Trigon Property Development — Interim / Quarterly Report 2022

May 31, 2022

Interim report for the first quarter of 2022 (unaudited)

Table of contents

BRIEF DESCRIPTION 3
MANAGEMENT REPORT 4
CONDENSED INTERIM REPORT7
Management Board's declaration 7
Condensed statement of financial position 8
Condensed statement of comprehensive income 9
Condensed cash flow statement 10
Condensed statement of changes in equity 11
Notes to condensed interim report 12 Note 1 Accounting Principles Followed upon Preparation of the Interim Accounts 12 Note 2 Trade and other receivables 12 Note 3 Inventories 12 Note 4 Investment property 13 Note 5 Trade and other payables 14 Note 6 Equity 14 Note 7 Sales revenue 15 Note 8 Costs of goods sold 15 Note 9 Expenses related to investment property 15 Note 10 Administrative and general expenses 15 Note 11 Earnings per share 16 Note 12 Segment 16 Note 13 Related party transactions 16

AS Trigon Property Development is a real estate development company.

AS Trigon Property Development currently owns one real estate development project involving a 13.8-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 31.03.2022 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.

Business name:	AS Trigon Property Development
Address:	Pärnu mnt 18 Tallinn 10141
Commercial Registry no.:	10106774
Beginning of financial year:	1.1.2022
End of financial year:	31.12.2022
Beginning of interim period:	1.1.2022
End of interim period:	31.03.2022
Auditor:	PricewaterhouseCoopers AS
Phone:	+372 6679 200
Fax:	+372 6679 201
E-mail:	info@trigonproperty.com
Internet homepage:	www.trigonproperty.com

Management report

Overview of business areas

The main business activity of Trigon Property Development AS is real estate development. As at 31.03.2022, AS Trigon Property Development owned one development project with an area of 13.8 hectares in the City of Pärnu, Estonia. An industrial and logistics park is planned on this area. The Company's 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 first quarter of 2022, a 0.53-hectare property was sold for 213,200 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.

Management

The law, the articles of association, decisions and goals stated by the shareholders and the Supervisory Board are followed in the 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.

Financial ratios

Statement of financial position	I Q 2022	I Q 2021
Total assets	2,546 828	2,558,670
Return on assets	10.69%	2.53%
Equity	2,471,987	2,556,022
Return on equity	11.01%	2.53%
Debt ratio	2.94%	0.10%
Net profit for the period	108,908	64,668
Share (31.03)	I Q 2022	I Q 2021
Number of shares at period-end	4,499,061	4,499,061
Closing price of the share	0.865	0.840
Earnings per share	0.02421	0.01437
Price-to-earnings (PE) ratio	35.73	58.44
Book value of the share	0.55	0.57
Price-to-book ratio	1.57	1.48
Market capitalisation	3,891,688	3,779,211

Return on equity = net profit/ equity Debt ratio = liabilities / total assets Earnings per share = net profit for the period/ 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 capitalisation = closing price of the share * number of shares

Share

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 0.80 at the end of 2021, closed at 0.865 euros euros at the end of March 2022. In the first 3 months of 2022, a total of 97,898 shares were traded and the total sales amounted to 81,053 euros.

Share price and trading statistics on the Tallinn Stock Exchange from 01.01.2022 to 31.03.2022:

The distribution of share capital by the number of shares acquired as at 31.03.2022

	Number of shareholders	% of shareholders	Number of shares	% of share capital
1-99	472	56.59%	10,745	0.24%
100-999	240	28.78%	68,162	1.52%
1 000-9 999	93	11.15%	227,366	5.05%
10 000-99 999	22	2.64%	573,084	12.74%
100 000-999 999	6	0.72%	1,855,104	41.23%
1 000 000-9 999 999	1	0.12%	1,764,600	39.22%
TOTAL	834	100%	4,499,061	100%

List of shareholders with over 1% holdings as at 31.03.2022.

	Number of
Shareholder	shares	Ownership %
Pärnu Holdings OÜ	1,764,600	39.22
Nordic Fibreboard LTD OÜ	804,552	17.88
Madis Talgre	359,800	8.00
Harju KEK AS	224,000	4.98
Kirschmann OÜ	201,752	4.48
M.C.E.Fidarsi OÜ	150,000	3.33
Avraal AS	115,000	2.56
James Kelly	95,809	2.13
Suur Samm OÜ	64,692	1.44
Toivo Kuldmäe	49,231	1.09
Invenio OÜ	47,727	1.06

Personal

AS Trigon Property Development had no employees as at 31 March 2022 and 31 March 2021. There were no labour costs in first 3 months of 2022 and 2021.

Description of main risks

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.

Management and Supervisory Boards and auditor

Management board of AS Trigon Property Development has one member – Rando Tomingas.

Supervisory Board of AS Trigon Property Development has three members: Joakim Helenius, Torfinn Losvik and Alo Lepp.

Audits are carried out by PricewaterhouseCoopers AS.

Condensed interim report

Management Board's declaration

The Management Board confirms the correctness and completeness of the unaudited interim report of AS Trigon Property Development for the first quarter of 2022 as set out on pages 4-16.

The Management Board confirms that to the best of their knowledge:

• 1. the accounting policies and presentation of information applied in the preparation of the condensed interim report are in compliance with International Financial Reporting Standards (IFRS) as adopted in the European Union.
• 1. the interim report presents a true and fair view of the financial position, the results of operations and cash flows of the Company;
• 1. the management report presents true and fair view of significant events that took place during the accounting period and their impact to financial statements and includes the description of major risks and doubts;
• 1. company is going concern.

Member of the Management Board Rando Tomingas

31.05.2022

Condensed statement of financial position

EUR	31.03.2022	31.12.2021	31.03.2021
Cash and cash equivalents	968,407	938,858	940,532
Trade and other receivables (note 2)	29,341	166,825	4,138
Inventories (note 3)	1,549,080	1,452,989	0
Total current assets	2,546,828	2,558,672	944,670
Investment property (note 4)	0	0	1,614,000
Total non-current assets	0	0	1,614,000
TOTAL ASSETS	2,546,828	2,558,672	2,558,670
Trade and other payables (note 5)	74,841	195,593	2,648
Total current liabilities	74,841	195,593	2,648
Total liabilities	74,841	195,593	2,648
Share capital at book value (note 6)	449,906	449,906	2,299,020
Share premium	226,056	226,056	226,056
Statutory reserve capital	287,542	287,542	287,542
Accumulated profit/loss	1,508,483	1,399,575	-256,596
Total equity	2,471,987	2,363,079	2,556,022
TOTAL LIABILITIES AND EQUITY	2,546,828	2,558,672	2,558,670

Condensed statement of comprehensive income

EUR	I Q 2022	I Q 2021
Gain on sales (note 7)	213,200	0
Costs of goods sold (note 8)	-83,830	0
Gross profit	129,370	0
Administrative and general expenses (note 10)	-20,487	-21,408
Expenses related to investment property (note 9)	0	-1,983
Changes in fair value of investment property (note 4)	0	88,040
Operating profit	108,882	64,649
Financial income	25	19
NET PROFIT FOR THE PERIOD	108,908	64,668
TOTAL COMPREHENSIVE PROFIT	108,908	64,668
Basic earnings per share (note 11)	0.02421	0.01437
Diluted earnings per share (note 11)	0.02421	0.01437

The notes to the condensed interim report presented on pages 12-16 are an integral part of this report.

Condensed cash flow statement

EUR	I Q 2022	I Q 2021
Cash flows from operating activities
Total comprehensive profit Adjustments:	108,882	64,649
Change in fair value of investment property (note 4)	0	-88,040
Operating loss before changes in working capital:	108,882	-23,391
Change in receivables and prepayments related to operating activities (note 2)	137,484	-3,349
Change in liabilities and prepayments related to operating activities (note 5)	-120,752	-3,677
Change in inventories (note 3)	-96,091	0
Interests received	25	19
Total cash flows generated from/(used in) operating activities	29,549	-30,398
Cash flows from investing activities
Disposal of investment property (note 4)	0	824,040
Total cash flows from investing activities	0	824,040
CHANGE IN CASH BALANCE	29,550	793,642
OPENING BALANCE OF CASH	938,858	146,890
CLOSING BALANCE OF CASH	968,407	940,532

The notes to the condensed interim report presented on pages 12-16 are an integral part of this report.

			Statutory
	Share	Share	reserve	Retained
EUR	capital	premium	capital	earnings/loss	Total
Balance 31.12.2020	2 299 020	226 056	287 542	-321 264	2 491 354
Total comprehensive profit	0	0	0	64 668	64 668
Balance 31.03.2021	2 299 020	226 056	287 542	-256 596	2 556 022
Total comprehensive profit	0	0	0	207 473	207 473
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
Total comprehensive profit	0	0	0	108 908	108 908
Balance 31.03.2022	449 906	226 056	287 542	1 508 483	2 471 987

Condensed statement of changes in equity

Additional information regarding the owners' equity is provided in note 6.

The notes to the condensed interim financial statements presented on pages 12-16 are an integral part of these financial statements.

Notes to condensed interim report

Note 1 Accounting Principles Followed upon Preparation of the Interim Accounts

General Information

AS Trigon Property Development (The Company) is active in real estate development.

Bases for Preparation

The accounting policies used for preparing the interim report of AS Trigon Property Development for the first quarter of 2022 are in accordance with International Financial Reporting Standards (IFRS) as adopted in the European Union. The presentation of the financial statements complies with the requirements of IAS 34 "Interim Financial Reporting". Interim financial statements should be read together with the annual report of last year. The accounting policies that have been used in the preparation of the condensed interim report are the same as those used in the annual report for the year ended 31 December 2021.

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

Management estimates that AS Trigon Property Development is a going concern and the Company's interim report for the first quarter of 2022 presents a true and fair view of the financial position, the results of operations and the cash flows of AS Trigon Property Development. This interim report has not been audited.

EUR	31.03.2022	31.12.2021	31.03.2021
Receivables	0	130,571	0
Tax prepayments	29,341	36,254	4,138
TOTAL	29,341	166,825	4,138

Note 2 Trade and other receivables

Note 3 Inventories

	EUR
Balance as at 31.12.2020	0
Balance as at 31.03.2021	1,614,000
Inventories	-161,011
Balance as at 31.12.2021	1,452,989
Inventories	96,091
Balance as at 31.03.2022	1,549,080

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 4).

Note 4 Investment property

	EUR
Balance as at 31.12.2020	2,350,000
Profit from change in fair value	88,040
Sale of investment property	-824,040
Reclassification to inventories	-1,614,000
Balance as at 31.12.2021	0

In 2021, investment property was reclassified to inventories (see Note 3).

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 1,983 euros in the first 3 months of 2021 (note 9).

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 newly 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.

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

AS Trigon Property Development Interim report for the first quarter of 2022 (unaudited)

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.

EUR	31.03.2022	31.12.2021	31.03.2021
Payables	6,625	3,610	2,430
Taxes payable	0	100,104	0
Other payables	68,217	91,879	218
TOTAL	74,841	195,593	2,648

Note 5 Trade and other payables

Note 6 Equity

	Number of shares (pcs)	Share capital (EUR)
Balance 31.03.2021	4,499,061	2,299,020
Balance 31.12.2021	4,499,061	449,906
Balance 31.03.2022	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 5).

As at 31 March 2022, the retained earnings amounted to 1,508,483 euros. As at 31 December 2021, the accumulated losses amounted to 1,399,575 euros. The maximum possible income tax liability which would arise if all of the unrestricted equity were distributed as dividends is 377,121 euros.

As at 31 March 2022, the Company had 834 shareholders (31 December 2021: 763 shareholders) of which the entities with more than a 5% holdings were:

• Pärnu Holding OÜ with 1,764,600 (31.12.2021: 1,764,600) shares or 39.22% (31.12.2021: 39.22%)
• Nordic Fibreboard LTD OÜ with 804,552 (31.12.2021: 804,552) shares or 17.88% (31.12.2021: 17.88%)
• Madis Talgre with 359,800 (31.12.2021: 343,000) shares or 8.00% (31.12.2021: 7.62%).

Members of the Management Board and Supervisory Board did not own directly any shares of Trigon Property Development AS as at 31 March 2022 and 31 December 2021. Supervisory Board members Joakim Johan Helenius and Torfinn Losvik have indirect ownership through parent company OÜ Pärnu Holdings.

Note 7 Sales revenue

EUR	I Q 2022	I Q 2021
Gain on sales by operating activities
Sale of real estate	213,200	0
Total gain on sales	213,200	0

Note 8 Costs of goods sold

EUR	I Q 2022	I Q 2021
Land and buildings	83,830	0
TOTAL	83,830	0

Note 9 Expenses related to investment property

EUR	I Q 2021
Land tax	1,983
TOTAL (Note 4)	1,983

Note 10 Administrative and general expenses

EUR	I Q 2022	I Q 2021
Security transactions and stock exchange fees	1,879	1,683
Accounting service	810	810
Consulting	10,260	600
Selling expenses	4,264	16,480
Auditing	20	20
Land tax	1,338	0
Legal expenses	891	1,795
Other	1,025	20
TOTAL	20,487	21,408

Note 11 Earnings per share

EUR	I Q 2022	I Q 2021
Weighted average number of shares	4,499,061	4,499,061
Basic earnings per share (basic EPS)	0.02421	0.01437
Diluted earnings per share	0.02421	0.01437
Book value of the share	0.55	0.57
Price to earnings ratio (P/E)	35.73	58.44
Closing price of the share of AS Trigon Property Development on Tallinn Stock Exchange	0.865	0.840

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

Diluted earnings 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.

Note 12 Segment

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.

Note 13 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, 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 31.03.2022, 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 the first 3 months of 2022 and 2021 no remuneration has been paid to the Management or Supervisory board. There are no potential liabilities to members of the Management Board or Supervisory Board.

In the first 3 months of 2022 the Company bought services from the companies under the control of the Members of the Supervisory Board in the amount of 600 euros (2021 Q1: 600 euros). In the first 3 months of 2022 Company bought services from the owners of the parent company in the amount of 810 euros (2021 Q1: 810 euros). As at 31 March 2022 the amount of 480 euros was unpaid to the related parties (31.03.2021: 240 euros).