Snaige AB

Quarterly Report • Oct 31, 2016

Snaige AB

CONFIRMATION OF RESPONSIBLE PERSONS

Following the Article No. 22 of the Law on Securities of the Republic of Lithuania and Rules on Preparation and Submission of Periodic and Additional Information of the Bank of Lithuania, we Gediminas Čeika, Managing Director of Snaige, AB and Mindaugas Sologubas, Finance Director of Snaige, AB hereby confirm that, to the best of our knowledge, the not audited Snaige AB interim Consolidated Financial Statements for the nine months period ended 30 September 2016, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, correctly reflects the reality and fairly shows issuer's assets, liabilities, financial position, profit or loss and çash flows of Snaige, AB.

Gediminas Čeika Managing Director

October $31$ , 2016

Mindaugas Sologubas Finance Director

AB SNAIG

CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016 (UNAUDITED)

CONTENTS

I. GENERAL PROVISIONS	3
II. FINANCIAL STATUS	4
III. EXPLANATORY NOTES	10

I. GENERAL PROVISIONS

1. Accounting period of the report

The report has been issued for the nine months of 2016.

2. The basic data about the issuer

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

Authorised capital – the Board of the Company proposed the Annual General Meeting of Shareholders, which was held on 30 April 2015, to change the expression of the par value of the Company's shares and the authorized capital in litas into expression in euro, i.e. to determine that the par value of one Company's share is equal to 0.29 euro and to establish that the Company's authorized capital is equal to 11,490,494.55 euro.

Address - Pramons str. 6, LT-62175 Alytus

Phone - (+370-315) 56 206

Fax - (+370-315) 56 207

E-mail – snaige@snaige.lt

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

Legal organisation status – legal entity, public limited company

Registered as an enterprise on December 1, 1992 in the Municipality Administration of Alytus; registration number AB 92-119; enterprise register code 249664610. The latest Statute of AB "Snaige" was registered on May 26, 2015 in Legal Entities of the Republic of Lithuania.

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

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

The mass media – daily paper "Kauno diena".

Statement of comprehensive income

Ref. No.	ITEMS	01 01 2016 30 09 2016	01 07 2016 30 09 2016	01 01 2015 30 09 2015	01 07 2015 30 09 2015
ı.	SALES AND SERVICES	31,495,590	12,628,828	34,658,478	14,273,170
1.1	Income of goods and other products sold	3,127,619	844,594	3,859,585	1,705,734
1.2	Income of refrigerators sold	28,367,971	11,784,234	30,798,893	12,567,436
П.	COST OF GOODS SOLD AND SERVICES RENDERED	(25, 320, 170)	(10, 020, 737)	(28, 946, 775)	(11, 673, 372)
II.1	Net cost of goods and other products sold	(1,976,000)	(721, 366)	(2, 419, 210)	(1,089,275)
II.2	Net cost of refrigerators sold	(23, 344, 170)	(9, 299, 371)	(26, 527, 565)	(10, 584, 097)
Ш.	GROSS PROFIT	6,175,420	2,608,091	5,711,703	2,599,798
IV.	OPERATING EXPENSES	(4, 316, 988)	(1, 559, 869)	(4, 702, 307)	(1,718,954)
IV.1	Sales expenses	(2,648,388)	(966, 443)	(3,025,211)	(1, 182, 322)
IV.2	General and administrative expenses	(1,668,600)	(593, 426)	(1,677,096)	(536, 632)
V.	PROFIT (LOSS) FROM OPERATIONS	1,858,432	1,048,222	1,009,396	880,844
VI.	OTHER ACTIVITY	18,277	(6, 697)	42,547	17,623
VI.1.	Income	160,414	41,645	168,012	59,724
VI.2.	Expenses	(142, 137)	(48, 342)	(125, 465)	(42, 101)
VII.	FINANCIAL AND INVESTING ACTIVITIES	(115, 923)	(35, 401)	(154, 770)	(72, 543)
VII.1.	Income	408,278	136,907	469,127	132,470
VII.2.	Expenses	(524, 201)	(172, 308)	(623,897)	(205, 013)
VIII.	PROFIT (LOSS) FROM ORDINARY ACTIVITIES	1,760,786	1,006,124	897,173	825,924
IX.	EXTRAORDINARY GAIN
Χ.	EXTRAORDINARY LOSS
XI.	CURRENT ACCOUNTING PERIOD PROFIT (LOSS) BEFORE TAXES	1,760,786	1,006,124	897,173	825,924
XII.	TAXES
XII.1	PROFIT TAX
XIII.	Adjustment of deferred profit tax
XIV.	Social tax
XV.	MINORITY INTEREST	53	20	48
XVI.	NET CURRENT ACCOUNTING PERIOD PROFIT (LOSS)	1,760,839	1,006,144	897,221	825,924

l.

Gediminas Čeika

Financial Director

Managing Director

Mindaugas Sologubas

page 4

Statement of financial position

Ref. No.	ASSETS	Notes	As at 30 September 2016	As at 31 December 2015
А.	Non-current assets		30, 158, 158
				17,855,129
I.	INTANGIBLE ASSETS	10	1,639,532	1,613,492
Ш	TANGIBLE ASSETS	11	18,678,467	6,790,886
II.1.	Land
II.2.	Buildings		5,443,251	2,,276,841
II.3.	Other non-current tangible assets		12,971,700	4,312,791
II.4.	Construction in progress and advance payments		263,516	201,254
Ш.	INVESTMENT PROPERTY
IV.	NON-CURRENT FINANCIAL ASSETS
IV.1	Deferred taxes assets		3,265	3,265
IV.2	Other non-current assets	12	9,836,894	9,447,486
V.	Amounts receivable after one year
VI.	Assets classified as held for sale
В.	Current assets		15,559,519	17,043,550
I.	INVENTORY AND CONTRACTS IN PROGRESS	13	4,721,288	4,380,099
1.1.	Inventory		4,721,288	4,380,099
1.2.	Advance payments
1.3.	Contracts in progress
II.	ACCOUNTS RECEIVABLE WITHIN ONE YEAR	14	8,713,758	8,228,649
III.	INVESTMENTS AND TERM DEPOSITS
IV.	CASH AT BANK AND ON HAND	16	1,199,102	3,763,622
V.	Other current assets	15	925,371	671,180
	Planned to sell non-current assets
C.	Accrued income and prepaid expenses
	TOTAL ASSETS		45,717,677	34,898,679

(continued on the next page)

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016
(all amounts are in EUR unless otherwise stated)

Ref. No.	SHAREHOLDERS' EQUITY AND LIABILITIES	Notes	As at 30 September 2016	As at 31 December 2015
А.	Capital and reserves		21,532,217	9,186,682
I.	SHARE CAPITAL		11,491,018	11,491,018
1.1.	Authorized (subscribed) share capital		11,491,018	11,491,018
1.2.	Uncalled share capital (-)
1.3.	Share premium (surplus of nominal value)
	Own shares (-)
Ш.	Foreign currency translation reserve		(50, 619)	(47, 936)
IV.	Legal reserve	18	901,431	901,431
	Non-current assets revaluation reserve		10,587,379
V.	RETAINED EARNING (LOSS)		(1,396,992)	(3157, 831)
	Current Profit (Loss)		1,760,839	444,338
	The previous year Profit (Loss)		(3, 157, 831)	(3,602,169)
в.	Minority interest		253	306
D.	Provisions and deferred taxes		0	$\mathbf{0}$
I.	PROVISIONS FOR COVERING LIABILITIES AND DEMANDS
Π.	DEFERRED TAXES
Е.	Accounts payable and liabilities		24, 185, 207	25,711,691
Ι.	ACCOUNTS PAYABLE AFTER ONE YEAR AND NON- CURRENT LIABILITIES		14,291,855	12,431,308
С	Financing (grants and subsidies)	19	733,969	829,926
1.1.	Financial debts	21	11,273,799	11,185,656
1.2.	Warranty provisions	20	220,220	220,220
1.3.	Deferred income tax liability		1,868,361
1.4.	Advances received on contracts in progress
1.5.	Non-current employee benefits		195,506	195,506
II.	ACCOUNTS PAYABLE WITHIN ONE YEAR AND CURRENT		9,893,352	13,280,383
II.1.	Current portion of non-current debts	21	298,933	1,950,000
II.2.	Financial debts
II.3.	Trade creditors		6,959,049	8,001,236
II.4.	Advances received on contracts in progress		184,503	1,568,096
II.5.	Taxes, remuneration and social security payable	24	1,087,049	1,133,372
II.6.	Warranty provisions	20	695,324	371,906
II.7.	Other provisions
II.8.	Other current liabilities	24	668,494	255,773
	TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		45,717,677	34,898,679

Managing Director

Gediminas Čeika

Financial Director

Mindaugas Sologubas

page 6

Statement of cash flow

Ref. No.		30 09 2016	30 09 2015
I.	Cash flows from the key operations
1.1	Net result before taxes	1,760,786	897,173
1.2	Depreciation and amortization expenses	1,332,047	1,257,349
1.3	(Amortisation) of grants	(95, 957)	(27, 881)
1.4	Result from disposal of non-current assets		(1, 137)
1.5	Write-off of non-current assets
1.6	Write-off of inventories
1.7	Depreciation of receivables
1.8	Other provisions
1.9	Change in provision for guarantee repair	323,418	8,129
1.10	Recovery of devaluation of trade receivables
1.11	Influence of foreign currency exchange rate change	8,529	(54, 241)
1.12	Financial income (interest income)	(407, 956)	(399, 831)
1.13	Financial expenses (interest expenses)	515,350	608,842
1.14	Income tax expense (income)
	Cash flows from the key operations until decrease (increase) in working capital	3,436,217	2,288,408
II.1	Decrease in receivables and other liabilities	(459, 635)	(3,739,717)
II.2	Decrease in inventories	(341, 189)	1,262,436
II.3	Increase in trade and other payables	(2,060,195)	3,409,340
	Cash flows from the main activities	575,198	3,220,467
III.1	Interest income
III.2	Interest expenses	(522, 413)	(609, 205)
III.3	Income tax paid	(112, 942)
	Net cash flows from the key operations	(60, 157)	2,611,262

IV.	Cash flows from (to) investing activities
IV.1	Acquisition of tangible non-current assets	(397, 971)	(1, 183, 795)
IV.2	Capitalization of intangible non-current assets	(264, 916)	(68, 538)
IV.3	Proceed from disposal of non-current assets		3,652
IV.4	Loans granted	(276, 850)	(89, 880)
IV.5	Loans regained
IV.6	Interest received
	Net cash flows from the investing activities	(939, 737)	(1, 338, 561)

(continued on the next page)

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016
(all amounts are in EUR unless otherwise stated)

Ш.	Cash flows from the financial activities	(1, 564, 626)	(436, 770)
III.1	Cash flows related to the shareholders of the company
III.1.1	Issue of shares
III.1.2	Shareholders' contributions for covering losses
III.1.3	Sale of own shares
III.1.4	Payment of dividends
III.2	Cash flows arising from other financing sources
III.2.1	Grants received		202,321
III.2.1.1	Proceeds from non-current borrowings
III.2.1.2	(Repayment) of borrowings	(1,662,500)	(639,091)
III.2.2	Finance lease received	112,113
III.2.2.1	Payments of leasing (finance lease) liabilities	(14, 239)
III.3	Other decreases in the cash flows from financial activities
III.4.	Redemption of issued securities
	Net cash flows from the financial activities	(1, 564, 626)	(436, 770)

IV.	Cash flows from extraordinary items
IV.1.	Increase in cash flows from extraordinary items
IV.2.	Decrease in cash flows from extraordinary items
V.	The influence of exchange rates adjustments on the balance of cash and cash equivalents
VI.	Net increase (decrease) in cash flows	(2, 564, 520)	835,931
VII.	Cash and cash equivalents at the beginning of period	3,763,622	1,222,254
VIII.	Cash and cash equivalents at the end of period	1,199,102	2,058,185

Managing Director

Financial Director

Gediminas Čeika

Mindaugas Sologubas

AB SNAIGÉ, company code 249664610, Pramonès str. 6, Alytus Lithuania
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016
(all amounts are in EUR unless otherwise stated)

Statement of changes in equity

TOTAL		8,738,488	897,173		6,066	9,641,728	(452, 811)		(1,928)	9,186,988	1,760,786	10,587,379	(2, 683)	21,532,470
sharehold Minority ers		354	(48)			306				306	(53)			253			page 9
TOTAL		8,738,134	897,221		6,066	9,641,422	(452, 811)		(1,928)	9,186,682	1,760,839	10,587,379	(2,683)	21,532,217
Retained earnings (losses)		(3,602,241)	897,221			(2,705,020)	(452, 811)			(3, 157, 831)	1,760,839			$(50, 619)$ $(1, 396, 992)$
	exchange Currency reserve	(36, 495)			(8,990)	(45, 485)			(2,451)	(47, 936)			(2,683)
Other reserves	investments For	$\circ$								$\circ$				$\circ$
	Other											10,587,379		10,587,379
	For social needs	$\circ$								$\circ$				$\overline{\circ}$
	own shares acquiring For	$\circ$								$\circ$				$\circ$
Legal reserves	Compulsory	901,431								901,431				901,431	Gediminas Čeika	Mindaugas Sologubas
Own	shares (-)
premium Share		$\circ$								$\circ$				$\circ$
authorised Paid up	capital	11,475,439			15,056	11,490,495			523	11,491,018				$10,49$ , 018
		Balance as at 1 January 2015	Net profit for the 2015 QI-III	Formed reserves	Other changes	Balance as at 30 September 2015	Net loss for the 2015 QIV	Formed reserves	Other changes	Balance as at 31 December 2015	Net Iprofit for the 2016 QI-III	Non-current assets revaluation	Other changes	Balance as at 30 September 2016	Managing Director	Financial Director

EXPLANATORY NOTES

1 Basic information

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

Pramons str. 6, Alytus, Lithuania.

The Company is engaged in producing refrigerators and refrigerating equipment. The Company was registered on 1 April 1963. The Company's shares are traded on the Baltic Secondary List of the NASDAQ OMX Vilnius stock exchange.

Main shareholders of AB Snaig as on September 30, 2016 and December 31, 2015 were:

		September 30, 2016	December 31, 2015
	Number of shares owned	Share of total capital, %	Number of shares owned	Share of total capital, %
VAIDANA UAB	36,096,193*	91.10%	36,096,193*	91.10%
Other shareholders	3,526,202	8.90%	3,526,202	8.90%
Total	39,622,395	100%	39,622,395	100%

*Out of this amount UAB Vaidana collateralized 4,584,408 shares to the bank in accordance with collateral agreement to ensure financial liabilities (31 December 2015 - 4,584,408 shares).

All the shares of the Company are ordinary registered intangible shares with the par value of 0.29 euro each and were fully paid as at 30 September 2016 and 31 December 2015.

As at 30 September 2016 and 31 December 2015 the Company did not hold its own shares.

As at 30 September 2016 UAB Vaidana was ultimately owned by controlling shareholder Tetal Global Ltd. (intermediate shareholders are Furuchi Enterprises Ltd and Hymana Holdings Ltd.).

The Group consisted of AB Snaige and the followings subsidiaries as at 30 September 2016 (hereinafter – "the Group"):

Company	Country	Percentage of the shares held by the Group	Profit (loss) for the reporting year	Shareholders' equity
TOB Snaige Ukraina	Ukraine	99%	447	12,672
UAB Almecha	Lithuania	100%	263,671	597,430

As at 30 September 2016, the Board of the Company consist of 4 members including 1 representative of Polair and 3 independent representatives (as at 31 December 2015, the Board consisted of 5 members, 2 representatives of OAO Polair and 3 independent representatives).

TOB Snaige Ukraina (Kiev, Ukraine) was established in 2002. Since the acquisition in 2002, the Company holds 99% shares of this subsidiary. The subsidiary provides sales and marketing services in the Ukrainian market.

UAB Almecha (Alytus, Lithuania) was established in 2006. The main activities of the company are production of refrigerating components and equipment. The Company acquired 100% of the Company's shares.

As at 30 September 2016 the number of employees of the Group was 731 (as at 31 December 2015 – 743).

2 Accounting principles

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

2.1. Basis of preparation

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

These financial statements are prepared on the historical cost basis.

2.2. Going concern

The Group's current assets exceeded current liabilities by EUR 5,666 thousand of 30 September 2016 (whereas in the year 2015, December 31st EUR 3,763 thousand).

• liquidity ratios: general coverage ratio (total current assets / total current liabilities) was 1.57 (1.28 in 31 December 2015),
• quick ratio ((total current assets − inventories) / total current liabilities) 1,1 (in 31 December 2015 0.95),
• the Group earned EUR 1,761 thousand profit before tax (in 2015 over the same period EUR 897 thousand profit before tax),
• commitment ratios: the ratio of debt/asset was 0.53 (whereas in the year 2015, December 31st 0.73).

These financial statements for the 30 September 2016 have been prepared based on the assumption that the Group will be able to continue as a going concern for at least 12 months. The going concern is based on the following assumptions:

• in order to finance the working capital the Group is planning to perform successful sales of finished goods and the continuation of cooperation only with trustful partners. Trade payables are planned to be decreased using free operational cash flows.

The direction of the Company agrees that all those assumptions above could be influenced of significant uncertainties, which could raise doubts about Company's ability to continue operating, because of the disability to realize its property and to implement its commitments by carrying out its normal activities. However despite all this the Company's direction expects that the Company will have enough resources to continue operating in the near future. Therefore, the Group has continued to adopt the going concern basis of accounting in preparing these financial statements.

2.3. Presentation currency

The Group's financial statements are presented in the currency of the European Union, the euro (EUR), which is the Company's functional and the Group's and the Company's presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the statement of financial position date. All differences are included in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the date of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign entity and translated at the rate of exchange ruling at the statement of financial position date.

The functional currency of a foreign entity TOB Snaige Ukraina is Ukrainian hryvnia (UAH). As at the reporting date, the assets and liabilities of this subsidiary are / were translated into the presentation currency of AB Snaig (EUR) at the rate of exchange at the statement of financial position date and their items of the statement of profit or loss and other comprehensive income are translated at the average monthly exchange rates for the reporting period. The exchange differences arising on the translation are stated in other comprehensive income.

On disposal of a foreign entity, the deferred cumulative amount recognised in the shareholders' equity caption relating to that particular foreign operation is transferred to profit or loss.

On 1 January 2015 the national currency or the Republic of Lithuania litas was replaced by the euro. The currency translation was done at the exchange rates approved by the Bank of Lithuania, i.e. 3.4528.

The applicable exchange rates in relation to euro as at the 30 September 2016 and 31 December 2015 were as follows:

	30 September 2016	31 December 2015
UAH	29.02312	26.2236
USD	1.1221	1.0926

2.4. Principles of consolidation

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

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

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

2.5. Intangible assets, except for goodwill

Intangible assets are measured initially at cost. Intangible assets are recognised if it is probable that future economic benefits that are attributable to the asset will flow to the Group and the Company and the cost of asset can be measured reliably. After initial recognition, intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. Intangible assets are amortised on a straight-line basis over their estimated useful lives (1–8 years).

Research and development

Research costs are expensed as incurred. Development expenditure on individual projects is recognised as an intangible asset when the Group and the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, their intention to complete and their ability to use or sell the asset so that the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use.

Licenses

Amounts paid for licences are capitalised and amortised over their validity period.

Software

The costs of acquisition of new software are capitalised and treated as an intangible asset if these costs are not an integral part of the related hardware. Software is amortised over a period not exceeding 3 years.

Costs incurred in order to restore or maintain the future economic benefits that the Group and the Company expect from the originally assessed standard of performance of existing software systems are recognised as an expense when the restoration or maintenance work is carried out.

2.6. Tangible non-current assets

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

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognised in the statement of comprehensive income, whenever estimated.

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

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

Buildings and structures (including investment property)	15 - 63 years
Machinery and equipment	5 - 15 years
Vehicles	4 - 6 years
Other property, plant and equipment	3 - 8 years

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

2.7. Non-current assets held for sale

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

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

2.8. Inventories

Inventories are valued at the lower of cost or net realisable value, after write-down of obsolete and slow moving items. Net realisable value is the selling price in the ordinary course of business, less the costs of completion, marketing and distribution. Cost is determined by the first-in, first-out (FIFO) method. The cost of finished goods and work in progress includes the applicable allocation of fixed and variable overhead costs based on a normal operating capacity. Unrealisable inventory is fully written-off.

2.9. Receivables and loans granted

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

2.10. Cash and cash equivalents

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

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

2.11. Borrowings

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised, otherwise – expensed as incurred. No borrowing costs were capitalised as at 30 September 2016 and 31 December 2015.

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

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

2.12. Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into. Subsequent to initial recognition and measurement, outstanding derivatives are carried in the statement of financial position at the fair value. Fair value is determined using the discounted cash flow method applying the effective interest rate. The estimated fair values of these contracts are reported on a gross basis as financial assets for contracts having a positive fair value; and financial liabilities for contracts with a negative fair value. Contracts executed with the same counterparty under legally enforceable master netting agreements are presented on a net basis. The Group had no derivative contracts outstanding as at 30 September 2016 and 31 December 2015.

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

2.13. Factoring

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

2.14. Financial lease and operating lease

Finance lease – the Group as lessee

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

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

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

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

Operating lease – the Group as lessee

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

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

2.15. Grants and subsidies

Grants and subsidies (hereinafter Grants) received in the form of non-current assets or intended for the purchase, construction or other acquisition of non-current assets are considered as asset-related grants (mainly received from the EU and other structural funds). Assets received free of charge are also allocated to this group of grants. The amount of the grants related to assets is recognised in the financial statements as used in parts according to the depreciation of the assets associated with this grant. In the statement of comprehensive income, a relevant expense account is reduced by the amount of grant amortisation.

Grants received as a compensation for the expenses or unearned income of the current or previous reporting period, also, all the grants, which are not grants related to assets, are considered as grants related to income (mainly received from the EU and other structural funds). The income-related grants are recognised as used in parts to the extent of the expenses incurred during the reporting period or unearned income to be compensated by that grant.

2.16. Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The provisions are reviewed at each balance sheet date and adjusted in order to present the most reasonable current estimate.

2.17. Non-current employee benefits

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

2.18. Revenue recognition

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

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

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

In these consolidated financial statements intercompany sales are eliminated.

2.19. Impairment of assets

Financial assets

Financial assets are reviewed for impairment at each reporting date.

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

Other assets

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

2.20. Subsequent events

Subsequent events that provide additional information about the Group's position at the date of the statement of financial position (adjusting events) are reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the notes when material.

2.21. Offsetting and comparative figures

When preparing the financial statements, assets and liabilities, as well as revenue and expenses are not set off, except the cases when a certain International Financial Reporting Standard specifically requires such set-off.

3 Segment information

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

Information with respect to the Group's sales and receivables from customers is presented below (EUR thousand):

Group	Total segment sales revenue		Inter-segment sales		Sales revenue		Total assets by its location *
	2016	2015	2016	2015	2016	2015	2016	2015
Russia	304	474	-	-	304	474	10,069	9,565
Ukraine	5,404	3,618	-	-	5,404	3,618	1,452	1,101
Western Europe	11,232	15,175	-	-	11,232	15175	3,250	3,656
Central Europe	7,050	7,460	-	-	7,050	7460	1,573	1,751
Lithuania	4,643	5,542	(198)	(2,226)	4,445	3,316	28,825	17,362
Other CIS countries	1,951	2,872	-	-	1,951	2872	377	1,275
Other Baltic states	1,034	950	-	-	1,034	950	136	187
Other countries	76	793	-	-	76	793	36	-
Total	31,694	36,884	(198)	(2,226)	31,496	34,658	45,718	34,897

Transactions between the geographical segments are generally made on commercial terms and conditions. Intersegments sales are eliminated on consolidation.

As at 30 September 2016 the sales to the five largest buyers comprised 34.48 % of total sales, including: the first buyer 10.09%, the second buyer 8.40%, the third buyer 7.54%, the fourth buyer 4.66%, the fifth buyer 3.79%, (as at 2015 – 42.48 %, including: the first buyer 14.09%, the second buyer 12.02%, the third buyer 7.68%, the fourth buyer 4.37%, the fifth buyer 4.32%).

4 Cost of sales

	30 09 2016	30 09 2015
Raw materials	18,290,164	20,836,354
Salaries and wages	2,687,279	2,688,395
Depreciation and amortisation	945,861	725,594
Other	3,396,866	4,696,432
Total:	25,320,170	28,946,775
5 Other income
	30 09 2016	30 09 2015
Income from transportation services	121,726	116,863
Income from sale of other services	-	-
Income from rent of premises	9,731	9,765
Gain on disposal of property, plant and equipment	-	1,137
Income from rent of equipment	97	70
Other	28,860	40,177
Total:	160,414	168,012
6 Operating expenses
	30 09 2016	30 09 2015
Selling expenses	2,648,388	3,025,211
General and administrative expenses	1,668,600	1,677,096
	4,316,988	4,702,307
7 Other operating expenses

	30 09 2016	30 09 2015
Transportation expenses	120,526	97,134
Expenses from rent of equipment	-	-
Gain on disposal of property, plant and equipment	-	-
Other	21,611	28,331
	142,137	125,465
8 Financial income
	30 09 2016	30 09 2015
Foreign currency exchange gain	-	69,296
Interest income and other	408,278	399,831
	408,278	469,127

9 Financial expenses

	30 09 2016	30 09 2015
Interest expenses	517,604	608,842
Loss of foreign currency exchange, net	4,794	-
Realized loss on foreign currency derivatives	-	-
Loss of foreign currency translation transactions	1,795	-
Other	8	15,055
	524,201	623,897

10 Intangible assets

		Balance sheet value
	30 09 2016	31 12 2015
Development costs	1,287,602	1,484,650
Software, license	86,397	92,132
Other intangible assets	265,533	36,710
Total:	1,639,532	1,613,492

Non-current intangible assets depreciation expenses are included under operating expenses in profit or loss.

Over 2016 nine months, the Group has accumulated EUR 239 thousand (2015 - EUR 217 thousand) of intangible assets depreciation.

Part of non-current intangible assets of the Group with the acquisition value of EUR 3,568 thousand as at 30 September 2016 was fully amortised (EUR 2,860 thousand as at 30 September 2015) but was still in use.

11 Non-current tangible assets

	Balance sheet value
	30 09 2016	31 12 2015
Land and buildings	5,443,251	2,276,841
Machinery and equipment	11,139,281	3,444,727
Vehicles and other property	1,832,419	868,064
Construction in progress and prepayments	263,516	201,254
Total:	18,678,467	6,790,886

Group's non-current tangible assets are stated in the balance sheet at their market value. Company assets were valued using comparative, income and expenses methods. Total market value of company's non-current tangible assets (as evaluated at 31-08-2016) was 18 097 000 Eur.

The long-term tangible assets value increased as follows:

Balance sheet value 31 08 2016
--------------------------------	--	--	--

	From the statistical asset's value	From the revalued asset's value
Land and buildings	2,179,955	5,455,362
Machinery and equipment	2,918,484	10,822,050
Vehicles	6,246	47,360
Other plant, devices, tools and equipment	281,255	958,682
Other tangible assets	255,320	813,546
Total	5,641,260	18,097,000

AB SNAIG, company code 249664610, Pramons str. 6, Alytus Lithuania CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016

(all amounts are in EUR unless otherwise stated)

After evaluating perspective intensity of assets usage and forecasted production renewals, new remaining terms of depreciatipon and amortizations were stated.

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

	Statistical	Remanining useful life terms at the revaluation date	Remanining useful life terms, stated after revaluation
Land and buildings	49	22	26
Machinery and equipment	6	1	8
Vehicles	6	1	4
Other plant, devices, tools and equipment	5	0,5	5
Other tangible assets	5	0,5	8

New remaining terms of depreciatipon and amortizations will be used from 01-10-2016.

The depreciation charge of the Group's property, plant and equipment and investment property for nine months 2016 amounts to EUR 1,093 thousand (EUR 1,040 thousand for the nine months 2015). The amount of EUR 1,025 thousand for 2016 (EUR 969 thousand for 2015) was included into production costs. The remaining amount of EUR 68 thousand (EUR 71 thousand for 2015) was included into administration expenses in the Group's profit or loss.

As at 30 September 2016 buildings of the Group and the Company with the carrying amount of EUR 1,990 thousand, (as at 31 December 2015 – EUR 2,077 thousand respectively), the Group's and the Company's machinery and equipment with the carrying amount of EUR 1,854 thousand (as at 31 December 2015 – EUR 1,834 thousand respectively) were pledged to bank as a collateral for the loans (Note 21).

12 Loans granted

	30 09 2016	31 12 2015
Hymana Holdings Ltd.	9,836,894	9,447,486
Loan to UAB Vaidana	616,326	339,476
Loans receivable	10,453,220	9,786,962
Including:
Non-current borrowings	9,836,894	9,447,486
Current borrowings	616,326	339,476
Total	10,453,220	9,786,962

On 24 November 2015, a rights transfer agreement was signed with the Group's and the Company's intermediate shareholder Hymana Holdings Ltd., which controls 91.1% of the Company's shares through intermediaries. Based on the agreement, the intermediate shareholder took over the loans granted and interest calculated to related companies:

• • Loan of EUR 6,775 thousand and interest of EUR 1,022 thousand from OAO Polair;
• • Loan of EUR 1,500 thousand and interest of EUR 97 thousand from ZAO Zavod Sovitalprodmash.

The loans taken over are subject to annual interest related to 1-month EURIBOR + 6.5%, and the latest loan maturity is set on 1 June 2018. Based on the Company's management, the loans taken over are not impaired and shall be repaid in compliance with contractual terms.

As at 30 September 2016 the Company and the Group have a loan granted to their shareholder UAB Vaidana of EUR 507 thousand. The loan is subject to 1-month EURIBOR + 6.5% annual interest, the loan matures on 31 December 2016.

13 Inventories

	30 09 2016	31 12 2015
Raw materials, spare parts and production in progress	3,358,595	2,737,390
Finished goods	1,293,859	1,541,613
Other	68,834	101,096
Total inventories, net	4,721,288	4,380,099

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

As at 30 September 2016 the Group and Company has no legal restrictions on inventories.

14 Trade receivables

	30 09 2016	31 12 2015
Receivables	9,711,686	9,229,393
Less: impairment allowance for doubtful receivables	(997,928)	(1,000,744)
	8,713,758	8,228,649

Trade receivables are non-interest bearing and are generally on 30 – 90 days terms.

As at 30 September 2016 100% impairment was accounted trade receivables of the Group in gross values of EUR 998 thousand (as at 31 December 2015 – EUR 1,001 thousand). Change in impairment allowance for receivables was accounted for within administrative expenses.

Impairment allowance for doubtful receivables is recognised due to receivables from not related customers.

Trade receivables from the Group in the amount of EUR 4,816 thousand as at 30 September 2016 (EUR 4,517 thousand as at 31 December 2015) were insured with credit insurance by Atradius Sweden Kreditförsäkring Lithuanian branch. Trade receivables from Ukraine, Moldova, Russia and other CIS countries are not insured.

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

	30 09 2016	31 12 2015
Balance at the beginning of the period	(1,000,744)	(1,016,744)
Charge for the year	(31,974)	(60,022)
Write-offs of trade receivables	-	-
Effect of the change in foreign currency exchange rate	1,349	18,669
Amounts paid	33,441	57,353
Balance in the end of the period	(997,928)	(1,000,744)

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

The analysis of trade receivables as of 30 September 2016 and 31 December 2015 is as follows:

					Trade receivables past due but not impaired
	Trade receivables neither past due nor impaired	Less than 30 days	30 – 60 days	60 – 90 days	90 – 120 days	More than 120 days	Total
2016	7 084 212	1 029 154	295 675	25 072	51 579	228 066	8 713 758
2015	6,194,705	1,030,025	359,279	21,249	138,735	484,656	8,228,649

As of 30 September 2016 the Group has signed factoring agreement with recourse, therefore no limitations on disposable assets been present.

15 Other current assets

	30 09 2016	31 12 2015
Prepayments and deferred expenses	108,505	51,256
VAT receivable	140,339	150,635
Compensations receivable from suppliers	900	-
Restricted cash	4,344	4,344
Granted loans	616,326	339,476
Other receivables	54,957	125,469
	925,371	671,180

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

	30 09 2016	31 12 2015
Balance at the beginning of the period	-	-
Charge for the year	-	-
Effect of the change in foreign currency exchange rate	-	-
Amounts paid	-	-
Write off	-	-
Balance in the end of the period	-	-

16 Cash and cash equivalents

	30 09 2016	31 12 2015
Cash at bank	1,195,229	3,762,073
Cash on hand	3,873	1,549
	1,199,102	3,763,622

17 Share capital

According to the Law on Companies of the Republic of Lithuania the Company's total equity cannot be less than 1/2 of its share capital specified in the Company's by-laws. As at 30 September 2016 the Company was in compliance with this requirement

18 Reserves

Legal reserve

The Company's legal reserve is compulsory under Lithuanian legislation. Annual transfers of not less than 5% of net profit are compulsory until the reserve reaches 10% of the share capital. As at 30 September 2016 the legal reserve has been fully formed yet.

As of 30 September 2016 the legal reserve amounted to EUR 901 thousand.

Other reserves

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

Foreign currency translation reserve

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

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

19 Grants

Balance as at 31 December 2013	3,100,058
Received during the period	12,261
Balance as at 31 December 2014	3,112,319
Received during the period	704,850
Balance as at 31 December 2015	3,817,169
Received during the period	-
Balance as at 31 March 2016	3,817,169
Received during the period	-
Balance as at 30 June 2016	3,817,169
Received during the period	-
Balance as at 30 September 2016	3,817,169
Accumulated amortisation as at 31 December 2013	2,913,685
Amortisation during the period	25,424
Accumulated amortisation as at 31 December 2014	2,939,109
Amortisation during the period	48,134
Accumulated amortisation as at 31 December 2015	2,987,243
Amortisation during the period	33,480
Accumulated amortisation as at 31 March 2016	3,020,723
Amortisation during the period	31,238
Accumulated amortisation as at 30 June 2016	3,051,961
Amortisation during the period	31,239
Accumulated amortisation as at 30 September 2016	3,083,200
Carrying amount as at 30 September 2016	733,969
Carrying amount as at 31 December 2015	829,926

The grants were received for the renewal of production machinery and repairs of buildings in connection with the elimination of CFC 11 element from the production of polyurethane insulation and filling foam, and for elimination of greenhouse gases in the manufacturing of domestic refrigerators and freezers, also, for increase in efficiency by investing into the production of commercial refrigerators and infrastructure development via investments into a research centre of new products.

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

20 Warranty provision

The Group provide a warranty of up to 2 years for the production sold. The provision for warranty repairs was accounted for based on the expected cost of repairs and statistical warranty repair rates and divided respectively into non-current and current provisions.

Changes in warranty provisions were as follows:

	30 09 2016	31 12 2015
As at 1 January	592,126	660,820
Additions during the year (Note 6)	415,348	231,918
Utilised	(91,930)	(300,612)
Foreign currency exchange effect	-	-
	915,544	592,126
Warranty provisions are accounted for:		30 09 2016
- - non- current		220,220
- current		695,324
		31 12 2015
non- current		220,220
current		371,906
21 Borrowings
	30 09 2016	31 12 2015
Non-current borrowings
Non-current borrowings with fixed interest rate	-	-
Non-current borrowings with variable interest rate	11,185,656	11,185,656
Ordinary bonds	-	-
Interest on bonds	-	-
	11,185,656	11,185,656
Current borrowings
Convertible bonds	-	-
Ordinary bonds	-	-
Current borrowings with fixed interest rate	-	-
Long-term loans of the current year	287,500	1,950,000
	287,500	1,950,000
Total	11,473,156	13,135,656

The main information on individual borrowings is disclosed below:

	Type	Maturity	As at September30 2016	As at December 31 2015
Borrowing 1	Loan	22/04/2017	11,185,656	11,185,656
Borrowing 2	Credit line	22/12/2016	287,500	1,950,000
			11,473,156	13,135,656

AB SNAIG, company code 249664610, Pramons str. 6, Alytus Lithuania CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016 (all amounts are in EUR unless otherwise stated)

The loan bear 1-month EURIBOR + 6.25 annual interest rate and credit line bears 1-month EURIBOR + 5.25 annual interest rate as at 30 September 2016 (as at 31 December 2015 1-month EURIBOR + 6.25 annual interest rate for the loan and credit line 1-month EURIBOR + 5.25 annual interest rate).

As of 30 September 2016 the Group's and Company's buildings with the carrying amount of EUR 1,990 thousand (EUR 2,077 thousand as at 31 December 2015), the Group's and Company's machinery and equipment with the carrying amount of EUR 1,854 thousand (EUR 1,834 thousand as at December 2015) were pledged to the banks for the loans.

Based on the terms of the loan agreements, the Company has to comply with certain financial and non-financial covenants, such as: EBITDA to financial liabilities ratio, calculated on the basis of the consolidated results of Polair group, which, according to a separate agreement with the bank, was not calculated as at 31 December 2015, written permission from the Bank to perform purchase or disposal transactions when the assets acquired or disposed exceed 25% of all the Company's assets.

As at 30 September 2016, the Company complied with the non-financial and financial covenants. Starting from 5 February 2016, based on the amendments to loan agreements, the ratio is calculated on the basis of the consolidated results of Snaig group instead of those of Polair Group.

Based on the amendments to loan agreements made on 5 February 2016, the Company also committed to provide an additional collateral to the bank, no later than by 16 May 2016, in the form of assets owned by the Company amounting to EUR 1,500 thousand or, instead of additional collateral, to repay the bank not less than EUR 1,000 thousand of the loan and/or credit line before their respective maturity. Additional collateral was done for 1 502 thousand EUR. As at the date of the additional agreement, the Company also committed to repay EUR 1,500 thousand of the loan or credit limit before their repayment term from the amounts scheduled to be repaid in 2016. The Company fulfilled this obligation.

Borrowings in national currency:

	30 09 2016	31 12 2015
Borrowings denominated in:
EUR	11,473,156	13,135,656
USD	-	-
	11,473,156	13,135,656

Repayment schedule for borrowings:

	Fixed interest rate	Variable interest rate
2016	-	287,500
2017 - 2018	-	11,185,656
	-	11,473,156

22 Financial leasing

Interest rates for financial leasing are fixed at 3,5 % and 3,9 %.

Financial lease payments in future are for dates September 30, 2016 and December 31, 2015 m. as follows:

	30 09 2016	31 12 2015
Within one year	12,320
From one year to five years	95,472
Financial lease liabilities total	107,792
Interest	(8,216)
Financial lease liabilities current value	99,576

AB SNAIG, company code 249664610, Pramons str. 6, Alytus Lithuania CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016 (all amounts are in EUR unless otherwise stated)

Financial lease obligations are accounted as:

Machinery and equipment	120,877	-
	30 09 2016	31 12 2015
Book value of leased assets:
Assets under financial lease are vehicles and machinery. Term of lease – 5 years.
- current	88,143
- non- current	11,433

23 Operating lease

The Group have concluded several contracts of operaing lease of land and premises. The terms of lease do not include restrictions of the activities of the Group in connection with the dividends, additional borrowings or additional lease agreements. In 2016 the lease expenses of the Group amounted to EUR 50 thousand (in 2015 EUR 50 thousand respectively).

Planned operaiting lease expenses of the Group in 2016 will be EUR 69 thousand.

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

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

24 Other current liabilities

	30 09 2016	31 12 2015
Salaries and related taxes	705,168	714,418
Vacation reserve	381,881	418,954
Accrued interest	16,521	21,330
Other taxes payable	415	104,904
Other payables and accrued expenses	651,558	129,539
	1,755,543	1,389,145

Terms and conditions of other payables:

- Other payables are non-interest bearing and have the settlement term up to six months.

- Interest payable is normally settled monthly throughout the financial year.

25 Basic and diluted profit (loss) per share

	30 09 2016	31 12 2015
Shares issued 1 January	39,622,395	39,622,395
Net profit (loss) for the year, attributable to the shareholders of company	1,760,786	897,173
Basic profit (loss) per share, in EUR	0.04	0.02

26 Risk and capital management

The Group and the Company have exposure to the following risks: credit risk, liquidity risk and market risk. This note presents information about the Group's and the Company's exposure to each of these risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board has overall responsibility for the establishment and oversight of the Group's and the Company's risk management framework. The Group's and Company's risk management policies are established to identify and analyze the risks faced by the Group and the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's and the Company's activities. The Group and the Company aim to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Credit risk

As at 30 September 2016 and 31 December 2015, the maximum exposure to credit risk is represented by the carrying amount of each financial asset, consequently, the Group's and the Company's management considers that its maximum exposure is reflected by the amount of loans receivable from related parties, trade and other receivables, net of impairment allowance, and the amount of cash and cash equivalents recognised at the date of the statement of financial position. Credit risk or risk that a counterparty will not fulfil its obligations, is controlled by credit terms and monitoring procedures, using services of external credit insurance agencies.

As at 30 September 2016 and 31 December 2015, the credit risk (in EUR thousand) was related to:

	30 09 2016	31 12 2015
Loans with interest receivable from related parties	10,453	9,786
Trade and other receivables	8,714	8,229
Cash and cash equivalents	1,199	3,764
	20,366	21,779

As at 30 September 2016 and as at 31 December 2015 the main part of the loans granted consist of the loan granted to intermediate shareholder HYMANA HOLDINGS.

The concentration of the Group's trade partners is high. The largest credit risk related to trade receivables according to clients as at 30 September 2016 and 31 December 2015 (in EUR thousand):

	2016	%	2015	%
Client 1	1,047	12	1,140	14
Client 2	610	7	1,123	14
Client 3	603	7	964	12
Client 4	597	7	579	7
Client 5	503	6	560	7
Client 6	388	4	300	4
Client 7	302	3	299	4
Other clients	5,662	54	4,265	38
Impairment	(998)		(1,001)
	8,714	100	8,229	100

AB SNAIG, company code 249664610, Pramons str. 6, Alytus Lithuania CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016 (all amounts are in EUR unless otherwise stated)

	30 09 2016	31 12 2015
Central Europe	1,573	3,138
Ukraine	1,440	610
Lithuania	1,674	529
Western Europe	3,250	2,803
Other CIS countries	377	936
Other Baltic States	136	84
Russia	227	129
Other	37	-
	8,714	8,229

Trade receivables according to geographic regions (in EUR thousand):

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

The Group's and the Company's management believes that the maximum risk equals to trade receivables, less recognised impairment losses at the reporting date. The Group and the Company do not provide guarantees for obligations of other parties, except for those disclosed in Note 27

The credit policy is implemented by the Group and the Company and credit risk is constantly controlled. Credit risk assessment is applied to all clients willing to get a payment deferral.

Trade receivables from the Group in the amount of EUR 4,816 thousand as at 30 September 2016 (EUR 4,517 thousand as at 31 December 2015) were insured with credit insurance by Atradius Sweden Kreditförsäkring Lithuanian branch. Trade receivables from Ukraine, Moldova, Russia and other CIS countries were not insured.

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

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

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

Interest rate risk

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

As at 30 September 2016 and 31 December 2015 the Group did not use any financial instruments to hedge against interest rate risk.

Liquidity risk

The Group's policy is to maintain sufficient cash and cash equivalents by using cash flows statements with liquidity forecasting for future periods. The statement comprises predictable cash flows of monetary operations and effective planning of cash investment if it is necessary.

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

Foreign exchange risk

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

Capital management

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

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

The Company is obliged to keep its equity not lower than 50% of its share capital, as imposed by the Law on Companies of the Republic of Lithuania. As at 30 September2016 the Group and the Company complied with this requirement. There were no other significant externally imposed capital requirements on the Group.

27 Commitments and contingencies

UAB Vaidana and AB Šiauli- Bankas has signed a financial guarantee agreement, in accordance to witch UAB Vaidana collateralized 4,584 thousand held share of AB Snaig thus transferring the non-pecuniary right of the shareholders retaining the right to dividens.

By the surety agreement No 2012-02-12 the Company guarantees proper fulfilment of UAB Vaidana financial obligations with all its present and future assets in favour of UAB Šiauli- Bankas in relation to received loan of EUR 1,113 thousand with repayment term postponed until 27 March 2017 (the initial repayment term was 27 March 2015).

The tax authorities may at any time perform investigation of the Company's accounting registers and records for the period of five years preceding the accounting tax period, as well as calculate additional taxes and penalties. Management of the Company is not aware of any circumstances which would cause calculation of additional significant tax liabilities.

The General Meeting of shareholders of Snaige AB was held on 29 April 2016 and approved:

• The Company's and group financial statements for the year 2015
• The distribution of profit of Snaig, AB. All Company's net profit was allocated for the earlier year losses coverage.
• The reserve foreseen by law EUR 885,477
• KPMG Baltics, UAB as the auditor for 2016 auditing purposes of annual financial statements
• One member of Board was revoked from the Board members of the Company. The new board member was not elected to Snaige, AB Board.

The Company had entered into surety agreements with OAO Petrokomerc Bank based on the agreements, the Company assumed joint and several liability for the loans of OAO Polair amounting to EUR 10,209 thousand as at 31 December 2015. In 2015 The Company received a copy of a claim from PAO FK Otkritie stating that PAO FK Otkritie took over the claim rights of OAO Petrokomerc and requires the Moscow Arbitration Court to transfer the obligation to fulfil the liabilities under surety agreements of OAO Polair to the Company. As these surety agreements were terminated on 5 February 2016 with no further liabilities or consequences to the Company and the Group, Moscow Arbitration Court on 12 April 2016 rejected the PAO FK Otkritie a claim as groundless.

28 Related party transactions

According to IAS 24 Related Party Disclosures, the parties are considered related when one party can unilaterally or jointly control other party or have significant influence over the other party in making financial or operating decisions or operation matters, or when parties are jointly controlled and if the members of management, their relatives or close persons who can unilaterally or jointly control the Group or have influence on it. To determine whether the parties are related the assessment is based on the nature of relation rather than the form.

The related parties of the Group during 2016 and 2015 were as follows:

UAB Vaidana (shareholder);

Furuchi Enterprises Ltd. (intermediary company between the shareholder and the ultimate shareholder);

AB SNAIG, company code 249664610, Pramons str. 6, Alytus Lithuania CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2016 (all amounts are in EUR unless otherwise stated)

Hymana Holdings Ltd. (intermediary company between the shareholder and the ultimate shareholder); Tetal Global Ltd. (ultimate shareholder);

OAO Polair (company controlled by ultimate shareholders);

OOO Torgovyj Dom Polair (company controlled by ultimate shareholders);

ZAO Polair Nedvižimost (company controlled by ultimate shareholders);

Area Polair (company controlled by ultimate shareholders);

Polair Europe S.R.L (company controlled by ultimate shareholders);

Polair Europe Limited (company controlled by ultimate shareholders);

ZAO Rada (company controlled by ultimate shareholders);

ZAO Zavod Sovitalprodmaš (company controlled by ultimate shareholders).

The Group has a policy to conduct related party transactions on commercial terms and conditions. Outstanding balances at the year-end are unsecured, interest-free, except the loan granted. As at 30 September2016 and 31 December 2015 the Group has not formed any impairment allowances for doubtful debts, related to receivables from related parties. Doubtful receivables are tested each year by inspecting the financial position of the related party and assessing the market in which the related party operates.

Financial and investment transactions with the related parties (in EUR thousand):

			30 September 2016			30 September 2015
	Loans received	Interest expenses	Loans granted	Interest income	Loans recived	Interest expenses	Loans granted	Interest income
ZAO "Zavod Sovitalprodmaš	-	-	-	-		-	- -	62
OAO Polair			-	-		-	- -	327
HYMANA HOLDINGS	-	-	-	389		-	- -	-
UAB Vaidana	-	-	277	19		-	- 90	10
	-	-	277	408		-	- 90	399
30 09 2016			Purchases	Sales		Receivables		Payables
OAO Polair (refrigerators)				124				-
OOO Torgovyj Dom Polair				625				194
				749				194
31 12 2015
			Purchases	Sales		Receivables		Payables

	673	-	76	219
OAO Polair (refrigerators)	673	-	76	219

The Company's transactions carried out with subsidiaries (in EUR thousand):

		30 09 2016		31 12 2015
	Purchases	Sales	Purchases	Sales
UAB Almecha	178	71	1,272	1,092
TOB Snaig Ukraina	9	-	16	-
	187	71	1,288	1,092

The Company has a policy to conduct transactions with subsidiaries on contractual terms. The Company's transactions with subsidiaries represent acquisitions and sales of raw materials and finished goods and acquisitions of marketing services, as well as acquisitions of property, plant and equipment. Outstanding balances at the year-end are unsecured, receivables are interest-free and settlement occurs at bank accounts. There were no pledged significant amounts of assets to ensure the repayment of receivables from subsidiaries.

The carrying amount of loans and receivables from subsidiaries (in EUR thousand):

	30 09 2016	31 12 2015
Non-current receivables
Trade receivables from UAB Almecha	-	-
Total non-current receivables	-	-
Current receivables
Trade receivables from UAB Almecha	16	18
Total current receivables	16	18

The analysis of receivables from subsidiaries and granted loans during the period on 30 September 2016 and 2015:

	Receivables from	Receivables from subsidiaries and granted loans past due but not impaired
	subsidiaries and granted loans neither past due nor impaired	Less than 30 days	30 – 60 days	60 – 90 days	90 – 120 days	More than 120 days	Total
2016	16,397	-	-	-	-	-	16,397
2015	18,164	-	-	-	-	-	18,164

Payables to subsidiaries as of 30 September 2016 and 31 December 2015 (included under the trade payables caption in the Company's statement of financial position) (in EUR thousand):

	30 09 2016	31 12 2015
TOB Snaig Ukraina	-	2
UAB Almecha	170	139
Total	170	141

On the actual date of the Company reporting Company has not any valid guaranty agreements for subsidiaries.

Remuneration of the management and other payments

Remuneration of the Company's and subsidiaries' management amounted to EUR 344 thousand and EUR 32 thousand, respectively, in 2016 (EUR 282 thousand and EUR 23 thousand in 2015, respectively). The management of the Group did not receive any other loans, guarantees; no other payments or property transfers were made or accrued.

29 Subsequent events

On 02-11-2016, extraordinary meeting of shareholders will take place, in order to incrase nominal share capital of company form revaluation reserve.