Annual report 2021

Translation of the Estonian original

Beginning of the financial year: 1.1.2021 End of the financial year: 31.12.2021 Business name: AS Trigon Property Development Commercial Registry No: 10106774 Address: Pärnu mnt 18, 10141, Tallinn Phone: +372 6679 200 Fax: +372 6679 201 E-mail: [email protected] Website: www.trigonproperty.com

BRIEF DESCRIPTION 3
3
MANAGEMENT REPORT 4
REMUNERATION REPORT 12
FINANCIAL STATEMENTS 12
Statement of financial position 13 Statement of comprehensive income 14 Cash flow statement 15 Statement of changes in equity 16 Notes to the financial statements 17 1 General information 17 2 Summary of significant accounting policies 17 3 Financial risk management 23 4 Critical accounting estimates and judgements 25 5 Trade and other receivables 26 6 Inventories 26 7 Investment property 26 8 Trade and other payables 27 9 Equity 28 10 Sales revenue 28 11 Costs of goods sold 29 12 Expenses related to investment property 29 13 Administrative and general expenses 29 14 Earnings per share 29 15 Segment report 30 16 Related party transactions 30 17 Contingent liabilities 30
18 Events after the balance sheet date 31 32

PROFIT DISTRIBUTION PROPOSAL 38 SIGNATURES OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD TO THE 2021 ANNUAL REPORT 39
TRIGON PROPERTY DEVELOPMENT AS SALES REVENUE ACCORDING TO THE EMTAK 2008 40

Brief description

AS Trigon Property Development is a real estate development company.

AS Trigon Property Development currently owns one real estate development project involving a 14.3 hectare area in the City of Pärnu, Estonia.

The Company is listed on the Tallinn Stock Exchange. On November 6, 2012, the Listing and Surveillance Committee of NASDAQ Tallinn decided to delist AS Trigon Property Development shares from the Main List starting from November 21, 2012, and to admit the shares simultaneously to trading in the Secondary List.

As at 31.12.2021 OÜ Pärnu Holdings owns 39.22% of the shares of Trigon Property Development AS directly and 17.88% through Nordic Fibreboard LTD OÜ. The biggest shareholders of OÜ Pärnu Holdings are OÜ Stetind (46.71% of the share capital and 49.75% of the voting shares) and Joakim Johan Helenius (46.71% of the share capital and 49.75% of the voting shares) by the time of compiling these financial statements.

The Management Board confirms that:

1. the management report presented on pages 4 to 12 presents a true and fair view of the business developments and results, as well as of the financial position of the Company, and includes a description of the main risks and doubts regarding the Company.
1. the accounting policies and the presentation of information of the 2021 financial statements of AS Trigon Property Development presented on pages 13 to 31 are in compliance with the International Financial Reporting Standards as adopted by the European Union;
1. the financial statements present a true and fair view of the financial position, the results of the operations and the cash flows of the Company;
1. the Company is a going concern.

________________________

Rando Tomingas Member of the Management Board

6 April 2022

Management report

Overview of business areas

The main business activity of Trigon Property Development AS is real estate development. As at 31.12.2021, AS Trigon Property Development owned one development project with an area of 14.3 hectares in the City of Pärnu, Estonia. An industrial and logistics park is planned on this area. The Company objective is to find companies willing to bring their business activities (industry, logistics) to the development project area of AS Trigon Property Development in Pärnu, which would add value to the land plots owned by the Company. As the main purpose of the company is to sell existing land plots, investment property was recognized as inventories. As of 31 January 2021, the investment property was reclassified to inventories in connection with commencement of development work consisting of road and route construction on the properties and the implementation of a specific sales strategy to sell the land plots to end-users. However, the company does not preclude the possibility of developing existing land into rental property if the opportunity arises. The Company does not have any plan to change or start a new business activity next year and will continue to sell of land plots the Company owns. In the first half of 2022, Kibuvitsa street will be completed, connecting Niidu and Kase streets that surround the company´s land plots. No other major investments are planned in the near future.

In the first quarter of 2021, a 3.43-hectare property was sold for 824,040 euros (excluding VAT).

In the second quarter of 2021, a 0.89-hectare property was sold for 205,000 euros (excluding VAT).

In the third quarter of 2021, a 2.01-hectare property was sold for 604,080 euros (excluding VAT).

In 2016, a new detailed planning was made for the property, under which the proportion of commercial land in the entire property increased compared to the previous planning. The new established detailed planning increased the flexibility for partial sale of land plots, as compared to the previous detailed planning the plots were made smaller and the flexibility to change the size of the plots as needed was added.

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Management

The law, the articles of association, the resolutions of the meetings of the shareholders and the Supervisory Board and the set targets are followed in managing the company. According to the Commercial Code, a resolution on the amendment of the articles of association shall be adopted, if at least two-thirds of the votes represented at the general meeting are in favour of the amendment. The powers of the Management Board of the Company are provided in the Commercial Code and are limited to the extent specified Management Board have no authority to issue shares. Members of the Management Board are e Management Board are appointed and recalled by simple majority voting of the Supervisory Board.

Economic environment

In 2021, Estonian GDP increased by 8.3% according to Statistics Estonia, exceeding the pre-pandemic level by 5.2%. The growth was driven by the manufacturing industry, which reached its pre-pandemic level. Accommodation and food service activities, which have been ravaged by the coronavirus crisis, continued to grow at a very rapid rate. The main activities that hampered economic growth were trade and agriculture due to price increases in these sectors. The energy sector remained at the same level year on year despite the increase in prices. Construction volume grew by 9% and reached a record high level.

According to the Land Board of the Republic of Estonia, in 2021 the total transaction value reached 6 billion euros, increasing by half in comparison to year 2020, reaching a historic record. The last time the number and turnover of real estate transactions were this high, was in 2006, when the turnover of the real estate market was 4.7 billion euros. A total 60,725 property sales-purchase transactions were made, and the number of transactions increased by a fifth. High demand raised prices in all real estate segments. In 2021, there were 15 transactions of immovables without buildings with mixed, industrial and commercial land in Pärnu, which is comparable level to 2020. The total transaction value reached EUR 8.45 million. *

Financial ratios

2021	2020
2,558,672	2,497,679
10.64%	13.93%
2,363,079	2,491,354
11.52%	13.96%
7.64%	0.25%
272,142	347,893

2021	2020
4,499,061	4,499,061
0.800	0.560
0.06049	0.07733
13.23	7.24

0.53	0.55
1.51	1.01

Return on assets = net profit / total assets

*Transactions with the land under the wind farm, which in Management´s opinion are not comparable to the land plots owned by the Company, are excluded from the transactions.

Return on equity = net profit / equity Debt ratio = liabilities / total assets Earnings per share = net profit / number of shares Price-to-earnings (PE) ratio = closing price of the share / earnings per share Book value of the share = equity / number of shares Price-to-book ratio = closing price of the share / book value of the share Market capitalization = closing price of the share * number of shares

Seasonality and the risks of the operating activities

The main business activity of the Company is real estate development, which by its nature is not significantly seasonal. Real estate development activities and the sale of development properties depend largely on the economic environment, which means that the operating activities are cyclical and highly correlated with the business cycle developments. The positive economic environment is expected to increase the demand for investment property of Trigon Property Development AS and potentially increase the value of these assets over time. The management assesses that current economic environment and its short-term outlook has turned negative due to the measures taken to fight with the spread of coronavirus, which does not allow the economy to function normally. The risk to the Company is that the economic environment will persist or turn even more negative, which could potentially result in decreased demand for and value of the assets of the Company.

The C for in euros, settlements are also in euros, the shares are listed and traded in euros. Thus, there are no risks regarding foreign exchange rates and stock exchange rates. However, the risks which are or may be considered as most important by the assessment of the Company are described in note 3. financial risks are managed separately and a comprehensive overview of their hedging and mitigation principles and means is provided in note 3 to the financial statements.

Environmental and social impacts

The development activities of the Company, based on the valid detailed planning, have no significant impact on the environment regarding environmental protection. Development activities follow the environmental conditions set out in the detailed planning as well as relevant recommendations. Development activities are based on an environmentally friendly production. The direction taken is the development of lighter activities with a business property function, which according to the Company , , including the access to services and has a positive impact both socially and environmentally.

Since 5 June 1997, the shares of Trigon Property Development AS have been listed on the Tallinn Stock Exchange. Trigon Property Development AS has issued 4,499,061 registered shares, each with the book value of 0.1 euros. The shares are freely transferable, no statutory restrictions apply. There are no restrictions on transfer of securities to the company as provided by contracts between the company and its shareholders.

The share, with a price of 0.56 at the end of 2020, closed at 0.80 euros euros at the end of 2021. In 2021, a total of 321,574 shares were traded and the total sales volume amounted to 297,389 euros.

Direct ownership of the members of the Management and Supervisory Boards as at 31.12.2021:

Joakim Johan Helenius does not hold any shares
Torfinn Losvik does not hold any shares
Alo Lepp does not hold any shares
Rando Tomingas does not hold any shares

Both Joakim Johan Helenius and Torfinn Losvik have indirect ownership through the company Pärnu Holdings OÜ and Nordic Fibreboard LTD OÜ. Rando Tomingas has indirect ownership through the company Nordic Fibreboard LTD OÜ.

Through Stetind OÜ Torfinn Losvik owns indirectly shares of Pärnu Holdings OÜ and Nordic Fibreboard LTD OÜ, owning 1,040,908 Trigon Property Development AS shares (2020: 1,106,368 shares).

Joakim Johan Helenius owns shares indirectly, through Pärnu Holdings OÜ and Nordic Fibreboard LTD OÜ, owning 1,040,908 Trigon Property Development AS shares (2020:1,096,041 shares).

Through Triangel Kapital OÜ Rando Tomingas owns indirectly shares of Nordic Fibreboard LTD OÜ, owning 6,574 Trigon Property Development AS shares (2020: 0 shares).

Share price and trading statistics on the Tallinn Stock Exchange from 01.01.2021 to 31.12.2021:

The distribution of the share capital by the number of shares acquired as at 31.12.2021

	Number of shareholders	% of shareholders	Number of shares	% of share capital
1-99	397	52.03%	9,143	0.20%
100-999	240	31.45%	68,766	1.53%
1 000-9 999	97	12.71%	253,088	5.63%
10 000-99 999	22	2.88%	555,160	12.34%
100 000-999 999	6	0.79%	1,848,304	41.08%
1 000 000-9 999 999	1	0.13%	1,764,600	39.22%
TOTAL	763	100%	4,499,061	100%

List of shareholders with over 1% holdings as at 31.12.2021.

	Number of
Shareholder	shares	Ownership %
Pärnu Holdings OÜ	1,764,600	39.22
Nordic Fibreboard LTD OÜ	804,552	17.88
Madis Talgre	343,000	7.62
Harju KEK AS	224,000	4.98
Kirschmann OÜ	201,752	4.48
M.C.E.Fidarsi OÜ	160,000	3.56
Avraal AS	115,000	2.56
James Kelly	97,994	2.18
Suur Samm OÜ	64,692	1.44
Toivo Kuldmäe	49,231	1.09
Invenio OÜ	47,727	1.06

No specific control rights have been granted to the shareholders. There are no restrictions in voting rights stipulated in the articles of association that would be different from the law; there are no preference shares.

The Company does not have a separately approved dividend policy; therefore the distribution of the profit takes place in accordance with the Commercial Code and the articles of association whereby the General Meeting of the Company decides on the distribution of profit and the payment method.

Personnel

AS Trigon Property Development had no employees as at 31 December 2021 and as at 31 December 2020. There were no labor costs in 2021 and 2020.

Corporate Governance Report

General

Corporate Governance Code, (the Code) is a set of guidelines and advisable rules recommended to be followed in terms of management and control primarily by listed companies whose shares have been admitted to trading on a regulated market operating in Estonia.

It is the duty of the Management Board of Trigon Property Development AS to organise the internal control and risk management of the Company in a manner that ensures the accuracy of the published financial reports. The purpose of the internal control and risk management systems connected with financial performance in conformity with the applicable laws, regulations and adopted accounting policies.

ccounting and management reporting is the area of responsibility of the Management Board of Trigon Property Development AS who is responsible for the identification and assessment of risks in financial reporting, arranging the principles in relation to financial reporting, organising the tools that are required for accounting.

generally by an auditor selected by the Supervisory Board and approved by the general meeting. Auditors are appointed to perform a single audit or for a specific term.

The listed companies must comply with the Code

The Code regulates, among other matters, the convening and the procedure of the General Meeting of Shareholders; requirements for the compositions, duties and activities of the Management and Supervisory Board, disclosure requirements and financial reporting.

As the principles set out in the Code are merely just recommendations by nature, a company is not obligated to comply with all of them. However it shall explain in the Corporate Governance Report the reasons of its non-compliance.

AS Trigon Property Development (TPD) follows the laws and legal regulations in its business activities. As a public company, TPD is guided by Nasdaq Tallinn requirements and the principle of equal treatment of shareholders and investors. Therefore, TPD largely follows the guidelines of the Code.

The Code is available: http://www.nasdaqbaltic.com/files/tallinn/bors/press/HYT.pdf

General Meeting of Shareholders

The highest governing body of TPD is the general meeting of shareholders (General Meeting). According to the Commercial Code and the Code, TPD convenes the General Meeting by publishing the respective notice via Tallinn Stock Exchange, on the web page of TPD and in a national daily newspaper. The following is published simultaneously: General Meeting agenda approved by the Supervisory Board, draft resolutions in regard to each item on the agenda, documents to be submitted for exercising voting rights and other essential information. The notice and aforementioned information is published both in Estonian and in English. The ordinary General Meeting is held once a year. The management board may call extraordinary General Meetings in the cases set out in the law.

On 04.06.2021, an ordinary General Meeting was held, where 57,98% of votes represented by shares were present. The General Meeting approved the 2020 Annual report, profit distribution proposal and election of auditor for the year 2021. Additionally, the shareholders approved the reduction of share capital and in relation to the reduction of the share capital of the Company, to amend the Articles of Association of the Company. The Annual General Meeting adopted a resolution to reduce the share capital of the Company by reducing the book value of shares. New amount of share capital is 449,906.10 euros. It was also decided to extend the term of office of the member of the Supervisory Board Joakim Johan Helenius for an additional five (5) year period. At the General Meeting the Management Board gave an overview of the activities of the past year.

TPD herein presents the requirements of the Code for the General Meeting using a comply or explain principle i.e. explains the requirements of the Code that were partly or wholly not complied with in 2021.

Article 1.3.1: The Chairman of the Supervisory Board and members of the Management Board cannot be elected as Chair of the General Meeting.

The shareholders elected the member of Management Board Rando Tomingas to chair the ordinary General Meeting held on the 04th of June in 2021, because the member of the Management Board has -day manager of the company would ensure the most efficient and smooth course of the meeting.

Article 1.3.2: All Members of the Management Board, the Chairman of the Supervisory Board and if possible, the members of the Supervisory Board and at least one of the auditors shall participate at the General Meeting.

The member of the Management Board, chairman of the Supervisory Board (Joakim Helenius) and a second member of the Supervisory Board (Torfinn Losvik) participated in the ordinary General Meeting held on 04.06.2021. An auditor and a third member of the Supervisory Board were not present at the

meeting. The Supervisory Board is convinced that the presence of two members is sufficient. No auditors were present at the meeting as the Management Board did not consider it necessary for the auditors attend, as there were no items on the agenda which the Management Board or Supervisory Board could not answer and which would have required a comment specifically from the auditor. At the same time, TPD had agreed with the auditors that they will be available via phone should the shareholders wish (for example, ask questions). Shareholders had no questions to the auditors.

Article 1.3.3: The Company shall make participation in the General Meeting possible by means of communications equipment (Internet) if the technical equipment is available and where doing so is not too cost prohibitive for the Issuer.

TPD did not make participation in the General Meeting possible by means of communications equipment since no such technical solutions are available to TPD and none of the shareholders have ever asked for a possibility to participate by means of communications equipment.

Considering the aforementioned description of the General Meeting held in 2021, TPD has largely complied in 2021 with the Recommendations in informing the shareholders, convening and holding the general meeting.

Supervisory Board

Supervisory Board plans the activities of TPD, guides and supervises the Management Board. TPD Supervisory Board comprises 3 members, according to the Articles of Association, up to 7 members may be elected to the Supervisory Board. No remuneration was paid to Supervisory Board members in 2021, therefore no relevant information is available for disclosure. During 2021, the members of the Supervisory Board did not have any conflicts of interest related to the management of TPD and their other business activities.

A company related with the Supervisory Board member Alo Lepp has provided real estate consultation services to TPD, but TPD is in the opinion that the provision of these services does not give rise to conflict of interest.

TPD herein presents requirements of the Code using a comply or explain principle.

Article 3.2.2: At least half of the members of the Supervisory Board of the Issuer shall be independent. If the Supervisory Board has an odd number of members, then there may be one independent member less than the number dependent members.

onsidered as independent in 2021 in the meaning of the Code. Joakim Johan Helenius and Torfinn Losvik are the members of the Management Board of OÜ Pärnu Holdings, the shareholder owning 39.22% of all shares of TPD, and Torfinn Losvik is a member of the Management Board of Nordic Fiberboard AS, the shareholder owning 17.88% of all shares of TPD. Regardless of the above, TPD is in the opinion that there is no basis for emergence of conflict of interest and taking into account the background and experience of the current Supervisory Board members there are no shortcomings in the activities of the Supervisory Board.

Management Board

According to the Articles of Association up to 7 members may be elected to the Management Board of TPD. In order to elect a member of the Management Board, his or her consent is required. According to the Articles of Association, a member of the Management Board shall be elected for a specified term of up to three years. Extension of the term of office of a member of the Management Board shall not be decided earlier than one year before the planned date of expiry of the term of office, and not for a period longer than the maximum term of office prescribed by the law or Articles of Association. Currently, the Management Board of TPD has one member. As of 05.06.2018 the Management Board member is Rando Tomingas.

The Management Board member has the right to represent TPD by himself. The Management Board member is not authorized to issue shares or decide the acquisition of own shares. Transactions which

are beyond the scope of everyday economic activities may only be concluded by the Management Board with the consent of the Supervisory Board.

No remuneration was paid to Management Board member in 2021, therefore no relevant information is available for disclosure. No transactions with Management Board member or his related parties were executed. Management Board answers to and cooperates with the Supervisory Board,

The following requirements in the Code for the Management Board were not complied with and below explanations are presented.

Article 2.2.1: The Management Board shall have more than one (1) member; a service contract shall be concluded with the member of the management board.

Rando Tomingas is the only member of the Management Board, but expansion of the Board is not ruled out in the future.

No service contract is concluded with Rando Tomingas since he is currently the only Member of the Management Board and is not receiving remuneration and his rights and obligations are stipulated by the law. In case more members of the Management Board are appointed, service contracts shall be concluded.

Publishing financial reports and other information

During 2021, TPD published interim reports and Annual Report for 2020. The Annual Report is audited by AS PricewaterhouseCoopers. The audit is done in compliance with international standards on auditing.

TPD herein presents the requirements of the Code which were not complied with using a comply or explain principle.

Article 5.2: The Issuer shall publish the disclosure dates of information subject to disclosure throughout a year at the beginning of the fiscal year in a separate notice, called a financial calendar.

TPD did not publish a separate financial calendar however information subject to disclosure was published not later than dates set by the law.

Article 5.6: The Company shall disclose the meetings with analysts and shall disclose the dates and places of presentations and press conference organized for analysts, investors and institutional investors on its website.

The Tallinn Stock Exchange Regulations require that an issuer publishes all essential information through the stock exchange system. Only previously published information is discussed in meetings with analysts and press conferences and therefore TPD has foreseen no need to disclose a meetings schedule.

Article 6.1.1: Together with the annual report, the Supervisory Board shall make available to shareholders the written report concerning the annual report.

No report was published simultaneously with the notice of General Meeting; however, the shareholders may obtain the report by contacting the Management Board.

Article 6.2.1: If there is a desire to appoint an auditor who has audited Issuers reports in previous financial year the Supervisory Board shall pass judgment on their work.

No judgment was published simultaneously with the notice of General Meeting. The Supervisory Board proposed to the General Meeting to continue with the same auditor and by that expressed its positive judgment about the auditor. At the General Meeting the Management Board member gave an overview

Remuneration report

This report provides an overview of the principles of remuneration and remuneration of the managers of Trigon Property Development AS.

The basic remuneration principles of Trigon Property Development AS were defined in 2007, according to which the remuneration paid to the members of the Company's management bodies, including members of the Management Board, is 0 euros.

A member of the Management board may be granted a performance pay by a resolution of the Supervisory board, the amount of which depends on the financial results of Trigon Property Development AS and the fulfilment of objectives previously agreed with the member of Management board.

In the last five financial years (2017-2021), the company did not pay a basic salary or performance fee to to the member of the Management Board, i.e. the basic salary and performance fee was 0 euros; including no basic salary or performance fee paid to the current Management Board member Rando Tomingas since 5.06.2018.

Statement of financial position

EUR	31.12.2021	31.12.2020
Cash and cash equivalents	938,858	146,890
Trade and other receivables (note 5)	166,825	789
Inventories (note 6)	1,452,989	0
Total current assets	2,558,672	147,679
Investment property (note 7)	0	2,350,000
Total non-current assets	0	2,350,000
TOTAL ASSETS	2,558,672	2,497,679


Trade and other payables (note 8)	195,593	6,325
Total current liabilities	195,593	6,325
Total liabilities	195,593	6,325
Share capital at book value (note 9)	449,906	2,299,020
Share premium	226,056	226,056
Statutory reserve capital	287,542	287,542
Accumulated profit/loss	1,399,575	-321,264
Total equity	2,363,079	2,491,354
TOTAL LIABILITIES AND EQUITY	2,558,672	2,497,679

The notes to the financial statements presented on pages 17-31 are an integral part of these financial statements.

Translation of the company's financial statements in pdf-format without European Single Electronic Format (ESEF) markups. The original document is submitted in machine-readable .xhtml format to the Tallinn Stock Exchange and digitally signed (Link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100003443/reports)

Statement of comprehensive income

EUR	2021	2020

Revenue (note 10)	809,080	0
Costs of goods sold (note 11)	-433,080	0

Gross profit	376,000	0

Administrative and general expenses (note 13)	-92,014	-20,577
Expenses related to investment property (note 12)	0	-10,544
Changes in fair value of investment property (note 7)	88,040	379,000
Other operating income	100	0

Operating profit	372,126	347,879
Financial income	120	14

PROFIT BEFORE INCOME TAX	372,246	347,893

Income tax expense (note 9)	-100,104	0
TOTAL COMPREHENSIVE PROFIT	272,142	347,893

Basic earnings per share (note 14)	0.06049	0.07733
Diluted earnings per share (note 14)	0.06049	0.07733

The notes to the financial statements presented on pages 17-31 are an integral part of these financial statements.

Cash flow statement

EUR	2021	2020
Cash flows from operating activities
Total comprehensive profit	272,142	347,893
Adjustments for:
Change in fair value of investment property	-88,040	-379,000
(note 7) Interest expense	-120	-14
Operating profit/loss before changes in working capital:	183,982	-31,121
Change in receivables and prepayments related to operating activities (note 5)	-166,036	6,592
Change in liabilities and prepayments related to operating activities (note 8)	189,268	-43,602
Change in inventories (note 6)	161,011	0
Interests received	120	14
Total cash flows generated from/(used in) operating activities	368,345	-68,117
Cash flows from investing activities
Disposal of investment property (note 7)	824,040	65,000
Total cash flows from investing activities	824,040	65,000
Cash flows from financing activities
Reduction of share capital (note 9)	-400,417	0
Total cash flows used in financing activities	-400,417	0
CHANGE IN CASH BALANCE	791,968	-3,117

OPENING BALANCE OF CASH	146,890	150,007
CLOSING BALANCE OF CASH	938,858	146,890

The notes to the financial statements presented on pages 17-31 are an integral part of these financial statements.

		Share	Statutory reserve	Retained
EUR	Share capital	premium	capital	earnings /loss	Total
Balance 31.12.2019	2,299,020	226,056	287,542	-669,157	2,143,461
Total comprehensive profit	0	0	0	347,893	347,893
Balance 31.12.2020	2,299,020	226,056	287,542	-321,264	2,491,354
Total comprehensive profit	0	0	0	272,142	272,142
Reduction of share capital	-1,849,114	0	0	1,448,697	-400,417
Balance 31.12.2021	449,906	226,056	287,542	1,399,575	2,363,079

Statement of changes in equity

Additional information regarding the owner 9.

The notes to the financial statements presented on pages 17-31 are an integral part of these financial statements.

Notes to the financial statements

1 General information

AS Trigon Property Development (The Company) is active in real estate development. The Company is a limited liability company (Estonian: aktsiaselts) that is registered and located in Estonia. The registered address of the company is Pärnu Rd 18, Tallinn.

The Management Board of AS Trigon Property Development authorised these financial statements for issue on 06 April 2022. Pursuant to the Commercial Code of the Republic of Estonia, the financial statements are subject to approval by the Supervisory Board and the General Meeting of Shareholders. Shareholders may decide not to approve the annual report, which has been prepared by the management board and approved by the supervisory board, and may demand that a new annual report be prepared. The financial statements will be published through the electronic channels of Tallinn Stock Exchange.

The 2021 financial statements of AS Trigon Property Development have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The financial statements have been prepared in euros (EUR).

The Company is listed in the secondary list of Nasdaq Tallinn. As at 31.12.2021 OÜ Pärnu Holdings owns 39.22% of the shares of Trigon Property Development AS directly and 17.88% through Nordic Fibreboard AS. The biggest shareholders of OÜ Pärnu Holdings are OÜ Stetind (46.71% of the share capital and 49.75% of the voting shares) and Joakim Johan Helenius (46.71% of the share capital and 49.75% of the voting shares) by the time of compiling these financial statements.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial statements have been prepared under the historical cost convention, except investment property, which is presented at fair value.

The preparation of the financial statements in accordance with IFRS requires management to make assumptions and judgements, which affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and the related assumptions are based on the historical experience and several other factors that are believed to be relevant and that are based on circumstances which help define principles for the evaluation of assets and liabilities and which are not directly available from other sources. Actual results may not coincide with these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is changed if it affects only the current period, or current and future periods, if the revision affects both current and future periods.

Management decisions and accounting estimates related to the application of IFRS that have a significant effect on the financial statements and that may be subject to adjustment are presented in Note 4.

2.2 Functional and presentation currency

The 2021 financial statements have been presented in euros (EUR). Functional currency of Company is euro.

2.3 Cash and cash equivalents

For the purposes of the statement of financial position and the cash flow statement, cash and cash equivalents are comprised of cash on hand, bank account balances (except for overdraft) and term deposits with maturities of three months or less. Cash and cash equivalents are carried at amortised cost.

2.4 Financial assets and liabilities

Classification

The Company classifies its financial assets in those to be measured at amortised cost measurement and the contractual terms of the cash flows.

Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of d managing the asset and the cash flow characteristics of the asset.

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other income/(expenses). Foreign exchange gains and losses and impairment losses are presented as separate line items in the statement of profit or loss.

As at 31 December 2021 and 31 December 2020 this category.

Equity instruments

The Company has no investments in equity instruments.

Impairment

The Company assesses on a forwardits debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.

For trade receivables without a significant financing component the Company applies a simplified approach permitted by IFRS 9 and measures the allowance for impairment losses at expected lifetime credit losses from initial recognition of the receivables. The Company uses a provision matrix in which allowance for impairment losses is calculated for trade receivables falling into different ageing or overdue periods.

Financial Liabilities

All Companies Financial liabilities (trade payables, borrowings etc.) are initially recognised at their fair value less any transactions costs. The items are subsequently measured at amortised cost, differences between acquisition costs (less transaction costs) and redemption costs are recognised during the loan period, using effective interest rate method.

Financial liabilities is classified as current, unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.5 Inventories

Inventories are initially recognized at cost, which includes all direct and indirect costs incurred in bringing the inventories to their present location and condition.

If separate inventory items are clearly distinguishable from each other, then the expensing of their costs shall be based on costs incurred specifically for the acquisition of each separate item (individual cost method). If separate inventory items are not clearly distinguishable from each other, then weighted average cost formula shall be used.

In the statement of financial position, inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The costs incurred in connection with real estate development are recognised as inventories. Depending on the stage of completion of the project, the costs are recognised either as work in progress or finished goods. A completed real estate property is sold either in parts (by houses, apartments, office spaces, etc.) or as a whole. Revenue is recognised as income from the sale of goods (Note 10). Upon the sale of real estate properties the group and the acquirer enter into a notarially certified agreement for transferring the property, and a respective entry is made in the land register.

2.6 Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property.

Investment property comprises freehold land.

Investment property is measured initially at its cost, including related transaction costs and is subsequently measured at fair value. After initial recognition investment properties are carried at

their fair value which is either determined annually by independent valuators or management, based on the market value using comparable market transactions which have occurred recently (adjusting differences in assessment) or by using the discounted cash flow method. The amount of the the statement of comprehensive income. Depreciation is not calculated for investment property recognised under the fair value method.

Subsequent expenditure is charged to the assets carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the income statement during the financial period in which they incurred.

Property that is being constructed or developed for future use as investment property is classified as investment properties.

2.7 Provisions and contingent liabilities

Provisions are recognised in the statement of financial position when the Company has a present legal or contractual obligation arisen as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount has been reliably estimated.

regarding the amount and timing of the expected outflows. When measuring provisions, risks and uncertainties are taken into consideration. Provisions are discounted when time value of money has significant impact and future events are taken into consideration, however no profits are recorded from disposal of assets. The increase in the provision due to passage of time is recognised as interest expense. Other commitments that in certain circumstances may become obligations, but it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability are disclosed in the notes to the financial statements as contingent liabilities.

A provision for expenses yet to be incurred and invoices not yet received is formed for sold land plots, which is recognised as an expense in the income statement and as a liability in the statement of financial position.

2.8 Corporate income tax

According to the Income Tax Act of Estonia, the annual profit earned by entities is not taxed in Estonia. Corporate income tax is paid on dividends, fringe benefits, gifts, donations, reception fees, non-business related disbursements and adjustments of the transfer price. Since 01.01.2015, the tax rate on the net dividends paid out of retained earnings is 20/80. In certain circumstances, it is possible to distribute dividends without any additional income tax expense. The corporate income tax arising from the payment of dividends is accounted for as a liability and as an income tax expense in the period in which dividends are declared, regardless of the actual payment date or the period for which the dividends are paid. An income tax liability arises at the 10th day of the month following the payment of dividends.

Due to the peculiarity of the taxation system, the companies registered in Estonia do not have any differences between the tax bases of assets and their carrying amounts and hence, no deferred income tax assets and liabilities arise. A contingent income tax liability which would arise due the payment of dividends out of retained earnings is not reported in the statement of financial position. The maximum income tax liability which would accompany the payment of dividends out of retained earnings is disclosed in the notes to the financial statements.

From 2019, tax rate of 14/86 can be applied to dividend payments. The more beneficial tax rate can be used for dividend payments in the amount of up to the average dividend payment during the three preceding years that were taxed with the tax rate of 20/80. When calculating the average dividend payment of three preceding years, 2018 will be the first year to be taken into account.

2.9 Revenue

Revenue is income ar the amount of transaction price. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange of transferring control over promised goods or services to a customer, excluding the amounts collected on behalf of third parties. The Company recognises revenue when it transfers control of a good or service to a customer.

Financing component

The Company does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, the Company does not adjust any of the transaction prices for the time value of money.

2.10 Cash flow statement

The cash flow statement is prepared using the indirect method. Cash flows from operating activities are determined by adjusting the net profit for the financial year through elimination of the effect of non-monetary transactions, changes in the balances of assets and liabilities related to operating activities and revenue and expenses related to investing or financing activities.

Investment and financial activities cash flow statement is prepared using the direct method.

2.11 Statutory reserve capital

Statutory reserve capital is formed from annual net profit allocations, also from other allocations which are transferred according to law or articles of association. The amount of reserve capital is stipulated in the articles of association and it cannot be less than one-tenth of the share capital. During each financial year, at least one-twentieth of the net profit shall be entered into the reserve capital. Increasing the statutory reserve capital from annual net profit allocations shall be finished if the reserve capital reaches to the amount that is stipulated in the articles of association.

Statutory legal reserve may be used to cover a loss, or to increase share capital. Payments shall not be made to shareholders from statutory legal reserve.

2.12 Earnings per share

Basic earnings per share are calculated by dividing the net profit for the financial year attributable to the equity holder ordinary shares. Diluted earnings per share are calculated by dividing the net profit of the financial year attributable to the equity holders of the company by the weighted average number of outstanding ordinary shares, adjusted for the effect of potential dilutive shares.

2.13 Events after the balance sheet date

Significant circumstances that have an adjusting effect on the evaluation of assets and liabilities and that became evident between the balance sheet date and the date of approving the financial statements but that are related to the reporting period or prior periods, have been recorded in the financial statements. Non-adjusting events and the events that have a significant impact on the results of the next financial year have been disclosed in the notes to the financial statements.

2.14 New International Financial Reporting Standards, amendments to existing standards and the interpretations of the standards by International Financial Reporting Interpretations Committee (IFRIC)

New IFRS standards and amendments and interpretations to existing standards have been published by the time of compiling these financial statements, which became effective for the Company reporting periods beginning on or after 1 January 2021 and which Company has not early adopted.

Adoption of New or Revised Standards and Interpretations

From 1 January 2021, the Company did not become obliged to adopt new or amended standards and interpretations related to the disclosure of financial information in the Company's areas of activity.

New Accounting Pronouncements

There are no other new or revised standards or interpretations that are mandatory for the Company annual periods beginning on or after 1 January 2022 that would be expected to have a material impact on the Company.

Standards not yet adopted

Classification of liabilities as current or non-current Amendments to IAS 1 (effective for annual periods beginning on or after 1 January 2022; not yet adopted by the EU).

These narrow scope amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities are non-current if the entity has a substantive right, at the end of the reporting period, to defer settlement for at least twelve months. The guidance no longer expectations whether they will subsequently exercise the right to defer settlement do not affect classification of liabilities. The right to defer only exists if the entity complies with any relevant conditions as of the end of the reporting period. A liability is classified as current if a condition is breached at or before the reporting date even if a waiver of that condition is obtained from the lender after the end of the reporting period. Conversely, a loan is classified as non-current if a loan covenant is breached only after the reporting date. In addition, the amendments include clarifying the is defined as the extinguishment of a liability with cash, other resources embodying economic benefits be converted into equity, but only for those instruments where the conversion option is classified as an equity instrument as a separate component of a compound financial instrument.

The entity shall analyze and disclose the effect of that change after its implementation.

Classification of liabilities as current or non-current, deferral of effective date Amendments to IAS 1 (effective for annual periods beginning on or after 1 January 2023; not yet adopted by the EU).

The amendment to IAS 1 on classification of liabilities as current or non-current was issued in January 2020 with an original effective date 1 January 2022. However, in response to the Covid-19 pandemic, the effective date was deferred by one year to provide companies with more time to implement classification changes resulting from the amended guidance.

The entity shall analyze and disclose the effect of that change after its implementation.

Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (effective for annual periods beginning on or after 1 January 2023; not yet adopted by the EU).

IAS 1 was amended to require companies to disclose their material accounting policy information rather than their significant accounting policies. The amendment provided the definition of material accounting policy information. The amendment also clarified that accounting policy information is expected to be material if, without it, the users of the financial statements would be unable to understand other material information in the financial statements. The amendment provided illustrative examples of accounting policy information that is likely to be considered material to the Further, the amendment to IAS 1 clarified that immaterial accounting policy information need not be disclosed. However, if it is disclosed, it should not obscure material accounting policy information. materiality to accounting policy disclosures.

The entity shall analyze and disclose the effect of that change after its implementation.

Amendments to IAS 8: Definition of Accounting Estimates (effective for annual periods beginning on or after 1 January 2023; not yet adopted by the EU).

The amendment to IAS 8 clarified how companies should distinguish changes in accounting policies from changes in accounting estimates.

The entity shall analyze and disclose the effect of that change after its implementation.

3 Financial risk management

3.1 Financial risks and their management

In its daily operations, the Company is exposed to different kinds of financial risks: market risk (including foreign exchange risk, price risk, interest rate risk, fair value interest rate risk), credit risk and liquidity risk. Financial risk is related to the following financial instruments: trade receivables, cash equivalents, trade payables, other liabilities, loans payable. Accounting principles that are used to account for these assets and liabilities have been disclosed in the note 2. Risk management is executed by the Management and coordinated by the Supervisory Board.

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk is the Company fluctuations. Company , other assets and liabilities are nominated in euros.

(ii) Price risk

The Company is not exposed to the price risk with respect to financial instruments.

(iii) Cash flow and fair value interest rate risk

As the Company has no significant interest-bearing assets and liabilities, its income and operating cash flows are substantially independent of changes in market interest rates. The change in market interest rates has indirect influence to the change of fair value of investment property, but the influence to the change of fair value of investment property is difficult to quantitatively evaluate.

(b) Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as prepayments and customer receivables, including outstanding receivables and committed transactions. The Company internationally known financial organisations. As at 31 December 2021 and 31 December 2020 the cash of the Company was deposited in Swedbank (credit rating Aa3 by Moody's Investor Service). Prepayments to the Tax Authority are considered non-credit risk bearing. Receivables from customers are considered short-term in nature and management monitors the collection of these receivables. Trade receivables have not been guaranteed with additional collateral as is customary in the industry. As at the date of the statement of financial position, the Company is 938,858 euros (31.12.2020: 147,679 euros). By the time of compiling these financial statements the trade receivables have been paid and, as a result, as at 31.12.2021 are not bearing credit risk.

While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial as at 31 December 2020 and 31 December 2021.

In general, receivables that are overdue for more than 180 days are considered unlikely to be collected, unless the Company has sufficient assurance that the receivable will be received or a payment schedule has been agreed for the receivables.

The loss allowance for receivables as at 31 December 2021 and 31 December 2020 (on adoption of IFRS 9) was determined immaterial.

(c) Liquidity risk

In order to finance potential investment needs in 2021 and 2020, the Company sold part of the property owned by the Company.

Accounts receivable and cash in bank balance as at 31.12.2021 will secure the settlement of liabilities at due date and will support the development of property.

As at 31 December 2021, the Company has current liabilities in the amount of 195,593 euros (31.12.2020: 6,325 euros). Company had no non-current liabilities.

Liquidity analysis

EUR
At 31 December 2021	1-3 months	4-12 months	1-5 years	Total
Financial assets
Cash	938,858	0	0	938,858
Trade and other receivables	130,571	0	0	130,571
Total financial assets	1,069,429	0		0 1,069,429
Liabilities
Trade and other payables	16,752	0	0	16,752
Total liabilities	16,752	0	0	16,752
EUR
At 31 December 2020	1-3 months	4-12 months	1-5 years	Total
Financial assets
Cash	146,890	0	0	146,890
Total financial assets	146,890	0	0	146,890
Liabilities
Trade and other payables	6,325	0	0	6,325
Total liabilities	6,325	0	0	6,325

3.2 Capital management

The Company pital are to safeguard the Company as a going concern in order to provide returns to shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce financial liabilities. Neither the Company management has set any specific requirements for its capital management or expectations for shareholder return. Company´s equity is strong enough, to ensure the financing of potential development activities, if it´s necessary.

At the date of the annual report 2021, the Company was leading only the equity as the Company capital and there were no changes in the capital requirements. Quantitative data about capital and the changes are to be seen in the statement of chan The Company does not have any other capital requirements beyond the general requirements of the Commercial Code. The respective requirements are not violated during the reporting period or during the comparison period.

3.3 Fair value of financial assets and financial liabilities

The Company management estimates that the fair values of the assets and liabilities denominated in the statement of financial position at amortised cost do not differ significantly from their carrying values as at 31 December 2021 and 31 December 2020.

3.4 Valuation of property measured at fair value

The market in Estonia for many types of real estate has been severely affected by the recent volatility in global financial markets. As such, the carrying value of land and buildings measured at fair value in accordance with IAS 40 has been updated to reflect market conditions at the reporting date. However, in certain cases, the absence of reliable market-based data has required the Company to amend its valuation methodologies.

The fair value of investment property accounted for using the fair value model in accordance with IAS 40 is updated to reflect market conditions at the end of the reporting period. Fair value of investment property is the price at which the property could be exchanged between knowledgeable, at any price. The best evidence of fair value is given by current prices in an active market for similar property in the same location and condition. In the absence of current prices in an active market, the Company considers information from a variety of sources, including:

a) current prices in an active market for properties of different nature, condition or location, adjusted to reflect those differences;

b) recent prices of similar properties on less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices; and

c) discounted cash flow projections based on reliable estimates of future cash flows, supported by the terms of any existing lease and other contracts and (when possible) by external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

4 Critical accounting estimates and judgements

Management judgements and estimates are reviewed on an ongoing basis and they are based on historical experience and other factors such as forecasts of future events which are considered reasonable under current circumstances.

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below (Note 7).

Inventories are valued separately by individual objects. For each object costs are compared with expected income. I realisation of the project (net realisable value), the company shall write down assets in the amount by which the costs exceed income. Due to the volatility of the construction market and low liquidity of the real estate market, determination of the net realisable value of the assets depends largely on

management estimates. In 2021, the investment property was reclassified to inventories. At the end of financial year the management assesses whether allowances on inventories should be made, as at 31.12.2021 no allowances have been made on inventories.

5 Trade and other receivables

EUR	31.12.2021	31.12.2020
Trade receivables	130,571	0
Tax prepayments	36,254	789
TOTAL	166,825	789

6 Inventories

	EUR
Balance as at 31.12.2020	0
Inventories	1,452,989
Balance as at 31.12.2021	1,452,989

As of 31 January 2021, the investment property was reclassified to inventories in connection with commencement of development work consisting of road and route construction on the properties and the implementation of a specific sales strategy to sell the land plots to end-users. The fair value of investment property as at 31.01.2021 became the acquisition cost of inventories. No inventories were written down in the reporting period (note 7).

7 Investment property

EUR
2,036,000
-65,000
379,000
2,350,000
88,040
-824,040
-1,614,000
0

In 2021, investment property was reclassified to inventories (see Note 6).

In January 2021, a 3.43-hectare property was sold for 824,040 euros.

In June 2020, a 0.7-hectare property was sold for 65,000 euros.

The expenses related to the management of investment property totalled 0 euros in 2021 and 10,544 euros in 2020 (note 12).

the previous detailed planning the plots were made smaller and the flexibility to change the size of the plots as needed was added.

As at 31 December 2020, the investment property is recognised at fair value. As a result of the discounted cash flow assessment performed by the Management as at 31 December 2020, the Management estimated the fair value of the investment property at 2,350,000 euros. The discounted cash flow model approach was applied based on the best use of investment property and inputs based on market conditions (discount rate, sales period). Considering the known comparable transactions in Pärnu city and the experience and knowledge of the Management, the average market value of the appraised objects was 19.11 EUR/m2. In order to assess the present value of the real estate as at 31 December 2020, the Management estimated the sale period of the plots to be 4 years.

According to IFRS 13, the real estate recognised at fair value is considered to be a level 3 investment. For determining fair value, the most important inputs are the sales price, the discount rate and the period of discounted cash flows.

Discount rate	Sales price, EUR / m2
2 350 000	18.36	18.61	18.86	19.11	19.36	19.61	19.86
9.60%	2,390,000	2,430,000	2,460,000	2,490,000	2,520,000	2,560,000	2,590,000
10.40%	2,350,000	2,380,000	2,410,000	2,440,000	2,480,000	2,510,000	2,540,000
11.20%	2,300,000	2,330,000	2,370,000	2,400,000	2,430,000	2,460,000	2,490,000
12.00%	2,260,000	2,290,000	2,320,000	2,350,000	2,380,000	2,410,000	2,440,000
12.80%	2,220,000	2,250,000	2,280,000	2,310,000	2,340,000	2,370,000	2,400,000
13.60%	2,180,000	2,210,000	2,240,000	2,270,000	2,300,000	2,330,000	2,350,000
14.40%	2,140,000	2,170,000	2,200,000	2,220,000	2,250,000	2,280,000	2,310,000

Sensitivity of the main inputs to investment property fair value as at 31.12.2020:

Sales
period	EUR
+ 1 year	2,250,000
- 1 year	2,450,000

The property valuation is based on estimates, assumptions and historical experience adjusted with prevailing market conditions and other factors which management assesses to the best of its ability on an on-going basis. Therefore, based on the definition and taking into account that evaluation is based on a number of presumptions, which may not realize in the assessed way, the valuation can be subject to significant adverse effects. This could lead to a significant change in the carrying amount of investment property in future periods. The fair value of the investment property, which is assessed using the described model is essentially dependent on whether this project could be accomplished and appropriate financing found in compliance with the presumptions made and schedule used in evaluation model.

8 Trade and other payables

EUR	31.12.2021	31.12.2020
Trade payables	3,610	407
Taxes payable (note 9)	100,104	0
Other payables	91,879	5,918
TOTAL	195,593	6,325

Payables balance includes unpaid invoices to related parties, which are disclosed in Note 16. A provision for expenses yet to be incurred and invoices not yet received is formed for sold land plots, this balance is reflected in other payables.

9 Equity

	Number of shares (pcs)	Share capital (EUR)
Balance 31.12.2020	4,499,061	2,299,020
Balance 31.12.2021	4,499,061	449,906

The share capital of AS Trigon Property Development is 449,906 euros which is divided into 4,499,061 no par value shares with the book value of 0.1 euro. The minimum share capital stipulated in the articles of association is 400,000 euros and the maximum share capital is 1,600,000 euros. Each share grants one vote to its owner at the General Meeting of Shareholders and the right to receive dividends. All shares issued have been fully paid for.

On 04 June 2021, the Annual General Meeting adopted a resolution to reduce the share capital of the Company by 1,849,114 euros from 2,299,020 euros to 449,906 euros. Share capital was reduced by reducing book value of the shares by 0.411 euros per share. The reduction of share capital has registered in the Commercial register, on 10th of September 2021. In relation to reduction of share capital the corresponding payments to the shareholders by 0.089 euros per share were made by a total of 400,417 euros. And respective income tax paid was in amount of 100,104 euros in total (Note 8).

As at 31 December 2021, the retained earnings amounted to 1,399,575 euros. As at 31 December 2020, the accumulated losses amounted to 321,264 euros. The maximum possible income tax liability which would arise if all of the unrestricted equity were distributed as dividends is 349,894 euros.

As at 31 December 2021, the Company had 763 shareholders (31 December 2020: 363 shareholders) of which the shareholders with more than a 5% holdings were:

Pärnu Holding OÜ with 1,764,600 (31.12.2020: 1,877,640) shares or 39.22% (31.12.2020: 41.73%)
Nordic Fibreboard LTD OÜ with 804,552 (31.12.2020: 804,552) shares or 17.88% (31.12.2020: 17.88%)
Madis Talgre with 343,000 (31.12.2020: 289,000) shares or 7.62% (31.12.2020: 6.42%).

Members of the Management Board and Supervisory Board did not own directly any shares of Trigon Property Development AS as at 31 December 2021 and 31 December 2020. Supervisory Board members Joakim Johan Helenius and Torfinn Losvik have indirect ownership through parent company OÜ Pärnu Holdings.

10 Sales revenue

EUR	2021	2020
Gain on sales by geographical location
Estonia	809,080	0
Total sales to EU member States	809,080	0
Gain on sales by operating activities
Sale of real estate	809,080	0
Total gain on sales	809,080	0

11 Costs of goods sold

EUR	31.12.2021	31.12.2020
Land and buildings	433,080	0
TOTAL	433,080	0

12 Expenses related to investment property

EUR	2020
Land tax (note 13)	8,241
Evaluation	2,200
Other expenses	103
TOTAL (Note 7)	10,544

13 Administrative and general expenses

EUR	2021	2020
Security transactions and stock exchange fees	8,397	7,076
Advertising	696	384
Accounting service	3,240	3,240
Consulting (Note 16)	22,132	3,885
Selling expenses	32,229	0
Auditing	12,920	5,700
Land tax	7,931	0
Legal expenses	3,852	144
Other	617	148
TOTAL	92,014	20,577

In 2021 and 2020, the average number of employees was 0. Audit fees contain only fees for auditing the annual report. Consulting fees includes consulting services and sales advice costs. Consultancy fees includes consulting services purchased from related parties (note 16).

In connection with the purpose of investment property reclassification from investment property to inventories, the expenses related to the investment property were also reclassified, which in 2020 were recorded under real estate expenses (note 12).

14 Earnings per share

EUR	2021	2020
Weighted average number of shares	4,499,061	4,499,061
Basic earnings per share (basic EPS)	0.06049	0.07733
Diluted earnings per share	0.06049	0.07733
Book value of the share	0.53	0.55
Price to earnings ratio (P/E)	13.23	7.24
Closing price of the share of AS Trigon
Property Development on Tallinn Stock	0.800	0.56
Exchange

Basic earnings per share have been calculated on the basis of the net profit for the period and the number of shares.

Diluted earnings (loss) per share equal the basic earnings per share because the Company does not have any potential ordinary shares with the dilutive effect on the earnings per share.

15 Segment report

The Company operates in one business segment sale of rale estate. The real estate sales division leases out land and develops real estate. The Management Board is responsible for allocating resources and evaluating the results of business segments. The Management Board monitors the Company's operations as one business segment, which is the sale of real estate. The internal reports submitted to the Management Board are prepared on the basis of the same accounting principles and in the form used in these financial statements.

16 Related party transactions

The following parties are considered to be related parties:

Parent company Pärnu Holdings OÜ and owners of the parent company with significant influence;
Members of the Management Board and the Supervisory Board of AS Trigon Property Development and their close relatives;
Entities under the control of the members of the Management Board and Supervisory Board.

The Company´s shares are listed in the secondary list of Nasdaq Tallinn. As at 31.12.2021, OÜ Pärnu Holdings owns 39.22 % of the shares of Trigon Property Development AS directly and 17.88% through Nordic Fibreboard LTD OÜ. The biggest shareholders of OÜ Pärnu Holdings are OÜ Stetind (46.71% of the share capital and 49.75% of the voting shares) and Joakim Johan Helenius (46.71% of the share capital and 49.75% of the voting shares) by the time of compiling these financial statements.

In 2021 and 2020, no remuneration has been paid to the Management or Supervisory board members. There are no potential liabilities to the members of the Management Board and the Supervisory Board or severance pay granted to them.

In 2021, the Company bought services from the companies under the control of the Members of the Supervisory Board in the amount of 2,400 euros (2020: 2,400 euros), note 8 and 13. In 2021 Company bought services from the owners of the parent company in the amount of 3,240 euros (2020: 3,240 euros). As at 31 December 2021 the amount of 240 euros was unpaid to the related parties (31.12.2020: 240 euros). No allowance has been made for related party receivables.

Trigon Property Development AS has purchased accounting and consulting services from related parties.

17 Contingent liabilities

The tax authorities may at any time inspect the books and records within 5 years subsequent to the reported tax year, and may impose additional tax assessments and penalties to the Company. Tax audits were not conducted in 2021 and 2020. The Company's management is not aware of any circumstances, which may give rise to a potential material liability in this respect.

18 Events after the balance sheet date

On the 24th of February 2022, Russia launched a full-scale military invasion and attack on Ukraine´s independence. This was an escalation into the Russian hybrid war that began in early 2014 following the occupation and annexation of Crimea in the regions of eastern and south-eastern Ukraine. Trigon Property Development AS considers this event as a non-adjusting event after the balance sheet date. As of the date of this report, the military action in Ukraine has not yet had a material impact on the Company and it is very difficult to assess the impact of this event to the Estonian economy and to Trigon Property Development AS.

Independent Auditor's Report

To the Shareholders of AS Trigon Property Development

Report on the audit of the financial statements

Our opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of AS Trigon Property Development (the "Company") as at 31 December 2021, and the Company´s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Our opinion is consistent with our additional report to the Audit Committee dated 6 April 2022.

What we have audited

The Company's financial statements comprise:

භ the statement of financial position as at 31 December 2021;
භ the statement of comprehensive income for the year then ended;
භ the cash flow statement for the year then ended;
භ the statement of changes in equity for the year then ended; and
භ the notes to the financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report.

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

Independence

We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

During the period from 1 January 2021 to 31 December 2021, we have not provided any non-audit services to the Company.

AS PricewaterhouseCoopers Pärnu mnt 15, 10141 Tallinn, Estonia; License No. 6; Registry code: 10142876 T: +372 614 1800, F: +372 614 1900, www.pwc.ee

Translation note:

This version of our report is a translation from the original, which was prepared in Estonian. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

Our audit approach

Overview

Materiality	Overall Company materiality is EUR 25.5 thousand, which represents approximately 1% of Company's total assets.
Key audit matters	x Key audit matter relates to the accounting of inventories.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the Management Board made subjective judgments; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which the Company operates.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgment, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Overall Company materiality	EUR 25.5 thousand.
How we determined it	Approximately 1% of Company's total assets.
Rationale for the materiality benchmark applied	We have applied this benchmark, as we considered total assets that mainly consist of property developments recognised as inventories to be key performance indicator that determines the Company's value and is monitored by management and investors.

Translation note:

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Accounting of inventories

(refer to Note 2 'Summary of significant accounting policies – subsection 2.5 'Inventories' and Note 6 'Inventories' for further details)

As at 31 December 2021, the Company's statement of financial position includes property developments recognised as inventories in the amount of EUR 1.45 million.

As of 31 January 2021, the investment property was reclassified to inventories in connection with commencement of development work consisting of road and communication construction on the properties and the implementation of a specific sales strategy to sell the land plots to end-users.

Inventories are carried at the lower of cost and net realisable value.

With property prices following the economic cycle and exhibiting substantial fluctuation over time, net realisable value of the property for resale recognised as inventories needs to be carefully monitored against the carrying amount. Should the net realisable value of a property fall below its carrying amount, a writedown to net realisable value is necessary. Determining the net realisable value of property requires estimates of the expected selling price and the cost to complete the development of the property.

Due to the magnitude and the reclassification during the year, the accounting of inventories is considered a key audit matter.

Key audit matter How our audit addressed the key audit matter

We assessed whether the Company's accounting policies in relation to inventories are in compliance with IFRS.

We assessed the management's expertise to perform valuation of property. The management is experienced in property valuation and the outcomes of completed development projects have usually met the profitability estimates.

We assessed whether the principles for determining the cost of inventories are reasonable and whether the cost determined for each property upon reclassification from investment property is appropriate.

We assessed the inputs used in the valuation analysis prepared by management. For inputs based on estimates, which include costs applicable for completing the construction and sales price, we assessed the reasonableness of the inputs by comparing them with available market information and existing construction contracts. Where available, we compared the estimated sales prices with comparable market transactions.

We conducted substantive audit procedures to verify the carrying amount of inventories. We selected a sample of inventory acquisitions and performed substantive procedures that included, but were not limited to:

x reconciling the inventory acquisition costs with underlying documents;
x testing the correct periodisation of inventory acquisition costs.

We also assessed the appropriateness of disclosures provided in the annual report in respect of inventories.

Translation note:

Reporting on other information including the Management report

The Management Board is responsible for the other information. The other information comprises the brief description, the Management report, the Remuneration report, Profit distribution proposal, Trigon Property Development AS sales revenue according to the EMTAK 2008 (but does not include the financial statements and our auditor's report thereon).

Our opinion on the financial statements does not cover the other information, including the Management report.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

With respect to the Management report, we also performed the procedures required by the Auditors Activities Act. Those procedures include considering whether the Management report is consistent, in all material respects, with the financial statements and is prepared in accordance with the requirements of the Accounting Act.

In accordance with the Securities Market Act with respect to the Remuneration Report, our responsibility is to consider whether the Remuneration Report includes the information in accordance with the requirements of Article 1353 (3) of the Securities Market Act.

Based on the work undertaken in the course of our audit, in our opinion:

භ the information given in the Management report for the financial year for which the financial statements are prepared is consistent, in all material respects, with the financial statements;
භ the Management report has been prepared in accordance with the requirements of the Accounting Act; and
භ the Remuneration Report has been prepared in accordance with Article 1353 (3) of the Securities Market Act.

In addition, in light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Management report and other information that we obtained prior to the date of this auditor's report. We have nothing to report in this regard.

Responsibilities of the Management Board and those charged with governance for the financial statements

The Management Board is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as the Management Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management Board is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Translation note:

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

භ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
භ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
භ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board.
භ Conclude on the appropriateness of the Management Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
භ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

Translation note:

Report on other legal and regulatory requirements

Report on the compliance of the presentation of financial statements with the requirements of the European Single Electronic Format ("ESEF")

The European single electronic reporting format has been applied by the management of the Company to the Company's financial statements to comply with the requirements of Article 3 of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the "ESEF Regulation"). These requirements specify the Company's obligation to prepare its financial statements in a XHTML format. We confirm that the European single electronic reporting format of the financial statements for the year ended 31 December 2021 complies with the ESEF Regulation in this respect.

Appointment and period of our audit engagement

We were first appointed as auditors of AS Trigon Property Development as a public interest entity for the financial year ended 31 December 2006. Our appointment has been renewed by tenders and shareholder resolutions in the intermediate years, representing the total period of our uninterrupted engagement appointment for AS Trigon Property Development, as a public interest entity, of 16 years. In accordance with the Auditors Activities Act of the Republic of Estonia and the Regulation (EU) No 537/2014, our appointment as the auditor of AS Trigon Property Development can be extended for up to the financial year ending 31 December 2025.

AS PricewaterhouseCoopers

/signed/

Lauri Past Certified auditor in charge, auditor's certificate no.567

6 April 2022 Tallinn, Estonia

Translation note:

Profit distribution proposal

Total retained earnings of Trigon Property Development AS as at 31 December 2021 are 1,399,575 euros.

The Chairman of the Management Board of Trigon Property Development AS proposes to the General Meeting of Shareholders to pay dividends in the amount of 584,878 euros.

________________________

Rando Tomingas Member of the Management Board

Signatures of the Management Board and the Supervisory Board to the 2021 Annual report

The Management Board has prepared the Company's Annual Report for 2021, which consists of the management report, remuneration report, financial statements, independent auditor's report and profit distribution proposal.

Rando Tomingas

Member of the Management Board

The Supervisory Board has reviewed the Annual Report prepared by the Management Board and approved it for presentation at the General Meeting of Shareholders.

Torfinn Losvik Member of the Supervisory Board

Joakim Helenius

Signed digitally

Member of the Supervisory Board

Signed digitally

Alo Lepp

Member of the Supervisory Board

Signed digitally

Trigon Property Development AS sales revenue according to the EMTAK 2008

EMTAK	Main activity	2021	2020
68101	Buying and selling of own real estate	809 080 euros	0 euros
	Total sales revenue	809 080 euros	0 euros

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Trigon Property Development — Annual Report 2021

2230_10-k_2022-04-29_e38c2cac-40c7-4cbf-8527-579d5f6ea79f.pdf

Table of contents

Brief description

Management report

Overview of business areas

Management

Economic environment

Financial ratios

Return on assets = net profit / total assets

Seasonality and the risks of the operating activities

Environmental and social impacts

Share

Personnel

Corporate Governance Report

General

General Meeting of Shareholders

Supervisory Board

Management Board

Publishing financial reports and other information

Remuneration report

Statement of financial position

Statement of comprehensive income

Cash flow statement

Statement of changes in equity

Notes to the financial statements

1 General information

2 Summary of significant accounting policies

2.1 Basis of preparation

2.2 Functional and presentation currency

2.3 Cash and cash equivalents

2.4 Financial assets and liabilities

Classification

Recognition and derecognition

Measurement

Debt instruments

Equity instruments

Impairment

Financial Liabilities

2.5 Inventories

2.6 Investment property

2.7 Provisions and contingent liabilities

2.8 Corporate income tax

2.9 Revenue

Financing component

2.10 Cash flow statement

2.11 Statutory reserve capital

2.12 Earnings per share

2.13 Events after the balance sheet date

2.14 New International Financial Reporting Standards, amendments to existing standards and the interpretations of the standards by International Financial Reporting Interpretations Committee (IFRIC)

Adoption of New or Revised Standards and Interpretations

New Accounting Pronouncements

Standards not yet adopted

3 Financial risk management

3.1 Financial risks and their management

(a) Market risk

(ii) Price risk

(c) Liquidity risk

Liquidity analysis

3.2 Capital management

3.3 Fair value of financial assets and financial liabilities

3.4 Valuation of property measured at fair value

4 Critical accounting estimates and judgements

5 Trade and other receivables

6 Inventories

7 Investment property

8 Trade and other payables

9 Equity

10 Sales revenue

11 Costs of goods sold

12 Expenses related to investment property

13 Administrative and general expenses

14 Earnings per share

15 Segment report

16 Related party transactions

17 Contingent liabilities

18 Events after the balance sheet date

Independent Auditor's Report

Report on the audit of the financial statements

Trigon Property Development Annual Report 2021