Snaige AB

Quarterly Report • Nov 30, 2017

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 three months period ended 30 September 2017, 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 cash flows of Snaige, AB.

Gediminas Čeika Managing Director

November 30, 2017

Mindaugas Sologubas Finance Director

AB SNAIGĖ

CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (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 2017.

2. The basic data about the issuer

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

Authorised capital –one Company's share is equal to 0.30 euro and to establish that the Company's authorized capital is equal to 11,886,718.50 euro.

Address - Pramonės 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 December 20, 2016 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 Pramonės 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".

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Ref. No.	ITEMS	Notes	01 01 2017 30 09 2017	01 07 2017 30 09 2017	01 01 2016 30 09 2016	01 07 2016 30 09 2016
1.	Sales	3	30.787	12,057	31,496	12,629
2.	Cost of sales	4	(26,969)	(10, 562)	(25, 320)	(10, 021)
3.	Real value change of biological property
4.	GROSS PROFIT (LOSS)		3,818	1,495	6,175	2,608
5.	Selling expenses		(2, 312)	(981)	(2,648)	(966)
6.	General and administrative expenses		(1, 723)	(572)	(1,669)	(593)
7.	Result of other activities	5,7	38	14	18	(7)
8.	Investments income into the shares of patronise, patronized and associated companies
9.	Income from other long-term investments and loans	8	379	101	389	130
10.	Interest and other similar income	8	52	52	19	$\overline{7}$
11.	Value decrease of financial property and short-term investments
12.	Interest and other similar expenses	9	(496)	(174)	(524)	(172)
13.	PROFIT (LOSS) BEFORE INCOME TAX		(244)	(65)	1,761	1,006
14.	Income tax
15.	PROFIT (LOSS) BEFORE NONCONTROLLING INTEREST		(244)	(65)	1,761	1,006
16.	Non-controlling interest		$\Omega$	(0)	$\Omega$	$\Omega$
17.	NET PROFIT (LOSS)		(244)	(65)	1,761	1,006
18.	Ohter comprehensive income		507	108
19.	TOTAL COMPREHENSIVE INCOME		263	42	1761	1006

Managing Director

Gediminas Čeika

Financial Director

Mindaugas Sologubas

Ref. No.	ASSETS	Notes	As at 30 September 2017	As at 31 December 2016
	ASSETS
Α.	Non-current assets		28,226	28,138
1.	Intangible assets	10	1,648	1,637
2.	Tangible assets	11	16,232	16,535
2.1.	Land
2.2.	Buildings and structures		5,229	5,394
2.3.	Machinery and equipment		9,208	9,275
2.4.	Vehicles and other property		1,621	1,856
2.5.	Construction in progress and prepayments		173	9
3.	Financial assets	12	10,346	9,966
$\overline{4}$ .	Other non-current assets			$\mathbf{r}$
B.	Current assets		15,200	13,818
1.	Inventories	13	4,557	4,855
2.	Accounts receivable within one year		10,289	6,346
2.1.	Customers' debts	14	8,330	5,356
2.2.	Debts of Group companies
2.3.	Debts of associated companies
2.4.	Other amounts receivable	15	1,959	990
3.	Short-term investments
4.	Cash and cashs equivalents	16	354	2,617
C.	Accrued income and prepaid expenses		15	23
	Total assets		43,442	41,979

Consolidated Statement of Financial Position

$\bar{N}$

(continued on the next page)

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017
(all amounts are in EUR thousand unless otherwise stated)

Ref. No.		Notes	As at 30 September 2017	As at 31 December 2016
	EQUITY AND LIABILITIES
D.	Equity		18,630	19,633
1.	Capital		11,887	11,887
1.1.	Authorized (subscribed) share capital		11,887	11,887
1.2.	Signed unpaid capital (-)
1.3.	Own shares(-)
2.	Shares premiums
3.	Revaluation reserve		5,433	5,550
4.	Reserves	18	1,001	901
5.	Retained earnings (loss)		361	1,345
6.	Influence of currency exchange rate		(52)	(50)
7.	Non-controlling interest		$\Omega$	$\Omega$
Е.	Grants, subsidies	19	636	703
F.	Provisions		2,522	2,449
1.	Pensions provisions and similar provisions		310	310
2.	Taxes provisions		1,726	1,640
3.	Other provisions	20	487	499
G.	Accounts payable and liabilities		21,501	19,105
1.	Accounts payable after one year and other non-current liabilities	21	10,648	9,951
2.	Account payable within one year and current liabilities		10,853	9,154
2.1.	Liabilities of debts
2.2.	Debts for credit institutions	21	568	1,323
2.3.	Received prepayments		76	190
2.4.	Debts to suppliers		8,511	6,045
2.5.	Payable sums acc.to bills and cheques
2.6.	Payable sums for Group companies
2.7.	Payable sums for associated companies
2.8.	Profit tax payment obligations			368
2.9.	Obligations related to work relations		1,168	1,190
2.10.	Other current liabilities		529	39
Η.	Accrued charges and deferred income		153	89
	Total equity and liabilities		43,442	41,979

Managing Director

Gediminas Čeika

Financial Director

Mindaugas Sologubas

page 6

Consolidated Statement of Cash Flow

Ref. No.		30 09 2017	30 09 2016
L	Cash flows from the key operations
1.1	Net result before taxes	(244)	1,761
1.2	Depreciation and amortization expenses	1,373	1,332
1.3	(Amortisation) of grants	(91)	(96)
1.4	Result from disposal of non-current assets	(2)
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	(12)	323
1.10	Recovery of devaluation of trade receivables
1.11	Influence of foreign currency exchange rate change	34	9
1.12	Financial income (interest income)	(426)	(408)
1.13	Financial expenses (interest expenses)	457	515
	Cash flows from the key operations until decrease (increase) in working capital	1,088	3,436
II.1	Decrease in receivables and other liabilities	(2, 775)	(460)
II.2	Decrease in inventories	86	(341)
II.3	Increase in trade and other payables	2,901	(2,060)
	Cash flows from the main activities	1,300	575
III.1	Interest received
III.2	Interest paid	(459)	(522)
III.3	Income tax paid	(471)	(113)
	Net cash flows from the key operations	370	(60)

IV.	Cash flows from (to) investing activities
IV.1	Acquisition of tangible non-current assets	(407)	(398)
IV.2	Capitalization of intangible non-current assets	(6)	(265)
IV.3	Funds from disposal of non-current assets	22
IV.4	Loans granted	(906)	(277)
IV.5	Loans regained
IV.6	Interest received	(414)
	Net cash flows from the investing activities	(1,707)	(940)

(continued on the next page)

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017
(all amounts are in EUR thousand unless otherwise stated)

Ш.	Cash flows from the financial activities	(927)	(1565)
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	(893)
III.2	Cash flows arising from other financing sources
III.2.1	Grants received	24
III.2.1.1	Funds from non-current borrowings	833
III.2.1.2	(Repayment) of borrowings	(921)	(1, 663)
III.2.2	Finance lease received	48	112
III.2.2.1	Payments of leasing (finance lease) liabilities	(18)	(14)
III.3	Other decreases in the cash flows from financial activities
III.4.	Redemption of issued securities
	Net cash flows from the financial activities	(927)	(1, 565)

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, 264)	(2, 565)
VII.	Cash and cash equivalents at the beginning of period	2,617	3,764
VIII.	Cash and cash equivalents at the end of period	354	1,199

Managing Director

Gediminas Čeika

Financial Director

Mindaugas Sologubas

AB SNAIGÉ, company code 249664610, Pramonès str. 6, Alytus Lithuania
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017
(all amounts are in EUR thousand unless otherwise stated)

Consolidated Statement of Changes in Equity

	Paid up authorised	Share	Own	Legal reserves				Other reserves		earnings Retained (losses)	TOTAL	sharehold Minority ers	TOTAL
	capital		premium shares (-)	Compulsory	own shares acquiring For	For social needs	Other	exchange Currency reserve	Revaluation reserve
Balance as at 31 January 2015	11,491	$\circ$	$\circ$	901	$\circ$	$\circ$	$\circ$	(48)		(3, 158)	9,187	$\circ$	9,187
Net profit for the 2016 QI-III										1,761	1,761	$\odot$	1,761
Non-current assets revaluation									9,223		9,223		9,223
Other changes								(3)			$\binom{3}{2}$		$\binom{3}{2}$
Balance as at 30 September 2016	11,491	$\circ$	$\circ$	901	$\circ$	$\circ$	$\circ$	(51)	9,223	(1, 397)	20,168	$\circ$	20,168
Net profit for the 2016 QIV										(554)	(554)	$\circ$	(554)
Increase of authorised capital	3,566								(3,566)
Other changes								$\overline{ }$	$\overline{19}$	$\widehat{\circ}$	$\frac{9}{2}$		$\frac{1}{9}$
Cover of losses	(3, 170)									3,170
Other comprehensive income									(126)	126
Balance as at 31 December 2016	11,887	$\circ$	$\circ$	901	$\circ$	$\circ$	$\circ$	(50)	5,550	1,345	19,633	$\circ$	19,633
Net profit for the 2017 QI-III										(244)	(244)		(244)
Dividends										(1,041)	(1, 041)		(1, 041)
Formed reserves				69	$30\,$					(99)
Other changes	$\left \right $							(2)	(117)	(107)	(226)	$\odot$	(226)
Other comprehensive income										507	507		507
Balance as at 30 September 2017	788 Ħ	$\circ$	$\circ$	971	$30\,$	$\circ$	$\circ$	(52)	5,433	361	18,630	$\circ$	18,630
Managing Director				Gediminas Čeika
Financial Director				Mindaugas Sologubas
												C

page 9

EXPLANATORY NOTES

1 Basic information

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

Pramonės 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 Snaigė as on September 30, 2017and December 31, 2016 were:

		September 30, 2017	December 31, 2016
	Number of shares owned	Share of total capital, %	Number of shares owned	Share of total capital, %
Sekenora Holdings Limited	26,927,377	67.96%
Bevorano Holdings Limited	9,168,816*	23.14%
Vaidana UAB			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 Bevorano Holdings Limited collateralized 4,584,408 shares to the bank in accordance with collateral agreement to ensure financial Snaige AB liabilities (31 December 2016 - 4,584,408 shares were collateralized by Vaidana UAB to ensure it's liabilities).

All the shares of the Company are ordinary registered intangible shares with the par value of 0.30 euro each and were fully paid as at 30 September 2017 and 31 December 2016.

As at 30 September 2017 and 31 December 2016 the Company did not hold its own shares.

As at 30 September 2017 Sekenora Holdings Limited and Bevorano Holdings Limited were ultimately owned by controlling shareholder Hymana Holdings Ltd. (intermediate shareholders Vaidana UAB).

The Group consisted of AB Snaige and the followings subsidiaries as at 30 September 2017 (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%	1	13
UAB Almecha	Lithuania	100%	(25)	394

As at 30 September 2017, the Board of the Company consist of 5 members. The board does not have AB Snaigė 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 2017 the number of employees of the Group was 727 (as at 30 September 2016 – 719).

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 4,347 thousand of 30 September 2017 (in the year 2016, December 31st current assets exceeded current liabilities by EUR 4,664 thousand).

• liquidity ratios: general coverage ratio (total current assets / total current liabilities) was 1.4 (1.51 on 31st December 2016),
• quick ratio ((total current assets − inventories) / total current liabilities) 0.98 (on 31st December 2016 0.98),
• the Group suffered EUR 244 thousand loss before tax (in 2016 over the same period EUR 755 thousand profit before tax),
• Debt ratios: the ratio of debt/asset was 0.57 (whereas in the year 2016, December 31st 0.53).

These financial statements for the 30 September 2017 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 by using free operational cash flows.

All those assumptions above could be influenced of significant uncertainties, which could raise doubts about Company's ability to continue operations, because of the disability to realize its property and to implement its commitments by carrying out its normal activities. However, the Company's management believes 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 Snaigė (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.

The applicable exchange rates in relation to euro as at the 30 September 2017 and 31 December 2016 were as follows:

	30 September 2017	31 December 2016
UAH	31.2089	28.4474
USD	1.1806	1.0453

2.4. Principles of consolidation

The consolidated financial statements of the Group include AB Snaigė 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.

Property, plant and equipment are shown at revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which is determined using fair value at the date of statement of financial position. The fair value of the property, plant and equipment is determined by appraisals undertaken by certified independent valuators. Any accumulated depreciation and impairment losses at the date of revaluation were eliminated against the gross carrying amount of the asset, instead the historical acquisition cost was increased by the surplus of the revaluation.

Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to other comprehensive income and shown as revaluation reserve in shareholders' equity. The revaluation reserve for property, plant and equipment is being reduced each period by the difference between depreciation based on the revalued carrying amount of the asset and that based on its original cost, which is transferred directly to retained earnings.

The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Decreases that offset previous increases of the same asset are charged to other comprehensive income and debited against revaluation reserve in equity; all other decreases are charged to the profit or loss. Revaluation increases that offset previous decreases charged to the profit or loss are recognised in the profit or loss.

Each year the difference between depreciation based on the revaluated carrying amount of the asset charged to the profit or loss, and depreciation based on the asset's original cost is transferred from revaluation reserve to retained earnings net of deferred income tax.

Subsequent costs are included in the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Depreciation is computed on a straight- Depreciation is computed on a straight-line basis over the following estimated useful lives from 1 October 2016:

Buildings and structures (including investment property)	15 - 73 years
Machinery and equipment	5 - 63 years
Vehicles	4 - 20 years
Other property, plant and equipment	3 - 30 years
Weighted average useful lives from 1 October 2016 are as follows:
Buildings and structures (including investment property)	55 years
Machinery and equipment	21 years
Vehicles	16 years
Other property, plant and equipment	12 years

The asset's carrying amounts, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount of property, plant and equipment and are recognised within other income or other expenses in the statement of comprehensive income. When revalued assets are sold, the amounts included in revaluation reserve are transferred to retained earnings.

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.

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 2017 and 31 December 2016.

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 2017 and 31 December 2016.

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 on Group's sales is presented below:

	Total sales revenue			Inter-group sales		Sales revenue
	2017	2016	2017	2016	2017	2016
Russia	563	304	-	-	563	304
Ukraine	5,901	5,404	-	-	5,901	5,404
Western Europe	10,910	11,232	-	-	10,910	11,232
Central Europe	5,429	7,050	-	-	5,429	7,050
Lithuania	4,713	4,643	(201)	(198)	4,512	4,445
Other CIS countries	2,422	1,951	-	-	2,422	1,951
Other Baltic states	985	1,034			985	1034
Other countries	65	76			65	76
Total	30,988	31,694	(201)	(198)	30,787	31,496

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

As at 30 September 2017 the sales to the five largest buyers comprised 28.52 % of total sales (as at 2016 – 34.48 %,).

4 Cost of sales

	30 09 2017	30 09 2016
Raw materials	19,321	18,290
Salaries and wages	2,876	2,687
Depreciation and amortisation	1,024	946
Other	3,748	3,397
Total:	26,969	25,320
5 Other income
	30 09 2017	30 09 2016
Income from transportation services	187	122
Income from sale of other services	44	29

Total:	244	160
Other	2	-
Income from rent of equipment	0	0
Gain on disposal of property, plant and equipment	2	-
Income from rent of premises	9	10

6 Operating expenses

	30 09 2017	30 09 2016
Selling expenses	2,312	2,648
General and administrative expenses	1,723	1,669
	4,035	4,317

7 Other operating expenses

	30 09 2017	30 09 2016
Transportation expenses	181	120
Expenses from rent of equipment	-	-
Gain on disposal of property, plant and equipment	-	-
Other	25	22
	206	142

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

8 Financial income

	30 09 2017	30 09 2016
Foreign currency exchange gain	4	-
Interest income and other	427	408
	431	408

9 Financial expenses

	30 09 2017	30 09 2016
Interest expenses	457	517
Loss of foreign currency exchange, net	39	5
Realized loss on foreign currency derivatives	-	-
Loss of foreign currency translation transactions	0	2
Other	-	0
	496	524

10 Intangible assets

		Balance sheet value
	30 09 2017	31 12 2016
Development costs	1,298	1,503
Software, license	61	96
Other intangible assets	289	38
Total:	1,648	1,637

Over 2017 the Group has accumulated EUR 244 thousand (2016 - EUR 239 thousand) of intangible assets depreciation The amount of EUR 6 thousand for 2017 (EUR 7 thousand for 2016) was included into production costs. The remaining amount of EUR 238 thousand (EUR 232 thousand for 2016) was included into administration expenses in the Group's profit or loss.

Part of non-current intangible assets of the Group with the acquisition value of EUR 3,829 thousand as at 30 September 2017 was fully amortised (EUR 3,568 thousand as at 31 December 2016) but was still in use.

11 Non-current tangible assets

	Balance sheet value
	30 09 2017	31 12 2016
Land and buildings	5,229	5,394
Machinery and equipment	9,208	9,275
Vehicles and other property	1,621	1,856
Construction in progress and prepayments	173	9
Total:	16,232	16,535

Starting from 30 September 2016 the Group and the Company decided to revaluate the non-current assets, including buildings, structures, machinery and equipment as well as other production equipment. The valuation of non-current assets for financial reporting purposes has been carried out by external, independent valuator, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The valuation of real estate was based on the comparable method by comparing sales prices of similar real estate in Lithuania. The valuation of machinery and equipment and other non-current assets was based on comparable or depreciated replacement cost (DRC) methods.

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

Building and structures were attributed to Level 3 of fair value hierarchy. Under the Market method the sale transactions or offer examples in respect of the real estate and constructions were observed in the market. The comparable real estate objects were selected due to the similarity with the object being measured with respect to size, nature, location, intended use, condition and other parameters. The valuation of real estate required adjustments to reflect differences between the objects being measured and comparable objects.

Machinery and equipment, vehicles and other assets were also attributed to Level 3 of fair value hierarchy. Part of the machinery was valued based on at least two or three comparable inputs. Comparable inputs selected were similar to the assets subject to valuation. This method was used for the measurement of a part of equipment in respect of which sale or offer market data was available. The remaining part of machinery and equipment were valued by DRC method. The replacement values of these non-current assets were based on their acquisition costs and comparable price changes provided by the Statistics Department. When establishing physical obsolescence it is assumed that the value of property being measured is written off in proportion to the number of years. The assets subject to valuation were classified into categories in respect of which the useful life up to 20 years depending on the group of asset was established based on the expert opinion of the valuer.

The estimated fair value of the buildings and structures amounted to EUR 5,380 thousand and the value of machinery and equipment, vehicles and other assets amounted to EUR 11,017 thousand as at 30 September 2016, based on the methods described above. As individually some items of machinery and equipment were assessed as impaired, the impairment loss of EUR 325 thousand was booked to general and administrative expenses for 2016 year and the revaluation amount of EUR 11,342 thousand was allocated to property, plant and equipment as at 30 September 2016.

The increase in value of non-current tangible assets was registered by increasing the acquisition cost of the asset and was accounted as follows as at 30 September 2016:

The Company	Book value	Revalued amounts	Revaluation surplus
Buildings and structures	2,180	5,455	3,275
Machinery and equipment	2,918	9,447	6,529
Vehicles and other assets	552	1,820	1,268
Total	5,650	16,722	11,072

The 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

The new useful lifetimes for assessing depreciation have been applied since 1 October 2016.

The depreciation charge of the Group's property, plant and equipment and investment property for 2017 nine months amounts to EUR 1,129 thousand (EUR 1,093 thousand for 2016). After the assessment of amortization of grants, the amount of EUR 1,053 thousand for 2017 (EUR 1,025 thousand for 2016) was included into production costs. The remaining amount of EUR 76 thousand (EUR 68 thousand for 2016) was included into administration expenses in the Group's profit or loss.

As at 30 September 2017 buildings of the Group and the Company with the carrying amount of EUR 5,042 thousand, (as at 31 December 2016 – EUR 5,171 thousand respectively), the Group's and the Company's machinery and equipment with the carrying amount of EUR 8,360 thousand (as at 31 December 2016 – EUR 10,538 thousand respectively) were pledged to bank as a collateral for the loans (Note 21).

12 Loans granted

	30 09 2017	31 12 2016
Controlling parties	11,914	9,966
The parent	-	667
Loans receivable	11,914	10,633
Including:
Non-current borrowings	10,346	9,966
Current borrowings	1,568	667
Total	11,914	10,633

13 Inventories

	30 09 2017	31 12 2016
Raw materials, spare parts and production in progress	3,496	3,310
Finished goods	935	1,166
Other	126	379
Total inventories, net	4,557	4,855

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

As at 30 September 2017 the Group and Company has no legal restrictions on inventories.

14 Trade receivables

30 09 2017	31 12 2016
9,356	6,417
(1,026)	(1,061)
8,330	5,356

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

As at 30 September 2017 100% impairment was accounted trade receivables of the Group in gross values of EUR 1,026 thousand (as at 31 December 2016 – EUR 1,061 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 4,633 thousand as at 30 September 2017 (EUR 2,935 thousand as at 31 December 2016) 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 2017	31 12 2016
Balance at the beginning of the period	(1,061)	(1,001)
Charge for the year	-	(81)
Write-offs of trade receivables	-	-
Effect of the change in foreign currency exchange rate	1	(12)
Amounts paid	34	33
Balance in the end of the period	(1,026)	(1,061)

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

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

15 Other current assets

	30 09 2017	31 12 2016
Prepayments and deferred expenses	35	66
VAT receivable	103	132
Compensations receivable from suppliers	-	-
Restricted cash	4	4
Granted loans	1,568	667
Income tax paid in advance	144	14
Other receivables	120	129
	1,974	1,013

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

	30 09 2017	31 12 2016
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 2017	31 12 2016
Cash at bank	346	2,615
Cash on hand	8	2
	354	2,617

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 2017 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 2017 the legal reserve has not been fully formed yet.

As of 30 September 2017 the legal reserve amounted to EUR 971 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.

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

Exchange rate 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
Received during the period	12
Balance as at 31 December 2014	3,112
Received during the period	705
Balance as at 31 December 2015	3,817
Received during the period	-
Balance as at 31 December 2016	3,817
Received during the period	-
Balance as at 31 March 2017	3,817
Received during the period	7
Balance as at 30 June 2017	3,824
Received during the period	18
Balance as at 30 September 2017	3,824
Accumulated amortisation as at 31 December 2013	2,914
Amortisation during the period	25
Accumulated amortisation as at 31 December 2014	2,939
Amortisation during the period	48
Accumulated amortisation as at 31 December 2015	2,987
Amortisation during the period	127
Accumulated amortisation as at 31 December 2016	3,114
Amortisation during the period	31
Accumulated amortisation as at 31 March 2017	3,145
Amortisation during the period	31
Accumulated amortisation as at 30 June 2017	3,176
Amortisation during the period	30
Accumulated amortisation as at 30 September 2017	3,206
Carrying amount as at 30 September 2017	636
Carrying amount as at 31 December 2016	703

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 provisions

The Group provide a warranty of up to 2 years for the production sold and 3 years warranty on resale. 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 2017	31 12 2016
As at 1 January	499	592
Additions during the year	102	670
Utilised	(110)	(262)
Foreign currency exchange effect	-	-
Written off	(4)	(501)
	487	499
Warranty provisions are accounted for:		30 09 2017
- - non- current		176
- current		310
		31 12 2016
- non- current		181
- current		318
21 Borrowings
	30 09 2017	31 12 2016
Non-current borrowings
Non-current borrowings with fixed interest rate	-	-
Non-current borrowings with variable interest rate	10,537	9,884
Long-term liabilities of leasing companies	112	68
	10,648	9,951
Current borrowings
Current borrowings with fixed interest rate	-	-
Long-term loans of the current year	561	1,302
Current liabilities of leasing companies	7	21
	568	1,323
Total	11,216	11,274

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017

(all amounts are in EUR thousand unless otherwise stated)

	Type	Maturity	As at September 30 2017	As at December 31 2016
Borrowing 1	Loan	23/12/2019	10,385	11,186
Borrowing 2	Loan	10/04/2020	713	-
Leasing 1		26/03/2021	41	49
Leassing 2		26/05/2021	17	20
Leasing 3		26/08 2021	14	19
Leasing 4		11/07 2022	46	-
			11,216	11,274

The main information on individual borrowings is disclosed below:

The loan 1 bear 1-month EURIBOR + 5.75 annual interest rate as at 30 September 2017, the loan 2 bear 5% fixed interest rate, with right to review conditions 6-month EURIBOR + 3,5% margin (as at 31 December 2016 1-month EURIBOR + 5,75 annual interest rate for the loan 1).

As of 30 September 2017 the Company's buildings with the carrying amount of EUR 5,042 thousand (EUR 5,171 thousand as at 31 December 2016), the Group's and Company's machinery and equipment with the carrying amount of EUR 8,360 thousand (EUR 10,538 thousand as at December 2016) were pledged to the banks for the loans.

On 11 april 2017 company was granted a credit, amounting to EUR 833 thousand, bearing 5% fixed interest rate, with right to review conditions 6-month EURIBOR + 3,5% margin. Maturinty date – 10 april 2020. Financial assurance agreement was signed with bank, under which company pledged current and future funds in all bank accounts, amounting maximum to EUR 833 thousand.

Borrowings in national currency:

	30 09 2017	31 12 2016
Borrowings denominated in:
EUR	11,216	11,274
USD	-	-
	11,216	11,274
Repayment schedule for borrowings:
	Fixed interest rate	Variable interest rate
2017	-	568
2018	-	1,666
2019	-	8,819
2020	-	139
2021	-	18
2022	-	6
	-	11,216

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, 2017 and December 31, 2016 as follows:

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

	30 09 2017	31 12 2016
2017	8	23
2018 - 2022	120	72
Financial lease liabilities total	128	95
Interest	(9)	(7)
Financial lease liabilities current value	119	88
Financial lease obligations are accounted as:
- non- current	7	20
- current	112	68
Assets under financial lease are vehicles and machinery. Term of lease – 5 years.

Book value of leased assets: 30 09 2017 31 12 2016 Machinery and equipment 206 146

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 2017 nine months the lease expenses of the Group amounted to EUR 46 thousand (in 2016 EUR 50 thousand respectively).

Planned operaiting lease expenses of the Group in 2017 will be EUR 68 thousand.

The most significant operating lease agreement of the Group is the non-current agreement of AB Snaigė 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 2017	31 12 2016
Salaries and related taxes	806	802
Vacation reserve	362	388
Dividends deposits	58	-
Accrued interest	14	16
Other taxes payable	6	391
Other payables and accrued expenses	604	88
	1,850	1,686

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 2017	30 09 2016
Shares issued 1 January	39,622,395	39,622,395
Net profit (loss) for the year, attributable to the shareholders of company, in EUR	(244,108)	1,760,786
Basic profit (loss) per share, in EUR	(0.01)	0.04

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 2017 and 31 December 2016, 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 2017 and 31 December 2016, the credit risk was related to:

	30 09 2017	31 12 2016
Loans with interest receivable from related parties	11,914	10,633
Trade and other receivables	8,330	5,356
Cash and cash equivalents	354	2,617
	20,598	18,606

As at 30 September 2017 and as at 31 December 2016 the main part of the loans granted consist of the loan granted to intermediate shareholder.

The concentration of the Group's trade partners and the largest credit risk related to trade receivables according to clients as at 30 September 2017 and 31 December 2016

	2017	%	2016	%
Client 1	628	7	719	11
Client 2	616	6	413	8
Client 3	542	6	396	6
Client 4	530	6	336	5
Client 5	474	5	287	4
Client 6	426	5	263	4
Client 7	399	4	205	3
Other clients	5741	61	3,797	59
Impairment	(1,026)		(1,060)
	8,330	100	5,356	100

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017 (all amounts are in EUR thousand unless otherwise stated)

	30 09 2017	31 12 2016
Western Europe	3,036	1,788
Central Europe	1,165	1,190
Ukraine	1,428	1,121
Lithuania	1,661	972
Other CIS countries	615	122
Other Baltic States	171	32
Russia	254	131
Other	-	-
	8,330	5,356

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.

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 4,633 thousand as at 30 September 2017 (EUR 2,935 thousand as at 31 December 2016) 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 2017 and 31 December 2016 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 September 2017 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

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.

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 2017 and 2016 were as follows:

UAB Vaidana (controlling party, 2016 - the parent);

Hymana Holdings Ltd. (controlling party);

Tetal Global Ltd. (controlling party).

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 September 2017 and 31 December 2016 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:

			30 September 2017			31 December 2016
	Loans received	Interest expenses	Loans granted	Interest income	Loans recived	Interest expenses		Loans granted	Interest income
Controlling parties	-	-	906	426		-	-	-	573
The parent	-	-	-		-	-	-	327	27
	-	-	906	426		-	-	327	600

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017

(all amounts are in EUR thousand unless otherwise stated)

30 09 2017	Purchases	Sales		Receivables	Payables
Companies, controlled by ultimate shareholders	752		-	6	220
Controlling parties	-		-	-	-
	752		-	6	220
2016	Purchases	Sales		Receivables	Payables
Companies, controlled by ultimate shareholders	995		-	239	-
Controlling parties	-		-	10,633
	995		-	10,872	-

The Company's transactions carried out with subsidiaries:

	Purchases		Sales
	2017	2016	2017	2016
Subsidiaries	192	265	82	102

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:

	30 09 2017	31 12 2016
Non-current receivables
Subsidiaries	-	-
Total non-current receivables	-	-
Current receivables
Subsidiaries	19	29
Total current receivables	19	29

The analysis of receivables from subsidiaries and granted loans during the period on 30 September 2017 and 2016:

	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
2017	19	-	-	-	-	-		19
2016	29	-	-	-	-	-		29

AB SNAIGĖ, company code 249664610, Pramonės str. 6, Alytus Lithuania CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2017

(all amounts are in EUR thousand unless otherwise stated)

Payables to subsidiaries as of 30 September 2017 and 31 December 2016 (included under the trade payables caption in the Company's statement of financial position):

	30 09 2017	31 12 2016
Subsidiaries	163	132

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 Group management amounted to EUR 859 thousand (24 employees) during the nine months of 2017, in 2016 - EUR 819 thousand (23 employees). 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

Snaige AB received two notifications about disposal of voting rights in the company by Bevorano Holdings Limited and acquisition of voting rights by Sekenora Holdings Limited on 26 October 2017 and 11 November 2017 (the date of disposal/acquisition of voting rights – 23 October 2017 and 6 November 2017). After them, 91.1% of the Company's shares are owned by Sekenora Holdings Limited. The ultimate owners of the Snaige AB shares remained the same.