ENDORSEMENT BY THE RESPONSIBLE PERSONS

07/04/2023

Pursuing Article 22 of the Law on Securities of the Republic of Lithuania and in accordance with the

rules of preparation and submission of periodical and supplementary information, we, the

undersigned – the Chief Executive Officer Dalius Trumpa and the Chief Financial Officer Antanas

Kavaliauskas – approve that to our knowledge the audited financial statements of the year 2022 as

well as annual consolidated financial statements of Rokiskio suris AB for the year 2022, are formed

in accordance with the applicable accounting standards, they are true and show fair assets, obligations,

financial state, profit and cash flows of the Company and total consolidated group. Also, to our best

knowledge both the Company’s annual report and the consolidated annual report make fair overview

of the operations and business development, current state of the company Rokiskio suris AB and the

overall group of Rokiskio suris AB, including description of the main risks and uncertainties.

Chief Executive Officer Dalius Trumpa

Chief Financial Officer Antanas Kavaliauskas

Dokumentą elektroniniu parašu

pasirašė ANTANAS,KAVALIAUSKAS

Data: 2023-04-07 08:27:07

Dokumentą elektroniniu parašu

pasirašė DALIUS,TRUMPA

Data: 2023-04-07 09:26:40

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE COMPANY’S

FINANCIAL STATEMENTS,

CONSOLIDATED ANNUAL REPORT AND

INDEPENDENT AUDITOR’S REPORT

31 December 2022

Translation note:

This version of the accompanying documents is a translation from the original, which was prepared in

Lithuanian language. All possible care has been taken to ensure that the translation is an accurate

representation of the original. However, in all matters of interpretation of information, views or opinions, the

original language version of the accompanying documents takes precedence over this translation.

TABLE OF CONTENTS

CONSOLIDATED AND SEPARATE THE COMPANY’S FINANCIAL STATEMENTS

Income statement

Statement of comprehensive income

Balance sheet

Statement of changes in equity

6-7

Statement of cash flows

Notes to the financial statements

9-52

CONSOLIDATED ANNUAL REPORT

53–144

INDEPENDENT AUDITOR'S REPORT

145–154

ROKIŠKIO SŪRIS AB Approved

CONSOLIDATED AND SEPARATE on _____________2023

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022 MINUTES No._____

(All tabular amounts are in EUR ’000 unless otherwise stated)

Income statement

		Group		Company
	Notes	2022	2021	2022	2021
Sales	5	359,269	253,062	342,529	233,658
Cost of sales	10	(319,381)	(234,435)	(308,064)	(219,356)
Gross profit		39,888	18,627	34,465	14,302
Selling and marketing expenses	6,10	(15,258)	(12,483)	(12,365)	(10,951)
General and administrative expenses	7,10	(11,942)	(5,609)	(9,200)	(3,654)
Other income	8	352	256	1,525	2,038
Other gains/(losses) - net	9	2	174	2	174
Operating profit		13,042	965	14,427	1,909
Finance costs	11	(449)	(369)	(449)	(369)
Profit before income tax		12,593	596	13,978	1,540
Income tax	12	(79)	(43)	(650)	18
Profit for the year		12,514	553	13,328	1,558
Profit for the year attributable to:
Owners of the Company		12,514	553	13,328	1,558
Non-controlling interest		-	-	-	-
		12,514	553	13,328	1,558
Basic and diluted earnings per share	13
(in EUR per share)		0.37	0.02	0.39	0.05

The accompanying notes are an integral part of these annual financial statements.

These financial statements were authorised for issue on 7 April 2023 by the Board of Directors and signed on behalf

of the Board of Directors by the Managing Director and the Finance Director.

Dalius Trumpa Antanas Kavaliauskas

Managing Director Finance Director

ROKIŠKIO SŪRIS AB Approved

CONSOLIDATED AND SEPARATE on _____________2023

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022 MINUTES No._____

(All tabular amounts are in EUR ’000 unless otherwise stated)

Statement of comprehensive income

			Group	Company
	Notes	2022	2021	2022	2021
Profit for the year		12,514	553	13,328	1,558
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurement of post-employment benefit
obligations, net of tax		(44)	-	(143)	-
Gain on revaluation of property, plant and equipment	14	-	-	-	-
Deferred income tax on revaluation	17	-	-	-	-
Other comprehensive income for the year, net of tax		(44)	-	(143)	-
Total comprehensive income for the year		12,470	553	13,185	1,558
Total comprehensive income for the year
attributable to:
Owners of the Company		12,470	553	13,185	1,558
Non-controlling interest		-	-	-	-
		12,470	553	13,185	1,558

The accompanying notes are an integral part of these annual financial statements.

ROKIŠKIO SŪRIS AB Approved

CONSOLIDATED AND SEPARATE on _____________2023

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022 MINUTES No._____

(All tabular amounts are in EUR ’000 unless otherwise stated)

Balance sheet

		Group		Company
		At 31 December		At 31 December
ASSETS	Notes	2022	2021	2022	2021
Non-current assets
Property, plant and equipment	14	82,939	79,056	56,988	54,809
Intangible assets	15	162	203	132	162
Investments in subsidiaries	16	169	169	5,048	5,154
Trade and other receivables	20	827	910	827	910
Loans granted	18	2,213	2,627	2,174	2,585
Current assets		86,310	82,965	65,169	63,620
Inventories	19	72,229	59,030	68,446	55,921
Loans granted	18	2,896	2,984	2,896	3,266
Trade and other receivables	20	56,675	51,711	62,762	53,437
Prepaid income tax		139	548	91	150
Cash and cash equivalents	21	3,401	5,629	1,149	4,511
		135,340	119,902	135,344	117,285
Total assets		221,650	202,867	200,513	180,905
EQUITY
Attributable to owners of the Company
Share capital	22	10,402	10,402	10,402	10,402
Share premium		18,073	18,073	18,073	18,073
Reserve for acquisition of treasury shares	24	10,850	10,850	10,850	10,850
Treasury shares	23	(2,251)	(2,251)	(2,251)	(2,251)
Other reserves	24	25,922	27,102	15,104	16,301
Retained earnings		88,453	78,304	84,486	73,605
Total equity		151,449	142,480	136,664	126,980
LIABILITIES
Non-current liabilities
Borrowings	25	5,950	8,050	5,950	8,050
Deferred income tax liability	17	1,122	3,812	439	2,129
Deferred income	26	2,097	2,190	1,585	1,487
Contract liabilities	31(ii)	2,126	2,356	2,126	2,356
Provisions	28	1,421	683	1,180	307
Current liabilities		12,716	17,091	11,280	14,329
Borrowings	25	24,440	19,344	24,440	19,344
Deferred income	26	399	404	206	211
Trade and other payables	27	30,209	22,864	25,584	19,437
Profit tax payable		2,123	-	2,123	-
Provisions	28	314	684	216	604
		57,485	43,296	52,569	39,596
Total liabilities		70,201	60,387	63,849	53,925
Total equity and liabilities		221,650	202,867	200,513	180,905

The accompanying notes are an integral part of these annual financial statements.

ROKIŠKIO SŪRIS AB Approved

CONSOLIDATED AND SEPARATE on _____________2023

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022 MINUTES No._____

(All tabular amounts are in EUR ’000 unless otherwise stated)

The Company’s statement of changes in equity

Notes

capital

premium

Reserve

for

acquisiti

on of

treasury

Treasury

Other

reserves

Retained

earnings

Total

Balance at 1 January 2021

10,402

18,073

10,850

(2,251)

17,417

74,432

128,923

Profit for the year

1,558

Other comprehensive income for the

year

Total comprehensive income for the

year

1,558

Transfer to retained earnings (transfer of

depreciation of revalued assets and

disposals of revalued assets, net of

deferred income tax)

(1,116)

1,116

Transactions with owners

Dividends

(3,501)

Total transactions with owners for the

year

(3,501)

Balance at 31 December 2021

10,402

18,073

10,850

(2,251)

16,301

73,605

126,980

Profit for the year

13,328

Other comprehensive income for the year

(143)

Total comprehensive income for the

year

13,185

Transfer to retained earnings (transfer of

depreciation of revalued assets and

disposals of revalued assets, net of

deferred income tax)

(1,197)

1,197

Transactions with owners

Dividends

(3,501)

Total transactions with owners for the

year

(3,501)

Balance at 31 December 2022

10,402

18,073

10,850

(2,251)

15,104

84,486

136,664

The accompanying notes are an integral part of these annual financial statements.

ROKIŠKIO SŪRIS AB Approved

CONSOLIDATED AND SEPARATE on _____________2023

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022 MINUTES No._____

(All tabular amounts are in EUR ’000 unless otherwise stated)

The Group’s statement of changes in equity

					Attributable to owners of the Company
				Reserve
				for
				acquisiti
		Share		on of
		capita	Share	treasury	Treasury	Other	Retained
	Notes	l	premium	shares	shares	reserves	earnings	Total
Balance at 1 January 2021		10,402	18,073	10,850	(2,251)	27,716	80,638	145,428
Comprehensive income
Profit for the year		-	-	-	-	-	553	553
Total other comprehensive income for the year		-	-	-	-	-	-	-
Total comprehensive income for the year		-	-	-	-	-	553	553
Transfer to retained earnings (transfer of depreciation of revalued assets and disposals
of revalued assets, net of deferred income tax)	24	-	-	-	-	(614)	614	-
Transactions with owners
Dividends	22	-	-	-	-	-	(3,501)	(3,501)
Total transactions with owners for the year		-	-	-	-	-	(3,501)	(3,501)
Balance at 31 December 2021		10,402	18,073	10,850	(2,251)	27,102	78,304	142,480
Comprehensive income
Profit for the year		-	-	-	-	-	12,514	12,514
Total other comprehensive income for the year		-	-	-	-	-	(44)	(44)
Total comprehensive income for the year		-	-	-	-	-	12,470	12,470
Transfer to retained earnings (transfer of depreciation of revalued assets and disposals
of revalued assets, net of deferred income tax)	24	-	-	-	-	(1,180)	1,180	-
Transactions with owners
Dividends	22	-	-	-	-	-	(3,501)	(3,501)
Total transactions with owners for the year		-	-	-	-	-	(3,501)	(3,501)
Balance at 31 December 2022		10,402	18,073	10,850	(2,251)	25,922	88,453	151,449

The accompanying notes are an integral part of these annual financial statements.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Statement of cash flows

		Group		Company
		Year ended		Year ended
		31 December		31 December
	Notes	2022	2021	2022	2021
Cash flows from operating activities
Cash generated from operations	30	11,909	13,546	4,319	9,541
Interest paid		(449)	(369)	(449)	(369)
Income tax paid		(146)	(43)	(92)	-
Net cash generated from/ operating
activities		11,314	13,134	3,778	9,172
Cash flows from investing activities
Purchases of property, plant and equipment	14	(13,817)	(13,251)	(8,880)	(11,182)
Purchases of intangible assets	15	(18)	(142)	(16)	(133)
Investments in subsidiaries		-	-	-	(100)
Loans granted to employees		(131)	(91)	(137)	(91)
Other loans granted		-	(1,950)	-	(1,950)
Proceeds from sale of property, plant and equipment	30	81	324	81	312
Other loan repayments received		633	1,653	919	1,653
Interest received		221	229	221	229
Dividends received	31	-	-	1,173	1,790
Net cash (used in) investing activities		(13,031)	(13,228)	(6,639)	(9,472)
Cash flows from financing activities
Dividends paid	22	(3,501)	(3,501)	(3,501)	(3,501)
Repayment of borrowings		(2,100)	(350)	(2,100)	(350)
Proceeds from borrowings		5,090	3,740	5,100	3,740
Net cash (used in) financing activities		(511)	(111)	(501)	(111)
Net (decrease) in cash and cash
equivalents		(2,228)	(205)	(3,362)	(411)
Cash and cash equivalents at the beginning of the year	21	5,629	5,834	4,511	4,922
Cash and cash equivalents at the end of the year	21	3,401	5,629	1,149	4,511

The accompanying notes are an integral part of these annual financial statements.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Notes to the financial statements

General information

Rokiškio Sūris AB (“the Company”) is a public limited liability company based in Rokiškis. The Company’s

code is 173057512, address: Pramonės g. 3, LT-42150 Rokiškis, Lithuania.

The Company’s core line of business is the production and trade in fermented cheese, skimmed milk

powder and wide range of other dairy products.

The shares of Rokiškio Sūris AB are quoted on the Baltic Main List (ticket: RSU1L) of Nasdaq Vilnius

stock exchange.

The main shareholders of the Company are disclosed in Note 31.

Antanas Trumpa and Dalius Trumpa are ultimate beneficial owners.

The consolidated group (“the Group”) consists of the Company and five subsidiaries (2021: five

subsidiaries). Information on the Group subsidiaries is presented below:

			Year of		Group’s ownership interest
			acquisition	Main activity	(%) as at 31 December
Subsidiaries					2022	2021
Rokiškio Pienas UAB				Distribution of dairy
			2006	products	100.00	100.00
Rokiškio	Pieno	Gamyba		Production of dairy
UAB			2013	products	100.00	100.00
Jekabpils Piena Kombinats
SIA		2005	-2011	Raw milk collection	100.00	100.00
Kaunata SIA*			2010	Raw milk collection	60.00	60.00
				Production of dairy
DairyHub.LT UAB			2021	products	100.00	100.00

* This subsidiary was not consolidated in the Group’s financial statements as it was not material (see

Note 16).

All the above-listed subsidiaries have been registered in Lithuania, except for Jekabpils Piena Kombinats

SIA and Kaunata SIA which have been registered in Latvia.

The average number of the Company’s employees during the year ended 31 December 2022 was 808

(2021: 829). The average number of the Group’s employees during the year ended 31 December 2022

was 1,291 (2021: 1,326).

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated )

Accounting policies

2.1

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) as adopted by the European Union.

The financial statements have been prepared on a going concern basis and under the historical cost

convention.

Pursuant to the Law on Companies of the Republic of Lithuania, the annual financial statements

prepared by the management must be approved by the general meeting of shareholders. The

shareholders of the Company have a statutory right to approve these financial statements or not to

approve them and to require preparation of a new set of financial statements. The financial year of the

Company and other Group companies coincides with the calendar year.

These financial statements include the consolidated financial statements of the Group and the separate

financial statements of the Company.

The financial statements have been prepared under the historical cost convention as modified for

property, plant and equipment measured at revalued amount.

The principal accounting policies applied in the preparation of these financial statements are set out

below. These policies have been consistently applied to all the years presented unless otherwise

stated.

The preparation of the financial statements in conformity with IFRS requires the use of estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period. Although these estimates are based on management’s best

knowledge of current event and actions, actual results ultimately may differ from those estimates (Note

4).

Amendments to standards and interpretations effective in 2022

a) The following new standards, amendments to standards and interpretations are effective

from 2022, but do not have a significant impact on the Company and the Group:

• Proceeds before intended use, Onerous contracts – cost of fulfilling a contract, Reference to

the Conceptual Framework – narrow scope amendments to IAS 16, IAS 37 and IFRS 3, and

Annual Improvements to IFRSs 2018-2020 – amendments to IFRS 1, IFRS 9, IFRS 16 and

IAS 41 (issued on 14 May 2020 and effective for annual periods beginning on or after 1 January

2022).

• Covid-19-Related Rent Concessions – Amendments to IFRS 16 16 (issued on 31 March 2021

and effective for annual periods beginning on or after 1 April 2021).

b) The following new standards were endorsed, but not yet effective:

• IFRS 17 "Insurance Contracts" (issued on 18 May 2017 and effective for annual periods

beginning on or after 1 January 2023).

• Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective

for annual periods beginning on or after 1 January 2023). IFRS 17 replaces IFRS 4, which has

given companies dispensation to carry on accounting for insurance contracts using existing

practices.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

• Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies

(issued on 12 February 2021 and effective for annual periods beginning on or after 1 January

2023). IAS 1 was amended to require companies to disclose their material accounting policy

information rather than their significant accounting policies.

• Amendments to IAS 8: Definition of Accounting Estimates (issued on 12 February 2021 and

effective for annual periods beginning on or after 1 January 2023). The amendment to IAS 8

clarified how companies should distinguish changes in accounting policies from changes in

accounting estimates.

• Deferred tax related to assets and liabilities arising from a single transaction – Amendments to

IAS 12 (issued on 7 May 2021 and effective for annual periods beginning on or after 1 January

2023). The amendments to IAS 12 specify how to account for deferred tax on transactions

such as leases and decommissioning obligations

and that have not been early adopted by the Company and the Group:

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22

September 2022 and effective for annual periods beginning on or after 1 January 2024).

• Classification of liabilities as current or non-current – Amendments to IAS 1 (originally issued

on 23 January 2020 and subsequently amended on 15 July 2020 and 31 October 2022,

ultimately effective for annual periods beginning on or after 1 January 2024).

The Company and the Group intends to adopt the above-mentioned standards and interpretations as

soon as they become effective.

The Company is currently assessing the impact of the following new standards on its financial

statements.

2.2

Consolidation

(a) Subsidiaries

Subsidiaries are those investees, that the Group controls because the Group (i) has power to direct the

relevant activities of the investees that significantly affect their returns, (ii) has exposure, or rights, to

variable returns from its involvement with the investees, and (iii) has the ability to use its power over

the investees to affect the amount of the investor’s returns. The existence and effect of substantive

rights, including substantive potential voting rights, are considered when assessing whether the Group

has power over another entity. For a right to be substantive, the holder must have a practical ability to

exercise that right when decisions about the direction of the relevant activities of the investee need to

be made. The Group may have power over an investee even when it holds less than the majority of the

voting power in an investee. In such a case, the Group assesses the size of its voting rights relative to

the size and dispersion of holdings of the other vote holders to determine if it has de-facto power over

the investee. Protective rights of other investors, such as those that relate to fundamental changes of

the investee’s activities or apply only in exceptional circumstances, do not prevent the Group from

controlling an investee. Subsidiaries are consolidated from the date on which control is transferred to

the Group (acquisition date) and are deconsolidated from the date on which control ceases.

The group uses the acquisition method of accounting to account for the acquisition of subsidiaries. The

consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,

the liabilities incurred and the equity interests issued by the group. The consideration transferred

includes the fair value of any asset or liability resulting from a contingent consideration arrangement.

Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and

contingent liabilities assumed in a business combination are measured initially at their fair values at the

acquisition date. On an acquisition-by-acquisition basis, the group recognizes any non-controlling

interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the

acquiree’s net assets.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree

and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of

the group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the

fair value of the net identifiable assets of the subsidiary acquired, the difference is recognized directly

in the income statement.

Inter-company transactions, balances and unrealized gains on transactions between group companies

are eliminated. Unrealized losses are also eliminated. Accounting policies of subsidiaries have been

changed where necessary to ensure consistency with the policies adopted by the group.

(b) Transactions and minority interest

The group treats transactions with non-controlling interest as transactions with equity owners of the

group. For purchases from non-controlling interests, the difference between any consideration paid and

the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity.

Gains or losses on disposals to non-controlling interests are also recorded in equity.

When the group ceases to have control or significant influence, any retained interest in the entity is

remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair

value is the initial carrying amount for the purposes of subsequently accounting for the retained interest

as an associate, joint venture or financial asset.

In addition, any amounts previously recognized in other comprehensive income in respect of that entity

are accounted for as if the group had directly disposed of the related assets or liabilities. This may

mean that amounts previously recognized in other comprehensive income are reclassified to profit or

loss.

2.3

Stand-alone financial statements

Subsidiaries in the stand-alone financial statements are accounted at cost less impairment charge. 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 an asset’s ‘fair value less costs of

disposal’ or ‘value in use’. The Company assesses at the end of each reporting period whether there

is any indication that an impairment loss recognised in prior periods for investment in subsidiary may

no longer exist or may have decreased. If any such indication exists, the Company estimates the

recoverable amount of investment and reverses impairment loss, if recoverable amount significantly

exceeds the carrying amount.

2.4

Foreign currency translation

(a) Functional and presentation currency

The items shown in the financial statements of the Company and each entity of the Group are valued

by the currency of the original economic environment wherein a specific company operates (hereinafter

the “functional currency”). These financial statements have been presented in euros (EUR), which is

the Company’s (and the Group’s each entity’s) functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates

prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the

settlement of foreign currency transactions and from the translation at year-end exchange rates of

monetary assets and liabilities denominated in foreign currencies are recognised in the income

statement.

2.5

Property, plant, and equipment

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Property, plant and equipment is shown at revalued amount, based on periodic valuations of assets,

less subsequent accumulated depreciation and impairment.

Property, plant and equipment, except construction in progress, are subject to revaluation with sufficient

regularity to ensure that the carrying amount does not differ materially from that which would be

determined using fair value at the end of the reporting period. Increases in the carrying amount arising

on revaluation of property, plant and equipment are credited to other comprehensive income and shown

as revaluation reserve in shareholders’ equity (other reserves). Decreases in the carrying amount on

subsequent revaluations that offset previous increases of the carrying amount of the same asset are

charged in other comprehensive income and debited against revaluation reserve in equity all other

decreases are charged to the income statement. Increases in the carrying amount on subsequent

revaluations that offset previous decreases of the carrying amount are recognised in the income

statement; all other increases in the carrying amount on revaluation of property, plant and equipment

are recognised in other comprehensive income and added to revaluation reserve in shareholders’

equity. Each year the difference between depreciation based on the revalued carrying amount of the

asset charged to the income statement, and depreciation based on the asset’s original cost is

transferred from revaluation reserve to retained earnings net of deferred income tax.

Subsequent costs are included in the asset’s carrying amount or recognised as separate assets only

when it is probable that future economic benefits associated with the item will flow to the Company or

the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part

is derecognised. All other repairs and maintenance are charged to the income statement during the

financial period in which they are incurred.

Depreciation on property, plant and equipment is calculated using the straight-line method to allocate

their cost to their residual values over their estimated useful lives.

Useful lives of property, plant and equipment are given in the table below:

Buildings	7-75 years
Plant and machinery	2-25 years
Motor vehicles	2-10 years
Equipment and other property, plant and equipment	2-25 years

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

sheet date.

Construction in progress is transferred to appropriate group of property plant and equipment when it is

completed and ready for its intended use.

When property is retired 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.

2.6

Intangible assets

(a) Computer software

Software assets expected to provide economic benefit to the Company and the Group in future periods

are valued at acquisition cost less subsequent amortisation. Software is amortised on the straight-line

basis over the useful life of 1 to 5 years.

(b) Contractual customer relationships

Contractual customer relationships recognized as intangible asset upon business acquisition are

accounted for at cost less accumulated amortization and impairment. Contractual customer

relationships are amortised on the straight-line basis over the estimated useful life of 2 years.

2.7

Impairment of non-financial assets

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Assets that are subject to amortisation or 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 an 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).

2.8

Financial assets

(a) Following the adoption of IFRS 9, Financial Instruments, the Group and the Company classifies its

financial assets into the following 3 new categories:

• financial assets subsequently measured at amortised cost;

• financial assets subsequently measured at fair value through other comprehensive income;

and

• financial assets subsequently measured at fair value through profit or loss.

Subsequent to initial recognition, financial assets are classified into the aforementioned categories

based on the business model the Group and the Company apply when managing their financial assets.

The business model applied to the financial assets of the Group and the Company is determined at a

level that reflects how all financial assets of the Group and the Company are managed together to

achieve a particular business objective of the Group and the Company. The intentions of the Group

and the Company’s management regarding individual items of instruments have no effect on the

adopted business model. The Group and the Company and the Company may adopt more than one

business model to manage its financial assets.

The business model for managing of financial assets is based not merely on an assertion, but also on

facts that are observable in the activities that the Group and the Company and the Company undertakes

in order to achieve the objectives of the business model. In determining the business model applicable

for managing financial assets, the Group and the Company makes its decision in view of not individual

factors or activity, but in view of all evidence that is available in the course of the assessment.

The Group and the Company and the Company recognises a financial asset in its statement of financial

position only when the Group and the Company becomes a party to the contractual provisions of the

instrument. The purchase or sale of financial assets is recognised and derecognised, as applicable,

using trade date accounting.

At initial recognition, the Group and the Company measures financial assets at fair value, except for

trade receivables that do not have a significant financing component. Transaction costs comprise all

charges and commission that the Group and the Company would not have paid if it had not entered

into an agreement on the financial instrument.

If the fair value of the financial asset at initial recognition differs from the transaction price, the difference

is recognised in profit or loss.

In view of the business model applied for managing the Group and the Company of financial assets,

the accounting for financial assets is as follows:

Financial assets measured at amortised cost

Loans granted by the Company and the Group and the Company and amounts receivable are

accounted for under the business model the purpose of which is to hold financial assets in order to

collect contractual cash flows that can contain cash flows related to the payment of the principal amount

and interest inflows.

Loans and amounts receivable are non-derivative financial assets with fixed or determinable payments

that are not quoted in an active market. They are included in current assets, except for maturities

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

greater than 12 months after the end of the date of the Balance sheet. These are classified as non-

current assets.

Loans and receivables are initially recognised at cost (the fair value of consideration receivable) and

subsequently carried at amortised cost using the effective interest rate method. Gains and losses are

recognised in the statement of profit or loss and other comprehensive income when these assets are

derecognised, impaired or amortised.

Financial assets at fair value through profit or loss

The Group and the Company measures financial assets, which are stated at fair value in subsequent

periods, through profit or loss, using the business model whose objective is achieved by both collecting

contractual cash flows and selling financial assets.

The Group and the Company does not have any financial assets held for trading and acquired for the

purpose of selling in the near term and attributes to this category only financial assets arising from the

disposal of business or investments classified as non-equity contingent consideration.

(b) Effective interest method

The effective interest method is used in the calculation of the amortised cost of a financial asset and in

the allocation of the interest income or interest expense in profit or loss over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash inflows through the

expected life of the financial asset to the gross carrying amount of the financial asset that shows the

amortised cost of the financial asset, before adjusting for any loss allowance. When calculating the

effective interest rate, the Group and the Company estimates the expected cash flows by considering

all the contractual terms of the financial instrument (for example, prepayment, extension, call and

similar options) but does not consider the expected credit losses. The calculation includes all fees and

points paid or received between parties to the contract that are an integral part of the effective interest

rate, transaction costs, and all other premiums or discounts.

There is an assumption that the cash flows and the expected life of a Group and the Company of similar

financial instruments can be estimated reliably. However, when it is not possible to reliably estimate

the cash flows or the expected life of a financial instrument (or Group and the Company of financial

instruments), the Group and the Company uses the contractual cash flows over the full contractual term

of the financial instrument (or Group and the Company of financial instruments).

Credit losses incurred by the Group and the Company are calculated as the difference between all

contractual cash flows that are due to the Group and the Company in accordance with the contract and

all the cash flows that the Group and the Company expects to receive (i.e. all cash shortfalls),

discounted at the original effective interest rate. The Group and the Company estimates cash flows by

considering all contractual terms of the financial instrument through the expected life of that financial

instrument, including cash flows from the sale of collateral held or other credit enhancements that are

integral to the contractual terms.

Expected credit losses show the weighted average of credit losses with the respective risks (probability)

of a default occurring as the weights.

Lifetime expected credit losses are the expected credit losses that result from all possible default events

over the period from the date of initial recognition of a financial asset to the subsequent date of

settlement of the financial asset or ultimate write-off of the financial asset.

The Group and the Company seeks for lifetime expected credit losses to be recognised before a

financial instrument becomes past due. Typically, credit risk increases significantly before a financial

instrument becomes past due or other lagging borrower-specific factors (for example, a modification or

restructuring) are observed. Consequently when reasonable and supportable information that is more

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

forward-looking than past due information is available without undue cost or effort, it must be used to

assess changes in credit risk.

Expected credit losses are recognised by taking into consideration individually or collectively assessed

credit risk of loans granted and trade receivables. Credit risk is assessed based on all reasonable and

verifiable information including future oriented information.

The lifetime expected credit losses of trade receivables are assessed based on both the collective and

individual assessment basis. The Group and the Company’s management decides on the performance

of the assessment on an individual basis reflecting the possibility of obtaining information on the credit

history of a particular borrower, its financial position as at the date of assessment, including forward-

looking information that would allow to timely determine whether there has been a significant increase

in the credit risk of that particular borrower, thus enabling making judgment on the recognition of lifetime

expected credit losses in respect of that particular borrower. In the absence of reliable sources of

information on the credit history of a particular borrower, its financial position as at the date of

assessment, including forward-looking information, the Group and the Company assesses the debt on

a collective basis.

The lifetime expected credit losses of trade receivables are recognised at the recognition of amounts

receivable.

When granting the loan the Group and the Company assesses and recognises 12-month expected

credit losses. In subsequent reporting periods, in case there is no significant increase in credit risk

related to the lender, the Group and the Company adjusts the balance of 12-month expected credit

losses in view of the outstanding balance of the loan at the assessment date. Having determined that

the financial position of the lender has deteriorated significantly compared to the financial position that

existed upon the issue of the loan, the Group and the Company records all lifetime expected credit

losses of the loan. The latest point at which the Group and the Company recognises all lifetime

expected credit losses of the loan granted is identified when the borrower is late to pay a periodic

amount or the total debt for more than 30 days. In case of other evidence available, the Group and the

Company accounts for all lifetime expected credit losses of the loan granted regardless of the more

than 30 days past due assumption.

Loans for which lifetime expected credit losses were calculated are considered credit-impaired financial

assets.

(d) Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the

estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is

credit-impaired include observable data about the following events:

a) significant financial difficulty of the borrower;

b) a breach of contract, such as a default or event that is past due for more than 90 days;

c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower's

financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not

otherwise consider;

d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation;

e) the disappearance of an active market for that financial asset because of financial difficulties;

f) the purchase or origination of a financial asset at a deep discount that reflects the incurred credit

losses.

The combined effect of several events that may occur simultaneously or subsequently throughout the

term of validity of the agreement on the financial assets may have caused financial assets to become

credit-impaired.

The lifetime expected credit losses of loans receivable and trade receivables is recognised in profit or

loss through the contra account of doubtful receivables.

The Group and the Company writes off the loans receivable and trade receivables when it loses the

right to receive contractual cash flows from financial assets.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

( e) Derecognition of financial assets

The Group and the Company derecognises financial assets in case of the following:

- the rights to receive cash flows from the asset have expired;

- the Group and the Company has retained the right to receive cash flows from the asset, but has

assumed an obligation to pay them in full without material delay to a third party under a “pass

through” arrangement; or

- the Group and the Company has transferred its rights to receive cash flows from the asset and

either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither

transferred nor retained substantially all the risks and rewards of the asset, but has transferred

control of the asset:

• if the Group and the Company has not retained control, it shall derecognise the financial asset

and recognise separately as assets or liabilities any rights and obligations created or retained

in the transfer;

• if the Group and the Company has retained control, it shall continue to recognise the financial

asset to the extent of its continuing involvement in the financial asset.

Whether the Group and the Company has retained control of the transferred asset depends on the

transferee's ability to sell the asset. If the transferee has the practical ability to sell the asset in its

entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to

impose additional restrictions on the transfer, the Group and the Company has not retained control. In

all other cases, the Group and the Company has retained control.

2.9

Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined by 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, 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.

2.10

Prepayments

Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-

current when the goods or services relating to the prepayment are expected to be obtained after one

year, or when the prepayment relates to an asset which will itself be classified as non-current upon

initial recognition. Prepayments to acquire assets are transferred to the carrying amount of the asset

once the Group has obtained control of the asset and it is probable that future economic benefits

associated with the asset will flow to the Group. Other prepayments are written off to profit or loss

when the services relating to the prepayments are received. If there is an indication that the assets,

goods or services relating to a prepayment will not be received, the carrying value of the prepayment

is written down accordingly and a corresponding impairment loss is recognised in profit or loss for the

year.

2.11

Cash and cash equivalents

Cash and cash equivalents include cash at bank and on hand. Cash and cash equivalents are carried

at AC because: (i) they are held for collection of contractual cash flows and those cash flows represent

SPPI, and (ii) they are not designated at FVTPL. For the purposes of the cash flow statement, cash

and cash equivalents comprise cash on hand and at bank and bank overdrafts. Bank overdrafts are

included in borrowings in current liabilities on the balance sheet.

2.12

Share capital

(a) Ordinary shares

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

shares are shown in equity as a deduction, net of tax, from the proceeds. Any excess of the fair value

of consideration received over the par value of shares issued is recorded as share premium in equity.

(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 the income statement on the sale, issuance or cancellation of treasury shares. Where

such shares are subsequently sold or reissued, any consideration received, net of any directly

attributable incremental transaction costs and the related income tax effects, is presented in the

consolidated financial statements as a change in shareholders’ equity.

2.13

Reserves

(a) Other reserves

Other reserves are established upon the decision of annual general meeting of shareholders on profit

appropriation. This reserve may be used only for the purposes approved by annual general meeting

of shareholders.

Legal reserve is included into other reserves. A legal reserve is a compulsory reserve under the

Lithuanian legislation. Annual transfers of 5 per cent of net profit are required until the reserve reaches

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

established to cover future losses only.

Revaluation reserve is included into other reserves.

(b) Reserve for acquisition of treasury shares

This reserve is maintained as long as the Group is involved in acquisition/disposal of its treasury

shares. This reserve is compulsory under the Lithuanian regulatory legislation and should not be

lower than the acquisition cost of treasury shares acquired.

2.14

Financial liabilities

(a) Financial liabilities

Financial liabilities are classified as subsequently measured at AC, except for (i) financial liabilities at

FVTPL: this classification is applied to derivatives, financial liabilities held for trading (e.g. short

positions in securities), contingent consideration recognised by an acquirer in a business combination

and other financial liabilities designated as such at initial recognition and (ii) financial guarantee

contracts and loan commitments. The Group does not have any financial liabilities at fair value

through profit or loss.

(b) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is settled, cancelled or

expires.

An exchange between the Group and the Company and its original lenders of debt instruments with

substantially different terms, as well as substantial modifications of the terms and conditions of

existing financial liabilities, are accounted for as an extinguishment of the original financial liability

and the recognition of a new financial liability. The terms are substantially different if the discounted

present value of the cash flows under the new terms, including any fees paid net of any fees received

and discounted using the original effective interest rate, is at least 10% different from the discounted

present value of the remaining cash flows of the original financial liability. If an exchange of debt

instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is

not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the

liability and are amortised over the remaining term of the modified liability.

Modifications of liabilities that do not result in extinguishment are accounted for as a change in

estimate using a cumulative catch up method, with any gain or loss recognised in profit or loss, unless

the economic substance of the difference in carrying values is attributed to a capital transaction with

owners.

Financial assets and liabilities are offset and the net amount reported in the consolidated statement

of financial position only when there is a legally enforceable right to offset the recognised amounts,

and there is an intention to either settle on a net basis, or to realise the asset and settle the liability

simultaneously. Such a right of set off (a) must not be contingent on a future event and (b) must be

legally enforceable in all of the following circumstances: (i) in the normal course of business, (ii) in the

event of default and (iii) in the event of insolvency or bankruptcy.

(d) Trade and other payables.

Trade payables are accrued when the counterparty performs its obligations under the contract and

are recognised initially at fair value and subsequently carried at AC using the effective interest

method.

(e) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and are

subsequently carried at AC using the effective interest method.

2.15

Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in the income

statement, except to the extent that it relates to items recognized in other comprehensive income or

directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in

equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively

enacted at the balance sheet date in the countries where the company and its subsidiaries operate

and generate taxable income. Management periodically evaluates positions taken in tax returns with

respect to situations in which applicable tax regulation is subject to interpretation. It establishes

provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Profit is taxable at a rate of 15 per cent in accordance with the Lithuanian regulatory legislation on

taxation. In Latvia distributed profits are taxed at 20% whereas undistributed profits are taxed at 0%

tax rate; deemed profit distributions are taxed at a 20% tax rate (25% effective rate, applying 20/80

to the taxable base).

Deferred income tax is recognised using the liability method on temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the consolidated financial

statements. Deferred tax liabilities are recognised on all temporary differences that will increase the

taxable profit in future, whereas deferred tax assets are recognised to the extent it is probable that

they will reduce the taxable profit in future. However the deferred income tax is not accounted for if it

arises from initial recognition of an asset or liability in a transaction other than a business combination

that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income

tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the

balance sheet date and 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 the temporary differences can be utilised.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Deferred income tax is provided on temporary differences arising on investments in subsidiaries

except where the timing of the reversal of the temporary difference is controlled by the Group and it

is probable that the temporary difference will not reverse in the foreseeable future.

The Group controls the reversal of temporary differences relating to taxes chargeable on dividends

from subsidiaries or on gains upon their disposal. The Group does not recognise deferred tax liabilities

on such temporary differences except to the extent that management expects the temporary

differences to reverse in the foreseeable future.

The Group and the Company determines whether to consider each uncertain tax treatment separately

or together with one or more other uncertain tax treatments based on which approach better predicts

the resolution of the uncertainty. The Group and the Company assumes that the taxation authority will

examine amounts it has a right to examine and will have full knowledge of all related information when

making those examinations. If the Group and the Company concludes it is not probable that the

taxation authority will accept an uncertain tax treatment, the effect of uncertainty will be reflected in

determining the related taxable profit or loss, tax bases, unused tax losses, unused tax credits or tax

rates, by using either the most likely amount or the expected value, depending on which method the

entity expects to better predict the resolution of the uncertainty. The Group and the Company reflects

the effect of a change in facts and circumstances or of new information that affects the judgments or

estimates required by the interpretation as a change in accounting estimate. The absence of

agreement or disagreement by a taxation authority with a tax treatment, in isolation, is unlikely to

constitute a change in facts and circumstances or new information that affects the judgments and

estimates required.

2.16

Employee benefits

(a) Social security contributions

The Group pays social security contributions to the state Social Security Fund (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 Group pays fixed contributions

into the Fund and will have no legal or constructive obligations to pay further contributions if the Fund

does not hold sufficient assets to pay all employees benefits relating to employee service in the

current and prior period. Social security contributions are recognised as expenses on an accrual

basis and are included in payroll expenses.

(b) Termination benefits

Termination benefits are payable whenever an employee’s employment is terminated before the

normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these

benefits. The Group recognizes termination benefits when it is demonstrably committed to either:

terminating the employment of current employees according to a detailed formal plan without possibility

of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary

redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to

present value.

The present value of the defined benefit obligation is determined by discounting the estimated future

cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency

in which the benefits will be paid, and that have terms approximating to the terms of the related

obligation. The net interest cost is calculated by applying the discount rate to the net balance of the

defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit

expense in the statement of profit or loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial

assumptions are recognised in the period in which they occur, directly in other comprehensive income.

They are included in retained earnings in the statement of changes in equity and in the balance sheet.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Changes in the present value of the defined benefit obligation resulting from plan amendments or

curtailments are recognised immediately in profit or loss as past service costs.

The Group recognises a liability and an expense for bonuses and profit-sharing where contractually

obliged or where there is a past practice that has created a constructive obligation.

2.17

Revenue recognition

Revenue is income arising in the course of the Group’s and the Company’s ordinary activities.

Revenue is recognised in the amount of transaction price. Transaction price is the amount of

consideration to which the Group and the Company expects to be entitled in exchange for transferring

control over promised goods or services to a customer, excluding the amounts collected on behalf of

third parties.

Revenue is recognised net of discounts, returns and value added taxes, export duties and other

similar mandatory payments.

The Company and the Group manufactures and sells a range of cheese and milk products in the

wholesale market. Sales are recognised when control of the products has transferred, being when

the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and

price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s

acceptance of the products. Delivery occurs when the products have been shipped to the specific

location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the

wholesaler has accepted the products in accordance with the sales contract, the acceptance

provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been

satisfied.

The goods are often sold with retrospective volume discounts based on aggregate sales over a 12

months period. Revenue from these sales is recognised based on the price specified in the contract,

net of the estimated volume discounts. Accumulated experience is used to estimate and provide for

the discounts, using the expected value method, and revenue is only recognised to the extent that it

is highly probable that a significant reversal will not occur. A refund liability (included in trade and

other payables) is recognised for expected volume discounts payable to customers in relation to sales

made until the end of the reporting period. No element of financing is deemed present as the sales

are made with a credit term of 30 days, which is consistent with market practice.

A receivable is recognised when the goods are delivered as this is the point in time that the

consideration is unconditional because only the passage of time is required before the payment is

due.

Revenue from transportation services is recognised in the period when services are performed.

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

receivable is impaired the Group reduces the carrying amount to its recoverable amount, being the

estimated future cash flow discounted at 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.

2.18

Expense recognition

Expenses are recognised on an accrual basis and matching principle in the reporting period in which

they are incurred. Expenses incurred during the reporting period, which cannot be attributed directly

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

to specific income earned and will not generate any income in subsequent reporting periods, are

recognised as expenses during the period when incurred. Expenses are stated at fair value.

2.19

Dividend distribution

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

statements in the period in which the dividends are approved by the Company’s shareholders.

2.20

Earnings per share

Basic earnings per share are calculated by dividing net profit attributed to the shareholders from

average weighted number of ordinary registered shares in issue, excluding ordinary registered shares

purchased by the Company and the Group and held as treasury shares.

2.21

Segment reporting

Operating segments are reported in a manner consistent with the 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 of

Directors that makes strategic decisions.

The Group’s management distinguished the following operating segments of the Group: hard cheese,

semi-hard cheese, butter, milk cream, sour cream, sour milk, yogurt, curd, curd cheese and other.

These segments were combined into two main reportable segments based on the similar nature of

products production process types of customers and the method of distribution.

2.22

Government grants and subsidies

Government grants are recognised at fair value where there is sufficient evidence that the grant will

be received and the Group and the Company will comply with all attached conditions.

Government grants relating to the purchase of property, plant and equipment are included in non-

current liabilities as deferred income and are credited to profit or loss on a straight line basis over the

expected lives of the related assets.

2.23

Provisions

Provisions for restructuring costs and legal claims are recognised when: the Group and the Company

have a present legal or constructive obligation as a result of past events; it is more likely than not that

an outflow of resources will be required to settle the obligation; and the amount can be reliably

estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of expenditures expected to be required to settle the

obligation using pre-tax rate that reflects current market assessments of the time value of money and

the risks specified to the obligation. The increase in the provision due to passage of time is recognised

as operating expenses.

2.24

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost

using effective interest method.

2.25

Derivative financial instruments

The Company uses derivative financial instruments such as interest rate swaps to hedge its cash flow

interest rate risks. Such derivative financial instruments are initially recognised at fair value on the

date on which a derivative contract is entered into and are subsequently re -measured at fair value.

Changes in the fair value of the interest rate swap are recognised immediately in profit or loss and

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

are included in finance cost. The full fair value of a hedging derivative is classified as a non-current

asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified

as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

The fair value of currency interest rate swaps is calculated as the present value of the estimated

future cash flows based on observable yield curves. Additionally, the instruments’ value is agreed

upon with bank.

All of the resulting fair value estimates are included in level 2 in the fair value hierarchy.

2.26

Events after the reporting period

Post-balance sheet events that provide additional information about the Company’s and Group’s

position at the statement of financial position date (adjusting events) are reflected in the financial

statements. Events after the reporting period that are non-adjusting events are disclosed in the notes

when material.

2.27

Contingent assets and liabilities

Contingent liabilities are not recognised in the financial statements. They are disclosed unless the

possibility of an outflow of resources embodying economic benefits is remote.

A contingent asset is not recognised in the financial statements but disclosed when an inflow of

economic benefits is probable.

2.28

Finance costs

Finance costs represents costs incurred by the Company and the Group from financing activities,

such as interest costs on borrowings.

2.29

Transactions with related parties

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.

Financial risk management

3.1

Financial risk factors

The Group’s and the Company’s activities expose them to a variety of financial risks. The Group’s

overall risk management programme focuses on the unpredictability of financial markets and seeks

to minimize potential adverse effects on the financial performance of the Group.

Risk management is carried out by the Company’s management. There are no written principles for

overall risk management in place.

(a) Market risk

(i) Foreign exchange risk

The Company and the Group operate internationally, however, their exposure to foreign exchange

risk is set at minimum level, since sales outside Lithuania are performed mostly in the euros.

(ii) Cash flow and fair value interest rate risk

The Company’s and the Group’s interest rate risk arises from interest-bearing loans and borrowings.

Borrowings with variable interest rates expose the Group to cash flow interest rate risk. Borrowings

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

with fixed interest rates expose the Group to fair value interest rate risk. In 2022 and 2021, loans

granted by the Group at a fixed interest rate were denominated in the euros. Borrowings were

denominated in the euros.

IBOR reform had no material impact for the Company and Group, as major borrowings are either

EURIBOR linked, or have fixed interest rates, therefore there was no need to transition to alternative

benchmark interest rates. Changes in how EURIBOR is determined (determination has shifted from

a quotes-based to a transactions-based methodology) had no impact on interest rates applied, as for

all EURIBOR linked borrowings three months EURIBOR is subject to a 0% floor. Before and after the

changes in how EURIBOR is determined EURIBOR was negative, therefore 0% floor was applicable

to arrive at interest rate and therefore those changes had no impact on interest rate itself and no

effect on future cash flows. The financial liabilities denominated at EURIBOR based interest rate are

disclosed in Note 25.

Instruments used by the group (Note 25)

The Company and the Group uses Interest rate swap to minimise the risk of interest rate fluctuations.

The interest rate swap currently in place covers approximately 26% (2021: 0%) of the short - term

borrowings interest and 100% of long term interest (2021: 100%).

The swap contract requires settlement of net interest receivable or payable every 30 days. The

settlement dates coincide with the dates on which interest is payable on the underlying debt.

The exposure of variable rate of the Group’s and the Company’s borrowings (amounted to EUR

22,340 (2021: 17,244)) to interest rate changes are as follows, at the year end: in every change of

interest rate amount by 0,1% (100 points), the Group’s and the Company’s interest expense changes

by Eur 22 thousand in 2022 and EUR 17 thousand in 2021.

As at 31 December 2022 the Company’s and the Group’s net assets sensitive to changes in interest

rate amounted to EUR 625 thousand (2021: EUR 625 thousand).

(b) Credit risk

The Group and the Company exposes itself to credit risk, which is the risk that one party to a financial

instrument will cause a financial loss for the other party by failing to meet an obligation.

Exposure to credit risk arises from trade receivables, cash and cash equivalents and as a result of the

Group’s and the Company’s lending and other transactions with counterparties, giving rise to financial

assets and off-balance sheet credit-related commitments.

Credit risk is managed on a group basis. According to internal rules, the Company’s and the Group’s

all cash balances are held at banks that had external credit ratings from ‘A+’ to ‘BBB’, as set by the

rating agency Fitch Ratings.

As at the year end the Group’s cash amounted EUR 1,669 thousand (2021: EUR 4,163 thousand)

and the Company’s cash amounted EUR 548 thousand (2021: EUR 3,958 thousand) were held at

bank with rating AA-, remaining miscellaneous balances were held in banks and payment institutions

with lower ratings or those which were not rated by Fitch.

While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the

identified impairment loss was immaterial.

i) Maximum exposure to credit risk

The table below summarises the Company’s and the Group’s credit risk exposures relating to on-

balance sheet items. Maximum exposure to credit risk before collateral held or other credit

enhancements as at 31 December:

Group

Company

2022

2021

2022

2021

Cash and cash equivalents at banks

3,401

5,629

1,149

4,511

Trade receivables

49,024

46,042

58,503

50,223

Loans granted

5,109

5,611

5,070

5,851

57,534

57,282

64,722

60,585

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

ii) Credit quality of financial assets

The Group does not classify amounts receivable and other financial assets exposed to credit risk

according to credit quality. Credit risk is managed through established credit limits for a major

customers and monitoring of overdue receivables and loans. Credit limits and overdue receivables

are continuously monitored by the Company’s and the Group’s management. There are no significant

concentrations of credit risk, whether through exposure to individual customers, specific industry

sectors and/or regions.

The table below presents credit limits, if management has established for the major customers and

amounts receivable from them before allowance as at 31 December 2022.

	Group	Amount	Company	Amount
	Credit limit	receivable	Credit limit	receivable
Customer A	5,600	5,523	5,600	5,523
Customer B	5,000	4,638	5,000	4,638
Customer C	4,800	4,631	-	-
Customer D	3,600	3,542	3,600	3,542
Customer E	3,000	2,860	3,000	2,860
Customer F	2,960	2,632	2,960	2,632
Customer G	2,400	2,380	2,400	2,380
Customer H	2,500	2,071	2,500	2,071

The table below presents credit limits established for the major customers and amounts receivable

from them as at 31 December 2021.

	Group	Amount	Company	Amount
	Credit limit	receivable	Credit limit	receivable
Customer A	5,500	5,376	5,500	5,376
Customer B	5,000	4,854	5,000	4,854
Customer F	4,345	3,024	-	-
Customer G	2,700	2,610	2,700	2,610
Customer D	2,200	2,104	2,200	2,104
Customer I	2,000	1,531	2,000	1,531
Customer J	1,500	1,500	1,500	1,500
Customer K	1,500	1,443	1,500	1,443

The table below summaries concentration of the loans granted:

	Group		Company
	2022	2021	2022	2021
in excess of EUR 1,000 thousand	3,187	3,187	3,187	3,187
in excess of EUR 500 thousand, but not in excess of EUR 1,000 thousand	687	1,205	690	1,205
not in excess of EUR 500 thousand	1,235	1,220	1,193	1,459
	5,109	5,612	5,070	5,851

Loans in excess of EUR 1,000 thousand were granted to two business entities.

iii) Impairment of financial assets

The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL)

which uses a lifetime expected loss allowance for all trade receivables.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

To measure the expected credit losses, trade receivables have been grouped based on shared

credit risk characteristics and the days past due.

The expected loss rates are based on the payment profiles of sales over a period of 36 month

before 31 December 2022 or 31 December 2021 respectively and the corresponding historical

credit losses experienced within this period. The forward looking analysis lead to the conclusion

that an adjustment of historical loss rates is not necessary.

On that basis, the loss allowance as at 31 December 2022 and 31 December 2021 was determined

as follows for trade receivables grouped (collective model) based on shared characteristics:

Group		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2022	due	past due	past due	past due	past due	past due	Total
Expected loss
rate	0.10%	0.10%	1.00%	1.00%	2.00%	2.00%	-
Gross carrying amount –
trade
receivables	39,797	4,496	1,039	602	396	62	46,392
Loss
allowance	40	4	10	6	8	1	70

Group		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2021	due	past due	past due	past due	past due	past due	Total
Expected loss
rate	0.10%	0.41%	1.82%	-	2.10%	-
Gross carrying amount –
trade
receivables	31,867	9,974	1,044	-	95	-	42,980
Loss
allowance	31	44	19		2		96

Company		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2022	due	past due	past due	past due	past due	past due	Total
Expected loss
rate	0.08%	0.10%	1.00%	1.00%	2.00%	2.00%
Gross carrying amount –
trade
receivables	49,276	4,496	1,039	602	396	62	55,871
Loss
allowance	40	4	10	6	8	1	70

Company		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2021	due	past due	past due	past due	past due	past due	Total
Expected loss
rate	0.12%	0.28%	1.72%	-	2.11%	-
Gross carrying amount –
trade
receivables	32,587	13,436	1,044		95		47,161

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Loss
allowance	37	39	18	2	96

ECL for significant trade receivables overdue for more than 90 days is evaluated individually based on

external information from credit insurance agency, collaterals received as security of repayment and past

history of default. For such trade receivables the loss allowance as at 31 December 2022 and 31 December

2021 was determined as follows:

Group		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2022	due	past due	past due	past due	past due	past due	Total
Gross
carrying
amount –
trade
receivables	186	815	1,358	1,367	1,414	1,278	6,418
						Expected loss rate	57.9%
						Loss allowance	3,716

Group		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2021	due	past due	past due	past due	past due	past due	Total
Gross carrying amount – trade
receivables	1,065	189	459	355	973	1,012	4,053
						Expected loss rate	22%
						Loss allowance	895

Company		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2022	due	past due	past due	past due	past due	past due	Total
Gross carrying amount –
trade
receivables	186	815	1,358	1,367	1,414	1,278	6,418

Expected loss rate

57.9%

Loss allowance

3,716

Company		Less than	More than	More than	More than	More than
31 December	Not yet	30 days	30 days	90 days	180 days	365 days
2021	due	past due	past due	past due	past due	past due	Total
Gross carrying amount – trade
receivables	1,065	189	459	355	973	1,012	4,053
						Expected loss rate	22%
						Loss allowance	895

The Group has followed the three-stage model for impairment of financial assets other than trade

receivables and considered all its loans granted at amortised cost to have Stage 1 (performing)

credit. The ECL model is based on the financial information of the Company’s and the Group’s

debtors and the assessment of collaterals as security of loan repayment. The Company and the

Group carried out an assessment of collaterals as security of loan repayment and determined that

the credit losses determined based on probability of default within 12 months resulted in immaterial

impairment loss.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

The information on loans receivable is disclosed in Note 18.

As at 31 December 2022 debtors collateral placed as security in favor to the Company and the

Group for trade receivables and loans receivable are valued at Eur 5,218 thousand (2021: Eur 2,218

thousand). The collateral consists of certain buildings, land plots and milk cows, no negative

changes in collateral quality observed during both reporting periods.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with

financial liabilities. Prudent liquidity risk management allows maintaining sufficient cash and

availability of funding under committed credit facilities.

The Group had access to EUR 12,660 thousand (2021: EUR 7,756 thousand) undrawn borrowing

facilities at the end of the reporting period expiring within one year.

The table below summarises the Group’s and the Company‘s financial liabilities. The financial

liabilities are classified into relevant maturity groupings based on the remaining period at the balance

sheet to the contractual maturity date. The amounts disclosed in the table are contractual

undiscounted cash flows. Accounts payable and other financial liabilities due within 3 months or less

are equal to their carrying amounts as the impact of discounting is insignificant.

Company	Less than 3	From 3 to 12
At 31 December 2022	months	months	From 1 to 5 years	After 5 years
Borrowings from banks and other financial liabilities	23,015	1,673	6,114	-
Trade payables	21,929	-	-	-
Accrued expenses	1,424
	46,368	1,673	6,114	-

Company	Less than 3	From 3 to 12
At 31 December 2021	months	months	From 1 to 5 years	After 5 years
Borrowings from banks and other financial liabilities	17,769	1,575	8,050	-
Trade payables	16,762	-	-	-
Accrued expenses	614
	35,145	1,575	8,050	-

Group
At 31 December 2022	Less than 3	From 3 to 12	From 1 to 5 years	After 5 years
	months	months
Borrowings from banks and other financial liabilities	25,127	1,598	6,524	-
Trade payables	25,195	-	-	-
Accrued expenses	1,806
	52,128	1,598	6,524	-

Group	Less than 3	From 3 to 12	From 1 to 5 years	After 5 years
At 31 December 2021	months	months
Borrowings from banks and other financial liabilities	17,769	1,575	8,050	-
Trade payables	19,225	-	-	-
Accrued expenses	909

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

37,903

1,575

8,050

3.2

Capital risk management

The Company’s and the Group’s objectives when managing capital are to safeguard the Group’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 Company and the Group define their capital as equity and debt, less cash and cash equivalents.

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

	Group		Company
	2022	2021	2022	2021
Borrowings (Note 25)	30,390	27,394	30,390	27,394
Less: cash and cash equivalents (Note 21)	(3,401)	(5,629)	(1,149)	(4,511)
Net debt	26,989	21,765	29,241	22,883
Shareholders’ equity	151,449	142,480	136,664	126,980
Total capital	178,438	164,245	165,905	149,863

Pursuant to the Lithuanian Law on Companies the authorised share capital of a public company must

be not less than EUR 40 thousand (the authorised share capital of a private company must not be less

than EUR 2.5 thousand) and the shareholders’ equity should not be lower than 50 per cent of the

company’s registered share capital. As at 31 December 2022 and 31 December 2021, the Company

and its subsidiaries registered in Lithuania complied with these requirements.

Under the terms of the major borrowing facilities, the Group is required to comply with the following

financial covenants:

• net Debt/EBITDA ratio no more than 3,

• equity/asset ratio more than 40%

• current borrowings/working capital ratio less than 70%.

The Group has complied with these covenants throughout the reporting period.

3.3

Fair value estimation

Trade payables and trade receivables accounted for in the balance sheet should be settled within a

period shorter than three months therefore it is deemed that their fair value equals to their carrying

amount less impairment. Interest rate on the borrowings received by the Company is subject to

repricing at least every six months therefore it is deemed that their fair value equals their carrying

amount. Companies and Group issued loans fair value disclosed in Note 18. Property, plant and

equipment fair value disclosed in Note 14.

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 three levels of the fair value hierarchy have been defined as follows:

Level 1 includes the fair value of assets which is established based on quoted prices (unadjusted) in

active markets for identical assets.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Level 2 includes the fair value of assets which is established based on other directly or indirectly

observable inputs.

Level 3 includes the fair value of assets which is established based on unobservable inputs.

Critical accounting estimates and judgements

Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss

rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment

calculation, based on the Group’s past history, existing market conditions as well as forward looking

estimates at the end of each reporting period. Details of the key assumptions and inputs used are

disclosed in Note 3.1.

Estimates of useful lives of property, plant and equipment

The estimation of the useful lives of items of property, plant and equipment is a matter of judgment based

on the experience with similar assets. The future economic benefits embodied in the assets are consumed

principally through use. However, other factors, such as technical or commercial obsolescence and wear

and tear, often result in the diminution of the economic benefits embodied in the assets. Management

assesses the remaining useful lives in accordance with the current technical conditions of the assets and

estimated period during which the assets are expected to earn benefits for the Group and the Company.

The following primary factors are considered: (a) the expected usage of the assets; (b) the expected

physical wear and tear, which depends on operational factors and maintenance programme; and (c) the

technical or commercial obsolescence arising from changes in market conditions.

The Company and the Group have old buildings and machinery, where the useful lives are estimated

based on the expected product lifecycles. However, economic useful lives may differ from the currently

estimated as a result of technical innovations and actions of competitors.

Fair value of property plant and equipment

The Company and the Group accounts property plant and equipment at revalued amount based on

periodic valuations performed by independent valuators and Company’s experts. The valuation techniques

involve judgement and are subject to estimation.

At the end of each reporting period, the Company’s and Group’s management update their assessment

of the fair value of each property, taking into account the most recent independent valuations and internal

experts’ analysis.

The fair value estimation methods used to value property plant and equipment is presented in Note 14.

Inventory write-down to net realizable value

The Group and the Company recognise inventory at the lower of cost and net realizable value. The Group

and the Company assess whether the value of inventory recognised at cost is not lower that its net

realisable value based on the historical data and actual results of inventory items sold below cost after

the financial year end. If the recognised inventory write-down to net realisable value was 5 %

higher/lower, the Group’s and the Company’s profit before income tax for the year 2022 would be EUR

274 thousand lower/ higher (2021: EUR 5 thousand, respectively). See Note 19 for more details.

Segment reporting

Operating segments and reportable segments

The Group’s management has distinguished the following operating segments of the Group: hard

cheese, semi-hard cheese, butter milk, cream, sour cream, sour milk, yogurt, curd, curd cheese and

other. These segments were combined into two main reportable segments based on the similar nature

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

of products, production process, types of customers and the method of distribution. From 2022 the Group

has introduced a modified segment structure, redistributing the Other segment into Cheese and other

dairy products segment. These changes were a result of change in management reporting. Due to the

change in the composition of these reportable segments, the Group has re-casted the comparable prior

year figures.

The main two reportable business segments of the Group are as follows:

- Fresh milk products

- Cheese and other dairy products

Transactions between the operating segments are on normal commercial terms and conditions. The

number of segment customers, each generating 10% of total revenue of the segment are:

- Fresh milk products: 2 external customers

- Cheese and other dairy products: 1 external customer

The table below summarizes segment information for the years ended 31 December 2022 and 2021:

		Cheese and other
	Fresh milk products	dairy products	Group
2022
Sales	107,228	276,103	383,331
Inter-segment sales	-	(24,062)	(24,062)
Third party sales	107,228	252,041	359,269
Segment’s gross profit	4,417	35,471	39,888
2021
Sales	86,869	181,386	268,255
Inter-segment sales	-	(15,193)	(15,193)
Third party sales	86,869	166,193	253,062
Segment’s gross profit	8,268	10,359	18,627

Geographical information

The Company’s sales by markets and assets by can be analysed as follows:

	Sales revenue		Total assets		Capital expenditure
	2022	2021	2022	2021	2022	2021
Lithuania	124,814	89,052	200,513	180,905	8,880	11,185
Europe Union countries	180,950	114,944	-	-	-	-
Near East	16,372	3,561	-	-	-	-
North America	3,698	12,279	-	-	-	-
Far East	9,576	4,885	-	-	-	-
Other countries	7,119	8,937	-	-	-	-
	342,529	233,658	200,513	180,905	8,880	11,185

The Group’s sales by markets and assets by location can be analysed as follows:

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Selling and marketing expenses

Group

Company

2022

2021

2022

2021

Transportation services

5,236

4,102

5,036

3,753

Wages and salaries

3,808

3,181

1,793

1,640

Intermediation services

535

331

522

307

Product image creation and advertising

expenses

964

440

176

130

Repair and maintenance

1,026

887

794

806

Depreciation of property, plant and equipment

631

612

577

548

Warehousing services

328

1,080

328

1,080

Customs fees

301

792

301

792

Other expenses

2,429

1,058

2,838

1,895

15,258

12,483

12,365

10,951

General and administrative expenses

Group

Company

2022

2021

2022

2021

Wages and salaries

4,569

2,978

3,424

2,066

Taxes (other than income tax)

Provisions for impairment of loans granted and

doubtful receivables and write-offs of loans

and receivables (reversals) (Note 20)

3,251

Consultations

205

191

150

141

Sales revenue

Total assets

Capital expenditure

2022

2021

2022

2021

2022

2021

Lithuania

127,571

102,037

214,665

197,212

13,709

13,473

Europe Union countries

194,933

121,363

6,985

5,655

109

Near East

16,372

3,561

North America

3,698

12,279

Far East

9,576

4,885

Other countries

7,119

8,937

359,269

253,062

221,650

202,867

13,818

13,476

Sales are allocated based on the country in which the customers are located.

The breakdown of revenue by category:

Group

Company

2022

2021

2022

2021

At point of time - sales of goods

357,666

251,970

336,484

227,499

Over time - services

1,603

1,092

6,045

6,159

359,269

253,062

342,529

233,658

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Depreciation of property, plant and equipment
and amortisation of intangible assets	670	664	528	453
Repairs and maintenance	303	253	270	217
Telecommunications and IT maintenance
expenses	140	131	128	118
Insurance expenses	171	197	156	182
Bank charges	122	117	119	110
Business trips	46	13	44	8
Fines	9	13	1	1
Staff training	62	72	42	53
Membership fees	1	2	-	-
Charity and support	475	339	96	89
Other expenses	1,873	574	957	162
	11,942	5,609	9,200	3,654

Other income

	Group		Company
	2022	2021	2022	2021
Interest income	221	229	221	229
Dividend and other income	131	27	1,304	1,809
	352	256	1,525	2,038

The Company’s other income comprises dividends received from subsidiary Rokiškio Pieno Gamyba

UAB.

Other (losses)/gains

	Group		Company
Result of disposal of property, plant and	2022	2021	2022	2021
equipment	2	174	2	174
	2	174	2	174

10.

Expenses by nature

	Group		Company
	2022	2021	2022	2021
Raw materials and consumables used	256,045	168,571	250,525	160,032
Changes in inventories of finished goods and work in progress	(7,719)	10,631	(7,045)	10,971
Inventory write-down to net realizable value
(Note 19)	(5,480)	(97)	(5,480)	(97)
Wages and salaries including social security
contributions	27,479	22,176	17,895	13,984
Transportation services	14,478	11,476	14,267	11,114
Depreciation (Notes 14)	9,789	8,108	6,555	5,473
Amortisation of the Government grant for property, plant and equipment (Note 26)	(397)	(418)	(206)	(221)

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Intermediation services	535	331	522	307
Repairs and maintenance	7,573	6,311	5,939	4,864
Cost of finished goods resold	352	287	16,628	9,435
Provisions for impairment of loans granted and doubtful receivables and write-offs of loans and receivables (reversals)	2,795	13	2,795	13
Taxes (other than income tax)	570	1,031	548	1,008
Consultations	205	191	150	141
Telecommunication and IT maintenance
expenses	149	142	136	126
Utilities (energy)	27,999	15,581	17,756	8,519
Other Total cost of sales, selling and marketing	12,208	8,193	8,644	8,292
expenses and general and administrative
expenses	346,581	252,527	329,629	233,961

11.

Finance costs

	Group		Company
Interest expenses:	2022	2021	2022	2021
− bank borrowings	449	369	449	369

12.

Income tax

	Group		Company
	2022	2021	2022	2021
Current income tax	(2,185)	(71)	(2,154)	-
Prior year income tax corrections	111	129	(55)	5
Deferred income tax (Note 17)	1 995	(101)	1,559	13
Income tax (expenses)/ benefit	(79)	(43)	(650)	18

The income tax on the Company’s and the Group’s profit before tax differs from the theoretical amount that

would arise when using the basic tax rate as follows:

	Group		Company
	2022	2021	2022	2021
Profit before income tax	12,593	596	13,978	1,540
Tax calculated at a rate of 15% (Note 2.15)	1,889	89	2,097	231
Expenses not deductible for tax purposes	110	95	222	54
Income not subject to tax	(27)	(33)	(203)	(302)
Charity expenses deductible twice for tax
purposes	(127)	(69)	(29)	-
Investment projects relief	(1,766)	(50)	(1,437)	-
Prior year income tax corrections and other	-	11	-	(1)
Income tax expense/(benefit)	79	43	650	(18)

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Expenses not deductible for tax purposes include representation expenses, write-offs, etc. Income not

subject to tax include interest on late payment and insurance benefits received.

The Tax Authorities may at any time during 3 successive years after the end of the reporting tax year carry

out the inspection of book-keeping and accounting records and impose additional taxes or fines (for certain

transactions period is 5 years). The Company‘s management is not aware of any circumstances that might

result in a potential material liability in this respect.

13.

Earnings per share

	Group		Company
	2022	2021	2022	2021
Net profit attributable to shareholders	12,514	553	13,328	1,558
Weighted average number of ordinary shares in issue (thousand)	35,007	35,007	35,007	35,007
Weighted average number of treasury shares
held (thousand)	(861)	(861)	(861)	(861)
Basic earnings/(deficit) per share (EUR per
share)	0.37	0.02	0.39	0.05

The Group has no dilutive potential ordinary shares, therefore, the diluted earnings per share are the same

as basic earnings per share.

14.

Property, plant, and equipment

Company			Motor
		Plant and	vehicles and	Construction
At 1 January 2021	Buildings	machinery	other assets	in progress	Total
Acquisition cost and revalued amount	18,609	86,361	42,043	4,820	151,833
Accumulated depreciation	(7,703)	(62,588)	(32,283)	-	(102,574)
Net book amount	10,906	23,773	9,760	4,820	49,259
Year ended 31 December 2021
Opening net book amount	10,906	23,773	9,760	4,820	49,259
Additions	102	2,026	2,035	7,022	11,185
Disposals	(40)	(15)	(83)	-	(138)
Write-offs	-	(6)	(18)	-	(24)
Transfers from CIP	508	8,131	603	(9,242)	-
Depreciation charge	(574)	(2,913)	(1,986)	-	(5,473)
Closing net book amount	10,902	30,996	10,311	2,600	54,809
At 31 December 2021
Acquisition cost and revalued amount	19,011	96,249	43,631	2,600	161,491
Accumulated depreciation	(8,109)	(65,253)	(33,320)	-	(106,682)
Net book amount	10,902	30,996	10,311	2,600	54,809
Year ended 31 December 2022
Opening net book amount	10,902	30,996	10,311	2,600	54,809
Additions	-	1,767	3,596	3,517	8,880
Disposals	(11)	(1)	(67)	-	(79)

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Write-offs	-	(62)	(5)	-	(67)
Transfers from CIP	1,690	11	192	(1,893)	-
Depreciation charge	(626)	(3,440)	(2,490)	-	(6,555)
Closing net book amount	11,954	29,272	11,538	4,224	56,988
At 31 December 2022
Acquisition cost and revalued amount	20,624	96,412	46,941	4,224	168,201
Accumulated depreciation	(8,670)	(67,140)	(35,403)	-	(111,213)
Net book amount	11,954	29,272	11,538	4,224	56,988

Group			Motor
		Plant and	vehicles and	Construction
	Buildings	machinery	other assets	in progress	Total
At 1 January 2021
Cost or revaluated amount	29,294	122,788	44,298	4,820	201,200
Accumulated depreciation	(11,679)	(81,657)	(34,002)	-	(127,338)
Net book amount	17,615	41,131	10,296	4,820	73,862
Year ended 31 December 2021
Opening net book amount	17,615	41,131	10,296	4,820	73,862
Additions	205	2,318	2,084	8,869	13,476
Disposals	(40)	(15)	(95)	-	(150)
Write-offs	-	(6)	(18)	-	(24)
Transfers from CIP	909	8,613	676	(10,198)	-
Depreciation charge	(1,035)	(4,965)	(2,108)	-	(8,108)
Closing net book amount	17,654	47,076	10,835	3,491	79,056
At 31 December 2021
Cost or revaluated amount	30,364	132,971	45,904	3,491	212,730
Accumulated depreciation	(12,710)	(85,895)	(35,069)	-	(133,674)
Net book amount	17,654	47,076	10,835	3,491	79,056
Year ended 31 December 2022
Opening net book amount	17,654	47,076	10,835	3,491	79,056
Additions	152	2,946	3,925	6,794	13,818
Disposals	(11)	(1)	(67)	-	(79)
Write-offs	-	(62)	(5)	-	(67)
Transfers from CIP	2,137	3,678	247	(6,062)	-
Depreciation charge	(1,118)	(6,085)	(2,586)	-	(9,789)
Closing net book amount	18,813	47,552	12,350	4,224	82,939
At 31 December 2022
Cost or revaluated amount	32,715	136,916	49,388	4,224	223,243
Accumulated depreciation	(13,902)	(89,364)	(37,038)	-	(140,304)
Net book amount	18,813	47,552	12,350	4,224	82,939

On 31 December 2020 the Group and the Company, with the help of independent experts UAB OBER

HAUS Nekilnojamasis Turtas, performed an appraisal of property, plant and equipment (excluding vehicles)

in order to determine its fair value. The Company's and the Group's property, plant and equipment was

revaluated as at 31 December 2020. The valuation of real estate was based on the comparable sales price

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

method by comparing sales prices in Lithuania. The valuation of other categories of assets was based on

the replacement cost method.

The valuation of motor vehicles was conducted by the Group's experts who established the fair value using

the comparable sales price method.

Gain arising on revaluation is disclosed in the tables on the movements in property, plant and equipment

and was recorded under the line item of other comprehensive income. Assets that were evaluated using

the replacement cost method were tested for impairment, as a result of which no indications for possible

impairment were identified.

Building and Motor vehicles and other assets were attributed to Level 2 of fair value hierarchy in 2022 and

2021. Property, plant and equipment within Level 2 was measured using the comparable sales price

method. This method was used for the measurement of real estate, the majority of motor vehicles and

constructions in respect of which sale transactions or offer examples were observable in the market. The

comparable real estate objects were selected due to the similarity with the object being measured with

respect to size, purpose, location, intended use, condition, engineering support and other parameters. The

valuation of real estate required adjustments to reflect differences between the objects being measured and

comparable objects. Comparable objects selected are of the closest possible similarity with the objects

being measured and differences are related only to the location and surroundings, the year of construction

and the total area of the object. The valuation of motor vehicles was based on the supply data. The value

calculated based on at least 2 or 3 comparable inputs was treated as the value of the assets. Comparable

inputs selected were similar to the assets subject to valuation.

Meanwhile Plant and Machinery was attributed to Level 3 of fair value hierarchy. Property, plant and

equipment within Level 3 was measured using the replacement cost method. This method was used for the

measurement of a part of special purpose movable property in respect of which no sale or offer market data

was available. When estimating the value of movable property (plant and machinery) under the cost method

the cost of replacing the item were equated to the acquisition cost of an item (replacement cost model of

the valued item). For the purpose of valuation the impairment (depreciation) was established under the

fragmentation calculation model. When establishing physical obsolescence it was assumed that the value

of property being measured is written off in proportion to the number of years. The assets subject to

valuation were classified into categories in respect of which the useful life up to 30 years depending on the

group of asset was established based on the expert opinion of the valuer. When establishing functional

obsolescence it is assumed that movable property (plant and machinery) produced and sold during the

valuation is of higher efficiency than property already produced or still in the process of production. When

establishing economic obsolescence the valuers assumed that the economic situation was rather stable,

therefore it was acceptable that economic obsolescence is equal to zero percent.

The valuation of movable property was based on the rationale that the asset cannot have no value if it was

used, irrespective of the fact that the asset is fully depreciated for accounting purposes. Therefore, a

possible net book value of the asset was obtained from market data.

As at 31 December 2022 no revaluation of assets was performed as, in management view, no significant

changes in the market and in Group’s and Company’s activities took place during the year, therefore it is

considered that the fair value of the Group‘s and the Company‘s property plant and equipment, adjusted

under the methods described above, did not differ significantly from their carrying amounts. . In 2022, the

Company also had consultations with the property valuer OBER HAUS Nekilnojamasis Turtas UAB, based

on which it was identified that the value of non-current assets of the Company and the Group did not differ

significantly from the fair value of the property in the market .

Revaluation reserve is disclosed in Note 24

Construction in progress items were recently purchased from third parties, therefore their fair value agrees

value in balance sheet.

As at 31 December 2022, the Company’s and the Group’s property, plant and equipment with a carrying

value of EUR 34,440 thousand and EUR 51,743 thousand, respectively (31 December 2021: EUR 25,783

thousand and EUR 40,048 thousand, respectively) was pledged as a security for credit limit agreements.

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Depreciation expenses of property plant and equipment are included in selling and marketing expenses,

general and administrative expenses and cost of sales in the income statement, as well as in work in

progress and finished goods in the balance sheet.

Had no revaluation been performed for property, plant and equipment, the net book amounts of the Group’s

and the Company’s property, plant and equipment would have been as follows as of 31 December 2022

and 2021:

		Structures and		Motor vehicles and Construction in
Company	Buildings	machinery		other assets	progress	Total
At 31 December 2021	7,907	19,314	8,343	2,600		38,164
At 31 December 2022	9,067	17,166	11,303	4,224		41,759

		Structures and		Motor vehicles and Construction in
Group	Buildings	machinery		other assets	progress	Total
At 31 December 2021	10,903	27,649	8,704	3,491		50,747
At 31 December 2022	12,182	28,058	11,841	4,224		56,304

15.

Intangible assets

Company	Computer software
At 1 January 2021
Cost	761
Accumulated amortisation	(724)
Net book amount	37
Year ended 31 December 2021
Opening net book amount	37
Additions	133
Amortisation charge	(8)
Closing net book amount	162
At 31 December 2021
Cost	891
Accumulated amortisation	(729)
Net book amount	162
Year ended 31 December 2022
Opening net book amount	162
Additions	16
Amortisation charge	(46)
Closing net book amount	132
At 31 December 2022
Cost	1,329
Accumulated amortisation	(1,197)
Net book amount	132

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Group	Computer software
At 1 January 2021
Cost	759
Accumulated amortisation	(677)
Net book amount	82
Year ended 31 December 2021
Opening net book amount	82
Additions	145
Amortisation charge	(21)
Closing net book amount	203
At 31 December 2021
Cost	900
Accumulated amortisation	(697)
Net book amount	203
Year ended 31 December 2022
Opening net book amount	203
Additions	18
Amortisation charge	(59)
Closing net book amount	162
At 31 December 2022
Cost	1,462
Accumulated amortisation	(1,300)
Net book amount	162

Amortisation expenses of computer software and other intangible assets are included in general and

administrative expenses in the income statement.

16.

Investments in subsidiaries and other investments

	Group		Company
	2022	2021	2022	2021
Rokiškio Pieno Gamyba UAB (consolidated)	-	-	4,733	4,733
Rokiškio Pienas UAB (consolidated)	-	-	105	105
Jekabpils Piena Kombinats SIA (consolidated)	-	-	3	3
DairyHub.LT UAB (consolidated)	-	-	100	100
Kaunata SIA (not consolidated)	165	165	103	103
Other (accounted at cost)	4	4	4	110
	169	169	5,048	5,154

The Group’s investments in subsidiaries consist of investment in Kaunata SIA. Kaunata SIA was

accounted for at cost in the consolidated and separate financial statements and not consolidated due to

immateriality.

Kaunata SIA, company code 240300369, VAT payer’s code: LV42403003695, address: S. Rogs, Kaunatas

pag. Rezekne novads.

Results of operations for the year ended 31 December 2022 (unaudited) are as follows:

Total assets: EUR 244,505;

Property, plant and equipment: EUR 35,853;

Results of operations: EUR (18,944).

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Core line of business of the subsidiary: collection and realisation of milk. The company is the main supplier

of raw milk to company Jekabpils Piena Kombinats SIA (subsidiary of Rokiškio Sūris AB).

17.

Deferred income tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal

authority. The offset amounts are as follows:

	Group		Company
Deferred income tax assets:	2022	2021	2022	2021
– to be realised after more than 12	913	-	862	-
months
– to be realised within 12 months	1,587	457	985	368
Deferred income tax liabilities:	2,500	457	1,847	368
– to be realised after more than 12	(3,392)	(3,969)	(2,086)	(2,297)
months
– to be realised within 12 months	(230)	(300)	(200)	(200)
	(3,622)	(4,269)	(2,286)	(2,497)
Net deferred tax liability	(1,122)	(3,812)	(439)	(2,129)

The gross movement in deferred income tax liabilities was as follows:

	Group		Company
	2022	2021	2022	2021
At the beginning of the year	(3,812)	(3,711)	(2,129)	(2,116)
Recognised in the income statement	1,995	(101)	1,559	(13)
Recognized directly to equity	602	-	-	-
(correction)
Recognised in other comprehensive income	93	-	131	-
At the end of the year	(1,122)	(3,812)	(439)	(2,129)

The movement in deferred income tax assets and liabilities during the period, without taking into

consideration the offsetting of balances within the same fiscal jurisdiction is as follows:

Company

	Inventory write-	Employee post-	Impairment of
Deferred income	down to net	retirement	amounts
tax assets	realisable value	benefits	receivable	Vacation reserve	Total
At 1 January 2021	224	56	149	148	577
Recognised in the income statement	(209)	-	-	-	(209)
Recognised in other comprehensive income	-	-	-	-	-
At 31 December	15	56	149	148	368
2021

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Recognised in the
income statement	807	23	503	15	1,348
Recognised in other comprehensive income	-	131	-	-	131
At 31 December	822	210	652	163	1,847
2022

Deferred income tax	Revaluation of property,
liabilities	plant and equipment	Total
At 1 January 2021	(2,693)	(2,693)
Recognised in the income statement	196	196
Recognised in other comprehensive income	-	-
At 31 December 2021	(2,497)	(2,497)
Recognised in the income statement	211	211
Recognised in other comprehensive income

At 31 December 2022

(2,286)

Group

					Tax loss,
	Inventory write-	Employee post-	Impairment of		transferable
Deferred income	down to net	retirement	amounts	Vacation	for future
tax assets	realisable value	benefits	receivable	reserve	years	Total
At 1 January 2021	224	56	149	237	-	667
Recognised in the income statement	(209)	-	-	-	-	(210)
Recognised in other comprehensive income	-	-	-	-	-	-
At 31 December
2021	15	56	149	237	-	457
Recognised in the income statement	807	23	503	15	602	1,348
Recognised in other comprehensive income	-	182	-	(89)	-	93
At 31 December
2022	822	261	652	163	602	2,500

Deferred income tax	Revaluation of property,
liabilities	plant and equipment	Total
At 1 January 2021	(4,378)	(4,378)
Recognised in the income statement	109	109
Recognised in other comprehensive income	-	-
At 31 December 2021	(4,269)	(4,269)
Recognised in the income statement	647	647

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Recognised in other
comprehensive income		-
At 31 December 2022	(3,622)	(3,622)

Deferred income tax assets and deferred income tax liabilities were calculated using a tax rate of 15%

(2021: 15%) enacted by the balance sheet date and expected to apply when the related deferred income

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

18.

Loans granted

	Group		Company
	2022	2021	2022	2021
Long-term loans to employees	371	249	332	207
Other long-term loans	1,842	2,413	1,842	2,413
Less: provision for impairment of loans
receivable	-	(35)	-	(35)
Long-term loans, net	2,213	2,627	2,174	2,585
Current portion of loans to employees	66	57	66	54
Other short-term loans granted	2,830	2,927	2,830	3,212
Current portion of long-term loans and short- term loans, net	2,896	2,984	2,896	3,266

Repayment terms of other long-term loans granted ranged between 1 and 5 years. The loans bear average

weighted interest rate of 3,17% (2021: 3.24%). Other loans repayments are secured with pledges of

assets or guarantees.

The fair value of borrowings is attributed to Level 2 in the fair value hierarchy.

The fair value of loans granted approximated their carrying amount.

Information on loans receivable that were past due as at 31 December is provided in the table below:

	Group		Company
	2022	2021	2022	2021
Loans granted not past due	5,109	5,611	5,070	5,851
Impaired loans granted	-	35	-	35
Gross value of loans granted	5,109	5,646	5,070	5,886
Less: Provision for impairment of loans
receivable	-	(35)	-	(35)
Net amount	5,109	5,611	5,070	5,851

19.

Inventories

	Group		Company
	2022	2021	2022	2021
Raw materials	3,321	3,023	1,475	1,477
Work in progress	14,594	8,154	14,357	7,816
Finished products	57,651	45,940	56,570	45,044
Other inventories	2,143	2,010	1,524	1,681
Total inventories at cost	77,709	59,127	73,926	56,018

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Less: inventory write-down to net realizable
value	(5,480)	(97)	(5,480)	(97)
Total inventories	72,229	59,030	68,446	55,921

As at 31 December 2022 and 2021 inventories were not pledged.

The Company’s inventories as at 31 December 2022: 58,8 tons of butter (2021: 0 tons) and 506 tons milk

sugar (2021:0 tons) held with third parties in Lithuania, 183,9 tons of hard cheese (2021: 21 tons) held in

the USA, 0 tons of hard cheese (2021:875 tons) held in Lithuania and 0 tons of hard cheese (2021: 2,5

tons) in the warehouses based in the European Union. The total value of these inventories is EUR 1,583

thousand (2021: 3,352 thousand).

The Company and the Group have to maintain comparably high level of hard cheese levels due to

technological process i.e., before selling this type of cheeses to customers, it is needed to mature them for

period from 6 month to 2 years. The Company does not have long-term contracts with customers to be able

to fix sales price.

At the year 2022 end cheese and other dairy product markets suffered a rapid slowdown in EU territory,

where the Group and the Company are selling the majority of its production. Because of that, the

management have significantly reduced the sales prices of hard cheeses and butter. Until the date of

approval of these financial statements the markets did not recovered. Consequently, the management had

to establish inventory write down to the net realizable value of EUR 5,480 thousand. Furthermore, if hard

cheese and butter prices go down by another 10 percent, the write-down amount should increase by

approximately EUR 2,4 million (if take year-end inventory quantities).

20.

Trade and other receivables

	Group		Company
Non-current receivables	2022	2021	2022	2021
Prepayments for non-current assets	562	236	562	236
Prepayments for milk supply	265	674	265	674
Current receivables	827	910	827	910
Trade receivables	49,024	46,042	58,503	50,223
VAT receivable	4,972	2,916	2,948	1,457
Prepayments for milk supply	1,851	1,800	1,014	811
Other prepayments and deferred expenses	828	953	297	946
	56,675	51,711	62,762	53,437

As at 31 December 2022 the Group’s and the Company’s trade receivables and claim rights to future trade

receivables were pledged as collateral respectively for amount not larger than EUR 20,000 thousand (2021:

no larger than EUR 20,000 thousand).

At 31 December 2022 and 2021 prepayments for milk supply were granted with repayment terms ranging

between 1 month and 4 years. The annual interest rate ranged between 1,1% and 6%. Majority part of

prepayments for milk supply were secured with pledges of assets (land, building) of the farmers. Most of

prepayments for milk supply are repaid not in the form of money but are offset with amounts payable for

raw milk purchases from farmers, therefore they do not meet criteria for the financial assets.

In view of the deterioration of the economic situation of certain farmers, an impairment provision was

established for certain prepayments for milk supply. As at 31 December 2022 and 2021, it amounted,

respectively, to EUR 561 thousand and EUR 340 thousand.

The information on credit quality of receivables as at 31 December 2022 is provided in Note 3.1. (b). +

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Movement in impairment during the financial year for trade receivables under contracts with clients:

	Group		Company
	2022	2021	2022	2021
In the beginning of the reporting period	991	991	991	991
Bad debts reversal during the year	-	-	-	-
Recognized impairment during the year	2,795	-	2,795	-
At the end of the reporting period	3,786	991	3,786	991

Certain EU customers of The Group suffered significant financial losses during the year 2022, because of

dairy product prices fluctuations, i.e. rapid price increase in beginning of the year, when they were not able

to increase their sales prices to customers and then rapid decrease of their sales prices at the end of the

year, when they suffered some losses from sales. Consequently the customers informed management that

they will not be able to fulfill their obligations to the Group. Based on their financial position and information

received from credit agencies, the management decided to recognize EUR 2,795 thousand impairment

allowance on receivables from those 2 customers.

The Group received no collaterals as a security for impaired amounts receivable.

21.

Cash and cash equivalents

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Cash at bank and on hand	3,401	5,629	1,149	4,511
	3,401	5,629	1,149	4,511

As at 31 December 2022, cash at bank balances pledged amounted to EUR 688 thousand (31 December

2021: EUR 4,054 thousand).

For the purposes of the cash flow statement, cash and cash equivalents comprise as follows:

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Cash at bank and on hand	3,401	5,629	1,149	4,511
	3,401	5,629	1,149	4,511

22.

Share capital

As at 31 December 2022, the authorized capital of the Company amounted to 35,867,970 ordinary

registered shares with a par value of EUR 0.29 per share. All shares are fully paid. The total amount of

the authorized capital is EUR 10,401,711. During 2022 there were no changes in the Company's

authorized capital.

Dividends

Dividends declared at the Company for the year 2021 were paid out in 2022 in the amount of EUR 0.10

per share (other than treasury shares) and in total amount of EUR 3,501 thousand (2021: EUR 3,501

thousand) (when par value of each share equals EUR 0.29 (2021: EUR 0.29)).

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

23.

Treasury shares

		2022		2021
	Number	Amount	Number	Amount
At the beginning of the year	861,274	(2,251)	861,274	(2,251)
Treasury shares acquired	-	-	-	-
	861,274	(2,251)	861,274	(2,251)

Treasury shares purchased through the official bidding market of Nasdaq Vilnius stock exchange.

24.

Other reserves and reserve for acquisition of treasury shares

Reserve for acquisition of treasury shares

Total reserve for acquisition of own shares was EUR 10,850 thousand as at 31 December 2022. During

2022 the reserve for acquisition of own shares was not increased and amounted to EUR 10,850 thousand

as at 31 December 2021.

Other reserves

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Non-distributable reserve	1,975	1,975	1,113	1,113
Revaluation reserve	23,947	25,127	13,991	15,189
	25,922	27,102	15,104	16,301

Non-distributable reserves (legal reserves) of Rokiškio Sūris AB, Rokiškio Pieno Gamyba UAB and

Rokiškio Pienas UAB can only be used to cover future operating losses, if any.

Revaluation reserve represents an increase in the value of property, plant and equipment as a result of

its revaluation. This reserve may not be used to cover losses. Movements in revaluation reserve are given

in the table below:

	Revaluation	Deferred	Revaluation
Company	reserve	income tax	reserve net of tax
At 1 January 2021	18,998	(2,694)	16,305
Depreciation of revalued amount of PP&E and disposals and write-offs of revalued assets	(1,313)	197	(1,116)
At 31 December 2021	17,685	(2,497)	15,189
Depreciation of revalued amount of PP&E and disposals and write-offs of revalued assets	(1,408)	211	(1,197)
At 31 December 2022	16,277	(2,286)	13,991

	Revaluation	Deferred	Revaluation
Group	reserve	income tax	reserve net of tax
At 1 January 2021	30,119	(4,378)	25,741
Depreciation of revalued amount of PP&E and disposals and write-offs of revalued assets	(723)	109	(614)
At 31 December 2021	29,396	(4,269)	25,127

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Depreciation of revalued amount of PP&E and
disposals and write-offs of revalued assets	(1,827)	647	(1,180)
At 31 December 2022	27,569	(3,622)	23,947

25.

Borrowings

	Group		Company
Non-current	2022	2021	2022	2021
Non-current borrowings	5,950	8,050	5,950	8,050
Current
Current borrowings	24,440	19,344	24,440	19,344
Total borrowings	30,390	27,394	30,390	27,394

The Company’s and the Group’s current borrowings – credit line granted by SEB Bankas. Interest rate

for EUR 5,950 thousand non-current borrowings is fixed, interest rate for current borrowings is Euribor

plus margin at market level.

The Group acquired IR/SWAP and fixed entire amount of non-current borrowings interest rate for entire

period of the loan. The fair value of the derivative is EUR 475 thousand as at 31 December 2022 (2021:

(55) thousand).

Under the loan agreements signed with the banks, certain property, plant and equipment (Note 14),

inventories (Note 19), trade receivables (Note 20) and cash balances in bank accounts (Note 21) were

pledged as collateral.

The carrying amounts of the Group’s and the Company’s borrowings are denominated in Euro only.

The fair value of borrowings does not materially differ from the carrying amount.

Net debt Reconciliation

		Group		Company
		2022	2021	2022	2021
Cash and cash equivalents	21	3,401	5,629	1,149	4,511
Credit line		(22,340)	(17,244)	(22,340)	(17,244)
Borrowings (excluding credit line)		(8,050)	(10,150)	(8,050)	(10,150)
Net debt		(26,989)	(21,765)	(29,241)	(22,883)

As at 31 December 2022, the balance not withdrawn under the committed credit line facilities with the

banks amounted to EUR 12,660 thousand (2021: EUR 7,756 thousand) for the Company and the Group.

The Group was not in breach of the set borrowing limits or financial covenants (Note 3.2).

26.

Deferred income

Group		Company
2022	2021	2022	2021

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Government grants at the beginning of the	2,594	3,021	1,698	1,918
year
Government grants recognised	299	-	299	-
Recognised in the income statement	(397)	(427)	(206)	(220)
	2,496	2,594	1,791	1,698
Less: non-current portion	(2,097)	(2,190)	(1,585)	(1,487)
Current portion	399	404	206	211

Deferred government grant is related to acquisition of property, plant and equipment using the European

Union funds and the funds of the Lithuanian Government under the SAPARD, Rural Development

Programme and other programmes. The Company has no obligation to repay or otherwise refund the

grants received unless it breaches the contractual provisions contained in the agreements with the

grantors.

27.

Trade and other payables

	Group		Company
	2022	2021	2022	2021
Trade payables	25,195	19,225	21,929	16,762
Salaries, social security contributions and taxes	2,178	1,595	1,395	979
Advance amounts received and other payables	1,030	1,135	836	1,082
Accrued expenses	1,806	909	1,424	614
	30,209	22,864	25,584	19,437

28.

Provisions

	Group		Company
	2022	2021	2022	2021
Non-current
Non-current provisions	1,421	683	1,180	307
Current
Current provisions	314	684	216	604
Total provisions	1,735	1,367	1,396	911

Employee benefit obligations

	Group		Company
	2022	2021	2022	2021
At the beginning of the year	1,367	1,367	911	911
Recognized in other comprehensive income –
remeasurement loss from change in demographic assumptions	212	-	329	-
Recognized in profit or loss – interest
expense	156	-	156	-
At the end of the year	1,735	1,367	1,396	911

The Company’s and the Group’s current and non-current provisions consists of provisions for payments

at the day of retirement calculated in accordance with the legal acts of the Republic of Lithuania. The

amount of the benefit equals to 2 monthly average salary amounts (calculated on last 3 month of service

salary amounts). The amount does not depend on service years. The sensitivity of the defined

obligation to changes in the weighted principal assumption is:

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

		Impact on defined obligation
		Change of assumption	Increase in		Decrease in
			assumption		assumption
	2022	2021	2022	2021	2022	2021
Discount rate	0.5 %	0.5 %	-5%	5%	5,29%	5,29%
Salary growth rate	0.5 %	0.5 %	5%	5%	-5%	5%

The above sensitivity analyses are based on a change while holding all other assumptions constant.

The methods of assumptions used did not change compared to prior period.

29.

Contingent liabilities and commitments

Contingent liabilities

As at 31 December 2022 and 2021, no guarantees were granted to third parties on behalf of the Group

and the Company.

Capital expenditure commitments

As at 31 December 2022 and 2021, there were no capital expenditure contracted for property, plant and

equipment at the balance sheet date but not recognised in the financial statements.

Assets pledged as collateral to the bank are disclosed in Notes 14, 20 and 21.

30.

Cash flows from operating activities

Reconciliation of profit before income tax to cash generated from operating activities:

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Net profit (loss) before income tax	12,593	596	13,978	1,540
Adjustments for:
-depreciation (Note 14)	9,789	8,108	6,555	5,473
-amortisation (Note 15)	59	21	46	8
-write-off of property, plant and equipment and intangible assets (Notes 14 and 15)	66	23	66	23
-loss/(profit) on disposal of property, plant and equipment (Note 9)	(2)	(174)	(2)	(174)
-interest expense (Note 11)	449	369	449	369
-interest income (Note 8)	(221)	(229)	(221)	(229)
-amortisation of loans	(230)	(230)	(230)	(230)
-inventory write-down to net realisable value
(reversal)	5,383	(1,395)	5,383	(1,395)
-impairment for doubtful receivables and write- offs of bad debts	3,214	-	3,214	-
-accrual for vacation reserve and bonuses	808	-	808	-
-amortisation of government grants received
(Note 26)	(397)	(427)	(206)	(221)

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

-dividend income	-	-	(1,173)	(1,790)
Changes in operating assets and liabilities:
-trade and other receivables	(7,446)	(10,233)	(12,051)	(11,014)
-inventories	(18,582)	11,928	17,908)	12,269
-prepayments for milk supply	(10)	(726)	(10)	(297)
-trade and other payable	6,436	5,914	5,621	5,209
Net cash generated from/(used in) operating
activities	11,909	13,546	4,319	9,541

For the purpose of the cash flow statement, proceeds from disposal of property, plant and equipment

comprised as follows:

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Net book amount (Note 14)	79	150	79	138
Profit/(Loss) on disposal of property, plant and equipment (Note 9)	2	174	2	174
Proceeds from sale of property, plant and equipment	81	324	81	312

31.

Related-party transactions

Main shareholders of the Company:

	At 31 December
	2022	2021
Antanas Trumpa (Chairman of the Board of the Company)	19.76%	19.76%
Pieno Pramonės Investicijų Valdymas UAB (established in Lithuania)*	27.21%	27.21%
RSU Holding SIA (established in Latvia)*	24,96%	24,96%
Fonterra (Europe) Coöperatie U.A.	10.00%	10.00%
Other shareholders (legal entities and natural persons)	18.07%	18.07%

* Pieno Pramonės Investicijų Valdymas UAB is controlled by Mr Antanas Trumpa (as a principal

shareholder holding 73.84% of the share capital and votes of Pieno Pramonės Investicijų Valdymas UAB).

RSU Holding SIA is controlled by Mr Dalius Trumpa (as a single shareholder holding 92% of the share

capital and votes of RSU Holding SIA). The group of persons acting in concert holds in total 81.93% (2021:

82.17%) of the Company’s share capital and votes.

Members of the Board of Directors of Pieno Pramonės Investicijų Valdymas UAB, RSU Holding SIA,

Fonterra (Europe) Coöperatie U.A., and Rokiškio Sūris AB and their family members are treated as related

parties. All Fonterra group companies are also treated as related parties.

Certain cooperative societies engaged in the production of milk are treated as related parties of the

Company because the Company can exercise a significant influence over daily activities of these

cooperative societies through close family members of its directors and certain employees.

(i) The following transactions were carried out with related parties:

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Purchase of milk from other related parties	6,946	3,156	62,371	38,559
Purchase of non-current assets	-	-	-	-
Purchase of inventory	-	-	13,148	7,883
Purchases of services	344	134	3,269	1,650
Sales of transportation services to other related
parties	42	42	1,515	4,796
Sales of production and other inventories	27,287	15,245	83,717	71,845
Interest charges on credit facility	11	20	19	74

In order to properly indicate the internal turnover of Rokiškio Sūris AB, Rokiškio Pienas UAB, and Rokiškio

Pieno Gamyba UAB, the management of the Group has decided that raw materials used in the production

of exported products of Rokiškio Sūris UAB will be bought at a zero price, while the production generated

by Rokiškio Pienas UAB and Rokiškio Pieno Gamyba UAB will be sold as a service, i.e. excluding the

value of raw materials.

Transactions related to the purchase of milk, acquisition of non-current assets and inventories, purchase

and sale of services and goods with related parties are carried out under normal market conditions,

including Fonterra group companies.

(ii) Year-end balances arising from transactions with related parties:

	Group		Company
	At 31 December		At 31 December
Non-interest bearing loans granted to directors (and	2022	2021	2022	2021
their family members)	4	8	4	8
Current loan receivable from Jekabpils Piena
Kombinats SIA	-	-	-	284
Current loan receivable from Dzūkijos Pienas KB	298	298	298	298
Advance payment received from Fonterra (Europe)
Coöperatie U.A – non current	2,126	2,356	2,126	2,356
Advance payment received from Fonterra (Europe)
Coöperatie U.A –current	230	230	230	230
Trade payables to other related parties	1,499	1,144	4,317	3,597
Trade receivables from other related parties	1,519	1,659	22,237	13,370

In 2012 the agreement was signed with Fonterra (Europe) Coöperatie U.A. for the purpose of financing the

acquisition of certain production facilities and improvement of certain production lines. Together with the

financing agreement the Company signed long term sales agreement, where the Company committed to

produce by the above mentioned production lines the agreed quantity of certain products and sell it to

Fonterra (Europe) Coöperatie U.A., while Fonterra (Europe) Coöperatie U.A. committed to purchase them.

According to the financing agreement the prepayment received is amortised in equal parts until 2033, if the

Company is fulfilling its obligations under the sales agreement. The total value of sales of products related

to the advance payment is EUR 24,055 thousand for the year 2022 (2021: EUR 14,468 thousand).

The Company accounted both agreements as single performance obligation, since the products developed

and sold and financing services received by the purchaser are not distinct.

By the decision of the Shareholder of Rokiškio Pieno Gamyba UAB, it was decided to approve and allocate

dividends in the amount of EUR 1,172,742 (2021: EUR 1,790,076). Dividends were paid out to Rokiškio

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

Sūris AB in May 2022 and 2021 respectively. Dividends were declared to the shareholders of the Company

in the amount of EUR 3,501 thousand (2021: EUR 3,501 thousand) and paid out in 2022 (Note 22).

(iii) Compensation of key management personnel

	Group		Company
	At 31 December		At 31 December
	2022	2021	2022	2021
Salaries	243	227	225	211
Bonuses/management bonuses paid	17	-	17	-
Accrual (reversal) for management bonuses	-	-	-	-
Social security contributions	4	4	4	4
	264	231	246	215

Key management personnel include 10 (2021: 9) members of the Board and management officers.

33.

Impact of COVID-19 virus on the Group's and company’s activities

The operations of the Group and the Company returned to the normal level of operations as it was before

the pandemic. In the opinion of the Group's management, the current restrictions do not have a significant

impact on the Group's and the Company’s sales, production volumes or financial position.

34.

Impact of war in Ukraine

On 24 February 2022 the Russian Federation started a war in eastern Ukraine, which was condemned

by the World. The economic and financial sanctions were imposed on Russian regime. Management of

the Group has assessed the possible consequences of these sanctions and the effect of the war for the

financial results to the Companies of the Group should not be significant.

During the year 2022 the Group’s and the Company’s sales of milk products to the clients in Russia,

Belarus and Ukraine totaled EUR 2,600 EUR thousand – 0.7 percent of total sales (2021: 7,169 thousand

– 2.8 percent).

As at 31 December 2022 there were no accounts receivable from companies in Russia, Belarus and

Ukraine (2021: EUR 1,531 thousand).

32.

Services rendered by the audit firm

Presented below are all services rendered by the audit firm to the Group / the Company (in EUR

thousands):

	Group		Company
	At 31 December		At 31 December
Audit of the financial statements under the	2022	2021	2022	2021
agreement	58	47	37	30
Tax consultation services	20	20	13	13
	78	67	50	43

ROKIŠKIO SŪRIS AB

CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022

(All tabular amounts are in EUR ’000 unless otherwise stated)

The management of the Group carefully monitors the situation in Ukraine and the sanctions imposed in

order to comply. However, based on Group’s Management evaluation, the current situation does not affect

the Group’s ability to continue as a going concern.

35.

Environmental, Social and Governance (ESG) matters - Consideration of climate change and

resulting climate related risks

The Group is continuously assessing climate related risks and their impact on the Group’s operation,

including the physical risks of climate change (such as severe weather events and the effects of rising

temperatures), the policy changes and economic consequences of efforts being made towards

decarbonisation of the economy. Further disclosure how the Group’s operations are impacted by the

climate related risks is provided in the Group’s Social responsibility report and Sustainability report.

For the identified climate related risks, the Group has assessed their impact on the

recognition/derecognition of assets and liabilities and measurement of such assets and liabilities as well.

As at date of preparing financial statements the Group’s management did not identify any material maters

that could materially affect assets, liabilities or it’s measurement or require additional disclosures in the

financial statements, in addition as disclosed in above mentioned reports.

36.

Events after the reporting period

On 27 February 2023, amendments to the Credit Agreement were signed with AB SEB bankas, increasing

the credit limit to EUR 50,100 thousand and extending the final maturity of the credit limit to 28 February

2024.

The Company's assets previously pledged in favour of the Bank were extended to secure the repayment

of the loan.

 
 
 

 
 
 
 
 
CONTENTS 
MESSAGE FROM THE CEO ............................................................................................................................................................................................................ 56 
GENERAL INFORMATION ............................................................................................................................................................................................................. 57 
REPORTING PERIOD FOR WHICH THE ANNUAL REPORT IS PREPARED ......................................................................................................................... 57 
BASIC INFORMATION ABOUT THE ISSUER: ......................................................................................................................................................................... 57 
INFORMATION ABOUT THE COMPANY'S GROUP OF COMPANIES .................................................................................................................................. 57 
NATURE OF THE PRINCIPAL ACTIVITIES OF THE COMPANY AND GROUP ................................................................................................................... 58 
GROUP STRATEGY AND OBJECTIVES .................................................................................................................................................................................... 59 
HIGHLIGHTS OF THE REPORTING PERIOD ........................................................................................................................................................................... 59 
SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL YEAR ................................................................................................................................. 62 
INFORMATION ON THE COMPANY'S AND GROUP'S ACTIVITIES ......................................................................................................................................... 62 
GROUP OPERATING ENVIRONMENT ...................................................................................................................................................................................... 62 
GROUP SALES ............................................................................................................................................................................................................................. 67 
PRODUCTS, BRANDS AND ACHIEVEMENTS ....................................................................................................................................................................... 70 
RISK FACTORS AND RISK MANAGEMENT ........................................................................................................................................................................... 72 
ENSURING BUSINESS CONTINUITY OF ROKIŠKIO SŪRIS AB AND MANAGING COVID-19 RISKS ................................................................................. 80 
INFORMATION ON FINANCIAL RISK MANAGEMENT OBJECTIVES AND HEDGING INSTRUMENTS USED ........................................................... 81 
KEY FEATURES OF INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS RELEVANT TO THE PREPARATION OF THE CONSOLIDATED 
FINANCIAL STATEMENTS ............................................................................................................................................................................................................ 81 
FOOD SAFETY AND QUALITY ............................................................................................................................................................................................... 82 
ENVIRONMENT ......................................................................................................................................................................................................................... 84 
RESEARCH AND DEVELOPMENT ACTIVITIES .................................................................................................................................................................... 86 
FINANCIAL PERFORMANCE ................................................................................................................................................................................................... 87 
ADDITIONAL NON-FINANCIAL INFORMATION ....................................................................................................................................................................... 91 
DISCLOSURE OF SUSTAINABILITY-RELATED INFORMATION ............................................................................................................................................. 91 
GROUP ACTIVITY BY SEGMENT ........................................................................................................................................................................................... 91 
INVESTMENTS .......................................................................................................................................................................................................................... 92 
GROUP BUSINESS PLANS AND FORECASTS ....................................................................................................................................................................... 93 
INFORMATION ON THE COMPANY'S SHAREHOLDERS AND SHARES ......................................................................................................................... 93 
INFORMATION ON THE COMPANY'S SHARE CAPITAL ..................................................................................................................................................... 93 
COMPANY CONTRACTS WITH BROKERAGE FIRMS ......................................................................................................................................................... 94 
DETAILS OF TRADING IN THE ISSUER'S SECURITIES ON REGULATED MARKETS .................................................................................................... 94 
RESTRICTIONS ON TRANSFER OF SECURITIES ................................................................................................................................................................. 96 
PROCEDURE FOR AMENDING THE COMPANY'S ARTICLES OF ASSOCIATION ........................................................................................................... 96 
INFORMATION ABOUT THE COMPANY'S SHAREHOLDERS ............................................................................................................................................ 97 
RIGHTS OF SHAREHOLDERS .................................................................................................................................................................................................. 98 
DETAILS OF THE ISSUER'S OWN SHARE BUYBACKS ....................................................................................................................................................... 99 
DIVIDENDS ................................................................................................................................................................................................................................ 99 
CORPORATE GOVERNANCE ...................................................................................................................................................................................................... 101 
THE GOVERNING BODIES OF THE COMPANY .................................................................................................................................................................. 101 
CORPORATE GOVERNANCE AND ORGANISATIONAL STRUCTURE OF THE COMPANY GROUP ........................................................................... 102 
INFORMATION ON THE COMPETENCE AND PROCEDURE FOR CONVENING THE GENERAL MEETING OF SHAREHOLDERS ........................ 102 
THE BOARD OF DIRECTORS OF THE COMPANY .............................................................................................................................................................. 106 
COMMITTEES OF THE COMPANY ....................................................................................................................................................................................... 110 
MANAGEMENT OF THE COMPANY .................................................................................................................................................................................... 112 
STAFF ........................................................................................................................................................................................................................................ 112 

37. INFORMATION ON AGREEMENTS BETWEEN THE COMPANY AND MEMBERS OF ITS ORGANS, MEMBERS OF COMMITTEES FORMED OR

EMPLOYEES PROVIDING FOR COMPENSATION IN THE EVENT OF THEIR RESIGNATION OR DISMISSAL WITHOUT JUST CAUSE OR IF THEIR

EMPLOYMENT IS TERMINATED AS A RESULT OF A CHANGE OF CONTROL OF THE ISSUER ..................................................................................... 116

INFORMATION ON RELATED PARTY TRANSACTIONS AND MATERIAL ARRANGEMENTS ......................................................................................... 116

38. RELATED PARTIES OF AB ROKIŠKIO SŪRIS GROUP ....................................................................................................................................................... 116

39. RELATED PARTY TRANSACTIONS ..................................................................................................................................................................................... 117

40. INFORMATION ON HARMFUL TRANSACTIONS ENTERED INTO ON BEHALF OF THE ISSUER .............................................................................. 117

OTHER INFORMATION ................................................................................................................................................................................................................ 118

41. AUDIT INFORMATION ........................................................................................................................................................................................................... 118

42. DATA ON PUBLICLY AVAILABLE INFORMATION ........................................................................................................................................................... 118

GOVERNANCE REPORT OF AB "ROKIŠKIO SŪRIS" ............................................................................................................................................................... 120

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE ............................................................................................................................................. 124

MESSAGE FROM THE CEO

Dear All,

The first thing to say as we look back on 2022

is to rejoice. Last year, not only did the

companies of Rokiškio sūris AB achieve

record results in both sales and profits, but

wage growth was also record high. In 2022,

the company also paid record high prices to

its main partners, raw milk producers, for the

milk they buy.

During 2022, important efficiency projects

were also carried out, including the relocation

of curd production to Utena and the

reorientation of the Ukmergė plant in a

completely new direction, which will allow

the Group to benefit more from the sale of its

products in future. The construction of a new

modern hard cheese ripening building in Rokiškis was also started and successfully continued. The

project to improve the organisation of work in the cheese ripening shop at the Rokiškis plant is also

noteworthy. It is particularly pleasing that all these projects were carried out on schedule and within

budget, despite the geopolitical storms caused by the war in Ukraine and inflation of almost 20%.

In 2022, we have not forgotten a relatively new area for our company. Sustainability is increasingly

becoming a normal part of the company's operations. The active work of the Sustainability Group,

which has been expanded with new members, is increasingly involving the entire company team. It

is raising awareness that sustainability is not a fashion statement, but an activity that helps create a

better future for our children and grandchildren.

To repeat, last year was a very good year. But as it was written on the ring of a famous legendary

king, "It won't always be like this..." . Already by the end of 2022, the collapse of prices and demand

in export markets has begun. Which reduced both company and farmer incomes. The deteriorating

geopolitical situation, the on-going war in Ukraine, the challenges from China, all point to very

turbulent times ahead. However, I believe that the accumulated reserves, the projects that have been

launched and, most importantly, the experience and professionalism of the employees of AB

Rokiškio sūris Group will allow the company to successfully overcome all the challenges and

continue to be the leader in the Baltic dairy industry.

Dalius Trumpa

Director

GENERAL INFORMATION

1. Reporting period for which the annual report is prepared

This 2022 consolidated report covers the period from 1 January 2022 to 31 December 2022.

2. Basic information about the issuer:

Name of the issuer:

Joint Stock Company "Rokiškio sūris" (hereinafter referred

to as the Company)

Legal form:

Public limited company

Date and place of registration:

28 February 1992. State Enterprise Centre of Registers

Company code:

173057512

Address:

Pramonės g. 3, LT 42150 Rokiškis, Republic of Lithuania

Keeper of the register of legal

persons:

State Enterprise Centre of Registers

Telephone number:

+370 458 55200

Fax number:

+370 458 55300

Email address:

rokiskio.suris@rokiskio.com

Website address:

www.rokiskio.com

ISIN code:

LT0000100372

LEI (Legal Entity Identifier) code:

48510000PW42N5W74S87

Share trading code AB Nasdaq

Vilnius

RSU1L

3. Information about the Company's group of companies

31 December 2022 The Rokiškio sūris Group (the Group) consists of the parent company Rokiškio

sūris AB and five subsidiaries (2021: parent company and five subsidiaries).

Main company:

AB "Rokiškio sūris" (company code 173057512, registered office address, Pramonės g. 3, LT-

42150 Rokiškis)

Subsidiaries of AB Rokiškio sūris:

UAB "Rokiškio pienas" (company code 300561844, registered office address Pramonės g. 8, LT -

28216 Utena). Rokiškio sūris AB is the founder and sole shareholder of Rokiškio pienas UAB,

holding 100 % of shares and votes.

UAB "Rokiškio pieno gamyba" (company code 303055649, registered office address Pramonės g.

8, LT - 28216 Utena). Rokiškio sūris AB is the founder and sole shareholder of UAB Rokiškio pieno

gamyba, holding 100 % of shares and votes.

The Latvian company SIA Jekabpils piena kombinats (company code 45402008851, registered

office address Akmenu iela 1, Jekabpils, Latvia LV-5201). AB Rokiškio sūris holds 100 % of the

shares and votes of the company.

The Latvian company SIA Kaunata (company code 240300369, registered office address Rogs,

Kaunata pag., Rezeknes nov., Latvia), AB Rokiškio sūris owns 40 % of the company's shares, and

UAB Rokiškio pienas owns 20 %.

UAB "DairyHub.LT" (company code 305831304, registered office address Kauno g. 65, LT-

20118 Ukmergė). Rokiškio sūris AB is the founder and sole shareholder of UAB DairyHub.LT,

holding 100 % of shares and votes.

4. Nature of the principal activities of the company and group

The main activities of the Rokiškio sūris Group:

•Dairy farming and cheese making (EVRK 10.51)

AB "Rokiškio sūris":

AB "Rokiškio sūris" is principally engaged in the production and marketing of fermented cheeses,

whey products and skimmed milk flour.

Subsidiaries:

The main activity of UAB Rokiškio Pienas is the sale of fresh dairy products and fermented cheeses.

The main activity of UAB Rokiškio pieno gamyba is the production of fresh dairy products (milk,

kefir, sour milk, butter, cottage cheese, cottage cheese, sour cream, glazed cheese, desserts).

SIA Jekabpils piena kombinats is active in the purchase of raw milk.

SIA Kaunata's business is the purchase of raw milk.

UAB "DairyHub.LT" - preparation and sale of hard cheeses to final consumers in various countries

around the world.

5. Group strategy and objectives

In order to ensure that all members of the Company's governing bodies have a clear understanding

of the Company's goals, directions and objectives, the Company's strategy is being developed to set

out long-term strategic goals and objectives.

The Rokiškio sūris Group is guided by a 3-year strategic plan approved by the Board of Directors,

the main provisions of which are presented below:

MISSION:

AB "Rokiškio sūris" = Reliable Professionals of the Milk Industry.

VISION:

In Lithuania, which has become Baltlandia, more than 1 million tonnes of raw milk per year are

processed sustainably.

OBJECTIVES:

• Leadership in the dairy sector in the region.

• Flexible production and sales of premium quality products that exceed consumer

expectations.

• To be the most attractive and reliable partner for dairy farmers.

• Continuously increase shareholder value.

• Achieving sustainability objectives along the entire chain.

Achieving our goals

• By increasing the amount of milk bought and processed by 5% each year.

• We are targeting a net annual yield of 3%.

• By continuously reducing greenhouse gas emissions, energy and water consumption and the

use of non-recyclable packaging in the production process.

6. Highlights of the reporting period

• On 7 April 2022, the Company received notification from Valdas Puzeras, an independent

member of the Audit Committee, of his resignation as a member of the Company's Audit

Committee with effect from 21 April 2022.

• The Ordinary General Meeting of Shareholders of AB Rokiškio sūris held on 29 April 2022:

1. Agreed with the Audit Committee's conclusion.

2. Approved the audited consolidated and Company financial statements for 2021.

3. Approved the allocation of profit/loss for 2021:

The total dividend allocation is EUR 3,500,669.60. EUR 0.10 per ordinary registered share.

4. Approved the company's remuneration report.

5. It has taken the decision to acquire its own shares:

Acquire treasury shares in the Company on the following terms:

The purpose of acquiring treasury shares is to maintain and increase the company's share price;

Maximum number of shares to be acquired - the total nominal value of the Company's treasury

shares may not exceed 1/10 of the Company's authorised capital.

The period within which the company may acquire its own shares is 18 months from the date of

adoption of this Decision;

Maximum and minimum share purchase price - the maximum purchase price per share shall be 10%

higher than the market price of the Company's shares on the Nasdaq Vilnius Stock Exchange when

the Board decides to buy back its own shares and the minimum purchase price per share shall be

10% lower than the market price of the Company's shares on the Nasdaq Vilnius Stock Exchange

when the Board decides to buy back its own shares;

Procedure for the sale of treasury shares and minimum sale price - Treasury shares acquired by the

Company may be cancelled by a decision of the General Meeting of Shareholders or sold by a

decision of the Board of Directors, provided that the minimum sale price of the shares is equal to

the acquisition price and that the sale procedure ensures equal opportunities for all shareholders to

acquire the Company's shares;

To instruct the Management Board of the Company, in accordance with the conditions set out in

this Decision and the requirements of the Law on Joint Stock Companies of the Republic of

Name

thousand

EUR

Retained earnings of the Company for the year

at the beginning of the year

74 432

Dividend for 2020 approved by shareholders

(3 501)

Transferred from other reserves

1 116

Retained earnings (losses) for the year

at the beginning of the year after payment of dividends and

transfer to reserves

72 047

Net profit/(loss) of the Company for the year under review

1 558

Total distributable profit of the Company

73 605

Share of profits allocated to the statutory reserve

Share of profit allocated to other reserves

Share of profit allocated to dividends*

(3 501)

10.

Share of profit allocated to annual payments (bonuses) to

members of the Management Board, employee bonuses and other

purposes, recorded in the Profit and Loss Account

11.

Retained earnings (losses) at the end of the financial year to be

carried forward to the following financial year

70 104

Lithuania, to take decisions on the purchase of the Company's own shares, to organise the purchase

and sale of own shares, to determine the procedure for the purchase of the shares, the award and

sale of the shares, the timing, the number of shares and the price of the shares and to carry out any

other actions relating to the purchase and sale of own shares.

The Company has a reserve of EUR 10.850 million for the acquisition of its own shares.

6. Elected a new member of the Company's Independent Audit Committee - Vilmantas

Pečiūra. He is a Director of Virenda UAB.

7. Appointed the audit firm PricewaterhouseCoopers UAB to audit the 2022 annual

consolidated financial statements of the Rokiškio sūris AB Group and the Parent Company and to

evaluate the 2022 consolidated annual report.

• Resignation of a member of the Board received on 11 July 2022

AB "Rokiškio sūris" (hereinafter referred to as the "Company") hereby informs that on 11 July 2022

it received a notice from the member of the Board of Directors, Mr Thijs Bosch, resigning from the

position of a member of the Board of Directors of the Company as of 31 August 2022.

Thijs Bosch was elected as a member of the Board of Directors of the Company on 10 December

2021. Thijs Bosch was a representative of the Company's strategic investor Fonterra and served as

Managing Director for Europe of Fonterra Co-operative Group Limited. Thijs Bosch is resigning

from the Board of the Company due to a change of employment and his departure from the Fonterra

Group.

In the event of the resignation of a member of the Board, an Extraordinary General Meeting of the

Company's shareholders will be convened for the election of a new member of the Company's

Board.

• On 31 August 2022, the six-month results of the Rokiškio sūris Group for 2022 were

announced:

Consolidated unaudited sales of AB Rokiškio sūris Group for January-June 2022 amounted to EUR

168 217 thousand, i.e. 56.5% more than in the same period of 2021 (EUR 107 461 thousand).

AB Rokiškio sūris Group earned a net profit of EUR 5 7811 thousand in the first 6 months of 2022.

In contrast, the Group made a net loss of EUR 989 thousand in the first 6 months of 2021.

The Group's positive performance was driven by a significant increase in global dairy prices in early

2022. However, the uncontrolled increase in energy prices and the highest raw milk price in Europe

paid by Lithuanian dairy processors had a negative impact on the Group's financial results.

•At the Extraordinary Meeting of Shareholders of AB Rokiškio sūris held on 7 October 2022,

a new member of the Board, Mr Thomas Jan de Bruijn (Commercial Director of Fonterra Co-

operative Group Limited), was elected to the Board of Directors of AB Rokiškio sūris until the

expiry of the term of office of the current Board. The term of office of the members of the Board

runs until 10 December 2025.

7.Significant events after the end of the financial year

On 27 February 2023, amendments to the Credit Agreement were signed with AB SEB bankas,

increasing the credit limit to EUR 50 100 thousand and extending the final maturity of the credit

limit to 28 February 2024.

Further information on significant events after the end of the financial year is disclosed in note 34

to the consolidated and parent company financial statements of AB Rokiškio sūris as at 31

December 2022.

INFORMATION ON THE COMPANY'S AND GROUP'S ACTIVITIES

8. Group operating environment

Basic provisions

Who we are:

• We process more than 500,000 tonnes of milk in three dairies.

• We produce and sell more than 35 000 tonnes of different cheeses.

• About two-thirds of our production is exported outside Lithuania.

• We are a responsible employer of around 1,300 employees.

The Group's activities include the purchase of raw milk, the production of various dairy products

and their sale on the Lithuanian and export markets.

Purchase of raw milk

According to the Register of Farm Animals (hereinafter referred to

as the "FARM Register"), on 1 January 2023. 224.13 thousand

dairy cows were registered in Lithuania on January 1, 2010, 7.3%

less than in the same period of 2022. Milk is purchased from 14,40

thousand producers keeping 208,16 thousand cows, as part of the

milk produced on farms is consumed for own use, sold or given for

direct consumption.

According to the PAIS data of the ŽŪIKVC, the number of cows

in January-December 2022 decreased by 0.6%, the number of

producers decreased by 10.6% and milk sales increased by 0.5%

compared to the same period in 2021. The analysis of milk sales

by farm and number of cows shows that milk purchases decreased

from farms with 1-5 cows and 6-14 cows. Milk purchases from

farms with 1-5 cows decreased by 10.0% between January and

December 2022, while milk sales from farms with 6-14 cows decreased by 6.6%. Milk sales from

farms with 15 cows and more increased by 2.6% from 1 072.47 thousand tonnes (January-December

2021) to 1 100.28 thousand tonnes (January-December 2022).

According to the PAIS data of ŽŪDC, in December 2022, the average buying-in price for natural

milk (4.46% fat and 3.50% protein) in Lithuania amounted to EUR 509.51, which was 19.3% higher

compared to December 2021 (EUR 427.35). The average price paid to producers in October 2022

for milk of natural fat content is the highest for the whole period December 2021 - December 2022,

at 552.95 €.

According to the data of the Milk Accountancy Information System (MAIS) maintained by the State

Enterprise Agricultural Data Centre (hereinafter referred to as 'EACD PAIS'), approved milk

purchasers bought 1 345,57 thousand tonnes of natural milk from 14 404 milk producers in January-

December 2022 (1 339,62 thousand tonnes in January-December 2021).

For large milk producers selling more than 40 t of raw milk per month, milk purchasers paid an

average of €547.96 per tonne in December 2022 for natural milk (4.40% fat and 3.60% protein).

This milk price decreased by 6.5% per month (€586.08 per tonne in November 2022).

Here are the buying-in prices for natural milk for the years 2020-2022 for milk producers in the

Rokiškio sūris group selling more than 40 t of milk per month:

The chart shows that the 2022 procurement price for raw natural milk is at an all-time high compared

to previous years. In 2022, raw milk farm gate prices in Lithuania were at an all-time high, with the

average being on a par with the EU average and the price paid to large farms above the average.

The rise in prices was driven by the situation on export markets, increased demand for dairy

products, higher fertiliser and feed costs, and sharply rising energy costs.

Production of dairy products

AB Rokiškio sūris Group is the largest

Lithuanian dairy processing company,

producing and supplying more than 300

product names to consumers. These include

not only the well-known and everyday

fermented cheeses, processed cheeses,

butter, cottage cheese and curd products, but

also other fresh dairy products. At the end of

2022, the Ukmergės pieninė branch of UAB

Rokiškio pieno gamyba, UAB Rokiškio

pieninė, will cease production and curd

production will be transferred to UAB

Rokiškio pieno gamyba, UAB in Utena. The

premises of Ukmergė pieninė are used for

the cutting of GRAND hard cheese by UAB

DairyHub.LT

The products produced by the companies of the Rokiškio sūris Group are of high quality, which is

why they have earned recognition not only in the domestic but also in export markets.

In total, 490 640 tonnes of milk were processed in the Group in 2022, an increase of 6.3% compared

to 2021.

The production of fermented cheeses in 2022 increases by 7.0% compared to 2021. Hard cheese

production is 48.4% higher than in 2021. Semi-hard cheese production is 15% higher and fresh

478,545

438,427

469,302

461,553

490,640

430,000

440,000

450,000

460,000

470,000

480,000

490,000

500,000

2018 2019 2020 2021 2022

VOLUME OF NATURAL MILK PROCESSED DURING 2018-2022

cheese production is 3.6% lower. The changes in the range are driven by market demand and price

changes.

In 2022, the production of GRAND hard cheese increased by

28.2%. The GRAND cheese technology was developed by the

company's production technologists and craftsmen in

collaboration with Angelo Frosio, a cheese master and

professor from Italy. GRAND hard cheese (GRANA type)

weighs approximately 32 kg. These hard cheeses are

characterised by their outstanding mature, rich and savoury

flavour. The production process for this type of cheese is very

complex, requiring a great deal of investment, exceptional

knowledge, time and patience. These cheeses can only be

made by a company with a very high technical level and a

team of highly qualified specialists.

Rokiškio GRAND hard cheese with its subtle, elegant taste

was recognised at the 2022 SUPERIOR TASTE AWARDS of

the world's top chefs and sommeliers, and was awarded two

gold stars. The International Taste Institute, a global

organisation based in Brussels, organises a unique annual

awards programme that evaluates and promotes only quality

food and drink products with exceptional taste. For the third

time in 2022 (previously in 2015 and 2019), Rokiškio

GRAND has been awarded two Gold Stars. Rokiškio GRAND

cheese is made in Rokiškis and is recognised worldwide.

The company's priority is to increase and improve the

production of GRAND hard cheese. Therefore, in 2021, new

premises will be built with state-of-the-art automated equipment for the packaging of this cheese.

The increased production of GRAND hard cheese has also created new challenges, as the need for

maturation facilities increases with the growing production volumes. Therefore, investments have

been planned for the construction of a new warehouse for the long maturation and storage of

GRAND cheese.

Changes in production volumes of AB Rokiškio sūris Group in 2018-2022:

Production / Year

2018

2019

2020

2021

2022

Fermented cheeses, t

36 214

31 745

32 617

35 357

37 831

Milk sugar, t

12 405

10 866

12 592

12 631

12 701

Butter and spreadable fat

mixtures, t

7 891

8 143

8 333

5 451

5 816

Fresh milk products, t

48 596

47 370

46 833

45 365

42 317

WPC powder, t

2 635

2 384

2 484

2 615

2 648

Dried milk products, t (including

WPC powder)

3 463

2 862

4 348

3 170

3 129

In 2022, the company will also produce 0.6% more milk sugar compared to 2021. This is due to the

higher volume of milk processed and the knowledge acquired by the craftsmen and technologists to

improve this technology.

Cooperation with Fonterra New Zealand, one of the world's largest dairy producers, continues with

successful whey products such as WPC (whey protein concentrate); IBI (whey protein isolate). This

technology is continuously improved and the WPC range is expanded. In 2022, WPC production was

1.3% higher than in the previous year, 2021.

The production of butter and spreadable fat mixtures in 2022 is 6.7% higher than in 2021.

In 2022, AB Rokiškio sūris launched a

new product - spreadable processed

cheese with additives. In addition to the

well-known and well-liked spreadable

processed cheese with ham, a new

addition to the market is spreadable

processed cheese with chimichuri

spices and chanterelles.

10,000

20,000

30,000

40,000

50,000

60,000

2018 2019 2020 2021 2022

PRODUCTION, t

2018-2022

Fermented cheeses, t Milk sugar, t

Butter and spreadable fat mixtures, t Fresh milk products, t

IBK flour, t Dried milk products, t

9. Group sales

As every year, most of the company's production is

exported. In 2022, Rokiškio Sūris will export its

production to 42 countries worldwide (2021: 41

countries). During 2022, the Group resumed sales to

Armenia, Belgium and India. Sales to Serbia have

started. Discontinued sales to countries such as China,

Moldova, Chile and South Africa.

In 2022, the Group's exports accounted for around

65% of total sales. This is 5% more than in 2021. Italy

remains the main and largest buyer of production.

A large part of production is also exported to the

Netherlands, Germany and Saudi Arabia.

Sold

Country names

2022

2021

Change

thousand EUR

thousand

EUR

Lithuania

127 571

35.51

102 037

35.71

25.02

European countries

194 933

54.26

121 363

54.26

60.62

Middle East

16 372

4.56

3 561

4.56

359.76

Far East

9 576

2.66

9 576

2.66

96.03

North America

3 698

1.03

12 279

1.03

-69.88

Other countries

7 119

1.98

8 937

1.78

-20.34

Total:

359 269

100

359 269

100

41.97

In 2022, the Group's sales revenue amounted to EUR 359 269 thousand. Compared to 2021 (EUR

253 062 thousand), the Group's sales revenue increased by 41.97 %.

The year 2022 on the dairy market could be divided into two parts: a rise in prices, and thus demand,

until July, and a gradual fall in prices from mid/late July onwards.

Sales to European countries increase by over 60% in 2022 compared to 2021. This is mainly due to

price increases and increased demand for both cheese and whey protein, lactose and cream. The

price increases that started in the second half of 2021 continued their upward trend until mid-July.

The outbreak of the war in Ukraine and the unprecedented rise in energy prices rapidly increased

the cost of dairy production, which consequently fell on the shoulders of buyers, pushing global

inflation further up. EU gas prices have risen by as much as 150% in one year (July 2021 - July

2022).

The price for whey protein also reached unprecedented levels in July 2022.

From the beginning of 2022 until mid-July, rising wholesale prices for dairy products kept pace with

demand. Buyers/manufacturers, seeing prices rising steadily, tried to buy as much as possible for

their own production, as supply was not fully covered until July, especially for whey proteins.

Thanks to the full recovery and renewed boom in tourism in Italy, Greece and other European

countries, demand for fresh cheese continued to grow until the end of the summer, even at such high

prices.

In 2022, the company's production was exported mainly to Western European countries, as before.

This is again due to the full recovery from the pandemic with the opening of the catering sector in

European countries, the significant increase in tourism and the growing demand for all dairy

products on export markets.

Compared to 2021, sales to the US have fallen by almost 70% in 2022, as US dairy prices have

always kept pace with European prices. At the same time, local producers still had stocks of local

hard cheese to cover their demand. It was therefore more profitable for the Group to maximise the

production of fresh cheese, such as Cagliata and Mozzarella, and to sell it to Italy, where, until the

middle of the year, demand often exceeded supply.

As in the past, the Group continued to sell its usual products - cream, milk flour and additional

products from the cheese-making process such as WPC and lactose - on export markets. The price

of lactose, like all dairy products, also increased, but not to the same extent as for whey products,

where demand outstripped supply throughout the half-year and prices for these products reached

unprecedented highs at mid-year.

Compared to 2021 prices, fat prices, like all dairy products, rose in the second half of the year.

However, the price of cream was lower when converted into butter per unit of fat, so instead of

cream the company produced butter for storage, where all butter stocks (and new production) were

then sold to the Middle East, resulting in a percentage increase of as much as 359% compared to

2021.

For all of the above reasons, exports to P.Korea have almost doubled compared to 2021.

However, as mentioned before, the market reached a critical level for dairy prices in the middle of

the year and started to slide downwards from July. Inflation, together with the rise in the interbank

interest rate, has significantly reduced the purchasing power of the final consumer, thereby reducing

the level of demand. As a consequence, prices for all dairy products started to fall steadily until the

end of the year.

One of the biggest goals of the Rokiškio sūris Group is currently to penetrate the European and

American retail/HORECA market for hard cheeses, especially Grand, i.e. to increase sales of value-

added cheese, which the company is already actively doing. The rapidly rising raw material prices

dictate that we sell as much value-added as possible and gradually reduce the production and sales

of raw cheese.

Sales on the local market

In 2022, Rokiškio Grupė's consolidated sales turnover in the local market amounted to EUR 127

571 thousand, or 25.02 per cent more than in 2021 (2021 - EUR 102 037 thousand).

A key reason for the increase in turnover is the sharp rise in output prices that starts in 2022, driven

by record high prices for raw milk, energy and many other inputs. Domestic output price increases

have also been directly influenced by the tens of percent increase in world commodity prices for

dairy products, which has been passed on to retail products.

At the end of 2022, this trend reversed and global prices started to fall, but as the retail market is

inert, with domestic price rises delayed by several months, the decline has already moved into 2023.

The year 2022 should be described as a challenging year for domestic consumption, with significant

price increases in many categories leading to a fall in consumers' relative incomes, which has spilled

over into consumption. In dairy categories (as in many others), total consumption has fallen by

~10%, which is probably the highest historical level in recent decades. On the other hand, the

company expects these price disparities to gradually even out and would expect some increase in

dairy consumption in 2023 (but remaining below the 2020-2021 level).

The overall annual price increase on the domestic market in 2022 exceeded 30% and in individual

categories (Butter, Sour Cream, Unripened Cheeses) 40%.

In financial terms, for the above reasons (the increase in costs has not kept pace with the increase in

sales prices), domestic sales in 2022 were loss-making, with export markets covering them.

The total volume of production on the Lithuanian market (45.5 thousand tonnes) in 2022 was 11%

lower than in 2021.The categories of Cottage cheese and its products, Sour cream had a higher than

average decrease. Despite the difficult market, sales volumes in the Fermented Cheese and Kefir

categories increased. The overall product mix remained stable during the year, at just over 200

products.

The company aims for a balanced sales portfolio between own and private brands, the share of

which has increased over the last year. This is also a signal that consumers are trying to save more.

The company does not try to participate in small market segments, focusing on mass production,

which ensures low cost and consistency of quality for high quality products. The company's

preferred sales channel is retail chains. The aim is to work with them in a mutually cooperative

manner and to produce private labels for them.

In 2022, the share of private labels in the company's basket exceeded 25%, helped by increased sales

to neighbouring markets. Participation in this segment helps to make better use of the company's

production capacity.

The share of the domestic market in Rokiškio Grupė's sales has almost significantly decreased in

recent years (from 40.3% to 35.6%), due to the fact that product prices on the global markets have

been rising faster than at home.

10. Products, brands and achievements

Recognition of sustainability projects of Rokiškio sūris AB

"Rokiškio sūris is on the list of the most sustainable brands for the third year!

Since 2011, a list of the most sustainable brands in Europe has been compiled. The Sustainable

Brand Index™, one of the largest independent research companies in Europe, which examines how

consumers perceive the sustainability of brands both in the overall context of the country as well as

in individual sectors, has been conducted for the third time in Lithuania. Brands are selected for the

study based on their market share, turnover and awareness. Overall, the results for Lithuania show

that Rokiškio sūris is in the top 10 of the list of the most sustainable brands in the Food &

Beverage category!

The survey conducted by the creators of the ranking revealed that Lithuanian citizens care about

sustainability. The majority of respondents take sustainability into account before deciding to buy a

product or service.

A study based on the opinion of Lithuanian consumers shows that brands are perceived in terms of

environmental and social responsibility. The more brands talk about sustainability, the more

consumers care and demand that companies follow these principles. It is expected that by

committing to and communicating their sustainability principles, companies will increase consumer

interest and trust in these issues. As interest increases, so does consumer knowledge of the

company's standards.

Brands are evaluated and classified on the basis of their environmental and social responsibility,

based on the definition of sustainability as defined by the United Nations Sustainable Development

Goals.

In 2022, the Rokiškio Sūris Group was awarded the EcoVadis Sustainability System rating with 57

points. The environmental performance is rated 70 points.

The 36-month aged hard cheese Rokiškio

GRAND joins the GRAND hard cheese

family.

Also - Rokiškio GRAND hard cheeses aged 20 and 30 months, 100 g each

These long-ripened hard

cheeses have developed a

special character, in other

words, they have reached the

peak of their flavour. Dense

and layered texture, with a

distinct crystalline

appearance. Rich, spicy,

heady, crumbly and at the

same time easily breakable.

The multitude of

combinations makes you

savour every bite. Aromatic

and intense, expressive, deep

and seemingly indescribable,

having acquired so many

notes thanks to the special

attention paid to them and

their long ageing in perfect

conditions.

New Bifi Active Plus yoghurt with cherries and

chia seeds.

And - NATURAL yoghurt made with only 2

ingredients: milk and live yoghurt bacteria.

• The product family TIKRAS supplemented by a new product - 600 g fixed weight cottage

cheese.

Cottage cheese is one of the oldest and most valuable fermented milk products. Its greatest

benefits are calcium, easily absorbed protein and milk fat.

11.Risk factors and risk management

Risk is understood as the impediment to the achievement of objectives due to potential events and

their potential impact on the business. The Company's objectives include both long-term strategic

goals and specific actions related to operations. The Company's Board is responsible for managing

the Company's risks and assessing the adverse impact on the objectives and results. The

identification and management of specific risks is assigned to the relevant functions within the

Company. The level of risk is assessed in both strategic and operational decision-making, taking

into account the external and internal environment. Risk management is integrated into the

Company's business processes, so that potential risks are continuously monitored and analysed.

The group's principal activity is milk processing. The dairy processing business is linked to raw

material suppliers, competition in the raw milk market and fluctuations in raw milk prices. Shortages

of raw milk, which lead to continuous volatility in milk prices, may affect the Issuer's results of

operations.

Specialisation in the production of fermented cheeses accounts for the bulk of revenues. The cheese

maturation process is rather long, which makes it difficult to react quickly to market changes and

may affect the company's performance. In addition, there is strong competition for dairy products

on the domestic and export markets, cheaper Polish products and the Russian market ban limits

sales.

The Group's credit risk relates to receivables. The risk of default by counterparties is controlled. The

Group has credit insurance cover for its customers. For customers with higher financial risks, a

prepayment system is in place.

The Group's activities are subject to regular food safety, environmental and social responsibility

audits. Food safety systems are in place and operational in the Group.

The company has specific HALAL and KOSHER quality certificates (for lactose, WPC, butter,

skimmed and full-fat milk flour, buttermilk flour, buttermilk flour, butter). This ensures consumer

confidence in product safety. Certified organic products are produced and labelled with additional

information.

The Group's management aims to produce safe and quality dairy products with the lowest possible

environmental impact.

The Group is constantly looking for opportunities to optimise production, reduce costs and minimise

and manage risks.

Risk factors:

Risk factor

Source of risk

Risk management.

Economic

factors:

Supply of raw

materials

Small farms;

Seasonality;

Competition;

Lack of a long-term public

regulatory framework.

The evolution of raw milk prices

during the winter and summer

periods.

Significant movements in milk

prices on world markets.

To mitigate potential risks and their

impact, milk producers are paid milk

price premiums for long-term

cooperation, higher milk quality, loyalty

and balancing seasonality in milk

production.

The risk is managed by additional

imports of milk from other countries

(Estonia, Latvia) and by diversifying the

purchase of raw milk from different

sized suppliers in Lithuania.

Sales of products

The group's principal activity is

milk processing. Its main

product is rennet cheese.

Revenue from the sale of cheese

accounts for the majority of

revenue.

The company's revenue, profit

and cash flow may be adversely

affected by changes in demand

and prices for cheese and other

products such as milk sugar,

butter, WPC on the markets.

The production of long-ripened

hard cheese is a lengthy

technological process that lasts

between 9 and 24 months. This

lengthy process may adversely

affect the company's cash flow

and results of operations.

Internal competition between

local producers.

Cheaper Polish production on

the Lithuanian market.

Finding alternatives to imports.

Increasing the range of products.

Finding new markets.

Working with business partners.

Risk assessment for each client.

Increase in the volume and range

of cheaper products from other

EU countries.

Environmental

factors

Our activities consume large

amounts of energy and natural

resources. This poses a risk of

environmental pollution directly

and/or indirectly, as well as air

pollution from technological

installations.

Vehicle replacement, maintenance,

control of operating conditions.

Choosing energy suppliers.

Resource saving, accounting and control

measures.

Process control, automation,

modernisation.

Monitoring the use and impact of

natural resources.

Use of chemicals. This poses

risks to workers, products and

the environment.

Employee training, personal protective

equipment.

Accounting and control.

Process automation.

Physical environmental

pollution: noise, smell, light

Control measurements and assessment.

Deploying technical tools.

Focus on design.

Treatment of industrial and

surface wastewater. Discharge of

pollutants with industrial and

surface wastewater.

Maintenance, operating conditions,

process control.

Pollutant concentration studies,

emission accounting.

Use of reserves at a municipal

wastewater treatment plant. Cleaning

and maintenance of sand oil traps and

sewers.

Improper management of waste

from operations poses a threat to

the environment

Waste sorting and accounting.

Ensuring proper storage conditions.

Process management, staff training.

Transfer to legitimate processors.

Regulation and compliance.

Risks are manifested in the high

volume of regulation and change

in legislation.

Certified management system

compliant with ISO 14001:2015

Environmental Management Systems.

Requirements and guidelines for use.

Continuous evaluation of legislation and

developments. Reporting, evaluation of

established reports.

Environmental concerns of

residents, neighbouring

businesses and local authorities.

The company is located in an

industrial area of the city and is

adjacent to both other businesses

and residential areas.

Disseminating information about

company news in the local press and on

the internet.

Active cooperation with local

authorities, residents and business

communities.

Assessment of the impact of planned

activities in accordance with the

established procedures

In the production areas, climate control

systems are installed, which not only

maintain the set temperature and

humidity parameters, but also work in a

recuperative mode.

Energy risks

We consume a lot of electricity,

heat and water in our operations.

All production and non-

production equipment relies on

electricity to operate. This poses

a risk to the uninterrupted supply

of electricity.

Electricity, heat (steam) and

water supply influence the

production and technological

processes.

Electricity is supplied by an independent

energy supplier under the terms of a

contract. Distribution is provided by the

Energy Distribution Operator.

Medium-voltage switchgear is fed from

two independent sources, which feed the

power transformers. If one substation

loses voltage, the other is immediately

energised.

We have installed 90 MW of solar

power plants.

Heat energy is supplied by centralised

urban heating networks using biofuels

(wood) in Rokiškis and Utena. We also

produce our own heat with two boiler

plants in Utena and Ukmergė which use

natural gas.

Strict contractual conditions for the

supply of thermal energy (steam),

defining maximum requirements for

pressure and temperature. Installed

steam metering to control and ensure

consumption and demand of the

respective workshops. Boilers for hot

water production.

The heat pumps recover some of the

heat from the environment and reduce

the amount of heat energy purchased.

Rokiškis receives most of its water

supply from its own waterworks and

treats wastewater in its own plants.

The technological operation of

wastewater treatment plants is strictly

controlled, and monitoring is carried out

and reports are submitted and made

public in accordance with the

established procedures. Part of the water

is purchased from the city's waterworks

and part of the wastewater is managed

by the city's water management

company. The water supply and

wastewater treatment services for

companies in Utena and Ukmergė are

provided by the urban water

management companies.

Food safety and

quality

In order to achieve one of the

most important objectives of

Rokiškio sūris AB - to ensure

food safety and quality and to

avoid product recalls, the

existing and potentially

dangerous risk factors

(biological, chemical, physical)

have been identified, and the

favourable conditions for their

occurrence and increase have

been analysed. The risk

assessment consists of an

evaluation of the likelihood of

the risk factor occurring and the

severity of the consequences.

Risk assessment covers the

entire production chain, from the

purchase of raw materials to

delivery to the customer.

Based on the level of risk identified and

the methodology approved by the

Codex Alimentarius Commission,

categories of control measures are

identified and control measures are

defined.

Identification of key control measures

for the main risk factors at play;

Assessing the effectiveness of

operational controls to reduce risks to

an acceptable level;

Developing the necessary action plans

to improve the control system;

Regular risk management and

monitoring of targets.

Information

security

IT risks relate to the use of illegal

software, lost and unrecoverable

data, and data vulnerabilities.

Only legal, licensed IT software is used

to avoid potential threats.

A configurable firewall is used to

protect against unauthorised access to

the company from outside.

Unauthorised access to data is limited to

those rights and roles that are necessary

for their work.

A test environment is used to test

changes to applications. Data loss is

prevented by backing up data.

All company computers have anti-virus

software installed.

Old computer equipment is replaced by

new equipment with supported software

versions.

Occupational

risk factors:

Physical factors:

Inadequate workplace design;

Non-compliance with the

general minimum requirements

for work equipment;

Mobile self-propelled, non-self-

propelled work equipment;

Potentially hazardous

installations;

Stability and robustness of

structures;

Workplaces and work equipment are

maintained. Any deficiencies that may

affect workers' health and safety are

corrected.

Controls for work equipment shall be

clearly visible, identifiable and labelled.

The work equipment shall have a

control system that allows it to be

brought to a complete and safe stop.

Emergency stop devices shall be

Escape routes and exits;

Fire detection and extinguishing;

Electric current;

Activities of other companies in

the provision of services and

other work for the company.

provided for this purpose. Where there

is a risk of injury to a worker as a result

of mechanical contact with moving parts

of the work equipment, such parts shall

be covered by guards and protective

devices shall be fitted to prevent access

to dangerous areas. Work equipment

shall bear the necessary safety and

health signs to ensure the safety of

workers. Workers shall receive

appropriate information on the use of

work equipment, on-the-job training and

instruction, i.e. they shall be made aware

of the hazards they may encounter from

work equipment.

Mobile work equipment shall be so

arranged and constructed as to expose

the worker to minimum risk. Such

equipment is subject to regular

maintenance, training and periodic

health checks.

Potentially hazardous installations are

operated in accordance with the Law on

the Maintenance of Potentially

Hazardous Installations. Maintenance of

potentially hazardous installations is

carried out. Employees working with

potentially hazardous equipment are

trained, periodically checked for their

knowledge and periodically checked for

their health.

To ensure the stability and robustness of

buildings, maintenance is carried out in

accordance with the technical building

regulations.

Evacuation routes are maintained and

signposted.

Fire extinguishing equipment and fire

safety engineering systems are

appropriate for the size and purpose of

the buildings, the equipment in the

buildings, the nature of the materials

stored in the buildings, and the number

of employees in the workplaces. Fire

extinguishers and fire safety

engineering systems are subject to

maintenance testing. Fire extinguishing

equipment is labelled. Workplaces are

equipped with a ventilation system.

Ventilation equipment is maintained

and updated.

Fire safety training and drills are

organised for staff.

Hazardous areas in workplaces are

marked.

Workstations have strong, stable floors.

Workers are provided with special

footwear that is slip-resistant.

Electrical installations shall be installed

in such a way as to avoid the risk of fire

or explosion and to protect workers

from direct or indirect contact with

electrical installations. Periodic

resistance measurements of electrical

installations shall be carried out in

accordance with the procedures laid

down by law.

In order to ensure the safety and health

of workers, avoiding risks arising from

the activities of another undertaking and

risks to their workers from the activities

of the company, a description of the

procedures for cooperation and

coordination shall be drawn up and

coordinating persons shall be appointed.

Physical:

Noise

Lighting

Chemical

factors:

Work equipment

Inadequate or poorly installed

and maintained lighting in

workplaces is a major

occupational risk factor,

affecting workers' emotional

stress, reducing productivity and

increasing the number of

accidents.

Use of chemicals in laboratory

testing, cleaning of work

equipment and facilities.

Use of personal protective equipment,

compulsory health checks for noise,

training for workers.

Occupational risk assessments measure

lighting in workplaces. If the lighting

does not meet the hygiene standards, the

luminaires are replaced with new LED

luminaires. The advantages are lower

energy consumption, longer lifetime and

higher efficiency.

High-pressure washing stations are

installed to fully control the doses of

chemicals needed for cleaning and

disinfecting rooms and to improve staff

conditions. Occupational risk

assessments are carried out in

workplaces where chemicals are used.

Mandatory health checks. Information

Ergonomic

factors:

Manual work exists in many

workplaces

and training for workers. Use of

personal protective equipment where

hazardous chemical agents are likely.

Artificial ventilation system in place.

An occupational risk assessment is

carried out. An ergonomic risk

assessment to prevent musculoskeletal

disorders. Compulsory health

screening. Manual and electric

wheelchairs are used to reduce

ergonomic risks. Lifts are also used. The

company has introduced robotic

technology to avoid heavy lifting. Job

rotation is implemented.

Social factors:

Finding and recruiting staff.

Staff development, and

integrating staff into work

processes.

Retaining staff and reducing

turnover.

Search for workers at the labour

exchange.

Cooperation with research institutions.

Recommendations from employees

working for the company.

Internal company resources (encourages

employees to develop their skills and

qualifications).

The company has a performance

appraisal and development system. Staff

development plans are drawn up each

year. Training is organised both by

sending employees to external seminars

organised by suppliers and internally.

The company strives to build a stable

workforce by fostering good relations,

providing opportunities for

development, growth, participation in

decision-making, and employee benefits

under the Collective Agreement.

These social factors do not depend

solely on the actions of the company.

The company may be forced to increase

investment in robotic production

processes, i.e. replacing manual labour

with robots.

Ensuring business continuity of Rokiškio sūris AB and managing

COVID-19 risks

The COVID-19 pandemic, which has affected many industries around the world, inevitably affected

our company. Since the first quarantine was introduced in Lithuania in March 2020, the company

has taken all necessary measures to ensure that the Group's employees work in the safest possible

conditions and that the spread of the virus is prevented as much as possible. The company has

reviewed and updated its Emergency and Critical Situations Management Plan to ensure that risks

in various areas are managed quickly and effectively.

Key risk areas:

- Potential supply chain disruptions for raw materials and other materials used in production.

The company's main raw material, milk, is purchased domestically and in adjacent regions, so there

were no disruptions and no additional measures were needed. Stock levels of other essential

materials have been reviewed and uninterrupted supply of materials is ensured.

- Risk to workers' health, ensuring uninterrupted milk processing and continuity of the production

chain.

In accordance with the recommendations of the Ministry of Health and the State Food and

Veterinary Service, the establishment has established procedures to prevent COVID-19:

- monitoring the health of workers,

- Measuring the temperature before entering the production area,

- regulating the flow of staff, service providers and visitors,

- use of personal protective equipment,

- enterprise-wide use of rapid antigen testing.

The measures taken were sufficiently effective, avoiding a significant increase in the number of

cases throughout the pandemic period and ensuring uninterrupted milk processing and continuity of

the production chain.

The procedures established to prevent COVID-19 also include the safe organisation of the collection

of raw milk from dairy farms and its reception in establishments.

- Market volatility and changes in consumption patterns.

The company constantly monitors and analyses the market situation and adapts to changing

customer needs.

On the Russian invasion of Ukraine

24 February 2022 The Russian Federation launches a war in Ukraine, condemned by the world.

Economic and financial sanctions were imposed on the Russian regime.

The Group's management believes that the crisis has no material direct or indirect impact on the

Group's operations, financial position, economic performance, markets or supply chains.

The Group's leadership is closely monitoring the situation in Ukraine and the sanctions imposed to

ensure compliance.

Further information on the Russian invasion of Ukraine is provided in note 34 to the consolidated

and parent company financial statements of AB Rokiškio sūris as at 31 December 2022.

12. Information on financial risk management objectives and hedging

instruments used

The Company and the Group are exposed to various financial risks in the course of their business.

The Group's overall risk management programme focuses on the unpredictability of the financial

markets and seeks to mitigate any potential negative impact on the Group's financial performance.

The Group is insured against general civil liability arising out of its business activities and damages

caused to the Group's products or services. The insurance policy is valid worldwide.

Risk management is carried out by the Company's management. There are no written principles for

overall risk management.

The financial risk factors of the Company and the Group are described in detail in Note 3 to the

consolidated and parent company financial statements of AB Rokiškio sūris as at 31 December

2022.

13.Key features of internal control and risk management systems

relevant to the preparation of the consolidated financial statements

The preparation of the Company's consolidated financial statements, internal control and financial

risk management systems, and compliance with the legislation governing the preparation of the

consolidated financial statements are supervised by the Audit Committee.

The consolidated financial statements of Rokiškio sūris AB and the Company are prepared in

accordance with International Financial Reporting Standards (IFRS) as adopted for use in the

European Union.

The Audit Committee monitors the preparation of the financial statements of the Company and the

Subsidiaries, reviews IFRS to ensure that all changes in IFRS are implemented in the financial

statements in a timely manner, analyses transactions material to the operations of the Company and

the Subsidiaries, ensures that information is gathered from the Group companies and that it is timely

and accurately processed and prepared for the purpose of the financial statements and informs the

Company's Board of Directors of material internal control weaknesses in the financial statements

identified by external and internal audits, and makes recommendations to remedy them.

The preparation of financial statements in conformity with IFRSs involves making estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of income and

expense during the reporting period. These estimates are based on management's knowledge of

current conditions and actions. The financial statements comprise the consolidated financial

statements of the Group and the separate financial statements of the Company.

Subsidiaries (including special purpose entities) are entities in which the Group has control over

financial and operating policies. Such control is generally exercised through the ownership of more

than half of the voting shares. In assessing whether the Group controls another entity, the existence

and effect of potential voting shares, whether presently held or convertible, are taken into account.

Subsidiaries are fully consolidated from the date on which the Group obtains control of those entities

and are deconsolidated from the date on which control is lost.

The Audit Committee makes recommendations to the Board on the selection of the external audit

firm and monitors the adherence of the external auditor and the audit firm to the principles of

independence and objectivity.

14. Food safety and quality

The company's products are internationally recognised for their quality, with internationally

recognised food safety and environmental systems in place and validated, allowing it to provide

consumers with a wide range of products with excellent taste. The experience gained over the years,

the focus on the introduction of new technologies and the continuous investment, allow us to remain

competitive in the raw milk purchasing and product sales markets.

The production of hard-ripened cheese is a lengthy process that can take from a few months to

several years. This specificity of production does not allow for a rapid response to sudden changes

in the cheese market, which may affect the results of operations.

The Company's companies place great emphasis on product safety and quality, meeting customer

needs and environmental requirements. AB Rokiškio sūris was the first company in Lithuania to

certify its Food Safety System, the first dairy company to certify its Quality Management and

Environmental Management Systems in accordance with the international ISO standards (ISO 9001,

ISO 14001).

In order to meet the needs of customers, expand sales markets and improve processes, it was decided

to implement the IFS food safety standard in all companies of the Rokiškio sūris Group.

• The IFS- International Food Standard is developed by the

German, French and Italian retail associations and is

recognised by the Global Food Safety Initiative (GFSI) and

retail organisations. It is recognised by retailers and brand

owners worldwide;

AB Rokiškio sūris successfully certified its food safety

systems according to IFS requirements and achieved the highest Higher Level rating (> 95%).

The IFS's core objective is to achieve the best possible product safety and quality management

system so that consumers can have confidence in the products they buy.

The requirements of the food safety standards establish rules to ensure the production of stable,

uniform, quality and safe products without deviating from the policies of the organisation. The

system covers processes from the purchase of raw materials to the satisfaction of customer needs

and is constantly reviewed and improved to maintain high product quality. In order to produce only

safe and high quality products that meet customer expectations, the Food Safety, Quality and Safety

systems are continuously reviewed and continuously improved.

In 2022, changes related to the new IFS Version 7 requirements were introduced as part of the

improvement of the company's existing food safety systems.

The company places great emphasis on maintaining and improving its food safety and quality

culture. Management and all employees are committed to the safe production and distribution of

food, and all employees are aware of food safety hazards and the importance of food safety and

hygiene. Adequate resources are allocated to this.

The company's management reviews and approves annually its food safety, quality and

environmental policy, which declares continuous improvement - "Our understanding is that 'doing

well' is never enough. We know that 'What we do well today, we will do even better tomorrow!'

The company has created an atmosphere in which every employee is involved in achieving its goals

and objectives.

The company has developed and implemented operational essential programmes that provide

conditions, measures and rules to prevent biological, chemical, physical, allergenic and radiological

contamination and to help ensure the production of safe products.

In 2007, the State Food and Veterinary Service of the Republic of Lithuania approved the

compliance of dairy production with the requirements of the EU hygiene regulations and issued

veterinary approval numbers:

• AB ,,Rokiškio sūris" LT 73-01 P EB;

• UAB "Rokiškio pieno gamyba" LT 82-01 P EB;

• UAB "Rokiškio pieno gamyba" branch "Ukmergės pieninė" LT 81-01 P EB.

In 2022, UAB Rokiškio pieno gamyba, a branch of UAB Ukmergės pieninė, ceased production. Part

of the production activities were taken over by UAB DairyHub.LT - cutting and packaging of hard

cheeses, production of glazed cottage cheese and cottage cheese.

• DairyHub.LT has been granted approval number LT 81-08 P EC.

The laboratory of AB Rokiškio sūris is accredited according to the international standard LST EN

ISO/IES 17025 "General requirements for the competence of testing and calibration laboratories".

The laboratory meets its objectives, improves the quality management of the laboratory and the

quality of the tests performed by gaining professional experience and ensuring reliable tests.

The performance of the laboratories of the Utena and Ukmergė establishments has been assessed in

accordance with the description of the procedure for the approval of the authorisation of laboratories

of food business operators approved by the State Food and Veterinary Service.

The company has granted HALAL and KOSHER specific WPC

To ensure the satisfaction of customers'

needs and to contribute to a more

sustainable world, Ukmergės pieninė, a

subsidiary of UAB Rokiškio pieno

gamyba, was certified in accordance with the requirements of the RSPO

Supply Chain Certification Systems version 2 on 22-03-2022.

9-4556-22-100-00

RSPO (Roundtable on sustainable palm oil) - A global initiative to make sustainable palm oil the

standard. The RSPO is a non-profit organisation bringing together stakeholders - palm oil producers,

processors, retailers, environmental and social non-governmental organisations (NGOs) - to develop

and implement global standards for sustainable palm oil. Palm oil is used as an ingredient in the

production of glazed cottage cheese.

The changing geopolitical situation is looking for opportunities to expand outlets.

The competent authorities of Taiwan, India have issued authorisations to export products to these

countries, with approved exporter status.

For more information on product safety and quality, see the company's Sustainability Report

(Social. Product safety and quality).

15. Environment

AB Rokiškio sūris is a leader in the region's dairy processing sector, a socially responsible and

transparent business partner, constantly striving for sustainability and continuity of its activities, and

upholding long-standing traditions. We are committed to protecting the environment and

continuously reducing the negative impact of our activities, to efficient use of resources, including

energy and natural resources, and to complying with legal and standard requirements related to

quality, food safety, environmental protection and all our activities.

Risks from industrial activities are managed in accordance with Directive 2010/75/EC of the

European Parliament and of the Council on industrial emissions (Integrated Pollution Prevention

and Control - IPPC). AB Rokiškio sūris is classified as an installation subject to an IPPC permit.

The IPPC permit was issued on 30-12-2005, renewed on 12-09-2014, revised on 10-07-2019.

The establishment UAB Rokiškio pieno gamyba in Utena is classified as an installation for which

an IPPC permit is required. The integrated pollution prevention and control permit was issued on

27.01.2006 No TU(1)-37, amended on 09.08.2017 No TU(1)-37/T-U.4-5/2017. The Ukmergė

branch of UAB Rokiškio pieno gamyba, and from 01.11.2022 UAB DairyHub.Lt are not required

to have an IPPC permit.

The Best Available Techniques (BREF), resource inputs and emission levels of the plants are in line

with those achieved in the European Union, IPPC Reference Document on the Best Available

techniques in the Food, Drink and Milk Industries. BREF reports are part of the environmental IPPC

permits.

Environmental monitoring programmes to monitor environmental impacts in 2022:

1. Monitoring programme for the wastewater discharged by AB Rokiškio sūris after treatment

at the Ruopiškis (Alseta) lake in Rokiškis district;

2. Groundwater monitoring programme for the AB "Rokiškio sūris" water point;

3. Groundwater monitoring programme for AB Rokiškio sūris petrol stations in Rokiškis and

Obeliai. The monitoring programmes are carried out by the environmental engineering

research company Geoaplinka UAB, and the reports have been submitted to the

Environmental Protection Agency, and no adverse environmental effects have been

identified;

4. Environmental monitoring programme for AB Rokiškio sūris farm facilities (monitoring of

pollutant emissions/discharges).

5. Environmental monitoring programme of UAB "Rokiškio pieno gamyba" (monitoring of

pollutants emitted/released from pollution sources).

We carry out the identified tests at authorised companies UAB Ekometrija and UAB Rokvesta.

Reports are submitted to the Environmental Protection Agency, and no adverse environmental

effects have been identified.

To improve the management of environmental risks and performance, Rokiškio sūris AB voluntarily

implemented the ISO 14001 Environmental Management System standard in 2001 and its

subsidiaries in 2002 and 2003. The ISO 14001:2015/LST EN ISO 14001:2015 certificate is valid

until 16 June 2025, and the certificate of UAB Rokiškio pieno gamyba is valid until 10 March 2024.

The certificate of the Ukmergė branch of UAB Rokiškio pieno gamyba is valid until 21-10-2023,

the management system is certified and independently audited by UAB Bureau Veritas Lit. No

observations or non-conformities were found during the internal and external audits in 2022.

Rokiškio sūris AB - environmental performance in 2022:

Steam condensate return system from remote plants has been extended. This reduces heat and water

losses. The volume of condensate returned is increased by 8.7%.

To save fuel, vehicle fuel rates are controlled, consumption is recorded and routes are optimised.

Overall fuel consumption increased slightly by 1.9%, while fuel consumption per tonne of raw

material transported increased by 3.6% to 5.44 l/t raw material.

Car park. The vehicle fleet is being gradually renewed and old cars are being phased out to reduce

fuel consumption and emissions. In 2022, 21 new vehicles were purchased and 22 vehicles were

written off or sold. Among the vehicles in use, 18 units (7.6%) are hybrid vehicles.

The total fleet consists of 237 vehicles: 138 trucks, 5 petrol, 125 diesel, 6 tractors, 2 other vehicles;

99 cars, 34 petrol, 65 diesel. 51% of the vehicles are Euro 6 compliant.

Eco-friendly packaging: in 2022, we will use a total of 4,361.6 tonnes of packaging. The breakdown

of packaging by type is given in the table below in tonnes and percentage:

Packaging

(t)

Plastics

905,0

20.8%

Paper, cardboard

987,6

22.6%

Metal

38,5

0.9%

Combined

614,4

14.1%

Wooden

1 816,0

41.6%

Total:

4 361,6

The share of recycled packaging is 79.9%. It is known that 70% of cardboard is recycled.

We follow packaging manufacturers' news, packaging market trends and consumer expectations and

are ready for technological innovations in packaging, especially eco-friendly ones.

For more information on waste generation, water consumption, Greenhouse Gas Emissions (GHG)

and other environmental issues, please refer to the Sustainability Report (Environment).

16. Research and development activities

AB Rokiškio sūris is always looking for ways to make the company more efficient, to continuously

increase revenues and to achieve the highest quality, which is why the company invests constantly.

In 2022, the Company has earmarked EUR 13.7 million for investments. The development of the

Grand hard cheese technology also continues, with investments of EUR 1.39 million, and the

construction of a cheese ripening/drying building is scheduled for completion in 2023.

A major focus is on improving operational efficiency and developing new technologies to reduce

production and operating costs. To this end, a project to digitise the paper logs was launched in

2022. The digitised journals will provide a convenient and time-saving tool for filling in and

analysing data records.

The constant goal of the companies of the Rokiškio sūris Group is to ensure the production and

supply to the consumer of products that meet the highest food safety and quality standards and that

create the greatest added value.

To this end, research activities are constantly being carried out both within the company and in

cooperation with scientific institutions such as KTU FTMC and Vilnius University. Most of the

research is carried out by the company's production specialists together with Prof. Angelo Frosio

from Italy (collaborator and founder of Centro Latte Lodi and Scuola d'Arte Bergognone).

New products are developed in collaboration with scientific institutions to meet the needs of today's

consumers. Product development takes into account sustainable raw materials and technologies, and

looks for added values for product functionality (products enriched with vitamins, milk proteins).

The company's specialists regularly take part in exhibitions and seminars.

By taking advantage of the fact that Fonterra, one of the world's largest dairy companies, has become

a shareholder of AB Rokiškio sūris, the company's specialists can use the company's accumulated

knowledge and research capabilities in their research activities. Research and testing with Fonterra's

specialists is carried out both in-house and in Fonterra's research laboratory located in the company's

Research and Development Centre. The company works closely with brands such as LIDL, whose

products are certified to EN ISO 17025 by the Eurofins Eurofins laboratory, as well as Mars

Netherlands, Mars UK, the IKI supermarket chain and others that place great emphasis on

exceptional quality. Laboratory tests of products are carried out both in the laboratories of the

Group's companies and in other laboratories in Lithuania and abroad, such as the National Institute

of Food and Veterinary Risk Assessment, KTU MI, Eurofins Germany, Poland, China, Campden

Bri food and drink innovation (UK), Galab laboratories (Germany), Qlip quality assurance in

agrofood (Netherlands), Mérieux NutriSciences Italia (Italy), Nutricontrol laboratory (Netherlands).

The company's laboratory in Rokiškis is accredited, certificate No LA01.129. The aim of these

activities is to ensure the safety of the products, to improve the recipes in order to achieve product

uniqueness and a more efficient production process, as well as to develop new products.

The efficiency of production processes and laboratory activities of AB Rokiškio sūris is ensured by

the laboratory information system LabdataLims implemented in 2019. The laboratory information

system successfully collects all data related to laboratory tests. The laboratory information system

is protected against unauthorised access, and the system is accessible only within the internal

network of AB Rokiškio sūris.

To better understand market needs, the company has a regular partnership with NIELSEN, an expert

in the field, both in terms of purchasing its services and in terms of seminars. Another way of

conducting market research is by participating in global exhibitions in the most important regions,

working with both the expertise of the largest customers and the representatives of the largest suppliers.

AB Rokiškio sūris has established a new subsidiary in Ukmergė - UAB DairyHub.Lt in 2022. The

company specialises in packaging hard cheese GRAND for retail sale.

During 2022, Rokiškio sūris subsidiary UAB Rokiškio pieno gamyba expanded its product range and

installed the latest production lines for cottage cheese products.

17. FINANCIAL PERFORMANCE

Alternative performance indicators

AB Rokiškio sūris presents in its financial statements financial performance indicators prepared in

accordance with International Financial Reporting Standards (IFRS), together with non-IFRS

financial performance indicators. These alternative performance indicators are important indicators

of its performance for investors and other users of financial statements. The alternative performance

measures should be treated as supplementary information prepared in accordance with IFRS.

The Company sets out below the alternative performance indicators and the methodology for

calculating them:

Financial indicators (EUR

thousand)

2022

2021

2020

2019

2018

Sales revenue

359 269

253 062

210 829

210 423

203 675

Gross profit

39 888

18 627

21 388

21 902

19 500

EBITDA

22 890

9 094

13 431

13 834

10 865

EBIT

13 042

965

4 171

4 101

1 193

Operating profit

13 042

965

4 171

4 101

1 648

Profit before tax (EBT)

12 593

596

3 972

3 914

1 619

Net profit/loss

12 514

553

4 061

4 101

1 918

Fixed assets

86 310

82 965

76 646

62 294

64 140

Short-term assets

135 340

119 902

120 424

106 774

106 071

Total assets

221 650

202 867

197 070

169 068

170 211

Shareholders' equity

151 449

142 480

145 428

130 771

130 319

Profitability (%)

Return on assets [ROA]

6.14

0.28

2.22

2.42

1.15

Return on equity [ROE]

8.51

0.38

2.94

3.14

1.45

Gross profit margin

11.10

7.36

10.14

10.41

9.57

EBITDA margin

6.37

3.59

6.37

6.57

5.33

EBIT margin

3.63

0.38

1.98

1.97

0.59

Return on constant capital employed

[ROCE]

6.61

0.53

2.45

2.67

0.76

Profitability ratio

[EBT margin]

3.51

0.24

1.88

1.86

0.79

Net profit margin

3.48

0.22

1.93

1.95

0.94

Financial structure

Liabilities/equity ratio

0.46

0.42

0.36

0.29

0.31

Equity to assets ratio

0.68

0.70

0.74

0.77

Debt-to-equity ratio

0.20

0.19

0.18

0.12

0.11

Debt ratio

0.32

0.30

0.26

0.23

Gross liquidity ratio

2.35

2.77

2.70

3.18

2.92

Market value indicators

Share price to earnings per share ratio

[P/E ratio]

8.00

144

24.33

21.00

50.20

Net earnings per share

0.37

0.02

0.12

0.05

Name of indicator

Methodology for calculating

the indicator

Value of indicator

EBITDA

Earnings before interest, tax,

depreciation and amortisation.

EBITDA - operating profit before depreciation,

amortisation and impairment of fixed assets -

helps investors assess the potential for profit

generation before investing in fixed assets.

EBITDA margin

EBITDA / Revenue

EBITDA to revenue ratio shows the efficiency of

a company's operations.

EBIT

Earnings before interest and tax, i.e.

net profit + corporation tax + finance

costs.

EBIT - operating profit. EBIT is a very important

indicator as operating profit is used to pay all

liabilities to creditors. It is a good indicator of a

company's ability to generate cash flow.

EBT

Profit before tax, i.e. net profit +

corporation tax.

Profit before net investment and financing

activities and income tax.

Average return on assets

[ROA]

Ratio of operating profit for the last

12 months to average total assets for

the last 12 months.

This indicator shows how efficiently a company's

assets are managed, i.e. how much net profit is

generated for every euro of assets, which is one

of the most popular measures of a company's

performance

Rate of return on equity

[ROE]

Ratio of average (net) profit for the

last 12 months to average equity for

the last 12 months.

The return on equity (or return on equity) shows

how many euros of net profit are generated per

euro of equity. This indicator is important for

shareholders in assessing the return on their past

investment in the company.

Return on constant capital

employed [ROCE]

Ratio of the sum of operating profit

(EBIT) and financial operating

income for the last 12 months to the

average capital employed for the last

12 months.

The ROCE profitability ratio measures the return

on the funds required for the company's ongoing

operations. It is often compared with the interest

rates on loans available on the market at the time.

The ROCE of a company is considered to be

higher than the cost of borrowed capital at that

time.

Liabilities/equity ratio

Liabilities/Equity

The liabilities/equity ratio shows the amount of a

company's total long-term and short-term

liabilities per euro of equity.

Debt-to-assets ratio

Financial debts (long-term + short-

term)/ Assets

It is a financial ratio that compares a company's

financial debts to its total assets. The ratio shows

how much of the company's assets are financed

by debt.

Debt-to-equity ratio

Financial debts (long-term + short-

term)/Equity

This is one of the main indicators of financial

leverage. The debt-to-equity ratio shows how

many euros of short-term and long-term debt are

held per euro of equity. The debt calculation

takes into account all the interest-bearing

liabilities of the company.

Debt ratio

Liabilities to assets ratio

The debt ratio reflects the proportion of a

company's assets that are acquired with borrowed

funds.

Gross liquidity ratio

Ratio of current assets to current

liabilities

The current ratio measures the ability of an

enterprise to meet its short-term liabilities using

its current assets.

P/E (share price/earnings

ratio)

Share price at the end of the period /

(Net profit/Shares)

The share price/earnings ratio reflects how much

an investor pays per euro of a company's net

profit earned in the previous period.

Earnings per share

Net profit/Shares

Earnings per share shows how much a company

earns in net profit per share outstanding.

Profit/(loss) statement

In 2022, AB Rokiškio sūris Group's sales revenue amounted to EUR 359 269 thousand, an increase

of 42% compared to 2021 (in 2021 the Group's sales revenue amounted to EUR 253 062 thousand).

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2022 2021 2020 2019 2018

Financial indicators (EUR thousand)

Gross profit

Net profit

EBITDA

EBIT

Profit before tax (EBT)

In 2022, the main share of revenue is 53.3% (52.1% in 2021) from sales of fermented cheeses. In

volume terms, sales of fermented cheeses in 2022 were 2% higher than in 2021, but in value terms

the increase was as much as 44%. This was due to the significant increase in world dairy sales prices

following the covid pandemic both in Europe and the US.

The selling prices of whey products more than doubled in 2022. Compared to 2021, these products

were sold at significantly higher prices due to increased demand.

Exports of cream in 2022 have increased due to increased demand. Sales volumes and prices in 2022

were higher and revenues were 71% higher than in 2021. The focus of the market developments has

been on butter or cream production.

Butter sales increased by 54% compared to 2021. The main factor behind the increase in these

revenues was the increase in export prices.

In 2022, sales of fresh dairy products increased by €7.9 million compared to 2021. This is due to an

increase in commodity selling prices.

Costs:

In 2022, the Rokiškio sūris Group will incur costs of sales of products of EUR 319 381 thousand

(EUR 234 435 thousand in 2021). In 2022, the cost of sales increased by 36.2% or EUR 84 946

thousand. This significant change is due to the increase in the purchase price of raw milk and the

increase in the prices of energy resources (steam, electricity, gas), fuel, packaging, auxiliary

materials, spare parts, services, etc. due to the war.

The largest part of the costs in 2022 (€256,045 thousand) is made up of raw materials and assembly

products (€168,571 thousand in 2021). An increase of EUR 87 474 thousand.

Sales, marketing and general administrative expenses as a percentage of turnover amounted to 7.6%

in 2022 (EUR 27 200 thousand) and 7.1% in 2021 (EUR 18 092 thousand).

In 2022, sales and marketing costs increased by 22% (EUR 15 258 thousand), while in 2021 they

amounted to (EUR 12 483 thousand).

The increase in sales and marketing costs in 2022 is due to the increase in sales volumes of cheeses

and an increase in transport costs, freight costs and fuel prices.

Profit:

The consolidated audited net profit of the Rokiškio sūris Group for 2022 is EUR 12 514 thousand,

i.e. EUR 11 961 thousand higher than in 2021 (EUR 553 thousand).

The calculation of net profit takes into account direct and indirect production costs and costs not

related to direct activities. The main factor contributing to the increase in profits was the rapid

recovery in sales prices and demand for dairy products following the pandemic, which continued

until the end of 2022.

The net profit margin of the Rokiškio sūris Group was 3.48% in 2022 (0.22% in 2021).

EBITDA in 2022 of EUR 22,890 thousand, i.e. 2.5 times higher compared to 2021 (EUR 9,094

thousand). EBITDA margin of 6.37% in 2022 (3.59% in 2021).

Additional non-financial information

Disclosure of Sustainability-related information

The Consolidated Social Responsibility Report and Sustainability Report of the Rokiškio sūris

Group are presented for the period from 1 January to 31 December 2022 and cover the activities of

the entire Group. The Sustainability Report is published as a stand-alone document and as part of

the Group's annual report.

This Social Responsibility Report and Sustainability Report is the Group's report and complies with

the Global Reporting Initiative (GRI) standards (2021 update) and the Bank of Lithuania's

recommendations on disclosure of sustainability-related information. The content of the report is

based on the principle of materiality and the principles of the United Nations (UN) Global Compact.

It provides information on the Group's contribution to the UN Sustainable Development Goals

(SDGs). The information is also in line with Nasdaq's U.S. disclosure guidelines and describes

activities and achievements in the areas of environmental, social and governance (ESG).

18. Group activity by segment

AB "Rokiškio sūris" The Group's business consists of the following segments: hard cheese, semi-

hard cheese, butter, milk, cream, sour cream, sour milk, yoghurt, cottage cheese, cottage cheese and

others. These segments have been aggregated into two main segments in the financial statements on

the basis of the similar nature of the products, the production process, the customer group and the

distribution method.

The two main segments presented in the Group's business financial statements are:

- Fresh dairy products

- Cheese and other milk products

Transactions between operating segments are conducted on normal commercial terms. The number

of segment customers, each of which generates 10% of the segment's total revenue, is:

- Fresh dairy products: 2 external customers

- Cheese and other dairy products: 1 external customer

Below is information on the impact of each of the operating segments on the Group's financial

performance.

2022

2021

Change (%)

Total sales revenue (EUR thousand):

359 269

253 062

41.97

Fresh dairy products

107 228

86 869

23.44

Cheese and other milk products

252 041

161 193

56.36

Total gross profit (EUR thousand):

39 888

18 627

114.13

Fresh dairy products

4 417

8 268

-46.58

Cheese and other milk products

35 471

10 359

242.42

Gross profit by segment (EUR thousand)

19. Investments

In 2022, AB Rokiškio sūris continued its active, sustainable development and renewal. Particular

attention was paid to innovative solutions and sustainability, and to what enables us to remain

competitive today and in the future.

The exploitation of the opportunities offered by technology has strengthened the company's

investment policy, which has increased its competitiveness, the production of higher value-added

products, and the uptake of new products and innovative technologies. The policy of implementing

the company's strategic priorities was continued.

As every year, investments have been made to protect the environment and to rationalise the

allocation and use of energy resources. Part of the investment has been for the modernisation of

existing equipment and buildings.

During the financial year 2022, the value of investments made by Rokiškio sūris Group amounted

to EUR 13.7 million.

One of the major investments in Rokiškis was the completion of a building housing a robotic

packaging line for hard Grand cheese. The investment amounted to €1.37 million. Another major

investment was the installation of a slicing line for semi-hard cheeses in the cheese ripening shop.

Much attention has been paid to reducing the cost of energy resources and using energy efficiently.

In the subsidiary in Utena, the biggest investment in 2022 was the introduction of a curd production

line.

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

Fresh dairy products

Cheese and other products

Fresh dairy products Cheese and other products

2022

3,097 36,791

2021

9,046 9,581

2020

11,067 10,321

2019

11,983 9,919

20. Group business plans and forecasts

The investment objective of AB Rokiškio sūris is to continue to increase production efficiency,

focusing on the modernisation, repair and renewal of production units and their equipment. It also

focuses on flexible management of energy resources.

As every year, the plan is to invest in solving environmental problems, introducing sustainable

solutions and generating a clear and strong position.

The construction of the cheese ripening warehouse building (2900m

) is scheduled for completion

in 2023 and will be equipped with new modern refrigeration equipment. The investment in this

warehouse is worth €3.4 million.

During 2023, investments will be made in works and repairs in workshops and units related to

production and economic activities. Each investment is planned with a view to the future.

The Group expects to invest €10.8 million in 2023 to achieve its goals and to expand.

The main areas of investment for 2023 are:

• Acquisition of equipment for the production of cheese (cheese making, curing, ripening, milk

sugar, cheese melting, modernisation of existing equipment, repairs, renovation and

completion of ongoing investments in workshops and buildings).

• For raw milk and product quality testing and evaluation;

• To improve the competitiveness of the company;

• Saving, rational use and distribution of energy resources;

• Reducing environmental impacts, developing sustainability;

• Improving working conditions for employees and the production environment;

• Measures to improve sanitation and hygiene in production and service units;

• To meet customer needs for the products produced;

• For sustainability purposes;

• Transport Spec.

The subsidiary UAB DairyHub.Lt plans to invest in cheese slicing equipment.

INFORMATION ON THE COMPANY'S SHAREHOLDERS AND SHARES

21. Information on the Company's share capital

31 December 2022 The authorised capital of Rokiškio sūris AB consisted of:

Number of

Nominal

value

Total nominal

Share of

authorised

capital (%)

Type of shares

(pcs.)

(EUR)

Value (EUR)

Ordinary registered

shares promotions

35 867 970

0.29

10,401,711.30

100

22. Company contracts with brokerage firms

AB Rokiškio sūris has concluded an agreement with UAB FMĮ Orion Securities (A.Tumėno g. 4,

LT-01109 Vilnius, tel. (8-5) 231 38 33, info@orion.lt) for the management of accounting of the

Company's securities issued by the Company as well as for provision of investment services.

23. Details of trading in the issuer's securities on regulated markets

35 867 970 ordinary registered shares of AB "Rokiškio sūris" are listed on the Nasdaq Vilnius

Baltic Official List (SSSE symbol RSU1L). Nominal value per share EUR 0,29.

The Nasdaq Vilnius Stock Exchange is the only trading market for the Company's shares. The

Company has been listed since 25 July 1995.

The company has not issued any debt securities to the public.

There are no debt securities registered and issued for private circulation.

There are no securities that do not represent a participation in the authorised capital but whose

circulation is regulated by the Securities Law of the Republic of Lithuania.

There was no trading on other exchanges or other organised markets.

Trading statistics for the Company's shares:

2018

2019

2020

2021

2022

Opening price, EUR

2.75

2.51

2.54

2.88

Closing price, EUR

2.51

2.52

2.92

2.88

2.96

Maximum price, EUR

2.81

2.75

2.98

3.18

3.20

Lowest price, EUR

2.25

2.2

2.1

2.6

2.50

Turnover, pcs.

277 058

159 107

161 788

218 200

196 098

Turnover, million euro

0.73

0.4

0.65

0.63

0.57

Capitalisation, million euro

90.03

90.39

104.73

103.3

106.17

Dynamics of the Company's share price and turnover during the reporting period

Source - AB Nasdaq Vilnius website Rokiškio sūris | Trading - Nasdaq Baltic Exchange (nasdaqbaltic.com)

Dynamics of the company's share price and turnover over 4 years

Source - AB Nasdaq Vilnius website Rokiškio sūris | Trading - Nasdaq Baltic Exchange (nasdaqbaltic.com)

Dynamics of the company's shares (RSU1L), OMX_Baltic_Benchmark_GI and

OMX_Baltic_GI indices:

Source - AB Nasdaq Vilnius: Baltic Market Indices - Nasdaq Baltic Exchange (nasdaqbaltic.com)

Chart data:

24. Restrictions on transfer of securities

There are no restrictions on holdings or requirements to obtain the approval of the company or other

security holders.

25. Procedure for amending the Company's Articles of Association

The Articles of Association of the Company shall be amended in accordance with the procedure

provided for by the laws of the Republic of Lithuania and the Articles of Association of the

Company. The decision to amend the Company's Articles of Association shall be taken by the

General Meeting of Shareholders of the Company by a qualified majority of 2/3 of the votes cast by

the shareholders present at the meeting, except for the exceptions provided for in the Law on Joint-

Stock Companies of the Republic of Lithuania.

If the General Meeting of Shareholders adopts a decision to amend the Company's Articles of

Association, a new version of the Articles of Association shall be drawn up and signed by a person

authorised by the General Meeting of Shareholders.

All amendments and additions to the Articles of Association of the Company shall enter into force

only after they have been registered in accordance with the procedure established by the laws of the

Republic of Lithuania.

The Company's Articles of Association were amended on 10 December 2021. by the decision of the

Extraordinary General Meeting of Shareholders of AB Rokiškio sūris. The new version of the

Articles of Association of Rokiškio sūris AB was registered in the Register of Legal Entities on 28

December 2021.

The Articles of Association were amended to increase the number of members of the company's

Board of Directors and to bring the Articles of Association into line with the relevant provisions of

the Law on Joint-Stock Companies of the Republic of Lithuania.

26. Information about the Company's shareholders

The total number of shareholders of AB Rokiškio sūris on 31 December 2022 was 5 464.

Shareholding held by a group of shareholders (31.12.2022):

Name, surname

Company name

Company code

Address

Owned

With persons

acting in

concert

Number of

ordinary

registered

Share of

capital and

votes %

Share of capital

and votes %

UAB Pieno Industri

Investments Management

Company code 173748857

Pramonės g. 3, Rokiškis

Lithuania

9 758 312

27.21

81.93*

RSU Holding Ltd, reg.

No 40103739795

Elizabetes iela 45/47,

LV-1010 Riga

8 953 883

24.96

Antanas Trumpa

Chairman of the Management

Board of the Company

Sodų 41a, Rokiskis

Lithuania

7 088 663

19.76

Fonterra (Europe)

Coöperatie U.A.,

CCI 50122541

Barbara Strozzilaan

356-360, EurBld2, 3e

verdieping, 1083HN

Amsterdam,

Netherlands

3 586 797

10.00

Investment and pension

funds managed by INVL

Asset Management UAB

Gynėjų g.14, Vilnius

Lithuania

2 073 615

5.78

*The group of persons acting jointly consists of UAB Pieno Industriu Invest valdymas (27.21% of the Company's

authorised capital and votes), SIA RSU Holding (24.96% of the Company's authorised capital and votes), strategic investor

Fonterra (Europe) Coöperatie U.A. (10.00% of the Company's authorised capital and votes) and Antanas Trumpa (19.76%

of the Company's authorised capital and votes).

Distribution of shareholders of AB "Rokiškio sūris"

31 December 2022

27. Rights of shareholders

Shareholders have the following moral rights:

1) attend general meetings of shareholders;

2) submit questions to the company in advance on items on the agenda of general meetings of

shareholders;

3) voting rights at general meetings of shareholders, based on the rights attached to the shares;

4) to receive the information on the company referred to in Article 18(1) of the Law on Public

Limited Companies;

5) to file a lawsuit with the court, requesting to compensate the company for damages incurred

as a result of non-performance or improper performance of the duties of the company's manager

and members of the board of directors, as set out in the Law on Companies of the Republic of

Lithuania and other laws, as well as the company's articles of association, as well as in other

cases provided for by law;

6) to obtain the information referred to in Article 89(6) of the Law on Markets in Financial

Instruments on a public limited liability company whose shares are admitted to trading on a

regulated market;

7) other moral rights established by the laws of the Republic of Lithuania.

Shareholders have the following property rights:

1) receive a share of the company's profits (dividend);

2) to receive company funds when the company's share capital is reduced in order to pay out

company funds to shareholders;

3) to receive shares gratuitously when the authorised capital is increased from the company's funds,

except for the exception provided for in Article 42(3) of the Law on Public Limited Companies

and in the case provided for in Article 47

of the Law on Public Limited Companies;

4) the right of first refusal to acquire shares or convertible bonds issued by the company, unless the

General Meeting of Shareholders decides to cancel the right of first refusal for all shareholders in

accordance with the procedure established by the Law on Companies of the Republic of Lithuania;

5) lend money to the company in the manner prescribed by law, but a company may not pledge its

assets to its shareholders when borrowing from them. When a company borrows from a

shareholder, the interest shall not exceed the average interest rate of commercial banks in the place

of residence or business of the lender at the time of the conclusion of the loan agreement. In such

a case, the company and the shareholders are prohibited from agreeing on a higher interest rate;

6) to receive a share of the assets of the liquidating company;

7) to have other property rights established by the laws of the Republic of Lithuania.

The rights referred to in paragraphs 1, 2, 3 and 4 shall be vested in the persons who were

shareholders of the company at the end of the tenth business day following the General Meeting of

Shareholders which adopted the relevant resolution.

28. Details of the issuer's own share buybacks

During the reporting period (1 January 2022 to 31 December 2022) AB Rokiškio sūris did not

acquire or dispose of any of its own shares.

Based on own share repurchases in previous years 31 December 2021 Rokiškio sūris AB held 861

274 treasury shares, representing 2.40% of the company's authorised capital. The total nominal

value of the treasury shares to be acquired, together with the nominal value of the treasury shares

already held, shall not exceed 1/10 of the Company's authorised capital.

The Company has a reserve of EUR 10.850 million for the acquisition of its own shares. The shares

were acquired through the Nasdaq Vilnius Stock Exchange's official offering market. The total price

of the shares acquired by AB Rokiškio sūris amounts to EUR 2 108 397,82.

29. Dividends

The General Meeting of Shareholders decides on the allocation and payment of dividends when

distributing the company's distributable profit.

The Ordinary General Meeting of Shareholders of AB Rokiškio sūris, held on 29 April 2022,

approved the audited consolidated financial statements and the Company's financial statements for

100

2021 and the distribution of the Company's profit for 2021. Dividends were distributed in the

amount of EUR 3,500,669.60 or EUR 0.10 per ordinary registered share.

Below are the dividends declared and paid over the last 10 years:

Per year

Amount of dividends

declared, EUR

Dividend per share EUR

2012

1,015,578.08

0.029

2013

1,015,578.08

0.029

2014

No dividends were paid

2015

2,341,737.37

0.07

2016

3,228,117.30

0.10

2017

3,586,797.00

0.10

2018

3,506,165.30

0.10

2019

3,500,669.60

0.10

2020

3,500,669.60

0.10

2021

3,500,669.60

0.10

AB Rokiškio sūris has a Dividend Policy approved by the General Meeting of Shareholders. In

accordance with this Dividend Policy, the Company's Board of Directors, when proposing to the

General Meeting of Shareholders to allocate dividends, will be guided by the signed Shareholders'

Agreement, according to which 100% of the Company's profit for the financial period, less the

Company's funds earmarked by the Board of Directors to be used for investment (CAPEX), working

capital and/or other purposes, will be allocated to the dividends. In the event that the Company's

Board of Directors foresees a significant amount of investments, which would result in the

Company's profit for the financial period being insufficient to pay dividends in accordance with the

dividend provisions described above, the Board of Directors of the Company will endeavour to

maintain the continuity of the payment of the dividends for the previous financial periods, taking

into account the Company's financial situation and the trend in the global dairy industry market.

The General Meeting of Shareholders may not decide to declare and pay dividends if any of the

following conditions are met:

1) has outstanding debts with the company which have fallen due before the decision is taken;

2) the amount of distributable profit (loss) for the financial year is negative (loss);

3) the company's equity is less than, or would become less if dividends were paid, than the sum

of the company's share capital, statutory reserve, revaluation reserve and reserve for the acquisition

of own shares.

A company that fails to pay its statutory taxes by the due dates cannot pay dividends, annual bonuses

to board members and bonuses to employees.

Dividends are payable to those persons who, at the close of business on the record date for the rights

of the General Meeting of Shareholders that declared the dividend (the close of business on the tenth

101

business day after the General Meeting that adopted the resolution), were shareholders in the

company or otherwise legally entitled to receive the dividend.

The Company shall pay the dividend within 1 month from the date of the decision to distribute

profits. The dividend may be for a financial year or for a period of less than a financial year.

Dividends for periods shorter than the financial year are distributed by a decision of the General

Meeting of Shareholders. Shareholders holding at least 1/3 of the total number of votes shall have

the right of initiative in the case of dividends for periods of less than one financial year. A general

meeting of shareholders whose agenda shall include the question of the granting of dividends for a

period shorter than a financial year shall be held within 3 months of the end of the period for which

the dividends are proposed to be granted, but no earlier than the approval of the set of annual

accounts and the distribution of the company's profit (loss) for the preceding financial year, and no

later than the end of the financial year.

Dividends for periods shorter than a financial year may be granted if all the following conditions

are met:

(1) a set of interim financial statements for a period of less than one financial year;

(2) the amount of profit or loss for the period of less than one financial year is positive (no loss);

3) the amount of the dividend payment does not exceed the amount of the profit (loss) for the period

shorter than the financial year, the amount of the retained earnings (loss) for the previous financial

year carried forward to the current financial year, less the part of the profit for the period shorter

than the financial year that, in accordance with the Law on Companies of the Republic of Lithuania

or the Articles of Association of the Company, is to be allocated to the reserves;

4. the company has no outstanding debts that have fallen due before the decision is taken and would

be able to meet its obligations for the current financial year if the dividend were paid.

If a dividend is declared for a period shorter than a financial year, it may not be declared for another

period shorter than a financial year earlier than 3 months.

CORPORATE GOVERNANCE

30. The governing bodies of the Company

The Articles of Association of AB Rokiškio sūris, registered in the Register of Legal Entities,

provide for the following governing bodies of the Company:

• General Meeting of Shareholders,

• Board,

• Company manager (director).

The Company does not have a Supervisory Board.

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31. Corporate governance and organisational structure of the

Company Group

The management structure of the Rokiškio sūris Group (hereinafter referred to as the Group) is

organised according to the main functions, i.e. sales and marketing, production, financial

management, milk purchasing, logistics and vindication. The functional directors formulate and

develop the Group's strategy, tactics and objectives in accordance with their assigned functions.

GENERAL MEETING OF SHAREHOLDERS

32. Information on the competence and procedure for convening the

General Meeting of Shareholders

The competence and convening procedure of the General Meeting of Shareholders shall not differ

from the competence and convening procedure of the General Meeting of Shareholders set out in

the Law on Companies of the Republic of Lithuania.

The right of initiative to convene the General Meeting of Shareholders of AB Rokiškio sūris shall

be vested in the Management Board and the shareholders whose shares carry at least 1/10 of the

total number of votes at the General Meeting of Shareholders.

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The notice of the General Meeting of Shareholders of the Company to be convened shall be made

public in the Republic of Lithuania and in all other Member States of the European Union, as well

as in the countries belonging to the European Economic Area, at least 21 days before the General

Meeting of Shareholders, in accordance with the procedure established by the Securities Law. The

notice of convening the General Meeting of Shareholders shall be additionally published in the

electronic publication "Public Notices of Legal Entities" published by the State Enterprise Centre

of Registers in the source specified in the Articles of Association.

Persons who were shareholders of the company at the close of business on the record date of the

meeting shall be entitled to attend and vote at a general meeting of shareholders or a reconvened

general meeting of shareholders, in person or by proxy, or by persons with whom an agreement to

transfer the voting right has been concluded, except for the exceptions provided for by law. A

shareholder's right to participate in a general meeting shall also include the right to speak and to ask

questions. The record date of a meeting of a public limited liability company shall be the fifth

business day preceding the general meeting or the fifth business day preceding a repeated general

meeting.

A shareholder may vote in writing by completing a general ballot paper. The form of the general

voting ballot is available on the Company's website www.rokiskio.com in the Investors section, and

is also attached to the draft resolutions submitted by the Company via the Central Regulated

Information Submission Database. The completed General Ballot Form must be signed by the

shareholder or his/her authorised person. The completed and signed by the shareholder or other

person entitled to vote general ballot paper and the document confirming the right to vote shall be

submitted to the Company in writing not later than on the last business day before the meeting, by

registered mail to Pramonės g. 3, LT- 42150, Rokiškis, or by hand delivery to the Company during

business days at the Company's registered office.

The Company does not offer the possibility to attend and vote at the meeting by electronic means.

A general meeting of shareholders may take decisions and shall be deemed to have taken place when

shareholders holding more than ½ of the total voting rights are present. If a quorum is established,

it shall be deemed to be present for the entire meeting. If a quorum is not present, the general meeting

shall be deemed not to have been held and a reconvened general meeting shall be convened, which

shall have the right to take decisions only on the agenda of the meeting that was not held and shall

not be subject to the quorum requirement. The reconvening of the General Meeting of Shareholders

shall be convened not earlier than 14 days and not later than 21 days after the date of the failed

General Meeting of Shareholders. The shareholders shall be notified of the reconvened general

meeting in the manner prescribed in Article 26

(3) of the Law on Companies not later than 14 days

before the reconvened general meeting of shareholders.

The Annual General Meeting of Shareholders must be held annually at the latest within 4 months

of the end of the financial year.

Shareholders holding shares representing at least 1/20 of the total votes shall have the right to

propose items to be added to the agenda. The proposal shall be accompanied by draft decisions on

the proposed items or, where no decisions are required, explanations of each proposed item on the

agenda of the General Meeting of Shareholders. The proposal to supplement the agenda shall be

submitted in writing by registered mail to AB "Rokiškio sūris" at the address Pramonės g.3, LT-

42150 Rokiškis, or by e-mail at rokiskio.suris@rokiskio.com. The agenda shall be supplemented if

the proposal is received not later than 14 days prior to the date of the General Meeting of

Shareholders.

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Shareholders holding shares representing at least 1/20 of the total votes shall have the right to

propose new draft resolutions on the issues included in the agenda of the meeting. The draft

resolutions shall be submitted in writing by registered mail to AB "Rokiškio sūris", Pramonės g.3,

LT-42150 Rokiškis, or by e-mail to rokiskio.suris@rokiskio.com. The shareholders shall also have

the right to propose draft resolutions on the items on the agenda of the Meeting in writing during

the Meeting.

Shareholders attending the General Meeting of Shareholders shall be registered in the register of

shareholders. This list shall indicate the number of votes attached to each shareholder's

shareholding.

A person attending a General Meeting of Shareholders and entitled to vote must produce proof of

identity. A person who is not a shareholder shall, in addition to this document, produce a document

confirming his/her right to vote at the General Meeting. The requirement to provide proof of identity

shall not apply to voting by written ballot in the form of a single ballot paper. The form of the

general voting form is available on the Company's website at www.rokiskio.com under "Investors".

If the shareholder so requests, the company shall, not later than 10 days before the general meeting,

send the general ballot paper by registered mail or deliver it personally by hand and by signature

free of charge. The completed postal ballot paper shall be signed by the shareholder or by his/her

authorised representative. The completed and signed blank ballot paper and the document

confirming the right to vote shall be submitted to the company in writing not later than on the last

working day before the meeting, by registered post to Pramonės g.3, LT-42150 Rokiškis, or by hand

delivery to the company on working days at the registered office of the company to the address

indicated above.

Only fully paid-up shares confer the right to vote at other General Meetings. Each share carries one

vote at a general meeting of shareholders.

The General Meeting of Shareholders has the exclusive right to:

1) amend the company's articles of association;

2) change your company's registered office;

3) elect the members of the Supervisory Board, or, in the absence of a Supervisory Board, the

members of the Management Board, or, in the absence of a Supervisory Board or a Management

Board, the Chief Executive Officer of the company;

4) to dismiss the Supervisory Board or its members, as well as the Management Board or its

members elected by the General Meeting of Shareholders and the Company's CEO;

5) to appoint and recall an auditor or audit firm to audit the annual financial statements, and to

determine the terms of remuneration for audit services;

6) decide on the approval of the remuneration policy for public limited liability companies whose

shares are admitted to trading on a regulated market;

7) determine the class, number, nominal value and minimum issue price of shares to be issued by

the company;

8) to adopt a decision to convert shares of one class of the company into shares of another class,

and to approve the description of the procedure for the conversion of shares;

9) to decide to change the number of shares of the same class issued by the company and the

nominal value per share without changing the amount of the share capital;

10) approve the annual accounts;

11) decide on the allocation of profits (losses);

12) decide on the establishment, use, reduction and elimination of reserves;

105

13. approve the interim financial statements drawn up for the purpose of deciding on the

distribution of dividends for a period of less than one financial year;

14. to decide on the granting of dividends for a period of less than a financial year;

15. decide to issue convertible bonds;

16) decide to withdraw the pre-emptive right of all shareholders to acquire shares or convertible

bonds of a particular issue of the company;

17. to decide to increase the share capital;

18) to take a decision to reduce the authorised capital, except for the exceptions provided for in the

Law on Joint Stock Companies;

19) to decide on the acquisition by the company of its own shares;

20) to decide on the award of Shares to employees and/or members of the organs,

21) approve the rules for the award of Shares;

22) decide on the reorganisation or separation of the company and approve the terms of the

reorganisation or separation;

23) decide to reorganise the company;

24) to take decisions on the restructuring of the Company in the cases set out in the Law on

Corporate Restructuring;

25) to take a decision to liquidate the company, to cancel the liquidation of the company, except

for the exceptions set out in the Companies Act;

26) to elect and remove the company's liquidator, except for the exceptions set out in the

Companies Act.

The General Meeting of Shareholders may also decide on other matters falling within its

competence under the company's Articles of Association, provided that such matters are not within

the competence of other organs of the company under the Companies Act and that they are not

essentially functions of the management bodies.

A resolution of the General Meeting of Shareholders shall be deemed to have been passed when

more shareholders vote in favour of it than against it, with the exception of items 1, 6, 7, 8, 9, 11,

12, 14, 15, 17, 18, 21, 22, 23, 24, 25 above, which shall be decided by a 2/3 (two-thirds) vote of the

total number of shares held by all the shareholders present at the Meeting, and for item 16, the

decision shall require 3/4 (three-quarters) of the votes of all the shares of the shareholders present

and entitled to vote at the General Meeting of Shareholders.

The Company's General Meetings of Shareholders are convened in 2022:

During 2022, two General Meetings of Shareholders of AB Rokiškio sūris were convened and held

on the initiative and by the decision of the Board of the Company.

At the General Meeting of Shareholders of the Company held on 29 April 2022, the shareholders

were presented with the consolidated annual report of AB Rokiškio sūris for 2021 and the auditor's

report on the consolidated financial statements for 2021 and the annual report, and the audit

committee's report was approved, and the audit committee's opinion was approved, and the

consolidated financial statements for the year 2021 were approved. The consolidated and

consolidated financial statements were approved, the Company's 2021 profit distribution was

approved, a dividend of EUR 0.10 per ordinary registered share (total dividend of EUR

3,500,669.60) was distributed, and EUR 17,000 per ordinary registered share was distributed. A

decision to buy back up to 10% of own shares was adopted, the remuneration report of the CEO and

the members of the Board of Directors of AB Rokiškio sūris was approved, a new independent

106

member of the Audit Committee, Mr Vilmantas Pečiūra, was elected (Director of UAB Virenda),

and the auditing firm UAB PricewaterhouseCoopers was selected for the audit of the 2022 annual

consolidated financial statements of AB Rokiškio sūris Group and the Parent Company.

At the Extraordinary General Meeting of the Company held on 7 October 2022, a new member of

the Board of Directors, Thomas Jan de Bruijn (Commercial Director of Fonrerra Co-operative

Group Limited), was elected. He replaces Thijs Bosch (Managing Director Europe, Fonrerra Co-

operative Group Limited), a member of the strategic investor Fonterra, who resigned.

Both General Meetings of Shareholders of AB Rokiškio sūris held in 2022 were attended by the

Company's CEO, the Chairman of the Company's Board of Directors and the Company's CFO.

33. The Board of Directors of the Company

The Board is the collegiate management body of the Company, consisting of 6 (six) members. The

members of the Board shall be elected and recalled by the General Meeting of Shareholders in

accordance with the procedure established by the Companies Law. The members of the Board shall

elect the Chairman of the Board. The number of terms of office of a member of the Board shall be

unlimited. Only a natural person may be elected as a member of the Board. A member of the

Supervisory Board of the Company (if the Company would have a Supervisory Board) and a person

who is not entitled to hold such office under the law shall not be a member of the Management

Board. The powers of the members of the Management Board are defined in the Companies Act

and the Articles of Association of the Company.

If the Board is dismissed, resigns or otherwise ceases to hold office before the end of its term of

office, a new Board shall be elected for a new term of office. If individual Board members are

elected, they shall be elected only until the end of the term of office of the existing Board.

The Board can take decisions and a meeting will be considered to have taken place when 2/3 or

more of the members of the Board are present. Members of the Board who have voted in advance

shall be deemed to be present at the meeting. A decision of the Board shall be adopted by a greater

number of votes in favour than against.

The Board held 6 meetings during 2022. (7 Board meetings in 2021). All Board meetings were held

remotely. All Board meetings were attended by all Board members. Five meetings were held in

accordance with the pre-arranged schedule of Board meetings and one meeting was convened in

accordance with the procedure laid down in the Companies Act and the Rules of Procedure of the

Board in the event of important issues requiring a decision of the Board (resignation of a member

of the Board). During the meetings, the Board approved the Company's 2021 consolidated and

Company financial statements and annual report, as well as the consolidated report and consolidated

financial statements for the first half of 2022, proposed to the General Shareholders' Meeting for

approval the 2021 profit distribution project, proposed a project for the repurchase of treasury shares

and approved the Company's remuneration report, which has been submitted to the General

Shareholders' Meeting for approval. The Board also analysed the reports of the Management and

Audit Committees and decided on the distribution of bonuses. Following the resignation of a

member of the Board, it proposed a new candidate for election to the Board and the nomination of

the Company's audit firm.

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The members of the Board of Directors are paid bonuses for their work on the Board in accordance

with the procedure laid down in Article 59 of the Law on Joint Stock Companies. The amount of

royalties depends on the Company's performance. The General Meeting of Shareholders shall decide

on the payment of bonuses. In 2022 (for the year 2021), the Company granted bonuses of EUR 17

thousand to the members of the Management Board.

There are no other additional payments for the Chairman of the Board in relation to the incentive

scheme.

Members of the Board of AB "Rokiškio sūris" :

(Elected at the Extraordinary General Meeting of the Company on 10.12.2021)

Antanas Trumpa - Chairman of the Management Board of the Company (since 13.12.2017)

Work experience

AB Rokiškio sūris has been operating since 1966.

1971 - 2017 Head of the Company (Director).

Education

1966 Kaunas Polytechnic Institute, specialist in food

industry machinery and apparatus, qualified as a

mechanical engineer. In 1979 he defended his thesis

"Organisation of the work of vacuum apparatus" at

Kaunas Polytechnic Institute, for which he received the

degree of Candidate of Technical Sciences on 12

October 1994. The doctorate degree was awarded by the

Lithuanian Science Council on 1994.

Shares in AB "Rokiškio sūris"

Directly owns 7,088,663 shares (19,76 % of the

authorised capital and votes) Together with related

parties, 29,387,655 shares (81,93 % of the authorised

capital and votes).

Involvement in other companies

Chairman of the Board of Rokiškio pienas UAB

(company code 300561844, registered office address

Pramonės g. 8, Utena) and Rokiškio pieno gamyba UAB

(company code 303055649, registered office address

Pramonės g. 8, Utena).

A shareholder of UAB Pieno pramones investiciju

valdymas (company code 173748857, address

Pramonės g.3, Rokiškis), holding 7.620 units, i.e. 75,60

% of the shares and votes of UAB Pieno pramonės

investi valdymas.

Darius Norkus - Member of the Management Board of the Company. Deputy Chairman of the

Board.

Member of the Board since 2008 (re-elected for a new 4-year term of office at the Company's

General Meeting of Shareholders on 10.12.2021).

Work experience

Since 2001 Sales and Marketing Director of AB

"Rokiškio sūris" (company code 173057512, address

Pramonės g.3, Rokiškis).

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Education

Kaunas University of Technology, graduated engineer

(1993). Baltic Management Institute, Master's degree in

Business Administration (EMBA programme, 2000).

Shares in AB "Rokiškio sūris"

No shares.

Involvement in other companies

A shareholder of UAB Pieno pramones investiciju

valdymas (company code 173748857, address

Pramonės g. 3, Rokiškis), holding 4,07 % of the shares

and votes of UAB Pieno pramonės investi valdymas.

Director of UAB "DairyHub.LT" (company code

305831304, address Kauno g. 65, Ukmergė). He has no

shares in this company.

Paul M Campbell - Independent member of the Company's Board.

(Elected for a new 4-year term of office at the Company's General Meeting of Shareholders on

10.12.2021).

Work experience

"Director and owner of Osmotics Consulting Ltd.

"Osmotics Consulting provides dairy and other

agricultural companies with strategic, M&A,

management and financial advice. Paul has over 35

years of experience in general management, setting up

and managing international joint ventures, marketing,

engineering and finance. Worldwide, Paul has worked

in Australia, USA, Japan, Latin America, Russia, China,

India, Europe and North Africa.

Paul M. Campbell currently lives in London.

Education

University of Canterbury, New Zealand, Chemical and

Industrial Engineering.

Massey University in New Zealand, Diploma in Dairy

Science and Technology.

Shares in AB "Rokiškio sūris"

It does not own shares in the Company.

Participation in other activities

Mr Campbell is a director of a multinational dairy joint

venture in Brazil and also on the Board of Soprole,

Chile's largest dairy company.

Ramūnas Vanagas - Member of the Board of Directors of the Company.

Member of the Board since 2006 (re-elected for a new 4-year term of office at the Extraordinary

General Meeting of Shareholders of the Company on 10.12.2021)

Work experience

Since 2005 Development Director of AB "Rokiškio

sūris" (company code 173057512, address Pramonės

g.3, Rokiškis).

From 2020 Director of Milk Purchasing for Lithuania at

AB Rokiškio sūris (company code 173057512, address

Pramonės g.3, Rokiškis).

Education

Lithuanian Academy of Agriculture, economics and

organisation.

109

Shares in AB "Rokiškio sūris"

No shares.

Involvement in other companies

shareholder of UAB Pieno pramones investiciju

valdymas, holds 4,07 % of the shares and votes of UAB

Pieno pramonės investi valdymas (company code

173748857, adr., Pramonės g.3, Rokiškis);

Member of the Board of Directors of the Latvian

company SIA Jekabpils piena kombinats (company

code 45402008851, registered office address Akmenu

iela 1, Jekabpils, Latvia), no shares.

Jonas Vaičaitis - Independent Member of the Board of Directors of the Company.

(Elected for a new 4-year term of office at the Company's General Meeting of Shareholders on

10.12.2021).

Work experience

1992-2018 m. Head of Branch, AB SEB Bank, Senior

Project Manager, Client Department.

Education

Higher engineering education, Kiev Polytechnic

Institute.

Shares in AB "Rokiškio sūris"

No shares.

Involvement in other companies

It is not involved in the activities of other companies.

Thomas Jan de Bruijn - Member of the Board of Directors.

(until the end of the current term of office (10.12.2025), elected at the Extraordinary General

Meeting of Shareholders of the Company on 07.10.2022).

Work experience

M&A consultant at Deloitte (2011-2017)

Head of M&A Fonterra Europe (2017-2019)

Head of Supply Fonterra Europe (2019-2021)

Commercial and Partnerships Director Fonterra Europe

(2021)

Education

Master's degree in Strategic Management (Rotterdam

RSM University)

Shares in AB "Rokiškio sūris"

No shares.

Involvement in other companies

There is no information on involvement in other

companies.

Company manager (director):

For the company is headed by the Chief Executive Officer (Director) of the Company. The Chief

Executive Officer (Director) of the Company is the Company's sole management body, which

organises the day-to-day business activities of the Company, considers and decides on the

Company's long-term strategic plan and business plan. In the Company's relations with other

persons, the Director shall act on behalf of the Company with sole authority.

The company's CEO attends all General Meetings of Shareholders (including those held during the

reporting period).

110

Director The duties and powers of the Director are defined in the Law on Joint Stock Companies of

the Republic of Lithuania and the Articles of Association of the Company.

Details of the Company's Chief Executive Officer (Director):

Dalius Trumpa - Head of the Company (Director)

(Appointed by the Board of Directors of the Company as of 01.01.2018)

Work experience

AB Rokiškio sūris (company code 173057512, address

Pramonės g.3, Rokiškis) has been operating since 1991.

2002-2006 Production Director of AB Rokiškio sūris.

2007-2017 Deputy Director of Rokiškio sūris AB.

Director of AB Rokiškio sūris since 01.01.2018.

Since 2007.01.02 Director of the subsidiary UAB

"Rokiškio pienas" (company code 300561844,

registered office address Pramonės g.8, Utena).

Since 29.04.2013 Director of the subsidiary UAB

"Rokiškio pieno gamyba" (company code 303055649,

registered office address Pramonės g.8, Utena).

Education

Kaunas University of Technology, Food Industry

Machinery and Apparatus, Mechanical Engineer.

Shares in AB "Rokiškio sūris"

He does not hold shares directly in AB Rokiškio sūris.

Together with related parties - 29,387,655 shares

(81,93 % of the authorised capital and votes)

Involvement in other companies

Shareholder of UAB Rokvalda (company code

300059165, address Basanavičiaus g.16A-125,

Vilnius), holding 100% of the shares and votes.

Since 2010 Chairman of the Board of the Latvian

company SIA Kaunata (company code 240300369,

registered office address Rogs, Kaunata pag., Rezeknes

nov., Latvia). Does not own shares in this company.

Since 11 December 2013 Director of SIA RSU Holding

(company code 40103739795, business address

Elizabetes iela 45/47, Riga). Holds 92 % of the shares

of SIA RSU Holding.

The shareholder of UAB Pieno pramones investiciju

valdymas (company code 173748857, address

Pramonės g.3, Rokiškis) holds 4,07 % of the shares and

votes of UAB Pieno pramones investiciju valdymas;

34. Committees of the Company

Audit Committee of Rokiškio sūris AB:

The Company's Audit Committee is composed of 3 members, 2 of whom are independent. The term

of office of the members of the Audit Committee is 4 years. The members of the Audit Committee

111

shall be elected by the General Meeting of Shareholders on the recommendation of the Board of

Directors of the Company.

Members of the Audit Committee of Rokiškio sūris AB:

1.Kęstutis Gataveckas - Director of UAB Perlas Finance (independent member). He does not

hold any shares in AB "Rokiškio sūris".

2.Vilmantas Pečiūra - Director of UAB Virenda (independent member). He does not hold any

shares in AB "Rokiškio sūris".

3. Rasa Žukauskaitė - (employee of the Finance Department of AB "Rokiškio sūris"). Has 2

shares in AB "Rokiškio sūris".

The term of office of the members of the Audit Committee ends on 30 April 2025.

The Audit Committee is a collegial body that takes its decisions at meetings. The Audit Committee

may take decisions and a meeting shall be deemed to have taken place when at least two (2) members

of the Committee are present. A decision shall be adopted by the affirmative vote of at least two (2)

members of the Audit Committee present at the meeting.

The functions, rights and duties of the Audit Committee shall be regulated by the Regulations on

the Establishment and Activities of the Audit Committee of AB Rokiškio sūris, approved by the

General Meeting of Shareholders of the Company, as well as by other documents regulating the

activities of the Audit Committee.

The main functions of the Audit Committee:

1. Monitor the process of preparing the financial statements of the Company and its Subsidiaries;

2. Monitor the effectiveness of the Company's internal control, risk management and internal

audit systems;

3. To make recommendations to the Company's Board on the selection of the external audit firm

and to monitor the audit process;

4. Monitor the external auditor's and audit firm's compliance with the principles of independence

and objectivity;

5. To inform the Company's Board of Directors of significant deficiencies in internal control

over financial reporting identified by external and internal audit and to make recommendations for

remediation;

6. To act honestly and responsibly for the benefit and welfare of the Company and its

shareholders.

The Audit Committee held 4 meetings in 2022 to discuss the principles for the preparation of the

2021 consolidated financial statements and the conclusions reached, the process for the preparation

of the 2022 half-year consolidated financial statements, the main risks, the impact of Covid-

19/arKar in Ukraine, the measures taken to minimise risks, the application of the accounting

principles, and the conclusions reached.

The Audit Committee reported on their functions, i.e. the preparation of the financial statements of

the Company and its subsidiaries, the functioning of the Company's internal control risk

management and internal audit systems.

112

On 15 December 2022, during a meeting with the audit team of PricewaterhouseCoopers, the audit

team discussed a summarised audit plan outlining the stakeholders' and PricewaterhouseCoopers'

overall understanding of the current situation, a description of the main risk factors, ESEF's financial

reporting, the reporting of corporate sustainability information, the audit plan of the external

auditors, and other issues. The Audit Committee approved the draft audit engagement and had no

comments. In accordance with the requirements of the Audit Law of the Republic of Lithuania, the

Audit Firm has provided the Audit Committee with a written confirmation of the Audit Firm's

independence. The Audit Committee has not identified any instances of the provision of services

that are contrary to the laws on auditing of the Republic of Lithuania and the principles of

professional ethics of auditing and that may affect the independence of the audit firm.

There are no other committees in the company.

35. Management of the Company

Members of the company's management

Responsibilities

Name, surname

In office since

Director

Dalius Trumpa

2018-01-01

Director of Finance

Antanas Kavaliauskas

2002-05-01

Milk Purchasing Director

Ramūnas Vanagas

2020-01-01

Director of Central Services

Jonas Kvedaravičius

2002-05-01

Director of Logistics

Jonas Kubilius

2002-05-16

Sales and Marketing Director

Darius Norkus

2001-07-18

Management bonus system:

Members of the Company's management receive a salary and variable components of remuneration

depending on the Company's performance, market conditions and other factors. The Group does not

have any management bonus schemes in place.

36. Staff

The average number of employees in the Rokiškio sūris Group in 2022 is 1291, a decrease of 2.64%

or 35 employees compared to 2021 (1326). The decrease in the number of employees is related to

the reduction of the raw milk collection points, which resulted in a decrease in the number of milk

collection point managers and logistics department employees. The number of staff increases

slightly during the summer season when more raw milk is purchased.

In 2022, 80.9% of the Company's total workforce is made up of workers (80.4% in 2021), 18.5% of

the total workforce is made up of professionals (19.0% in 2021); and the number of managerial staff

has remained unchanged at 8 managers.

Group employees by category

Employee group

Average number of employees

Change

2022.12.31

2021.12.31

(%)

Managers*

Specialists

239

252

-5.16

Workers

1044

1066

-2.06

Total:

1291

1326

-2.64

113

*Functional directors are assigned to the company's senior management.

As at 31 December 2022, 56.8% of men and 43.2% of women worked in the Rokiškio sūris group.

(31 December 2021: 56,5 % and 43,5 % respectively).

The average age of the Company's Group employees is 48 years. In 2021, the average age of

employees was 45 years.

The company employs highly qualified employees, of which: higher education - 12.55% (11.16%

in 2021); higher education - 50.43% (50.60% in 2021); secondary education - 36.87% (39.16% in

2021); incomplete secondary education - 0.15% (0.08% in 2021).

Rokiškio sūris Group staff education

Education

2022.12.31

2021.12.31

Change

(%)

Higher education

162

148

9.46

Higher education

651

671

-2.98

Secondary

476

506

-5.93

Unfinished secondary

education

100

Length of service

Age of employees

Staff education

114

Payroll system

The company has an efficient and fair remuneration system to attract, retain and motivate staff. All

employment contracts with the Company's employees, including managers, are concluded in

accordance with the requirements of the Labour Code of the Republic of Lithuania. Employees are

recruited and dismissed in accordance with the requirements of the Labour Code.

Average monthly earnings of Rokiškio sūris Group by employee group

Employee group

Average monthly salary (gross)

EUR

Change

(%)

2022.12.31

2021.12.31

Guides

3147

2844

10.65

Specialists

1877

1495

25.55

Workers

1688

1333

26.63

Group average

1860

1372

35.57

The average monthly salary is calculated in accordance with Government Resolution No 496,

21.06.2017.

The remuneration paid to employees of AB Rokiškio sūris Group consists of:

1) the fixed remuneration you receive for the work you do - the monthly salary stipulated in your

contract;

2) piece rates: for shop floor workers, sales figures, etc. Warehouse workers are remunerated

according to the amount of actual work performed and the approved rates;

3) Variable remuneration: in accordance with the provisions of the incentive fund approved in the

collective agreement.

The Company has a remuneration system in place since 2018, with variable remuneration

components determined by the Company, depending on the Company's performance, market

conditions and other factors. The variable remuneration components are allocated to each division

in accordance with the approved functional management system. These remuneration arrangements

shall be approved by the Chief Executive Officer of the Company.

Each of the Company's production workshops or departments has an approved procedure for the

allocation of the incentive pool, which includes performance criteria and incentives for all

employees. Performance appraisal is one of the most important tasks of the Company in order to

organise work as efficiently as possible, to achieve the objectives set, to foster positive relations

between managers and their subordinates, and to increase the motivation of employees.

Social dialogue

As of 2018, the Company has an elected Labour Council with 11 members. The Council is

established for a three-year term of office, starting from the beginning of the Council's mandate. At

the end of the term, the Labour Council was re-elected in May 2021 for another three-year term.

115

Employees of Group companies have the right to participate in trade union activities. The companies

have a trade union committee which defends the labour, economic and social rights and interests of

its members, defends the right to employment and social security of its members, takes care of the

development of professional qualifications, develops professional ethics, and seeks to increase the

wages and other incomes of workers in the food industry.

The Collective Agreement was approved in September 2020 and renewed in August 2022,

improving the existing guarantees for employees. The purpose of this Collective Agreement is to

create conditions for the harmonious functioning of the collective, to guarantee a level of work,

remuneration, health and safety and other working conditions for the various categories of

employees that is better than that provided for by the laws of the Republic of Lithuania,

governmental decrees and regulations, and to provide better labour and social guarantees for the

Company's employees. The following additional guarantees are envisaged for the employees:

- A worker with a disabled child receives a material allowance of 1 MMA once a year;

- A funeral allowance is paid to employees of the Company in the event of the death of a

family member (spouse, parent, child); a one-off funeral allowance is paid to the family in

the event of the death of an employee of the Company;

- On work anniversaries (20th, 25th, 30th, 35th, 40th, 45th, 50th), the Company's employees

are paid an additional allowance;

- Support is provided to the Company's employees with serious and prolonged illnesses and

injuries;

- The Company's employees, employees' family members, employees who have worked for

the Company and retired employees receive a discount on medical treatment at the

Company's prophylactic sanatorium;

- Unpaid leave provided for in the LC for the celebration of an employee's marriage or for the

attendance of a funeral of a deceased family member shall be paid in accordance with the

general procedure for granting leave. In addition, leave is granted for the marriage of

employees' children and for the death of the parents of the employee's spouse.

The rights and obligations of the Company's employees are set out in their job descriptions. There

are no specific rights and obligations in the employment contracts.

During 2021, 258 employees of the Company Group benefited from the social guarantees of the

"Material Incentive and Benefits Procedure" in force prior to the Collective Agreement and

subsequently of the Collective Agreement.

Developing competences

The development of Rokiškio sūris staff and the improvement of special and general skills is one of

the company's top priorities, as only educated employees with the right knowledge and experience

can create a quality product. Training plans are drawn up annually, taking into account the

Company's objectives and the adequacy of the staff's competences to meet these objectives. The

Group's employees are provided with opportunities to improve their knowledge and skills at various

training courses, seminars and conferences, and the Company supports the acquisition of

professional education at national universities, colleges or other qualifying educational institutions.

A strong emphasis is placed on learning foreign languages.

116

The company continuously trains its employees internally, taking into account the nature of the

work and the requirements of the workplace and product quality. In 2022, distance training was

provided to employees on the basic principles of sustainability.

AB Rokiškio sūris also organises special courses and training for farmers in the country in order to

ensure that they successfully take care of the health of their cow herds, properly maintain milking,

cooling and storage equipment, and modernise their dairy farm. A modern dairy farm, milk quality

and herd health are key to the success of a dairy business.

Code of Ethics

The Company has an Ethical Employer Policy in place since 2018, which was revised and replaced

by a Code of Ethics with effect from November 2022, under which the Company conducts its

business in accordance with internationally recognised human and workers' rights, which it

considers to be the basis of the International Bill of Human Rights and the principles of fundamental

rights as set out in the International Labour Organisation's Declaration of Fundamental Principles

and Rights at Work, and which it applies the Principles of Social Responsibility, and operates in a

manner that is transparent, credible and fair.

For more information on social aspects, see the Sustainability Report (Social area).

37. Information on agreements between the Company and members of

its organs, members of committees formed or employees providing for

compensation in the event of their resignation or dismissal without

just cause or if their employment is terminated as a result of a change

of control of the issuer

There are no agreements between the Company and the members of the Board of Directors or

employees providing for compensation in the event of their resignation or dismissal without just

cause, or in the event of termination of their employment as a result of a change of control of the

Company. All employment contracts with the Company's employees, including members of the

Company's management, are concluded in accordance with the requirements of the Labour Code of

the Republic of Lithuania. The Company does not provide for any additional share-based payments.

INFORMATION ON RELATED PARTY TRANSACTIONS AND MATERIAL

ARRANGEMENTS

38. Related parties of AB Rokiškio sūris Group

The group of persons acting in concert consists of UAB Pieno pramones investiciju valdymas

(27.21% of the Company's share capital and votes), SIA RSU Holding (24.96% of the Company's

share capital and votes), Fonterra (Europe) Coöperatie U.A. (Netherlands) (10.00% of the

Company's share capital and votes), Antanas Trumpa (19.76% of the Company's share capital and

117

votes), and Dalius Trumpa (no shareholdings in the Company). The group of persons acting in

concert owns 81.93% of the Company's share capital and votes.

The remaining 18.07% of the Company's shares and votes are held by other small Lithuanian and

foreign individuals and legal entities.

Closed Joint Stock Company Pieno pramones investiciju valdymas is controlled by Antanas Trumpa

(as the main shareholder, holding 75.60% of the shares and votes of UAB Pieno pramones

investiciju valdymas). RSU Holding SIA is controlled by Dalius Trumpa (holding 92% of the shares

and votes of RSU Holding SIA).

Certain cooperative companies involved in milk production are considered related parties of the

Company as the Company, through close family members of its directors and certain of its

employees, can exercise significant influence over the day-to-day operations of these companies.

39. Related party transactions

During 2022, the company did not have any related party transactions that meet the criteria in

paragraph 37

. All related party transactions included purchases of raw milk from related parties

and sales of dairy products by related parties, see note to the Company's consolidated financial

statements "Related Party Transactions". The transactions were at arm's length, are in the ordinary

course of business and do not have a material impact on the Company. The Company considers the

related parties to be the Fonterra group companies - Fonterra (Europe) Coöperatie U.A., company

reg. code 50122541, registered office at Barbara Strozzilaan 356-360, 1083 HN Amsterdam, The

Netherlands, and Fonterra Ingredients Limited, registered office at 109 Fanshawe Street, 1010

Auckland, New Zealand, (for the sale of dairy products), and KB Dzūkijos pienas, company reg.

code 300058288, registered office at Varanausko km., Krokialaukio sen. Alytaus r. (raw mik

purchased).

Related party transactions are disclosed in note 31 to the Company's consolidated financial

statements for 2022.

40. Information on harmful transactions entered into on behalf of the

issuer

During the reporting period, there were no harmful transactions that were inconsistent with the

Company's objectives, were not in line with normal market conditions, were prejudicial to the

interests of the shareholders or other groups of persons, and had or may in the future have an adverse

effect on the Company's business or results of operations. There were also no transactions resulting

from conflicts of interest between the duties of the Company's directors, controlling shareholders or

other related parties to the Company and their private interests and/or duties.

118

OTHER INFORMATION

41. Audit information

The consolidated balance sheet of AB Rokiškio sūris Group as at 31 December 2022 and the related

consolidated statements of comprehensive income, cash flows and changes in equity for the year

then ended and the assessment of the annual report have been audited and the annual report have

been reviewed by PricewaterhouseCoopers UAB, an international audit firm.

The General Meeting of Shareholders selects the audit firm for the audit of the annual financial

statements and sets the terms of remuneration. As the Company is listed and maintains its accounts

in accordance with International Financial Reporting Standards, the Company's shareholders are

required to appoint an international audit firm.

PricewaterhouseCoopers International Limited (PwC) is a network of audit and tax advisory firms,

one of the members of the Big Four (the others being KPMG, Ernst & Young and Deloitte Touche

Tohmatsu). PricewaterhouseCoopers Lithuania is a legally independent firm in Lithuania and a

member of the global PwC network.

PricewaterhouseCoopers UAB provides audit, accounting, consulting, tax and legal services to

multinational companies and large Lithuanian companies.

The Rokiškio sūris Group paid the audit firm a fee of EUR 58,120 for the 2022 audit.

42. Data on publicly available information

The information on the 2022 public announcement of AB Rokiškio sūris is available on the

company's website www.rokiskio.com in the Investors > Material events section.

Summary of information published:

Date of

publication

Brief description of the report

2022.04.07

Independent member of the Audit Committee resigns

2022.04.07

Ordinary General Meeting of Shareholders of AB "Rokiškio sūris" convened

on 30 April 2021

2022.04.29

Resolutions adopted at the Ordinary General Meeting of Shareholders of AB

Rokiškio sūris held on 29 April 2022

2022.04.29

AB Rokiškio sūris audited annual information 2021

2022.05.06

AB Rokiškio sūris 2021 ex-dividend payment day

2022.05.12

Dividend payment procedure for AB Rokiškio sūris for 2021

2022.05.16

Notification of a manager's transaction in the securities of the Issuer

2022.07.12

A member of the Board of Directors of the Company has resigned

2022.08.31

Six-month results of AB Rokiškio sūris Group for 2022

119

2022.09.13

Extraordinary General Meeting of Shareholders of AB "Rokiškio sūris"

convened on 7 October 2022

2022.10.07

Decisions adopted at the Extraordinary General Meeting of Shareholders of

AB Rokiškio sūris on 7 October 2022

2022.12.30

Dates of publication of AB "Rokiškio sūris" Group results for 2023

The Company publishes public information by uploading it to the Central Database of Regulated

Information, publishing it on the website of AB Nasdaq Vilnius at http://www.nasdaqbaltic.com,

and uploading it to the Company's website at www.rokiskio.com

120

GOVERNANCE REPORT OF AB "ROKIŠKIO SŪRIS"

AB Rokiškio sūris Corporate Governance Report prepared in accordance with the Law on

Financial Reporting of the Republic of Lithuania

1. Reference to the applicable corporate governance code and where it is publicly available

and/or reference to any relevant publicly available information on corporate governance

practices

The consolidated report for 2022, together with the Corporate Governance Report and the audited

financial statements of the Company and its Group, is published on the Company's website

www.rokiskio.com and on the website of the stock exchange AB Nasdaq Vilnius

www.nasdaqbaltic.com

2. Where the provisions of the applicable corporate governance code are deviated from

and/or not complied with, the provisions deviated from and/or not complied with and the

reasons for this

Information on compliance and/or non-compliance with the provisions of the Corporate

Governance Code is presented in a structured table (No.2).

3. Information on the extent and management of risks - a description of the management of

risks associated with the financial statements, mitigating measures and the entity's internal

control system

The Company shall disclose information on the extent of risk and risk management, risk

mitigation measures and the internal control system in place at the Company in paragraphs 11-

12 to 13 of the consolidated annual report for 2022.

4. Information on significant direct or indirect shareholdings

Information on significant direct or indirect holdings is provided in paragraph 26 of the 2022

consolidated annual report.

121

5. Information on transactions with related parties as set out in Article 37 of the Law on Joint

Stock Companies

(specifying the parties to the transaction (legal form of the legal entity,

name, code, the register in which the data concerning this person are collected and stored, the

registered office (address) name of the natural person, the address for correspondence) and

the value of the transaction)

During 2022, the company did not have any related party transactions that meet the criteria in

paragraph 37

. For further details, please refer to paragraph 39 of the 2022 Consolidated Annual

Report.

6. Information on shareholders with special control rights and a description of those rights

The company has no shareholders with special control rights.

7. Information on any existing restrictions on voting rights, such as restrictions on the voting

rights of persons holding a certain percentage or number of votes, time limits for the exercise

of voting rights, or systems whereby the rights attached to the securities are separated from the

security holder

The Company is not subject to restrictions on voting rights. All shareholders have the same

property and non-property rights (except for the Company's treasury shares, which have no

voting rights).

8. Information on the rules governing the election and replacement of members of the board

of directors and amendments to the articles of association

The Company does not have rules governing amendments to the Company's Articles of

Association and the election and replacement of members of the Company's Board. The

Company's activities are governed by the Law on Companies of the Republic of Lithuania, the

Company's Articles of Association and other legal acts.

For further details see paragraphs 25 and 33 of the Company's 2022 Consolidated Annual Report.

9. Information on the powers of the members of the Board

The members of the Board have not delegated any authority to others to perform the functions

falling within the Board's competence. The members of the Company's Board act in accordance

with the Companies Act, the Company's Articles of Association and the Board's Rules of

Procedure.

10. Information on the competence of the general meeting of shareholders, the rights of

shareholders and their exercise, unless this information is provided for by law

Information on the competences, rights and exercise of the General Meeting of Shareholders, as

well as on the procedures for organising shareholders' meetings, is provided in point 32 of the

2022 Consolidated Annual Report.

122

11. Information on the composition of the management and supervisory bodies and their

committees, and their activities and those of the chief executive

The Company's information on the composition of the management and supervisory bodies and

their committees, and the scope of their activities and the activities of the Company's Chief

Executive Officer, is set out in paragraphs 34 and 35 of the 2022 Consolidated Annual Report.

12. A description of the diversity policy for the election of the members of the company's

management, governing and supervisory bodies, including aspects such as age, gender,

education, professional experience, the objectives of the policy, how it has been implemented

and the results achieved during the reporting period. If the diversity policy is not applied, the

reasons for not applying it shall be explained

The Company does not have a policy on diversity in the election of the CEO and the management

and supervisory bodies. The requirements for candidates for nomination to the Company's

governing bodies do not discriminate between candidates on the basis of age, gender, education

or professional experience. The Company does not impose any restriction on persons standing

for election on the grounds of sex or age. The main criterion for the election of members of the

management bodies is the competence of the candidate.

13. Information on the remuneration of each member of the management or supervisory body

(average remuneration paid during the reporting period, with separate reference to bonuses,

allowances, royalties and other payments

Amounts and average amounts of money per member of the management bodies, assets

transferred and guarantees granted to the members of the Board of AB Rokiškio sūris, the

Company's CEO and the Chief Financial Officer during 2022:

Members of the

management

bodies

Number

of people

Total amounts

accrued,

(salaries and

bonuses)

thousand EUR*

TOTAL

average per

member,

(salaries and

bonuses)

thousand EUR

incl.

average

wage

levels

incl.

average

royalty rate

incl.

average

size of

bonuses

Board members*

101.87

16.98

14.15

2.83

Chief Executive

Officer and Chief

Financial Officer

69.15

34.58

* Two members of the Board are employees of the Company. The amounts accrued and paid for 2022 (salaries) relate to employment.

During the period under review, the Company did not make any loans, guarantees or transfers of

assets to the members of the Board of Directors, the Chief Executive Officer or the Chief

Financial Officer.

14. Details of any agreements between shareholders (substance, terms)

123

On 13 October 2017, the Strategic Investment Agreement and the Shareholders' Agreement were

signed between the Company's shareholders - UAB Pieno pramonės investi valdymas, SIA RSU

Holding, Antanas Trumpa and Ledina Trumpienė, Daliaus Trumpa and Rasa Trumpienė, the

Strategic Investor - Fonterra (Europe) Coöperatie U.A., and the Company - AB Rokiškio sūris.

The purpose of this agreement was to define the relationship between the parties in relation to

the Company, to ensure joint action in the development of the Company and in the exercise of

voting rights at General Meetings of Shareholders, to agree on specific conditions and restrictions

on the disposal of the shares, and to enable the shareholders to protect their interests in their

investment in the Company.

The Company has no record of any other agreements between shareholders.

124

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

Rokiškio sūris Joint Stock Company (hereinafter referred to as the "Company"), in accordance

with Article 22(3) of the Securities Law of the Republic of Lithuania and Clause 24.5 of the

Listing Rules of AB Nasdaq Vilnius, hereby discloses the extent to which it has complied with

the Code of Corporate Governance of Companies Listed on Nasdaq Vilnius, and the specific

provisions or recommendations thereof. In the event of non-compliance with the Code or any of

its provisions or recommendations, it shall state which specific provisions or recommendations

are not complied with and the reasons for non-compliance, as well as any other explanatory

information as specified in this form.

Structured table 2

PRINCIPLES/GUIDELINES

YES /NO /NOT

APPLICABLE

COMMENTARY

1. Principle 1: General Meeting of Shareholders, fair treatment of shareholders and shareholders' rights

The corporate governance system should ensure fair treatment of all shareholders. The corporate governance

system should protect shareholders' rights.

1.1 All shareholders should have equal access to the

information and/or documents provided for in the

legislation and should be able to participate in the adoption

of decisions of importance to the company.

Yes

All shareholders have equal access

to information and/or documents

required by law and to participate in

decisions of importance to the

company. The Company provides

information through the Central

Regulated Information Database of

AB Nasdaq Vilnius Stock Exchange

in Lithuanian and English

simultaneously. The information

shall be published immediately and

simultaneously, thus ensuring

simultaneous provision of

information to all.

1.2 It is recommended that a company's capital should

consist only of shares that give their holders equal voting,

ownership, dividend and other rights.

Yes

The Company's authorised capital

consists of ordinary registered

shares, giving all holders of the

Company's shares equal voting,

ownership, dividend and other

rights.

1.3 It is recommended that investors should be given the

opportunity to familiarise themselves with the rights

attaching to new or existing shares in advance, i.e. before

purchasing them.

Yes

The Company makes available to

investors in advance the rights

attaching to new or existing shares

to be issued.

125

1.4. Exceptional transactions of major importance, such as

the disposal of all or substantially all of the company's

assets, which would effectively amount to a disposal of the

company, should be subject to the approval of the General

Meeting of Shareholders.

Yes

In accordance with the Company's

Articles of Association, significant

transactions, i.e. decisions on

investment, transfer, lease, pledge

and mortgage of fixed assets with a

carrying amount exceeding 1/5 of

the Company's authorised capital,

decisions on guaranteeing or

guaranteeing the performance of

obligations of other persons

exceeding 1/5 of the Company's

authorised capital and decisions on

the acquisition of fixed assets for a

price exceeding 1/5 of the

Company's authorised capital, do

not require the approval of the

Company's shareholders. These

decisions (in accordance with the

Company's Articles of Association)

shall be approved by the

Management Board. For very

important exceptional transactions,

such as the disposal of all or almost

all of the Company's assets, the

Company would be guided by the

Law on Joint Stock Companies of

the Republic of Lithuania as well as

by other legal acts setting out the

requirements for approval of such

transactions.

1.5 The procedures for organising and participating in the

General Meeting of Shareholders should ensure that

shareholders have an equal opportunity to participate in the

General Meeting of Shareholders and should not prejudice

the rights and interests of shareholders. The choice of the

place, date and time of the General Meeting of Shareholders

should not preclude the active participation of shareholders

in the General Meeting of Shareholders. In the notice

convening the general meeting, the company should

indicate the latest date on which proposed draft resolutions

may be submitted

Yes

All shareholders of the Company

shall be informed of the date, place

and time of the General Meeting of

Shareholders by publicly

announcing the General Meeting of

Shareholders, the agenda, and draft

resolutions in advance in accordance

with the procedure established by

law, in the Central Regulated

Information Base of the AB Nasdaq

Vilnius Stock Exchange, in the

electronic publication "Public

Announcements of Legal Entities"

issued by the Centre of Registers of

Legal Entities, as well as in the

Company's website

www.rokiskio.com In the notice of

the General Meeting of

Shareholders, the Company shall

indicate by when shareholders may

supplement the agenda of the

General Meeting of Shareholders

and propose draft resolutions.

126

1.6 In order to ensure the right of shareholders living abroad

to access information, it is recommended that, where

possible, the documents prepared for the General Meeting

of Shareholders be made available to the public in advance

not only in the Lithuanian language, but also in English

and/or in other foreign languages. It is also recommended

that the minutes of the General Shareholders' Meeting after

signing and/or the decisions adopted are made public not

only in Lithuanian but also in English and/or other foreign

languages. It is recommended that this information be

published on the company's website. Not all documents may

be made publicly available if their public disclosure would

be detrimental to the company or would disclose the

company's business secrets.

Yes

The documents prepared for the

General Meeting of Shareholders,

including the draft resolutions of the

meeting, in accordance with the

procedure established by the Law on

Companies of the Republic of

Lithuania, shall be published on the

website of the Nasdaq Vilnius Stock

Exchange and on the Company's

website not later than 21 days prior

to the General Meeting of

Shareholders, and shall be made

available to the shareholders for

public inspection in Lithuanian and

English.

The resolutions approved by the

General Meeting of Shareholders,

including the financial statements,

the audit report, the annual report,

amendments to the Articles of

Association, etc., are publicly

disclosed in Lithuanian and English

through the Central Regulated

Information Database of Nasdaq

Vilnius and on the Company's

website www.rokiskio.com.

1.7 Shareholders entitled to vote should be given the

opportunity to vote at the shareholders' meeting in person,

either present or absent. Shareholders should not be

prevented from voting in advance in writing by completing

a single ballot paper.

Yes

The Company's shareholders have

the right to participate in the General

Meeting of Shareholders both in

person and through a representative,

provided that the person has a proper

power of attorney or a contract for

transfer of voting rights has been

concluded with him/her in

accordance with the procedure

established by the legislation, as

well as the Company shall enable the

shareholders to cast their votes by

completing a general ballot paper, as

provided for by the Law on

Companies of the Republic of

Latvia.

1.8 In order to enhance shareholders' ability to participate in

general meetings, it is recommended that companies should

increase the use of modern technology to enable

shareholders to participate and vote in general meetings by

electronic means. In such cases, the security of the

information transmitted must be ensured and the identity of

the attendees and voters must be identifiable.

The Company does not comply with

the provisions of this

Recommendation as it is not

possible to ensure the security of the

information transmitted and the

identity of the person who

participated and voted cannot be

established.

127

1.9 It is recommended to disclose in the notice of the draft

decisions of the convened General Meeting of Shareholders

the new nominations of the members of the collegial body,

the remuneration proposed for them, the proposed

appointment of the audit firm, if these matters are included

in the agenda of the General Meeting of Shareholders.

When a new member of the collegial body is proposed for

election, it is recommended to disclose his/her educational

background, work experience and other management

positions held (or proposed to be held).

Yes

The company shall disclose in the

draft resolutions, when giving notice

of a general meeting of shareholders

and if the agenda of the general

meeting of shareholders includes the

election of a new member of the

collegial body or the appointment of

an audit firm, the nominations of the

proposed new members of the

collegial body and the audit firm to

be appointed.

Information on candidates for the

members of the collegial body shall

be provided in advance by

publishing this information on the

website of the Nasdaq Vilnius Stock

Exchange, on the website of AB

"Rokiškio sūris"

www.rokiskio.com, or by publicly

announcing it to the shareholders

present at the General Shareholders'

Meeting at the time of the meeting,

if the shareholders whose shares

represent at least 1/20 of the total

number of votes nominate an

additional candidate during the

meeting.

The company publicly discloses the

position, experience and educational

background of the collegiate body in

its annual and six-monthly interim

reports.

1.10 Members of the Company's collegial body, the Chief

Executive Officers

or other competent persons associated

with the Company who are in a position to provide

information relating to the agenda of the General Meeting

of Shareholders should be present at the General Meeting of

Shareholders. Proposed candidates for membership of a

collegiate body should also attend the General Meeting if

the election of new members is on the agenda of the General

Meeting.

Yes

General Shareholders' Meetings are

attended by members of the

company's collegial body and the

Chief Executive Officer. Proposed

candidates for election to the

collegiate body shall also be present

if the election of new members is on

the agenda of the General Meeting

of Shareholders, except in special

cases (e.g. if physical attendance at

the meeting would be prevented due

to quarantine regime or other

important circumstances).

For the purposes of this Code, chief executives are those employees of a company who hold senior management positions.

128

2. Principle 1: Supervisory Board

2.1. Functions and responsibilities of the Supervisory Board

1.1.1. The Supervisory Board should ensure that the interests of the company and its shareholders are represented,

that it is accountable to the shareholders and that it exercises objective and impartial oversight of the company's

activities and its management bodies, and that it makes regular recommendations to the management bodies.

1.1.2.

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

honestly, diligently and responsibly in the best interests of

the Company and its shareholders and represent their

interests, taking into account the interests of employees and

the public good.

Not applicable

According to the Articles of

Association of AB Rokiškio sūris,

the Company has only one collegial

body - the Management Board.

There is no Supervisory Board in the

Company. The shareholders of the

Company have decided to delegate

all management functions to a

collegiate body, the Management

Board.

2.1.2. Where the Supervisory Board's decisions may affect

the interests of the company's shareholders differently, the

Supervisory Board should treat all shareholders impartially.

It should ensure that shareholders are adequately informed

about the company's strategy, risk management and control,

and the management of conflicts of interest.

Not applicable

See point 2.1.1.

2.1.3. The Supervisory Board should be impartial in making

decisions relevant to the company's operations and strategy.

The work and decisions of the members of the Supervisory

Board should not be influenced by those who elected them.

Not applicable

See point 2.1.1

2.1.4. Members of the Supervisory Board should make clear

their objection when they consider that a decision of the

Supervisory Board could be detrimental to the company.

Independent members of the

Supervisory Board should: a)

remain independent in their analysis and decision-making;

b) neither seek nor accept any undue preferences that may

cast doubt on the independence of the members of the

Supervisory Board.

Not applicable

See point 2.1.1

2.1.5 The Supervisory Board should oversee that the

company's tax planning strategies are designed and

implemented in accordance with the law, in order to avoid

perverse practices that are not in the long-term interests of

the company and its shareholders, which could give rise to

reputational, legal or other risks.

Not applicable

See point 2.1.1

For the purposes of this Code, the criteria for independence of the members of the Supervisory Board shall be understood in

the same way as the criteria for non-affiliated persons are defined in Article 31(7) and (8) of the Law on Joint-Stock

Companies.

129

2.1.6 The company should ensure that the Supervisory

Board is provided with sufficient resources (including

financial resources) to carry out its duties, including access

to all relevant information and the right to seek independent

professional advice from external legal, accounting or other

specialists on matters within the competence of the

Supervisory Board and its committees.

Not applicable

See point 2.1.1

2.2. Formation of the Supervisory Board

1.1.3. The procedures for the composition of the Supervisory Board should ensure that conflicts of interest are properly

managed , and that the company is governed efficiently and fairly.

2.2.1 The members of the Supervisory Board elected by the

General Meeting of Shareholders should collectively ensure

a diversity of qualifications, professional experience and

competences, and strive for gender balance. In order to

maintain an appropriate balance of qualifications among the

members of the Supervisory Board, it should be ensured that

the members of the Supervisory Board as a whole have a

broad range of knowledge, views and experience to perform

their tasks properly.

Not applicable

See point 2.1.1

2.2.2. Members of the Supervisory Board should be

appointed for a fixed term, with the possibility of individual

re-election, in order to ensure the necessary development of

professional experience.

Not applicable

See point 2.1.1

2.2.3.The Chairperson of the Supervisory Board should be

a person whose current or former position would not be an

obstacle to the impartial exercise of his/her duties. A former

director or member of the management board of a company

should not be immediately appointed as chairman of the

Supervisory Board. Where a company decides not to

comply with these recommendations, information should be

provided on the measures taken to ensure the impartiality of

the activity.

Not applicable

See point 2.1.1

2.2.4 Each member should devote sufficient time and

attention to his/her duties as a member of the Supervisory

Board. Each member of the Supervisory Board should

undertake to limit his/her other professional commitments

(in particular managerial positions in other companies) in

such a way that they do not interfere with the proper

performance of his/her duties as a member of the

Supervisory Board. If a member of the Supervisory Board

has attended less than half of the meetings of the

Supervisory Board during the company's financial year, the

company's shareholders should be informed.

Not applicable

See point 2.1.1

2.2.5. When the appointment of a member of the

Supervisory Board is proposed, it should be disclosed which

members of the Supervisory Board are considered

independent. The Supervisory Board may decide that a

particular member of the Supervisory Board, although

Not applicable

See point 2.1.1

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fulfilling the criteria for independence, may not be

considered to be independent because of particular personal

or company-related circumstances.

2.2.6 The amount of remuneration for the members of the

Supervisory Board should be approved by the company's

General Meeting of Shareholders for their activities and

participation in the meetings of the Supervisory Board.

Not applicable

See point 2.1.1

2.2.7 The Supervisory Board should carry out an annual

evaluation of its activities. This should include an

assessment of the Supervisory Board's structure,

organisation and ability to act as a group, as well as an

assessment of the competence and effectiveness of each

member of the Supervisory Board and an assessment of

whether the Supervisory Board has achieved its stated

performance objectives. The Supervisory Board should

publish, at least once a year, relevant information on its

internal structure and operating procedures.

Not applicable

See point 2.1.1

3. Principle: Board

3.1. Functions and responsibilities of the Management Board

1.1.4. The Board should ensure the implementation of the company's strategy, as well as the proper governance of the

company, taking into account the interests of shareholders, employees and other interest groups.

3.1.1 The Executive Board should ensure the

implementation of the company's strategy, as approved by

the Supervisory Board, if one is established. In cases where

the Supervisory Board is not established, the Management

Board is also responsible for approving the company's

strategy.

Yes

The Company has only one

collegiate body, the Board of

Directors.

The Company's Board is responsible

for the proper strategic management

of the Company (approving the

Company's business strategy,

approving the annual budget and

performance targets, and making

important decisions on the

Company's organisational

management structure as provided

for by law).

3.1.2 The Management Board, as the collegial management

body of the Company, shall perform the functions assigned

to it by the Act and the Articles of Association of the

Company and, in cases where the Company does not have a

Supervisory Board, shall perform, inter alia, the supervisory

functions provided for in the Act. In exercising the functions

assigned to it, the Management Board should take into

account the needs of the company, its shareholders,

employees and other interest groups, as appropriate, with a

view to building a sustainable business.

Yes

The Company is guided by a

corporate strategic plan, according

to which the mission of the

governing bodies of the Company is

to create and maintain a strong,

competitive, financially capable and

technically advanced company that

creates and maximises shareholder

value.

According to the Company's

information, all members of the

Board of Directors act in good faith

in the interests of the Company and

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its shareholders, are guided by the

interests of the Company rather than

their own interests or those of third

parties, and endeavour to maintain

their independence in their decision-

making.

3.1.3.The Board should ensure compliance with the laws

and internal company policies applicable to the company or

group of companies to which it belongs. It should also

establish appropriate risk management and control

measures to ensure regular and direct accountability of

management.

Yes

The Board ensures compliance with

the law and the company's internal

policies, both for the company and

the Group. The company also has a

risk management and control

programme. Risk management is

carried out by the Company's

management.

3.1.4 The Board should also ensure that the company has in

place the measures included in the OECD Good Practice

Guidance

on internal control, ethics and compliance to

ensure compliance with applicable laws, regulations and

standards.

Yes

The Company has adopted an Anti-

Corruption Policy, which clearly

and publicly declares its negative

attitude towards bribery and

corruption. The provisions of this

policy apply to all employees,

agents, intermediaries and suppliers

of the Company. The Company has

also adopted a Code of Ethics, a

Human Rights Policy, an Equal

Opportunities Policy, a Violence

and Harassment Prevention Policy

and a Personal Data Protection

Policy.

3.1.5 When appointing a director of the company, the Board

should take into account an appropriate balance of

qualifications, experience and competence.

Yes

When appointing the company's

CEO, the Board considers the

candidate's qualifications,

experience and competence.

3.1. Formation of the Management Board

3.2.1 The members of the Management Board elected by the

Supervisory Board, or by the General Meeting of

Shareholders in the absence of a Supervisory Board, should

collectively ensure a diversity of qualifications,

professional experience and competences, and strive for

gender balance. In order to maintain an appropriate balance

of qualifications among the members of the Management

Board, it should be ensured that the members of the

Management Board as a whole have a wide range of

knowledge, views and experience to perform their tasks

adequately.

Yes

The members of the Company's

Management Board are elected by

the General Meeting of

Shareholders. The members of the

Company's Board of Directors are

qualified and competent to perform

their functions and have many years

of management experience. One

member of the Board is delegated by

a strategic investor (Fonterra),

which has extensive experience in

corporate strategy development,

Link to the OECD Good Practice Guidance on Internal Control, Ethics and Compliance:

https://www.oecd.org/daf/anti-bribery/44884389.pdf

132

management and development in

multinational companies. The other

two independent board members

also have extensive experience in

general management, marketing,

setting up and managing

international joint ventures.

3.2.2 The names of the candidates for election to the

Management Board, their education, qualifications,

professional experience, positions held, other relevant

professional commitments and potential conflicts of interest

should be disclosed, without prejudice to the requirements

of the legislation on the processing of personal data, at the

meeting of the Supervisory Board at which the Management

Board or individual members thereof are to be elected. In

the absence of a Supervisory Board, the information set out

in this point should be provided to the general meeting of

shareholders. The Management Board should compile the

data referred to in this point on its members on an annual

basis and present them in the company's annual report.

Yes

Information on the candidates for

the Company's Management Board

shall be provided to the shareholders

in accordance with the procedure

established by the Law of the

Republic of Lithuania on Joint-

Stock Companies in the materials of

the shareholders' meeting, which

shall be made available to the

shareholders in advance.

Information on the members of the

collegial management bodies

(names, surnames, information on

their education, qualifications,

professional experience,

participation in the activities of other

companies, other relevant

professional commitments) shall be

provided in the Company's periodic

reports and on its website.

3.2.3 All new board members should be familiarised with

their duties, the company's structure and activities.

Yes

All new members of the company's

board are briefed on their duties, the

company's structure and activities.

3.2.4 Board members should be appointed for a fixed term,

with the possibility of individual re-election, to ensure the

necessary growth in professional experience and

sufficiently frequent reconfirmation of their status.

Yes

The members of the Board are

elected for a 4-year term. There is no

limit to the number of terms.

The members of the Board are

elected by the General Meeting of

Shareholders. Shareholders

nominate and vote for candidates for

the Board based on their own views

as to which candidates are best

placed to represent the interests of

shareholders.

3.2.5 The Chairperson of the Board should be a person

whose current or former position would not be an obstacle

to the impartial conduct of business. In the absence of a

Supervisory Board, a former director of the company should

not be immediately appointed to the post of Chairman of the

Board. Where a company decides not to comply with these

recommendations, information should be provided on the

measures taken to ensure the impartiality of the activity.

The Chairman of the Board of

Directors of the company is the

former CEO of the company. In

appointing the former CEO as

Chairman of the Board, the

members of the Board took into

account the former CEO's long-

standing managerial experience and

his competence for the position of

Chairman of the Board.

Yes

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3.2.6 Each member should devote sufficient time and

attention to his/her duties as a Board member. If a member

of the Management Board has attended less than half of the

meetings of the Management Board during the company's

financial year, the company's Supervisory Board should be

informed, or, in the absence of a Supervisory Board, the

general meeting of shareholders.

Members of the Company perform

their assigned functions well: they

actively participate in the meetings

of the collegial body and devote

sufficient time to the performance of

their duties as a collegial member. A

quorum of Board members is

established at all Board meetings,

which allows the Board to take

decisions in a constructive manner.

During 2022, the Board held 6

Board meetings. All Board

meetings were held remotely. All

Board meetings were attended by all

Board members.

3.2.7. If, in the cases provided for in the Act, some of the

members of the Management Board will be independent in

the election of the Management Board where no

Supervisory Board is established,

, it should be published

which members of the Management Board are considered

independent. The board may decide that a particular

member of the board, although fulfilling all the criteria for

independence set out in the Act, cannot be considered

independent because of particular personal or company-

related circumstances.

As the company does not have a

Supervisory Board, two independent

members of the Management Board

have been elected to the

Management Board of the company

and meet the criteria of

independence set out in the Law on

Public Limited Companies. The

Board of Rokiškio sūris AB consists

of 6 members. Candidates to the

Board may be nominated by

shareholders whose shares carry at

least 1/20 of the total votes.

3.2.8. The amount of remuneration to be paid to the

members of the Board for their activities and participation

in Board meetings should be approved by the company's

general meeting of shareholders.

Yes

In accordance with the Law on Joint-

Stock Companies of the Republic of

Lithuania, the members of the Board

of Directors are paid remuneration

for their work on the Board of

Directors by the decision of the

General Meeting of Shareholders.

The members of the Board of

Directors do not receive any other

remuneration for their activities and

participation in meetings.

3.2.9 Board members should act honestly, diligently and

responsibly in the best interests of the Company and its

shareholders and represent their interests, taking into

account other interest holders. They should not pursue

personal interests in their decision-making, they should be

subject to non-competition agreements and they should not

take advantage of business information and opportunities

that are relevant to the company's business to the detriment

of the company.

Yes

According to the Company's

information, all members of the

Board of Directors act in good faith

in the interests of the Company and

its shareholders, are guided by the

interests of the Company rather than

their own interests or the interests of

third parties, and endeavour to

maintain their independence in their

decision-making.

For the purposes of this Code, the criteria for independence of the members of the Board of Directors shall be understood in

the same way as the criteria for unrelated persons are defined in Article 33(7) of the Law of the Republic of Lithuania on Public

Limited Companies.

134

3.2.10. Each year the Board should carry out an evaluation

of its own performance. This should include an assessment

of the Board's structure, organisation and ability to act as a

group, as well as an assessment of the competence and

effectiveness of each member of the Board and an

assessment of whether the Board has achieved its stated

performance objectives. The Board should, at least once a

year, publish relevant information on its internal structure

and operating procedures, without prejudice to the

requirements of the legislation on the processing of personal

data.

The Company does not have a

practice of evaluating the

performance of the Board. As two

members of the Board are members

of the Company's management

(functional directors of the

Company) and one member of the

Board is a former long-serving

manager of the Company, the Board

is considered to have sufficient

organisation and ability to work as a

group. Therefore, it does not carry

out any assessment of competence

and effectiveness. The other two

members of the Board are

independent members.

4. Principle 1: Working procedures of the Company's Supervisory Board and Management Board

1.1.5. The company's procedures for the work of the Supervisory Board, if established, and the Management Board

should ensure the effective work and decision-making of these bodies and promote active cooperation between

the company's bodies.

4.1 The Management Board and the Supervisory Board, if

established, should work closely together for the benefit of

both 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, if necessary,

promptly inform the Supervisory Board on all matters of

importance to the company, such as planning, business

development, risk management and control, and compliance

with company commitments. The Executive Board should

inform the Supervisory Board of actual deviations of the

business development from the previously formulated plans

and objectives, indicating the reasons for this.

The Company does not have a

Supervisory Board. The

shareholders of the Company have

decided to delegate all management

functions to a single collegiate body,

the Management Board. They

believe that. that a single collegial

body, the Management Board, is

sufficient to ensure the effective

management of the Company.

4.2 It is recommended that meetings of the Company's

collegial bodies be held at appropriate intervals in

accordance with a pre-approved schedule. It is up to each

company to decide on the frequency of meetings of its

collegial bodies, but it is recommended that they be held at

a frequency that ensures uninterrupted discussion of key

corporate governance issues. Meetings of the company's

collegial bodies should be convened at least once a quarter

of the year.

Yes

The Board shall meet in accordance

with a timetable approved in

advance in the Rules of Procedure of

the Board, i.e. at least once every 3

months, and more frequently if

necessary.

The agenda for the Board meeting,

together with the notice convening

the meeting, shall be sent to all

Board members at least five (5) days

before the Board meeting, indicating

the items to be discussed at the

meeting. Scheduled meetings of the

Board shall be convened by its

Chairperson or, in his/her absence,

by his/her Deputy.

135

4.3 Members of the collegial body should be informed in

advance of the convening of a meeting in order to allow

sufficient time for adequate preparation of the issues to be

discussed at the meeting and for the discussion leading to

the adoption of decisions. The members of the collegial

body should be provided with all relevant material relating

to the agenda of the meeting together with the notice of the

convened meeting. The agenda should not be amended or

supplemented during the meeting unless all members of the

collegial body are present and agree to such amendment or

supplementation or unless there is an urgent need to deal

with matters of importance to the company.

Yes

The agenda may only be added to a

meeting if all Board members are

present, there is an important matter

and all Board members agree that it

should be dealt with urgently.

4.4 In order to coordinate the work of the company's

collegial bodies and ensure an efficient decision-making

process, the chairpersons of the company's collegial

supervisory and management bodies should coordinate the

dates and agendas of the meetings convened and cooperate

closely on other issues related to the company's governance.

Meetings of the company's Supervisory Board should be

open to the members of the company's Management Board,

in particular where the meeting deals with issues relating to

the removal of members of the Management Board,

liability, remuneration.

Not applicable

The company does not have a

Supervisory Board and therefore

cannot comply with this provision.

5. Principle 1: Nomination, Remuneration and Audit Committees

5.1. Purpose and composition of committees

1.1.6. The committees established in the company should enhance the effectiveness of the Supervisory Board and, where

there is no Supervisory Board, of the Management Board, which performs supervisory functions, by ensuring

that decisions are taken after due consideration and by helping to organise the work in such a way as to ensure

that decisions are not influenced by material conflicts of interest.

1.1.7. The Committees should act independently and in a principled manner and make recommendations related to the

decision of the collegial body, but the final decision is taken by the collegial body itself.

5.1.1 Depending on the specific circumstances of the

company and the governance structure chosen, the

company's Supervisory Board and, in the absence of a

Supervisory Board, the Board of Management, which

performs supervisory functions, shall set up Committees. It

is recommended that the collegial body form nomination,

remuneration and audit committees

Yes/No

The Company has an Audit

Committee. The Audit Committee

was formed and elected at the

General Meeting of Shareholders on

24 April 2009. The General

Shareholders' Meeting approved the

Terms of Reference for the

establishment and operation of the

Audit Committee. 30 April 2021

The Company's General Meeting of

Shareholders elected 3 new

members of the Audit Committee, 2

5.1.2 Companies may decide to form fewer than three

committees. In this case, companies should provide an

explanation as to why they have chosen an alternative

Legislation may provide for an obligation to set up an appropriate committee. For example, the Law on Audit of

Financial Statements of the Republic of Lithuania stipulates that public interest entities (including, but not limited

to, joint stock companies whose securities are traded on the regulated market of the Republic of Lithuania and/or

any other Member State) are obliged to establish an audit committee (the legislation provides for exceptions when

the functions of the audit committee may be performed by a collegial body exercising oversight functions).

136

approach and how the chosen approach meets the objectives

set for three separate committees.

of whom are independent members.

The members of the Audit

Committee were elected for a term

of 4 years.

The Audit Committee is an

independent, objective monitoring,

research, evaluation and advisory

committee dedicated to improving

the organisation's performance and

creating added value. Its main

function is to systematically and

comprehensively assess and

promote improvements in the

effectiveness of the organisation's

risk management, control and

oversight processes, and to report to

the Board and Management on the

achievement of objectives and

targets, the effectiveness of risk

management procedures, and the

functioning of the internal controls.

The Company does not have

nomination and remuneration

committees. As the Company's

Board is composed of competent

members and performs its functions

effectively, the Company does not

see the need for any other

committees at present.

5.1.3. the functions assigned to the committees formed in

the companies may be performed by the collegial body itself

in the cases provided for by law. In such a case, the

provisions of this Code relating to committees (in particular

as regards their role, functioning and transparency) should

apply to the collegiate body as a whole where appropriate.

Not applicable

The Board of Directors of the

Company does not perform the

functions assigned to the Audit

Committee.

5.1.4 Committees set up by a collegiate body should

normally consist of at least three members. Subject to legal

requirements, committees may be composed of as few as

two members. The members of each committee should be

selected primarily on the basis of their expertise, with a

preference for independent members of the collegial body.

The Chairperson of the Board should not be the Chairperson

of the Committees.

Yes

The Audit Committee shall be

composed of 3 members, 2 of whom

shall be independent, with at least 5

years' experience in the accounting

field, with relevant experience in the

finance and accounting of listed

companies. The Chairman of the

Board is not a member of the

Committee.

5.1.5 The mandate of each committee formed should be

determined by the collegiate body itself. The committees

should carry out their duties in accordance with their terms

of reference and regularly report to the collegial body on

their activities and their results. The terms of reference of

each committee, defining its role and specifying its rights

Yes

The Audit Committee shall be

governed by the rules of procedure

established by the Committee and

approved by the General Meeting of

Shareholders. These bylaws lay

down the rules defining the rights

137

and duties, should be published at least once a year (as part

of the information that the company publishes annually on

its governance structure and practices). Companies should

also publish each year in their annual report, without

prejudice to the requirements of the legislation on the

processing of personal data, reports by existing committees

on their composition, number of meetings and attendance of

members at meetings during the previous year, as well as on

their main activities and performance.

and duties of the Audit Committee,

the size of the Audit Committee, the

period of membership of the Audit

Committee, the educational and

professional requirements of the

members of the Audit Committee

and the principles of independence.

The Audit Committee shall submit

an annual activity report to the

General Meeting of Shareholders

each year, disclosing the

composition of the Committee, the

number of meetings and attendance

of its members, a description of the

work carried out and the results.

5.1.6 In order to ensure the independence and objectivity of

committees, members of the collegial body who are not

members of the committee should normally be entitled to

attend committee meetings only at the invitation of the

committee. The committee may invite or require the

attendance of certain employees or experts of the company.

The chairman of each committee should be able to

communicate directly with shareholders. The circumstances

in which this should be done should be set out in the rules

governing the operation of the committee.

Yes

The members of the collegial body

take decisions at meetings of its

members, but in certain cases the

Committee shall invite the Chief

Executive Officer of the Company

and the responsible employees of the

Company who are in charge of the

areas of activity of the matters under

discussion to attend its meetings.

The Chairman of the Audit

Committee is also able to

communicate with shareholders.

5.2. Nomination Committee.

5.2.1 The main functions of the Nomination Committee

should be:

(1) to select candidates for vacancies in the Supervisory,

Governing Body and Executive Management positions and

to recommend them to the collegial body for consideration.

The Nomination Committee should assess the balance of

skills, knowledge and experience in the management body,

prepare a description of the functions and skills required for

the specific position and assess the time required to

complete the assignment;

(2) regularly assess the structure, size, composition, skills,

knowledge and performance of the supervisory and

management bodies, and make recommendations to the

collegiate body on how to bring about the necessary

changes;

3) giving due attention to succession planning.

The Company does not have a

nomination committee.

138

5.2.2 The Chief Executive Officer should be consulted on

matters relating to members of the collegial body who have

an employment relationship with the company and the Chief

Executive Officer, with the right to make proposals to the

Nomination Committee.

5.3. Remuneration Committee.

The Company does not have a

Remuneration Committee.

The company has a remuneration

policy covering all forms of

remuneration, including fixed

remuneration, performance-related

benefits, pension modules and

severance payments. The

Company's policy is approved by the

Company's management in

consultation with the Company's

Trade Union Committee.

The main functions of the Remuneration Committee

should be:

1) submitting proposals to the college for

consideration on the remuneration policy

applicable to members of the supervisory and

management bodies and the chief executive

officers. Such a policy should cover all forms of

remuneration, including fixed remuneration,

performance-related remuneration, incentive

schemes with financial incentives, pension

schemes, severance payments, as well as

conditions that would allow the company to

recover amounts or suspend payments, indicating

the circumstances that would make it appropriate

to do so;

2) proposing to the collegial body the individual

remuneration of members of the collegial bodies

and of the chief executive officers, in order to

ensure that it is in line with the company's

remuneration policy and the assessment of their

performance;

3) regularly review the remuneration policy and its

implementation.

5.4 Audit Committee.

5.4.1 The main functions of the Audit Committee are

defined in the legislation governing the Audit Committee

Yes

The Audit Committee shall be

governed by the Audit Committee

Charter approved by the General

Meeting of Shareholders of the

Company.

The Audit Committee carries out

independent, objective monitoring,

research, evaluation and advisory

activities to improve the Company's

performance and create added value.

Yes

The activities of audit committees are governed by Regulation No 537/2014 of the European Parliament and of the Council of

16 April 2014 on specific statutory audit requirements for public-interest entities, the Law on Audit of Financial Statements of

the Republic of Lithuania, as well as by the rules of the Bank of Lithuania governing the activities of audit committees.

139

5.4.2 All members of the Committee should be provided

with detailed information relating to the company's specific

accounting, financial and operational characteristics. The

audit committee should be informed by the company's

senior management of the accounting treatment of

significant and unusual transactions, which may be

accounted for in different ways.

All members of the Committee are

provided with detailed information

relating to the specific accounting,

financial and operational features of

the Company and, on request, are

provided with information on the

execution of significant

transactions.

5.4.3 The Audit Committee should decide whether (and if

so, when) the Chairman of the Board, the Chief Executive

Officer, the Chief Financial Officer (or senior finance and

accounting staff), the Internal Auditor and the External

Auditor should attend its meetings. The Committee should

be able to meet i with the relevant persons, if necessary, in

the absence of the members of the management bodies.

Yes

The Audit Committee shall decide

on the attendance of other persons at

its meetings and, if necessary, the

Audit Committee shall invite to its

meetings the Chief Executive

Officer of the Company and the

responsible employees of the

Company who are in charge of the

areas of activity of the matters under

discussion. The Chairman of the

Audit Committee shall also be able

to communicate with the

shareholders.

5.4.4 The Audit Committee should be informed of the work

programme of the internal auditors and receive internal

audit reports or a periodic summary. The audit committee

should also be informed of the work programme of the

external auditors and should receive a report from the audit

firm describing any relationship between the independent

audit firm and the company and its group.

Yes

The Audit Committee is informed of

the work carried out by the Internal

Auditor and receives the

conclusions of the investigations

carried out. The Audit Committee

receives reports each year from the

external auditors describing any

relationship between the

independent audit firm and the

Company and its Group.

5.4.5 The Audit Committee should review the company's

compliance with the provisions in place governing the

ability of employees to make a complaint or anonymously

report allegations of wrongdoing within the company, and

should ensure that there are procedures in place for a

proportionate and independent investigation of such matters

and for the appropriate follow-up action.

Yes

The Company has given employees

the opportunity to file complaints or

anonymous reports of irregularities

committed by the Company, but the

Company has not received any such

complaints or reports during the

reporting period.

5.4.6 The Audit Committee should report to the Supervisory

Board, or if no Supervisory Board is formed, to the

Management Board, at least once every six months, at the

same time as the approval of the annual and half-yearly

reports.

Yes

The Audit Committee analyses and

evaluates the company's annual and

half-yearly financial statements and

makes recommendations to the

Board of Directors for their

approval, together with its own

performance reports for that period.

140

6. Principle 1: Avoidance and disclosure of conflicts of interest

1.1.8. The corporate governance framework should encourage members of the supervisory and management bodies of

the company to avoid conflicts of interest and ensure a transparent and effective mechanism for disclosure of

conflicts of interest by members of the supervisory and management bodies of the company.

1.1.9. The corporate governance system should recognise the rights of stakeholders as enshrined in law and promote

active cooperation between the company and stakeholders to create wealth, jobs and financial stability. In the

context of this principle, stakeholders include investors, employees, creditors, suppliers, customers, the local

community and others with an interest in the company.

A member of a company's supervisory and management

body should avoid a situation where his or her personal

interests conflict or may conflict with the interests of the

company. If such a situation does arise, the member of the

supervisory or management body of the company should,

within a reasonable period of time, inform the other

members of the same body, or the body of the company

which elected him, or the shareholders of the company of

the situation of such a conflict of interests, indicating the

nature of the interests and, where possible, the value.

Yes

Members of the Company's

governing bodies shall conduct

themselves in such a way as to avoid

any conflict of interest with the

Company. During the reporting

period, there are no known cases of

conflict of interest between the

Company and a member of its

governing body.

7. Principle 1: Company remuneration policy

1.1.10. The company's remuneration policy and the procedures for its review and disclosure should prevent potential

conflicts of interest and abuse in determining the remuneration of members of the collegiate bodies and the chief

executive officers, as well as ensure the openness and transparency of the company's remuneration policy,

including the company's long-term strategy.

7.1 The Company should adopt and publish on the

Company's website a remuneration policy, which should be

reviewed regularly and be consistent with the Company's

long-term strategy.

Yes/No

The Company has a remuneration

policy in place and approved by the

Company's management, but it is

not published on the Company's

website.

The Remuneration Policy was

approved at the company's 2020

Annual General Meeting and is

published on the company's website.

7.2 Remuneration policies should cover all forms of

remuneration, including fixed remuneration, performance-

related remuneration, financial incentive schemes, pension

schemes, termination payments, and conditions that provide

for the company to recover amounts paid or to suspend

payments

Yes

The company has a remuneration

policy covering all forms of

remuneration, including fixed

remuneration, performance-related

benefits, pension modules and

severance payments.

7.3 In order to avoid potential conflicts of interest, the

remuneration policy should stipulate that members of the

collegiate bodies which exercise supervisory functions

should not receive remuneration which is linked to the

performance of the company.

Yes

See point 3.2.8.

141

7.4 The remuneration policy should provide sufficient detail

on the severance pay policy. Severance payments should

not exceed a fixed amount or a fixed number of annual

salaries and should generally not exceed a fraction of two

years' fixed remuneration or its equivalent. Termination

payments should not be made if the contract is terminated

due to poor performance.

Yes

Severance payments are granted in

accordance with the provisions of

Chapter 5 of the Labour Code of the

Republic of Lithuania and the

Collective Agreement of the

Company.

7.5 If the company has a financial incentive scheme, the

remuneration policy should include sufficient details on the

retention of shares after vesting. In the case of share-based

awards, the shares should not vest for at least three years

after the award. After vesting, members of the collegiate

bodies and chief executives should retain a certain number

of shares until the end of their term of office, depending on

the need to cover any costs associated with the acquisition

of shares.

The Company does not have a

financial incentive scheme.

7.6 The company should publish on the company's website

information on the implementation of the remuneration

policy, which should focus on the remuneration policy of

the collegiate bodies and the management for the next and,

where appropriate, the following financial year. It should

also provide an overview of how the remuneration policy

was implemented in the previous financial year. Such

information should not contain commercially valuable

information. Particular attention should be paid to material

changes in the company's remuneration policy compared to

the previous financial year.

See point 7.1.

7.7 It is recommended that the remuneration policy, or any

material change to the remuneration policy, should be

placed on the agenda of the general meeting of shareholders.

Schemes where members of the collegial body and

employees are remunerated in shares or share options

should be approved by the general meeting of shareholders.

See point 7.1.

8. Principle 1: The role of stakeholders in corporate governance

1.1.11. The corporate governance system should recognise the rights of stakeholders, whether enshrined in law or in

mutual agreements, and promote active cooperation between the company and stakeholders in order to create

wealth, jobs and financial stability. In the context of this principle, stakeholders include investors, employees,

creditors, suppliers, customers, the local community and others with an interest in the company.

8.1 The corporate governance framework should ensure that

the rights and legitimate interests of interest holders are

respected.

Yes

The company's corporate

governance system ensures that the

rights of interest holders protected

by law are respected. The Company

provides for the participation of

interest holders in the management

of the Company through the

participation of the Company's

employees and milk producers in the

share capital of the Company. The

majority of the employees are

shareholders of the Company and

8.2 The corporate governance framework should allow

interest holders to participate in the governance of the

company in accordance with the law. Examples of the

participation of interest holders in the governance of the

company could include the participation of employees or

their representatives in important decisions of the company,

consultations with employees or their representatives on

142

corporate governance and other important issues,

participation of employees in the share capital of the

company, the involvement of creditors in the governance of

the company in cases of insolvency, etc.

therefore participate directly in the

management of the Company.

Interest holders involved in the

governance process are given access

to relevant information and the

opportunity to vote on relevant

decisions. In addition, the Company

has made arrangements for

confidential reporting of illegal or

unethical practices.

8.3 Where stakeholders are involved in the governance of

the company, they should be given access to relevant

information.

8.4 Interest holders should be able to confidentially report

illegal or unethical practices to the collegiate body

exercising the supervisory function.

9. Principle 1: Disclosure of information

1.1.12. The corporate governance framework should ensure that timely and accurate disclosures are made on all

material matters relating to the company, including its financial position, performance and corporate

governance. .

9.1 Without prejudice to the Company's procedures for

confidential information and trade secrets, as well as the

requirements of the legislation governing the processing of

personal data, the Company's public disclosure of

information should include, but not be limited to:

Yes

The information referred to in this

Recommendation is disclosed in the

Company's annual and half-yearly

reports, subject to the requirements

of data processing legislation and

the confidential information regime.

This information shall be published

on the website of AB Nasdaq

Vilnius Stock Exchange and on the

Company's website.

9.1.1. the Company's performance and financial results;

9.1.2. the company's business objectives and non-financial

information;

9.1.3. the persons owning or controlling a shareholding in

the company, directly and/or indirectly and/or jointly with

related persons, as well as the structure of the group of

companies and the interrelationships between them,

indicating the final beneficiary;

9.1.4. the members of the company's supervisory and

management bodies, which of them are considered

independent, the company's chief executive officer, the

shares or votes they hold in the company, and their

participation in the management of other companies, their

competence and remuneration;

9.1.5. reports from existing committees on their

composition, number of meetings and attendance of

members during the previous year, as well as on their main

activities and results;

9.1.6. the foreseeable material risk factors and the

company's risk management and oversight policies;

143

9.1.7. the Company's transactions with related parties;

9.1.8. key issues relating to employees and other

stakeholders (e.g. human resources policy, employee

participation in the management of the company, promotion

through shares or stock options, relations with creditors,

suppliers, the local community, etc);

9.1.9. the company's governance structure and strategy;

9.1.10. initiatives and measures in the areas of social

responsibility policy, anti-corruption, and major investment

projects underway or planned.

This list is to be considered as a minimum and companies

are encouraged to go beyond the disclosures contained in

this list. This principle of the Code does not relieve

companies of their obligation to disclose information as

required by law.

9.2 For the disclosures referred to in paragraph 9.1.1 of

Guideline 9.1, it is recommended that a company that is a

parent company in relation to other companies should

disclose the consolidated results of the whole group.

Yes

The Company discloses information

on the consolidated results of the

Company and its group of

subsidiaries. The disclosures are

made in the consolidated annual

report and consolidated half-yearly

financial statements.

9.3 In the disclosures referred to in paragraph 9.1.4 of

Guideline 9.1, it is recommended to provide information on

the professional experience and qualifications of the

members of the company's supervisory and management

bodies and the company's chief executive officer, and on

any potential conflicts of interest that could affect their

decisions. It is also recommended to disclose the

remuneration or other income received by the members of

the supervisory and management bodies of the company and

by the company's manager from the company, as detailed in

Principle 7.

Yes

The information referred to in the

Recommendation is provided in the

Company's annual and half-yearly

reports. The consolidated annual

report shall disclose information on

total employee-related costs, the

amount of remuneration paid to the

Company's chief executive officer

during the year, and the

Remuneration Report shall disclose

the remuneration received by the

members of the collegial body.

9.4 Disclosures should be made in such a way that no

shareholders or investors are discriminated against in terms

of the manner and extent to which they receive information.

Disclosure should be made to all and at the same time.

Yes

The Company discloses all

regulated information through the

AB Nasdaq Vilnius news

distribution system. This ensures

that it is available to the widest

possible public. The information is

simultaneously available in both

Lithuanian and English. In addition,

the Company publishes the

information before or after the

Nasdaq Vilnius trading session to

ensure that all shareholders and

investors of the Company have

equal access to the information and

to make appropriate investment

decisions. The Company shall not

144

disclose information that may affect

the price of its issued securities in

comments, interviews or otherwise

until such information is made

publicly available through the

Central Regulated Information

Base.

10. Principle 1: Selection of the Company's audit firm

The company's mechanism for selecting the audit firm should ensure the independence of the audit firm's report

and opinion.

10.1 In order to obtain an objective opinion on the

Company's financial position and financial performance,

the Company's set of annual financial statements and the

financial information contained in the Annual Report

should be reviewed by an independent audit firm.

Yes

An independent audit firm audits the

separate and consolidated annual

financial statements of the Company

and its subsidiaries (the Group) in

accordance with International

Financial Reporting Standards as

adopted by the European Union. The

independent audit firm also assesses

the consistency of the annual report

with the audited financial

statements.

10.2 It is recommended that the nomination of the audit firm

be proposed to the General Meeting of Shareholders by the

company's Supervisory Board or, if the company does not

have a Supervisory Board, by the company's Management

Board.

Yes

The Board of Directors of the

Company proposes the appointment

of the auditor to the General Meeting

of Shareholders.

10.3 If the audit firm has received fees from the company

for non-audit services, the company should disclose this

publicly. This information should also be made available to

the company's supervisory board or, if the company does

not have a supervisory board, to the company's management

board when considering which audit firm to propose to the

general meeting of shareholders.

Yes

Information on the remuneration of

the audit firm is disclosed publicly

in the Company's annual reports.

The audit firm shall provide non-

audit services only with the approval

of the Audit Committee. During

2022, the Audit Firm received a fee

of Tk. 24 thousand. The Audit

Committee received a fee of EUR

24,000 for non-audit services

provided to the Company's Group.

PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, 03163 Vilnius, Lithuania

+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt

Company code 111473315, registered with the Legal Entities’ Register of the Republic of Lithuania

Independent auditor’s report

To the shareholders of Rokiškio Sūris AB

Report on the audit of the separate and consolidated financial statements

Our opinion

In our opinion, the separate and consolidated financial statements give a true and fair view of the

separate and consolidated financial position of Rokiškio Sūris AB (the “Company”) and its subsidiaries

(together - the “Group”) as at 31 December 2022, and of the Company’s and of the Group’s separate

and consolidated financial performance and separate and consolidated cash flows for the year then

ended in accordance with International Financial Reporting Standards as adopted by the European

Union.

Our opinion is consistent with our additional report to the Audit Committee dated 7 April 2023.

What we have audited

The Company’s and the Group’s separate and consolidated financial statements comprise:

● the separate and consolidated balance sheets as at 31 December 2022;

● the separate and consolidated income statement and statement of comprehensive income for the

year then ended;

● the separate and consolidated statements of changes in equity for the year then ended;

● the separate and consolidated statements of cash flows for the year then ended; and

● the notes to the separate and consolidated financial statements, which include significant

accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our

responsibilities under those standards are further described in the Auditor’s responsibilities for the

audit of the financial statements section of our report.

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

for our opinion.

Independence

We are independent of the Company and the Group in accordance with the International Code of

Ethics for Professional Accountants (including International Independence Standards) issued by the

International Ethics Standards Board for Accountants (IESBA Code) and the Law of the Republic of

Lithuania on the Audit of Financial Statements that are relevant to our audit of the separate and

consolidated financial statements in the Republic of Lithuania. We have fulfilled our other ethical

responsibilities in accordance with the IESBA Code and the Law of the Republic of Lithuania on the

Audit of Financial Statements.

To the best of our knowledge and belief, we declare that non-audit services that we have provided to

the Company and the Group are in accordance with the applicable law and regulations in the Republic

of Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of

Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed

in the Law of the Republic of Lithuania on the Audit of Financial Statements.

The non-audit services that we have provided to the Company and the Group, in the period from 1

January 2022 to 31 December 2022, are disclosed in note 32 to the separate and consolidated

financial statements.

Our audit approach

Overview

● Overall Company and Group materiality: EUR 2,740 million and

EUR 2,874 million, respectively.

● We tailored our audit scope based on the risk and size of entities

within the Group and performed a full scope audit of the Company

and two subsidiaries. At the Group level we tested the consolidation

process and performed selected audit procedures over the

subsidiary not covered by the above procedures to be able to report

on the consolidated financial statements as a whole. We conducted

audit at 3 Group entities, all operating in Lithuania, covering 99.5% of

the Group’s revenues and 99% of the Group’s total assets.

● Revenue recognition

● Valuation of accounts receivable and loans granted

● Inventory write-down to net realisable value

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the separate and consolidated financial statements (together “the financial

statements”). In particular, we considered where management made subjective judgements; for

example, in respect of significant accounting estimates that involved making assumptions and

considering future events that are inherently uncertain. As in all of our audits, we also addressed the

risk of management override of internal controls, including, among other matters, consideration of

whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain

reasonable assurance whether the financial statements are free from material misstatement.

Misstatements may arise due to fraud or error. They are considered material if individually or in

aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality,

including the overall Company and Group materiality for the financial statements as a whole as set out

in the table below. These, together with qualitative considerations, helped us to determine the scope

of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of

misstatements, if any, both individually and in aggregate on the financial statements as a whole.

Overall Company materiality

EUR 2,740 million (2021: EUR 1,9 million)

Overall Group materiality

EUR 2,874 million (2021: EUR 2 million)

Materiality

Group

scoping

Key audit

matters

How we determined it

0.8% of the Group’s and Company’s revenue, respectively

Rationale for the materiality

benchmark applied

Significant fluctuations in the Company’s and the Group’s

profit depend on the prevailing trends in global dairy markets,

and therefore, the profits for the last years have been volatile.

We have, therefore, chosen revenue as a benchmark for

determining the materiality because, in our view, it provides

more consistent information year-on-year basis, reflecting the

Group’s and the Company’s size and growth, and is one of

the key measures of performance that the stakeholders

observe.

We agreed with the Audit Committee that we would report to them misstatements identified during our

audit above EUR 137 thousand and EUR 143 thousand for the Company and the Group, respectively,

as well as misstatements below that amount that, in our view, warranted reporting for qualitative

reasons.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the financial statements of the current period. These matters were addressed in the

context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we

do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Revenue recognition

Refer to note 2.17 and note 5 ‘Segment

reporting’ in the financial statements

The Group’s and the Company’s revenue in

2022 amounted to EUR 359,3 million and EUR

342,5 million, respectively, and mostly

consisted of sales of goods.

The Group and the Company recognises

revenues from sales of goods based on the

quantity of goods dispatched and the agreed

prices. Revenue is recognised only at point of

time, when control of goods has been

transferred to the customer based on the

agreed delivery terms. Revenue is recognised

net of discounts or other sales incentives

provided. Although revenue recognition

involves only limited judgement, due to the

size and volume of transactions it continues to

be an audit area which requires significant time

and resources and is therefore considered to

be a key audit matter.

We audited revenue recognition through a

combination of controls testing and substantive

procedures.

We evaluated the design and tested, based on a

selected sample of relevant information tested,

operating effectiveness of key controls in relation

to the recognition of revenue, with particular focus

on controls over the matching of invoices to

related shipping documents and to the agreed

prices as indicated in the sale orders or

agreements.

We read the accounting policy for revenue

recognition in respect of all material revenue

streams and assessed its compliance with the

International Financial Reporting Standards as

adopted by the European Union.

We also performed the following tests of details:

• We obtained a sample of transactions

conducted with customers during the year and

either obtained third party confirmations of the

transactions or reconciled the transactions to the

signed agreements or sale orders, the shipping

documents, the invoices and subsequent receipts

of payments from the customers.

• We selected a sample of transactions

conducted before and after the year-end and

evaluated whether revenue was recognised in an

appropriate period based on the transfer of control

according to the delivery terms and shipping

documents.

• We assessed the accounting treatment

for various sales incentives paid to retail chains,

such as publication of advertisements in a

supermarket’s newspaper, listing fees etc.

• We selected a sample of credit invoices,

discounts and returns after the year-end and

checked whether they were recorded in the

appropriate period.

• Our work also included testing a sample

of revenue journal entries to identify whether they

have been recorded in the General Ledger with

any unusual corresponding entries.

Valuation of accounts receivable and loans

granted

Refer to note 2.8, note 4 ‘Critical accounting

estimates and judgments’, note 20 ‘Trade and

other receivables’, and note 18 ‘Loans granted’

in the financial statements.

As at 31 December 2022, the Group’s and the

Company’s trade receivables amounted to

EUR 52,8 million and EUR 62,3 million,

respectively, including the credit loss

allowance of EUR 3,786 million, and loans

granted amounted to EUR 5,1 million and EUR

5,07 million, respectively.

In accordance with IFRS 9 ‘Financial

Instruments’, the Group’s management

assesses expected credit losses in relation to

trade receivables on a forward-looking basis

and recognises an allowance for credit losses

at each reporting date. The estimate of

expected credit losses represents an unbiased

and probability weighted amount that is

determined by evaluating a range of possible

outcomes, and reflects all reasonable and

supportable information that is available at

each reporting date about past events, current

conditions and forecasts of future economic

conditions.

We performed the following procedures for testing

the management’s assessment of expected credit

losses in relation to trade receivables:

• We evaluated the methodology used by

the Group's management to assess its

compliance with the requirements of IFRS 9.

• We obtained the ageing analysis of trade

receivables as at 31 December 2022 and tested

its reliability on the basis of a selected sample of

invoices.

• We examined the accuracy of

management’s classification of trade receivables

for their further assessment on a collective or

individual basis depending on the credit risk

characteristics and the ageing of receivables.

• We examined, on a sample basis the

models and calculations used for the assessment

of credit losses on a collective or individual basis.

• We analysed, on a sample basis, whether

the ratio of unpaid balances of a customer at the

year end to the annual receipts from the customer

indicates any potential impairment issues.

• For debtors with significant amounts

overdue more than 90 days, we examined their

To measure the expected credit losses, the

management has grouped trade receivables

based on shared credit risk characteristics and

the days past due to assess them on a

collective or individual basis. The collective

assessment was based on the payment

profiles of sales over a period of 36 months

before 31 December 2022 and the

corresponding historical credit losses

experienced within this period. Expected credit

losses for significant trade receivables overdue

for more than 90 days were evaluated

individually based on external information from

credit insurance agency, collaterals received

as security for repayment, and past history of

default.

The degree of accuracy of the management’s

estimate will be confirmed or rebutted

depending on the future developments that are

inherently uncertain. We focused on assessing

the allowance for credit losses in relation to

trade receivables as the estimation process is

complicated and requires significant

management’s judgements, and the amount of

allowance is significant.

The expected credit losses for loans granted

were calculated in view of the fair value of the

collateral, which was not lower than the

balance of loans granted as at 31 December

2022.

credit ratings at a credit insurance agency and

assessed whether the probability of default

assigned by the Company aligned with these

ratings.

• For the sample of the amounts overdue

more than 90 days, we obtained the data about

payments received after the year end to

determine whether the payment patterns were

consistent with the management’s estimates as at

year end. We also enquired whether there was

any collateral received or insurance paid in

respect of the related receivables, and whether

those were appropriately reflected in the

calculation of the expected credit losses.

• We read the minutes of the Credit

Committee containing the results of regular

analysis of possible indicators of default or

increase in credit risk.

• We tested the management’s estimates of

expected credit losses in relation to loans granted

to see whether the fair value of the collateral was

not lower than the balance of loans granted, by

comparing, on sample basis, the carrying amount

of the collateral as at 31 December 2022 with the

sale transactions of similar assets in the market.

Inventory write-down to net realisable value

Refer to note 2.9, note 4 ‘Critical accounting

estimates and judgments’ and note 19

‘Inventory’ in the financial statements

The Group’s and the Company’s inventory

balance amounted to EUR 72,2 million and

EUR 68,5 million, respectively, as at 31

December 2022.

We focused on this area due to the size of the

inventory balance and because the

management’s assessment of the net

realisable value of finished goods involves

estimates about their potential selling price at

the balance sheet date.

The Group’s and the Company’s inventory

write-down to net realisable value amounted to

EUR 5,5 million as at 31 December 2022.

• We obtained the Company’s and the

Group’s policies and methodology in respect of

inventory write-downs to net realisable value,

evaluated their compliance with the requirements

of IFRSs.

• We analysed sales prices of the finished

goods items sold after the balance sheet date and

compared results with the figures used in the

management’s calculation of inventory write-down

allowance.

• We analysed the aging of inventories

other than finished goods, by periods, to identify

slow-moving or obsolete items. We also verified

the reliability of the inventory ageing report and

compared our estimated inventory write-down

allowance to the management’s calculations.

How we tailored our Group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an

opinion on the consolidated financial statements as a whole, taking into account the structure of the

Group, the accounting processes and controls, and the industry in which the Group operates.

Accordingly, based on the size and risk characteristics, we performed a full scope audit of the financial

information for the following entities within the Group: Rokiškio Pienas UAB, Rokiškio Pieno Gamyba

UAB, Rokiškio Sūris AB (parent company). At the Group level we tested the consolidation process to

be able to report on the consolidated financial statements as a whole.

Reporting on other information including the consolidated annual report

Management is responsible for the other information. The other information comprises the

consolidated annual report, including the corporate governance report, the remuneration report and

the social responsibility report (but does not include the financial statements and our auditor’s report

thereon).

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

consolidated annual report.

In connection with our audit of the financial statements, our responsibility is to read the other

information identified above and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears

to be materially misstated.

With respect to the consolidated annual report, including the corporate governance report and the

remuneration report, we considered whether the consolidated annual report, including the corporate

governance report and the remuneration report, includes the disclosures required by the Law of the

Republic of Lithuania on Consolidated Reporting by Groups of Undertakings, the Law of the Republic

of Lithuania on Reporting by Undertakings.

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

● the information given in the consolidated annual report, including the corporate governance report

and the remuneration report, for the financial year for which the financial statements are prepared,

is consistent with the financial statements; and

● the consolidated annual report, including the corporate governance report and the remuneration

report, has been prepared in accordance with the Law of the Republic of Lithuania on

Consolidated Reporting by Groups of Undertakings and the Law of the Republic of Lithuania on

Reporting by Undertakings.

The Company and the Group have prepared the social responsibility report that was presented as a

separate report.

In addition, in light of the knowledge and understanding of the Company and the Group and their

environment obtained in the course of the audit, we are required to report if we have identified material

misstatements in the consolidated annual report which we obtained prior to the date of this auditor’s

report. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial

statements

Management is responsible for the preparation of the financial statements that give a true and fair

view in accordance with International Financial Reporting Standards as adopted by the European

Union, and for such internal control as management determines is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or

error.

In preparing the financial statements, management is responsible for assessing the Company’s and

the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless management either intends to

liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do

so.

Those charged with governance are responsible for overseeing the Company’s and the Group’s

financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain

professional scepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the financial statements, whether due to

fraud or error, design and perform audit procedures responsive to those risks, and obtain audit

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override

of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the Company’s and the Group’s internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

● Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events

or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue

as a going concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures in the financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events or conditions may

cause the Company and the Group to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the Group audit.

We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence, and have communicated with them all relationships and

other matters that may reasonably be thought to bear on our independence, and where applicable,

actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters

that were of most significance in the audit of the financial statements of the current period and are

therefore the key audit matters. We describe these matters in our auditor’s report unless law or

regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we

determine that a matter should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of

such communication.

Report on other legal and regulatory requirements

Report on the compliance of the format of the consolidated financial statements with the

requirements of the European Single Electronic Reporting Format

We have been engaged based on the amendment to our audit agreement by the management of the

Company to conduct a reasonable assurance engagement for the verification of compliance with the

applicable requirements of the European single electronic reporting format of the Group’s consolidated

financial statements, including the consolidated annual report, for the year ended 31 December 2022

(the “Single Electronic Reporting Format of the consolidated financial statements”).

Description of a subject matter and applicable criteria

The Single Electronic Reporting Format of the consolidated financial statements has been applied by

the management of the Company to comply with the requirements of art. 3 and 4 of the Commission

Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of

the European Parliament and of the Council with regard to regulatory technical standards on the

specification of a single electronic reporting format (the “ESEF Regulation”). The applicable

requirements regarding the Single Electronic Reporting Format of the consolidated financial

statements are contained in the ESEF Regulation.

The requirements described in the preceding sentence determine the basis for application of the

Single Electronic Reporting Format of the consolidated financial statements and, in our view,

constitute appropriate criteria to form a reasonable assurance conclusion.

Responsibility of the management and those charged with governance

The management of the Company is responsible for the application of the Single Electronic Reporting

Format of the consolidated financial statements that complies with the requirements of the ESEF

Regulation.

This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF

taxonomy and designing, implementing and maintaining internal controls relevant for the preparation

of the Single Electronic Reporting Format of the consolidated financial statements which is free from

material non-compliance with the requirements of the ESEF Regulation.

Those charged with governance are responsible for overseeing the financial reporting process, which

should also be understood as the preparation of financial statements in accordance with the format

resulting from the ESEF Regulation.

Our responsibility

Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic

Reporting Format of the consolidated financial statements complies, in all material aspects, with the

ESEF Regulation.

We conducted our engagement in accordance with International Standard on Assurance

Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical

Financial Information’ (“ISAE 3000 (R)”). This standard requires that we comply with ethical

requirements, plan and perform procedures to obtain reasonable assurance whether the Single

Electronic Reporting Format of the consolidated financial statements complies, in all material aspects,

with the applicable requirements.

Reasonable assurance is a high level of assurance, but it does not guarantee that the service

performed in accordance ISAE 3000 (R) will always detect the existing material misstatement

(significant non-compliance with the requirements).

Summary of the work performed

Our planned and performed procedures were aimed at obtaining reasonable assurance that the

Single Electronic Reporting Format of the consolidated financial statements was applied, in all material

aspects, in accordance with the applicable requirements and such application is free from material

errors or omissions. Our procedures included in particular:

• obtaining an understanding of the internal control system and processes relevant to the

application of the Single Electronic Reporting Format of the consolidated financial statements,

including the preparation of the XHTML format and marking up the consolidated financial

statements;

• verification whether the XHTML format was applied properly;

• evaluating the completeness of marking up the consolidated financial statements using the iXBRL

markup language according to the requirements of the implementation of single electronic format

as described in the ESEF Regulation;

• evaluating the appropriateness of the Group’s' use of XBRL markups selected from the ESEF

taxonomy and the creation of extension markups where no suitable element in the ESEF

taxonomy has been identified; and

• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.

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

conclusion.

Conclusion

In our opinion, the Single Electronic Reporting Format of the consolidated financial statements for the

year ended 31 December 2022 complies, in all material aspects, with the ESEF Regulation.

Report on the compliance of the format of the separate financial statements with the

requirements of the European Single Electronic Reporting Format

The European single electronic reporting format has been applied by the management of the

Company to the Company’s financial statements to comply with the requirements of Article 3 of

Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive

2004/109/EC of the European Parliament and of the Council with regard to regulatory technical

standards on the specification of a single electronic reporting format (the “ESEF Regulation”). These

requirements specify the Company’s obligation to prepare its financial statements in a XHTML format.

We confirm that the European single electronic reporting format of the financial statements for the year

ended 31 December 2022 complies with the ESEF Regulation in this respect.

Appointment

We were first appointed as auditors of the Company and the Group on 1996. Our appointment has

been renewed annually by shareholder resolution representing a total period of uninterrupted

engagement appointment of 27 years.

The key audit partner on the audit resulting in this independent auditor’s report is Jurgita

Krikščiūnienė.

On behalf of PricewaterhouseCoopers UAB

/signed with electronic signature/

Jurgita Krikščiūnienė

Assurance Director

Auditor's Certificate No. 000495

Vilnius, Republic of Lithuania

7 April 2023

The auditor's electronic signature is used herein to sign only the Independent Auditor's Report