, apparently, people no longer cared much about household appliances” said M. Sologubas. "March was dead in terms of sales, most customers, even in Western Europe, stopped their orders, and everyone was waiting for what would happen next. I would say that the sales result achieved under these conditions can be assessed as satisfactory. " The price increase of raw materials, materials, transport, and energy resources also had a significant impact on the Company's negative results. With the outbreak of the war, these resources became even more expensive, supply chains became even more disrupted, and transport services began to be scarce. "Due to the lack of raw materials and their delivery delays, we were unable to place some orders on time. We have often been forced to produce what we could produce rather than what we needed to" said M. Sologubas. Late payments by some customers increased the shortage of working capital. The situation has been exacerbated by rising energy costs. They have risen several times and became a daunting burden for the Company. All of this had a negative impact on the Company's results. However, despite the difficulties, the Company continues to introduce its new professional and medical products to European markets and develops new projects. According to Mindaugas Sologubas, the Company has chosen this line of business because it has many years of experience in the refrigeration business, experienced specialists, and the necessary technical base for the development and production of such products. The Company has been urged by many of its customers to get involved in this area. In addition, the business of professional and medical devices is more profitable and less competitive. The Company planned that professional and medical refrigeration appliances will account for more than half of the Company’s portfolio. However, establishment in this business category is unexpectedly delayed due to the above-mentioned circumstances. In the first quarter of this year, AB Snaige exported 95% of its production. The largest sales markets were Germany, the Czech Republic, Italy, and Austria. Consolidated annual report for 2022 101 Sekenora Holdings Limited, a Cypriot investment company, is the main shareholder of SNAIGE. SNAIGE Group owns two subsidiaries: TOB SNAIGE UKRAINA and UAB ALMECHA. The Company has nothing to do with the Russian company Polair, as is erroneously stated in other sources. 27-05-2022 Convocation of the Extraordinary General Meeting of the Shareholders of Snaige AB On 23 June 2022 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened (hereinafter, the “Meeting”). The place of the meeting –at AB “Snaige” office, at the address Kareiviu str. 6, Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.). The Meeting’s accounting day – 16 June 2022 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The meeting is being initiated and convened by the decision of the Board of the Company. Agenda and draft decisions of the Meeting: The agenda question 1. Coverage of the Company’s losses by shareholders’ contributions. Draft of the decision: With reference to the fact that as per the balance sheet of the Company of 31 March 2022, the total equity of the Company is equal to EUR 2575039 and is lower than ½ of the share capital of the Company, and pursuant to Articles 38(3) and 59(10)(2) of the Law on Companies of the Republic of Lithuania, to cover a part of the Company’s losses equal to EUR 1,000,000 by additional contributions of shareholders of the Company. The agenda question 2. Approval of the project of the Company’s restructuring plan. Draft of the decision: To approve the project of the Company’s restructuring plan. Additional information regarding the agenda question 2: To avoid the temporary difficulties encountered by the Company and possible negative impact on the continuity of its operations, and according to Law on Insolvency of Legal Persons of the Republic of Lithuania - the Board of the Company proposes to initiate the restructuring of the Company. The Company's operations were adversely affected by the prolonged military conflict in Ukraine: the Company lost one of its largest markets, Ukraine, and trade has slowed in almost all of the Company's markets. Last year, the main raw materials and materials became more expensive, this year they became even more expensive. The increase in the cost of transport and the significant lack of this service also contributed. Therefore, not wanting to risk the future of a viable and potential Company, to ensure jobs and social guarantees for its employees, the Board of the Company decided to initiate the restructuring process of the Company. This will allow the Company to breathe a sigh of relief, use its working capital more efficiently and achieve its strategic goal of becoming a manufacturer of professional and medical refrigeration equipment. For several years now, AB SNAIGĖ has been consistently pursuing this goal: it has developed and started manufacturing storage refrigerators, refrigeration units for cold rooms, and pharmaceutical refrigerators (one of which is DIN-certified), and this year it has started serial production of refrigerators for professional kitchens. AB SNAIGĖ has chosen this line of business because it has many years of experience in the refrigeration business, experienced specialists, and the necessary technical base for the development and production of such products. The Company has been urged by many of its customers to get involved in this area. In addition, the business of professional and medical devices is more profitable and less competitive. The Company planned that professional and medical refrigeration appliances will account for more than half of the Company’s portfolio. However, establishment in this business category took an unplanned period due to the above-mentioned circumstances. Following the start of the restructuring process, the Company would continue to operate and meet its obligations to its employees and customers. As before, the Company will continue to pay taxes to the Social Security and the state on time. 11-06-2022 Information for the Extraordinary General Meeting of Shareholders of Snaige AB Provided is the additional information for the Extraordinary General Meeting of Shareholders (hereinafter - the Meeting) of Snaige AB (hereinafter - Company) which is convened on June 23rd, 2022 10 a.m. on the agenda item No. 2 .: Regarding the approval of the project of the Company’s restructuring plan. The Company's shareholders are invited to participate in the Meeting and vote on the agenda items in writing, by filling voting ballot in advance and submitting to the Company (by address Pramones str. 6, Alytus, Lithuania). The document confirming the right to vote must also be sent together with voting ballot. Based on the COVID-19 morbidity rates in the country it is recommended to firstly consider the possibilities of receiving the General Voting Ballot and advance voting remotely, and to come to the Company's office only in exceptional cases when there is no other possibility. Consolidated annual report for 2022 102 23-06-2022 Resolutions of Snaige AB the Extraordinary Meeting of Shareholders The Extraordinary Meeting of shareholders of Snaige AB (further - the Company) was held on 23 June 2022. The following decisions on the agenda questions were adopted at the Extraordinary Meeting of the shareholders. The agenda question: 1. Coverage of the Company’s losses by shareholders’ contributions. The decision: Disapprove of covering Company’s losses by shareholders’ contributions. The agenda question: 2. Approval of the project of the Company’s restructuring plan. The decision: Approve the project of the Company’s restructuring plan. 01-07-2022 AB SNAIGĖ applied to the court for the initiation of a restructuring case AB "Snaigė" (the "Company") informs that, in order to implement the restructuring according to the draft restructuring plan of the Company approved by the extraordinary general meeting of the Company’s shareholders on 23 June 2022, on 1 July 2022 the Company applied to the Kaunas District Court (the "Court") with a request to initiate the Company's restructuring case. After the court decides to initiate the Company's restructuring case, the Company's restructuring plan should be coordinated with the Company's creditors specified by LILE and submitted to the Court for approval within the next 6 months. The Court should then issue a ruling on the approval of the restructuring plan within the following 14-day period. The Company will inform about the further most significant decisions of the Court in the restructuring process of the Company separately. 15-07-2022 Notice to shareholders Dear Shareholders, we inform you that on 14.07.2022 the District Court of Kaunas in civil case no. eB2-1226-555/2022 adopted a ruling, to accept the statement of the General Manager of AB "Snaigė" Mindaugas Sologubas regarding the filing of a restructuring case of AB "Snaigė". The civil case is intended to be examined at a court session in the order of the written process in 2022 on September 6 at 9:00 a.m., the date, time, place, and composition of the court will be announced on a special website. 08-09-2022 The Kaunas District Court made a decision to initiate the restructuring case of AB SNAIGE On 2022 September 9th The Kaunas District Court made a decision to initiate the restructuring case of AB SNAIGE and appointed as the restructuring administrator the JSC Įmonių bankroto administravimo ir teisinių paslaugų biuras. The Kaunas District Court has set a deadline of thirty days from the date of publication of the court order to file a restructuring case on the website of the supervisory authority, during which the creditors have the right to submit their claims and supporting documents to the appointed restructuring administrator, as well as indicate how the fulfillment of these claims is ensured. Also, the court set a deadline of four months, calculated from the date of entry into force of the ruling, to prepare and submit to the court the restructuring plan of AB SNAIGĖ. According to the AB SNAIGE General Manager Mindaugas Sologubas, such court decision was expected. "The court's decision to initiate a restructuring case gives the company an opportunity to straighten up, solve the problems it faced due to the war, raw materials and energy crisis, avoid bankruptcy and settle with its creditors," says M. Sologubas. "Now the company's immediate goal is to prepare a restructuring plan that meets the interests of creditors and the company and to approve it in the court." 30-09-2022 The war harms AB SNAIGĖ results of the first half of this year According to unaudited consolidated data, the company reached almost 12 million in the first half of 2022. EUR turnover, i.e. 29 percent lower than in the same period last year. The company suffered a 1.6 million EUR unaudited consolidated EBITDA loss. According to Mindaugas Sologubas, General Manager of AB Snaigė, the protracted war and the rising cost of resources and transport negatively affected the company's results. The company has lost Ukraine, one of the most important markets for its production. The war also negatively affected other AB SNAIGĖ markets, such as central and western Europe. Sales have slowed down significantly or even stopped. The uncertainty of the situation prompted many of the company's customers to postpone their orders and suspend their development plans. To ensure continuity of operations, the company prepared a restructuring plan for the company's operations and started the restructuring process, which became effective on September 20. According to the court's assessment, the prospects of the company's activities in the draft restructuring plan lead to the conclusion that the company has real opportunities to restore solvency, which is why it was allowed to restructure. According to Mindaugas Sologubas, the company continues to operate, manufactures refrigerators, develops its new line of industrial refrigeration products and does not intend to stop. The company pays taxes to the state and settles with employees on time. Consolidated annual report for 2022 103 AB Snaigė exported 93% of its production in the first half of this year. Germany, the Czech Republic, Italy and Austria were the most significant company's sales markets. Sekenora Holdings Limited, a Cypriot investment company, is the main shareholder of SNAIGĖ. The SNAIGĖ group includes two subsidiaries TOB SNAIGĖ UKRAINA and UAB ALMECHA. The company is one of the largest employers in the city and district of Alytus, provides orders to many Lithuanian companies. The company pays the Lithuanian state about 3 million. EUR in taxes annually. 30-09-2022 Resignation from the position of the board member of SNAIGĖ AB Snaigė AB has received notification from board member Oleg Tsarkov about his resignation from the position of the board member of Snaigė AB. Pursuant to p. 11 article 33 of the Law on Companies of the Republic of Lithuania the last day of Oleg Tsarkov's work on the board is 13 th of October 2022. 25-11-2022 AB SNAIGĖ III quarter results According to consolidated unaudited data, AB SNAIGE managed to stop the growth of losses: in the third quarter of this year, it was three times lower than in the second and reached 263 thousand. euros. However, the factors affecting the company's activities negatively, such as the war, rising prices of energy resources, inflation, and recession in Europe, have remained. According to AB SNAIGĖ CEO, Mindaugas Sologubas, the company is currently continuing to operate, producing refrigerators, developing its new line of industrial refrigeration products and has no intention of stopping yet. "We are trying to get out of this unfavourable situation for the company on our own," says M. Sologubas. "The biggest internal obstacle to our activity is the lack of working capital. We have many more orders than we can produce. We cannot borrow; for the time being, we pay for raw materials in advance, which negatively affects the company's result". In the third quarter, AB SNAIGĖ implemented an impressive and honourable order. Refrigerators of the Retro line in various colours produced by the company will be sold in Lidl stores in Germany. According to unaudited consolidated data, the company reached over 16 million EUR turnover in three quarters of this year, i.e., one and a half times lower than in the same period last year. The company suffered a 1.9 million EUR unaudited consolidated EBITDA loss. According to unofficial data, the main shareholder of AB SNAIGĖ's shares, Sekenora Holdings Limited, a Cypriot investment company, is considering the possibility of selling the company's shares. According to AB SNAIGĖ CEO M. Sologubas, the appearance of a new shareholder would significantly improve the company's situation. A change in the shareholder's country of origin alone would solve many problems that M. Sologubas believes the company is undeservedly facing. AB "Snaigė" exported 93% of its production in three quarters of this year. Germany, the Czech Republic, Italy and Austria were the most significant company's sales markets. The AB SNAIGĖ group includes two subsidiaries TOB SNAIGĖ UKRAINA and UAB ALMECHA. The company is one of the largest employers in the city and district of Alytus, with more than 370 employees, it supplies orders and works to many Lithuanian companies, and it pays the Lithuanian state about 3 million. EUR taxes. In September, the company started the restructuring process. 09-12-2022 Convocation of the Extraordinary General Meeting of Shareholders of Snaigė AB On 2 January 2023 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the “Company”) is convened (hereinafter, the “Meeting”). The company is ready to present to its shareholders a restructuring plan to solve the temporary difficulties that arose due to last year's raw materials crisis, the increase in the price of energy resources and the war in Ukraine. Currently, AB SNAIGĖ continues its activities by manufacturing refrigeration devices for domestic and professional purposes, paying salaries to employees and taxes to the state on time, and developing new projects. The place of the meeting –at AB “Snaige” office, at the address Kareiviu str. 6, Vilnius, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.). The Meeting’s accounting day – 23 December 2022 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The meeting is initiating and convening by the decision of the Managing Director of the Company. Agenda and draft decisions of the Meeting: The agenda question 1. Regarding the approval of the restructuring plan of the Company. Draft of the decision: To approve the restructuring plan of the Company. The Company shall not provide the possibility to participate and vote in the Meeting through electronic communication channels. Consolidated annual report for 2022 104 16-12-2022 Information for the Extraordinary General Meeting of Shareholders of Snaige AB AB "Snaigė" (the "Company") informs that, in order to implement the Company's restructuring according to the Company's draft restructuring plan, approved by the Company's extraordinary general meeting of shareholders on June 23, 2022, the Company has prepared a restructuring plan and presents it to its‘ shareholders for approval at the meeting, that will take place on January 2, 2023. According to AB SNAIGĖ General Director Mindaugas Sologubas, the Company's restructuring plan meets the interests of both the Company and its creditors. It gives optimism that the Company will be able to resolve temporary financial problems. "The main strategic goal of the Company during the restructuring period is to optimize and reorganize the company's operations so that it can fulfil its obligations to creditors as soon as possible," said M. Sologubas. During the restructuring plan, the Company will implement the planned measures, which will help to increase the production volume and sales of professional and medical refrigerating equipment with higher added value and the production and sales of more profitable exclusive domestic refrigerating appliances. "Over the past few years, we have consistently developed the segment of professional refrigeration equipment: we invested in production lines (1.2 million euros), created a dozen new products, received international quality certificates, participated in an international exhibition and secured the support of some large customers," said M. Sologubas. "Already, professional products make up 48 percent of our turnover, when in 2019 accounted for 16 percent. We aim to have a radically changed product portfolio in 2025, in which professional refrigeration equipment will make up more than 70 percent. We are working on it at full capacity, we have the plan to do it, so I am sure we will succeed." During the implementation of the restructuring plan, part of the Company's long-term assets planned to be sold, without which the Company can continue to operate and earn income. Its sale would allow a significant reduction in liabilities. Taking into account the deadlines for the initiation, preparation and approval of the restructuring process provided by the law of the Republic of Lithuania, after the approval of the majority of creditors, the restructuring plan is expected to be approved and begin implemented at the beginning of 2023, and completed within four years. The Company's General Director will be responsible for the Company's restructuring process, and the restructuring administrator will carry out the supervision. 3.4 Strategies and plans In order to avoid the temporary difficulties that the Company is experiencing (higher raw material costs than the Company's production costs, partial loss of the Ukrainian market as a result of the war as well as stagnation in the Company's other markets, higher energy costs, etc.) and the potential negative impact on the Company's business continuity, the Board of the Company has initiated a restructuring process of the Company. The main strategic goal of the Company during the restructuring period is to optimize and reorganize the Company's activities so that the Company can fulfill its obligations to creditors as soon as possible. The restructuring will include the implementation of planned measures to increase the production and sales of higher value-added professional and medical refrigeration appliances, as well as the production and sales of more profitable exclusive household refrigeration appliances. This will improve the Company's profitability and other financial indicators. In addition, the Company plans to sell part of its real estate and financial assets. In the short term, the Company's main objective is to maintain the confidence of its creditors and to secure an uninterrupted supply of raw materials and components. This is a prerequisite for the continuity of the Company's operations. Therefore, the Company intends to continue with its main contracts and to add its main suppliers to the list of non-impaired creditors and to settle with them. During the restructuring process, the Company will continue its operations and its obligations to employees and customers. The Company will continue to pay its taxes to the Social Security and the State on time, as before. The restructuring plan is expected to last four years. Taking into account the deadlines for the initiation of the restructuring process, the preparation and approval of the plan provided for in the Law on Insolvency of Legal Entities of the Republic of Lithuania, and subject to the approval of the majority of creditors, it is expected that the restructuring plan will be approved and implemented in the 2023, and that it will be completed provisionally by the end of 2026. Consolidated annual report for 2022 105 4 CORPORATE REMUNERATION REPORT GENERAL INFORMATION ABOUT THE REMUNERATION REPORT The Remuneration report of AB „Snaigė“ has been prepared for reporting financial period of 2022, which coincides with the calendar year. The Remuneration report (hereinafter - the Report) was prepared in accordance with the Law on Financial Statements of Entities of the Republic of Lithuania, Remuneration provisions applicable to the Managing Director and members of the Board of AB „Snaigė“, approved by the General Meeting of Shareholders 30 April 2022, the Company's remuneration policy and other legal acts. These Remuneration Provisions apply to the Company's Managing Director and members of the management bodies insofar as they relate to the payment of monetary remuneration for activities in the Company's management bodies. The remuneration report shall include information on the remuneration of each member of the management bodies, if he was paid, and other data. INFORMATION ON REMUNERATION RECEIVED BY MEMBERS OF MANAGEMENT BODIES During 2022, the remuneration of the head of the company was accrued and paid, which was determined by the Board and fixed in the employment contract. The employment contract of the head of the company is for an indefinite period. The salary of the Managing Director of the Company, as well as other employees of the Company, is paid in accordance with the procedure and terms provided for in the employment contract. The rules of increased remuneration do not apply to the Company‘s Managing Director and he is not paid for overtime work, work on weekends or holidays, as well as night work. Average wages by employee groups are presented in the annual report. No bonuses or allowances have been awarded by the Board or paid to the CEO in 2022. Until 2023, the Company does not remunerate the members of the Board of the Company elected by the Ordinary General Meeting of Shareholders. Bonuses are also not paid. FINAL PROVISIONS OF THE REMUNERATION REPORT The Report approved by the Board of the Company is submitted to the Ordinary General Meeting of Shareholders, which at its own discretion decides to approve the Remuneration Report or not. Such (non) approval does not release the Board from the responsibility for the decision taken. The Remuneration Report for 2022 is an integral part of the consolidated annual report and is published in accordance with the procedure established by legal acts on the Company's website www.snaige.lt and www.nasdaqomxbaltic.com. Social Responsibility Report for 2022 106 UNDER RESTRUCTURING SNAIGĖ AB AND CONSOLIDATED SOCIAL RESPONSIBILITY REPORT FOR 2022 Social Responsibility Report for 2022 107 CONTENTS MESSAGE FROM THE MANAGING DIRECTOR OF SNAIGE AB 108 SCOPE OF THE REPORT 109 PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITY 110 COMPANY PRESENTATION AND PERFORMANCE INDICATORS 111 ADHERENCE TO HUMAN RIGHTS. EMPLOYEES AND OTHER SOCIAL ISSUES 1166 ENVIRONMENT PROTECTION 120 Social Responsibility Report for 2022 108 MESSAGE FROM THE MANAGING DIRECTOR OF SNAIGĖ AB Dear All, Although we cannot be satisfied with good results, we are happy to have peaceful skies, to be able to work, to make plans and to enjoy this day. Our condolences to all the people of Ukraine, to our partners and colleagues who have lost their loved ones, their homes, their businesses and, most importantly, their normal, peaceful lives. The war has touched all of us, even those a thousand kilometres away. It has also affected our company. In the first half of last year, the war not only deprived us of Ukraine, one of our biggest markets, but also frightened many of our Central and Western European customers. The uncertainty of the situation has led many of them to postpone their orders and halt their expansion plans. In the first half of the year, sales slowed down or even stopped in almost all our markets. The subsequent wave of rising energy prices also contributed significantly to the decrease in sales. Therefore, according to unaudited consolidated data, we achieved a turnover of EUR 21 million in 2022; one and a half times lower than in 2021. To ensure the continuity of its operations, the Company prepared a business restructuring plan and started the restructuring process, which entered into force at the beginning of September of 2022. In the Court's view, the prospects for the company's business as set out in the draft restructuring plan lead to the conclusion that the company has a realistic prospect of being able to restore its solvency, and the company was therefore allowed to restructure. In 2022, the Company incurred an unaudited consolidated EBITDA loss of EUR 2.7 million. I would like to underline that almost half of this loss is due to the recalculation of reserves, provisions and accruals. The Company had to make this recalculation due to the ongoing restructuring process and the assessment of the consequences of the war in Ukraine. As a result, the Company's actual results of operations are better than those reported. Last year, we exported 93% of our production, mainly to Western and Central European countries such as Germany, Austria, Poland and the Czech Republic. The Company's main strategic goal for the coming years and throughout the restructuring period is to optimise and restructure the Company's operations in order to be able to meet its obligations to its creditors as quickly as possible. We do not intend to stop; our goal is to become a stable and profitable company. Social Responsibility Report for 2022 109 SCOPE OF THE REPORT This report presents activities of Snaigė AB in 2022. The social responsibility report is prepared once a year and published together with the annual performance results. The report for the year 2022 is the sixth Social Responsibility Report of the Group and the Company. This report has been prepared in accordance with the European Commission Communique “Guidelines for Non-Financial Reporting (2017 / C 215/01)” and “Guidelines for the Global Reporting Initiative (GRI)”. The report is not audited. This report provides non-financial information on responsible business to the interested parties: customers, shareholders, investors, employees, suppliers, business and social partners and the public. Social Responsibility Report for 2022 110 PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITY The company's social responsibility strategic principles In its activities, the company follows the highest standards of business ethics and the principles of social responsibility. The Company seeks to preserve the status of a reliable social partner not only in Alytus, but also on a national scale by contributing to solving current social problems of our society. The company's social responsibility is divided into the following separate areas: - Taking care of the health, well-being and motivation of its employees, development of professional competence of employees (see more – Employees). - Maintaining good relations with communities, as well as openness to other interested parties and the public. - Development of various social initiatives and projects for local communities. - Education of a civil society that cares about the future of Lithuania (through educational campaigns). Social Responsibility Report for 2022 111 COMPANY PRESENTATION AND PERFORMANCE INDICATORS Strategy and Goals of the Company In order to avoid the temporary difficulties that the Company is experiencing (higher raw material costs than the Company's production costs, partial loss of the Ukrainian market as a result of the war as well as stagnation in the Company's other markets, higher energy costs, etc.) and the potential negative impact on the Company's business continuity, the Board of the Company has initiated a restructuring process of the Company. The main strategic goal of the Company during the restructuring period is to optimize and reorganize the Company's activities so that the Company can fulfill its obligations to creditors as soon as possible. The restructuring will include the implementation of planned measures to increase the production and sales of higher value-added professional and medical refrigeration appliances, as well as the production and sales of more profitable exclusive household refrigeration appliances. This will improve the Company's profitability and other financial indicators. In addition, the Company plans to sell part of its real estate and financial assets. In the short term, the Company's main objective is to maintain the confidence of its creditors and to secure an uninterrupted supply of raw materials and components. This is a prerequisite for the continuity of the Company's operations. Therefore, the Company intends to continue with its main contracts and to add its main suppliers to the list of non-impaired creditors and to settle with them. During the restructuring process, the Company will continue its operations and its obligations to employees and customers. The Company will continue to pay its taxes to the Social Security and the State on time, as before. The restructuring plan is expected to last four years. Taking into account the deadlines for the initiation of the restructuring process, the preparation and approval of the plan provided for in the Law on Insolvency of Legal Entities of the Republic of Lithuania, and subject to the approval of the majority of creditors, it is expected that the restructuring plan will be approved and implemented in the beginning of 2023, and that it will be completed provisionally by the end of 2026. Mission Our Mission is to develop financially disciplined business that provides consumers with good value and quality products and our shareholders with top-tier returns on their investments. Vision Our goal is to become the most reliable home appliances brand for consumers in the Eastern Europe and the preferred choice for OEM supplier in the Western Europe. Values Open minded. Trustworthy. Teamwork. Flexibility. Basic data about the Company The name of the Company –SNAIGĖ AB (hereinafter referred to as the “Company”) Authorised capital as of 31 December 2022 – EUR 6,735,807.15 Address – Pramonės str. 6, LT-62175 Alytus Phone – (+370 315) 56 206 Fax – (+370 315) 56 207 E-mail – snaige@snaige.lt Internet web page – http://www.snaige.lt Legal organisation status – legal entity, public limited company Registered as a Public Enterprise of the Republic of Lithuania on 1 December 1992 in the Municipality Administration of Alytus; registration number AB 92-119; enterprise register code 249664610. The latest Articles of Association of Snaigė AB were registered on 24 November 2021 in the Register of Legal Entities of the Republic of Lithuania. Social Responsibility Report for 2022 112 The type of the Company’s main business activities The main business activities of the Company are manufacture of refrigerators and freezers, the manufacture of household electrical appliances and other activities permitted by the laws of Lithuania as indicated in the Articles of Association. The Company’s company group structure Information about the Company‘s subsidiaries The Company’s group consists of the refrigerator manufacturer Snaigė AB, based in Alytus, and the following subsidiaries: • Almecha UAB. Main activity – manufacturing of miscellaneous machinery and equipment. The enterprise was registered in November 2006. Address: Pramonės str. 6, Alytus, Lithuania. • Snaigė-Ukraine OOO. Main activity – sales of refrigeration appliances, sales, consulting and services. The enterprise was registered in November 2002. Address: Grushevski str. 28-2a/43 Kiev, Ukraine. OPERATING REVIEW General rates, describing the Company's business performance, their behaviour The financial figures for the recent years are presented in general. (consolidated data): 2022 2021 2020 Turnover (continuing operations), EUR thousand 21,220 33,538 29,418 Gross profit (continuing operations), EUR thousand (609) 3,249 3,150 Net profit (loss) from continuing operations, EUR thousand (5,170) (1,974) 158 Net (loss) from discontinued operations, EUR thousand - - - Net profit (loss), EUR thousand (5,170) (1,974) 158 Average share price, EUR 0.147 0.215 0.163 Financial figures 2022 2021 2020 Profit before tax indicator, % (current year profitability of continuing operations) -27.02% -5.81% 0.42% General mark-up (continuing operations), % -2.87% 9.69% 10.71% EBITDA mark-up (continuing operations), % -12.95% 1.50% 9.2% Solvency ratio, % (general short-term solvency) 333.93% 91.06% 112.79% Debt to assets ratio, % (general debt ratio) 108.01% 86.43% 77.65% Return on average shareholders’ equity (continuing operations), % -357.93% -55.29% 2.85% Social Responsibility Report for 2022 113 Shares indicators 2022 2021 2020 Net profit per share (continuing operations), EUR -0.13 -0.05 0.004 Net loss per share (discontinued operations), EUR - - - Net profit per share (total), EUR -0.13 -0.05 0.004 Average annual share market price, EUR 0.147 0.215 0.163 EBITDA per share (continuing operations), EUR -0.07 0.01 0.07 EBITDA multiplier (EBITDA per share / Average annual share market price) -0.48 0.05 0.43 Total dividends, EUR thousand - - - Dividends per share, EUR - - - Average net book share value (continuing operations), EUR -0.04 0.09 0.14 The Company’s Management bodies Management Bodies are: • General shareholders meeting; • The management board is formed of five members and elected for the period of 4 years; • Head of the Company – Managing Director. The calling of general shareholder meeting, the competence of the meeting has no differences from the procedures and competences indicated in the Law on Companies of Republic of Lithuania. The Board of the Company elected and resigned by the General Meeting of Shareholders according to the procedures indicated by the Law on Companies. The management board has a right to take decision to issue bonds and performs a supervisory function. The competence of the management board has no other differences from the competences indicated in the Law on Companies. The work procedures of the management board are set by the board’s work rules of procedure. The competence of the head of the Company, his nomination and resignation procedures are not different from those indicated in the Law on Companies. The Company has the Audit committee which is the operating collegial administrative body and which was elected by shareholders in 2009. The Audit committee is operating by Audit committee’s labour regalement. During the General Meeting of Shareholders held in 2019, the shareholders appointed two elected independent members of the Board to the Audit Committee and authorized the Board of the Company to appoint members to the Audit Committee in the future. Legal basis of the Company’s operations Snaigė AB uses the Company’s articles of association, Law on Companies of the Republic of Lithuania, other legal acts issued by the Republic of Lithuania and European Union as legal guidelines for operations. Social Responsibility Report for 2022 114 Corporate governance bodies Information about the members of management bodies with regard to the share of the Company’s authorized capital: NAME Position Available number of shares, units Share capital, per cent Votes, per cent BOARD Aleksey Kovalchuk Snaigė AB chairman of the board - - - Konstantin Kovalchuk Snaigė AB member of the board - - - Anna Korneeva Snaigė AB member of the board - - - ADMINISTRATION (Managing Director and Chief Financial Officer) Mindaugas Sologubas Snaigė AB Managing Director - - - Vytautas Adomaitis Snaigė AB Chief of the Accounting and Finance Department - - - Participating in other companies activities and interests (31 December 2022): Name Name of organisation, position Share of the capital and votes available in other companies, in percentage Aleksey Kovalchuk Does not participate in other Lithuanian companies activities and interests - Konstantin Kovalchuk Does not participate in other Lithuanian companies activities and interests - Anna Korneeva Does not participate in other Lithuanian companies activities and interests - Mindaugas Sologubas Almecha UAB member of the board - Verslo Architektūra UAB Managing Director 100% Vytautas Adomaitis Does not participate in other Lithuanian companies activities and interests - Information about start date and end date of the office term of each member of the management body NAME Start date of the office term End date of the office term BOARD Aleksey Kovalchuk 14/12/2011 Until February 2023 Oleg Tsarkov 30/04/2015 Until February 2023 Konstantin Kovalchuk 30/04/2018 Until February 2023 Anna Korneeva 15/05/2019 Until February 2023 ADMINISTRATION (Managing Director and Chief Accountant) Mindaugas Sologubas 21/09/2019 Term less agreement (23/09/2014 – 20/09/2019 Finance Director Snaige AB) Vytautas Adomaitis 03/10/1983 Term less agreement Social Responsibility Report for 2022 115 The Company’s group’s management structure Mindaugas Sologubas – Managing Director Rūta Petrauskaitė – Marketing Director. Ruslanas Lugovik – Executive Director. Vytautas Adomaitis – Chief of the Accounting and Finance Department. Social Responsibility Report for 2022 116 ADHERENCE TO HUMAN RIGHTS. EMPLOYEES AND OTHER SOCIAL ISSUES Protection of Human Rights The Company carries out its business activities in accordance with the principles of protection of human rights, the principles of equal opportunities and non-discrimination on other grounds, and the procedure for implementation of these principles. This means that any direct or indirect discrimination in relationship between an employer and employees, harassment, an instruction to discriminate on the basis of sex, race, ethnicity, and etc. due to circumstances that are not relative to professional competences of employees is intolerable. The Company assures that people who are searching for employment or current employees would not be subject special behaviour unless this is related to the quality of work performed or other business functions. The Company also assures the transparent wages policy, complies with the right of employees to have a rest, takes measures to help an employee to discharge his/her family obligations. The Company regulates the principles of collection, usage, and storage of personal data of employees, sets the goals and means of management of personal data of employees, assigns persons who are authorized to review the personal data of employees, and the sets the purposes of this review. Seeking to protect the rights of employees, the Company adopted the policy of equal opportunities and the policy of storage of personal data of employees, the procedure for usage of information and communication technologies, and other procedures. Principles of the Personnel Policy Besides the size, image, and strategy of the Company, the Company‘s success, to a wide extent, also depends on the Company‘s behaviour with its employees. All challenges and changes that are faced by the Company affect its employees as well. Therefore the efficiency of the Company‘s business, first and utmost, is predetermined by the Company’s ability to manage human resources. The Company‘s personnel policy and management of human resources is composed of: planning of human resources, personnel formation (personnel attraction, selection, employment, and maintenance), personnel upbringing, evaluation of a job, personnel motivation, the standard of behaviour, occupational safety, and assurance of social conditions. In the event of changes and new challenges, it is important to be able to maintain qualified, skilled, and motivated personnel capable of performing the tasks set with as low costs as possible and to help the Company to achieve its strategic goals. Strategic Management of Human Resources The objective of the personnel policy is to help employees to be adapted to new environmental requirements and implement strategic goals, this means enhancement of administration efficiency, combination of the practice of human resources and the general strategy of the Company, and evaluation of human resources. Planning of Human Resources. This planning includes planning of the efficient number of job positions and structure, planning of a requirement for human resources, and evaluation of planning quality. Analysis of the Activity. Seeking to assure a more efficient management of human resources, it necessary to evaluate new tasks of the activity, eliminate an inefficient activity, duplication of functions, and regroup and redistribute functions. Evaluation of a Job and a Career. The objective of evaluation of the activity is the maximal matching of the personnel activity and the goals of the Company. The procedure of management of the activity means the setting of definite and achievable objectives, monitoring of achievement of objectives, coordination of the activity (objectives) of employees, adjustment of the objectives set, and annual evaluation of the activity of personnel. When planning a career, it is important to take into consideration not only the past, which is the results of the job of an employee, but also the future – the skills of an employee, his/her capability for development and response to changes, and performance of more complex tasks – his/her potential. Personnel Motivation. For the time being, still being under difficult economic conditions, it is necessary to pay more attention to strengthening social motivations: for encouragement of personal achievements, increase of responsibility, formation of group or team membership, creation of conditions for management, personal expression, and etc. Social Responsibility Report for 2022 117 Turnover of Employees The employees of the Company in 2020–2022 according to the personnel groups: Employees 2022 2021 2020 Amount % Average salary, EUR Amount % Average salary, EUR Amount % Average salary, EUR Managers 20 4.7 3,504 21 4.0 3,485 21 4.2 3,397 Specialists 74 17.3 1,392 87 16.8 1,352 85 17.3 1,259 Workers 334 78.0 912 411 79.2 907 386 78.5 820 In total: 428 100 1,123 519 100 1,100 492 100 1,012 Average annual data The structure of the Company’s employees in 2019–2021 according to education level Education level of the employees 2022 2021 2020 Amount % Amount % Amount % University education 86 20.1 100 19.3 98 19.9 Professional high school education 287 67.0 348 67.0 325 66.1 Secondary education 55 12.9 67 12.9 65 13.2 Uncompleted secondary education 0 0 4 0.8 4 0.8 Total: 428 100 519 100 492 100 Average annual data The employees of the Company and its subsidiaries in 2019–2021 according to personnel groups: Employees 2022 2021 2020 Amount % Amount % Amount % Managers 22 4.9 22 4.1 23 4.3 Specialists 81 17.9 94 17.3 95 17.7 Workers 349 77.2 427 78.6 418 78.0 Total: 452 100 543 100 536 100 *Average annual data Wage System The Company is seeking to form an effective and fair wages policy the purpose of which is to attract, maintain, and motivate employees whose qualification and results of a job help the Company to successfully perform its mission and achieve the tasks set. The Company formed and adopted a wages system that regulates the procedure for payment for work, the accountancy of wages for works in a night shift, overtime work, work during days off and holidays, time limits for settlement of accounts with employees, sets the categories of employees according to employment positions, indicates the procedures for payment and amounts of wages according to employment positions and groups of positions, and supplements the procedure for allocation of supplemental payments (additions, premiums, and bonuses). The wages system is applied to all the Company’s employees. The Company seeks to pay fair wages meeting market conditions with due consideration of competences of each individual employee and the benefit generated by him/her for the Company. The wages system was adopted after consultations with the representatives of the Company’s trade union in accordance with the principles of equality and non-discrimination on other grounds. Social Responsibility Report for 2022 118 Trade Unions The trade union uniting 42 percent of the total number of employees of the Company is operating in the Company. Representatives of the trade union are invited to the meetings of the Company’s management. Economic, social, and labour issues that are important to the Company also are discussed with the trade union. Union Agreement The Company has entered into the union agreement with the trade union representing the Company‘s employees. This agreement is fulfilled in accordance with the principles of mutual understanding and openness. If any disagreement arises, problems are settled amicably and in a spirit of mutual trust. The union agreement provides for the regulations for conclusion and amendment of employment contracts, the time limits of work and rest, payment of wages, terms and conditions of work, and qualification and social security issues. The objective of the agreement is the formation of conditions for the consistent development of business and assurance of the level of working conditions which is better than provided for in the legal acts of the Republic of Lithuania. The union agreement foresees the following additional social guarantees for employees: in the event of death of the Company's employee the member of the employee’s family will receive a death allowance; in the event of death of the member of the family of an employee, an employee receives an allowance; allowances also are paid to congratulate an employee with a jubilee (50 years, 60 years anniversary); during Christmas events children of employees are given Christmas gifts; during a calendar year the Company allocates funds for arrangement and prizes of some events organized by its employees. During the year, employees are vaccinated free of the flu vaccine. Upbringing of Competences The upbringing of personnel is an indispensable condition for the achievement of the strategic objectives of the Company because due to training personnel acquires qualification and capabilities. Changing challenges of the Company, the environment for the performance of tasks, application of new technologies, and a complex situation in the labour market witnesses that investments in personnel training (improvement of professional skills) are indispensible because training motivates, upgrades the quality of work, enhances loyalty, and assures more efficient adaptation to new challenges and conditions. The Company systematically plans training sessions and carries training according to an adopted training programme. In 2022, 15 management employees participated in external trainings, which mean that they upgraded their professional qualification at consultation seminars, conferences, and target trainings; 30 employees were trained according to consistent professional training programmes; 1 worker acquired new adjacent specializations. In 2022, duration of professional training amounted to 492 hours. It is adopted the procedure for internal training of employees of production divisions in the Company, which provides for the development of required programmes, training and periodical attestation of employees. Internal trainings and periodical attestation are arranged seeking to help to acquire or update professional knowledge, to acquire or to test skills required to assure due technological processes of the Company, to consistently maintain the high professional level of employees. The Company‘s Occupational Safety Division instructs newly employed employees on the introduction themes concerning prevention of accidents and health protection, fire safety, and civil safety. The managers of divisions instruct their inferiors at the workplace once per year. Employees operating and maintaining potentially hazardous machinery are trained in accordance with the Procedure for Training of Employees and Assessment and Evaluation of Knowledge of Employees in the Field of Occupational Safety and Health Protection adopted by the Managing Director. Employees operating energy plants are periodically attested in accordance with the procedures prescribed by the Order of the Minister of Energy of the Republic of Lithuania. Integration of New Employees A new company means new goals, other specificity of operation, career opportunities, traditions, and other internal code of conduct. For this purpose the Company has developed the Standard for Demand for Employees, Recruiting, Selection of Employees, Determination of their Qualifications, and Introduction of New Employees and the training procedure. A new employee becomes familiar with the Company‘s Social Responsibility Report for 2022 119 organizational culture, employees, and the activities of divisions according to the programme developed. A mentor is appointed to boost the integration of a new employee in the work collective, to help a new employee to understand the principles of work, to perceive the Company's values, and to understand the Company's mission and vision. Based on his/her experience and competence, the mentor trains a new employee at the workplace and helps to understand business, its processes, purposes, and responsibility so that a new employee could start creating a new value as soon as possible. Occupational Safety and Health Protection The Company boasts efficient long-standing occupational safety traditions. Employees form the most important wealth of the Company. Therefore investments in occupational safety and health protection are among the most important obligations of the Company‘s management. The Company seeks to avoid any possible accident or a professional disease and bring them to naught. The Company carries out the uninterrupted assessment of workplaces and the environment of workplaces. Firstly, the health and safety of employees is evaluated during the implementation of new technologies. The Company spares no pains to assure that new equipment and machinery is as safe as possible and new materials and raw materials are not harmful for the health of employees. The Company takes measures to eliminate a noise, vibration, and dust content – major factors that can cause professional diseases. Seeking to protect employees against possible affect of harmful factors, both collective and individual protective equipment are applied. Employees are trained to work safely, are familiarized with the requirements of normative legal acts in the field of occupational safety and health protection. The Company flexibly matches hours of work and relaxation. Working schedules provide for daily breaks for relaxation, there are recreation rooms in the premises of the Company. The Company has implemented the occupational safety and health protection management system. The Company was given a certificate certifying that Snaigė AB has implemented the management system meeting the requirements of ISO 45001 standard. This certificate is an expression of the Company’s priorities and responsibility for creation of safe working conditions so that accidents and professional diseases would be avoided Social Responsibility Report for 2022 120 ENVIRONMENT PROTECTION Environment Protection Policy Snaigė AB is rated among the most advanced and innovative Lithuanian production companies in the field of environment protection. The Company’s goal comprises ecological products, environmentally friendly technologies, and clean environment. To achieve this goal, the Company has implemented the certified environment protection management system meeting the requirements of international ISO 14001 standard. All legal requirements are met in a timely and complete manner. The Company regularly upgrades the efficiency of the environment protection, makes efforts to reduce emissions, focuses on environmental friendliness, economic consumption of natural resources, and safe environment. Products During design of new products, the Company always gives a priority to production that saves raw materials and resources, ensures safe transportation, minimization of waste, and achievement of top quality of products. The Company makes efforts to use materials that later on could be recycled. Snaigė AB complies with the 21 October 2009 Directive 2009/125/EC of the European Parliament and of the Council governing the product design. Snaigė refrigerators are made of environment friendly materials that are free of harmful components. For example, each plastic component part of a refrigerator is marked (in accordance with ISO) so that marking indicates that a component part may be used repeatedly and re-processed in accordance with the requirements of Directive 2002/96/EC on waste electrical and electronic equipment. The technological process of coating the surface of products is ecologically clean: this is a dry coating that is dried by gas. Refrigeration system is filled with gas R600a or R290 (propane), which has natural origin and doesn’t deplete ozone layer, while a hydrocarbon compound cyclopentane which is used for insulation of refrigerators is not harmful for the environment. All the products manufactured by the Company meet the requirements of the following directives and regulation of the European Community: • Regarding non-usage of harmful materials: o RoHS2 Directive 2011/65/EU of the European Parliament and of the Council on the restriction of the use of certain hazardous substances in electrical and electronic equipment. o REACH Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the non-use of high-risk substances (151) which refrigerators may release into the environment; o PAH Decision AFPS-GS-2019:01 PAK of the Government of Germany, which means that SNAIGĖ products meet the polycyclic aromatic hydrocarbons concentration limit for 18 carcinogenic materials. • Regarding contact with food (these regulations mean that the materials applied during the manufacture of Snaigė refrigerators are allowed to contact with food): o Regulation (EC) No 1935/2004 of the European Parliament and of the Council on materials and articles intended to come into contact with food (general); o Commission Regulation (EU) No 10/2011 on plastic materials and articles intended to come into contact with food (for plastics). The less energy a refrigerator uses, the more environmentally friendly it is. All Snaige products are available in the highest and most energy-efficient energy efficiency classes F, E, D and B. Since this year, the CC70 professional refrigerator has been designed and manufactured, achieving the highest energy efficiency class A. This refrigerator reduces electricity consumption by up to 50% per year. The purchasers of a refrigerator are also provided with information regarding ecology. They are advised how to install, use, and maintain their refrigerator so that its service life would be extended as much as possible and the effect on the environment would be reduced as much as possible. In addition to this, purchasers are advised how to return the refrigerator after the expiry of its service life. Social Responsibility Report for 2022 121 Environment Protection From 1 January 2015, Snaigė AB in accordance with Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 on substances that deplete the ozone layer assumed an obligation and does not buy and use virgin and non-virgin (which is recycled or recovered) hydrochlorofluorocarbons (HCFC) whenever alone or in a mixture. The Company also pays a lot of attention to such pollutants as nitrogen or carbon oxides, particulate matter, styrene, and cyclopentane. Their emission is systematically monitored and controlled. In 2022, the total emission of the aforementioned pollutants amounted to 14.30 t, which is significantly less than permissible limit amounting to 21.78 t. Protection of Surface Waters The impact made by the Company's production and economic activity on the environment is regulated by the Pollution Permit issued by the Environmental Protection Agency under the Ministry of Environment of the Republic of Lithuania. The Company strictly follows the permissible pollution limits as indicated in this Pollution Permit. The function of supervision is carried out in accordance with the Company’s monitoring programme, which sets the quality parameters of discharged surface (rainfall) waters and sewage resulting from the economic activity and indicates the periodicity and scope of performance of prevention analyses of the pollutants discharged with sewage. The Company systematically analyses the results obtained and reviews any changes: increase and decrease of individual pollutants. In addition to this, the technical conditions of inner vehicles of the Company as well as vehicles entering the territory of the Company are examined on a permanent basis. The production process is carried out in accordance with the Regulation of Delivery of Chemical Materials from a Warehouse to Production Premises. Protection of Subsoil, Soil, and Ground Waters While seeking to protect the quality of underground waters and soil, the Company executes the programme of analysis of the Company’s underground waters for 2021 to 2025 period, which was adopted by Environmental Protection Agency under the Ministry of Environment of the Republic of Lithuania. There are five wells installed in the territory of the Company. Water specimens for the analysis of the quality of ground waters are taken out of these wells with the periodicity foreseen in the programme. In 2022, the full scope of ground water analyses was made in accordance with the monitoring programme. Parameters that were analysed include the ground water level, physical and chemical parameters (water ion concentration (pH), the oxidation and reduction potential (Eh)), and other parameters. Beyond that, the general chemical water composition (concentration of core ions and permanganate value) was analysed, the chemical oxygen consumption value and concentration of heavy metals was determined. Compared to the analyses made last year, the quality of subsoil waters was gradually becoming better, neither analysed parameters achieved or exceeded the parameters set. Waste Management Though waste cannot be avoided during the production process of refrigerators, the Company does not spare pains to reduce waste as much as possible and to manage waste as efficiently as possible. Therefore, the amounts and types of pollutants generated by the Company do not exceed the standard values set. Waste free production has been implemented in some production areas of the Company, where generated waste is further used in production processes. For instance, the waste generated in workshops of plastics thermoforming and injection moulding is further ground in mills and reused in production. The major share of the waste generated by the Company such as cardboard, metals, plastics, wood, and etc., is fit for use as recyclable materials. This waste is transferred to waste managers who specialize in recycling of specific types of waste and manage waste in accordance with the requirements of the legal acts of the European Union and the Republic of Lithuania. The Company holds a licence for the management of the waste of electric and electronic equipment, namely, refrigerators and is a member of the Electronic Distributors Association (EDA) and the Packing Management Association (PMA). Due to active participation in the joint management of old refrigerators and packages resulting from the sale of refrigerators, the Company contributes to the execution of governmental tasks of management of aforesaid waste. Social Responsibility Report for 2022 122 Application of Chemicals Seeking to implement the provisions of REACH Regulation concerning the usage of environment and health friendly materials, the Company regularly carries out the inventory of the chemicals used in production and makes efforts to replace harmful materials by less harmful ones or absolutely non-harmful ones. For example, plastic parts are only painted with ecologic waterborne paints. In accordance with the requirements of the Company‘s environment protection management system regarding operation with chemicals, the impact of chemicals on the environment is modelled and supervised and the information obtained is entered in the data safety sheets of most chemical materials. On the basis of this information, prevention measures for the management of chemicals emissions in the environmental air and sewage are prepared. This significantly contributes to the management of harmful waste of a chemical origin. Seeking to assure that the information declared in material data safety sheets would be as accurate as possible: the Company closely cooperates with the suppliers of harmful materials. The Company also requests from suppliers to attach to material data safety sheets the annex ‘Impact Scenario’, which would in detail and thoroughly describe the impact made by a chemical on the environment and means and methods for the reduction of this impact and the protection against this impact. Sustainability Report for 2022 123 UNDER RESTRUCTURING SNAIGĖ AB SUSTAINABILITY REPORT FOR 2022 Sustainability Report for 2022 124 CONTENTS ABOUT THE SUSTAINABILITY REPORT 125 MAIN AREAS OF ACTIVITY 125 VALUE CHAIN 125 APPROACH TO SUSTAINABILITY AND RESPONSIBILITY 126 MATERIALITY ASSESSMENT 127 SOCIAL RESPONSIBILITY 128 ENVIRONMENTAL RESPONSIBILITY 131 ECONOMIC (MANAGEMENT) RESPONSIBILITY 134 SUSTAINABLE DEVELOPMENT GOALS 134 Sustainability Report for 2022 125 ABOUT THE SUSTAINABILITY REPORT [GRI – 102-50] The Sustainability Report (the "Report") is presented for the period from 1 January 2022 to 31 December 2022 and is the Report of the Snaigė Group as a whole. This Report has been prepared in accordance with the standards of the Global Reporting Initiative (GRI) and the principles of the United Nations (UN) Global Compact, and in the context of the Global Sustainable Development Goals (SDGs). The report is published as part of the Group's annual report, together with the Company's consolidated annual report and financial statements. MAIN AREAS OF ACTIVITY Legal form and governance [GRI 102-1/3/4/5/18] AB Snaigė is a joint stock company registered in Lithuania at Pramonės g. 6, Alytus, whose ordinary registered shares are listed on the Additional Trading List of the Nasdaq Vilnius Stock Exchange. According to the company's Articles of Association, the governing bodies of the company are the General Meeting of Shareholders, the Board of Directors and the CEO. The Chief Executive Officer is the head of the company, who, in accordance with his powers, organises the day-to-day business activities of the company. The company owns two subsidiaries: a trading company in Ukraine, TOB Snaige Ukraina, and a manufacturing company in Lithuania, UAB Almecha. Activities and objectives [GRI – 102-2] The Company's core business is the manufacture of high-quality household and professional refrigeration appliances. One of the Company's main objectives is to increase the production and sales of higher value-added industrial and medical refrigeration appliances and to increase the production and sales of more profitable exclusive household refrigeration appliances. Main export markets [GRI – 102-6] Main export markets for the company's production in 2022: - Germany; - The Czech Republic; - Italy; - Poland; - Ukraine; - Austria; - Switzerland. VALUE CHAIN [GRI – 102-9] The value chain of AB Snaigė consists of product development, selection and procurement of raw materials and components, production, transport, sales and use. The value chain ends with the recycling or disposal of the product. Potential risks and opportunities for the value chain [GRI – 102-15] 1. Product development Developing a new business model and products may open up new markets for the Company, but we may face new challenges. Sustainable product development requires more investment, which would lead to an increase in the cost of the product. Sustainability Report for 2022 126 2. Supply chain The increasing scarcity of raw materials calls for greater attention to transparency in the supply chain, which is why relationships based on partnership and long-term cooperation, as well as a shared commitment to human rights and environmental protection, are important for the Company's sustainable operations. 3. Production The average age of the workforce in the manufacturing sector is worryingly high, at around 54 years old. This means that we could lose skilled workers in a few years' time. However, this calls for a review of working conditions, remuneration policies, motivation and incentive systems in order to make the Company's work attractive to young people. 4. Sales and transport Transport-related emissions are one of the most important risks, as emissions are only increasing each year. It is therefore very important to choose logistics that are oriented towards environmentally friendly transport. 5. Use of the product The increased investment in the development of a sustainable product, as well as the increase in the final price to consumers, can make it difficult to survive in a highly competitive market. However, encouraging consumers to choose a sustainable product is essential to contribute to reducing climate change. 6. Recycling or disposing of the product The company has a recycling system for old refrigerators, and a number of its products can be recycled and the secondary raw materials reused in production. However, only a small part of the Company's production is returned for recycling/utilization. APPROACH TO SUSTAINABILITY AND RESPONSIBILITY [GRI – 102-31; 417-1/2] Sustainability is currently the subject of much and widespread discussion and debate around the world, and there are many definitions, explanations and opinions about it. Sustainability must first and foremost be present in people's thinking and behaviour. The initial awareness must come from society as a whole, which uses natural resources sparingly in its daily activities, reduces consumption, sorts waste and has an interest in preserving natural resources for future generations. When it comes to sustainability in business, one of the main objectives is to create added value that makes a positive difference to people. Today, sustainability is the axis around which products are developed and social responsibilities are developed. One of our goals is to bring refrigeration appliances to the market that are durable and reduce the use of energy resources. However, by investing in new innovative technologies, we must be able to survive in a highly competitive market and retain our existing skilled workforce, while continuing to develop and improve products that contribute to a sustainable environment in people's daily lives. That is why today the company is setting up a Sustainability Group, which will report to the CEO and coordinate the company's impact on people, nature and the economy. It will also advise employees on sustainable practices and find solutions to reduce emissions. Our company's sustainability activities cover social, environmental and economic responsibilities. In order to build a sustainable business, we set ourselves the following objectives: - Social responsibility (respect for human rights and freedoms; safe working conditions for employees; non-discrimination and gender equality; cooperation with the local community); - Environmental responsibility (to comply with environmental legislation; to reduce emissions; to carry out continuous environmental monitoring; to use more and more recyclable materials, thus reducing waste emissions); Sustainability Report for 2022 127 - Economic responsibility (improving products; creating shareholder value; responsible sourcing of raw materials; creating an anti-corruption environment in the organisation). MATERIALITY ASSESSMENT [GRI – 102-40/42/44/46/47] In order to improve the quality of dialogue with stakeholders, the Company has carried out an assessment of the relevance of sustainability criteria. The most important sustainability criteria were identified for the environmental, social and governance areas and a stakeholder survey was organised. The Company interviewed shareholders, customers (wholesale), consumers, suppliers, employees, governmental and non-governmental organisations. The relevance of the sustainability criteria to the business of AB Snaige was assessed by the Company's management in the light of the Company's strategic objectives and market trends. The following stakeholder groups and mutual concerns have been identified: - Shareholders – delivering profitable operations in line with the Company's standards and legislation; - Employees – ensuring employee welfare, safe working conditions, non-discrimination and fair pay; - Consumers – development of quality and safe products, supply of products with a high energy efficiency rating; - Customers (wholesale) – long-term cooperation; - Suppliers – work with suppliers who have a clear approach to environmental protection and sustainability; - Government organisations – to calculate and pay taxes correctly and on time, and to comply with the laws and regulations of the Republic of Lithuania; - Community/non-governmental organisations – Supporting local community initiatives, thus promoting community spirit, by trying to involve employees in activities. Significance criteria: Environmental: 1. Conservation of energy resources 2. Climate impact and GHG emissions 3. Recyclability of the product 4. Conservation of water resources 5. Product recovery 6. Waste reduction 7. Circular economy 8. Impact on soil, air and water quality 9. Energy efficiency of the product Social: 10. Product safety and quality 11. Employee motivation system 12. Occupational safety and health 13. Diversity, equal opportunities, human rights 14. Employee welfare and fair remuneration 15. Talent attraction 16. Involvement in social/local community activities Sustainability Report for 2022 128 Economic (Governance): 17. Legislation and taxation 18. Business ethics and anti-corruption 19. Data protection 20. Transparency Vertical line (importance for stakeholders) (bottom to top): moderately important, important, very important. Horizontal line (relevance to the Company's strategy) (left to right): moderately important, important, very important. SOCIAL RESPONSIBILITY Employees by group [GRI 102-8; 405 -1] The average number of employees in Snaigė AB in 2022 is 428. The turnover rate in 2019-2020 was around 8%, while in 2021/2022, due to the difficulties and the outbreak of the war in Ukraine, we were forced to lay off some of our employees, which increased the turnover rate to 28%. The vast majority of the company's employees have been with the company for more than 15 years. Average number of employees by gender in 2022 Women Men Managers 8 13 Specialists 33 40 Workers 160 174 Sustainability Report for 2022 129 Average number of employees by age group in 2022 20 – 30 m. 30 – 40 m. 40 – 50 m. 50 – 60 m. 60 - 70 m. >70 m. Managers 0 2 7 6 6 0 Specialists 5 5 10 26 26 1 Workers 8 20 42 158 104 2 Emloyeers remuneration policy and motivation system [GRI – 102 -35] The Company aims to develop an effective and fair remuneration policy aimed at attracting, retaining and motivating employees whose qualifications and performance contribute to the Company's success in achieving its objectives. In consultation with the Company's trade union representatives and in accordance with the principles of equality and non-discrimination on other grounds, the organisation has adopted a "Remuneration Scheme", which regulates the procedure for remuneration of employees, the calculation of wages for night work, overtime, rest days and holidays, and the timing of payments to employees. The salary framework establishes the grades of staff members by post, the forms of remuneration and salary levels for a post or group of posts, and the procedures for granting additional payments (increments, bonuses and premiums). The remuneration system shall apply to all employees of the Company. Trade unions and collective agreements [GRI 102-41; 401-2] The Company has a trade union representing 42% of the Company's workforce. Representatives of the trade union are invited to management meetings to discuss economic, social and labour issues important to the Company. The Company has a Collective Agreement between the Company and the trade union representing the employees. The purpose of the agreement is to create conditions for the development of a sustainable business and to guarantee a higher level of working conditions than those provided for in the legislation of the Republic of Lithuania. The collective agreement provides for the following financial incentives for employees: - A lump-sum funeral allowance is paid to family members in the event of the death of a company employee; - a lump-sum allowance is paid in the event of the death of a member of the worker's family (spouse, parent, child); - An additional allowance is paid on anniversaries (50, 60 years); - Christmas events, gifts for children of employees; - A refrigerator is donated upon retirement after 40 or more years of service. Developing competences [GRI – 404-3] The changing challenges of the Company, the environment in which tasks need to be carried out, the application of new technologies, and the difficult situation on the labour market mean that it is necessary to invest in staff training, as this motivates them, improves the quality of their work, increases their loyalty, and ensures that they can adapt more efficiently to new challenges and conditions. Therefore, the Company's training process is carried out in a planned and systematic manner in accordance with the approved training programme. The Company's employees participate in external training on an annual basis, i.e. they improve their qualifications at consultative seminars, conferences, targeted training courses, and some employees undergo continuing professional education programmes. The company has also adopted a procedure for internal training of employees in its production units, which includes the development of the necessary programmes, training and periodic certification of employees. Internal training and periodic certification are organised to help acquire or update professional knowledge, to acquire or test skills on the Company's production processes and facilities, and to maintain a high level of professionalism among employees. Sustainability Report for 2022 130 The Company's safety department trains new recruits in introductory safety and health, fire safety and civil protection. Once a year, all subordinate employees are given on-the-job training by their department heads. Employees who work on and maintain potentially hazardous installations shall be trained in accordance with the procedures for the testing and assessment of employee training and knowledge in the field of occupational safety and health approved by the Director-General. Employees operating energy installations shall be periodically certified in accordance with the procedure laid down by order of the Minister of Energy of the Republic of Lithuania. Occupational safety and health [GRI 404-2; 403 – 1/4/5/7/8] A Company's commitment to the health of its employees goes without saying, as healthy employees are the key to the long-term success of any company. Keeping employees in good physical and mental health is a company's top priority. The Company has a medical centre staffed by a qualified community nurse, so that if a worker falls ill or needs urgent help, it is always provided promptly. For the convenience of employees, medical institutions are contracted to carry out preventive health check-ups on the Company's premises. The company's community nurse at the health post has been certified to administer the flu vaccine to employees, so they do not need to go to a health facility to get the vaccine, but can get it at their work place. The company regularly reviews its employees' working conditions, ensuring that workplaces are ergonomically designed and adapted to the employee's needs to ensure comfort and safety. The company's occupational safety officers provide advice on the planning and installation of workplaces. Safety officers receive regular training on various safety topics, after which they provide training and coaching to other employees on workplace safety. The company has a certified occupational safety and health management system in place that meets the requirements of the international standard ISO 45001. This certification demonstrates the company's priorities and responsibility to create safe working conditions to prevent accidents and occupational diseases. COVID-19 pandemic The onset and persistence of the COVID-19 pandemic was a real challenge for the organisation. It was a challenge to keep production processes running and to protect staff. All safety measures recommended by the National Public Health Centre were taken to prevent the spread of COVID-19 in the company. Administrative staff were given every opportunity to work from home, while production workers had to wear masks at work. Lunch break times were reviewed and rationed to minimise contact. Hand sanitizer dispensers were installed throughout the company's premises, and signs indicating safe distances and the need to wear masks were posted. Most meetings and deliberations have moved to virtual space, with seating in the meeting room arranged to maintain the distances required at the time. The Company's medical centre has started screening employees with rapid antigen tests in accordance with the legislation issued in the Republic of Lithuania on the COVID-19 pandemic, and each employee's body temperature is taken on arrival at work. In cooperation with the Alytus Municipal Doctor, employees have been given the opportunity to undergo PCR testing on the company's premises with the arrival of a mobile medical team. A mobile medical team was also present at the company's premises when employees requested to be vaccinated with the COVID-19 vaccine. Risk of accidents at work [GRI 403-1/2/4/5] As a manufacturing company, some workplaces pose health risks or are particularly hazardous (metalworking, various machines, presses, etc.). However, the company takes all measures to eliminate or reduce the risks, starting with a risk assessment of the workplace, which determines what training is necessary for the worker and/or what protective equipment must be provided. All this is done in order to prevent accidents at work. Sustainability Report for 2022 131 Number of workplace accidents in 2021 Number of workplace accidents in 2022 1 0 Human rights The Company, in the course of its activities, shall comply with the principles of protection of human rights, ensure the principles of equal opportunities and non-discrimination on other grounds and the procedure for their implementation on the basis of a person's race, colour, religion, gender, sexual orientation, nationality, origin, age, disability, or any other status considered as a human right. The Company treats all people fairly and impartially, regardless of where they work. The Company does not tolerate child labour, does not use forced or compulsory forms of labour, and respects the freedom and right of workers to form trade unions or organisations. The Company regulates the principles of collection, use and security of employees' personal data and sets out the purposes and means of processing employees' personal data, who can access employees' personal data and for what purposes. Community [GRI - 413-1] The Company's management strives to maintain good relations with local communities and municipalities, and supports local communities with its products. In 2021, support was provided to the Alytus City Municipality and the Alytus Polyclinic, which received a refrigerator for vaccine storage. In 2022, we provided support to the Alytus City Municipality, which provided equipment for Ukrainians fleeing the war in Ukraine. A refugee centre in Alytus was donated with necessary household equipment. We also supported the Vilnius SOS Children's Village and the Mato Šalčius Community in Panemunė. ENVIRONMENTAL RESPONSIBILITY Snaigė is one of Lithuania's most progressive manufacturing companies in the field of environmental protection, with a focus on environmentally friendly, long-lasting products. To achieve this goal, the company operates a certified environmental management system in compliance with the requirements of the international standard ISO 14001, and all legal requirements are fulfilled on time. The company continuously improves its environmental performance, reducing pollution, making its products environmentally friendly, using natural resources efficiently and ensuring a safe environment. When developing new products, the company always gives priority to raw material and resource-efficient production, safe transport, minimum waste and product quality. The aim is to use materials that can be recycled later. Product quality and safety [GRI – 301-2/3; 416-1] SNAIGĖS fridges are made from eco-friendly materials that are free from hazardous elements. Every plastic part in the fridge is marked (ISO) for reuse and recycling in accordance with Directive 2002/96/EC on waste electrical and electronic equipment. The surface coating process is environmentally friendly: dry coating and gas drying. The refrigeration system is filled with R600a, an ozone-friendly natural gas, and the hydrocarbon compound cyclopentane, used to insulate the refrigerators, is environmentally friendly. All products produced by the Company complies with the following European Community directives and regulations: • Regarding non-usage of harmful materials: o RoHS2 Directive 2011/65/EU of the European Parliament and of the Council on the restriction of the use of certain hazardous substances in electrical and electronic equipment. Sustainability Report for 2022 132 o REACH Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the non-use of high-risk substances (151) which refrigerators may release into the environment; o PAH Decision AFPS-GS-2019:01 PAK of the Government of Germany, which means that SNAIGĖ products meet the polycyclic aromatic hydrocarbons concentration limit for 18 carcinogenic materials. • Regarding contact with food (these regulations mean that the materials applied during the manufacture of Snaigė refrigerators are allowed to contact with food): o Regulation (EC) No 1935/2004 of the European Parliament and of the Council on materials and articles intended to come into contact with food (general); o Commission Regulation (EU) No 10/2011 on plastic materials and articles intended to come into contact with food (for plastics). The compliance of Snaigė AB's products with the requirements set out in the notification is evidenced by the tests carried out by the notified testing laboratories DEKRA (Germany) and the Chemical Testing Division of the National Public Health Surveillance Laboratory (Lithuania) and the test reports submitted. The less energy a refrigerator uses, the more environmentally friendly it is. All Snaige products are available in the highest and most energy-efficient energy efficiency classes F, E, D and B. Since this year, the CC70 professional refrigerator has been designed and manufactured, achieving the highest energy efficiency class A. This refrigerator reduces electricity consumption by up to 50% per year. Consumers also receive sustainability information when buying a refrigeration appliance. Advice is given on how to install, use and maintain the product so that it can be used for as long as possible and the environmental impact is minimised. It also provides information on how to return the product at the end of its useful life, as the Company operates a disposal system for old refrigerators. Since mid-2008, the Company has been managing waste from large household appliances such as refrigerators and freezers. Ambient air protection [GRI – 305- 2] From 1 January 2015. In accordance with the requirements of Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 on Substances that Deplete the Ozone Layer, Snaigė Joint Stock Company has committed to not purchase or use pure and unpure (i.e. recycled and reclaimed) HCFCs, either individually or in mixtures. The company also pays close attention to pollutants such as nitrogen or carbon oxides, particulate matter, styrene and cyclopentane. Their emissions are systematically monitored and controlled. In total, 14.30 t of these pollutants were emitted in 2022, well below the 21.78 t limit. The Company plans to reduce emissions of these pollutants by at least one third by 2030. Automotive fuel consumption in 2021-2022 Mobile sources (vehicles) Measuring pcs. 2021 2022 Diesel fuel litres 23 366 17 524 Petrol litres 9 604 7 412 Gases kilos 7 458 3 987 Electricity and drinking water consumption 2021-2022 Measuring pcs. 2021 2022 Drinking water consumption m3 5930 4321 Electricity consumption kWh 5654708 3362554 Sustainability Report for 2022 133 Surface water protection The environmental impact of the Company's production and economic activities is regulated by the Pollution Permit issued by the Ministry of the Environment, Environmental Protection Agency. The Company strictly complies with the permissible emission limits specified in this permit. The control function is carried out in accordance with the Company's Monitoring Programme, which sets out the quality parameters for the discharge of surface (rainwater) and industrial (faecal) effluents, and specifies the frequency and extent of preventive tests for pollutants in the discharged effluents. The Company systematically analyses the results and monitors changes in the increase and decrease of individual pollutants. In addition, the technical condition of both the company's internal transport and the vehicles arriving at the plant is constantly monitored. The rules for the safe transport of chemicals from the warehouses to the production building are observed during the production process. Protection of groundwater, soil, groundwater In order to best ensure the quality of groundwater and soil protection, the company is implementing the company's groundwater investigation programme for the period 2021-2025, approved by the Ministry of the Environment, the Environment Protection Agency. Five boreholes have been installed in the Company's territory and are sampled for groundwater quality at the frequency specified in the programme. In 2022, they were subject to all the groundwater tests foreseen in the monitoring programme. Groundwater levels, physico-chemical parameters (hydrogen ion concentration (pH), oxidation-reduction potential (Eh) and others) were measured. The general chemical composition of the water (major ion concentrations, permanganate value), the chemical oxygen demand and the concentrations of heavy metals were also investigated. Since the last year of the study, groundwater quality has continued to improve, with none of the parameters tested being above or below the established standards. Waste management [GRI – 102-13] Although it is impossible to avoid waste during the refrigerator manufacturing process, the company tries to minimise it and manage it as efficiently as possible. As a result, the quantities and types of materials generated by the company do not exceed the established limits. In some of the company's production sites, waste-free production is practised, where the waste generated is further used in the production process. For example, in the vacuum forming and injection moulding of plastics, the waste generated in the vacuum forming and injection moulding shops is ground in special shredders at the factory and reused in production. Most of the waste generated by the company, such as cardboard, metal, plastics, wood, etc., is suitable for recycling. They are sent to waste handlers for treatment in accordance with EU and LT legislation. The company is licensed to manage waste electrical and electronic equipment - refrigerators - and is a member of the Electronics Distributors Association EEPA and the packaging management association "Gamtos ateitis". By actively participating in the collective management of old refrigerators and packaging waste generated by refrigerators for sale, the company contributes to the fulfilment of these waste management targets. Use of chemicals In order to comply with the REACH regulation on the use of safer substances for the environment and health, the company continuously takes stock of the chemicals used and tries to replace hazardous substances with less hazardous or even harmless ones. For example, plastics painting uses only eco- friendly, water-based paints. In accordance with the requirements of the company's environmental management system, the environmental impact of chemicals is modelled and controlled mainly on the basis of the information Sustainability Report for 2022 134 contained in the Safety Data Sheets (SDSs) of these substances: preventive measures are being developed to manage the pollution of chemicals into the ambient air and waste water, which significantly contribute to the management of hazardous wastes of a chemical nature. Close cooperation with suppliers of hazardous substances to ensure that the information declared in material safety data sheets is as accurate as possible. It is also required that the Safety Data Sheets contain an annex - the Exposure Scenario - which provides a detailed and thorough description of the environmental effects of the substance and the ways and methods to reduce or prevent these effects. ECONOMIC (MANAGEMENT) RESPONSIBILITY The Company's activities are based on the principles of humanity and integrity. The Company's activities are guided by national legislation, international laws and regulations. The Company does not tolerate corruption and bribery and adheres to transparent business ethics. The Company shall calculate and pay taxes on time and correctly in accordance with the laws in force in the Republic of Lithuania. Compliance with the legal framework is ensured by the Company's financial statements being independently audited annually by an independent auditor. The Company's CFO is responsible for monitoring and controlling the fair payment of taxes. Data protection The protection of personal data in the Company is carried out in accordance with the EU General Data Protection Regulation and other relevant legislation. Effective protection of personal data is one of the key areas of sustainable development for the Company's stakeholders. SUSTAINABLE DEVELOPMENT GOALS In 2015, the United Nations agreed to work towards sustainable international development and agreed to achieve 17 Sustainable Development Goals (SDGs) by 2030. The Company's activities are a major contributor to these SDGs: Environmental SDG SDG indicators How we contribute/plan to contribute 12.5 Many of the parts of our products are already made from recycled/recycled raw materials. By 2030, we plan to increase the use of recycled materials in our production by at least 10%. 7.2 We reduce energy consumption and find solutions to optimise production processes. Within two years, we plan to sign a contract to use renewable energy in our operations, after assessing our financial capacity. By 2030, this should amount to 25%. 6.3 We constantly monitor water consumption. 13.2 We are reducing our fossil fuel consumption, keeping our operations within the CO2 emission limits and aiming to reduce emissions year on year. By 2030, we plan to reduce emissions by a third. Sustainability Report for 2022 135 Social SDG SDG indicators How we contribute/plan to contribute 3.4 3.9 Continue to ensure safe and healthy working conditions for workers by carrying out regular risk assessments of workers' workplaces, and to prevent accidents at work by providing regular safety training to workers. 5.1 5.5 In 2022, the company employed 201 women and 227 men. There were 8 women and 13 men in management positions. 8.2 The company provides equal working conditions for all employees, regardless of their race, gender, origin, social status, disability or religion. Human rights are respected and guaranteed. 11A We maintain good relations with local communities and local government, provide support to local communities, and encourage the involvement of employees in society. Economic (management) SDG SDG indicators How we contribute/plan to contribute 9.4 We are reviewing our processes and introducing innovative technologies to minimise our environmental impact. 16.5 We do not tolerate corruption, bribery and adhere to transparent business ethics. We calculate taxes on time and correctly, and we comply with national legislation and international laws and regulations.