UTENOS TRIKOTAŽAS AB

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

CONSOLIDATED ANNUAL REPORT

AND INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

CONTENT

Financial Statements:

Statements of Financial Position

2 - 3

Statements of Comprehensive

Income

4–5

Statements of Changes in Equity

6–7

Statements of Cash Flows

8–9

Notes to the Financial Statements

10–64

Confirmation of responsible persons

Annual Report:

Consolidated Annual Report (incl.

Remuneration Report)

66 -105

Appendix: Disclosure of Compliance with the Governance Code for the year ended 31 December 2022. 106 - 120

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Financial Position

		Group		Company
	Notes	31 December		31 December
		2022	2021	2022	2021
ASSETS
Non-current assets
Intangible assets	6	474	486	70	84
Property, plant and equipment	7	6,898	9,443	6,182	6,405
Right-of-use assets	17	355	578	227	238
Investment property	8	157	163	157	163
Investments in subsidiaries	9	-	-	1,490	1,490
Receivables from subsidiaries	26	-	-	-	1,104
Prepayments to subsidiaries	26	-	-	-	771
Deferred tax asset	24	-	-	-	-
		7,884	10,670	8,126	10,255
Current assets
Inventories	10	4,346	6,914	4,292	6,831
Trade receivables	11	1,997	1,182	1,623	1,065
Contract assets	11	1,900	2,748	1,801	2,673
Other current assets	12	315	534	280	463
Cash and cash equivalents	13	385	625	29	72
		8,943	12,003	8,025	11,104
Total assets		16,827	22,673	16,151	21,359

Continued on the next page

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of financial position (continued)

		Group		Company
		31 December		31 December
		2022	2021	2022	2021
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the Company
Share capital	14	2,756	2,756	2,756	2,756
Legal reserve	15	574	574	574	574
Revaluation reserve	15	2,361	3,946	2,071	2,129
Reserve for acquisition of own shares	15	1,090	1,090	1,000	1,000
Foreign exchange translation reserve	15	1,023	1,053	-	-
Retained earnings		(3,959)	(2,142)	(2,134)	480
		3,845	7,277	4,267	6,939
Non-controlling interest	26	188	109	-	-
Total equity		4,033	7,386	4,267	6,939
LIABILITIES
Non-current liabilities
Borrowings	16	4,162	2,999	4,162	2,999
Borrowings from related entities	16	532	532	532	532
Non-current lease liabilities	17	685	488	126	177
Borrowings from subsidiaries	16, 26	-	-	600	600
Deferred tax liability	24	517	825	460	425
Provisions for employee benefits	18	231	358	157	251
Other non-current liabilities	19	394	-	394	-
		6,521	5,202	6,431	4,984
Current liabilities
Current portion of non-current borrowings	16	637	637	637	637
Other current liabilities	16	320	1,801	320	1 801
Current lease liabilities	17	208	116	115	81
Trade payables		1,184	2,989	1,122	2 886
Payables to other related parties and subsidiaries	26	175	106	243	320
Contract liabilities	11	827	861	820	860
Income tax payable		-	-	-	-
Accrued expenses and other current liabilities	19	2,922	3,575	2,196	2 851
		6,273	10,085	5,453	9 436
Total liabilities		12,794	15,287	11,884	14 420
Total equity and liabilities		16 827	22,673	16,151	21,359

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Comprehensive Income

			Group			Company
	Notes		Year ended 31 December			Year ended 31 December
			2022	2021	2022	2021
Revenue from contracts with customers	5	34,509	30,443		31,633	28,121
Cost of sales	20	(30,679)	(26,321)		(28,603)	(24,364)
Gross profit		3,830	4,122		3,030	3,757
Selling expenses	21	(2,222)	(2,806)		(2,014)	(2,503)
General and administrative expenses	21	(3,201)	(4,264)		(2,335)	(3,313)
Other income	22	193	137		73	106
Other expenses	22	(91)	(17)		(85)	(13)
Operating profit (loss)		(1,491)	(2,828)		(1,331)	(1,966)
Interest income	23	-	-		70	66
Finance income	23	334	227		243	68
Finance costs	23	(746)	(260)		(1,684)	(924)
Profit/(loss) before tax		(1,903)	(2,861)		(2,702)	(2,756)
Income tax	24	(17)	(250)		(34)	(192)
Net profit (loss) for the year		(1,920)	(3,111)		(2,736)	(2,948)
Net profit (loss) attributable to:
Equity holders of the Company		(1,916)	(2,966)		(2,736)	(2,948)
Non-controlling interests	26	(4)	(145)		-	-
		(1,920)	(3,111)		(2,736)	(2,948)
Other comprehensive income/(loss)
that may be reclassified to profit or loss in subsequent periods, net of tax
Exchange differences on translation of foreign operations		(41)	131		-	-
Total other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods, net of tax		(41)	131		-	-

Continued on the next page

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Comprehensive Income (continued)

			Group	Company
	Notes		Year ended 31 December		Year ended 31 December
		2022	2021	2022	2021
Other comprehensive income/(loss)
that will not be reclassified to profit or loss in subsequent periods
Actuarial gain/(loss) from the pensions	18	64	(54)	64	(54)
reserve
Impairment of revaluation result of non- current assets		(1,446)	-	-	-
Total other comprehensive income/(loss) that will not be reclassified to profit or loss in subsequent periods		(1,382)	(54)	64	(54)
Total other comprehensive income/(loss), net of tax		(1 423)	77	64	(54)
Total comprehensive income/(loss), net of tax		(3 343)	(3,034)	(2,672)	(3,002)
Total comprehensive income/(loss) attributable to:
Equity holders of the Company		(3,328)	(2,889)	(2,672)	(3,002)
Non-controlling interests		(15)	(145)	-	-
		(3,343)	(3,034)	(2,672)	(3,002)
Basic/diluted earnings (loss) per share		(0.35)	(0.32)
(EUR)

Group				Reserve for	Foreign	UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31 DECEMBER 2022 (All amounts are in EUR thousand, unless otherwise stated) 6 Statements of Changes in Equity Equity attributable to the Company’s shareholders
			Revalua	acquisition	currency	Retained		Non-
	Share	Legal	tion	of own	translation	earnings/		controlling	Total
	capital	reserve	reserve	shares	reserve	(deficit)	In total	interests	equity
Balance at 31 December
2020	2,756	574	4,085	1,090	922	739	10,166	244	10,410
Net profit (loss) for the year	-	-	-	-	-	(2,966)	(2,966)	(145)	(3,111)
Other comprehensive income	-	-	-	-	131	(54)	77	-	77
Total comprehensive income	-	-	-	-	131	(3,020)	(2,889)	(145)	(3,034)
Acquisition/disposal of non- controlling interest	-	-	-	-	-	-	-	10	10
Transfer of revaluation reserve
to retained earnings	-	-	(139)	-	-	139	-	-	-
Balance at 31 December
2021	2,756	574	3,946	1,090	1,053	(2,142)	7,277	109	7,386
Net profit (loss) for the year	-	-	-	-	-	(1,916)	(1,916)	(4)	(1,920)
Other comprehensive income	-	-	(1,446)	-	(30)	64	(1,412)	(11)	(1,423)
Total comprehensive income	-	-	(1,446)	-	(30)	(1,852)	(3,328)	(15)	(3,343)
Acquisition/disposal of non- controlling interest	-	-	-	-	-	(104)	(104)	94	(10)
Transfer of revaluation
reserve to retained earnings	-	-	(139)	-	-	139	-	-	-
Balance at 31 December
2022	2,756	574	2,361	1,090	1,023	(3,959)	3,845	188	4,033

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Changes in Equity (continued)

Company

capital

Legal

reserve

Revaluation

reserve

Reserve for

acquisition of

own shares

Retained

earnings/(deficit)

In total

Balance as at 31 December 2020

2,756

574

2,187

1,000

3,424

9,941

Net profit (loss) for the year

(2,948)

Other comprehensive income

(54)

Total comprehensive

income/(loss)

(3,002)

Transfer of revaluation reserve to

retained earnings

(58)

Balance at 31 December 2021

2,756

574

2,129

1,000

480

6,939

Net profit (loss) for the year

(2,736)

Other comprehensive income

Total comprehensive

income/(loss)

(2,672)

Transfer of revaluation reserve to

retained earnings

(58)

Balance at 31 December 2022

2,756

574

2,071

1,000

(2,134)

4,267

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Cash Flows

		Group		Company
		Year ended 31		Year ended 31
		December		December
Cash flows from (to) operating activities	Notes	2022	2021	2022	2021
Profit (loss) before tax		(1,903)	(2,861)	(2,702)	(2,756)
Adjustments for non-cash items:
Depreciation and amortisation	7	960	909	665	655
(Gain) loss from disposal of property, plant and equipment and investment property	22	55	-	55	(2)
Impairment (reversal of impairment) and write-off of accounts receivable, loans granted and interest		(3)	(25)	1,874	675
Impairment of investments in subsidiaries		-	-	10	40
Impairment and write-off (reversal) of non-current assets	7	457	158	(141)	158
Impairment and write-off (reversal) of inventories	21	(235)	507	(236)	507
Elimination of finance (income)/costs	23	308	(248)	233	(11)
Income tax expense/(benefit)	24	17	250	34	192
Changes in working capital:
(Increase)/decrease in inventories		2,803	(1,993)	2,775	(1,954)
(Increase)/decrease in trade receivables		(812)	277	(559)	215
(Increase)/decrease in contract asset		848	(1,364)	871	(1,317)
(Increase)/decrease in non-current receivables from subsidiaries		-	-	131	47
Decrease/(increase) in other receivables and other current assets		288	58	252	74
Increase/(decrease) in contract liabilities		(34)	490	(40)	500
Increase (decrease) in trade payables and other accounts payable		(1,747)	848	(1,806)	968
Increase/(decrease) in taxes payable and other current	19	(82)	(1,566)	(351)	(1,877)
liabilities
Income tax (paid)		(68)	(199)	(70)	(187)
Net cash flows from operating activities		852	(4,759)	995	(4,073)
Cash flows used in investing activities
Purchase of property, plant and equipment	7	(185)	(651)	(177)	(635)
(Purchase) of intangible assets and prepayments	6	(13)	(20)	(13)	(20)
Proceeds from sale of property, plant and equipment		28	1	22	4
(Acquisition) of investments in subsidiaries		-	-	(10)	(40)
Loans granted		-	-	(130)	(700)
Interest received	23	-	-	70	66
Dividends received		-	-	-	-
Net cash flows used in investing activities		(170)	(670)	(238)	(1,325)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Statements of Cash Flows (continued)

		Group		Company
		Year ended 31		Year ended 31
		December		December
	Notes	2022	2021	2022	2021
Cash flows from/(used in) financing activities
Loans received		1,800	3,351	1,800	3,351
Loans repaid		(2,118)	(795)	(2,118)	(795)
Interest paid	23	(308)	(100)	(303)	(105)
Lease payments	17	(296)	(194)	(179)	(148)
Net cash flows from (used in) financing activities		(922)	2,262	(800)	2,303
Net increase/(decrease) in cash and cash equivalents		(240)	(3,167)	(43)	(3,095)
Cash and cash equivalents at the beginning of the year		625	3,792	72	3,167
Cash and cash equivalents at the end of the year		385	625	29	72

Supplementary cash flow information:

Non-cash activities:

Non-cash investing and financing activities:

Acquisition of the right-of-use asset under lease, excl. VAT

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

Notes to Separate and Consolidated Financial Statements

1. General

UTENOS TRIKOTAŽAS AB (hereinafter “the Company”) is a joint-stock company registered in the Republic of Lithuania on 6

December 1994. The address of its registered office is as follows:

Basanavičiaus St. 122,

Utena

Lithuania

The Company is engaged in production of knit-wear and textile articles.

The shares of UTENOS TRIKOTAŽAS AB are listed on the Official List of the NASDAQ OMX Vilnius Stock Exchange.

As at 31 December 2022 and 2021, the shareholders of the Company were:

	2022			2021
	Number of shares		Number of shares
	held	% of share capital	held	% of share capital
SBA Grupė UAB	8,771	92.31	8,771	92.31
Other shareholders	732	7.69	732	7.69
	9,503	100	9,503	100

92.31% of the Company’s shares are owned by the parent company SBA Grupė UAB with 90% of the shares owned

by Mr. A. Martinkevičius.

As at 31 December 2022, the number of employees of the Company was 662 (as at 31 December 2021 – 797).

The Group consists of the Company and the following subsidiaries (hereinafter “the Group”) :

		Group’s share (%) as at 31
		December
	Registered office	2022	2021	Activity
				Manufacture of wearing
Šatrija AB	Šatrijos St. 3, Raseiniai	89.78	89.78	apparel
	Laisvės ave. 33,
Gotija UAB	Kaunas	100	100	Retail
PAT MTF Mrija	Tomas Masarik 13,			Production of knitted
	Mukachevo, Ukraine	98.95	98.95	articles
Aboutwear UAB	Laisvės pr.3, Vilnius			Production of knitted
		100	80	articles

As at 31 December 2022, the number of employees of the Group was 919 (31 December 2021 – 1,094).

The Group’s and the Company’s management authorised these financial statements on 04 April 2023. The shareholders of

the Group and the Company have a statutory right to either approve or refuse to approve these financial statements and

require the management to prepare a new set of financial statements.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2 Summary of Significant Accounting Policies

Unless otherwise stated, the Company's separate financial statements are prepared using the same accounting

principles as those applied by the Group. The principal accounting policies applied in the preparation of the financial

statements of the Group and the Company for the year ended 31 December 2022 are set out below.

2.1 Basis of preparation

The financial statements of the Group and the Company have been prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the EU.

These financial statements have been prepared on a historical cost basis, except for buildings measured at revalued

amounts and derivative financial instruments measured at fair value.

Adoption of new and/or amended IFRS and International Financial Reporting Interpretations Committee (IFRIC)

interpretations

New standards, amendments or interpretations to issued standards

Certain new standards, amendments to standards and interpretations issued in 2022 that will be adopted for subsequent annual

periods are not yet applicable in the EU. Such standards have not been applied in the preparation of these financial statements.

The Group and the Company have no plans to early adopt these standards.

Standards issued but not yet adopted

The revised standards and interpretations effective from 1 January 2023 will not have a material impact on the Company's

financial statements:

- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);

- IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance;

- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice statement 2);

- Definition of Accounting Estimates (Amendments to IAS 8);

- Deferred tax related to assets and liabilities arising from Single Transaction (Amendments to IAS 12)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2 Summary of Significant Accounting Policies

2.2 Consolidation and Business Combinations

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. The financial

statements of the subsidiaries are prepared for the same reporting date using consistent accounting policies. A subsidiary is an

entity controlled directly or indirectly by the Company. The Company controls an entity when it has the ability or right to receive

variable returns from the relationship and those returns may be affected by the power to govern the investee. Subsidiaries are

consolidated from the date on which effective control is transferred to the Group and cease to be consolidated from the date on

which the Group transfers control. All intercompany transactions, balances and unrealised gains and losses on intercompany

transactions have been eliminated. Equity and net income attributable to non-controlling shareholders are presented separately

in the statement of financial position and statement of comprehensive income.

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate

of the consideration transferred, measured at fair value at the acquisition date and the amount of any non-controlling interest in

the acquire, if any. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at

fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and

included in administrative expenses.

If the business combination is achieved in stages, at the acquisition date, the fair value of the acquirer’s previously held equity

interest in the acquiree is remeasured to fair value at the acquisition date in the statement of comprehensive income. Any

contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent

changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in

accordance with IFRS 9 in profit or loss. If the contingent consideration is classified as equity, it should not be remeasured until

it is finally settled within equity.

Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount

recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is

lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in the statement of

comprehensive income.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses and is assessed for impairment

at each reporting date

2.3 Segment Reporting

Operating segments are reported in a manner consistent with the Group’s internal reporting provided to the chief operating

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of

the operating segments, has been identified as the Board that makes strategic decisions.

2.4 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary

economic environment in which each entity operates (hereinafter “the functional currency”). These financial statements are

presented in euro (EUR), which is the Company’s functional and the Group’s and the Company’s presentational currency.

(b) Transactions and balances

Transactions in foreign currencies are converted based on their respective functional currency spot rates at the date the

transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange

at the reporting date.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.4 Foreign currencies (continued)

Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary

items that are designated as the Group’s net investment in a foreign subsidiary. These are recognised in other comprehensive

income. On disposal of a foreign subsidiary, the cumulative amount of the translation differences recognised in other

comprehensive income is reclassified to profit or loss. Tax charges attributable to exchange differences on those monetary items

are also recognised in other comprehensive income.

The functional currency of the Group Companies is EUR, except for subsidiary PAT MTF Mrija, which operates in Ukraine and its

functional currency is UAH (Ukrainian hryvnia).

The results and financial position of all the Group entities that have a functional currency different from the presentational currency

are translated into the presentational currency as follows:

(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that

statement of financial position;

(ii) income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this

average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case

income and expenses are translated at the rate on the dates of transactions);

(iii) all resulting exchange differences are recognised as a separate component of equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign

operation and translated at the closing rate.

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in other comprehensive income

are reclassified to profit and loss as part of the gain or loss on sale.

2.5 Derivatives

The Group and the Company engage in swap contracts for interest rate risk management purposes. Derivatives are initially

recognised at cost. Subsequent to initial recognition and measurement, outstanding swaps are carried in the statement of financial

position at the fair value. Fair value is derived from using the discounted cash flow method which is based on directly observable

inputs (level 2 in fair value hierarchy). The estimated fair values of these contracts are reported on a gross basis as financial

assets for instruments having a positive fair value, and financial liabilities for instruments with a negative fair value.

Gain or loss from changes in the fair value of outstanding forward contracts, swaps and other financial instruments, which are not

classified as hedging instruments, are recognised in the statement of comprehensive income as they arise.

2.6 Hedge Accounting

For the purposes of hedge accounting, hedges are classified into two categories:

(a) fair value hedges which hedge the exposure to changes in the fair value of a recognised asset or liability; and

(b) cash flow hedges which hedge exposure to variability in cash flows that is either attributable to a particular risk associated with

a recognised asset or liability or a forecasted transaction.

The Group and the Company use cash flow hedge.

In relation to cash flow hedges, which meet the conditions for hedge accounting, the portion of the gain or loss on the hedging

instrument that is determined to be an effective hedge is recognised initially in other comprehensive income and the ineffective

portion is recognised in the statement of comprehensive income as profit or loss.

The gains or losses on effective cash flow hedges recognised initially in equity are either transferred to profit or loss in the period

in which the hedged transaction impacts the statement of comprehensive income or included in the initial measurement of the

cost of the related asset or liability.

For hedges, which do not qualify for hedge accounting, any gains or losses arising from changes in the fair value of the hedging

instrument are taken directly to the statement of comprehensive income (profit or loss) for the period.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.6 Hedge Accounting (continued)

Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated, exercised, or no longer qualifies for

hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity remains in

equity until the forecasted transaction occurs. Where the hedged transaction is no longer expected to occur, the net cumulative

gain or loss recognised in equity is transferred to profit or loss.

The Group and the Company have entered into interest swap agreement with a purpose to hedge itself against a possible

fluctuation (increase) of EURIBOR on the loan taken from a bank and with this action fixed the payable interest rate (Note 16).

These hedged items are subject to a single risk component, thus the Company hedged an item in its entirety, not splitting into

different components.

There is an economic relationship between the hedged item and the hedging instrument as the terms of the interest rate swap

match the terms of the fixed rate loan (i.e., notional amount, maturity, payment and reset dates). The Company and Group has

established a hedge ratio of 1:1 for the hedging relationships as the underlying risks are identical to the hedged risk component.

To test the hedge effectiveness, the Company and Group uses the hypothetical derivative method and compares the changes in

the fair value of the hedging instrument against the changes in fair value of the hedged item attributable to the hedged risk.

The hedge ineffectiveness can arise from:

• Differences in timing of cash flows of the hedged item and hedging instrument;

• The counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and hedged item;

• Changes to the forecasted amount of cash flows of hedged items and hedging instruments.

2.7 Intangible assets

(a) Goodwill

After initial recognition (Note 2.2), goodwill is measured at cost less any accumulated impairment losses. Goodwill is included in

intangible assets in the statement of financial position. Goodwill is tested annually for impairment (Note 2.10). Gains and losses

arising from the disposal of a business include the carrying amount of goodwill relating to the business sold .

(b) Computer software

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use a specific

software and are further carried at acquisition cost, less subsequent accumulated amortisation and impairment losses. Computer

software is amortised using the straight-line method over their estimated useful lives (3 to 5 years).

2.8 Property, Plant and Equipment

Buildings are stated at revalued amounts less accumulated depreciation and impairment losses.

A building revaluation surplus is recorded in OCI and credited to the asset revaluation surplus in equity. However, to the extent

that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit

and loss. A revaluation deficit is recognised in the statement of comprehensive income, except to the extent that it offsets an

existing surplus on the same asset recognised in the asset revaluation surplus. An annual transfer from the asset revaluation

surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset

and depreciation based on the asset’s original cost. Valuations are performed on a regular basis to ensure that the fair value of a

revalued asset does not differ materially from its carrying amount. Accumulated depreciation as at the revaluation date is

eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to retained earnings.

Other property, plant and equipment are carried at acquisition cost, less subsequent accumulated depreciation and impairment

losses. The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes

and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Depreciation is started from the month following the month in which the asset is brought into use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is

probable that future economic benefits associated with the item will flow to the Company and the Group and the cost of the item

can be measured reliably. All other repairs and maintenance are charged to general and administrative expenses during the

financial period in which they are incurred.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.8 Property, plant and equipment (continued)

Depreciation on property, plant and equipment is calculated on a straight-line method by depreciating their cost to their residual

values over their estimated useful lives, as follows:

Buildings	10 to 80 years
Structures	15 to 25 years
Vehicles	4 to 7 years
Machinery	5 to 15 years
Other property, plant and equipment	2 to 20 years

Land is not depreciated.

The assets’ residual values, depreciation method and useful lives are reviewed, and adjusted if appropriate, at each reporting

date, ensuring that they are consistent with the expected pattern of economic benefits from items in property, plant and equipment.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its

recoverable amount (Note 2.10). Impairment of property, plant and equipment as well as reversals of impairment during the year

are included into operating expenses in the profit and loss.

Borrowing costs incurred in relation to acquisition of qualifying property, plant and equipment are capitalised. Other borrowing

costs are recognised as finance costs as incurred.

Construction in progress is transferred to appropriate groups of property, plant and equipment when it is completed and available

for its intended use.

When property is written-off or otherwise disposed, the cost and related depreciation are removed from the financial statements

and any related gains or losses are determined by comparing proceeds with carrying amount and are included in operating profit.

2.9 Investment property

Property held for long-term rental yields and (or) capital appreciation and which is not occupied by the Company and the Group

is classified as investment property. Investment property comprises freehold land and buildings.

Investment property is stated at historical cost, less accumulated depreciation and impairment losses. Subsequent costs are

included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future

economic benefits associated with the item will flow to the Company and the Group and the cost of the item can be measured

reliably. All other repairs and maintenance are charged to general and administrative expenses during the financial period in which

they are incurred.

Land is not depreciated. Buildings are depreciated over their expected useful life (40 to 70 years) using the straight-line method

by writing-off the cost of each asset to its residual value. Depreciation of investment property is recognised in other operating

expenses.

When the carrying amount of an asset is higher than its estimated recoverable amount, it is written down immediately to its

recoverable amount (Note 2.10). Impairment of investment property as well as reversals for the year are included in operating

expenses.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included into operating

profit.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.10 Impairment of non-financial asset

Assets that have an indefinite useful life, for example goodwill, are tested annually for impairment. Assets that are subject to

amortisation and depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash

flows (cash-generating units). Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation

is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business

combination in which the goodwill arose.

Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each

financial statement date. Impairment losses on goodwill are not reversed.

2.11 Financial assets and financial liabilities

IFRS 9 Financial instruments

Financial instrument: a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of

another entity.

i) Financial assets

Initial recognition and measurement:

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other

comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics

and the Group’s/Company’s business model for managing them. With the exception of trade receivables that do not contain a

significant financing component, the Group/Company initially measures a financial asset at its fair value plus, in the case of a

financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing

component are measured at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income

OCI, it needs to give rise to cash flows that are “solely payments of principal and interest (SPPI)” on the principal amount

outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Group’s/Company’s business model for managing financial assets refers to how the Group/Company manages its financial

assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual

cash flows, selling the financial assets, or both.

A regular way purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group/Company

commits to purchase or sell the asset.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.11. Financial assets and financial liabilities (continued)

Subsequent measurement

After initial recognition, the Group/Company measures a financial asset at:

(a) Amortised cost (debt instruments)

(b) Fair value through other comprehensive income with recycling of cumulative gains and losses upon derecognition (debt

instruments). The Group/Company did not have such items as at 31 December 2022 and 2021.

(equity instruments). The Group/Company did not have such items as at 31 December 2022 and 2021.

(d) Fair value through profit or loss (Note 2.5).

Financial assets at amortised cost (debt instruments)

The Group/Company measures financial assets at amortised cost if both of the following conditions are met:

(i) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual

cash flows and

(ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to

impairment. Gains and losses are recognised in the statement of comprehensive income when the asset is derecognised,

modified or impaired.

The Group’s/Company’s financial assets at amortised cost includes trade, other current and non-current receivables, loans

granted.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial

recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial

assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,

including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging

instruments (under IFRS 9). Financial assets with cash flows that are not solely payments of principal and interest are classified

and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt

instruments to be classified at amortised cost or at fair value through other comprehensive income (OCI), as described above,

debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly

reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial

position at fair value with net changes in fair value recognised in profit or loss (Note 2.5).

Impairment of financial asset

Under IFRS 9, the Group/Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held

at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with

the contract and all the cash flows that the Group/Company expects to receive, discounted at an approximation of the original

effective interest rate.

(a) Impairment of trade receivables

For trade receivables and contract assets, the Group/Company applies a simplified approach in calculating ECLs. Therefore, the

Group/Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each

reporting date. The Group/Company has established a provision matrix that is based on its historical credit loss experience,

adjusted for forward-looking factors specific to the debtors and the economic environment. The Group/Company considers a

financial asset in default when contractual payments are past due or when indications exist that the debtors or a group of debtors

are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will

enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the

estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. A financial asset is

written off when there is no reasonable expectation of recovering the contractual cash flows.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.11 Financial assets and financial liabilities (continued)

(a) Impairment of trade receivables (continued)

The Company/Group is also making allowances on individual assessment basis for certain debtors.

(b) Assessment of impairment of loans granted

The Company grants loans to the entities of the Group with a fixed maturity as it is disclosed in Note 4. Upon issuing a loan,

expected credit losses for 12 months are generally assessed and accounted. In subsequent reporting periods, when there is no

significant increase in credit loss risk related to the lessee, the Company modifies the balance of expected credit losses for 12

months with regard to the remaining debt amount that is not yet repaid at the assessment date. If a lessee’s financial position

significantly deteriorates in comparison to the position upon issuing of the loan, the Company accounts all expected credit losses

that fall within maturity term. Loans with estimated credit losses within maturity term are considered as credit-impaired financial

assets.

ii) Financial liabilities

Initial recognition and measurement:

Financial liabilities are classified as measured at amortised cost or fair value through profit or loss. The Group’s/Company’s

financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, lease liabilities and

derivatives.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated

upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred

for the purpose of repurchasing in the near term. This category also includes derivatives entered into by the Company that are

not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also

classified as held for trading unless they are designated as effective hedging instruments. Gains and losses arising from financial

liabilities held for trading are recognised in profit or loss.

Loans and other payables

After initial recognition, loans, borrowings and other payables are subsequently measured at amortised cost using the EIR method.

Gains and losses are recognised in the statement of comprehensive income, when the liabilities are derecognised as well as

through the amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and

fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of

comprehensive income.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a

currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realise

the assets and settle the liabilities simultaneously.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.11 Financial assets and financial liabilities (continued)

Derecognition of financial assets and liabilities

Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily

derecognised (i.e., removed from the Group’s/Company’s statement of financial position) when:

i) the rights to receive cash flows from the asset have expired; or

ii) the Group/Company has transferred its rights to receive cash flows from financial asset; or has undertaken a liability to

pay all received cash flows to a third party based on contract of disposal without significant overdue and (a) the

Group/Company has transferred substantially all the risks and rewards of the asset, or (b) the Group/Company has

neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the

asset.

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing

financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability

are substantially modified, such an replacement or modification is treated as the derecognition of the original liability and the

recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related indirect

production overheads (based on normal operating capacity), but excludes borrowing costs. Net realisable value is the estimated

selling price in the ordinary course of business, less the costs of completion and selling expenses. Unrealised inventory is fully

written-off. Impairment of obsolete inventories is assessed in accordance with the rates approved by management for individual

inventory groups, calculated on the basis of historical information.

2.13 Cash and cash equivalents

Cash and cash equivalents are carried at nominal value.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and cash at banks, deposits on

demand with banks and other short-term highly liquid investments with original maturities of 3 months or less.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.14 Share capital

(a) Ordinary shares

Ordinary shares are stated at their par value.

(b) Treasury shares

Where the Company or its subsidiaries purchase the Company’s equity share capital, the consideration paid, including any

attributed incremental external costs, is deducted from shareholders’ equity as treasury shares until they are sold, reissued, or

cancelled. No gain or loss is recognised in profit or loss on the sale, issuance, or cancellation of treasury shares. Where such

shares are subsequently sold or reissued, any consideration received is presented in the consolidated financial statements as a

change in shareholders’ equity.

2.15 Reserves

(a) Legal reserve

A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of 5% of net result are required until

the reserve reaches 10 per cent of issued capital. The legal reserve cannot be used for payment of dividends and it is

established to cover future losses only.

(b) Revaluation reserve

A revaluation reserve is recorded in other comprehensive income and credited to the asset revaluation reserve in equity. However,

when new revalued amount is higher than net book value previously recognised impairment for the asset accounted in statement

of comprehensive income as loss, the increase in value of revalued amount which not exceed recognised impairment is recognised

in statement of comprehensive income as profit. If a revaluation surplus still exists after the reversal of an impairment loss, it is

recognised in comprehensive income as other comprehensive income (and, accordingly, in equity in the statement of financial

position).

A revaluation deficit is recognised in the statement of profit comprehensive income, except to the extent that it offsets an existing

surplus on the same asset recognised in the consolidated financial statement as a change in equity. Upon disposal or write-off of

an asset carried at revalued amount, the related revaluation surplus is transferred to retained earnings in the statement of changes

in equity.

Revaluation reserve in foreign currency in the consolidated financial statements is converted based on their respective functional

currency spot rates at the date of revaluation. Revaluation reserve in foreign currency is not translated at the closing rate at the

date of that statement of financial position.

This reserve is created based on the decision of the shareholders for the acquisition of own shares.

(d) Foreign currency translation reserve

The foreign currency translation reserve is used for exchange differences arising on consolidation of financial statements of foreign

subsidiaries. Exchange differences are classified as equity in the consolidated financial statements until disposal of the investment.

Upon disposal of the corresponding assets, the accumulated amount of foreign currency translation reserve is recognised as

income or expenses in the same period when the gain or loss of disposal is recognised.

(e) Cash flow hedge reserve

This reserve represents the effective part of the change in fair value of derivatives (interest rate swaps), used by the Group and

the Company to secure the cash flows from interest rate risk, at the reporting date. The reserve is accounted for based on the

requirements of IFRS 9 (Note 3.1).

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.16 Trade and Other Payables

Trade payables are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market.

Such liabilities are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in the

statement of comprehensive income when trade liabilities are written-off or amortised.

2.17 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial

period of time to get ready for its intended use, construction production or sale are capitalised as part of the cost of the respective

assets. Other borrowing costs are expensed as incurred.

2.18 Income tax

(a) Current income tax

The Group companies are taxed individually irrespective of the overall results of the Group.

Income tax expenses reported in these financial statements is based on the calculation made by the management in accordance

with tax legislation of the Republic of Lithuania and the Republic of Ukraine.

Profit for the year 2022 of the Group companies that operate in Lithuania is taxable at a rate of 15% (2021: 15%), corporate

income tax rate in Ukraine is 18% (2021: 18%).

In accordance with tax legislation of the Republic of Lithuania, taxable losses, except for losses related to transfer of securities

and (or) financial instruments may be carried forward for an unlimited period. As from 1 January 2014, tax loss carry forward that

is deducted cannot exceed 70% of the taxable profit of the current financial year.

The losses from disposal of securities and (or) derivative financial instruments can be carried forward for 5 consecutive years and

only be used to reduce taxable income earned from the transactions of the same nature.

Investment incentive can be carried forward for 5 years.

In accordance with tax legislation of the Republic of Ukraine, as from 1 January 2012, tax loss carry forward that is deducted

cannot exceed 25% of the taxable profit of the current financial year.

(b) Deferred income tax

Deferred income tax is provided using the liability method for temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not recognised if it

arises from the initial recognition of assets or liabilities other than those arising from a business combination that, at the time of

the transaction, had no effect on either accounting or taxable profit or loss. Deferred income tax is calculated using tax rates (and

laws) enacted or substantively enacted at the date of the financial statements that are expected to apply when the related deferred

income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which

temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except to the extent that the

timing of the reversal of the temporary difference is within the Group's control and it is probable that the temporary difference will

not reverse in the foreseeable future.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.19 Lease

A. THE COMPANY/GROUP IS A LESSEE

The Company/Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys

the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company/Group applies a single recognition and measurement approach for all leases, except for short-term leases and

leases of low-value assets. The Company/Group recognises lease liabilities to make lease payments and right-of-use assets

representing the right to use the underlying assets.

Right-of-use assets

The Company/Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset

is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and

adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities

recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives

received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful

lives of the assets, as follows:

Premises	5–6 years
Land	25–99 years
Vehicles	4–7 years
Other property, plant and equipment	4–6 years

If ownership of the leased asset transfers to the Company and the Group or the price of the right-of-use assets at the end of the

lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the

asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.10 “Impairment of non-financial

assets”.

Lease liabilities

At the commencement date of the lease, the Company/Group recognises lease liabilities measured at the present value of lease

payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)

less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be

paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain

to be exercised by the Company/Group and payments of penalties for terminating the lease, if the lease term reflects the

Company/Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are

recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers

the payment occurs.

In calculating the present value of lease payments, the Company/Group uses its incremental borrowing rate at the lease

commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the

amount of lease liabilities is increased to reflect the estimates of interest and reduced for the lease payments made. In addition,

the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease

payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments)

or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Company and the Group apply the short-term lease recognition exemption to its non-current-asset (i.e., those leases that

have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the

lease of low-value assets recognition exemption to leases of office equipment. Lease payments on short-term leases and leases

of low-value assets are recognised as expense on a straight-line basis over the lease term .

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.19 Lease (continued)

B. THE COMPANY/GROUP IS A LESSOR

At inception of a contract, the Company and the Group, as a lessor, determine whether the lease is a finance lease or an operating

lease. If the Company and the Group determine that the lease transfers substantially all of the risks and rewards of ownership of

the underlying asset, the lease is a finance lease. Leases in which the Company and the Group do not transfer substantially all

the risks and rewards incidental to ownership of an asset are classified as operating leases. The Company and the Group have

not entered into any finance leases as a lessor. Operating lease payments are accounted for on a straight-line basis over the

lease term and recognised as revenue in the statement of comprehensive income based on its lease nature. Initial direct costs

incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised

over the lease term on the same basis as rental income. Contingent payments are recognised as revenue in the period in which

they are earned.

The accounting policies applied by the Group as a lessor in the comparative period were not different from IFRS 16.

2.20 Revenue Recognition

Revenue from contracts with customers

The main activity of the Company and the Group is production of knitted articles and working clothes upon particular customers’

order. The service includes the full process of production from making yarns to preparation of fully finished production. Revenue

from contracts with customers is only recognised when the control of goods or services is transferred to the customer to the extent

that reflects the remuneration which the Group and the Company expects to receive in return for these goods or services.

As it is disclosed in the Note 5, the Company and the Group in their activities generate revenue from sales of goods with their

brand and from other commercial activities. This type of revenue, in comparison with knitted article production under particular

customers’ order, is relatively insignificant. This type of revenue is recognised when the control over goods is transferred to the

customer (conditions of goods collection are agreed differently with separate customers) and the goods are transferred at a

particular time. Payment terms vary from 2 to 45 days.

Step 1 - Identifying customer contracts

A contract is an agreement between two or more parties (depending on the terms of the purchase or sale) that creates enforceable

rights and enforceable obligations and to which the customer is a party. A customer is a party who has contracted with the

Company/Group to receive goods or services for consideration. A contract with a customer to which IFRS 15 applies is accounted

for when the following criteria are met:

- the parties have approved the contract (in writing, orally or in accordance with other usual business practice) and are committed

to their respective obligations;

- the rights of each party in respect of the goods or services to be transferred can be identified;

- the terms of payment for the goods or services to be transferred can be identified;

- the contract is of a commercial nature;

- the Company/Group will receive the consideration to which it is entitled in exchange for the goods or services to be transferred

to the customer.

Step 2 - Identification of performance obligations

Performance obligation - a contractually binding promise to provide services. If the services are separable, the liability is

recognised separately. Each liability is identified in one of the following ways:

- a service (or bundle of goods or services) that is distinct,

- a set of individual services that are essentially the same and are delivered to the customer according to a uniform model.

Step 3 - Setting the transaction price

The Company/Group shall take into account the terms of the contract, the legislation of the Republic of Lithuania and its normal

business practices when determining the transaction price. The transaction price is the amount of consideration to which the

Company expects to be entitled in exchange for the delivery of the promised goods or services to the customer, excluding amounts

collected on behalf of third parties (e.g. certain sales taxes). The consideration promised in a contract with a customer may include

fixed amounts, variable amounts or both.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.20 Revenue recognition (continued)

Step 4: Allocation of the transaction price to operating liabilities

The Company/Group, in assigning a transaction price, assigns to each performance obligation an amount of the transaction price

that reflects the amount of consideration to which the Company/Group expects to be entitled in exchange for delivering to the

customer the goods or services promised.

Step 5 - Revenue recognition when the Company and the Group execute performance obligations

The Company/Group recognises revenue when it satisfies a performance obligation by delivering a promised good or service to

a customer. Performance obligations are settled over a period of time or at a point in time. The amount of revenue recognised is

equal to the amount attributable to the performance obligation. Revenue is recognised when the amount of revenue can be

measured reliably and it is probable that the economic benefits associated with the obligation will flow to the Company/Group and

the amount of revenue can be measured reliably.

Knitted article and working clothes production under particular customers’ order

The main performance obligation arising from contracts with customers is to provide knitted article production defined in technical

specifications (knitting, dying, decorating, sewing, and cutting) service with a fixed price set for each produced (finished) knitted

article separately.

Revenue from contracts with customers is recognised over the period in which the services are rendered. The Company/Group

provides its products to customers only fully finished. The Company and the Group allocate the transaction price over the product

production period based on the relative selling prices of the individual production levels.

The Company has performed an analysis and evaluated that the Company and the Group fulfils their performance obligation

described in contracts with customers over a period of time (not at point in time) due to the following reasons:

- The Company and the Group do not create an alternatively usable asset while providing article production services;

- The Company and the Group have an enforceable right to payment for work in progress.

Management of the Company and the Group calculates its share of revenue based on the expected costs plus margin. Based on

management and production accounting data, the production fulfilment status of a particular order is deducted at each stage of

production (calculating what proportion of the expected product cost at which stage of production is reached accordingly). The

calculations shall be completed by adding the applicable margin to the estimated relative levels of work-in-progress at different

stages of production. Thus, the calculated revenue is recognised in the statement of comprehensive income under the caption

“Revenue from contracts with customers” and contract assets are accounted in the current assets in the statement of financial

position under the caption “Contract asset”. Costs related to this revenue amount are reflected in the statement of comprehensive

income under the caption “Cost of sale”.

In preparation of financial statements according to IFRS and applying IFRS 15, the Company’s and the Group’s management has

to apply particular assumptions and estimates that have significant impact on amounts presented in financial statements.

According to the management, the most significant estimates and associated uncertainties arising while calculating and

recognising revenue from contracts with costumers relate to:

- The estimated product margin (percentage);

- Application of historical management and production accounting data in calculating value ratios, related to each stage of

production.

Aside from aforementioned, the management considered the impact of other matters on revenue recognition, such as the

existence of significant financing components, non-cash considerations, discounts applied, etc. None of these terms appear in

the Company’s and the Group’s contracts with customers or, in the judgement of management, they are not significant in

application of IFRS 15.

Revenue from sales of goods to a group of customers for which supply contracts contain clauses allowing alternative uses are

recognised when the control over goods is transferred to the customer and the revenue is recognised in the same way as from

the sale of their branded goods.

Contract assets: Accrued income

Contract assets are conditional rights to consideration. The right is conditional, for example, when the Company / Group must first

satisfy another performance obligation in the contract before it is entitled to payment from the customer. If the Company / Group

has an unconditional right to receive consideration from the customer, the contract asset is accounted for as a receivable and

presented separately from other contract assets.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.20 Revenue recognition (continued)

If the Company and the Group transfer goods or services to a customer before the customer pays consideration or before payment

is due, a contract asset is recognised for the earned consideration that is conditional as the order is not completed. Contract

assets – accrued revenue – at the end of production cycle (usually within 60 days) after fulfilling contractual obligations and issuing

an invoice, is accounted as trade receivable.

Contract liabilities: Prepayments received

Contract liabilities consist of prepayments received from customers for services to be rendered or goods to be sold in the future.

Trade receivables

A trade receivable represents the Company’s and the Group’s right to an amount of consideration that is unconditional (i.e., only

the passage of time is required before payment of the consideration is due). Trade receivables usually have a set payment delay

term of 10–60 days.

Interest income

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

Company or the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted

at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income

on impaired loans is recognised using the original effective interest rate.

Dividend income

Dividend income is recognised when the right to receive payment is established.

Rental income

Payments received under operating leases (net of any incentives given to the lessee) are credited to profit and loss on a straight-

line basis over the period of the lease (Note 2.19).

2.21 Dividend Distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s and the Group’s financial

statements in the period in which the dividends are approved by the shareholders of the Company/Group.

2.22 Earnings (Losses) per Share

The Group presents basic (EPS) and diluted earnings per share (DEPS) data for its ordinary shares. Basic EPS is calculated by

dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares

outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and

the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, such as

convertible notes and share options granted to employees.

2.23 Non-Current Assets Held for Sale

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than

through its continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for

immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for

recognition as a completed sale within one year from the date of classification.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

2.24 Subsequent Events

Subsequent events that provide additional information about the Group’s and the Company’s position at the reporting date

(adjusting events) are reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the

notes when material.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2 Summary of Significant Accounting Policies (continued)

2.25 Current versus Non-Current Classification

The Group and the Company present assets and liabilities in the statement of financial position based on current/non-current

classification. An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within 12 months after the reporting period

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the

reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle

• Held primarily for the purpose of trading

• It is due to be settled within 12 months after the reporting period

• There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.

The Group and the Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-

current assets and liabilities.

2.26 Employee Benefits

(a) Social security contributions

The Company and the Group pay social security contributions to the state Social Security Fund (hereinafter the “Fund”) on behalf

of its employees based on the defined contribution plan in accordance with the local legal requirements. A defined contribution

plan is a plan under which the Company and the Group pays fixed contributions and will have no legal or constructive obligations

to pay further contributions if the Fund does not hold sufficient assets to pay benefits to all employees related to employee service

in the current and prior period. Social security contributions are recognised as expenses on an accrual basis and are included in

staff costs.

(b) Bonus plans

The Company and the Group recognises a liability and expenses for bonuses where contractually obliged or where there was a

practice applied in the past that has created a constructive obligation.

According to the requirements of the Labour Code of the Republic of Lithuania, each employee leaving the Company at the age

of retirement is entitled to a one-off payment amounting to two-month salary.

Current year cost of employee benefits is recognised as incurred in the statement of comprehensive income. Previously incurred

service costs are recognised as expenses on a straight-line basis over the average period until the benefits become vested.

Any gains or losses appearing as a result of changes in terms of benefits (curtailment or settlement) are recognised in the

statement of comprehensive income as incurred.

The above mentioned employee benefit obligation is calculated based on actuarial assumptions, using the projected unit credit

method. Remeasurements, consisting of actuarial gains and losses, are recognised immediately in the statement of financial

position with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they

occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Obligation is recognised in the statement of financial position and reflects the present value of these benefits on the date of the

statement of financial position. Present value of the non-current obligation to employees is determined by discounting estimated

future cash flows using the discount rate which reflects the interest rate of the Government bonds of the same currency and similar

maturity as the employment benefits.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

2. Summary of Significant Accounting Policies (continued)

2.27 Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions

will be complied with. When the grant relates to an expense item, it is recognised as income (as a reduction of related costs) on

a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant

relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

The balance of grant not yet received is shown in the statements of financial position caption “Other current assets”.

2.28 Offsetting and comparative figures

When preparing the financial statements, assets and liabilities, as well as revenue and expenses are not set off, except for the

cases when certain International Financial Reporting Standard specifically requires such set-off.

Where necessary, comparative figures have been adjusted to agree with the current year's presentation of information.

3. Financial risk management

3.1 Financial risk factors

The Group’s and the Company’s activities expose them to a variety of financial risks: market risk (including currency risk and cash

flow interest rate risk), credit risk and liquidity risk. The Group’s and the Company’s overall risk management programme focuses

on the unpredictability of financial markets and seeks to minimise potential adverse effects of the financial performance of the

Group and the Company. Risk management is carried out by the Company’s/Group‘s management.

	Group		Company
Financial assets reported in the statement of financial	31 December		31 December
position	2022	2021	2022	2021
Financial assets at amortised cost
Non-current amounts receivable from subsidiaries except for prepayments	-	-	-	1,085
Trade receivables and contract assets (Note 11)	3,897	3,930	3,424	3,738
Cash and cash equivalents	385	625	29	72
Other current assets (excluding prepayments made and deferred expenses)	54	145	25	99
	4,336	4,700	3,478	4,994

	Group		Company
Financial liabilities reported in the statement of financial	31 December		31 December
position	2022	2021	2022	2021
Financial liabilities measured at amortised cost
Borrowings and other current liabilities	5,119	5,437	5,119	5,437
Borrowings from subsidiaries	-	-	600	600
Borrowings from parent company	532	532	532	532
Trade payables	1,184	2,989	1,122	2,886
Payables to subsidiaries	-	-	75	225
Payables to other related parties	175	106	168	95
Accrued expenses and other current liabilities, other payables	653	792	440	593
(Note 19)	7,663	9,856	8,056	10,368

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.1 Financial risk factors (continued)

(a) Market risk

(i) Monetary assets and monetary liabilities foreign exchange risk

The Group and the Company operate internationally and carry out significant part of their transactions in euros. Therefore, the

management believes that entities operating in Lithuania are not exposed to significant currency exchange risk.

During 2022, due to fluctuations in the official exchange rate of the Ukrainian Hryvnia (UAH) against the EUR as determined by

the National Bank of Ukraine, the Ukrainian subsidiary had an exchange loss of EUR 471 thousand (2021: exchange gain of EUR

201 thousand) as a result of the Company's Euro-denominated borrowings and long-term payables. As from 2014, due to the

geopolitical situation in Ukraine and significant drop in the value of UAH against EUR, the management of the Group and the

Company re designated of loans granted and long term receivables from the subsidiary Mrija PAT MTF to investment, considering

that the repayment of these amounts is not expected in the foreseeable future.

Accordingly, gains (losses) arising from foreign exchange related to the monetary items considered to be part of net investment

into foreign operation are accounted in Group’s consolidated financial statements through other comprehensive income (loss) in

2022 and 2021. Amount of monetary items attributed to net investment amounts to EUR 1,385 million and foreign currency

exchange difference related to this amount for the year 2022 comprises EUR 532 thousand (EUR (208) thousand in 2021), is

accounted in the Group’s consolidated financial statements through other comprehensive income.

Comprehensive income (loss) from foreign currency translation included in the consolidated statement of changes in

equity in other comprehensive income attributable to the equity holders of the Company:

Foreign currency exchange difference on monetary items attributed to net	2022	2021
	532	(208)
investments
Foreign currency translation effect on other items	(562)	339
Total comprehensive income (loss)	(30)	131

Other comprehensive income (loss) from foreign currency translation included in other comprehensive income attributable to non-

controlling interests was not material.

Company’s business transactions mainly are denominated in euro, therefore, the Company is not exposed to significant foreign

exchange risk. In the Group the UAH exchange risk is related to intercompany balances in different currencies. The following table

demonstrates the sensitivity to a reasonably possible change in UAH exchange rate related to EUR, with all other variables held

constant.

	Change in UAH rate with
	regard to EUR	Effect on profit before tax	Effect on equity
2022	5%	51	263
	(5)%	(12)	11
2021	5%	4	134
	(5)%	(4)	(130)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.1 Financial risk factors (continued)

(ii) Cash flow interest rate risk

Borrowings with variable interest rates expose the Company and the Group to cash flow interest rate risk. In 2022 and 2021, the

Company’s and the Group’s borrowings with variable interest rates were denominated in EUR.

The Group and the Company analyse their interest rate exposure on an annual basis. The Group and the Company calculates

the impact on profit or loss by multiplying year-end balances of interest-bearing loans granted and borrowings by the estimated

interest rate change. Except for the current year’s profit (loss), there is no impact on the equity of the Group and the Company.

Based on the sensitivity analysis performed, the impact of a 0.5% increase/decrease in interest rates on the Company’s and the

Group’s net result would be an increase/decrease at maximum of EUR 20 thousand and EUR 22 thousand respectively (in 2021:

EUR 13 thousand and EUR 19 thousand, respectively), mainly as a result of higher/lower interest expenses/income on borrowings

and loans granted.

(b) Credit risk

None of the Group’s and the Company’s customers comprise more than 10% of the Group’s and Company’s trade receivables.

The Group and the Company evaluates the concentration of risk with respect to trade receivables as low because its customers

are located in several industries and operate in largely independent markets.

(i) Maximum exposure to credit risk

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

The table below summarises all credit risk exposures related to the items of the Group’s and the Company’s statements of financial

position. Maximum exposure to credit risk before collateral held or other credit risk reduction:

	Group		Company
	31 December		31 December
	2022	2021	2022	2021
Cash and cash equivalents at banks (Note 13)	385	625	29	72
Trade receivables and contract assets (Note 11)	3,897	3,930	3,424	3,738
Non-current loans granted and amounts receivable	-	-	-	1,085
except for prepayments (Note 26)
In total	4,282	4,555	3,453	4,895

(ii) Credit quality of financial assets

Trade customer quality is assessed with respect to their financial position, work experience and other facts.

The credit quality of financial assets that are neither past due nor impaired can be assessed considering historical data of their

performance as independent credit ratings are not available.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.1 Financial risk factors (continued)

(a) Trade receivables and contract assets – trade customers with no independent rating

	Group		Company
	31 December		31 December
	2022	2021	2022	2021
New trade customers (up to 12 months)	343	800	343	753
Current trade customers (more than 12 months) that fully fulfilled their obligations in the past	3,554	3,130	3,081	2,985
In total	3,897	3,930	3,424	3,738

Impairment analysis is performed at each balance sheet date based on provision matrix and individual assessment in order to

evaluate expected credit losses. Provision rates are assessed based on the number of days past due payment, grouping

customers based on similar previous credit loss risk experience. Calculations reflect the possibility to calculate the amount, time

value of money, reasonable and predicable information on past events, current conditions and forecasts of expected economic

conditions, which can be obtained at the reporting date. Based on the performed analysis, the Company/Group assessed that

historical loss rates are very low even including any reasonable adjustments based on forward looking indicators.

(b) Cash and cash equivalents, excluding cash on hand.

	Group		Company
	31 December		31 December
	2022	2021	2022	2021
Rating “A”	340	506	6	28
Rating “BBB+”	12	43	12	31
No rating	33	76	11	13
In total	385	625	29	72

*Independent ratings established by Fitch agency.

As at 31 December 2022, the Company’s non-current receivables and loans granted before impairment comprises the receivables

only from PAT MTF Mrija (Note 26). In December 2022, an impairment was formed on the receivable from PAT Mrija and on the

loan issued in an amount of EUR 1,877 thousand. Please refer to Note 4 for the evaluation of expected credit losses for these

receivables.

Trade receivables that are past due are not treated as impaired when the Group’s and the Company’s management expects to

recover these receivables.

	Group		Company
	31 December		31 December
	2022	2021	2022	2021
Not past due receivables	3,793	3,833	3,382	3,672
Past due not impaired
Less than 30 days	102	82	40	51
Past due from 31 to 60 days	2	-	2	-
Past due from 61 to 180 days	-	15	-	15
More than 181 days	-	-	-	-
Total past due not impaired	104	97	42	66
Overdue and impaired
Up to 180 days	-	-	-	-
More than 181 days	77	85	52	59
Impairment allowance for trade receivables	(77)	(85)	(52)	(59)
Total accounts receivable and contract assets
after impairment	3,897	3,930	3,424	3,738

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS, FOR THE YEAR ENDED 31 DECEMBER 2022 (All amounts are in EUR thousand, unless otherwise stated) 31 3 Financial Risk Management (continued) 3.1 Financial risk factors (continued) Impairment of loans granted and trade receivables evaluated based on the accounting policy as disclosed in Note 2.11, is recognised in the statement of comprehensive income. (c) Liquidity risk The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of committed credit lines to meet its commitments at a given date in accordance with its strategic plans. As at 31 December 2022, the Group’s current assets exceeded its current liabilities by EUR 2,670 thousand (as at 31 December 2021, current assets exceeded current liabilities by EUR 1,918 thousand). As at 31 December 2022, the Group’s liquidity (current assets/current liabilities) and quick ratios ((current assets - inventory)/current liabilities) were 1.43 and 0.73, respectively (as at 31 December 2021: 1.19 and 0.50, respectively). As at 31 December 2022, the Company’s (UTENOS TRIKOTAŽAS AB) current assets exceeded its current liabilities by EUR 2,572 thousand (as at 31 December 2021: by EUR 1,668 thousand). As at 31 December 2022, the Company’s liquidity (current assets/current liabilities) and quick ratios ((current assets - inventory)/current liabilities) were 1.47 and 0.68, respectively (as at 31 December 2021: 1.18 and 0.45, respectively). The table below summarises the Group’s and the Company’s undiscounted financial liabilities. The financial liabilities are classified into relevant maturity groupings based on the remaining period to the contractual maturity date. Fair value of accounts payable and other financial liabilities due within 3 months or less are equal to their carrying balances as the impact of discounting is insignificant. The tables below summarise the maturity profile of the Group’s financial liabilities as at 31 December 2022 and 2021, based on contractual undiscounted payments: Group	Less
	than 3	From 3 to 12	From 1 to 5	After 5
31 December 2022	months	months	years	years	In total
Borrowings from the banks with future interest	209	718	1,209	-	2,136
State Aid Fund for Business	50	249	3,448	-	3,747
Lease liabilities	45	175	754	-	974
Borrowings from parent company	-	-	633	-	633
Trade payables and payable to related parties	1,359	-	-	-	1,359
	1,663	1,142	6,044	-	8,849

	Less	From 3 to 12	From 1 to 5	After 5
	than 3				In total
31 December 2022	months	months	years	years
Borrowings from the banks with future interest	209	718	1,209	-	2,136
State Aid Fund for Business	50	249	3,448	-	3,747
Borrowings from subsidiaries	-	-	732	-	732
Borrowings from parent company	-	-	633	-	633
Lease liabilities	22	102	127	-	251
Trade payables and payable to related parties	1,365	-	-	-	1,365
	1,646	1,069	6,149	-	8,864

	Less than 3	From 3 to	From 1 to	After 5
31 December 2021	months	12 months	5 years	years		In total
Borrowings from the banks with future interest	174	513	2,122		-	2,809
State Aid Fund for Business	29	147	3,739		-	3,915
Lease liabilities	35	111	564		-	710
Borrowings from parent company	-	-	602		-	602
Trade payables and payable to related parties	3,095	-	-		-	3,095
	3,333	771	7,027		-	11,131

Company

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.1 Financial risk factors (continued)

Company

	Less	From 3 to 12	From 1 to 5	After
	than 3			5	In total
31 December 2021	months	months	years	years
Borrowings from the banks with future interest	174	513	2,122	-	2,809
State Aid Fund for Business	29	147	3,739	-	3,915
Borrowings from subsidiaries	-	-	679	-	679
Borrowings from parent company	-	-	602	-	602
Lease liabilities	23	71	175	-	269
Trade payables and payable to related parties	3,200	-	-	-	3,200
	3,426	731	7,317	-	11,474

The tables below summarise the changes in the Group’s and the Company’s liabilities arising from financing activities:

Group					Write-offs					Effect of
			New		and	Reclassifi		Discounts	Interest	exchange
Current portion of non-current	01/01/2022	Cash flows	leases		disposals	cation		received	charges	rate	31/12/2022
borrowings	2,438	(1,481)		-	-		-	-	-	-	957
Non-current
portion of borrowings	3,531	1,163	-		-		-	-	-	-	4,694
Lease liabilities	604	(294)	709		6		-	-	19	(151)	893
	6,573	(612)	709		6		-	-	19	(151)	6,544

Company

				Write-offs					Effect of
				and	Reclassifi		Discounts	Interest	exchange
Current portion of non-current	01/01/2022	Cash flows	New leases	disposals	cation		received	charges	rate	31/12/2022
borrowings	2,438	(1,481)	-	-		-	-	-	-	957
Non-current
portion of borrowings	4,132	1,163	-	-		-	-	-	-	5,295
Lease liabilities	258	(179)	152	6		-	-	4	-	241
	6,828	(497)	152	6		-	-	4	-	6,493

				Write-offs				Effect of
Group				and	Reclassifi	Discounts	Interest	exchange
Current portion	01/01/2021	Cash flows	New leases	disposals	cation	received	charges	rate	31/12/2021
of non-current
borrowings	1,099	1,871	-	-	(532)	-	-	-	2,438
Non-current
portion of borrowings	2,314	685	-	-	532	-	-	-	3,531
Lease liabilities	655	(194)	594	(496)	-	-	17	28	604
	4,068	2,362	594	(496)	-	-	17	28	6,573

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.1 Financial risk factors (continued)

Company				Write-offs			Interests for	Effect of
		Cash	New	and	Reclass	Discounts	the year and	exchange
Current portion	01/01/2021	flows	leases	disposals	ification	received	net-offs*	rate	31/12/2021
of non-current
borrowings	1,099	1,871	-	-	(532)	-	-	-	2,438
Non-current
portion of borrowings	2,914	686	-	-	532	-	-	-	4,132
Lease liabilities	323	(147)	570	(496)	-	-	8	-	258
	4,336	2,410	570	(496)	-	-	8	-	6,828

3.2 Capital management

The Group’s and the Company’s objectives when managing capital are to ensure the Group’s and the Company’s ability to

continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain

an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and

Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell

assets to reduce debt.

The Group and the Company defines its capital as equity and borrowings, including lease, less cash and cash equivalents. As

at 31 December, the Group’s and the Company’s capital structure was as follows:

	Group		Company
	31 December		31 December
	2022	2021	2022	2021
Total borrowings	5,119	5,437	5,119	5,437
Lease liabilities	893	604	241	258
Less: cash and cash equivalents	(385)	(625)	(29)	(72)
Net debt	5,627	5,416	5,331	5,623
Total equity	3,845	7,277	4,265	6,939
Total capital	9,472	12,693	9,596	12,562

UTENOS TRIKOTAŽAS AB

Under the Lithuanian Republic Law on Companies, the authorised share capital of a public company must be not less than EUR

40 thousand (EUR 2.5 thousand for a private limited liability company) and the shareholders’ equity should not be lower than

50% of the company’s registered share capital. As at 31 December 2022 and 2021, the Company and its subsidiaries registered

in Lithuania complied with these requirements.

Mrija PAT MTF

As at 31 December 2022 and 31 December 2021, the shareholders’ equity of the subsidiary registered in Ukraine was negative.

Pursuant to the Ukrainian laws, a company may be put into liquidation when its shareholders’ equity becomes less than the

minimal amount of authorised share capital as defined in the Law on Companies at the moment of the company’s registration. On

the date of these financial statements, there were no decisions made or actions taken concerning PAT MTF Mrija negative

shareholders’ equity. Taking into the account appropriate financial support to PAT MTF Mrija, the management of the Group and

the Company assesses the liquidation risk as low.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3 Financial Risk Management (continued)

3.3 Fair value of financial assets and liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the

asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group and the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the

asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits

by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest

and best use.

The Group and the Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data

are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable

inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair

value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable;

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company

determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest

level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Valuations are performed by the Group’s and the Company’s management at each reporting date. For the purpose of fair value

disclosures, the Group and the Company have determined classes of assets and liabilities on the basis of the nature,

characteristics and risks of asset or liability and the level of the fair value hierarchy as explained above.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

3.3 Fair value of financial assets and liabilities (continued)

Valuation of assets according to the fair value hierarchy levels:

31 December 2022		Group				Company
	Level	Level	Level	Carrying	Level	Level	Level	Carrying
Assets for which fair values are disclosed:	1	2	3	amount	1	2	3	amount
Trade receivables	-	-	-	1,997	-	-	-	1,623
Cash and cash equivalents (Note 13)	-	-	-	385	-	-	-	29
Other current assets (excluding prepayments
made and deferred expenses)	-	-	-	54	-	-	-	25
Liabilities for which fair values
are disclosed							-
Borrowings and other current liabilities	-	1,999	-	3,120	-	1,999	-	3,120
Borrowings to subsidiaries	-	-	-	-	-	600	-	-
Borrowings to parent company	-	532	-	-	-	532		-
Trade payables	-	-	-	1,184	-	-	-	1,122
Payables to subsidiary	-	-	-	-	-	-	-	75
Payables to related parties	-	-	-	175	-	-	-	168
Other current liabilities (Note 19)	-	-	-	423	-	-	-	422

31 December 2021			Group						Company
	Level	Level	Level	Carrying	Level	Level	Level		Carrying
Assets for which fair values are disclosed:	1	2	3	anount	1	2	3		amount
Loans receivable and other receivables from subsidiaries	-	-	-	-	-	-		-	1,085
Trade receivables	-	-	-	1,182	-	-		-	1,065
Cash and cash equivalents (Note 13)	-	-	-	625	-	-		-	72
Other current assets (excluding prepayments
made and deferred expenses)	-	-	-	145	-	-		-	99
Liabilities for which fair values
are disclosed
Borrowings and other current liabilities	-	2,636	-	2,801	-	2,636		-	5,437
Borrowings to subsidiaries	-	-	-	-	-	600		-	600
Borrowings to parent company		532	-	-		532		-	532
Trade payables	-	-	-	2 989	-	-		-	2,886
Payables to subsidiaries	-	-	-	-	-	-		-	225
Payables to related parties	-	-	-	106	-	-		-	95
Other current liabilities (Note 19)	-	-	-	494	-	-		-	496

The fair value of receivables from subsidiaries and loans granted to the subsidiary by the Company is estimated as described in

Note 4, therefore, the management estimates that their fair value approximates carrying amounts as at 31 December 2022 and

2021 (level 3 in fair value hierarchy). Interest rate on the loans received by the Group and the Company is subject to repricing at

least every 1 year, therefore, the fair value of loans received equals their carrying amount.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

4. Critical accounting estimates and judgements

The Company and the Group make estimates and assumptions that affect the reported amounts of assets and liabilities within.

The estimates and judgements are continually evaluated and are based on the management’s experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances. The management also makes

certain judgements, apart from those involving estimations, in the process of applying the accounting policies. Estimates and

judgements that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year

include:

Estimates of recoverable amounts of goodwill, investments in subsidiaries, as well as loans to and receivables from

subsidiaries

The Group and the Company annually test goodwill for impairment in accordance with the accounting policy described in Note

2.7. The recoverable amount of cash-generating units has been determined based on the greater of their value in use and its fair

value less costs to sell. Loans granted and accounts receivable are tested for impairment in accordance with the accounting

principles described in Note 2.10. These calculations require the use of significant estimates as outlined below.

Valuation of investment in the subsidiary PAT MTF Mrija, including loan granted and amounts receivable, in the

Company’s separate financial statements, as well as valuation of non-current assets in the Company’s consolidated

financial statements

As at 31 December 2022, the Company's investment (including loan and receivables) in PAT MTF Mrija before impairment was

EUR 4,852 thousand (31 December 2021: EUR 4,850 thousand after impairment of EUR 1,875 thousand). During 2022 an

impairment test was carried out and an additional impairment of EUR 1,877 thousand was recorded for the entire amount for a

loan issued of EUR 1,145 thousand and for interest receivable of EUR 732 thousand. The impairment was recorded in the

Company's statement of comprehensive income under financial expenses (Note 23) and under general and administrative

expenses (note 21).

As at 31 December 2022 and 2021, goodwill which is related to PAT MTF Mrija and accounted in consolidated financial statements

amounted to EUR 0 thousand.

At the Group’s consolidated financial statement and UTENOS TRIKOTAŽAS separate financial statement level, cash generating

unit, related to the subsidiary PAT MTF Mrija is comprised of the entity’s property, plant and equipment, goodwill and working

capital.

As at 31 December 2021, the recoverable amount of the cash generating unit was determined based on the fair value, less costs

of disposal, which is considered by the management to be the higher of the value in use and fair value less the costs of disposal.

Further is disclosure of significant assumptions used for the assessment of the value. As at 31 December 2022, the recoverable

amount of the cash generating unit was estimated based on the asset’s value in use, which was estimated by reference to the

expected future cash inflows in accordance with the five-year financial projections approved by management.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

4. Critical Accounting Estimates and Judgements (continued)

Fair value less cost of disposal

The fair value of the cash generating unit was estimated based on the net asset value of PAT MTF Mrija less the estimated costs

of disposal.

The major part (95%) of the assets of PAT MTF Mrija (other than right-of-use assets and unrecognised deferred tax assets arising

from tax loss) consists of real estate (buildings) located in the Transcarpathian region of Ukraine. As disclosed in Note 7, the fair

value of these assets was determined as part of revaluation of buildings of the Company and the Group in October and November

2018 and is based on valuations performed by certified appraiser Aleksandr Tidir. In order to assess possible changes in the fair

value of buildings until 31 December 2020, the management of the Group commissioned the reassessment of the fair value of

these assets carried out by an independent property appraiser, who identified the fair values of these assets on 6 November 2020.

Considering that by the end of 2020 no significant changes have occurred in the real estate market in the Transcarpathian region

of Ukraine, the fair value of the property approximates its carrying amount, therefore, the values of the buildings of PAT MTF Mrija

identified in 2018 less depreciation for the year approximates to the market values as at 31 December 2020 (no revaluation surplus

was recorded). The fair values of the other components of net assets of PAT MTF Mrija, in the Group’s management opinion,

approximate their carrying amount. Liabilities of PAT MTF Mrija mostly (98%) comprise loans granted by and payables to the

Company (excluding lease liabilities and deferred tax liability).

Based on the above estimate of the recoverable amount of the assets, the management of the Company and the Group did not

identify and recognise in the consolidated financial statements the impairment of the Group’s property, plant and equipment related

to MTF Mrija PAT, nor did it identify and account for in the separate financial statements the reversal of impairment related to

investment in MTF Mrija PAT, which was impaired to zero. Significantly negative net asset position of MTF Mrija PAT (i.e. liabilities

to the Company) would not lead to a reversal of an impairment loss related to the investment, if key assumptions used in the

measurement of fair value change within reasonably possible limits.

The bookkeeping company Grossbuh of asset valuators carried out the market price analysis of property in the area of

Transcarpathia on 20 December 2021. There were no significant changes in the property market in 2021.

Impairment of non-current assets (in 2022)

In 2022, as a result of the hostilities in Ukraine, the Group and the Company were unable to carry out an independent real estate

valuation of properties located in Ukraine due to the non-functioning real estate market in that country. In 2022, the Group carried

out a valuation of the non-current assets of PAT MTF Mriya, the carrying amount of which before impairment, as reflected in the

Group's financial statements as at 31 December 2022, amounts to EUR 1,671 million. The recoverable amount of non-current

assets was determined by taking into account the value in use of the assets, which was estimated based on the expected future

cash inflows estimated on five-year financial projections approved by management. One of the significant assumptions used in

the valuation of the value in use of the assets was the discount rate, which was estimated by taking into account the weighted

average cost of capital and amounted to 24%. Financial forecasts for PAT MTF Mriya are based on sales growth of 11% in 2023

and 0% in 2022-2027, which is based on the uncertainty and risk of the ongoing hostilities in Ukraine. An impairment of PAT MTF

Mrija's non-current assets of EUR 1,671 was recognised as at 31 December 2022. The carrying value of non-current assets of

PAT MTF Mriya stated in the Group's financial statements as at 31 December 2022 is EUR zero.

The expected credit loss (ECL) model was applied to assess impairment of loans granted and accounts receivables from the

subsidiary PAT MTF Mrija in the separate financial statements of the Company, as provided for in IFRS 9 Financial Instruments.

Because the credit exposure of the subsidiary PAT MTF Mrija has increased significantly since initial recognition (negative balance

in equity), the impairment loss is required for credit losses expected over the remaining life of the exposure, irrespective of the

timing of the default. The probability of default without the Company’s financial support in the near future is considered to be close

to 100%, and the loss given default is close to net assets of PAT MTF Mrija (Including its liabilities to the Company) less costs of

disposal, as this value is negative. Based on this estimate, additional impairment of loans granted and interest receivable from

PAT MTF Mrija (EUR 150 thousand) was recognised in 2020. In 2022, an additional impairment was recorded for the entire debt

of PAT MTF Mrija in an amount of EUR 1,877 thousand.

Determination of the carrying value of the buildings

Revaluation of buildings is performed periodically (every 5 years, unless there are indications that there are significant differences

in the market of buildings) to ensure that the carrying value of buildings does not significantly differ from fair value at the reporting

date. In 2018, the Group’s and the Company’s management identified indications of impairment of buildings and due to that,

based on the data of October 2018, professional appraisers performed an independent valuation in 2018. In 2022, the Company

and the Group employed independent appraisers to carry out property valuations or an overview of the real estate market, and

did not identify any indications that the carrying values of the property may differ significantly from their fair values, except for

property in Ukraine. In the absence of valuation of the assets in Ukraine due to ongoing hostilities and a dormant real estate

market in 2022, the value of the assets in Ukraine was tested by estimating the expected future cash inflows of PAT MTF Mrija.

After the valuation, an impairment was formed on the entire value of the property.

Revenue recognition

Management’s judgement related to revenue recognition over time is disclosed in Note 2.20.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

4. Critical Accounting Estimates and Judgements (continued)

Determining the lease term of contracts with renewal and termination options – the Company/Group as lessee

The Company/Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by

an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,

if it is reasonably certain not to be exercised.

The Company/Group has few land lease contracts that include extension or/and termination options. The Company/Group applies

judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease.

That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After

the commencement date, the Company/Group reassesses the lease term if there is a significant event or change in circumstances

that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction

of significant leasehold improvements or significant customisation to the leased asset). For more details please see Note 17.

5. Segment information

The Group has two main business segments which are identified based on products type and the entities within the Group

producing them: production of knitted articles (that includes the Company and its subsidiaries PAT MTF Mrija and Aboutwear

UAB) and production of working clothes (that includes subsidiary Šatrija AB).

In assessing operational performance of segments, the Board of the Group takes into account the sales revenue, gross profit,

EBITDA (earnings before financial activity result, tax, depreciation and amortisation), profit (loss) ratios, therefore the report on

the Group’s segments discloses these items in respect of each segment. Inter-segment transactions are eliminated on

consolidation.

	Production
2022	of knitted	Production of
	articles	working clothes	Eliminations	In total
External sales	31,774	2,735	-	34,509
Internal sales	917	-	(917)	-
Total sales	32,691	2,735	(917)	34,509
Gross profit	3,319	511	-	3,830
EBITDA	(719)	188	-	(531)
Profit (loss)	(2,016)	96	-	(1,920)
Depreciation and amortisation (Notes 6,7,8,17)	855	105	-	960
Interest expense (Note 23)	318	0	(10)	308
Income tax (Note 24)	19	(2)	-	17
Total segment assets	15,275	1,551	-	16,826
Total segment liabilities	11,814	979	-	12,79 3

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

5. Segment information (continued)

	Production	Production of
2021	of knitted	working
	articles	clothes	Eliminations	In total
External sales	28,194	2,249	-	30,443
Internal sales	870	-	(870)	-
Total sales	29,064	2,249	(870)	30,443
Gross profit	4,022	100	-	4,122
EBITDA	(1,693)	(226)	-	(1,919)
Profit	(2,704)	(407)	-	(3,111)
Depreciation and amortisation (Notes 6,7,8,17)	793	116	-	909
Interest expense (Note 23)	113	-	(13)	100
Income tax (Note 24)	176	74	-	250
Total segment assets	21,241	1,432	-	22,673
Total segment liabilities	14,355	932	-	15,287

	2022	2021
EBITDA	(531)	(1,919)
Depreciation and amortisation	(960)	(909)
Operating profit	(1,491)	(2,828)
Interest expense	(308)	(100)
Other finance costs, net	(104)	67
Loss for the year before income tax	(1,903)	(2,861)

The measurement and recognition policies used for preparation of management’s reports are the same as those used in these

financial statements.

Breakdown of the Company’s and Group’s revenue by type of activity:

	Group		Company
	2022	2021	2022	2021
Sales of goods ordered (recognised over time)	24,062	22,142	21,241	19,902
Sales of goods ordered (recognised at the point in time)*	4,961	2,424	4,961	2,424
Company brands (About, Utenos) (recognised at the point in time)	3,623	4,480	3,619	4,482
Sales of services (recognised over time)	699	503	648	427
Other sales (recognised at the point in time)	1164	894	1,164	886
	34,509	30,443	31,633	28,121

* As described in Note 2.20, revenue from sales of goods to a group of customers for which supply contracts contain clauses

allowing alternative uses are recognised at the point in time.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

5. Segment information (continued)

The table below summarises the Group’s and the Company’s revenues geographically:

		Scandinavia
	DACH	(Sweden,
2022	(Germany,	Norway,
	Austria,	Denmark,		Other
	Switzerland)	Finland)	Lithuania	markets	In total
Group’s sales	17,397	6,394	6,585	4,133	34,509
Company’s sales	16,981	6,017	6,181	2,454	31,633

		Scandinavia
	DACH	(Sweden,
2021	(Germany,	Norway,
	Austria,	Denmark,		Other
	Switzerland)	Finland)	Lithuania	markets	In total
Group’s sales	16,661	4,690	5,500	3,592	30,443
Company’s sales	15,651	4,475	4,946	3,049	28,121

In 2022, 50.4% of the Group’s sales were made to DACH customers (in 2021: 54.7%). In 2022, 18.5% of total production was

sold to Scandinavian customers (in 2021: 15.4%). 19% of the production was sold in the Lithuanian market (in 2021: 18%).

Assets are divided by separate geographical segments and described in Notes 6 and 7.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

6. Intangible assets

The Group's intangible assets are located in the Republic of Lithuania, except for the assets of the subsidiary PAT MTF Mriya,

which are located in the Republic of Ukraine; the intangible non-current assets located in Ukraine have been fully amortised..

		Group		Company
	Goodwill	Other		Other
	related to	intangible		intangible
	Šatrija AB	assets	In total	assets
Acquisition cost:
Balance at 31 December 2020	441	885	1 326	734
Additions	-	20	20	20
Disposals and write-offs	-	(29)	(29)	(29)
Balance at 31 December 2021	441	876	1 317	725
Additions	-	13	13	13
Disposals and write-offs	-	-	-	-
Balance at 31 December 2022	441	889	1 330	738
Amortisation and impairment:
Balance at 31 December 2020	37	770	807	619
Amortisation for the reporting period	-	36	36	36
Disposals and write-offs	-	(14)	(14)	(14)
Balance at 31 December 2021	37	792	829	641
Amortisation for the reporting period	-	27	27	27
Disposals and write-offs	-	-	-	-
Balance at 31 December 2022	37	819	856	668
Net book value at 31 December 2020	404	115	519	115
Net book value at 31 December 2021	404	82	486	84
Net book value at 31 December 2022	404	70	474	70

The Company and the Group do not have internally generated intangible assets. Amortisation expenses of intangible assets are

recognised in general and administrative expenses in the statement of comprehensive income (Note 21) .

As at 31 December 2022, acquisition cost of fully amortised but still in use intangible assets of the Group and the Company

amounted to EUR 719 thousand and EUR 587 thousand, respectively (as at 31 December 2021: EUR 719 thousand and EUR

587 thousand, respectively).

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

				Vehicles and other
				property, plant and	Construction-
7. Property, plant and equipment Group	Land	Buildings	Structures	equipment	in-progress	In total
Cost or revalued amount:
Balance at 31 December 2020	4	6,879	389	21,103	382	28,757
Additions	-	43	-	565	9	617
Reclassification between asset groups	-	95	-	268	(380)	(17)
Disposals and write-offs	-	-	-	(39)	-	(39)
Foreign currency translation differences	-	460	5	109	-	574
Balance at 31 December 2021	4	7,477	394	22,006	11	29,892
Additions	-	-	-	67	129	196
Reclassification between asset groups	-	-	-	-	(9)	(9)
Disposals and write-offs	-	(3)	-	(512)	-	(515)
Foreign currency translation differences	-	(566)	(10)	(99)	-	(675)
Balance as at 1 January 2022	4	6,908	384	21,462	131	28,889
Accumulated depreciation:
Balance at 31 December 2020	-	269	188	18,839	-	19,296
Depreciation charge for the year	-	96	17	422	-	535
Depreciation of revalued asset	-	156	-	-	-	156
Reclassification between asset groups	-	23	-	-		23
Disposals and write-offs	-	-	-	(38)	-	(38)
Foreign currency translation	-	215	4	102	-	321
differences
Balance at 31 December 2021	-	759	209	19,325	-	20,293
Depreciation charge for the year	-	83	17	405	-	505
Depreciation of revalued asset	-	152	-	-	-	152
Reclassification between groups	-	-	-	-	-	-
Disposals and write-offs	-	(3)	- -	- (422)	-	(425)
Foreign currency translation	-	(117)	(9)	(92)	-	(218)
differences
Balance as at 1 January 2022	-	874	217	19,216	-	20,307
Impairment:
Balance at 31 December 2020	-	13	-	-	-	13
Balance at 31 December 2021	-	13	-	143	-	156
Balance at 31 December 2022	-	1,657	-	27	-	1,684
Net book value at 31 December 2020	4	6,597	201	2,264	382	9,448
Net book value at 31 December 2021	4	6,705	185	2,538	11	9,443
Net book value at 31 December 2022	4	4,377	167	2,219	131	6,898

The Group's assets are located in the Republic of Lithuania, except for the assets of its subsidiary PAT MTF Mriya, which are located

in the Republic of Ukraine. The carrying amount of property, plant and equipment located in Ukraine before impairments at 31 December

2022 was EUR 1,671 thousand (31 December 2021: EUR 2,219 thousand), all of which was impaired (note 4) .

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

7. Property, plant and equipment (continued)

At the end of 2021, the Company's Management decided to decline the lease of five stores of AB UTENOS TRIKOTAŽAS. As at

31 December 2021 an impairment loss of EUR 143 thousand was formed for the store equipment. As a result of the disposal of

part of the shop equipment during 2022 (Note 23), the impairment formed in 2021 was reversed.

Company

Land

Buildings

Structures

Vehicles,

equipment and

other property,

plant and

equipment

					Construction-
Cost or revalued amount:					in-progress	In total
Balance at 31 December 2020	4	4,229	356	18,714	382	23,685
Additions	-	43	-	549	9	601
Disposals and write-offs	-	-	-	(33)	-	(33)
Reclassification between asset groups	-	95	-	268	(363)	-
Reclassified to investment property	-	-	-	-	(17)	(17)
Balance at 31 December 2021	4	4,367	356	19,498	11	24,236
Additions	-	-	-	59	129	188
Disposals and write-offs	-	-	-	(416)	-	(416)
Reclassification between groups	-	-	-	-	(9)	(9)
Balance at 31 December 2022	4	4,367	356	19,141	131	23,999
Accumulated depreciation:
Balance at 31 December 2020	-	222	161	16,830	-	17,213
Depreciation for the reporting period	-	66	16	326	-	408
Depreciation of revalued asset	-	67	-	-	-	67
Reclassified to investment property	-	23	-	-	-	23
Disposals and write-offs	-	-	-	(32)	-	(32)
Balance at 31 December 2021		378	177	17,124	-	17,679
Depreciation for the reporting period	-	54	16	326	-	396
Depreciation of revalued asset	-	67	-	-	-	67
Disposals and write-offs	-	-	-	(334)	-	(334)
Balance at 31 December 2022	-	499	193	17,116	-	17,808
Impairment:
Balance at 31 December 2020	-	9	-	-	-	9
Balance at 31 December 2021	-	9	-	143	-	152
Balance at 31 December 2022	-	9	-	-	-	9
Net book value at 31 December 2020	4	3,998	195	1,884	382	6,463
Net book value at 31 December 2021	4	3,980	179	2,231	11	6,405
Net book value at 31 December 2022	4	3,859	163	2,025	131	6,18 2

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

7. Property, plant and equipment (continued)

Allocation of depreciation and amortisation of property, plant and equipment, intangible assets, investment property and the right-

of-use asset is disclosed in the table below.

		Group			Company
	2022		2021	2022		2021
Cost of sales (Note 20)		523	586		340	381
General and administrative expenses (Note		428	315		316	266
21)
Other operating expenses		9	8		9	8
Total		960	909		665	655

As at 31 December 2022, property, plant and equipment of the Group and the Company with the cost of EUR 17,678 thousand

and EUR 14,737 thousand, respectively, were fully depreciated (as at 31 December 2021 – EUR 17,861 thousand and EUR

14,873 thousand, respectively).

As at 31 December 2022, the Company had its non-current assets pledged to OP Bank and manages the Business Assistance

Fund. The carrying amount of the pledged assets was EUR 2,025 thousand (Note 16). The carrying amount of the non-current

assets of Šatrija AB pledged to KŪB Pagalbos verslui Fund as a collateral to secure the liabilities of the Company amounted to

EUR 146 thousand. As at 31 December 2021, the carrying amount of the Company’s non-current assets pledged to the bank

amounted to EUR 2,100 thousand.

If buildings were measured using the cost method, the carrying amounts of buildings would be as follows:

	Group	Company
	As at 31 December	As at 31 December
	2022	2022
Acquisition cost	4,287	2,676
Accumulated depreciation and impairment losses	(2,673)	(1,238)
Net book value	1,614	1,438

	Group	Company
	As at 31 December	As at 31 December
	2021	2021
Acquisition cost	4,567	2,677
Accumulated depreciation and impairment losses	(2,634)	(1,185)
Net book value	1,933	1,492

The revalued buildings consist of warehouses, factories, shop, administration buildings, etc. The management determined that

these constitute one class of asset under IFRS 13, based on the nature, characteristics and risks of the property.

Fair value of the properties was determined by using the market prices method. This means that valuations performed by the

appraiser are based on active market prices for comparable properties adjusted for difference in the nature, location or condition

of the specific property. As at the date of the last revaluation (October and November 2018) the properties’ fair values were based

on valuations performed by accredited independent appraisers Centro Kubas UAB (Lithuania) and certified appraiser Aleksandr

Tidir (Ukraine). The value of the Group’s and the Company’s assets is based on third level of fair value hierarchy.

In 2021 and 2022, the management of the Company and the Group did not identify any indication that the carrying amounts of

the assets may differ materially from their fair values, except for the assets in Ukraine, after using an independent appraiser UAB

Centro kubas, which carried out a review of the real estate market in Lithuania. In 2022, in the absence of the possibility to carry

out a valuation of the property in Ukraine due to the ongoing hostilities and the inactive real estate market, the value of the property

in Ukraine was tested by estimating the expected future cash inflows of PAT MTF Mrija. The valuation resulted in an impairment

of the total value of the assets.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

7. Property, plant and equipment (continued)

Significant directly or indirectly observable valuation inputs:

	Group	Company
Price per sq. m (EUR)	Average price	Average price
Administration buildings	96-125	96-125
Manufacturing and warehouse buildings	96-125	96-125
Shop premises	178-475	178-475

Significant increases (decreases) in estimated price per square metre alone would result in a significantly higher (lower) fair

value.

Impact of non-current asset revaluation:

	Group	Company
Net book value of the building as at 31 December 2020	6,597	3,998
Net book value of buildings at revalued amount as at 31 December 2020:	4,711	2,555
Net book value of buildings at acquisition cost as at 31 December 2020:	1,886	1,443
Acquisition, reclassification, write-off of buildings	138	138
Effect of exchange rate to revalued amount	217	-
Effect of exchange rate to buildings acquisition cost	28	-
Depreciation of acquisition cost of buildings	(119)	(89)
Depreciation of the revalued part of buildings	(156)	(67)
Net book value of buildings revalued amount as at 31 December 2021:	4,772	2,488
Net book value of buildings acquisition cost as at 31 December 2021:	1,933	1,492
Net book value of the building as at 31 December 2021:	6,705	3,980
Acquisition, reclassification, write-off of buildings	(185)	-
Acquisition (write-off) of the revalued part of buildings	(1,459)
Effect of exchange rate to revalued amount	(401)	-
Effect of exchange rate to buildings acquisition cost	(51)	-
Depreciation of acquisition cost of buildings	(83)	(54)
Depreciation of the revalued part of buildings	(152)	(67)
Net book value of buildings revalued amount as at 31 December 2022:	2,760	2,421
Net book value of buildings acquisition cost as at 31 December 2022:	1,614	1,438
Net book value of the building as at 31 December 2022:	4,374	3,85 9

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

8. Investment property

	Group	Company
Cost:
Balance at 31 December 2020	207	207
Acquisition	3	3
Reclassified from property, plant and equipment	17	17
Balance at 31 December 2021	227	227
Acquisition	-	-
Reclassified from property, plant and equipment	-	-
Balance at 31 December 2022	227	227
Accumulated depreciation:
Balance at 31 December 2020	82	82
Depreciation for the reporting period	5	5
Reclassified from property, plant and equipment	(23)	(23)
Balance at 31 December 2021	64	64
Depreciation for the reporting period	6	6
Reclassified from property, plant and equipment	-	-
Balance at 31 December 2022	70	70
Net book value at 31 December 2020	125	125
Net book value at 31 December 2021	163	163
Net book value at 31 December 2022	157	157

Rental income and related costs have been disclosed in Note 22.

Investment property of the Company and the Group is comprised of buildings rented to a third party.

Fair value of the properties was determined by using the market prices method. This means that valuations performed by the

appraiser are based on active market prices for comparable properties adjusted for difference in the nature, location or condition

of the specific property. As at the date of the last revaluation (October and November 2018), the asset’s fair value was based on

valuations performed by accredited independent appraisers Centro Kubas UAB (Lithuania).

In 2021 and 2022, the management of the Company and the Group did not identify any indication that the carrying amounts of

the assets may be materially different from their fair values, following the engagement of independent valuers to review the

property market.

The Group’s and the Company’s investment property fair value was estimated based on the level 3 of fair value hierarchy (Note

3.3).

	Group		Company
	2022	2021	2022	2021
	31 December	31 December	31 December	31 December
Net book value of investment	157	163	157	163
property
Fair value of investment property	227	227	227	22 7

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

8. Investment property (continued)

Future rental income of investment property

No material contractual commitments to purchase, construct, develop, repair or increase the investment property existed at the

year-end.

9. Investments in subsidiaries

The Company’s investments in subsidiaries were as follows as at 31 December:

	2022	2021
Cost of investments:
Balance as at 1 January	3,785	3,745
Additions	709	40
Disposals	-	-
Balance as at 31 December	4,494	3,785
Impairment:
Balance as at 1 January	2,295	2,255
Impairment	709	40
Balance as at 31 December	3,004	2,295
Carrying amount of investments in subsidiaries as at 31 December	1,490	1,490

In 2021, Aboutwear UAB was established as a subsidiary company with a capital of EUR 50,000. As at 31 December 2021, AB

UTENOS TRIKOTAŽAS held 80% of the shares in this subsidiary. As at 31 December 2021, an impairment loss of EUR 40

thousand was formed on the investment in the subsidiary UAB Aboutwear, which was recognised in the Company's Statement of

Comprehensive Income under financial expenses.

As at 27 June 2022, AB UTENOS TRIKOTAŽAS acquired a 20% shareholding in UAB Aboutwear. As at 31 December 2022, AB

UTENOS TRIKOTAŽAS held 100% of the shares in this subsidiary.

In 2022, the Company increased the capital of UAB Aboutwear by covering part of the losses of UAB Aboutwear and offsetting

them against the Company's receivables from UAB Aboutwear. An impairment loss has been recognised for the full amount of

the investment.

As at 31 December 2022, a 100% impairment has been recorded on the investment in PAT MTF Mrija. More detailed information

is presented in Note 4.

10. Inventories

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Raw materials	2,993	3,310	2,640	2,971
Production-in-progress	1,596	2,418	1,594	2,411
Finished goods	1,386	2,985	1,367	2,930
Goods for re-sale	6	94	3	89
	5,981	8,807	5,604	8,401
Write-down to net realisable value:
Opening balance	(1,893)	(1,418)	(1,570)	(1,095)
Change	258	(475)	258	(475)
Closing balance	(1,635)	(1,893)	(1,312)	(1,570)
	4,346	6,914	4,292	6,83 1

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

10. Inventories (continued)

Taking into account the changed circumstances of the realisation of inventories in 2022, the principles of write-down of inventories

to net realisable value were revised and a reversal of the impairment was formed - the total reversal amount of the allowance

formed during 2022 amounted to EUR 258 thousand in the Company and the Group.

The cost of the Group’s and the Company’s inventories accounted for at net realisable value as at 31 December 2022 amounted

to EUR 1,965 thousand and EUR 1,627 thousand, respectively (as at 31 December 2021: EUR 2,184 thousand and EUR 1,849

thousand, respectively). Changes in impairment allowance for inventories during 2022 and 2021 were recorded within the Group’s

and the Company’s general and administrative expenses (Note 21).

The Group and the Company do not account for third-party inventories received for processing and which are stored in the Group’s

and the Company’s warehouse premises in the statement of financial position. As at 31 December 2022, the unaudited value of

such inventories owned by third parties was EUR 1,428 thousand and EUR 14 thousand, respectively (as at 31 December 2021:

EUR 1,798 thousand and EUR 501 thousand, respectively).

As at 31 December 2022, all inventories were pledged to the bank of the Company and the Group.

As at 31 December 2021, the carrying amount of pledged inventories of the Company and the Group was EUR 2,100 thousand

and EUR 2,132 thousand (Note 16).

11. Trade receivables, contract assets

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Trade receivables, gross	2,075	1,267	1,675	1,124
Impairment:
Opening balance	(85)	(107)	(59)	(81)
Accrued over the year	-	-	-	-
Written-off	7	22	7	22
Closing balance	(78)	(85)	(52)	(59)
	1,997	1,182	1,623	1,065

Changes in allowance for doubtful trade receivables during 2022 and 2021 were recorded within the Group’s and the Company’s

general and administrative expenses (Note 21).

For trade receivables ageing see Note 3.1.

As at 31 December 2022, the contract assets of the Company and the Group consisted of accrued income of EUR 1,900 thousand

and EUR 1,801 thousand respectively, which mainly reflects the earned revenue from contract sewing services for which invoices

had not yet been issued at the end of the year and for which certain performance commitments (e.g. order not fully completed)

had not yet been made. The amount was assessed for impairment but was not determined to be impaired..

As at 31 December 2021, the contract assets of the Company and the Group consisted of accrued income of EUR 2,673 thousand

and EUR 2,748 thousand respectively, which mainly reflects the earned revenue from contract sewing services for which invoices

had not yet been issued at the end of the year and for which certain performance commitments (e.g. order not fully completed)

had not yet been made. The amount was assessed for impairment but was not determined to be impaired.

As at 31 December 2022 and 2021, the Group and the Company did not have other amounts past due.

As at 31 December 2022, the Group and the Company had received advances from customers in the amount of EUR 827 thousand

and EUR 820 thousand, respectively (as at 31 December 2021: EUR 861 thousand and EUR 860 thousand, respectively). The

advances received are reflected as contractual liabilities in the statement of financial position.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

12. Other current assets

	Group		Company
	31 December	31 December	31 December	31 December
Other current assets	2022	2021	2022	2021
Taxes receivable and other receivables, except for prepaid income tax	54	145	25	99
Prepaid income tax	79	126	79	114
Prepayments	119	212	116	200
Deferred expenses	63	51	60	50
Total other current assets	315	534	280	463

13. Cash and cash equivalents

	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Cash on hand	4	5	4	5
Cash at bank	381	620	25	67
	385	625	29	72

As at 31 December 2022 and 2021, the use of cash has not been restricted.

14. Share capital

As at 31 December 2022 and 2021, the share capital comprised of 9,503,000 ordinary registered shares with nominal value of

EUR 0.29 each.

As at 31 December 2022 and 2022, all shares were fully paid.

The subsidiaries did not hold any shares of the Company as at 31 December 2022 and 2021. The Company and the Group did

not hold its own shares as at 31 December 2022 and 2021.

15. Other reserves

Legal reserve

A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of not less than 5% of distributable profit

of the Company calculated under the Lithuanian Republic Law on Companies, are compulsory until the reserve reaches 10% of

the share capital. As at 31 December 2022 and 2021, the legal reserve was fully formed by the Company. The legal reserve

cannot be distributed as dividends but can be used to cover accumulated losses.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

15. Other Reserves (continued)

Revaluation reserve

Revaluation reserve reflects the result of the revaluation (net of deferred tax) of the property, plant and equipment.

	Group	Company
Net book value of buildings revaluation reserve as at 31 December 2020:	4,085	2,187
Building revaluation depreciation charges	(139)	(58)
Net book value of buildings revaluation reserve as at 31 December 2021:	3,946	2,129
Building revaluation impairment	(1,203)	-
Deferred tax asset	(261)	-
Building revaluation depreciation charges	(121)	(58)
Net book value of buildings revaluation reserve as at 31 December 2022:	2,361	2,071

Reserve for acquisition of own shares

According to the decision of the shareholders of Šatrija AB in 2019, the reserve for acquisition of own shares amounted to

EUR 100 thousand (including that attributable non-controlling interest).

In 2019, a decision of the shareholders of AB UTENOS TRIKOTAŽAS was passed to build up a reserve of EUR 1,000

thousand for acquisition of own shares.

Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising on consolidation of financial statements of

foreign subsidiaries (Note 2.15).

As at 31 December 2022, foreign currency translation impact on consolidated financial statements amounted to EUR (30)

thousand (including non-controlling interest), (as at 31 December 2021: EUR 130 thousand).

16. Borrowings

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Current
Current portion of non-current bank
borrowings	637	637	637	637
Other current borrowings	320	1,801	320	1,801
Non-current
Borrowings from subsidiaries	-	-	600	600
Borrowings from related entities	532	532	532	532
Non-current borrowings	4,162	2,999	4,162	2,999
Total borrowings	5,651	5,969	6,251	6,569

The Company’s borrowings from subsidiaries consist of the loan granted by subsidiary Šatrija AB, amounting to EUR 600

thousand with maturity as at 31 December 2027 and variable interest rate 12-month EURIBOR+2.2%.

On 18 December 2020, the Company entered into the loan agreement with SBA Grupė UAB for EUR 532 thousand.

The annual interest rate on the loan will be 6-month EURIBOR+2.2%. The loan matures on 31 December 2027.

In 2021, the Company had granted a loan of EUR 700 thousand to its subsidiary UAB Aboutwear, bearing interest at a floating

rate of 6 month EURIBOR plus 2.2%. In 2022, the amount of the loan was increased to EUR 830 thousand. In 2022, the

Company increased the share capital of UAB Aboutwear by covering part of the losses of UAB Aboutwear and by offsetting it

against the Company's receivables (including the loan) from UAB Aboutwear. UAB Aboutwear is deemed to have repaid the

loan under the loan agreement amounting to EUR 830 thousand.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

16. Borrowings (continued)

On 27 December 2021, bond subscription agreement and a loan agreement were concluded with manages the Business

Assistance Fund, which provide that the Fund signs and acquires whereas the Company issues ordinary registered bonds of

nominal value of up to EUR 2,300 thousand, and the Fund grants the Company a loan of up to EUR 500 thousand. The

redemption date of the bonds and the repayment deadline of the loan – 15 December 2027. The liabilities are subject to an

annual interest rate which is calculated at intervals of 12 (twelve) months - 7%. For each other 12 (twelve) months the interest

rate is increased by 0.1 (one tenth) percentage point annually. Under the agreements, liabilities are guaranteed by pledges of

current and non-current assets and by sureties of the subsidiaries Šatrija AB and Aboutwear UAB. As at 31 December 2021,

the balance of issued and paid bonds amounted to EUR 1,000 thousand.

As at 31 December 2022, the balance of the issued bonds amounted to EUR 2,300 thousand, and the loan balance amounted

to EUR 500 thousand.

As of 31 December 2022 and 2021, the bank borrowings were secured by property, plant and equipment and inventory (Note

7 and 10).

On 28 March 2019, the Company signed a long-term loan agreement and an overdraft agreement with the Lithuanian branch

of OP Corporate bank plc. As at 31 December 2022, the amount of the long-term loan is EUR 1,747 thousand. The final

repayment date is 31 August 2024.

On 28 December 2021, an extension of the overdraft agreement for a limit of EUR 2,000,000 was signed until 30 April 2024.

As at 31 December 2022, AB UTENOS TRIKOTAŽAS owed EUR 320 thousand under the overdraft agreement.

Borrowings were received in the following currencies:

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
EUR	5,651	5,969	6,251	6,569

The weighted average interest rates (%) were as follows:

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Non-current borrowings from subsidiaries	-	-	5.49	2.2
KŪB Paramos verslui fondas	7.1	7	7.1	7
Non-current loan from related	4.77	2.2	4.77	2.2
entities
Current loan from related entities	-	-	-	-
Current bank borrowings	4.63	2.45	4.63	2.45
Non-current bank borrowings	4.23	2.2	4.23	2.2

The Group’s and the Company’s borrowings fair value was estimated based on the level 3 of fair value hierarchy, contractual

cash-flows were discounted using the prevailing market interest rates. Borrowings fair value is approximate to carrying value, as

disclosed in Note 3.

The exposure of the borrowings to interest rate changes and the contractual re-pricing dates at the statements of financial position

dates are as follows:

Interest changes

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
Every 3 months	2,319	4,437	2,319	4,437
Every 6 months	532	532	532	532
Every 12 months	2,800	1,000	3,400	1,600
	5,651	5,969	6,251	6,569

The interest rate of the loans was based on the market rate of interest and, in the opinion of management, the carrying amount

of the loans was consistent with their fair value.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

17. Leases

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

Company

				Other property,
	Premises	Land	Vehicles	plant and	In total
				equipment
31 December 2020	168	27	101	8	304
Additions	521	-	48	1	570
Disposals and write offs	(496)	-	-	-	(496)
Depreciation expense	(96)	(3)	(38)	(3)	(140)
31 December 2021	97	24	111	6	238
Additions	100	-	52	-	152
Reversal of impairment	85	-	-	-	85
Disposals and write offs	(79)	-	-	-	(79)
Depreciation expense	(126)	(3)	(38)	(2)	(169)
31 December 2022	77	21	125	4	227

Group

				Other property,
	Premises	Land	Vehicles	plant and	In total
				equipment
31 December 2020	168	339	114	8	629
Additions	521	-	72	1	594
Disposals and write offs	(496)	-	-	-	(496)
Depreciation expense	(96)	(34)	(44)	(3)	(177)
Effect of exchange rate	-	28	-	-	28
31 December 2021	97	333	142	6	578
Additions	100	526	83	-	709
Disposals and write offs	(79)	-	-	(1)	(80)
Depreciation expense	(126)	(97)	(45)	(2)	(270)
Impairment and reversal	85	(512)	-	-	(427)
Effect of exchange rate	-	(155)	-	-	(155)
31 December 2022	77	95	180	3	355

Set out below are the carrying amounts of lease liabilities and their dynamics during the period:

	Company	Group
1 January 2022	258	604
Additions	152	709
Increase in interest	4	19
Payments	(178)	(294)
Write-offs and disposals	5	5
Effect of exchange rate	-	(150)
31 December 2022	241	893
Current	115	208
Non-current	126	685

The maturity analysis of lease liabilities is disclosed in Note 3.1.

The following are the amounts recognised in profit or loss:

	Company	Group
Depreciation expense of right-of-use assets	154	254
Interest expense on lease liabilities	4	19
Commitments relating to short-term leases	-	-
Commitments relating to leases of low-value assets	-	-
Discounts received	-	-
Variable lease payments (included in cost of sales)	9	9
Total amount recognised in profit or loss	167	282

In 2022, the Company and the Group had total cash outflows for leases of EUR 178 thousand and EUR 294 thousand,

respectively.

The Group has lease contracts for premises that contains variable payments based on sales turnover. The following provides

information on the Company’s variable lease payments in 2022, including the magnitude in relation to fixed payments:

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

17. Lease (continued)

2022

	Fixed	Variable
	payments	payments	In total
	EUR	EUR	EUR
	thousand	thousand	thousand
Variable rent with minimum payment	125	9	134
	125	9	134

The Company and the Group do not have any contracts that include extension and termination options for which the extension

options are expected not to be exercised or termination options are expected to be exercised.

The Company and the Group are lessors

The Company and the Group have entered into operating leases on its investment property portfolio consisting of certain office

and manufacturing buildings (refer to Note 8). These leases have terms of between 1 to 5 years. All leases include a clause to

enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also

required to provide a residual value guarantee on the properties.

Rental income recognised by the Group during the year is EUR 44 thousand (in 2021: EUR 24 thousand).

Future minimum rentals receivable under non-cancellable operating leases as at 31 December were as follows:

	2022	2021
	EUR thousand	EUR thousand
Within one year	16	14
After one year but not more than five years	28	10
After five years	-	-
	44	24

18. Provisions for employee benefits

	Group		Company
Balance at 31 December 2020		354	262
Benefits earned		71	39
Interest expense		-	-
Actuarial (gain) loss		54	54
Reversal due to cancelled job contracts		(28)	(28)
Balance at 31 December 2021		451	327
Benefits earned		(32)	(5)
Interest expense		-	-
Actuarial (gain) loss		(64)	(64)
Reversal due to cancelled job contracts		(43)	(43)
Balance at 31 December 2022		312	215
	Group		Company
Non-current provisions for employee benefits as at 31 December 2022		231	157
Current provisions for employee benefits as at 31 December 2022		81	58
Non-current provisions for employee benefits as at 31 December 2021		358	251
Current provisions for employee benefits as at 31 December 2021		93	76

Provisions for pension and jubilee benefits represent amounts calculated according to the collective agreements, which are in

force in the Group and the Company. In the Company and its subsidiary Šatrija AB, each employee is entitled to a jubilee benefit

and a 2-month salary payment when leaving the job at or after the beginning of pension period.

In 2022, provisions were calculated with the discount rate of 4.16% and employee turnover rate of 12.04% (in 2021: 0.16% and

13.06%, respectively).

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

18. Provisions for Employee Benefits (continued)

The table below discloses the sensitivity of the Group’s and the Company’s provisions to possible changes in key

assumptions, with all other variables held constant.

			31 December 2022
		Group		Company
			Negative	Positive	Negative
	Change in	Positive changes	changes in	changes in	changes in
	assumption	in assumption	assumption	assumption	assumption
		Decreased by	Increased by	Decreased by	Increased by
Discount rate	0.50%	2.35%	2.45%	2.18%	2.26%
		Increased by	Decreased by	Increased by	Decreased by
Salary growth rate	0.50%	2.47 %	2.38 %	2.27%	2.21%

			31 December 2021
		Group		Company
		Positive	Negative	Positive	Negative
	Change in	changes in	changes in	changes in	changes in
	assumption	assumption	assumption	assumption	assumption
		Decreased by	Increased by	Decreased by	Increased by
Discount rate	0.50%	3.36%	3.43%	3.15%	3.21%
		Increased by	Decreased by	Increased by	Decreased by
Salary growth rate	0.50%	3.56%	3.27 %	3.35%	3.05%

19. Accrued expenses and other current liabilities

	Group		Company
	As at 31	As at 31	As at 31	As at 31
	December 2022	December 2021	December 2022	December 2021
Accrual for vacation reserve	1,088	1,360	810	1,061
Salaries and social security*	653	792	549	635
Loan granted by SoDra	15	-	15	-
Accounts payables for services and non-current assets	423	494	422	496
Taxes (excl. income tax)**	258	466	224	414
Provisions for accrued bonuses	122	72	50	72
Provisions for employee benefits	81	93	58	76
Tax loan granted by Tax Authorities	52	-	52	-
Other liabilities	230	298	16	97
	2,922	3,575	2,196	2,851

*In November 2022, a decision of the SODRA Board was taken in respect of EUR 371 thousand deferral of the arrears of social

insurance contributions with interest, the amount of which shall be determined by order of the Minister of Finance. The repayment

of the contributions is due in October 2027. The current part of the liability amounts to EUR 15 thousand.

**In November 2022, a tax loan agreement was signed with the tax authorities. The total amount of the tax loan was EUR 99

thousand bearing interest at a rate determined by order of the Minister of Finance. The loan matures in September 2024. As at

31 December 2022, the balance of the loan amounted to EUR 90 thousand. The short-term part of the loan amounting to EUR 52

thousand.

In 2020, AB UTENOS TRIKOTAŽAS entered into an interest-free loan agreement of EUR 1,347 thousand with the State Tax

Authorities (STA).The liability to STA amounted to EUR 103 thousand as at 31 December 2021, the repayment of which has

been postponed until 25 March 2022.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

20. Cost of sales

	Group		Company
	2022	2021	2022	2021
Materials used in production	(11,185)	(10,467)	(11,089)	(10,353)
Salaries and social security	(11,105)	(9,954)	(8,741)	(7,647)
Depreciation and amortisation (Notes	(523)	(586)	(340)	(381)
6, 7, 8 and 17)
Cost of materials sold	(1,279)	(860)	(1,212)	(802)
Other additional expenses*	(6,587)	(4,454)	(7,221)	(5,181)
	(30,679)	(26,321)	(28,603)	(24,364)

*The amount reflects subsidies received. Under the European Commission's Interim War Communication, the company (AB

UTENOS TRIKOTAŽAS) was included in the list of sectors severely affected in 2022 and received subsidies as a company

severely affected by the energy crisis. The subsidies are accounted for as energy cost reductions (the total amount of the

subsidies received in 2022 amounted to EUR 371 thousand). The impact of the subsidies has been accounted for under cost of

sales through a reduction in other ancillary expenses.

21. Selling, General and Administrative Expenses

		Group		Company
Selling expenses	2022		2021	2022	2021
Salaries and social
security		(859)	(1,053)	(755)	(927)
Advertising and marketing costs		(302)	(737)	(237)	(576)
Agency costs		(338)	(287)	(323)	(286)
Transportation expenses		(376)	(395)	(360)	(389)
Maintenance costs of retail outlets		(65)	(39)	(65)	(39)
Depreciation and amortisation (Notes 6, 7, 8 and 17)		(196)	(158)	(196)	(158)
Other selling expenses		(86)	(137)	(78)	(128)
Total selling expenses		(2,222)	(2,806)	(2,014)	(2,503)
General and administrative
expenses
Salaries and social		(1,164)	(1,477)	(834)	(1,067)
security
Communication and consulting		(508)	(719)	(377)	(476)
services*
Taxes (other than income tax)		(93)	(138)	(76)	(124)
Depreciation and amortisation		(232)	(157)	(120)	(108)
Security services		(151)	(139)	(78)	(71)
Car operating expenses		(73)	(54)	(57)	(46)
Fees to financial institutions		(79)	(95)	(71)	(89)
Premises operating expenses		(54)	(45)	(51)	(43)
Travel expenses		(4)	(3)	(2)	(2)
Representation expenses		(26)	(29)	(26)	(27)
Allowance (reversal) and write-off of trade receivables		3	25	(729)	25
Allowance (reversal) and write-off of inventories		235	(507)	236	(507)
Other		(1,055)	(926)	(150)	(778)
		(3,201)	(4,264)	(2,335)	(3,313)
		(5,423)	(7,070)	(4,349)	(5,816)

* The amount of other non-audit services performed by independent auditors in 2022 is EUR 4.1 thousand (SA8000-Surveillance

audit). In 2021, the amount of EUR 8.6 thousand was paid.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

22. Other income and expenses

		Group			Company
	2022		2021	2022		2021
Gain on disposal of non-current assets		11	1		11	3
Rental income		25	26		27	24
Other income		157	110		35	79
Other income		193	137		73	106
Loss from disposal of non-current assets		(66)	(1)		(66)	(1)
Expenses related to leasehold assets		(16)	(8)		(10)	(4)
Depreciation of rentals		(9)	(8)		(9)	(8)
Other expenses		(91)	(17)		(85)	(13)

23. Finance expenses, net

		Group		Company
	2022		2021	2022	2021
Gain on foreign exchange		329	224	238	66
Interest income		-	-	70	66
Other finance income		5	3	5	2
Income from financing activities		334	227	313	134
Interest expense*		(308)	(100)	(303)	(105)
Loss on foreign exchange		(438)	(145)	(226)	(64)
Impairment of loans and interest of loans		-	-	(1,145)	(700)
Impairment of investments in subsidiary		-	-	(10)	(40)
Other finance costs		-	(15)	-	(15)
Finance costs		(746)	(260)	(1,684)	(924)

*Interest is calculated on the loans measured at amortised cost.

24. Income tax

Income tax expenses comprise the following:

		Group			Company
	2022		2021	2022		2021
Current income tax		-	-		-	-
Change of deferred income tax		(17)	(250)		(34)	(192)
Income tax (expenses) recognised in the statement of comprehensive income		(17)	(250)		(34)	(192)

Reconciliation of the reported amount of income tax expenses for the year to the amount of income tax that would be calculated

applying the statutory income tax rate on profit before tax:

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

24. Income tax (continued)

			Group				Company
			Effective	Effective			Effective	Effective
	2022	2021	tax rate	tax rate	2022	2021	tax rate	tax rate
			2022 (%)	2021 (%)			2022 (%)	2021 (%)
Profit (loss) before tax	(1,903)	(2,861)	-	-	(2,702)	(2,754)	-	-
Income tax (expense), applying 15% rate	285	429	(15.0)	(15.0)	405	413	(15.0)	(15.0)
Effect of different tax rates	41	(3)	(2.2)	0.1	-	-	-	-
for a subsidiary in Ukraine
Used tax losses carried
forward for which deferred	217	194	(11.4)	(6.8)	-	-	-	-
tax assets was not recognised
Impact of permanent	(560)	(870)	29.4	30.4	(439)	(605)	16.2	22.0
differences
Income tax (expenses)
recognised in the statement of comprehensive income	(17)	(250)	0.9	8.7	(34)	(192)	1.2	7.0

In 2022, deferred income tax asset and liability related to the entities operating in Lithuania were estimated using a tax rate of

15% (in 2021: 15%). Deferred income tax asset and liability relating to entity operating in Ukraine were estimated using a tax rate

of 18% (in 2021: 18%).

The movement in the Group’s and the Company’s deferred tax assets and deferred tax liabilities accounts (prior to and after

offsetting the balances) during the period was as follows:

			Recognised
		Recognised	in other
	31 December	in profit or	comprehensi	31 December
Group	2021	loss	ve income	2022
Deferred tax asset	-	-	-	-
Tax loss carry forward	-	-	-	-
Inventories	-	-	-	-
Amounts receivable	-	-	-	-
Impairment of property, plant and equipment	-	-	-	-
Provisions for employee benefits	-	-	-	-
Accrued expenses	-	-	-	-
Deferred tax asset before valuation allowance	-	-	-	-
Less: valuation allowance	-	-	-	-
Less: deferred tax asset netted with deferred tax	-	-	-	-
liability
Deferred tax asset, net	-	-	-	-
Deferred tax liabilities
Depreciation of property, plant and equipment	(104)	(44)	69	(79)
Revaluation of property, plant and equipment	(721)	27	-	(694)
Deferred tax liabilities	(825)	(17)	69	(773)
Less: deferred tax liability netted with deferred tax	-	-	256	256
asset
Deferred tax liabilities, net	(825)	(17)	325	(517)
Deferred income tax, net	(825)	(17)	325	(517)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

24. Income tax (continued)

			Recognised
		Recognised	in other
	31 December	in profit or	comprehensi	31 December
Group	2020	loss	ve income	2021
Deferred tax asset
Tax loss carry forward	-	-	-	-
Inventories	172	(172)	-
Amounts receivable	17	(17)	-
Impairment of property, plant and equipment	1	(1)	-
Provisions for employee benefits	51	(51)	-
Accrued expenses	29	(29)	-
Deferred tax asset before valuation allowance	270	(270)	-
Less: valuation allowance	(8)	8	-
Less: deferred tax asset netted with deferred tax	(185)	185	-
liability
Deferred tax asset, net	77	(77)	-
Deferred tax liabilities
Depreciation of property, plant and equipment	(68)	2	(38)	(104)
Revaluation of property, plant and equipment	(731)	10	-	(721)
Deferred tax liabilities	(799)	12	(38)	(825)
Less: deferred tax liability netted with deferred tax	185	(185)	-	-
asset
Deferred tax liabilities, net	(614)	(173)	(38)	(825)
Deferred income tax, net	(537)	(250)	(38)	(825)

			Recognised in
			other
	31 December	Recognised in	comprehensive	31 December
Company	2021	profit or loss	income	2022
Deferred tax asset
Tax loss carry forward	-	-	-	-
Inventories	-	-	-	-
Allowance for amounts receivable	-	-	-	-
Impairment of property, plant and equipment
and investment property	-	-	-	-
Provisions for employee benefits	-	-	-	-
Accrued expenses	-	-	-	-
Deferred tax assets before valuation	-	-	-	-
allowance
Less: valuation allowance	-	-	-	-
Less: deferred tax assets netted with deferred	-	-	-	-
tax liability*
Deferred tax asset, net			-	-
Deferred tax liabilities
Depreciation of property, plant and equipment	(52)	(45)	-	(97)
Revaluation of property, plant and equipment	(373)	10	-	(363)
Deferred tax liability	(425)	(35)	-	(460)
Less: deferred tax liability netted with deferred
tax asset*	-	-	-	-
Deferred tax liabilities, net	(425)	(35)	-	(460)
Deferred income tax, net	(425)	(35)	-	(460)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

24. Income Tax (continued)

			Recognised in
			other
	31 December	Recognised in	comprehensive	31 December
Company	2020	profit or loss	income	2021
Deferred tax asset
Tax loss carry forward	-	-	-	-
Inventories	164	(164)	-	-
Allowance for amounts receivable	13	(13)	-	-
Impairment of property, plant and equipment	1	(1)	-	-
and investment property
Provisions for employee benefits	39	(39)	-	-
Accrued expenses	2	(2)	-	-
Deferred tax assets before valuation	219	(219)	-	-
allowance
Less: valuation allowance	-	-	-	-
Less: deferred tax assets netted with deferred	(219)	219	-	-
tax liability*
Deferred tax asset, net	-	-	-	-
Deferred tax liabilities
Depreciation of property, plant and equipment	(69)	17	-	(52)
Revaluation of property, plant and equipment	(383)	10	-	(373)
Deferred tax liability	(452)	27	-	(425)
Less: deferred tax liability netted with deferred	219	(219)	-	-
tax asset*
Deferred tax liabilities, net	(233)	(192)	-	(425)
Deferred income tax, net	(233)	(192)	-	(425)

*Deferred income tax asset and liabilities are netted as much as they are related to the tax institution and with the condition

that tax institution does not perform such coverings.

As at 31 December 2022, UTENOS TRIKOTAŽAS AB had a tax loss of EUR 2 441 thousand for which no deferred income

tax asset was recognised due to uncertainties related to its realisation. Tax losses of EUR 366 thousand can be carried forward

indefinitely.

As at 31 December 2022, the subsidiary PAT MTF Mrija had tax losses carried forward amounting to EUR 1,444 thousand (as

at 31 December 2021: EUR 1,295 thousand) for which it did not recognise deferred tax assets due to uncertainties related to

their realisation. These tax losses may be carried forward for an unlimited term.

25. Earnings per share

Profit per share reflect the Group’s net profit, divided by the number of shares. The Company has no dilutive instruments,

therefore basic and dilutive earnings per share are equal. Calculation of the profit per share is presented below:

Group	2022	2021
Profit (loss) attributable to the equity holders of the Group	(1,916)	(2,966)
Weighted average number of shares in issue (thousand)	9,503	9,503
Earnings per share/notional profit (in EUR)	(0.20)	(0.31)

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

26. Related party transactions

The parties are considered related when one party has the possibility to control the other one or have significant influence

over the other party in making financial and operating decisions. The related parties of the Group are as follows:

Related party	Description of relation
A. Martinkevičius	Ultimate controlling individual
	Ultimate parent company, exercising control through majority of Board
SBA Grupė UAB	members
SBA Group companies	Koncernas SBA UAB subsidiaries
Company’s management	Directors, Board members and their family members

Besides related parties of the Group, subsidiaries of the Company are treated as related parties of the Company.

In the normal course of business, the Company and the Group enter into transactions with their related parties. These

transactions are priced predominantly at market rates. Judgement is applied in determining if transactions are priced at market

or non-market rates, where there is no active market for such transactions. The basis for judgement is pricing for similar types

of transactions with unrelated parties, when such information is known to the Company or the Group.

As at 31 December 2022 and 2021, the management of the Group and the Company had 0.002 per cent of shares of PAT

MTF Mrija.

Information on less than 100% owned subsidiaries

Financial information of subsidiaries that have non-controlling interests is provided below.

Equity interest attributable to non-controlling interests:

	Country of incorporation
	and operation	2022	2021
Šatrija AB	Lithuania	10.22%	10.22%
PAT MTF Mrija	Ukraine	1.05%	1.05%
Aboutwear UAB	Lithuania	-	20.00%

Accumulated balances of non-controlling interest:	31/12/2022	31/12/2021
Šatrija AB	177	166
PAT MTF Mrija	11	37
Aboutwear UAB	-	(94)

Summarised statement of comprehensive income for 2022:

		Aboutwear
	Gotija UAB	UAB	Šatrija AB	PAT MTF Mrija
Revenue	-	209	2 735	850
Cost of sales	-	(100)	(2 224)	(713)
Administrative expenses	-	(292)	(524)	(968)
Other operating income (expenses)	-	20	96	1
Finance income (expenses)	-	(10)	11	(546)
Profit before tax	-	(173)	94	(1,376)
Income tax	-	-	(2)	(15)
Profit from continued operations for the year	-	(173)	96	(1,361)
Total comprehensive income	-	(173)	96	(1,361)
Attributable to non-controlling interests	-	-	10	(14)
Dividends paid to non-controlling interests	-	-	-	-

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

26.Related party transactions (continued)

Summarised statement of comprehensive income for 2021:

Summarised statement of financial position as at 31 December 2022:

		Aboutwear
	Gotija UAB	UAB	Šatrija AB	PAT MTF Mrija
Inventories, cash at hand and cash at bank	60	15	829	73
(current assets)
Property, plant and equipment and other non- current financial assets (non-current assets)	-	-	1,746	-
Trade and other payables (current)	-	(1)	(720)	(1,702)
Interest-bearing loans and borrowings and deferred tax liabilities (non-current)	-	-	(130)	(1,075)
Total equity	60	14	1,725	(2,704)
Attributable to:
Parent company	60	14	1,548	(2,715)
Non-controlling interests	-	-	177	11

Summarised statement of financial position as at 31 December 2021:

		Aboutwear
	Gotija UAB	UAB	Šatrija AB	PAT MTF Mrija
Inventories, cash at hand and cash at bank	61	425	640	127
(current assets)
Property, plant and equipment and other non- current financial assets (non-current assets)	-	49	1,830	2,491
Trade and other payables (current)	-	(243)	(676)	(1,757)
Interest-bearing loans and borrowings and deferred tax liabilities (non-current)	-	(700)	(166)	(1,338)
Total equity	61	(469)	1 628	(477)
Attributable to:
Parent company	61	(375)	1,462	(514)
Non-controlling interests	-	(94)	166	37

* Upon application of changes in IAS 27 Consolidated and Separate Financial Statements on 1 January 2010, the Group

retrospectively started to attribute losses to a non-controlling interest even if this resulted in non-controlling interest having a

deficit balance.

		Utenos
	Gotija UAB	trikotaza SIA	Šatrija AB	PAT MTF Mrija
Revenue	-	102	2 249	842
Cost of sales	-	(39)	(2 149)	(712)
Administrative expenses	-	(576)	(536)	(184)
Other operating income (expenses)	-	-	91	1
Finance income (expenses)	-	(6)	10	135
Profit before tax	-	(519)	(335)	82
Income tax	-	-	2	16
Profit from continued operations for the year	-	(519)	(333)	98
Total comprehensive income	-	(519)	(333)	98
Attributable to non-controlling interests	-	(104)	(42)	1

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

26. Related party transactions (continued)

Related party transactions are disclosed below:

		Group			Company
	2022		2021	2022		2021
Sales of goods and services
and other sales
Subsidiaries of the Company		-	-		75	98
SBA Group companies		-	2		-	2
Ultimate parent company		-	-		-	-
		-	2		75	100

		Group			Company
	2022		2021	2022		2021
Interest income
Subsidiaries of the Company		-	-		70	66
		-	-		70	66

		Group			Company
	2022		2021	2022		2021
Purchases of goods and services
Subsidiaries of the Company		-	-		889	900
Ultimate parent company		151	144		127	144
Other related parties		183	177		162	170
		334	321		1,178	1,214

		Group	Company
	31 December	31 December	31 December	31 December
Amounts receivable, prepayments and loans	2022	2021	2022	2021
Accounts receivable from subsidiaries of the Company, gross*	-	-	21	19
Impairment	-	-	(21)	-
Accounts receivable from subsidiaries			-	19
of the Company, net	-	-
Prepayments to subsidiaries	-	-	711	771
Loans granted including interest			1,145
receivables from subsidiaries, gross**	-	-		2,565
Impairment	-	-	(1,856)	(1,480)
Prepayments, loans granted and interest receivables from the Company’s subsidiaries, net	-	-	-	1,856
	-	-	-	1,856

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

26. Related party transactions (continued)

* As at 31 December 2022 and 2021, accounts receivable consisted only of accounts receivable from PAT MTF Mrija.

**As at 31 December 2022 and 2021, the amount stands for loan (including interest receivables) granted to PAT MTF Mrija

with fixed annual interest rate of 6%.

As at 31 December 2022, an impairment of EUR 1,877 thousand was formed on the receivable, as well as on the loan and

interest from PAT MTF Mrija.

As at 31 December 2021, receivables not past due and loans granted amounted to EUR 1,146 thousand, a portion of

receivable payments from subsidiaries of EUR 5 thousand was more than 30 days past due, another portion of receivable

payments from subsidiaries of EUR 15 thousand was 31–120 days past due. The rest of the payments EUR 709 thousand

were more than 121 days past due.

In 2021, the Company issued a loan of EUR 700 thousand to AB UTENOS TRIKOTAŽAS and its subsidiary UAB Aboutwear.

The loan bears variable interest of 6 months EURIBOR plus 2.2%. The loan was fully impaired at 31 December 2021.

Interest rates set for loans granted to related parties by the Company are based on the market interest rates set for similar

borrowings, therefore, the carrying amount of loans granted to related parties is approximately equal to their fair value.

	Group		Company
	31/12/2022	31/12/2021	31/12/2022	31/12/2021
Current and non-current payables
Subsidiaries of the Company:
Borrowings	-	-	600	600
Other payables	-	-	75	225
SBA Group companies:
Other related parties	58	57	55	52
Ultimate parent company	649	582	645	574
	707	639	1,375	1,451

Except for loans and borrowings, payables to or receivables from related parties have no interest. Except for dividends and loans

which are respectively paid out or settled based on the legal or contractual requirements, other balances are settled within 15–30

days.

Balances at the year-end have no collaterals and all transactions are carried out in cash unless otherwise agreed.

As at 31 December 2022, the amount of loan from subsidiary Šatrija AB amounted to EUR 600 thousand and accounted for in

non-current liabilities. As at 31 December 2021, the loan from subsidiary Šatrija AB amounted to EUR 600 thousand.

		Group			Company
Key management remuneration including	2022		2021	2022	2021
social security costs
Remuneration of the management		661	1,053	439	745
Defined benefit and jubilee payments to management		10	13	4	4
		671	1,066	443	749

Management includes general director, functional directors and chief accountant.

In 2022 and 2021, the management of the Group and the Company did not receive any loans, guarantees, any other payments

or property transfers were not made or accrued. Remuneration to management comprise base salary and related social security

costs.

In December 2021, guarantee agreements were signed with OP Corporate Bank, KŪB Pagalbos verslui fondas and the

subsidiaries Šatrija AB and Aboutwear UAB. Under these agreements, guarantors guarantee to the creditors that UTENOS

TRIKOTAŽAS AB will fulfil all of its obligations.

No guarantees were issued on behalf of related parties as at 31 December 2022.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

27. Contingent Liabilities and Commitments

As at 31 December 2022 and 2021, the Company and the Group had no material commitments for acquisition of property, plant

and equipment or intangible assets.

From 2003 to the end of 2022, the State Tax Inspectorate did not perform a full tax assessment of the Company and the Group

(a partial Company’s tax assessment was performed in 2017). In accordance with applicable laws, the State Tax Inspectorate can

at any time assess the Company’s accounting archive and registers within 3-5 years before the reporting taxable period and can

calculate additional taxes and sanctions. Analogically, similar risk exists due to the existence of entity PAT MTF Mrija registered

in Ukraine as the local state tax authority has not yet performed a full tax inspection.

The Company’s management is not aware of any circumstances that would cause the company any additional material tax

liabilities.

Going concern

(1) The Group operates on the Ukrainian market through its subsidiary Mriya PAT MTF, whose main activity is the provision

of services to the Company (UTENOS TRIKOTAŽAS AB) and whose external sales are small. Therefore, the Group and

the Company are exposed to the Ukrainian economy and financial markets. In February 2022, following the recognition

by the Russian Federation of the self-proclaimed republics of Donetsk and Lugansk and the subsequent invasion of

Ukraine, the military conflict escalated and spread to other regions of the country. There remains a risk that the ongoing

military conflict in Ukraine will have a negative impact on the political and business environment in Ukraine, including the

ability of many entities to continue their normal operations. In view of the above, the situation in Ukraine is unstable and

largely uncertain at the date of authorisation to issue these separate and consolidated financial statements. Given the

ongoing and dynamic nature of military operations, management is not in a position to fully and reliably assess the

financial impact on going concern. Given the importance of the Ukrainian market before it is affected by the events

described above, the Company's management is assessing the possibility of expanding its subcontracting activities in

the local market/other markets.

(2) In 2022, despite the military action in Ukraine, Mriya PAT MTF was operating without significant disruption. During the

year ended 31 December 2022, Mrija PAT MTF's sales revenue amounted to EUR 850 thousand, of which direct sales

to Ukrainian customers amounted to EUR 30 thousand during the year ended 31 December 2022. In 2022, Mrija PAT

MTF produced 26.9% of the Group's total units of goods. Meanwhile, in the year ended 31 December 2021, Mrija PAT

MTF generated sales revenues of EUR 842 thousand, of which direct sales to Ukrainian customers amounted to EUR

10 thousand in the year ended 31 December 2021. In 2021, Mrija PAT MTF manufactured 25.4% of the Group's total

number of units of goods manufactured.

(3) The current assets of the Company and the Group are higher than the current liabilities by EUR 2,570 thousand and

EUR 2,670 thousand, respectively. In 2022, the Company and the Group incurred losses of EUR 2,736 thousand and

EUR 1,916 thousand, respectively. In the opinion of management, the Company and the Group will have sufficient

resources to continue as a going concern for at least 12 months from the reporting date. Management has concluded

that the scope of possible outcomes, considered in making this judgement, does not give rise to any material uncertainties

related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern.

(4) However, management cannot exclude the possibility that general market uncertainties may spill over into other markets

or adversely affect the economic environment in which the Company and the Group operates, which could have a

material adverse effect on the Company and the Group and on the Company's and the Group's financial condition and

operating results in the medium and longer term.

(5) The Company and the Group have received a letter of support from Shareholders and will, if necessary, avail themselves

of the opportunity to obtain financial and other support to enable them to continue trading and meet their obligations

28. Subsequent events

There have been no significant subsequent events up to the date of approval of the financial statements that could have a material

effect on the financial statements of the Company and the Group.

UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,

FOR THE YEAR ENDED 31 DECEMBER 2022

(All amounts are in EUR thousand, unless otherwise stated)

CONFIRMATION OF RESPONSIBLE PERSONS

Pursuant to Article 21 of the Securities Law of the Republic of Lithuania and the Rules of the Board of the Bank of Lithuania for

the Preparation and Presentation of Periodic and Additional Information, we, Nomeda Kaučikienė, Managing Director of AB

,,UTENOS TRIKOTAŽAS", Živilė Jonaitytė, Finance Director, and Reda Kučinskienė, Chief Accountant, hereby confirm that, to

the best of our knowledge, the consolidated and Company’s financial statements as well as the annual management report for

2022 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union,

and give a true and fair view of AB UTENOS TRIKOTAŽAS and the consolidated assets, liabilities, financial position, profit or loss

and cash flows of the group.

General director Nomeda Kaučikienė

Finance director Živilė Jonaitytė

Chief accountant Reda Kučinskienė

Utena, 4 April 2023

UTENOS TRIKOTAŽAS AB

CONSOLIDATED ANNUAL REPORT

For the year ended 31 December 2022

1. Reporting Period Covered by the Annual Report

The Annual Report covers the period from 1 January 2022 to 31 December 2022. All amounts in the Annual Report

presented as at 31 December 2022 or for the year than ended, unless otherwise stated. Further in this report UTENOS

TRIKOTAŽAS AB can be referred to as the Company or the Issuer.

2. Issuer and its contact data

Company name

Legal and organisation

form

Date and place of

incorporation

Registration code

Code of the Register of

Legal Entities

Authorised share capital

Address

Name of Register of Legal

Entities

Telephone

Fax

E-mail

Website

Main activities

Auditor

UTENOS TRIKOTAŽAS AB

Legal entity, public company

Registered with the Register of Legal Entities of Utena District on 6 December 1994;

Reregistered with the Ministry of Economy of the Republic of Lithuania on 18 September

1998.

BĮ 98-257

183709468

EUR 2,755,870

J. Basanavičiaus St.122, LT-28214, Utena, Lithuania

Registrų centras VĮ

+370 389 51445

+370 389 69358

utenos.trikotazas@ut.lt

www.ut.lt

Production of knit-wear and textile articles

KPMG Baltics UAB

3. Nature of the Issuer’s Operations

UTENOS TRIKOTAŽAS AB operates in the field of textile industry. The Company’s principal activity is production of knit-

wear and textile articles.

UTENOS TRIKOTAŽAS AB types of activities:

-production of knit-wear and textile articles;

-production of mass-consumption goods which is closely related to principal activities;

-retail and wholesale trade in own production and production of other companies in local and foreign

markets;

-rendering of services to natural and legal persons.

Šatrija AB type of activity:

- sewing of clothes;

MTF Mrija PAT type of activity:

- production of knitwear;

- sewing of knitwear;

Gotija UAB type of activity:

- retail trade;

Aboutwear UAB types of activities:

- retail and wholesale trade;

4. Company and Group Companies

The Company and the Group companies do not have branches or representative offices.

5. Agreements with Intermediaries of Securities’ Public Turnover

On 25 September 2005, the Issuer concluded a service agreement with the Department of Safe Custody Services of SEB

Vilniaus Bankas AB, address Gedimino pr. 12, LT-01103 Vilnius. Under this agreement, the accounting and servicing of

the Issuer’s securities is handled in Šiaulių bankas AB in 2018.

On 25 April 2007, the Issuer concluded an agreement with OMX Exchanges Ltd. on the system of service provision,

disclosure and communication of information.

6. Overview of the Company's Activities

During 12 months of 2022, the group of companies UTENOS TRIKOTAŽAS AB (hereinafter – the Group) realised orders

of its productions and provided services for the amount of EUR 34.5 million, i. e. an increase by 13.4 per cent compared

to the previous year when the Company’s sales amounted to EUR 30.4 million. The Group exported 80.9% of its

production.

During 12 months of 2022, the Company UTENOS TRIKOTAŽAS earned EUR 28.1 million of income. Sales income

increased by EUR 31.6 million, and compared to the same period of 2021, increased by EUR 3.5 million or 12.5 per cent.

The Company‘s sales income related to export accounted for 80.5 per cent.

Compared to the corresponding period of the previous year, sales of on-demand production – the largest segment of the

Group‘s sales – increased by 18.7 per cent to EUR 28.2 million. Sales of the Company‘s brands - UTENOS and ABOUT-

decreased by 19.1 per cent to EUR 3.6 million, and sales of functional-technical clothing manufacture by the subsidiary

Šatrija increased by 21.6 per cent.

As a result of the military actions that commenced in Ukraine in February 2022 and are still ongoing, and the resulting

uncertainty in determining the value of the Group's assets and investments in that country, in 2022 the Group and the

Company made provisions for assets and investments in Ukraine. Nevertheless, the Group company Mriya in Ukraine

continued its activity in 2022 and currently operates without material disruption.

In 2022, the loss before tax of the Group amounted to EUR 1,903 thousand. Excluding the loss on provisions made for

the Group's assets in Ukraine, the Group incurred a loss before tax of EUR 1,178 thousand, compared to the loss before

tax of EUR 2,861 thousand for the same period in 2021. The Company UTENOS TRIKOTAŽAS AB incurred a loss before

tax of EUR 2,702 thousand for the same period. Excluding provisions related to assets located in Ukraine, the Company’s

loss before tax amounted to EUR 825 thousand, compared to the loss before tax of EUR 2,756 thousand in the previous

year.

The Group's EBITDA is negative - EUR 531 thousand. If compared, the Group EBITDA, excluding the loss on provisions

made for the Group's assets in Ukraine, was positive (EUR 194 thousand) and by EUR 2,113 thousand higher than in the

same period in 2021. The Company's EBITDA is negative - EUR 666 thousand, excluding the impact of provisions, was

positive EUR (66 thousand) and by EUR 1,376 thousand higher than the same period in 2021 when the Company's

EBITDA was negative EUR 1,310 thousand.

7. Key performance indicators of the Group

UT group sales, profit, price per share for the last 5 years:

2022

2021

2020

2019

2018

Revenue (EUR’000)

34,509

30,443

27,902

30,771

30,457

Profit for the year (loss) (EUR’000)

(1,920)

(3,111)

(422)

763

1,141

Price per share

0,630

0,760

0,900

0,940

0,820

Trade

Group

Company

Revenue (EUR’000)

Change,

2022

2021

per cent

2022

2021

per cent

Products manufactured on

demand of other clients

28,151

23,714

18.7

28,014

23,639

18.5

Company brands (ABOUT,

UTENOS)

3,623

4,480

(19.1)

3,619

4,482

(19.3)

Outsourcing of functional-technical

clothing

2,735

2,249

21.6

34,509

30,443

13.4

31,633

28,121

12.5

Sales (EUR’000)

2021

2020

Change,

per cent

2019

UTENOS TRIKOTAŽAS AB

31,633

28,120

12.5

24,778

Šatrija AB

2,735

2,249

21.6

3,044

PAT MTF Mrija

849

842

0.8

692

Gotija UAB

Aboutwear UAB

209

102

104.9

Elimination of intercompany transactions

(917)

(870)

5.4

(638)

34,509

30,443

13.4

27,902

Sales by regions

In 2022, the Company has sold goods and services of total amount of EUR 31.6 million. Trade volume increased by EUR

3.5 million as compared to 2021. The Company exported to Western Europe and other countries 80.5 per cent, whereas

sold in Lithuania 19.5 per cent of total production.

In 2022, the total sales of goods and services of UTENOS TRIKOTAŽAS AB group (hereinafter “the Group”) amounted

to EUR 34.5 million. The Group exported 80.9 per cent, whereas sales in Lithuania accounted for 19.1 per cent of total

production.

Lithuania

In 2022, the Company sold in Lithuania total amount of EUR 6.2 million of knitwear production. The sales in Lithuania

increased by EUR 1.2 million or 25.0 per cent.

In 2022, the Group’s sales in Lithuania amounted to EUR 6.6 million, which is by EUR 1.1 thousand more than in 2021.

Export

In 2022, the Company exported knitwear in the amount of EUR 25.5 million. Export volumes increased by EUR 2.3 million

or 9.8 per cent, compared to 2021. Western European retail chains remained the Company’s major customers.

In 2022, the Group‘s exports to Western Europe and other regions amounted to EUR 27.9 million, which is more by EUR

3.0 million, compared to 2021.

Trade by regions is disclosed in Note 5 of the financial statements.

Operating indicators

Group

Company*

2022

2021

2020

2022

2021

2020

Manufactured items, units’000

2,347

2,578

3,149

2,265

2,492

3,062

Average number of employees (FTE)

917

1 022

936

658

715

662

* The production of UTENOS TRIKOTAŽAS UAB is shown in conjunction with the subsidiary’s production according to

the Company’s orders.

Production

In 2022, the Company produced 1.2 million knit-wear items. The Company‘s subcontractors (including subcontractors in

Ukraine) produced 1.1 million knit-wear items or 47.79 per cent of the total production volume. In 2022, Šatrija AB

produced 78 thousand sewn items. In 2022, MTF Mrija PAT produced 631 thousand items.

Production (units’000)

2022

2021

Change, per

cent

UTENOS TRIKOTAŽAS, AB

1,638

1,842

(11.1)

Šatrija, AB

(2.5)

PAT,MTF Mrija

631

656

(3.8)

Gotija, UAB

Aboutwear, UAB

2,347

2,578

(9.0)

Financial ratios

Group

Company

2022

2021

2020

2022

2021

2020

Revenue (EUR’000)

34,509

30,443

27,902

31,633

28,121

24,778

Operating profit (loss) (EUR’000)

(1,491)

(2,828)

131

(1,331)

(1,966)

(2)

Operating profit (loss) margin (per cent)

(4.3)

(9.3)

0,5

(4.2)

(7.0)

(0.01)

EBITDA *

(531)

(1,919)

1,184

(666)

(1,310)

778

EBITDA margin (per cent)

(1.5)

(6.3)

4,2

(2.1)

(4.7)

3,1

Profit (loss) before tax (EUR’000)

(1,903)

(2,861)

(336)

(2,702)

(2,756)

(224)

Profit (loss) before tax, margin (per cent)

(5.5)

(9.4)

(1.2)

(8.5)

(9.8)

(0.9)

Net profit (loss) for the year (loss) (EUR’000)

(1,920)

(3,111)

(422)

(2,736)

(2,948)

(273)

Net profit (loss) for the year margin (per cent)

(5.6)

(10.2)

(1.5)

(8.6)

(10.5)

(1.1)

Number of shares (thousand)

9,503

* EBITDA is calculated taking profit (loss) before tax from the statement of comprehensive income, plus financial costs

and minus financial income and plus depreciation and amortization.

Benchmarks

Group

Company

2022

2021

2020

2022

2021

2020

Return on capital employed (per cent)

(net profit divided by share capital)

(69.7)

(112.9)

(15.3)

(99.3)

(107.0)

(9.9)

Return on assets (per cent)

(net profit divided by total assets)

(11.4)

(13.7)

(1.8)

(16.9)

(13.8)

(1.2)

Return on shareholders’ equity (per cent)

(net profit divided by shareholder’s equity)

(47.6)

(42.1)

(4.1)

(64.2)

(42.5)

(2.7)

Debt ratio (per cent )

(total liabilities divided by total assets)

76.0

67.4

55.2

73.6

67.5

54.7

Debt-to-equity ratio (per cent)

(total liabilities divided by shareholder’s equity)

317.3

207.0

123.1

278.7

207.8

120.6

Liquidity ratio (per cent)

(current assets divided by current liabilities)

142.6

119.0

136.8

147.1

117.7

136.7

Equity-to-asset ratio (per cent)

24.0

32.6

44.8

26.4

32.5

45.3

Indicators related to share price

2022

2021

2020

P/E (price-to-earnings ratio)

(3.13)

(2.31)

(18.88)

EPS (earnings per share)

(0.20)

(0.33)

(0.05)

EV/EBITDA (enterprise value to EBITDA

ratio)

(21.47)

(6.50)

6.90

EV/EBIT (enterprise value to EBIT ratio)

(5.99)

(4.43)

(32.68)

Investments

In 2022, the Group’s investments in new equipment and new technologies amounted to EUR 209 thousand.

In 2022, the Company‘s investments in new equipment and technologies amounted to EUR 201 thousand,

including transactions between Group companies.

In 2022, Joint Stock Company Šatrija did not make any investments.

In 2022, MTF Mrija PAT invested EUR 8 thousand.

8. Information About Trade in the Issuer’s Securities in Regulated Markets

The Company’s shares are listed on the Official List of the National Stock Exchange, as well on the Baltic List of the

Lithuanian, Latvian and Estonian stock market. 9,503,000 of ordinary registered shares have been registered for public

turnover of securities. ISIN code ISIN LT0000109324. Vilnius is place of registration of shares. A nominal value of one

share is EUR 0.29.

9. Information Regarding the Price of Shares and Their Dynamics

UTENOS TRIKOTAŽAS AB share price dynamics during 2020–2022 (EUR):

Price ratios

2022

2021

2020

Open price, EUR

0.78

0.92

0.94

High price, EUR

0.80

0.98

1.04

Low price, EUR

0.45

0.75

0.80

Last price, EUR

0.63

0.76

0.90

Turnover, units

51,808

140,306

56,369

Turnover, million EUR

0.04

0.12

0.05

Capitalisation, million EUR

5.99

7.17

8.55

UTENOS TRIKOTAŽAS AB, OMX Baltic Benchmark GI and OMX Vilnius Index dynamics during 2020 - 2022

Index/Equity

31/12/2022

31/12/2021

31/12/2020

2022/2021

change, per cent

OMX Baltic Benchmark GI

1,384.42

1,568.82

1,104.74

(11.75)

OMX Vilnius

947.14

966.13

816.64

(1.97)

UTR1L

0.63 EUR

0.76 EUR

0.90 EUR

(16.56)

10. Dividend Policy

The decision on dividends payment for 2022 will be made by the General Meeting of Shareholders, based on the proposal

of the Board.

2022

2021

2020

Dividends (EUR’000)

Dividends per share

11. Description of Key Risks and Contingencies of the Company

In 2022, the sales of UTENOS TRIKOTAŽAS AB (hereinafter referred to as “the Group”), the largest group of textile

companies in Central and Eastern Europe, were influenced by the economic situation in the main export markets and in

Lithuania due to the spike in energy prices and the hostilities in Ukraine. In 2022, the Group's largest export regions remain

the German-speaking countries - Germany, Austria, Switzerland and Scandinavia.

11.1. Risk assessment, management, and control process (including corporate social reporting risk assessment

procedure)

As a business unit, the Group is continuously exposed to various internal and external risks. In order to ensure that these

risks are properly managed and their impact eliminated or mitigated, the Company has put in place a risk management control

framework that identifies risks, assesses risk levels, develops a risk management strategy and implements a monitoring

process. It is essential that risks are managed proactively as the business world is changing rapidly and new risks are

constantly emerging. For this reason, the Company ensures that management decisions are made in a timely manner and in

the light of the latest available information.

Risk assessment

An effective risk management procedure includes internal audit: our internal team, called the Social Performance Team (SPT),

carries out periodic risk assessments at least once a year to identify and prioritise non-compliance with the various elements

of the Standard and recommends to senior management what action should be taken on the risks identified.

The purpose of a risk assessment is to assess the likelihood of an adverse event occurring and the significance of the impact

should such an event occur. Such proactive assessments help to prioritise, based on actual or potential risks, the degree of

risk based on the severity and likelihood of non-compliance, in order to recommend corrective and preventive actions to

senior management.

The SPT is responsible for establishing and managing the risk assessment process, including general checks. Throughout

the risk assessment process, the SPT consults stakeholders and draws on a variety of information sources, such as:

- employee surveys;

- internal and external audit reports;

- reports of the Occupational Safety and Health Committee;

- legal and other requirements;

- consultations with stakeholders;

- Complaints from within the Company;

- risk assessments by a supplier, subcontractor or recruitment agency.

In addition, UTENOS TRIKOTAŽAS AB applies a risk assessment matrix model (see picture below), which allows the

Company to determine the level of risk and the appropriate risk management strategy. Risk is assessed by calculating the

probability of occurrence of the risk and its potential impact on the business.

Picture 1 RISK ASSESSMENT MODEL

11.2. Key risks and contingencies in 2022

In order to minimise the negative impact on the business, a key task of the Group's

risk management process is to accurately identify the risks associated with a

specific activity. This is also an important element of strategic planning and target

setting, as risks can significantly affect the ability to achieve objectives. Some risks

can be considered strategic because they arise from unfavourable business

decisions or inappropriate implementation of decisions. In addition, operational

risks can arise from inefficient internal processes, mismanagement of staff, etc.

Financial risks include credit, liquidity, foreign exchange risks, as well as risks

related to fluctuations in stock and market prices, etc. External risks, i.e. changes

in rules and regulations, market conditions, unexpected changes in natural

resources or natural disasters, can significantly affect the Company's business

environment.

The main risks identified by the Company fall into eight categories:

External risks | The main macro-level risks are the market situation in Lithuania

and in the main export markets (demand, inflation, general economic growth or

recession that may affect sales results or costs), the geopolitical situation in Europe

and the world. The Group's companies are established in Lithuania, with the

exception of PAT MTF Mriya in Ukraine. Despite the ongoing hostilities on the

territory of Ukraine, the company operated without major disruptions in 2022.

Management risk | Risks related to difficulties in anticipating changes in the market and gaining a competitive advantage,

as well as poor strategy implementation and risk mitigation. UTENOS TRIKOTAŽAS AB has implemented an ISO 9001:2015

management system and continuously monitors the results in order to mitigate the risks related to management. In addition,

the Company is part of a larger group (SBA) and has a Management Board with independent members.

Environmental risk | It is important for the Group to consider environmental risks in its strategic planning and decision-

making processes to ensure their long-term viability and feasibility. The Company has implemented the ISO 14001

environmental management system to avoid environmental risks. The main strategic objectives for environmental protection

are:

• reducing environmental pollution through the efficient and economical use of raw materials and energy resources;

• reducing waste, improving the management of waste and chemicals, and reducing the use of hazardous chemicals

in the production process.

Financial risks | Financial risks include delays in cash collection, increased costs, miscalculation of profits, unplanned cash

outlays and foreign exchange risk. To manage these risks, the Group monitors cash flows, plans cash inflows and outflows,

prepares reports, controls budget investment plans, income and expenditure, and secures additional contingency funding. In

addition, analysis and control of customer debts, inventory and cost analysis are carried out on an ongoing basis.

Customer risk | Unmet customer expectations and needs, loss of image or competitive advantage, poor customer service

and changing customer needs are also major risks for a business if they are not managed properly. For this reason, the Group

conducts market research, records and investigates complaints, contacts customers regularly to clarify their needs and strives

to ensure a level of service quality that satisfies its customers. In addition, the Company's client portfolio is highly diversified,

which reduces the risk of dependency on a single client.

Social risks | Social risk factors can have a significant impact on the success and longevity of the Group. Companies that

take proactive steps to address these types of risks and promote social responsibility are more likely to be more successful

in the long term. The company focuses on improving working conditions, attracting, training, development, safety and

preventing discrimination and consults with the trade union on all major employee issues.

Technological risks | The impact of technological risks can range from financial and reputational losses to legal and

regulatory compliance issues. The main types of technological risks are data loss or inability to process data, unauthorised

disclosure of confidential data, and non-compliance with laws. To protect the business from these risks, the Group makes

copies of data under contract with an information services company and access to such applications is password protected.

The Company also invests continuously in upgrading its infrastructure and adopting the latest technologies.

Procurement risks | Losses can arise from improper selection of suppliers and the inability to supply quality products that

meet environmental and human rights requirements. To avoid this, the Company has established criteria for the selection

and evaluation of suppliers based on relevant certificates and documents, and carries out laboratory tests and raw material

screening.

KEY RISKS

Management

Environmental

Financial

Customer

Social

Technological

Procurement

12. References and additional explanatory notes to the financial statements

All financial data for 2022 and 2021 presented in this Annual Report have been calculated using the financial information

presented in the Group's and Company's 2022 financial statements prepared in accordance with International Financial

Reporting Standards as adopted by the European Union. These financial statements have been certified by a duly appointed

auditor.

13. Key features of the Group's internal control and risk management systems relevant to the preparation of the

consolidated financial statements

The consolidated financial statements of the UTENOS TRIKOTAŽAS Group are prepared in accordance with International

Financial Reporting Standards (IFRS) as adopted by the EU. All companies in the UTENOS TRIKOTAŽAS Group are subject

to the same principles of internal control and accounting. For the purpose of preparing the consolidated financial statements,

all intercompany transactions and balances between the Group are eliminated

The internal control process of UTENOS TRIKOTAŽAS AB includes the control of processes related to the sale, production,

supply and preparation of financial statements.

14. Environment protection and corporate social responsibility

UTENOS TRIKOTAŽAS AB is the largest Lithuanian knitwear producer, whose production cycle covers the entire process:

from yarn to finished product and an increase of sales of innovative materials. The Company's goal is to become an innovative

knitwear leader in Europe, taking responsibility for the environment and the well-being of society, innovating to produce high

value-added and new products, and increasing process flexibility and speed. The Company strives to maintain good relations

with existing partners and customers and is constantly looking for new ones, working flexibly and adapting to customer needs.

Investors are increasingly looking for companies that prioritise environmental sustainability and social responsibility in order

to meet the Paris Agreement targets. These factors are taken into account when making investment decisions, as companies

that strive to improve their sustainability are considered responsible members of the community. For this reason, the Group

is developing a sustainable business strategy.

The Environmental, Social and Governance (ESG) criteria is a concept based on the idea that businesses and companies

must take responsibility for their production and practices, not just for profit. The ESG criteria reflect how a company can be

environmentally and socially responsible to society, while at the same time maintaining economic efficiency.

UTENOS TRIKOTAŽAS AB has improved and adapted its annual report, which now also includes sustainability data. The

Group has expanded its ESG system and started reporting according to the EU taxonomy. It also provides a roadmap of how

the Group intends to integrate ESG into its business strategy and operations to address environmental and social issues in

the coming years (see picture below).

Picture 2. ACTIONS OF THE GROUP FOR A SUSTAINABLE CHANGE

The Group plans to take the following steps to integrate ESG practices into its operations and to provide sustainability

information in accordance with the Corporate Sustainability Information Reporting Directive (CSIRD):

Materiality assessment | The first step in applying the ESG strategy is to assess the Company's existing environmental,

social and governance practices and determine the relative impact of these practices on the Company's operations and

sustainability.

Carbon footprint assessment | Following the materiality assessment, the carbon footprint analysis will be extended to cover

all Group companies as well as Tier 3 emissions

Developing a strategy and monitoring system | Once greenhouse gas emissions have been measured, a mitigation

strategy and a monitoring system for disclosure are developed.

Strategy implementation | The Group will implement the ESG strategy through appropriate changes to its operations,

policies and procedures. This may include investing in renewable energy, reducing waste, improving working conditions for

employees and increasing transparency in management.

Reporting under the CSIRD | The Group will disclose information on the risks, opportunities and impacts of activities on

people and the environment.

Monitoring and reporting on progress | The Group will monitor and report on progress towards the achievement of the

ESG objectives, adjusting the strategy implementation plan as necessary.

14.1. General principles of environmental and social welfare management

The Group's quality, environmental and social welfare management policy is based on the certifications acquired by the

Company, e.g. SA 8000, ISO 9001, IS014001. It sets out the general and guiding principles and responsibilities of

management. A structured process description with instructions and explanations, including a detailed description of all

processes, responsibilities, mandates, internal culture and external communication with customers, is essential for the

Company.

General principles:

• analyse, assess and forecast market developments and trends, meeting current and future customer needs through

innovative solutions for the development of high added-value products and services, process flexibility and speed

improvements;

• regularly improve the Company's business processes through SA 8000, ISO 9001, IS0 14001 and other systems, creating

a culture of continuous improvement within the Company;

• Ensure compliance with the requirements to which the Company has committed itself through regular internal and

external audits, and use the results of the audits to make critical decisions regarding the Company's operations and

growth;

• to strive to continuously improve the effectiveness of environmental measures and apply preventive measures;

• systematically develop the competences of its employees;

• maintain good relations with existing business partners and customers and seek new customers;

• to choose partners responsibly and to cooperate exclusively with those whose products are certified and meet the

Company's requirements.

Main principles:

• comply with legal, quality, environmental, occupational safety, social responsibility and other obligations undertaken by

the Company;

• comply with the standards of business ethics;

• Ensure continuous training and skills development of employees and improve teamwork.

Management responsibilities:

• producing safe products that are environmentally and worker friendly;

• to produce environmentally friendly products that meet OEKO-TEX Standard 100, GOTS, Woolmark and other customer

requirements;

• continuously improve the working environment, provide safe and comfortable workplaces that are free from harmful

influences, enable employees to work in a quality and efficient manner, offer performance-related pay and enable

employees to earn the Company's declared minimum wage in order to meet the basic needs of employees, and guarantee

social security;

• reduce environmental pollution;

• use recyclable raw materials, so that production waste can be used as secondary raw materials, and sort waste;

• conserve energy and water by optimising the organisation of production, ensuring quality indicators and eliminating

unused equipment;

• use new technologies and methods to prepare and manage production processes;

• to reward employees for creative, active and honest work, and for the realisation of ideas and innovation.

14.2. Activities related to environmental protection

The Group aims to act sustainably and contribute to environmental protection. For this reason, the Company has implemented

a carbon footprint assessment procedure, started to develop an ESG strategy and implemented an EU taxonomy reporting

process.

14.2.1. GHG emissions assessment

A key element in measuring climate impacts is the calculation of greenhouse gas (GHG) emissions, based on the

internationally recognised methodology of the Greenhouse Gas Protocol standards, which calculates such indicators:

• Tier 1: Direct emissions from activities under the Company's direct control (e.g. transport fuels, captive heat production

or other on-site emissions);

• Tier 2: Indirect emissions from purchased electricity and heat generation.

In the first year of the assessment, the Company has not yet assessed Tier 3 emissions, as additional preparation is needed

to collect the necessary data for the whole Group and all past activities. As UTENOS TRIKOTAŽAS AB aims to systematically

and comprehensively address climate impacts in the long term, the carbon footprint analysis in 2024 will be extended to the

described scope.

Picture 3. CARBON FOOTPRINT ASSESSMENT

Source: GHG Protocol Standards, adjusted by Civitta

In this analysis, only the Company's Tier 1 and Tier 2 emissions were measured. Tier 1 emissions consist of petrol and diesel

used in vehicles and natural gas used for on-site power generation. Tier 2 emissions include energy purchased for central

heating and electricity purchased from a renewable electricity supplier. The picture below shows the significant positive

change associated with the Company's investment in reducing emissions.

Picture 4. DECREASE IN TOTAL EMISSIONS IN 2022 COMPARED TO 2021

The full impact assessment is planned to be carried out in 2024, as indicated in the timetable (Picture 2).

14.2.2. Our environmental policies, principles and certifications

An environmental policy is a plan for mitigating business activities and assessing

their potential environmental impacts. The Environmental Policy of UTENOS

TRIKOTAŽAS AB Group sets out the specific measures, ambitions, reviews,

systems and procedures that the organisation applies to achieve its environmental

objectives. It also defines the duties and responsibilities of environmental

management throughout the organisation and establishes reporting and monitoring

mechanisms to track progress towards the objectives.

UTENOS TRIKOTAŽAS AB has integrated the ISO 14001 environmental

management system, which guarantees the systematic measurement and

improvement of environmental impact. ISO 14001 helps the Company to define the

strategic objectives of the organisation and to align them with objectives and results

that are environmentally sustainable. This certification process differentiates the

Company from its competitors, reduces costs and waste, ensures compliance with

legal requirements, and helps to monitor and control the Company's activities.

Sustainability certificates are also an important part of the process, demonstrating that UTENOS TRIKOTAŽAS AB is taking

appropriate steps to reduce the environmental impact of its products and operations, and to achieve a more sustainable

future. The company has obtained the following certificates:

• OEKO-TEX Standard 100 | Confirms the ecological and human safety of textile and leather products from all stages of

production (raw materials and fibres, yarns, materials, ready-to-use end products) throughout the textile value chain.

• Global Organic Textile Standard (GOTS) | Developed by leading standard-setters to define globally recognised

requirements for organic textiles. From raw material harvesting, to ecologically and socially responsible production, to

labelling, GOTS certified textiles offer consumers a reliable guarantee.

• Responsible Wool Standard | A voluntary programme to help sheep farmers meet the needs of consumers, retailers and

the brand. The standard certifies that they meet strict animal welfare and land management requirements.

• Woolmark | Licensing Programme - a textile quality assurance and product certification scheme that guarantees fibre

composition and quality for both consumers and the supply chain. In order to obtain the prestigious Woolmark

certification, yarns, fabrics and garments are subject to rigorous and independent testing.

• Sustainable Apparel Coalition | The leading alliance for sustainable manufacturing in the apparel, footwear and textile

industries. The Coalition is developing the Higg Index, a standardised set of value chain metrics for all players in the

industry.

• The Green Energy | Certificate measures electricity from 100% renewable energy sources, making it a real role model

and a source of inspiration for other market players to develop energy-efficient and environmentally friendly businesses.

14.2.3. Our actions to protect the environment

The Group and the Company's production is carried out using natural gas, water and electricity - resources that have a

significant impact on our climate. The Company has therefore set specific targets and procedures to reduce energy and water

consumption per kilogram of textiles. Energy and water consumption is highly dependent on orders and the technology used,

and solutions to reduce consumption are currently being implemented:

• Since 1997, the Company has been using an energy-saving industrial water heating system. This system saves around

30% of the energy used for water heating.

• In 2016-2017, all light bulbs were replaced with LEDs, saving 1,200 kWh of electricity per day.

• The Company uses electricity supplied by renewable energy sources (RES). The Company's use of electricity from

renewable energy sources demonstrates its social responsibility for the environment and its contribution to reducing

global pollution.

• The thermal energy purchased and used to heat buildings is supplied by biofuel.

• Some rooms are equipped with motion detectors to improve the efficiency of electricity use.

• In 2022, piping modifications were made to improve energy efficiency during painting processes.

• In 2022, the Company reviewed its knitwear dyeing processes to shorten and improve efficiency. By changing some

processes (shortening or combining several steps) and changing the chemicals used, the Company has shortened certain

dyeing cycles and lowered the temperature of the water used in the process, which results in lower water and energy

consumption, and reduced CO2 and waste water emissions.

By measuring fuel and energy consumption in 2021 and 2022, the Company found a significant improvement. In terms of fuel

consumption, petrol consumption decreased by 12 per cent and diesel consumption by 26 per cent. In terms of energy, gas

consumption decreased by 24 per cent, electricity consumption by 21 per cent and heating energy by 37 per cent.

KEY ENVIRONMENTAL

ACTIONS

Environmental certificates

GHG amount assessment

Energy and resource

efficiency

„Detox my Fashion“

Picture 5. DECREASE IN THE COMPANY'S ENERGY AND FUEL COSTS IN 2022 COMPARED TO 2021.

2021

2022

FUEL

Gasoline, l

28,161

24,786

Diesel, l

24,024

17,698

ENERGY

Gas, MWh

20,952

15,845

Electricity, MWh

5,785

4,547

Heating, MWh

3,052

1,920

Waste is generated in all areas of the fashion industry. This is due to overproduction, overconsumption and problems in

dealing with the fate of products after they have been worn. UTENOS TRIKOTAŽAS AB takes the following steps to manage

waste and waste water:

• The waste is sorted and handed over to waste handlers. The monitored waste data and the annual waste report are

submitted to the Environmental Protection Agency.

• Wastewater is discharged to the city's waste water treatment plant. The results are monitored. No waste water is

discharged into the environment.

• The company carries out annual tests on its wastewater under the Greenpeace Detox programme. The results are

monitored and a corrective action plan is prepared. In 2019, UTENOS TRIKOTAŽAS AB became the first company to

comply with the GP standard. Compliance has been maintained until 2023.

14.2.4. Environmental initiatives: "Greenpeace" campaign "Detox My Fashion"

In 2011, “Greenpeace” launched the “Detox My Fashion” campaign, announcing that it would stop all textile sales "until

suppliers and manufacturers ensure that no hazardous chemicals are used or released at all stages of production". A few

years later, in 2018, UTENOS TRIKOTAŽAS AB successfully implemented the pilot production phase of the Greenpeace

collection. This became the basis for the organisation's new textile production standard, and a year later, the first large-scale

collection was released. Becoming the first manufacturer in the world to comply with Greenpeace requirements is a historic

and unique achievement. Greenpeace's "Detox My Fashion" campaign, launched almost a decade ago, has put the global

textile industry, one of the most polluting industries, under intense pressure to avoid the use and release of hazardous

chemicals. Environmentalists have identified 11 groups of hazardous chemicals widely used in the textile industry that are of

particular concern for human and environmental impacts, and have insisted that major manufacturers and their suppliers

commit to ending their use in production processes. UTENOS TRIKOTAŽAS AB is the only Lithuanian company participating

in this campaign and one of the few companies committed to the Detox programme that has a vertically integrated production

cycle (meaning that all of its production processes, from sourcing raw materials to manufacturing finished, ready-to-wear

products, are carried out under one roof). Since the launch of "Detox my Fashion", more than 80 different textile companies

(H&M, Nike, Adidas, Puma and many others) representing around 10-15% of the global clothing market have joined the

initiative.

14.2.5. EU taxonomy reports

In 2020, the European Union adopted the EU Taxonomy Regulation (EU) 2020/852, which provides a classification system

to identify environmentally sustainable economic activities. In order to be considered "environmentally sustainable", an

economic activity must meet the preconditions of the Technical Analysis Criteria (TAC) described in Article 3 of Regulation

(EU) 2020/852. The economic activities covered by the EU taxonomy and their specific TSC requirements can be found in

the climate legislation of the EU taxonomy, the Delegated Regulation (EU) 2021/2139

2023 is the first year in which companies have to disclose financial information on both taxonomic economic activities and

qualifying taxonomic economic activities, the latter covering two of the six environmental objectives - climate change mitigation

and adaptation. As this report presents the first assessment of the Group's taxonomy, definitions of two key terms are provided

for clarity:

• Taxonomic economic activity | Economic activity to which the technical selection criteria set out in the EU taxonomy

apply, whether or not the activity meets the criteria.

________________________________

Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to

facilitate sustainable investment and amending Regulation (EU) 2019/2088: link

Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament

and of the Council: link

• Eligible taxonomic economic activity | Eligible economic activity meeting the conditions set out in the TSC (i.e.

contributing substantially to at least one of the environmental objectives, without significant harm to the other objectives,

and meeting minimum social standards).

The UTENOS TRIKOTAŽAS Group, as a group of non-financial companies, is required to disclose information on the key

performance indicators (KPIs) of its business, which are classified as environmentally sustainable, i.e. as a qualifying

taxonomic economic activity in accordance with Article 3 of Regulation (EU) 2020/852. The relevant KPIs are turnover, capital

expenditure (CapEx) and operating costs (OpEx). In addition, the same financial KPIs have to be reported for both the non-

taxonomic economic activity and the taxonomic economic activity that does not meet the criteria. The list of taxonomy-related

activities and their turnover, capital expenditure and operating expenditure results can be found in Tables 1, 2 and 3

respectively.

Specification of the information to be provided with KPIs

Information submitted with the KPIs In order to assess the extent to which the Group's activities are reflected in the EU

taxonomy, a detailed assessment has been carried out using third parties. The following sections describe the relevant

information accompanying the financial KPIs and follow the predefined structure described in Section 1.2 of Annex I of the

Delegated Act on Disclosures, Regulation (EU) 2021/2178

1. Accounting policy

The proportions of taxonomic economic activity turnover, capital expenditure and operating costs shall be determined in

accordance with the requirements and definitions set out in Sections 1.1.1, 1.1.2 and 1.1.3 of Annex I to Delegated Regulation

(EU) 2021/2178, as appropriate. In accordance with Article 8(2) of that Regulation, as well as the European Commission's

Q&A document on this subject, the disclosures cover the previous calendar year, i.e. 2022

Turnover-related KPIs | Turnover of a taxonomic economic activity is the proportion of turnover derived from economic

activities to which a taxonomic valuation can be applied (numerator) and absolute turnover (denominator). The numerator

includes the turnover generated by the taxonomic economic activity. The denominator represents net turnover, which is the

sum of turnover from taxonomic economic activities and turnover from non-taxonomic economic activities and includes

revenue recognised in accordance with paragraph 82(a) of International Accounting Standard (IAS)

KPI for capital expenditure | The denominator includes the Group's investment in tangible and intangible assets (before

depreciation, amortisation and any remeasurement) during the financial year. The numerator represents the portion of capital

expenditure that relates to the taxonomic economic activity.

KPI related to operating expenses | The denominator includes direct non-capitalised costs related to the day-to-day

maintenance of tangible fixed assets carried out by a third-party enterprise. The numerator refers to the part of operating

costs that is related to the taxonomic economic activity.

2. Assessment of compliance with Regulation (EU) 2020/852

The assessment of the taxonomy of the UTENOS TRIKOTAŽAS AB Group can be divided into 3 phases:

PHASE 1 | The objective of the first phase was to identify the economic activities of the Group that are described in the Climate

Delegated Act and can therefore be subject to subsequent taxonomy assessment. This was done by first comparing the

activities described in the taxonomy with the economic activities of the Group and identifying those activities that are relevant

to the Group's activities. The relevant NACE codes listed in Annex II to Regulation (EU) 2021/2139 were then analysed in

order to arrive at a final list of taxonomic economic activities.

______________________________

Commission Delegated Regulation (EU) 2021/2178 of 6 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament

and of the Council: : link

European Commission FAQ on the Taxonomy Regulation, December 2021 (updated January 2022):link

IAS 1: link

PHASE 2 | In accordance with Article 3 of Regulation (EU) 2020/852, the taxonomic economic activities were further analysed

to determine the extent to which the activities are environmentally sustainable. The process was carried out according to the

TSCs that are described for each taxonomic economic activity in Annexes I and II of the Climate Delegated Act. The

assessment revealed that today none of the taxonomic economic activities of the UTENOS TRIKOTAŽAS Group meet the

requirements of the TSCs and therefore cannot be considered as a qualifying taxonomic economic activity, i.e. an

environmentally sustainable activity.

PHASE 3 | Following the identification and analysis of the appropriateness and alignment of the Group's activities, the

necessary KPIs relating to turnover, capital expenditure and operating costs have been calculated in accordance with the

requirements and definitions of Section 1.1 of Annex I to Regulation (EU) 2021/2178.

3. Contextual information

Turnover | AB UTENOS TRIKOTAŽAS produces knitted, ready-made garments and knitted fabrics in a sustainable way.

This applies to both the product development process and production. Currently, the economic activities related to textile and

clothing production are not described in the Climate Delegated Act, which means that the Group's main economic activities

are not included in the EU taxonomy. Therefore, the numerator of the reported KPIs is limited to turnover generated from (a)

the rental of the Company's assets and (b) the sale of waste paper, cardboard and wood to a third party contractor.

Capital expenditure | The capital expenditure meter covers the costs associated with an individual measure to upgrade a

gas pipeline system to improve its energy efficiency.

Operating expenses| The numerator expresses the operating expenses associated with the separate collection and transport

of waste (primarily textiles, packaging, wood waste, paper and cardboard) generated in production and ancillary processes.

The denominator includes the daily costs related to the daily maintenance of property, plant and equipment.

Conclusions

Following the first assessment and reporting of the taxonomy, the Group concludes that the EU taxonomy does not reflect

the Company's actual contribution to sustainable production and development in general. Despite the fact that the Company

is considered to be one of the most sustainable knitwear producers in Europe, the EU Taxonomy Regulation (EU) 2020/852

makes the Company's efforts towards social and environmental responsibility almost invisible.

Nevertheless, the EU taxonomy is an important step towards greater transparency and the elimination of eco manipulation.

The evaluation has provided the UTENOS TRIKOTAŽAS AB Group with additional knowledge and insights that can be used

to develop the Group's strategy in the future.

Table 1. KPI RELATED TO TURNOVER

Key control

criteria

Criteria for no significant harm (DNSH)

"No significant harm"

Economic activity

NACE code

Absolute

turnover(EUR

million)

Share of the total

turnover (%)

Mitigation of

climate change (%)

Adaptation to

climate change (%)

Climate change

mitigation (T/N)

Adaptation to

climate

change(T/N)

Water and marine

resources T/N)

Pollution (T/N)

Biodiversity and

ecosystems (T/N)

Minimum

safeguards (T/N)

Taxonomic

economic share of

turnover , 2022 (%)

Enabling (E) or

Transitional (T)

activity

A. TAXONOMIC ECONOMIC ACTIVITY

A1. Environmentally sustainable activities (taxonomic

economic activities meeting the criteria)

–

A2. Taxonomic but environmentally unsustainable economic

activity (non-criteria taxonomic economic activity)

0,017

0,049

Acquisition and ownership of buildings

L68.20

0,014

0,041

Installation, maintenance and repair of energy efficiency

equipment

C33.12

–

Collection and transport of separated non-hazardous waste

on site

E38.11

0,002

0,006

Transport by motorcycles, passenger cars and light

commercial vehicles

N77.11

–

Total A (A.1 + A.2)

–

0,017

0,049

B. NON-TAXONOMIC ECONOMIC ACTIVITIES

B. Turnover of non-taxonomy economic activities

34.5

99.94

Total turnover (A + B)

34.52

100

Table 2. KPI FOR CAPITAL EXPENDITURE

Key control

criteria

Criteria for no significant harm (DNSH)

"No significant harm"

Economic activity

NACE code

Absolute

turnover(EUR

million)

Share of the total

turnover (%)

Mitigation of

climate change (%)

Adaptation to

climate change (%)

Climate change

mitigation (T/N)

Adaptation to

climate change

( T/N)

Water and marine

resources T/N)

Pollution (T/N)

Biodiversity and

ecosystems (T/N)

Minimum

safeguards (T/N)

Taxonomic

economic share of

turnover , 2022 (%)

Enabling (E) or

Transitional (T)

activity

A. TAXONOMIC ECONOMIC ACTIVITY

A1. Environmentally sustainable activities (taxonomic

economic activities meeting the criteria)

–

A2. Taxonomic but environmentally unsustainable

economic activity (non-criteria taxonomic economic

activity)

0,171

81.82

Acquisition and ownership of buildings

L68.20

–

Installation, maintenance and repair of energy efficiency

equipment

C33.12

0,088

42.11

Collection and transport of separated non-hazardous

waste on site

E38.11

–

Transport by motorcycles, passenger cars and light

commercial vehicles

N77.11

0,083

39.71

Total A (A.1 + A.2)

–

0,171

81.82

B. NON-TAXONOMIC ECONOMIC ACTIVITIES

B. Capital expenditure on non-taxonomy economic

activities

0,038

18.18

Total capital expenditure (A + B)

0,209

100

Table 3. KPI RELATED TO OPERATING EXPENSES

Key control

criteria

Criteria for no significant harm (DNSH)

"No significant harm"

Economic activity

NACE code

Absolute

turnover(EUR

million)

Share of the total

turnover (%)

Mitigation of climate

change (%)

Adaptation to

climate change (%)

Climate change

mitigation (T/N)

Adaptation to

climate change(T/N)

Water and marine

resources T/N)

Pollution (T/N)

Biodiversity and

ecosystems (T/N)

Minimum

safeguards (T/N)

Taxonomic

economic share of

turnover , 2022 (%)

Enabling (E) or

Transitional (T)

activity

A. TAXONOMIC ECONOMIC ACTIVITY

A1. Environmentally sustainable activities (taxonomic

economic activities meeting the criteria)

–

A2. Taxonomic but environmentally unsustainable

economic activity (non-criteria taxonomic economic

activity)

0,238

56.67

Acquisition and ownership of buildings

L68.20

–

Installation, maintenance and repair of energy efficiency

equipment

C33.12

–

Collection and transport of separated non-hazardous

waste on site

E38.11

0,238

56.67

Transport by motorcycles, passenger cars and light

commercial vehicles

N77.11

–

Total A (A.1 + A.2)

0,238

56.67

B. NON-TAXONOMIC ECONOMIC ACTIVITIES

B. Operating expenses on non-taxonomy economic

activities

0,182

43.33

Total operating expenses (A + B)

0.42

100

14.3. Social activity

Businesses, like the Company and the Group, are essential for sustaining economic

growth, but they also have a significant impact on people's lives. The Company

strives to ensure that its activities are conducted to the highest standards of integrity,

transparency, ethics and respect for all stakeholders. This commitment is

fundamental to the business and forms the basis for sustainable growth and success.

UTENOS TRIKOTAŽAS AB strives to continuously improve the conditions of its

employees. The company is committed to creating a safe and positive working

environment for employees. To achieve this, the Company continuously improves

working conditions, employee benefits and job satisfaction. This includes appropriate

training, incentives and fair remuneration to help employees reach their full potential.

The Company also seeks to foster a culture of continuous engagement and

development, with a focus on gratitude, well-being and respect.

14.3.1. Our social policies, principles and certifications

In order to implement the development of corporate social responsibility in

cooperation with business, social and international partners, on 23 May 2006 the Company obtained the international social

responsibility standard SA 8000 (re-certification audit was carried out on 22-24 November 2021 and a new certificate was

obtained, which will be valid until 27 February 2025). Objectives of the SA 8000 standard are as follows:

• Ensure the social well-being of employees, increase social responsibility within the Company and encourage

subcontractors to do the same;

• Demonstrate to our Western partners that UTENOS TRIKOTAŽAS AB at all levels of management treats its employees

in a civilised manner, and that the Company has implemented key human rights conventions and directives.

The Group pays wages that meet the basic needs of its employees and leave them with spare income. Requirements of the

Social Responsibility Standard (SA 8000) are as follows:

• child labour for children under 16 cannot be practised;

• forced labour, verbal abuse or physical punishment must be avoided and working conditions must be healthy and safe;

• discrimination on grounds of nationality, race, religion, sex, sexual orientation, organisational or political affiliation,

gender, age or disability must be prevented, and employment, dismissal or retirement must not interfere with the ability

to succeed and to feel happy and needed;

• men and women must be paid equal pay for equal work and have equal opportunities for training and promotion;

• people must work according to precise working time schedules (start, end, lunch and rest breaks), and overtime or work

on rest days or public holidays must be covered by a collective agreement or agreed with the workers' representatives -

the trade union council;

• remuneration and bonuses for work performed must be clearly defined and agreed in the collective agreement or with

the employees' representatives - the Trades Union Council.

14.2.2. What we do for our people

UTENOS TRIKOTAŽAS Group is guided by the shared values of the SBA Group, which are like a signpost that guides the

right path for the implementation of the mission Invent Every day, for the Better. The SBA Group (and Group companies)

selects nominees for each value in the semi-annual Values Ambassador election. Group values and nomination categories:

• Passion to win

• Discovery Leadership

• Sense of home

The number of nominees is determined by the management of each company, taking into account the size and structure of

the company, established traditions and best practices. Nominations as Values Ambassadors are open to employees in any

position, with the exception of the Chief Executive Officer. All colleagues nominated in the first and second half of the year

are eligible to participate in the election of the best Invent Everyday, for the Better Ambassador. Great importance is attached

to the sincere efforts and performance of the employee in contributing to the Invent Everyday, for the Better mission.

UTENOS TRIKOTAŽAS AB offers additional benefits to its employees - occasional bonuses, anniversary gifts, entertainment

events and product discounts.

KEY ACTIONS FOR

SOCIAL ACTIVITY

Social responsibility

standard (SA 8000)

Customer experience

Engaging workplace

Developing staff

competences

Health and safety

Contribution to society

Customer experience

In order to meet customer expectations in a timely and quality manner, the Group records and investigates internal non-

conformities, investigates the causes of non-conformities and plans actions to prevent recurrence of such problems. If a

customer complaint is received, it is recorded in the register, the causes are identified and preventive action is taken to ensure

that the problem does not recur and that the customer receives appropriate feedback.

Engaging workplace

The Company's employees are educated on the importance of social considerations and the Company has a system for

complaints/suggestions that ensures confidentiality and anonymity. The Company complies with the applicable legal

requirements in the fields of environmental protection, occupational safety and other areas. Inspections are carried out by the

controlling authorities to ensure compliance with the applicable legislation. The Company's employees are actively involved

in the activities of the employees' trade union. The trade union works closely with the management to address issues raised

by employees.

Developing staff competences

The Group pays great attention to recruitment processes and smooth induction. The Group regularly invites both experienced

professionals and newcomers with ambitions to develop and grow to join the Group. It is important that candidates have the

right value base. It's not just about what is done, but how it is done, i.e. professionalism, collaboration and development.

The Group aims to provide employees with opportunities to learn and develop, to broaden their knowledge and horizons, and

to participate as effectively as possible in the process of achieving the Group's strategic objectives. All employees are given

the opportunity to acquire new skills or to update the knowledge and skills needed to perform their direct functions. The

responsibility for developing the competencies required for the employee's function and the organisation's activities rests with

both the individual employee and the organisation. In addition, the Company's staff development system includes not only

formal training activities but also other forms of education and learning.

• External training | Mandatory periodic occupational safety training and vocational training to develop individual

skills (in 2022, topics for knowledge development - materials and product development).

• Internal training | Developing staff competences: in 2022, 28% of staff completed trainings and upgraded their

skills

There is also a talent development process - 20 talented employees (selected from 150 managers and professionals) agree

with their managers on their professional development paths, milestones and monitoring.

Employee turnover

The overall turnover rate was 32.1% in 2022 and 24.3% in 2021. The highest turnover rate was observed among specialists,

at 12%. The overall increase in staff turnover is in line with the Company's optimisation in the previous year to increase

efficiency and reduce costs.

Picture 6. EMPLOYEE TURNOVER IN 2022 HAS INCREASED COMPARED TO 2021

Occupational health

UTENOS TRIKOTAŽAS AB takes great care of the physical and emotional health of its employees - they have the opportunity

to exercise free of charge in the Company's sports hall and to use the Company's canteen, receiving partial reimbursement

for food. The Company also offers free flu vaccines to employees every year before the season.

Work-life balance

Administrative staff can work remotely. All staff are allowed to take time off for personal needs.

Safety

The Group is committed to providing a safe and healthy working environment and minimising the risk of safety hazards.

Occupational risks are continuously assessed with the participation of employee representatives and measures are taken to

prevent and eliminate occupational risks. New recruits are given an induction safety and health briefing. The number of

accidents at work in 2022 has decreased significantly compared to 2021. The company would like to achieve zero accidents

in the coming year.

Picture 7. THE NUMBER OF ACCIDENTS AT WORK IN 2022 DECREASED BY MORE THAN HALF COMPARED TO 2021.

Employee satisfaction

Employee satisfaction surveys are essential for companies as they can provide valuable insights into the overall level of job

satisfaction in a company. These surveys allow the Group to gather feedback from employees on various aspects of their

working environment, including job responsibilities, working conditions, communication with management, remuneration,

benefits and career opportunities.

Through regular employee satisfaction surveys, the Group identifies areas for improvement in order to increase employee

satisfaction and retain talented employees. These surveys also help the Group to better understand the needs and

expectations of its employees, which can help to make strategic decisions and foster a more positive and productive working

culture.

A recent employee satisfaction survey showed that 56% of the Company's employees feel more respected by their line

manager in 2022 compared to 2021. Employees felt that assessment of their skills and contribution to the Company has

improved.

Picture 8. EMPLOYEE SATISFACTION SURVEY

Social initiatives

In 2022, in response to a call for help from the Lithuanian Police Trade Union, the Company donated more than 3,000 items

of warm underwear and other clothing to the defenders of Ukraine's independence, as well as almost 400 items of children's

clothing for Ukrainian children. In March-April, the Company employed 18 Ukrainian women who had fled the war and had

no experience of this type of work. UTENOS TRIKOTAŽAS AB gave them the opportunity to train, and invested time and

effort to enable them to continue their lives here and to take care of their children.

In 2022, the Company participated in the National Forest Planting Project: 6,000 birch saplings were planted on 2 hectares

of the Smėlynės Forest. UTENOS TRIKOTAŽAS AB, together with its colleagues and the inhabitants of the Family and Child

Welfare Centre of Utena, tidied up the horse farm and the surrounding area, and prepared the horse farm for the new season

of 2023.

14.4. Group governance

A transparent environment, a zero-tolerance policy on corruption, and a code of

ethics enshrine the principles of a responsible company. These principles guide

how the Group achieves its objectives, how it treats its colleagues and partners,

and the general standards of ethics. UTENOS TRIKOTAŽAS AB, in accordance

with Article 22(3) of the Law on Securities of the Republic of Lithuania and Clause

24.5 of the NASDAQ Vilnius Listing Rules, discloses in the Annex to the Annual

Report how it complies with the Code of Corporate Governance for Listed

Companies of the NASDAQ Vilnius Stock Exchange, and with the specific

provisions or recommendations of the Code.

14.4.1. Combating corruption

Providing information on the fight against corruption helps to increase the Group's credibility and trust in the eyes of the public.

It also allows the Group to monitor progress, benchmark its performance against other companies and share best practices,

thereby improving its anti-corruption performance. Finally, it builds a better reputation and improves relations with customers,

partners and local communities.

The Group does not tolerate any form of corruption and advocates honest business and transparent cooperation. Risks are

mitigated through internal controls aimed at identifying potential corruption risk factors. Information on risks is provided in

Note 3.1 to the financial statements.

In accordance with the requirements of SA 8000, the Company established a Social Performance Team in 2014, which

periodically assesses all aspects of social responsibility (including corruption) in accordance with the Procedures for

Assessing the Risk of Corporate Social Responsibility, and makes suggestions to the management for improvement.

Company employees are educated about the importance of whistleblowing, and the Company has a complaint/suggestion

system in place that ensures confidentiality and anonymity.

BASIS FOR GOVERNANCE

Anti-corruption policy

Code of Conduct

Data privacy management

and security system

Supplier management

principles

14.4.2. Code of Ethics

Code of Conduct

People are at the heart of the SBA Group's corporate culture, and the UTENOS TRIKOTAŽAS Group is guided by the SBA

Group's Code of Conduct, which acts as an "ethical compass" for all of its business activities.

SBA Group companies employ more than 5,000 people, united by a passion for winning, discovery leadership and a sense

of home. The strength of SBA Group people is their ability to combine different approaches and achieve team results. SBA

Group companies strive to create the best conditions for the pursuit of careers and personal ambitions. In order to achieve

these goals, we adhere to the following principles at all stages of our relations with our employees:

• maintain fair and ethical working relationships based on mutual respect;

• provide a safe and healthy working environment;

• we have zero tolerance for humiliation, violence, harassment, sexual harassment, direct or indirect discrimination

based on gender, race, nationality, language, origin, social status, age, sexual orientation, disability, ethnic origin,

membership of a political party or association, religion, belief, conviction or opinion, as well as on the basis of any

other circumstances not related to business characteristics (as further defined in the Equal Opportunities Policy

adopted by the SBA Group companies);

• employees are evaluated on the basis of performance, professionalism and ethical behaviour;

• ensure confidentiality, discretion and protection of personal data;

• creating opportunities for professional development and the development of additional competences.

Employees of SBA Group companies are encouraged to actively participate in internal training and competence development

programmes, and to inform their line managers about the need for specific training programmes, such as internal work culture,

anti-corruption, social responsibility and others. When such a need is expressed, company managers initiate appropriate

training programmes, based on the internal training policy.

Avoiding conflicts of interest

Employees must not engage in any business activity that would create a conflict of personal interest with the interests of SBA

Group companies, and must avoid any contact that would create a conflict between their personal activities and the business

interests of SBA Group companies. In the event of a potential conflict of interest, an employee or a member of the collegial

management bodies shall immediately disclose his/her interests to his/her line manager and take measures to help eliminate

the consequences of such a conflict of interest for business decisions.

Confidentiality commitments

Employee communication and information exchange, both within the SBA Group and in business relationships with third

parties, is based on open communication and the ongoing sharing of knowledge and experience, but must not go beyond the

bounds of confidentiality. All business information within the SBA Group companies shall be considered confidential, except

for general knowledge of business relationships which an employee receives in the course of his or her duties, including

information relating to the employees themselves, as well as to the companies' customers and suppliers.

External principles relating to work culture

SBA Group companies take into account the interests of their stakeholders in the conduct of their business and strive to meet

them to the best of their ability. In establishing and developing business relationships with customers, partners, suppliers,

competitors, public sector bodies, the media and other third parties, we are guided primarily by the principles of transparent,

honest and fair business conduct, as well as by mutual respect, human rights, the protection of confidential information and

the avoidance of conflicts of interest.

Relationships with public authorities

In all countries, where SBA Group companies operate, we base our activities on the requirements of laws and regulations,

including, but not limited to, anti-corruption legislation. Acting in the business interests of the SBA Group companies, we do

not pay bribes or make any other unlawful payments to public officials, including low-value unofficial payments. This

commitment extends to the activities of SBA Group companies in foreign countries.

Relationships with competitors

Guided by the SBA Group's values, we strive for a clear competitive advantage in our daily activities, and we want to be a

leader in our field and to maintain this leadership. We do not initiate any discussions or agreements in which we perceive a

potential risk of distortion of fair competition, nor do we participate in such discussions initiated by other market participants.

In accordance with the principles of ethical competition, we collect and analyse information about competitors' activities

through legitimate means.

Relations with the community

Our social responsibility starts with ourselves, and we encourage all SBA Group employees to take responsibility for caring

for and enhancing the environment in which we operate. We strive to minimise the direct and indirect impact of our activities

on the environment, even beyond what is required by the legal norms that set mandatory environmental standards. SBA

Group companies support community projects that are in line with our values and contribute to the socio-economic well-being

of individual regions. In addition, the Group's companies and their employees initiate social responsibility projects to protect

the environment and wildlife, preserve unique traditions, reduce social exclusion, etc.

Reporting policy

The Group has a whistleblowing mechanism in place and the SBA within the Group is managed independently of the Group.

The SBA Group manages the email address pasitikejimolinija@sba.lt for receiving reports. This mailbox is not subject to

inspection by the Group and can be used by employees to contact responsible persons at shareholder level without the

knowledge or involvement of their managers.

Diversity policy

The diversity policy applies to the election of chief executive officers of the Group companies and members of the

management and supervisory bodies. The key management team must be sufficiently diverse, depending on the legislation.

Diversity criteria include, for example, gender, age, geographical origin, education and work experience. The appointment

and selection of top management positions is based on qualifications, skills and competencies, and the selection of individuals

for such positions is based on their potential to contribute to the value of the organisation.

The following tables show the distribution of staff by educational, with the largest number of staff having vocational, secondary

or higher education qualifications. Average monthly salary increase by 9.7% in 2022.

Picture 9. DISTRIBUTION OF THE COMPANY'S EMPLOYEES BY EDUCATION

Managers

Specialists

Workers

Total

Higher - university

Advanced

120

146

Vocational

149

162

Secondary

146

151

Basic

Higher non-university

Total

126

489

662

Picture 10. SALARY INCREASE IN THE COMPANY IN 2022

Change, %

Executives

19.2

Managers

3.3

Specialists

21.2

Workers

8.3

Total

9.7

14.4.3. Data privacy management and safety

The protection of personal data is an essential aspect of responsible business. The Group considers data protection a high

priority in order to build trust, demonstrate its commitment to responsible and quality business conduct, and enhance its

reputation. Cyber security measures help to detect unauthorised activities and to detect if a cyber security incident has

occurred: attempts to exploit privileged rights, access key systems, install or run malicious programs. By implementing a strict

data management policy, the Company protects its customers and employees from harm and complies with legal

requirements. There were no cybersecurity incidents reported in 2022. Key principles of data privacy management:

• conducting a risk assessment to help identify risks related to email hacking attacks, data theft or falsification. In

response to these risks, the following technical and procedural solutions are implemented:

(a) email filtering, two-factor authentication (Microsoft 365 package);

(b) education and awareness raising: staff are trained on email attacks, the risks of email attacks, data theft

or falsification and how to avoid such situations;

• the Company's internal accounting controls are assessed against cyber security risks to ensure an effective level of

data protection. Rules and policies are established and applied, regular security checks and audits are carried out,

and security monitoring and incident response are performed. Employee education and security awareness are key

to ensuring that all employees know how to act safely and respond to cyber risks;

• data are collected and processed for the stated legitimate purposes established before the personal data are

collected and are not further processed in a way incompatible with those purposes;

• the processing is carried out with the consent of the data subject or on another lawful basis for processing;

• the processing is accurate, fair and lawful;

• the data shall be kept in a form which permits identification of the data subject for no longer than is necessary for

the fulfilment of the purposes for which the data were collected and are processed;

• the processing is carried out in such a way as to ensure, through appropriate technical or organisational measures,

adequate security of personal data, including protection against unauthorised or unlawful processing and against

accidental loss, destruction or damage (principle of data integrity and confidentiality).

14.4.4. Supplier management

The Group follows the SBA Group's procurement policy, which aims to minimise dependence on a single supplier and promote

competition by seeking alternative, innovative solutions, providing the market with advance notice of future purchases and

current demand, sourcing suppliers and encouraging them to participate actively in the procurement process. Key objectives:

• To ensure competitive prices and the best purchasing conditions, PSC

and PD

continuously carry out market

research, gather information on goods and price developments, and seek new suppliers.

• In order to ensure stability of supply, PSC and PD are responsible for sourcing suppliers for the relevant procurement

group and for ensuring that all the goods they need can be purchased from more than one supplier at any given

time.

• The PSC and PD shall encourage competition between suppliers and shall give manufacturers and suppliers who

meet the established quality and environmental requirements an equal opportunity to bid for the goods they need to

the company concerned.

• The selection of suppliers is based on, among other things, reputation, sustainability, green solutions, capacity,

reliability, integrity of operations, payment of taxes, proper fulfilment of obligations, protection of the environment,

social responsibility, ensuring human rights in employment, and ensuring safe working conditions and fair

remuneration.

• Relations with suppliers must be based on professional skills and the principles of cooperation, transparency and

fairness.

Communication with suppliers must be based on the principle of equality and avoid situations which may give rise to doubts

as to the transparency of procurement or suspicions of personal gain.

15. Information about the Company‘s treasury shares acquired and held

The Company has not acquired or held any treasury shares during the reporting period.

____________________________________

Procurement services centre of SBA Group for centralised procurement functions

Procurement department of the Company or other department’s employee in charge of procurement

16. Significant events since the end of the previous financial year

28-02-2023 Sales of AB UTENOS TRIKOTAŽAS Group grew in 2022: EUR 34.5 million revenue.

03-01-2023 Decisions of the Extraordinary General Meeting of Shareholders.

03-01-2023 Announcement of the preliminary dates for the announcement of UTENOS TRIKOTAŽAS AB performance results

in 2023.

12-12-2022 Announcement about the Extraordinary General Meeting of Shareholders of AB UTENOS TRIKOTAŽAS AB.

05-12-2022 Notification of resignation of a member of the Management Board.

31-10-2022 UTENOS TRIKOTAŽAS Group earned EUR 26.3 million over the first three quarters of the year.

29-07-2022 UTENOS TRIKOTAŽAS AB earned revenues of EUR 17.3 million in the first half of the year.

29-04-2022 In Q1 of the year, UTENOS TRIKOTAŽAS AB earned revenues of EUR 8.6 million.

29-04-2022 Annual information of UTENOS TRIKOTAŽAS AB for 2021.

29-04-2022 Decisions of the Ordinary General Meeting of Shareholders.

29-04-2022 Nomeda Kaučikienė becomes the CEO of UTENOS TRIKOTAŽAS AB.

08-04-2022 Announcement on convocation of the Ordinary General Meeting of Shareholders of UTENOS TRIKOTAŽAS AB.

28-02-2022 UTENOS TRIKOTAŽAS Group earned EUR 30.4 million revenue last year.

23-02-2022 Announcement about the change of the CEO of UTENOS TRIKOTAŽAS AB.

23-02-2022 Notification about resignation of a member of the Management Board.

28-01-2022 UTENOS TRIKOTAŽAS AB will concentrate investments on its most profitable activities.

03-01-2022 Announcement of the preliminary dates for the announcement of UTENOS TRIKOTAŽAS AB performance results

in 2022.

17. The Company’s Operating Plans and Objectives

Sales in 2023 are planned to be maintained at the similar level as in 2022. As the demand for exclusive and sustainable

knitwear is increasing, high value-added production to worldwide brands remains the Group’s strategic direction. As a result of

this tendency, the Group’s investments and resources will be directed towards further development of eco-friendly innovations,

strengthening of positions on global markets and long-term profitable growth of the company.

The potential impact of the military action in Ukraine on the Group's results for 2023 is unknown, and the Group's entity PAT

MTF Mriya has been operating in Ukraine in 2022 and at the time of publication of the financial statements without material

disruption. The company sewed 26.9% of the Group's manufactured products in 2022, with a loss before tax of EUR 651

thousand (excluding the impact of impairment of assets of EUR 725 thousand). 100 per cent impairment was established for

the carrying amount of property, plant and equipment in Ukraine at the end of 2022 (31 December 2021: the carrying amount

was EUR 2,219 thousand).

The Group's growth potential rests on two pillars of its business strategy: first, a strategic transformation was launched at the

beginning of 2022, with the aim of purifying the customer portfolio and focusing on the most profitable segment of the business

- the production of more complex and higher-priced products, especially from functional wool and its blends. Secondly, the

environmental and consumer friendliness of the production processes is a major concern. This is particularly appreciated by

customers both in Lithuania and abroad. Environmental and social responsibility commitments cover all areas of production

and activities of UTENOS TRIKOTAŽAS AB - from naturally grown fibres, use of chemicals in production and their impact on

the environment, the properties of the garment produced, to the fair remuneration of employees and the transparency of

production processes. All this is ensured through comprehensive certification measures and extensive research throughout

the production process. For more information, see Section 14.

As part of the clean-up process, investments in lower revenue-generating own labels are significantly reduced.

The UTENOS brand has become an integrated part of the organisation, which, as part of the sustainable Zero Waste ideology,

is essentially devoted to collections made from quality and sustainable raw materials that are not used in production. Statistics

show that up to 30% of textiles inevitably go unused at various stages of garment production. These quantities are too small

for mass production, but are suitable for the small customised batches that are at the heart of the redesigned UTENOS brand.

The reduction in volumes of the UTENOS brand products following the redesign has led to a review of its marketing channels.

The e-shop continues to operate, some physical stores were closed during 2022 and one closure is planned for 2023. For

more information on environmental initiatives, see SEction14.

In implementing restructuring of the Company‘s brands, the subsidiary Aboutwear that is developing the innovative and

sustainable brand ABOUT suspended its commercial activities in 2022. The decision regarding commercial activities has been

adopted after completion of the active search for investors.

Priority directions for 2023:

• Increase sales to customers by focusing on high quality and added-value, eco-friendly products made of innovative

materials.

• Further restructuring of the brand UTENOS and further development according to the purified Zero Waste strategy.

• Improvement of operational efficiency.

There are no restrictions.

18. Research and Development Activities

The Company and the Group did not carry out research activities.

19. Structure of the Issuer's Authorised Share Capital

As at 31 December 2022, the Company’s authorised share capital was comprised of 9,503,000 ordinary registered

shares with a nominal value of EUR 0.29 each.

UTENOS TRIKOTAŽAS AB authorised share capital according to types of shares:

Class of shares

Number of

shares, units

Nominal

value (EUR)

Total nominal

value (EUR)

Percentage in the

authorised share

capital (per cent)

Ordinary registered shares

9,503,000

0.29

2,755,870

100.00

All shares of UTENOS TRIKOTAŽAS AB are fully paid. All shares of the Company are ordinary registered shares of one

class granting equal rights to their holders (shareholders).

An ordinary registered share grants the following property rights to its holder (shareholder):

1. to receive a part of the Company’s profit (dividend);

2. to receive a part of assets of the Company in liquidation;

3. to receive shares without payment if the authorised capital is increased out of the Company’s funds, except in

cases specified in the Law on Companies of the Republic of Lithuania;

4. to have the pre-emption right in acquiring shares or convertible debentures issued by the Company, except in

cases when the General Meeting of Shareholders decides to withdraw the pre-emption right in the manner

prescribed by the Lithuanian Law on Companies in acquiring the Company’s newly issued shares or

convertible debentures for all the shareholders;

5. to lend to the Company in the manner prescribed by law; however, when borrowing from its shareholders, the

Company may not pledge its assets to the shareholders. When the Company borrows from a shareholder, the

interest may not be higher than the average interest rate offered by commercial banks of the locality where

the lender has his place of residence or business, which was in effect on the day of conclusion of the loan

agreement. In such a case, the Company and the shareholders shall be prohibited from negotiating a higher

interest rate;

6. to transfer all or part of the shares into the ownership of other persons;

7. to force other shareholders to sell their shares to them or to force other shareholders to buy their shares from

them in cases and manner prescribed by the Law on the Law on Securities Market;

8. other property rights established by laws.

An ordinary registered share grants the following non-property rights to its holder (shareholder):

1. to attend the General Meetings of Shareholders;

2. to vote at General Meetings of Shareholders according to voting rights carried by their shares. One ordinary

registered share carries one vote;

3. to receive information on the Company specified by laws;

4. to file a claim with the court for reparation of damage resulting from nonfeasance or malfeasance by the

Company’s manager and the Board members of their obligations prescribed by laws or these Articles of

Association as well as in other cases laid down by laws;

5. other non-property rights established by laws.

20. Restrictions on Disposal of Securities

21. Shareholders

The consolidated Group (hereinafter “the Group”) consists of the Company and the following subsidiaries:

Registered office

Group’s share (%) as at 31

December

Activity

2022

2021

Šatrija, AB

Šatrijos St. 3, Raseiniai

89.78

Manufacture of wearing

apparel

Gotija, UAB

Laisvės St. 33, Kaunas

100.00

Retail trade

MTF Mrija, PAT

Tomas Masarik St.13,

Mukačiov, Cietokšna iela 60

98.95

Production of knitted

articles

Aboutwear, UAB

Laisvės pr. 3, Vilnius

100.00

80.00

Retail and wholesale

trade

24. All Mutual Agreements Between Shareholders of Which the Issuer is Aware and Due to Which Restrictions

on Transfer of Securities and/or Voting Rights May Be Imposed

None.

As at 31 December 2022, the total number of shareholders of UTENOS TRIKOTAŽAS AB was 1,397.

The shareholders that owned or controlled more than 5 per cent of the Issuer’s authorized share capital as at 31

December 2022 were as follows:

Shareholder’s

name

Company code

Address, country

Number of ordinary

registered shares

held (thousand)

Ownership

interest in the

authorized share

capital (per cent)

Voting rights

(per cent)

SBA Grupė UAB

132206739

Upės St. 21, Vilnius,

Lithuania

8,771

92.31

Other

shareholders

732

7.69

22. Shareholders Holding Special Control Rights and Descriptions of These Rights

There are no restrictions.

23. All restrictions regarding voting rights

There are no restrictions.

25. Employees

Average number of employees of UTENOS TRIKOTAŽAS AB group companies at the end of the period, by companies:

Employees related costs (thousand EUR) distribution, by companies:

Company name

2022

2021

Change, per cent

UTENOS TRIKOTAŽAS, AB

10,182

10,599

(3.9)

Šatrija, AB

2,128

2,073

2.7

MTF Mrija, PAT

571

580

(1.6)

Gotija, UAB

Aboutwear, UAB

188

(47.3)

12,980

13,440

(3.4)

Company name

31/12/2022

31/12/2021

Change, per cent

UTENOS TRIKOTAŽAS, AB

662

797

(16.9)

Šatrija, AB

132

154

(14.3)

MTF Mrija, PAT

123

136

(9.6)

Gotija, UAB

100

Aboutwear, UAB

(85.7)

919

1,094

(16.0)

The average monthly wages of the Company’s employees before taxes (EUR):

Average monthly salary of the Company’s employees is calculated as payroll expense (before taxes)/FTE.

Information on distribution of employees of UTENOS TRIKOTAŽAS by education (according to data as at 31 December

2022):

Group

Company

Group of employees

2022

2021

Change, per

cent

2022

2021

Change, per

cent

Executives

4,716

7,158

(34.1)

12,464

10,457

19.2

Managers

2,811

2,847

(1.3)

2,848

2,757

3.3

Specialists

1,521

1,239

22.8

1,573

1,298

21.2

Workers

968

880

10.0

1,071

989

8.3

1,178

1,080

9.1

1,301

1,186

9.7

Group of

employees

Number of

employees

Higher

Non-higher

professional

Vocational

Secondary

Basic

Higher non-

university

Executives

Specialists

126

Workers

489

120

149

146

662

146

162

151

26. Management of the Group Companies

Company name

Chief Executive Officers

UTENOS TRIKOTAŽAS, AB

Nomeda Kaučikienė (from 03-05-2022)

Šatrija, AB

Giedrius Grondskis

MTF Mrija, PAT

Tatjana Roshchina

Gotija, UAB

Renata Varaneckienė (from 01-07- 2022)

Aboutwear, UAB

Renata Varaneckienė (from 01-06- 2022)

27. Management Incentives

According to the Remuneration Policy, management incentives are assigned by the decision of the Board taking into account the

objectives met.

28. Amendment Procedure of the Issuer’s Articles of Association

The Articles of Association of the Company shall be amended by the decision of the General Meeting of Shareholders adopted

in the manner prescribed by laws, except in cases specified in the Lithuanian Law on Companies. Following the decision by the

General Meeting of Shareholders to amend the Company’s Articles of Association, the full text of the amended Articles of

Association shall be drawn up and signed by the person authorised by the General Meeting of Shareholders.

The Company’s issued capital amounted to EUR 2,755.9 thousand and was divided into 9,503,000 ordinary registered shares

with par value of EUR 0.29 each.

29. Issuer’s Governing Bodies

The management bodies of the Company are listed below.

General Meeting of Shareholders

meeting

Audit Committee

Management Board

Chief Executive Officer

The Articles of Association of UTENOS TRIKOTAŽAS AB stipulate that the Company shall have the following bodies: the General

Meeting of Shareholders, the management Board and the Chief Executive Officer. The Supervisory Board shall not be set up at

the Company.

The Management Board shall be granted all powers stipulated in the Company’s Articles of Association including powers

assigned to it by laws. The Board shall deal with deliberation of collegial issues and decision making.

The Management Board considers and approves the Company's business strategy, the Company's management structure and

the positions of employees. The Management Board elects and recalls the Company's Chief Executive Officer, determines his/her

remuneration and other terms and conditions of employment. The Management Board shall determine the information which

shall be considered to be the Company's business secrets. The Management Board shall analyse and evaluate the Company's

draft annual and consolidated financial statements and draft appropriation of profit (loss) and submit them to the General Meeting

of Shareholders. The Management Board shall also take any other decisions within the competence of the Management Board

as provided for by law, the Company's Articles of Association or the decisions of the General Meeting of Shareholders. The

Management Board shall be responsible for convening and holding General Meetings of Shareholders in a timely manner. The

Management Board of UTENOS TRIKOTAŽAS AB is elected from 6 members for a period of four years.

The Audit committee consists of 2 (two) independent members. The Audit committee members by the submission of the Board

are being appointed and withdrawn by the General Meeting of Shareholders. The members of the Committee are elected for the

term of 4 (four) years.

During the reporting period 2022, the Audit committee held 4 (four) meetings (on 4 January 2022, on 31 January 2022, on 7 April

2022 and 15 December 2022). During the meetings, the Audit Committee considered the questions which fall under its

competency.

The shareholders meeting held on 26 April 2017 approved the Terms of Reference of the Audit Committee of UTENOS

TRIKOTAŽAS. The meeting of shareholders held on 26 April 2017 elected the Audit committee members: Šarūnas Radavičius

and Inga Kuktienė.

Šarūnas Radavičius (born in 1968)

Independent member of the audit committee of UTENOS TRIKOTAŽAS AB since 30 November 2021 elected for the period of

4 years.

Education:

• Vilnius University, Accounting and control (1993), certified auditor of Lithuania;

Workplace:

• Director of Saluma, MB;

Participation in the management of other companies:

• Founder of Saluma, MB;

• Independent member of the audit committee of AKROPOLIS GROUP, UAB;

• Independent member of the audit committee of AB Klaipėdos nafta.

Inga Kuktienė (born in 1980)

Independent member of the audit committee of UTENOS TRIKOTAŽAS AB since 30 November 2021 elected for the period of

4 years.

Education:

• Vilnius University (Master’s degree), Service Management, and Stockholm University, Bachelor’s degree in

Economics and Management, certified auditor of Lithuania and risk management specialist;

Workplace:

• Head of risk management department of SME Bank, UAB;

Participation in the management of other companies:

• Member of the Board of SME Bank, UAB;

• Independent member of the audit committee of Lietuvos oro uostai, VĮ.

Responsibilities of the Audit Committee:

o To observe the process of preparation of the Company’s financial reports;

o To review the systems of internal control, risk management and internal audit, if it exists in the Company;

o To observe the process of external audit;

o To observe how the external auditor or audit company follows the principles of independence and objectivity;

o To provide the Board of the Company with written recommendations regarding the selection, appointment and recall of

an external audit company.

o To immediately inform the Managing Director of the company about information provided by the audit company to audit

committee about audit related problematic issues especially when significant control defects related to financial

statements occur.

Rights of the Audit committee:

• To get complete information and/or documents (their copies) needed for the audit committee to perform their duties. On

the Audit committee request, administration of the Company must provide the information and/or documents (their

copies) to the Audit committee per 3 working days.

• To get complete information on details of accounting, financial and other operations of the company. On the Audit

committee request, administration of the Company as well as on its own initiative must inform the Audit committee of

the methods used to account for significant and/or unusual transactions where the accounting treatment may be open

to different approaches. In such case, a special consideration should be given to the Company’s operations in off shores

and/or activities carried out through special purpose vehicles (organizations), for the purpose to clarify the justification

of such operations.

The Audit committee members may be remunerated for their operations. Remunerations and the payment terms are determined

by the submission of the board by the General Meeting of Shareholders.

30. Members of the Collegial Bodies, the Company Manager, the Finance Manager

As at 31 December 2022:

Position

Full name

Number of the

Issuer’s shares held

End of the

term of office

Start of term of

office

End of the term

of office

End of term of

office

Management Board

Chairwoman

Dovilė Tamoševičienė

30/04/2021

28/04/2025

Member

Jelena Grišina

29/04/2022

28/04/2025

Independent member

Artūras Užgalis

28/04/2021

28/04/2025

Head of Administration and the Chief Financial Officer

Chief Executive Officer

Nomeda Kaučikienė

03/05/2022

Finance Director

Živilė Jonaitytė

02/03/2020

Audit Committee

Independent auditor

Šarūnas Radavičius

30/11/2021

30/11/2025

Independent auditor

Inga Kuktienė

30/11/2021

30/11/2025

Remuneration was paid to the members of a collegial body of the Company (Members of the Management Board, Members of

the Audit committee) for their work.

Information about the Management Board members:

Dovilė Tamoševičienė (b. 1978)

Chairwoman of the Management Board of UTENOS TRIKOTAŽAS AB from 28 April 2021.

Education:

• Vilnius University, Master’s degree in Economics.

Workplace:

• Head of Business Control of SBA Grupė, UAB

Participation in the management of other companies:

• Kauno Baldai AB, Management Board member;

• Šatrija AB, Management Board member;

• SBA Competence and Service Centre UAB, Management Board member;

• Robotex UAB, Management Board member;

• Klaipėdos Baldai AB, Supervisory Board member

• Šilutės Baldai, AB, Supervisory Board member

• SBA Modular, UAB, Director

• SBA Modular, UAB, Management Board member

Jelena Grišina (b. 1979)

UTENOS TRIKOTAŽAS AB, the Management Board member since 29 April 2022.

Education:

• Vilnius University, Master’s degree in Finance.

• Klaipėda University, Bachelor’s degree in Maritime Economics.

Workplace:

• Head of Development of SBA Grupė, UAB.

Participation in the management of other companies:

• Management Board member at SBA Competence and Service Centre UAB.

Artūras Užgalis (b. 1989)

Independent member of the Management Board of UTENOS TRIKOTAŽAS AB since 28 April 2021.

Education:

• Mykolas Romeris University, Master’s degree in Leadership and Change Management;

• Kaunas University of Technology, Bachelor’s degree in Food Technology and Engineering.

Workplace:

• Director of Dealja, MB;

• Etilja, MB, Director

31. Information About Significant Agreements

The Company has concluded no significant agreements in which the Company is a party to and which would come into effect,

change or terminate as a result of the change in the control of the Company.

32. Information About the Compliance with the Governance Code

UTENOS TRIKOTAŽAS AB complies with the principles of Corporate Governance Code for the Companies Listed on Vilnius

Stock Exchange.

100

33. Information About Transactions with Related Parties

Results of transactions with related parties performed in 2022 are disclosed in the notes to the financial statements of UTENOS

TRIKOTAŽAS AB for the period ended as at 31 December 2022.

34. Data on Publicly Announced Information

The Company announces information on significant events (as well as other information required by laws) through the system

of information disclosure and communication Globe Newswire. Publicly announced information is also available on the

Company’s website at www.ut.lt and on the website of the Vilnius Stock Exchange at www.baltic.omxgroup.com.

35. The Company’s Auditor

UTENOS TRIKOTAŽAS AB signed an agreement for the audit of the Financial Statements for 2022 with KPMG Baltics, UAB

(company code 111494971, the registered address: Lvivo St. 101, 08104, Vilnius). The annual remuneration for the audit

services is EUR 38,280 plus VAT, for the year 2023 – EUR 39,050 plus VAT, for the year 2024 (if extended) – EUR 39,050 plus

VAT.

36. General Information on the Group of Companies

36.1 Companies that Constitute the Group, Their Contact Data and Principle Activities

Company name

Šatrija, AB

Legal form

Joint stock company

Registration date and place

1955, Šatrijos St.3, 4400 Raseiniai

Company code

172285032

Address

Šatrijos st.3, 4400 Raseiniai

Telephone

8 (428) 70611

Fax

8 (428) 70611

E-mail

raseiniai@satrija.lt

Website

www.satrija.lt

Principal activities

Manufacture of wearing apparel

Company name

Mukačevska Trikotažnaja Fabrika Mrija PAT

Legal form

Open public company

Registration date and place

1971, Tomas Masarik St.13, 89600 Mukachevo, Ukraine

Company code

00307253

Address

Tomas Masarik St.13, 89600 Mukachevo, Ukraine

Telephone

+ 380 (3131) 52780

Fax

+ 380 (3131) 52780

E-mail

mriya@mriya.ut.lt

Website

www.mriyamukachevo.com

Principal activities

Production of knitted articles

Company name

Gotija, UAB

Legal form

Private company

Registration date and place

1994, Laisvės al. 33, Kaunas

Company code

134181619

Address

Laisvės ave. 33, Kaunas

Telephone

8 (37) 205879

Fax

8 (37) 205879

E-mail

gotija@ut.lt

Website

None

Principal activities

Retail trade in knitwear products

Company name

Aboutwear, UAB

Legal form

Private company

Registration date and place

2021, Laisvės ave. 3, Vilnius m., Vilnius city municipality, 04215

Company code

305758870

Address

Laisvės ave. 3, Vilnius m., Vilnius city municipality

Telephone

Fax

E-mail

help@aboutwear.com

Website

www.aboutwear.com

Principal activities

Retail and wholesale trade

101

Subsidiaries Šatrija AB, PAT MTF Mrija, Gotija UAB, Aboutwear UAB do not trade in securities in regulated markets.

37. Information on harmful transactions in which the issuer is a party (transactions that are not consistent with

the Company’s objectives or usual market terms and conditions, infringe interests of the shareholders or other

stakeholders).

There were no harmful transactions (those that are not in line with issuer‘s goals, not under usual market terms, harmful

to the shareholders or stakeholders’ interests) made in the name of the issuer that had or potentially could have negative

effects in the future on the issuer’s activities or business results. There were also no transactions where a conflict of

interest was present between issuer’s management’s, controlling shareholders’ or other related parties’ obligations to the

issuer and their private interests.

38. Diversity Policy

The election of the Company's directors, management and supervisory bodies is subject to a diversity policy. Diversity

criteria such as gender, age, geographic origin, education and work experience should be applied in the composition of

the top management team, subject to the law. For more information on diversity policies, see section 14.4.2.

39. Corporate Governance

(Information is prepared in accordance with the Law of the Republic of Lithuania on Companies Financial Reporting

(IX575), effective from 29 November 2017, applicable to reporting periods beginning on or after 1 of January 2017).

39.1 A reference to the applicable Corporate Governance Code and where it is publicly disclosed and/or by

reference to the publicly available complete information on corporate governance practices

The Company provides information on compliance with the applicable Corporate Governance Code in 2022 in the Annex

to the Consolidated Annual Report. The Company publishes its annual reports on the web page in Investors section.

39.2 If the provisions of the applicable Corporate Governance Code are divergent and/or non-compliant, the

provisions for which the derogations and/or non-compliance and the reasons

The Company publishes this information in 2022 in the Annex to the Consolidated Annual Report on Compliance with the

Corporate Governance Code, “Yes/No/Not applicable” and “Comment”.

39.3 Information on risk scale and risk management: Description of risk management related to the financial

statements, risk mitigation measures and the Company's internal control system

The preparation of the Company’s consolidated financial statements, internal control and financial risk management

systems, compliance with the legislation regulating the preparation of consolidated financial statements are monitored by

the Audit Committee.

The Company is responsible for the supervision and final oversight of the preparation of consolidated financial statements.

The Company is constantly reviewing International Financial Reporting Standards (IFRSs) to ensure timely

implementation of all IFRS developments in the financial statements, analyse transactions that are significant to the

Company and the Group’s activities, ensure collection of information from the Group companies, and timely and correct

processing and preparation of that information for the financial statements, periodically informing The Board of the

Company on the progress of preparation of financial statements.

39.4 Information on significant direct or indirect holding of shares

Information on significant direct or indirect holding of shares is disclosed in Note 1 to the Group and the Company’s

financial statements for 2022.

39.5 Information on shareholders with specific control rights and a description of these rights

The Company does not have shareholders with special control rights.

39.6 Information on all existing limitations of voting rights, such as a certain percentage of votes or the number of

persons entitled to vote, restrictions on the use of voting rights or systems in which the property rights granted by the

securities are separated from the holder of the securities

The Company does not impose any restrictions on rights.

39.7 Information on the rules governing the election and amendment of the Board members, as well as changes

to the Articles of Association of the Company

The Company does not have the rules governing the election and amendment of the Board members. The Board of the

Company acts in accordance with the Law on Companies, the Articles of Association of the Company, the Rules of

Procedure of the Board and other legal acts. The members of the Board are always working to benefit the Company and

its shareholders.

The procedure for changing the Company’s Articles of Association does not differ from the Law on Companies.

102

Nomeda Kaučikienė,

Chief Executive Officer 4 April 2023

39.8 Information on the powers of the members of the Board.

The members of the Board of the Company act in accordance with the Law on Companies, the Articles of Association,

the Rules of Procedure of the Board and other legal acts, and do not have special powers. The members of the Board

are always working to benefit the Company and its shareholders.

39.9 Information on the competence of the General Meeting of Shareholders, the rights of shareholders and their

implementation, if this information is not provided by law

The Company provides information about the competence of the General Meeting, the shareholders’ rights and their

implementation, as well as the organization of meetings of shareholders present in 2022 in the Annex to the Annual

Report on Compliance with the Corporate Governance Code in 2022.

39.10 Information on the composition of the management, supervisory bodies and their committees, and their

areas of activity

The Company provides information on the members of the Board of Company, the general manager in the Notes 26, 29,

30 of the Consolidated Annual Report for 2022, which outline the scope of the management’s activities, mention is made

of other important information related to the positions held.

39.11 Election of members of the Company’s manager, management and supervisory bodies is subject to

diversity policies related to aspects such as age, gender, education, and professional experience, description of

the objectives, policy objectives, methods and results of this policy during the reporting period. If the diversity

policy does not apply, the reasons for non-application are explained

The election of the members of the Board of Directors and the Head of the Company is subject to the diversity policy.

39.12 Information on the remuneration of each member of the management and supervisory body (average

salaries paid during the reporting period, with separate mention of bonuses, bonuses, bonuses and other

payments)

The members of the Company's management Board are elected by the shareholders' meeting for a term of four years

and do not have employment contracts as they represent the shareholders and are not employees of the Company.

Based on the resolution of the Ordinary General Meeting of Shareholders, while approving the profit appropriation report,

the members of the Management Board may be granted tantjems for their work in the Management Board. The Company

has not granted any loans, guarantees or sureties to the members of the governing bodies to ensure the fulfilment of their

obligations.

The Management Board approves the main terms of the employment contract of the team members. Information on the

remuneration paid to the directors of the Company and the Group is disclosed in Note 25 to the financial statements of

the Company and the Group.

Information on remuneration of the Management Board members is presented in the Remuneration report.

39.13 Information on all agreements between shareholders (their essence, terms and conditions).

To the Company’s knowledge, the shareholders have no mutual agreements.

40. Subsequent events

Subsequent events are more widely disclosed in the financial statements.

There were no significant subsequent events that could have a significant effect on the Group and Company’s financial

statements.

103

REMUNERATION REPORT

Remuneration of Governing Bodies

Remuneration Policy

The Executive Remuneration Policy (hereinafter referred to as “the Remuneration Policy”) lays down the principles for

remuneration to the general manager and members of the Board of UTENOS TRIKOTAŽAS AB, and to define the main

provisions to be followed by the Company bodies in determining the monthly remuneration or any other pay to the general

manager and members of the Board of UTENOS TRIKOTAŽAS AB for work/activities and setting a variable part of the

remuneration (if applicable under the Remuneration Policy).

Principles laid down in the Remuneration Policy define the following elements of the executive remuneration:

- A fixed part of the remuneration – monthly salary (hereinafter – Fixed Part);

- A variable part of the remuneration – remuneration for the achievement of objectives/indicators (hereinafter – Variable

Part); or

- Other financial remuneration.

The Remuneration Policy shall apply to the general manager and members of the Board of the Company.

The Remuneration Policy contributes to the Company’s strategy, long-term objectives and interests, i.e.:

- Orientation to the business strategy and dynamism: the Remuneration Policy contributes to the implementation of the

Company’s strategy. The policy must be dynamic, responsive to the market situation, needs of the organization,

business development priorities and plans, and must encourage the required change in the organization.

- Result orientation: the Remuneration Policy encourages to achieve organizational and personal objectives, to build

competitive advantages and to improve.

- External competitiveness – the Remuneration Policy reflects market trends; it is aimed at attracting and retaining

Executives of the required qualifications for the Company.

The Remuneration Policy is aimed at providing appropriate incentives to Company Executives whose personal activities

have a significant impact on the Company’s business and on respecting organizational values in the Company’s activities.

Where the same person holds the position of the general manager and a member of the Board of the Company or the position

of a member of the Board and another job in the Company and/or in another company of the Group in which the Company

is a part (hereinafter – affiliated company), a single type of remuneration shall be paid to such Executive, i.e. total

remuneration for holding the position of the general manager or total remuneration for the job (the remuneration principles

for other jobs in the Company are laid down in the SBA Group remuneration policy), but no additional remuneration shall be

paid for duties as the member of the Board.

The Remuneration Policy must be applied in such a way as to avoid any discrimination on the basis of gender and on other

grounds. Men and women shall be equally remunerated for the same or an equivalent job/activity. In terms of implementing

the principles of gender equality and non-discrimination on other grounds, discrimination-free Executive remuneration means

discrimination-free remuneration for work/activity and any additional amounts paid under this Remuneration Policy.

Principles of Determining Remuneration

The monthly salary of the general manager shall be determined by the decision of the Board of the Company, and the

monthly salary to the members of the Board shall be determined by the decision of the General Meeting of Shareholders. In

all cases, the principle of internal equity must be respected when determining the manager’s monthly salary, taking into

account the Job Level or activity performed by the person where the remuneration to a member of the Board, who does not

have employment relationship with the Company, is determined.

The monthly salary of executives shall be reviewed based on:

- The performance of the Company – the achievement of the Company’s annual and/or long-term objectives.

- The budget for remuneration approved by the Company.

The Remuneration Policy provides for the possibility of Variable Part of remuneration for the general manager to encourage

the achievement of the Company’s annual and long-term objectives. The Variable Part shall not be allocated or paid to the

members of the Board. The Board of the Company shall approve the objectives, and weights and indicators of the objectives.

The following objectives may be set:

- financial;

- operational;

- manufacturing;

- qualitative.

The annual Variable Part paid to the general manager shall be calculated where not less than 100 per cent of the Company’s

objectives have been achieved The Board of the Company shall determine the amount of the annual Variable Part. The

annual Variable Part shall not be higher than 75 per cent of the annual salary of the general manager. The Board of the

Company may decide to apply long-term incentives and establish their principles.

Upon the termination of the employment contract, the general manager shall be entitled to the severance pay provided for

in the Labour Code of the Republic of Lithuania (if the general manager is at all entitled to it under the law), unless the parties

agree on a different severance pay in the employment contract.

No prior arrangements on the conditions for early retirement shall apply to executives.

The Board members of UTENOS TRIKOTAŽAS AB did received remuneration in 2022. There were no transactions with

managers granting shares or share options.

104

The tables provide information on the pre-tax remuneration to the members of the management bodies accrued in euros.

Remuneration of members of the governing bodies, 2022

Remuneration of members of the governing bodies, 2021

Remuneration of the parent company’s and the Group’s employees

In 2022, the parent’s remuneration fund amounted to EUR 10.18 million (2021: EUR 10.59 million). The total remuneration

fund in 2022 amounted to EUR 12.98 million (in 2021: EUR 13.44 million). The tables below show the average monthly

remuneration of employees in euros before taxes in 2018–2022 (Variable and Fixed Part).The number of employees

29031/230306/149548 is estimated as the full-time equivalent.

Full name

Position

Fixed Part

Variable

Part

Another

financial

remuneration

In total

Dovilė Tamoševičienė

Chairwoman of the

Management Board

Artūras Užgalis

Independent member of the

Management Board

15,708

Nortautas Luopas

Independent member of the

Management Board

1,305

Jelena Grišina

Member of the

Management Board

Nerijus Kalinauskas

Member of the

Management Board

Vytautas Vaškys

Member of the

Management Board, later

Chief Executive Officer

17,401

Nomeda Kaučikienė*

Chief Executive Officer

86,678

Petras Jašinskas

Chief Executive Officer

45,487

* In 2022, Nomeda Kaučikienė, the Chief Executive Officer of UTENOS TRIKOTAŽAS AB, was paid also for other positions held in

the Company.

Full name

Position

Fixed Part

Variable

Part

Another

financial

remuneration

In total

Arūnas Martinkevičius

Chairman of the

Management Board

Dovilė Tamoševičienė

Chairwoman of the

Management Board

Artūras Užgalis

Independent member of the

Management Board

9,331

Nortautas Luopas

Independent member of the

Management Board

3,827

Auksė Žukauskienė

Member of the

Management Board

Vytautas Vaškys

Member of the

Management Board

Giedrius Grondskis**

Member of the

Management Board

28,393

21,270

49,663

Nerijus Kalinauskas

Member of the

Management Board

Petras Jašinskas

Chief Executive Officer

125,487

30,034

155,521

** Giedrius Grondskis, Member of the management Board of UTENOS TRIKOTAŽAS AB and General Manager of the subsidiary

Šatrija AB, received a remuneration from the subsidiary Šatrija AB., information refers to the period during which he was a member of

the Management Board of UTENOS TRIKOTAŽAS AB.

105

Average monthly salary of the parent company’s employees in EUR before taxes

** As from 2019, a change in taxation or remuneration took effect.

Average monthly salary of the Group’s employees in EUR before taxes

** As from 2019, a change in taxation or remuneration took effect.

Changes in the Company’s and the Group’s results during 2018–2022 (EUR’000)

Employee

category

2022

2021

2020

2019

2018

Number of

employees

Average

salary**

Number of

employees

Average

salary**

Number of

employees

Average

salary**

Number of

employees

Average

salary**

Number of

employees

Average

salary**

CEO

4,716

7,158

5,166

5,949

4,511

Managers

2,811

2,847

1,863

1,365

1,251

Specialists

154

1,521

191

1,239

153

1,129

177

990

170

725

Workers

710

968

757

880

737

862

869

641

840

585

Indicator

2022

2021

2020

2019

2018

Group

Parent

Group

Parent

Group

Parent

Group

Parent

Group

Parent

EBITDA (defined in

section 7)

(531)

(666)

(1,919)

(1,310)

1,184

778

1,710

1,337

2,032

1,785

Net profit

(1,920)

(2,736)

(3,111)

(2,948)

(422)

(273)

763

1,798

1,141

571

106

APPENDIX TO THE ANNUAL REPORT

DISCLOSURE OF UTENOS TRIKOTAŽAS AB CONCERNING THE COMPLIANCE WITH THE GOVERNANCE CODE

FOR THE COMPANIES LISTED ON THE REGULATED MARKET IN 2022

UTENOS TRIKOTAŽAS AB (hereinafter referred to as the “Company”), acting in compliance with Article 22(3) of the Law of

the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB NASDAQ Vilnius, hereby discloses how

it complies with the Corporate Governance Code for the Companies listed on NASDAQ Vilnius as well as its specific provisions

or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific

provisions or recommendations that are not complied with must be indicated and the reasons for such non-compliance must

be specified. In addition, other explanatory information indicated in this form must be provided.

PRINCIPLES/ RECOMMENDATIONS

YES/NO /NOT

APPLICABLE

COMMENTARY

1. Principle: General meeting of shareholders, equitable treatment of shareholders and shareholder rights

The corporate governance framework should ensure equitable treatment of each shareholder. The corporate governance

framework should protect the rights of the shareholders.

1.1. All shareholders should be furnished with equal opportunity to

familiarise with information provided for in legislation and (or)

documents and participate in the decision-making process regarding

significant corporate issues.

Yes

Yes, all shareholders have an

opportunity to familiarise with

information.

1.2. It is recommended that the company’s capital should consist

only of the shares that grant the same rights to voting, ownership,

dividend and other rights to all their holders.

Yes

The ordinary registered shares

which make the authorised capital of

the Company give the equal rights

for all share owners.

1.3. It is recommended that investors should have access to the

information concerning the rights attached to the shares of the new

issue or those issued earlier in advance, i.e. before they purchase

shares.

Yes

The ordinary registered shares

which make the authorised capital of

the Company give the equal rights

for all share owners.

1.4. Exclusive transactions that are especially important, such as

transfer of all or almost all of the company's assets, which would

basically mean the transfer of the company, should be subject to

approval of the General meeting of shareholders.

Not applicable

None of such transactions were

made. The Company follows the

provisions of the Law on Companies

and the Company’s Articles of

Association.

1.5. Procedures of organising and participating in a general meeting

of shareholders should ensure equal opportunities for the

shareholders to effectively participate at the general meetings of

shareholders and should not prejudice the rights and interests of the

shareholders. The venue, date, and time of the general meeting of

shareholders should not hinder wide attendance of the shareholders.

In the notice about the general meeting of shareholders being

convened, the company should specify the date when draft

resolutions to be proposed should be last submitted.

Yes

No comment.

107

1.6 If it is possible, in order to ensure shareholders living abroad the

right to access to the information, it is recommended that documents

on the course of the general shareholders’ meeting should be

published not only in Lithuanian language, but in English and /or other

foreign languages in advance. It is recommended that the minutes of

the general shareholders’ meeting after signing them and/or adopted

resolutions should be also published not only in Lithuanian language,

but in English and /or other foreign languages. It is recommended to

place this information on the company’s website. Documents may be

publicly available to the extent that publishing of these documents is

not detrimental to the company or the company’s commercial secrets

are not revealed.

Yes

No comment.

1.7 Shareholders who are entitled to vote should be furnished with the

opportunity to vote in the general shareholders’ meeting in person and

in absentia. Shareholders should not be prevented from voting in

writing in advance by completing the general voting ballot.

Yes

No comment.

1.8 With a view to increasing the shareholders’ opportunities to

participate effectively at general meetings of shareholders, the

companies are recommended to expand use of modern technologies

by allowing the shareholders to participate and vote in general

meetings of shareholders via electronic means of communication. In

such cases security of transmitted information and a possibility to

identify the identity of the participating and voting person should be

guaranteed.

The Company does not have opportunities

to apply modern technologies to voting at

general meetings of shareholders with a

view to ensuring security of shareholders’

rights due to legal regulation being

incompletely clear.

1.9. It is recommended that the notice on the draft decisions of the

general meeting of shareholders being convened should specify new

candidatures of members of the collegial body, their proposed

remuneration and the proposed audit company if these issues are

included into the agenda of the general meeting of shareholders.

Where it is proposed to elect a new member of the collegial body, it

is recommended that the information about his/her educational

background, work experience and other managerial positions held (or

proposed) should be provided.

Yes

This information about candidates for the

Board was provided to shareholders

together with the notice about the

convening of the general meeting of

shareholders (in accordance with

requirements of the Law on Companies of

the Republic of Lithuania) during which

members of the Board were elected, and

with the agenda of the general meeting of

shareholders.

1.10. Members of the company’s collegial management body, heads

of the administration

or other competent persons related to the

company who can provide information related to the agenda of the

general meeting of shareholders should take part in the general

meeting of shareholders. Proposed candidates to member of the

collegial body should also participate in the general meeting of

shareholders in case the election of new members is included into the

agenda of the general meeting of shareholders.

Yes

No comment.

For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.

108

2. Principle: Supervisory board

2.1. Functions and liability of the supervisory board

The supervisory board of the company should ensure representation of the interests of the company and its

shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations

and its management bodies as well as constantly provide recommendations to the management bodies of the company.

The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control

system.

2.1.1. Members of the supervisory board should act in good faith, with

care and responsibility for the benefit and in the interests of the

company and its shareholders and represent their interests, having

regard to the interests of employees and public welfare.

Not

applicable

There is no supervisory board.

2.1.2. Where decisions of the supervisory board may have a different

effect on the interests of the company’s shareholders, the supervisory

board should treat all shareholders impartially and fairly. It should

ensure that shareholders are properly informed about the company’s

strategy, risk management and control, and resolution of conflicts of

interest.

Not

applicable

2.1.3. The supervisory board should be impartial in passing decisions

that are significant for the company’s operations and strategy.

Members of the supervisory board should act and pass decisions

without an external influence from the persons who elected them.

Not

applicable

2.1.4. Members of the supervisory board should clearly voice their

objections in case they believe that a decision of the supervisory

board is against the interests of the company. Independent

members

of the supervisory board should: a) maintain independence of their

analysis and decision-making; b) not seek or accept any unjustified

privileges that might compromise their independence.

Not

applicable

2.1.5. The supervisory board should oversee that the company’s tax

planning strategies are designed and implemented in accordance

with the legal acts in order to avoid faulty practice that is not related

to the long-term interests of the company and its shareholders, which

may give rise to reputational, legal or other risks.

Not

applicable

2.1.6. The company should ensure that the supervisory board is

provided with sufficient resources (including financial ones) to

discharge their duties, including the right to obtain all the necessary

information or to seek independent professional advice from external

legal, accounting or other experts on matters pertaining to the

competence of the supervisory board and its committees.

Not

applicable

For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of

unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.

109

2.2. Formation of the supervisory board

The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and

effective and fair corporate governance.

2.2.1. The members of the supervisory board elected by the general

meeting of shareholders should collectively ensure the diversity of

qualifications, professional experience and competences and seek for

gender equality. With a view to maintain a proper balance between

the qualifications of the members of the supervisory board, it should

be ensured that members of the supervisory board, as a whole,

should have diverse knowledge, opinions and experience to duly

perform their tasks.

Not

applicable

2.2.2. Members of the supervisory board should be appointed for a

specific term, subject to individual re-election for a new term in office

in order to ensure necessary development of professional experience.

Not

applicable

2.2.3. Chair of the supervisory board should be a person whose

current or past positions constituted no obstacle to carry out impartial

activities. A former manager or management board member of the

company should not be immediately appointed as chair of the

supervisory board either. Where the company decides to depart from

these recommendations, it should provide information on the

measures taken to ensure impartiality of the supervision.

Not

applicable

2.2.4. Each member should devote sufficient time and attention to

perform his duties as a member of the supervisory board. Each

member of the supervisory board should undertake to limit his other

professional obligations (particularly the managing positions in other

companies) so that they would not interfere with the proper

performance of the duties of a member of the supervisory board.

Should a member of the supervisory board attend less than a half of

the meetings of the supervisory board throughout the financial year of

the company, the shareholders of the company should be notified

thereof.

Not

applicable

2.2.5. When it is proposed to appoint a member of the supervisory

board, it should be announced which members of the supervisory

board are deemed to be independent. The supervisory board may

decide that, despite the fact that a particular member meets all the

criteria of independence, he/she cannot be considered independent

due to special personal or company-related circumstances.

Not

applicable

2.2.6. The amount of remuneration to members of the supervisory

board for their activity and participation in meetings of the supervisory

board should be approved by the general meeting of shareholders.

Not

applicable

110

2.2.7. Every year the supervisory board should carry out an

assessment of its activities. It should include evaluation of the

structure of the supervisory board, its work organisation and ability to

act as a group, evaluation of the competence and work efficiency of

each member of the supervisory board, and evaluation whether the

supervisory board has achieved its objectives. The supervisory board

should, at least once a year, make public respective information about

its internal structure and working procedures.

Not

applicable

3. Principle: Management Board

3.1. Functions and liability of the management board

The management board should ensure the implementation of the company’s strategy and good corporate governance

with due regard to the interests of its shareholders, employees and other interest groups.

3.1.1. The management board should ensure the implementation of

the company’s strategy approved by the supervisory board if the latter

has been formed at the company. In such cases where the

supervisory board is not formed, the management board is also

responsible for the approval of the company’s strategy.

Yes

No comment

3.1.2. As a collegial management body of the company, the

management board performs the functions assigned to it by the Law

and in the articles of association of the company, and in such cases

where the supervisory board is not formed in the company, it performs

inter alia the supervisory functions established in the Law. By

performing the functions assigned to it, the management board

should take into account the needs of the company’s shareholders,

employees and other interest groups by respectively striving to

achieve sustainable business development.

Yes

No comment

3.1.3. The management board should ensure compliance with the

laws and the internal policy of the company applicable to the company

or a group of companies to which this company belongs. It should

also establish the respective risk management and control measures

aimed at ensuring regular and direct liability of managers.

Yes

No comment

3.1.4. Moreover, the management board should ensure that the

measures included into the OECD Good Practice Guidance

Internal Controls, Ethics and Compliance are applied at the company

in order to ensure adherence to the applicable laws, rules and

standards.

Yes

No comment

3.1.5. When appointing the manager of the company, the

management board should take into account the appropriate balance

between the candidate’s qualifications, experience and competence.

Yes

No comment

Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-

bribery/44884389.pdf

111

3.2. Formation of the management board

3.2.1. The members of the management board elected by the

supervisory board or, if the supervisory board is not formed, by the

general meeting of shareholders should collectively ensure the required

diversity of qualifications, professional experience and competences

and seek for gender equality. With a view to maintain a proper balance

in terms of the current qualifications possessed by the members of the

management board, it should be ensured that the members of the

management board would have, as a whole, diverse knowledge,

opinions and experience to duly perform their tasks.

Yes

Members of the management bodies

of the Company work in a variety of

areas in other companies, which

ensures reasonableness of their

competences in respect of their held

positions.

3.2.2. Names and surnames of the candidates to become members of

the management board, information on their educational background,

qualifications, professional experience, current positions, other

important professional obligations and potential conflicts of interest

should be disclosed without violating the requirements of the legal acts

regulating the handling of personal data at the meeting of the

supervisory board in which the management board or individual

members of the management board are elected. In the event that the

supervisory board is not formed, the information specified in this

paragraph should be submitted to the general meeting of shareholders.

The management board should, on yearly basis, collect data provided

in this paragraph on its members and disclose it in the company’s

annual report.

Yes

This information about candidates

for the Board was provided to

shareholders together with the notice

about the convening of the general

meeting of shareholders (in

accordance with requirements of the

Law on Companies of the Republic

of Lithuania) during which members

of the Board were elected, and with

the agenda of the general meeting of

shareholders.

The required information on

members of the board is disclosed in

Notes 29-30 to the Company’s

annual report.

3.2.3. All new members of the management board should be

familiarised with their duties and the structure and operations of the

company.

Yes

Newly appointed members of the

management board are familiarised

with their duties and the structure

and operations of the company.

3.2.4. Members of the management board should be appointed for a

specific term, subject to individual re-election for a new term in office in

order to ensure necessary development of professional experience and

sufficiently frequent reconfirmation of their status.

Yes

No comment

3.2.5. Chair of the management board should be a person whose

current or past positions constitute no obstacle to carry out impartial

activity. Where the supervisory board is not formed, the former manager

of the company should not be immediately appointed as chair of the

management board. Where the company decides to depart from these

recommendations, it should provide information on the measures taken

to ensure impartiality of the supervision.

Yes

The supervisory board in not formed

at the Company, the chairman of the

management board is not and has

not been the head of the Company.

3.2.6. Each member should devote sufficient time and attention to

perform his duties as a member of the management board. Should a

member of the management board attend less than a half of the

meetings of the management board throughout the financial year of the

company, the supervisory board of the company or, if the supervisory

board is not formed at the company, the general meeting of

shareholders should be notified thereof.

Yes

Members of the Company’s

management board perform their

duties in a responsible manner.

112

3.2.7. In the event that the management board is elected in the cases

established by the Law where the supervisory board is not formed at

the company, and some of its members will be independent,

it should

be announced which members of the management board are deemed

as independent. The management board may decide that, despite the

fact that a particular member meets all the criteria of independence

established by the Law, he/she cannot be considered independent due

to special personal or company-related circumstances.

Yes

The required information on

members of the management board

is disclosed in Note 30 to the

Company’s annual report.

3.2.8. The general meeting of shareholders of the company should

approve the amount of remuneration to the members of the

management board for their activity and participation in the meetings of

the management board.

Yes

Remuneration to the members of the

management board is approved by

the general meeting of shareholders

of the Company.

3.2.9. The members of the management board should act in good

faith, with care and responsibility for the benefit and the interests of the

company and its shareholders with due regard to other stakeholders.

When adopting decisions, they should not act in their personal interest;

they should be subject to no-compete agreements and they should not

use the business information or opportunities related to the company’s

operations in violation of the company’s interests.

Yes

Members of the Company’s

management board perform their

duties in a responsible manner.

3.2.10. The management board should carry out an assessment of its

activities every year. It should include evaluation of the structure of the

management board, its work organisation and ability to act as a group,

evaluation of the competence and work efficiency of each member of

the management board, and evaluation whether the management

board has achieved its objectives. The management board should, at

least once a year, make public respective information about its internal

structure and working procedures in observance of the legal acts

regulating the processing of personal data.

No comment

4. Principle: Rules of procedure of the supervisory board and the management board of the company

The rules of procedure of the supervisory board, if it is formed at the company, and of the management board

should ensure efficient operation and decision-making of these bodies and promote active cooperation between

the company’s management bodies.

4.1. The management board and the supervisory board, if the latter is

formed at the company, should act in close cooperation in order to attain

benefit for the company and its shareholders. Good corporate

governance requires an open discussion between the management

board and the supervisory board. The management board should

regularly and, where necessary, immediately inform the supervisory

board about any matters significant for the company that are related to

planning, business development, risk management and control, and

compliance with the obligations at the company. The management

board should inform he supervisory board about any derogations in its

business development from the previously formulated plans and

objectives by specifying the reasons for this.

Not

applicable

Supervisory Council of the

Company

For the purposes of this Code, the criteria of independence of members of the management board are interpreted as the criteria of

unrelated parties defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.

113

4.2. It is recommended that meetings of the company’s collegial bodies

should be held at the respective intervals, according to the pre-

approved schedule. Each company is free to decide how often meetings

of the collegial bodies should be convened but it is recommended that

these meetings should be convened at such intervals that

uninterruptable resolution of essential corporate governance issues

would be ensured. Meetings of the company’s collegial bodies should

be convened at least once per quarter.

Yes

Meetings of the board are convened

once per quarter and more frequently

when necessary.

4.3 Members of a collegial body should be notified of the meeting being

convened in advance so that they would have sufficient time for proper

preparation for the issues to be considered at the meeting and a fruitful

discussion could be held and appropriate decisions could be adopted.

Along with the notice of the meeting being convened all materials

relevant to the issues on the agenda of the meeting should be submitted

to the members of the collegial body. The agenda of the meeting should

not be changed or supplemented during the meeting, unless all

members of the collegial body present at the meeting agree with such

change or supplement to the agenda, or certain issues that are

important to the company require immediate resolution.

Yes

No comment

4.4. In order to coordinate the activities of the company’s collegial

bodies and ensure effective decision-making process, the chairs of the

company’s collegial supervision and management bodies should

mutually agree on the dates and agendas of the meetings and close

cooperate in resolving other matters related to corporate governance.

Meetings of the company’s supervisory board should be open to

members of the management board, particularly in such cases where

issues concerning the removal of the management board members,

their responsibility or remuneration are discussed.

Not

applica

ble

Not applicable because there is only

the management board formed.

5. Principle: Nomination, remuneration and audit committees

5.1. Purpose and formation of committees

The committees formed at the company should increase the work efficiency of the supervisory board or, where the

supervisory board is not formed, of the management board which performs the supervisory functions by ensuring

that decisions are based on due consideration and help organise its work in such a way that the decisions it takes

would be free of material conflicts of interest.

Committees should exercise independent judgement and integrity when performing their functions and provide with

recommendations concerning the decisions of the collegial body; nevertheless, the final decision should be

adopted by the collegial body.

5.1.1. Taking due account of the company-related circumstances and

the chosen corporate governance structure, the supervisory board of

the company or, in cases where the supervisory board is not formed,

the management board which performs the supervisory functions,

establishes committees. It is recommended that the collegial body

should form the nomination, remuneration and audit committees

Yes

No comment.

5.1.2. Companies may decide to set up less than three committees. In

such case companies should explain why they have chosen the

alternative approach, and how the chosen approach corresponds with

the objectives set for the three different committees.

114

5.1.3. In the cases established by the legal acts the functions assigned

to the committees formed at companies may be performed by the

collegial body itself. In such case the provisions of this Code pertaining

to the committees (particularly those related to their role, operation and

transparency) should apply, where relevant, to the collegial body as a

whole.

Yes

No comment.

5.1.4. Committees established by the collegial body should normally be

composed of at least three members. Subject to the requirements of the

legal acts, committees could be comprised only of two members as well.

Members of each committee should be selected on the basis of their

competences by giving priority to independent members of the collegial

body. The chair of the management board should not serve as the chair

of committees.

Yes

The Audit Committee comprises two

independent members.

5.1.5. The authority of each committee formed should be determined by

the collegial body itself. Committees should perform their duties in line

with authority delegated to them and inform the collegial body on their

activities and performance on regular basis. The authority of each

committee defining its role and specifying its rights and duties should

be made public at least once a year (as part of the information disclosed

by the company on its governance structure and practice on an annual

basis). In compliance with the legal acts regulating the processing of

personal data, companies should also include in their annual reports the

statements of the existing committees on their composition, the number

of meetings and attendance over the year as well as the main directions

of their activities and performance.

Yes - the Audit Committee operates in

accordance with the approved

provisions of the Audit Committee.

Reports of the committees are not

published in the annual report.

5.1.6. With a view to ensure the independence and impartiality of the

committees, the members of the collegial body who are not members

of the committees should normally have a right to participate in the

meetings of the committee only if invited by the committee. A committee

may invite or request that certain employees of the company or experts

would participate in the meeting. Chair of each committee should have

the possibility to maintain direct communication with the shareholders.

Cases where such practice is to be applied should be specified in the

rules regulating the activities of the committee.

Yes

The Audit Committee has the right to

invite the head of the Company,

members of the management board,

chief finance officer, and other

employees responsible for finances, as

well as external auditors to participate in

its meetings.

5.2. Nomination Committee.

The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of

the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities

are traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit

committee (the legal acts provide for the exemptions where the functions of the audit committee may be carried out by the collegial body

performing the supervisory functions).

115

5.2.1. Key functions of the nomination committee should be the following:

1) to select candidates to fill vacancies in the membership of supervisory

and management bodies and the administration and recommend the

collegial body to approve them. The nomination committee should

evaluate the balance of skills, knowledge and experience in the

management body, prepare a description of the functions and capabilities

required to assume a particular position and assess the time commitment

expected;

2) assess, on a regular basis, the structure, size and composition of the

supervisory and management bodies as well as the skills, knowledge and

activity of its members, and provide the collegial body with

recommendations on how the required changes should be sought;

3) devote the attention necessary to ensure succession planning.

There is no nomination committee.

5.2.2 When dealing with issues related to members of the collegial body

who have employment relationships with the company and the heads of

the administration, the manager of the company should be consulted by

granting him/her the right to submit proposals to the Nomination

Committee.

There is no nomination committee.

5.3. Remuneration committee

The main functions of the remuneration committee should be as follows:

1) submit to the collegial body proposals on the remuneration

policy applied to members of the supervisory and management

bodies and the heads of the administration for approval. Such

policy should include all forms of remuneration, including the

fixed-rate remuneration, performance-based remuneration,

financial incentive schemes, pension arrangements and

termination payments as well as conditions which would allow

the company to recover the amounts or suspend the payments

by specifying the circumstances under which it would be

expedient to do so;

2) submit to the collegial body proposals regarding individual

remuneration for members of the collegial bodies and the heads

of the administration in order to ensure that they would be

consistent with the company’s remuneration policy and the

evaluation of the performance of the persons concerned;

3) review, on a regular basis, the remuneration policy and its

implementation.

There is no remuneration

committee.

5.4. Audit committee.

5.4.1. The key functions of the audit committee are defined in the legal

acts regulating the activities of the audit committee

Yes

The audit committee performs the

functions provided for in the

provisions of the audit committee.

5.4.2. All members of the committee should be furnished with complete

information on particulars of accounting, financial and other operations of

the company. The heads of the company’s administration should inform

the audit committee about the methods of accounting for significant and

unusual transactions where the accounting may be subject to different

approaches.

Yes

The audit committee performs the

functions provided for in the

provisions of the audit committee.

Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council

of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements

of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania.

116

5.4.3. The audit committee should decide whether the participation of the

chair of the management board, the manager of the company, the chief

finance officer (or senior employees responsible for finance and

accounting), the internal and external auditors in its meetings is required

(and, if required, when). The committee should be entitled, when needed,

to meet the relevant persons without members of the management bodies

present.

Yes

No comment

5.4.4. The audit committee should be informed of the internal auditor’s

work program, and should be furnished with internal audit’s reports or

periodic summaries. The audit committee should also be informed of the

work program of the external auditor and should be furnished with report

disclosing all relationships between the independent auditor and the

company and its group.

Yes

No comment

5.4.5. The audit committee should examine whether the company

complies with the applicable provisions regulating the possibility of

lodging a complaint or reporting anonymously his/her suspicions of

potential violations committed at the company and should also ensure

that there is a procedure in place for proportionate and independent

investigation of such issues and appropriate follow-up actions.

Yes

No comment

5.4.6. The audit committee should submit to the supervisory board or,

where the supervisory board is not formed, to the management board its

activity report at least once in every six months, at the time that annual

and half-yearly reports are approved.

Yes

No comment

6. Principle: Prevention and disclosure of conflicts of interest

The corporate governance framework should encourage members of the company’s supervisory and management

bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of

interest related to members of the supervisory and management bodies.

The corporate governance framework should recognise the rights of stakeholders as established by law and

encourage active co-operation between companies and stakeholders in creating the company value, jobs and

financial sustainability. For the purposes of this Principle, the concept “stakeholders” includes investors,

employees, creditors, suppliers, clients, local community and other persons having certain interest in the company

concerned.

Any member of the company’s supervisory and management body should

avoid a situation, in which his/her personal interests are in conflict or may

be in conflict with the company’s interests. In case such a situation did

occur, a member of the company’s supervisory and management body

should, within reasonable time, inform other members of the same

collegial body or the company’s body that has elected him/her, or to the

company’s shareholders about a situation of a conflict of interest, indicate

the nature of the conflict and value, where possible.

Yes

No comment

7. Principle: Remuneration policy of the company

The remuneration policy and the procedure for review and disclosure of such policy established at the company

should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial

bodies and heads of the administration, in addition it should ensure the publicity and transparency of the company’s

remuneration policy and its long-term strategy.

117

7.1.The company should approve and post the remuneration policy on

the website of the company; such policy should be reviewed on a regular

basis and be consistent with the company’s long-term strategy.

Yes

No comment.

7.2.The remuneration policy should include all forms of remuneration,

including the fixed-rate remuneration, performance-based remuneration,

financial incentive schemes, pension arrangements and termination

payments as well as the conditions specifying the cases where the

company can recover the disbursed amounts or suspend the payments.

Yes

The Company is in compliance

with the legislation regulating

labour relations effective in the

Republic of Lithuania. The

remuneration policy comprises

fixed-rate and variable

components of remuneration;

according to the policy, the

variable component of

remuneration is not paid to

executives if the level of

implementation of objectives is

below 100%.

7.3.With a view to avoid potential conflicts of interest, the remuneration

policy should provide that members of the collegial bodies which perform

the supervisory functions should not receive remuneration based on the

company’s performance.

Yes

According to the remuneration

policy, the variable component of

remuneration is not paid to

members of the collegial bodies.

7.4.The remuneration policy should provide sufficient information on the

policy regarding termination payments. Termination payments should not

exceed a fixed amount or a fixed number of annual wages and in general

should not be higher than the non-variable component of remuneration

for two years or the equivalent thereof. Termination payments should not

be paid if the contract is terminated due to inadequate performance.

The remuneration policy defines

termination payments; however, it

does not provide for specific

thresholds of such payments.

7.5.In the event that the financial incentive scheme is applied at the

company, the remuneration policy should contain sufficient information

about the retention of shares after the award thereof. Where remuneration

is based on the award of shares, shares should not be vested at least for

three years after the award thereof. After vesting, members of the

collegial bodies and heads of the administration should retain a certain

number of shares until the end of their term in office, subject to the need

to compensate for any costs related to the acquisition of shares.

Not

applicable

The Company does not anticipate

nor apply schemes according to

which members of collegial bodies

and heads of the administration

are remunerated with shares,

share options, etc.

7.6.The company should publish information about the implementation of

the remuneration policy on its website, with a key focus on the

remuneration policy in respect of the collegial bodies and managers in the

next and, where relevant, subsequent financial years. It should also

contain a review of how the remuneration policy was implemented during

the previous financial year. The information of such nature should not

include any details having a commercial value. Particular attention should

be paid on the major changes in the company’s remuneration policy,

compared to the previous financial year.

Yes

The Company publishes a

remuneration report

118

7.7.It is recommended that the remuneration policy or any major change

of the policy should be included on the agenda of the general meeting of

shareholders. The schemes under which members and employees of a

collegial body receive remuneration in shares or share options should be

approved by the general meeting of shareholders.

Yes

The remuneration policy has been

approved by the general meeting

of shareholders.

8. Principle: Role of stakeholders in corporate governance

The corporate governance framework should recognise the rights of stakeholders entrenched in the laws or mutual

agreements and encourage active cooperation between companies and stakeholders in creating the company value,

jobs and financial sustainability. For the purposes of this Principle, the concept “stakeholders” includes investors,

employees, creditors, suppliers, clients, local community and other persons having certain interest in the company

concerned.

8.1.The corporate governance framework should ensure that the rights

and lawful interests of stakeholders are protected.

Yes

The Company has a collective

agreement concluded.

8.2.The corporate governance framework should create conditions for

stakeholders to participate in corporate governance in the manner

prescribed by law. Examples of participation by stakeholders in corporate

governance include the participation of employees or their

representatives in the adoption of decisions that are important for the

company, consultations with employees or their representatives on

corporate governance and other important matters, participation of

employees in the company’s authorised capital, involvement of creditors

in corporate governance in the cases of the company’s insolvency, etc.

Yes

No comment

8.3.Where stakeholders participate in the corporate governance process,

they should have access to relevant information.

Yes

No comment

8.4.Stakeholders should be provided with the possibility of reporting

confidentially any illegal or unethical practices to the collegial body

performing the supervisory function.

Yes

No comment

9. Principle: Disclosure of information

The corporate governance framework should ensure the timely and accurate disclosure of all material corporate

issues, including the financial situation, operations and governance of the company.

9.1.In accordance with the company’s procedure on confidential

information and commercial secrets and the legal acts regulating the

processing of personal data, the information publicly disclosed by the

company should include but not be limited to the following:

9.1.1. The financial and operating results of the company;

Yes

The information is published in the

Company’s financial statements,

and on websites of the Company

and the stock exchange.

9.1.2. Objectives and non-financial information of the company;

Yes

No comment

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9.1.3. persons holding a stake in the company or controlling it directly

and/or indirectly and/or together with related persons as well as

the structure of the group of companies and their relationships

by specifying the final beneficiary;

Yes

No comment

9.1.4. members of the company’s supervisory and management

bodies who are deemed independent, the manager of the

company, the shares or votes held by them at the company,

participation in corporate governance of other companies, their

competence and remuneration;

Yes

No comment

9.1.5. reports of the existing committees on their composition, number

of meetings and attendance of members during the last year as

well as the main directions and results of their activities;

No comment

9.1.6. potential key risk factors, the company’s risk management and

supervision policy;

Yes

No comment

9.1.7. the company’s transactions with related parties;

Yes

No comment

9.1.8. main issues related to employees and other stakeholders (for

instance, human resource policy, participation of employees in

corporate governance, award of the company’s shares or share

options as incentives, relationships with creditors, suppliers,

local community, etc.);

Yes

No comment

9.1.9. structure and strategy of corporate governance;

Yes

No comment

9.1.10. initiatives and measures of social responsibility policy and anti-

corruption fight, significant current or planned investment

projects.

This list should be deemed as a minimum recommendation, while the

companies are encouraged not to limit themselves to disclosure of the

information specified in this list. This principle of the Code does not

exempt companies from their obligation to disclose information as

provided for in the applicable legal acts.

Yes

No comment

9.2 When disclosing the information specified in paragraph 9.1.1 of

recommendation 9.1, it is recommended that the company which is a

parent company in respect of other companies should disclose

information about the consolidated results of the whole group of

companies.

Yes

No comment

9.3 When disclosing the information specified in paragraph 9.1.4 of

recommendation 9.1, it is recommended that the information on the

professional experience and qualifications of members of the company’s

supervisory and management bodies and the manager of the company

as well as potential conflicts of interest which could affect their decisions

should be provided. It is further recommended that the remuneration or

other income of members of the company’s supervisory and management

bodies and the manager of the company should be disclosed, as provided

for in greater detail in Principle 7.

Yes

No comment

9.4 Information should be disclosed in such a way that neither

shareholders nor investors are discriminated with regard to the manner

or scope of access to information. Information should be disclosed to all

simultaneously.

Yes

The information is published on

websites of the Company and the

Vilnius stock exchange.

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10. Principle: Selection of the company’s audit firm

The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the

audit firm.

10.1. With a view to obtain an objective opinion on the company’s

financial position and financial results, the company’s annual financial

statements and the financial information provided in its annual report

should be audited by an independent audit firm.

Yes

No comment.

10.2. It is recommended that the audit firm would be proposed to the

general meeting of shareholders by the supervisory board or, if the

supervisory board is not formed at the company, by the management

board of the company.

Yes

The Company complies with the

recommendation to have the

candidature for the audit firm to be

proposed to the general meeting of

shareholders by the management

board.

10.3. In the event that the audit firm has received remuneration from the

company for the non-audit services provided, the company should

disclose this publicly. This information should also be available to the

supervisory board or, if the supervisory board is not formed at the

company, by the management board of the company when considering

which audit firm should be proposed to the general meeting of

shareholders.

Yes

Except for translation services, no

services other than the audit of the

financial statements were provided

during the audit.

Within 1 year

After 1 year but not later than 5 years