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**SEMI-ANNUAL REPORT OF** 

# **INVESTMENT FRIENDS SE**

# **CONTAINING THE FINANCIAL STATEMENTS AND THE ISSUER'S MANAGEMENT REPORT**

**FOR 6 MONTHS**

**ENDED ON DECEMBER 31, 2024** 

**TALLINN 21/02/2025**

**Investment Friends SE** Harju maakond, Tallinn, Kesklinna linnaosa, Tornimäe tn 5, 10145, Estonia Registry code: 14617862 Email: info@ifsa.pl

1

# **INVESTMENT FRIENDS SE GENERAL INFORMATION**

Company's name: **INVESTMENT FRIENDS SE**

Registry code: 14617862 Address: Harju maakond, Tallinn, Kesklinna linnaosa, Tornimäe tn 5, 10145 Email: info@ifsa.pl Website[: www.ifsa.pl](http://www.ifsa.pl/)

Reporting period: 01/07/2024 – 31/12/2024

*Supervisory Board:*

Wojciech Hetkowski Jacek Koralewski Małgorzata Patrowicz Anna Kajkowska

*Management Board:* Agnieszka Gujgo

**TABLE OF CONTENTS:**

**I.SELECTED FINANCIAL DATA**

**II. GENERAL INFORMATION ABOUT THE ISSUER**

**III. REPORT ON THE ACTIVITY**

**IV. FINANCIAL STATEMENTS**

**V. STATEMENT OF THE MANAGEMENT BOARD**

#### **I.SELECTED FINANCIAL DATA**

#### In thous. EUR

|                                                            | Six months<br>ended on<br>December 31 | Six months<br>ended on<br>December 31 |
|------------------------------------------------------------|---------------------------------------|---------------------------------------|
|                                                            | 2024                                  | 2023                                  |
| Revenues from the sale of products, goods<br>and materials |                                       |                                       |
|                                                            | 17                                    | 17                                    |
| Profit (loss) from operating activities                    | -10                                   | 9                                     |
| Pre-tax profit (loss)                                      | 42                                    | 8                                     |
| Net cash flow from operating activities                    | 34                                    | 5                                     |
| Change in cash and cash equivalents                        | 56                                    | 40                                    |
| Total assets *                                             | 1 511                                 | 1 476                                 |
| Short-term liabilities*                                    | 47                                    | 54                                    |
| Share capital *                                            | 1 464                                 | 1 422                                 |
| Weighted average diluted number of shares                  |                                       |                                       |
| (in pcs.)                                                  | 68 850 000                            | 68 850 000                            |
| Book value per share ( EURO)                               | 0,02                                  | 0,02                                  |

\*For the balance items market with asterisk the data presented in the second column cover the data as at 30/06/2024.

# **II. GENERAL INFORMATION ABOUT THE ISSUER**

Name of the Issuer: Investment Friends SE Registered office: Harju maakond, Tallinn, Kesklinna linnaosa, Tornimäe tn 5, 10145 Estonia

*Object of activity according to the Estonian Classification of Activities:*

the main area of the Company's activity according to the EMTAK classification is " Other credit granting, excluding lombard credits", EMTAK no. 6492

*Registry court of the Company*:

Since 01/12/2018 the Company is entered in the Registration Department of the District Court in Tartu, registry code 14617862

*Share capital of the Company:*

As at the date of publication of the report, the Company's share capital amounts to EUR 6 885 000,00 (in words: six million eight hundred and eighty-five thousand EUR) and is divided into 68 850 000 shares without a nominal value with a book value of EUR 0.10 each share.

*Financial year:*

On May 31, 2019 the Register of Commercial Companies applicable to the law of Estonia (Ariregister) registered the change of the financial year pursuant to Resolution no. 2 of the Extraordinary General Meeting of Shareholders of May 17, 2019.

As a result of this, the Company's financial year begins on July 1 and ends on June 30.

# **III. REPORT ON THE COMPANY'S ACTIVITIES**

# *The main fields of activity*

The main business activity of the Company is financial activity, including lending activities. The Company realizing its basic profile activities related to lending services concluded agreements with Polish and Estonian business entities. The Company intends to continue its operations in the area of lending activities.

In the reporting period, the Company obtained revenues mainly from its financial service activity, i.e., interest on loans granted.

# *General (macroeconomic) development*

The Company undertakes financial activities, especially related to granting loans to natural persons and business entities, mostly to related parties. In the Management Board's opinion, operations in this area have a growth-oriented nature, particularly in the Polish market. Entrepreneurs who have not obtained financing from a bank, usually reach out to companies which provide lending services and declare high flexibility depending on the needs of a particular customer and their security capabilities. Financial markets are characterized by significant volatility, which on the one hand, increases the risk of operating businesses such as lending activities, but on the other hand, creates opportunities to achieve above-average returns in a relatively short period.

The key factors incluencing market volatility include:

- economic conditions both domestic and global
- monetary policy of central banks,
- internal situation of a given company or market,
- situation in international markets.

Investment Friends SE recognizes growth potential in the scope of providing financial services to business entities and therefore, intends to continue operations in this segment.

### *Financial instruments, financial risk management objectives and policies*

The main risks arising from financial instruments of the Company are: interest rate risk, liquidity risk, credit risk, risk related to financial collaterals. The Management Board is responsible for establishing of risk management in the Company as well as for supervision of their respect compliance. The purpose of the Company's risk management policies is to identify and analyse the risks to which the Company is exposed, by setting appropriate restrictions and controls, as well as by monitoring the risks and limits adjusted accordingly. The Management Board identifies potential risks by analysing each transaction of the entity. Due to the simple structure of the Company, there are no problems with communicating information in a timely manner. The management board is responsible for designing, introducing and ensuring adequate and effective actions aimed at achieving the goal.

# *Characteristics of external and internal factors*

Considering the specific of the activity, i.e., financial service activities in the field of granting nonconsumer cash loans, results are currently and will be significantly influenced by: - the general market prosperity on lending market and level of interest rates,

- the proper realization by the Borrowers of their obligations resulting from concluded loan agreements, as well as course of execution process and vindication of loans terminated, if such agreements occur,

- efficiency of administrative and legal procedures,

- opportunity to gain possible borrowers,
- the economic situation and investing circumstances in Poland, Estonia and the region,
- access to external financing sources,
- cooperation with other financial entities,

- changes in market prices, such as foreign exchange rates, interest rates (including currency risk).

Due to the fact that the Company conducts lending activities, it is exposed to various types of risks, the types and significance of which depend on the scope of its activities in the financial markets, in particular: liquidity risk; market risk, including: interest rate risk o and currency risk. These risks are described in detail in the Descriptions of significant factors of risks section of this report.

# *The structure of the share capital*

As at the balance sheet date of 31/12/2024 and as of the date of the publication of the semiannual report, i.e., as of 21/02/2025 it holds 68 850 000 without a nominal value with a book value of EUR 0,10 each share.

# *Share capital of the Company*

As at the balance sheet date i.e., 31/12/2024 and as of the date of the publication of the semiannual report i.e., as of 21/02/2025 the share capital of the Company amounts to EUR 6 885 000,00.

### *Information of the company and shareholders*

As at the balance sheet date i.e., 31/12/2024 and as of the date of the publication of the report the Company Investment Friends SE has no subsidiaries and it does not create its own consolidation group.

According to the best knowledge of the Management Board the direct shareholder is Patro Invest OǕ with registered office in Tallinn, that holds 63,85 % contribution in the share capital and 43 961 150 votes at the General Meeting of the Company.

As at December 31, 2024 the Company did not own any capital investments in the form of shares and stock of other entities.

*Qualifying holding pursuant to the provisions of § 9 of the Securities Market Act.* 

# **The table below presents shareholding structure as of 30/06/2024. Shareholders holding at least 5% of the total number of votes at the General Meeting.**

| No. | Shareholder     | Number of<br>shares | % of shares | Number of votes | % of votes |
|-----|-----------------|---------------------|-------------|-----------------|------------|
| 1.  | PATRO INVEST OÜ | 43 961 150          | 63,85       | 43 961 150      | 63,85      |
|     | total           | 68 850 000          | 100         | 68 850 000      | 100        |

Damian Patrowicz holds 100% of Patro Invest OÜ shares

# **S***hareholding structure as at the date of publication the report i.e.* **21/02/2025**

| No. | Shareholder     | Number of<br>shares | % of shares | Number of votes | % of votes |
|-----|-----------------|---------------------|-------------|-----------------|------------|
| 1.  | PATRO INVEST OÜ | 43<br>961 150       | 63,85       | 43 961 150      | 63,85      |
|     | total           | 68 850 000          | 100         | 68 850 000      | 100        |

Damian Patrowicz holds 100% of Patro Invest OÜ shares

# *Members of the Management Board*

As at the balance sheet date and the date of publication of the periodical report, members of the Management Board do not hold directly or indirectly shares of the Company.

# *Members of the Supervisory Board*

As at the balance sheet date and the date of publication of the periodical report, members of the Supervisory Board do not hold directly or indirectly shares of the Company.

# *Authorization of management board members to issue or redeem shares*

In the period since 01/07/2024 till 31/12/2024 the Management Board of the Company was not entitled to issue or redeem shares.

# *Provisions and rules for the election, appointment, resignation and dismissal of the members of the management board of the company established by legislation.*

There are general rules for the selection, appointment, resignation and dismissal of board members of the management board of a company established by the Estonian Commercial Code, in particular § 308, § 309 and others. Section V of the Company's Articles of Association contains principles similar to the general rules of the Commercial Code. The information on the description of management and supervisory bodies and their composition have been described in the report on the application of corporate governance principles.

# **Competences and election of the supervisory board**

In accordance with the provisions of point 5.3. The Company's Articles of Association, members of the Company's Management Board are appointed and dismissed by the Supervisory Board, which also decides on the remuneration of members of the Management Board. Members of the Supervisory Board are elected by the Company's general meeting of shareholders.

# **Resolutions and rules for amendment of the articles of association of the company**

In accordance with point 4.9.1 of the Company's Articles of Association, any amendment of the Company's Articles of Association is included in the General Meeting of Shareholders' competencies.

In accordance with point 4.5 of the Articles of Association, the General Meeting is able to adopt valid resolutions, if more than half of all votes are represented at the General Meeting, if the applicable legal acts do not provide for a higher majority of votes.

If an enough number of shareholders does not participate in General Meeting, in order to ensure a majority of votes, in accordance with point 4.5, the Management Board of the Company within three weeks, but not earlier than after seven days, convenes a new general meeting with the same agenda. In this way, the General Meeting is competent to adopt resolutions regardless of the number of votes represented. Resolutions of the general meeting are adopted, when more than half of all votes represented at the General Meeting support the resolution, and if there is no other requirement arising from applicable legal acts.

### **Information on average employment**

The Company did not employ any employees in the financial year lasting since July 1, 2024 till December 31, 2024 and in the previous financial year since July 1, 2023 till December 31, 202

| RATIO | Six months ended on<br>December 31, 2024<br>unaudited<br>in thous. EUR | Six months ended on<br>December 31, 2023<br>unaudited<br>in thous. EUR |
|-------|------------------------------------------------------------------------|------------------------------------------------------------------------|
| ROA   | 0,03                                                                   | 0,01                                                                   |
| ROE   | 0,03                                                                   | 0,01                                                                   |

# **Selected ratios of Investment Friends SE**

ROA – return on assets, net profit of the Company to value of the assets (net profit/value of assets)

# ROE – return on equity, net profit of the Company to equity (net profit/equity)

#### **IV. FINANCIAL STATEMENT**

#### *a. STATEMENT OF FINANCIAL POSITION*

(In thous. EUR)

| STATEMENT OF FINANCIAL POSITION                   | December 31,<br>2024 | June 30,<br>2024 |
|---------------------------------------------------|----------------------|------------------|
|                                                   | (in thous. EUR)      | (in thous. EUR)  |
| A s s e t s                                       |                      |                  |
| Current assets                                    | 1 511                | 1 476            |
| Short-term financial assets                       | 1 454                | 1 432            |
| Cash and cash equivalents                         | 56                   | 35               |
| Short-term prepayments                            | 1                    | 2                |
| T o t a l A s e t s                               | 1 511                | 1 469            |
|                                                   |                      |                  |
| L i a b i l i t i e s                             |                      |                  |
| Equity                                            | 1 464                | 1 422            |
| Share capital                                     | 6 885                | 6 885            |
| Differences from conversion into EURO             | 110                  | 110              |
| Supplementary capital                             | 161                  | 161              |
| Other reserve capital                             | 0                    | 0                |
| Retained earnings / Retained earnings             | -5 692               | -5 734           |
| II. Short-term liabilities                        | 47                   | 54               |
| Trade liabilities                                 | 0                    | 1                |
| Other provisions                                  | 47                   | 53               |
| T o t a l e q u i t y a n d l i a b i l i t i e s | 1 511                | 1 476            |
|                                                   |                      |                  |
| Book value                                        | 1 464                | 1 422            |
| Number of shares                                  | 68 850 000           | 68 850 000       |
| Book value per one share (in EUR)                 | 0,02                 | 0,02             |
| Diluted number of shares                          | 68 850 000           | 68 850 000       |

**Diluted book value per share (in EUR)** 0,02 0,02

# *b. PROFIT AND LOSS ACCOUNT*

(in thous. EUR)

| PROFIT AND LOSS ACCOUNT                            | Period ended on<br>31/12/2024<br>(in thous. EUR) | Period ended on<br>31/12/2023<br>(in thous. EUR) |
|----------------------------------------------------|--------------------------------------------------|--------------------------------------------------|
| Net interest income                                | 17                                               | 17                                               |
| Gross profit (loss) on sales (I-II)                | 17                                               | 17                                               |
| General and administrative expenses                | 11                                               | 8                                                |
| Other operating revenues                           | 0                                                | 0                                                |
| Other operating costs                              | 16                                               | 0                                                |
| Profit (loss) on operating activities              | -10                                              | 9                                                |
| Financial revenues                                 | 52                                               | 0                                                |
| Financial costs                                    | 0                                                | 1                                                |
| Pre-tax profit (loss)                              | 42                                               | 8                                                |
| Net profit (loss)                                  | 42                                               | 8                                                |
| Weighted average number of ordinary shares         | 65 132 877                                       | 4 050 000,00                                     |
| Profit (loss) per ordinary share (in EUR)          | 0,00                                             | 0,00                                             |
| Diluted weighted average number of ordinary shares | 65 132 877                                       | 4 050 000,00                                     |
| Diluted profit (loss) per ordinary share (in EUR)  | 0,00                                             | 0,00                                             |

# *c. STATEMENT OF COMPREHENSIVE INCOME*

| STATEMENT OF COMPREHENSIVE INCOME                          | Period ended on<br>31/12/2024<br>(in thous. EUR) | Period ended on<br>31/12/2023<br>(in thous. EUR) |  |
|------------------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--|
| Net profit/loss for the period                             | 42                                               | 8                                                |  |
| Other comprehensive income, including:                     | 0                                                | 1                                                |  |
| - - Exchange differences due to conversion into EURO– will |                                                  |                                                  |  |
| not be classified to the profit and loss account           | 0                                                | 1                                                |  |
| Comprehensive income for the period                        | 42                                               | 9                                                |  |

| STATEMENT OF CHANGES IN EQUITY                                 | Period ended<br>on<br>31/12/2024<br>(in thous.<br>EUR) | Period ended<br>on<br>31/12/2023<br>(in thous.<br>EUR) |
|----------------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
| Equity at the beginning of the period (OB)                     | 1 418                                                  | 1 418                                                  |
| Opening balance of share capital                               | 405                                                    | 405                                                    |
| Changes of share capital                                       | 6 480                                                  | 0                                                      |
| a) increases (due to) reduction of the nominal value of shares | 6 480                                                  | 0                                                      |
| b) decreases (due to) decrease of the nominal value of shares  | 0                                                      | 0                                                      |
| Closing balance of share capital                               | 6 885                                                  | 405                                                    |
| Opening balance of supplementary capital                       | 6 435                                                  | 6 435                                                  |
| Changes of supplementary capital                               | -6 274                                                 | 0                                                      |
| a) increases (due to) result of nominal value of shares        | 0                                                      | 0                                                      |
| b) decreases (due to) decrease of the nominal value of shares  | 6 274                                                  | 0                                                      |
| Closing balance of supplementary capital                       | 161                                                    | 6 435                                                  |
| Opening balance of other reserve capital                       | 206                                                    | 206                                                    |
| Changes of other reserve capital                               | -206                                                   | 0                                                      |
| increases (due to) decrease of primary capital                 | 0                                                      | 0                                                      |
| Decreases (due to) increase of primary capital                 | 206                                                    | 0                                                      |
| Closing balance of other reserve capital                       | 0                                                      | 206                                                    |
| Retained earnings                                              | -5 734                                                 | -5 736                                                 |
| Increases (due to)                                             | 42                                                     | 8                                                      |
| a) profit/loss for the period                                  | 42                                                     | 8                                                      |
| Decreases (due to)                                             | 0                                                      | 0                                                      |
| a) coverage of losses from supplementary capital               | 0                                                      | 0                                                      |
| Retained earnings                                              | -5 692                                                 | -5 728                                                 |
| Opening balance of exchange differences                        | 109                                                    | 108                                                    |
| Changes of exchange differences                                | 1                                                      | 1                                                      |
| Increases                                                      | 1                                                      | 1                                                      |
| decreases                                                      | 0                                                      | 0                                                      |
| Closing balance of exchange differences                        | 110                                                    | 109                                                    |
| Closing balance of equity (CB)                                 | 1 464                                                  | 1 427                                                  |

#### *d. STATEMENT OF CHANGES IN EQUITY*

#### *e. CASH FLOW STATEMENT*

#### (in thous. EUR)

| CASH FLOWS STATEMENT<br>(indirect method)                 | Period ended on<br>31/12/2024<br>(in thous. EUR) | Period ended on<br>31/12/2023<br>(in thous. EUR) |
|-----------------------------------------------------------|--------------------------------------------------|--------------------------------------------------|
| Operating activities                                      |                                                  |                                                  |
| I. Gross profit (loss)                                    | 42                                               | 8                                                |
| II. Adjustments total                                     | -8                                               | -3                                               |
| Difference between interest accrued and interest received | 0                                                | 0                                                |
| Interests and dividends                                   | 50                                               | -1                                               |
| Granted loans                                             | 0                                                | 0                                                |
| Repayments received                                       | 0                                                | 0                                                |
| Change in the balance of reserves                         | -6                                               | -4                                               |
| Change in receivables and prepaid expenses                | 0                                                | 0                                                |
| Change in the balance of liabilities                      | -1                                               | 0                                                |
| Change in the balance of accruals                         | 1                                                | 2                                                |
| Other adjustments                                         | -52                                              | 0                                                |
| Exchange differences                                      | 0                                                | 0                                                |
| A.III. Net cash flows from operating activity             | 34                                               | 5                                                |
| B. Exchange differences                                   | 0                                                | 0                                                |
| Net cash flow, total (I+/-II+/-III)                       | 34                                               | 5                                                |
| Balance sheet change in cash                              | 34                                               | 5                                                |
| Opening balance of cash                                   | 22                                               | 35                                               |
| Closing balance of cash                                   | 56                                               | 40                                               |

# *f. EXPLABATORY NOTE*

# **Note 1. Loans granted to related entities:**

# As at 31/12/2024 the Company INVESTMENT FRIENDS SE shows loans:

Loan agreement concluded on 09/06/2020 with DAMAR PATRO UU with registered office in Tallinn. The value of the loan granted is EUR 1 720 thous. The interest rate is 2,5%. The term of repayment of the loan was set for 30/06/2025.

| Name of the<br>Company | 12<br>months<br>period<br>-principle | 12<br>months<br>period<br>-interests | 1-5<br>year | Interest | Currency | Term           | Collaterals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------------|--------------------------------------|--------------------------------------|-------------|----------|----------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| DAMAR<br>PATRO UU      | 1 376                                | 77                                   | 0           | 2,5%     | EUR      | 30.06.<br>2025 | Investment Friends SE has the right<br>to complete the promissory note for<br>each of these loans in an amount<br>representing the Borrower's<br>obligation under the loan agreement,<br>reduced by payments made by the<br>Borrower toward this obligation and<br>increased by the value of unpaid<br>interest, default interest, and other<br>ancillary costs in the event of failure<br>to repay the full loan amount along<br>with ancillary obligation within the<br>required timeframe. |

As at June 30, 2024 the Company has the following loans granted to related entities:

| Name of the<br>Company                      | 12<br>months<br>period<br>-principle | 12<br>months<br>period<br>-interests | 1-5<br>year | Interest | Currency | Term           | Collaterals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------|--------------------------------------|--------------------------------------|-------------|----------|----------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| DAMAR<br>PATRO UU                           | 1 376                                | 60                                   | 0           | 2,5%     | EUR      | 30.06.<br>2025 | Investment Friends SE has<br>the right to complete the<br>promissory note for each of<br>these loans in an amount<br>representing the Borrower's<br>obligation under the loan<br>agreement, reduced by<br>payments made by the<br>Borrower toward this<br>obligation and increased by<br>the value of unpaid interest,<br>default interest, and other<br>ancillary costs in the event of<br>failure to repay the full loan<br>amount along with ancillary<br>obligation within the<br>required timeframe. |
| Patro Invest<br>Sp. z o.o. w<br>likwidacji* | 0                                    | 15                                   | 0           | 24,5%    | PLN      | 25.10.<br>2019 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

\*In 2019 and 2020, the company recognized an impairment allowance for receivables from the Company Patro Invest SP. z o.o. w likwidacji in the total amount of EUR 51 958,44. The impairment allowance did not cover the interests amounting to EUR 14 789,34. On September 15, 2024, the receivable of Patro Invest Sp. z o.o. in liquidation with its registered office in Płock was sold in its entirety to Patro Administracja Sp. z o.o. with its registered office in Płock for the amount of PLN 223,888.93.

# **Note 2. Transaction with related entities**

| Transactions with related<br>entities ended on<br>31/12/2023 | Revenues<br>due to<br>interests<br>from<br>related<br>entities<br>EUR | Purchases<br>from<br>related<br>entities<br>EUR | Receivables<br>due to loans<br>and interests<br>from related<br>entities<br>EUR | Trade<br>liabilities and<br>other<br>liabilities at the<br>end of the period<br>towards related<br>entities<br>EUR |
|--------------------------------------------------------------|-----------------------------------------------------------------------|-------------------------------------------------|---------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
| Damar Patro UU                                               | 17                                                                    | 0                                               | 1 454                                                                           | 0                                                                                                                  |
| Total                                                        | 17                                                                    | 0                                               | 1 454                                                                           | 0                                                                                                                  |

| Transactions with related<br>entities ended on<br>31/12/2023 | Revenues<br>due to<br>interests<br>from<br>related<br>entities<br>EUR | Purchases<br>from<br>related<br>entities<br>EUR | Receivables<br>due to<br>loans<br>and<br>interests<br>from<br>related<br>entities<br>EUR | Trade<br>liabilities and<br>other<br>liabilities at the<br>end of the period<br>towards related<br>entities<br>EUR |
|--------------------------------------------------------------|-----------------------------------------------------------------------|-------------------------------------------------|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
| Patro Invest sp. z o.o.                                      | 0                                                                     | 0                                               | 15                                                                                       | 0                                                                                                                  |
| Damar Patro UU                                               | 17                                                                    | 0                                               | 1 419                                                                                    | 0                                                                                                                  |
| Total                                                        | 17                                                                    | 0                                               | 1 434                                                                                    | 0                                                                                                                  |

# **Description of significant risk factors and threats with specification of the extent to which the Issuer is exposed to them**

The main types of risk arising from the Company's financial instruments include interest rate risk, liquidity risk, credit risk. The Management Board is responsible for establishing of the risk management rules and supervising of its respecting. The principles of risk management aim is to identify and analyse the risks that the Company is exposed to, by establishing appropriate limits and controls.

### **Exchange rate risk**

At the balance sheet date, the interest rate structure of the Company's interest-bearing financial instruments was as follows:

The Company has no interest-bearing liabilities.

The Company's income and operating cash flows are independent of changes in market interest rates because contracts are concluded at fixed interest rates.

|                | Interest rate | Fixed/variable interest rate |  |
|----------------|---------------|------------------------------|--|
| Damar Patro UU | 2,5%          | Fixed                        |  |

### **Credit risk**

Credit risk represents a potential loss that could arise if a Company's counterparty in a transaction is unable to meet its contractual obligations and provide cash flows. Credit risk is mainly related to loans granted by the Company, cash and cash equivalents, deposits, trade receivables. The scope of the Company's credit risk is most affected by the specific circumstances of each customer. At the same time, the Company's management also follows the general circumstances such as the legal status of the client (private or public company), the geographical location of the client, the field of operation, the state of the economy and future economic forecasts. To reduce the credit risk, customers' payment discipline and their ability to meet their commitments are monitored daily.

|               | Total | Maturity date |           |           |         |
|---------------|-------|---------------|-----------|-----------|---------|
| 31/12/2024    |       |               |           |           | Above 3 |
| in thous. EUR |       | < 1 year      | 1-2 years | 2-3 years | years   |
| Cash          | 56    | 56            | 0         | 0         | 0       |
| Loans         |       |               |           |           |         |
| granted       | 1 454 | 1 454         |           |           |         |
| Total         | 1 510 | 1 510         | 0         | 0         | 0       |

The maturity dates as at 31/12/2024

# The maturity dates as at 31/12/2023

|                             | Total | Maturity date |           |           |         |
|-----------------------------|-------|---------------|-----------|-----------|---------|
| 30/12/2023<br>in thous. EUR |       |               |           |           | Above 3 |
|                             |       | < 1 year      | 1-2 years | 2-3 years | years   |
| Cash                        | 40    | 40            | 0         | 0         | 0       |
| Loans                       |       |               |           |           |         |
| granted                     | 1 434 | 1 434         |           | 0         | 0       |
| Total                       | 1 474 | 1 474         | 0         | 0         | 0       |

### **Liquidity risk**

Liquidity risk management process bases on monitoring estimated cash-flows, and adjusting final maturity of assets and liabilities, analysing working capital and maintaining an access to different sources of funding. The aim of the Company is to maintain the balance between funding continuity and flexibility, through using sources of funding such as loan, overdraft facility.

### **Risk of shares price's fluctuations and limited liquidity**

Immanent feature of market trading is the shares' price fluctuations and short-term fluctuations of turnover. It might result in sale or purchase of the qualifying holding of the Company's shares will relate to a necessity to accept significantly less favourable price than the reference price. The Company cannot also exclude significant, temporary limitations of liquidity which may significantly hamper sales or purchase of the Company's shares.

### **Risk connected to links between members of the Company's corporate bodies**

There are interpretations indicating the possibility of emerging risks consisting in the negative impact of links between members of the Company's bodies on their decisions. This applies to the impact of these links on the Company's Supervisory Board regarding the day-to- day supervision of the Company's operations. While assessing the probability of such a risk, one should consider the fact that the supervisory bodies are subject to the control of another body - the General Meeting, and in the interest of the members of the Supervisory Board it is to perform their duties in a reliable and lawful manner. Otherwise, members of the Supervisory Board are exposed to responsibility from Ordinary General Meeting or criminal responsibility from the title of acting against the Company.

# **Risk related to the shareholding structure**

As at the balance sheet date 63,85%of the share capital i.e., 43 961 150 votes at the Company's General Meeting belong directly to Patro Invest OU, was a result of which the above Shareholder has a significant impact on the resolutions adopted at the Company's General Meeting.

# **Risk related to the economic situation in Poland and Estonia**

The economic situation in Poland has a significant impact on the financial results achieved by all entities including the Company, because the success of development of companies investing in financial instruments and conducting financial services largely depends on the conditions of running a business. In case of realization the transfer of the seat of the Company to Estonia, risk in the above scope will applies to the new registered office in Republic of Estonia.

# **Risk related to the armed conflict in Ukraine**

Due to the ongoing armed conflict in Ukraine, the Company's operations are moderately exposed to the consequences of the war. As at the date of publication of the report, the Company does not anticipate extending the conflict beyond the territory of Ukraine therefore, no impact on the operating activities of the Company is expected.

#### **V. THE MANAGEMENT BORAD'S STATEMENT ON RELIABILITY OF THE PREPARATION OF THE FINANCIAL STATEMENT**

The Management Board aware of its responsibility confirms that according to its best knowledge, Accounting principles applied in the preparation of the financial statements are in accordance with the International Financial Reporting Standards adopted in the European Union, the data contained in the statements are true and present a fair view of the Issuer's financial position, financial result and cash flows for the period they refer to and they assume the continuation of activity. The semi-annual report presents a true and fair view of the Issuer's assets, liabilities, financial position and loss or profit and the statement of the management board presents true and fair view of development, performance and financial condition of the Issuer and contains description of the main risks and concerns.

Signature Member of the Management Board of the Issuer *Agnieszka Gujgo*