Apranga Group

Annual Report (ESEF) • Apr 3, 2025

Report 529900XX7EU9F4GJTY862024-01-012024-12-31529900XX7EU9F4GJTY862023-01-012023-12-31529900XX7EU9F4GJTY862024-12-31529900XX7EU9F4GJTY862023-12-31529900XX7EU9F4GJTY862022-12-31ifrs-full:IssuedCapitalMember529900XX7EU9F4GJTY862022-12-31ifrs-full:StatutoryReserveMember529900XX7EU9F4GJTY862022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900XX7EU9F4GJTY862022-12-31ifrs-full:RetainedEarningsMember529900XX7EU9F4GJTY862022-12-31iso4217:EURiso4217:EURxbrli:shares529900XX7EU9F4GJTY862023-01-012023-12-31ifrs-full:IssuedCapitalMember529900XX7EU9F4GJTY862023-01-012023-12-31ifrs-full:StatutoryReserveMember529900XX7EU9F4GJTY862023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900XX7EU9F4GJTY862023-01-012023-12-31ifrs-full:RetainedEarningsMember529900XX7EU9F4GJTY862023-12-31ifrs-full:IssuedCapitalMember529900XX7EU9F4GJTY862023-12-31ifrs-full:StatutoryReserveMember529900XX7EU9F4GJTY862023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900XX7EU9F4GJTY862023-12-31ifrs-full:RetainedEarningsMember529900XX7EU9F4GJTY862024-01-012024-12-31ifrs-full:IssuedCapitalMember529900XX7EU9F4GJTY862024-01-012024-12-31ifrs-full:StatutoryReserveMember529900XX7EU9F4GJTY862024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900XX7EU9F4GJTY862024-01-012024-12-31ifrs-full:RetainedEarningsMember529900XX7EU9F4GJTY862024-12-31ifrs-full:IssuedCapitalMember529900XX7EU9F4GJTY862024-12-31ifrs-full:StatutoryReserveMember529900XX7EU9F4GJTY862024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900XX7EU9F4GJTY862024-12-31ifrs-full:RetainedEarningsMember APB APRANGA Consolidated and Company’s Financial Statements, Consolidated Management Report for the year ended 31 December 2024 3 April 2025 Vilnius CONFIRMATION OF THE COMPANY’S RESPONSIBLE PERSONS Hereby we confirm, that by our knowledge Consolidated Financial Statements for the year 2024 prepared in accordance with International Financial Reporting Standards as adopted by the EU true and fairly present assets, liabilities, financial position, profit or loss and cash flows of APB Apranga, as well as of Apranga Group consolidated companies. As well we confirm that by our knowledge Consolidated Management Report for the year 2024 includes a fair review of the development and performance of the business and the position of APB Apranga and Apranga Group in relation to the description of the main risks and contingencies faced thereby. Apranga Group General Manager Rimantas Perveneckas Apranga Group Chief Financial Officer Gabrielius Morkūnas This document is electronically signed with safe electronical signature. TABLE OF CONTENT APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius Translation note: This version of the accompanying documents is a translation from the original, which was prepared in the Lithuanian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of the accompanying documents takes precedence over this translation. 1 FINANCIAL STATEMENTS 4-7 1.1 Statements of comprehensive income 4 1.2 Statements of financial position 5 1.3 Statements of changes in equity 6 1.4 Statements of cash flows 7 2 NOTES TO THE FINANCIAL STATEMENTS 8-46 3 CONSOLIDATED MANAGEMENT REPORT 47-167 3.1 Consolidated Management Report 47-59 Renumeration Report 56-57 3.2 Governance Report 60-87 3.3 Sustainability Statement 88-167 STATEMENTS OF COMPREHENSIVE INCOME 1.1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) STATEMENTS OF COMPREHENSIVE INCOME GROUP COMPANY Year ended 31 December Year ended 31 December Note 2024 2023 2024 2023 Revenue from contracts with customers 6 292 937 269 696 107 545 104 443 Cost of sales 5 (160 810) (145 554) (62 894) (60 500) GROSS PROFIT 132 127 124 142 44 651 43 943 Selling (costs) 5 (87 403) (80 768) (26 805) (24 530) General and administrative (expenses) 5 (23 869) (21 932) (13 621) (12 902) Other income 6 99 59 13 098 10 311 OPERATING PROFIT 20 954 21 501 17 323 16 822 Finance income 7 337 269 414 284 Finance (costs) 7 (1 857) (1 438) (1 172) (1 003) PROFIT BEFORE INCOME TAX 19 434 20 332 16 565 16 103 Income tax (expense) 8 (3 474) (3 559) ( 677) ( 904) PROFIT FOR THE YEAR 4 15 960 16 773 15 888 15 199 Other comprehensive income - - - - TOTAL COMPREHENSIVE INCOME 15 960 16 773 15 888 15 199 Total comprehensive income attributable to: 15 960 16 773 15 888 15 199 Owners of the Company 15 960 16 773 15 888 15 199 Non-controlling interests - - - - Basic and diluted earnings per share (in EUR) 11 0.29 0.30 0.29 0.27 The notes on pages 8 to 46 are an integral part of these financial statements. These financial statements were approved by Management Board on 3 April 2025 and signed by responsible persons. This document is electronically signed with safe electronical signature. 4 STATEMENTS OF FINANCIAL POSITION 1.2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) STATEMENTS OF FINANCIAL POSITION GROUP COMPANY ASSETS As at 31 December As at 31 December NON-CURRENT ASSETS Note 2024 2023 2024 2023 Property, plant and equipment 12 28 719 24 052 16 536 12 019 Intangible assets 13 1 426 1 483 1 376 1 441 Investments in subsidiaries 14 - - 5 095 5 095 Non-current prepayments 16 102 142 102 63 Non-current trade and other receivables 19 672 528 83 80 Right-of-use assets 25 58 856 58 785 23 664 24 455 Other non-current financial assets 17 2 600 2 600 2 600 2 600 Total non-current assets 92 375 87 590 49 456 45 753 CURRENT ASSETS Inventories 15 50 141 50 607 28 352 27 297 Current prepayments 16 1 452 1 525 1 445 1 524 Current trade and other receivables 19 2 595 2 638 10 003 10 482 Cash and cash equivalents 20 18 405 17 665 6 845 7 974 Total current assets 72 593 72 435 46 645 47 277 TOTAL ASSETS 164 968 160 025 96 101 93 030 EQUITY AND LIABILITIES GROUP COMPANY EQUITY Note 2024 2023 2024 2023 Ordinary shares 21 16 035 16 035 16 035 16 035 Legal reserve 22 1 604 1 604 1 604 1 604 Foreign currency translation reserve ( 53) ( 53) - - Retained earnings 48 762 46 072 34 339 31 721 Total equity 66 348 63 658 51 978 49 360 NON-CURRENT LIABILITIES Deferred tax liabilities 9 2 469 2 301 501 366 Non-current lease liabilities 25 48 074 47 629 19 087 19 765 Non-current employee benefits 282 194 282 194 Total non-current liabilities 50 825 50 124 19 870 20 325 CURRENT LIABILITIES Current borrowings 23 - - 6 960 6 360 Current lease liabilities 25 14 578 14 306 5 742 5 616 Current income tax liability 261 579 - 320 Current trade and other payables 24 32 956 31 358 11 551 11 049 Total current liabilities 47 795 46 243 24 253 23 345 Total liabilities 98 620 96 367 44 123 43 670 TOTAL EQUITY AND LIABILITIES 164 968 160 025 96 101 93 030 The notes on pages 8 to 46 are an integral part of these financial statements. These financial statements were approved by Management Board on 3 April 2025 and signed by responsible persons. This document is electronically signed with safe electronical signature. 5 STATEMENTS OF CHANGES IN EQUITY 1.3 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) STATEMENTS OF CHANGES IN EQUITY GROUP Note Share capital Legal reserve Translation reserve Retained earnings Total Balance at 1 January 2023 16 035 1 604 ( 53) 44 781 62 367 Comprehensive income Profit for the year 2023 - - - 16 773 16 773 Total comprehensive income - - - 16 773 16 773 Transactions with owners Dividends 10, 22 - - - (15 482) (15 482) Balance at 31 December 2023 16 035 1 604 ( 53) 46 072 63 658 Comprehensive income Profit for the year 2024 - - - 15 960 15 960 Total comprehensive income - - - 15 960 15 960 Transactions with owners Dividends 10, 22 - - - (13 270) (13 270) Balance at 31 December 2024 16 035 1 604 ( 53) 48 762 66 348 COMPANY Note Share capital Legal reserve Retained earnings Total Balance at 1 January 2023 16 035 1 604 32 004 49 643 Comprehensive income Profit for the year 2023 - - 15 199 15 199 Total comprehensive income - - 15 199 15 199 Transactions with owners Dividends 10, 22 - - (15 482) (15 482) Balance at 31 December 2023 16 035 1 604 31 721 49 360 Comprehensive income Profit for the year 2024 - - 15 888 15 888 Total comprehensive income - - 15 888 15 888 Transactions with owners Dividends 10, 22 - - (13 270) (13 270) Balance at 31 December 2024 16 035 1 604 34 339 51 978 The notes on pages 8 to 46 are an integral part of these financial statements. These financial statements were approved by Management Board on 3 April 2025 and signed by responsible persons. This document is electronically signed with safe electronical signature. 6 STATEMENTS OF CASH FLOW 1.4 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) STATEMENTS OF CASH FLOW GROUP COMPANY Year ended 31 December Year ended 31 December OPERATING ACTIVITIES Note 2024 2023 2024 2023 Profit before income taxes 19 434 20 332 16 565 16 103 ADJUSTMENTS FOR: Depreciation and amortization 5 20 503 19 427 8 170 7 524 Impairment charge (reversal) 12, 25 186 ( 74) 63 ( 70) Write-down (reversal) of inventories to net realisable value 5 579 719 255 161 Loss (gain) on disposal of property, plant and equipment 6 ( 9) 9 ( 6) ( 2) Write-off of property, plant and equipment 63 105 43 ( 10) Dividend income 6 ( 65) ( 33) (13 065) (10 283) Interest expenses 7 1 857 1 438 1 172 1 003 Total 42 548 41 923 13 197 14 426 CHANGES IN OPERATING ASSETS AND LIABILITIES: Decrease (increase) in inventories 15 ( 113) (9 940) (1 310) (5 252) Decrease (increase) in receivables and prepayments ( 324) 823 ( 866) ( 909) Increase (decrease) in payables 24, 26 1 515 4 557 572 1 538 Cash generated from operations 43 626 37 363 11 593 9 803 Income taxes paid (3 624) (3 574) ( 862) (1 216) Interest paid 7 (1 857) (1 438) (1 172) (1 003) Net cash from operating activities 38 145 32 351 9 559 7 584 INVESTING ACTIVITIES Interest received 7 337 269 414 284 Dividends received 6 65 33 13 065 10 283 Loans granted (124 000) (71 200) (147 301) (77 670) Loans repayments received 124 000 71 200 148 270 78 430 Purchases of property, plant and equipment and intangible assets 12, 13 (12 038) (12 381) (7 405) (3 295) Proceeds on disposal of property, plant and equipment 958 2 640 280 21 Net cash from investing activities (10 678) (9 439) 7 323 8 053 FINANCING ACTIVITIES Dividends paid 3 (13 252) (15 472) (13 252) (15 472) Proceeds from borrowings 3 - - 139 020 102 201 Repayments of borrowings 3 - - (138 420) (97 873) Payment of principal portion of lease liabilities 25 (13 475) (12 753) (5 359) (4 894) Net cash from financing activities (26 727) (28 225) (18 011) (16 038) NET INCREASE (DECREASE) IN CASH 740 (5 313) (1 129) ( 401) CASH AND CASH EQUIVALENTS: AT THE BEGINNING OF THE PERIOD 20 17 665 22 978 7 974 8 375 AT THE END OF THE PERIOD 20 18 405 17 665 6 845 7 974 The notes on pages 8 to 46 are an integral part of these financial statements. These financial statements were approved by Management Board on 3 April 2025 and signed by responsible persons. This document is electronically signed with safe electronical signature. 7 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) NOTES TO THE FINANCIAL STATEMENTS 1.GENERAL INFORMATION APB Apranga, (hereinafter “the Company”), was incorporated and commenced its operations in March 1993 in Lithuania. The Company’s main office is situated in Ukmerges str. 362, Vilnius, Lithuania. The Company has legal form of public limited liability company under the Law on Companies of Republic of Lithuania. The principal activity of the Company and its subsidiaries (hereinafter “the Group”) is retail trade of apparel in Baltic countries. The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a nominal value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code LT0000102337) that comprise Company‘s share capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange. At 31 December 2024, the Company had 7 163 shareholders (as per shareholders list prepared in accordance with SRD II directive). At 31 December the Company‘s shareholders were: Number of shares % of total ownership Number of shares % of total ownership Shareholder 2024 2023 UAB MG Investment 36 169 099 65.4 36 169 099 65.4 UAB Minvista 5 795 929 10.5 5 795 929 10.5 Other 13 326 932 24.1 13 326 932 24.1 Total 55 291 960 100.0 55 291 960 100.0 The main shareholder is UAB MG Investment. The ultimate parent company whose financial statements are available for public use is UAB MG Grupė. The ultimate controlling individual of the Group is Mr. D. J. Mockus: At 31 December the Group consisted of the Company and the following its wholly owned subsidiaries: Name Country Ownership interest in % 31 12 2024 Ownership interest in % 31 12 2023 UAB Apranga LT Lithuania 100% 100% UAB Apranga BPB LT Lithuania 100% 100% UAB Apranga PLT Lithuania 100% 100% UAB Apranga SLT Lithuania 100% 100% UAB Apranga MLT Lithuania 100% 100% UAB Apranga HLT Lithuania 100% 100% UAB Apranga OLT Lithuania 100% 100% UAB Apranga Ecom LT Lithuania 100% 100% SIA Apranga Latvia 100% 100% 8 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Name Country Ownership interest in % 31 12 2024 Ownership interest in % 31 12 2023 SIA Apranga LV Latvia 100% 100% SIA Apranga BPB LV Latvia 100% 100% SIA Apranga PLV Latvia 100% 100% SIA Apranga SLV Latvia 100% 100% SIA Apranga MLV Latvia 100% 100% SIA Apranga HLV Latvia 100% 100% SIA Apranga OLV Latvia 100% 100% SIA Apranga Ecom LV Latvia 100% 100% OU Apranga Estonia 100% 100% OU Apranga Estonia Estonia 100% 100% OU Apranga BEE Estonia 100% 100% OU Apranga PB Trade Estonia 100% 100% OU Apranga ST Retail Estonia 100% 100% OU Apranga MDE Estonia 100% 100% OU Apranga HEST Estonia 100% 100% OU Apranga Ecom EE Estonia 100% 100% * At 31 December 2024 the Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of shares (At 31 December 2023: 14.91% and 85.09%, respectively) At 31 December the Group‘s number of stores was: Total number of shops Shops, where premises are owned by Group Country 2024 2023 2024 2023 Lithuania 103 100 6 5 Latvia 44 44 - - Estonia 24 25 - - Total 171 169 6 5 At 31 December 2024 the Group and the Company employed 2 295 and 785 people respectively (2023: 2 249 and 760 people respectively). These financial statements were approved by Management Board on 3 April 2025. The shareholders of the Company have a statutory right to approve or not these financial statements and to require preparation of a new set of the financial statements. 9 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 2.MATERIAL ACCOUNTING POLICY INFORMATION The material accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are presented in Euro and all values are rounded to the nearest thousand, except when otherwise indicated. The numbers in tables may not coincide due to rounding of particular amounts to EUR thousand. Such rounding differences are not material to these financial statements. 2.1.BASIS OF PREPARATION The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). These financial statements have been prepared under the historical cost basis, except for financial asset at fair value through profit (loss) as described in Note 17. These financial statements comprise the Group’s consolidated financial statements and the Company’s separate financial statements. The Group and Company have prepared the financial statements on the going concern basis. 2.2.CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS International Financial Reporting Standards require that in preparing the financial statements, management of the Company and the Group make estimates and assumptions that affect the reported amounts of assets and liabilities and required disclosure at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There are no areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, except for the following: a) Revenue recognition Management judgment is needed to determine whether revenue for certain sales transactions should be recorded on a gross basis or on a net basis. Revenue is recognised on a gross basis where the role of the Group/Company is that of principal in a transaction. The gross (without VAT) basis represents sales price after discounts, with any related costs charged to expenses. The Group/Company has concluded that it is the principal in its revenue arrangements including all online sales, because: - The entity controls the goods or services before transferring them to the customer; - The entity is primarily responsible for the supply of goods and services and bears risk of non-performance, all customers returns are accepted into stores/warehouse; - The entity has latitude in establishing price either directly or indirectly. At the end of each year, the Group/Company also assesses the decrease in accounting income due to customers’ right to return goods after the end of the accounting period. b)Estimates concerning useful lives of tangible and intangible assets The useful lives of tangible and intangible assets are determined by management at the time the asset is acquired and reviewed on an annual basis for appropriateness. The lives are based on historical experiences with similar assets as well as anticipation of future events, which may impact their useful life. c)Impairment of property, plant and equipment and right-of-use assets Each shop is considered to represent a separate cash generating unit for impairment test. Cash generating units, which had indications of impairment loss, i.e. suffered operational loss, are tested. The Group and the Company have tested its leasehold improvements, right-of-use assets and other property, plant and equipment, whether those posess impairment loss, in accordance with the accounting policies 10 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) stated in Note 2.6. The Group and the Company have used “value in use” calculations to test for impairment as information on fair value less costs to sell was not available. These calculations require the use of estimates as described in Note 12 and Note 25. The management reviewed the main assumptions used for the measurement of the recoverable value of property, plant and equipment and right-of-use assets. Results of impairment assessment are disclosed in Note 12 and Note 25. d)Inventory write-down to net realizable value In accordance with the accounting policies stated in Note 2.8 the Group and the Company recognise inventory at the lower of cost and net realizable value less cost to sell. The Group and the Company evaluate whether the value of inventory recognised at cost is not lower that its net realisibale value based on the historical data and actual subsequent results of inventory items sold below costs. Net realisable values are disclosed in Note 15. Management has assessed the level of inventories and determined that the book value of inventories as of 31 December 2024 and 2023 does not exceed the net realisable value. Results of inventories write-down to net realizable value are disclosed in Note 15. e)Determining the lease term of contracts with renewal and termination options – Company/Group as lessee The Company/Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company/Group has lease contracts that include extension and termination options. The Company/Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company/Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset). f) Leases - Estimating the incremental borrowing rate The Company/Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company/Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company/Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Company/Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific or country-specific adjustments. IBR used in 2024 varies from 1.0 to 4.0 per cent (from 1.0 to 4.7 per cent in 2023). g) Options granted The Company/Group has options granted for non-financial assets and lease rights, which are not recognized as they do not meet the criteria of a financial instrument. Based on historical information and numerous extentions of the cooperation agreements and intensions of cooperation, the management of the Group believes that the agreement parties will not use any above options. In the unlikely event of happening, the selling price would be approximate fair value of the items/goods. For more details, refer to Note 27. h)Climate-related risks The Company/Group has assessed climate-related risks and concluded that they do not have a material impact on the business performance, continuity of operations, impairment of assets value or allowances. 11 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 2.3.ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (A)The standards/amendments that are effective and have been endorsed by the European Union The accounting policies adopted are consistent with those of the previous financial year except for the following IFRS and amendments to IFRS which have been adopted by the Group/Company as of 1 January 2024: IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments). IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments). IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures - Supplier Finance Arrangements (Amendments). The newly adopted IFRS and amendments to IFRS did not have a material impact on the Group’s/Company’s accounting policies. (B)The standards/amendments issued but not yet effective and not early adopted B.1) The standards/amendments that are not yet effective, but have been endorsed by the European Union IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments). The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with earlier application permitted. Management assessed that the amendments do not have a significant impact on the Group's/Company's accounting policies. B.2) The standards/amendments that are not yet effective and have not yet been endorsed by the European Union IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and Measurement of Financial Instruments (Amendments). In May 2024, the IASB issued amendments to the classification and measurement of financial instruments which amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures and they become effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted. The Company and the Group have not yet evaluated the impact of the implementation of these amendments. IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-dependent Electricity (Amendments). In December 2024, the IASB issued targeted amendments for a better reflection of Contracts Referencing Nature-dependent Electricity, which amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures and they become effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted. The Company and the Group have not yet evaluated the impact of the implementation of these amendments. IFRS 18 Presentation and Disclosure in Financial Statements. In April 2024, the IASB issued the IFRS 18 - Presentation and Disclosure in Financial Statements which replaces IAS 1 - Presentation of Financial Statements and it becomes effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. The Company and the Group have not yet evaluated the impact of the implementation of these amendments. IFRS 19 Subsidiaries without Public Accountability: Disclosures. In May 2024, the IASB issued the IFRS 19 - Subsidiaries without Public Accountability: Disclosures, and it becomes effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. The Company and the Group have not yet evaluated the impact of the implementation of these amendments. Annual Improvements to IFRS Accounting Standards – Volume 11. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards – Volume 11. An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted. The Company and the Group have not yet evaluated the impact of the implementation of these amendments. Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture. In December 2015, the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. The Group plans to adopt the above mentioned standards and interpretations on their effectiveness date provided they are endorsed by the EU. 12 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 2.4.CONSOLIDATION The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in euro, which is the functional currency of the Company and the Group, and the presentation currency for the consolidated financial statements. 2.5.INTANGIBLE ASSETS Intangible assets expected to provide economic benefit to the Company and the Group in future periods are measured at cost less subsequent accumulated amortisation and impairment losses. Amortisation is calculated on a straight-line basis to write off the cost of each asset over the estimated useful life as follows: Software 3-5 years Licences and rights acquired 5-9 years Amortisation is accounted for as selling expense. The Group and the Company have no intangible assets with indefinite useful life. 2.6.PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment (hereinafter “PPE”) is stated at historical cost, less accumulated depreciation and impairment losses. Leasehold improvements, that meet definition of PPE, are capitalised in the statement of financial position and depratiated over the lease term. Compensation received from shopping malls in connection with the setting up of shops is related to the compensation of PPE, not to rent fees, and consequently the cost of acquisition of property, plant and equipment is reduced. The Company and the Group did not received compensations that do meet the definition of lease incentive compensations in 2024 and 2023. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the Group 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 statement of comprehensive income during the financial period in which they are incurred. Depreciation is charged so as to write-off the cost of PPE to their residual value over their estimated useful lives, using the straight-line method, on the following basis: Buildings 15-50 years Plant and equipment 5-20 years Leasehold improvements 4-10 years Commercial and other equipment 3-6 years The "Commercial and other equipment" category includes stores trading equipment, cash registers, IT equipment, warehouse equipment, and other assets used in the Group‘s and the Company's operations. 13 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) All depreciation of property, plant and equipment is recognised in the statement of comprehensive income and accounted for as selling expenses. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (Note 2.2). Impairment of PPE as well as reversals of impairment during the year are included into selling costs caption in the statement of comprehensive income. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in other income caption in the statement of comprehensive income. 2.7.INVESTMENTS IN SUBSIDIARIES In the Company’s separate financial statements investments in subsidiaries are accounted for at cost less impairment. Cost also includes direct attributable costs of investment. Dividends received are credited to the Company’s statement of comprehensive income. 2.8.INVENTORIES Inventories are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. Net realizable value represents the estimated selling price less all estimated costs to be incurred in selling. Unrealisable inventory has been fully written-off. Impairment losses are recognized as an expense immediately (under cost of sales caption). 2.9.IMPAIRMENT OF NON-FINANCIAL ASSETS At the end of the reporting period, the Company and the Group review of its tangible and intangible non current assets and right-of-use assets to determine whether there is any indication (e.g. loss of cash-generating unit) that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company and Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately (under selling costs). Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized as income immediately. 14 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 2.10.FINANCIAL ASSETS AND LIABILITIES A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s/Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group/Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s/Company’s business model for managing financial assets refers to how the Group/Company manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. A regular way purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group/Company commits to purchase or sell the asset. Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities; Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. No transfers occurred in 2023 and 2024. Fair value measurements are disclosed in Note 17. Subsequent measurement After initial recognition, the Group/Company measures a financial asset at: a) Amortised cost (debt instruments), see Note 17; b) Fair value through other comprehensive income (OCI) with recycling of cumulative gains and losses upon derecognition (debt instruments). The Group/Company did not have such items as at 31 December 2024 and 2023; 15 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) c) Fair value through other comprehensive income (OCI) with no recycling of cumulative gains and losses upon derecognition (equity instruments). The Group/Company did not have such items as at 31 December 2024 and 2023; d) Fair value through profit or loss, see Note 17. Financial assets at amortised cost (debt instruments) The Group/Company measures financial assets at amortised cost if both of the following conditions are met: i) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in the statement of comprehensive income when the asset is derecognised, modified or impaired. The Group’s/Company’s financial assets at amortised cost includes cash and cash equivalents, trade, other current and non-current receivables/payables and loans granted. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model.. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in other income caption in the statement of comprehensive income. The Group/Company in order to make efficient use of the available free cash, in 2018 acquired collective investment scheme (fund units), which fair value (level 3) as at 31 December 2024 and as at 31 December 2023 is EUR 2 600 thousand (Note 17). Impairment of financial assets Following IFRS 9, the Group/Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. At the end of every reporting period it is assessed whether credit risk significantly increased from initial recognition taking into account change in probability of default during the life-time of the instrument. During this process the Group/Company classifies debt instruments into stages 1, 2 and 3: • Stage 1: on initial recognition the Group/Company recognizes a 12-month ECL. Stage 1 debt instruments include instruments which credit risk improved and which were transferred back from Stage 2. • Stage 2: When a loan has shown a significant increase in credit risk since origination, the Group/Company records an allowance for the lifetime ECL. Stage 2 debt instruments include instruments which credit risk improved and which were transferred back from Stage 3. Group/Company considers that significant increase in credit risk when debt is overdue more than 30 days or when it is visible from financial information that debtor is experiencing financial difficulties. • Stage 3: For loans considered credit-impaired, the Group/Company recognises the lifetime expected credit losses for these loans. The method is similar to that for Stage 2 assets, with the probability of default set at 100%.. In 2023 and 2024 there were no transfers between the different stages. In 2023 and 2024 there were no financial instruments which credit risk significantly increased. For loans granted the Group/Company calculates ECLs based on an expected cash shortfalls, discounted at an approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to the Group/Company in accordance with the contract and the 16 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) cash flows that the Group/Company expects to receive. The Group/Company did not recognize allowance for loans granted because based on probability of default, loss given default, exposure at default and forward looking information the allowance is not material. For trade receivables, the Group/Company applies a simplified approach in calculating ECLs. Therefore, the Group/Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. For that purpose the Group/Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group/Company considers a financial asset in default when contractual payments are 90 days past due or when indications exist that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. The Group/Company did not recognize allowance for trade receivables, intercompany trade receivables, loans and other receivables because based on historical as well as forward looking information the allowance is not material. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings and payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s/Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and finance lease liabilities. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below. Loans, borrowings and other payables After initial recognition, loans, borrowings and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of comprehensive income, when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realise the assets and settle the liabilities simultaneously. 17 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Derecognition of financial instruments Financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s/Company’s statement of financial position) when: i) The rights to receive cash flows from the asset have expired or ii) The Group/Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group/Company has transferred substantially all the risks and rewards of the asset, or (b) the Group/Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. 2.11.SHARE CAPITAL (a) Ordinary shares Ordinary shares are stated at their par value. Consideration received for the shares sold in excess over their par value is shown as share premium. Incremental external costs directly attributable to the issue of new shares are accounted for as a deduction from share premium. 2.12.RESERVE (a)Foreign currency translation reserve The foreign currency translation reserve is used for translation differences arising on consolidation of financial statements of foreign subsidiaries. Exchange differences are classified as equity in the consolidated financial statements until disposal of the investment. Upon disposal of the corresponding assets, the cumulative revaluation of translation reserves is recognised as income or expenses in the same period when the gain or loss on disposal is recognised. The Group's recorded currency translation reserve relates to investments in the share capital of its Latvian and Estonian subsidiaries prior to the introduction of the euro in all Baltic countries. (b)Legal reserves Legal reserve is compulsory under the Lithuanian regulatory legislation. Annual transfers of 5 per cent of net result are required until the reserve reaches 10 per cent of share capital. The legal reserve cannot be used for payment of dividends and it is established to cover future losses only. 2.13.INCOME TAX (a) Current income tax The Group companies are taxed individually irrespective of the overall results of the Group. The Group companies in Lithuania may transfer the estimated tax losses (or part thereof) to another Group company in Lithuania, which has a right to reduce the taxable profit with the respective amount of the tax looses transferred for the same taxable period. The charge for taxation included in these financial statements is based on the calculation made by the management in accordance with tax legislation of the respective country in which group entity operates. The tax currently payable is based on taxable profit for the reporting period. For companies operating in Lithuania tax losses can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities and/or derivative financial instruments not 18 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) designated for hedging. Starting from 1 January 2014 the transferable tax loss cannot cover more than 70% of the taxable profit of the current year. Such carrying forward is disrupted if the company changes its activities due to which these losses were incurred except when the company does not continue its activities due to reasons which do not depend on the company itself. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s and the Company’s liability for current tax is calculated using tax rates that have been enacted at the end of the reporting period. The income tax rate applied for the Company and subsidiaries operating in Lithuania was 15 per cent in 2023 and in 2024. In Latvia and Estonia income tax rate on reporting period and prior taxable profits is nil. In Latvia and Estonia, the taxation of profit of operating subsidiaries is deferred until the profit appropriation moment, i.e. payment of dividends. The dividends paid by the Group’s companies in Latvia are taxed at the withholding tax rate of 20% of their gross amounts as at 31 December 2024 (20% as at 31 December 2023). The dividends paid by the Group’s companies in Estonia are taxed at the withholding tax rate of 22% of their gross amounts as at 31 December 2024 (20% as at 31 December 2023) In periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, the Group/Company does not expect material impact of the amendments on the the financial statements as effective income tax rate is above 15% in Lithuania and for Latvia and Estonia acruals of deffered tax liabilities are made with 20% and 22% effective income tax rate. (b) Deferred income tax Deferred income tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred income tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group and the Company are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred income tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred income tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis. Deferred income tax asset and liability related to the entities operating in Lithuania were calculated at 16 per cent rate as at December 2024 (as at December 2023: 15 per cent). Deferred income tax liability related to the entities operating in Latvia were calculated at 20 per cent rate as at 31 December 2024 and as at 31 December 2023 for the accrued undistributed profit of these subsidiaries. Deferred income tax liability related to the entities operating in Estonia were calculated at 22 per cent rate as at 31 December 2024 (at 31 December 2023: 20 per cent) for the accrued undistributed profit of these subsidiaries. These undistributed profits are planned to be paid out as dividends during the coming years (Note 2.17). 2.14.LEASES The Company or the Group as lessee The Company/Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company/Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company/Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Company/Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any 19 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) remeasurement of lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: · Premises 1 to 15 years · Motor vehicles 1 to 5 years If ownership of the leased asset transfers to the Company/Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.9, Impairment of non-financial assets. Lease liabilities At the commencement date of the lease, the Company/Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company/Group and payments of penalties for terminating the lease, if the lease term reflects the Company/Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company/Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. The Company’s/Group’s lease liabilities are included in Non-current lease liabilities and Current lease liabilities (see Note 25). Short-term leases and leases of low-value assets The Company/Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value (below EUR 5 thousand). Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. 2.15.EMPLOYEE BENEFITS (a) Social security contributions The Company and the Group pay social security contributions to the state Social Security Fund (the Fund) on behalf of its employees based on the defined contribution plan in accordance with the local legal requirements. A defined contribution plan is a plan under which the Group and the Company pay fixed contributions into the Fund and will have no legal or constructive obligations to pay further contributions if the Fund does not hold sufficient assets to pay all employees benefits relating to employee service in the current and prior period. Social security contributions are recognised as expenses on an accrual basis and included in payroll expenses. (b) Long-term employee benefits According to the requirements of Lithuanian Labor Code, each employee leaving the Group at the age of retirement is entitled to a one-off payment in the amount of 2 months’ salary. The actuarial gains and losses are recognized in the statement of other comprehensive income. The past service costs are recognised as an expense on a straight line basis over the average period until the benefits become vested. Any gains or losses appearing as a result of curtailment and/or settlement are recognised in the statement of comprehensive income as incurred. The past service costs are recognized in the statement of comprehensive income as incurred. The above mentioned employee benefit obligation is calculated based on actuarial assumptions, using the projected unit credit method. Obligation is recognized in the statement of financial position and reflects the present value of these benefits on the date of the statement of financial position. 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 20 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) employment benefits. Actuarial gains and losses are recognized in the statement of other comprehensive income as incurred. In 2024 and 2023 years there were no material amounts. (c) Termination benefits Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company and the Group recognise termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. (d) Bonus plans The Company and the Group recognise a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a constructive obligation. 2.16.RECOGNITION OF REVENUE AND RELATED EXPENSES Revenue recognition Revenue from contracts with customers is recognised when control of the services or goods are transferred to the customer at an amount that reflects the consideration to which the Group/Company expects to be entitled in exchange for those services or goods. The Group/Company has concluded that it is the principal in its revenue arrangements, because: - The entity controls the goods or services before transferring them to the customer; - The entity is primarily responsible for the supply of goods and services and bears risk of non-performance; - The entity has latitude in establishing price either directly or indirectly. Sales of goods at physical stores are recognized when the Company or another Group entity sells and provides a product to the customer. Online sales of goods are recognized at a point in time when the Company or another Group entity sends a product to the customer. Retail sales are usually in cash or by credit card. The recorded revenue includes credit card fees payable for the transaction. Such fees are included in operating expenses. Every sale of goods that the Group/Company makes is a separate performance obligation with separately identifiable fixed price. The Group/Company does not have any customer loyalty progammes. The Company recognizes wholesale income upon shipment of goods to its subsidiaries. The Company is the main supplier of goods to non-franchised subsidiaries located in Latvia and Estonia. The Company recognises revenue from management services provided to subsidaries over time, based on expenses incurred to measure provision of the services, because the customer simultaneously receives and consumes the benefits provided by the Company. Other occasional revenue from the sale of property, plant or equipment is recognised at a point in time, when sold items are delivered to client and control is transfered. Dividend income is recognised when the right to receive payment is established. In addition the management considers the effect of other matters to the revenue recognition such as the existence of significant financing components, non-cash consideration, consideration payable to the customer and warranties. None of these are present in the Group’s/Company‘s contracts with the customers. Contract liabilities Contract liabilities include advance payments received for goods not yet shipped and unused gift cards. These liabilities are recognized when the Group/Company receives payment from customers before delivering goods or services. Revenue from these liabilities is recognized when the goods are delivered or the gift cards are redeemed. For more information see Note 24. 21 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Assets and liabilities arising from rights of return Right of return assets A right-of-return asset is recognised for the right to recover the goods expected to be returned by customers. The asset is measured at the former carrying amount of the inventory, less any expected costs to recover the goods and any potential decreases in value. The Group/Company updates the measurement of the asset for any revisions to the expected level of returns and any additional decreases in the value of the returned products. For more information see Note 15 as part of inventories. Refund liabilities A refund liability is recognised for the obligation to refund some or all of the consideration received (or receivable) from a customer. The Group’s/Company’s refund liabilities arise from customers’ right of return. The liability is measured at the amount the Group/Company ultimately expects it will have to return to the customer. The Group/Company updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. For more information see Note 24. The Group/Company does not incur material costs to acquire or fulfill the contract. 2.17.DIVIDEND DISTRIBUTION Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s and Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders. 2.18.EARNINGS PER SHARE Basic earnings per share are calculated by dividing net profit attributed to the shareholders of the Company and the Group by the weighted average number of ordinary registered shares in issue, excluding ordinary registered shares purchased by the Group and the Company and held as treasury shares, if any. 22 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 3.FINANCIAL RISK MANAGEMENT (a) Financial risk factors The risk management function within the Group and the Company are carried out in respect of financial risks (credit, market (which consist of currency, interest rate and price) and liquidity). The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risks stays within these limits. The operational and legal risk management functions are intended to ensure proper functioning of internal policies and procedures to minimize operational and legal risks. The financial risks relate to the following financial instruments: financial assets at fair value through profit or loss trade receivables, cash and cash equivalents, trade and other payables, borrowings and guarantees provided on behalf of the Company to goods suppliers and guarantees issued by the Company to lessors of premises. The accounting policy with respect to these financial instruments is described in previous section . Credit risk Credit risk is managed by Group management. Credit risk arises from cash and cash equivalents with banks and financial institutions as well as credit exposures to wholesale and retail customers, including outstanding receivables. For banks and financial institutions, only independently rated parties (or subsidiaries of such parties) with high credit ratings are accepted. Sales to wholesale customers are rare and immaterial, therefore risk control only assesses the credit quality of the customer, taking into account its financial position, past experience and future factors. Sales to retail customers are settled in cash or using major credit cards, therefore there is no credit risk. Company’s credit risk arising from trade receivables from subsidiaries, loans to subsidiaries and guarantees issued for the benefit of subsidaries is managed by controlling financial performance of subsidiaries on a monthly basis. All the subsidiaries having Company’s loans have been profitable during the financial year, generated strong positive cash flows, historically none of them had liquidity issues. Management has also assessed the projected future information that will not have a material adverse effect on the Company’s subsidiaries. Therefore, in the management’s opinion, the credit risk is low. The Company and the Group have no significant concentration of credit risk, except for cash which is held in two banks, which parent companies having high credit ratings, and loans granted to subsidiaries. Liquidity risk Liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, the Group and the Company treasury maintain flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Group’s and the Company’s liquidity reserve (comprises undrawn borrowing facility (Note 23) and cash and cash equivalents (Note 20) on the basis of expected cash flow. This is generally carried out at local level in the operating companies of the Group in accordance with practice set by the Group. In addition, the Group’s and the Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these; and maintaining debt financing plans. The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. 23 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) GROUP Less than 1 month Between 1 and 12 months Between 1 and 3 years More than 3 years Total As at 31 December 2024 Borrowings - - - - - Lease liabilities 1 265 13 313 24 902 29 720 69 200 Trade and other payables 13 356 4 658 - - 18 014 Total 14 621 17 971 24 902 29 720 87 214 As at 31 December 2023 Borrowings - - - - - Lease liabilities 1 222 13 084 22 743 30 804 67 853 Trade and other payables 13 957 3 775 - - 17 732 Total 15 179 16 859 22 743 30 804 85 585 COMPANY Less than 1 month Between 1 and 12 months Between 1 and 3 years More than 3 years Total As at 31 December 2024 Borrowings - 6 960 - - 6 960 Lease liabilities 493 5 249 10 086 11 299 27 127 Trade and other payables 4 211 1 741 - - 5 952 Total 4 704 13 950 10 086 11 299 40 039 As at 31 December 2023 Borrowings - 6 360 - - 6 360 Lease liabilities 476 5 140 9 415 12 510 27 541 Trade and other payables 3 767 1 800 - - 5 567 Total 4 243 13 300 9 415 12 510 39 468 Change in liabilities arising from financing activities: GROUP As at 31 December 2023 Dividends declared Dividends paid Proceeds from borrowings Repayments of borrowings As at 31 December 2024 Borrowings - - - - - - Dividends payable 176 13 270 (13 252) - - 194 Total 176 13 270 (13 252) - - 194 COMPANY As at 31 December 2023 Dividends declared Dividends paid Proceeds from borrowings Repayments of borrowings As at 31 December 2024 Borrowings 6 360 - - 139 020 (138 420) 6 960 Dividends payable 176 13 270 (13 252) - - 194 Total 6 536 13 270 (13 252) 139 020 (138 420) 7 154 GROUP As at 31 December 2022 Dividends declared Dividends paid Proceeds from borrowings Repayments of borrowings As at 31 December 2023 Borrowings - - - - - - Dividends payable 166 15 482 (15 472) - - 176 Total 166 15 482 (15 472) - - 176 COMPANY As at 31 December 2022 Dividends declared Dividends paid Proceeds from borrowings Repayments of borrowings As at 31 December 2023 Borrowings 2 032 - - 102 201 (97 873) 6 360 Dividends payable 166 15 482 (15 472) - - 176 Total 2 198 15 482 (15 472) 102 201 (97 873) 6 536 24 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Changes in lease liabilities are disclosed in Note 25. Market risk Cash flow and fair value interest rate risk The Company has loans to subsidiaries with floating interest rates, but the cash flow risk is mitigated by applying the same variable element of interest rate on those loans as the banks are charging the Company. Loans granted and received at variable rates expose the Group to cash flow interest rate risk, which however has no material impact on profit or equity of the Group. Loans granted and received at fixed rates expose the Company to fair value interest rate risk, which however has no material impact on profit or equity of the Company. The Company’s and Group’s borrowings consist of loans with floating interest rate, which are related to EURIBOR and €STR. The Company and the Group did not use any derivative financial instruments in order to control the risk of interest rate changes. Trade and other receivables and payables are interest-free and have settlement dates within one year. The Group’s and the Company’s cash flow and fair value interest rate risk is periodically monitored by the Group’s management. It analyses its interest rate exposure on a dynamic basis taking into consideration refinancing, renewal of existing positions, alternative financing. Based on these scenarios, the Group and the Company calculate the impact on profit and loss of a defined interest rate shift. The scenarios are run only for receivables and liabilities that represent the major interest-bearing positions. Based on the performed simulations, the Company's management assessed that if the interest rate increases or decreases by 1 percent, the Group's profit for the period or equity for the period would change by EUR 97 thousand in 2024 (in 2023 – EUR 85 thousand), while the Company's would change by EUR 156 thousand (in 2023 – EUR 131 thousand). These simulations do not include lease liabilities, which are calculated using incremental borrowing as described in Note 2.14. Foreign exchange risk The Company and the Group have a policy to synchronize the cash flows from expected sales in the future with the expected purchases and other expenses in each foreign currency. Substantially all the Group’s payables and receivables are short-term and in addition expenses in foreign currencies are insignificant (less than 10%) as compared to those in Euro. The Group operates in Lithuania, Latvia and Estonia, and during the reporting period used Euro currency. Since Estonia, Latvia and Lithuania introduced the Euro (respectively, since 1st January 2011, 1st January 2014 and 1st January 2015), so there is no exchange rate fluctuations. (b) Capital risk management The Group’s and the Company’s objectives when managing capital, which includes ordinary shares, legal reserve, foreign currency translation reserve and retained earnings, are to safeguard the Group’s and the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Group and the Company monitor capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt. Pursuant to the Lithuanian Law on Companies the authorised share capital of a public limited liability company must be not less than EUR 40 thousand and of a private limited liability company must be not less than EUR 2.5 thousand. In addition, for all entities the shareholders’ equity should not be lower than 50 per cent of the company’s registered share capital. As at 31 December 2024 and as at 31 December 2023 the Company and all of the Company’s Lithuanian subsidiaries complied with these requirements. As at 31 December 25 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 2024 and at 31 December 2023 UAB Apranga Ecom LT did not comply with the requirements. Business activities of UAB Apranga Ecom LT are terminated since 2019 November month. Pursuant to the Latvian Commercial Law the authorised share capital of a private limited liability company must be not less than EUR 2.8 thousand. As at 31 December 2024 and 31 December 2023 , all of the Company’s Latvian subsidiaries complied with these requirements. Pursuant to the Estonian Commercial Code the authorised share capital of a private limited liability company must be not less than EUR 2.5 thousand. In addition, the shareholders’ equity should not be lower than 50 per cent of the company’s share capital. As at 31 December 2024 and as at 31 December 2023 all of the Company’s Estonian subsidiaries complied with these requirements. In addition, the Group has to comply with the total equity over total assets covenant imposed in the agreement with Luminor Bank AS. For more information see note 23. 26 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 4.SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the General Director and other 6 Directors (responsible for managing, sales and marketing, human resources, purchases, development and finance) that are used to make strategic decisions. The Directors consider the business from both a geographic and product perspective to certain extent. From product perspective Directors review only sales volume and gross margin, as presented in the statment of the comprehensive income by brand name. Gross margins of different brands are not significantly different, therefore can be aggregated into one reportable segment. Geographically, Directors separately consider operations in Lithuania, Latvia and Estonia depending on where the stores are located. Different legislation, consumer habits and economic situation substantially affect the average sales and expenses in each country, therefore Directors believe that each country represents a separate reportable segment. All financial information, including the measure of profit and total assets, is analysed on a country basis. Liabilities are measured on a Group basis only and are not individually measured on a country basis. The segment information provided to the Chief Operating Decision Makers for the reportable segments for the year ended 31 December is as follows: 31 December 2024 Lithuania Latvia Estonia Total Inter-company eliminations Total in consolidated financial statements Total segment revenue 193 406 75 285 43 037 311 728 - Inter-segment revenue (18 151) ( 289) ( 351) (18 791) - Stores income from external customers (note 6) 175 255 74 996 42 686 292 937 - 292 937 Gross profit margin 44.7% 45.3% 46.6% 45.1% 45.1% Other income (expenses): Rent (Note 25) (5 471) (2 490) ( 891) (8 852) ( 34) (8 886) Utilities (1 392) ( 602) ( 336) (2 330) (2 330) Renumeration and social security contributions (28 989) (8 890) (5 813) (43 692) (43 692) Depreciation and amortisation (12 248) (5 170) (3 085) (20 503) (20 503) Impairment (charges) ( 63) ( 51) ( 72) ( 186) ( 186) Other income 7 072 4 - 7 076 (6 977) 99 Other (expenses) (24 061) (11 601) (7 024) (42 686) 7 011 (35 675) Finance income 689 129 53 871 ( 534) 337 Finance (costs) (1 633) ( 475) ( 283) (2 391) 534 (1 857) Income tax (expense) (2 054) ( 954) ( 466) (3 474) (3 474) Profit (loss) for the year 10 110 3 888 1 962 15 960 - 15 960 Total assets 127 829 35 852 17 657 181 338 (16 370) 164 968 Additions to non-current assets (except for leases) 10 141 1 121 776 12 038 - 12 038 27 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 31 December 2023 Lithuania Latvia Estonia Total Inter-company eliminations Total in consolidated financial statements Total segment revenue 182 689 66 272 42 291 291 252 - Inter-segment revenue (20 270) ( 643) ( 643) (21 556) - Stores income from external customers (note 6) 162 419 65 629 41 648 269 696 - 269 696 Gross profit margin 45.6% 46.4% 47.1% 46.0% 46.0% Other income (expenses): Rent (Note 25) (5 303) (2 377) ( 967) (8 647) ( 33) (8 680) Utilities (1 374) ( 627) ( 385) (2 386) (2 386) Renumeration and social security contributions (26 906) (8 045) (5 470) (40 421) (40 421) Depreciation and amortisation (11 527) (4 879) (3 021) (19 427) (19 427) Impairment (charges) 93 287 ( 306) 74 74 Other income 7 355 - - 7 355 (7 296) 59 Other (expenses) (22 046) (10 177) (6 966) (39 189) 7 329 (31 860) Finance income 464 151 64 679 ( 410) 269 Finance (costs) (1 333) ( 256) ( 259) (1 848) 410 (1 438) Income tax (expense) (2 140) (1 124) ( 295) (3 559) (3 559) Profit (loss) for the year 11 348 3 401 2 024 16 773 - 16 773 Total assets 120 938 35 553 19 173 175 664 (15 639) 160 025 Additions to non-current assets (except for leases) 5 800 5 706 875 12 381 - 12 381 inter-segment revenue consists of sales of the Company's goods to subsidiaries Apranga SIA and Apranga OU and subsidiaries sale of remnants of goods to the Company. In 2024, the Group’s profitability before taxes decreased to 6.6% (2023: 7.5%): in Lithuania decreased to 6.9% (2023: 8.3%), in Latvia decreased to 6.5% (2023: 6.9%), in Estonia increased to 5.7% (2023: 5.6%). The profitability before taxes is calculated as follows: profit (loss) for the year before income tax divided by store income from external customers. The total carrying value of non-current assets located in Lithuania is EUR 64 889 thousand (2023: EUR 57 440 thousand), and the total of these non-current assets located in other countries is EUR 27 486 thousand (2023: EUR 30 150 thousand). 28 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 5.EXPENSES BY NATURE For the year ended 31 December cost of sales consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Cost of goods sold 160 231 144 835 62 639 60 343 Write-down (reversal) of inventories to net realisable value 579 719 255 157 Total cost of sales 160 810 145 554 62 894 60 500 For the year ended 31 December selling costs consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Rent 8 886 8 680 2 343 2 351 Utilities 2 331 2 386 913 873 Remuneration of stores personnel 30 565 27 804 11 288 10 171 Social security contributions of stores personnel 3 195 2 916 208 185 Depreciation and amortization 20 503 19 427 8 170 7 524 Impairment charge (reversal) 186 ( 74) 63 ( 70) Advertising and marketing 3 031 2 714 2 094 1 819 Franchise expenses 12 531 11 357 109 102 Bank commissions 1 699 1 614 396 392 Labelling, packing and repairing 1 014 895 533 455 Logistics and distribution 2 847 2 397 302 299 Business trips 615 652 386 429 Total selling costs 87 403 80 768 26 805 24 530 For the year ended 31 December general and administrative expenses consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Remuneration of administration personnel 9 494 9 277 7 445 7 311 Social security contributions of administration personnel 438 424 133 131 Other personnel related expenses 2 009 1 669 910 772 IT and communications 1 818 1 527 1 151 950 Repair and maintenance 3 836 3 710 1 754 1 617 Taxes (excluding income tax) 461 380 204 195 Consulting expense 212 221 203 212 Audit fee 259 201 75 47 Other expenses 5 342 4 523 1 746 1 667 Total general and administrative expenses 23 869 21 932 13 621 12 902 The "Other expenses" category includes trading platform fees, inventory losses, translation services, insurance costs, charitable donations and support, as well as other miscellaneous expenses. 29 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 6.REVENUE FROM CONTRACTS WITH CUSTOMERS For the year ended 31 December revenue from contracts with customers consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Retail income 292 842 269 540 82 842 77 355 Wholesale income 36 38 17 639 19 731 Management fees - - 6 971 7 291 Other income from contracts with custumers 59 118 93 66 Total revenue from contracts with customers 292 937 269 696 107 545 104 443 For the year ended 31 December retail income consisted of the following: GROUP COMPANY Chain 2024 2023 2024 2023 Economy 27 078 26 041 17 395 16 715 Youth 69 614 65 516 18 670 17 117 Footwear 3 272 3 521 2 046 1 896 Business 55 799 51 260 17 469 15 797 Luxury 28 792 26 461 15 845 15 421 Zara 95 240 84 992 - - Outlets 13 047 11 749 11 417 10 409 Total 292 842 269 540 82 842 77 355 For the year ended 31 December other income consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Rent income 25 23 27 26 Gain from disposal of PPE, net 9 3 6 2 Dividends 65 33 13 065 10 283 Total other income 99 59 13 098 10 311 7.FINANCE INCOME AND COSTS For the year ended 31 December finance income consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Interest income 337 269 414 284 Total finance income 337 269 414 284 For the year ended 31 December finance costs consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Interest on bank borrowings 21 48 20 48 Interest expense on lease liabilities 1 836 1 390 695 560 Interest on borrowings from subsidiaries - - 457 395 Total finance costs 1 857 1 438 1 172 1 003 30 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 8.INCOME TAX EXPENSE Domestic income tax is calculated at 15 per cent of the estimated profit for the year. The total income tax charge can be reconciled to the accounting profit before tax as follows: GROUP COMPANY 2024 2023 2024 2023 Profit before tax 19 434 20 332 16 565 16 103 Tax at the domestic income tax rate 2 915 3 050 2 485 2 415 Tax effect of income not subject to tax ( 37) ( 111) (1 971) (1 626) Tax effect of expenses that are not deductible in determining taxable profit 199 249 163 115 Effect of different tax rates of foreign subsidiaries 397 371 - - Tax expense 3 474 3 559 677 904 Effective income tax rate 17.9% 17.5% 4.1% 5.6% For the year ended 31 December income tax expense consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Current income tax expense 3 306 3 451 542 945 Deferred income tax 168 108 135 ( 41) Total income tax expense 3 474 3 559 677 904 9.DEFERRED INCOME TAX The movement in deferred income tax liabilities account was as follows: GROUP COMPANY 2024 2023 2024 2023 At beginning of year (2 301) (2 193) ( 366) ( 407) Comprehensive income statement (charge) credit ( 168) ( 108) ( 135) 41 At end of year (2 469) (2 301) ( 501) ( 366) Deferred tax assets and liabilities recognised as follows: GROUP COMPANY 2024 2023 2024 2023 Deferred tax assets: Lease liabilities IFRS 16 6 560 5 835 3 900 3 770 Inventory write down 551 456 328 270 Accruals 142 133 64 71 Impairment of property, plant and equipment 12 24 12 2 Total deferred tax assets 7 265 6 448 4 304 4 113 Deferred tax liability: Right-of-use assets IFRS 16 (6 436) (5 740) (3 818) (3 702) Undistributed profits of subsidiaries (2 162) (2 073) - - Depreciation of property, plant and equipment (1 136) ( 936) (1 006) ( 777) Total deferred tax liabilities (9 734) (8 749) (4 824) (4 479) Total deferred tax (liabilities) assets, net (2 469) (2 301) ( 520) ( 366) 31 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 10.DIVIDENDS PER SHARE 2024 2023 Approved dividends 13 270 15 482 Weighted average number of ordinary shares in thousand (Note 21) 55 292 55 292 Approved dividends per share, EUR 0.24 0.28 In 2024, the Annual Shareholder’s Meeting approved to pay dividends 0.24 cent per share to the shareholders for 2023 year. In respect of the current 2024 year, the Board of Directors propose to pay 0.24 EUR dividend per share to the shareholders (Note 22). This dividend is subject to approval by the shareholders at the Annual Shareholder’s Meeting and has not been included as a liability in these financial statements. 11.EARNINGS PER SHARE GROUP COMPANY 2024 2023 2024 2023 Profit for the year 15 960 16 773 15 888 15 199 Weighted average number of ordinary shares in thousand (Note 21) 55 292 55 292 55 292 55 292 Basic and diluted earnings per share, EUR 0.29 0.30 0.29 0.27 The Company has no dilutive potential ordinary shares, therefore, the diluted earnings per share are the same as basic earnings per share. 32 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 12.PROPERTY, PLANT AND EQUIPMENT At 31 December property, plant and equipment consisted of the following: GROUP Buildings Plant and equipment Leasehold improve-ments Commercial and other equipment Construction in progress Total Cost At 31 December 2022 8 963 2 126 9 848 43 150 434 64 521 Additions 104 35 686 2 140 8 783 11 748 Disposals and write-offs - ( 7) (2 853) (6 333) - (9 193) Transfers between captions - - 4 758 4 449 (9 207) - At 31 December 2023 9 067 2 154 12 439 43 406 10 67 076 Additions 2 511 1 804 2 982 5 414 11 712 Disposals and write-offs - ( 38) (1 394) (3 046) - (4 478) Transfers between captions - - 2 703 2 347 (5 050) - At 31 December 2024 11 578 2 117 14 552 45 689 374 74 310 Accumulated depreciation At 31 December 2022 4 016 758 5 659 32 588 - 43 021 Charge for the year 254 140 1 470 3 962 - 5 826 Disposals and write-offs - ( 7) ( 168) (6 094) - (6 269) At 31 December 2023 4 270 891 6 961 30 456 - 42 578 Charge for the year 264 141 1 496 3 983 - 5 884 Disposals and write-offs - ( 39) ( 575) (2 851) - (3 465) At 31 December 2024 4 534 993 7 882 31 588 - 44 997 Impairment charge At 31 December 2022 - - 198 310 - 508 Charge for the year (reversal) 53 ( 115) ( 62) At 31 December 2023 - - 251 195 - 446 Charge for the year (reversal) 42 106 148 At 31 December 2024 - - 293 301 - 594 Carrying amount At 31 December 2022 4 947 1 368 3 991 10 252 434 20 992 At 31 December 2023 4 797 1 263 5 227 12 755 10 24 052 At 31 December 2024 7 044 1 124 6 377 13 800 374 28 719 33 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) COMPANY Buildings Plant and equipment Leasehold improve-ments Commercial and other equipment Construction in progress Total Cost At 31 December 2022 8 963 2 126 5 120 12 066 135 28 410 Additions 104 34 28 1 334 1 190 2 690 Disposals and write-offs - ( 7) - (1 468) - (1 475) Transfers - - 1 104 211 (1 315) - At 31 December 2023 9 067 2 153 6 252 12 143 10 29 625 Additions 2 511 2 256 1 972 2 364 7 105 Disposals and write-offs - ( 38) ( 383) (1 298) - (1 719) Transfers - - 1 749 276 (2 025) - At 31 December 2024 11 578 2 117 7 874 13 093 349 35 011 Accumulated depreciation At 31 December 2022 4 016 758 2 748 9 218 - 16 740 Charge for the year 254 140 838 978 - 2 210 Disposals and write-offs - ( 7) -? (1 353) - (1 360) At 31 December 2023 4 270 891 3 586 8 843 - 17 590 Charge for the year 264 141 807 995 - 2 207 Disposals and write-offs - ( 39) ( 235) (1 126) - (1 400) At 31 December 2024 4 534 993 4 158 8 712 - 18 397 Impairment charge At 31 December 2022 - - 34 22 - 56 Charge for the year (reversal) ( 24) ( 16) ( 40) At 31 December 2023 - - 10 6 - 16 Charge for the year (reversal) 27 35 62 At 31 December 2024 - - 37 41 - 78 Carrying amount At 31 December 2022 4 947 1 368 2 338 2 826 135 11 614 At 31 December 2023 4 797 1 262 2 656 3 294 10 12 019 At 31 December 2024 7 044 1 124 3 679 4 340 349 16 536 At 31 December 2024 the Group’s and the Company’s buildings with the carrying amount of EUR 4 103 thousand (2023: EUR 4 314 thousand) have been pledged as security for outstanding loans from financial institutions (Note 23). As of December 31 2024 and as of December 31 2023, the Company has leased one premises to third parties. At 31 December the acquisition cost of the fully depreciated property, plant and equipment still in use was as follows: GROUP COMPANY 2024 2023 2024 2023 Plant and equipment 968 998 953 983 Leasehold improvements - 276 - 66 Commercial and other equipment 10 659 12 337 4 205 4 896 Total 11 627 13 611 5 158 5 945 The main cash generating unit of the Group and the Company is a store. The Group and the Company have tested PPE used in stores operations for impairment in accordance with the accounting policies stated in Note 2.6.   Estimation of the value in use was based on the discounted post-tax cash flows (DCF) of the latest available business plan. DCF was estimated over remaining useful life of leasehold improvements and commercial and other equipment (vast majority of premises are leased). For the calculation of future cash flows in 2025 and in later years, each cash generating unit was assessed individually. Net sales 34 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) and personnel costs growth rates were established on brand or country level. The weighted average cost of capital (further – WACC) of 13-14 per cent post-tax (WACC of 13 per cent post-tax – in 2023) was used for value in use estimation. Based on the calculations performed the management concluded that impairment in the amount of EUR 594 thousand for the Group (2023: EUR 446 thousand) and EUR 78 thousand for the Company (2023: EUR 16 thousand) should be recorded against PPE in the statement of financial position. The Group and the Company in 2024 recognized impairment losses of EUR 148 thousand and EUR 62 thousand respectively (2023: reversed impairment losses of EUR 62 thousand and EUR 40 thousand for the Group and the Company respectively). The impairment losses on PPE in 2024 were mainly due to an increase in the number of loss-making stores that showed indications of impairment and were therefore tested. Impairment of PPE is recognized in the statement of comprehensive income under selling costs. If future operating cash flows in 2025 and in later years were reduced by 5 per cent, the Group and the Company in 2024 would have recognized additional PPE impairment amounting to EUR 9 thousand and EUR 3 thousand, respectively. If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 percentage point higher than management estimates (for example 14-15 per cent instead of 13-14 per cent), the Group and the Company in 2024 would have recognized additional PPE impairment amounting to EUR 6 thousand and EUR 2 thousand, respectively. The Management does not expect material changes in estimations made in the near future, except those disclosed in Note 2.2 (a). 13.INTANGIBLE ASSETS At 31 December intangible assets consisted of the following: GROUP COMPANY Licenses and rights acquired Software Total Licenses and rights acquired Software Total Cost At 31 December 2022 625 1 808 2 433 500 1 788 2 288 Additions 89 544 633 90 515 605 Write-offs - ( 5) ( 5) - ( 1) ( 1) At 31 December 2023 714 2 347 3 061 590 2 302 2 892 Additions 184 142 326 157 143 300 Write-offs - ( 9) ( 9) - - - At 31 December 2024 898 2 480 3 378 747 2 445 3 192 Accumulated amortisation At 31 December 2022 369 992 1 361 272 972 1 244 Charge for the year 75 147 222 66 142 208 Write-offs - ( 5) ( 5) - ( 1) ( 1) At 31 December 2023 444 1 134 1 578 338 1 113 1 451 Charge for the year 92 291 383 83 282 365 Write-offs - ( 9) ( 9) - - - At 31 December 2024 536 1 416 1 952 421 1 395 1 816 Carrying amount At 31 December 2022 256 816 1 072 228 816 1 044 At 31 December 2023 270 1 213 1 483 252 1 189 1 441 At 31 December 2024 362 1 064 1 426 326 1 050 1 376 35 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) At 31 December the acquisition cost of fully amortized intangible assets still in use was as follows: GROUP COMPANY 2024 2023 2024 2023 Licenses 185 159 90 84 Software 813 822 809 808 Total 998 981 899 892 14.INVESTMENTS IN SUBSIDIARIES The Company’s investments in subsidiaries at 31 December are as follows: Name Country of incorporation Cost 2024 Ownership, % 2023 Ownership, % UAB Apranga LT Lithuania 724 100 724 100 UAB Apranga BPB LT Lithuania 145 100 145 100 UAB Apranga PLT Lithuania 87 100 87 100 UAB Apranga SLT Lithuania 87 100 87 100 UAB Apranga MLT Lithuania 87 100 87 100 UAB Apranga HLT Lithuania 75 100 75 100 UAB Apranga OLT Lithuania 50 100 50 100 UAB Apranga Ecom LT Lithuania 10 100 10 100 SIA Apranga Latvia 2 175 100 2 175 100 SIA Apranga LV Latvia 153 100 153 100 SIA Apranga BPB LV Latvia 86 100 86 100 SIA Apranga PLV Latvia 86 100 86 100 SIA Apranga SLV Latvia 85 100 85 100 SIA Apranga MLV Latvia 86 100 86 100 SIA Apranga HLV Latvia 50 100 50 100 SIA Apranga OLV Latvia 50 100 50 100 SIA Apranga Ecom LV Latvia 3 100 3 100 OU Apranga Estonia 447 100 447 100 OU Apranga Estonia Estonia 128 100 128 100 OU Apranga BEE Estonia 96 100 96 100 OU Apranga PB Trade Estonia 221 100 221 100 OU Apranga ST Retail Estonia 96 100 96 100 OU Apranga MDE Estonia 2 100 2 100 OU Apranga HEST Estonia 50 100 50 100 OU Apranga Ecom EE Estonia 17 100 17 100 Total investments 5 095 5 095 * At 31 December 2024 the Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of shares (At 31 December 2023: 14.91% and 85.09%, respectively). The changes in investments are as follows: 2024 2023 Beginning of the year 5 095 5 095 At end of the year 5 095 5 095 36 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 15.INVENTORIES GROUP COMPANY 2024 2023 2024 2023 Goods for resale 52 982 53 320 29 442 28 323 Write-down of goods for resale to net realisable value (4 911) (4 332) (2 053) (1 798) Return assets 1 111 879 196 184 Goods in transit 294 131 294 131 Packaging and other materials 665 609 473 457 Total 50 141 50 607 28 352 27 297 Acquisition cost of write-down of goods for resale to net realisable value 23 035 20 514 11 971 10 372 At 31 December 2024 inventories of the Group and the Company have been pledged as security for outstanding loans from financial institutions (Note 23). The total carrying amount of Group’s pledged inventories as at 31 December 2024 was EUR 11 296 thousand, Company’s - EUR 7 896 thousand (EUR 11 296 thousand and EUR 7 896 thousand as at 31 December 2023, respectively). 16.PREPAYMENTS At 31 December prepayments consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Prepayments 1 554 1 667 1 547 1 587 Less non-current portion of prepayments ( 102) ( 142) ( 102) ( 63) Current portion of prepayments 1 452 1 525 1 445 1 524 The major share of prepayments are prepayments to suppliers for goods, which are subsequently used to settle amounts due. 17.FINANCIAL INSTRUMENTS BY CATEGORY The accounting policies for financial instruments have been applied to the line items at 31 December below: GROUP COMPANY Category - Financial assets at amortised cost Category - Financial assets at amortised cost Assets as per statement of financial position: 2024 2023 2024 2023 Trade and other receivables 3 267 3 166 10 086 10 562 Cash and cash equivalents 18 405 17 665 6 845 7 974 Total 21 672 20 831 16 931 18 536 Category - at fair value Category - at fair value Shares of Verslo Trikampis UAB (level 3) 2 600 2 600 2 600 2 600 Total 2 600 2 600 2 600 2 600 Total financial assets 24 272 23 431 19 531 21 136 In June 2018, the Company acquired shares of the investment company UAB Verslo trikampis (formerly UAB LIM Verslo Trikampio NT Fondas), which are recognized as financial assets at fair value through profit or loss. Refer to the accounting policies in Note 2.10, Financial assets and liabilities. 37 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) In 2024 and in 2023, the management concluded that fair value of the investment in shares of UAB Verslo Trikampis corresponded to the book value, therefore the Group and the Company did not recognize any gain from change in value in 2024 and in 2023. GROUP COMPANY Category - Financial liabilities measured at amortised cost Category - Financial liabilities measured at amortised cost 2024 2023 2024 2023 Liabilities as per statement of financial position: Borrowings - - 6 960 6 360 Lease liabilities 62 652 61 935 24 829 25 381 Trade and other payables 18 014 17 732 5 952 5 567 Total 80 666 79 667 37 741 37 308 The following methods and assumptions are used to estimate the fair value of each class of financial instruments: a.The carrying amount of current trade and other accounts receivable, current trade and other accounts payable and current borrowings approximates their fair value due to short term maturities (Level 3); b.The value of investment in Verslo trikampis UAB fund is calculated as the number of fund units held multiplied by the value of the fund unit as at reporting date (Level 3). The valuation of main fund assets is performed using DCF model. 18.CREDIT QUALITY OF FINANCIAL ASSETS Total credit risk exposure of the Group and the Company is provided below . Since there are no material overdue or with increased credit risk items, provision matrix is not provided in these financial statements. GROUP COMPANY 2024 2023 2024 2023 Financial assets at fair value 2 600 2 600 2 600 2 600 Trade and other receivables with no history of counterparty defaults 3 250 3 145 1 542 1 388 Receivables from related parties (Note 26) 17 21 8 544 9 174 Cash at bank or their parent companies that have high credit ratings (cash on hand or in transit is excluded) 13 586 13 089 6 338 7 164 Total 19 453 18 855 19 024 20 326 19.TRADE AND OTHER RECEIVABLES At 31 December trade and other receivables consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Trade receivables from subsidiaries (Note 26) - - 8 526 8 183 Loans to subsidiaries (Note 26) - - 1 970 Loans and other receivables from related parties (note 26) 17 21 17 21 Trade receivables from unrelated parties 363 271 208 135 Other receivables 2 887 2 874 1 334 1 253 Total 3 267 3 166 10 086 10 562 Less non-current portion of other receivables ( 672) ( 528) ( 83) ( 80) Current portion 2 595 2 638 10 003 10 482 The major share of other receivable are deposits, related to internet sales, and receivables from suppliers for returned goods. 38 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) There were no expected significant credit lossess identified and, consequently, no allowance was accounted for as at 31 December 2024 and 2023. There were no receivables past due in 2024 and 2023. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group and the Company do not hold any collateral as security. All the Company’s loans granted to subsidiaries are denominated in EUR currency. The interest rate at 31 December 2024 is 2.5 per cent (2023: 2.5 per cent), maturity date – 31 December 2025 (2023: 31 December 2024). 20.CASH AND CASH EQUIVALENTS At 31 December cash and cash equivalents consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Cash at bank 13 586 13 089 6 338 7 164 Cash on hand 686 644 296 254 Cash in transit 4 133 3 932 211 556 Total 18 405 17 665 6 845 7 974 Cash in certain bank accounts and future cash inflows into these accounts were pledged to banks as security for credit facilities granted. At 31 December 2024, the cash balances of the Group and the Company in the pledged accounts amounted to EUR 6 338 thousand (2023: EUR 7 163 thousand) (Note 23). Cash and cash equivalents include the following for the purposes of the cash flow statement: GROUP COMPANY 2024 2023 2024 2023 Cash and cash equivalents 18 405 17 665 6 845 7 974 Total 18 405 17 665 6 845 7 974 Presented below is the analysis of the credit quality of balances of cash and cash equivalents, except cash on hand and cash in transit, based on ratings established by the rating agency S&P (parent banks of the banks in whose accounts the Group's revenues are collected): GROUP COMPANY 2024 2023 2024 2023 A+ 13 586 13 089 6 338 7 164 Total 13 586 13 089 6 338 7 164 21.SHARE CAPITAL At 31 December 2024 issued share capital of the Company consisted of 55 291 960 (2023: 55 291 960) ordinary shares at par value of EUR 0.29 each. All issued shares are fully paid. Subsidiaries did not hold any shares of the Company as of 31 December 2024 and 2023. The Company did not hold its own shares as of 31 December 2024 and 2023. 39 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 22.LEGAL RESERVE AND PROFIT DISTRIBUTION Under Lithuanian Law on Companies the Company has to allocate 1/20 of its net profit to the legal reserve until it reaches 1/10 of the Company’s authorised capital (up to EUR 1 604 thousand as at 31 December 2024 and 31 December 2023). Legal reserve is fully formed. On 27 April 2024 the Company’s shareholders’ meeting resolved to pay EUR 13 270 thousand in dividends (EUR 0.24 per one share) for 2023 year. On 28 April 2023 the Company’s shareholders’ meeting resolved to pay EUR 15 482 thousand in dividends (EUR 0.28 per one share) for 2022 year. In respect of the current year, the Board of directors propose a dividend of EUR 13 270 thousand to be paid to the shareholders. This dividend amount is subject to approval by shareholders at the Annual Shareholder’s Meeting. 23.BORROWINGS At 31 December the carrying amounts of the borrowings consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Long term borrowings Total - - - - Short term borrowings Borrowings from subsidiaries - - 6 960 6 360 Total - - 6 960 6 360 Total borrowings - - 6 960 6 360 The bank credit lines are secured by cash in certain of bank accounts (Note 20), some of buildings (Note 12) and part of inventories (Note 15). At 31 December all amounts of the borrowings are denominated in EUR currency. The weighted average interest rates at the end of the reporting period were as follows: GROUP COMPANY 2024 2023 2024 2023 Bank credit lines and loans 4-6% 5-6% 4-6% 5-6% Bank overdraft 4-6% 5-6% 4-6% 5-6% Borrowings from subsidiaries - - 3-4% 4.0% Exposure of the Group’s and the Company’s borrowings to interest rate changes and the contractual repricing dates fall into period of 6 month or less. The Group’s and the Company’s borrowing facilities contracted but undrawn as at the end of the reporting period were EUR 2 854 thousand (2023: EUR 10 282 thousand), and can be utilised until 31 May 2025. The Group and the Company use borrowing facilities to issue guarantees. For more information see note 27. The Group has to comply with financial covenants imposed in the agreements with Luminor Bank AS and SEB bankas AB, such as equity to assets, financial debt to EBITDA as well as net financial debt to EBITDA. As at 31 December 2024 and as at 31 December 2023, the Group complied with all mentioned financial covenants. Definition of EBITDA is provided in the section No. 11 “Alternative Performance Indicators” of management report and on the Group’s website. 40 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 24.TRADE AND OTHER PAYABLES At 31 December trade and other payables consisted of the following: GROUP COMPANY 2024 2023 2024 2023 Payables to subsidiaries - - 767 - Payables to other related parties 109 115 109 115 Trade payables 11 674 11 267 3 053 3 111 Employee benefits and related payables 6 567 6 449 3 378 3 417 Contract liabilities 1 186 721 256 182 Refund liabilities 1 749 1 394 337 314 Taxes, except income taxes, payable 5 440 5 062 1 628 1 569 Accrued expenses and other payables 6 231 6 350 2 023 2 341 Total 32 956 31 358 11 551 11 049 25.LEASES The Group and the Company leases premises for retail trade, administration and logistics purposes and vehicles used by personnel for business activities. Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period: GROUP COMPANY Premises Vehicles In total Premises Vehicles In total As at 1 January 2024 58 452 333 58 785 24 144 311 24 455 Additions 13 813 532 14 345 4 435 373 4 808 Impairment (charge) reversal ( 38) - ( 38) ( 1) - ( 1) Depreciation (expense) (14 036) ( 200) (14 236) (5 429) ( 169) (5 598) As at 31 December 2024 58 191 665 58 856 23 149 515 23 664 GROUP COMPANY Premises Vehicles In total Premises Vehicles In total As at 1 January 2023 53 012 269 53 281 23 596 234 23 830 Additions 18 643 228 18 871 5 484 216 5 700 Impairment (charge) reversal 12 - 12 30 - 30 Depreciation (expense) (13 215) ( 164) (13 379) (4 966) ( 139) (5 105) As at 31 December 2023 58 452 333 58 785 24 144 311 24 455 The Group and the Company have tested right-of-use assets for impairment in accordance with the accounting policies stated in Note 2. 6. Estimation of the value in use was calculated using the same method and using the same indicators as in Note 12. Based on the calculations performed the management concluded that impairment in the amount of EUR 610 thousand for the Group (As at 31 December 2023: EUR 572 thousand) and EUR 54 thousand for the Company (As at 31 December 2023: EUR 53 thousand) should be recorded against right-of-use assets in the statement of financial position as at 31 December 2024. The Group in 2024 have recognised the impairment loss of right-of-use assets of EUR 38 thousand (impairment reversal of EUR 12 thousand was recognized in 2023), the Company have recognised the impairment loss of right-of-use assets of EUR 1 thousand (impairment reversal of EUR 30 thousand was recognized in 2023). The impairment charges on right-of-use assets in 2024 were mainly due to an increase in the number of loss-making stores that showed indications of impairment and were therefore tested. Impairment of right-of-use assets is recognized in the statement of comprehensive income under selling costs. 41 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) If future operating cash flows in 2025 and in later years were reduced by 5 per cent, the Group and the Company in 2024 would have recognized additional right-of-use assets impairment amounting to EUR 11 thousand and EUR 4 thousand, respectively. If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 per cent higher than management estimates (for example 14-15 per cent instead of 13-14 per cent), the Group and the Company in 2024 would have recognized additional right-of-use assets impairment amounting to EUR 8 thousand and EUR 2 thousand, respectively. Set out below are the carrying amounts of lease liabilities (presented under “Current lease liabilities” and “Non-current lease liabilities”) and the movements during the period: GROUP COMPANY As at 1 January 2024 61 935 25 381 Additions 14 345 4 808 Accretion of interest 1 836 695 Payments (15 311) (6 055) Rent discounts ( 153) - As at 31 December 2024 62 652 24 829 Current 14 578 5 742 Non-current 48 074 19 087 GROUP COMPANY As at 1 January 2023 56 182 24 657 Additions 18 871 5 700 Accretion of interest 1 390 560 Payments (14 354) (5 525) Rent discounts ( 154) ( 11) As at 31 December 2023 61 935 25 381 Current 14 306 5 616 Non-current 47 629 19 765 As at 31 December 2024 present value of payments for leases which are not yet commenced but to which the Group and the Company are committed amounted to EUR 2 420 thousand and EUR 896 thousand (as at 31 December 2023 amounted to EUR 3 306 thousand and EUR 0 respectively). The following are the amounts recognized in profit or loss: GROUP COMPANY 2024 Depreciation expense of right-of-use assets (included in selling costs) 14 236 5 598 Interest expense on lease liabilities (included in finance costs) 1 836 695 Expenses relating to short-term leases (included in selling costs) 243 65 Impairment charge (reversal), (included in selling costs) 38 1 Variable lease payments (included in selling costs) 8 796 2 278 Rent discounts (included in selling costs) ( 153) - Total amount recognized in profit or loss 24 996 8 637 GROUP COMPANY 2023 Depreciation expense of right-of-use assets (included in selling costs) 13 379 5 105 Interest expense on lease liabilities (included in finance costs) 1 390 560 Expenses relating to short-term leases (included in selling costs) 407 278 Impairment charge (reversal) (included in selling costs) ( 12) ( 30) Variable lease payments (included in selling costs) 8 427 2 085 Rent discounts (included in selling costs) ( 154) ( 11) Total amount recognized in profit or loss 23 437 7 987 42 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) The Company/Group has lease contracts for Premises that contain variable payments based on the turnover of stores located in those Premises. Management’s objective is to align the lease expense with the revenue earned. The Company/Group accounted short-term leases and rent discounts as variable lease payments. The following provides information on the Company’s/Group’s variable lease payments in 2024 and 2023, including the magnitude in relation to fixed payments: GROUP COMPANY Fixed payments Variable payments In total Fixed payments Variable payments In total Year ended 31 December 2024 Fixed payments 2 245 - 2 245 1 829 - 1 829 Variable rent with minimum payment 13 219 5 509 18 728 4 226 1 737 5 963 Variable rent only - 3 377 3 377 - 606 606 Total 15 464 8 886 24 350 6 055 2 343 8 398 Year ended 31 December 2023 Fixed payments 2 082 - 2 082 1 765 - 1 765 Variable rent with minimum payment 12 215 5 904 18 119 3 700 1 979 5 679 Variable rent only - 2 776 2 776 - 373 373 Total 14 297 8 680 22 977 5 465 2 352 7 817 26.RELATED PARTY TRANSACTIONS The parties are considered related when one party has the possibility to control the other or have significant influence over the other party in making financial and operating decisions. There is no allowance for intercompany receivables as expected credit losses are immaterial. The Company’s and the Group’s transactions with related parties and balances arising from these transactions as of 31 December were as follows: Related parties Accounts payable Accounts receivable and loans granted Income Purchases 2024 2023 2024 2023 2024 2023 2024 2023 UAB MG Grupė (the ultimate parent company) 14 12 - - - - 127 123 As per ultimate parent company associated companies: UAB Mineraliniai vandenys - - - - - - 44 29 UAB Mediafon Technology 1 11 - - - - 22 112 UAB MG Investment - - - - - - - 31 UAB Minvista - - 17 21 260 224 - - LNK Group - 1 - - 1 - - - UAB Eminta 94 91 - - - - 942 905 UAB MV GROUP - - - - - - - - Total 109 115 17 21 261 224 1 135 1 200 Prevailing types of related party contracts are rent, management service fee, advertising, centralised services (telecommunications, utilities and etc.). 43 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) The Company’s transactions with subsidiaries and balances arising from these transactions as of 31 December were as follows: Subsidiaries Borrowings and accounts payable Loans and accounts receivable Income Purchases 2024 2023 2024 2023 2024 2023 2024 2023 UAB Apranga LT 4 000 2 500 204 94 4 288 3 940 292 197 UAB Apranga BPB LT 350 700 35 53 1 079 916 44 43 UAB Apranga PLT 50 500 25 28 554 754 25 25 UAB Apranga SLT 350 400 28 39 802 902 30 28 UAB Apranga MLT 1 330 1 500 64 126 2 886 999 78 69 UAB Apranga HLT 750 760 31 60 661 633 23 21 UAB Apranga OLT 130 - 14 74 418 301 10 7 UAB Apranga Ecom LT - - - - - - - - SIA Apranga 375 - 5 401 4 836 13 609 14 195 21 120 SIA Apranga LV - - 134 39 2 430 1 979 111 89 SIA Apranga BPB LV - - 11 9 317 304 17 9 SIA Apranga PLV - - 11 2 257 288 11 8 SIA Apranga SLV - - 11 11 305 355 17 10 SIA Apranga MLV - - 36 36 1 089 878 49 33 SIA Apranga HLV - - 14 25 332 341 11 5 SIA Apranga OLV - - 10 14 274 276 11 6 SIA Apranga Ecom LV - - 1 - - - - - OU Apranga 392 - 2 380 3 593 6 096 8 475 8 48 OU Apranga Estonia - - 73 32 1 606 1 473 64 51 OU Apranga BEE - - 7 3 171 63 15 10 OU Apranga PB Trade - - 6 54 85 64 5 4 OU Apranga ST Retail - - 5 4 183 55 11 9 OU Apranga MDE - - 17 9 493 287 17 13 OU Apranga HEST - - 9 12 256 317 7 5 OU Apranga Ecom EE - - - - - - - - Total 7 727 6 360 8 527 9 153 38 191 37 795 877 810 Prevailing types of intra-group transactions are centralised supplies of goods for resale, management service fees, centralised purchasing of services (telecommunications, IT, utilities and etc.), financing, distribution of earnings. Dividend income received from the subsidiaries is presented in ‘Income’ together with other income. In 2024, the Company received EUR 13 00 thousand dividend income from subsidiaries (in 2023 - EUR 10 250). Under ‘Income’ also accounted for sales of goods to subsidiaries SIA Apranga and OU Apranga, which in 2024 amounted to EUR 11 896 thousand and EUR 5 706 thousand respectively (in 2023: EUR 11 934 thousand and EUR 7 758 thousand, respectively). The debts of Group companies are offset each month, and the remaining portion of the debt is paid no later than in 30 days. The Company’s/Group’s and related parties debts are paid within 30 days. The Company has concluded short-term loan agreements with its subsidiaries, which, in case of need, are borrowed for 1 month Euribor plus margin interests. Guarantees provided on behalf of related parties Guarantees provided on behalf of related parties are disclosed in Note 27. 44 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Compensation of key management personnel The General Director and other Directors of the Company are considered to be the key management of the Group. There were 7 members of the key management as at 31 December 2024 (7 members of the key management as at 31 December 2023). 2 of them also belong to the Management Board, which consists of 6 members. GROUP COMPANY 2024 2023 2024 2023 Remuneration 3 001 3 261 2 912 3 174 Social security 53 58 51 56 Average number of key managers 7 7 7 7 On 30 April 2024 and on 27 April 2023 the Company’s shareholders’ meetings decided not to pay out annual bonuses to the key management. 27.COMMITMENTS AND CONTINGENCIES Legal proceedings As of 31 December 2024 and 2023 the Company and the Group were not involved in any legal process, which in the opinion of management, could have a material impact on the financial statements. Guarantees As of 31 December 2024, guarantees issued by the credit institutions on behalf of the Company to secure the obligations of its subsidiaries to their goods suppliers totaled EUR 22 523 thousand (31 December 2023: EUR 15 447 thousand). The letters of credit and guarantees provided to goods suppliers by the credit institutions on behalf of the Group as of 31 December 2024 amounted to EUR 24 146 thousand (31 December 2023: EUR 16 718 thousand). The Group and the Company increased the amount of outstanding guarantees due to a significant rise in purchases from goods suppliers over the past few years. As of 31 December 2024, the Company’s guarantees issued to secure the obligations of its subsidiaries to their landlords totaled EUR 466 thousand (31 December 2023: EUR 474 thousand). As of 31 December 2024 and 2023 the Company had no guarantees to the credit institutions issued to secure the borrowings of subsidiaries. The management of the Group believes that the subsidiaries on behalf of which guarantees were issued will meet their liabilities to the creditors, therefore, no provisions in respect of these guarantees were accounted for in the financial statements as at 31 December 2024 and 31 December 2023. Options granted Options for assets The Group issued irrevocable call options to INDITEX Group granting the right to purchase assets (leasehold improvements and PPE located in the premises of shops and inventory) of subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga PLT, UAB Apranga SLT, UAB Apranga MLT, UAB Apranga HLT, UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA Apranga PLV, SIA Apranga SLV, SIA Apranga MLV, SIA Apranga OLV, SIA Apranga HLV, OU Apranga Estonia, OU Apranga BEE, OU Apranga PB Trade, OU Apranga ST Retail, OU Apranga MDE and OU Apranga HEST operating brands of INDITEX Group (ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO). The options are exercisable in 2026 and are firmly and irrevocably granted thus the Group cannot waive them. The Group also issued irrevocable call options to ALDO Group granting the right to purchase assets (PPE located in the premises of shops and inventory) of Company and subsidiaries SIA Apranga and OU Apranga operating the brand of ALDO. The options are exercisable in 2027 and are firmly and irrevocably granted thus the Group cannot waive them. 45 NOTES TO THE FINANCIAL STATEMENTS 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) Options for lease rights Subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga PLT, UAB Apranga SLT, UAB Apranga MLT, UAB Apranga HLT, UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA Apranga PLV, SIA Apranga SLV, SIA Apranga MLV, SIA Apranga OLV, SIA Apranga HLV, OU Apranga Estonia, OU Apranga BEE, OU Apranga PB Trade, OU Apranga ST Retail, OU Apranga MDE and OU Apranga HEST operating brands of INDITEX Group (ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO) granted irrevocable options exercisable in 2026 by virtue of which INDITEX Group might acquire the lease rights and might become lessee in all or part of the lease agreements for the premises where ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO stores are located. Company and its subsidiaries SIA Apranga and OU Apranga operating brand ALDO granted irrevocable options exercisable in 2027 by virtue of which ALDO Group might acquire the lease rights and might become lessee in the lease agreements for the premises where ALDO stores are located. Considering economic and operational aspects, as well as more than 20-year business relationship with INDITEX Group, and taking into account numerous extensions of cooperation agreements and their terms, the Group's management believes that the agreements parties will not exercise any of the aforementioned options. 28.EVENTS AFTER THE REPORTING PERIOD After the end of the reporting period, there were no events that had a significant impact on the activities of the Company and the Group. 46 APB APRANGA Consolidated Management Report For the year ended 31 December 2024 C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 48 1. GENERAL INFORMATION Consolidated management report is prepared for the year ended 31 December 2024. Name of the Issuer: public limited liability trade company “Apranga” Legal form: public limited liability company Date and place of registration: 1 st March 1993, Board of Vilnius City Code of Enterprise: 121933274 Registered office: Ukmerges str. 362, Vilnius, LT-14311, Lithuania Telephone number: +370 5 2390808 E-mail address: info@apranga.lt Internet address: www.aprangagroup.com At 31 December 2024 Apranga Group (hereinafter the Group) consisted of the parent company APB Apranga (hereinafter the Company) and its 100 per cent owned 25 subsidiaries. The principal activity of the Company and its subsidiaries is retail trade of apparel in Baltic countries. Structure of the Group at 31 December 2024: For more information on subsidiaries refer to Note 1 and Note 14 to Consolidated financial statements. 2. OPERATING HIGHLIGHTS In 2024, the Group’s priorities were influenced by stagnating retail market of textile, clothing and footwear, rapid growth of salaries, utilization of new technologies and sustainability related topics. 2.1. RETAIL MARKET OVERVIEW The retail turnover (including VAT) of Apranga Group reached EUR 354.2 million in 12 months 2024 and increased by 8.5% year- on-year. In 2024, the retail turnover of Apranga Group in Lithuania reached EUR 211.8 million and increased by 7.6% year-on-year. In 2024 the retail turnover of Apranga Group in Latvia was EUR 90.7 million and surged by 14.1% year-on-year, in Estonia was EUR 51.7 million and grew by 3.4% year-on-year. According to the data from the official statistics departments of Lithuania, Latvia and Estonia, the market of retail trade, except motor vehicles and motorcycles, in the Baltic states the year 2024 generated 40.1 billion euros (without VAT) and grew by 2.4% at current prices compared to the prior year. The change of consumer prices in Baltic retail market in the year 2024 compared to the previous year averaged to around 1.6%. In this period the price index change in Lithuania was 0.9%, Latvia 1.4% and Estonia 3.8%. Consumer confidence index in the Euro area has been increasing throughout the year 2024 and rose from -16.0 to -14.5 (+1.5 p.). In Lithuania the index increased from +2.5 to +6.6 (+4.1 p.), Latvia from -13.2 to -12.1 (+1.1 p.). Estonia’s consumer confidence despite being the lowest one of the three countries continued to shrink from -33.6 to -35.9 (-2.3 p.). The companies participating in the textile, clothing and footwear market of the Baltic states generated around 1.9 billion euros turnover (without VAT) in 2024, which was 0.5% lower than in prior year. APB "APRANGA" LITHUANIA LATVIA ESTONIA SIA "Apranga" OÜ "Apranga" UAB "Apranga LT" SIA "Apranga LV" OÜ "Apranga Estonia" UAB "Apranga BPB LT" SIA "Apranga BPB LV" OÜ "Apranga BEE" UAB "Apranga PLT" SIA "Apranga PLV" OÜ "Apranga PB Trade" UAB "Apranga SLT" SIA "Apranga SLV" OÜ "Apranga ST Retail" UAB "Apranga MLT" SIA "Apranga MLV" OÜ "Apranga MDE" UAB "Apranga HLT" SIA "Apranga HLV" OÜ "Apranga HEST" UAB "Apranga OLT" SIA "Apranga OLV" UAB "Apranga Ecom LT" SIA "Apranga Ecom LV" OÜ "Apranga Ecom EE" C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 49 The change of consumer prices index in the clothing and footwear industry in Baltic retail market in year 2024 compared to the corresponding period of the previous year averaged to around 0.6%. In this period the price index change in Lithuania was -1.1%, Latvia 2.0% and Estonia 0.9%. Lithuania remains the largest market of retail trade of textile, clothing, and footwear in specialized stores in the Baltic countries, generating about 50% of the Baltic countries market turnover. Retail turnover of Group‘s stores by countries (EUR thousand, VAT included): Country 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Lithuania 211 766 196 884 178 024 7,6% 19,0% Latvia 90 746 79 513 70 900 14,1% 28,0% Estonia 51 693 50 009 44 416 3,4% 16,4% Total: 354 205 326 406 293 340 8,5% 20,7% Retail turnover of Group‘s stores by countries (EUR thousand, VAT excluded): Country 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Lithuania 175 337 162 728 147 134 7,7% 19,2% Latvia 75 151 65 716 58 601 14,4% 28,2% Estonia 42 687 41 674 37 016 2,4% 15,3% Total: 293 175 270 118 242 752 8,5% 20,8% The difference between turnover (VAT excluded) shown in the Annual report and retail income disclosed in Note 6 of the Financial statements is due to return of goods (see Note 24). In 2024, the turnover (VAT included, taking into account actual returns during the calendar year 2024, this consideration is also used in all comments below) of the retail chain operated by Apranga Group amounted to EUR 211.8 million in the main domestic market of Lithuania, or by 7.6% more than in 2023. The share of Lithuanian chain turnover comprised 59.8%, or by 0.5 percentage points less than in 2023. The retail turnover from physical stores and online sources of the Apranga Group chain in foreign markets (Latvia and Estonia) reached EUR 142.4 million in 2024, or by 10.0% more, than in 2023. The foreign turnover share in total Group’s turnover has increased from 39.7% to 40.2% during the year. The retail turnover of Apranga Group by quarters (EUR thousand, VAT included): Q1 Q2 Q3 Q4 Year 2024 72 254 89 317 89 812 102 822 354 205 2023 65 123 82 517 83 606 95 159 326 406 2022 52 614 75 077 81 130 84 519 293 340 2024/2023, % 10,9% 8,2% 7,4% 8,1% 8,5% 2024/2022, % 37,3% 19,0% 10,7% 21,7% 20,7% The retail turnover of Apranga Group by quarters (EUR thousand, VAT excluded): Q1 Q2 Q3 Q4 Year 2024 59 817 73 910 74 292 85 156 293 175 2023 53 882 68 280 69 180 78 776 270 118 2022 43 539 62 133 67 141 69 939 242 752 2024/2023, % 11,0% 8,2% 7,4% 8,1% 8,5% 2024/2022, % 37,4% 19,0% 10,7% 21,8% 20,8% The online turnover of the Group was as follows (EUR thousand, VAT included): 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Online turnover 48 428 39 860 33 672 21,5% 43,8% Relative weight in total turnover 13,7% 12,2% 11,5% C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 50 The online turnover of the Group was as follows (EUR thousand, VAT excluded): 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Online turnover 40 759 33 008 27 884 23,5% 46,2% Relative weight in total turnover 13,9% 12,2% 11,5% The Group's online turnover (VAT included) increased by 21,5% in the 12 months of the year, and its relative weight in total turnover increased from 12.2% to 13.7% compared to the corresponding period of the previous year. Retail turnover of Group‘s stores by chains (EUR thousand, VAT included) was as follows: Chain 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Economy 1 32 839 31 535 31 102 4,1% 5,6% Youth 2 84 379 79 346 69 998 6,3% 20,5% Footwear 3 970 4 263 4 679 -6,9% -15,2% Business 3 67 668 62 064 54 100 9,0% 25,1% Luxury 4 34 154 32 087 29 280 6,4% 16,6% Zara 115 524 102 871 89 853 12,3% 28,6% Outlets 15 670 14 240 14 328 10,0% 9,4% Total 354 205 326 406 293 340 8,5% 20,7% 1 Apranga, Tom Tailor, Orsay, Jack&Jones, Vero Moda; 2 Aprangos galerija, Moskito, Mango, Bershka, Pull & Bear, Stradivarius, Oysho, A|X Armani Exchange; 3 City, Massimo Dutti, Marella, Pennyblack, Coccinelle, Tommy Hilfiger, Zara Home, Calvin Klein Underwear, Liu Jo, MAX&Co., Calvin Klein, Boggi; 4 Burberry, Emporio Armani, Boss, Zegna, MaxMara, Weekend MaxMara, Marina Rinaldi, Mados linija, Nude, Sandro, Maje, Hugo. Retail turnover of Group‘s stores by chains (EUR thousand, VAT excluded) was as follows: Chain 12 months 2024 12 months 2023 12 months 2022 2024/2023, % 2024/2022, % Economy 1 27 107 26 094 25 733 3,9% 5,3% Youth 2 69 698 65 650 57 915 6,2% 20,3% Footwear 3 276 3 528 3 873 -7,1% -15,4% Business 3 55 897 51 348 44 761 8,9% 24,9% Luxury 4 28 811 26 567 24 242 8,4% 18,8% Zara 95 328 85 162 74 387 11,9% 28,2% Outlets 13 059 11 768 11 841 11,0% 10,3% Total 293 175 270 118 242 752 8,5% 20,8% 2.2. DEVELOPMENT AND MODERNIZATION OF THE RETAIL CHAIN In 2020-2024 the dynamics of the number of stores and sales area was as follows: 31 12 2024 31 12 2023 31 12 2022 31 12 2021 31 12 2020 The number of stores 171 169 168 169 179 Stores area (thousand sq. m.) 92,0 90,8 90,6 90,6 92,6 During the year 2024 Apranga Group opened 7 new stores, renovated 11 stores and closed 5 stores. Currently Apranga Group operates the chain of 171 stores (103 in Lithuania, 44 in Latvia and 24 in Estonia) covering the gross area of 92.0 thousand sq. m., or by 1.3% more than a year ago. The total area of stores by countries was as follows (thousand sq. m): Country 31 12 2024 31 12 2023 31 12 2022 2024/2023, % 2024/2022, % Lithuania 50,7 49,4 51,0 2,7% -0,4% Latvia 27,9 27,9 26,4 0,0% 5,5% Estonia 13,4 13,5 13,2 -1,0% 1,1% Total: 92,0 90,8 90,6 1,3% 1,5% C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 51 The number of stores by countries was as follows: Country 31 12 2024 31 12 2023 31 12 2022 2024/2023, % 2024/2022, % Lithuania 103 100 100 3,0% 3,0% Latvia 44 44 44 0,0% 0,0% Estonia 24 25 24 -4,0% 0,0% Total: 171 169 168 1,2% 1,8% At 31 December the number of stores by chains was as follows: Chain 31 12 2024 31 12 2023 31 12 2022 2024/2023, % 2024/2022, % Economy 20 20 19 0,0% 5,3% Youth 45 46 48 -2,2% -6,3% Footwear 9 10 11 -10,0% -18,2% Business 44 43 41 2,3% 7,3% Luxury 35 32 30 9,4% 16,7% Zara 9 9 10 0,0% -10,0% Outlets 9 9 9 0,0% 0,0% Total 171 169 168 1,2% 1,8% The net capital expenditure to the retail chain expansion, renovation and modernization amounted to EUR 11.1 million in 12 months of 2024 (see Note 4 “Investments into non-current assets”). Investments (acquisitions) by segments are disclosed in Note 3 (“Segment information”). The Group is not engaged in activities related to research and experimental development, except to the extent of process improvement. Group invests in the latest technology and the latest technology processes. 2.3. MAIN INDICATORS In addition to the key figures defined or specified in the applicable IFRS financial reporting framework, the Group also provides key financial ratios derived from or based on the prepared financial statements. These are known as Alternative Performance Measures (APM). Definitions of APM are provided in the section No. 11 “Alternative Performance Indicators” of this report and on the Group’s website. The Group earned EUR 19.4 million of profit before income tax in 12 months 2024, while profit before taxes amounted to EUR 20.3 million in 12 months of 2023 (decreased by 4.4%). EBITDA of the Group was EUR 41.5 million in 12 months 2024, while the Group had EBITDA of EUR 40.9 million in the same period of 2023 (increased by 1.3%). EBITDA margin has decreased from 15.2% to 14.2% during the year. ROE and ROA ratios increased to 24.1% and 9.7%, respectively. Main Group Indicators 2024 2023 2022 2021 2020 Net sales, EUR thousand 292 937 269 696 242 899 189 745 169 958 Net sales in foreign markets, EUR thousand 117 682 107 277 95 595 68 502 71 424 Gross profit, EUR thousand 132 127 124 142 111 344 82 230 71 146 Gross profit margin, % 45,1% 46,0% 45,8% 43,3% 41,9% Operating profit, EUR thousand 20 954 21 501 19 869 14 278 7 038 Operating profit margin, % 7,2% 8,0% 8,2% 7,5% 4,1% Profit before income tax, EUR thousand 19 434 20 332 18 745 13 211 5 961 Profit before income tax margin, % 6,6% 7,5% 7,7% 7,0% 3,5% Profit for the period, EUR thousand 15 960 16 773 15 635 10 896 4 936 Profit for the period margin, % 5,4% 6,2% 6,4% 5,7% 2,9% EBITDA, EUR thousand 41 457 40 928 38 906 34 076 27 340 EBITDA margin, % 14,2% 15,2% 16,0% 18,0% 16,1% Earnings per share (EPS), EUR 0,29 0,30 0,28 0,20 0,09 Price-to-Earnings ratio (P/E), times 10,1 8,8 7,6 10,7 23,6 Dividend / Profit for the period, % 83,1% 79,1% 99,0% 182,7% 0,0% Return on equity (end of the period), % 24,1% 26,3% 25,1% 14,6% 7,8% Return on assets (end of the period), % 9,7% 10,5% 10,5% 6,6% 3,1% Net debt to equity, % -27,7% -27,7% -36,8% -39,7% -28,5% Current ratio, times 1,5 1,6 1,7 2,0 1,9 * The year 2024 dividends proposed by the Board, not approved. C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 52 In 12 months 2024, the Group‘s gross profit grew slower than the sales. The Group‘s gross profit margin, compared to the same period last year, decreased from 46.0% to 45.1% due to more active sales promotions and higher level of goods inventories throughout the year. The operating expenses of the Group totaled to EUR 111.2 million in 12 months 2024 and increased by 8.3%, comparing to the same period 2023. Operating expenses increased less than sales, which grew by 8.6%. Main Group Indicators 2024 2023 Change Net sales, EUR thousand 292 937 269 696 8,6% Net sales in foreign markets, EUR thousand 117 682 107 277 9,7% Gross profit, EUR thousand 132 127 124 142 6,4% Operating expenses (111 173) (102 641) 8,3% Operating profit, EUR thousand 20 954 21 501 -2,5% Profit before income tax, EUR thousand 19 434 20 332 -4,4% Net profit, EUR thousand 15 960 16 773 -4,8% EBITDA, EUR thousand 41 457 40 928 1,3% The Group’s level of inventories during the last 12 months decreased by 0.9% to EUR 50.1 million. Company’s inventories increased by 3.9% to EUR 28.4 million. For additional information on the operations by countries of the Group refer to Note 4 to the Consolidated financial statements. 2.4. PERSONNEL The number of employees on 31 December 2024 and average salary by categories in 2024 were as follows: Group Company Group Company Employee category Number of employees Average monthly salary, EUR Administration 190 130 4 333 4 857 Stores' personnel 2 030 580 1 337 1 445 Logistics 75 75 1 845 1 845 Total 2 295 785 1 606 2 059 In 2024 the number of employees in the Group and the Company has increased by 46 (+2.0%) and 25 (+3.3%), respectively. The number of employees by education level on 31 December 2024 was as follows: Education level Group Company Higher 458 177 Professional 373 211 Secondary 478 151 Primary 71 10 Student 915 236 Total: 2 295 785 2.5. TRADING INFORMATION The price of the Company shares in 12 months 2024 increased by 10.0% from EUR 2.66 per share to EUR 2.93 per share. The maximum share price for the 12 months period was EUR 3.06 per share, minimum share price - EUR 2.67 per share. The market capitalization of the Company increased from EUR 147 million at the beginning of the year to EUR 162 million at the end of December 2024. The weighted average price of 1 share during the reporting period was EUR 2.86. Company’s share turnover was EUR 6.2 million in 12 months 2024. C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 53 Company and OMX Baltic Benchmark GI index change for the period 2020-2024: 0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1,0 0,40 0,60 0,80 1,00 1,20 1,40 1,60 1,80 2,00 2,20 2,40 2,60 2,80 3,00 3,20 3,40 01.2022 06.2022 12.2022 06.2023 12.2023 06.2024 12.2024 Millions Share price Turnover Share price, in EUR Turnover, EUR million C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 54 3. OPERATING PLANS Apranga Group plans to reach EUR 377 million turnover (including VAT) in 2025, or by 6.4% higher than the year 2024 turnover. In 2025 Apranga Group plans to renovate or open 7-10 stores. The net investment is planned to be about EUR 7-10 million. 4. BUSINESS PHILOSOPHY • We work and strive to work only with the fastest-growing, commercially the most successful global brands and chains operating in different markets and acceptable to our market; • We never make compromises in the selection of the best locations for stores (“Location – more important than money”, “We have to be where we can not not to be”; • We aim to install stores according to the highest European design and technology requirements; • We strive to use in best the power of the obvious market leader, as well as rapid development opportunities in competitive environment. 5. ENVIRONMENTAL PROTECTION The Groups approach to environmental protection is defined by respect and responsibility of own actions. The main areas of interest are defined by the outcomes of the Double Materiality Assessment (DMA) process, which identified the most important environmental topics. This process has also incorporated the interests and perspectives of our stakeholders, ensuring that our approach not only addresses our own operations but also considers our broader impact on the value chain. The Group is yet to adapt Sustainability strategy, nevertheless the main initiatives are focused on sustainable resource use, energy-efficient stores, fair treatment of waste, and working with stakeholders in the value chain. More information about the Group’s environmental protection is presented in the Group’s 2024 Sustainability Statement. 6. CONSOLIDATION In order to ensure the fairness of preparation consolidated financial statements and to reduce associated risks, the unified centralised accounting and business information management system has been implemented in all Group companies. All Group companies use the standard chart of accounts and apply unified accounting principles. More information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the Consolidated financial statements. 7. SECURITIES The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a nominal value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code LT0000102337) that comprise Company‘s share capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange. For more information on the share capital of the Company refer to Note 21 to Consolidated financial statements. Neither Company, nor its subsidiaries directly or indirectly acquired own shares. By the knowledge of the Company’s management, there are no restrictions imposed on transfer of Company’s shares. All Company‘s shares give equal rights to shareholders and there are no shareholders with special control rights. By the knowledge of the Company’s management, there are no restrictions imposed on voting rights. By the knowledge of the Company’s management, there are no agreements among shareholders which may limit transfer of shares, or their voting rights. Each owner of the ordinary registered share has the following property rights: 1) To receive part of the company‘s profit (dividend); 2) To receive a part of the assets of the company in liquidation; 3) To receive shares free of charge if the share capital is increased out of the company‘s funds, except the cases specified in the Law on Companies. 4) To have the pre-emption right to acquire the shares or convertible debenture issued by the company, except in cases when General Shareholder‘s Meeting pursuant to Law on Companies decides to withdraw the pre-emption right in acquiring the company‘s issued shares for all shareholders; 5) As provided by laws to lend to the company, however the company borrowing from its shareholders has no right to mortgage or pledge its assets to shareholders. When the company borrows from a shareholder, the interest may not be higher than the average interest rate offered by commercial banks of the locality where the lender has his/her place of residence or business, which was in effect on the day of conclusion of the loan agreement. In such a case the company and shareholders are prohibited from negotiating a higher interest rate; 6) To receive Company‘s funds in event the share capital is decreased on purpose to pay Company‘s funds to shareholders; 7) Shareholders have other property rights provided by laws of the Republic of Lithuania. C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 55 Each owner of the ordinary registered share has the following non-property rights: 1) To attend and vote in General Shareholder‘s Meetings. One ordinary registered share grants to its owner one vote at the General Shareholders‘ Meeting. The right to vote at the General Shareholder‘s Meeting may be withdrawn or restricted in cases established by laws of the Republic of Lithuania, also in cases when share ownership is contested; 2) To submit to the company in advance the questions related to the issues on the agenda of the general meeting of shareholders; 3) To receive information on the company as provided by Law on Companies and/or by Law on Markets in Financial Instruments; 4) To file a claim to the court requesting compensation of damage to company resulting from non-performance or improper performance of the duties of the Manager of the Company or members of the Board of the company which duties have been prescribed by law and these Articles of Association of the company as well as in other cases as may be prescribed by law; 5) Other non-property rights prescribed by law. At 31 December 2024, the Company had 7 163 shareholders. Company‘s shareholders which owned or had under management more than 5% of share capital were: Shareholder Enterprise code Address Number of shares % of total ownership UAB MG Investment 123249022 Aukštaičių 7, Vilnius, Lithuania 36 169 099 65,4% UAB Minvista 110685692 Aukštaičių 7, Vilnius, Lithuania 5 795 929 10,5% There are no material agreements where the Company is a counterparty and which may come into force, or may change, or may end with the change of control over the Company. Information about related party transactions is provided in the Note 27 to the Consolidated financial statements. At 24 July 2017 the Company concluded an open-ended agreement with SEB bankas AB (entity code: 112021238, address: Konstitucijos av. 24, LT-08105 Vilnius) on supervision of securities accounts. 8. GOVERNANCE REPORT For the Governance Report and the full text of Compliance Report with the Governance Code for the companies listed on the Nasdaq Vilnius stock exchange refer to Annex “Governance Report” to this management report. 9. SUSTAINABILITY STATEMENT The Group’s Sustainability Report is provided in Annex “Sustainability Statement” to this consolidated management report. C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 56 10. REMUNERATION REPORT Company’s Remuneration Policy approved by the General meeting of shareholders is valid and applicable at the Company. Remuneration Policy of the Company establishes the essential requirements and principles based on which remuneration is paid to the Company’s General Manager and to the members of the Management Board of the Company. The Supervisory Board is not formed in the Company. No agreements are concluded with the Members of the Management Board regarding their activities as Members of the Management Board in the Company. Only Independent Members of the Management Board of the Company are remunerated for their work at the Board. The Members of the Management Board of the Company, who are also employees of the Company, receive remuneration only for the direct duties they perform under the employment contract, i.e. their remuneration for direct functions in the Company and being a Member of the Board (performance of the duties of member of the Board) are not related in any way and are not dependent on each other. The Members of the Management Board of the Company, who are not employees of the Company or do not serve as Independent Members of the Management Board, are not additionally incentivised, they are not paid for their work in the Management Board of the Company, therefore, such members of the Board perform their duties of a member of the Management Board of the Company free of charge. The employment contract with the Head of the Company is concluded for an indefinite period. The Head of the Company, as provided by the Law on Companies, is elected and removed from office, his remuneration is determined, his job description is approved, he is promoted and penalized based on the Management Board decision. In his / her activities, the Head of the Company follows the laws, other legal acts, the Company's Articles of Association, decisions of the General Meeting of Shareholders, as well as decisions of the Management Board. The amounts of allowances, notice periods related to the termination of employment or term of office are determined taking into account the requirements established in the specific labour laws. Employment contracts with the Head of the Company are not normally subject to prior agreements on severance pay, supplementary pensions or early retirement arrangements. The remuneration of the Head of the Company consists of: - a fixed part of the remuneration, which is agreed upon and approved by the Management Board of the Company in each individual case and which does not change and is paid to the Head of the Company on a monthly basis, regardless of the Company's performance; - a variable part of remuneration, which depends on the performance of the Company, including its subsidiaries (hereinafter - the Group), i.e. this is a concrete percentage of Group's profit, which is approved by the Management Board of the Company. This variable part of the remuneration is paid once a calendar quarter, based on the Group's results for the previous quarter. The ratio of variable to fixed part depends only on the Group's performance. The amount of variable remuneration (as a percentage of the Group's profit) for the Head of the Company is determined and approved by the Management Board of the Company so as to comply with the Company's and the Group's business strategy, long-term goals and operational interests, to ensure shareholders' interests, to promote sound and efficient management and risk management to the extent of decision making, would help to avoid conflicts of interest, ensure compliance with the code of ethics and conduct. There are no agreements between the Company, members of its management bodies, or its employees regarding special compensations in case of their resignation, or dismiss without legitimate reason, or the end of their duties connected with the change of the Control over the Company. Annual remuneration for 2024 year of the members of the Management Board - the Company's employees, EUR thousand (before taxes): Name, Surname Position Fixed part Variable part Total Variable part, % Darius Juozas Mockus Chairman of the Board - - - Vidas Lazickas Member of the Board - - - Rimantas Perveneckas General Director 248 505 753 67% Ilona Simkuniene Member of the Board, Purchasing Director 150 316 465 68% Ramunas Gaidamavicius Member of the Board, Development Director 103 253 356 71% Jonas Jukštys Member of the Board, independent 12 - 12 - Gintaras Juškauskas Member of the Board, independent 12 - 12 - C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 57 Annual remuneration and Group’s performance in 2020-2024: 2024 2023 2022 2021 2020 Remuneration, EUR thousand Rimantas Perveneckas 753 836 767 487 430 Ilona Šimkūnienė 465 514 465 307 265 Ramūnas Gaidamavičius 356 394 355 241 204 Average Employee Total Remuneration Costs 19,3 18,4 17,3 13,1 10,0 Group performance Net sales, EUR thousand 292 937 269 696 242 899 189 745 169 958 EBT, EUR thousand 19 434 20 332 18 745 13 211 5 961 EBITDA, EUR thousand 41 457 40 928 38 906 34 076 27 340 * Average employee total remuneration costs ratio is computed using a total headcount, including part-time employees. Part-time employees make up more than half of the total Group‘s employees. The Management Board members and the Head of the Company do not receive any other parts of remuneration, bonuses, premiums, incentives other than those provided for in Remuneration Policy. The Management Board members and the Head of the Company have not received any remuneration from other companies belonging to the Group. C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 58 11. ALTERNATIVE PERFORMANCE MEASURES With regard to the requirements of the European Securities and Markets Authority (ESMA) Guidelines on Alternative Performance Measures, an overview of the Alternative Performance Measures (APM) used, their definition and calculation are provided below and also on Apranga APB website at: https://aprangagroup.lt/en/investors/investor-relations/alternative- performance-measures Performance measure Formula and components used for the calculation Interpretation Net sales A sum of stores income, online income, wholesales and other income from contracts with customers Revenue from contracts with customers EBITDA Profit before finance income and finance costs, income tax, depreciation and amortization EBITDA is used as a relevant measure for investors to be able to understand profit generation before investments in fixed assets. It also shows the ability to repay loans and pay interests Alternative calculation: EBIT before depreciation and amortization. EBITDA margin, % EBITDA divided by net sales Shows the profitability of the company and is used to compare companies in the same business sector EBIT Profit before finance income and finance costs and income tax A business performance indicator that shows the company's ability to make a profit, regardless of the method of financing (then determines the optimal use of debt vs. equity) EBIT margin, % EBIT divided by net sales Shows the profitability of the company and is used to compare companies in the same business sector Net investment Purchases of long-term assets – Disposal of long-term assets In the activities of Apranga APB, part of the investment into installation of the store is often disposed to the owner of the premises. Therefore, to reflect the real impact on cash flows and operating costs (depreciation), it is appropriate to use the net investment measure Net debt Borrowings - Cash and cash equivalents Shows the level of real debt to financial institutions (Non-current and current borrowings, excluding IFRS 16 lease liabilities, less cash and cash equivalent) Net debt to equity Net debt / Equity (at the end of the reporting period) Shows the level of financial debts compared to equity. The ratio is used to evaluate a company's financial leverage. The debt/equity ratio is also referred to as a risk or gearing ratio. The higher the value of this ratio, the lower the solvency of the company Earnings per share (EPS) Profit for the period / Number of shares Earnings per share serve as an indicator of a company's profitability. It shows the portion of a company's profit allocated to each share of common stock Price-to-Earnings ratio (P/E) Share price (at the end of the reporting period) / Earnings per share (EPS) The price-earnings ratio indicates the price investors pay for one euro of the company’s earnings. This ratio is very versatile and is suitable for comparing not only for companies of the same sector but also very different companies Dividend payout ratio, % Dividend / Profit for the period Shows which the part of the company's profit is paid by dividends Return on equity (ROE) Profit for the period / Equity (at the end of the reporting period) The ratio shows the percentage return the company earns from equity. Higher ROE ratio is considered as better Return on assets (ROA) Profit for the period / Assets (at the end of the reporting period) The ratio shows the percentage return the company earns from assets. The higher the ratio, the more efficient use of assets Current ratio Current Assets (at the end of the reporting period) / Current Liabilities (at the end of the reporting period) The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations C O N S O L I D A T E D M A N A G E M E N T R E P O R T 3 . 1 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 59 12. PUBLICLY ANNOUNCED INFORMATION The Company in 2024 publicly announced and broadcasted through Nasdaq Vilnius Globe Newswire and own webpage the following information: Date Title 2024-01-03 Turnover of Apranga Group in December 2023 and total year 2023 2024-02-01 Turnover of Apranga Group in January 2024 2024-02-28 Apranga Group interim information for 12 months of 2023 2024-03-01 Turnover of Apranga Group in February 2024 2024-04-02 Turnover of Apranga Group in March 2024 2024-04-03 Notice of the Annual General Meeting of APB „APRANGA“ shareholders 2024-04-03 Draft resolutions of the Annual General Meeting of APB APRANGA shareholders to be held on April 30th, 2024 2024-04-26 Apranga Group interim report for 3 months of 2024 2024-04-30 Resolutions of the Annual General Meeting of Apranga APB shareholders 2024-04-30 Apranga APB annual report 2023 2024-05-02 Turnover of Apranga Group in April 2024 2024-05-06 Ex-dividend date and procedure for the payment of Apranga APB dividends for the year 2023 2024-05-10 Notification on Apranga APB manager's related party transactions 2024-06-03 Turnover of Apranga Group in May 2024 2024-07-01 Turnover of Apranga Group in Jue 2024 2024-07-26 Apranga Group interim report for 6 months of 2024 2024-08-01 Turnover of Apranga Group in July 2024 2024-09-02 Turnover of Apranga Group in August 2024 2024-10-01 Turnover of Apranga Group in September 2024 2024-10-29 Apranga Group interim information for 9 months of 2024 2024-11-04 Turnover of Apranga Group in October 2024 2024-12-02 Turnover of Apranga Group in Novermber 2024 2024-12-10 The turnover and expansion plans of Apranga Group in 2025 2024-12-19 Apranga Group investor's calendar for the year 2025 2024-12-27 Apranga Group revised investment forecast for the year 2024 Contents of above mentioned announcements can be obtained on Nasdaq Vilnius Stock Exchange webpage https://nasdaqbaltic.com/statistics/en/instrument/LT0000102337/news? and on Company‘s webpage http://aprangagroup.lt/en/investors/news-and-material-events. 202 4 G O V E R N A N C E R E P O R T G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 61 The public trade company APRANGA (hereinafter referred to as the “Company”) essentially follows the Corporate Governance Code for the Companies Listed on the Nasdaq Vilnius stock exchange adopted and valid as on 31 December 2024. Corporate Governance Code is publicly available at: https://nasdaqbaltic.com/market-regulation/nasdaq-vilnius-rules/ RISKS In its activities the Group is exposed to various risks (regulatory, operational, investment, market, competition, economic cycle, macroeconomic factors, etc.), but only some of which may significantly affect the Group's results. The Group's activities are significantly influenced by overall economic situation (and especially by the economic cycles) in countries where the Group operates. Considering risks related to Russia’s invasion to Ukraine, the restrictive measures imposed had no significant impact on the Company’s performance, no operations had been suspended and no significant direct losses related to the restrictive measures had been incurred, however, the risk remains and will be monitored and managed closely. The competition-related risk. In its activities the Group is exposed to increasingly intense competition in the clothing market. The Group, in order to manage this risk and to meet the customer service quality standard requirements, continuously carries out chain expansion and modernization, improves its sales and marketing strategies, carries out market research, improves customer service and implements a consistent business process optimization and cost reduction program. In its activities, the Group consistently follows the principles of transparency and fair competition. Weather conditions influences the Group's activity and results to some extent as well. The Group's operating results are planned assuming that the weather conditions will be normal, i.e., usual for the Baltic region. Unfavorable weather conditions may negatively affect the Group's turnover, at the same time, financial performance and inventories level. The main features of the Group’s internal control and risk management systems related to preparation of consolidated financial statements. The Group’s consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. Chief financial officer (CFO) of the Company and the Audit Committee supervises preparation of the consolidated financial statements, systems of internal control and financial risk management and how the Company follows legal acts that regulate preparation of consolidated financial statements. CFO of the Company is responsible for the preparation supervision and the final revision of the consolidated financial statements. He constantly reviews International Financial Reporting Standards (IFRS) in order to implement in time IFRS changes, analyses Company’s and group’s significant transactions, ensures collecting information from the Group’s companies and timely and fair preparation of this information for the financial statements. In order to ensure that the consolidated financial statements are prepared correctly and on time, the Group has established appropriate rules and the procedures which regulates the principles, methods, and rules of accounting and preparation and presentation of consolidated financial statements. More information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the Consolidated financial statements and in part 6 to the Consolidated Management report. The types of financial risks that Group faces and risk management are described in Note 3 to the Consolidated Financial Statements. The latest information on the risks related to the Group is also provided in Note 2.2 and Note 26 to the Consolidated Financial Statements. CORPORATE GOVERNANCE The management bodies of the Company specified in the Articles of Association are as follows: General Shareholders' Meeting, a collegial management body – Board, and a single-person management body – Manager of the Company. The Law of the Republic of Lithuania on Companies provides that Lithuanian companies at their discretion could have only one collegial governing body. There is no Supervisory Council in the Company. The Board consists of six members who are elected for the term of four years, represents the shareholders, and performs supervision and control functions. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 62 Competence of General Shareholders‘ Meeting is the same as specified by the Law on Companies. The General Meeting shall have the exclusive right to: 1) Amend the Articles of Association of the Company; 2) Change the registered office of the Company; 3) Elect the members of the Board; 4) Remove the Board or its members; 5) Select and remove the firm of auditors, set the conditions for auditor remuneration; 5 1 ) Select and remove an auditor, a firm of auditors or an independent sustainability assurance service provider to provide sustainability assurance services; 6) Take a decision on the approval of the Remuneration policy; 7) Determine the class, number, nominal value and the minimum issue price of the shares issued by the Company; 8) Take a decision regarding conversion of shares of one class into shares of another class, approve share conversion procedure; 9) Take a decision to change the number of shares of the same class issued by the Company and the nominal value of the share, without changing the size of the authorized capital; 10) Approve the set of annual financial statements; 11) Take a decision on profit/loss appropriation; 12) Take a decision on the formation, use, reduction and liquidation of reserves; 13) Approve a set of interim financial statements compiled in order to make a decision on the allocation of dividends for a period shorter than the financial year; 14) Take a decision on the allocation of dividends for a period shorter than the financial year; 15) Take a decision to issue convertible debentures; 16) Take a decision to withdraw for all the shareholders the right of pre-emption in acquiring the shares or convertible debentures of a specific issue of the Company; 17) Take a decision to increase the authorised capital; 18) Take a decision to reduce the authorised capital, except where otherwise stipulated by the Law on Companies; 19) Take a decision on approval of the Rules for granting shares to employees and/or members of bodies; 20) Take a decision for the Company to purchase own shares; 21) Take a decision on the reorganisation or division of the Company and approve the terms of reorganisation or division; 22) Take a decision to transform the Company; 23) Take a decision to restructure the Company; 24) Take a decision to liquidate the Company, cancel the liquidation of the Company, except where otherwise provided by the Law on Companies; 25) Elect and remove the liquidator of the Company, except where otherwise provided by the Law on Companies. Competence of General Shareholders‘ Meeting additionally includes adoption of the resolutions on the composition of the Audit Committee of the Company, including the appointment and removal of individual members of the Audit Committee, and approving the charter of the Audit Committee. General Shareholders' Meeting has a right to amend the Articles of Association under the qualified majority of votes, which may not be less than 2/3 of all votes the shareholders attending at the Meeting, except for the exceptions specified by Law on Companies. For more information on the rights and restrictions granted to shareholders, see Note 7, Securities in Management report. The Board, consisting of six members, is elected by General Shareholders' Meeting for a 4 year term. Company‘s Board members election and revocation procedure is the same as specified by Law on Companies. Since supervisory board is not formed in the Company, the Board performs, among other things, the supervisory functions established by the Law on Companies. Company’s Board activity is conducted by chairman of the Board. The Board elects its chairman from among its members. The Board continues in office for the period established in the Articles of Association or until a new Board is elected and assumes the office but not longer than until the annual General Shareholders' Meeting during the final year of its term of office. Board of Company considers and approves: 1) The activity strategy of the Company; 2) The annual and interim report of the Company; 3) The management structure of the Company and the positions of the employees; 4) The positions to which employees are recruited by competition; 5) Regulations of branches and representative offices of the Company; 6) Description of the procedure for participation and voting in the general meeting of shareholders by means of electronic communication; 7) Annual budget. The Board adopts the following resolutions: 1) Resolutions for the Company to become an incorporator or a member of other legal entities; 2) Resolutions to establish branches and representative offices of the Company; 3) Resolutions to invest, dispose of or lease the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated individually for every type of transaction); 4) Resolutions to pledge or mortgage the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated for the total amount of transactions); G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 63 5) Resolutions to offer surety or guarantee for the discharge of obligations of third persons the amount whereof exceeds 1/20 of the share capital of the Company; 6) Resolutions to acquire the tangible long-term assets the price whereof exceeds 1/20 of the share capital of the Company; 7) Resolutions regarding issuance of debenture of the Company (except issuance of convertible debenture); 8) Other resolutions within the competence of the Board as prescribed by the Law on Companies, Articles of Association or the resolutions of the General Shareholders' Meeting. The Board analyses and assesses the documents submitted by the Manager of the Company on: 1) The implementation of the activity strategy of the Company; 2) The organisation of the activities of the Company; 3) Financial standing of the Company; 4) The results of economic activities, income and cost estimates, the stocktaking data and other accounting data of changes in the assets. The Board elects and removes from office the Manager of the Company, fixes his/her remuneration and sets other terms of the employment agreement, approves his/her job description, provides incentives and imposes penalties. The Board analyses and assesses the Company's draft set annual financial statement and draft of profit/loss distribution and together with feedback, proposals and with the annual report of the Company submits them to the General Shareholders' Meeting. The Board is responsible for convening and arrangement of the General Shareholders' Meeting in due time. The Board performs the supervisory functions set out in Article 34, Part 11 of the Law on Companies. The Board analyzes and evaluates the draft of the Company's remuneration policy and submits it together with feedback and proposals to the General Meeting of Shareholders. Each member of the Board is entitled to initiate convening of the Board meeting. The Board may adopt resolutions and its meeting shall be deemed to have taken place when the meeting is attended by 2/3 and more of the members of the Board. The resolution of the Board is adopted if more votes for it are received than the votes against it. In the event of a tie, the Chairman of the Board shall have the casting vote. The member of the Board is not entitled to vote when the meeting of the Board discusses the issue related to his/her activities on the Board or the issue of his/her responsibility. The Board also assumes the responsibilities set out in the Group sustainability statement and performs the functions set out therein. The Manager of the Company – General Director - is a single-person management body of the Company. The Manager of the Company acts at his/her own discretion in relation of the Company with other persons. The Manager of the Company is elected and removed from office by the Board which also fixes his/her salary, approves his/her job description, provides incentives and imposes penalties. The employment agreement is concluded with the Manager of the Company and is signed on behalf of the Company by the Chairman of the Board or other person authorized by the Board. In his/her activities the Manager of the Company complies with laws and other legal acts, Articles of Association, General Shareholders' Meeting resolutions, Board resolutions, his/her job descriptions. The Manager of the Company acts on behalf of the Company and is entitled to enter into the transactions at his/her own discretion. The Manager of the Company may conclude the following transactions provided that there is a decision of the Board to enter into these transactions: to invest, dispose of or lease the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated individually for every type of transaction); to pledge or mortgage the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated for the total amount of transactions); to offer surety or guarantee for the discharge of obligations of third persons the amount whereof exceeds 1/20 of the share capital of the Company; to acquire the tangible long-term assets the price whereof exceeds 1/20 of the share capital of the Company as well as to conclude transactions with related parties as provided by Law on Companies. The Manager of the Company is responsible for: 1) The organization of the Company‘s activity and implementation of its objectives; 2) The drawing up of the set of annual financial statements and the drafting of the annual report of the Company; 3) Preparation of the draft description of the procedure for participation and voting in the general meeting of shareholders by means of electronic communication; 4) The drawing up of a draft of procedure of the assessment and conditions for transactions with related parties that are concluded under normal market conditions in the course of normal economic activity; 5) The drawing up of a draft remuneration policy; 6) The drawing up of a draft remuneration report; 7) Public announcement of the remuneration policy and remuneration report on the Company's website; 8) Concluding an agreement with the auditor, firm of auditors and/or independent sustainability assurance service provider; G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 64 9) Submission of information and documents to the shareholders, General Shareholders' Meeting and the Board in cases prescribed by Law on Companies or at their request; 10) Submission of the documents and data of the Company to manager of the Register of Legal Entities; 11) Submission of documents to the Bank of Lithuania and Central Securities Depository; 12) Public announcement of information prescribed by Law on Companies in a source indicated in Articles of Association; 13) Submission of information to shareholders; 14) Preparation of the draft decision of the distribution of dividends for the period, shorter than a financial year, composition of the set of the interim financial reports and the preparation of the interim report for the decision of the distribution of dividends for the period, shorter than a financial year; 15) Notification to the shareholders and the Board about the most important events that have a significance for the company's activities 16) Preparation of draft rules for granting shares; 17) The performance of other duties prescribed by laws as well as in the Articles of Association and the job descriptions of the Manager of the Company. The Manager of the Company organizes daily activities of the Company, hires and dismisses employees, concludes and terminates employment contracts with them, provides incentives and imposes penalties. The Manager also assumes the responsibilities set out in the Group sustainability statement and performs the functions set out therein. The Manager of the Company is responsible for preparation of the draft share subscription agreement and its data correctness. The Manager of the Company issues authorizations and procuration within the scope of its competence. The Manager of the Company is accountable and regularly reports to the Board on the implementation of Company‘s activity strategy, the organization of the Company‘s activity, the financial standing of the Company, the results of economic activity, the income and cost estimates, the stocktaking data and other accounting data of changes in the assets. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 65 MANAGEMENT OF THE COMPANY BOARD OF THE COMPANY On 28 April 2022 the Annual General Meeting of Company shareholders elected Company‘s members of the Board for new 4- year term. 27 th April 2026 is the end term for Company‘s Board. Company’s Board consist of six members, two of them are independent. Darius Mockus Chairman of the Board Darius Mockus (born in 1965) - Chairman of the Board since 2 May 2002 (member of the Board since 23 March 1995). Education: Vilnius University, Faculty of Economics, Industrial Planning. He has no Company shares. With related companies Minvista UAB (Code of Enterprise: 110685692; Registered office: Aukštaičių g. 7, Vilnius) and MG Investment UAB (Code of Enterprise: 123249022; Registered office: Aukštaičių g. 7, Vilnius) he has 41 965 028 shares, representing 75.90% of the share capital and votes. Information on current management positions in other companies: Company name Company code Registered office Current position UAB MG grupė 125459336 Aukštaičių g. 7, Vilnius, Lithuania President - the main position UAB MV GROUP 125313192 Aukštaičių g. 7, Vilnius, Lithuania Chairman of the Board UAB DARNU GROUP 123010339 Aukštaičių g. 7, Vilnius, Lithuania Chairman of the Board Information on shareholdings in other companies above 5%: MG Grupė UAB - 100% of the share capital; Minvista UAB – 100% of the share capital. Information about participation in other organizations: President of Honour of the Lithuanian Tennis Union. Ilona Šimkūnienė Member of the Board, Purchasing Director Ilona Šimkūnienė (born in 1963) - Apranga group Purchasing Director, Member of the Board of APB Apranga since 27 March 1998, in the Company since 1985. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics. She has no Company shares. Information on positions in other companies: Company name Company code Registered office Current position UAB Apranga LT 300021271 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga BPB LT 300509648 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga PLT 300551572 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga SLT 301519684 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga MLT 302627022 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga HLT 304042131 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga OLT 304757395 Ukmergės 362, Vilnius, Lithuania Chairman of the Board UAB Apranga Ecom LT 304184173 Ukmergės 362, Vilnius, Lithuania Chairman of the Board Apranga LV SIA 40003672631 Elizabetes iela 51, Riga, Latvia Chairman of the Board Apranga BPB LV SIA 40003887840 Elizabetes iela 51, Riga, Latvia Chairman of the Board G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 66 Company name Company code Registered office Current position Apranga PLV SIA 40003887747 Elizabetes iela 51, Riga, Latvia Chairman of the Board Apranga SLV SIA 50103201281 Elizabetes iela 51 - 1A, Riga, Latvia Chairman of the Board Apranga MLV SIA 40103486301 Elizabetes iela 51 - 1A, Riga, Latvia Chairman of the Board Apranga HLV SIA 40203202205 Elizabetes iela 51 - 1A, Riga, Latvia Chairman of the Board Apranga OLV SIA 50203162031 Elizabetes iela 51 - 1A, Riga, Latvia Chairman of the Board Apranga Ecom LV SIA 40103972857 Elizabetes iela 51 - 1A, Riga, Latvia Chairman of the Board Apranga Estonia OU 11026132 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga BEE OU 11419148 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga PB Trade OU 11530250 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga ST Retail OU 11530037 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga MDE OU 12617929 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga HEST OU 14075697 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga Ecom EE OU 14004869 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Has no shareholdings in other companies above 5%. Vidas Lazickas Member of the Board Vidas Lazickas (born in 1965) - Member of the Board of APB Apranga since 29 April 2011. Education: Vilnius University, Faculty of Economics, specialization in Production Management and Organization. He has 265 138 shares of the Company, representing 0.48% of the share capital and votes. Information on current management positions in other companies: Company name Company code Registered office Current position UAB MG Grupė 125459336 Aukštaičių g. 7, Vilnius, Lithuania Economics and Finance Director - the main position UAB MG Investment 123249022 Aukštaičių g. 7, Vilnius, Lithuania General Director UAB Eminta 303140423 Aukštaičių g. 7, Vilnius, Lithuania Director UAB Euvalda 123248988 Aukštaičių g. 7, Vilnius, Lithuania Director UAB MG Media 211616910 Aukštaičių g. 7, Vilnius, Lithuania General Director UAB Minvista 110685692 Aukštaičių g. 7, Vilnius, Lithuania Director UAB MV GROUP Distribution LT 121702328 Aukštaičių g. 7, Vilnius, Lithuania Chairman of the Board UAB Laisvas ir nepriklausomas kanalas 123026090 Šeškinės g. 20, Vilnius, Lithuania Chairman of the Board UAB Mediafon“ 124424581 Olimpiečių g. 1 - 31, Vilnius, Lithuania Chairman of the Board UAB Mediafon Carrier Services 304065315 Olimpiečių g. 1 - 31, Vilnius, Lithuania Chairman of the Board UAB Mediafon Datapro 304065322 Olimpiečių g. 1 - 31, Vilnius, Lithuania Chairman of the Board UAB MV GROUP 125313192 Aukštaičių g. 7, Vilnius, Lithuania Member of the Board UAB MV GROUP Asset Management 304145213 Aukštaičių g. 7, Vilnius, Lithuania Member of the Board Įmonių grupė Alita AB 302444238 Miškininkų g. 17, Alytus, Lithuania Member of the Board OU MV GROUP Distribution EE 11021347 Kalmari tee 10, Rae vald, Harjumaa, Estonia Member of the Board SIA MV GROUP Distribution LV 40003787568 Medus iela 7, Ryga, Latvia Member of the Board MV GROUP Distribution PL Sp.Zo.o 140330387 22 Annopol Street, 03-236 , Warsaw, Poland Member of the Board AB MV GROUP Production 132082782 Aukštaičių g. 7, Vilnius, Lithuania Member of the Board UAB DARNU GROUP 123010339 Aukštaičių g. 7, Vilnius, Lithuania Member of the Board Has no shareholdings in other companies above 5%. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 67 Ramūnas Gaidamavičius Member of the Board, Development Director Ramūnas Gaidamavičius (born in 1968) - APB Apranga group Development Director, Member of the Board of APB Apranga since 30 April 2010, in the Company since 2002. Education: Vilniaus University of Technology, Faculty of Mechanics, specialization in Machine Building. He has 5 000 shares of the Company, representing 0.01% of the share capital and votes. Information on positions in other companies: Company name Company code Registered office Current position UAB Apranga LT 300021271 Ukmergės 362, Vilnius, Lithuania Member of the Board Apranga SIA 40003610082 Elizabetes iela 51, Riga, Latvia Chairman of the Board Apranga LV SIA 40003672631 Elizabetes iela 51, Riga, Latvia Member of the Board Apranga BPB LV SIA 40003887840 Elizabetes iela 51, Riga, Latvia Member of the Board Apranga PLV SIA 40003887747 Elizabetes iela 51, Riga, Latvia Member of the Board Apranga SLV SIA 50103201281 Elizabetes iela 51 - 1A, Riga, Latvia Member of the Board Apranga MLV SIA 40103486301 Elizabetes iela 51 - 1A, Riga, Latvia Member of the Board Apranga HLV SIA 40203202205 Elizabetes iela 51 - 1A, Riga, Latvia Member of the Board Apranga OLV SIA 50203162031 Elizabetes iela 51 - 1A, Riga, Latvia Member of the Board Apranga Ecom LV SIA 40103972857 Elizabetes iela 51 - 1A, Riga, Latvia Member of the Board Apranga OU 11274427 Rotermanni mnt 18/1, Tallinn, Estonia Chairman of the Board Apranga Estonia OU 11026132 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga BEE OU 11419148 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga PB Trade OU 11530250 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga ST Retail OU 11530037 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga MDE OU 12617929 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga HEST OU 14075697 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Apranga Ecom EE OU 14004869 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Has no shareholdings in other companies above 5%. Jonas Jokštys Member of the Board, independent Jonas Jokštys (born in 1982) – Member of Board of APB Apranga since 29 th April 2021. Education: Stocholm School of Economics in Riga (2000-2003) Bachelor of Economics and Business Administration and London School of Economics and Political Science (2005-2006) Master of Philosophy and Political Science. He has no Company shares. Information on positions in other companies: Company name Company code Registered office Current position UAB Elmoris VG 305710509 Titnago g. 13A, Vilnius, Lithuania Member of the Board UAB Vendos 304472649 S. Konarskio g. 2-29, Vilnius, Lithuania Director APB Imum 305646914 S. Konarskio g. 2-29, Vilnius, Lithuania Director UAB Žemaitijos žemė 305704335 Vaidilutės g. 61, Vilnius, Lithuania Director Has no shareholdings in other companies above 5%. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 68 Gintaras Juškauskas Member of the Board, independent Gintaras Juškauskas (born in 1970) - Member of Board of APB Apranga since 29th April 2021. Education: Vilnius University, Finance faculty (1998-2003), Master of Economics and Vilnius University, Law faculty (2010-2013), Master of Law. He has no Company shares. Information on positions in other companies: Company name Company code Registered office Current position Gintaro Juškausko IĮ 302720373 Vanaginės g. 87, Vilnius, Lietuva Director UAB Merits 301678932 Gedimino pr. 54B-1, Vilnius, Lietuva Associate Partner Has no shareholdings in other companies above 5%. MANAGEMENT OF THE COMPANY AND THE GROUP The key management members of the Company and the Group as of 31 December 2024: Name, Surname Position Number of shares owned Part in the share capital Start at company Rimantas Perveneckas General Director 800 770 1,45% 1983 Ilona Šimkūnienė Purchasing Director - - 1985 Ramūnas Gaidamavičius Development Director 5 000 0,01% 2002 Gabrielius Morkūnas Chief Financial Officer - - 2021 Aušra Tartilienė Inditex chain Director - - 1989 Irma Marcinkienė Sales and Marketing Director 1 863 0,003% 2000 Audronė Martinkutė Personnel Director 360 0,001% 2002 * with related parties Information about General director of the Company and the Group: Rimantas Perveneckas General Director Rimantas Perveneckas (born in 1960) - APB Apranga group General Director, Member of the Board of APB Apranga since 23 February 1993, in the Company since 1983. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics. He has 800 770 shares of the Company, representing 1.45% of the share capital and votes. Has no positions in other companies. Has no shareholdings in other companies above 5%. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 69 Information about CFO of the Company and the Group: Gabrielius Morkūnas Chief Financial Officer Gabrielius Morkūnas (born in 1990) - Apranga Group Finance and Economics Director, in the Company since 2021. Education: Mykolo Romerio University, Bachelor of Economics and Finance. Information on positions in other companies: Company name Company code Registered office Current position UAB Apranga BPB LT 300509648 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga PLT 300551572 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga SLT 301519684 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga MLT 302627022 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga HLT 304042131 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga OLT 304757395 Ukmergės 362, Vilnius, Lithuania Member of the Board UAB Apranga Ecom LT 304184173 Ukmergės 362, Vilnius, Lithuania Member of the Board Apranga OU 11274427 Rotermanni mnt 18/1, Tallinn, Estonia Member of the Board Has no shareholdings in other companies above 5%. AUDIT COMMITTEE The Audit Committee consists of 3 members, 2 of them are independent. The Audit Committee is elected for a 4-year term. Committee members are appointed and dismissed by the Company's general meeting of shareholders at the proposal of the Management Board. The main functions of the Audit Committee are: - To inform the General Manager of the Company of the outcome of the statutory audit and assurance of sustainability reporting; - To monitor the financial and sustainability reporting processes and provide recommendations or proposals for ensuring the reliability of the processes; - To monitor the effectiveness of the Company’s internal quality control and risk management systems, having impact on the financial and/or sustainability reporting of the Company; - To monitor the statutory audit of the annual and consolidated financial statements and the assurance of annual and consolidated sustainability reporting; - To review and monitor the independence of the statutory auditors, the audit firms or the independent assurance service providers; - To be responsible for the procedure for the selection of statutory auditor(s) or audit firm(s); - To provide opinions on transactions concluded by the Company with related parties. The General Shareholders Meeting hold on 27 April 2017 approved the Charter of the Audit Committee. The General Shareholders Meeting hold on 27 April 2021 approved three members of the Audit Committee for the new 4-year term: Rita Zakalskienė (the independent member of the Committee, Chair of the committee), Justina Puškorė (the independent member of the Committee) and Rasa Rulevičiūtė (an employee of the Company). In 2024, three meetings of the Audit Committee were held. During these meetings, the committee discussed matters related to the external auditors' observations on the 2023 financial statements, the planned scope and timeline of the 2024 audit, and other relevant topics. Information on major share packages controlled either directly or indirectly Details of the shares are provided in Note 14 to the Consolidated financial statements, Investments In Subsidiaries. Information on transactions with related parties No transactions with related parties as provided for in art. 37(2) of the Law on Companies of the Republic of Lithuania were concluded in 2024. Information on shareholders having special control rights G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 70 All shares of the Company are of one class ordinary registered shares granting their owners (shareholders) equal rights. Details of the shares are provided in Note 7 to the Consolidated financial statements, Securities . Information of amendments to the Company‘s Articles of Association In 2024, the Company's Articles of Association were amended by the decision of the Ordinary General Meeting of Shareholders. The essential amendments to the Articles of Association included: the abandonment of the use of the seal in the Company's activities, the expansion of the Board's functions - approval of the annual budget, and the right of the Company's Manager to grant temporary authorization to act as the Company's Manager in the event of his/her business trips or temporary unemployment. Other amendments are related to the change in the provisions of the Law on Companies. Information on all agreements between shareholders The Company does not have any information on agreements between shareholders. Information on the varied policy applicable to the election of the Company‘s chief manager, the members of governing and supervisory boards The Company does not have the variety policy applicable to the election of the chief manager and the members of governing and supervisory bodies. During the procedure of selection of candidates to the Company‘s board of directors, governing and supervisory boards, the candidates shall be subject to requirements that do not discriminate a candidate on grounds of age, sex,education, or professional experience. During the selection of a candidate, the Company does not set any restrictions for nomination of a candidature on grounds of sex or age. Considering the specificity of the Company‘s business activity unbiased requirements, which are only related to the functions and competences of the members of a governing boards and the professional experience and education proportionate to these functions and competences are set. Disclosure of Compliance with the Corporate Governance Code for the Companies Listed son NASDAQ Vilnius The public trade company APRANGA (hereinafter referred to as the “Company”), acting in compliance with Article 12(3) of the Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB NASDAQ OMX Vilnius, hereby discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific provisions or recommendations that are not complied with must be indicated and the reasons for such non-compliance must be specified. In addition, other explanatory information indicated in this form must be provided. Summary of the Corporate Governance Report: Apranga APB is the parent company of the Group, registered in the Republic of Lithuania. At the end of 2024, it managed 25 daughter companies established in the three Baltic States. The Group’s core business is the retail sale of clothing. Of the 26 companies that make up the Group, 23 represent specific brands (Zara, Bershka, Pull&Bear, Stradivarius, Massimo Dutti, Zara Home and Oysho) on the basis of franchise agreements concluded with Inditex, a leader in the global apparel retail market. Three companies (APB Apranga, SIA Apranga and OÜ Apranga) represent brands other than Inditex (single-brand stores) as well as their own retail chains (multi-brand stores): Apranga, Apranga Galerija, City, Mados Linija, etc. Corporate governance activities are concentrated in the Group’s parent company, APB Apranga, which coordinates finances, legal, strategic planning and control, human resources and training, business management and development, information technology, ordering and pricing, marketing and advertising, and other general areas within the Group’s companies. The Group uses a centralized management model, and practically all management functions are concentrated at the Group’s headquarters in Vilnius. The Group’s main company, APB Apranga, has been listed on the Nasdaq Vilnius Stock Exchange since 1997. The company has been on the Baltic Main List since 2005. The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares (ISIN code LT0000102337) with a nominal value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners equal rights. On 31 December 2024, APB Apranga had 7 163 shareholders. The main parent company, whose financial statements are made public, is MG grupė, UAB. The main person controlling the Group is Mr. D. J. Mockus, who, together with related companies, holds 41 965 028 APB Apranga shares, accounting for 75.90% of the authorized capital and total votes. According to the Company’s articles of association, the bodies of the Company are the general meeting of shareholders, the collegial management body – the management board, and the sole management body – the manager of the Company. A supervisory board is not formed at the Company. Six members are elected to the management board by the general meeting of shareholders for a maximum period of four years. The Company’s management board is made up of board chair D.J. Mockus and board members Ilona Šimkūnienė, Vidas Lazickas, Gintaras Juškauskas (independent), Jonas Jokštys (independent) and Ramūnas Gaidamavičius. The management board elects and removes the manager of the Company – the general director. The Company has an audit committee consisting of three members, two of whom are independent. The audit committee is elected for a period of four years. The members of the committee are appointed and removed by the Company’s general meeting of shareholders on the recommendation of the Company’s management board. On 27 April 2017, the authority of the audit committee and the composition of the audit committee consisting of three (3) members were approved by the decision of the general meeting of shareholders. Members of the audit committee: Rita Zakalskienė (the independent G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 71 member of the Committee, Chair of the committee) and Justina Puškorė (the independent member of the Committee), Rasa Rulevičiūtė (an employee of the Company). Structured table for disclosure: PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance framework should protect the rights of shareholders. 1.1. All shareholders should be provided with access to the information and/or documents established in the legal acts on equal terms. All shareholders should be furnished with equal opportunity to participate in the decision-making process where significant corporate matters are discussed. Yes The Company adheres to the Information Disclosure Guidelines and provides important information to investors in a timely, accurate, clear and comprehensive manner on its website https://aprangagroup.lt/lt/investuotojams, in the Nasdaq Vilnius Information Disclosure System, in the Central Storage Facility, and in presentations to investors by the manager and senior management of the Company, thus providing equal access to it to all of the Company’s shareholders. The Company complies with the requirements provided in the Law on Companies concerning the right of shareholders to information and the provision thereof. The Company adheres to the decision-making procedures prescribed to the competence of the general meeting of shareholders by the Law on Companies as well as the Company’s articles of association, and gives shareholders equal opportunities to vote on the adoption of relevant decisions at general meetings of shareholders (it is permitted to vote by completing a ballot, represent a shareholder by proxy, etc.; information about upcoming general meetings of shareholders and related material is also published in English). 1.2. It is recommended that the company’s capital should consist only of the shares that grant the same rights to voting, ownership, dividend and other rights to all of their holders. Yes The Company’s capital only consists of ordinary registered intangible shares, which grant each shareholder equal voting, ownership, dividend and other rights, depending on the number of shares held. 1.3. It is recommended that investors should have access to the information concerning the rights attached to the shares of the new issue or those issued earlier in advance, i.e. before they purchase shares. Yes The Company provides information concerning the rights attached to newly or previously issued shares in preliminary prospectuses, in its annual and interim reports, and on its website. 1.4. Exclusive transactions that are particularly important to the company, such as transfer of all or almost all assets of the company which in principle would mean the transfer of the company, should be subject to approval of the general meeting of shareholders. No Decisions on the transfer, lease, investment, pledge or mortgage of fixed assets with a book value of more than 1/20 of the authorized capital in accordance with the Company’s articles of association, which were approved by decision the general meeting of shareholders, are taken by the Company’s management board. The competence of the general meeting of shareholders provided for in the Company’s articles of association does not differ from its competence as provided for in the Law on Companies. In any event, under the Law on Companies, approval of the general meeting of shareholders does not relieve the management board of responsibility for decisions made. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 72 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY 1.5. Procedures for convening and conducting a general meeting of shareholders should provide shareholders with equal opportunities to participate in the general meeting of shareholders and should not prejudice the rights and interests of shareholders. The chosen venue, date and time of the general meeting of shareholders should not prevent active participation of shareholders at the general meeting. In the notice of the general meeting of shareholders being convened, the company should specify the last day on which the proposed draft decisions should be submitted at the latest. Yes Shareholders are informed about upcoming general meetings of shareholders in accordance with the requirements of legislation and the Company’s articles of association – adhering to the notification deadlines and methods and means of announcement. The opportunity to participate in the meeting is supplemented by the option of voting by ballot or authorizing another person to represent the shareholder. All shareholders are also notified about upcoming general meetings of shareholders in advance on the Investor Calendar. The general meeting of shareholders is always held at the Company’s headquarters. A working day is always chosen for the date, and the time is always during the first half of the day or around lunchtime, so public transport can also be used to attend. In the notice of the general meeting of shareholders being convened, the Company does not restrict the right of shareholders to submit new draft decisions either before or during the meeting, and this is clearly stated in the notice of the general meeting of shareholders being convened in both Lithuanian and English. 1.6. With a view to ensure the right of shareholders living abroad to access the information, it is recommended, where possible, that documents prepared for the general meeting of shareholders in advance should be announced publicly not only in Lithuanian language but also in English and/or other foreign languages in advance. It is recommended that the minutes of the general meeting of shareholders after the signing thereof and/or adopted decisions should be made available publicly not only in Lithuanian language but also in English and/or other foreign languages. It is recommended that this information should be placed on the website of the company. Such documents may be published to the extent that their public disclosure is not detrimental to the company or the company’s commercial secrets are not revealed. Yes The notice of the general meeting of shareholders being convened, draft decisions, the general voting ballot, and other related documents (for example, when amending the articles of association – the articles of association and the proposed amendments) are published/presented not only in Lithuanian, but in English as well (thus far, there has not been a need to prepare documents in other foreign languages). Decisions taken during the meeting are also published on the Company’s website in English. 1.7. Shareholders who are entitled to vote should be furnished with the opportunity to vote at the general meeting of shareholders both in person and in absentia. Shareholders should not be prevented from voting in writing in advance by completing the general voting ballot. Yes Shareholders are furnished with these opportunities – information is provided about them in advance in the notice of the general meeting of shareholders being convened. The completed general voting ballot can be submitted to the Company in various ways convenient for shareholders. The general voting ballot can also be completed in English. 1.8. With a view to increasing the shareholders’ opportunities to participate effectively at general meetings of shareholders, it is recommended that companies should apply modern technologies on a wider scale and thus provide shareholders with the conditions to participate and vote in general meetings of shareholders via electronic means of communication. In such cases the security of transmitted information must be ensured and it must be possible to identify the participating and voting person. No Shareholders are not yet provided with these conditions because the security of transmitted information and identification of the participating and voting person must first be ensured by necessary and proportionate means. The Company has not yet introduced such electronic means of communication. We believe that these opportunities to vote at the meeting: - voting in person at the meeting; - voting by proxy; - voting upon concluding a voting trust agreement; voting in advance by completing the general voting ballot (in English as well), including its transmission to the Company via electronic means of communication; are versatile and sufficient, and that shareholders’ rights to participate and vote at the meeting are properly implemented. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 73 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY 1.9. It is recommended that the notice on the draft decisions of the general meeting of shareholders being convened should specify new candidatures of members of the collegial body, their proposed remuneration and the proposed audit company if these issues are included into the agenda of the general meeting of shareholders. Where it is proposed to elect a new member of the collegial body, it is recommended that the information about his/her educational background, work experience and other managerial positions held (or proposed) should be provided. Yes If these issues are on the agenda of the general meeting of shareholders, new candidatures of members of the collegial body, information about his/her educational background, work experience and other managerial positions held and the proposed audit company are specified in the draft decisions of the general meeting of shareholders. Remuneration of collegial body members is determined by the Remuneration Policy approved by the general meeting of shareholders. All candidates for members of the Company’s collegial body also inform the general meeting of shareholders what position they hold and where, and how their other activities are related to the Company and other legal entities related to the Company, as defined in Article 19(9) of the Law on Companies. All information about elected management board members is provided on the Companys website. 1.10. Members of the company’s collegial management body, heads of the administration 1 or other competent persons related to the company who can provide information related to the agenda of the general meeting of shareholders should take part in the general meeting of shareholders. Proposed candidates to member of the collegial body should also participate in the general meeting of shareholders in case the election of new members is included into the agenda of the general meeting of shareholders. Yes Members of the Company’s collegial body, heads of the administration, or other competent persons related to the Company who can provide information related to the agenda of the general meeting of shareholders usually take part in the general meeting of shareholders. Proposed candidates for members of the collegial body usually also participate in the general meeting of shareholders. Principle 2: Supervisory board 2.1. Functions and liability of the supervisory board The supervisory board of the company should ensure representation of the interests of the company and its shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations and its management bodies as well as constantly provide recommendations to the management bodies of the company. The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system. 2.1.1. Members of the supervisory board should act in good faith, with care and responsibility for the benefit and in the interests of the company and its shareholders and represent their interests, having regard to the interests of employees and public welfare. Not applicable A supervisory board is not formed at the Company. 2.1.2. Where decisions of the supervisory board may have a different effect on the interests of the company’s shareholders, the supervisory board should treat all shareholders impartially and fairly. It should ensure that shareholders are properly informed about the company’s strategy, risk management and control, and resolution of conflicts of interest. Not applicable 2.1.3. The supervisory board should be impartial in passing decisions that are significant for the company’s operations and strategy. Members of the supervisory board should act and pass decisions without an external influence from the persons who elected them. Not applicable 1 For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 74 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY 2.1.4. Members of the supervisory board should clearly voice their objections in case they believe that a decision of the supervisory board is against the interests of the company. Independent 2 members of the supervisory board should: a) maintain independence of their analysis and decision-making; b) not seek or accept any unjustified privileges that might compromise their independence. Not applicable 2.1.5. The supervisory board should oversee that the company’s tax planning strategies are designed and implemented in accordance with the legal acts in order to avoid faulty practice that is not related to the long-term interests of the company and its shareholders, which may give rise to reputational, legal or other risks. Not applicable 2.1.6. The company should ensure that the supervisory board is provided with sufficient resources (including financial ones) to discharge their duties, including the right to obtain all the necessary information or to seek independent professional advice from external legal, accounting or other experts on matters pertaining to the competence of the supervisory board and its committees. Not applicable 2.2. Formation of the supervisory board The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective and fair corporate governance. 2.2.1. The members of the supervisory board elected by the general meeting of shareholders should collectively ensure the diversity of qualifications, professional experience and competences and seek for gender equality. With a view to maintain a proper balance between the qualifications of the members of the supervisory board, it should be ensured that members of the supervisory board, as a whole, should have diverse knowledge, opinions and experience to duly perform their tasks. Not applicable 2.2.2. Members of the supervisory board should be appointed for a specific term, subject to individual re-election for a new term in office in order to ensure necessary development of professional experience. Not applicable 2.2.3. Chair of the supervisory board should be a person whose current or past positions constituted no obstacle to carry out impartial activities. A former manager or management board member of the company should not be immediately appointed as chair of the supervisory board either. Where the company decides to depart from these recommendations, it should provide information on the measures taken to ensure impartiality of the supervision. Not applicable 2.2.4. Each member should devote sufficient time and attention to perform his duties as a member of the supervisory board. Each member of the supervisory board should undertake to limit his other professional obligations (particularly the Not applicable 2 For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 75 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY managing positions in other companies) so that they would not interfere with the proper performance of the duties of a member of the supervisory board. Should a member of the supervisory board attend less than a half of the meetings of the supervisory board throughout the financial year of the company, the shareholders of the company should be notified thereof. 2.2.5. When it is proposed to appoint a member of the supervisory board, it should be announced which members of the supervisory board are deemed to be independent. The supervisory board may decide that, despite the fact that a particular member meets all the criteria of independence, he/she cannot be considered independent due to special personal or company- related circumstances. Not applicable 2.2.6. The amount of remuneration to members of the supervisory board for their activity and participation in meetings of the supervisory board should be approved by the general meeting of shareholders. Not applicable 2.2.7. Every year the supervisory board should carry out an assessment of its activities. It should include evaluation of the structure of the supervisory board, its work organization and ability to act as a group, evaluation of the competence and work efficiency of each member of the supervisory board, and evaluation whether the supervisory board has achieved its objectives. The supervisory board should, at least once a year, make public respective information about its internal structure and working procedures. Not applicable Principle 3: Management Board 3.1. Functions and liability of the management board The management board should ensure the implementation of the company’s strategy and good corporate governance with due regard to the interests of its shareholders, employees and other interest groups. 3.1.1. The management board should ensure the implementation of the company’s strategy approved by the supervisory board if the latter has been formed at the company. In such cases where the supervisory board is not formed, the management board is also responsible for the approval of the company’s strategy. Yes/No The Company does not prepare or approve a separate Company strategy. The Company prepares, approves and publishes the Company’s one-year operational plans. Company’s objectives are disclosed in the Company’s management reports and notifications of material events, which are published in the same sources as provided in the answer to 1.1. However, in 2025, the board plans to approve a Companys strategy that would be aligned with sustainability aspects. 3.1.2. As a collegial management body of the company, the management board performs the functions assigned to it by the Law and in the articles of association of the company, and in such cases where the supervisory board is not formed in the company, it performs inter alia the supervisory functions established in the Law. By performing the functions assigned to it, the management board should take into account the needs of the company’s shareholders, employees and other interest groups by respectively striving to achieve sustainable business development. Yes As a collegial management body of the Company, the management board performs the functions assigned to it by the Law and in the articles of association of the Company. Since supervisory board is not formed in the Company, the board performs, among other things, the supervisory functions established by the Law on Companies. In performing the functions assigned to it, the management board takes into account the needs of the Company, shareholders, employees and other interest groups; the objective of the management board is essentially to achieve sustainable business development. At the end of the year, the Company’s management board approves next year’s budget, considering not only expansion and planned investments, but also potential staff salary increases, allocation of investments for employee G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 76 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY training and development, health insurance, implementation of IT systems and security, etc. 3.1.3. The management board should ensure compliance with the laws and the internal policy of the company applicable to the company or a group of companies to which this company belongs. It should also establish the respective risk management and control measures aimed at ensuring regular and direct liability of managers. Yes/No Compliance with the provisions of laws and the Company’s internal policies is ensured by the management board, as well as by the person or persons delegated by the management board, and department heads and/or jurists, within the scope of activities of the laws/policies. The board does not establish separate risk management and control measures that ensure regular and direct accountability of managers. 3.1.4. Moreover, the management board should ensure that the measures included into the OECD Good Practice Guidance 3 on Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to the applicable laws, rules and standards. Yes Some of the measures are applied. In 2019, the management board approved and published the Code of Ethics and Conduct, which contains, in addition to the OECD Good Practice Guidance, other rules and principles relevant to the Company’s operations. At the very beginning of 2024, Rules on Implementation of the Corruption Prevention Policy were approved in the Companys group, which, among other things, include the obligation to declare private interests in the group companies, appoints a person responsible for corruption prevention in the group, and training were organized on corruption prevention for the employees of the Company's group. 3.1.5. When appointing the manager of the company, the management board should take into account the appropriate balance between the candidate’s qualifications, experience and competence. Yes When appointing the manager of the Company, the management board takes into account the appropriate balance between the candidate’s qualifications, experience and competence. 3.2. Formation of the management board 3.2.1. The members of the management board elected by the supervisory board or, if the supervisory board is not formed, by the general meeting of shareholders should collectively ensure the required diversity of qualifications, professional experience and competences and seek for gender equality. With a view to maintain a proper balance in terms of the current qualifications possessed by the members of the management board, it should be ensured that the members of the management board would have, as a whole, diverse knowledge, opinions and experience to duly perform their tasks. Yes/No (due to gender equality) The management board is made up of persons of different professional experience and competences. The management board is composed of experts in corporate governance, economics and finance, taxes, procurement, expansion and development who possess the diverse knowledge, opinions and experience necessary for the proper and effective functioning of the management board and the interests of the Company. All members of the management board are closely acquainted with the activities of the Company, and two out of six members of the management board are employees of the Company – heads of administration. Even though only one of the six members of the management board is a woman, there are no requirements for the composition of the management board that may discriminate on the basis of sex in any way. 3.2.2. Names and surnames of the candidates to become members of the management board, information on their educational background, qualifications, professional experience, current Yes The names and surnames of the candidates to become members of the management board, information on their educational background, qualifications, professional experience, current positions, other important professional 3 Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 77 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY positions, other important professional obligations and potential conflicts of interest should be disclosed without violating the requirements of the legal acts regulating the handling of personal data at the meeting of the supervisory board in which the management board or individual members of the management board are elected. In the event that the supervisory board is not formed, the information specified in this paragraph should be submitted to the general meeting of shareholders. The management board should, on yearly basis, collect data provided in this paragraph on its members and disclose it in the company’s annual report. obligations and potential conflicts of interest are disclosed to the general meeting of shareholders in accordance with the requirements of the legislation regulating the processing of personal data and the internal legislation approved by the Company establishing the principles of data protection and processing, in all cases with the prior informed consent of the individual. The aforementioned data are presented in the Company's annual report. 3.2.3. All new members of the management board should be familiarized with their duties and the structure and operations of the company. Yes New members of the management board are familiarized with their duties, the structure and operations of the Company, and other information relevant to the activities of a management board member. 3.2.4. Members of the management board should be appointed for a specific term, subject to individual re-election for a new term in office in order to ensure necessary development of professional experience and sufficiently frequent reconfirmation of their status. Yes The members of the management board are appointed for a four-year term or, when electing individual members – until the end of the term of office of the current management board. Members of the management board who have responsibly carried out their duties, devoted time to the work of the management board, and participated in meetings, and who would like to continue to play an active role in the activities of the management board, always have the opportunity to be nominated and re-elected. 3.2.5. Chair of the management board should be a person whose current or past positions constitute no obstacle to carry out impartial activity. Where the supervisory board is not formed, the former manager of the company should not be immediately appointed as chair of the management board. When a company decides to depart from these recommendations, it should furnish information on the measures it has taken to ensure the impartiality of supervision. Yes The chair of the management board is a person who has never been the manager of the Company. The chair of the Company’s management board is not an employee of the Company and is a shareholder representative. It is the Company’s belief that these facts are sufficient to state that the chair of the management board is capable of acting impartially and taking decisions which represent and protect the rights of shareholders. 3.2.6. Each member should devote sufficient time and attention to the performance of duties as a member of the management board. If a member of the management board has attended less than half of the meetings of the management board over the course of the Company’s financial year, the Company’s supervisory board – or, if a supervisory board is not formed at the Company, the general meeting of shareholders – should be informed. Yes The Company believes that each member devotes sufficient time and attention to their duties as member of the management board, actively participates in the meetings of the management board, and devotes time to prepare for them. Thus far, there have been no members who have attended less than half of the meetings of the management board over the course of the Company’s financial year, but such information could be submitted to the general meeting of shareholders. 3.2.7. In the event that the management board is elected in the cases established by the Law where the supervisory board is not formed at the company, and some of its members will be independent 4 , it should be announced which members of the management board are deemed as independent. The management board may decide that, despite the fact that a particular member meets all the criteria of independence established by the Law, he/she cannot be considered independent due to special personal or company-related circumstances. Yes In cases when management board is elected, it is announced, which members of the management board are deemed as independent. 3.2.8. The general meeting of shareholders of the company should approve the amount of remuneration to the members of the Yes Remuneration Policy, which indicates the amount of remuneration to the members of the board (at the moment 4 For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 78 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY management board for their activity and participation in the meetings of the management board. to the independent ones only), is approved by the general meeting of shareholders of the company. 3.2.9. The members of the management board should act in good faith, with care and responsibility for the benefit and the interests of the company and its shareholders with due regard to other stakeholders. When adopting decisions, they should not act in their personal interest; they should be subject to no-compete agreements and they should not use the business information or opportunities related to the company’s operations in violation of the company’s interests. Yes/No The Company believes that the members of the management board act in good faith, with care and responsibility for the benefit and the interests of the Company and its shareholders with due regard to other stakeholders, and that they do not act in their personal interest when adopting decisions. The Company is of the opinion that the duties of confidentiality that the members of the management board are subject to by law are sufficient to ensure their loyalty and trustworthiness, so non-compete agreements are not concluded with the members of the management board and their activities are not additionally restricted by such agreements. Members of the management board are introduced to the list of confidential information and trade secrets approved by the management board. The members of the Company’s management board are prohibited by law from using the business information or opportunities related to the Company’s operations in violation of the company’s interests and by the Rules on Implementation of the Corruption Prevention Policy of the Companys group. 3.2.10. Every year the management board should carry out an assessment of its activities. It should include evaluation of the structure of the management board, its work organization and ability to act as a group, evaluation of the competence and work efficiency of each member of the management board, and evaluation whether the management board has achieved its objectives. The management board should, at least once a year, make public respective information about its internal structure and working procedures in observance of the legal acts regulating the processing of personal data. No The management board does not carry out an annual assessment of its activities. Principle 4: Rules of procedure of the supervisory board and the management board of the company The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure efficient operation and decision-making of these bodies and promote active cooperation between the company’s management bodies. 4.1. The management board and the supervisory board, if the latter is formed at the company, should act in close cooperation in order to attain benefit for the company and its shareholders. Good corporate governance requires an open discussion between the management board and the supervisory board. The management board should regularly and, where necessary, immediately inform the supervisory board about any matters significant for the company that are related to planning, business development, risk management and control, and compliance with the obligations at the company. The management board should inform he supervisory board about any derogations in its business development from the previously formulated plans and objectives by specifying the reasons for this. Not applicable A supervisory board is not formed at the Company. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 79 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY 4.2. It is recommended that meetings of the company’s collegial bodies should be held at the respective intervals, according to the pre- approved schedule. Each company is free to decide how often meetings of the collegial bodies should be convened but it is recommended that these meetings should be convened at such intervals that uninterruptable resolution of essential corporate governance issues would be ensured. Meetings of the company’s collegial bodies should be convened at least once per quarter. Yes Meetings of the management board are held at the respective intervals, according to the pre-approved schedule, usually once per quarter. 4.3. Members of a collegial body should be notified of the meeting being convened in advance so that they would have sufficient time for proper preparation for the issues to be considered at the meeting and a fruitful discussion could be held and appropriate decisions could be adopted. Along with the notice of the meeting being convened all materials relevant to the issues on the agenda of the meeting should be submitted to the members of the collegial body. The agenda of the meeting should not be changed or supplemented during the meeting, unless all members of the collegial body present at the meeting agree with such change or supplement to the agenda, or certain issues that are important to the company require immediate resolution. Yes The members of the management board are notified of the meeting of the management board being convened in advance so that they have sufficient time for proper preparation for the issues to be considered at the meeting and a fruitful discussion can be held. Along with the notice of the meeting being convened, all materials relevant to the issues on the agenda of the meeting are submitted to the members of the management board, and the members of the management board can always request additional information if they consider that the information provided is inadequate. 4.4. In order to coordinate the activities of the company’s collegial bodies and ensure effective decision-making process, the chairs of the company’s collegial supervision and management bodies should mutually agree on the dates and agendas of the meetings and close cooperate in resolving other matters related to corporate governance. Meetings of the company’s supervisory board should be open to members of the management board, particularly in such cases where issues concerning the removal of the management board members, their responsibility or remuneration are discussed. Not applicable A supervisory board is not formed at the Company. Principle 5: Nomination, remuneration and audit committees 5.1. Purpose and formation of committees The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory board is not formed, of the management board which performs the supervisory functions by ensuring that decisions are based on due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of interest. Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by the collegial body. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 80 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY 5.1.1. Taking due account of the company- related circumstances and the chosen corporate governance structure, the supervisory board of the company or, in cases where the supervisory board is not formed, the management board which performs the supervisory functions, establishes committees. It is recommended that the collegial body should form the nomination, remuneration and audit committees 5 . Yes/No Nomination and remuneration committees are not formed at the Company, as the Company believes that the management board, in performing its functions, partially performs the functions of the said committees. The Company’s management board selects and appoints the manager of the Company and makes recommendations to the manager of the Company on the appointment of senior management. The management board will provide feedback and suggestions on the remuneration policy approved in the Company under the valid legislation. The Company’s management board approves the Company’s strategic and budget plans and controls their implementation and analyzes and evaluates the reports of the Company’s manager and senior management on implementation of the Company’s approved budget plans and the use of funds. In compliance with the requirements of the Law on the Audit of Financial Statement (Official Gazette, 2008, No. 82-3233), the Company has formed an audit committee consisting of three members, two of whom are independent. The audit committee is elected for a period of four years. The members of the committee are appointed and removed by the Company’s general meeting of shareholders on the recommendation of the Company’s management board. On 27 April 2017, the authority of the audit committee was approved by the decision of the general meeting of shareholders. 5.1.2. Companies may decide to set up less than three committees. In such case companies should explain in detail why they have chosen the alternative approach, and how the chosen approach corresponds with the objectives set for the three different committees. Yes See answer to 5.1.1. 5.1.3. In the cases established by the legal acts the functions assigned to the committees formed at companies may be performed by the collegial body itself. In such case the provisions of this Code pertaining to the committees (particularly those related to their role, operation and transparency) should apply, where relevant, to the collegial body as a whole. Yes See answer to 5.1.1. 5.1.4. Committees established by the collegial body should normally be composed of at least three members. Subject to the requirements of the legal acts, committees could be comprised only of two members as well. Members of each committee should be selected on the basis of their competences by giving priority to independent members of the collegial body. The chair of the management board should not serve as the chair of committees. Yes/No Yes, as far as the audit committee is concerned. See answer to 5.1.1. The chair of the audit committee is not the chair of the management board; furthermore, the chair of the audit committee is an independent member of the audit committee. 5.1.5. The authority of each committee formed should be determined by the collegial body itself. Committees should perform their duties according to the authority delegated to them and regularly inform the collegial body about their activities and performance on a regular basis. The authority of each committee defining its role and specifying its rights and duties should be made public at least once a year (as part of the information disclosed by the company on its governance structure and practice on an annual basis). In compliance with the legal acts regulating the processing of personal data, companies should also include in their annual Yes/No The authority of the audit committee laying down the procedure for the formation of the committee, the number and composition of members and requirements for members, the period of membership of the committee, the rights and obligations of the committee, the procedure for organizing meetings and making decisions, the scale of the information provided to the committee and the procedure for its provision, etc. are approved by the body that elected this body (its members) – the general meeting of shareholders. The members of the audit committee are presented to the meeting by the management board. The authority of the audit committee defining its role and specifying its rights and duties was made public after it was 5 The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit committee may be carried out by the collegial body performing the supervisory functions). G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 81 PRINCIPLES/ RECOMMENDATIONS YES / NO/ NOT APPLICABLE COMMENTARY reports the statements of the existing committees on their composition, the number of meetings and attendance over the year as well as the main directions of their activities and performance. approved in 2017, and is not additionally published by the Company every year if there are no changes. The information provided for in this paragraph is published annually in the annual report. 5.1.6. With a view to ensure the independence and impartiality of the committees, the members of the collegial body who are not members of the committees should normally have a right to participate in the meetings of the committee only if invited by the committee. A committee may invite or request that certain employees of the company or experts would participate in the meeting. Chair of each committee should have the possibility to maintain direct communication with the shareholders. Cases where such practice is to be applied should be specified in the rules regulating the activities of the committee. Yes It is the audit committee’s right and prerogative to decide who to invite to participate in meetings of the management board (excerpts from the Audit Committee Charter): “4.3. The Company’s general director, the chair of the management board and/or members of the management board and external auditors may participate in the meetings of the Committee. In addition, the Company’s finance and economics director and other employees of the Company may be invited to participate in the meetings of the Committee.” “3.8. The Committee shall be accountable to the Company’s general meeting of shareholders. The Committee shall submit an activity report to the general meeting of shareholders together with the complete set of financial statements submitted by the management board for approval.” 5.2. Nomination committee 5.2.1. The key functions of the nomination committee should be the following: 1) to select candidates to fill vacancies in the membership of supervisory and management bodies and the administration and recommend the collegial body to approve them. The nomination committee should evaluate the balance of skills, knowledge and experience in the management body, prepare a description of the functions and capabilities required to assume a particular position and assess the time commitment expected; 2) assess, on a regular basis, the structure, size and composition of the supervisory and management bodies as well as the skills, knowledge and activity of its members, and provide the collegial body with recommendations on how the required changes should be sought; 3) devote the attention necessary to ensure succession planning. Not applicable See answer to 5.1.1. 5.2.2. When dealing with issues related to members of the collegial body who have employment relationships with the company and the heads of the administration, the manager of the company should be consulted by granting him/her the right to submit proposals to the Nomination Committee. Not applicable See answer to 5.1.1. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 82 5.3. Remuneration committee The main functions of the remuneration committee should be as follows: 1) submit to the collegial body proposals on the remuneration policy applied to members of the supervisory and management bodies and the heads of the administration for approval. Such policy should include all forms of remuneration, including the fixed-rate remuneration, performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well as conditions which would allow the company to recover the amounts or suspend the payments by specifying the circumstances under which it would be expedient to do so; 2) submit to the collegial body proposals regarding individual remuneration for members of the collegial bodies and the heads of the administration in order to ensure that they would be consistent with the company’s remuneration policy and the evaluation of the performance of the persons concerned; 3) review, on a regular basis, the remuneration policy and its implementation. Not applicable See answer to 5.1.1. The remuneration policy is drafted and approved as provided by the amendments to the Law on Companies. 5.4. Audit committee 5.4.1. The key functions of the audit committee are defined in the legal acts regulating the activities of the audit committee 6 . Yes 5.4.2. All members of the committee should be provided with detailed information on specific issues of the company’s accounting system, finances and operations. The heads of the company’s administration should inform the audit committee about the methods of accounting for significant and unusual transactions where the accounting may be subject to different approaches. Yes The approved Audit Committee Charter provides for the following: “3.3. The Committee shall be entitled: 3.3.1. to obtain any information or documents when performing the Committee’s duties; 3.3.2. to obtain full information related to the specific features of the Company’s accounting, finances and operations. At the request of the members of the Committee or at its own initiative, the Company’s administration should inform the Committee about the methods of accounting for significant and unusual transactions where the accounting may be subject to different approaches, as well as about activities in preferential trade areas and/or activities carried out through special-purpose entities (companies, organizations) in order to determine whether these activities are justified. 3.4. The Committee shall submit requests for information or documents to the Company’s general director. The Company’s general director shall provide the Committee member(s) with access to the information or documents.” The Audit Committee Charter does not provide for any exceptions in which information may be withheld. The audit committee or its members may exercise these established rights without restriction. 6 Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 83 5.4.3. The audit committee should decide whether the participation of the chair of the management board, the manager of the company, the chief finance officer (or senior employees responsible for finance and accounting), the internal and external auditors in its meetings is required (and, if required, when). The committee should be entitled, when needed, to meet the relevant persons without members of the management bodies present. Yes The audit committee is free to choose who to invite to its meetings, or to meet without inviting anyone to the meeting. The participation of members of the management bodies is only possible at the direction of the audit committee. Since there is one employee of the Company on the audit committee, the committee may, if necessary, arrange a meeting with the necessary employee of the Company without members of the management bodies present. The committee is free to decide on meetings with other necessary persons (not employees) and acts independently. See also answer to 5.1.1. 5.4.4. The audit committee should be informed about the internal auditor’s work program and should be furnished with internal audit reports or periodic summaries. The audit committee should also be informed about the work program of external auditors and should receive from the audit firm a report describing all relationships between the independent audit firm and the company and its group. Not applicable /Yes The Company does not have any internal auditors. The audit committee is informed about the work program of external auditors and receives from the audit firm a report describing all relationships between the independent audit firm and the Company and its group. 5.4.5. The audit committee should examine whether the company complies with the applicable provisions regulating the possibility of lodging a complaint or reporting anonymously his/her suspicions of potential violations committed at the company and should also ensure that there is a procedure in place for proportionate and independent investigation of such issues and appropriate follow-up actions. No The procedure for reporting suspicions of potential violations committed at the Company is established and posted on the Company’s website, as regulated by the Law on Whistleblower Protection. There is an internal channel for the proportionate and independent investigation of such issues and appropriate follow-up actions, and there are reporting rules in place (link below). In the rules, the audit committee is not designated as a supervisory body for compliance with the relevant provisions of the Company and has not done so thus far. 5.4.6. The audit committee should submit to the supervisory board or, where the supervisory board is not formed, to the management board its activity report at least once in every six months, at the time that annual and half-yearly reports are approved. No The committee is accountable to the Company’s general meeting of shareholders. The committee submits an activity report to the general meeting of shareholders together with the complete set of financial statements submitted by the management board for approval. Principle 6: Prevention and disclosure of conflicts of interest The corporate governance framework should encourage members of the company’s supervisory and management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to members of the supervisory and management bodies. Any member of the company’s supervisory and management body should avoid a situation where his/her personal interests are or may be in conflict with the company’s interests. In case such a situation did occur, a member of the company’s supervisory or management body should, within a reasonable period of time, notify other members of the same body or the body of the company which elected him/her or the company’s shareholders of such situation of a conflict of interest, indicate the nature of interests and, where possible, their value. Yes As of the beginning of 2024 the Rules on the Implementation of the Corruption Prevention Policy were approved and are valid and applicable to the management bodies of the Company. The Rules, among other things, provide for the obligation to declare private interests in the event of circumstances that may cause a conflict of interests. All board members were separately informed of the aforementioned rules. Prior to the adoption of the aforementioned Rules, the general principles of avoiding conflicts of interest provided for in the Code of Ethics and Conduct of the Company's group were followed. To the Company’s knowledge, the members of the Company’s management body avoid situations in which their personal interests are or may be in conflict with those of the Company. The members of the Company’s management body are informed of their duty to report, within a reasonable period of time, such a conflict of interest to the other members of the same body, or to the body of the Company that elected them, or to the shareholders of the Company and from now on also to the person responsible for the corruption prevention in the group by completing a declaration of private interests. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 84 Principle 7: Remuneration policy of the company The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long- term strategy. 7.1. The company should approve and post the remuneration policy on the website of the company; such policy should be reviewed on a regular basis and be consistent with the company’s long-term strategy. Yes Remuneration_policy_dcd7ea1ea9.pdf 7.2. The remuneration policy should include all forms of remuneration, including the fixed-rate remuneration, performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well as the conditions specifying the cases where the company can recover the disbursed amounts or suspend the payments. Yes/No The remuneration policy is drafted and adopted in accordance with the requirements of the Law on Companies and actual situation in the Company. The remuneration policy does not cover factors that are not applied in the Company or for which there is no established practice or generally applicable principles in the Company. 7.3. With a view to avoid potential conflicts of interest, the remuneration policy should provide that members of the collegial bodies which perform the supervisory functions should not receive remuneration based on the company’s performance. Yes According to the Remuneration Policy, remuneration for work in the board is received only by independent members of the board and is fixed. 7.4. The remuneration policy should provide sufficient information on the policy regarding termination payments. Termination payments should not exceed a fixed amount or a fixed number of annual wages and in general should not be higher than the non-variable component of remuneration for two years or the equivalent thereof. Termination payments should not be paid if the contract is terminated due to inadequate performance. No Severance pay policy is not established in the remuneration policy. The amount of severance pay would be decided on a case-by-case basis, taking into account the Company's interests, principles of reasonableness, proportionality, fairness and integrity as well as consensus reached between the parties, contribution to the Company's activities and reasons for dismissal. 7.5. In the event that the financial incentive scheme is applied at the company, the remuneration policy should contain sufficient information about the retention of shares after the award thereof. Where remuneration is based on the award of shares, shares should not be vested at least for three years after the award thereof. After vesting, members of the collegial bodies and heads of the administration should retain a certain number of shares until the end of their term in office, subject to the need to compensate for any costs related to the acquisition of shares. No No financial incentive scheme, as defined by the Law on Markets in Financial Instruments, is applied at the Company. 7.6. The company should publish information about the implementation of the remuneration policy on its website, with a key focus on the remuneration policy in respect of the collegial bodies and managers in the next and, where relevant, subsequent financial years. It should also contain a review of how the remuneration policy was implemented during the previous financial year. The information of such nature should not include any details having a commercial value. Particular attention should be paid on the major changes in the company’s remuneration policy, compared to the previous financial year. Yes The remuneration report is published together with the Company's annual report how the content requirements of such a report are provided by the Law on Corporate Financial Statements. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 85 7.7. It is recommended that the remuneration policy or any major change of the policy should be included on the agenda of the general meeting of shareholders. The schemes under which members and employees of a collegial body receive remuneration in shares or share options should be approved by the general meeting of shareholders. Yes Approval of the remuneration policy or any major change of the policy is within the competence of the general meeting of shareholders. Principle 8: Role of stakeholders in corporate governance The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial sustainability. In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community and other persons having certain interests in the company concerned. 8.1. The corporate governance framework should ensure that the rights and lawful interests of stakeholders are protected. Yes The Company respects the rights of different stakeholders and their rights entrenched in the laws. 8.2. The corporate governance framework should create conditions for stakeholders to participate in corporate governance in the manner prescribed by law. Examples of participation by stakeholders in corporate governance include the participation of employees or their representatives in the adoption of decisions that are important for the company, consultations with employees or their representatives on corporate governance and other important matters, participation of employees in the company’s authorized capital, involvement of creditors in corporate governance in the cases of the company’s insolvency, etc. Yes The Company has never restricted the rights of stakeholders, has not prohibited their implementation. and always strives to create conditions for stakeholders to participate in corporate governance in the manner prescribed by law. For example, a work council has been formed at the Company which represents the interests of employees and participates in corporate governance within its competence. 8.3. Where stakeholders participate in the corporate governance process, they should have access to relevant information. Yes 8.4. Stakeholders should be provided with the possibility of reporting confidentially any illegal or unethical practices to the collegial body performing the supervisory function. No The company has a general procedure for reporting violations, see the answer to 5.4.5, as established by the Law on Whistleblower Protection. Principle 9: Disclosure of information The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues, including the financial situation, operations and governance of the company. 9.1. In accordance with the company’s procedure on confidential information and commercial secrets and the legal acts regulating the processing of personal data, the information publicly disclosed by the company should include but not be limited to the following: _ The information referred to below in this recommendation is disclosed in notifications of material events published through the Nasdaq Vilnius Information Disclosure System, the Company’s website, and the Company’s annual and interim information documents, to the extent required by legislation and the International Financial Reporting Standards applicable in the European Union. The information is also disclosed in presentations to investors by the manager and senior management of the Company. 9.1.1. operating and financial results of the company; Yes 9.1.2. objectives and non-financial information of the company; Yes G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 86 9.1.3. persons holding a stake in the company or controlling it directly and/or indirectly and/or together with related persons as well as the structure of the group of companies and their relationships by specifying the final beneficiary; Yes 9.1.4. members of the company’s supervisory and management bodies who are deemed independent, the manager of the company, the shares or votes held by them at the company, participation in corporate governance of other companies, their competence and remuneration; Yes 9.1.5. reports of the existing committees on their composition, number of meetings and attendance of members during the last year as well as the main directions and results of their activities; Yes/No See the answer given in 5.1.5. 9.1.6. potential key risk factors, the company’s risk management and supervision policy; Yes 9.1.7. the company’s transactions with related parties; Yes 9.1.8. main issues related to employees and other stakeholders (for instance, human resource policy, participation of employees in corporate governance, award of the company’s shares or share options as incentives, relationships with creditors, suppliers, local community, etc.); Yes/No Most of this information is disclosed in the Company’s sustainability report under CSRD requirements. 9.1.9. structure and strategy of corporate governance; Yes/No The Company’s governance structure and management principles are published on the Company’s website and in its financial statements. One-year operational plans are publicly disclosed. 9.1.10. initiatives and measures of social responsibility policy and anti-corruption fight, significant current or planned investment projects. This list is deemed minimum and companies are encouraged not to restrict themselves to the disclosure of information included into this list. This principle of the Code does not exempt companies from their obligation to disclose information as provided for in the applicable legal acts. Yes 9.2. When disclosing the information specified in paragraph 9.1.1 of recommendation 9.1, it is recommended that the company which is a parent company in respect of other companies should disclose information about the consolidated results of the whole group of companies. Yes Information is disclosed about the Company and the consolidated results of its daughter companies. 9.3. When disclosing the information specified in paragraph 9.1.4 of recommendation 9.1, it is recommended that the information on the professional experience and qualifications of members of the company’s supervisory and management bodies and the manager of the company as well as potential conflicts of interest which could affect their decisions should be provided. It is further recommended that the remuneration or other income of members of the company’s supervisory and management bodies and the manager of the company should be disclosed, as provided for in greater detail in Principle 7. Yes All information is on the Company’s website; also see the answers to 3.2.2 and 7.1. G O V E R N A N C E R E P O R T 3 . 2 APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius FOR THE YEAR ENDED 31 DECEMBER 2024 (all tabular amounts are in EUR thousands unless otherwise stated) 87 9.4. Information should be disclosed in such manner that no shareholders or investors are discriminated in terms of the method of receipt and scope of information. Information should be disclosed to all parties concerned at the same time. Yes All information is disclosed as provided for in 9.1 and related answers; no shareholders or investors are discriminated in terms of the method of receipt and scope of information. Information is disclosed to all parties concerned at the same time. Information is disclosed in accordance with the applicable legislation of the Republic of Lithuania. The Company makes information publicly available through the Nasdaq Vilnius Information Disclosure System, thus ensuring simultaneous disclosure to investors. Information is also immediately placed in the Central Storage Facility. Notifications of material events are disclosed in Lithuanian and English, before or after the Nasdaq Vilnius Stock Exchange trading session. The Company also publishes the information published through the Nasdaq Vilnius Information Disclosure System and placed in the Central Storage Facility on the Company’s designated investor website aprangagroup.com/en/investors, where the information is presented in Lithuanian and English. Principle 10: Selection of the company’s audit firm The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm. 10.1. With a view to obtain an objective opinion on the company’s financial condition and financial results, the company’s annual financial statements and the financial information provided in its annual report should be audited by an independent audit firm. Yes An independent audit firm audits the complete set of consolidated financial statements for the Company and its group of companies in accordance with the International Financial Reporting Standards applicable in the European Union. The audit firm also performs a limited assurance engagement on Sustainability Statement. 10.2. It is recommended that the audit firm would be proposed to the general meeting of shareholders by the supervisory board or, if the supervisory board is not formed at the company, by the management board of the company. Yes The audit firm is proposed to the general meeting of shareholders by the Company’s management board. 10.3. In the event that the audit firm has received remuneration from the company for the non- audit services provided, the company should disclose this publicly. This information should also be available to the supervisory board or, if the supervisory board is not formed at the company, by the management board of the company when considering which audit firm should be proposed to the general meeting of shareholders. Not applicable The Company’s audit firm did not provide non-audit services to the Company during the reporting year and did not receive remuneration from the Company for this, except for Sustainability Statement limited assurance engagement. Sustainability Statement 2024 APRANGA GROUP SUSTAINABILITY STATEMENT 2024 APRANGA GROUP 01General Disclosures Basis for preparation Governance system Strategy Materiality assessment 91 94 99 103 02Environment Apranga Group Taxonomy Report Climate change Pollution Water and marine resources Circular economy 120 125 134 134 135 04Social Our colleagues Workers in the value chain 138 147 05Governance Business conduct Management of relationships with suppliers 150 153 06Annex Appendix No. 1: List of disclosure requirements Appendix No. 2: List of datapoints deriving from other EU legislation 155 159 General Disclosures Sustainability Statement 2024 91 GENERAL DISCLOSURES Sustainability Statement 2024 This sustainability statement is prepared for Apranga Group companies and covers the period from January 1, 2024, to December 31, 2024. The report includes consolidated data from Apranga Group subsidiaries for the year 2024, and the scope of consolidation is the same as in the Consolidated Financial Statements. APB Apranga, (hereinafter “the Company”), was incorporated and commenced its operations in March 1993 in Lithuania. The Company’s main office is situated in Ukmerges str. 362, Vilnius, Lithuania. The Company has legal form of public limited liability company under the Law on Companies of Republic of Lithuania. The principal activity of the Company and its subsidiaries (hereinafter “the Group”) is retail trade of apparel in Baltic countries. Of the 26 companies that make up the Group, 23 represent specific brands (Zara, Bershka, Pull&Bear, Stradivarius, Massimo Dutti, Zara Home and Oysho) on the basis of franchise agreements concluded with Inditex, a leader in the global apparel retail market. Three companies (APB Apranga, SIA Apranga and OÜ Apranga) represent brands other than Inditex (single- brand stores) as well as their own retail chains (multi-brand stores): Apranga, Apranga Galerija, City, Mados Linija, etc. The Group uses a centralized management model, and practically all management functions are concentrated at the Group’s headquarters in Vilnius. The Group’s main company, APB Apranga, has been listed on the Nasdaq Vilnius Stock Exchange since 1997. The company has been on the Baltic Main List since 2005. The sustainability information section for Apranga Group complies with the Corporate Sustainability Reporting Directive (CSRD), the European Sustainability Reporting Standards (ESRS) and the Law on Reporting by Undertakings and Groups of Undertakings of the Republic of Lithuania (lith. Lietuvos Respublikos įmonių ir įmonių grupių atskaitomybės įstatymas). It includes our double materiality assessment (DMA). The DMA process described in IRO-1 covers impacts, risks, and opportunities across the Group’s operations, as well as our upstream and downstream value chains. The sections on topical standards explain how our policies, actions, targets, and metrics extend to our value chain. No information related to intellectual property, know-how, or innovation results has been omitted from the sustainability statement. For 2024, iXBRL tagging of the Sustainability Statements under CSRD is not applied, as the European Single Electronic Format (ESEF) has not been formally adopted. In its disclosures in this report, Apranga Group complied with the short, medium and long-term definitions as set out in the ESRS: a. short: the period that is used as a reference period in the company’s financial statements – one year. b. medium: from the end of the short reference period defined in point (a) to five years. c. long: more than 5 years. BASIS FOR PREPARATION General disclosures for the report Periods BP-1 BP-2 The accounting policies have been applied consistently in the financial year and for comparative figures. Calculation factors used are listed on the pages with the relevant metrics, together with references. Measurement basis 92 GENERAL DISCLOSURES Sustainability Statement 2024 We regularly reassess our use of estimates and judgements based on experience, the development of sustainability reporting, and several other factors. Changes in estimates are recognised in the period in which the estimate in question is revised. In certain parts of Energy, GHG Scope 2 and 3, as well as Waste disclosures the considerations and calculation metrics used may be subject to measurement uncertainty. All sources, calculation methods, and underlying assumptions or approximations are disclosed in the considerations and methodology descriptions provided next to relevant sections. Additionally, the measurement of the metrics has not been validated by an external body unless stated otherwise. In 2024, we performed a double materiality assessment for the first time. It was concluded that climate change (climate change mitigation, energy), pollution (pollution of water, microplastics), water and marine resources (water consumption), and workers in the value chain (working conditions, equal treatment, and equal opportunities for all) are material topics for the Group. Since these topics were not evaluated in depth before conducting the double materiality assessment, the Group has not yet adopted any policies or actions, nor set any metrics or targets. We plan to adopt the necessary policies and actions and set targets and metrics during 2025. This year marks the first time our report is being prepared under the new ESRS requirements (our previous report was prepared in alignment to general GRI reporting principles). Consequently, the information disclosed differs in structure and detail from last year’s report and we do not include any comparative information. Sources of estimation and outcome uncertainty Changes in preparation or presentation of sustainability information In accordance with the European Sustainability Reporting Standards (ESRS), we recognize the critical importance of transparency in our supply chain operations. Transparency is essential for building trust with our stakeholders and ensuring accountability throughout our value chain. However, we currently do not possess the precise data required to fully meet disclosure standards in relation to value chain. The complexity and extensive nature of our supply chain present significant challenges in providing accurate and reliable information during this reporting period. As a result, we will not be disclosing value chain data for this reporting period (especially in relation to Water pollution, Microplastics, Resources and Value chain employees linked metrics). This decision is made in alignment with the ESRS transitional provision outlined in Chapter 5, “Value Chain”. We are committed to addressing this gap and are actively working to enhance our data collection processes. Over the next three years, we will implement robust measures to gather the necessary information, ensuring that we can comply with these requirements in future reports. Despite the current limitations, our business model is based on cooperation with worldwide known and respectable suppliers who have been engaged in sustainability matters for years. Although currently we do not possess specific information, relevant to our reporting, about the supply chain, we expect the situation to change in the medium term. Most of our suppliers have made significant climate commitments that align with ESRS requirements; their comprehensive approach to reducing emissions, managing resources sustainably, and enhancing biodiversity supports our own sustainability goals. Our commitment to improving data accuracy and transparency reflects our dedication to sustainable practices and continuous improvement. We believe that by investing in better data collection and management systems, we will be able to provide more comprehensive and reliable disclosures in the future, thereby strengthening our sustainability reporting and overall corporate responsibility. We plan to enhance its supply chain engagement by implementing a comprehensive supplier policy and questionnaire. This initiative aims to ensure that all suppliers adhere to our ethical standards and sustainability goals and provide more detailed information required to report in the sustainability statement. The questionnaire will cover key areas such as labour practices, environmental impact, and compliance with regulations. These will not only improve our Corporate Social Responsibility (CSR) reporting but also foster stronger, more transparent relationships with our suppliers, ultimately contributing to a more sustainable and responsible supply chain. Value chain estimates 93 GENERAL DISCLOSURES Sustainability Statement 2024 Incorporation by reference Disclosure 65-69 30 4 52 ESRS 2 SBM-1_06 E1-6_33 ESRS 2 GOV-1_08; ESRS 2.GOV-1_09 ESRS 2 SBM-1_03; ESRS 2 SBM-1_04; S1-6_17 Board and management team members Total revenue disclosure Total employee number disclosure Net revenue, used to calculate GHG intensity, disclosure ESRS code Page No. There were no errors to report from previous reporting periods. Reporting errors in prior periods This report includes information as required by by Article 8 of Regulation (EU) 2020/852 (Taxonomy regulation). Any other disclosures stemming from other legislation are signposted clearly throughout the statement. Disclosures stemming from other legislation or other sustainability reporting standards Key updates include: • The inclusion of a sustainability statement in the company’s sustainability report, structured according to the European Sustainability Reporting Standards (ESRS). • Additional disclosures as mandated by the ESRS, covering material impacts, risks, opportunities, policies, actions and metrics. • Included Greenhouse Gas (GHG) Scope 3 disclosures. 94 GENERAL DISCLOSURES Sustainability Statement 2024 The role of the administrative, management and supervisory bodies At Apranga Group we prioritize the versatility and diversity of our governing bodies by selecting candidates with the relevant experience necessary to serve effectively. The primary criteria for assessing candidates for the Management and Supervisory Boards include their education, industry knowledge, and competences. All management team members and board members have many years of experience in the retail sector (or have education and experience in other sectors, such as finance, regulation, etc.); therefore, they have knowledge of the products and the market in the Baltic region These criteria ensure efficient management and the effective fulfilment of roles within our governing bodies. To ensure that the necessary skills and expertise are developed to oversee sustainability aspects, our governing bodies are regularly updated on the latest sustainability information. This includes providing access to specialized training programs and workshops focused on sustainability- related topics. Additionally, we leverage external experts who provide counsel, enabling our governing bodies to make informed decisions. Our governing bodies are actively involved in overseeing sustainability-related initiatives, demonstrating their competence and commitment to these matters. During general shareholder meetings, the topic of education and applicable skills for management and board are assessed (please see management report, page 40). Apranga Group corporate governance model ensures effective management, oversight, and transparent communication with the market, respecting shareholders’ rights. We prioritize clear updates on performance and strategic decisions, building trust and confidence among stakeholders. Our governance framework includes feedback mechanisms to continuously improve and adapt to market conditions. APB Apranga is the parent company, whose governing bodies makes decisions for the entire Group. Currently main governing bodies at APB Apranga are: • General Shareholders’ Meeting • Board • General Manager • Management team (lith. Direktoratas) • Audit committee GOVERNANCE SYSTEM GOV-1 APB Apranga governance structure and reporting lines Highest governing and supervisory level General meeting Board Audit committee Preparation of sustainability related information for annual report General Manager of the Company Management team Head of Legal Other supporting representatives of various departments Data Protection Officer Corporate Communications Project Manager Highest executional level Executional level 95 GENERAL DISCLOSURES Sustainability Statement 2024 The General meeting of shareholders is the body that decides the fundamental issues of the Company's activities. Its competence is defined by the Republic of Lithuania Law on Companies and the Company's Articles of Association. Additional information on this body can be found in Governance report of this Annual report (page 40). The competence of the APB Apranga Board is determined by the Law on Companies of the Republic of Lithuania and the Company's Articles of Association. APB Apranga Board elects and dismiss the General Manager as well as in accordance with the Company's remuneration policy, determines his salary, other terms of the employment. Composition of the APB Apranga management team Composition of the APB Apranga board Number of executive directors Number of board members Proportion (%) of independent members of the management body Average ratio (%) of female to male members of the management Average ratio (%) of female to male members of the board (calculated as an average ratio of female to male board members) 7 6 57,14% 16,67% 33% Responsibilities overview within APB Apranga Management team per sustainability topics: Responsible for monitoring impacts, risks and Climate change | E1 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Pollution | E2 Water and marine resources | E3 Resource use and circular economy | E5 Own workforce | S1 Workers in the value chain | S2 Business conduct | G1 General Manager Finance and Economics Director Buying Director Sales and Marketing director Human resources director Development Director Managing Director | Inditex Baltic countries APB Apranga Board and General Manager oversee the strategic direction and target setting for Group’s sustainability. General Manager, with the management team, ensures these targets are implemented across the Group. While we do not have a single document outlining sustainability responsibilities, these are embedded in job descriptions and operational practices, ensuring accountability and integration throughout the organization. Each department dedicates additional personnel internally to work on allocated sustainability topics. 96 GENERAL DISCLOSURES Sustainability Statement 2024 The Works Council at the Group is an important representative body for employees, actively participating and expressing opinions on all major issues related to employees. The Works Council ensures that employees' interests are represented and defended; also, it contributes to the decision-making process. Additionally, the Works Council actively engages in discussions on work organization, safety and health, and other important issues that affect employee well-being and ensure the protection of employees' rights. Its activities are essential for ensuring effective communication between employees and the employer. APB Apranga Board is regularly informed about sustainability related topics / projects during General Meetings, with updates provided by the Corporate Communications Project Manager upon request, but at least once a year. These meetings enable the Board to address sustainability- related questions, propose new measures, and evaluate the effectiveness of actions taken. On November 5th, 2024, the agenda included a presentation on the Double Materiality Analysis (DMA) process and results, providing the Board with detailed insights into this crucial aspect of sustainability reporting. IROs were updated in the first quarter of 2025. As the DMA was completed last year, identifying key impacts, risks, and opportunities (IROs), the Board will adopt a strategy in 2025 that aligns with these sustainability IROs. This strategy will include the identification of related targets, ensuring a focused and effective approach to addressing the company's sustainability priorities. Representation of employees and other workers Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies GOV-2 Main responsibilities of the APB Apranga General Manager include: ب The head of the company - the General manager is the sole management body of the company. • The head of the company acts unilaterally in relations with other persons, except in cases where the approval of the Board or the General shareholders' meeting is required based on the laws or the Articles of association of the Company. • The main duty of the General manager is to organize the Company's daily activities, including responsibility for sustainability-related strategic decisions. Main responsibilities of the APB Apranga Management team include: • Defining and aligning sustainability targets with strategic ambitions. ب Guiding decision-making on daily environmental, social, and governance (ESG) matters. • Participating in the process and approving the results of the double materiality analysis as well as IROs oversight. ب Overseeing the preparation and completion of the annual report. APB Apranga Audit committee: APB Apranga Audit Committee consists of three members, two of whom are independent. The Audit Committee is elected for a four-year term. The members of the Committee are appointed and removed by the APB Apranga Board, except for the independent Committee members. Independent Audit Committee members are elected and removed by the General Meeting of Shareholders upon the proposal of the APB Apranga Board. Additional information on this body can be found in Consolidated Annual Report (page 69-70). Main responsibilities of the of the Audit Committee: ب Inform the APB Apranga General Manager about the results of the financial statements audit. • Oversee the company’s financial and non-financial reporting process to ensure the accuracy and transparency of financial statements and sustainability report. ب Monitor the financial statement preparation process and provide recommendations to ensure its reliability. ب Monitor the effectiveness of the APB Apranga internal quality control and risk management systems that affect the APB Apranga financial reporting. • Oversee the audit of annual financial statements and consolidated financial statements. • Review and monitor the independence of auditors or audit firms. • Be responsible for conducting the selection procedure for the auditor(s) or audit firm(s). 97 GENERAL DISCLOSURES Sustainability Statement 2024 As one of the leading clothing retailers in the Baltic States, we recognize our responsibility for the impact of our actions on employees, customers, shareholders, society, and the environment. In every market where we operate, we conduct our activities with fairness, transparency, and responsibility, adhering to all applicable laws and the highest standards of business ethics. We are dedicated to upholding the ethical principles that guide our operations. The principles of Apranga Group include integrity and clear communication of our values and ethics. These principles are integral to our commitment to transparency and respect in all relationships, both internal and external. We expect our employees, colleagues, and contractors to adhere to these same standards. These principles are outlined in our company policies and are available on our website. Building on the foundation set by our "Code of Ethics and Conduct," we ensure that all potential partners and suppliers align with these ethical standards through clear communication and adherence to our established principles. We recognize the importance of having a robust sustainability strategy and are planning to develop and implement one in 2025. This strategy will include setting specific targets and establishing a tracking system to monitor our progress. Our priority is to gradually improve our existing governance and oversight processes, ensuring that we meet the ESRS requirements and continuously enhance our due diligence practices. Currently, our Group does not have any remuneration schemes that integrate sustainability- related (including climate) performance. We recognize the importance of aligning incentives with sustainability goals; therefore, we are committed to evaluating the potential for incorporating sustainability-related performance metrics into our remuneration policies in the future. Statement on due diligence Integration of sustainability-related performance in incentive schemes GOV-3 GOV-4 E1.GOV-3 Key elements of due diligence (a) (b) (c) (d) (e) Sustainability report points Page No. in the report Integrating due diligence into governance, strategy and business model Engaging affected stakeholders in all relevant stages of due diligence Identification and evaluation of adverse effects Taking measures to mitigate these adverse effects Monitoring and communicating the effectiveness of these efforts ESRS 2 GOV-2: ESRS 2 GOV-3: ESRS 2 SBM-3 ESRS 2 IRO-1; ESRS 2 SBM-3; Related actions Metrics ESRS 2 GOV-2; ESRS 2 SBM-2: ESRS 2 IRO-1; All policies, which are mentioned in this report 96, 97 96, 101, 114, 126, 138, 150 114, 97 126, 136, 142, 151 127, 129, 136, 140, 145, 146 Effective risk management and internal controls are crucial for ensuring the long-term viability and ethical integrity of organization. Although currently there is no documented risk management system in place at Apranga Group, we have several steps which we take to ensure a comprehensive and effective approach. While working in projects which are related to sustainability, we take into consideration all aspects, including environmental impact, social responsibility, and governance practices. During the DMA process, which took place in 2024, we have assessed sustainability related risks together with impacts and opportunities, which are disclosed in this report. General sustainability related risks management system will be put in place after we develop updated strategy and set related targets and actions. Sustainability risk management and internal controls over sustainability reporting SBM-3 GOV-5 (ON RISKS) 98 GENERAL DISCLOSURES Sustainability Statement 2024 * European Parlament and Council directive (EU) 2022/2464 Regarding sustainability reporting, we perform reviews to assess the effectiveness of our practices and controls, ensuring they remain robust and relevant. Final report is approved by the General Manager of the company. The company's Management team assumes responsibility for the information presented in the sustainability report as per legal requirements. Transparent and reliable metrics are crucial in this process, as they allow us to accurately measure our progress and identify areas for improvement. To further enhance our efforts, we will focus on educating employees and work closer with our suppliers. 99 GENERAL DISCLOSURES Sustainability Statement 2024 SBM-1 Strategy, business model and value chain We integrate sustainability into our strategy through initiatives such as sustainable sourcing, energy-efficient operations, green energy usage, and waste reduction. While the specific sustainability focus areas of our updated strategy are yet to be confirmed, we have adhered to these principles. The forthcoming strategy, to be updated in 2025, will be shaped by the outcomes of the Double Materiality Assessment (DMA) process, which identified impacts, risks, and opportunities. This process has also incorporated the interests and perspectives of our stakeholders, ensuring that our strategy not only addresses our own operations but also considers our broader impact on the value chain. By engaging with stakeholders throughout the DMA process, we could ensure that their views are reflected in our strategic decisions, thereby aligning our sustainability efforts with stakeholder expectations and addressing relevant sustainability matters comprehensively. Business model: Group’s main activity is retail sales of clothing in Lithuania, Latvia, and Estonia. We operate stores which are owned or leased in retail spaces in major cities in all three countries. The business model relies on cooperation with worldwide known fashion brands whom we represent via franchise or in other forms of agreement. The main partner is the world's leading fashion retailer Inditex. We operate brick and mortar stores and sell through e-commerce platforms (owned and third party). All administrative functions are concentrated in the main office in Vilnius. Meanwhile there are small administrative offices in Riga and Tallin, to implement local functions. Central warehouse is in Vilnius and serves as the main logistics operation point for all three countries. From it we organize shipments to all three Baltic countries with our own or third-party transportation companies. Current Markets and Customers: We serve key markets such as Lithuania, Latvia, and Estonia and represent different customer groups according to the main retail segments of our activities: Economy, Youth, Business, Luxury, Zara, Outlets, and Footwear. During the reporting period, there were no significant changes in the groups of products and/or services offered, nor in the markets and/or customer groups served. Employee Distribution: Our workforce is distributed across all Baltic countries’ regions, with most of the administration located in Lithuania. Total number (headcount at the end of the reporting period) of employees – 2295 (see in financial statements page 52). In Lithuania there are 1456, Latvia – 524, Estonia – 315. Detailed information on our employees can be found in our Own workforce part of this report (page 140). STRATEGY * Related considerations: Number of employees is provided in headcount as of December 31, 2024. Information is provided from internal HR system „HRB portal“. The numbers align with financial data. Employees on maternity (paternity) leave and duplicates (when the same person is working in more than one company in the Group) are excluded. 100 GENERAL DISCLOSURES Sustainability Statement 2024 Value chain In the materiality assessment, Value chain is defined as the full range of activities, resources and relationships related to the undertaking’s business model and the external environment in which it operates. It encompasses the activities, resources and relationships the undertaking uses and relies on to create its products or services from conception to delivery, consumption and end-of- life. Therefore, as a first step of Double materiality assessment, Company’s Value Chain and Stakeholder map was created. It helped to identify the broad field of activity in which company operates, as well as to agree on the scope and boundaries of the assessment. Value chain related data available at the publicly accessible sources, such as sustainability reports and sectoral statistics, was collected and analysed. Based on this information, the identification of the potentially material sustainability matters and IROS was carried on. Business impact and relation to strategy and actions is stated in Material impacts, risks and opportunities and their interaction with strategy and business model part of this report, page 104. Key dependencies: • Types of goods (Clothing, footwear, household goods) • Cotton (major source for product manufacturing by suppliers) • Packaging materials • Energy and water • Fuel for transport • Solar power plant and charging stations • Own employees • Finances (equity (stock market) and bank loans, guarantees, leasing and supplier credit, insurance) • Technological resources (e.g. IT equipment, software, warehouse management system, e-commerce platform etc.) • Business trips • Buildings (5 to 10 owned buildings and over 160 leased premises) • Product safety The most significant assets in our business line are contracts with suppliers, our own employees and our own stores. We ensure the stability of the company's operating model by investing in our employees, entering preliminary contracts with suppliers and planning activities with partners (long-term lease), as well as consistently investing in store renovations that meet the highest standards. Therefore, we focus on dependencies which are within our and take into account those dependencies which we cannot directly control. Apranga Group value chain map: Supply chain: • Manufacturers (Manufacture and selling of the products) • Suppliers (Creating products and producing for other manufacturers in full or in part) • Packaging manufacturers and suppliers • Upstream and downstream transport • Rental of premises and shopping centers • Resources (Energy and water supply) • Construction works (shop installation) • Outsourced services (cleaning of premises, couriers, IT services) • Other services (Consulting, Advertising) Own activities: • Brick and mortar, and online retail • Trading on third-party online platforms • Storage facilities (for own operations) • Logistics (for own operations) • Returns (to Customers or Suppliers) • Real estate management (not a significant part of the business) • Repair services (direct and/or third-party management, small %) 101 GENERAL DISCLOSURES Sustainability Statement 2024 Markets (End use): • Consumers (Product segments: Economy, Youth, Business, Luxury, Zara, Outlets, and Footwear) • Third-party platforms (e.g. Farfetch) • Shopping centers • Shops in own premises End of life: • Unsold items sold in outlets • Product consumption cycle (Efforts to prolong it) • Energy regeneration from unsold products (less than 1%) • Used clothing which is gathered in stores given to charity (a small proportion) • Clothing hangers and mannequins returned to partners or sold (50/50) • Plastic and paper waste (distributed to market) collected via “Žaliasis taškas, VšĮ” in Lithuania • Unsold products return to supplier (producer) • Management of operational waste Our approach to stakeholder relations is grounded in continuous dialogue through various channels, including surveys, expert meetings, and consumer feedback. The insights gathered from these interactions are integral to our business decision-making process, in example we have involved our stakeholders in DMA process last year and took into consideration their views and opinions while evaluating most material topics (more information in DMA process description of this report). We ensure that stakeholders are regularly informed about our company's objectives and decisions, and we actively solicit their feedback. This ongoing engagement allows us to better understand stakeholder needs, adapt our strategies and actions accordingly, and collaborate effectively to achieve optimal results. The structure of major shareholders remained unchanged last year. APB Apranga is majority owned by investment holding MG investment, UAB. Shareholders of the company who control more than 5% of the votes at the shareholders' meeting: • MG investment, UAB 65.41 % • Minvista, UAB 10.48 % • Private or institutional investors (remaining part) Interests and views of stakeholders SBM-2 Stakeholder groups: Stakeholder group Shareholders and investors (financial institutions) Business partners Involvement type & regularity (ad hoc if not indicated otherwise) Topics discussed Impact on business decisions Shareholders meetings (once a year) E-mail Company website Media Meetings Events and special publications Dedicated communication channels E-mail Teleconference calls Code of Conduct Surveys and opinion polls Company website Sustainability themes in relation to business: climate, business ethics and compliance. Cooperation on sustainability related products or activities. Comply with the law in the markets in which we operate. Invest in renewable Energy. Setting sustainability targets for our partners. Profitable growth, reputation and risk management. Financial results and annual report. Stable payment of dividends and share price development. Sustainability themes in relation to business development. Direct decisions for business development. Creation of financial value. Measures for ESG related investor assessments. 102 GENERAL DISCLOSURES Sustainability Statement 2024 Own work force Regulators Internal company portal HR management system Trainings and webinars Surveys and opinion polls Face-to-face meetings Information boards in common areas E-mail Face-to-face meetings Company website Media Compliance with laws and regulations Development of sustainable business Preparing and adhering to new sustainability legislation. Complying with the local regulations. Good working conditions Employee training and development Employee involvement in implementing sustainability related activities Measures emerging from annual employee satisfaction survey. Updated trainings. Career opportunities (both horizontal and vertical). Flexible working Hours. Customers Customer service office Surveys Internet services Company website Newsletters Stores Media Quality products, sustainable packaging. Good customer service and reliable deliveries Transparent and reliable information in relation to products, good customer service and reliable deliveries Sustainable value chain Sustainability information Customer feedback and survey results inform both business related and sustainability related decisions, such as expanding sustainable assortment and responsible handling of defective products. Supply chain Dedicated communication channels Code of Conduct Company website Media Company website Media Sustainability oriented partnerships. Sustainability related information. Sustainable products, environmental targets and human rights throughout the value chain. Transparent and reliable information on sustainability related matters. Cooperation to promote sustainability. Setting sustainability targets for our partners. Monitoring commitment to Code of Ethics. Active communication via various channels. Society Stakeholder group Topics discussed Impact on business decisions Management team and the Board are informed of stakeholders' views and interests on sustainability through regular reports and updates from dedicated stakeholder engagement teams. These teams gather feedback, conduct surveys, and hold consultations to ensure that the perspectives and concerns of stakeholders are accurately communicated to the leadership, enabling informed decision-making on sustainability matters. Involvement type & regularity (ad hoc if not indicated otherwise) 103 GENERAL DISCLOSURES Sustainability Statement 2024 In 2024, Apranga Group conducted a double materiality assessment in alignment with the ESRS. This assessment evaluated the impact and financial materiality of various sustainability topics relevant to our operations. This is the first time we have systematically identified and assessed our company’s key significant topics. A comprehensive list of materiality topics and related impacts, risks and opportunities was created as a result of this process. No in-depth resilience analysis was conducted; however, we have indicated some strategic actions in relation to identified IROs in the table below. The results of this assessment are listed below, highlighting the key areas of importance. Material topics (with sub-topics, sub-sub-topics): • ESRS E1: Climate change (Climate change mitigation, climate change energy). • ESRS E2: Pollution (Pollution of water, microplastics) – entity specific. • ESRS E3: Water and marine resources (Water consumption) – entity specific. • ESRS E5: Circular economy (Resource inflows- entity specific, waste). • ESRS S1: Own workforce (Working conditions (working time, work-life balance, adequate wage), equal treatment and opportunities for all (training and skills development). • ESRS S2: Workers in the value chain (Working conditions (working time & work-life balance; adequate wages, freedom of association), Equal treatment and equal opportunities for all (gender equality and equal pay for work of equal value; measures against violence and harassment in the workplace; diversity)). • ESRS G1: Business conduct (Corporate culture and business conduct, management of relationships with suppliers including payment practices, corruption and bribery). We have omitted all the disclosure requirements in the topical standards for Biodiversity and ecosystems (E4), Affected communities (S3) and Consumers and end-users (S4) as these topics were deemed immaterial in our DMA. We understand the importance of periodically reviewing our double materiality assessment to keep pace with changing stakeholder expectations and emerging requirements. Therefore, in the future, we plan to review and reassess both our current significant topics and those that were assessed as not material. This comprehensive review process will help us identify new impacts, risks, and opportunities, ensuring our sustainability focus and planned actions remain effective and relevant. IROs which are stemming from value chain have an indirect impact, thus sets boundary on ownership of said impact, risk or opportunity. In the following IRO disclosure table, we transparently disclose all IROs which were identified during DMA. However, we do not to reflect on each of them separately from business impact or planned actions perspective – only on those for which we have evaluated such impact or have certain short-term plans. By continuously updating our assessment, we can better align our efforts with the latest industry standards and stakeholder concerns. This proactive approach will not only enhance our ability to respond to emerging challenges but also strengthen our commitment to transparency and accountability. Material impacts, risks and opportunities and their interaction with strategy and business model MATERIALITY ASSESSMENT SBM-3 (+ E1.SMB-3, S1.SBM-3, S4.SBM-3) 104 GENERAL DISCLOSURES Sustainability Statement 2024 E1 Climate change (climate change mitigation) Critical Important I: The actual negative impact arises from the high emission intensity in the value chain—particularly during raw material supply and the production process— as well as from the Group's direct operations, such as e-commerce, transportation, and warehousing. R: The limited availability of GHG-reducing technologies in the value chain may require costly investments, potentially driving up product prices and posing a financial risk to the Goup. R/O: The financial sector is more likely to invest (as well as it also can influence consumers choice) in climate-friendly industries or companies, presenting both a risk and an opportunity for the Group, depending on its own environmental practices. R: There is potential for overall reputational damage due to the significant climate impact of this industry. Upstream and own operations All time horizons This environmental challenge necessitates a shift towards more sustainable practices to mitigate negative effects. Strong focus on integrating sustainability into core strategies, with focus on reducing emissions through improved supply chain management, adopting eco-friendly materials, and enhancing production efficiency. Additionally, moving towards solutions which create lower emissions in own operations – means of transport, petrol, energy sources. The scarcity of sustainable materials can lead to higher costs and supply chain disruptions, impacting production schedules and delivery times. Additionally, limited investment in innovative technologies can hinder innovation and competitiveness, resulting in missed growth opportunities. Focus on ensuring continuous investment for a strong and resilient business model. Assess the entire supply chain to identify key sources of emissions. Use this data to establish a baseline for measuring improvement. Assess highest emission points and investigate possible medium-term solutions. Set related emission reduction targets. Work closely with key suppliers to promote the development and adoption of sustainable practices across the supply chain. Enhanced transparency coming with new CSRD aligned reporting, starting with annual report for FY 2024 Sustainability integration into the core business strategy. Clearly define emission targets and focus on emissions reduction actions that offer the greatest impact and are within Group’s sphere of influence. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 105 GENERAL DISCLOSURES Sustainability Statement 2024 E1 I: Textile and clothing production uses a lot of energy, which has a negative impact. An additional negative impact is that ttransportation of goods is dependent on fossil fuels. R: Tighter environmental regulations on energy consumption and variations in energy prices could lead to higher operating expenses. Additionally, not transitioning to cleaner energy can harm a company's reputation and relationships with consumers, investors, and regulators. R/O: High energy prices can push suppliers out of the market and reduce market share. The need to invest in energy-efficient technologies can undermine partnerships if there is no equal access to or understanding of these technologies. However, investing in energy-efficient technologies can provide long-term financial benefits. R/O: While investing in non- fossil fuel transportation solutions or self-generated energy can be expensive, it offers significant long-term financial benefits. O: Implementing energy- saving practices (value- chain) can yield immediate cost savings. Additionally, investing in energy-efficient technologies can enhance efficiency and result in long- term financial benefits ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned Climate change (energy) Critical Important Upstream, downstream, own operations All time horizons High energy prices may push suppliers out, affecting Group’s market share. Operating expenses on electricity might increase due to tighter environmental regulations. The Group may face potential disruptions if its transportation partner struggles with fuel price fluctuations, affecting the overall stability of the delivery of the goods. Need to consider external partner's dependency on fossil fuels, such as diversifying transportation partners or investing in collaborative sustainability initiatives. Work closely with key suppliers to promote the development and adoption of sustainable practices across the supply chain. I.e. Promote the use of green energy in the value chain by setting requirements for suppliers. Optimize inventory levels to buffer against supply chain disruptions, ensuring that there is enough stock to handle short-term supplier issues. To mitigate possible risks, we plan to choose partners based on their sustainability practices and fuel efficiency 106 GENERAL DISCLOSURES Sustainability Statement 2024 E2 E2 E3 Pollution (pollution of water) (entity specific) Pollution (microplastics) (entity specific) Water and marine resources (water consumption & water withdrawals) (entity specific) Critical Critical Critical Informative Important Informative I: Negative impacts arise from high water consumption and chemical use in the raw material processing and textile production. Such substances enter the environment, especially in countries where water treatment options are limited. R: The need to invest in water pollution control technologies may require significant costs and increase production costs. R: In long-term supplier selection options may be reduced if some technologies (manufacturing, dyeing) are considered unacceptable due to high water consumption. I: Negative impact due to the release of microplastics into the environment in the value chain (production processes, use and washing of sold garments). R/O: Opting for sustainable design and production by eliminating synthetic materials could expand the product range and attract a broader customer base, though it would lead to higher production costs. However, this could lead to higher production costs for suppliers, potentially affecting product pricing. I: Negative impacts arise from the high-water dependency in cotton cultivation and textile production, particularly concerning the use of freshwater sources like groundwater and nearby rivers. O: Encourage suppliers to use water sustainably (both in terms of consumption and the management of contaminated water). Upstream Upstream, downstream Upstream Long-term Long-term All time horizons The rising demand for eco-friendly products can enhance customer relationships, but failing to address this demand properly could result in a loss of market share. Focus on ensuring compliance with environmental regulations to avoid reputational damage and build trust with stakeholders, especially consumers, regulators, and financial partners. High water dependency in cotton growing and textile production can lead to supply chain disruptions, affecting the availability and cost of raw materials. To mitigate possible risks, we plan to introduce a questionnaire designed for suppliers. This will help us to identify what our suppliers are doing to address related risks of pollution. To mitigate possible risks, we plan to introduce a questionnaire designed for suppliers. This will help us to identify what our suppliers are doing to address related risks of pollution. We plan to evaluate communication possibilities to educate customers about microplastic pollution. The Group might need to engage more closely with its suppliers to obtain more accurate information and promote sustainable practices and reduce water dependency – via supplier policy and questionnaire. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 107 GENERAL DISCLOSURES Sustainability Statement 2024 E5 E5 Circular economy (resources inflows, including resource use) Circular economy (waste) Critical Critical Important Significant I: Negative impacts rise from the limited availability of secondary resources, reliance on raw materials, and the use of complex materials that are challenging or impossible to recycle. Direct negative impact due to the trade in fast fashion clothing. R: There are insufficient alternatives to make positive changes in the value chain, and a lack of suppliers offering clothing made from secondary resources. However, consumer demand for alternative materials may rise. I: Negative impact downstream as sold garments ends up in landfills or are incinerated. Negative impact on the company's direct operations due to the amount of waste generated. R: Currently there is no effective solution to prevent sold garments from ending up in landfills, and regulatory authorities may impose strict textile waste management rules, impacting the entire business model. R: Reputational risk and consumer backlash if waste management is not addressed at the end-use stage R/O: Some suppliers require a waste management programme at the end- use stage, which increases operational costs O: The EU Waste Directive will propose a solution to participate in the textile management process by sorting textile waste separately. This will increase operational costs but will help to manage waste efficiently at the end-use stage. Upstream Own operations, downstream Long-term All time horizons Dependence on raw materials and the use of complex, non-recyclable materials can drive up production costs, as these materials may become more expensive or harder to source. Increasing environmental regulations may require the company to shift towards more sustainable practices, potentially leading to higher compliance costs and operational changes. The Group may face higher costs to comply with new textile waste management regulations, including investments in waste reduction technologies and processes. Developing a risk management strategy to address potential supply chain disruptions due to the limited availability of secondary resources. This could include diversifying the supplier base or creating contingency plans. Plan to work closely with suppliers to ensure they comply with new regulations and adopt sustainable practices. Continue take-back programs to collect used garments from customers for recycling or repurposing. Take part in creating a system of separate textile collection in all markets where the company operates in line with EU waste regulation. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 108 GENERAL DISCLOSURES Sustainability Statement 2024 S1 S1 Own workforce: working conditions (working time & work-life balance) Own workforce: working conditions (adequate wages) Significant Significant Significant Significant I: Potential negative impact on employees due to the specific nature of working hours (non-traditional working hours) and changing shifts. R/O: Risk of deterring new employees due to unstable working hours, but also an opportunity to offer a flexible work schedule. R/O: In case of introduction of new national legislation on shop opening hours (e.g. weekends, Sundays or late evenings) it can have turnover losses due to shorter working hours; however, offering flexible hours can attract individuals who prefer or need non-traditional work schedules, such as students or parents. I: There may be a negative impact on employee well- being, especially in the medium and long term, if wages do not reach adequate wage limits and wage growth is not linked to average wages (or purchasing power). R: Increase of operating costs due increased market average wage. O: Competitive wages and growth opportunities can lead to higher employee retention, reducing turnover costs, and improve the company's reputation and employer image. Own operations Own operations All time horizons All time horizons Attracting new employees is difficult due to the perceived instability of the work schedule. Increased Turnover: Employees may leave for more stable job opportunities, leading to higher turnover rates. The Group may face difficulties in attracting new talent and retaining current employees if the wages are perceived as inadequate. This perception can deter potential hires and lead to higher turnover rates. Additionally, the need to train new employees can further impact productivity, as these training programs require time and resources, temporarily reducing overall efficiency. Manage employee turnover effectively: Provide resources to help employees manage their work-life balance. Provide motivational salary programs. Provide additional benefits, such as private healthcare fund. Carry out employee satisfaction survey Wage policy: Review a wage growth strategy tied to performance and market conditions to motivate employees and align their interests with our goals. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 109 GENERAL DISCLOSURES Sustainability Statement 2024 S1 S2 Own workforce: equal treatment and opportunities for all (training and skills development) Workers in the value chain: working conditions (working time & work-life balance) Significant Critical Significant Important I: Possible positive impact of internal training programs and career development programs. R: Increased operating costs due to the investment in enhanced training programs and the development of partnerships with educational institutions. O: Improvement of existing training programs will help employees gain better skills and knowledge, which can lead to higher productivity and job satisfaction. O: Partnerships with educational institutions can attract students who are looking for work-study opportunities, thereby expanding the talent pool. I: Potential negative impacts on value chain workers at all levels, excluding Tier 1, due to the lack of regulations and guidelines to mitigate excessive working hours, which is a significant issue within the global fashion industry. R: Disregarding work-life balance within the value chain threatens its stability, potentially jeopardizing operations and performance. R/O: Regulation in this area enhances the stability of the value chain, although it may also lead to increased production costs. Own operations Upstream Short-term Long-term Balancing the increased costs with the expected benefits will be crucial to ensure the initiatives are sustainable. Higher production costs due to increased regulation may be passed down the supply chain, potentially leading to higher prices for the purchasing company. Thus, company might need to adjust operational strategies to accommodate changes in supplier practices and costs. Evaluate existing training programs to identify strengths and areas for improvement. Develop new training content based on the assessment. Set up metrics to measure the effectiveness of the training programs. Regularly review and update the training content based on feedback and performance data. Communicate the new training opportunities to current and potential employees and highlight the benefits of these programs in recruitment materials. Create and introduce a supplier code of conduct and distribute comprehensive supplier questionnaires to direct (Tier 1) suppliers to gather information in relation to working conditions of value chain workers. Use the responses to assess compliance and identify areas for improvement. Regularly monitoring suppliers to ensure ongoing compliance and address any issues promptly. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 110 GENERAL DISCLOSURES Sustainability Statement 2024 S2 S2 Workers in the value chain: working conditions (adequate wages, freedom of association, including the existence of work councils, collective bargaining, health and safety) Workers in the value chain: equal treatment and opportunities for all (gender equality and equal pay for work of equal value, measures against violence and harassment in the workplace, diversity) Critical Critical Important Important I: Potential negative impact on workers’ rights in the garment industry due to the absence of commitments and processes to ensure that suppliers respect fundamental labour rights, including the right to assembly and collective bargaining, across the entire value chain (beyond just Tier 1). R: Increased regulation may lead to higher production costs and pose a reputational risk due to potential negative consumer reactions if issues such as fair pay, health and safety, and fundamental labour rights (including the right to assembly and collective bargaining) are not adequately addressed throughout the entire value chain. I: Potential negative impact on women working in the garment industry arise from the absence of commitments and processes to prevent discrimination and ensure a harassment-free environment throughout the value chain. R: Increased regulation may lead to higher production costs. Additionally, there is a reputational risk due to potential negative consumer reactions if the issue is not adequately addressed. Upstream Upstream All time horizons All time horizons A need to adjust pricing strategies to maintain profitability while managing increased costs. Incorporating these risks into strategic planning and decision-making processes necessitates adjustments to internal risk management procedures to better prepare for potential impacts. The Group will need to revise its financial forecasts and plans to account for the higher costs, ensuring that it maintains financial stability and meets its financial goals. Create and introduce a supplier code of conduct and distribute comprehensive supplier questionnaires to direct (Tier 1) suppliers to gather information in relation to working conditions of value chain workers. Use the responses to assess compliance and identify areas for improvement. Regularly monitoring suppliers to ensure ongoing compliance and address any issues promptly. Create and introduce a supplier code of conduct and distribute comprehensive supplier questionnaires to direct (Tier 1) suppliers to gather information in relation to equal treatment and opportunities for value chain workers. Use the responses to assess compliance and identify areas for improvement. Regularly monitoring suppliers to ensure ongoing compliance and address any issues promptly. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 111 GENERAL DISCLOSURES Sustainability Statement 2024 G1 Business conduct (Corporate culture and business conduct) Important Important I: Non-compliance with the company's Code of Ethics and cultural principles may negatively affect direct operations and the entire value chain. R: A negative or discriminatory company culture can have profound impacts on both potential employees and business relationships. For the workforce, particularly the younger generation, such a culture can deter talented individuals from joining the company, leading to challenges in attracting and retaining top talent. Moreover, partners may be unwilling to associate with a company that does not uphold inclusive and respectful cultural principles, leading to a breakdown in collaborations and potential loss of business opportunities. O: A positive and supportive work culture, backed by appropriate internal regulations, can enhance trust among business partners, the community, and other stakeholders. Upstream, own operations All time horizons Troubles in attracting new talent can result in a less dynamic and innovative workforce, ultimately affecting the company's competitiveness and growth. Strong corporate culture can lead to more robust and enduring business relationships, increased community support, and greater overall stakeholder engagement and satisfaction. Conduct regular training sessions for employees at all levels to ensure understanding and adherence to the company’s Code of Ethics and cultural principles. Encourage open communication and feedback from employees to continuously improve the work environment. Regularly review and update internal regulations to ensure they are aligned with best practices and legal requirements. Maintain transparent communication with business partners about the company's commitment to ethical practices and cultural principles. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 112 GENERAL DISCLOSURES Sustainability Statement 2024 G1 Business conduct (Management of relationships with suppliers including payment practices) Important Important I: Improper management of supplier relationships can lead to actual negative impact on Environmental, Social, and Governance (ESG) areas. R: Neglecting supplier relationships and delaying payments can lead to diminished or halted supplies and may also result in the cancellation of franchise or distribution agreements. R: Failure to manage supplier relationships and late payments can lead to reduced or halted supplies, termination of agreements, late deliveries, interest charges, and the end of business partnerships. O: Making timely payments and effectively managing relationships can help establish strong and reliable connections with suppliers. Upstream Medium and long-term Late payments can result in interest charges and strained business partnerships, leading to late deliveries and potential termination of relationships. Ensure all payments to suppliers are made on time to build trust and reliability. Maintain open and transparent communication with suppliers to address any issues promptly. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 113 GENERAL DISCLOSURES Sustainability Statement 2024 G1 Business conduct (corruption and bribery) Informative Important I: Non-compliance with the company's Code of Ethics and Conduct can negatively impact direct operations and the entire value chain. While the impact on people and the environment may be limited, it is significant from a risk management perspective. R: Failure to comply with legal requirements and incidents of corruption and bribery can damage public trust, compel partners to end business relationships, lead financial institutions to downgrade the company's reliability, and worsen financial conditions. R: Incidents would negatively affect public trust, partners would be forced to terminate business relationships, financial institutions would worsen the company's reliability indicators, and financial conditions would deteriorate. O: Strengthening organizational resilience through the prevention of bribery and corruption, implementing strong and preventive internal documentation, along with continuous training to improve employees’ awareness and knowledge of good practices, helps them recognize risks. Upstream, own operations, downstream All time horizons Non-compliance can lead to disruptions in daily operations, as the company may face legal actions, fines, and increased scrutiny from regulators. The company may experience financial strain due to downgraded reliability indicators from financial institutions, leading to higher borrowing costs and reduced access to capital. Loss of public trust (including consumers) can reduce sales and market share, impacting the entire value chain from production to distribution. Provide continuous training for employees on compliance, ethical behaviour, and recognizing risks related to bribery and corruption. Maintain transparency with stakeholders about the company's compliance efforts and any incidents that occur. Perform regular risk assessments to identify potential areas of non- compliance and develop mitigation strategies. ESRS DMA outcome overview Our related actions Topic Impact assessment Financial assessment Impacts (I), risks (R) and opportunities (O) Origin of the impact Time horizon considered (short-, medium-, long-term) Impact on business, value chain, strategy or decision making Actions taken or planned 114 GENERAL DISCLOSURES Sustainability Statement 2024 The materiality assessment process was conducted in accordance with the double materiality principle as defined by the EU Corporate Sustainability Reporting Directive. This assessment was performed by APB Apranga Management team, Heads of departments and other responsible personnel with consultations provided by external experts, in accordance with the ESRS and the May 2024 version of the EFRAG implementation guidelines. Both impact and financial materiality were assessed during the process. The topic is considered material from the perspective of the impact when it concerns the actual or potential, positive, or negative impact of the Group to the environment or people in the short to long term. Meanwhile, financial materiality means that a topic is considered material from a financial perspective if it has, or is likely to have, a financial impact for the Group, i.e. when it presents financial risks or opportunities. The evaluation was carried out in three stages: 1. Perception of context and scope. The scope of the assessment was determined and agreed considering the main activities of the company, value chain and stakeholders. a. Scope of the assessment: value chain and stakeholder maps have been created. b. Time perspectives have been applied. Since the assessment of the materiality of the enterprise must be carried out in the short, medium, and long term, the following periods have been defined: i. Short-term: 1 year (reporting period, up to one year). ii. Medium term: end of short term to 5 years. iii. Long-term: More than 5 years. 2. Compilation of a list of potentially material sustainability topics. ESRS 1 Annex A provides a list of sustainability topics that must be considered in the company’s materiality assessment. During this analysis, sector-specific expert pre-evaluation was used to determine whether each topic from the list is significant for the company. The significance of each topic was assessed based on the company’s responses to the pre-assessment questionnaire, publicly available information, scientific articles, experts’ consensus, and industry-related research. The value chain perspective was also considered—ESRS does not require detailed information on every participant in the value chain, but it is crucial to include essential information. When evaluating significant impacts, risks, and opportunities (IROs), attention was given to relationships that may be associated with significant IROs. For example, for relations with: a. participants who are involved in high-impact zones, i.e. the actual or potential effects are likely to occur, or b. participants on whom the business model of the enterprise is highly dependent in relation to goods and services. 3. Assessment of materiality. The aim of this phase was to identify the impact and financial significance of potentially significant topics selected in the second step and to identify actual and potential sustainability impacts, risks, and opportunities (IROs). Impact materiality assessment was conducted considering the severity and likelihood of actual and potential impacts across the value chain. Severity Severity of the impacts were assessed based on three parameters: • Scale to determine how grave or beneficial the negative or positive impact respectively is for people or the environment. • Scope to determine how widespread the positive or negative impacts are. • Irremediability to determine whether and to what extent the negative impacts could be remediated. Irremediability was not considered for positive impacts. Likelihood The likelihood of an impact materialising was assessed considering short-, medium and long-term perspectives, as described earlier. In the case of actual impacts the likelihood was not considered. Also, the likelihood was not considered in case of any kind – actual or potential -impacts on human rights. In this case, the materiality was determined only by the severity of the impact. Disclosures on the materiality assessment process IRO-1 (+E1.IRO-1, E2.IRO-1, E3. IRO-1, E5.IRO-1, G1.IRO-1) 115 GENERAL DISCLOSURES Sustainability Statement 2024 Impact materiality categories Based on the sum of the severity and likelihood scoring, the actual and potential impacts were divided into four categories: • Informative • Material • Significant • Critical Impact materiality assessment approaches and sources Applied approaches Used resources • Value chain as the ‘hot spot’: Since the company is a retailer and does not have production itself, most of the environmental impact was associated with its value chain. These hot spots were identified in the pre- assessment and the scores were allocated based on the potential impact that concern this hot spot. • Conservative approach: The severity parameters were assessed by applying a conservative approach, i.e. considering the potential non-compliance or most significant impact that can happen. Not all the company’s suppliers have publicly disclosed sustainability information. Therefore, known impacts associated with fashion or clothing industry was attributed to the company’s value chain. • Likelihood: For the likelihood assessment, the company’s own policies and mitigation measures to address impacts of the environmental topics were considered. In case there were no established policies or disclosed measures, the likelihood was scored 0 (present state condition) Severity and likelihood parameters were assessed based on various information and sources, including: • Apranga Group sustainability reports and existing policies. • Geographical location of the main suppliers and industry clusters. • Annual reports and material topics of suppliers, where applicable (i.e. “Inditex”. • Disclosed information by industry stakeholders on environmental impacts (e.g. CDP, Global Fashion Agenda, SASB, ENCORE, MSCi sectoral analysis, EURATEX documentation and statistics, IAF resources). • STTI White Paper on the Definition and Application of Commercial Compliance and other resources. • Research and reviews of international organisations on environmental impacts (e.g. UNEP, European Environment Agency, McKinsey, Ellen McArthur Foundation), such as: • “Remake Fashion Accountability Report 2024”, • “The intersections of environmental and social impacts of the garment industry (August 2022)”, • “Fair Wear Fair Working Hours Guide” • “The circular economy: a ‘triple play’ solution for achieving China’s climate objectives” report, • “Unlocking the potential of a nature- positive, circular economy for Europe”, • “An innovation pathway to decarbonization: circular economy solutions for policymakers and industry” • “Patagonia Annual Benefit Corporation Report” Environmental impacts: 116 GENERAL DISCLOSURES Sustainability Statement 2024 Applied approaches Applied approaches Used resources Used resources • Sector’s specifics “hot spots” – Apranga Group business and governance model largely depends on the sector specifics and relations in the value chain. Therefore, sectoral benchmark and governance practice across the value chain was evaluated (e.g. supplier policies, commitments and governance practice of the largest suppliers). • National laws and business environment – although Apranga Group activity depends on the broad value chain, operational process is specific to the Baltic region. Group’s activity was evaluated in the perspective of the local business environment, as well as the national and applicable European policies and requirements. • Group’s engagements – “current state” of the company was based on provided policies, national engagements and participation in business associations. • Conservative approach: The severity parameters were assessed by applying a conservative approach, i.e. considering the potential non-compliance or most significant impact that can happen. In case some sub-sub-topics could have been associated with both negative and positive impacts (e.g. working time/work- life balance) depending on the sub-group of the stakeholder, only the negative impact was assessed. • Impact area ‘hot spots’: In the pre- assessment, the hot spot of a specific (sub-) sub-topic was identified and the scores were allocated based on the potential impact that concern this hot spot (e.g. some value chain employee topics focused on raw material production, some more specifically on the garment production) • Value chain impact likelihood: For the likelihood assessment, the company’s own policies and mitigation measures to address impacts on the value chain employees were considered. In case there were no established policies or disclosed measures, the likelihood was scored 0 (present state condition). Severity and likelihood parameters were assessed based on various information and sources, including: • Apranga Group sustainability reports. • Existing policies and governance structure, including Apranga Group Code of Conduct. • Apranga Group Sustainability Policy. • Activities of Lithuanian Trade Enterprises Association. • Annual reports and material topics of suppliers, where applicable. • The Law on the Protection of Whistle- blowers of the Republic of Lithuania under the EU Whistleblowing Directive. • The assessment was also informed by previous and current stakeholder engagement. Severity and likelihood parameters were assessed based on various information and sources, including: • Apranga Group sustainability reports and existing policies. • Annual reports and material topics of suppliers, where applicable • Industry ratings and materiality maps (e.g. SASB, MSCI). • Research and reviews of international organisations on social and human rights impacts of the garment and retail industry (e.g. UN, EU, ILO). • Disclosed information by industry stakeholders on social and human rights impacts, including Business & Human Rights Resource Centre – Apparel Company Dashboards; Corporate Human Rights Benchmark; Fashion Checker; Clean Clothes Campaign; Collective Fashion System. • The assessment was also informed by previous and current stakeholder engagement Governance impacts: Social impacts: As a clothing retailer, Group sells products made of natural, synthetic or mixed materials derived from land use, with impacts primarily stemming within its value chain. Suppliers source products globally, and land use practices critically determine the resilience of these locations to adverse climate effects. Given the extensive scale of the value chain and the numerous stakeholders involved, large-scale changes in land management practices are essential. Climate change adaptation has been identified as having a significant negative impact due to intensive agricultural practices upstream in the value chain. This impact extends beyond local areas, potentially affecting several countries within the region. While measures for sustainable land management exist, their application varies significantly across different regions. This inconsistency is often due to a On climate change adaptation 117 GENERAL DISCLOSURES Sustainability Statement 2024 lack of capacity and infrastructure to support land managers in implementing new techniques. Consequently, this effort is costly and requires the collaboration of multiple stakeholders. Financial materiality assessment was conducted considering the magnitude of financial effects and likelihood of occurrence of risks and opportunities across the value chain in the short-, medium- and long-term perspective. Internal stakeholders of the company took the leading role in assessing and identifying sustainability-related risks and opportunities. Sustainability-related risks and opportunities can arise from sustainability impacts that the company is causing and/or dependencies on resources (including relationships). To assess actual or potential risks and opportunities, two parameters were assessed: 1. Effects on relationships were assessed to determine whether and how likely a company will be able to rely on the relationships needed on the same terms or are they possibly changing due to sustainability related factors. 2. Continuous use of resources was assessed by considering different aspects affecting resource availability, including changes on the market (supply, demand, pricing), technological changes, policy/regulatory constraints etc. Both aspects were evaluated on a qualitative scale that determines the magnitude and likelihood of the risk/opportunity. Additionally, two types of quantitative values were assigned to the assessment scores: a) percentage of revenue and b) percentage of EBT. We have not yet assessed if there are risks of material adjustment within next annual reporting period to carrying amounts of assets and liabilities reported in related financial statements. Financial materiality categories • No risk • Informative • Important • Significant • Critical Identification of material topics The topics were considered material if: • An impact or financial assessment result is Critical. • Both impact and financial assessment results are Significant. • Additional topics that are recognized as relevant to the Group’s business strategy (such as Own workforce and Governance). Financial materiality assessment approaches and sources Stakeholder involvement The assessment of both impact and financial materiality was carried out with the participation of stakeholders. Stakeholder engagement approaches (i.e., different levels of engagement) have been developed according to the "AA1000 Stakeholder Engagement Standard". ESRS identifies two types of stakeholders who are relevant to the impact and financial materiality assessment: affected stakeholders and users of sustainability information. Some, but not all, interested parties may belong to both groups. At the different stages of Apranga Group value chain, significant stakeholders were identified at the stage of perception of context and scope. The preliminary assessment of materiality and the launch of the main impact and financial materiality assessment highlighted on which topics (sub- topics and sub-sub-topics) and which stakeholders' involvement is necessary. Based on this logic, a revised plan for their inclusion was drawn up. Point of view of stakeholders was checked in two ways: a. Face-to-face engagement – at this stage, face-to-face interviews and focus groups with stakeholder groups were organised. The sample and representative persons of the groups were identified by the responsible persons of Apranga Group (e.g. employees were recommended by the representatives of the human resources division of the company, representatives of financial institutions – by the head of finance). This method was selected where a more detailed opinion was needed, overlapping through several ESRS topics and sub-topics, and when there is insufficient publicly available data of quality. This method of 118 GENERAL DISCLOSURES Sustainability Statement 2024 inclusion provided more detailed information than questionnaires. b. Analysis of documents and available sources – at this stage, documents indicating actions and obligations to certain stakeholders were analysed, e.g. sustainability reports, supplier policies, results of questionnaires conducted. This method was chosen to understand their opinions and expectations on a company-wide scale or when individual answers were not available or relevant. Different approaches to the involvement of stakeholders were used considering: • Whether the relationship with the interested party is linked to a zone of great impact or to the greatest dependence. This was assessed during the preliminary assessment and the main assessment. • The quality of information on the point of view of the stakeholder group. The following stakeholders were involved in the double materiality analysis (as well as the method of their involvement): • Shareholders (interviews) • Regulators (interviews) • Banks (interviews and analysis) • Environment (analysis) • Media (interviews and analysis) • Employees (interviews and analysis) • Business partners (analysis) • Value chain employees (analysis) • Consumers (analysis) Stakeholder views were used to validate, contradict or deny the initial assessment hypothesis. If stakeholder inputs suggested additional information, it was re-assessed with other related stakeholders and experts to avoid biased views (i.e. Employee inputs were double-checked with HR representatives and other employees). Sustainability Statement 2024 Environment 120 ENVIRONMENT Sustainability Statement 2024 The EU Taxonomy Regulation (EU) 2020/852 is a classification system that establishes criteria for identifying environmentally sustainable economic activities. It aims to direct capital towards investments that support the European Green Deal and the EU’s transition to a climate-neutral and resilient economy. To be classified as an environmentally sustainable activity under the EU Taxonomy, an economic activity must first be taxonomy-eligible, meaning it falls within the scope of the activities defined by the Taxonomy regulation. For an activity to be taxonomy-aligned, and thereby environmentally sustainable, it must meet technical screening criteria, contribute substantially to at least one of the six environmental objectives, and comply with the Do No Significant Harm (DNSH) principle while also adhering to minimum safeguards. The Taxonomy regulation has been expanded on through Delegated Acts that specify the list of eligible activities, relevant technical screening criteria and DNSH requirements as well as reporting obligations. APRANGA GROUP TAXONOMY REPORT As a first step of Taxonomy assessment process, Apranga Group conducted eligibility screening to determine which of our business activities fall into the scope of the Taxonomy regulation. To ensure consistency and alignment with market practices and recommendations, Apranga Group has established a materiality threshold. This approach allows for a practical and proportionate assessment of eligibility, ensuring that only activities with a meaningful financial impact are reported under the EU Taxonomy framework. The Group’s core business activities remain outside the scope of the EU Taxonomy. The delegated acts do not define either Apranga’s primary or secondary economic activities as taxonomy- eligible. As a result, Group do not generate any revenue from taxonomy-eligible activities, and no further analysis is required for this reporting period (see financial statements, page 4). In 2023, the Group identified certain long-term asset additions as potentially taxonomy-eligible, including: 1. 7.3. Installation, maintenance, and repair of energy efficiency equipment ; 2. 7.6. Installation, maintenance, and repair of renewable energy technologies; 3. 6.5. Transport by motorbikes, passenger cars, and light commercial vehicles. Following a detailed reassessment in 2024, the eligibility of these categories was re-evaluated according to the following arguments: • Energy efficiency and renewable energy investments were minimal in 2024 and therefore were not considered as taxonomy-eligible. As a result, these investments are not reported this year. • Vehicle acquisitions previously identified as taxonomy-eligible were re-assessed to not meet the required criteria. The assessment determined that the purchased vehicles were not used for income-generating commercial activity, making them non-eligible under the Taxonomy framework (see financial statements, page 4). There were no such acquisitions in 2024 and the category was not assessed. Assessment Process and Results Threshold Setting Revenue Capital Expenditures (CapEx) 121 ENVIRONMENT Sustainability Statement 2024 In 2024, the Group reassessed its taxonomy-eligible OpEx and confirmed that expenses related to previously identified activities, such as vehicle repairs and air-conditioning maintenance, remained below 1% of total OpEx. As a result, the taxonomy-eligible OpEx is reported as 0%. Following 2024 Taxonomy assessment, we confirm that none of the Group’s economic activities or investments (see financial statements, page 4) meet the eligibility criteria outlined in the delegated acts. Compared to the previous reporting period, a detailed reassessment was conducted, leading to the conclusion that certain investments previously classified as taxonomy- eligible do not fully meet the eligibility criteria under the latest regulatory interpretation. The key reasons for this revision include: • Careful review of Apranga Group’s activity and scope of the investments, focusing on potential areas where Group could do have eligible activities and substantial contribution in the future. • Alignment with best practices in sustainability reporting, ensuring accuracy and compliance with ESRS environmental disclosure requirements. The Group will continue monitoring potential eligibility in future reporting periods. Since none of the Group's current activities meet the eligibility criteria, the financial indicators related to taxonomy-aligned revenue, capital expenditures (CapEx), and operating expenditures (OpEx) are reported as 0% for the reporting period. Operational Expenditures (OpEx) Conclusions and future plans 122 Sustainability Statement 2024 ENVIRONMENT EU TAXONOMY REPORT Economic Activities A.1. Environmentally sustainable activities (Taxonomy-aligned) Of which enabling Of which transitional Turnover of environmentally sustainable activities (Taxonomy aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) A. Turnover of Taxonomy-eligible activities (A.1 + A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non- eligible activities Total (A + B) Revenue from main operations (mln EUR): 293 2023 activities were re-assessed as non-eligible, therefore data is incomparable. NACE code (mln. Eur) % % % % % % % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Percentage E T Absolute turnover Proportion of turnover Climate change adaptation Climate change adaptation Pollution Pollution Climate change mitigation Climate change mitigation Water and marine resources Water and marine resources Circular economy Circular economy Biodiversity and ecosystems Biodiversity and ecosystems Minimum safeguards Category (enabling activity) Category (transitional activity) Proportion of Taxonomy- aligned or -eligible turnover, year 2023 Substantial contributions Do no significant harm (Y/N) Percentage share of revenue generated from products or services related to taxonomy-aligned economic activity. Information disclosed for the year 2024. A. TAXONOMY-ELIGIBLE ACTIVITIES % 0,00 0,00 0,00 0,000,00 0,00 0,00 0,00 0,00 0,00 100,00 100,00293,00 293,00 100,00 100,00 100,00 100,00 0,00 0,00 0,00 0,00 0,00 0,000,00 123 Sustainability Statement 2024 ENVIRONMENT Economic Activities A.1. Environmentally sustainable activities (Taxonomy-aligned) Of which enabling Of which transitional CapEx of environmentally sustainable activities (Taxonomy aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) A. CapEx of Taxonomy-eligible activities (A.1 + A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities Total (A + B) CapEx (mln EUR): 25,43 NACE code (mln. Eur) % % % % % % % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Percentage E T Absolute CapEx Proportion of CapEx Climate change adaptation Climate change adaptation Pollution Pollution Climate change mitigation Climate change mitigation Water and marine resources Water and marine resources Circular economy Circular economy Biodiversity and ecosystems Biodiversity and ecosystems Minimum safeguards Category (enabling activity) Category (transitional activity) Proportion of Taxonomy- aligned or -eligible CapEx, year 2023 Substantial contributions Do no significant harm (Y/N) Percentage share of capital expenditures related to products or services associated with taxonomy-aligned economic activity. Information disclosed for the year 2024. A. TAXONOMY-ELIGIBLE ACTIVITIES % 0,00 0,00 0,00 0,000,00 0,00 0,00 0,00 0,00 0,00 100,00 100,0025,43 25,43 100,00 100,00 100,00 100,00 0,00 0,00 0,00 0,00 0,00 0,000,00 2023 activities were re-assessed as non-eligible, therefore data is incomparable. 124 Sustainability Statement 2024 ENVIRONMENT Economic Activities A.1. Environmentally sustainable activities (Taxonomy-aligned) Of which enabling Of which transitional OpEx of environmentally sustainable activities (Taxonomy aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) A. OpEx of Taxonomy-eligible activities (A.1 + A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities Total (A + B) OpEx (mln EUR): 111,20 NACE code (mln. Eur) % % % % % % % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Percentage E T Absolute OpEx Proportion of OpEx Climate change adaptation Climate change adaptation Pollution Pollution Climate change mitigation Climate change mitigation Water and marine resources Water and marine resources Circular economy Circular economy Biodiversity and ecosystems Biodiversity and ecosystems Minimum safeguards Category (enabling activity) Category (transitional activity) Proportion of Taxonomy- aligned or -eligible OpEx, year 2023 Substantial contributions Do no significant harm (Y/N) Percentage share of operating expenses related to products or services associated with taxonomy-aligned economic activity. Information disclosed for the year 2024. A. TAXONOMY-ELIGIBLE ACTIVITIES % 0,00 0,00 0,00 0,000,00 0,00 0,00 0,00 0,00 0,00 100,00 100,00111,20 111,20 100,00 100,00 100,00 100,00 0,00 0,00 0,00 0,00 0,00 0,000,00 2023 activities were re-assessed as non-eligible, therefore data is incomparable. 125 ENVIRONMENT Sustainability Statement 2024 Climate change is a critical issue that affects everyone, impacting ecosystems, economies, and communities worldwide. For the textile and clothing industry, which directly supports the successful clothing retail business of Apranga Group, these challenges are particularly pronounced. The industry is energy and resource intensive, contributing to the increase in global emissions, which also determines the overall sector's impact on climate change. The greatest GHG emissions stem from the value chain—primarily from the purchase of products, including their manufacturing processes. These emissions account for the majority of Apranga Group's impact. Other direct operations, such as e-commerce, transportation, and warehousing, also contribute to GHG emissions through fuel and energy consumption, further affecting Apranga Group's environmental footprint. The limited availability of greenhouse gas-reducing technologies can drive up costs, while the financial sector's preference for climate-friendly companies presents both risks and opportunities. Additionally, tighter environmental regulations and fluctuating energy prices can increase operating expenses. Understanding these factors is crucial not only for promoting a more sustainable future, but also to ensure a stable business. In this chapter, we will disclose metrics and mitigation measures related to these risks and impacts. Also, we are in the process of developing a supplier policy that will address some environmental topics, particularly in relation to our tier 1 suppliers. Together with the policy we will implement a supplier questionnaire to gather information on our suppliers' environmental practices, including water pollution, microplastics, water consumption and other. During our double materiality analysis, we identified climate-related risks that are critical to our business (during DMA only transition risks were identified). However, we have not yet conducted a resilience analysis, which requires a scenario-based climate risk evaluation. As a result, we are currently unable to provide details on the financial effects of physical and transition risks or potential climate-related opportunities. We plan to define the scope of this analysis to understand how climate change could impact our business. Given our current development stage, we aim to begin this analysis within the next two years. Once complete, we will share the results in a future report. CLIMATE CHANGE Climate risk and resilience E1 SBM-3 Climate change risk as identified in DMA Involvement type & regularity The limited availability of GHG-reducing technologies in the value chain may require costly investments, potentially driving up product prices and posing a financial risk to the company. The financial sector is more likely to invest in climate- friendly industries or companies, presenting both a risk and an opportunity for the company, depending on its own environmental practices. Tighter environmental regulations on energy consumption and variations in energy prices could lead to higher operating expenses. High energy prices can push suppliers out of the market and reduce market share. However, investing in energy- efficient technologies can provide long-term financial benefits. While investing in non-fossil fuel transportation solutions or self-generated energy can be expensive, it offers significant long-term financial benefits. Transition risk Transition risk Transition risk Transition risk Transition risk 126 ENVIRONMENT Sustainability Statement 2024 While we have not yet defined specific actions or targets, we have acted by calculating our greenhouse gas emissions for Scope 1, Scope 2, and Scope 3. This data provides an important baseline for understanding our current carbon footprint and identifying key areas for improvement. However, we currently do not have policies in place as required to manage our material impacts, risks, and opportunities related to climate change mitigation. This means we have not yet established formal guidelines or strategies to systematically identify, assess, manage, and remediate the effects of climate change on our operations. The company has not adopted any environment-related policies as it currently lacks a defined strategy, clear goals, or targets in this area. Developing these policies will be crucial for effectively addressing our environmental responsibilities and aligning with regulatory expectations. Over the next year, we are committed to developing a climate change mitigation strategy. This strategy will leverage our emissions data to: • Identify key actions: pinpoint areas where we can achieve the most significant reductions in our carbon footprint. • Allocate resources: ensure that we have the necessary resources to implement these actions effectively. • Set measurable targets: establish specific, measurable targets based on our emissions data to track our progress and ensure accountability. Together with this strategy and target setting, developing an environmental policy will also be one of our key actions. We will provide detailed information on these initiatives in our next annual report. Policy, actions and targets E1-3 E1-4 E1-2 Disclosure on Transition Plan Corporate Sustainability Reporting Directive (CSRD) requires companies to disclose a transition plan which is expected to detail how we will adjust our strategy and business model to align with the transition to a sustainable economy, limit global warming to 1.5°C in accordance with the Paris Agreement, and achieve climate neutrality by 2050 as per Regulation (EU) 2021/1119 (European Climate Law). Currently, Apranga Group does not have a formal transition plan in place. We recognize the importance of developing such a plan to ensure our operations are compatible with the global objectives of climate change mitigation and sustainability. We are in the process of evaluating our current practices and exploring strategic adjustments that will enable us to meet these critical environmental goals. In medium term (until 2030) we plan to have transition plan in place. Meanwhile, we plan to: • Conduct a comprehensive assessment of our carbon footprint and identify key areas for improvement. • Continuously engage with stakeholders to better understand their expectations and incorporate their feedback into our sustainability strategy. • Set interim targets and milestones to track our progress towards developing a robust transition plan. As we do not currently have a specific transition plan, so there is no direct impact on our own workforce in terms of transition or job losses resulting from the implementation of such a plan. We understand the urgency of addressing climate change and are dedicated to taking the necessary steps to develop a comprehensive transition plan in the coming years. We will provide updates on our progress in future reports. E1-1 (+ S1.SBM-3) 127 ENVIRONMENT Sustainability Statement 2024 As part of our commitment to sustainability, we are taking steps to ensure that our operations and those of our partners align with our environmental ambitions. A key initiative involves encouraging our partners to purchase green energy for use in leased facilities (majority of premises in Group operations are leased). We track the proportion of electricity sourced from renewable energy and monitor the adherence of our partners to this policy. By doing so, we aim to foster a culture of sustainability and reduce our overall carbon footprint. In addition, Apranga Group has installed a solar power plant on the roof of its administration and logistics centre in Vilnius, further enhancing our commitment to renewable energy and sustainability. As Apranga Group is classified under NACE Code 4771, which covers the retail sale of clothing and is considered a high climate impact sector, these efforts are especially important. This section provides detailed insights into our energy metrics and the measures we have implemented to promote green energy usage. The data is sourced directly from our own premises, shopping center managers, and fuel purchase invoices. Energy E1-5 Energy consumption and mix Total Fuel consumption from crude oil and petroleum products Fuel consumption from coal and coal products 1722,06 1004,69 1785,01 275,99 4787,75 81,25 0,39 1 010,52 4,91 23,28 282,39 1,37 13798,22 2024 [MWh] [MWh] [MWh] [MWh] [MWh] [MWh] [MWh] [%] [MWh] [%] [MWh] [MWh] [MWh] Lithuania 1633,06 173,84 811,79 38,88 2657,56 - - - - 20,95 55,53 0,44 9369,10 Latvia 51,67 712,14 764,77 77,03 1605,60 - - 1 010,52 18,39 29,23 198,36 3,61 2679,08 Estonia 37, 34 118,71 208,46 160,08 524,59 81,25 3,40 - - 21,98 28,50 1,19 1750,04 Fuel consumption from natural gas Fuel consumption from other fossil sources Total fossil energy consumption (MWh) Total non-fossil non-renewable energy consumption Share of non-fossil non-renewable energy consumption Consumption of purchased or acquired electricity, heat, steam, and cooling (fuel sources unknown) Share of unknown fuel sources in total energy consumption Share of fossil sources in total energy consumption Consumption from nuclear sources Share of consumption from nuclear sources in total energy consumption Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10) 14405,12 70,04 20567,03 [MWh] [MWh] [MWh] 9973,92 78,62 12687,01 2679,08 48,77 5493,56 1752,11 73,42 2386,46 Share of renewable sources in total energy consumption Total energy consumption [MWh] 604,82 - - 604,82 The consumption of self-generated non-fuel renewable energy 2,07[%] - - 2,07 Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sourcesw 128 ENVIRONMENT Sustainability Statement 2024 Energy intensity per net revenue 2024 The energy intensity is calculated as the total energy consumption divided by the revenue in EUR million. 293 MEUR 20567,03 MWh 70,19 MWh/MEUR Net revenue Total energy consumption Energy intensity per net revenue Total energy refers to all energy consumed by Apranga Group across Scope 1 and 2 activities, including fuels, electricity, and district heating. This total energy consumption is categorized into fossil and renewable sources. Non-renewable energy sources include direct and estimated consumption of electricity, district heating, diesel, and petrol. Renewable energy sources encompass solar power and other sustainable alternatives. Energy consumption is initially recorded in various units (e.g., liters, kWh) and later converted into megawatt hours (MWh) for consolidation. National inventory reports (2024) and residual mixes published by the Association of Issuing Bodies (AIB) (2024) are used in the calculations. To ensure accurate reporting, additional energy categories have been introduced: • Non-fossil non-renewable energy consumption – This category accounts for energy sources such as peat and waste heat used for heating, which do not fall under provided fossil or renewable classifications. • Consumption of purchased or acquired electricity, heat, steam, and cooling (fuel sources unknown) – This category has been added specifically for Latvia, where the exact fuel mix of purchased heat is not available. Methodology and accounting policies Energy intensity based on net revenue * Apranga Group is classified under NACE Code 4771, which pertains to the retail sale of clothing. Since this sector is considered to have a high climate impact, we disclose only the total net revenue. See financial statement page 4. 129 ENVIRONMENT Sustainability Statement 2024 In our GHG disclosures, we have not provided comparative data from the previous year due to changes in our calculation methods, including updates to emission factors, which render the data non-comparable. As a result, 2024 will be counted as the baseline year for our GHG calculations. Additionally, as we will be reviewing our strategy in 2025, we will set our goals and targets accordingly. These will be presented in future annual reports, ensuring that our progress and commitments are transparently communicated. Currently, the company does not implement internal carbon pricing schemes within its sustainability management framework. Emissions E1-6 Operational control Scope 1 GHG emissions Scope 2 GHG emissions Significant scope 3 GHG emissions Total Gross indirect (Scope 3) GHG emissions (tCO2eq) Gross Scope 1 GHG emissions (tCO2eq) 1 Purchased goods and services 2 Capital goods 4 Upstream transportation and distribution 5 Waste generated in operations 6 Business travel 7 Employee commuting 8 Upstream leased assets (omitted) 9 Downstream transportations 10 Processing of sold products (omitted) 11 Use of sold products 12 End-of-life treatment of sold products 13 Downstream leased assets (omitted) 14 Franchises (omitted) 15 Investments Total GHG emissions (location-based) (tCO2eq) Total GHG emissions (market-based) (tCO2eq) Total GHG emissions 3 Fuel and energy-related activities (not included in Scope1 or Scope 2) Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) Gross location-based Scope 2 GHG emissions (tCO2eq) Gross market-based Scope 2 GHG emissions (tCO2eq) 2024 2024 % of Total (market-based) 397,78 0,00 2 901,85 554,52 308,32 78,31 225 377,87 221 216,23 5,75 0,00 2 192,10 1 181,80 173 442,60 4 632,76 124,66 5 958,11 9,77 247,20 1 147,50 NA 9 082,79 NA 16 814,84 6 731,19 NA NA NA Lithuania Latvia Estonia 4,20 0,00 1 150,43 346,42 142,13 5,58 Total 407,73 0,00 6 244,38 2 082,74 218 725,76 0,242 0,0 0,0 0,14 0,0 0,0 0,1 0,0 NA 0,0 NA 0,0 0,0 NA NA NA 173 442,60 4 632,76 575,11 5 958,11 93,66 247,20 1 147,50 NA 9 082,79 NA 16 814,84 6 731,19 NA NA NA 0,18 0,00 2,77 Note: The impact of cooling has been included in the calculation of electricity consumption. Category calculated using primary data (%) of Total (market based) Scope 3 calculated using primary data (%) 0,94 98,87 0,245 78,40 2,09 0,26 2,69 0,04 0,11 0,52 NA 4,11 NA 7,60 3,04 NA NA NA 130 ENVIRONMENT Sustainability Statement 2024 GHG intensity per net revenue Total GHG emissions (location-based) per net revenue (tCO2eq/Monetary unit) Net revenue Total GHG emissions (market-based) per net revenue (tCO2eq/Monetary unit) 2024 769,21 tCO₂-eq/MEUR 293 MEUR 755,00 tCO₂-eq/MEUR GHG intensity is calculated as the total GHG emissions divided by the revenue in EUR million. All emissions are accounted in accordance with the methodology set out in the Greenhouse Gas (GHG) Protocol Corporate Standard. Scope 1 and 2 emissions are reported at the country level for Lithuania, Latvia, and Estonia. Scope 3 emissions are disclosed at a consolidated Group level, as business operations and impacts across these countries are similar. Separating emissions by country would not provide additional insights, particularly given the complexity of allocation—e.g., centralized ordering and warehousing. Direct Scope 1 emissions include all direct emissions from Apranga Group owned or controlled sources, covering fuel combustion and fugitive emissions from purchased refrigerants. Fuel volumes are multiplied by the latest available emission factors from the 2024 National Inventory Reports (NIR) of Lithuania, Latvia, and Estonia. Refrigerant leakage volumes are multiplied by emission factors from the Intergovernmental Panel on Climate Change (IPCC AR6). Scope 2 GHG emissions include indirect emissions from the acquired electricity and heating consumed by Apranga Group (downstream). Scope 2 emissions are calculated using both location-based and marketbased approaches. Scope 2 GHG emissions amount to 2 082,74 tCO2e. Out of this, 0.73% - 15.13 tCO2e is attributed to renewable electricity. Since the origin of the renewable electricity was unknown, a conservative approach was taken by assuming it was sourced from biomass, incorporating potential biogenic CO₂ emissions. Apranga Group operates in both owned and leased premises, with the majority of its spaces leased from shopping centers or other real estate owners. In owned premises, electricity is exclusively purchased from renewable sources through direct contracts with electricity suppliers, using Renewable Energy Certificates (RECs). In leased spaces, green electricity is also purchased whenever possible. As a result, renewable energy —both purchased and locally produced—accounts for 80.28% of the group’s total electricity consumption. For Scope 1 and 2 calculations the external Greenspect tool (https://sustinere.eu/climate-impact/) was used. The model of Greenspect is validated by Bureau Veritas. For the calculations, the most recent available emission factors, were selected, sourced from reports published in 2024, with the exception of the emission factors for heating in Tartu and Tallinn, which are based on 2023 data. These factors, including location- specific ones, were chosen to ensure accuracy and relevance. For electricity, emission factors for each country are sourced from the Association of Issuing Bodies (AIB, 2024), European Residual Mixes 2023. For the market-based approach, when certificates of origin for renewable energy are unavailable, we assumed biomass as the energy source. This assumption ensures that potential biogenic emissions are included in the calculations. The emission factor is derived from the academic paper Giuntoli J, Agostini A, Edwards R, Marelli L, Solid and gaseous bioenergy pathways: input values and GHG emissions and is calculated according to the methodology set in COM(2016) 767, EUR 27215 EN. On-site production emission factors are derived from Bastos, J., Monforti-Ferrario, F., & Melica, G. (2024). Covenant of Mayors for Climate and Energy: Greenhouse gas emission factors for local emission inventories. Publications Office of the European Union. For heating emissions, supplier-specific emission factors are used for Estonia, while country-average district heating emission factors are used for Latvia and Lithuania. Specifically, Estonia's emissions are calculated using heat indicators from Gren and Utilitas, obtained from their respective websites or through direct contact. Lithuania's emissions data is sourced from The National Energy Regulatory Council's Heat sector overview for 2023. Latvia's emissions data is derived from the Republic of Latvia Cabinet Regulations No. 42, Calculation methodology of greenhouse gas emissions. Apranga Group obtains heating either through direct purchases or by paying for consumption under agreements with landlords of rented spaces. GHG Intensity based on net revenue GHG methodology and accounting policies Scopes 1 and 2 * Apranga Group is classified under NACE Code 4771, which pertains to the retail sale of clothing. Since this sector is considered to have a high climate impact, we disclose only the total net revenue. See financial statement page 4. 131 ENVIRONMENT Sustainability Statement 2024 Scope 3 includes and accounts for other indirect emissions within Apranga Group’s value chain that are not covered elsewhere. The reporting of indirect Scope 3 emissions is based on the GHG Corporate Value Chain (Scope 3) Standard, which divides the Scope 3 inventory into 15 categories (C1–C15). For Apranga Group, 10 out of these 15 categories are relevant based on screening criteria, including factors such as size, spending, revenue analysis, and other considerations: Category 1 (purchased goods and services), Category 2 (capital goods), Category 3 (fuels and energy-related emissions), Category 4 (upstream transportation and distribution), Category 5 (waste generated in operations), Category 6 (business travel), Category 7 (employee commuting), Category 9 (downstream transportation and distribution), Category 11 (use of sold products), and Category 12 (end-of-life treatment of sold products). Apranga Group does not report Scope 3 emissions for Categories 8 (upstream leased assets), 10 (processing of sold products), 13 (downstream leased assets), 14 (franchises), or 15 (investments). Emissions categories excluded from reporting are also detailed, with justifications for their exclusion. Scope 3 emissions are calculated using a combination of methods, prioritizing actual data whenever possible. Where available, supplier-specific data, product lifecycle assessments (LCAs), and scientific papers are used for the most accurate calculations. However, when the quality of activity data is insufficient, a spend-based methodology is employed. For spend-based approach EXIOBASE database and relevant emission factors are used. The quality of Scope 3 emissions data in GHG calculations improves with the use of more specific methods, while less specific methods tend to result in lower-quality data. Activity-based assessment indicates the use of primary data when based on direct measurements or supplier-specific data, whereas spend-based and average-data methods rely on secondary data, such as industry averages or financial data converted into emissions estimates. A detailed overview of the calculation methods used is provided in the table below. Scope 3 GHG emissions Scope 3 category Calculation method Assessment of relevance Description of underlying data Upstream GHG emissions from purchased products, such as retail fashion goods, are estimated by multiplying the quantity of products purchased (number of units) by appropriate manufacturing-phase emission factors. These emission factors are sourced from the ADEME (Agence de la Transition Écologique) database and scientific literature on product lifecycle assessments (LCA). Where activity-based data is unavailable, a spend-based approach is used. In these cases, spending on the products is multiplied by corresponding emission factors from the EXIOBASE database. Upstream GHG emissions from capital expenditures are calculated by multiplying categorized spending on items/services such as trade equipment, repairs, buildings, and other capital goods by the relevant emission factors from the EXIOBASE database. For electricity, only grid loss-related emissions are calculated for each country, as fuel mix data necessary for well-to- tank emissions calculations is unavailable. For heating, a more comprehensive approach was possible for Estonia, where both grid loss and well-to-tank emissions were calculated using supplier-specific data. However, for Lithuania and Latvia, only grid loss emissions were calculated for heating, based on information from various available reports, including the CEER Report on Power Losses, data from Litgrid's 2023 National Electricity Demand and Generation report, AS Rīgas Siltums' 'Vidēja termiņa darbības stratēģija 2024- 2030', and data gathered from VERT. The category is considered relevant. The category is considered relevant. The category is considered relevant. Activity based assessment Spend-based Spend-based Spend-based 1 Purchased goods and services 2 Capital goods 3 Fuel and energy-related activities (not included in Scope1 or Scope 2) 132 ENVIRONMENT Sustainability Statement 2024 Scope 3 category Calculation method Assessment of relevance Description of underlying data The data is based on the Unified Product, Packaging and Waste Record Keeping Information System applied in the Lithuanian market. Due to the lack of comparable systems in Latvia and Estonia, waste data for these countries is estimated based on Lithuania's waste type intensity per revenue. This methodology was selected as the most accurate available option. Emissions are then calculated using Estonia’s national GHG footprint calculation model (2024), https://kliimaministeerium. ee/rohereform-kliima/rohereform/ organisatsioonide-khg-jalajalg#mudel. Employee air travel emissions data is obtained from the travel agency. Emissions from hotel stays are calculated by multiplying the number of nights stayed in each country by the relevant emission factors from the UK Government Conversion Factors for Greenhouse Gas (GHG) Reporting. To estimate the impact of employee commuting, external experts conducted a benchmark analysis and used the average emissions per employee (tCO2e/per employee commute) derived from that benchmark. Benchmarking data is based on same sector companies in Baltics as well as in Europe. Emissions are calculated based on financial spending in EUR, with the corresponding spend-based emission factors sourced from the EXIOBASE database. The category is considered relevant. The category is considered relevant. Average-method The category is not considered relevant because emissions from rented premises are accounted for under Scope 2 in Apranga’s GHG calculations. Since there are no other significant leased assets, C8 is not relevant. The category is considered relevant. The category is not considered relevant because Apranga sells only finished products and does not supply goods for further production by other companies. Activity based assessment Spend-based Activity based assessment Spend-based N/A Spend-based N/A 5 Waste generated in operations 6 Business travel 7 Employee commuting 8 Upstream leased assets 9 Downstream transportations 10 Processing of sold products Emissions are calculated based on financial spending in EUR, multiplied by relevant spend-based emission factors sourced from the EXIOBASE database. The category is considered relevant. Spend-based 4 Upstream transportation and distribution 133 ENVIRONMENT Sustainability Statement 2024 Scope 3 category Calculation method Assessment of relevance Description of underlying data GHG emissions from the end-of-life of sold products are estimated by multiplying the quantity of products sold by the appropriate end-of-life emission factors. These emission factors are sourced from the ADEME (Agence de la Transition Écologique) database and relevant scientific literature on product lifecycle assessment (LCA). The category is considered relevant. Activity based assessment 12 End-of-life treatment of sold products The category is not considered relevant because Apranga does not lease assets to other companies. The category is not considered relevant because Apranga does not lease assets to other companies. The Category is not considered relevant. Although Apranga Group holds shares in the investment company UAB Verslo Trikampis, this investment is not related to the group's core activities. Additionally, with only a 6.5% ownership stake and no controlling rights over the project, it is not considered relevant for the Scope 3 calculations. N/A N/A N/A 13 Downstream leased assets 14 Franchises 15 Investments GHG emissions from the use of sold products are estimated by multiplying the quantity of products sold by the appropriate use-phase emission factors. These emission factors are sourced from the ADEME (Agence de la Transition Écologique) database and other relevant scientific literature on product lifecycle assessment (LCA). The category is considered relevant. Activity based assessment 11 Use of sold products 134 ENVIRONMENT Sustainability Statement 2024 Water pollution is an important issue in the clothing production process, as our value chain relies heavily on water-intensive processes. High water consumption and chemical use in raw material processing and textile production cause significant negative impacts. Addressing these issues is crucial as we work towards enhancing our commitment to sustainability and responsible business practices. Currently, the Group does not have formal policies in place to manage our material impacts, risks, and opportunities related to pollution prevention and control. This is because we lack a defined strategy, clear goals, or targets in this area as the double materiality assessment was conducted first time. Additionally, we do not have any set targets specifically related to water pollution, and we are unable to quantify the adverse impacts of pollution from value chain. However, we acknowledge other potential impacts, such as microfiber release during fabric manufacturing and home washing, textile scraps ending up in landfills or being incinerated during assembly, and waste generation from our operations and from unwanted, outworn, or dysfunctional clothing at the end of their life cycle. These waste management processes can contribute to water pollution through leachate from landfills contaminating groundwater and surface water, and airborne pollutants from incineration settling into water bodies. POLLUTION Water pollution and microplastics E2-2 E2-3 E2-1 Water dependency is an important issue in the clothing production process due to the industry's reliance on water-intensive processes. Although water use is not material topic in our own operations, negative impacts arise from the high-water dependency in cotton cultivation and textile production, particularly concerning the use of freshwater sources like groundwater and nearby rivers. This dependency not only strains local water resources but also contributes to environmental degradation and affects the sustainability of water supplies. Addressing water onsumption and its impacts is essential for promoting responsible business practices and ensuring the long-term viability of the clothing retail sector. Recognizing the importance of this issue, we are committed to improving our approach and will continue to develop strategies to address these critical issues in value chain. WATER AND MARINE RESOURCES Currently, Apranga Group does not have any formal policies, related actions or targets in place specifically related to water and marine resources. This is because we lack a defined strategy, clear goals, or targets in this area. We rely on information provided by our suppliers and their actions to manage these aspects. In example their focus on reductions in water consumption within our supply chain. We will continue to work closely with our partners to obtain more data on water usage in the future. Water consumption E3-2 E3-3 E3-1 135 ENVIRONMENT Sustainability Statement 2024 Functioning circular economy is crucial for the clothing retail sector, aiming to reduce waste and maximize resource use. As a retailer, we do not source raw materials directly but trade in ready- made garments. However, together with same sector players, we face similar challenges such as dependence on upstream suppliers for raw material sourcing, limited availability of secondary resources, and the use of complex, hard-to-recycle materials in the products we sell. Many sold garments end up in landfills or are incinerated, and we lack effective solutions to prevent this. By addressing these challenges and leveraging opportunities, we aim to improve our practices and contribute to a more sustainable future. Additionally, the EU Waste Directive and extended producer responsibility will have a significant impact on the implementation of circular economy principles in all markets. CIRCULAR ECONOMY Currently, the Group does not have formal policies or targets in place to manage our material impacts, risks, and opportunities related to resource use and the circular economy due to novelty of the subject area. However, we do acknowledge the importance of addressing these issues, therefore already have certain actions in relation to waste in place. Actions addressing some of the impacts and risks are disclosed further in the report. In addition, we strive to identify and implement effective strategies, including policy setting to manage our resource use and contribute to a circular economy but timeframe to do so will depend on the availability of resources. We will provide updates on our progress in future reports. In our commitment to transparency and sustainability, we provide the following detailed description of our resource inflows. This information covers the main products, materials, property, plant, and equipment used in our operations and along our upstream value chain. Due to limitations in obtaining relevant information from our suppliers we are using the transitional provisions (as mentioned in the General information part of the report). Products Our main products include clothing, shoes, and accessories. The Group sells finished products and takes no part in manufacturing. Since clothing accounts for more than 90% of total products sold, its packaging is important for protection and transportation. The main packaging materials used are plastic and cardboard. • Total weight of products during reporting period: 3 886 tonnes (without packaging, which is disclosed in the waste section). Total weight is calculated in the import documents declared by manufacturers. In some cases, estimations are made by attributing fixed weight for similar items. There is no possibility to distinguish the percentage of products made of recycled materials as this information would not be accurate. Nevertheless, some of the manufacturers do offer selection of products and product lines made of recycled materials. Materials • Primarily used materials in sold products (clothing) are natural and synthetic textiles. We do not currently utilize any critical raw materials. • Information on the percentage of biological materials used in products or packaging that are sustainably sourced is currently not available to disclose. • Water usage in our own operations is not significant due to the low quantity used only in domestic water use (shopping centers, offices). • The main properties are store premises (owned and leased), administrative and logistics buildings. Majority of our stores are leased. Policies Resources inflows, including resource use E5-3 E5-4 E5-1 A significant portion of our waste in our operations is generated due to the repackaging process that occurs during the logistics process after suppliers deliver goods to the central warehouse or stores, as well as during the distribution of goods to stores. Reverse logistics plays a crucial role in our operations as we collect and transport plastic, paper waste (used for own purposes), and wooden pallets to a central warehouse for recycling. Unsold products are also returned to central warehouse, from where it is directed to outlets. We also collect and reuse cardboard boxes and wooden hangers from our warehouse and in the retail chain. However, in some rented locations Waste and circular initiatives E5-5E5-2 136 ENVIRONMENT Sustainability Statement 2024 Waste split Mass of non-recycled waste (tonnes) Hazardous waste Non-recycled waste ratio (%) Non-hazardous waste Mass of recycled waste 912,34 0 72,08 353,39 0,32 912,02Mass of non-recycled waste • Collection of clothing in Inditex chain stores. Dedicated collection points were established in some stores (such as Zara, Bershka, Pull and Bear, Stradivarius, Massimo Dutti, Zara Home, and Oysho) across the Baltic States. Customers can drop off their used clothing, which is then sorted and processed for recycling or reuse. In relation to this programme, collaboration with local NGO’s and recycling facilities ensures that the collected textiles are processed efficiently. • Participation in the Textile Waste Management System in Latvia. To effectively manage textile waste, agreements are signed with certified waste management companies in Latvia. These companies, for a fee, handle a specified amount of textile waste generated from products placed on the market. This approach ensures that the waste is managed in an environmentally responsible manner, reducing landfill use and promoting recycling and reuse. This ensures that activities comply with local and EU regulations regarding textile waste management. This includes adhering to the mandatory textile waste collection requirements set to be enforced across the EU. Considerations and methodology: • The data is based on the Unified Product, Packaging, and Waste Record-Keeping Information System applied in the Lithuanian market. This system accounts for packaging waste released to the market (given to customers) and packaging waste used for internal purposes. It also includes waste reports generated on-site. However, it does not cover municipal waste generated in administrative buildings or stores, as these quantities are considered insignificant and are therefore not accounted for. Additionally, it does not provide information on what processes are applied to recycled (i.e. preparation for reuse) or non-recycled (i.e. incineration etc.) waste, thus such information is not possible to disclose. • The Group has the most reliable waste data in Lithuanian operations. Therefore, the decision was made to ensure the accuracy to use the Lithuanian data as the base and to calculate Latvian and Estonian data proportionally. Although we have some information about waste generation in Latvia and Estonia it would not be as all-encompassing as using Lithuania data as base and accordingly for Latvia and Estonia, the data is calculated as a percentage based on Lithuanian data. We will work on enhancing the data quality in the future. Our actions *** Actions are disclosed in best possible detail as is currently available in the Group – information, which was not collected during the reporting year, such as quantitative and qualitative information regarding the progress of actions or comparison to prior periods, as well as related CAPEX and OPEX investments, is not disclosed. As it is the first year of reporting according ESRS standards, we will put effort to include more relevant information in the future reports based on a good practice. and shopping centres, we often face challenges in identifying all amount of waste generated as there are cases when we use paper and plastic sorting facilities of the shopping centre and have no possibility to receive data of the waste treated. Waste in leased assets is usually handled by third party service providers who interact directly with the lessor only. To address these challenges, we are actively seeking ways to improve our waste tracking and management processes across all locations. This includes working with our landlords and property managers to gain better visibility into waste disposal practices and exploring partnerships with waste management services that can provide comprehensive reporting. Our goal is to enhance our waste reduction efforts and ensure responsible disposal practices throughout our entire operational footprint. • Total amount of waste generated (in tonnes): 1265,73 • Information on composition of the waste: * Non-hazardous waste: glass, plastic, paper, PET, and other materials. * Hazardous waste: IT and telecommuni- cations equipment, screens and monitors with a surface area greater than 100 cm², as well as batteries and accumulators. Sustainability Statement 2024 Social 138 SOCIAL Sustainability Statement 2024 At Apranga Group, our employees are the foundation of our business success. We take pride in having an energetic and diverse team, which includes many young professionals. The Group often provides young people with their first work experience, as the sector’s flexible working hours are attractive to students. Our goal is to equip these young professionals with the tools, opportunities and knowledge necessary for successful operations, professional growth and to draw attention to the opportunities to continue their careers within our Group. We aim to foster an environment that inspires people who love fashion consider a long-term career with us. Given that employees in the trade sector, particularly salespeople, constitute most of our workforce, the impact on this group is considered the most significant. The average salary in this sector is lower than the national average, therefore one of key topics and focus of our efforts is remuneration and competitive wage. Working hours, which include evenings and weekends, are evaluated with the aim of mitigating any negative effects by offering favourable work schedules or, when possible, allowing employees to choose their workplace (store). The interests, views, and rights of our employees are taken into consideration while responding and creating mitigation measures to above and in the beginning of the report listed impacts, risks and opportunities (see page 104). Especially regarding potential positive impact of our internal training and career development programs, we focus on improving our programmes to better reflect the needs of our employees (see detailed in formation on this sub-topic in page 142). This reflects our commitment to respect and upholding human rights within our organization. Currently, none of our operations are at significant risk of incidents involving forced labour, compulsory labour or child labour. OUR COLLEAGUES S1.SBM-3 There are several documents which oversee various rights and responsibilities of employees at Apranga Group. One of main internal documents is Rules of Procedure ( l i e t . D a r b o t varko s t a i s y k l ės), which establishes the Group’s values, work procedures, general duties, rights and responsibilities of employees and the employer. This document aims to ensure the smooth operation of the Group, proper work organization and create a suitable and safe working environment. All employees are introduced to this document (with signature) upon starting their work. Implementation of this document falls under responsibility of Head of Human resources department. In the rules these are the main covered topics: • Company values, • Conclusion of Employment contract, • Internal documents procedures, • Work and resting time, • Working environment, safety and health requirements, • Work equipment, • Salary, incentives and benefits, • Ensuring equal opportunities, • Liability for violations of labour duties. Certain topics related to employees are addressed within the company’s Code of Ethics and Conduct (as disclosed in Governance section of this report, page 150). These topics include ethical behaviour, compliance with labour laws, and guidelines for maintaining a respectful and safe work environment. Additionally, the Code of Ethics and Conduct specifically covers the following grounds for discrimination: nationality, culture, race, religion, political views, financial situation, education, age, sexual orientation, marital status, gender, appearance, and physical and intellectual abilities. It explicitly states that any discriminatory behaviour towards employees or other persons is not tolerated. Additional internal documents in relation to own workforce are: • Violence and Harassment Prevention Policy. This policy aims to safeguard the honour, dignity, and physical or psychological integrity of all employees, ensuring they are not subjected to actions that seek to harm or diminish them. This policy clearly states how to recognise such behaviour and what actions should be taken by the employee as well as mechanisms of complaint. This policy is implemented by Head of Human resources department. Policies, actions and targets S1-4 S1-5 S1-1 139 SOCIAL Sustainability Statement 2024 • General Instructions for Occupational Safety and Health. This document states that employees must adhere to the company’s safety and health regulations and Lithuanian laws, ensuring their own and colleagues’ safety by following supervisors’ instructions. Our internal documents are not explicitly aligned with relevant internationally recognized instruments, including the UN Guiding Principles on Business and Human Rights. However, at Apranga Group we ensure compliance with existing labour laws and regulations at both the national level and within the framework of European Union regulations, thereby upholding high standards of worker protection and rights. Although our internal documents do not explicitly address trafficking in human beings, forced labour or compulsory labour and child labour, all these actions are forbidden by national laws, and our Group's activities meet the highest operational standards. Additionally, we ensure that by following national laws, i.e. in relation to GDPR, such as Republic of Lithuania “Law on legal protection of personal data” (liet. LR “Asmens duomenų teisinės apsaugos įstatymas”) we do not cause or contribute to material negative impacts, particularly in procurement, sales, and data use. Actions, which Group has implemented in 2024, are described next to separate sub-topics further in this chapter (i.e. conducting surveys as part of Engagement activities, providing trainings for employees as disclosed under Trainings sub-topic). Actions are disclosed in best possible detail as is currently available in the Group – information, which was not collected during the reporting year, such as quantitative and qualitative information regarding the progress of actions or comparison to prior periods, as well as related CAPEX and OPEX investments, is not disclosed. As it is the first year of reporting according ESRS standards, we will put effort to include more relevant information in the future reports based on a good practice. However, we have not yet set any specific targets related to our own workforce as we did not have a defined strategy - we plan to take this step and adopt our new strategy in 2025. In preparation for setting these targets, we currently monitor employee turnover rates and evaluate feedback through exit surveys. This approach allows us to gather valuable insights and ensure that our future targets are well-informed and aligned with our overall strategic goals. All related company actions are disclosed in IRO table (see page 104). Additionally, information on engagement with own workforce and channels for own workforce to raise concerns are disclosed in Engagement sub-topic of this section. Currently, we do not have any commitments related to inclusion or positive actions for vulnerable groups. Engagement In Apranga Group we have an organ called Work Council, which is directly run by employee representatives, established to ensure that the voices of employees are properly represented, and their interests are protected within the organization. The Council is elected for a term of three years. Elections and activities are carried out in accordance with the requirements of the Labour Code of Republic of Lithuania. It serves as a bridge between the workforce and management, facilitating communication and collaboration to continuously improve working conditions, meet employee expectations and increase operational efficiency by identifying areas that need improvement, proposing and implementing initiatives, and ensuring that employee concerns are addressed promptly and effectively. In 2024, the Works Council successfully implemented several key initiatives that had a significant impact on the organization: ب Additional Equipment at Points of Sale: Enhanced inventory management by providing additional equipment or installing elevators in both auxiliary premises and sales halls, which facilitate the work of employees with the supply of goods. This equipment eliminates the need for heavy lifting, thus ensuring more favourable working conditions for our employees. ب Assisted Delivery of Goods: Introduced a system where an additional person accompanies the driver to assist with the acceptance of goods at points of sale, ensuring smoother and more efficient deliveries. ب Coordination of Product Delivery Schedules: Aligned product delivery schedules with store hours and employee work schedules, ensuring a sufficient number of employees to achieve a balanced workload during delivery and increasing overall efficiency. To gather valuable insights from our employees, we conduct surveys as needed, without adhering to a fixed schedule. These surveys are typically used when consultation is required on specific business-related or employee well-being topics. The Human Resources department, led by the Head of HR, is responsible for organizing these surveys. This includes designing the survey, administering it, collecting responses, and analysing the results (effectiveness of engagement is S1-3S1-2 140 SOCIAL Sustainability Statement 2024 Apranga Group operates in the retail sector, which has a significant impact on the structure of our employees according to responsibilities. The majority of our employees are salespeople, who play a crucial role in our day-to-day operations and customer interactions. It is worth noting that the majority of our employees are women, which correlates with the demographic trends of the retail industry. Characteristics Information on employees by contract type: Country Lithuania Latvia Estonia No of permanent employees (head count) Men Men MenWomen Women Women 0 1338 558 780 0 467 132 335 0 298 98 200 0 118 72 46 0 57 12 45 0 17 4 13 No of temporary employees (head count) No of full-time employees (head count) No of part-time employees (head count) Total No. of employees by country (per gender): Country Lithuania Latvia Estonia Gender Men Men MenWomen Women Women 1338 467 298 1456 524 315 118 57 17Number of employees Total No. of employees per country not assessed). The insights gained from these surveys are then used to make informed decisions that enhance our workplace environment and address employee concerns effectively; as well as employee feedback is continuously integrated into our organizational strategies, fostering a culture of continuous improvement and engagement. The Exit Survey is a regularly conducted online survey completed by employees upon their departure from the organization. This survey serves the dual purpose of gathering information and feedback. Participants have the option to complete the survey anonymously or to provide their name. Quarterly and annual summaries of the survey data are compiled to facilitate comparison and to monitor trends over time, as well as take necessary measures informed by the survey results. Channels for own workforce to raise concerns Detailed process of complaints raised in relation to breach of Code of Ethics and Compliance and other internal rules is described in Governance section, page 152. In relation to actions related to violence and harassment in the workplace employees can raise their complaints according to the process as described in Violence and Harassment Prevention Policy, which is an internal document, applied to all employees in Apranga Group companies, which are based in Lithuania. Similar policies will be adopted in 2025 also in Latvian and Estonian operations. Employees are introduced to internal documents and through this they become aware of the existing channels to raise concerns. Number of non-employees: Lithuania Country Latvia Estonia 314 0 339 0 0 0No of self-employed people No of people provided by undertakings primarily engaged in “employment activities” S1-7S1-6 141 SOCIAL Sustainability Statement 2024 Employee turnover: Lithuania Country Latvia Estonia 86,3% 82,7% 63,3% 1232 434 197 Number of employees who have left the undertaking Percentage of employee turnover The employee turnover metric is a critical tool for our business as it provides valuable insights into the stability and satisfaction of our workforce. We strive to meet the needs of all our employees by creating a supportive and engaging work environment. However, given the nature of our industry, we recognize that many young people will join us, and only some will pursue long-term careers within our organization. This is a common trend in the retail sector, which at the same time influences and leads to higher employee turnover than in other sectors. In this context, we closely monitor employee turnover to identify any abnormal changes compared to the long-term average. By tracking this metric, we have the opportunity to preventively model potential organizational problems in the short or long term, and review internal policies and practices. For instance, a sudden increase in turnover could signal dissatisfaction among employees, changes in market conditions, or shifts in the competitive landscape. It should be noted that in Lithuania the indicators are relatively lower because back office (administration) is included, where the change is smaller. Quantitative data provided in the following tables of this chapter is aligned with the management report (page 52) and is provided as it was at the end of the reporting period to ensure integrity of the report (unless indicated otherwise). On gender: Currently, we do not collect data on non-binary individuals. This limitation means that our gender diversity metrics only include data for male and female employees. As a result, our reports may not fully represent the diversity within our workforce. Limitation: Existing data collection systems and processes are not yet equipped to capture non- binary gender information. In all three Baltic countries, the legal recognition of gender primarily includes male and female, and the legal framework for recognizing non-binary genders is not fully established. To enhance diversity and inclusion, we plan to update our data collection systems to include non-binary gender options, ensure compliance with legal and regulatory requirements, and provide training and resources to support inclusive data collection practices. On total number of employees and contract type: Number of employees is provided in headcount as of December 31, 2024. Information is provided from internal HR system „HRB portal“. The numbers align with management report (page 52). Employees on maternity (paternity) leave and duplicates (when the same person is working in more than one company in the Group) are excluded. More than half of permanent employees due to specifics of our sector (retail) work part- time. On non-employees: The number of non-employees is provided in headcount method throughout the year in each country separately. Non-employees are workers who agree to work temporarily usually through third-party employment agency. Estonia also has a special type of work contract for temporal employees with fixed hours agreed. These workers are not considered as employees. Seasonal fluctuation may influence the number of non-employees at any given moment; therefore, the total number throughout the year is calculated (FTE calculations and comparison to the total number of employees is not available). On employee turnover: Only employees with working contract are included while calculating employee turnover. Non-employees are not included into calculations. Number does not include rehired employee number. To calculate the turnover rate, we first determine the number of employees who left during 2024. Then, we divide this number by the average number of employees for the year. The average number of employees is calculated by adding the employee count at the beginning of the year (January 1, 2024) to the employee count at the end of the year (December 31, 2024) and dividing the sum by two. This gives us a fair estimate of the workforce size throughout the year, ensuring an accurate turnover calculation. Considerations and methodology 142 SOCIAL Sustainability Statement 2024 Our dedication to continuous professional growth is evident in the extensive training and skills development programs we provide for our employees. We have implemented a hybrid training model that includes both face-to-face and remote training sessions. This flexible approach ensures that all employees can access the training they need, regardless of their location or schedule. The hybrid model allows us to deliver high-quality training content while accommodating the diverse needs of our workforce. An essential component of our training strategy is the E-learning system, which supports both mentors and new employees. This platform contains fundamental theoretical material that is crucial for new hires to learn and understand. The E-learning system offers an interactive and engaging way for employees to acquire important knowledge at their own pace. Our mentoring program is another key element of our training efforts. This program enables us to train new sales consultants within two months, ensuring they are well-prepared to excel in their roles. New mentors receive periodic training on effective mentoring techniques, how to train new employees, and how to utilize the tools developed by the organisation. Such ongoing support helps mentors provide the best possible assistance to new employees and balance the psychological burden during the induction period for new employees. The same principles used in our mentoring program are applied to prepare employees for further careers or new responsibilities in stores. Each position has a specific training form that is tailored to the situation and learning priorities. This structured approach ensures that employees are equipped with the necessary skills and knowledge to advance in their careers. We will regularly review our current training programs to identify areas for improvement and new training content. Based on these reviews, we will develop new training content to address any gaps. Additionally, we will establish metrics to measure the effectiveness of our training programs, ensuring they meet our standards and deliver tangible results. We take a comprehensive approach to training that not only improves professional skills but also supports the overall well-being and growth of our employees, promoting a thriving and motivated workforce. Training and skills development S1-13 Lithuania: Training module Number of participants 70 22 918 28 9 94 148 220 Try on Carrier (Internal talent development program) New employees’ trainings New Managers trainings Dress Your Thoughts (Training focused on employee well- being and personal growth) Ambassadors’ trainings (Training with focus on strengthening the employer's image and personal brand) Performance Appraisal training (Training on conducting annual interviews for those conducting annual interviews) First Aid trainings Master Mind sessions for Store managers (Training on improving customer experience and service) 129 78 Mentor trainings A Medida Workshops (Leadership skills development workshops) 143 SOCIAL Sustainability Statement 2024 Training module Number of participants Latvia: Training module Number of participants 26 66 Disc training for Store and office Managers (Mastering the teamwork and personality recognition tool for managers) 125New employees’ training Copilot trainings for Office (use of artificial intelligence tool) 205 Dress Your Thoughts (Training focused on employee well-being and personal growth) 91Safety training 66 Manager training (DISC, Leadership, Customer service) 19Mentor training 12 Performance Appraisal training (Training on conducting annual interviews for those conducting annual interviews) 30 A Medida Workshops (Leadership skills development workshops) 49Training for Lux store 9IG courses 21 Try on Carrier (Internal talent development program) 11Coordinator training 27Second manager training Estonia: Training module Number of participants 94New employees’ training 14Mentors 48Managers ABC (by Lilian Saage) 9Recruitment workshop for managers 16Emotional intelligence for managers 18 Performance Appraisal training (Training on conducting annual interviews for those conducting annual interviews) 23 Try on Carrier (Internal talent development program) 144 SOCIAL Sustainability Statement 2024 Training module Number of participants 94New employees’ training 14Mentors 48Managers ABC (by Lilian Saage) 9Recruitment workshop for managers 16Emotional intelligence for managers 35GDPR training (managers/office) 58Dress Your Thoughts 18 Performance Appraisal training (Training on conducting annual interviews for those conducting annual interviews) 23 Try on Carrier (Internal talent development program) 35GDPR training (managers/office) 58Dress Your Thoughts 33Managers ABC Labow law 25Managers inspiration day 14New managers - HR documents 46New managers - talking in numbers 6Store Merchandisers - Fashion week Total training hours and participants per country: Lithuania Hours Participants Latvia Estonia 273 1808 132 665 146 439 Another important measure we use is employee performance reviews. We see them as essential tool which provides a formal opportunity to evaluate employees' skills, set goals, and identify areas for improvement. They also facilitate continuous professional growth, ensuring employees' skills remain relevant, they are well-prepared for future roles within the organization, and also receive feedback on their achievements and stay motivated. At Apranga Group we have established a structured process for regularly reviewing employees' performance and career progression, particularly for store managers and key employees. At least two performance and career assessment interviews are held annually – mid-year and end-year. The only exception to this schedule occurs when a change in management results in a shorter evaluation period than required. Employees take part in these reviews after their trial period is over. Reviews are not mandatory for all positions - in example recommended for back-office employees. Considerations and methodology: On gender: we have not been tracking training information per gender category. As of next year, we will try to adapt this approach and improve reporting. On trainings: Number are calculated by summing up the participants of each training. Therefore, there are duplicates, as same people participate in more than one session due to the specifics of the training. Information provided from training registration reports and allows only total amount of hours to be disclosed, as an average number of training hours per FTE cannot be calculated. 145 SOCIAL Sustainability Statement 2024 At Apranga Group we are committed to supporting the work-life balance of our employees, even though we do not have specific social policies or collective agreements in place. All employees are entitled to take advantage of the opportunities provided by law, including maternity leave, childcare leave, and nursing leave. Additionally, we provide an opportunity to take advantage of study leave, as we employ many young people who are studying. We ensure that these entitlements are accessible to all employees in a gender-equitable manner, promoting a balanced approach to family-related leave. This practice is crucial for fostering a supportive work environment where employees can manage their professional and personal responsibilities effectively. Work and life balance S1-15 Additionally, we try to offer favourable work schedules to support our employees’ work-life balance. This includes flexible working hours that accommodate personal commitments (such as full-time study or vocational training) and family responsibilities. Work schedules in stores are prepared one month in advance, adhering to the principles of fairness and equality. The responsibility for creating these schedules lies with the store manager. When drafting schedules, consideration is given to the interests of employees and their work-life balance, to the extent possible. The primary objective is to assemble a team that meets the required staffing levels without necessitating additional overtime from employees. When possible, we also allow employees to choose their preferred workplace of store location. This flexibility helps reduce commuting time and stress, enabling employees to better manage their professional and personal lives. To manage employee turnover effectively, we offer motivational salary programs, provide additional benefits such as a private healthcare fund, and carry out employee satisfaction surveys. Employees entitled to take family-related leave: Country Lithuania Latvia Estonia Employees that took family-related leave Men Men MenWomen Women Women 1,86% 4,92 % 7,05 % 1,69 % 0 % 0 % As the average salary in the retail sector is lower than the national average, one of the key material sub-topics and a primary focus of our efforts is ensuring adequate remuneration and competitive wages for our employees. We recognize that fair compensation is crucial for attracting and retaining talented individuals, as well as for maintaining employee satisfaction and motivation. To address this, we regularly review and adjust our wage structures to ensure they are competitive within the retail sector and aligned with the cost of living. We also benchmark our salaries against national standards and sectoral best practices to ensure our employees are fairly compensated for their skills and contributions. In 2025 we plan to review a wage growth strategy tied to performance and market conditions to motivate employees and align their interests with Group goals. Additionally, we offer various incentives and benefits, such as performance bonuses tied to store achieved results for retail employees, additional health insurance for workers in Lithuania, ant other initiatives to further enhance the overall compensation package. In line with our commitment to fair compensation, we also analyse the company's remuneration system data to monitor the gender pay gap within the organisation. This analysis helps us identify and address gaps in a timely manner, ensuring that all employees are paid fairly for their work, regardless of gender, and, where necessary, take appropriate measures to eliminate them. All employees of the Group are paid higher than the minimum wage (minimum wage definition is indicated in the legislation of each market where Group is operating and implements Directive (EU) 2022/2041). In calculating annual total renumeration ratio the Group currently does not have the opportunity to provide more detailed data on all employees due to the incomplete implementation of a unified personnel accounting system in all three countries. In the 2025 report, we plan to provide a more detailed disclosure of this indicator • Employees earning below the applicable adequate wage benchmark: [number] • Gender pay gap: 25,01 % • Annual total remuneration ration: 41,38 Remuneration S1-16S1-10 * This disclosure includes the share of employees who acquired the right to use paternity/ maternity leave or other additional leave provided for by law during the reporting period. Nursing leave (liet. sergančiojo slau- ga) is not included in this metric, as related information is not currently collected 146 SOCIAL Sustainability Statement 2024 More information in relation to renumeration at the Group please see at Consolidated Annual Report, Renumeration report, page 56. Considerations and methodology: Gender pay gap: Gender pay gap is calculated as the average salary of all men minus the average salary of all women divided by the average salary of all men and multiplied by 100. We do not have the possibility to calculate on an hourly basis due to the incomplete implementation of the personnel accounting system in all countries. In the 2025 report, we plan a more detailed disclosure of this indicator. Annual total remuneration ration is calculated as a ratio of annual highest earner and annual median (without the highest earner). Since the Group has a very high employee turnover rate, only employees who have worked for a year or more were included in the ATRR calculation. This is the most accurate method to calculate annual median which included all seasonal factors, additional payouts (bonuses) ant other remuneration means. Estonian data was also excluded because we do not have data for the whole year. Employees on maternity leave were excluded. Just only 38,9 % of our employees work full time job, while the remaining portion works part-time. Maintaining a safe and respectful work environment is a top priority for Apranga Group. We are dedicated to adhering to all relevant laws and regulations to prevent any work-related incidents, complaints, or severe human rights impacts within our workforce. Our proactive approach includes regular training, strict compliance with safety protocols, and a system for reporting and addressing any issues. The representative of Legal Department records information related to human rights violations and complaints received in a registry. In 2024, we are pleased to report that there were no work- related incidents, complaints, or severe human rights impacts within our organization. • Incidents of discrimination: 0 • Number of complaints filled through channels for people in own workforce to raise concerns: 0 • Number of complaints filled to National Points for OECD Multinational Enterprises: 0 • Amount of fines, penalties, and compensation for damages as a result of the incidents and complaints: • Number of severe human rights incidents (connected to the undertaking’s workforce in the reporting period): 0 • Number of severe human rights issues and incidents connected to own workforce that are cases of non-respect of UN Guiding Principles and OECD Guidelines for Multinational Enterprises: 0 • Amount of material fines, penalties, and compensation for severe human rights issues and incidents connected to own workforce: Incidents Lithuania Lithuania Latvia Latvia Estonia Estonia 0 EUR 0 EUR 0 EUR 0 EUR 0 EUR 0 EUR S1-17 147 SOCIAL Sustainability Statement 2024 This chapter aims to provide insights into the impacts on value chain workers connected with our operations and value chain, including through our products and business relationships. We acknowledge potential negative impacts on value chain workers, and though we are in the early stages of our sustainability journey, we are committed to taking steps to prevent, mitigate, and remediate negative impacts. This includes ensuring suppliers respect fundamental labour rights, and preventing discrimination and harassment, especially for women in the garment industry. Increased regulation can enhance value chain stability but may raise production costs. There is also a reputational risk if issues like fair pay, health and safety, and labour rights are not adequately addressed. As we continue to develop our sustainability practices, we aim to better manage these risks and opportunities, creating a more stable and sustainable value chain for all stakeholders. In fulfilling the requirements of paragraph ESRS 2 SBM-3 (paragraph 48), we confirm that our disclosures include all value chain workers who are likely to be materially impacted by our operations and value chain. Apranga Group does not possess comprehensive information about all stages of the value chain, therefore, we apply transitional provision which allows not to provide all necessary information in relation for value chain for 3 years. However, our business model is based on collaboration with global fashion industry suppliers who are committed to prohibiting child labour and forced labour in their operations and value chains, and to ensuring the protection of workers' rights. Currently Apranga Group does not have a policy which would cover specifically workers in the value chain, as this topic was not evaluated in depth prior to conducting DMA. Currently, the Group does not have formal policies in place to manage our material impacts, risks, and opportunities related to value chain workers working conditions and equal treatment and opportunities for all. This is because we lack a defined strategy, clear goals, or targets in this area. However, in alignment with our commitment to transparency and sustainability, we are developing a comprehensive Supplier Policy, set to take effect in 2025. This policy will establish clear Environmental, Social, and Governance (ESG) standards for our suppliers, ensuring alignment with our core values and sustainability objectives. To support this, we will implement a Supplier Questionnaire to assess and ensure supplier engagement and compliance with these ESG standards. The initial focus will be on our Tier 1 suppliers, as we believe this approach will help mitigate risks and impacts while allowing us to monitor progress closely. By ensuring that our Tier 1 suppliers follow these standards, we aim to address critical issues such as fair labour practices, health and safety, and fundamental labour rights. This will help us promote a more ethical and sustainable supply chain. We acknowledge that making significant changes to our lower-tier suppliers and the workers within those tiers presents challenges due to the market size and the nature of our key suppliers. However, we are committed to ensuring that our Tier 1 suppliers adhere to our Supplier Policy. Through this effort, we aim to enhance our role in fostering sustainability and ethical practices within our supply chain. After planned strategy update in 2025, we will be able to establish specific goals and allocate the necessary resources to achieve them. Currently, we do not have any targets specifically related to workers in the value chain. However, the development of our strategy, along with the implementation of a comprehensive Supplier Policy, will provide a framework for setting these goals in the future. This approach will enable us to better address the needs and rights of value chain workers, ensuring that our practices align with our commitment to fair and ethical treatment. While we do not have our own policies fully established, we rely on the robust policies of our main suppliers, for example, Inditex. In their 2023 Annual Report, Inditex outlines several strategies to mitigate their relationship with suppliers and value chain workers: Policies, actions and targets WORKERS IN THE VALUE CHAIN S2-4 S2-5 S2-1 148 SOCIAL Sustainability Statement 2024 • Sustainability and Ethical Practices: Inditex emphasizes their commitment to sustainability and ethical practices throughout their supply chain. They work closely with suppliers to ensure compliance with their Code of Conduct for Manufacturers and Suppliers, which includes standards for labour rights, health and safety, and environmental practices. • Supplier Audits and Assessments: The company conducts regular audits and assessments of their suppliers to ensure adherence to their standards. These audits help identify areas for improvement and ensure that suppliers are meeting Inditex’s expectations. Disclosure on Human Rights Issues and Incidents in the Value Chain We do not currently collect information on severe human rights issues and incidents within our upstream and downstream value chain, nor are our suppliers required to report such incidents. Consequently, we cannot confirm or disclose any related information. However, in the new Supplier Policy we will indicate a channel to report on breaches of the policy which could be also used to report on incidents related to workers in the value chain. We are committed to ensuring that our value chain workers are treated fairly and ethically, and we will continue to work closely with our suppliers to uphold these standards. Currently, Apranga Group does not have a dedicated role or function assigned for engaging with value chain workers regarding their impact. There is no clear process in place to directly engage with these workers. As we provide general anonymous channels intended for reporting corruption and bribery, which could also be utilized by value chain workers to raise their concerns. These mechanisms, which include grievance mechanisms and hotlines, are detailed in the Governance section of this report. However, these channels are not communicated to the workers of our value chain as their primary purpose is to report on corruption and bribery incidents. But in the new Supplier Policy such channel will be separately listed. Engagement S2-3S2-2 Sustainability Statement 2024 Governance 150 GOVERNANCE Sustainability Statement 2024 At Apranga Group, we are committed to fostering a culture of transparency and ethical conduct. We advocate for open and honest communication with our shareholders and ensure equal access to information for all market participants. The Group remains steadfast in its commitment to comply with all applicable laws and regulations, acting ethically both within the company and in our interactions with third parties. Our goal is to minimize any potential harm arising from the actions of individuals, whether intentional or unintentional, through comprehensive risk management and ethical oversight. In managing our relationships with suppliers, we prioritize fairness and integrity. We are dedicated to maintaining prompt and fair payment practices, particularly with small and medium-sized enterprises, to foster a healthy and collaborative supply chain. In this chapter we aim to provide an insight into our approach to corporate culture, ensuring that our values and ethical standards are deeply embedded in all aspects of our operations. GOVERNANCE BUSINESS CONDUCT Policies Code of Ethics and Conduct Our governance policies are designed to provide a clear understanding of how we address the identification, assessment, management, and remediation of material impacts, risks, and opportunities related to business conduct matters. Central to our approach are two key policies: the Code of Ethics and Conduct and the Rules for the Implementation of the Corruption Prevention Policy. These policies reflect our commitment to fostering a strong corporate culture, ensuring ethical conduct, and maintaining transparency in all our operations. Key Contents of the Policy: This policy establishes, entrenches and explains the basic principles of ethics and conduct that should be adhered to in order to ensure honesty, transparency and accountability. It enlists the main values, such as respect, accountability, professionalism, duty to avoid conflicts of interest and other. Additionally, Code is designed to ensure equal treatment of all stakeholders, adherence to the rule of law, respect for employee privacy, and freedom of speech. Scope of the Policy: It applies to all entities within the Group, including employees, contractors, suppliers, independent partners, and consultants. Accountability: Legal department is responsible for the review and update of the Code and ensuring that the policies are effectively integrated into the company’s operations and that compliance is maintained. Code of Ethics and Conduct is approved by APB Apranga board. Every employee is responsible for following this document. Third-Party Standards: The implementation of Code of Ethics and Conduct is guided by general ethics standards and best practices. While no specific third-party standards or initiatives are directly referenced, the Code was developed with consideration of widely recognized ethical principles and international guidelines to ensure comprehensive and robust governance. Stakeholder Consideration: In setting these policies, the interests of key stakeholders, including employees, suppliers, customers, and contractors, were carefully considered. This Code is designed to ensure that all stakeholders are treated fairly and ethically. Policy Availability: The Code is publicly available on the company’s website. Employees are introduced to the policies upon joining the company, and all current employees have been briefed on the contents. New employees must sign a document acknowledging that they have been introduced to the policies when signing their work contract. Reporting channels: Although the whistleblowing channel is not fully confidential, the Code ensures that there is no persecution of any employee who reports potential corruption or conflicts of interest. Anonymous complaints can be filed and sent by post to an address stated in the Code. G1-3 G1-4 G1-1 151 GOVERNANCE Sustainability Statement 2024 Rules for the Implementation of the Corruption Prevention Policy Key Contents of the Policy: This document specifies the requirements set out in the Code of Ethics and Conduct in relation to anti-corruption and bribery. The key principle is zero tolerance for corruption. It includes a list of company positions who are required to declare private interests and provides specific rules about gifts and sponsorships. Scope of the Policy: The policy applies to all employees within the Group. Accountability: The Head of Legal is the most senior level accountable for the implementation of this policy. Third-Party Standards: The policy is informed by general ethics standards and global best practices. Although it does not directly reference specific third-party standards or initiatives, it is crafted with widely recognized ethical principles and international guidelines in mind to ensure thorough and effective governance. Stakeholder Consideration: The policy is developed with consideration for the interests of key stakeholders to ensure fair and ethical treatment. Priority is given to partners who implement corruption prevention measures and adhere to internal guidelines. Policy Availability: The policy is available publicly on the company’s website. Employees are introduced to the policy as it is a compulsory company document in a similar manner as with Code of Ethics and Conduct. Reporting Channels: The policy describes channels through which employees, partners, and other stakeholders can report non-compliance. Reports can be made via designated email or phone. Although the complaint process is not anonymous, anonymity is ensured. Actions - training of employees By investing in continuous education and awareness, the company demonstrates its dedication to employee development and retention. Keeping employees well-informed and engaged is a crucial goal, as it fosters a culture of integrity and accountability, ultimately contributing to a more resilient and sustainable business environment. In relation to the Rules for the Implementation of the Corruption Prevention Policy, employees periodically receive training related to the policy at least once a year (training takes place online). This include the Management team and some members of the Board (who are considered as part of the Company). Non-employees, such as independent Board members, are not obliged to take the training, however they are also introduced to the Rules individually and must comply. ب Number of employees who took training on corruption and bribery: 124 ب How many hours: 186 We do not have identified separately functions that are most at risk in respect of corruption and bribery. As this is first year in disclosing related to training information according the ESRS, information, which was not collected during the reporting year, such as quantitative and qualitative information regarding the progress of actions or comparison to prior periods, as well as related CAPEX and OPEX investments, is not disclosed. We will put effort in the future reports to improve our disclosures related to actions. * Number does not include all participants because when connecting to the online training platform from the store more than one employee could use one account to listen in to the training. ** Hours calculated is an approximate number. It is calculated by multiplying the training duration - approx. 1,5 hour - by the number of participants. 152 GOVERNANCE Sustainability Statement 2024 Mechanisms for Identifying, Reporting, and Investigating Concerns Apranga Group has established comprehensive mechanisms for identifying, reporting, and investigating concerns about unlawful behaviour indicated in Whistleblower protection and other laws or actions that contradict its Code of Ethics and Conduct or internal rules. These mechanisms accommodate reporting from both internal and external stakeholders. Rules for Reporting Violations (document is publicly available on the company’s website) outlines the procedure for providing information about violations through internal channels, receiving reports, evaluating and examining the information received, and informing the concerned parties. Complaints can be raised anonymously through a form or by post, ensuring the anonymity of the complainant and non-retaliation. The document also specifies the timing for processing complaints and the evaluation process. Only technical evaluation of existing mechanisms is performed - during which we check if the channels are active and functional. Additional evaluation of effectiveness is currently not performed. The policy applies to the company’s own operations and value chain, including current or former employees and individuals connected with the company through contractual relationships (consulting, service provision, contracting, internship, etc.). The rules are implemented by a group of employees appointed by the General Manager of the Company (including Head of the Legal Department and the Head of Vindication). This team manages the internal whistleblower reporting channel, analyses information about violations, ensures the confidentiality of individuals reporting violations (except as required by law), and performs other functions as outlined in legal acts and the Rules. As it is described in the Rules, responsible person once a year makes a summary of all incidents related data and actions and presents it the General Manager of the company. Measures are in place to protect whistleblowers from retaliation as well as to uphold the principle of non-partiality while investigating, in accordance with national law on Whistleblower Protection of the Republic of Lithuania (similar measures are to be implemented in Latvia and Estonia in 2025). During the reporting period, the company had no incidents of corruption or bribery, received zero convictions and no fines for violation of anti-corruption and anti- bribery laws. This underscores our commitment to ethical operations. We continuously implement measures to ensure integrity and transparency in all our activities. Throughout the reporting year, there were no violations of anti-corruption and anti-bribery procedures and standards. Consequently, no corrective actions were required. 153 GOVERNANCE Sustainability Statement 2024 Apranga Group is in the initial stages of developing a Supplier Policy, which will be finalized in early 2025 along with a supplier questionnaire. The company’s approach to supplier relationships is evolving, with a focus on identifying and mitigating risks related to its supply chain and addressing sustainability impacts. The company is committed to integrating social and environmental criteria into its supplier selection process. As the company develops its policy, it aims to ensure that suppliers align with its emerging sustainability goals. This includes considering factors such as ethical practices, environmental impact, and social responsibility. The objective is to build a responsible and resilient supply chain that supports the company’s long-term sustainability ambitions. The company’s main supply chain partners (almost 100 percent) are worldwide known fashion suppliers and manufacturers. In all cases the partnership is based on mutual respect and business arrangements are made following common practices of the suppliers. Therefore, the company is neither in the position, nor seeks any favourable conditions regarding payments or other practices. The practice of advance payments is common, and contract obligations are respected in all other cases. The common practice in contracts is 30 days period for the payments to be made. In some cases, the period might be longer if agreed with partners. According to the financial statements (section Financial risk management, page 23-26) 74 percent of obligations are covered in 30 days. Other payments are made in 12 months. Lease agreements are usually paid on the current month of lease with specific date agreed by both parties. The average time the undertaking takes to pay an invoice from the date when the contractual or statutory term of payment starts to be calculated is not calculated, as the company respects is obligations and did not have any legal proceedings outstanding for late payments in the previous year. All payments are managed and approved centrally. Responsible persons are the CEO and CFO. MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS G1-6G1-2 Sustainability Statement 2024 Annex 155 ANNEX Sustainability Statement 2024 ESRS 2 General disclosures E1 Climate change E2 Pollution BP-1 BP-2 E1.GOV-3 E1-3 E1-5 GOV-1 E1-1 E1-2 E1-4 E1-6 E1-7 E1-8 E2-1 GOV-3 GOV-4 GOV-5 SBM-1 SBM-2 SBM-3 IRO-1 E1.SMB-3 E1.IRO-1 E1-9 E2.IRO-1 IRO-2 GOV-2 General basis for preparation of sustainability statements Disclosures in relation to specific circumstances Integration of sustainability-related performance in incentive schemes Actions and resources in relation to climate change policies Energy consumption and mix The role of the administrative, management and supervisory bodies Transition plan for climate change mitigation Policies related to climate change mitigation and adaptation Targets related to climate change mitigation and adaptation Gross Scopes 1, 2, 3 and Total GHG emissions GHG removals and GHG mitigation projects financed through carbon credits Non-material Non-material Non-material Internal carbon pricing Policies related to pollution Integration of sustainability-related performance in incentive schemes Statement on due diligence Risk management and internal controls over sustainability reporting Strategy, business model and value chain Interests and views of stakeholders Material impacts, risks and opportunities and their interaction with strategy and business model Description of the processes to identify and assess material impacts, risks and opportunities Material impacts, risks and opportunities and their interaction with strategy and business model Description of the processes to identify and assess material climate-related impacts, risks and opportunities Anticipated financial effects from material physical and transition risks and potential climate-related opportunities Description of the processes to identify and assess material pollution-related impacts, risks and opportunities Disclosure requirements in ESRS covered by the undertaking’s sustainability statement Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies ESRS code Disclosure Requirement Location in the report APPENDIX NO. 1: LIST OF DISCLOSURE REQUIREMENTS Material disclosure requirements were identified during DMA; non-material disclosure requirements are indicated in the table below, last column. If information is phased-in, related disclosure is indicated in the report. 134 114 129 127 126 126 126 114 103 126 97 155 114 97, 103 101 99 97 97 97 96 94 91 91 IRO-2 156 ANNEX Sustainability Statement 2024 E5 Resource use and circular economy S1 Own workforce E4 Biodiversity and ecosystems E3 Water and marine resources E2-5 E2-6 E5-2 E5-3 S1.SBM-3 S1.SBM-2 S1-1 S1-2 S1-5 S1-6 S1-7 E3-1 E3-2 E3-3 E3-4 E5.IRO-1 E5-4 E5-5 E5-6 S1-3 S1-4 E5-1 E3.IRO-1 E3-5 Substances of concern and substances of very high concern Anticipated financial effects from pollution-related impacts, risks and opportunities Actions and resources related to resource use and circular economy Targets related to resource use and circular economy Material impacts, risks and opportunities and their interaction with strategy and business model Interests and views of stakeholders Policies related to own workforce Processes for engaging with own workers and workers’ representatives about impacts Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities Characteristics of the undertaking’s employees Characteristics of non-employee workers in the undertaking’s own workforce Policies related to water and marine resources Actions and resources related to water and marine resources Targets related to water and marine resources Water consumption Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities Resource inflows Resource outflows Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities Processes to remediate negative impacts and channels for own workers to raise concerns Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions Policies related to resource use and circular economy Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities Anticipated financial effects from water and marine resources-related impacts, risks and opportunities ESRS code Disclosure Requirement Location in the report Non-material Non-material Non-material Non-material Non-material 134 134 134 114 134 134 Non-material 135 114 Non-material 140 140 138 138 139 139 138 135 135 135 135 103, 126, 138 101 E2-4 Pollution of air, water and soil E2-2 E2-3 Actions and resources related to pollution Targets related to pollution 157 ANNEX Sustainability Statement 2024 S4 Consumers and end-users S3 Affected communities G1 Business conduct S1-10 G1.GOV-1 G1.IRO-1 G1-1 G1-4 G1-5 G1-6 S1-11 S1-12 S1-15 S1-13 S1-16 S1-14 S1-17 S2-2 S2-5 G1-2 G1-3 S2-1 S2.SBM-2 Adequate wages The role of the administrative, supervisory and management bodies Description of the processes to identify and assess material impacts, risks and opportunities Corporate culture and business conduct policies and corporate culture Confirmed incidents of corruption or bribery Political influence and lobbying activities Payment practices Social protection Persons with disabilities Work-life balance metrics Training and skills development metrics Compensation metrics (pay gap and total compensation) Health and safety metrics Incidents, complaints and severe human rights impacts Processes for engaging with value chain workers about impacts Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities Management of relationships with suppliers Prevention and detection of corruption and bribery Policies related to value chain workers Interests and views of stakeholders ESRS code Disclosure Requirement Location in the report S2 Workers in the value chain S2.SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 145 Non-material Non-material Non-material Non-material Non-material Non-material 153 150 150 153 150 114 94 147 147 148 148 147 103 101 146 145 145 142 S2-3 S2-4 Processes to remediate negative impacts and channels for value chain workers to raise concerns Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions S1-8 S1-9 Collective bargaining coverage and social dialogue Diversity metrics Non-material Non-material 158 ANNEX Sustainability Statement 2024 ESRS code Disclosure Requirement Location in the report Pollution of water and microplastics Water consumption Mitigation measures in response to identified IROs in relation to Pollution topic in value chain (upstream & downstream) Mitigation measures in response to identified IROs in relation to Water topic in value chain (upstream) Entity specific disclosures 134 134 159 ANNEX Sustainability Statement 2024 APPENDIX NO. 2: LIST OF DATAPOINTS DERIVING FROM OTHER EU LEGISLATION Appendix B is an integral part of the ESRS 2. The table below illustrates the datapoints in ESRS 2 and topical ESRS that derive from other EU legislation. ESRS 2 GOV-1 ESRS 2 GOV-1 ESRS 2 GOV-4 ESRS 2 SBM-1 ESRS 2 SBM-1 ESRS 2 SBM-1 ESRS 2 SBM-1 Board's gender diversity Percentage of board members who are independent Statement on due diligence Involvement in activities related to fossil fuel activities Involvement in activities related to chemical production Involvement in activities related to controversial weapons Involvement in activities related to cultivation and production of tobacco paragraph 21 (d) paragraph 21 (e) paragraph 30 paragraph 40 (d) i paragraph 40 (d) ii paragraph 40 (d) iii paragraph 40 (d) iv Indicator number 13 of Table #1 of Annex 1 Indicator number 10 Table #3 of Annex 1 Indicators number 4 Table #1 of Annex 1 Indicator number 9 Table #2 of Annex 1 Indicator number 14 Table #1 of Annex 1 Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Article 12(1), Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Article 12(1), Delegated Regulation (EU) 2020/1816, Annex II Commission Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1816, Annex II 95 95 97 Non- material Non- material Non- material Non- material Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report 160 ANNEX Sustainability Statement 2024 ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14 Regulation (EU) 2021/1119 Article 2(1) 126 126 126 127 127 128 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS E1-1 ESRS E1-4 ESRS E1-5 ESRS E1-5 ESRS E1-5 Undertakings excluded from Paris-aligned Benchmarks GHG emission reduction targets Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) Energy consumption and mix Energy intensity associated with activities in high climate impact sectors paragraph 16 (g) paragraph 34 paragraph 38 paragraph 37 paragraphs 40 to 43 Indicator number 4 Table #2 of Annex 1 Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1 Indicator number 5 Table #1 of Annex 1 Indicator number 6 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2 Delegated Regulation (EU) 2020/1818, Article 6 Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking Book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics 161 ANNEX Sustainability Statement 2024 ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14 paragraph 44 paragraphs 53 to 55 paragraph 56 paragraph 66 paragraph 66 (a) paragraph 66 (c). Indicators number 1 and 2 Table #1 of Annex 1 Indicators number 3 Table #1 of Annex 1 Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk. Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1) Delegated Regulation (EU) 2020/1818, Article 8(1) Delegated Regulation (EU) 2020/1818, Annex II Delegated Regulation (EU) 2020/1816, Annex II Regulation (EU) 2021/1119, Article 2(1) Regulation (EU) 2021/1119 Article 2(1) 126 129 130 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS E1-6 ESRS E1-6 ESRS E1-7 ESRS E1-9 ESRS E1-9 ESRS E1-9 Gross Scope 1, 2, 3 and Total GHG emissions Gross GHG emissions intensity GHG removals and carbon credits Exposure of the benchmark portfolio to climate-related physical risks Disaggregation of monetary amounts by acute and chronic physical risk Location of significant assets at material physical risk Non- material / Not applicable 3 years phase in 3 years phase in 162 ANNEX Sustainability Statement 2024 ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy- efficiency classes paragraph 67 (c) paragraph 69 paragraph 28 paragraph 9 paragraph 13 paragraph 14 paragraph 28 (c) Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1 Indicator number 7 Table #2 of Annex 1 Indicator number 8 Table 2 of Annex 1 Indicator number 12 Table #2 of Annex 1 Indicator number 6.2 Table #2 of Annex 1 Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34; Template 2: Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral Delegated Regulation (EU) 2020/1818, Annex II 3 years phase in 1 year phase in Non- material 134 Non- material 134 Non- material Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS E1-9 ESRS E2-4 ESRS E3-1 ESRS E3-1 ESRS E3-1 ESRS E3-4 Degree of exposure of the portfolio to climate- related opportunities Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil Water and marine resources Dedicated policy Sustainable oceans and seas Total water recycled and reused 163 ANNEX Sustainability Statement 2024 ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29 Indicator number 6.1 Table #2 of Annex 1 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report paragraph 16 (a) i paragraph 16 (b) paragraph 16 (c) paragraph 24 (b) paragraph 24 (c) paragraph 24 (d) paragraph 37 (d) paragraph 39 paragraph 14 (f) paragraph 14 (g) Indicator number 7 Table #1 of Annex 1 Indicator number 10 Table #2 of Annex 1 Indicator number 14 Table #2 of Annex 1 Indicator number 11 Table #2 of Annex 1 Indicator number 12 Table #2 of Annex 1 Indicator number 15 Table #2 of Annex 1 Indicator number 13 Table #2 of Annex 1 Indicator number 9 Table #1 of Annex 1 Indicator number 13 Table #3 of Annex I Indicator number 12 Table #3 of Annex I ESRS 2- IRO 1 - E4 ESRS E4-2 ESRS E4-2 ESRS E4-2 ESRS E5-5 ESRS E5-5 ESRS 2- SBM3 - S1 ESRS 2- SBM3 - S1 ESRS 2- IRO 1 - E4 ESRS 2- IRO 1 - E4 x Sustainable land / agriculture practices or policies Sustainable oceans / seas practices or policies Policies to address deforestation Non-recycled waste Hazardous waste and radioactive waste Risk of incidents of forced labour Risk of incidents of child labour x Non- material Non- material Non- material Non- material Non- material Non- material Non- material Non- material 136 136 Non- material 164 ANNEX Sustainability Statement 2024 ESRS S1-1 Human rights policy commitments paragraph 20 paragraph 21 paragraph 22 paragraph 23 paragraph 32 (c) paragraph 88 (b) and (c) paragraph 97 (a) paragraph 88 (e) Indicator number 9 Table #3 Indicator number 11 Table #1 of Annex I Indicator number 11 Table #3 of Annex I Indicator number 1 Table #3 of Annex I Indicator number 5 Table #3 of Annex I Indicator number 2 Table #3 of Annex I Indicator number 12 Table #1 of Annex I Indicator number 3 Table #3 of Annex I Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS S1-1 ESRS S1-1 ESRS S1-1 ESRS S1-3 ESRS S1-14 ESRS S1-16 ESRS S1-14 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Processes and measures for preventing trafficking in human beings Workplace accident prevention policy or management system Grievance/ complaints handling mechanisms Number of fatalities and number and rate of work- related accidents Unadjusted gender pay gap Number of days lost to injuries, accidents, fatalities or illness Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1816, Annex II Non- material 139 139 139 140 145 Non- material Non- material 165 ANNEX Sustainability Statement 2024 ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b) paragraph 103 (a) paragraph 11 (b) paragraph 17 paragraph 18 paragraph 19 paragraph 19 paragraph 36 Indicator number 8 Table #3 of Annex I Indicator number 7 Table #3 of Annex I Indicators number 12 and 13 Table #3 of Annex I Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1 Indicator number 11 and n. 4 Table #3 of Annex 1 Indicator number 10 Table #1 of Annex 1 Indicator number 14 Table #3 of Annex 1 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS S1-17 ESRS 2- SBM3 – S2 ESRS S2-1 ESRS S2-1 ESRS S2-1 ESRS S2-1 ESRS S2-4 Incidents of discrimination Significant risk of child labour or forced labour in the value chain Human rights policy commitments Policies related to value chain workers Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Human rights issues and incidents connected to its upstream and downstream value chain Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1) Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) Delegated Regulation (EU) 2020/1816, Annex II 146 147 147 147 147 147 147 Non- material 166 ANNEX Sustainability Statement 2024 ESRS S3-1 Human rights policy commitments paragraph 16 paragraph 17 paragraph 36 paragraph 16 paragraph 17 paragraph 35 paragraph 10 (b) paragraph 10 (d) paragraph 24 (a) Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 Indicator number 10 Table #1 Annex 1 Indicator number 14 Table #3 of Annex 1 Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 Indicator number 10 Table #1 of Annex 1 Indicator number 14 Table #3 of Annex 1 Indicator number 15 Table #3 of Annex 1 Indicator number 6 Table #3 of Annex 1 Indicator number 17 Table #3 of Annex 1 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report ESRS S3-1 ESRS S3-4 ESRS S4-1 ESRS S4-1 ESRS S4-4 ESRS G1-1 ESRS G1-1 ESRS G1-4 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines Human rights issues and incidents Policies related to consumers and end-users Non-respect of UNGPs on Business and Human Rights and OECD guidelines Human rights issues and incidents United Nations Convention against Corruption Protection of whistle- blowers Fines for violation of anti- corruption and anti-bribery laws Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) Delegated Regulation (EU) 2020/1816, Annex II) Non- material Non- material Non- material Non- material Non- material Non- material 150 150 152 167 ANNEX Sustainability Statement 2024 ESRS G1-4 Standards of anti- corruption and anti- bribery paragraph 24 (b) Indicator number 16 Table #3 of Annex 1 Disclosure Requirement and related datapoint ESRS paragraph SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Page in the report 150 SFDR reference - Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019on sustainability-related disclosures in the financial services sector (Sustainable Finance Disclosures Regulation) (OJ L 317, 9.12.2019, p. 1). Pillar 3 reference - Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Capital Requirements Regulation “CRR”) (OJ L 176, 27.6.2013, p. 1). Benchmark Regulation reference - Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1). EU - Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1). Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1). Commission Implementing Regulation (EU) 2022/2453 of 30 November 2022amending the implementing technical standards laid down in Implementing Regulation (EU) 2021/637 as regards the disclosure of environmental, social and governance risks (OJ L 324,19.12.2022, p.1.). Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17).