ROKIŠKIO SÜRIS

CONSOLIDATED INTERIM REPORT AND CONSOLIDATED FINANCIAL STATEMENTS OF AB ROKIŠKIO SÜRIS

FOR SIX MONTHS ENDED JUNE 30, 2021

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

REPORTING PERIOD OF THE SUBMITTED HALF YEAR CONSOLIDATED REPORT AND CONSOLIDATED FINANCIAL STATEMENTS ... 3
KEY INFORMATION OF THE ISSUER: ... 3
INFORMATION ON THE COMPANY'S GROUP ... 3
TYPES OF MAIN ACTIVITIES OF THE COMPANY AND THE COMPANY GROUP ... 4
STRATEGY AND OBJECTIVES OF THE GROUP ... 4
THE MOST IMPORTANT EVENTS IN THE REPORTING PERIOD ... 5
SIGNIFICANT DEVELOPMENTS AFTER THE END OF THE FISCAL YEAR ... 6
BUSINESS ENVIRONMENT OF THE GROUP OF COMPANIES ... 6
SALES OF THE GROUP OF COMPANIES ... 10
PRODUCTS, BRANDS AND ACHIEVEMENTS ... 12
RISK FACTORS AND RISK MANAGEMENT ... 14
INFORMATION ABOUT THE AIMS OF FINANCIAL RISK MANAGEMENT AND THE USE OF HEDGING MEASURES ... 20
KEY ASPECTS OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS ASSOCIATED WITH THE FORMATION OF CONSOLIDATED FINANCIAL ACCOUNTS ... 21
ENVIRONMENT ... 21
FINANCIAL PERFORMANCE ... 23
PLANS AND FORECASTS FOR THE OPERATIONS OF THE GROUP AND INVESTMENTS FOR THE YEAR 2021 ... 27
INFORMATION ON THE COMPANY'S AUTHORIZED CAPITAL ... 28
CONTRACTS OF THE COMPANY WITH THE FINANCIAL BROKERAGE UNDERTAKINGS ... 28
DATA ABOUT TRADE IN ISSUER'S SECURITIES ON REGULATED MARKETS ... 28
LIMITATION ON TRANSFERENCE OF SECURITIES: ... 30
PROCEDURE FOR AMENDING THE ARTICLES OF ASSOCIATION ... 30
INFORMATION ABOUT THE SHAREHOLDERS OF THE COMPANY ... 31
RIGHTS OF SHAREHOLDERS ... 32
SHAREHOLDERS WITH SPECIAL CONTROL RIGHTS AND DESCRIPTION OF THE RIGHTS ... 33
INFORMATION ABOUT ALL RESTRICTIONS ON THE VOTING RIGHTS ... 33
INFORMATION ABOUT THE PURCHASE OF OWN SHARES BY ISSUER ... 33
DIVIDENDS ... 33
MANAGEMENT BODIES OF THE COMPANY ... 35
ORGANIZATIONAL STRUCTURE OF THE MANAGEMENT OF THE COMPANY AND THE COMPANY GROUP ... 35
INFORMATION ON THE POWERS OF AND THE PROCEDURE FOR CONVENING THE GENERAL MEETING OF SHAREHOLDERS 36
BOARD OF THE COMPANY ... 39
COMMITTEES SET UP IN THE COMPANY ... 43
MANAGEMENT OF THE COMPANY ... 44
EMPLOYEES ... 44
INFORMATION ON AGREEMENTS BETWEEN THE COMPANY AND MEMBERS OF ITS BODIES, MEMBERS OF ITS COMMITTEES, OR EMPLOYEES PROVIDING FOR COMPENSATION IF THEY RESIGN OR ARE MADE REDUNDANT WITHOUT VALID REASON OR IF THEIR EMPLOYMENT CEASES BECAUSE OF CHANGE OF CONTROL OF THE ISSUER ... 46
RELATED-PARTY TRANSACTIONS ... 46
INFORMATION ON INJURIOUS TRANSACTION CONCLUDED ON BEHALF OF THE ISSUER ... 47
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ... 49
CONSOLIDATED BALANCE SHEET ... 50
CONSOLIDATED CASH FLOW STATEMENT ... 51
CONSOLIDATED OWN CAPITAL CHANGE STATEMENT ... 52
COMMENTARY ON THE REPORT ... 53

ROK ISKIO SURIS AB

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

GENERAL INFORMATION

1. Reporting period of the submitted half year consolidated report and consolidated financial statements

The half year consolidated report and consolidated financial statements are prepared for six months 2021.

2. Key information of the issuer:

Name of the issuer:	Rokiškio suris, AB (hereinafter, the “Company”)
Legal form:	Public limited liability company
Registration date and place:	28 February 1992, State Enterprise Centre of Registers
Registration number:	173057512
Address:	Pramonės g. 3, LT-42150 Rokiškis, Republic of Lithuania
Administrator of the Register of Legal Entities	State Enterprise Centre of Registers
Telephone:	+370 458 55 200
Fax:	+370 458 55300
E-mail address:	[email protected]
Website:	www.rokiskio.com
ISIN code:	LT0000100372
LEI code:	48510000PW42N5W74S87
Share ticker symbol at AB Nasdaq Vilnius	RSU1L

3. Information on the Company's group

As at June 31, 2021, the group of Rokiškio suris, AB (hereinafter, the “Group”) consists of the parent company Rokiškio suris, AB, and four subsidiaries (as at June 30, 2020: the parent company and four subsidiaries).

Rokiškio suris, AB (registration number 173057512, Pramonės g. 3, LT-42150 Rokiškis).

Subsidiaries of Rokiškio suris, AB:

Rokiškio pienas, UAB, address of the registered office Pramonės g. 8, LT-28216 Utena. Registration number: 300561844. Rokiškio suris, AB is the founder and the sole shareholder of Rokiškio pienas, UAB, holding 100% of shares and votes.

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Interim report and financial statements for 6 months ended 30 June 2021 of

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Rokiškio pieno gamyba, UAB, address of the registered office Pramonės g. 8, LT-28216 Utena. Registration number: 303055649. Rokiškio suris, AB is the founder and the sole shareholder of Rokiškio, UAB, pieno gamyba, holding 100% of shares and votes.

Latvian company SIA Jekabpils piena kombinats (registration number 45402008851, address of the registered office Akmenu iela 1, Jekabpils, Latvia LV-5201). Rokiškio suris, AB holds 100% of shares and votes in the company.

Latvian company SIA Kaunata (registration number 240300369, address of the registered office Rogs, Kaunata pag., Rezeknes nov., Latvia). Rokiškio suris, AB holds 40 percent of member shares in the company, whereas Rokiškio pienas, UAB, holds 20 percent of member shares in the company.

4. Types of main activities of the Company and the Company group

Main activities of Rokiškio suris, AB group:

Operation of dairies and cheese making (EVRK 10.51)

Rokiškio suris, AB:

The main activity of Rokiškio suris, AB is production and sale of fermented cheeses, whey products, skimmed milk powder.

Subsidiaries:

The main activity of UAB Rokiškio pienas is sale of fresh milk products and fermented cheeses.

The main activity of UAB Rokiškio pieno gamyba is production of fresh milk products (milk, kefir, sour milk, butter, curd, curd cheese, sour cream, glazed curd cheese bars, desserts).

The activity of SIA Jekabpils piena kombinats is purchase of raw milk.

The activity of SIA Kaunata is purchase of raw milk.

5. Strategy and objectives of the Group

Rokiškio suris, AB group in its activities is guided by a three-year strategic plan approved by the Board, the main provisions of which are set forth below:

MISSION:

Rokiškio suris, AB = Reliable Professionals in the Dairy Industry

VISION:

Processing more than 1 million tonnes of raw milk per year, as Lithuania turns into Baltlandia.

OBJECTIVES:

Regional leadership in milk processing sector.
Flexible production and sales of top-quality products exceeding consumer expectations.
Being the most attractive and reliable partner for farmers producing milk.
Continuously increasing value for shareholders.

We seek objectives

By increasing the volume of purchased and processed milk by 5 percent annually.
We target at 3 percent net annual profit rate.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

6. The most important events in the reporting period

The 30 April 2021 General Shareholders' meeting of Rokiškio suris, AB:

Endorsed findings made by the Audit Committee;
Approved the Company's and consolidated financial reports for the year 2020;
Approved profit (loss) allocation 2020:

	Title	kEUR
1.	Non-distributable profit (loss) at beginning of year	73 169
2.	Approved by shareholders dividends related to the year 2018	(3 501)
3.	Transfers from other reserves	1 435
4.	Non-distributable profit (loss) at beginning of year after dividend pay-out and transfer to reserves	71 103
5.	Net profit (loss) of the Company of fiscal year	3 329
6.	Distributable profit (loss) of the Company	74 432
7.	Profit share for mandatory reserve	-
8.	Profit share for other reserves	-
9.	Profit share for dividend pay-out *	(3 501)
10.	Profit share for annual payments (tantiemes) to the Board of Directors, employee bonuses and other as accounted by Profit (loss) statement	-
11.	Non-distributable profit (loss) at end of year transferred to the next fiscal year	70 931

In total it will be allocated EUR 3,500,669.60 to the dividends pay-out, 0.10 euro per ordinary registered share.

Approved the company's Remuneration Report for 2020.
Resolved to acquire treasury shares as follows:

The Company's shares shall be acquired under the following conditions:

Purpose of acquisition of own shares – maintain and increase the price of the company's shares.

Maximal number of the shares to be purchased – total value of the Company's treasury shares including the nominal value of already owned shares may not exceed 1/10 of the Company's Authorized Capital.

Period during which the company may purchase own shares – 18 months from the approval of resolution.

Maximal and minimal purchase price per share – maximal purchase price per share is higher by 10 per cent compared to the Company's share market price at Nasdaq Vilnius Stock Exchange at the time of the resolution's approval by the Board of Directors in regard with the treasury share acquisition, and the minimal purchase price per share is lower by 10 per cent compared to the Company's share market price at Nasdaq Vilnius Stock Exchange at the time of the resolution's approval by the Board of Directors in regard with the treasury share acquisition.

Procedure of selling the treasury shares and minimal sales price – The Company's treasury shares might be cancelled upon a resolution of the general meeting of shareholders or sold under a resolution of the Board of Directors provided the minimal sales price is equal to the acquisition price, and the procedure will ensure equal opportunities for all shareholders to acquire the company's shares.

Following the conditions set herewith and the requirements of the Law on Companies of the Republic of Lithuania, to authorize the Board of Directors to accept resolutions regarding purchase of

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

the Company’s own shares, organize purchase and sales of the own shares, establish an order for purchase and sales of the own shares, as well as their price and number, and also complete all other related actions.

The company has accumulated a reserve of kEUR 10,850 for acquisition of treasury shares.

The decision of the General Meeting of Shareholders of April 30, 2019 regarding the acquisition of own shares shall become invalid as of the date of adoption of this resolution.

Elected the Company’s Audit Committee for a 4 year term: Kęstutis Gataveckas, Director Perlas Finance, UAB (independent member), Valdas Puzeras independent management and financial consultant (independent member) and Rasa Žukauskaitė (Finance department employee of Rokiškio suris, AB).
Elected an audit company UAB PricewaterhouseCoopers to perform an audit of annual consolidated financial statements for the year 2021 and evaluation of the consolidated annual report 2021 of the Group of AB Rokiškio suris and the Parent Company.
On June 29, 2021, the Board of AB Rokiškio suris made a decision to establish a subsidiary UAB DairyHub.LT, which will be 100% owned by AB Rokiškio suris. The authorized capital is formed by a monetary contribution. The estimated authorized capital is EUR 100 thousand. The main goal of this company will be the preparation and sale of hard cheeses to the end consumer in various countries. A separate company is being set up to effectively manage the production and sales costs of hard cheese prepared for the final consumer and to create an efficient sales system.

7. Significant developments after the end of the fiscal year

There were no significant developments in the Company after the end of the reporting period.

Publicly announced information

Pursuing the Law of the Republic of Lithuania all material events related with the Company’s performance and the information on time and location of general meetings of shareholders are publicly announced on the Company’s website www.rokiskio.com and also submitted to the website of securities stock exchange Nasdaq Vilnius AB (www.nasdaqomxbaltic.com).

INFORMATION ON THE OPERATIONS OF THE COMPANY AND THE GROUP OF COMPANIES

8. Business environment of the Group of Companies

Basic Provisions

Who we are:

We process more than 500 thousand tonnes of milk at three milk processing plants
We manufacture and sell more than 35 thousand tonnes of different cheeses.
We export approximately two-thirds of our production.
We are a responsible employer to around 1,400 employees.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

The Company’s operations cover raw milk procurement, the manufacture of various dairy products and their sales on the local and export markets.

Raw milk procurement

During the first half of 2021, according to the preliminary data of ŽÜIKVC (ŽÜMPRIS), a total of 632.30 thousand tons of raw natural milk was purchased in Lithuania from milk producers, which is 1.8 percent less than in the same period of 2020. In June 2021, the country's largest processing companies paid an average of 342 euros per tonne for natural milk (4.10% fat and 3.39% protein) to large farms in Lithuania, which sold about 70% of the total purchased quantity - 21.8% more than before. years. During the analyzed period, the average purchase price of natural milk in Latvia amounted to 305.6 EUR / t, in Poland - 333.4 EUR / t, in Estonia - 313.0 EUR / t, and compared to June 2020, the price in Latvia increased by 18.8%. In Poland - 12.3 percent, in Estonia - 11.8 percent. According to the data of the Agricultural Information and Rural Business Center, on 1 July 2021, 236.16 thousand dairy cows were registered in Lithuania - 2.9 per cent less than in the same period of 2020. Milk is purchased from 15.76 thousand producers who keep 212.77 thousand cows, because part of the milk produced on farms is consumed for own use, sold or given for direct consumption.

The chart shows that this year the purchase price of raw natural milk is significantly higher than in previous years. Although the pandemic has a negative impact on milk purchase prices worldwide, Lithuania is in an exceptional situation. Prices are affected by seasonality and declining milk production. According to the Ministry of Agriculture, the purchase of milk in February this year, compared to February last year, decreased by 5.9 percent.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Manufacture of dairy products

Rokiškio suris, AB Group is the largest dairy company in Lithuania that manufactures and offers more than 300 products to its customers. This includes not only fermented cheeses but also a variety of products obtained from whey, such as lactose, 80% WPC, 90% WPC. The Group manufactures milk powder, butter, processed cheeses, curd and curd products, other fresh dairy products.

Thanks to their excellent quality, the products manufactured by the companies of the Group have earned the trust of consumers both in the local and the export markets.

Rokiškio suris, AB Group carries out its production activity in the towns of Rokiškis (Rokiškio suris, AB), Utena (Rokiškio pieno gamyba, UAB) and Ukmergė (Ukmergės pieninė, branch of Rokiškio pieno gamyba, UAB).

Rokiškio suris, AB (in Rokiškis) specialises in the production and marketing of fermented cheeses and products obtained from whey.
Rokiškio pieno gamyba, UAB (Utena company) specialises in fresh dairy products for the local market, whey protein concentrate, milk powder and butter production.
Rokiškio pieno gamyba, UAB (Ukmergė company) specialises in curd and curd products.
Rokiškio pienas, UAB specialises in the marketing of the complete range of products of the Group in Lithuania, Latvia and Estonia. The company also markets dairy products manufactured by other foreign producers.

The following table and chart show changes in the production volumes of Rokiškio suris, AB Group (in tons):

Production / Year	6 months 2021	6 months 2020	Change, %
Fermented cheese, t	15,799	15,282	3.4
WPC powder, t	1,239	1,193	3.9
Lactose, t	6,105	6,040	1.1
Butter and fat blends, t	2,928	5,521	-47.0
Dry milk products*, t	1,351	2,286	-40.9
Fresh dairy products, t	24,120	22,572	6.9

WPC, skim milk powder, butter milk powder.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Production of fermented cheeses increased by 3.4% due to a change in the range.

In 2021, hard cheese production fell by 26%, but 16% more semi-hard and fresh cheeses were produced. The range has been driven by improved dairy supplies between European Union (EU) countries compared to 2020, when the World Health Organization declared a coronavirus pandemic on 11 March 2020 and introduced quarantine regimes and restrictions in many countries, leading to significant reductions in dairy consumption.

As a result, the production of dry dairy products and the production of butter and fat blends have decreased significantly.

Increased production of fermented cheeses resulted in higher whey yields during processing, which in turn led to higher production of edible milk sugar and WPC (whey protein concentrate) flour.

The GRAND (GRANA type) 35 kg hard cheeses produced by the company have an exceptionally mature, rich and delicate taste. The production process for this type of cheese is very complex, requiring a lot of investment, exceptional knowledge, time and patience. Cheeses of this level can only be made by a company with a very high technical level and a team of highly qualified specialists.

The IBK (Whey Protein Concentrate) production technology continues to be successfully developed in collaboration with the New Zealand company Fonterra, one of the world's largest producers of dairy products.

New premises for GRAND cheese have been built in Rokiškis, where the equipment is currently being installed. The technological processes of the cheese will be automated and modernized.

In order to successfully compete and expand sales markets, improve processes, in 2021 the food safety system was certified in accordance with the requirements of the International Food Standard (IFS) and assessed by awarding a Higher Level certificate. This assessment confirms that dairy products are produced to the highest standards of quality and safety.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

9. Sales of the Group of companies

Consolidated unaudited sales of AB Rokiškio suris Group in January-June 2021 amounted to EUR 107,461 thousand, which is 4.54% more than in the same period of the previous year. In 2020, consolidated sales for the same period amounted to EUR 102,796 thousand.

The largest part of the company's production is exported. AB Rokiškio suris Group exports its products to 54 countries around the world. Italy remains the main and largest buyer of products. In the first half of 2021, exports to Italy increased significantly compared to the first half of 2020, when the country was completely paralyzed by a pandemic and completely shut down. The country reopened to tourists in late spring and the HORECA market began to rise again in terms of consumption.

In the first half of 2021, the company's products continued to be exported mainly to Western European countries, and compared to the first half of 2020, exports to all European countries increased by as much as 26 percent. This, again, was influenced by some of the recovery from the pandemic, when the catering sector opened up in European countries. During the first half of 2021, the group's exports accounted for 55.49 percent of total sales, while the group's total sales in the domestic market accounted for 44.51 percent. This declining proportion was, of course, due to a significant increase in global demand for retail products.

In the first half of 2021, sales in the US fell by as much as 17 percent, as the HORECA sector had not yet managed to recover there at the time of contracting. At the same time, a lot was produced during the local inexpensive cheese pandemic, which customers used.

As before, the group continued to sell its usual products in the export markets, such as cream, milk flour and by-products from the cheese-making process, such as WPC and lactose. Lactose was very little affected by the pandemic and, in the case of whey products, demand far outstripped supply and prices for these products reached unprecedented heights. Everyone started to shortage these products and prices grew at lightning speed.

Compared to the prices of the first half of 2020, the prices of fat, especially butter, have risen sharply. The price of cream, converted to butter per unit of fat, was lower, so the company mainly produced and sold butter to Europe instead of selling cream. Butter sales for the most part also affected the increase in sales to European countries in the first half of the year.

Mozzarella exports to South Korea fell compared to the first half of 2020. This was due to lower US producer prices of our competitors in that market.

One of the biggest goals of the Rokiškio suris group remains the penetration of hard cheeses, especially Grand, into the European and American retail / Horeca market - i.e. to increase sales of value-added cheese, but at the same time to further increase the wholesale export of hard cheeses used for grating to the US market by finding new customers there.

During January-June 2021, products worth 47.8 million euros were sold in Lithuania, i. 18 percent more than in previous years. In the domestic market, the Rokiškis Group's share remains stable at ~ 22%.

The company supplies consumers in Lithuania with nearly 5,000 tons of various dairy products per month to meet everyone's needs. The majority of sales (about three quarters) are made by private labels, supplemented by private labels produced by retail chains.

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The company's goal is efficient mass production, to refine the valuable components of sales, while giving up small and often unprofitable segments.

The strongest positions are in the Butter, Sour Cream, Milk, Curd product categories, while they are slightly weaker in the dessert groups that require a wide and small range. The company is most famous for its fermented cheeses; 240 gr Rokiškis semi-hard cheese has been selected by the Lithuanian Trade Association for 10 years as the most popular among the country's buyers.

The company strives to adapt to the needs of consumers, to deliver dedicated news. During this period, special attention is paid to hard cheese (Rokiškio GRAND brand); which in 2021 has the highest growth, more than 50% compared to 2020.

The main challenge is the rising prices of both raw milk and other ingredients of production and packaging materials, which in the future will have to reflect the prices of products. So far, this increase has not taken place, during the year the prices of the company's products supplied to the domestic market have even decreased by ~1%.

Sales of the Group of companies by different markets

Country	Sales
	Jan-June 2021		Jan-June 2020		Change
	kEUR	%	kEUR	%	%
Lithuania	47,829	44.51	40,518	39.42	18.04
European countries	51,247	47.69	40,445	39.34	26.71
Middle East	972	0.90	13,292	12.93	-92.69
Far East	2,161	2.01	2,400	2.33	-9.96
North America	4,504	4.19	5,489	5.34	-17.94
Other countries	748	0.70	652	0.63	14.72
Total:	107,461		102,796		4.54

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10. Products, brands and achievements

NIELSEN (Market Research. Retail Research. Consumer Surveys, Quantitative and Qualitative Research. Brands: INFACT, NITE, SPACEMAN. Public Opinion Research) published the strongest news of the year based on retail data:

Lithuanian news trio - Rokiškio NAMINIS Šaltibarščių Rūgpienis!!

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AB Rokiškio suris Group also has a full range of high-quality and exclusive high value-added products and other product categories.

BiFi Active Plus yoghurts that bring additional properties – lactose free and supplemented with vitamins A (benefits for the skin, vision, nerves) and D (immunity, energy; the lack of this vitamin is widely known).

AB Rokiškio suris cooperates with Gian Luca Demarco - has launched a new line of dairy products.

In 2019, Gian Luca Demarco published his unique book of recipes, Carpe Diem. The owner of the culinary studio, TV presenter, great chef and just a friendly Italian, who loves Lithuania no less than the Lithuanians themselves, shares recipes they have learned from their family and wonderful people they met on the way. Luca, who has been living and working in Lithuania for many years, is well aware of the tastes of its inhabitants and has chosen dishes that will undoubtedly find their way to the hearts of Lithuanians, are delicious and easy to prepare.

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Interim report and financial statements for 6 months ended 30 June 2021 of

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11. Risk factors and risk management

Risk is understood as a hindrance to achieve the set targets due to potential evens or their possible impact on business. The Company's objectives also include long-term strategic goals and specific actions related to the operations. The Management of the Company is responsible for managing the Company's risks and the assessment of negative impact on the set targets and outcomes. The identification of specific risk and the management thereof is attributed to the respective functions implemented in the Company. Given the external and internal environment, the risk level is assessed when adopting both strategic and operational decisions. Risk management forms an integral part of the Company's operational processes, therefore potential risks are under permanent monitoring and evaluation.

The Group's core business is milk processing. Milk processing business is related to raw material suppliers, competition in raw milk market, raw milk price fluctuations. Shortage of raw milk, which promotes the constant fluctuation of milk prices, may affect the performance of the issuer.

Specialization in the production of fermented cheeses determines the main part of the income. The process of maturing the cheeses is quite long. Therefore, it is difficult to react quickly to market changes, which may affect the performance of the company.

High competition for dairy products in domestic and export markets, cheaper Polish products, restrictions to the Russian market limits sales.

Group's credit risk is related to receivables. The risk that partners fail to meet their obligations is controlled. The Group has insured its customers with credit insurance. Customers with higher financial risk are subject to a prepayment system.

The Group's activities are under constant control of food safety, environmental and social responsibility audits. Food safety systems are in place and operate in the group's companies. The company has been awarded the specific quality certificates of HALAL and KOSHER (for the products such as Lactose, WPC, SMP, FMP, Butter milk powder, Butter). This ensures consumer confidence in product safety. Certified organic products are labeled with additional information.

The goal of the Group's management is to produce safe and high-quality milk products with minimal impact on the environment. The Group is constantly looking for ways to optimize production, reduce costs and minimize risk factors and manage them as much as possible.

Risk Factor	Source of Risk	Risk Management.
Economic Factors: Supply of raw material	Small farms; Seasonality; Competition; Absence of a long-term regulatory framework. Fluctuation of raw milk prices in winter and summer. Significant changes in milk prices on global markets	In order to mitigate the potential risks and their impact, dairy producers are paid additionally to the milk price for long-term cooperation, for higher milk quality indicators, loyalty, and balance in seasonality of milk production. Risk is managed by additional import of milk from other countries (Estonia, Latvia) and diversification of raw milk purchase from different size suppliers in Lithuania.

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Interim report and financial statements for 6 months ended 30 June 2021 of

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Product sales	The Group's core business is milk processing. The main product is fermented cheese. Cheese sales account for most of the revenue. The Company's income, profits and cash flows may be negatively affected by changes in the demand and prices of cheeses and other products - milk sugar, butter, WPC. The production of long ripening hard cheese is a long process that lasts from 9 to 24 months. This long process can negatively affect the company's cash flows and performance. Internal competition between local producers. Cheaper Polish production on the Lithuanian market. Increase in the number and range of cheaper products from other EU countries.	Searching for alternatives to import production. Increasing the range. Search for new markets. Cooperation with business partners. Risk assessment for each client.
Environmental Factors	We consume a lot of energy and natural resources in our operations. This poses direct and/or indirect risk of environmental pollution, as does air pollution from technological equipment.	Replacement of vehicles with new ones, maintenance, operation conditions control. Selection of energy suppliers. Resource conservation, accounting and control measures. Control, automatisation and modernisation of technological processes. The monitoring of the consumption and impact of natural resources.
	The use of chemical substances. This poses a risk to employees, products, and the environment. Physical environmental pollution: noise, odour, light	Staff training, personal protection measures. Accounting and control. Process automatisation. Control measurements and assessment. The deployment of technical measures. Focus on design works.
	Industrial and surface wastewater management. Release of industrial and surface wastewater containing pollutants.	Maintenance, operation conditions, process control. Analysis of the concentrations of contaminants, accounting of contaminant releases. The use of city wastewater purification reserves. Cleaning and maintenance of sand oil precipitators. In 2020, part of the rain and industrial wastewater networks were renewed, and the

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		aeration system of the second aeration tank of wastewater treatment plants was reconstructed.
	Poor treatment of waste generated during operation poses environmental risk.	Waste separation, process management. Ensuring adequate storage conditions. Staff training. Transfer to legitimate managers.
	Regulation and compliance. The risk manifests itself in the large scope and developments of legal regulations.	Certified management system in compliance with ISO 14001:2015 Environmental management system. Requirements and usage guidelines. Continuous assessment of legal acts and developments.
	The interests of the population and self-government institutions related to the environmental impact of the Company. The Company is located in the industrial area of the city and borders on other business undertakings as well as a residential area.	Disseminating information about important developments at the company in the local media and online. Active co-operation with self-government authorities, people’s and business communities. Assessment of the impact of planned business operations in accordance with the established procedure. Climate control chambers have been installed in the production rooms, which not only maintain the set temperature and humidity parameters, but also operate in recuperation mode.
Energy-related risk	The Company’s operations involve high consumption of electricity, heat energy and water. The operation of all industrial and non-industrial equipment is based on electricity consumption. This poses a risk of uninterrupted electricity supply. Electricity, heat energy (steam) and water supply affects the industrial-technological process.	There are three 10KV high-voltage distribution facilities in the territory that feed energy to three power transformers. If voltage is lost in one substation, feeding continues from another one. Four water supply inlets are available: two from Rokiškio vandenys, UAB and two from own wells. Strict contractual terms and conditions for heat energy (steam) supply from Rokiškis ŠTR define maximum demand for pressure and temperature. Installed thermal energy vapor accounting with controlled and assured consumption and needs of relevant workshops. Three hot water boilers are installed at the production facility. The installed heat pump will allow to recover about 10% of heat from wastewater, will reduce the amount of purchased heat energy.
Food safety and quality	In order to implement one of the most important goals of AB Rokiškio suris - to ensure food	Categories of management measures and control measures are identified according to the level of risk identified and the

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	safety and quality, to avoid product recalls, existing and potentially dangerous risk factors (biological, chemical, physical) have been identified and favorable conditions for their emergence and growth have been analyzed. The risk assessment consists of an assessment of the likelihood of the risk factor occurring and the severity of the consequences. Risk assessment covers the entire production chain of products - from the purchase of raw materials to delivery to the customer.	methodology approved by the Codex Alimentarius Commission. Identification of key active risk control measures; Assessment of the efficiency of operational controls to mitigate the risks to a tolerable level; The development of appropriate action plans aimed at the improvement of the control system; Constant risk management and the monitoring of set targets.
Information security	IT risks arise from the use of illegal software, lost and unrecoverable data and data vulnerability.	Only legal and licensed IT software is used to prevent possible risks. Configured firewall is used to prevent unauthorised access from the outside. Unauthorised data access is controlled by granting employees only those rights and roles that are necessary for their work. Test environment is used to test software modifications. Protection against accidental data loss is ensured through creation of back-up copies. Antivirus software is installed in all computers of the Company.
Occupational risk factors: Physical factors	Inadequate workplace equipment; Non-compliance with the minimum requirements to workplace equipment; Mobile self-propelled/non-self-propelled work equipment; Potentially dangerous machinery; Stability and firmness of construction works; Evacuation routes and exits; Fire detection and fire extinguishing; Electrical installations; The activities of other undertakings in the process of providing services and performing other works at the Company.	Workplaces and work equipment are under regular maintenance. Identified irregularities that might affect employee safety and health are addressed. Work equipment control devices are clearly visible, identifiable and appropriately labelled. Work equipment is equipped with a control system allowing to stop them fully and safely. Emergency stop devices are installed for this purpose. Where there is a risk that contact with the moving parts of a piece of work equipment may cause employee trauma, such parts must be covered and protective devices must be installed to prevent access to danger zones. Work equipment is appropriately labelled with safety and health warnings to ensure employee safety. Employees receive appropriate briefing on the use of work equipment, they receive on-site training at the workplace and are made aware of

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Interim report and financial statements for 6 months ended 30 June 2021 of

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potential hazards related to work equipment. The installation and structure of mobile work equipment is designed to ensure minimum risk exposure for employees. Such equipment is under continuous maintenance, employees using the equipment receive training and undergo periodic health checks. The maintenance of potentially dangerous machinery is carried out in accordance with the Law on the Maintenance of Potentially Dangerous Machinery. Maintenance of potentially dangerous machinery is performed, supervisors of potentially dangerous machinery are appointed. Employees operating potentially dangerous machinery receive training, their qualification is reviewed on a regular basis, they undergo periodic health checks. Maintenance of construction works is performed in order to ensure stability and firmness of construction works in accordance with the construction technical regulation. The condition of construction works is under regular monitoring, periodic inspections of construction works are carried out. Evacuation routes are appropriately maintained and identified. Considering the size and the function of construction works, the equipment located inside as well as the characteristics of materials stored in the construction works, workplaces are provided with adequate fire extinguishing means and fire safety engineering systems, with due regard to the number of employees at the workplace. Fire extinguishers and fire safety systems are maintained and tested on a regular basis. Reconstructed fire reservoir. It fully complies with the relevant laws of the Republic of Lithuania. Fire extinguishing means are adequately labelled. Workplaces are equipped with a ventilation system. Ventilation equipment is maintained and renovated on a regular basis. Fire safety trainings are organized for the employees. Danger zones of the workplaces are appropriately marked. Workplace floors are firm and stable.

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Interim report and financial statements for 6 months ended 30 June 2021 of

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| | | Employees are provided with special anti-slip footwear.
Electrical installations are fitted in the manner that prevents the risk of fire and employees are protected against direct or indirect contact with electrical installations. Resistance of electrical installations is periodically measured in accordance with the procedure laid down in the laws.
A description of the procedure for cooperation and co-ordinated action is prepared and coordinators are appointed to ensure employee safety and health in order to prevent the risks which arise from the activities of other undertakings as well as the risks to employees of such undertakings which arise from the activities of the Company. |
| --- | --- | --- |
| Physical: Noise | Work equipment | The use of personal protection means, mandatory health checks for noise, staff trainings. Equipped with high-pressure washing stations that fully control the dose of chemicals needed to clean and disinfect premises and improve staff conditions. |
| Lighting | Insufficient or poorly equipped, poorly maintained lighting in the workplace is one of the main factors of occupational risk, which affects the emotional stress of employees, reduces work productivity, increases the number of accidents. | Measurements of natural and artificial lighting were performed during the occupational risk assessment in the cheese production workshop. Lighting in certain workplaces has been found not to meet hygiene standards. As a result, many luminaires have been replaced with new, LED luminaires. Their advantages, lower energy consumption, longer service life, higher efficiency. |
| Chemical factors | Use of chemical substances during laboratory tests, cleaning process of work equipment and premises. | Equipped with high-pressure washing stations that fully control the dose of chemicals needed for indoor cleaning and disinfection and improve staff conditions. Occupational risk assessment of workplaces where chemicals are used. Mandatory medical examinations. Information and training of employees. Use personal protective equipment where hazardous chemical agents are present. An artificial ventilation system is installed. |
| Ergonomic factors | Manual work is present in many workplaces. | Occupational risk assessment. Mandatory health checks. Manual and power-driven carts are used to address ergonomic risk factors. Lifts are also used. Robot technology is deployed at the Company to |

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Interim report and financial statements for 6 months ended 30 June 2021 of

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		prevent the lifting of heavy weight. Robotic milk sugar bagging line is installed. Cheese maturing facility is equipped with a cheese packaging device; a vacuum lift for shifting heavy cheeses is also installed Avoiding heavy manual handling of cheeses, in 2019 a lifting device with a pivot / flip function was installed.
Social factors	Employee Search and Recruitment.	Employee search in the Employment Agency. Cooperation with educational institutions. Recommendations of employees working in the company. Internal resources of the company (encourages employees to improve their skills).
	Employee qualification and employee integration into work processes.	The company has a system for assessing and developing employee performance. Every year, employee training plans are drawn up. The training is organized both by sending employees to external seminars organized by the suppliers and within the group.
	Employee retention and reduction of turnover.	The company strives to build a stable team by maintaining good relationships, empowering to grow, participate in decision-making, giving employee benefits under the Collective Agreement. These social factors do not depend solely on the company's actions. The company may be forced to increase investment in robotic production processes, i.e. to replace manual work with robots.

12. Information about the aims of financial risk management and the use of hedging measures

The Company and the Group face various financial risks in their operations. The general risk monitoring program of the Group focuses on uncertainties of the financial markets and aims to mitigate possible impact on the financial results of the Group's operations.

The Group has general liability insurance against claims arising from its operations and damages to the Group's products or services. The insurance policy is valid throughout the world.

Risk management is the responsibility of the Management of the Company. The Company does not have a written document which sets out the general principles of risk management.

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Interim report and financial statements for 6 months ended 30 June 2021 of

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13. Key aspects of the internal control and risk management systems associated with the formation of consolidated financial accounts

The supervision of the drawing up of the Company's consolidated financial accounts, the internal control and financial risk management systems and compliance with the laws on the drawing up of consolidated financial accounts is carried out by the Audit Committee.

The consolidated accounts of Rokiškio suris, AB and the financial accounts of the Company are prepared in accordance with the International Financial Reporting Standards (IFRS) adopted for application in the European Union.

The Audit Committee supervises the preparation process of the financial accounts of the Company and Subsidiaries, reviews IFRS so as to ensure timely implementation of all changes to IFRS in the financial reports, analyses the transactions relevant to the operations of the Company and Subsidiaries, ensures information collection from the companies of the Group as well as timely processing and preparation of the information for financial accounting purposes, informs the Board of the Company about significant internal control irregularities related to financial accounts that have been identified by external and internal audit and makes recommendations regarding ways of addressing them.

The preparation of IFRS-compliant financial statements involves the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are based on the knowledge of the management about current situation and actions. The financial accounts include consolidated financial accounting of the Group and individual financial accounting of the Company.

Subsidiaries are the entities (including special purpose entities) over which the group has the power to govern the financial and operating policies. Control is normally exercised though the ownership of more than a half of the voting rights. When assessing whether the Group controls another company, the existence and effect of the shares or convertible potential shares with voting rights currently held is taken into account. Subsidiaries are fully consolidated from the date when the Group acquires control over these companies, and cease to be consolidated from the date when this control is lost.

The Audit Committee makes recommendations to the Board regarding the choice of external audit undertaking and monitors the way in which the external auditor and the audit undertaking complies with the principles of independence and impartiality.

14. Environment

AB "Rokiškio suris" policy in the field of environmental protection - to strive for efficient use of energy and natural resources, to reduce the negative impact on the environment, to implement pollution prevention measures, to take care of the environment in which we live.

The company implements five environmental monitoring programs to monitor and analyze potential environmental impacts. No adverse environmental effects have been identified and reports are submitted to the Environmental Protection Agency.

Compared to 2019, $3.0\%$ more raw materials were recycled in the first half of 2020, and the results in resource consumption changed accordingly.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Thermal power	Electricity	Water	Waste effluent
Decreased by 2,3%	Increased by 5,0%	Decreased by 1,2%	Decreased by 3,5%

2021 in the first half of the year, 70% of the water consumed was extracted at our own well. We saved 16% of groundwater by using purified whey water.

All the whey formed is processed with the available advanced equipment. Nanofiltration, ultrafiltration, reverse osmosis are used in the recycling process. The water obtained by filtering the whey meets the environmental requirements. Cleaning efficiency 98% according to BOD7. 50.4% of treated water was reused.

The generated industrial wastewater is treated in its own treatment plants with nitrification and dinitrification, and chemical phosphorus removal. Cleaning efficiency according to controlled parameters 96.4-99.8%.

In 2021, scheduled repairs of own biological treatment plants were performed. Good technical condition ensures high cleaning efficiency. A smaller amount, ie 3.9% of industrial wastewater, was transferred to UAB Rokiškio vandenys for treatment. Amount of pollutants transferred with wastewater specific load according to BOD7 -0.158 kg / ton of raw material, twice lower.

Fuel consumption is 3.5% lower than in the corresponding period in 2020, mainly due to lower volumes of raw materials transported.

The waste generated is managed in accordance with the waste management rules. In the first half of 2021, 205 tons of municipal waste, 2,586 tons of hazardous waste, and 2803.6 tons of sewage sludge were generated. Secondary raw materials were sold to managers: paper and cardboard 15.8 t, plastic 37.5 t. 1108.1 t of biodegradable waste was collected and transferred for compost or biogas production. The amount of waste decreased by 21.8%, mainly due to the decrease in the amount of biodegradable waste due to changes in production processes.

AB Rokiškio suris has:

Integrated Pollution Prevention and Control (IPPC) permit, which was updated on 10.07.2019.

ISO 14001: 2004 / LST EN ISO 14001: 2005 “Environmental management systems. Requirements and guidelines for use”. The certificate was issued on June 17, 2019, valid until June 16, 2022.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

FINANCIAL PERFORMANCE

Financial performance	Values	30/06/2021	30/06/2020	Change
				+/-	%
Sales revenues	kEUR	107,461	102,796	4,665	4.54
Gross profit	kEUR	8,900	10,382	-1,482	-14.27
EBITDA	kEUR	2,768	7,220	-4,452	-61.66
EBIT	kEUR	(1,066)	2,524	-3,590	-
Earnings before tax EBT	kEUR	(1,214)	2,459	-3,673	-
Net profit/loss	kEUR	(989)	2,134	-3,123	-

Fixed assets	kEUR	79,923	60,419	19,504	32.28
Current assets	kEUR	120,274	109,024	11,250	10.32
Total assets	kEUR	200,197	169,443	30,754	18.15
Shareholders’ equity	kEUR	140,787	129,404	11,383	8.80

Profitability
Return on assets [ROA]	%	(0.53)	1.49	-2.02 p.p.	-
Return on equity [ROE]	%	(0.70)	1.64	-2.34 p.p.	-
Gross profit margin	%	8.28	10.10	-1.82 p.p.	-
EBITDA margin	%	2.58	7.02	-4.44 p.p.	-
EBIT margin	%	(0.99)	2.46	-3.45 p.p.	-
Profitability rate [EBT margin]	%	(1.13)	2.39	-3.52 p.p.	-
Net profit margin	%	(0.92)	2.08	-3.00 p.p.	-

Financial structure
Debt-to-equity ratio	coef.	0.42	0.31	0.11	-
Equity capital to assets ratio	coef.	0.70	0.76	-0.06	-
General liquidity ratio	coef.	2.53	3.06	-0.53	-

Market value indicators
Number of ordinary registered shares	thou	35,868	35,868	-	-
Price per share at the end of period	EUR	2.92	2.54	0.38	14.96
Market capitalisation at the end of period	kEUR	105,452	91,105	14,347	15.75
Price/earnings ratio (P/E ratio)	coef.	(97.33)	42.33	-	-
Net earnings per share		(0.03)	0.06	-0.09	-

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Interim report and financial statements for 6 months ended 30 June 2021 of

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Ratio	Method of calculation	Meaning of ratio
EBITDA	Earnings before Interest, Tax, Depreciation and Amortization	EBITDA – Operating profit before depreciation of fixed assets, amortization and impairment costs helps investors to assess the potential for profit before investing in fixed assets.
EBITDA margin	EBITDA / Income	EBITDA - the relationship with income shows the effectiveness of company performance
EBIT	Profit before tax and interest, i.e. net profit + income tax + financial activity costs.	EBIT – operational profit. EBIT is a very important indicator, as all liabilities to creditors are paid from the operational profit. This indicator well reflects the company's ability to generate cash flow.
EBT	Profit before tax, i.e. net profit + profit tax.	Profit before deduction of income tax and investing and financing activities at net value
Return on assets [ROA]	The ratio of EBIT for the past 12 months to the average of the total assets over the past 12 months.	This indicator shows how much the company's assets are effectively managed, i.e. share of net profit to every euro of the company's assets, which is one of the most popular valuation rates
Return on equity [ROE]	The ratio of the net profit of the last 12 months to the average equity of the last 12 months.	The return on equity shows how much euro s of net profit is attributable to one euro of equity. This indicator is important for the shareholders, taking into account their past return on investment.
Liability to equity ratio	Liability/Equity capital	The ratio of liabilities to equity shows what the total amount of long-term and short-term liabilities of the company is per euro of equity.
Debt-to-assets ratio	Financial debts (long-term + short-term) / Assets	It is a financial indicator comparing a company's financial debts with its entire assets. The coefficient shows what part of the company's assets is financed by borrowed funds.
Debt-to-equity ratio	Financial debts (long-term + short-term) / Equity	This is one of the key financial leverage indicators. The debt-to-equity ratio shows how many euros of short-term and long-term debt are per euro of equity. In calculating debts, all liabilities of the company related to interest payment are assessed.
Debt ratio	Total liabilities / Total assets	The loss coefficient reflects the part of the Company’s assets acquired with borrowed funds.
General liquidity ratio	The ratio of current assets to current liabilities	The current liquidity ratio shows the ability of the company to settle short-term liabilities using its current assets.
Price/earnings ratio (P/E ratio)	Share price at end of period / (Net profit / Number of shares)	The share price / earnings ratio reflects how much the investor pays for one euro of net profit earned by the company in the past period.
Net earnings per share	Net profit / Number of shares	Earnings per share show how much of the net profit earned by the company is attributable to one share in circulation.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Profit/loss report

The sales revenue of AB Rokiškio suris Group as at 30 June 2021 amounted to EUR 107,461 thousand. The main part of the revenue, 77 percent, is the sales of cheese and other dairy products. Compared to the 6-month period of 2020, the Group's sales revenue increased by $4.54\%$ .

Cheese exports increased due to an increase in sales of fresh cheeses (19%) and increased sales of hard cheeses (1%).

Due to the difficult situation on the world market for product prices in the first half of the year, production has become more focused on sales of fresh cheeses in recent months.

Sales of milk sugar and other whey products were successful due to long-term contracts. Milk sugar was sold at higher prices, and export sales of cream also increased. There were no significant changes in sales volumes in the market of fresh dairy products, a small increase was due to changes in prices and range. These are the main reasons behind the increase in sales.

Costs:

During the first half of 2021, the Group incurred expenses of EUR 98,561 thousand, i.e. 6.7 percent more compared to the same period in 2020 (92,414 thousand euros).

The change in costs was mainly due to higher sales volumes and higher raw milk prices.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

During the 6 months of 2021, AB Rokiškio suris Group incurred a consolidated unaudited net loss of EUR 989 thousand. During the 6 months of 2020, the Group received a net profit of EUR 2,134 thousand.

The negative result of the Group was determined by the fact that in 2021, compared to 2020, the prices of raw milk increased (18%) in the second quarter, which affected the profitability of cheeses and fresh dairy products.

In export markets, only lactose and export cream in 2021 were sold at higher prices. Prices of other whey products and butter have fallen on world markets as a result of the pandemic.

Of the main segment cheeses, sales of fresh cheeses accounted for the bulk of the loss. This was due to the non-recovery of global market prices and declining consumption as a result of the pandemic.

The operating profit margin for the 6 months of 2021 was 0.99 percent, while the operating profit margin for the 6 months of 2020 was 2.46 percent.

EBITDA for the first half of 2021 amounted to EUR 2,768 thousand, i.e. 2.6 times lower than in 2020 (EUR 7,220 thousand).

The EBITDA margin in the first half of 2021 was 2.58 percent, in 2020 it was 7.02 percent in the same period.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

16. Plans and forecasts for the operations of the Group and investments for the year 2021

AB Rokiškio suris business plans and goals are related to the continuity of the Company's strategy, focusing on production efficiency by optimizing processes; Investments are made to maintain and improve food safety systems, to produce higher value-added products, to improve the accounting of energy and raw material resources, and to improve environmental protection.

The goal of AB Rokiškio suris is to further strengthen confidence in its products, promote a healthy lifestyle and at the same time increase the consumption of dairy products per capita.

In order to implement and develop the goals, the group of companies plans to invest 5.9 million euros in 2021.

For Grand cheese packaging, by implementing a technological process innovation - by purchasing a modern, robotic, modern hard cheese packaging line. The line will be installed in a newly built building;
Operational management, efficient milk processing and marketing processes;
Improvement of innovative technologies in the production of fresh dairy products, deeper and more comprehensive whey processing;
Increasing the company's competitiveness by focusing more on the Far East and other world markets in the sale of cheese, butter and whey products;
Saving energy resources, reducing harmful effects on the environment;
Improving the working conditions of employees;
Improving the level of sanitation and hygiene in production units;
Meeting customer needs for manufactured products;
Modernization of wastewater utilization;
Internal and external transport;
Other.

The subsidiary in Utena plans to invest in the repair of the purchasing warehouse, improvement of the quality of dairy products, improvement of the infrastructure serving production, on which the successful and efficient operation of other equipment depends.

It is planned to purchase a cream pasteurizer, metal detectors, improve the hygienic-sanitary environment and make other small investments in Ukmergè company, which by their nature are significant and important for the functioning of the company's production activities.

During the first half of 2021, the value of investments made by AB Rokiškio suris Group is EUR 2.4 million. The value of investments in this half-year includes equipment for production and service bars, repairs of buildings in the subsidiary in Utena and refrigeration equipment for butter, etc.

The main investments in AB Rokiškio suris were made for product safety (metal detectors), cheese ripening (containers), washing stations, and modernization of ice water supply was continued, avoiding cold losses. Part of the sewage network changed. In addition, electricity metering equipment was installed, modern laboratory equipment was purchased, and stationary and portable computers were replaced. Purchase of finished products and other transport was purchased.

AB Rokiškio suris, a well-known dairy industry professional, implementing essential long-term development goals, is constantly increasing its competitiveness in the region and in the international market, creating new products that meet the highest safety and quality requirements.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

INFORMATION ON THE COMPANY'S SHAREHOLDERS AND SHARES

17. Information on the Company's Authorized capital

As of June 30, 2021, the Authorized capital of Rokiškio suris, AB consisted of:

Type of shares	Number of shares (units)	Par value EUR)	Total par value, (EUR)	Share of authorized capital (%)
Ordinary registered shares	35,867,970	0.29	10,401,711.30	100.00

18. Contracts of the Company with the financial brokerage undertakings

Rokiškio suris, AB has a contract with FMJ Orion Securities, UAB (address: 4, A.Tumėno g., LT-01109. Vilnius, phone No. +370 5 231 3833, [email protected]) regarding the administration of securities issued by the Company and provision of investment services.

19. Data about trade in issuer's securities on regulated markets

35,867,970 units of ordinary registered shares of Rokiškio suris, AB are entered in Nasdaq Vilnius official trading list for the Baltics. (Vilnius Stock Exchange symbol RSU1L). Par value of one share: EUR 0.29.

The company has been listed since 25 July, 1995.

The Company’s shares are listed in OMX Baltic Benchmark index.

The Company has not issued debt securities for public stock trading.

The Company has not issued or registered debt securities for non-public stock trading.

There are no securities which do not certify participation in the Authorized Capital but the turnover whereof is regulated under the Law on Securities of the Republic of Lithuania.

There was no trading on other stock exchanges and other organised markets.

Trading statistics:

	6 months 2021	6 months 2020	6 months 2019
Price at the most recent trading session, EUR	2.94	2.54	2.48
Highest price, EUR	3.12	2.76	2.75
Lowest price, EUR	2.80	2.10	2.48
Turnover, units	134,628	216,707	58,954
Turnover, kEUR	392	534	150
Capitalisation, kEUR	105,452	91,105	88,953

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Share price and turnover dynamics at the Nasdaq Vilnius stock exchange within 6 months of 2021

RSU1L

01.01.2021 - 30.06.2021 2.94 € -0.16 (-5.16%)

Source: Nasdaq Vilnius, AB website

https://nasdaqbaltic.com/statistics/en/instrument/LT0000100372/trading

Share price and turnover dynamics at the Nasdaq Vilnius stock exchange during 4 years' period (06/2017-06/2021)

RSU1L

30.06.2017 - 30.06.2021 2.94 € +0.55 (+23.01%)

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Source: Nasdaq Vilnius, AB website: https://nasdaqbaltic.com/statistics/en/instrument/LT0000100372/trading

Dynamics of the Company’s shares (RSU1L), OMX Baltic Benchmark and OMX Vilnius indexes within 6 months of 2021:
01.01.2021 - 30.06.2021

Source: NASDAQ Vilnius, AB website: https://nasdaqbaltic.com/statistics/en/charts

Index	Equity	Opening value	Closing value	Change %
	OMX_Baltic_Benchmark_GI	1,104.74	1,339.95	+21.29
OMX Vilnius_GI	816.64	924.5	+13.21
RSU1L - Rokiškio suris	2.92	2.94	+0.68

20. Limitation on transference of securities:

There are no limitations to share packages or any claims against the Company or other holders of the securities.

21. Procedure for amending the Articles of Association

The procedure for amending the Articles of Association of the Company is provided in the laws of the Republic of Lithuania and the Articles of Association of the Company. Decisions to amend the Articles of Association of the Company are adopted by a qualified 2/3 majority of the votes held by the shareholders attending the meeting, except for the cases laid down in the Law on Stock Corporations of the Republic of Lithuania.

UNIVERSITY

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

When the general meeting of shareholders adopts a decision to amend the Articles of Association of the Company, a new working of the Articles of Association shall be drawn up; it shall be signed by a person authorised by the general meeting of shareholders.

Any amendments of or additions to the Articles of Association of the Company shall enter into force only after they are registered in accordance with the procedure established in the laws of the Republic of Lithuania.

22. Information about the shareholders of the Company

As of 30 June, 2021, the total number of shareholders of Rokiškio suris, AB was 5,404 (30 June, 2020 – 5,285).

Package held by a group of shareholders (as of 30 June, 2021):

| Name, surname
Company name
Registration number | Address | Held under ownership right | | With associated persons |
| --- | --- | --- | --- | --- |
| | | Number of ordinary registered shares | Share of capital and votes, % | Share of capital and votes, % |
| Pieno pramonės investicijų valdymas, UAB
Code 173748857 | Pramonės str. 3, Rokiškis Lithuania | 9 758 312 | 27.21 | 82.17 |
| SIA RSU Holding, reg. No. 40103739795 | Elizabetes iela 45/47, LV-1010 Riga | 8 953 883 | 24.96 | |
| Antanas Trumpa
Board Chairman of the Company | Sodų 41a, Rokiškis Lithuania | 7 088 663 | 19.76 | |
| Fonterra (Europe) Coöperatie U.A.,
CCI 50122541 | Barbara Strozzilaan 356-360, EurBld2, 3e verdieping, 1083HN Amsterdam, The Netherlands | 3 586 797 | 10.00 | |
| Dalius Trumpa
CEO of the Company | Sodų g.31, Rokiškis Lithuania | 83 500 | 0.23 | |
| Investment and pension funds owned by INVL Asset Management, UAB | Gynėjų str.14, Vilnius Lithuania | 1 954 328 | 5.45 | |

*The group of jointly-acting persons consists of: Pieno pramonės investicijų valdymas, UAB (27.21% the authorized capital and votes of the Company), SIA RSU Holding (24.96% of the authorized capital and votes of the Company), strategic investor Fonterra (Europe) Coöperatie U.A. (10.00% of the authorised capital and votes of the Company), Antanas Trumpa (19.76% of authorized capital and votes of the Company) and Company CEO Dalius Trumpa (0.23% of the authorized capital and votes of the Company).

ROK ISKIO SURIS

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

The basis of the group of persons acting together is the shareholders' agreement signed on 13.10.2017. The purpose of this agreement is:

to regulate the relations between the shareholders, the strategic investor and the Company in appropriate cases;
to ensure joint actions during the development of the Company;
to agree on specific conditions and restrictions on the disposal of the Company's shares;
to enable shareholders and strategic investors to protect their interests related to their investments in the Company.

23. Rights of Shareholders

Non-property rights of shareholders:

1) the right to attend general meetings of shareholders;
2) the right to make advance inquiries addressed to the company in regards with the items on the agenda of general meeting of shareholders;
3) the right to vote at the general meeting of shareholders in accordance with the rights granted by shares;
4) the right to receive company information specified in Article 18(1) of the Law on Stock Corporations of the Republic of Lithuania;
5) the right to approach a court with a claim for compensation of damages to the Company caused by failure to perform or poor performance on the part of the Company CEO and Board members of their duties established in the Lam on Stock Companies and other laws of the Republic of Lithuania as well as in the present Articles of Association, also in other cases established under the law.
6) to receive the information specified in Paragraph 6 of Article 89 of the Law on Markets in Financial Instruments regarding a public limited company whose shares are admitted to trading on a regulated market.
7) other non-property rights established in the laws of the Republic of Lithuania.

Property rights of shareholders:

1) the right to receive a part of the profit of the Company (dividend);
2) the right to receive funds of the Company when the authorised capital of the Company is reduced in order to pay the funds of the Company to the shareholders;
3) receive shares free of charge when the authorised capital is increased with the funds of the Company, except for the derogation established in Article 42(3) of the Law on Stock Corporations of the Republic of Lithuania and in the case established in Article 47¹ of the Law on Stock Corporations of the Republic of Lithuania.
4) priority right in acquiring the shares or convertible bonds issued by the Company, unless the general meeting of shareholders decides to revoke the priority right for all shareholders in accordance with procedure laid down in the Law on Stock Corporations of the Republic of Lithuania;
5) lend funds to the Company in the manner established in the laws; when borrowing from its shareholders, the Company shall be prohibited form pledging its assets to the shareholders. When the Company borrows from a shareholder, the interest must not exceed the average interest rate of the local commercial banks on the day of contracting. In this case the Company and shareholders may not agree to apply a higher interest rate;
6) receive a part of the assets of the Company if it enters into liquidation;
7) other property rights established in the laws of the Republic of Lithuania.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

The rights stipulated in paragraphs 1, 2, 3 and 4 shall apply to the persons who were shareholders of the Company in the end of the tenth business day after the general meeting of shareholders which adopted the respective decision.

24. Shareholders with special control rights and description of the rights.

There are no shareholders with special control rights.

25. Information about all restrictions on the voting rights.

There are no shareholders whose voting rights are restricted.

26. Information about the purchase of own shares by issuer

On 30 June 2021, AB Rokiškio suris had acquired 861,274 own shares, which is 2.40% of the company's authorized capital. The total price of the shares acquired by AB Rokiškio suris is EUR 2,251,286.02.

The company acquired its own shares in 2018 and 2019. The shares were acquired in accordance with the decisions of the General Meeting of Shareholders of AB Rokiškio suris on 27 April 2018 and 30 April 2019, through the official offering market of the Nasdaq Vilnius Stock Exchange.

During the first half of 2020, the Company did not acquire or transfer its own shares.

The Company's own repurchased shares do not have voting rights.

27. Dividends

The decision on the distribution and payment of dividends is made by the general meeting of shareholders, distributing the profit of the company to be distributed.

The Annual General Meeting of Shareholders of AB „Rokiškio suris“, held on April 30, 2021, approved the audited consolidated and Company's financial statements for 2020 and the Company's profit allocation for 2020. Dividends totaled EUR 3,500,669.60 or EUR 0.10 per ordinary registered share.

Dividends assessed and paid and the indicators thereof during 10 recent years:

Year	Dividend amount EUR	Dividend amount per share EUR
2011	1,015,578.08	0.0290
2012	1,015,578.08	0.0290
2013	1,015,578.08	0.0290
2014	Dividends were not paid
2015	2,341,737.37	0.0700
2016	3,228,117.30	0.1000
2017	3,586,797.00	0.1000
2018	3,506,165.30	0.1000
2019	3,500,669.60	0.1000
2020	3,500,669.60	0.1000

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

On 27 April 2018, the General Meeting of Shareholders of AB „Rokiškio suris“ approved the Dividend Policy. In accordance with this approved policy, the Board of the Company, when proposing to distribute the dividends to the General Meeting of Shareholders, will follow the signed Shareholders' Agreement, according to which dividends will be allocated 100% of the Company's profit for the financial period minus the Company's funds for investment (CAPEX), working capital and / or other purposes. If the Company's Board of Directors foresees a large amount of investment and therefore, according to the dividend allocation provisions described above, the Company's profit for the financial period would not be sufficient to pay dividends, the Board of the Company, taking into account the Company's financial situation and trends in the global dairy market, will endeavor to maintain the continuity of dividends paid in previous financial periods.

The general meeting of shareholders must not decide to assess and pay dividends if at least one of the following conditions exists:

1) the Company has outstanding liabilities the maturity whereof has expired prior to the date of the decision;
2) the amount of the distributable profit (loss) of the fiscal year is negative (the Company has generated a loss);
3) the own capital of the Company is below the aggregate amount of the authorised capital of the Company, the mandatory reserve, the revaluation reserve and the reserve for the acquisition of own shares, or would fall below the amount after the dividends are paid.

The Company must not pay dividends, annual payments to Board members and employee bonuses, unless it has paid statutory taxes within the established time limits.

The persons who were shareholders of the Company or were otherwise legally entitled to dividends at the end of the rights accounting day of the general meeting of shareholders which declared the dividends (at the end of the tenth day after the general meeting of shareholders that issued the decision) shall be entitled to collect dividends.

The Company pays dividends within one month from the date of the decision to distribute the profit. Dividends may be granted for a financial year or less than a financial year.

Dividends for a period shorter than a financial year shall be decided by the General Meeting of Shareholders. Shareholders who hold at least 1/3 of the voting rights have the right to initiate the distribution of dividends for a period shorter than a financial year. The general meeting, which has an agenda for the distribution of dividends for a period shorter than a financial year, must be held within 3 months of the end of the period for which the dividend is proposed, but not before the approval of the annual financial statements and profit (loss) of the preceding financial year is distributed, and at the latest by the end of the financial year.

Dividends for a period shorter than a financial year may be granted if all of the following conditions are met:

(1) an approved set of interim reports for a period shorter than the financial year;
(2) the amount of profit (loss) for the period shorter than the financial year is positive (no losses);
(3) the amount of dividend payout shall not exceed the amount of profit (loss) of the period less than a financial year carried forward to the current financial year less the amount of profit earned during the period less than a financial year which according to the Law on Companies whether the Articles of Association of the Company should be assigned to reserves;

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

(4) the company does not have outstanding obligations that were due before the date of the decision and would be able to meet its obligations for the current financial year by paying dividends.

If a dividend is paid for a period shorter than a financial year, the distribution of dividends for a period shorter than a financial year may not be earlier than 3 months.

MANAGEMENT OF THE COMPANY

28. Management bodies of the Company

The following management bodies of the Company are provided for in the Articles of Association of the Rokiškio suris, AB entered in the Register of Legal Persons:

General meeting of shareholders,
Board
Company CEO (Director)

The Supervisory Board shall not be formed at the Company.

29. Organizational structure of the management of the Company and the Company group

The management structure of Rokiškio suris, AB is organised on the basis of the principal functions, i.e. sales, production, finance management, milk procurement, central services and development. The strategy, tactics and objectives of the Group are set forth by functional director in accordance with the functions assigned to them.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

30. Information on the powers of and the procedure for convening the General Meeting of Shareholders

The powers of and the procedure for convening the General Meeting of Shareholders shall not differ from those provided for in the Law on Companies.

The right of initiative to convene the General Meeting of Shareholders of Rokiškio suris, AB shall be exercised by the Board and shareholders whose shares grant at least 1/10 of all votes at the General Meeting of Shareholders.

A notice of the convening of the General Meeting of Shareholders of the Company must be published in the Republic of Lithuania and all other EU member states as well as countries of the European Economic Area not later than 21 days before the General Meeting of Shareholders according to the procedure laid down in the Law on Securities. A notice of the convening of the General Meeting of Shareholders shall also be published in the electronic publication Juridinių Asmenų Vieši Pranešimai (Public Notices of Legal Entities) issued by the State Enterprise Centre of Registers (VĮ Registrų Centras) as provided for in the Articles of Association.

The persons who were shareholders of the Company at the close of the accounting day of the General Meeting of Shareholders shall have the right to attend and vote at the General Meeting of Shareholders or repeat General Meeting of Shareholders in person, unless otherwise provided for by laws, or may authorise other persons to vote for them as proxies or may conclude an agreement on the disposal of the voting right with third parties. The shareholder's right to attend the General Meeting of Shareholders shall also cover the right to speak and to enquire. The record date of the meeting of a public limited liability company shall be the fifth working day before the General Meeting of Shareholders or the fifth working day before the repeat General Meeting of Shareholders.

A shareholder may vote in writing by filling in a general ballot paper. The form of a general ballot paper is available on the website of the Company www.rokiskio.com, in the section "For investors", and is also provided with draft resolutions submitted by the Company via the Central Storage Facility. The filled-in general ballot paper shall be signed by the shareholder or his authorised person. The filled-in general ballot paper signed by the shareholder or another person entitled to vote as well as the document confirming the right to vote shall be submitted to the Company in writing not later than the last working day before the Meeting, by sending them by registered mail to the following address: Pramonės g. 3, LT- 42150, Rokiškis, or delivering to the registered office of the Company against its signed acknowledgement on working days.

The Company shall not provide a possibility to attend the Meeting and to vote by means of electronic communications.

A General Meeting of Shareholders may take decisions and shall be held valid if attended by the shareholders who hold the shares carrying not less than $\frac{1}{2}$ of all votes. After the presence of a quorum has been established, the quorum shall be deemed to be present throughout the Meeting. If the quorum is not present, the General Meeting of Shareholders shall be considered invalid and a repeat General Meeting of Shareholders must be convened, which shall be authorised to take decisions only on the issues on the agenda of the meeting that was not held and to which the quorum requirement shall not apply. The repeat General Meeting of Shareholders shall be convened after the lapse of at least 14 days and not later than after the lapse of 21 days following the day of the General Meeting of Shareholders which was not held. The shareholders must be notified of the repeat General Meeting of Shareholders in the manner specified in Article $26^{1}(3)$ of the Law on Companies not later than 14 days before the repeat General Meeting of Shareholders.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

An annual general meeting of shareholders must be held every year not later than within four months from the end of the financial year.

The shareholders who hold shares carrying at least 1/20 of all the votes shall have the right to propose issues to supplement the agenda. Draft decisions on the proposed issues or, when it is not mandatory to adopt decisions, explanatory notes on each proposed issue of the agenda of the General Meeting of Shareholders shall be submitted alongside with the proposal. A proposal to supplement the agenda shall be submitted in writing, by sending it by registered mail to the address of Rokiškio suris, AB: Pramonės g.3, LT-42150 Rokiškis, or by e-mail: [email protected]. The agenda shall be supplemented where the proposal is received not later than 14 days before the General Meeting of Shareholders.

The shareholders who hold shares carrying at least 1/20 of all the votes shall have the right to propose new draft decisions on issues on the agenda of the Meeting. Proposed draft decisions shall be submitted in writing, by sending them by registered mail to the address of Rokiškio suris, AB: Pramonės g.3, LT-42150 Rokiškis, or by e-mail: [email protected]. The shareholders shall also have the right to propose draft decisions on the issues of the agenda of the Meeting in writing during the Meeting.

The shareholders attending the general meeting of shareholders shall be registered in the shareholder registration list. This list must indicate the number of votes granted to each shareholder by the shares held by him.

A person attending the General Meeting of Shareholders and entitled to vote shall produce a document which is a proof of his identity. A person who is not a shareholder must additionally produce a document confirming his right to vote at the General Meeting of Shareholders. The requirement to present the document confirming a person's identity shall not apply if votes are cast in writing by filling in a general voting ballot. The form of a general ballot paper is available on the website of the Company www.rokiskio.com, in the section "For investors".

If a shareholder requests so, the Company shall, at least 10 days before the General Meeting of Shareholders, send the general ballot paper by registered mail or deliver it to the shareholder in person against his signed acknowledgement of receipt. The filled-in general ballot paper shall be signed by the shareholder or his authorised person. The filled-in general ballot paper signed by the shareholder or another person entitled to vote as well as the document confirming the right to vote shall be submitted to the Company in writing not later than the last working day before the Meeting, by sending them by registered mail to the following address: Pramonės g. 3, LT- 42150, Rokiškis, or delivering to the registered office of the Company, by the address indicated above, against its signed acknowledgement on working days.

The right to vote at other General Meetings of Shareholders shall be granted only by fully paid-up shares. Each share shall give one vote at the General Meeting of Shareholders.

The General Meeting of Shareholders 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 Supervisory Board; if the Supervisory Board is not formed, elect members of the Board, if neither the Supervisory Board nor the Board is formed, elect the Manager of the Company;
4) remove the Supervisory Board or its members, also the Board or its members elected by the General Meeting of Shareholders and the Manager of the Company;

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

5) select and remove an auditor or an audit firm for carrying out the audit of a set of annual financial statements, establish payment conditions for audit services;
6) to take a decision on the approval of the remuneration policy of public limited companies whose shares are admitted to trading on a regulated market;
7) determine the class, number, nominal value and the minimum issue price of the shares issued by the Company;
8) take a decision on conversion of the Company's shares of one class into shares of another class, approve the share conversion procedure;
9) take a decision on changing the number of shares of the same class issued by the Company or the nominal value of the shares without changing the amount of the authorised capital;
10) approve the set of annual financial statements;
11) take a decision on profit/loss distribution;
12) take a decision on the building-up, use, reduction and liquidation of reserves;
13) approve the set of interim financial statements drawn up for the purpose of adoption of 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 on the issue of convertible debentures;
16) take a decision on withdrawal for all the shareholders the right of pre-emption in acquiring the Company's shares or convertible debentures of a specific issue;
17) take a decision on increase of the authorised capital;
18) take a decision on reduction of the authorised capital, except where otherwise provided for by the Law on Companies;
19) take a decision on the Company's acquisition of its own shares;
20) take a decision on allocation of the Shares to employees and/or members of the management bodies;
21) to approve the Rules of the Allocation of Shares;
22) take a decision on the reorganisation or split-off of the Company and approve the terms of reorganisation or split-off;
23) take a decision on conversion of the Company;
24) take a decision on the restructuring of the Company in the cases specified by the Law on Restructuring of Enterprises;
25) take a decision on liquidation of the Company or on cancellation of the liquidation of the Company, except where otherwise provided for by the Law on Companies;
26) elect and remove the liquidator of the Company, except where otherwise provided for by the Law on Companies.

The General Meeting of Shareholders may also decide on other matters assigned to its powers by the Articles of Association of the Company, unless these have been assigned under the Law on Companies to the powers of other bodies of the Company and provided that, in their essence, these are not the functions of the management bodies.

A decision of the General Meeting of Shareholders shall be considered taken if more votes of the shareholders have been cast for it than against it, except for the issues mentioned in Points 1, 6, 7, 8, 9, 11, 12, 14, 15, 17, 18, 21, 22, 23, 24 and 25 above, a decision on which shall be taken by 2/3 (two thirds) of all the votes carried by the shares held by the shareholders attending the Meeting, and the issue mentioned in Point 16, a decision on which shall require 3/4 (three thirds) of all the votes carried by the shares held by the shareholders attending the Meeting and entitled to vote on this issue.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

31. Board of the Company

The Board shall be a collegial management body of the company which has 5 (five) members. The members of the Board shall be elected and removed from office by the General Meeting of Shareholders in accordance with the procedure laid down by the Law on Companies. The members of the Board shall elect the Chairperson of the Board. The number of the terms of office of a member of the Board shall not be limited. Only a natural person may be elected a member of the Board. The following persons may not be a member of the Board: a member of the Supervisory Board of the Company (should the Supervisory Board be formed in the Company) and a person who may not hold this office under legal acts. The powers of the members of the Board are defined in the Law on Companies and in the Articles of Association of the Company.

If the Board is removed from office, resigns, or discontinues to perform its duties for any other reasons before the end of the term of office, a new Board shall be elected for a new term of office of the Board. If individual members of the Board are elected, they shall serve only until the expiry of the term of office of the current Board.

The Board may adopt decisions and its meeting shall be deemed to have been held when the meeting is attended by 2/3 or more of the Members of the Board. The Members of the Board who have voted in advance shall also be deemed to be present at the meeting. A decision of the Board shall be adopted if more votes for it are received than the votes against it.

Members of the Board are paid bonuses for their work on the Board in accordance with the procedure laid down in Article 59 of the Law on Companies of the Republic of Lithuania. The amount of bonuses depends on the performance of the Company. The decision on the payment of bonuses shall be taken by the General Meeting of Shareholders.

The 30 April 2021 General Meeting of Shareholders did not award any tantiemes to the members of the Board.

No other additional payments related to the motivation system are provided for the Chairperson of the Board. The members of the Board have not authorised any other persons to perform the functions assigned to the scope of the powers of the Board.

Members of the Board of Rokiškio suris, AB

(Elected at the General Meeting of Shareholders held on 13 December 2017)

Antanas Trumpa – the Chairperson of the Board (from 13 December 2017)

| Work experience | Antanas Trumpa worked in the Company since 1966
1971–2017 – the Manager (Director) of the Company |
| --- | --- |
| Education | In 1966, he graduated from Kaunas Polytechnic Institute, Faculty of Equipment for Food Industry, and acquired the qualification of Mechanical Engineer In 1979, he defended the Ph. D. thesis titled “Organisation of Operation of Vacuum Apparatus” in Kaunas Polytechnic Institute On 12 October 1994, the Lithuanian Science Council nostrificed the thesis for a doctoral degree. |

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Shares of Rokiškio sūris, AB held	Antanas Trumpa directly holds 7,088,663 shares (19.76% of the authorised capital and votes) His holding jointly with other persons amounts to 29,471,155 shares (82.17% of the authorised capital and votes)
Participation in the activities of other companies	Board Chairperson at Rokiškio Pienas (code 300561844, adr. Pramonės str.8, Utena), UAB and Rokiškio Pieno Gamyba UAB (code 303055649, adr. Pramonės g.8, Utena). Shareholder of Pieno Pramonės Investicijų Valdymas, UAB, (code 173748857, adr. Pramonės str.3, Rokiškis) owning 7,443, i.e. 73.84%, of the shares of and voting rights in the company.

Antanas Kavaliauskas – Deputy Chairperson of the Board

He is a member of the Board since 2005 (and was elected for a new 4-years term of office by the General Meeting of Shareholders held on 13 December 2017)

Work experience	From 2002, Chief Financial Officer of Rokiškio Sūris, AB
Education	Faculty of Management of Kaunas University of Technology; Master of Financial Management Member of ACCA (Association of Chartered Certified Accountants)
Shares of Rokiškio sūris, AB held	No shares held
Participation in the activities of other companies	Shareholder of Pieno Pramonės Investicijų Valdymas, UAB (code 173748857, adr. Pramonės str.3, Rokiškis) owning 4.07% of the shares of and voting rights in the company. Board Chairperson of the Latvian-based SIA Jekabpils Piena Kombinats (code 45402008851, adr. Akmenu iela 1, Jekabpils, Latvia) no shares held.

Paul M Campbell – Member of the Board of the Company

(Elected for a 4-year term of office at the General Meeting of Shareholders held on 13 December 2017)

Work experience	Director for Special Projects at Fonterra Co-operative Group Ltd. He works in the Co-operative since 1984 and held various posts in Fonterra in the following fields: general management, management of joint ventures, marketing, engineering and finance in New Zealand, Japan, and North Africa Currently, Paul M Campbell resides in London
Education	The University of Canterbury in New Zealand; Chemical and Industrial Engineering Massey University in New Zealand; Diploma in Dairy

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

	Industry Science and Technology
Shares of Rokiškio suris, AB held	No shares held
Participation in other activities	Mr Campbell is director of many international joint ventures of Fonterra. The main employer - Fonterra logistics (UK) Ltd., (company number 03718518 adr., Delta 200, Delta Business Park., Great Western Way, Swindor SN5 7XP, UK). Position - Director Special Projects.

Ramūnas Vanagas – Member of the Board of the Company

A member of the Board since 2006 (elected for a new 4-years term of office by the General Meeting of Shareholders on 13 December 2017)

Work experience	From 2005, Business Development Director of Rokiškio Sūris, AB
Education	Lithuanian Academy of Agriculture; major in Economics and Management
Shares of Rokiškio sūris, AB held	No shares held
Participation in the activities of other companies	Shareholder of Pieno Pramonès Investicijų Valdymas (code 173748857, adr. Pramonès str.3, Rokiškis), UAB owning 4.07% of the shares of and voting rights in the company Board person of the Latvian-based SIA Jekabpils Piena Kombinats (code 45402008851, adr. Akmenu iela 1, Jekabpils, Latvia) no shares held.

Darius Norkus – Member of the Board of the Company

A member of the Board since 2008 (elected for a new 4-years term of office by the General Meeting of Shareholders on 13 December 2017)

Work experience	From 2005, Sales and Marketing Director
Education	Kaunas University of Technology; Diploma of Engineer (1993) Baltic Management Institute, Master’s Degree in Business Administration (EMBA programme, 2000).
Shares of Rokiškio sūris, AB held	No shares held
Participation in the activities of other companies	Shareholder of Pieno Pramonès Investicijų Valdymas, UAB (code 173748857, adr. Pramonès str.3, Rokiškis), owning 4.07% of the shares of and voting rights in the company.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Manager (Director) of the Company

The Manager (Director) of the Company shall be a single-person management body, who shall organise daily activities of the Company, considers and decides on issues of the Long-term Strategic Plan and Business Plan of the Company. In the Company's relations with other persons, the Director shall act at his own discretion on behalf of the Company.

The Manager of the Company shall take part in all General Meetings of Shareholders held (including those in the reporting period).

The duties and powers of the Director are defined in the Law on Companies and in the Articles of Association of the Company.

Information on the Manager (Director) of the Company:

Dalius Trumpa – Manager (Director) of the Company

(appointed by the Board of the Company as of 1 January 2018)

| Work experience | Dalius Trumpa works in Rokiškio suris, AB since 1991
2002–2006, Production Director of Rokiškio suris, AB
2007–2017, Deputy Director of Rokiškio suris, AB
From 1 January 2018, Director of Rokiškio Suris, AB
From 2 January 2007, Director of the subsidiary Rokiškio Pienas, UAB
From 29 April 2013, Director of the subsidiary Rokiškio Pieno Gamyba, UAB |
| --- | --- |
| Education | Kaunas University of Technology; major in Food Industry Machinery and Apparatus; Mechanical Engineer |
| Shares of Rokiškio suris, AB held | He directly holds 83,500 shares (0.23% of the authorised capital and votes)
His holding jointly with other persons amounts to 29,471,155 shares (82.17% of the authorised capital and votes) |
| Participation in the activities of other companies | Shareholder of Rokvalda UAB (code 300059165, adr. Basanavičiaus str.16A-125, Vilnius), holding 100% of shares and votes.
From 2010, Chairperson of the Board of the Latvian-based SIA Kaunata (code 240300369, adr. Rogs, Kaunata pag., Rezeknes nov., Latvia) holding no shares of the company
From 11 December 2013, Director of SIA RSU Holding (code 40103739795, adr. Elizabetes iela 45/47, Riga), owning 100% of the company’s shares
Shareholder of Pieno Pramonės Investicijų Valdymas UAB (code 173748857, adr. Pramones str.3, Rokiškis) owning 4.07% of the shares of and voting rights in the company. |

ROK ISKIO SURIS

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

32. Committees set up in the Company

Audit Committee of Rokiškio suris, AB

The Audit Committee of the Company consists of 3 members, including 2 independent ones. The term of office of the Audit Committee is four years. The members of the Audit Committee shall be elected by the General Meeting of Shareholders upon the recommendation of the Board of the Company. The members of the Audit Committee were elected by the General Meeting of Shareholders held on 31 April 2021. The term of office of the Audit Committee shall end on 31 April 2025.

The Audit Committee is a collegial body, which adopts decisions at its meetings. The Audit Committee may adopt decisions and its meeting shall be deemed to have been held when it is attended by at least 2 (two) members of the Committee. A decision shall be deemed to have been adopted when it is voted for by at least two members of the Audit Committee attending the meeting.

The functions, rights, and obligations of the Audit Committee shall be governed by the Provisions for the Establishment and Activities of the Audit Committee of Rokiškio suris, AB approved by the General Meeting of Shareholders of the Company as well as in other documents governing the activities of the Audit Committee.

Main functions of the Audit Committee

To monitor the process of preparation of the financial statements of the Company and its subsidiaries;
To monitor the efficiency of the internal control, risk management, and internal audit systems of the Company;
To provide recommendations to the Board of the Company on the selection of an external audit firm and to monitor the process of the audit;
To monitor the compliance of the external auditor and audit firm with the principles of independence and impartiality;
To inform the Board of the Company about any significant internal control deficiencies relating to financial statements found by external and internal audit and to provide recommendations on their correction;
To act fairly and responsibly in the interest for the benefit of the Company and its shareholders.

Members of the Audit Committee:

Kestutis Gataveckas – an independent member, Director of Perlo Paslaugos, UAB, holding no shares of Rokiškio suris, AB;

Valdas Puzeras - an independent member, independent management and financial consultant, holding no shares of Rokiškio suris, AB;

Rasa Žukauskaitė – an employee of Rokiškio Suris AB, Finance Department, holding 2 shares of Rokiškio suris, AB.

No other committees are established in the Company.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

33. Management of the Company

Members of the management team of the Company

Position	Forename and surname	In office since
Director	Dalius Trumpa	01/01/2018
Chief Financial Officer	Antanas Kavaliauskas	01/05/2002
Procurement Director (Lithuania)	Ramūnas Vanagas	01/01/2020
Central Services Director	Jonas Kvedaravičius	01/05/2002
Logistics Director	Jonas Kubilius	16/05/2002
Sales and Marketing Director	Darius Norkus	18/07/2001

Management team bonus system

The members of the management team of the Company are paid wages and also receive variable components of pay which depend on the performance of the Company, market situation and other factors. There are no management team bonus systems established in the Company.

Executive Remuneration Policy:

On April 30, 2020, the General Meeting of Shareholders of the Company approved the remuneration policy of the Company's management. The Remuneration Policy defines the procedure for determining the remuneration paid to the Company's director and members of the Board, establishes the forms, bases and procedure for payment of monetary remuneration for members of the Company's collegial management and supervisory bodies, as well as regulates other issues related to remuneration. The remuneration policy applies to the Managers (the Director of the Company and the members of the Board). The remuneration policy is established for a period of four years. The Remuneration Committee has not been formed in the Company.

The Company's remuneration policy is publicly announced on the Company's website www.rokiskio.com in the section "Investors".

34. Employees

The average number of employees of AB Rokiškio suris Group for 6 months of 2021 was 1,338, compared to the first half of 2020, it decreased by 4.15 percent or 58 employees. The average number of employees for the 6 months of 2020 was 1,396 employees. The decrease in the number of employees is related to the technical reorganization changes taking place in the Company, as well as the optimization of works, as well as due to seasonal fluctuations in the number of employees.

Workers for 6 months of 2021 make up 80.8% (in the first half of 2020 - 81.7) among all employees of the Company; specialists -16.6% (in the first half of 2020 - 17.8%); the number of managerial staff remained unchanged.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Employees of the Group of the Company by categories

Employee group	Average number of employees		Change
	30/06/2021	30/06/2020	(%)
Management*	8	8	0
Specialists	249	248	+0.40
Workers	1081	1140	-5.18
Total:	1338	1396	-4.15

*The managerial staff of the Company shall be understood as its Directors

The Company employs people with high qualifications. Out of them, 11.14% were graduates of higher education institutions (10.8% in 2020), 50.45% had professional post-secondary education (50.2% in 2020), 38.34% were people with secondary education (39.0% in 2020), and 0.07% had partially completed secondary education (0.08% in 2020).

Labour remuneration system

The Company has an efficient and fair remuneration system in place. Its aim is to attract, maintain, and motivate employees. All employment contracts with employees of the Company, including those with the managerial staff, have been drawn up in accordance with the requirements of the Labour Code of the Republic of Lithuania. Employees are hired and dismissed in accordance with the requirements of the Labour Code.

Average monthly salary at the Rokiškio suris, AB Group, by employee groups

Employee group	Average monthly wages (gross), EUR		Change, %
	30/06/2021	30/06/2020
Managerial staff	2747	2744	+0.11
Specialists	1555	1547	+0.52
Workers	1352	1313	+3.05
Group average	1292	1259	+2.62

The average monthly wages are calculated in accordance with Resolution No 496 of the Government of the Republic of Lithuania dated 21 June 2017.

Wages payable to the employees of Rokiškio suris, AB include the following components:

1) fixed remuneration for work performed, i.e. the monthly salary provided for in the employment contract;
2) piece-work pay, i.e. remuneration for workers of production shops, sales divisions, and warehouses is paid according to the volume of their actual work and at approved rates;
3) variable component of remuneration in accordance with the Regulations of the Incentive Fund approved in the Collective Agreement.

From 2018, the Company has been applying a remuneration procedure, which establishes variable components of pay depending on the performance of the Company, market situation, and other factors. Variable components of pay are allocated to every division in accordance with the approved functional

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

management system. The remuneration procedure is subject to approval by the Manager of the Company.

Every production shop or division of the Company has an approved procedure for the distribution of the incentive fund which provides for employee appraisal criteria and incentives for employees. Employee appraisal is one of the key tasks of the Company in ensuring efficient work organisation in the pursuance of its objectives, building positive relationship between managers and their subordinates, and fostering staff motivation.

Employees of the companies of the Group are guaranteed the right to participate in activities of trade unions. The companies have a trade union committee, which defends its members' labour, economic, and social rights and interests, right to employment, social guarantees, takes care of the professional qualification improvement, builds up professional ethics, and works towards increasing the wages and other income of food industry workers.

In September 2020, the Collective Agreement was approved. The purpose of this collective agreement is to create conditions for harmonious collective activities, to guarantee the level of work, wages, safety and health and other working conditions of various categories of employees better than provided by the laws of the Republic of Lithuania, Government resolutions, legal acts and to provide better company and social guarantees employees.

35. Information on agreements between the Company and members of its bodies, members of its committees, or employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of change of control of the issuer

There are no agreements between the Company and its board members or employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of change of control of the Company. All employment contracts with employees of the Company, including those with the members of its management, have been drawn up in accordance with the requirements of the Labour Code of the Republic of Lithuania. The Company does not provide for any additional payments in the form of shares.

INFORMATION ON RELATED-PARTY TRANSACTIONS AND SIGNIFICANT AGREEMENTS

36. Related-party transactions

Interested-person/related-party transactions are disclosed in Note 7 to the Consolidated Financial Statements of the Company for 6 months 2021.

In the period of 6 months 2021, there are no related-party transactions concluded at unusual market conditions and (or) non-attributable to the Company's business nature, and (or) having made significant influence on the Company, its finance, assets or obligations.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

37. Information on injurious transaction concluded on behalf of the issuer

During the reporting period, there were no injurious transactions failing to comply with the Company’s objectives or normal market conditions, infringing the interests of the shareholders or other groups of persons, or adversely affecting of threatening to adversely affect in future the Company’s operations or performance. There were no transactions concluded due to conflicts of interests between the obligations of the Company’s managers, controlling shareholders, or other related parties toward the Company and their private interests and/or obligations.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

A SET OF OPERATIONAL RESULTS AND INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF ROKISKIO SURIS AB FOR FIRST SIX MONTHS 2021

ROKOISKI

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

AB „ROKIŠKIO SÜRIS“

CONSOLIDATED AND PARENT COMPANY’S

FINANCIAL STATEMENTS as at 30th June 2021

Company code 173057512, address: Pramonės g. 3, LT-42150 Rokiškis, Lithuania

(All tabular amounts are in EUR ‘000 unless otherwise stated)

38. Consolidated Statement of comprehensive income

	January - June
	2021	2020
Sales	107,461	102,796
Cost of sales	(98,561)	(92,414)
Gross profit	8,900	10,382
Selling and marketing expenses	(9,966)	(7,858)
Operating profit (loss)	(1,066)	2,524
Finance costs	(148)	(65)
Profit before tax	(1,214)	2,459
Income tax	225	(325)
Operating activity income (loss)	(989)	2,134
Net profit (loss)	(989)	2,134
Other comprehensive income	-	-
Total comprehensive income for the year	(989)	2,134

ROKIŠKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

AB „ROKIŠKIO SÜRIS“

CONSOLIDATED AND PARENT COMPANY'S

FINANCIAL STATEMENTS as at 30th June 2021

Company code 173057512, address: Pramonės g. 3, LT-42150 Rokiškis, Lithuania

(All tabular amounts are in EUR ‘000 unless otherwise stated)

Consolidated Balance sheet

	June 30, 2021	December 31, 2020	June 30, 2020
PROPERTY
Long-term tangible assets	75,669	73,862	57,315
Intangible assets	79	82	40
Investments	169	169	169
Other non-current receivables and loans granted	4,006	2,533	2,895
	79,923	76,646	60,419
Current assets
Inventories	67,605	69,564	64,486
Receivables and advance payments	40,439	40,354	34,296
Loans granted	2,608	3,642	6,040
Prepaid income tax	670	1,030	844
Cash and cash equivalents	8,952	5,834	3,358
	120,274	120,424	109,024
Total assets	200,197	197,070	169,443
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shares	10,402	10,402	10,402
Share premium	18,073	18,073	18,073
Reserve for acquisition of treasury shares	10,850	10,850	10,850
Treasury shares	(2,251)	(2,251)	(2,251)
Other reserves	27,487	27,716	14,427
Retained earnings	76,226	80,638	77,903
	140,787	145,428	129,404
Non-current liabilities
Borrowings	5,161	-	-
Deferred income tax liability	3,693	3,711	1,358
Non-current provisions	683	683	683
Deferred income	2,377	2,601	2,322
	11,914	6,995	4,363
Current liabilities
Trade and other payables	20,479	16,723	18,329
Tax liabilities	-	-	-
Deferred income	420	420	519
Current provisions	684	684	684
Borrowings	25,913	26,820	16,144
	47,496	44,647	35,676
Total equity and liabilities	200,197	197,070	169,443

ROKOISKO
SURIS
Interim report and financial statements for 6 months ended 30 June 2021 of
ROKISKIO SURIS AB

AB „ROKIŠKIO SÜRIS“
CONSOLIDATED AND PARENT COMPANY’S
FINANCIAL STATEMENTS as at 30th June 2021
Company code 173057512, address: Pramonės g. 3, LT-42150 Rokiškis, Lithuania
(All tabular amounts are in EUR ‘000 unless otherwise stated)

Consolidated cash flow statement

	January-June
Operating activities	2021	2020
Profit before tax and minority interest	(1,214)	2,459
Corrections:
- depreciation	3,831	4,691
- amortisation (negative prestige not included)	3	5
- profit loss on disposal of property, plant and equipment	(93)	(19)
- interest expense	148	65
- interest income	(113)	(123)
- amortization of government grants received	(224)	(240)
- inventory write-down to net realizable value	(149)	-
Circulating capital changes:
- inventories	2,108	(4,966)
- amounts payable	3,608	1,428
- amounts receivable and prepayments	317	3,273
Cash flows from operating activities	8,222	6,573
Interest paid	(148)	65
Income tax paid	-	-
Net cash generated from operating activities	8,074	6,638
Investing activities
Purchase of property, plant and equipment	(5,838)	(3,110)
Purchase of intangible assets	-	(1)
Loans granted to farmers and employees	-	(167)
Proceeds from sale of property, plant and equipment	133	40
Other loans granted	(1,550)	(540)
Interest received	113	123
Other loan repayments received	1,437	168
Net cash generated from investing activities	(5,705)	(3,487)
Financing activities
Loans received	6,461	720
Repayments of borrowings	(2,211)	-
Dividends paid	(3,501)	(3,501)
Net cash generated from financing activities	749	(2,781)
Net increase in cash and cash equivalents	3,118	370
Cash and cash equivalents at the beginning of the period	5,834	2,988
Cash and cash equivalents at the end of the period	8,952	3,358

ROKO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

AB „ROKIŠKIO SÜRIS“

CONSOLIDATED AND PARENT COMPANY'S

FINANCIAL STATEMENTS as at 30th June 2021

Company code 173057512, address: Pramonès g. 3, LT-42150 Rokiškis, Lithuania

(All tabular amounts are in EUR '000 unless otherwise stated)

Consolidated Own Capital Change Statement

	Share capital	Share premium	Reserve for acquisition of treasury shares	Treasury shares	Other reserves	Retained earnings	Total
Balance at December 31st 2019	10,402	18,073	10,850	(2,251)	15,138	78,559	130,771
Comprehensive income
Profit (loss) of the year						2,134	2,134
Decrease in share capital/ cancellation of treasury shares
Dividends relating to 2019						(3,501)	(3,501)
Transfer to retained earnings (transfer of depreciation, net of deferred income tax)					(711)	711
Balance at June 30st 2020	10,402	18,073	10,850	(2,251)	14,427	77,903	129,404
Comprehensive income
Profit (loss) of the year						1,927	1,927
Acquisition of treasury shares
Transfer to retained earnings (transfer of depreciation, net of deferred income tax)					(696)	808	112
Gain on revaluation of property, plant and equipment, net of deferred tax					13,985		13,985
Balance at December 31st 2020	10,402	18,073	10,850	(2,251)	27,716	80,638	145,428
Comprehensive income
Profit (loss) of the year						(989)	(989)
Transfer to reserves
Dividends relating to 2020						(3,501)	(3,501)
Transfer to retained earnings (transfer of depreciation, net of deferred income tax)					(229)	78	(151)
Balance at June 30st 2021	10,402	18,073	10,850	(2,251)	27,487	76,226	140,787

ROKOISKO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

AB „ROKISKIO SÜRIS“

CONSOLIDATED AND PARENT COMPANY’S

FINANCIAL STATEMENTS as at 30th June 2021

Company code 173057512, address: Pramonès g. 3, LT-42150 Rokiškis, Lithuania

(All tabular amounts are in EUR ‘000 unless otherwise stated)

42. Commentary on the Report

1. General information

The Public Limited Liability Company Rokiskio suris (hereinafter – the company) is a public listed company incorporated in Rokiskis.

The shares of AB Rokiskio Suris are traded on the Baltic Main List of the Nasdaq Vilnius (symbol – RSU1L).

The Consolidated Group (hereinafter – the Group) consists of the Company and four subsidiaries. (2019: Company and four subsidiaries). The subsidiaries that comprise consolidated Group are indicated below:

	Group’s share (%) as at 30 June
Subsidiaries	2021	2020
UAB Rokiskio pienas	100.00	100.00
UAB Rokiskio pieno gamyba	100.00	100.00
SIA Jekabpils Piena Kombinats	100.00	100.00
SIA Kaunata*	60.00	60.00

These subsidiaries were not consolidated due to their insignificance.

All above subsidiaries are incorporated in Lithuania, except for SIA Jekabpils Piena Kombinats and SIA Kaunata which are incorporated in Latvia.

The Group’s main line of business is the production of fermented cheese and a wide range of other dairy products.

As of 30th June 2021, the average number of the Group’s employees was equal to 1,338 (compared to 1,396 employees as at 30th June 2020).

2. Accounting Principles

These consolidated financial statements have been prepared according to International Financial Reporting Standards (IFRS) as adopted by the European Union.

The financial statements have been prepared under the historical cost convention, as modified for available-for-sale financial assets measured at fair value and property, plant and equipment measured at revalued amount.

The principal 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 preparation of the financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Subsidiaries are the entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

The group treats transactions with non-controlling interest as transactions with equity owners of the group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

The items shown in the financial statements of the Company and each entity of the Group are valued by the currency of the original economic environment wherein a specific company operates (hereinafter the "functional currency"). These financial statements have been presented in euros (EUR), which is the Company's (and the Group's each entity's) functional and presentation currency.

Property, plant and equipment is shown at revalued amount, based on periodic valuations of assets, less subsequent accumulated depreciation and impairment.

Subsequent costs are included into the asset's carrying amount or recognized as separate assets, as appropriate, only when it is likely that in future the Group will receive economic benefits associated with the item and the cost of the item will be measured accordingly. All other repairs and maintenance expenses are charged to the income statement during the financial period in which they have been incurred.

Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, at the Group:

Buildings	7 – 75 years
Plant & machinery	2 - 25 years
Motor vehicles	2 - 10 years
Equipment and other property, plant and equipment	2 - 25 years

The asset residual values and useful lives are reviewed, and adjusted, if appropriate, at each balance sheet date.

Software assets expected to provide economic benefit to the Company and the Group in future periods are valued at acquisition cost less subsequent amortisation. Software is amortised on the straight-line basis over the useful life of 1 to 5 years.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are classified as 'trade and other receivables' in the balance sheet.

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Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Held-to-maturity financial assets are initially recorded at fair value. Held-to-maturity financial assets are subsequently measured at amortised cost using the effective interest method less any recognised impairment losses which reflect irrecoverable amounts.

Proceeds from held-to-maturity financial assets are recognised through profit or loss using the effective interest method.

Inventories are subsequently carried at the lower of cost and net realisable value. Cost is determined by the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related indirect production overheads, but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

Loans granted and amounts receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less the amount of impairment loss. A provision for impairment of amounts receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The impairment amount is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the provision is recognised in the statement of comprehensive income within 'general and administrative expenses'. Bad debts are written off during the year in which they are identified as irrecoverable.

Cash and cash equivalents are carried at nominal value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and at bank and bank overdrafts. Bank overdrafts are included in borrowings in current liabilities on the balance sheet.

Ordinary shares are stated at their par value. Consideration received for the shares sold in excess over their nominal 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.

Where the Company or its subsidiaries purchase the Company's equity share capital, the consideration paid including any attributed incremental external costs is deducted from shareholders' equity as treasury shares until they are sold, reissued, or cancelled. No gain or loss is recognised in the statement of comprehensive income on the sale, issuance, or cancellation of treasury shares. Where such shares are subsequently sold or reissued, any consideration received is presented in the consolidated financial statements as a change in shareholders' equity.

Other reserves are established upon the decision of annual general meeting of shareholders on profit appropriation. This reserve may be used only for the purposes approved by annual general meeting of shareholders.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the amount at initial recognition and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

Profit is taxable at a rate of 15 per cent (2020: 15 per cent) in accordance with the Lithuanian regulatory legislation on taxation.

The Group pays 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.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Social security contributions are recognised as expenses on an accrual basis and are included in payroll expenses.

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminated sales within the Group. Revenue from sales of goods is recognised only when all significant risks and benefits arising from ownership of goods is transferred to the customer.

Interest income is recognised on a time-proportion basis using the effective interest method.

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

Basic earnings per share are calculated by dividing net profit attributed to the shareholders from average weighted number of ordinary registered shares in issue, excluding ordinary registered shares purchased by the Company and the Group and held as treasury shares.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of directors that make strategic decisions. The Group’s management identified the following operating segments within the Group: hard cheese, semi hard cheese, butter, milk, cream, sour cream, sour milk, yogurt, curds, curd cheese and other. These operating segments were aggregated into two main reportable segments, based on similar nature of products, production process, type of customers and method of distribution.

Government grants are recognised at fair value where there is sufficient evidence that the grant will be received and the Group and the Company will comply with all attached conditions.

Government grants received to finance acquisition of property, plant and equipment are included in non-current deferred income in the balance sheet. They are recognised as income on a straight-line basis over the useful life of property, plant and equipment concerned.

Provisions are measured at the present value of expenditures expected to be required to settle the obligation using pre-tax rate that reflects current market assessments of the time value of money and the risks specified to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using effective interest method.

The valuation of property, plant and equipment, except for motor vehicles, at the Group and the Company as at 31 December 2020 was conducted by independent property valuer Ober-Haus UAB. The fair value estimation was based on the comparable sales price method. The valuation of other categories of assets was based on the replacement cost method. The valuation of motor vehicles was conducted by the Company's experts who established the fair value using the comparable sales price method. Assets that were evaluated using the replacement cost method were tested for impairment as a result of which no indications for possible impairment were identified.

The Company’s management believes the values of property, plant and equipment adjusted under these methods as of 30 June 2021 and 2020 approximated the fair value.

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

3. Financial risk management

The Group's and the Company's activities expose them to a variety of financial risks. The Group's overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects of the financial performance of the Group.

Risk management is carried out by the Company's management. There are no written principles for overall risk management in place.

The Group operate internationally, however, their exposure to foreign exchange risk is set at minimum level, since sales outside Lithuania are performed mostly in the euros.

The Group's interest rate risk arises from interest-bearing loans and borrowings. Borrowings with variable interest rates expose the Group to cash flow interest rate risk. Borrowings with fixed interest rates expose the Group to fair value interest rate risk. In 2021 and 2020, loans granted by the Group with fixed interest rate were denominated in the euros. In 2021 and 2020, the Group's borrowings were with variable interest rate and they were denominated in the euros.

Credit risk arises from cash at bank, loans granted, and trade receivables.

As at 30 June 2021, the Company's and the Group's all cash balances were held at banks that had external credit ratings from 'A+' to 'BBB', as set by the rating agency Fitch Ratings (30 June 2020: from 'A+' to 'BBB').

The table below summarises the Group's credit risk exposures relating to on-balance sheet items. Maximum exposure to credit risk before collateral held or other credit enhancements as at 30 June:

	2021 06 30	2020 06 30
Cash and cash equivalents at banks	8,952	3,358
Trade receivables	35,038	30,603
Loans granted	6,614	8,740
	50,604	42,701

The Group does not classify amounts receivable and other financial assets exposed to credit risk according to credit quality. Credit risk is managed through established credit limits for a major customers and monitoring of overdue receivables and loans. Credit limits and overdue receivables are continuously monitored by the Company's and the Group's management.

	2021 06 30		2020 06 30
	Credit limit	Amount receivable	Credit limit	Amount receivable
Customer A	4,000	3,980	3,800	3,613
Customer B	4,000	3,289	4,000	2,704
Customer C	4,345	2,653	4,500	2,532
Customer D	2,500	2,208	4,345	2,508
Customer E	1,450	1,410	2,500	2,389

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

The Group’s objectives when managing capital are to safeguard the Group’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 Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group define their capital as equity and debt less cash and cash equivalents.

As at 30 June, the Group’s capital structure was as follows:

	2021 06 30	2020 06 30
Borrowings	31,074	16,144
Less: cash and cash equivalents	(8,952)	(3,358)
Net debt	22,122	12,786
Shareholders’ equity	140,787	129,404
Total capital	162,909	142,190

Pursuant to the Lithuanian Law on Companies the authorised share capital of a public company must be not less than EUR 25 thousand (the authorised share capital of a private company must not be less than EUR 2.5 thousand) and the shareholders’ equity should not be lower than 50 per cent of the company’s registered share capital. As at 30 June 2021 and 30 June 2020, the Company and its subsidiaries registered in Lithuania complied with these requirements.

4. Information on segments

Operating segments and reportable segments

The Group’s management has distinguished the following operating segments of the Group: hard cheese, semi-hard cheese, butter milk, cream, sour cream, sour milk, yogurt, curd, curd cheese and other. These segments were combined into two main reportable segments based on the similar nature of products, production process, types of customers and the method of distribution. The main two reportable business segments of the Group are as follows:

Fresh milk products
Cheese and other dairy products.

Other operations of the Group comprise of raw milk collection. Transactions between the business segments are on normal commercial terms and conditions.

Geographical information

Analysis of the Group’s income from sales according to markets is as follows:

	2021 06 30	2020 06 30
Lithuania	47,829	40,518
European Union member states	51,247	40,445
Near East	972	13,292
North America	2,161	5,489
Far East	4,504	2,400
Other countries	748	652
Total	107,461	102,796

ROK ISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

The breakdown of the Group’s revenue by category:

	2021 06 30	2020 06 30
Product Sales	106,769	102,257
Provided services	692	539
Total	107,461	102,796

5. Long-term tangible assets

In the income statement the depreciation charge of long-term tangible assets is reported in the following entries: selling and marketing expenses, general and administrative expenses and cost of sales, as well as in production in progress and ready production entries.

Software and intangible asset depreciation charge are accounted in the entry of general and administrative expenses.

6. Inventories

As at 30st June 2021, the Group’s inventories were made of:

	2021 06 30	2020 06 30
Raw materials	2,290	2,195
Work in progress	8,039	9,813
Finished products	55,275	51,539
Other inventories	2,001	939
Total	67,605	64,486

7. Related-party transactions

Main shareholders of Company:

	2021 06 30	2020 06 30
Mr Antanas Trumpa (Chairman of the Board of the Company)	19.76%	19.76%
„Pieno pramonès investicijų valdymas“ UAB (established in Lithuania) *	27.21%	27.21%
SIA „RSU Holding“ (established in Latvia) *	24.96%	24.96%
Fonterra (Europe) Coöperatie U.A	10.00%	10.00%
Dalius Trumpa (Managing manager)	0.23%	0.23%
Other shareholders (legal entities and natural persons)	15.44%	15.44%
Rokiškio sūris AB (treasury shares)	2.40%	2.40%

Pieno Pramonès Investicijų Valdymas UAB is controlled by Mr Antanas Trumpa (as a principal shareholder holding 73.84% of the share capital and votes of Pieno Pramonès Investicijų Valdymas UAB). RSU Holding SIA is controlled by Mr Dalius Trumpa (as a single shareholder holding 100% of the share capital and votes of RSU Holding SIA). The group of persons acting in concert holds in total 82.17% (2020 06 30: 82.17%) of the Company’s share capital and votes*.

ROKISKI OUR ACADEMY

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

Members of the Board of Directors of Pieno Pramonės Investicijų Valdymas UAB, RSU Holding SIA, Fonterra (Europe) Coöperatie U.A., and Rokiškio Sūris AB and their family members are treated as related parties.

Certain cooperative societies engaged in the production of milk are treated as related parties of the Company because the Company can exercise a significant influence over daily activities of these cooperative societies through close family members of its directors and certain employees.

The following transactions were carried out with related parties:

	2021 06 30	2020 06 30
Purchase of raw milk from other related parties	671	995
Purchase of non-current assets	-	-
Purchases of services	30	36
Sales of production and other inventories	6,256	5,797
Interest charges on credit facility	6	6

Seeking to disclose more accurately the internal turnovers for Rokiškio Sūris AB and Rokiškio Pienas and for Rokiškio Pieno Gamyba UAB, the Group's management decided that all purchases of raw materials used for the manufacturing of products exported by Rokiškio Sūris AB should be made at zero price, and all sales of products produced by Rokiškio Pienas UAB and by Rokiškio Pieno Gamyba UAB should be treated as sales of services, i.e. excluding the value of raw material. Purchases and sales of milk, property plant & equipment and inventory is organised at arm's length conditions between related parties.

Year-end balances arising from transactions with related parties:

	2021 06 30	2020 06 30
Non-interest bearing loans granted to directors (and their family members)	10	15
Loan receivable from Dzūkijos Pienas KB	298	298
Loan payable to Fonterra (Europe) Coöperatie U.A.	2,701	2,932
Trade payables to other related parties	25	83
Trade receivables from other related parties	1,962	2,655

Based on Resolution No 11 of the shareholder of Rokiškio Pieno Gamyba UAB made on 30 April 2021 (Item No 4 of the Agenda), it was decided to approve the proposed appropriation of profit (loss) for 2020 for Rokiškio Pieno Gamyba UAB and allocate EUR 1,790,076 for the payment of dividends. Dividends were paid out to Rokiškio Sūris AB in May 2021.

8. Financial ratios

The Group’s financial ratios:	2021 06 30	2020 06 30	2019 06 30
Revenue (EUR thousand)	107,461	102,796	89,168
EBITDA (EUR thousand)	2,768	7,220	2,793
EBITDA margin (%)	2.58	7.02	3.13
Operations profit (EUR thousand)	(1,066)	2,524	(1,891)
Margin of operations profit (%)	(0.99)	2.46	(2.12)
Profit per share (EUR)	(0,03)	0,06	(0,04)
Number of shares (units)	35,867,970	35,867,970	35,867,970

ROKISKIO

Interim report and financial statements for 6 months ended 30 June 2021 of

ROKISKIO SURIS AB

9. Information on the audit

The audit according to the International Accounting Standards will be made for the full year 2021 by audit company UAB PricewaterhouseCoopers.

10. Up-to-date information on material events and transactions

On 24 February 2021, amendments were signed to the credit agreement with SEB Bankas AB, under which the final repayment date for the overdraft facility granted to the Company was extended until 28 February 2022, and the credit limit granted was increased to EUR 35,000,000. The Company’s funds placed in and future inflows, as well as the assets owned by the right of ownership by Rokiškio Pieno Gamyba UAB, were additionally pledged to the bank.

On 7 May 2021, amendments to the Lending Agreement were signed with AB SEB bankas, according to which the Borrower (AB Rokiškio suris) was granted a new business loan of EUR 10.5 million, the repayment term of which is 30 October 2026.

11. Impact of COVID-19 virus on the Group’s performance

Scope of activity

As of the date of the semi-annual financial statements, there were no significant disruptions in the company's main raw material (milk) and other procurement chain. Milk processing volumes did not change significantly. Also, none of the ongoing projects were suspended due to COVID-19.

At the date of this report, approximately 80 percent of the group's employees had been vaccinated against COVID-19.

Sales volumes are highly dependent on the ability to transport goods both inside and outside the EU, as well as the restrictions imposed by various governments on COVID-19.

The group makes every effort to minimize the possibility of the virus entering its territories. As of the date of the financial statements, no employee was infected with the virus.

Liquidity

The Group has entered into a loan agreement with the bank without additional restrictions on COVID-19. The Group fulfills all the conditions set out in the agreement and met the set performance indicators.

There were no additional significant increases in arrears at the date of the financial statements.

As the situation is still changing, management believes that it is not possible to reliably estimate the potential impact of this outbreak on the Group. Management believes that this outbreak is a non-adjusting post-balance sheet event and therefore does not result in a change in the financial statements for the first half of 2021. The effect, if any, will be included in the Group's annual financial statements for 2021 accounts.

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Rokiskio Suris — Interim / Quarterly Report 2021

2242_rns_2021-08-31_5c0695b4-2cd7-4f2d-9a8f-78981a8e420d.pdf

CONSOLIDATED INTERIM REPORT AND CONSOLIDATED FINANCIAL STATEMENTS OF AB ROKIŠKIO SÜRIS

TABLE OF CONTENTS

GENERAL INFORMATION

1. Reporting period of the submitted half year consolidated report and consolidated financial statements

2. Key information of the issuer:

3. Information on the Company's group

Subsidiaries of Rokiškio suris, AB:

4. Types of main activities of the Company and the Company group

5. Strategy and objectives of the Group

6. The most important events in the reporting period

7. Significant developments after the end of the fiscal year

Publicly announced information

INFORMATION ON THE OPERATIONS OF THE COMPANY AND THE GROUP OF COMPANIES

8. Business environment of the Group of Companies

Basic Provisions

Who we are:

Raw milk procurement

Manufacture of dairy products

9. Sales of the Group of companies

10. Products, brands and achievements

AB Rokiškio suris Group also has a full range of high-quality and exclusive high value-added products and other product categories.

AB Rokiškio suris cooperates with Gian Luca Demarco - has launched a new line of dairy products.

11. Risk factors and risk management

12. Information about the aims of financial risk management and the use of hedging measures

13. Key aspects of the internal control and risk management systems associated with the formation of consolidated financial accounts

14. Environment

Profit/loss report

Costs:

16. Plans and forecasts for the operations of the Group and investments for the year 2021

INFORMATION ON THE COMPANY'S SHAREHOLDERS AND SHARES

17. Information on the Company's Authorized capital

18. Contracts of the Company with the financial brokerage undertakings

19. Data about trade in issuer's securities on regulated markets

Share price and turnover dynamics at the Nasdaq Vilnius stock exchange within 6 months of 2021

Share price and turnover dynamics at the Nasdaq Vilnius stock exchange during 4 years' period (06/2017-06/2021)

20. Limitation on transference of securities:

21. Procedure for amending the Articles of Association

22. Information about the shareholders of the Company

23. Rights of Shareholders

Non-property rights of shareholders:

Property rights of shareholders:

24. Shareholders with special control rights and description of the rights.

25. Information about all restrictions on the voting rights.

26. Information about the purchase of own shares by issuer

27. Dividends

MANAGEMENT OF THE COMPANY

28. Management bodies of the Company

29. Organizational structure of the management of the Company and the Company group

30. Information on the powers of and the procedure for convening the General Meeting of Shareholders

31. Board of the Company

Members of the Board of Rokiškio suris, AB

Antanas Kavaliauskas – Deputy Chairperson of the Board

Paul M Campbell – Member of the Board of the Company

Ramūnas Vanagas – Member of the Board of the Company

Darius Norkus – Member of the Board of the Company

Manager (Director) of the Company

Information on the Manager (Director) of the Company:

Dalius Trumpa – Manager (Director) of the Company

32. Committees set up in the Company

Audit Committee of Rokiškio suris, AB

Main functions of the Audit Committee

Members of the Audit Committee:

33. Management of the Company

Management team bonus system

Executive Remuneration Policy:

34. Employees

Labour remuneration system

35. Information on agreements between the Company and members of its bodies, members of its committees, or employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of change of control of the issuer

INFORMATION ON RELATED-PARTY TRANSACTIONS AND SIGNIFICANT AGREEMENTS

36. Related-party transactions

37. Information on injurious transaction concluded on behalf of the issuer

A SET OF OPERATIONAL RESULTS AND INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF ROKISKIO SURIS AB FOR FIRST SIX MONTHS 2021

38. Consolidated Statement of comprehensive income

42. Commentary on the Report

1. General information

2. Accounting Principles

3. Financial risk management

Rokiskio Suris Interim / Quarterly Report 2021