Snaige AB

Quarterly Report • May 27, 2022

SNAIGE AB CONFIRMATION OF RESPONSIBLE PERSONS

27 May, 2022

Following the Article No. 22 of the Law on Securities of the Republic of Lithuania and Rules on Preparation and Submission of Periodic and Additional Information of the Bank of Lithuania, we, Mindaugas Sologubas, CEO of Snaige AB and Vytautas Adomaitis, Chief of the Accounting and Finance Department of Snaige AB hereby confirm that, to the best of our knowledge, the attached unaudited interim consolidated Snaige AB, financial statements for the three months period ended 31 March 2022, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, reflects the reality, correctly and fairly shows issuer's assets, liabilities, financial position, profit or loss and cash flow of Snaige AB.

Mindaugas Sologubas Managing Director

Vytautas Adomaltis Chief of the Accounting and Finance Department

SNAIGÉ AB

CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (UNAUDITED)

CONTENTS

I. GENERAL PROVISIONS
II. FINANCIAL STATUS
III. EXPLANATORY NOTES

I. GENERAL PROVISIONS

1. Accounting period of the report

The report has been issued for the period of three months ended 31 March 2022.

2. The basic data about the issuer

The name of the company – SNAIGE PLC (hereinafter referred to as the "Company")

Authorised capital - one Company's share is equal to EUR 0.17 and to establish that the Company's authorized capital is equal to EUR 6,735,807.

Address - Pramonės str. 6, LT-62175 Alytus

Phone - (+370 315) 56 206

Fax - (+370 315) 56 207

E-mail - snaige@snaige.lt

Internet address - http://www.snaige.lt

Legal organisation status - legal entity, public limited company

Registered as an enterprise on 1 December 1992 in the Municipality Administration of Alytus; registration number AB 92-119; enterprise register code 249664610. The latest Statute of Snaige AB was registered on 19 August 2020 in Register of Legal Entities of the Republic of Lithuania.

3. Information with regard to the location and time provided for introduction of the report and the accompanying documents; name of the mass media

The report is available in the Accounting and Finance Department of Snaige AB at Pramones str. 6, Alytus, on the days of I - IV from 7.30 to 16.30, and V from 7.30 to 14.00.

The mass media - publication issued by the Center of Registers, daily paper "Kauno diena".

II. FINANCIAL STATUS

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Ref. No.	ITEMS	Notes	01-01-2022 31-03-2022	01-01-2021 31-03-2021
1.	Sales	3	5,617	6,994
2.	Cost of sales	4	(5, 729)	(6, 436)
3.	Real value change of biological property
4.	GROSS PROFIT (LOSS)		(112)	558
5.	Selling expenses		(482)	(547)
6.	General and administrative expenses		(560)	(345)
7 1	Results of other activity	5,7	19	15
8.	Investments incomes into the shares of patronise, patronized and associated companies
9.	Incomes of other long-term investments and loans	8
10.	Incomes of other interest or similar incomes	8	5	13
11.	Value decrease of financial property and short-term investments
12.	Costs of interest and other similar costs	9	(141)	(117)
13.	PROFIT (LOSS) BEFORE INCOME TAX		(1, 271)	(423)
14.	Income tax
15.	PROFIT (LOSS) BEFORE NONCONTROLLING INTEREST		(1, 271)	(423)
16.	Non-controlling interest
17.	Other comprehensive income		259	240
18.	TOTAL COMPREHENSIVE INCOME		(1,012)	(183)

Managing Director

Mindaugas Sologubas

Chief of the Accounting and Finance Department

Vytautas Adomaitis

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022

(All amounts are in EUR thousand unless otherwise stated)

Consolidated Statement of Financial Position

Ref. No.	ASSETS	Notes	As at 31 March 2022	As at 31 December 2021
	ASSETS
A.	Non-current assets		14,878	15,042
1.	Intangible assets	10	1,581	1,567
2.	Tangible assets	11	13,297	13,475
2.1.	Land
2.2.	Buildings and structures		5,180	5,236
2.3.	Machinery and equipment		5,606	5,878
2.4.	Vehicles and other property		890	951
2.5.	Right to leased assets		101	109
2.6.	Construction in progress and prepayments		1,520	1,301
3.	Financial assets	12	$\mathbf{0}$	$\mathbf{0}$
4.	Other non-current assets		$\mathbf{0}$	0
Β.	Current assets		11,524	11,261
1.	Inventories	13	6,261	6,142
2.	Accounts receivable within one year		5,051	4,990
2.1.	Customers' debts	14	4,118	4,247
2.2.	Contracts assets
2.3.	Prepayments		488	493
2.4.	Other amounts receivable	15	445	250
3.	Short-term investments
4.	Cash and cash equivalents	16	212	129
C.	Accrued income and prepaid expenses		$\mathbf 0$	$\mathbf{0}$
	Total assets		26,402	26,303

(Continued on the next page)

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

Ref. No.	ASSETS	Notes	As at 31 March 2022	As at 31 December 2021
	EQUITY AND LIABILITIES
D.	Equity		2,337	3,570
$\mathbf 1$ .	Capital		6,736	6,736
1.1,	Authorized (subscribed) share capital		6,736	6,736
1.2.	Signed unpaid capital (-)
1.3.	Own shares(-)
2.	Shares premiums
3.	Revaluation reserve		7,455	7,675
4.	Reserves	18	718	718
5.	Retained earnings (loss)		(12, 519)	(11, 507)
6.	Influence of currency exchange rate		(53)	(52)
7.	Non-controlling interest		0	0
Е.	Grants, subsidies	19	275	289
F.	Provisions		2,022	2,072
1.	Pensions provisions and similar provisions		315	326
2.	Taxes provisions		1,589	1,628
3.	Other provisions	20	118	118
G.	Accounts payable and liabilities		21,768	20,372
1.	Accounts payable after one year and other non- current liabilities	21	8,005	8,005
1.1.	Debts for credit institutions		8,005	8,005
1.2.	Other non-current liabilities
2.	Account payable within one year and current liabilities		13,763	12,367
2.1.	Liabilities of debts		14	18
2.2.	Debts for credit institutions	21	2,923	2,484
2.3.	Received prepayments		162	93
2.4.	Debts to suppliers		9,118	8,204
2.5.	Short - term lease obligations		103	111
2.6.	Payable sums acc.to bills and cheque
2.7.	Contracts liabilities
2.8.	Payable sums for associated companies
2.9.	Profit tax payment obligations
2.10.	Obligations related to work relations		881	893
2.11.	Other current liabilities		562	564
Н.	Accrued charges and deferred income
	Total equity and liabilities		26,402	26,303

Managing Director

Chief of the Accounting and Finance Department

Mindaugas Sologubas

Vytautas Adomaitis

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

Consolidated Statement of Cash Flow

Ref. No.	Assets	31-03-2022	31-03-2021
L.	Cash flows from the key operations
1.1	Net result before taxes	(1, 271)	(423)
1.2	Depreciation and amortization expenses	475	499
1.3	(Amortisation) of grants	(14)	(136)
1.4	Result from disposal of non-current assets		(20)
1.5	Write-off of non-current assets
1.6	Write-off of inventories	4
1.7	Depreciation of receivables
1.8	Loss on currency futures
1.9	Change in provision for guarantee repair	(5)	5
1.10	Recovery of devaluation of trade receivables and other provisions	(5)	(113)
1.11	Influence of foreign currency exchange rate change
1.12	Financial income (interest income)	(5)	(13)
1.13	Financial expenses (interest expenses)	141	117
1.14	Income tax expense (income)
II.	Cash flows from the key operations until decrease (increase) in working capital	(680)	(84)
II.1	Change in receivables and other debts liabilities (increase)	(61)	(1,070)
II.2	Change in inventories (increase)	(113)	(243)
II.3	Change in trade and other payables (decrease)	946	1,033
Ш.	Cash flows from the main activities	92	(364)
III.1	Interest received
III.2	Income tax paid
	Net cash flows from the key operations	92	(364)
IV.	Cash flows from (to) investing activities
IV.1	Acquisition of tangible non-current assets	(29)	(132)
IV.2	Capitalization of intangible non-current assets		(74)
IV.3	Proceed from disposal of non-current assets	$\overline{2}$	33
IV.4	Loans granted
IV.5	Loans regained		89
IV.6	Advance payments	(302)
IV.7	Interest received		26
IV.8	Financial investment assets
	Net cash flows from the investing activities	(329)	(58)

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus, Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022

(All amounts are in EUR thousand unless otherwise stated)

V.	Cash flows from the financial activities	320	243
V.1	Cash flows related to the shareholders of the company
V.1.1	Issue of shares
V.1.2	Shareholders' contributions for covering losses
V.1.3	Sale of own shares
V.1.4	Payment of dividends
V.2	Cash flows arising from other financing sources
V.2.1	Grants received		107
V.2.1.1	Proceeds from non-current borrowings
V.2.1.2	Factoring	462	413
V.2.1.3	Repayment of borrowings	(46)	(132)
V.2.2	Finance lease received
V.2.2.1	Payments of leasing (finance lease) liabilities	(5)	(27)
V.3	Other decreases in the cash flows from financial activities	(5)
V.4.	Interest paid	(86)	(118)
	Net cash flows from the financial activities	320	243
VI.	Cash flows from extraordinary items
VI.1.	Increase in cash flows from extraordinary items
VI.2.	Decrease in cash flows from extraordinary items
VII.	The influence of exchange rates adjustments on the balance of cash and cash equivalents
VIII.	Net increase (decrease) in cash flows	83	(179)
IX.	Cash and cash equivalents at the beginning of period	129	309
Х.	Cash and cash equivalents at the end of period	212	130

Managing Director

Mindaugas Sologubas

Chief of the Accounting and Finance Department

Vytautas Adomaitis

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022
(All amounts are in EUR thousand unless otherwise stated)

Consolidated Statement of Changes in Equity

	Paid up		Own		Legal reserves			Other reserves		Retained		Minority
	authorised capital	premium Share	shares $\mathbb{C}$	lsory Compu	For acquiring own shares	For social needs	Other	exchange Currency reserve	Revaluation reserve	earnings (losses)	TOTAL	sharehol ders	TOTAL
Recalculated balance as at 31 December 2020	6,736	$\bullet$	$\bullet$	$\overline{5}$	0	$\bullet$	0	(54)	8,521	(10, 652)	5,542	$\bullet$	5,542
expenses for the l-st quarter 2021 Total recognized revenue and										(423)	(423)		(423)
Formed reserves
Reduction of authorized capital											$\bullet$	$\circ$
Other changes								$\overline{\phantom{0}}$	(204)		(203)	$\circ$	(203)
Other comprehensive income										240	240		240
Balance as at 31 March 2021	6,736	0	۰	$\overline{5}$	0	0	$\bullet$	(53)	8,317	(10, 835)	5,156	0	5,156
expenses from the II-nd to IV-th Total recognized revenue and quarter 2021										(1,587)	(1,587)	$\circ$	(1,587)
Transfers from reserves
Reduction of authorized capital											$\bullet$	$\circ$
Other changes				(273)				$\overline{\phantom{0}}$		273			$\overline{\phantom{0}}$
Other comprehensive income									(642)	642
Balance as at 31 December 2021	6,736	$\bullet$	$\bullet$	718	0	0	$\bullet$	(52)	7,675	(11,507)	3,570	$\bullet$	3,570
expenses for the l-st quarter 2022 Total recognized revenue and										(1, 271)	(1, 271)		(1, 271)
Formed reserves
Reduction of authorized capital											$\bullet$	$\circ$
Other changes								€	(220)		(221)	$\circ$	(221)
Other comprehensive income										259	259		259
Balance as at 31 March 2022	6,736	0	$\bullet$	718	$\bullet$	$\bullet$	$\bullet$	$\overline{53}$	7,455	(12,519)	2,337	$\bullet$	2,337

Managing Director

Chief of the Accounting and Finance Department

Vytautas Adomaitis

Mindaugas Sologubas

III. EXPLANATORY NOTES

$\mathbf{1}$ Basic information

Snaige AB (hereinafter the "Company") is a public company registered in the Republic of Lithuania. The address of its registered office is as follows:

Pramonės str. 6, Alvtus. Lithuania.

he 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 Vilnius stock exchange.

Main shareholders of Snaige AB were:

	31 March 2022			31 December 2021
	Number of shares owned	Share of total capital, %	Number of shares owned	Share of total capital, %
Sekenora Holdings Limited	36,096,193	91.10%	36,096,193	91.10%
Other shareholders	3,526,202	8.90%	3.526,202	8.90%
Total	39,622,395	100%	39,622,395	100%

All shares of the Company are ordinary registered intangible shares with the par value of EUR 0.17 each and were fully paid as at 31 March 2022 and 31 December 2021.

As at 31 March 2022 and 31 December 2021 the Company did not hold its own shares.

The Group consisted of Snaige AB and the followings subsidiaries as at 31 March 2022 (hereinafter - the "Group"):

Company	Country	Percentage of the shares held by the Group	Profit (loss) for the reporting vear	Shareholders' equity
Snaige-Ukraina TOB	Ukraine	99%	(1)
Almecha UAB	Lithuania	100%	22	196

As at 31 March 2022, same as at 31 December 2021, the Board of the Group consist of 4 members. The board does not have Snaigė AB representatives.

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 in 2006. The main activities of the company are production of refrigerating components and equipment. The Company acquired 100% of the Company's shares.

At 31 March 2022 the number of employees of the Group was 507 (as at 31 December 2021 - 539).

$2.$ Accounting principles

The principal accounting policies adopted in preparing the Group's financial statements are as follows:

$2.1.$ Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union (hereinafter the "EU").

These financial statements are prepared on the historical cost basis.

$2.2.$ Going concern

These financial statements for the 31 March 2022 have been prepared based on the assumption that the Group will be able to continue as a going concern for at least 12 months. The going concern is based on the following assumptions:

In order 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.

The investment plan for 2022 contains additional investments in new products and new production directions EUR 550 thousand, for the replacement of equipment and renewal of other areas of activity EUR 200 thousand. This will allow to revive sales and successfully expand the Company's operation.

In the opinion of the Company and the Group's management, the impact of the pandemic caused by COVID-19 will no longer have a material impact on the going concern, although it is likely to have a negative impact on the Company's and the Group's results. If the pandemic lasts longer than expected, the Company's and the Group's management expects adequate necessary state support to ensure business continuity.

In the opinion of the Company and the management of the Group, the impact of the military conflict in Ukraine which began at the end of February (Note 29) is significant. Trade of Company products in one of the largest markets has been temporarily suspended due to this conflict, but new product groups and the active actions of the Company 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.

As one of the Company's loan agreements is done with the financing bank, registered in Russia (Note 21), all payments under this agreement were frozen after war in Ukraine began. After geopolitical situation changes, there will be negotiations with financing bank on future condition or refinancing. Management believes that this agreement will be extended during the year or refinanced in other bank under conditions that will not jeopardize the Company's and the Group's business continuity.

The Company's negative performance and related liquidity challenges due to rising raw materials and energy prices and declining consumption due to declining expectations in the war in Ukraine are temporary and the Company and the Group's management expect to overcome them with available resources and adequate state support.

The management of the Company agrees that all those assumptions above could be influenced of significant uncertainties, which could raise doubts about Company's ability to continue operating, because of the disability to realize its property and to implement its commitments by carrying out its normal activities. However, despite all this the Company's management expects that the Company will have enough resources to continue operating in the near future. Therefore, the Group has continued to adopt the going concern basis of accounting 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. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional 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 / were translated into the presentation currency of Snaige 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 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 applicable exchange rates in relation to euro as at the 31 March 2022, and 31 December 2021, were as follows:

	31 March 2022	31 December 2021
UAH	32.90984	30.99338
USD	1.1126	1.1334

$2.4.$ Principles of consolidation

The consolidated financial statements of the Group include Snaige AB and its subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting year, using consistent accounting policies.

Subsidiaries are consolidated from the date from which effective control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Group. All intercompany transactions, balances and unrealised gains and losses on transactions among the Group companies have been eliminated. The equity and net result attributable to non-controlling interest are shown separately in the statement of financial position and profit or loss.

Acquisitions and disposals of non-controlling interest by the Group are accounted as equity transaction: the difference between the carrying value of the net assets acquired from/disposed to the non-controlling interests in the Group's financial statements and the acquisition price/proceeds from disposal is accounted directly in equity.

$2.5.$ 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).

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.

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.

$2.6.$ Tangible non-current assets

Property, plant and equipment are assets that are controlled by the Group and the Company, which are expected to generate economic benefits in the future periods with the useful life exceeding one year, and which acquisition (manufacturing) costs could be reliably measured. Property, plant and equipment are stated at cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment losses. Such cost includes the cost of replacing part of such assets when that cost is incurred if the asset recognition criteria are met. Replaced parts are written off.

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.

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 reqularity 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.

Depreciation is computed on a straight-line basis over the following estimated useful lives from 1 October 2016:

Buildings and structures (including 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 (including investment property)	55 years

Buildings and structures (including 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.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.

Construction in progress is stated at cost less accumulated impairment. This includes the cost of construction, plant and equipment and other directly attributable costs. Construction in progress is not depreciated until the relevant assets are completed and put into operation.

$2.7.$ Non-current assets held for sale

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Property, plant and equipment once classified as held for sale are not depreciated.

If the Group has classified an asset as held for sale, but the above mentioned criteria are no longer met, the Group ceases to classify the asset as held for sale and measure a non-current asset that ceases to be classified as held for sale at the lower of: its carrying amount before the asset was classified as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset not been classified as held for sale, and its recoverable amount at the date of the subsequent decision not to sell. The adjustment to the carrying amount of a noncurrent asset that ceases to be classified as held for sale and recorded in profit or loss in the period in which the criteria are no longer met.

$2.8.$ 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.

$2.9.$ Receivables and loans granted

Receivables are initially recorded at the true value at the same moment as they were given. Later receivables and loans are accounted in justice to their depreciation.

2.10. Cash and cash equivalents

Cash includes cash on hand and cash with banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits at current accounts, and other short-term highly liquid investments.

2.11. Borrowings

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised, otherwise - expensed as incurred. No borrowing costs were capitalised as at 31 March 2022 and 31 December 2021.

Borrowings are initially recognised at fair value of proceeds received, net of expenses incurred. They are subsequently carried at amortised cost, the difference between net proceeds and redemption value being recognised in the net profit or loss over the period of the borrowings (except for the capitalised portion as discussed above).

Borrowings are classified as non-current if the completion of a refinancing agreement before the balance sheet date provides evidence that the substance of the liability at the balance sheet date was non-current.

2.12. Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into. Subsequent to initial recognition and measurement, outstanding derivatives are carried in the statement of financial position at the fair value. Fair value is determined using the discounted cash flow method applying the effective interest rate. The estimated fair values of these contracts are reported on a gross basis as financial assets for contracts having a positive fair value; and financial liabilities for contracts with a negative fair value. Contracts executed with the same counterparty under legally enforceable master netting agreements are presented on a net basis. The Group had no derivative contracts outstanding as at 31 March 2022 and 31 December 2021.

Gain or loss from changes in the fair value of outstanding derivative contracts is recognised in the comprehensive income statement as they arise.

2.13. Factoring

Factoring transaction is a funding transaction wherein the Group transfers to factor claim rights for determined fee. The Group alienate rights to receivables due at a future date according to invoices.

2.14. Financial lease and operating lease

Finance lease - the Group as lessee

The Group recognises finance leases as assets and liabilities in the statement of financial position at amounts equal at the inception of the lease to the fair value of the leased property or, if lower, to the present value of the minimum lease payments. The rate of discount used when calculating the present value of minimum payments of finance lease is the nominal interest rate of finance lease payment, when it is possible to determine it, in other cases, Group's composite interest rate on borrowings is applied. Directly attributable initial costs are included into the asset value. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Direct expenses incurred by the lessee during the lease period are included in the value of the leased asset.

The depreciation is accounted for finance lease assets and it also gives rise to financial expenses in the statement of comprehensive income for each accounting period. The depreciation policy for leased assets is consistent with that for depreciable assets that are owned. The leased assets cannot be depreciated over the period longer than the lease term. unless the Group according to the lease contract, gets transferred their ownership after the lease term is over.

If the result of sales and lease back transactions is finance lease, any profit from sales exceeding the book value is not recognised as income immediately. It is deferred and amortised over the finance lease term.

Operating lease - the Group as lessee

Leases where the lessor retains all the risk and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

If the result of sales and lease back transactions is operating lease and it is obvious that the transaction has been carried out at fair value, any profit or loss is recognised immediately. If the sales price is lower than the fair value, any loss is recognised immediately, except for the cases when the loss is compensated by lower than market prices for lease payments in the future. The loss is then deferred and it is amortised in proportion to the lease payments over a period, during which the assets are expected to be operated. If the sales price exceeds the fair value, a deferral is made for the amount by which the fair value is exceeded and it is amortised over a period, during which the assets are expected to be operated.

2.15. Grants and subsidies

Grants and subsidies (hereinafter "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 the statement of comprehensive income, 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 (mainly received from the EU and other structural funds). 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.

2.16. Provisions

Provisions are recognised when the Group has 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 balance sheet date and adjusted in order to present the most reasonable current estimate.

2.17. Non-current employee benefits

According to the collective agreement, each employee leaving the Company at the retirement age is entitled to a onetime payment. Employment benefits are recognised in the statement of financial position and reflect the present value of future payments at the date of the statement of financial position. The above mentioned employment benefit obligation is calculated based on actuarial assumptions, using the projected unit credit method. Present value of the non-current obligation to employees is determined by discounting estimated future cash flows using the discount rate which reflects the interest rate of the Government bonds of the same currency and similar maturity as the employment benefits. Actuarial gains and losses are recognised in the statement of comprehensive income as incurred.

2.18. Revenue recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of the revenue can be measured reliably. Sales are recognised net of VAT and discounts.

Revenue from sales of goods is recognised when delivery has taken place and transfer of risks and rewards has been completed.

Revenue from services is recognized on accrual basis when services are rendered and are stated in the statement of comprehensive income.

In these consolidated financial statements intercompany sales are eliminated.

2.19. Impairment of assets

Financial assets

Financial assets are reviewed for impairment at each reporting date.

For financial assets carried at amortised cost, whenever it is probable that the Group will not collect all amounts due according to the contractual terms of loans or receivables, impairment is recognised in the statement of comprehensive income. The reversal of impairment losses previously recognised is recorded when the decrease in impairment loss can be justified by an event occurring after the write-down. Such reversal is recorded in the statement of comprehensive income. However, the increased carrying amount is only recognised to the extent it does not exceed the amortised cost that would have been had the impairment not been recognised.

Other assets

Other assets are reviewed for impairment whenever events or changes in circumstances indicate that carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the statement of comprehensive income. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is accounted for in the same caption of the statement of comprehensive income as the impairment loss.

2.20. Subsequent events

Subsequent events that provide additional information about the Group'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.

$3₁$ Segment information

The Group's sole business segment identified for the management purposes is the production of refrigerators and specialised equipment, therefore this note does not include any disclosures on operating segments as they are the same as information provided by the Group in these financial statements.

Information as at 31-03-2022 and at 31-03-2021 on Group's sales and receivables from clients is presented below:

	Total sales revenue			Inter-group sales		Sales revenue
	2022	2021	2022	2021	2022	2021
Russia		87			$\overline{\phantom{a}}$	87
Ukraine	168	838	-		168 -	838

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

77 13	102 464	$\overline{\phantom{0}}$	٠ $\blacksquare$	77 13	102 464
25	103	$\overline{\phantom{a}}$	۰.	25	103
783	877	(107)	(25)	676	852
2,015	1,578	$\overline{\phantom{a}}$	٠	2,015	1,578
2,643	2,970	-		2,643	2,970

Transactions between the Group companies are made on commercial terms and conditions. Inter-group sales are eliminated in consolidation.

As at year 2022 the sales to the five largest buyers comprised 49% of total sales, including: the largest buyer 13.81% (as at $2021 - 44.46\%$ , including: the largest buyer 16.40%).

Cost of sales 4.	31-03-2022	31-03-2021
Raw materials	3,427	4,379
Salaries and wages	638	755
Depreciation and amortisation	334	355
Other	1,330	947
Total:	5,729	6,436

5. Other income

	31-03-2022	31-03-2021
Income from transportation services	26	100
Income from sale of other services
Income from rent of premises		6
Gain on disposal of property, plant and equipment	1.
Other	32
Total:	66	106

6. Operating expenses
	31-03-2022	31-03-2021
Selling expenses	482	547
General and administrative expenses	560	345
Total:	1.042	892

$7.$ Other operating expenses

	31-03-2022	31-03-2021
Transportation expenses	18	73
Gain on disposal of property, plant and equipment
Other	29	18
	47

$8.$ Financial income

	31-03-2022	31-03-2021
Foreign currency exchange gain	5	13
Interest income and other
	5	13
9. Financial expenses
	31-03-2022	31-03-2021
Interest expenses	141	117
Loss of foreign currency exchange, net
Realized loss on foreign currency derivatives
Loss of foreign currency translation transactions
Other
	141	117

10. Intangible assets

Balance sheet value

	31-03-2022	31-12-2021
Development costs	1,319	1,388
Software, license	5
Other intangible assets	257	172
Total:	1,581	1,567

The Group during the first quarter in 2022 has accumulated EUR 70 thousand (on 2021 respectively - EUR 74 thousand) of intangible assets depreciation of which EUR 70 thousand (EUR 74 thousand in 2021) is included in operating expenses of the profit (loss) statement.

Part of non-current intangible assets of the Group with the acquisition value of EUR 5,162 thousand as at 31 March 2022, was fully amortised (EUR 4,842 thousand for 2021) but is still in use.

11. Non-current tangible assets		Balance sheet value
	31-03-2022	31-12-2021
Land and buildings	5.180	5,236
Machinery and equipment	5,606	5,878
Vehicles and other property	32	38
Other equipment, fittings and tools	858	913
Construction in progress and prepayments	1,520	1,301
Vehicles used on a leasing basis	6	14
Right to land lease	95	95
Total:	13,297	13,475

Revaluation of tangible fixed assets

Starting from 30 September 2016 the Group and the Company have begun to revalue 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 fair value of the property was determined by an independent property appraiser, UAB 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 valuator.

Assets were valued under this scheme:

• 1. All Company long term assets were valued using discounted cash flows model.
• 1. From this value, intangible assets at balance value and buildings at market value were taken off.

• 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.

• 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

The useful life terms of Non-current material assets, in years:

	Statistical	Remaining useful life terms at the revaluation date	Remaining useful life terms, stated after revaluation
Land and buildings	49	22	26
Machinery and equipment	6		8
Vehicles	6		4
Other plant, devices, tools and equipment	5	0.5	5
Other tangible assets	5	0.5	8

The new useful lifetimes for assessing depreciation have been applied since 1 October 2016.

The depreciation charge of the Group's property, plant and equipment and investment property for the period of three months of 2022 amounts to EUR 405 thousand (EUR 425 thousand respectively for the same period of 2021). After the assessment of amortization of grants, the amount of EUR 382 thousand for 2022 (EUR 401 thousand for 2021) was included into production costs. The remaining amount of EUR 23 thousand (EUR 24 thousand for 2021) was included into administration expenses in the Group's profit or loss.

As at 31 March 2022 buildings of the Group and the Company with the carrying amount of EUR 5,072 thousand (as at 31 December 2021 - EUR 5,278 thousand respectively), the Group's and the Company's machinery and equipment with the carrying amount of EUR 4.962 thousand (as at 31 December 2021 - EUR 5,391 thousand respectively) were pledged to bank as a collateral for the loans (Note 21).

12. Non-current and current loans to related companies

	Group		Company
	31 March 2022	31 December 2021	31 March 2022	31 December 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:
Provisons for doubtfull loans	(8,068)	(8,068)	(8,068)	(8,068)
Provisons for doubtfull interest	(2,262)	(2,262)	(2,262)	(2, 262)
Minus: total provisions	(10, 330)	(10,330)	(10, 330)	(10, 330)
Net receivables

13. Inventories

	31-03-2022	31-12-2021
Raw materials, spare parts	2.921	3,288
Production in progress	378	274
Finished goods	2.509	1,867
Goods purchased for resale	617	882
Minus: total provisions	(164)	(169)
Total inventories, net	6,261	6,142

Raw materials and spare parts consist of compressors, components, plastics, wires, metals and other materials used in the production.

As at 31 March 2022 and as at 31 December 2021, the Group and Company has no legal restrictions on inventories.

14. Trade receivables

	31-03-2022	31-12-2021
Receivables	4.788	4.918
Less: impairment allowance for doubtful receivables	(670)	(671)
	4.118	4.247

Trade receivables are non-interest bearing and are generally on $30 - 90$ day's terms.

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

As at 31 March 2022 100% impairment was accounted trade receivables in gross values of EUR 670 thousand (as at 31 December 2021 - EUR 671 thousand). Change in impairment allowance for receivables was accounted for within administrative expenses. Impairment allowance for doubtful receivables is recognised due to receivables from not related customers.

In note 14 mentioned trade receivables from the Group in the amount of EUR 2,682 thousand (as at 31 December 2021 -EUR 2.718 thousand) were insured with credit insurance by Atradius Sweden Kreditförsäkring Lithuanian branch. Trade receivables from Ukraine, Moldova, Russia and other CIS countries are not insured.

Movements in the individually assessed impairment of trade receivables were as follows:

	31-03-2022	31-12-2021
Balance at the beginning of the period	(671)	(1,259)
Charge for the year
Write-offs of trade receivables		584
Effect of the change in foreign currency exchange rate		(2)
Amounts paid		6
Balance in the end of the period	(670)	(671)

The receivables are written-off when it becomes obvious that they will not be recovered.

As at 31 March 2022 the Group has factoring agreement with recourse, but there are no any restrictions on company assets according to this agreement.

15. Other current assets

	31-03-2022	31-12-2021
VAT receivable	386	192
Restricted cash	14	14
Other receivables	45	44
	445	250

Movements in the individually assessed impairment of other receivables were as follows:

	31-03-2022	31-12-2021
Balance at the beginning of the period	$\blacksquare$
Charge for the year
Effect of the change in foreign currency exchange rate
Amounts paid
Write off
Balance in the end of the period

16. Cash and cash equivalents

	31-03-2022	31-12-2021
Cash at bank	205	126
Cash on hand	6	3
Cash in transit
	212	129

17. Share capital

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 March 2022 the Company did not comply with this requirement. Therefore, according to the law. Management of the Company will call extraordinary shareholder meeting to solve this issue.

18. Reserves

Legal reserve

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. As at 31 March 2022 the legal reserve was fully formed.

As of 31 March 2022 the legal reserve amounted to EUR 718 thousand.

Other reserves

Other reserves are formed based on the decision of the General Shareholders' Meeting for special purposes. All distributable reserves before distributing the profit are transferred to retained earnings and redistributed annually under a decision of the shareholders.

Foreign currency translation reserve

The foreign currency translation reserve is used for translation differences arising upon consolidation of the financial statements of foreign subsidiaries.

Exchange differences are classified as equity in the consolidated financial statements until the disposal of the investment. Upon disposal of the corresponding investment, the cumulative translation reserve is transferred to retained result in the same period when the gain or loss on disposal is recognised.

1. Grants

Balance as at 31 December 2020	5.020
Received during the period	118
Balance as at 31 December 2021	5.138
Received during the period
Balance as at 31 March 2022	5.138

Balance as at 31 December 2020	4,628
Amortisation during the period	221
Accumulated amortisation as at 31 December 2021	4,849
Amortisation during the period	14
Accumulated amortisation as at 31 March 2022	4,863
Carrying amount as at 31 March 2022	275
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; also, for increase in efficiency by

investing into the production of commercial refrigerators and infrastructure development via investments into a research centre of new products.

Grants are depreciated over the same period as the machinery and other assets for which grants were designated when compensatory costs are incurred. The amortization of grants is included in production cost against depreciation of machinery and reconstruction of buildings for which the grants were designated.

To reimburse costs the grants is included in the period in which only those costs have been incurred and reduced.

20. Warranty provision

The Group provide a warranty of up to 2 years for the production sold. 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.

Changes in warranty provisions were as follows:

	31-03-2022	31-12-2021
As at 1 January	300	320
Additions during the year	18	165
Utilised	(22)	(185)
Foreign currency exchange effect
Written off
	296	300
Warranty provisions are accounted for:		31-03-2022
non-current		118
current		178
		31-12-2021
non-current		118
current		182
Borrowings 21.
	31-03-2022	31-12-2021
Non-current borrowings
Non-current borrowings with fixed interest rate	888	888

Non-current borrowings with variable interest rate 7,108 $9$ Long-term liabilities of leasing companies 8,005 Total Current borrowings Current borrowings with fixed interest rate 415 Current borrowings with variable interest rate 1.268 Current liabilities of leasing companies 14 Receivables, financed by the bank 1,240 2,937 Total 10,942 In Total

7,108

8,005

437 1,270

18

777

2,502

10,507

9

SNAIGĖ AB. company code 249664610. Pramonės str. 6. Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

The main information on individual borrowings is disclosed below:

	Type	Maturity	As at 31 March 2022	As at 31 December 2021
Borrowing 1	Loan	31-01-2023	8,376	8,378
Borrowing 2	Loan	11-08-2024	1,303	1,325
Receivables financed by the bank	Factoring	05-06-2022	1,240	777
Leasing 1		25-06-2023	7	9
Leasing 2		25-06-2023	6	6
Leasing 3		25-06-2023	5	6
Leasing 4		25-06-2023	5	6
			10,942	10,507

As at 31 March 2022 annual interest rate of the loan 1 is 1 month EURIBOR + 5.25% (as at 31 December 2021 EURIBOR + 5.25%).

As at 31 March 2022 interest rate for the loan 2 is set: 0.67% for a period of 30 days and 0.23% compensatory interest (per day).

As of 31 March 2022 the Company's buildings with the carrying amount of EUR 5,072 thousand (EUR 5,278 thousand as at 31 December 2021), the Group's and Company's machinery and equipment with the carrying amount of EUR 4,962 thousand (EUR 5,391 thousand as at 31 December 2021) were pledged to the bank for the loans.

According to the annex no. 9, to the agreement signed with the bank on 11-12-2020, the entire loan must be repaid by 31 January 2023. In addition, under this agreement, the Company's liabilities under the loan 1 were guaranteed by a Russian company related to the shareholders, with a maximum guarantee amount of EUR 6,890 thousand. This credit is issued by Russian bank, which was not under sanctions at the date of report.

According to factoring with recourse agreement, maximum factoring limit on 31 March 2022 is EUR 1 930 thousand (EUR 930 thousand as at 31 December 2021). Factoring advances can only be paid on the accounts of insured clients.

At the reporting date the outstanding loans and lease received in foreign currencies:

	31-03-2022	31-12-2021
Currency of loans, leasing and other debt obligations:
EUR	10.942	10.507
	10,942	10,507

Repayment schedule for borrowings:

	Fixed interest rate	Variable interest rate
2022	1,669	1,268
2023	274	7,108
2024	623	-
	2,566	8,376

22. Financial leasing

The Group's finance lease liabilities have a fixed interest rate of 3.9%.

Financial lease payments in future are for dates 31 March 2022 and 31 December 2021 as follows:

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

	31-03-2022	31-12-2021
2022	15	19
2023	9	9
Financial lease liabilities total	24	28
Interest	(1)	(1)
Financial lease liabilities current value	23	27
Financial lease obligations are accounted as:	23
current	14
non-current	9

Assets under financial lease are vehicles and machinery. The term of financial lease is 5 years.

Book value of leased assets:

	31-03-2022	31-12-2021
Machinery and equipment	55	60
Cars	27	32
	82	92

23. Operating lease

The Group have concluded several contracts of operating lease of land and premises. The terms of lease do not include restrictions of the activities of the Group in connection with the dividends, additional borrowings or additional lease agreements. As at 31 March 2022, the lease expenses of the Group amounted to EUR 8 thousand (EUR 8 thousand as at 31 March 2021).

Planned operating lease expenses of the Group in 2022 will be EUR 24 thousand.

The most significant operating lease agreement of the Group is the non-current agreement of Snaige AB signed with the Municipality of Alytus for the rent of the land. The payments of the lease are reviewed periodically; the lease end term is 2 July 2078.

Future lease payments according to the signed lease agreements are not defined as agreements might be cancelled upon the prior notice of 1 month.

24. Other current liabilities

	31-03-2022	31-12-2021
Salaries and related taxes	522	442
Vacation reserve	359	451
Dividends payable	49	49
Accrued interest	81	9
Other taxes payable
Provisions for warranty repairs	178	182
Other payables and accrued expenses	254	324
	1,443	1,457

Terms and conditions of other payables:

• Other payables are non-interest bearing and have the settlement term up to six months.
• Interest payable is normally settled monthly throughout the financial year.

25. Basic and diluted profit (loss) per share in EUR

	31-03-2022	31-03-2021
Shares issued 1 January	39.622	39,622
Net profit (loss) for the year, attributable to the shareholders of company, in EUR	(1.271)	(423)
Basic profit (loss) per share, in EUR	(0.03)	(0.01)

26. Risk and capital management

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's 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 March 2022 and 31 December 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 agencies.

As at 31 March 2022 and 31 December 2021, the credit risk was related to:

	31-03-2022	31-12-2021
Trade and other receivables	4.118	4,247
Cash and cash equivalents	212	129
	4.330	4,376

The concentration of the Group's trade partners and the largest credit risk related to trade receivables according to clients as at 31 March 2022 and 31 December 2021:

	2022	%	2021	$\%$
Client 1	692	14	852	17
Client 2	484	10	699	14
Client 3	394	8	347	7
Client 4	309	7	221	5
Client 5	245	5	192	4
Client 6	231	5	161	3
Client 7	224	5	160	3
Other clients	2,209	46	2,286	47
Impairment	(670)		(671)
	4,118	100	4,247	100

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

Trade receivables according to geographic regions:

31-03-2022	31-12-2021
1,638	1,263
302	445
287	228
1,541	1,904
15	86
39	14
296	307
4,118	4,247

Concentration of partners and largest credit risk related to trade receivables on 31 March 2022 and 31 December 2021:

	Receivables from customers that are not past due and are not recognized for impairment			recognized for impairment	Overdue receivables from customers, that are not
		Less than 30 days	$30 - 60$ days	$60 - 90$ days	$90 - 120$ days	More than 120 days	Total
2022	3.330	278	58	81		370	4.118
2021	3.759	74	60	8	$\,$	346	4.247

Central Europe comprises Poland, the Czech Republic, Bulgaria; Western Europe comprises France, Germany, Norway, Portugal; other CIS countries include Uzbekistan, Moldova and Azerbaijan.

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 credit policy is implemented by the Group and the Company 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 2,682 thousand (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.

In accordance with the policy of receivables recognition as doubtful, the payments variations from agreement terms are monitored and preventive actions are taken in order to avoid overdue receivables in accordance with the standard of the Group entitled "Trade Credits Risk Management Procedure".

According to the policy of the Group, receivables are considered to be doubtful if they meet the following criteria:

• the client is late with settlement for 60 and more days, receivable amount is not covered by insurance and it does not come from subsidiaries:
• factorised clients late with settlement for 30 and more days;
• client is unable to fulfil the obligations assumed;
• reluctant to communicate with the seller;
• turnover of management is observed;
• reorganisation process is observed:
• information about tax penalties, judicial operation and restrictions of the use of assets is observed;
• bankruptcy case;
• inconsistency and variation in payments;
• other criteria.

Interest rate risk

The Group's borrowings are subject to variable interest rates related to EURIBOR.

As at the period of three months of 2022 and in 2021 the Group did not use any financial instruments to hedge against interest rate risk.

Liquidity risk

The purpose of the Group's liquidity risk management policy is to maintain the ratio between continuous financing and flexibility in using overdrafts, bank loans, trade credits, financial and operating lease agreements.

Foreign exchange risk

The Group significantly reduced income earned in USD. Most of income is earned in euro by the Group.

Capital management

The Group manage share capital, share premium, legal reserves, reserves, foreign currency translation reserve and retained earnings as capital. The primary objective of the Group's capital management is to ensure that the Group complies with the externally imposed capital requirements and to maintain appropriate capital ratios in order to ensure its business and to maximise the shareholders' benefit.

The Group manages its capital structure and makes adjustments to it in the light of changes in the economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares, reduce capital.

The Company is obliged to keep its equity not lower than 50% of its share capital, as imposed by the Law on Companies of the Republic of Lithuania. As at 31 March 2022 this requirement was not complied with (Note 17)

27. 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.

28. 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 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 related 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).

The Group has a policy to conduct related party transactions on commercial terms and conditions. Outstanding balances at the reporting date are unsecured, interest-free, except the loan granted.

As at 31 March 2022 and 31 December 2021 the Group has formed an impairment allowances for doubtful debts, related to receivables from loans and related interest from related parties. 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.

	2022					2021
	Loans received	Interest expenses	Loans granted	Interest income	Loans received	Interest expenses	Loans granted	Interest income
Controlling parties	$\blacksquare$		-	$\blacksquare$		$\sim$
The parent	-	$\blacksquare$		۰				-
	۰		$\blacksquare$	$\blacksquare$		۰

Financial and investment transactions with the related parties at 31 March 2022 and 31 December 2021 in EUR:

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.

Trade transactions with the related parties:

31-03-2022	Purchases	Sales	Receivables	Payables
Companies, controlled by ultimate shareholders	28		641	122
Controlling parties	$\equiv$		$\overline{\phantom{0}}$
	28		641	122

31-12-2021	Purchases	Sales	Receivables	Payables
Companies, controlled by ultimate shareholders	203	83	638	94
Controlling parties	-	۰	۰
	203	83	638	94

The Company's transactions carried out with subsidiaries:

	Purchases		Sales
	31-03-2022	31-12-2021	31-03-2022	31-12-2021
Subsidiaries	105	284	31	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 receivables from subsidiaries at 31 March 2022 and 31 December 2021:

SNAIGĖ AB, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2022 (All amounts are in EUR thousand unless otherwise stated)

	31-03-2022	31-12-2021
Non-current receivables
Subsidiaries	$\overline{\phantom{a}}$
Total non-current receivables	$\blacksquare$
Current receivables
Subsidiaries	38	23
Total current receivables	38	23

The analysis of receivables from subsidiaries and granted loans during the period of 31 March 2022 and 31 December 2021:

	Receivables from subsidiaries and granted loans neither past due nor impaired	Receivables from subsidiaries and granted loans past due but not impaired
		Less than 30 days	$30 - 60$ days	$60 - 90$ days	$90 - 120$ days	More than 120 days	Total
2022	38		$\overline{\phantom{a}}$	$\blacksquare$	٠	$\blacksquare$	38
2021	23	-	-	-	٠	$\overline{\phantom{a}}$	23

Payables to subsidiaries as of 31 March 2022 and 31 December 2021 (included under the trade payables caption in the Company's statement of financial position):

	31-03-2022	31-12-2021
Subsidiaries	191	89

As at the date of issue of the statements, the Company does not have any guarantee agreements for its subsidiaries.

Remuneration of the management and other payments

Remuneration of Management of the Company and of its subsidiaries including taxes amounted to EUR 234 thousand (23 employees) during the period of three months of 2022 (EUR 317 thousand (23 employees) during the year 2021). The Management of the Company and of its subsidiaries did not receive any other loans, guarantees; no other payments or property transfers were made or accrued.

29. The Impact of the Military Conflict in Ukraine

In response to the geopolitical situation, Snaige AB has taken all necessary measures to preserve the continuity of the Company's operations, employees, clients and partners. At the time of issue of the Statements the Company continues to operate. Snaige AB is able to fulfil the placed orders and fulfils them, but faces additional 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, and their application in the future is also unlikely, as persons related to the Company and the Group do not participate in politics or hostilities to the knowledge of the management.

• At the time of preparing the Statements, the export of products to Ukraine has completely stopped, as well as the activities of the subsidiary Snaige Ukraina ZAO have been temporarily suspended. As of 27 April 2022 receivables from Ukrainian customers amounted to EUR 0.3 million. The recovery of receivables after the end of hostilities is considered positive, but with a significant delay. The supply of raw materials from Ukraine has stopped, however, its volume in 2021 was insignificant (about 1% of all purchases) and the suspension of supply from Ukraine does not directly affect the Company's operations.

• Exports of products to Russia and Belarus have been 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 received from sales in Russia and Belarus in 2021 amounted about 2% of the Company's total turnover. As of 27 April 2022 receivables from Russian and Belarusian customers were insignificant. The supply of raw materials from Russia and Belarus has also stopped, but its volume in 2021 was 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:
• 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).
• 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, Snaige 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.

30. Subsequent events

The Ordinary General Meeting of Shareholders of Snaige AB was held on 29 April 2022, where consolidated annual report and set of financial statements of the Company for year 2021 were approved.