Afarak Group — Audit Report / Information 2024

Mar 28, 2025

HLB TIETOTILI ADVISORY AND ACCOUNTING

This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.

Auditor’s Report

To the Annual General Meeting of Afarak SE

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Afarak SE (business identity code 0618181-8) for the year ended 31 December, 2024. The financial statements comprise the consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary of significant accounting policies, as well as the parent company’s balance sheet, income statement, statement of cash flows and notes.

In our opinion

• the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU,
• the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements

Our opinion is consistent with the additional report submitted to the Audit Committee.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 1.7/5 to the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

www.tietotili.fi

Vanha Kaarelantie 33A, 01610 Vantaa, Finland

TEL: +358 (0)9 7253 0800

Y-TUNNUS/BUSINESS ID: 0980209-3

EMAIL: asiakaspalvelu@tietotili.fi

Tietotili Audit Oy (HLB Tietotili) - Tilintarkastusyhteisö - Authorised Public Accountants

HLB Tietotili (Tietotili Audit Oy) is a member of HLB international, the global advisory and accounting network

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HLB TIETOTILI ADVISORY AND ACCOUNTING

Matters affecting the operations of the Group

Due to ongoing war in Europe there will be significant changes concerning the markets on which the Group operates. Geopolitical risk will affect the operations of the Group. The effects will be significant on short term time frame but there is no certainty how long these will affect.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.

We have fulfilled the responsibilities described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risk of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud.

Key Audit Matters

Valuation of intangible and tangible assets, environmental obligations, valuation of inventory and valuation of goodwill (Accounting principles and notes 1.4, 1.5, 1.8/9, 1.8/10 and 1.8/19 for the consolidated financial statements)

The key audit matter

— The value of tangible and intangible assets at the date of the financial statements amounted to 51,9 million euro representing 32,1 % of total assets and 46,3 % of equity. When the underlying assumptions are changed concerning impairment review this may result in an impairment of tangible and intangible assets

— At the balance sheet date 31 December 2024 the provision for rehabilitation and decommissioning costs related to mines and processing facilities amounted to 9,5 million euro. The provisions are subject to effects of any changes in local regulations, management’s

How the matter was addressed during the audit

— Our audit procedures to address the risk of material misstatement in respect of valuation included among other assessment of sensitivity and whether any reasonably possi change in assumptions could cause the carrying amount to exceed its recoverable amount. We assessed the Group’s disclosures in notes 1.5 financial statements about the assumptions to which the outcome of the impairment tests were more sensitive

— We carried out audit procedures to address the risk of material misstatement in respect of valuation of environmental obligation. We carried out audit procedures among others to assess the assumptions used by management in their calculations and reviewed the calculations. We

www.tietotili.fi

Vanha Kaarelantie 33A, 01610 Vantaa, Finland

TEL: +358 (0)9 7253 0800

Y-TUNNUS/BUSINESS ID: 0980209-3

EMAIL: asiakaspalvelu@tietotili.fi

Tietotili Audit Oy (HLB Tietotili) - Tilintarkastusyhteisö - Authorised Public Accountants

HLB Tietotili (Tietotili Audit Oy) is a member of HLB international, the global advisory and accounting network

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HLB TIETOTILI ADVISORY AND ACCOUNTING

expected approach to decommissioning, underlying assumptions concerning the calculations along with effects of changes in exchange rates

• At the balance sheet date 31 December 2024 the value of inventory amounted to 28,8 million euro representing 17,8 % of the total assets. The inventory is exposed to price and exchange rate fluctuation. Inventory costing was considered a risk

• At the balance sheet date 31 December 2024 the value of goodwill amounted to 49,8 million euro representing 30,8 % of total assets and 44,4 % of equity. Valuation of goodwill and related impairment review is based on numerous Management estimates and assumptions. Changes in these estimates and assumptions may result in an impairment of goodwill

assessed the Group’s disclosures in the financial statements respect of environmental and rehabilitation provisions

• Our audit procedures to address the risk of material misstatement in respect of valuation of inventory included among others assessing the Group’s accounting policies over recognizing inventory in compliance with applicable accounting standards. We tested the costing and valuation of inventory. We performed analytic procedures. We assessed the Group’s disclosures in the financial statements in respect of inventory

• We carried out audit procedures to address the risk of material misstatement in respect of valuation of goodwill. We carried out audit procedures among others to assess the assumptions and methodologies used by the Group. We assessed the sensitivity analysis and underlying assumption. We assessed the Group’s disclosures in notes 1.5 in the financial statements about the assumptions to which the outcome of the impairment tests were more sensitive

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in

www.tietotili.fi

Vanha Kaarelantie 33A, 01610 Vantaa, Finland

TEL: +358 (0)9 7253 0800 Y-TUNNUS/BUSINESS ID: 0980209-3 EMAIL: asiakaspalvelu@tietotili.fi

Tietotili Audit Oy (HLB Tietotili) - Tilintarkastusyhteisö - Authorised Public Accountants

HLB Tietotili (Tietotili Audit Oy) is a member of HLB international, the global advisory and accounting network

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HLB TIETOTILI ADVISORY AND ACCOUNTING

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

www.tietotili.fi

Vanha Kaarelantie 33A, 01610 Vantaa, Finland

TEL: +358 (0)9 7253 0800

Y-TUNNUS/BUSINESS ID: 0980209-3

EMAIL: asiakaspalvelu@tietotili.fi

Tietotili Audit Oy (HLB Tietotili) - Tilintarkastusyhteisö - Authorised Public Accountants

HLB Tietotili (Tietotili Audit Oy) is a member of HLB international, the global advisory and accounting network

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HLB TIETOTILI ADVISORY AND ACCOUNTING

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other reporting requirements

Information on our audit engagement

We were first appointed as auditors by the Annual General Meeting for the financial period ended 31.12.2021.

Other Information

The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report but does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board of Directors and the Annual Report prior to the date of this auditor’s report. Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations, excluding the sustainability report information on which there are provisions in Chapter 7 of the Accounting Act and in the sustainability reporting standards.

In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. Our opinion does not cover the sustainability report information on which there are provisions in Chapter 7 of the Accounting Act and in the sustainability reporting standards.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Vantaa 28.3.2025

Tietotili Audit Oy, Authorised Public Accountants

Urpo Salo

Authorised Public Accountant, KHT

www.tietotili.fi

Vanha Kaarelantie 33A, 01610 Vantaa, Finland

TEL: +358 (0)9 7253 0800

Y-TUNNUS/BUSINESS ID: 0980209-3

EMAIL: asiakaspalvelu@tietotili.fi

Tietotili Audit Oy (HLB Tietotili) - Tilintarkastusyhteisö - Authorised Public Accountants

HLB Tietotili (Tietotili Audit Oy) is a member of HLB international, the global advisory and accounting network