INVL Baltic Farmland, AB

Consolidated Annual Report, Consolidated and Company’s Financial

Statements for the year ended 31 December 2021 prepared in accordance

with International Financial Reporting Standards as adopted by European

Union presented together with independent auditor’s report

AB INVL Baltic Farmland

Gynėjų str. 14, LT-01109 Vilnius

Telephone +370 5 279 0601

Fax +370 5 279 0530

E-mail farmland@invaldainvl.com

Code: 303299781

VAT Code: LT100009222813

Account No LT934010051001989356

Luminor bank AS

Eglė Surplienė,

Director of the Company signs the

Consolidated and the Company‘s financial

statements for the year 2021, also

Consolidated Annual Report for the year

2021 and Confirmation of responsible

persons with a qualified electronic

signature.

Raimondas Rajeckas,

Person authorised to conduct accounting

of the Company signs the Consolidated and

the Company‘s financial statements for the

year 2021 and Confirmation of responsible

persons with a qualified electronic

signature.

CONFIRMATION OF RESPONSIBLE PERSONS

28 February 2022

Following on Information Disclosure Rules of the Bank of Lithuania and the Law on Securities

(article 12) of the Republic of Lithuania, management of INVL Baltic Farmland, AB hereby confirms

that, to the best our knowledge, the attached Consolidated and Company‘s Financial Statements for

2021 are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted

by the European Union, give true and fair view of the assets, liabilities, financial position and profit

or loss of INVL Baltic Farmland and Consolidated Group.

Presented Consolidated Annual Report for 2021 includes a fair review of the development and

performance of the business and position of the company and the consolidated group in relation to

the description of the main risks and contingencies faced thereby.

ENCLOSURE:

1. Consolidated and Company‘s Financial Statements for 2021.

2. Consolidated Annual Report for 2021.

Director Eglė Surplienė

(The document is signed with a qualified electronic signature)

Person authorised to conduct accounting Raimondas Rajeckas

(The document is signed with a qualified electronic signature)

3 
 
  
Translation note:  
 
This version of the financial statements has been prepared in Lithuanian and English languages. 
In all matters of interpretation of information, views or opinions, the Lithuanian language version 
of our report takes precedence over the English language version. 
 
CONTENTS 
 
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS: 
DETAILS OF THE COMPANY ............................................................................................................................... 4 
CONSOLIDATED AND COMPANY’S STATEMENTS OF COMPREHENSIVE INCOME .......................... 5 
CONSOLIDATED AND COMPANY’S STATEMENTS OF FINANCIAL POSITION..................................... 6 
CONSOLIDATED AND COMPANY’S STATEMENTS OF CHANGES IN EQUITY ...................................... 7 
CONSOLIDATED AND COMPANY’S STATEMENTS OF CASH FLOWS ..................................................... 9 
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................... 10 
1  GENERAL INFORMATION ............................................................................................................................... 10 
2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ....................................................................................... 11 
3  FINANCIAL RISK MANAGEMENT .................................................................................................................... 19 
3.1.  Financial risk factors ........................................................................................................................................... 19 
3.2.  Capital management ............................................................................................................................................ 21 
4  FAIR VALUE ESTIMATION .............................................................................................................................. 22 
5  SUBSIDIARIES ................................................................................................................................................ 23 
6  SEGMENT INFORMATION AND OPERATING LEASE COMMITMENTS .................................................................. 24 
7  AGREEMENT ON THE ADMINISTRATION OF LAND PLOTS ................................................................................ 26 
8  INCOME TAX .................................................................................................................................................. 26 
9  EARNINGS PER SHARE ................................................................................................................................... 28 
10  INVESTMENT PROPERTIES .............................................................................................................................. 28 
11  FINANCIAL INSTRUMENTS BY CATEGORY ...................................................................................................... 29 
12  LOANS GRANTED TO SUBSIDIARIES AT AMORTISED COST .............................................................................. 30 
13  TRADE AND OTHER RECEIVABLES ................................................................................................................. 31 
14  SHARE CAPITAL, ACQUISITION OF OWN SHARES AND RESERVES .................................................................... 32 
15  DIVIDENDS .................................................................................................................................................... 33 
16  RELATED PARTY TRANSACTIONS ................................................................................................................... 33 
17  IMPACT OF COVID-19 .................................................................................................................................. 34 
 
CONSOLIDATED ANNUAL REPORT ................................................................................................................ 35 
 
INDEPENDENT AUDITOR’S REPORT ............................................................................................................ 101 
 
 
 
 
 
 

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(all amounts are in EUR thousand unless otherwise stated)

DETAILS OF THE COMPANY

Board of Directors

Mr. Alvydas Banys (chairman of the Board)

Ms. Indrė Mišeikytė

Mr. Darius Šulnis

Management

Ms. Eglė Surplienė (director)

Address of registered office and company code

Gynėjų str. 14,

Vilnius,

Lithuania

Company code 303299781

Banks

Luminor Bank AS Lithuanian branch

AB Šiaulių Bankas

Auditor

UAB PricewaterhouseCoopers

J. Jasinskio str. 16B,

Vilnius, Lithuania

The financial statements were approved and signed by the Management on 28 February 2022.

The document is signed with a qualified

electronic signature

The document is signed with a qualified

electronic signature

Ms. Eglė Surplienė

Mr. Raimondas Rajeckas

Director

Authorized person according to the

agreement to conduct accounting

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s statements of comprehensive income

Group

Company

Notes

2021

2020

2021

2020

Revenue

665

649

Interest income

163

177

Other income

Share of net profit of subsidiaries accounted for using

the equity method

1,313

776

Net gain from fair value adjustments on investment

property

1,256

683

Land plots administration fees

(175)

(206)

Legal, professional and securities administration fees

(72)

(56)

(35)

(33)

(Provision for) reversal of impairment of trade

receivables

(1)

Direct property operating expenses

(23)

(22)

Employee benefits expense

(10)

(2)

Other expenses

(11)

(4)

(11)

(2)

Operating profit

1,655

1,049

1,428

916

Finance costs

Profit before income tax

1,655

1,049

1,428

916

Income tax expense

(244)

(154)

(17)

(21)

NET PROFIT FOR THE YEAR

1,411

895

1,411

895

Other comprehensive income for the year, net of

tax

TOTAL COMPREHENSIVE INCOME FOR THE

YEAR

1,411

895

1,411

895

Attributable to:

Equity holders of the parent

1,411

895

1,411

895

Basic and diluted earnings per share (in EUR)

0.44

0.28

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s statements of financial position

Group

Company

Notes

As at 31

December

2021

As at 31

December

2020

As at 31

December

2021

As at 31

December

2020

ASSETS

Non-current assets

Investment properties

16,620

15,364

Investments into subsidiaries accounted for using the

equity method

11,436

10,123

Loans granted to subsidiaries at amortised cost

3,529

3,920

Total non-current assets

16,620

15,364

14,965

14,043

Current assets

Trade and other receivables

170

198

Loans granted to subsidiaries at amortised cost (accrued

interest)

Prepayments and deferred charges

Cash and cash equivalents

3.1

144

302

Total current assets

315

502

TOTAL ASSETS

16,935

15,866

15,030

14,096

EQUITY AND LIABILITIES

Equity

Equity attributable to equity holders of the parent

Share capital

955

Own shares

(203)

Share premium

1,387

Reserves

3,237

3,211

Retained earnings

9,566

8,639

9,592

8,665

Total equity

14,942

14,015

14,942

14,015

Liabilities

Non-current liabilities

Deferred income tax liability

1,798

1,608

Total non-current liabilities

1,798

1,608

Current liabilities

Trade payables

125

Income tax payable

Advances received

Other current liabilities

Total current liabilities

195

243

Total liabilities

1,993

1,851

TOTAL EQUITY AND LIABILITIES

16,935

15,866

15,030

14,096

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s statements of changes in equity

Reserves

Group

Notes

Share capital

Own shares

Share premium

Legal reserve

Reserve for

purchase of own

Retained earnings

Total

Balance as at 31 December 2019

955

(203)

1,387

158

3,079

8,067

13,443

Net profit for the year

895

Total comprehensive income for the year

895

Dividends approved

(323)

Total transactions with owners of the Company,

recognised directly in equity

(323)

Balance as at 31 December 2020

955

(203)

1,387

158

3,079

8,639

14,015

Net profit for the year

1,411

Total comprehensive income for the year

1,411

Dividends approved

(484)

Total transactions with owners of the Company,

recognised directly in equity

(484)

Balance as at 31 December 2021

955

(203)

1,387

158

3,079

9,566

14,942

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s statements of changes in equity (cont’d)

Reserves

Company

Notes

Share capital

Own shares

Share premium

Legal reserve

Reserve for

purchase of own

Retained earnings

Total

Balance as at 31 December 2019

955

(203)

1,387

132

3,079

8,093

13,443

Net profit for the year

895

Total comprehensive income for the year

895

Dividends approved

(323)

Total transactions with owners of the Company,

recognised directly in equity

(323)

Balance as at 31 December 2020

955

(203)

1,387

132

3,079

8,665

14,015

Net profit for the year

1,411

Total comprehensive income for the year

1,411

Dividends approved

(484)

Total transactions with owners of the Company,

recognised directly in equity

(484)

Balance as at 31 December 2021

955

(203)

1,387

132

3,079

9,592

14,942

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s statements of cash flows

Group

Company

Notes

2021

2020

2021

2020

Cash flows from (to) operating activities

Net profit for the year

1,411

895

1,411

895

Adjustments for non-cash items and non-operating

activities:

Net gains from fair value adjustments on investment

property

(1,256)

(683)

Share of net profit of subsidiaries accounted for using the

equity method

(1,313)

(776)

Interest income

(163)

(177)

Deferred taxes

190

Current income tax expenses

Allowances

(1)

Changes in working capital:

Decrease (increase) in trade and other receivables

103

(12)

Decrease (increase) in other current assets

(Decrease) increase in trade payables

(66)

(4)

(7)

(Decrease) increase in other current liabilities

Cash flows from (to) operating activities

375

548

(56)

(31)

Income tax paid

(57)

(81)

(21)

(22)

Net cash flows from (to) operating activities

318

467

(77)

(53)

Cash flows from (to) investing activities

Acquisition of investment properties

Proceeds from sale of investment properties

Loans granted

(50)

(38)

Repayment of granted loans

464

268

Interest received

135

153

Net cash flows from (to) investing activities

549

383

Cash flows from (to) financing activities

Cash flows related to Group owners

Dividends paid to equity holders of the parent

(476)

(316)

(476)

(316)

Net cash flows from (to) financing activities

(476)

(316)

(476)

(316)

Net increase (decrease) in cash and cash equivalents

(158)

189

(4)

Cash and cash equivalents at the beginning of the

period

302

113

Cash and cash equivalents at the end of the period

144

302

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

Notes to the financial statements

1 General information

AB INVL Baltic Farmland (hereinafter the Company) is a joint stock company registered in the Republic of Lithuania. It was

established on 29 April 2014, following the split-off of 14.45% assets, equity and liabilities from AB Invalda INVL (company code

121304349). Entities, which business is investment into agricultural land and its rent, were transferred to the Company (hereinafter

split-off).

The Group consists of the Company and its directly owned subsidiaries (hereinafter the Group, Note 5).

The address of the office is Gynėjų str. 14, Vilnius, Lithuania.

The Company manages shares of entities investing into agricultural land and provides finance. Now the Company has 100%

shares in 18 companies owning approximately 3 thousand hectares of agricultural land in Lithuania (detailed list of subsidiaries is

presented in Note 5), that is rented to farmers and agricultural companies. The Company focuses on growth of quality of owned

land and environmental sustainability. The Group operates in one segment – agricultural land segment.

Investments into agricultural land are classified as long term and are recommended for investors who are satisfied with the return

on rent and possible income from increase of agricultural land prices. Since prices of agricultural products are determined in the

world markets, this investment allows participating in the world food supply chain.

As at 31 December 2021 and 2020 the shareholders of the Company were:

2021

2020

Number of

shares held

Percentage

Number of

shares held

Percentage

UAB LJB Investments (controlling shareholder

Mr. Alvydas Banys)

977,751

29.70

977,751

29.70

Mrs. Irena Ona Mišeikienė

931,831

28.31

931,831

28.31

UAB Lucrum Investicija (sole shareholder Mr.

Darius Šulnis)

469,628

14.27

469,628

14.27

Mr. Alvydas Banys

252,875

7.68

252,875

7.68

Ms. Ilona Šulnienė

185,000

5.62

185,000

5.62

Ms. Greta Mišeikytė

65,758

2.00

65,758

2.00

Ms. Indrė Mišeikytė

64,450

1.96

64,450

1.96

The Company (own shares)

63,039

1.92

63,039

1.92

Other minor shareholders

281,217

8.54

281,217

8.54

Total

3,291,549

100.00

3,291,549

100.00

All the shares of the Company are ordinary shares with the par value of EUR 0.29, and were fully paid as at 31 December 2021

and 2020. Subsidiaries did not hold any shares of the Company as at 31 December 2021 and 2020.

The Company’s shares are traded on the Baltic Secondary List of NASDAQ Vilnius from 4 June 2014.

As at 31 December 2021 the number of employees of the Group and the Company was 2 and 1, respectively. As at 31

December 2020 the number of employees of the Group and the Company was 2 and 1, respectively.

According to the Law on Companies of Republic of Lithuania, the annual financial statements prepared by the Management are

authorised by the General Shareholders’ meeting. The shareholders hold the power not to approve the annual financial statements

and the right to request new financial statements to be prepared.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies

The principal accounting policies applied in preparing the Group’s and the Company’s financial statements for the year ended

31 December 2021 are as follows:

2.1. Basis of preparation

Statement of compliance

The financial statements of the Company and the consolidated financial statements of the Group have been prepared in

accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (hereinafter the EU).

These financial statements have been prepared on a historical cost basis, except for investment properties that have been

measured at fair value. The financial statements are presented in thousands of euro (EUR) and all values are rounded to the

nearest thousand except when otherwise indicated. From 1 January 2015 the euro became local currency of the Republic of

Lithuania.

Adoption of new and/or changed IFRSs and IFRIC interpretations

The Group/Company has adopted the new and amended IFRS and IFRIC interpretations as of 1 January 2021:

− Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest rate benchmark (IBOR) reform – phase 2 (effective for

annual periods beginning on or after 1 January 2021);

− Amendment to IFRS 4 Insurance Contracts – deferral of IFRS 9 (effective for annual periods beginning on or after 1 January

2021);

− Amendments to IFRS 16 Covid-19-Related Rent Concessions – (effective for annual periods beginning on or after 1 January

2021).

All amendments adopted as of 1 January 2021 had no impact on the Group’s and Company’s financial statements for the year

ended 31 December 2021.

Standards adopted by the EU but not yet effective and have not been early adopted

Other amendments to existing standards and new standards, which are adopted by the EU, but not yet effective, are not relevant

to the Group and the Company.

Standards not yet adopted by the EU

The Group/the Company is currently assessing the impact of the amendments, described below and not yet adopted by the EU,

on its financial statements:

Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (effective for annual periods beginning

on or after 1 January 2023 once adopted by the EU).

IAS 1 was amended to require companies to disclose their material accounting policy information rather than their significant

accounting policies. The amendment provided the definition of material accounting policy information. The amendment also

clarified that accounting policy information is expected to be material if, without it, the users of the financial statements would be

unable to understand other material information in the financial statements. The amendment provided illustrative examples of

accounting policy information that is likely to be considered material to the entity’s financial statements. Further, the amendment

to IAS 1 clarified that immaterial accounting policy information need not be disclosed. However, if it is disclosed, it should not

obscure material accounting policy information. To support this amendment, IFRS Practice Statement 2, ‘Making Materiality

Judgements’ was also amended to provide guidance on how to apply the concept of materiality to accounting policy disclosures.

Amendments to IAS 8: Definition of Accounting Estimates (effective for annual periods beginning on or after 1 January 2023 once

adopted by the EU).

The amendments to IAS 8 clarified how companies should distinguish changes in accounting policies from changes in accounting

estimates.

Other amendments to existing standards and new standards, which are not yet adopted by the EU, are not relevant to the Group

and the Company.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.2. Basis of consolidation

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

statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting

policies.

Subsidiaries are all entities (including structured entities) over which the group has control. The Group controls an entity when the

group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns

through its power over the entity. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the

Group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group balances,

transactions, income and expenses, unrealised gains and losses and dividends resulting from intra-group transactions that are

recognised in assets, are eliminated in full.

When the group ceases to have control, any retained interest in the entity is remeasured to its fair value, with the change in

carrying amount recognised 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 recognised

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 recognised in other comprehensive income are reclassified to profit

or loss or retained earnings, as appropriate.

2.3. Functional and presentation currency

From 1 January 2015 the euro became local currency of the Republic of Lithuania. The financial statements are prepared in euro

(EUR), which is local currency of the Republic of Lithuania, and presented in EUR thousand. Euro is the Company’s and the

Group’s functional and presentation currency. The exchange rates in relation to other currencies are set daily by the European

Central Bank and the Bank of Lithuania.

As these financial statements are presented in euro thousand, individual amounts were rounded. Due to the rounding, totals in

the tables may not add up.

2.4. Business combinations and goodwill

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for

the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree

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. Identifiable assets acquired and liabilities

and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at

the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree

either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net

assets.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and

designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

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 the total of consideration transferred, non-controlling interest recognised and previously held

interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the

difference is recognised directly in profit or loss.

2.5. Investment properties

Land that is held for long-term rental yields and for capital appreciation is classified as investment properties.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment

properties are carried at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in

the fair values of investment properties are included in profit or loss in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently

withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal

of an investment property are recognised in the statement of comprehensive income within “Net gains (losses) from fair value

adjustments on investment property” in the year of retirement or disposal.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.6. Investments into subsidiaries (the Company)

Investments in subsidiaries are accounted for using the equity method of accounting.

Under the equity method, the investment in the subsidiary is carried in the statement of financial position at cost plus post

acquisition changes in the Company’s share of net assets of the subsidiary. Goodwill relating to a subsidiary is included in the

carrying amount of the investment and is neither amortised nor individually tested for impairment. The statement of comprehensive

income reflects the share of the results of operations of the subsidiary. Where there has been a change recognised in the other

comprehensive income of the subsidiary, the Company recognises its share of any changes and discloses this, when applicable,

in the other comprehensive income. Company’s share in the changes in the net assets of the subsidiary that are not recognised

in profit or loss or other comprehensive income (OCI) of the subsidiary, are recognised in equity. Unrealised gains and losses

(unless the transaction provides evidence of the impairment of asset transferred) resulting from transactions between the

Company and the subsidiary are eliminated to the extent of the interest in the subsidiary.

The reporting dates of the subsidiary and the Company are identical and the subsidiary’s accounting policies conform to those

used by the Company for like transactions and events in similar circumstances. After application of the equity method, the

Company determines whether it is necessary to recognise an additional impairment loss of the Company’s investment in its

subsidiaries. The Company determines at each reporting date whether there is any objective evidence that the investment in

subsidiary is impaired. If this is the case the Company calculates the amount of impairment as being the difference between the

recoverable amount of the subsidiary and its carrying value and recognises the amount in the statement of comprehensive income.

When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, including any other unsecured

receivables, the Company does not recognise further losses, unless it has incurred obligations or made payments on behalf of

the subsidiary.

2.7. Financial assets

Financial assets within the scope of IFRS 9 are classified as either financial assets at fair value through profit or loss (either

through other comprehensive income or through profit or loss) or financial assets measured at amortised cost. The classification

depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

As the business model for the Group‘s and the Company‘s financial assets are held to collect contractual cash flows and they are

solely payments of principal and interest, the Group and the Company have only financial assets measured at amortised cost.

They comprised trade and other receivables, loans granted, cash and cash equivalents. The Group and the Company reclassifies

debt instruments when and only when its business model for managing those assets changes.

Financial assets are recognised when the Group/the Company becomes party to the contractual provisions of the instrument.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been

transferred and the Group/the Company has transferred substantially all the risks and rewards of ownership.

At initial recognition, the Group/the Company measures a financial asset at its fair value plus, in the case of a financial asset not

at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction

costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and

interest are measured at amortised cost. Interest income from these financial assets is calculated using the effective interest rate

method and presented as “interest income” in the statement of comprehensive income. Any gain or loss arising on derecognition

is recognised directly in profit or loss. Impairment losses are presented as separate line item in the statement of comprehensive

income.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.8. Impairment of financial assets

From 1 January 2018, the Group/the Company assesses on a forward-looking basis the expected credit losses associated with

its financial assets carried at amortised cost. The impairment methodology applied depends on whether there has been a

significant increase in credit risk.

The Group/the Company follows a three-stage model for impairment for financial assets other than trade receivables:

− Stage 1 – balances, for which the credit risk has not increased significantly since initial recognition, or that have low credit risk

at the reporting date. For these assets, 12-month expected credit losses (‘ECL’) are recognised and interest revenue is

calculated on the gross carrying amount of the asset (that is, without deduction for credit allowance). 12-month ECL are the

expected credit losses that result from default events that are possible within 12 months after the reporting date. It is not the

expected cash shortfalls over the 12-month period but the entire credit loss on an asset weighted by the probability that the loss

will occur in the next 12 months;

− Stage 2 – comprises balances for which there have been a significant increase in credit risk since initial recognition (unless they

have low credit risk at the reporting date) but that do not have objective evidence of impairment. For these assets, lifetime ECL

are recognised, but interest revenue is still calculated on the gross carrying amount of the asset. Lifetime ECL are the expected

credit losses that result from all possible default events over the expected life of the financial instrument. Expected credit losses

are the weighted average credit losses with the probability of default (‘PD’) as the weight;

− Stage 3 – comprises balances with objective evidence of impairment at the reporting date. For these assets, lifetime ECL are

recognised and interest revenue is calculated on the net carrying amount (that is, net of credit allowance).

Loans granted are considered to be low credit risk when they have a low risk of default and the borrower has a strong capacity to

meet its contractual cash flow obligations in the near term.

The financial assets are considered as credit-impaired, if objective evidence of impairment exist at the reporting date. Evidence

of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default

or delinquency in payments, the probability that they will enter bankruptcy or other financial reorganisation.

Financial assets are written off, in whole or in part, when there is no reasonable expectation of recovery. Indicators that there is

no reasonable expectation of recovery include, among others, the probability of insolvency or significant financial difficulties of the

debtor. Impaired debts are derecognised when they are assessed as uncollectible.

For trade and other receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime

losses to be recognised from initial recognition of the receivables. Trade receivables are classified either to Stage 2 or Stage 3:

− Stage 2 – comprises receivables for which there the simplified approach was applied to measure the expected lifetime credit

losses, except for certain trade receivables classified in Stage 3;

− Stage 3 – comprises trade receivables which are overdue more than 360 days or individually identified as impaired.

The expected loss rates are based on the payment profiles of rent over a period of 36 months before reporting date and the

corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and

forward-looking information on macroeconomic factors affecting the ability of the tenants to settle the receivable. Such forward-

looking information would include:

− changes in economic, regulatory, technological and environmental factors, (such as industry outlook, GDP, employment and

politics);

− external market indicators; and

− tenant base.

2.9. Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits

with an original maturity of three months or less.

For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand and in current bank account as

well as deposit in bank with an original maturity of three months or less.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.10. Financial liabilities

The Group recognises a financial liability when it first becomes a party to the contractual rights and obligations in the contract.

All financial liabilities are initially recognised at fair value, minus (in the case of a financial liability that is not at fair value through

profit or loss) transaction costs that are directly attributable to issuing the financial liability. Financial liabilities are measured at

amortised cost using the effective interest method. A financial liability is derecognised when the obligation under the liability is

discharged or cancelled or expires.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from

suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating

cycle of the business if longer). Financial liabilities included in trade payables are recognised initially at fair value and subsequently

at amortised cost. The fair value of a non-interest bearing liability is its discounted repayment amount. If the due date of the liability

is less than one year, discounting is omitted.

2.11. Share capital

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

recognised in equity as a deduction, net of tax, from the proceeds. Where any group company purchases the company’s equity

share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes)

is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such shares

are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the

related income tax effects, is included in equity attributable to the company’s equity holders.

2.12. Leases

Group’s company is the lessor in an operating lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the Group’s company are classified as

operating leases. Payments, including pre-payments, received under operating leases (net of any incentives granted to the lessee)

are credited to the statement of comprehensive income on a straight-line basis over the period of the lease. The Group account

for a modification to an operating lease as a new lease from the effective date of the modification, considering any prepaid or

accrued lease payments relating to the original lease as part of the lease payments for the new lease.

See Note 2.13 for the recognition of lease income.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.13. Revenue recognition

Revenue includes lease income, interest income and other income. Other income includes penalties from tenants for overdue

payments.

Lease income

Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease

term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and

recognised as expense over the lease term on the same basis as lease income. The Group elected to recognise lease income for

variable payment that depends on an index or a rate in the periods in which changes of index or rate occur. Variable lease

payments that do not depends on an index or a rate are recognised as lease income in the periods in which the event or condition

that triggers those payments occurs. When the Group provides incentives to its tenants, the cost of the incentives is recognised

over the lease term, on a straight-line basis, as a reduction of lease income.

At the commencement date, the Group assesses whether the lessee is reasonably certain to exercise an option to extend the

lease or not to exercise an option to terminate the lease. The Group considers all relevant facts and circumstances that create an

economic incentive for the lessee to exercise, or not to exercise, the option, including any expected changes in facts and

circumstances from the commencement date until the exercise date of the option.

In the first quarter rental fee, except variable part related to land tax, is invoiced to the tenants. In the fourth quarter variable part

of the rent related to land tax is invoiced to the tenants, when State tax authorities provide an estimate of the land tax and land

tax expenses are recognised.

Interest income

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for

financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied

to the net carrying amount of the financial asset (after deduction of the loss allowance).

2.14. 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. All financial information, including the

measure of profit, total assets and total liabilities, is analysed as single reporting segment - agricultural land segment, therefore is

not further disclosed in these financial statements.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.15. Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of comprehensive income,

except to the extent that it relates to items recognised directly in equity. In this case, the tax is also recognised directly in equity.

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

reporting period in Lithuania 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.

The standard income tax rate in Lithuania was 15 % in 2020 and 2021. Starting from 2010, tax losses can be transferred at no

consideration or in exchange for certain consideration between the group companies if certain conditions are met.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their

carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from

the initial recognition of goodwill; 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 substantively 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.

The deferred tax liability in relation to investment property that is measured at fair value is determined assuming the property will

be recovered entirely through sale.

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

which the temporary differences can be utilised.

Following the provisions of Law on Corporate Income Tax the sale of shares of an entity, registered or otherwise organised in a

state of the European Economic Area or in a state with which a treaty for the avoidance of double taxation has been concluded

and brought into effect and which is a payer of corporate income tax or an equivalent tax, to another entity or a natural person

shall not be taxed where the entity transferring the shares held more than 10% of voting shares in that entity for an uninterrupted

period of at least two years. If mentioned condition is met or is expected to be met by the management of the Company, no

deferred tax liabilities or assets are recognised in respect of temporary differences associated with carrying amounts of these

investments.

Tax losses can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities and/or

derivative financial instruments. Such carrying forward is disrupted if the Company changes its activities due to which these losses

incurred except when the Company does not continue its activities due to reasons which do not depend on the Company itself.

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

only be used to reduce the taxable income earned from the transactions of the same nature. From 1 January 2014 current year

taxable profit could be decreased by previous year tax losses only up to 70%.

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 assets and liabilities relate to income taxes levied by the same taxation

authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net

basis.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

2 Summary of significant accounting policies (cont’d)

2.16. Employee benefits

Social security contributions

The Company and the Group pay 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 included in payroll expenses.

Bonus plans

The Company and the Group recognises a liability and an expense for bonuses where contractually obliged or where there is a

past practice that has created a constructive obligation.

2.17. Events after the reporting period

Events after the reporting period that provide additional information about the Group’s position as at the end of the reporting period

(adjusting events) are reflected in the financial statements. Events after the reporting period that are not adjusting events are

disclosed in the notes when material.

2.18. Significant accounting judgements and estimates

The preparation of financial statements requires management of the Group and the Company to make judgements and estimates

that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of

reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a

material adjustment to the carrying amount of the asset or liability affected in the future periods.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances.

Judgements

In the process of applying the Group accounting policies, management has not made any judgements, which has most significant

effect on the amounts recognised in these financial statements.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a

significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are

described below. The Group based its assumptions and estimates on parameters available when the consolidated financial

statements were prepared. Existing circumstances and assumptions about future developments however, may change due to

market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when

they occur.

The significant areas of estimation used in the preparation of these financial statements are discussed below.

Fair value of investment properties in consolidated financial statements

Fair value of investment properties was based on the market approach by reference to sales in the market of comparable

properties. Market approach refers to the prices of the analogues transactions in the market. These values are adjusted for

differences in key attributes such as land size and productivity.

The fair value of the investment properties as at 31 December 2021 was EUR 16,620 thousand (as at 31 December 2020 – EUR

15,364 thousand) (described in more details in Note 10).

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

3 Financial risk management

3.1. Financial risk factors

The risk management function within the Group is carried out in respect of financial risks, operational risks and legal risks and

managed on an overall Group level by the Management Board. After signing land administration agreement most of operational

and legal risks, as well as credit risk are managed by the third party UAB INVL Farmland Management. The primary objectives of

the financial risk management function are to establish risk limits, and then ensure that exposure to risks stays within these limits.

The operational and legal risk management functions are intended to ensure proper functioning of internal policies and procedures

to minimise operational and legal risks. To limit operational risk, annual documentation reviews are held. This helps to limit legal

risks as well in case a dispute arises and all the documentation is in place and of appropriate quality and can be used to prove

the rights. Legal risk is limited as well by the fact that counterparties do not grant guarantees on each other.

The Group’s and the Company’s principal financial liabilities comprise trade and other payables. The main purpose of these

financial liabilities is to finance the Group’s and the Company’s operations. The Group and the Company have various financial

assets such as trade and other receivables, loans granted and cash which arise directly from their operations. The Company and

the Group have not used any derivative instruments and borrowings so far, as management considered that there is no necessity

for them.

The main risks arising from the financial instruments are market risk (including currency risk, cash flow and fair value interest rate

risk and price risk), liquidity risk and credit risk. The risks are identified and disclosed below.

Credit risk

Credit risk is the risk one party to a financial instrument will cause a financial loss for the other party by failing to discharge an

obligation. Credit risk arises from cash and cash equivalents, credit exposures to outstanding trade receivables and loans granted.

As at 31 December 2020 the Group had a significant concentration of credit risk related to two tenants. The balance of trade

receivable from tenant A comprise approximately 55% of the Group’s total trade receivables, gross (before write off and provision).

Impairment loss of EUR 106 thousand for the trade receivable from tenant A was recognised as at 31 December 2020

(approximately 82% of the receivable). The lease agreement with tenant A was terminated in 2019. The balance of trade receivable

from tenant B comprise approximately 19% of the Group’s total trade receivables, gross (before write off and provision). The trade

receivable from tenant B was secured by pledge of land plots. The lease agreement with tenant B was expired in 2020.The trade

receivable was settled by tenant B in 2021. As at 31 December 2021 the balance of trade receivable from tenant A comprise

approximately 69% of the Group’s total trade receivables, gross (before write off and provision). Approximately 84% (EUR 106

thousand) of the receivable from tenant A was written-off as at 31 December 2021. The carrying amount of the receivable

represents possibility to recovery of remaining amount by applying VAT credit from balance of bad debts. Other tenants did not

expose the Group to a significant concentration of credit risk., The credit risk is managed by the third party UAB INVL Farmland

Management according to the agreement (Note 7). The third party seeks to ensure that lease contracts are entered into only with

lessees with an appropriate credit history.

The maximum exposure to credit risk, impairment of financial assets is disclosed in Notes 12 and 13. In Note 13 is also disclosed

credit risk exposure of trade receivable. There are no transactions of the Group or the Company that occur outside Lithuania.

With respect to credit risk arising from cash and cash equivalents the Group’s and the Company’s exposure to credit risk arises

from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

According to the European deposit insurance scheme, cash, cash equivalents and deposits of up to EUR 100 thousand of every

legal entity in each bank are covered with insurance. All the Group’s and the Company’s balance of cash and cash equivalents

are covered with the insurance. Therefore, all cash balances have a low credit risk at the reporting date and the impairment loss

determined on 12-month expected credit losses is resulted in an immaterial amount.

The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings of the banks:

Group

Company

2021

2020

2021

2020

Moody’s short-term ratings

Prime-1

Prime-2

144

302

Prime-3

Not Prime

144

302

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

3 Financial risk management (cont’d)

3.1 Financial risk factors (cont’d)

Market risk

Cash flow and fair value interest rate risk

The Group has no borrowings and loans granted. The Company has loans granted to its subsidiaries with fixed interest rates for

one year. Therefore, the Group and the Company are not exposed to cash flow interest rate risk.

Foreign exchange risk

The Group and the Company holds assets and liabilities denominated only in the euro. Therefore, the Group and the Company

are not exposed to foreign exchange risk.

Price risk

The Group is not exposed to price risk of financial instruments as it does not hold any equity securities or commodities.

Liquidity risk

The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents. The liquidity risk of the Group and the

Company is controlled on an overall Group level. The Group and the Company have not been facing any liquidity issues so far.

The proceeds from rent and cash balances are sufficient to settle all liabilities.

The Group’s liquidity ratio (total current assets / total current liabilities) as at 31 December 2021 was approximately 1.62 (2.07 as

at 31 December 2020). The Company’s liquidity ratio as at 31 December 2021 was approximately 0.74 (0.65 as at 31 December

2020).

The table below summarises the maturity profile of the Group’s financial liabilities as at 31 December 2021 and 2020 based on

contractual undiscounted payments.

On demand

Less than

3 months

4 to 12

months

2 to 5

years

More than

5 years

Total

Trade and other payables

Other liabilities

Balance as at 31 December 2021

130

Trade and other payables

125

Other liabilities

Balance as at 31 December 2020

135

183

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

3 Financial risk management (cont’d)

3.1 Financial risk factors (cont’d)

Liquidity risk (cont’d)

The table below summarises the maturity profile of the Company’s financial liabilities as at 31 December 2021 and 2020 based

on contractual undiscounted payments.

On demand

Less than

3 months

4 to 12

months

2 to 5

years

More than

5 years

Total

Trade and other payables

Other liabilities

Balance as at 31 December 2021

Trade and other payables

Other liabilities

Balance as at 31 December 2020

3.2. Capital management

The primary objective of the capital management is to ensure that the Group and the Company maintain a strong credit health

and healthy capital ratios in order to support their business and maximise shareholder value. The Company‘s management

supervises the investments so that they are in compliance with requirements applied to the capital, specified in the appropriate

legal acts, as well as provide the Group’s management with necessary information.

The Group‘s and the Company‘s capital comprises share capital, share premium, reserves and retained earnings.

The Group and the Company manage their capital structure and make adjustments to it, in light of changes in economic conditions

and specific risks of their activity. To maintain or adjust the capital structure, the Company may adjust the dividend payment to

shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes

during the year 2021 and 2020.

The Company is obliged to keep its equity ratio at not less than 50 % of its share capital, as imposed by the Law on Companies

of Republic of Lithuania. The Company and the subsidiaries complied with this requirement as at 31 December 2021 and 2020,

except one dormant subsidiary as at 31 December 2021 and 2020. There are no plans yet to rectify the situation.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

4 Fair value estimation

Assets carried at fair value

The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is,

as prices) or indirectly (that is, derived from prices);

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The following table provides the fair value measurement hierarchy of the Group’s assets measured at fair value in the statement

of financial position as at 31 December 2021.

Level 1

Level 2

Level 3

Total balance

Assets of the Group

Investment properties (Note 10)

16,620

The following table provides the fair value measurement hierarchy of the Group’s assets measured at fair value in the statement

of financial position as at 31 December 2020.

Level 1

Level 2

Level 3

Total balance

Assets of the Group

Investment properties (Note 10)

15,364

There were no transfers of assets between the levels of the fair value hierarchy during 2021 and 2020.

There were no liabilities measured at fair value in the Group’s and the Company’s statements of financial position.

Financial instruments that are not carried at fair value

The Group’s and the Company’s principal financial instruments that are not carried at fair value in the statement of financial

position are cash and cash equivalents, trade and other receivables, loans granted, trade and other payables.

The carrying amount of the cash and cash equivalents, trade and other receivables, trade and other payables of the Group and

the Company as at 31 December 2021 and 2020 reasonably approximated their fair value because they are short-term and the

impact of discounting is immaterial.

The carrying amount of loans granted by the Company approximates their fair value because the interest rates are reviewed at

the end of each financial year and adjusted in line with market rates changes. Their fair value is based on cash flows discounted

using 4.5 % interest rate as at 31 December 2021 and 2020 It is Level 3 fair value measurement.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

5 Subsidiaries

The Group had the following subsidiaries, owned directly by the Company, as at 31 December 2021 and 2020:

Name

Country of incorporation

and place of business

Proportion of shares

(voting rights) directly held

by the Company (%)

Nature of business

UAB Avižėlė

Lithuania

100.00

Agricultural landowner and lessor

UAB Beržytė

Lithuania

100.00

Agricultural landowner and lessor

UAB Dirvolika

Lithuania

100.00

Agricultural landowner and lessor

UAB Duonis

Lithuania

100.00

Agricultural landowner and lessor

UAB Ekotra

Lithuania

100.00

Agricultural landowner and lessor

UAB Kvietukas

Lithuania

100.00

Agricultural landowner and lessor

UAB Laukaitis

Lithuania

100.00

Agricultural landowner and lessor

UAB Lauknešys

Lithuania

100.00

Agricultural landowner and lessor

UAB Linažiedė

Lithuania

100.00

Agricultural landowner and lessor

UAB Pušaitis

Lithuania

100.00

Agricultural landowner and lessor

UAB Puškaitis

Lithuania

100.00

Agricultural landowner and lessor

UAB Sėja

Lithuania

100.00

Agricultural landowner and lessor

UAB Vasarojus

Lithuania

100.00

Agricultural landowner and lessor

UAB Žalvė

Lithuania

100.00

Agricultural landowner and lessor

UAB Žemgalė

Lithuania

100.00

Agricultural landowner and lessor

UAB Žemynėlė

Lithuania

100.00

Agricultural landowner and lessor

UAB Žiemkentys

Lithuania

100.00

Agricultural landowner and lessor

UAB Cooperor

Lithuania

100.00

Dormant

All subsidiary undertakings are included in the consolidation.

The following table presents the movements of investments in subsidiaries of the Company:

2021

2020

At 1 January

10,123

9,347

Share of net profit of subsidiaries

1,313

776

Increase of share capital

At 31 December

11,436

10,123

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

6 Segment information and operating lease commitments

Management of the Company has determined the operating segments based on the reports reviewed by the Board of Directors

that are used to make strategic decisions. All financial information, including the measure of profit, total assets and total liabilities,

is analysed as a single reporting segment - agricultural land segment, therefore is not further disclosed in these financial

statements. The Company and its subsidiaries are domiciled in Lithuania. There are no transactions of the Group or the Company

that occur outside Lithuania. Therefore, the management has neither analysed revenue, nor other financial indicators by

geographical areas. All revenue of the Group is received from one type of service – rent of land. Therefore, the Group has not

disclosed any breakdown of revenue by product and services type and by geographical areas.

In 2021 and in 2020 there is no single customer from which the Group has received more than 10% of its revenue.

Operating lease commitments – Group as a lessor

The Group has entered into leases of the Group’s investment properties under operating lease agreements with rentals payable

yearly in two parts. First part of rent is payable until 1 April according to the most Group’s lease agreements. Second part of rent

related to land tax is payable in November – December. Most of the agreements have remaining terms of between 1 and 5 years.

The most Group’s lease agreements have clause for indexation on consumer price index or unilaterally right to increase rent by

notice. Approximately 37% of land plots is leased with clause of agreement that lessee could have to pay surcharge that depends

on milling wheat futures price change. Although the Group is exposed to changes in the residual value at the end of the current

leases, the Group typically enters into new operating leases and therefore will not immediately realise any reduction in residual

value at the end of these leases. Expectations about the future residual values are reflected in the fair value of the land.

Cancellable lease agreements can be cancelled under the following terms:

• Tenants must notify the lessor 12 months in advance if they wish to cancel the rent agreement without any reason and

have to pay annual rent fee for these 12 months.

• The lessor has the right to unilaterally change the rent price for the coming year and must notify the tenant about the

change till 1 May of the current year. If tenants do not agree with the new rent price, they can terminate the agreement

with notification of 3 months in advance.

In 2021 lease income relating to variable lease payments that do not depend on an index or a rate was EUR 23 thousand (2020:

EUR 25 thousand).

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

6 Segment information and operating lease commitments (cont’d)

Future lease receivable under operating leases as at 31 December were as follows:

2021

2020

Within one year

- non-cancellable lease

692

617

- non-cancellable amount of cancellable lease

- minimum lease payments total

712

640

Between 1 and 2 years

- non-cancellable lease

381

461

- minimum lease payments total

381

461

- cancellable amount of cancellable lease

384

480

Between 2 and 3 years

- non-cancellable lease

352

232

- minimum lease payments total

352

232

- cancellable amount of cancellable lease

355

235

Between 3 and 4 years

- non-cancellable lease

208

209

- minimum lease payments total

208

209

- cancellable amount of cancellable lease

208

212

Between 4 and 5 years

- non-cancellable lease

104

155

- minimum lease payments total

104

155

- cancellable amount of cancellable lease

104

155

After five years

- non-cancellable lease

166

223

- minimum lease payments total

166

223

- cancellable amount of cancellable lease

169

226

Total

1,932

1,948

- non-cancellable lease

1,903

1,897

- non-cancellable of cancellable lease

- minimum lease payments total

1,923

1,920

- cancellable amount of cancellable lease

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

7 Agreement on the administration of land plots

The Group has signed land plot administration agreement with UAB INVL Farmland Management on 30 June 2015. UAB INVL

Farmland Management, is a company owned by AB Invalda INVL. The agreement came into force on 1 July 2015. According to

the agreement administration fees paid to UAB INVL Farmland Management will be 7% of annual rent revenues and 0,5% market

capitalization of AB INVL Baltic Farmland. Success fee is also set, and it consists of 20% from the share of the return exceeding

the pre-determined annual return of 5% plus inflation. If the carrying amount of past due trade receivables arising from the current

year would exceed 5% of annual turnover (revenue plus VAT), the excess shall be fully compensated by UAB INVL Farmland

Management. If the Group receive the compensated trade receivables, the compensation is returned to UAB INVL Farmland

Management. The split of administration fees is presented in the table below:

Group

2021

2020

Administration fees from rent revenues and market capitalisation

156

117

Compensation for past due trade receivables

Success fee

Total

175

206

8 Income tax

Group

Company

2021

2020

2021

2020

Components of the income tax expenses

Current year income tax

(54)

(57)

(17)

(21)

Deferred income tax expenses

(190)

(97)

Income tax expenses charged to profit or loss – total

(244)

(154)

(17)

(21)

There is no income tax expense (credit) recognised in other comprehensive income or directly in equity.

Deferred income tax asset and liability were estimated at 15% rates as at 31 December 2021 and 2020.

The movement in deferred income tax assets and liabilities of the Group during 2021 is as follows:

Balance as at 31

December 2020

Recognised in profit or

loss during the year

Balance as at 31

December 2021

Deferred tax asset

Tax loss carry forward for indefinite period of time

(2)

Recognised deferred income tax asset

(2)

Asset netted with liability of the same legal entities

(5)

(3)

Deferred income tax asset, net

Deferred tax liability

Investment properties

(1,613)

(188)

(1,801)

Deferred income tax liability

(1,613)

(188)

(1.801)

Liability netted with asset of the same legal entities

(2)

Deferred income tax liability, net

(1,608)

(190)

(1.798)

Deferred income tax, net

(1,608)

(190)

(1.798)

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

8 Income tax (cont’d)

The movement in deferred income tax assets and liabilities of the Group during 2020 is as follows:

Balance as at 31

December 2019

Recognised in profit or

loss during the year

Balance as at 31

December 2020

Deferred tax asset

Tax loss carry forward for indefinite period of time

Recognised deferred income tax asset

Asset netted with liability of the same legal entities

(5)

Deferred income tax asset, net

Deferred tax liability

Investment properties

(1,516)

(97)

(1,613)

Deferred income tax liability

(1,516)

(97)

(1,613)

Liability netted with asset of the same legal entities

Deferred income tax liability, net

(1,511)

(97)

(1,608)

Deferred income tax, net

(1,511)

(97)

(1,608)

The Company has not any taxable temporary differences in 2021 and 2020 and has not recognised any deferred tax assets or

liabilities.

The Group’s deferred tax liability will be recovered after more than 12 months.

The reconciliation of the total income tax to the theoretical amount that would arise using the tax rate of the Group and

the Company is as follows:

Group

Company

2021

2020

2021

2020

Profit before income tax

1,655

1,049

1.428

916

Tax calculated at the tax rate of 15 %

(248)

(157)

(214)

(137)

Tax effect of non-deductible expenses and non-taxable income

197

116

Income tax expenses recorded in the statement of comprehensive

income

(244)

(154)

(17)

(21)

In 2021 and 2020 non-taxable income of the Company was share of net profit of subsidiaries accounted for using the equity

method.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

9 Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the

parent by the weighted average number of ordinary shares outstanding during the year.

The weighted average number of shares for 2021 and 2020 was 3,228 thousand.

The following table reflects the income and share data used in the basic earnings per share computations:

Group

2021

2020

Net profit (loss), attributable to the equity holders of the parent

1,411

895

Weighted average number of ordinary shares (thousand)

3,228

Basic earnings (deficit) per share (EUR)

0.44

0.28

For 2021 and 2020 diluted earnings per share of the Group and the Company are the same as basic earnings per share.

10 Investment properties

The movements of investment properties during 2021 and 2020 were:

2021

2020

Fair value hierarchy

Level 2

Balance as at 1 January

15,364

14,719

Gain from fair value adjustment

1,258

717

Loss from fair value adjustment

(2)

(34)

Disposals (taken by the State for public needs)

(38)

Balance as at 31 December

16,620

15,364

Unrealised gains and losses for the period included within ‘Net gains (losses) from fair

value adjustments on investment property’ in the statement of comprehensive income

1,256

681

Investment properties are stated at fair value and are valued by accredited valuer UAB korporacija Matininkai using sales

comparison method. The valuations were performed in December 2021 and in December 2020.

The fair value represents the price that would be received selling an asset in an orderly transaction between market participants

at the measurement date. An investment property’s fair value was based on the market approach by reference to sales in the

market of comparable properties. Market approach refers to the prices of the analogues transactions in the market. These values

are adjusted for differences in key attributes such as land plot size and productivity. The most significant input into this valuation

approach is price per hectare.

There were no changes to the valuation techniques during the period.

In 2

Quarter 2019 the Group received letters from Ministry of Transport and Communications informing about possibility to take

for the purpose of construction and reconstruction of local roads, related to project of Rail Baltica, 8 land plots owned by the Group

(77.2 ha). The Group had no right to sell, pledge, restructure or in any other way restrict rights to those land plots. The Group was

informed that 6.56 ha of above mentioned land plots would be taken for the public needs (the value of the land plots in the Group’s

statement of financial position as at 31 December 2019 was EUR 36 thousand). The ownership of these land plots was transferred

to the State in 2020. The State paid for these land plots EUR 38 thousand and, therefore, in 2020 was recognised additionally

gain of fair value adjustment of EUR 2 thousand.

On 1 May 2014 changes to the Agricultural Land Acquisition temporary law entered into force, providing restrictions of the

purchase of agricultural land (including restriction of purchase of shares in the legal entity owning agricultural land). These

restrictions mean that the Group cannot purchase additional agricultural land and/or acquire shares in entities owning agricultural

land. As a result of restrictions the land sale market in Lithuania became less liquid.

There were no other restrictions on the realisation of investment properties or the remittance of income and proceeds of disposals

during 2021 and 2020. No contractual obligations to purchase investment properties existed at the end of the period.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

11 Financial instruments by category

Group

Financial assets at amortised cost

2021

2020

Assets as per statement of financial position

Trade and other receivables excluding tax prepayments

111

157

Cash and cash equivalents

144

302

Total

255

459

Company

Financial assets at amortised cost

2021

2020

Assets as per statement of financial position

Loans granted to subsidiaries – non-current assets

3,529

3,920

Loans granted to subsidiaries – interest

Trade and other receivables excluding tax prepayments

Cash and cash equivalents

Total

3,587

3,971

Group

Financial liabilities at amortised cost

2021

2020

Liabilities as per statement of financial position

Trade payables

125

Other current liabilities excluding taxes and employee benefits

Total

130

183

Company

Financial liabilities at amortised cost

2021

2020

Liabilities as per statement of financial position

Trade payables

Other current liabilities excluding taxes and employee benefits

Total

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

12 Loans granted to subsidiaries at amortised cost

The Company’s loans granted are described below:

2021

2020

Loans granted to subsidiaries

3,547

3,930

Total loans granted

3,547

3,930

The movements of loans granted to subsidiaries during the year were:

Balance as at 31 December 2019

4,136

Loans granted during year

Loans repayment received

(268)

Interest charged

177

Interest received

(153)

Balance as at 31 December 2020

3,930

Loans granted during year

Loans repayment received

(464)

VAT receivable arising from interest on loans granted to subsidiaries converted to loans

granted

Interest charged

163

Interest received

(135)

Balance as at 31 December 2021

3,547

The contractual maturity of loans granted to subsidiaries is 31 December 2022 according to the agreements, but the Company

classifies them as long term, because intends to prolong them on maturity date. Effective interest rate of loans is 4.5 %. At each

year end maturity of the loans granted is prolonged for one extra year and new market interest rate is determined.

While the loans granted to the subsidiaries are the main liabilities of the subsidiaries and the fair values of investment properties

owned by the subsidiaries are approximately 2.4 – 13.2 times higher than the carrying amounts of the loans granted, they were

considered as low credit risk financial assets at the reporting date (attributable to Stage 1 financial assets). This is because even

if loans granted were covered in the case of forced sale of investment properties, the Company considers that the loss given

default would amount to zero. As at 31 December 2021 and 2020, the Company’s loans granted were neither overdue nor impaired

and they had no history of counterparty defaults. The Company’s policy is to grant loans only to the subsidiaries controlled by it.

The maximum credit risk as at the financial reporting date is the carrying amount of each category of amounts receivable as

indicated above. The Company does not hold any collateral, but investment properties owned by the subsidiaries are not pledged

to any other party and in fact secure loans granted.

The carrying amount of loans granted by the Company approximates their fair value because the interest rates are reviewed at

the end of each year and adjusted when market rates change. Their value is based on cash flows discounted using 4.5 % and

interest rate as at 31 December 2021 and 2020. It is Level 3 fair value measurement.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

13 Trade and other receivables

Group

2021

2020

Trade receivables, gross

185

237

Accrued lease income, gross

Other receivables, gross

Taxes receivable, gross

Total trade and other receivable, gross

325

359

Less: provision for impairment of trade and other receivables

(2)

(3)

Less: Write off still subject to enforcement activity

(153)

(158)

Trade and other receivable net of expected credit losses

170

198

As at 31 December 2021 and 2020 the Company had receivable of EUR 13 thousand and EUR 10 thousand, which was VAT

receivable arising from interest on loans granted to subsidiaries (the Company has elected to calculate VAT from interest). The

receivable was settled in January 2021 and 2020, respectively. As at 31 December 2021 the Company had also taxes receivables

of 6 EUR thousand.

Changes in provision for impairment of trade and other receivables for the year 2021 and 2010 have been included within

‘Provision for (reversal of) impairment of trade receivables’ in the statement of comprehensive income.

The Group’s trade and other receivables are non-interest bearing and are generally with a credit term of 30 days.

Movements in the accumulated impairment losses on credit impaired accounts receivable of the Group and in the write-off were

as follows:

Group

Impairment

losses

Write off still subject to

enforcement activity

Total

Balance as at 31 December 2019

110

167

Charge for the year

Enforcement activity ended

(7)

Recoveries of amounts previously impaired or written off

(36)

(4)

(40)

Reclassification to write-off

(106)

106

Balance as at 31 December 2020

158

161

Charge for the year

Enforcement activity ended

(5)

Recoveries of amounts previously impaired or written off

(2)

Reclassification to write-off

Balance as at 31 December 2021

153

155

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

13 Trade and other receivables (cont’d)

The credit risk exposure of trade receivables can be assessed on the ageing analysis disclosed below:

Current

Less than

30 days

30–90 days

91–180 days

181 – 365

days

Credit

impaired

Total

As at 31 December 2021

Trade receivables net of write off

Accrued lease income

Other receivables

Expected credit losses

(2)

Trade and other receivable net of

expected credit losses

111

As at 31 December 2020

Trade receivables net of write off

Accrued lease income

Other receivables, gross

Expected credit losses

(2)

(1)

(3)

Trade and other receivable net of

expected credit losses

157

As at 31 December 2020 trade receivables of EUR 45 thousand within aging group ’91-180’ days is secured by pledge of land

plots of 11.3 hectare and they were settled in 2021.

The ageing analysis of the credit impaired of trade receivables disclosed below:

Current

Less than

30 days

30–90 days

91–180 days

181 – 365

days

More than

1 years

Total

Trade receivables net of write off as

at 31 December 2021

Trade receivables net of write off as

at 31 December 2020

14 Share capital, acquisition of own shares and reserves

The total authorised number of ordinary shares is 3,291,549 (as of 31 December 2020: 3,291,549 shares) with a par value of

EUR 0.29 per share. All the shares of the Company were fully paid. The Company’s share capital and equity was formed in

accordance with the procedure set forth in the terms of split-off on 29 April 2014. The Company holds 63,039 own shares (1.92%

of share capital).

There are not any changes in 2020 and 2021.

Legal reserve

Legal reserve is a compulsory reserve under Lithuanian legislation. Annual transfers of not less than 5 % of net profit, calculated

in accordance with the statutory financial statements, are compulsory until the reserve reaches 10 % of the share capital. The

reserve can be used only to cover the accumulated losses.

Reserve for the acquisition of own shares

Reserve for the acquisition of own shares is formed for the purpose of buying own shares in order to keep their liquidity and

manage price fluctuations. It can be formed by shareholders’ decision at the Annual Shareholders Meeting from the profit available

for distribution. The reserve cannot be used to increase the share capital. The reserve does not change when Company acquires

own shares, but is utilised when own shares are cancelled. The shareholders can decide to transfer unused amounts of the

reserve back to retained earnings at the Annual Shareholders Meeting.

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

15 Dividends

A dividend in respect of the year ended 31 December 2020 of EUR 0.15 per share, amounting to a total dividend of EUR 484

thousand, was approved at the annual general meeting on 9 April 2021.

A dividend in respect of the year ended 31 December 2019 of EUR 0.10 per share, amounting to a total dividend of EUR 323

thousand, was approved at the annual general meeting on 23 March 2020.

Movement in dividends payable (presented within “Other current liabilities” in the statement of financial position) is presented in

the table below:

Group/Company

Dividends payable

2021

2020

As at 1 January

Dividends paid to equity holders of the parent

(476)

(316)

Approved dividends

484

323

As at 31 December

16 Related party transactions

The related parties of the Group were the shareholders of the Company, who have significance influence (Note 1), key

management personnel, including companies under control or joint control of key management and shareholders having

significant influence. AB Invalda INVL and the entities controlled by AB Invalda INVL are also considered to be related parties,

because the shareholders of the Company, having significance influence, also have a joint control over AB Invalda INVL group

through shareholders’ agreement.

The Group’s transactions with related parties during 2021 and related balances as at 31 December 2021 were as follows:

2021

Group

Sales to related

parties

Purchases from

related parties

Receivables from

related parties

Payables to

related parties

AB Invalda INVL (accounting services)

UAB INVL Farmland Management

(administration fees)

175

AB Invalda INVL group (reimbursement of

expenses for insurance and webpage)

217

The Group’s transactions with related parties during 2020 and related balances as at 31 December 2020 were as follows:

2020

Group

Sales to related

parties

Purchases from

related parties

Receivables from

related parties

Payables to

related parties

AB Invalda INVL (accounting services)

UAB INVL Farmland Management

(administration fees)

206

124

221

124

AB INVL BALTIC FARMLAND, company code 303299781, Gynėjų str. 14, Vilnius, Lithuania

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2021

(all amounts are in EUR thousand unless otherwise stated)

16 Related party transactions (cont’d)

The Company’s related parties are the subsidiaries (Note 5), shareholders, who have significance influence (Note 1), key

management personnel and companies under control or joint control of key management and shareholders with significant

influence. AB Invalda INVL and the entities controlled by AB Invalda INVL are also considered to be related parties, because the

shareholders of the Company, having significance influence, also have a joint control over AB Invalda INVL group through

shareholders’ agreement.

Transactions of the Company with subsidiaries in 2021 and 2020 and related balances as at 31 December 2021 and 2020 were

as follows:

Company

2021

2020

Interest income

from related parties

Receivables from

related parties

Interest income

from related parties

Receivables from

related parties

Loans and borrowings

163

3,547

177

3,930

VAT receivable arising from interest

163

3,560

177

3,940

The maturity of loans granted is till 31 December 2022, effective interest rate 4.5% (Note 12). As at 31 December 2020 the maturity

of loans granted was till 31 December 2021, effective interest rate 4.5% (Note 12).

The Company’s transactions with other related parties during 2021 and 2020 and related balances as at 31 December 2021 and

2020 were as follows:

Company

2021

2020

Purchases from

related parties

Payables to

related parties

Purchases from

related parties

Payables to related

parties

AB Invalda INVL (accounting services)

AB Invalda INVL group (reimbursement

of expenses for insurance and

webpage)

The management remuneration contains short-term employees’ benefits. Key management of the Company and the Group

includes Board members and the Director of the Company, respectively. In 2021 and 2020 the Group’s key management

compensation was EUR 2 thousand and EUR 2 thousand, respectively. In 2021 and 2020 the Company’s key management

compensation was EUR 2 thousand and EUR 2 thousand, respectively.

There were no loans granted during the reporting period or outstanding at the end of the reporting period.

In 2021 to the Board members, which are shareholders of the Company, were paid EUR 40 thousand of dividends, net of tax. To

the entities, which are controlled by the Board members, were paid EUR 217 thousand of dividends, net of tax. To the natural

persons related to the Board members the Company paid EUR 128 thousand of dividends, net of tax.

In 2020 to the Board members, which are shareholders of the Company, were paid EUR 27 thousand of dividends, net of tax. To

the entities, which are controlled by the Board members, were paid EUR 146 thousand of dividends, net of tax. To the natural

persons related to the Board members the Company paid EUR 85 thousand of dividends, net of tax.

17 Impact of COVID-19

The Group was not significantly affected by the COVID-19 virus pandemic. The Group's operations were not disrupted, as the

Group can perform all the operations remotely. The Group did not request or received any financial support due to the COVID-19

virus pandemic, as this was not relevant taking into account Group's operations. The Group's customers are farmers who lease

land from the Group and whose activities were effected only a little by the COVID-19 virus pandemic. Their ability to pay the lease

to the Group is more determined by the meteorological conditions that affects the harvest. No discounts were granted to farmers

renting the land from the Group due to the effects of the COVID-19 virus. The Group is not expected to be significantly affected in

the future by the COVID-19 virus pandemic.

INVL

Baltic

Farmland,

BALTIC

FARMLAND

CONSOLIDATED

ANNUAL

REPORT

2021

APPROVED

THE

BOARD

INVL

BALTIC

FARMLAND,

FEBRUARY

2022

   
INVL BALTIC FARMLAND, AB 
ANNUAL REPORT OF 2021 |  36 
CONTENT 
I. GENERAL INFORMATION .................................................................................................................... 38 
Legal basis for preparation of the Annual Consolidated Report and content of information............................................... 38 
Reporting period for which the report is prepared ...................................................................................................... 38 
General information about the Issuer and other companies comprising the Issuer‘s group .............................................. 38 
1. Information about the issuer ............................................................................................................................. 38 
2. Information on company’s goals, philosophy and strategy ..................................................................................... 38 
3. Information about the Issuer‘s group of companies .............................................................................................. 39 
Agreements with intermediaries on public trading in securities .................................................................................... 41 
Information on Issuer’s branches and representative offices ....................................................................................... 41 
II. INFORMATION ABOUT SECURITIES ..................................................................................................... 42 
The order of amendment of Issuer’s Articles of Association ......................................................................................... 42 
Structure of the authorized capital ........................................................................................................................... 42 
1. Information about the issuer’s treasury shares .................................................................................................... 42 
Trading in Issuer’s securities as well as securities, which are deemed to be a significant financial investment to the Issuer 
on a regulated market ............................................................................................................................................... 43 
Dividends ............................................................................................................................................................. 46 
Shareholders ....................................................................................................................................................... 47 
1. Information about company‘s shareholders ....................................................................................................... 47 
2. Rights and obligations carried by the shares ...................................................................................................... 48 
III. ISSUER’S MANAGING BODIES .......................................................................................................... 50 
Structure, authorities, the procedure for appointment and replacement ...................................................................... 50 
1. General Shareholders’ Meeting......................................................................................................................... 50 
2. The Board ..................................................................................................................................................... 52 
2.2. Procedure of work of the Board ..................................................................................................................... 53 
3. The Director .................................................................................................................................................. 54 
Information about members of the Board, Company providing accounting services ...................................................... 54 
Information about the Audit Committee of the company ........................................................................................... 57 
1. Procedure of work of the audit committee ......................................................................................................... 57 
2. Members of the Audit Committee ..................................................................................................................... 57 
Information on the Issuer’s payable management fee, the amounts calculated by the Issuer, other assets transferred and 
guarantees granted to the Managing bodies and company providing accounting services .................................................... 58 
IV. INFORMATION ABOUT THE ISSUER’S AND ITS GROUP COMPANIES’ ACTIVITY ........................................... 60 
Overview of the Issuer and its group activity ........................................................................................................... 60 
1. Business environment ..................................................................................................................................... 60 
2. Significant Issuer’s and its group events during the reporting period, affect on the financial statement ..................... 63 
3. Employees .................................................................................................................................................... 64 
4. Environmental Protection ................................................................................................................................ 64 
5. Disclosure of the impact of the COVID-19 pandemic ........................................................................................... 64 
A description of the principal advantages, uncertainties encountered, risks and uncertainties ........................................ 64 
1. Advantages of investments.............................................................................................................................. 64 
2. Risk factors ................................................................................................................................................... 65 
3. The main indications about internal control and risk management systems related to the preparation of consolidated 
financial statements ................................................................................................................................................ 67 

   
INVL BALTIC FARMLAND, AB 
ANNUAL REPORT OF 2021 |  37 
17. Significant investments made during the reporting period ......................................................................................... 67 
18. Information about significant agreements to which the issuer is a party, which would come into force, be amended or 
cease to be valid if there was a change in issuer‘s controlling shareholder ........................................................................ 67 
19. Information on the related parties’ transactions ....................................................................................................... 67 
20. Information on harmful transactions in which the issuer is a party ............................................................................. 69 
21. Significant events since the end of the financial year ................................................................................................ 69 
22. Estimation of Issuer’s and Group’s activity last year and activity plans and forecasts .................................................... 69 
22.1. Evaluation of implementation of goals for 2021 .................................................................................................. 69 
22.2. Activity plans and forecasts ............................................................................................................................. 69 
V. OTHER INFORMATION ....................................................................................................................... 70 
23. Additional non - financial information ..................................................................................................................... 70 
24. References to and additional explanations of the data presented in the annual financial statements and consolidated 
financial statements................................................................................................................................................... 70 
25. Information on financial risk management objectives used for hedging measures which hedge accounting and of price 
risk, credit risk, liquidity risk and cash flow risk where the company group uses financial instruments and is an important 
evaluation of the property, own capital, liabilities, revenue and expenses ......................................................................... 70 
26. Information about activities of the Issuer and companies comprising the issuer’s group in the field of research and 
development ............................................................................................................................................................. 70 
27. Information about agreements of the Company and its managing bodies, members of the formed committees, or the 
employees’ agreements providing for compensation in case of the resignation or in case they are dismissed without a due 
reason or their employment is terminated in view of the change of the control (official offering) of the Company. ................. 70 
28. Information about any control systems in the employee share plan that are not exercised directly by employees............. 70 
29. Information on audit company ............................................................................................................................... 70 
30.  Data on the publicly disclosed information.............................................................................................................. 71 
APPENDIX 1. INFORMATION ABOUT GROUP COMPANIES, THEIR CONTACT DETAILS ....................................... 72 
APPENDIX 2. CORPORATE GOVERNANCE CODE ......................................................................................... 74 
APPENDIX 3. COMPANY'S MANAGEMENT REPORT ...................................................................................... 88 
APPENDIX 4. COMPANY'S OPERATING AND FINANCIAL INDICATOR FORMULAS AND DEFINITIONS .................... 96 
APPENDIX 5. REMUNERATION REPORT .................................................................................................... 99 
 
   

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 38

I. GENERAL INFORMATION

1. Legal basis for preparation of the Annual Consolidated Report and content of information

The Annual Consolidated Report of the public joint-stock company INVL Baltic Farmland (hereinafter may be referred as the

Company or INVL Baltic Farmland, AB) has been prepared by the Company in accordance with the Lithuanian Law on Securities of

the Republic of Lithuania, the Law on Companies of the Republic of Lithuania, the Rules on the Disclosure of Information and the

Guidelines on the Disclosure of Information approved by the Board of the Bank of Lithuania. The content of the consolidated annual

report is disclosed according to Law on Consolidated Financial Statements of Enterprises of the Republic of Lithuania and Law on

Corporate Financial Reporting of the Republic of Lithuania.

The Company informs that information disclosing information about the Company presented in this Annual Report is divided into

five (V) sections. These sections disclose information on Company's securities, the Management of the Company, the Company's

and the Group's activities and other information, that Company’s Management values as important to disclose. The Company notes

that the information presented in the Annual Report is relevant for understanding the Company's performance, condition and impact

of operations. .

2. Reporting period for which the report is prepared

The report covers the financial period of INVL Baltic Farmland, AB starting from 1 January 2021 and ending on 31 December 2021.

The report also discloses information from the end of the reporting period to the release of the report.

The report was audited.

3. General information about the Issuer and other companies comprising the Issuer‘s group

3.1. Information about the issuer

Name of the Issuer

The public joint-stock company INVL Baltic Farmland

Code

303299781

Registered address

Gynėjų str. 14, 01109, Vilnius, Lithuania

Telephone

+370 5 279 0601

Fax

+370 5 279 0530

E-mail

farmland@invaldainvl.com

Website

www.invlbalticfarmland.lt

LEI code

5299000AUE9M1W13ZQ36

Legal form

public joint-stock company

Date and place of registration

29 April 2014. Register of Legal Entities

Company are accumulated and stored

3.2. Information on company’s goals, philosophy and strategy

The main goal of INVL Baltic Farmland – to invest into agricultural land in Lithuania and, after renting it to farmers and agricultural

companies, to ensure that income from rent will exceed inflation and make a profit from agricultural land price growth. Since prices

of agricultural products are determined in the world markets, this investment allow to participate in the world food supply chain.

The public joint-stock company INVL Baltic Farmland was established on 29 April 2014 on the basis of a part of assets split-off from

one of the leading asset management groups in the Baltic region Invalda INVL. INVL Baltic Farmland manages shares of 18

companies investing into agricultural land that are owning about 3 thousand hectares of agricultural land in Lithuania. More than

98% of land is rented to farmers and agricultural companies.

Shares of INVL Baltic Farmland are listed on Nasdaq Vilnius stock exchange since 4 June 2014.

The administration of the INVL Baltic Farmland group owned land, according to the basic property administration agreement signed

on 30 June 2015, is transmitted to the owned company INVL Farmland Management. Management fees paid for INVL Farmland

Management are 7 percent of annual rental income of the companies - land owners as well as 0.5 percent of INVL Baltic Farmland

market capitalization. Moreover there is a success fee which becomes valid only when consolidated equity of companies - land

owners annual growth is higher than 5 percent plus inflation (High-Water Mark principle is applicable). Success fee is 20 percent of

the consolidated equity in excess of the above mentioned benchmark. On 28 December 2020, the Basic Property Administration

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 39

Agreement’s Amendment No. 20150630/01 was concluded, based on which the term of the Basic Property Administration Agreement

was extended until 31 December 2025.

As the company has signed the property administration agreement it employs a minimum number of people.

It is prohibited for one person to have more than 500 hectares of land in Lithuania since 2014. That‘s why INVL Baltic Farmland

development is limited and the generated funds are directed to the payment of dividends to shareholders.

Investments into agricultural land are classified as long term and are recommended for investors who are satisfied with the return

on rent and possible income from increase of agricultural land prices.

3.3. Information about the Issuer‘s group of companies

INVL Baltic Farmland has 100% in 18 companies owning about 3 thousand hectares of agricultural land in the most fertile regions

of Lithuania. Companies - land owners and joint-stock company INVL Baltic Farmland, whose shareholder is Invalda INVL – one of

the leading asset management groups in the Baltic region, on 30 June 2015 have signed a basic property administration agreement

with INVL Farmland Management which administrates agricultural land owned by the companies to ensure steady growth of income

for the shareholders and the value of the land. On 21 October 2020, the General Meeting of Shareholders of the Company approved

the extension of the agreement with UAB INVL Farmland Management and its arrangement in a recast version. The agreement was

extended until 31 December 2025.

Fig. 3.3.1. Group structure of INVL Baltic Farmland, AB as of 31 December 2021

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 40

Fig. 3.3.2. Agricultural land portfolio and agricultural land fertilisation of INVL Baltic Farmland, AB

Plots belonging to the company are in the most fertile areas of Lithuania. They are highlighted in blue.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 41

Table 3.3.3. Information about companies of INVL Baltic Farmland group

Company name

District of company‘s activities

Owned land

plot,

hectares

Cultivated

cropland area,

hectares

Avizele, UAB

Rokiskis dist., Anyksciai dist.

113.82

107.51

Berzyte, UAB

Birzai dist.

150.49

145.99

Dirvolika, UAB

Akmene dist., Joniskis dist., Siauliai dist.

199.44

192.03

Duonis, UAB

Jonava dist., Kedainiai dist., Ukmerge dist.

181.98

174.34

Ekotra, UAB

Vilkaviskis dist.

238.76

228.70

Kvietukas, UAB

Pakruojis dist., Pasvalys dist.

118.01

112.69

Laukaitis, UAB

Pakruojis dist., Pasvalys dist., Siauliai dist.

204.10

193.44

Lauknesys, UAB

Birzai dist., Pasvalys dist.

109.94

107.83

Linaziede, UAB

Alytus dist., Jonava dist., Kaisiadorys dist., Prienai dist.

85.13

80.75

Pusaitis, UAB

Radviliskis dist.

82.44

81.10

Puskaitis, UAB

Marijampole dist., Prienai dist., Vilkaviskis dist.

210.74

204.20

Seja, UAB

Kedainiai dist.

82.53

79.75

Vasarojus, UAB

Anyksciai dist., Panevezys dist., Ukmerge dist.

375.73

364.85

Zalve, UAB

Kupiskis dist.

216.88

201.73

Zemgale, UAB

Birzai dist., Kupiskis dist., Panevezys dist.

241.76

232.00

Zemynele, UAB

Sakiai dist., Vilkaviskis dist.

72.57

70.81

Ziemkentys, UAB

Panevezys dist., Pasvalys dist.

414.14

401.62

3098.46

2979.34

4. Agreements with intermediaries on public trading in securities

INVL Baltic Farmland, AB has signed the agreements with these intermediaries:

 Šiaulių bank, AB (Tilžės str. 149, Šiauliai, Lithuania, tel. +370 41 595 607) – the agreement on investment services, the

agreement on management of securities accounting and agreement on dividend distribution.

5. Information on Issuer’s branches and representative offices

INVL Baltic Farmland, AB has no branches or representative offices.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 42

II. INFORMATION ABOUT SECURITIES

6. The order of amendment of Issuer’s Articles of Association

The Articles of Association of INVL Baltic Farmland, AB may be amended by resolution of the General Shareholders’ Meeting, passed

by more than 2/3 of votes (except in cases provided for by the Law on Companies of the Republic of Lithuania).

Actual wording of the Articles of Association of the Company is dated as of 18 April 2018. The Company’s Articles of Association is

published on the Company’s web page (Company‘s web site section „Investor Relations“ → „Articles of Association“. The link:

https://invlbalticfarmland.com/en/investor-relations/legal-documents/).

7. Structure of the authorized capital

Table 7.1. Structure of INVL Baltic Farmland, AB authorised capital as of 31 December 2021.

Type of shares

Number of shares and

total voting rights granted

by the issued shares, units

Number of votes for

the quorum of the

General Shareholders

Meeting, units*

Nominal

value,

EUR

Total nominal

Value and

authorised

capital, EUR

Portion of

the

authorised

capital,

Ordinary registered shares

3,291,549

3,228,510

0.29

954,549.21

100

*According to Article 27 (4) of the Law on Companies’ in determining the quorum of the General Meeting of Shareholders, it is considered that the

acquired own shares do not grant voting rights.

All shares are fully paid-up and no restrictions apply on their transfer.

7.1. Information about the issuer’s treasury shares

The General Shareholders Meeting of the Company that was held on 28 October 2015 approved resolution to purchase its own

shares. The period during which the company could acquire its own shares - 18 months from the day of this resolution. The

maximum one share acquisition price – EUR 4.00, minimum one share acquisition price – EUR 2.87. During this period the Company

initiated acquisition of own shares 1 time. On 21 June, the company announced about acquisition of 1.92 percent of own shares.

63,039 units of shares were offered. The settlement for the acquired shares happened on 22 June 2016.

The General Shareholders Meeting of INVL Baltic Farmland, AB that was held on 22 March 2017 made decision to purchase its own

shares. The period during which the company may acquire its own shares - 18 months from the day of this resolution. The maximum

one share acquisition price – EUR 4.50, minimum one share acquisition price – EUR 3.16. Company not initiated acquisition of own

shares in 2017.

The General Shareholders Meeting of INVL Baltic Farmland, AB that was held on 10 April 2018 approved resolution to purchase its

own shares. The period during which the company may acquire its own shares - 18 months from the day of this resolution. The

maximum one share acquisition price – EUR 5.00, minimum one share acquisition price – EUR 3.00. Company not initiated

acquisition of own shares in 2018.

The General Shareholders Meeting of INVL Baltic Farmland, AB that was held on 22 March 2019 made decision to purchase its own

shares. The period during which the company may acquire its own shares - 18 months from the day of this resolution. The maximum

one share acquisition price – EUR 5.00, minimum one share acquisition price – EUR 3.00. Company not initiated acquisition of own

shares in 2019.

The General Shareholders Meeting of INVL Baltic Farmland, AB that was held on 23 March 2020 made decision to purchase its own

shares. The period during which the company may acquire its own shares - 18 months from the day of this resolution. The maximum

one share acquisition price – EUR 5.00, minimum one share acquisition price – EUR 3.00. Company not initiated acquisition of own

shares in 2020.

The General Shareholders Meeting of INVL Baltic Farmland, AB that was held on 9 April 2021 made decision to purchase its own

shares. The period during which the company may acquire its own shares - 18 months from the day of this resolution. The maximum

one share acquisition price – EUR 5.00, minimum one share acquisition price – EUR 3.00.

At the end of the reporting period the amount of Company‘s acquired own shares stayed the same and amounted to

63,039 (units) or 1.92 percent of the Company’s Authorised capital. Subsidiaries of INVL Baltic Farmland have not

implemented acquisition of shares in INVL Baltic Farmland directly or indirectly under the order of subsidiary by persons acting by

their name.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 43

8. Trading in Issuer’s securities as well as securities, which are deemed to be a significant financial

investment to the Issuer on a regulated market

Table 8.1. Main characteristics of INVL Baltic Farmland, AB shares admitted to trading:

Type of shares

Ordinary registered shares

ISIN code

LT0000128753

LEI code

5299000AUE9M1W13ZQ36

Name

INL1L

Exchange

Nasdaq Vilnius

List

Baltic Secondary list

Authorised capital (EUR)

954,549.21

Nominal value of 1 share (EUR)

0.29

Shares issued, units

3,291,549

Total voting rights granted by the issued

shares, units

3,291,549

Number of votes for the quorum of the

General Shareholders Meeting, units*

3,228,510

Date of the beginning of listing

4 June 2014

*According to Article 27 (4) of the Law on Companies’ in determining the quorum of the General Meeting of Shareholders, it is considered that the

acquired own shares do not grant voting rights.

Company uses no services of liquidity providers.

Table 8.2. Trading in the company’s shares 2017 – 2021 (quarterly) on NASDAQ Vilnius:

Reporting

period

Price, EUR

Turnover, EUR

Last trading

date

Total turnover

high

low

last

high

low

last

quantity

EUR

2017 1st Q

4.30

3.15

4.30

2,557.04

26.08

301

31.03.2017

2,905

10,684.95

2017 2nd Q

4.01

3.75

3.88

4,516.05

7.56

30.06.2017

7,854

29,872.22

2017 3rd Q

4.20

3.69

3.80

1,668.16

41.36

29.09.2017

2,266

8,730.19

2017 4th Q

4.20

3.78

3.89

4,908.67

19.45

29.12.2017

3,039

12,246.93

2018 1st Q

4.32

3.96

4.32

2,572.64

3.96

29.03.2018

1,279

5,463.80

2018 2nd Q

4.80

3.90

4.08

1,697

23.40

29.06.2018

2,136

9,369.12

2018 3rd Q

4.34

3.80

1,414.08

8.00

380

28.09.2018

2,077

8,347.86

2018 4th Q

4.00

3.50

1,365

10.5

238

28.12.2018

1,295

4,623.38

2019 1st Q

4.00

3.42

3.58

5,982.34

10.74

29.03.2019

2,731

10,518.30

2019 2nd Q

3.80

3.48

3.58

887.04

54.30

662.30

28.06.2019

1,582

5,661.24

2019 3rd Q

4.10

3.42

4.00

2,455.80

7.4

30.09.2019

2,336

8,942.32

2019 4th Q

3.86

3.46

3.48

4,323.80

7.28

274.92

12.30.2019

3,610

13,022.18

2020 1st Q

4.18

3.5

4.00

6,883.64

33.84

31.03.2020

8,571

33,405.22

2020 2nd Q

5.00

3.74

4.44

6,046.44

4.02

30.06.2020

3,101

14,141.06

2020 3rd Q

5.20

4.20

5.00

2,530.8

4.78

30.09.2020

3,029

14,555.94

2020 4th Q

5.10

4.40

5.05

3,536.3

4.82

5.05

30.12.2020

3,444

16,871.20

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 44

2021 1st Q

6.50

4.90

5.70

3,721.75

5.20

365.60

31.03.2021

4,846

26,706.11

2021 2nd Q

8.70

5.70

8.65

4,336.70

6.40

3,410.80

30.06.2021

5,650

38,375.60

2021 3rd Q

9.00

6.30

24,823

8.20

329.70

30.09.2021

9,892

78,273.90

2021 4th Q

7.95

6.90

7.70

5,188.45

7.05

1,084.40

30.12.2021

3,624

26,434.15

Table 8.3. Trading in INVL Baltic Farmland, AB shares 2017 - 2021:

2017

2018

2019

2020

2021

Share price, EUR

- open

3.340

4.300

3.500

3.480

5.000

- high

4.300

4.800

4.100

5.200

9.000

- low

3.150

3.500

3.420

3.500

4.900

- medium

3.831

4.097

3.718

4.352

7.071

- last

3.890

3.500

3.480

5.050

7.700

Turnover, units

16,064

6,787

10,259

18,145

24,012

Turnover, EUR

61,534.29

27,804.16

38,144.04

78,973.42

169,789.76

Traded volume, units

179

105

471

861

Table 8.4. Capitalisation*, 2017-2021.

Last trading date

Number of shares granted

with voting rights, units

Last price, EUR

Capitalisation, EUR

31.03.2017

3,228,510

4.30

13,882,593

30.06.2017

3,228,510

3.88

12,526,619

29.09.2017

3,228,510

3.80

12,268,338

29.12.2017

3,228,510

3.89

12,558,904

31.03.2018

3,228,510

4.32

13,947,163

30.06.2018

3,228,510

4.08

13,172,321

29.09.2018

3,228,510

3.80

12,268,338

29.12.2018

3,228,510

3.50

11,299,785

29.03.2019

3,228,510

3.58

11,558,066

28.06.2019

3,228,510

3.58

11,558,066

30.09.2019

3,228,510

4.00

12,914,040

30.12.2019

3,228,510

3.48

11,235,215

31.03.2020

3,228,510

4.00

12,914,040

30.06.2020

3,228,510

4.44

14,334,584.4

30.09.2020

3,228,510

5.00

16,142,550

30.12.2020

3,228,510

5.05

16,303,975.5

31.03.2021

3,228,510

5,70

18,402,507

30.06.2021

3,228,510

8,65

27,926,611.5

30.09.2021

3,228,510

6,30

20,339,613

30.12.2021

3,228,510

7,70

24,859,527

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 45

*The Company publishes Alternative performance measures (AVR), that are in use of the Company, provides indicators definitions and calculation

formulas. All the information is disclosed in Appendix 4 to this Consolidated Annual report and in Company‘s web site section „Investor Relations“ →

„Reports“ → „Indicator formulas“. The link: https://invlbalticfarmland.com/en/investor-relations/financial-information-and-reports/)

Fig. 8.1. INVL Baltic Farmland, AB change of share price and indexes

(resource: Nasdaq Baltic, Baltic market indexes)

Fig. 8.2. Change of share price of INVL Baltic Farmland, AB

The OMX Baltic Benchmark index (OMXBB – PI, GI, CAP) tracks the largest and most traded shares from all the industry sectors represented on the Nasdaq Baltic Market.

The OMX Baltic Real Estate GI index is available at the Baltic level. Based on the FTSE Group’s Industry Classification Benchmark (ICB), each shows the trend in a specific

industry and enables the comparison of companies in that industry. Indexes for each ICB industry and supersector are calculated in euros for the stocks on the Main and

Secondary lists of the Nasdaq Baltic exchanges is based on the Industry Classification Benchmark (ICB) developed by FTSE Group (FTSE).

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 46

9. Dividends

The General Shareholders’ Meeting decides upon dividend payment and sets the amount of dividends. The company pays out the

dividends within 1 month after the day of adoption of the resolution on profit distribution.

The General Shareholders Meeting of the Company held on 10 April 2018 approved the new wording of the Dividend Payment Policy.

According to the Policy, it is decided to allocate EUR 0.10 dividend per share (exceptions, which state decrease / increase of the

allocated dividend is disclosed in the Company's dividend payment policy).

Persons have the right to receive dividends if they were shareholders of the company at the end of the tenth working day after the

day of the General Shareholders’ Meeting which issued the resolution to pay dividends.

According to the Law on Personal Income Tax and the Law on Corporate Income Tax, 15 % tax is applied to the dividends since

2014. The company is responsible for calculation, withdrawn and transfer (to the benefit of the State) of applicable taxes

The General Shareholders Meeting of INVL Baltic Farmland, AB held on 9 April 2021, decided to allocate EUR 0.15

dividend per share.

Dividends were allocated to the shareholders, who at the end of the tenth business day following the day of the General Shareholders

Meeting that adopted a decision on dividend payment, i.e., on 23 April 2021 were shareholders of INVL Baltic Farmland, AB.

On 6 May 2021, the Company announced that will start to allocate dividends from 7 May 2021. Dividends were allocated to those

shareholders of the Company, who has provided existing bank accounts.

Information relevant to the dividends paid by the Company, as well as matter of dividend payments and valid Dividend payment

policy is published on Company’s web page.

Table 9.1. Indexes related with shares.

Company’s*

2017

2018

2019

2020

2021

Net Asset Value per share, EUR

3.72

3.91

4.16

4.34

4.63

Price to book value (P/Bv)

1.05

0.89

0.84

1.16

1.66

Dividend yield

1.8

4.3

2.9

2.0

1.9

Dividends/ Net profit

0.26

0.43

0.28

0.36

0.34

* The Company publishes Alternative performance measures (AVR), that are in use of the Company, provides indicators definitions and calculation

formulas. All the information is disclosed in Appendix 4 to this Consolidated Annual report and in Company‘s web site section „Investor Relations“ →

„Reports“ → „Indicator formulas“. The link: https://invlbalticfarmland.com/en/investor-relations/financial-information-and-reports/)

Fig. 9.1. Dividends allocation per share

This information should not be treated as tax consultation.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 47

10. Shareholders

10.1. Information about company‘s shareholders

The total number of shareholders in INVL Baltic Farmland was 3,363on 31 December 2021. There are no shareholders entitled to

special rights of control.

Table 10.1.1. Shareholders who held title to more than 5% of INVL Baltic Farmland, AB authorised capital, votes as of 31 December

2021. The votes, authorised capital held of the management of the Company (manager, members of the Board) is also be disclosed.

Name of the shareholder or

company

Number of shares

held by the right of

ownership, units

Share of the

authorised

capital held, %

Share of votes given by the

shares held by the right of

ownership, %

Indirectly held

voting rights, %

LJB Investments, UAB

code 300822575,

Juozapavičiaus str. 9A, Vilnius

977,751

29.70

Irena Ona Mišeikienė

931,831

28.31

Lucrum Investicija, UAB

code 300806471, Gynėjų str.

14, Vilnius

469,628

14.27

Alvydas Banys

252,875

7.68

29.70

Ilona Šulnienė

185,000

5.62

Indrė Mišeikytė

64,450

1.96

Darius Šulnis

14.27

Eglė Surplienė

Fig. 10.1.1. Votes as of 31 December 2021

According to Paragraph 1 of Article 16 of the Law on Securities of the Republic of Lithuania, Alvydas Banys is deemed to hold the voting rights of LJB Investments, a

company controlled by him.

According to Paragraph 1 of Article 16 of the Law on Securities of the Republic of Lithuania, Darius Šulnis is deemed to hold the voting rights of Lucrum investicija, a

company controlled by him.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 48

Table 10.1.2. Distribution of securities by investors’ groups as of 31 December 2021

Investors

Shareholders

Share of votes given by the owned

Amount

Part, %

Amount

Part, %

Private persons

3,345

99.46

1,770,580

53.79

Legal persons (private corporations,

Financial institutions and insurance

corporations and their clients)

0.54

1,523 242

46.21

Total

3,363

3,291 549

10.1.2. Fig. Distribution of securities by investors’ groups and share of votes given by the owned shares as of 31 December 2021

Table 10.1.3. Distribution of securities by investors’ groups as of 31 December 2021

Regions

Shareholders

Share of votes given by the owned

Amount

Part, %

Amount

Part, %

Lithuania

3,247

96.55

3,207,796

97.45

Other EU members

2.59

13,693

0.42

Non- EU countries

0.86

70,060

2.13

Total

3,363

3,291,549

10.2. Rights and obligations carried by the shares

10.2.1. Rights of the shareholders

The Company’s shareholders have the following property and non-property rights:

1) to receive a part of the Company's profit (dividend);

2) to receive the company’s funds when the authorised capital of the company is reduced with a view to paying out the company’s

funds to the shareholders;

3) to receive a part of assets of the company in liquidation;

4) to receive shares without payment if the authorised capital is increased out of the Company funds, except in cases provided by

the laws of the Republic of Lithuania;

5) to have the pre-emption right in acquiring shares or convertible debentures issued by the Company, except in cases when the

General Shareholders’ Meeting in the manner prescribed in the Law on Companies of the Republic of Lithuania decides to

withdraw the pre-emption right in acquiring the Company’s newly issued shares or convertible debentures for all the

shareholders;

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 49

6) to lend to the company in the manner prescribed by law; however, when borrowing from its shareholders, the company may

not pledge its assets to the shareholders. When the company borrows from a shareholder, the interest may not be higher than

the average interest rate offered by commercial banks of the locality where the lender has his place of residence or business,

which was in effect on the day of conclusion of the loan agreement. In such a case the company and shareholders shall be

prohibited from negotiating a higher interest rate;

7) other property rights provided by laws;

8) to attend the General Shareholders’ Meetings;

9) to submit to the Company in advance the questions connected with the issues on the agenda of the General Meeting of

Shareholders;

10) to vote at the General Shareholders’ Meetings according to voting rights carried by their shares;

11) to receive information on the Company specified in the Law on Companies of the Republic of Lithuania;

12) to appeal to the court for reparation of damage resulting from nonfeasance or malfeasance by the Company’s manager and

the Board members of their obligations prescribed by the Law on Companies of Republic of Lithuania and other laws of the

Republic of Lithuania and the Company’s Articles of Association as well as in other cases laid down by laws;

13) to receive information on a public company whose shares are admitted to trading on a regulated market as specified in the Law

on Companies of Financial Instruments Markets in the Republic of Lithuania;

14) other non-property rights established by laws and the Company’s Articles of Association.

10.2.2. Obligations of the shareholders

The shareholders have no property obligations to the Company, except for the obligation to pay up, in the established manner, all

the shares subscribed for at their issue price.

If the General Shareholders’ Meeting takes a decision to cover the losses of the Company from additional contributions made by

the shareholders, the shareholders who voted "for" shall be obligated to pay the contributions. The shareholders who did not attend

the General Shareholders’ Meeting or voted against such a resolution shall have the right to refrain from paying additional

contributions.

The person who acquired all shares or part of shares in the company from the Company’s sole shareholder must notify the company

of the acquisition or transfer of shares within 5 days from the conclusion of the transaction. The notice shall indicate the number of

acquired or transferred shares, including share number per class, when the different share class is acquired, the nominal share

price and the particulars of the person who acquired or transferred the shares (the natural person's full name, personal number,

personal code and address; the name, legal form it has taken, registration number, address of the registered office of the legal

person.). A document confirming the acquisition of the shares or an acquisition extract must be added to the notice. If an acquisition

extract is provided, it must include the parties to the transaction, the subject of the transaction and the date of acquisition of the

shares.

Contracts between the company and holder of all its share shall be executed in a simple written form, unless the Civil Code prescribes

the mandatory notarised form.

A shareholder shall repay the Company any dividend paid out in violation of the mandatory norms of the Law on Companies, if the

Company proves that the shareholder knew or should have known thereof.

Each shareholder shall be entitled to authorise a natural or legal person to represent him when maintaining contacts with the

Company and other persons.

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III. ISSUER’S MANAGING BODIES

11. Structure, authorities, the procedure for appointment and replacement

The governing bodies of INVL Baltic Farmland, AB are: the General Shareholders’ Meeting, sole governing body – the director and

a collegial governing body – the Board. The Supervisory Board is not formed.

11.1. General Shareholders’ Meeting

11.1.1. Powers of the General Shareholders’ Meeting

Persons who were shareholders of the Company at the close of the accounting day of the meeting (the 5th working day before the

General Shareholders’ Meeting) shall have the right to attend and vote at the General Shareholders’ Meeting in person, unless

otherwise provided for by laws, or may authorise other persons to vote for them as proxies or may conclude an agreement on the

disposal of the voting right with third parties. The shareholder’s right to attend the General Shareholders’ Meeting shall also cover

the right to speak and enquire.

The General Shareholders’ Meeting may take decisions and shall be held valid if attended by the shareholders who hold the shares

carrying not less than ½ of all votes. After the presence of a quorum has been established, the quorum shall be deemed to be

present throughout the General Shareholders’ Meeting. If a quorum is not present, the General Shareholders’ Meeting shall be

considered invalid and a repeat General Shareholders’ Meeting must be convened, which shall be authorised to take decisions only

on the issues on the agenda of the General Shareholders’ Meeting that has not been held and to which the quorum requirement

shall not apply.

An Annual General Shareholders’ Meeting must be held every year at least within 4 months from the close of the financial year.

The General Shareholders’ Meeting shall have the exclusive right to:

 amend the Articles of Association of the Company, unless otherwise provided for by the Law on Companies of the Republic of

Lithuania;

 change the premises of the Company;

 elect members of the Board;

 dismiss the Board or its members;

 elect and dismiss the firm of auditors, set the conditions for auditor remuneration;

 determine the class, number, nominal value and the minimum issue price of the shares issued by the Company;

 take a decision on the remuneration policy approval of public companies whose shares are admitted to trading on a regulated

market;

 take a decision regarding conversion of shares of one class into shares of another class, approve share conversion procedure;

 take a decision to change the number of shares of the same class issued by the company and the nominal value per share

without changing the authorized capital;

 take a decision to replace private limited liability company share certificates by shares;

 approve the annual financial statements report;

 take a decision on profit/loss appropriation;

 take a decision on the formation, use, reduction and liquidation of reserves;

General Shareholder‘s

Meeting

(Shareholders

more than 3300)

The Board

(3 members)

Director

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 51

 approve the financial statements for the purpose of deciding on the allocation of dividends for a period shorter than a financial

year;

 to decide on the allocation of dividends for a period shorter than a financial year;

 take a decision on the issue of convertible debentures;

 take a decision on withdrawal for all the shareholders the pre-emption right to acquire the Company’s shares or convertible

debentures of the specific issue;

 take a decision to increase the authorised capital;

 take a decision to reduce the authorised capital, except the cases provided for by the Law on Companies of the Republic of

Lithuania;

 take a decision for the Company to purchase its own shares;

 take a decision on the approval of the Rules for the Offering of Shares to Employees and / or Members of the Bodies (hereinafter

referred to as the Share Allocation Rules);

 take a decision on the reorganisation or split-off of the Company and approve the terms of reorganisation or split-off, except

the cases provided for by the Law on Companies of the Republic of Lithuania;

 take a decision on transformation of the Company;

 to take decisions on the restructuring of the Company in the cases established by the Law on Insolvency of Legal Persons of

the Republic of Lithuania;

 take a decision to liquidate the Company, cancel the liquidation of the Company, except the cases provided by the Law on

Companies of the Republic of Lithuania;

 elect and dismiss the liquidator of the Company, except the cases provided by the Law on Companies of the Republic of

Lithuania.

The General Shareholders’ Meeting may also decide on other matters assigned within the scope of its powers by the Articles of

Association of the Company, unless these have been assigned under the Law on Companies of the Republic of Lithuania within the

scope of powers of other organs of the Company and provided that, in their essence, these are not the functions of the governing

bodies.

11.1.2. Convocation of the General Shareholders’ Meeting of INVL Baltic Farmland, AB

The documents related to the agenda, draft resolutions on every item of agenda, documents what have to be submitted to the

General Shareholders Meeting and other information related to realization of shareholders rights are published on the Company ’s

website www.invlbalticfarmland.com section For investors, also available in the office of INVL Baltic Farmland (Gyneju str. 14,

Vilnius) during working hours. Phone for information +370 5 279 0601.

The shareholders are entitled:

(i) to propose to supplement the agenda of the General Shareholders Meeting submitting draft resolution on every additional

item of agenda or, than there is no need to make a decision - explanation of the shareholder (this right is granted to

shareholders who hold shares carrying at least 1/20 of all the votes). Proposal to supplement the agenda is submitted in

writing sending the proposal by registered mail to the Company at Gyneju str. 14, Vilnius, Lithuania, or delivered in person

to the representative of the Company on business hours or by sending proposal to the Company by email

farmland@invaldainvl.com. The agenda is supplemented if the proposal is received no later than 14 days before the General

Shareholders Meeting. In case the agenda of the Meeting is supplemented, the Company will report on it no later than 10

days before the Meeting in the same way as on convening of the Meeting;

(ii) to propose draft resolutions on the issues already included or to be included in the agenda of the General Shareholders

Meeting at any time prior to the date of the General Shareholders meeting (in writing, sending the proposal by registered

mail to the Company at Gyneju str. 14, Vilnius, Lithuania, or delivered in person to the representative of the Company on

business hours or by sending proposal to the Company by email farmland@invaldainvl.com) or in writing during the General

Shareholders Meeting (this right is granted to shareholders who hold shares carrying at least 1/20 of all the votes);

(iii) to submit questions to the Company related to the issues of agenda of the General Shareholders Meeting in advance but

no later than 3 business days prior to the General Shareholders Meeting in writing sending the proposal by registered mail

to the Company at Gyneju str. 14, Vilnius, Lithuania, or delivered in person to the representative of the Company on

business hours or by sending proposal to the Company by email farmland@invaldainvl.com. All answers related to the

agenda of the General Shareholders Meeting to questions submitted to the Company by the shareholders in advance, are

submitted in the General Shareholders Meeting or simultaneously to all shareholders of the Company prior to the General

Shareholders Meeting. The company reserves the right to answer to those shareholders of the Company who can be

identified and whose questions are not related to the company's confidential information or commercial secrets.

The shareholder participating at the Meeting and having the right to vote, must submit the documents confirming personal identity.

A person who is not a shareholder shall, in addition to this document, submit a document confirming the right to vote at the Meeting.

The requirement to provide the documents confirming personal identity does not apply when voting in writing by filling in a general

ballot paper.

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ANNUAL REPORT OF 2021 | 52

Each shareholder may authorize either a natural or a legal person to participate and to vote on the shareholder's behalf at the

Meeting. An authorised person has the same rights as his represented shareholder at the Meeting unless the authorized person's

rights are limited by the power of attorney or by the law. The authorized persons must have the document confirming their personal

identity and power of attorney approved in the manner specified by law which must be submitted to the Company no later than

before the commencement of registration for the Meeting. The Company does not establish special form of the power of attorney.

A power of attorney issued by a natural person must be certified by a notary. A power of attorney issued in a foreign state must be

translated into Lithuanian and legalised in the manner established by law. The persons with whom shareholders concluded the

agreements on the disposal of voting right, also have the right to attend and vote at the Meeting.

Shareholder is entitled to issue power of attorney by means of electronic communications for legal or natural persons to participate

and to vote on its behalf at the Meeting. No notarisation of such authorization is required. The power of attorney issued through

electronic communication means must be confirmed by the shareholder with a safe electronic signature developed by safe signature

equipment and approved by a qualified certificate effective in the Republic of Lithuania. The shareholder shall inform the Company

on the power of attorney issued through the means of electronic communication by e-mail farmland@invaldainvl.com not later than

on the last business day before the Meeting. The power of attorney and notification must be issued in writing and could be sent to

the Company by electronic communication means if the transmitted information is secured and the shareholder's identity can be

identified. By submitting the notification to the Company, the shareholder shall include the internet address from which it would be

possible to download software to verify an electronic signature of the shareholder free of charge.

The Company is not providing the possibility to attend and vote at the Meeting through electronic means of communication.

Shareholder or its representative may vote in writing by filling general voting bulletin. The form of general voting bulletin is

presented at the Company's webpage www.invlbalticrealestate.com section For Investors. If shareholder requests, the Company

shall send the general voting bulletin to the requesting shareholder by registered mail or shall deliver it in person against signature

no later than 10 days prior to the General Shareholders Meeting free of charge. The filled general voting bulletin must be signed by

the shareholder or its authorized representative. Document confirming the right to vote must be added to the general voting bulletin

if an authorized person is voting. The filled general voting bulletin must be sent by the registered mail to the Company at Gyneju

str. 14, Vilnius, Lithuania, or delivered in person to the representative of the Company no later than the day before of the General

Shareholders Meeting. Ballots will be considered as valid if they are properly filled-in and received by the Company prior the Meeting.

For the convenience of the shareholders of INVL Baltic Farmland the company provides notifications about convocation of General

Shareholders Meeting, draft resolutions as well as general voting bulletins and resolutions adopted in the Meetings on the company‘s

website section For Investors (Shareholders' Meetings).

There was 1 (one) General Shareholders Meeting of INVL Baltic Farmland, AB during the 2021.

On 18 March 2021 INVL Baltic Farmland announced about convocation of the General Shareholders Meeting and published the draft

resolutions of the General Shareholders Meeting. On 9 April 2021 the Company announced resolutions of the General Shareholders

Meeting: during the meeting the Shareholders of the Company were presented with the consolidated annual report of the Company,

Audit Committee activity report and independent auditor's report on the financial statements and annual report, approved the

consolidated and companies financial statements for 2021, and approved the profit distribution (allocating EUR 0.15 dividend per

share). The shareholders also made a decision regarding the purchase of own shares of the INVL Baltic Farmland and regarding

the election of the Audit Committee members. .

11.2. The Board

The Company has a collegial management body - the Board. The Supervisory Board is not formed in the Company.

11.2.1. Powers of the Board

The Board shall continue in office for the 4 year period or until a new Board is elected and commences its activities, but not longer

than until the date of the Annual General Shareholders’ Meeting to be held during the final year of the term of office of the Board.

If individual members of the Board are elected, they shall serve only until the expiry of the term of office of the current Board.

The Board or its members shall commence their activities after the close of the General Shareholders’ Meeting which elected the

Board or its members. Where the Articles of Association of the Company are amended due to the increase in the number of its

members, newly elected members of the Board may commence their activities solely from the date of registration of the amended

Articles of Association. The Board shall elect the chairman of the Board from among its members.

The General Shareholders’ Meeting may dismiss from the office the entire Board or its individual members (as well as the Chairman

of the Board) before the expiry of their term of office. A member of the Board may resign from his post before the expiry of his

term of office, notifying the Board in writing at least 14 calendar days in advance.

The Board shall have all authorities provided for in the Articles of Association of the Company as well as those assigned to the Board

by the laws. The activities of the Board shall be based on collegial consideration of issues and decision-making as well as shared

responsibility to the General Shareholders’ Meeting for the consequences of the decisions made. Striving for as big benefit for the

Company and shareholders as possible and in order to ensure the integrity and transparency of the control system, the Board

closely cooperates with the manager of the Company. The procedure of work of the Board shall be laid down in the rules of procedure

of the Board.

The Board shall consider and approve:

 Annual report of the Company;

 Interim report of the Company;

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 53

 the management structure of the Company and the positions of the employees;

 the positions to which employees are recruited through competition;

 regulations of branches and representative offices of the Company.

The Board shall elect and dismiss from office the manager of the Company, fix his salary and set other terms of the employment

contract, approve his job description, provide incentives for and impose penalties against him. The Board of a public company whose

shares are admitted to trading on a regulated market shall determine the remuneration of the manager of the company in

accordance with the remuneration policy, as stated on the Law on Companies of the Republic of Lithuania.

The Board shall determine which information shall be considered to be the Company's commercial secret and confidential

information. Any information which must be publicly available under the laws may not be considered to be the commercial secret

and confidential information.

The Board shall take the following decisions:

 for the Company to become an incorporator or a member of other legal entities;

 to open branches and representative offices of the Company;

 to invest, dispose of or lease the fixed assets which book value exceeds 1/20 of the authorised capital of the Company

(calculated individually for every type of transaction);

 to pledge or mortgage the fixed assets which book value exceeds 1/20 of the authorised capital of the Company (calculated for

the total amount of transactions);

 to offer surety or guarantee for the discharge of obligations of third parties for the amount which exceeds 1/20 of the authorised

capital of the Company;

 to acquire the fixed assets for the price which exceeds 1/20 of the authorised capital of the Company;

 other decisions assigned to the scope of powers of the Board by the Law on Companies of the Republic of Lithuania, Articles of

Association or the decisions of the General Shareholders’ Meeting.

The Board shall analyse and evaluate the information submitted by the manager of the Company on:

1) the organisation of the activities of the Company;

2) the financial status of the Company;

3) the results of business activities, income and expenditure estimates, the stocktaking data and other accounting data of changes

in the assets.

The Board shall analyse and assess a set of Company's and consolidated annual financial statements and draft of profit/loss

appropriation and together with suggestions and proposals shall submit them to the General Shareholders’ Meeting together with

the annual report of the Company. The Board shall analyze and evaluate the draft remuneration policy of the companies whose

shares are admitted to trading on a regulated market and submit it to the General Shareholders Meeting together with proposals

related to the policy.

It shall be the duty of the Board to convene and organise the General Shareholders’ Meetings in due time.

11.2.2. Procedure of work of the Board

The order of the formation of the Board of the company should ensure objective, impartial and fair representation of minority

shareholders of the company: names and surnames of the candidates to become members of the Board of the company, information

about their education, qualification, professional background, positions taken in supervisory and management Boards of other

companies, owned block of shares in other companies, larger than 1/20, potential conflicts of interest, information on whether the

candidates are applied to administrative sanctions or punishment for violations / crimes against the economy, business policy,

property, property rights and property interests, or do they have no obligations neither functions which would threaten the safe

and reliable operations of the company, or whether candidates meet the legal requirements made for the Managers, are disclosed

not later than 10 days prior the General Shareholders’ Meeting in which the election of the Members of the Board is intended, so

that the shareholders would have sufficient time to make an informed voting decision

In order to maintain a proper balance in terms of the current qualifications possessed by its members, the desired composition of

the Board of the company are determined with regard to the company’s structure and activities. The Board evaluates its performance

once a year. No evaluation of the independence of the Board members has been carried out.

Any Member of the Board of the company must confound companies property with its own property and do not use it or information

which they received while holding position as the Members of the Board for personal benefit or for the benefit of third party on other

way than the General Shareholders Meeting and the Board allows it.

Any Member of the Board of the company within 5 (five) days must inform the Manager or the Chairman of the company on any

subsequent changes in provided information that have been submitted for shareholders prior to the election of the Member of the

Board. Changes in provided information are disclosed in the company's annual report.

Each Member of the Board actively participates in the Meetings of Board and devotes sufficient time and attention to perform his

duties as the Member of the Board.

5 Meetings of the Board of the company have been held in 2021. Since the start of the company, the composition of the Board has

not changed and consisted from: Alvydas Banys, Indrė Mišeikytė and Darius Šulnis. Members of the Board Alvydas Banys, Darius

Šulnis and Indrė Mišeikytė attended all the Meetings of the Board personally in 2021.

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ANNUAL REPORT OF 2021 | 54

11.3. The Director

The manager of the Company (the Director) shall be elected and dismissed from office by the Board which shall also fix his salary,

approve his job description, provide incentives and impose penalties. An employment contract shall be concluded with the Director.

The Director shall assume office after the election, unless otherwise provided for in the contract concluded with him. If the Board

adopts a decision on his removal from office, the employment contract therewith shall be terminated.

In his activities, the Director shall be guided by laws and other legal acts, the Articles of Association of the Company, decisions of

the General Shareholders’ Meeting and the Board, his job description. The Director is accountable to the Board.

The Director shall organise daily activities of the Company, hire and dismiss employees, conclude and terminate employment

contracts therewith, provide incentives and impose penalties.

The Director shall act on behalf of the Company and shall be entitled to enter into transactions at his own discretion. The Director

may conclude the transactions to invest, dispose of or lease the fixed assets for the book value which exceeds 1/20 of the authorised

capital of the Company (calculated individually for every type of transaction), to pledge or mortgage the fixed assets for the book

value which exceeds 1/20 of the authorised capital of the Company (calculated for the total amount of transactions), to offer surety

or guarantee for the discharge of obligations of third parties for the amount which exceeds 1/20 of the authorised capital of the

Company, to acquire the fixed assets for the price which exceeds 1/20 of the authorised capital of the Company, provided there is

a decision of the Board to enter into these transactions.

The Director shall be responsible for:

 the organisation of activities and the implementation of objects of the company;

 preparation of the draft remuneration policy, disclosure of the remuneration policy and the remuneration report publicly on the

website of a Company;

 the drawing up of the annual financial statements and preparation of the annual report of the Company;

 preparation of a draft decision on dividend allocation for a period shorter than a financial year, preparation of the interim

financial statements and also, preparation of an interim report, related to decision on dividend allocation for a period shorter

than a financial year. The provisions of the Law on Financial Statements of the Company regulating the preparation and

publication of the annual report shall apply mutatis mutandis to the interim report;

 drafting of the Share Allocation Rules;

 the conclusion of the contract with the firm of auditors where the audit is mandatory or required under the Statutes of the

company;

 the submission of information and documents to the General Shareholders Meeting and to the Board in cases stated in the Law

on Companies or at their request;

 the submission of documents and particulars of the company to the administrator of the Register of Legal Persons;

 the submission of the documents of a public limited liability company to the Bank of Lithuania and the Central Securities

Depository of Lithuania;

 the publication of information referred to in this Law in the daily indicated in the Statutes;

 notification to shareholders and the Board of the Company about key events relevant to the Company's operations;

 the submission of information to shareholders;

 the fulfilment of other duties laid down in this Law and other laws and legal acts as well as in the Statutes and the staff

regulations of the manager of the company.

The Director must keep commercial secrets and confidential information of the Company which he learned while holding this office.

12. Information about members of the Board, Company providing accounting services

The Board of INVL Baltic Farmland, AB has been elected for the new four-year term of office during the General Shareholders

Meeting held on 10 April 2018. The shareholders of the Company approved the Board of the same composition as the Board

operating in 2014-2018. Mr. Banys was elected as the Chairman of the Board. Mr. Šulnis and Ms. Mišeikytė were elected as the

Members of the Board. From 30 June 2015 Egle Surpliene holds position as a director of the company.

Alvydas Banys -

Chairman of the Board

Main workplace – Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – Adviser, Chairman

of the Board

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 55

The term of office

From 2018 until 2022

Educational

background and

qualifications

Vilnius Gediminas Technical University. Faculty of Civil Engineering. Master in Engineering and

Economics.

Junior Scientific co-worker. Economic‘s Institute of Lithuania‘s Science Academy.

Work experience

Since 1 July 2013 Invalda INVL, AB – Advisor

Since 2007 LJB Investments, UAB – Director

Since 2007 LJB Property, UAB – Director

1996 – 2006 Invalda, AB – Vice President

1996 – 2007 Nenuorama, UAB – President

Owned amount of

shares in INVL Baltic

Farmland

Personally: 252,875 units of shares, 7.68 % of authorised capital, 7.68 % of votes.

Together with controlled company LJB Investments: 1,230,626 units of shares, 37.38 % of

authorized capital, 37.38 % of votes.

Participation in other

companies

Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – Chairman of the Board

Litagra, UAB (code 304564478, Savanorių pr. 173, Vilnius) – Member of the Board

INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) managed fund INVL

Baltic Sea Growth Fund - Member of the Investment Committee

Indrė Mišeikytė -

Member of the Board

Main workplace – Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – Adviser, Member

of the Board

The term of office

From 2018 until 2022

Educational

background and

qualifications

Vilnius Gedimino Technical University. Faculty of Architecture. Master in Architecture

Work experience

Since May 2012 Invalda INVL, AB – Advisor

2013 - 2019 Invalda Privatus Kapitalas, AB – Advisor

Since 2002 Inreal Valdymas, UAB – Architect

2000 - 2002 Gildeta, UAB – Architect

Owned amount of

shares in INVL Baltic

Farmland

Personally: 64,450 units of shares, 1.96 % of authorised capital and votes

Participation in other

companies

Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – Member of the Board

UTIB INVL Technology (code 300893533, Gynėjų str. 14, Vilnius) – Member of the Supervisory

Board

Darius Šulnis -

Member of the Board

Main workplace – Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – President, Member

of the Board

The term of office

From 2018 until 2022

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 56

Educational

background and

qualifications

Duke University (USA). Business Administration. Global Executive MBA.

Vilnius University. Faculty of Economics. Master in Accounting and Audit.

Financial broker‘s license (General) No. A109.

Work experience

2006 – 2011 Invalda, AB – President. 2011 – 2013 Invalda, AB – Advisor. Since May 2013 Invalda

INVL, AB – President.

2002 – 2006 Invalda Real Estate, UAB (current name Inreal Valdymas) – Director

1994 – 2002 FBC Finasta, AB – Director

Owned amount of

shares in INVL Baltic

Farmland

Personally: 0 units of shares, 0.00 % of authorised capital and votes.

Together with controlled company Lucrum Investicija: 469,628 units of shares, 14.27 % of

authorised capital and votes.

Participation in other

companies

Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – Member of the Board, the president

INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) – Chairman of the

Board

Litagra, UAB (code 304564478, Savanorių pr. 173, Vilnius) – Member of the Board

Šiaulių bankas, AB (code112025254, Tilžės str. 149, Šiauliai) – Member of the Supervisory Board

INVL Baltic Sea Growth Fund (code 126263073, Gynėjų str. 14, Vilnius) - Managing Partner,

Investment Committee Member

Eglė Surplienė –

Director

Main workplace - Gerovės valdymas, UAB FPĮ (code 302445450, Gedimino pr. 20-27, Vilnius) –

director

Educational

background and

qualifications

Vilnius University, Faculty of Economic Cybernetics and Finance, Economic Cybernetics studies,

Economics – mathematics diploma (equivalent of Master's degree)

2009 – Award in Financial Planning (CII program and exam) certificate.

2005 – OMX Vilnius dealer certificate

1996 – General financial broker license

Work experience

October 2009 - present – Wealth manager, UAB FPI Geroves Valdymas

March 2009 - present – Director, UAB DIM investment

September 2014 - June 2016 – Director, UAB Margio investicija

August 2006 - October 2009 – Wealth manager, VIP Clients manager, AB FBC Finasta, AB bank

Finasta

June 2005 - July 2006 – Project manager, UAB Zabolis ir partneriai

June 1999 - June 2005 – Member, Deputy Director of the Commission, Securities Commission of

Lithuania

June 1995 - June 1999 – Head of Issuer Division, UAB FMI Vilfima June 1993 - June 1995 -

Member of Market Regulation Division, Securities Commission of Lithuania

Owned amount of

shares in INVL Baltic

Farmland, AB

Personally: 0 units of shares, 0.00 % of authorised capital and votes.

Participation in other

companies

Atelier Investment Management, UAB (code 303335430, Žemaitijos str. 8-20, Vilnius) – Chairman

of the Board

Gerovės valdymas, UAB FPĮ (code 302445450, Gedimino pr. 20-27, Vilnius) – Director

Gerovės partneriai, KŪB (code 304746185, Gedimino pr. 20, Vilnius) – Full member

DIM investment, UAB (code 301145749, Pasakų str. 5, Vilnius ) – Director

UTIB INVL Baltic Real Estate (code 152105644, Gynėjų str. 14, Vilnius) – Member of the

Supervisory Board

Invalda INVL, AB provides accounting services and preparation of the documents related with bookkeeping for INVL Baltic Farmland,

AB according to an agreement signed on 30 April 2014 No. 20140430/03.

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ANNUAL REPORT OF 2021 | 57

13. Information about the Audit Committee of the company

The Audit Committee consists of 2 independent members. The members of the Audit Committee are elected by the General

Shareholders’ Meeting. The main functions of the Committee are the following:

 provide recommendations for the Board of the company with selection, appointment, reappointment and removal of an external

audit company as well as the terms and conditions of engagement with the audit company;

 monitor the process of external audit;

 monitor how the external auditor and audit company follow the principles of independence and objectivity;

 observe the preparation process of company‘s financial reports;

 monitor the efficiency of company’s internal control and risk management systems. Once a year review the need of the internal

audit function;

 monitor if the company‘s board and/or managers properly response to the audit firm‘s recommendations and comments.

The Member of the Audit Committee of INVL Baltic Farmland, AB may resign from his post before the expiry of term of office,

notifying the Board of the company in writing at least 14 calendar days in advance. When the Board of the Company receives the

notice of resignation and estimates all circumstances related to it, the Board may pass the decision either to convene the

Extraordinary General Shareholders Meeting to elect the new member of the Audit Committee or to postpone the question upon the

election of the new member of the Audit Committee until the nearest General Shareholders Meeting. In any case the new member

is elected till the end of term of office of the operating Audit Committee.

13.1. Procedure of work of the audit committee

The Audit Committee is a collegial body, taking decisions during meetings. The Audit Committee may take decisions and its meeting

should be considered valid, when both members of the Committee participate in it. The decision should be passed when both

members of the Audit Committee vote for it. The Member of the Audit Committee may express his will – for or against the decision

in question, the draft of which he is familiar with – by voting in advance in writing. Voting in writing should be considered equal to

voting by telecommunication end devices, provided text protection is ensured and it is possible to identify the signature. The right

of initiative of convoking the meetings of the Audit Committee is held by both Members of the Audit Committee. The other Member

of the Audit Committee should be informed about the convoked meeting, questions that will be discussed there and the suggested

drafts of decisions not later than 3 (three) business days in advance in writing (by e-mail or fax). The meetings of the Audit

Committee should not be recorded, and the taken decisions should be signed by both Members of the committee. When both Audit

Committee Members vote in writing, the decision should be written down and signed by the secretary of the Audit Committee who

should be appointed by the Board of the Company. The decision should be written down and signed within 7 (seven) days from the

day of the meeting of the Audit Committee.

The Audit Committee should have the right to invite the Manager of the Company, Member(s) of the Board, the chief financier, and

employees responsible for finance, accounting and treasury issues as well as external auditors to its meetings. Members of the

Audit Committee may receive remuneration for their work in the committee at the maximum hourly rate approved by the General

Shareholders’ Meeting.

The Company's Audit Committee is guided by the Regulations of the Audit Committee (hereinafter referred to as the Regulations)

approved by the General Shareholders Meeting of the Company held on 22 March 2017. The Regulations are published on the

Company's website in the section For investors.

13.2. Members of the Audit Committee

During the General Shareholders Meeting of INVL Baltic Farmland held on 9 April 2021, the decision to elect Dangutė Pranckėnienė,

partner and auditor of Moore Stephens Vilnius, UAB and Tomas Bubinas, Chief Operating Officer at Biotechpharma, UAB for the

Audit Committee for the 4 (four) years of office term has been adopted. Both members of the Audit Committee are independent,

having submitted an notice certifying their independence.

During the reporting period the composition of the Audit Committee remain unchanged.

Tomas Bubinas –

Independent Member of the Audit Committee

The term of office

Since 2021 till 2025

Educational background

and qualifications

2004 - 2005 Baltic Management Institute (BMI), Executive MBA

1997 - 2000 Association of Chartered Certified Accountants. ACCA. Fellow Member

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 58

1997 Lithuanian Sworn Registered Auditor

1988 - 1993 Vilnius University, Msc. in Economics

Work experience

Since 2013 Chief Operating Officer at Biotechpharma, UAB

2010 - 2012 Senior Director, Operations. TEVA Biopharmaceuticals (USA)

2004 - 2010 CFO for Baltic countries, Teva Pharmaceuticals

2001 - 2004 m. CFO, Sicor Biotech

1999 - 2001 Senior Manager, PricewaterhouseCoopers

1994 - 1999 Senior Auditor, Manager, Coopers & Lybrand.

Owned amount of shares

in INVL Baltic Farmland

Dangutė Pranckėnienė –

Independent Member of the Audit Committee

The term of office

Since 2021 till 2025

Educational

background and

qualifications

1995 - 1996 Vilnius Gediminas Technical University, Master of Business Administration.

1976 - 1981 Vilnius University, Master of Economics.

The International Coach Union (ICU), professional coucher name, license No. E-51.

Lithuanian Ministry of Finance, the auditor's name, license No. 000345.

Work experience

Since 1997 the Partner at Moore Mackonis, UAB (previous name Moore Stephens Vilnius and Verslo

auditas)

1996 - 1997 Audit Manager, Deloitte & Touche

1995 - 1996 Lecturer, Vilnius Gediminas Technical University

1982 - 1983 Lecturer, Vilnius University

Owned amount of

shares in INVL Baltic

Farmland

14. Information on the Issuer’s payable management fee, the amounts calculated by the Issuer, other

assets transferred and guarantees granted to the Managing bodies and company providing accounting

services

CEO of the company is entitled only to a fixed salary. The company does not have a policy concerning payment of a variable part

of remuneration to the management.

During the year 2021 to the Board members, which are shareholders of the Company, were paid EUR 40 thousand of dividends,

net of tax. To the entities, which are controlled by the Board members, were paid EUR 217 thousand of dividends, net of tax. Natural

persons, who are related to the Board members of the company, were paid EUR 128 thousand of dividends, net of tax. There were

no assets transferred, no guarantees granted, no bonuses paid and no special pay-outs made by the company to its managers. The

Members of the Board were not granted with bonuses by other companies of INVL Baltic Farmland, AB group.

INVL Baltic Farmland, AB Group and the Company for the company providing accounting services respectively paid EUR 34 thousand

and EUR 5 thousand during the reporting period (in 2020 - respectively EUR 15 thousand and EUR 3 thousand; in 2019 – respectively

EUR 15 thousand and EUR 3 thousand; in 2018 – respectively EUR 15 thousand and EUR 3 thousand; in 2017 – respectively EUR

15 thousand and EUR 3 thousand).

According to Article 23 (3) of the Law on Financial Statements of Enterprises of the Republic of Lithuania, the Company must publish

the Remuneration Report from the year 2020. The Company’s Remuneration Report is provided in the Appendix 5 of the Annual

Report.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 59

Table 14.1. Information about calculated remuneration for the CEO of the issuer for 2019- 2021 (EUR)

2019

2020

2021

For members of administration (the

CEO)

2,043

2,044

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 60

IV. INFORMATION ABOUT THE ISSUER’S AND ITS GROUP COMPANIES’

ACTIVITY

15. Overview of the Issuer and its group activity

15.1. Business environment

According to the data of Statistics Lithuania, in 2021, the average annual inflation in Lithuania amounted to 4.7 %. (compared to

2020, the average annual inflation was 1.2 %). Average annual inflation was mainly driven by higher prices for fuels and oil, heat,

solid fuels, vegetables, milk and dairy products, gas, bread and cereal products, restaurant and café services, vehicle maintenance

and repair services, electricity, lottery tickets and decreased in the water supply prices. In 2021, the prices of consumer goods in

Lithuania increased by 11.7%, while the prices for consumer services increased by 7.8 %. In 2021, the average annual inflation

rate in the European Union was 2.9 % and 2.6 % in the euro area. In Lithuania, the average annual inflation in 2021 was calculated

according to the consumer price index harmonised with the EU countries, which accounted for 4.6 %.

In 2021, according to the data of the Statistics Lithuania, Lithuania’s gross domestic product (GDP) at current prices amounted to

EUR 55.4 billion. Compared to 2020, the real change in GDP, seasonally and working day adjusted, was positive at 5.1 %. The

change in GDP in 2021 was positively influenced by a significant increase in the performance of retail trade, except of motor vehicles

and motorcycles, and results of activities of industrial enterprises. The GDP (seasonally and working-day adjusted and quarter on

quarter) grew the most in the first (2.1 %) and second (2 %) quarters. The GDP grew by 0.04 % in the third quarter and by 0.5 %

in the fourth quarter.

According to the Bank of Lithuania, in 2021, the global economy recovered, but slowed at the end of the year. The slowdown in the

global economy is mainly due to the high incidence of COVID-19 (which, even without severe restrictions, is worsening household

expectations) and the continuing tensions in supply chains. Although the global COVID-19 vaccination population is increasing and

the risk of restrictions that could have a significant negative impact on economic development is diminishing, the high number of

COVID-19 cases and the rapid spread of Omicron variant have led some countries to renew their restrictions, and yet again increases

uncertainty about when the pandemic will be overcome. In addition, there are still no signs of normalisation and tensions in supply

chains, such as delivery times, remain relatively close to historic highs. At the same time, it should be noted that, in contrast to the

beginning of the pandemic, when long delivery times were associated with supply-side restriction, they are now more associated

with extremely high demand for goods. On the one hand, households are expected to increase their use of services in the near term

as pandemic constraints ease. This would reduce the demand for goods and the tensions over their supply. On the other hand,

growing labour shortages and rising energy prices on global markets are forcing the cessation of production of some goods, which

poses an additional risk that tensions in supply chains will persist for longer than previously thought. At present, they are not

expected to fully normalise until 2023.

According to the Ministry of Finance of the Republic of Lithuania, in 2021, businesses were able to adapt to the changed conditions

caused by the COVID-19 pandemic. As a result, changes in the value added generated by almost all economic activities in 2021

were positive and the country’s economic growth was one of the fastest in the European Union. However, the further development

of a large number of enterprises is limited by staff shortages. Although labour force participation has increased with the lifting of

quarantine and the easing of contact restrictions, and the unemployment rate has approached pre-pandemic levels, the level of job

vacancies shows that the country's labour shortage is the highest since the beginning of 2008. Increasing competition for workers

was one of the key factors behind a nearly 10 % annual wage growth in the country. Wage growth was recorded in all economic

activities, including the accommodation and catering, leisure organisation and retail trade activities, which suffered the most during

the pandemic, where wages grew at double-digit rates. The Ministry of Finance forecasts that in 2022, taking into account the

situation in the labour market, rising salaries of public sector employees and increasing minimum monthly wage, the growth rate

of wages in Lithuania will reach 9.3 %. The growing pressure to increase wages may contribute to the factors limiting the

development of production, but according to the Bank of Lithuania, rapidly rising wages have not yet reduced the competitiveness

of Lithuanian business abroad, and wages still lag behind the EU average more than productivity (-35 % and -29 % respectively).

The Bank of Lithuania’s Review of the Development and Prospects of the Lithuanian Economy states that the further development

of the Lithuanian economy will continue to be determined by the global management of the pandemic situation, the recovery of

domestic demand and the development of export-oriented activities. The scale of the pandemic and adaptation to it both in Lithuania

and abroad will continue to have a decisive impact on economic activity. Households should benefit from increased access to

previously limited services. Although their purchasing power growth will be limited by rising inflation, household consumption in

2022 is still expected to grow significantly faster than was usual before the pandemic and to reach around 4 %, according to the

Ministry of Finance. Such developments in household consumption should be driven by household disposable income growth higher

than inflation and a gradual return to household savings to pre-pandemic levels. It is forecast that the development of household

consumption of Lithuania’s most important trading partners will be similar, which will also favour the demand for Lithuanian goods

and services and contribute to the further growth of Lithuanian exports of goods and services, which, according to the Ministry of

Finance, could reach about 5.2 % per year. However, the development of exports in 2022 will be partially limited by unfavourable

factors, such as the imposition of sanctions on Belarusian exports or the increase in capacity utilisation to the highest level since

the release of the data. Nonetheless, due to the expected growth in investment, resulting from shortage of production capacity and

labour, and the increased flow of EU support, some of the adverse effects will somewhat significantly limit exports only short term.

All of these factors are expected to lead to a relatively significant economic growth in 2022. Lithuania’s real GDP in 2022 is projected

to grow by 3.6 %. However, the continuing tensions in the supply chains, which may persist until 2023, expensive energy resources

and various factors related to Lithuania’s domestic economic development, which are driving up service prices the most, will continue

to affect inflation in Lithuania. It is estimated that in 2022, the average annual inflation will still rise to 5.1 %. Inflation will also be

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 61

affected by the increase in excise duties on alcoholic beverages and rising food prices. However, the Bank of Lithuania does not

change its assessment that the increase in inflation is temporary: although inflation will remain high in the beginning of 2022, it

should subside in the second half of the year.

Despite all the challenges posed by the pandemic to the development of the Lithuanian economy, in 2020, the coordination of EU

funds investment programmes for 2021-2027 period was completed. According to the European Union Support Center operating in

Lithuania, a total of EUR 14.5 billion of EU assistance will be allocated to Lithuania in 2021-2027.(with EUR 12.8 billion allocated in

2014-2020), which is EUR 1.7 billion more than was allocated in the financial period 2014-2020. In the new financial period,

Lithuanian farmers will receive higher direct payments, with EUR 4.9 billion allocated for this purposes, which is EUR 892 million

more than in the previous financial period 2014-2020. From 2022, farmers will receive a payment of EUR 200 per hectare (currently

receiving EUR 177), after which the payments will gradually increase. It is projected that in 2027, these payments will reach EUR

215 per hectare. This factor is especially important in order to ensure a level playing field for Lithuanian farmers in the EU internal

market.

According to the calculations of Statistics Lithuania, the value of agricultural production in 2021, compared to 2020, increased by

7.8 % at current prices. The value of crop production increased by 8.1 % and that of livestock production – by 7.2 %. The purchase

prices of agricultural products increased by 15.6 %. The largest increases of purchase prices were in buckwheat (37.1 %), rapeseed

(35.2 %) and potatoes (34.2%), and in livestock products – dairy products (16.9 %), cattle (14.7 %) and poultry (11.2%).

According to the preliminary 2021 data of the Statistic Lithuania, the yields of sugar beets (16.7 %), legumes (13.1 %), cereals

(8.6 %) and potatoes (7.8 %) decreased the most. The 4.2 % increase in rapeseed yield was due to the increased of rapeseed crop

area. Livestock production volumes decreased by 0.9 % due to a lower production of poultry (5 %), sheep and goats (1.6 %) and

lower milk produce (0.8 %). The direct payments for agricultural production increased by 10 %, up to EUR 387.8 million. Other

subsidies on production decreased by 15.6 %, up to EUR 211 million. The value of agricultural services provided grew by 13 % over

the year.

The growth of prices of agricultural land in the past years was significantly affected by the consistently improving national economy,

the growing incomes of the market players and the activity of the market players in more expensive territories provided with well-

developed communications and road and services infrastructure. The prices of plots of agricultural land are also affected by the

high profitability of agricultural activities supported by EU grants for agriculture as well as the increase in the sizes of farms resulting

from acquisition or lease of additional agricultural land. The supply of plots of agricultural land in Lithuania is fairly active, but the

selection of land plots suitable for farming is becoming scarce. Major farmers increase their facilities by purchasing small land plots,

but the supply of these shrinks each year. Fertile land plots are sold very quickly.

The restrictions on the acquisition of agricultural land enforced in Lithuania and the consistently growing purchase price of plots of

agricultural land raise the demand for leased land and the lease rates. Young farmers, farmers with large farm areas and agricultural

companies are very interested in the lease of land plots since after plots of agricultural land are leased a higher probability to

subsequently purchase them appears in case land owners wish to sell their land plots.

More stringent amendments to the Provisional Law on the Acquisition of Agricultural Land became effective in May 2014. These

amendments do not allow related parties to acquire more than 500 hectares of land from the State or other persons. A new wording

of the Law on the Acquisition of Agricultural Land became effective on 1 January 2018. The wording of the law enforced prior to

2018 only permitted the purchase of agricultural land to a person that has professional skills and competence, i.e. satisfies the

eligibility requirements prescribed by the law. The new wording of the law enforced from 1 January 2018 does not contain any

eligibility requirements. The list of persons that have the pre-emptive right to purchase private agricultural land was adjusted in

the Law on the Acquisition of Agricultural Land. The new wording of the law ensures the right to purchase land for persons engaged

in agricultural activities. The new wording of the law provides for the prohibition to land plot owners to set the condition of sale of

a land plot providing that a person that enjoys the pre-emptive right only may avail of it if it acquires the land plot together with

the other land plots offered for sale. This provision is no longer effective when land plots offered for sale have adjacent borders.

The new wording of the Law on the Acquisition of Agricultural Land effective from 1 January 2018 provides that agreements of

purchase and sale of land may only be executed with payments made via bank transfers. The new wording of the law also provides

that related parties that manage in the Lithuanian territory by right of ownership agricultural land plots with an area greater than

specified in the law (300 hectares, in certain cases 500 hectares) may conclude agreements of transfer of agricultural land plots

with each other provided that the total area of the agricultural land acquired by such related parties does not increase as a result

of such agreements and that the area of the agricultural land of each of these related parties does not exceed 500 hectares.

INVL Baltic Farmland owns 100% of the shares of 18 private joint-stock companies, which, taken together, have purchased an

approximately 3,000 hectares of agricultural land in Lithuania.

Starting from 30 June 2015, when the simple administration agreement was signed with INVL Farmland Management, a company

managed by Invalda INVL (one of the largest asset management group in the Baltic countries), the administration of land plots was

assigned to this company. On 28 December 2020, an amendment to the Simple Property Administration Agreement No 20150630/01

was executed, on the basis of which the term of the agreement for property administration was extended until 31 December 2025.

The enforced more stringent requirements for the acquisition of land have resulted in that companies of the INVL Baltic Farmland

group are no longer able to directly invest in agricultural land in Lithuania and are unable to overtake the control of companies that

manage agricultural land.

INVL Baltic Farmland is seeking to earn in the long run from the increase in land rent and from the growth of the value of land.

According to the data of the property valuation conducted in Q4 2021, the value of the land plots has increased in the course of the

year by 8.2% and reached EUR 16.62 million. One hectare is valuated on average at EUR 5.36 thousand (divided by the total

amount).

The following graph shows the difference of prices of agricultural land in Lithuania by region:

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 62

Fig. 15.1.1. Map on values of land qualified as agricultural land in Lithuania.

Source: the Centre of Registers (data as of 6 October 2021)

https://www.registrucentras.lt/bylos/dokumentai/ntr/masvert/zem_zu2022.pdf

Group key figures

31 December 2019

31 December 2020

31 December 2021

Controlled cultivated cropland area*, ha

2,986

2,979

Book value of land**, EUR thousand

14,719

15,364

16,620

Average rental income per hectare, EUR (not

included the variable part of the rent, equal to

the land lease payment payable to the state)

202

206

215

Consolidated equity, EUR thousand

13,443

14,015

14,942

Book value of one share, EUR

4.16

4.34

4.63

* Phase II of the Rail Baltica project was completed in 2020, 6.5556 ha of agricultural land was taken over for public use.

**Investment properties are stated at fair value and are valued by accredited valuer UAB korporacija Matininkai using sales comparison method. The

valuation was performed in December 2019, 2020 and 2021.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 63

The balance sheet and profit (loss) summary reports

Balance sheet,

thousand EUR

Group

Company

31.12.2019

31.12.2020

31.12.2021

31.12.2019

31.12.2020

31.12.2021

Investment property

14,719

15,364

16,620

Investments into subsidiaries

9,347

10,123

11,436

Loans granted

4,136

3,930

3,547

Trade receivables

302

198

170

Cash

113

302

144

Other assets

Deferred income tax liabilities

1,511

1,608

1,798

Other liabilities

182

243

195

Consolidated equity

13,443

14,015

14,942

13,443

14,015

14,942

Profit (loss)

01.01.2019 –

31.12.2019

01.01.2020 –

31.12.2020

01.01.2021 –

31.12.2021

01.01.2019 –

31.12.2019

01.01.2020 –

31.12.2020

01.01.2021 –

31.12.2021

Revenue

645

649

665

Revaluation of investment property

864

683

1,256

Income before tax

1,341

1,049

1,655

1,158

916

1,428

Net profit

1,136

895

1,411

1,136

895

1,411

Indexes

2019

2020

2021

Return on Equity (ROE), %

8.71

6.52

9.75

Return on Assets (ROA), %

7.74

5.77

8.60

Liquidity ratio

2.29

2.07

1.62

Operating profit margin (pretax profit margin), %

207.91

161.63

248.87

Operating profit excluding revaluation of investment

property margin, %

73.95

56.39

60.00

Earnings per share (EPS), EUR

0.35

0.28

0.44

Price earnings ratio (P/E)

9.94

18.04

17.50

Net profit margin (%)

176.12

137.90

212.18

EBITDA margin (%)

73.95

56.39

60.00

* The Company publishes Alternative performance measures (AVR), that are in use of the Company, provides indicators definitions and calculation

formulas. All the information is disclosed in Appendix 4 to this Consolidated Annual report and in Company‘s web site section „For Investors“ →

„Reports“ → „Indicator formulas“. The link: https://invlbalticfarmland.com/en/investor-relations/financial-information-and-reports/

15.2. Significant Issuer’s and its group events during the reporting period, affect on the financial

statement

Financial results and information related to the dividends

 On 18 March 2021, the Company announced an audited group results of 2020. The audited consolidated net profit of INVL Baltic

Farmland, AB Group and the Company amounted to EUR 895 thousand, the revenue was EUR 649 thousand.

 On 9 April 2021, the Company announced the approved audited annual financial information for 2020 together with the

confirmation of responsible persons.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 64

 On 18 March 2021, INVL Baltic Farmland informed that it is planning during 2021 to receive EUR 665 thousand of revenue and

earn a consolidated net profit of EUR 385 thousand.

 On 12 May 2021, the Company announced financial results for 3 months of 2021 - the unaudited consolidated net profit of the

AB INVL Baltic Farmland group was EUR 106 thousand and the revenue was EUR 160 thousand.

 On 6 May 2021, INVL Baltic Farmland to implement resolutions of the General Shareholders Meeting regarding allocation of

Company’s profit, announced the procedure for the pay-out of dividends for 2020. On 9 April 2021, the General Shareholders

Meeting of INVL Baltic Farmland, AB decided to allocate EUR 0.15 dividend per share. Dividends were paid to the shareholders

who on 23 April 2021 were shareholders of INVL Baltic Farmland, AB. The Company informed that the dividends had been

allocated from 7 May 2021.

 On 26 July 021, the Company announced unaudited consolidated financial results of the INVL Baltic Farmland group: unaudited

consolidated net profit amounted to EUR 203 thousand for 6 months of 2021 and the revenue was EUR 320 thousand. The

Company published half year results for the 6 months of 2021, financial statements, factsheet and management statement.

 On 3 November 2021, INVL Baltic Farmland announced unaudited results for 9 months of 2021: unaudited consolidated net profit

of the AB INVL Baltic Farmland group was EUR 290 thousand and the revenue was EUR 481 thousand.

General Shareholders Meeting

 On 18 March 2021 INVL Baltic Farmland announced about convocation of the General Shareholders Meeting and published the

draft resolutions of the General Shareholders Meeting. On 9 April 2021 the Company announced resolutions of the General

Shareholders Meeting: during the meeting the Shareholders of the Company were presented with the consolidated annual report

of the Company and independent auditor's report on the financial statements and annual report, approved the consolidated and

companies financial statements for 2021, and approved the profit distribution (allocating EUR 0.15 dividend per share). The

shareholders also decided regarding the purchase of own shares of the INVL Baltic Farmland and regarding the election of the

Audit Committee members. The shareholders were presented also with the the Audit Committee activity report. .

Management of the Company

 On 10 December 2021 INVL Baltic Farmland published investor’s calendar for 2022: 28 February – audited financial reports and

annual report; 10 May – factsheet for 3 months of 2022; 26 July – semi–annual report of 2022; 8 November – factsheet for 9

months of 2022.

The group

The companies during the reporting period rented agricultural land for farmers and agricultural companies and performed usual.

15.3. Employees

There is only one employee (director) at INVL Baltic Farmland, AB. Invalda INVL, AB provides accounting services for the company.

Employment agreements are concluded following requirements of the Labour Code of the Republic of Lithuania. Employees are

employed and laid off following requirements of the Labour Code. There are no special employees’ rights and duties described in

the employment agreements.

There were 2 employees working at INVL Baltic Farmland and INVL Baltic Farmland subsidiary companies on 31 December 2021

(31 December 2020 – 2; 31 December 2019 – 2; 31 December 2018 – 2; 31 December 2017 - 2).

15.4. Environmental Protection

Due to the corporate governance structure and the small amount of employees within the Company, it was considered inefficient

to separately approve environmental policy. We seek to protect the productivity of the land while renting in land to the land tenants.

By entering into contracts, the tenants are committed to ensure the timely and proper operation of the land, not to abandon it, to

prevent it from being set aside and to carry out annual agricultural work. Actions which may have negative effect on fertility of the

land, is prohibited. There is also an increase in certified organic and innovative farms in leased areas of the Company.

15.5. Disclosure of the impact of the COVID-19 pandemic

In 2021 the Company’s operations were not be impacted or were be little impacted by the coronavirus because the agricultural land

rental agreements which have been made are long-term and so far there are no announcements about disruptions of farming

activity. The management of the Company informs that the effects of coronavirus in the agricultural sector are smaller than in the

whole economy, therefore the coronavirus did not have a significant impact on the Company's results in 2021.

16. A description of the principal advantages, uncertainties encountered, risks and uncertainties

16.1. Advantages of investments

Agricultural land in Lithuania is undervalued

Agricultural land prices in Lithuania are among the lowest in the European Union, and much lower than in neighbouring Poland. This

is caused by increased land fragmentation and other reasons.

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ANNUAL REPORT OF 2021 | 65

Land allows saving core capital and has a low risk

After recent market turmoil, investors are paying more and more attention on capital preservation. Investment in agricultural land

is backed by assets which has only a small possibility of devaluation. Historical data shows that land, in the long term, is

characterized by strong core capital preservation features. Unlike investments in exhaustible metals, oil and gas resources, a well-

managed agricultural land is a completely renewable resource, which remains productive forever.

Land is a good protection against inflation

Agricultural land, as an asset class, has a positive correlation with inflation. Historically, agricultural land values rose faster than

inflation, therefore agricultural land is an effective insurance against inflation and a capital preservation tool. It may be attractive

to investors, who are worried about governments' inflationary policies.

Land generates stable income

Unlike other popular insurance against inflation measures, such as precious metals, land provides a regular income to the investor,

which, in the low interest environment, is often higher than the deposit or bond interest. Although land investment does not bring

the highest income in the real estate sector, not depreciating assets with strong price growth potential and close to 100 % occupation

(unlike commercial real estate, high-quality agricultural land demand is always high, regardless of the economic environment)

generate the income.

Investment in land is characterized by lower income volatility

By placing agricultural land in a diversified portfolio, investors can reduce the risk of income shortage at a time when other assets

generate little or no income. While the long-term rise in agricultural commodity prices positively affect the value of land, short-term

fluctuations in the price of production are assumed by the farmer rather than the landowner.

Historically, land had higher yield

In developed countries agricultural land had higher profits than other asset classes, including equities, bonds and commercial real

estate, despite the lower risk (measured as the standard deviation of the annual return).

Land is an attractive diversification tool

Agricultural land yield has a low or even negative correlation with traditional asset classes like stocks and bonds, and a small positive

correlation with residential and commercial real estate. These features make farmland an attractive diversification tool that can

reduce the impact of general market fluctuations on diversified portfolio.

Agricultural land advantages compared with other real estate investments

Investment in agricultural land is classified as a real estate, but has unique features. This allowed agricultural land to pr otect itself

from extreme falls in the value of assets, which were experienced by residential and commercial property during the crisis.

16.2. Risk factors

Information, provided in this section, should not be considered complete and covering all aspects of the risk factors associated with

the activity and securities of the public joint-stock company INVL Baltic Farmland.

Risk factors, associated with activities of INVL Baltic Farmland

Restriction of the purchase of agricultural land

The public joint-stock company INVL Baltic Farmland invests in agricultural land in Lithuania through its owned private companies.

In 1 January 2014 changes to the Agricultural Land Acquisition temporary law (No. IX-1314) entered into force, providing restrictions

of the purchase of agricultural land (including restriction of purchase of shares in the legal entity owning agricultural land). This law

was changed from 1 January 2018 by Agricultural Land Acquisition law (No. XIII-801). These restrictions mean that the public joint-

stock company INVL Baltic Farmland and its owned private companies will not be able to purchase agricultural land in Lithuania

additionally and/or acquire shares in companies owning agricultural land.

Prohibition stated in the law can reduce the amount of buyers of agricultural land, owned by subsidiaries of the public joint-stock

company INVL Baltic Farmland, and thus the liquidity and price of the asset.

The total investment risk

The value of the investment in agricultural land can vary in the short term, depending on the harvest, prices of agricultural products,

local demand and supply fluctuations, competition between farmers and financial situation. Investment in agricultural land should

be carried out in the medium and long term, so that investor can avoid the short-term price fluctuations. Investing in real estate is

connected with the long-term risks. After failure of investments or under other ill-affected circumstances (having been unable to

pay for the creditors) the bankruptcy proceedings may be initiated.

Agricultural production and other commodity price volatility risk

Agricultural products and other commodities prices are historically characterized by very large fluctuations, on which, in many

cases, depends the price of agricultural land. The main factor affecting profitability of agricultural business is the price of the crop

(wheat, canola, etc.), but fuel, labour, fertilizers' and other commodity prices also affect the cost of agricultural activity, therefore

their increase lowers profit margins and reduces the ability to pay higher prices for agricultural land leases. If high fuel, fertilizer

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 66

and labour costs coincide with the fall of agricultural output prices, farmers and investors in the agricultural sector may suffer a

loss.

Common agricultural risk

The public joint-stock company INVL Baltic Farmland will seek to lease its owned agricultural land to farmers and agricultural

companies for the highest price possible. Factors that could adversely affect the agricultural sector may be: weather conditions

(floods, droughts, heavy rains, hail, frost, weeds, pests, diseases, fire, climate change related worsening conditions and others).

Any of these factors, together or separately, could have a negative impact on farmers' incomes and farmland values. Part of the

risks, not all, can be insured, but the insurance costs reduce agricultural profitability, thus not all Lithuanian farmers do it.

Reliance on the European Union and national subsidies

Lithuanian and the European Union farmers' activities and profits are highly dependent on the European Union's Common

Agricultural Policy (CAP) - EU and national subsidies for agricultural activities. Recent changes to the CAP are valid for the period

2021-2027.

Elimination of direct payments could have a negative impact on agricultural land rents and values.

Land illiquidity risk

Investments in agricultural land under certain market conditions are relatively illiquid, thus finding buyers for these lands can take

time. Investors may consider the investment in agricultural land only if they do not have needs for the sudden liquidity.

Risk of legislative and regulatory changes

Lithuanian law, the European Union directives and other legislative changes may affect the income of farmers and agricultural land

rents. For example, changes affecting agricultural products price controls, export restrictions, customs entry or withdrawal, more

stringent environmental restrictions could adversely affect the profitability of agriculture.

Tax increase risk

Tax laws change may lead to a greater taxation of the public joint-stock company INVL Baltic Farmland and its group companies,

which in turn may reduce the profits and assets of the company.

Inflation and deflation risk

It is likely that during its operational period the public joint-stock company INVL Baltic Farmland will face both inflation and deflation

risks as investments in agricultural land are long term. If the profit from the agriculture land rent will be less than the inflation rate,

it will result in loss of purchasing power. It is estimated that investment in agricultural land profitability is highly correlated with

inflation.

Credit risk

The public joint-stock company INVL Baltic Farmland will seek to lease agricultural land plots in the highest price possible to farmers

in Lithuania and agricultural companies. There is a risk that tenants of the land will not fulfil their obligations - it would adversely

affect the profit of the public joint-stock company INVL Baltic Farmland. Large parts of liabilities not fulfilled in time may cause

disturbances in activities of the public joint-stock company INVL Baltic Farmland, there might be a need to seek additional sources

of financing, which may not always be available.

The public joint-stock company INVL Baltic Farmland also bears the risk of holding funds in bank accounts or investing in short -

term financial instruments.

Liquidity risk

The public joint-stock company INVL Baltic Farmland may be faced with a situation where it will not be able to settle with suppliers

and other creditors in time. The company will seek to maintain adequate liquidity levels or secure funding in order to reduce this

risk.

Interest rate risk

Interest rate risk mainly includes loans with a variable interest rate. The public joint-stock company INVL Baltic Farmland plans to

use very small amount of debt. Rising interest rates worldwide may adversely affect the values of property - agricultural land.

Large shareholders risk

Three shareholders of the public joint-stock company INVL Baltic Farmland together with related parties hold more than 60 percent

of shares and their voting will influence the election of the Members of the Boards of company, essential decisions regarding

management of the public joint-stock company INVL Baltic Farmland, operations and financial position. There is no guarantee that

the decisions made by the major shareholders' will always coincide with the opinion and interest of the minority shareholders. Large

shareholders have the right to block the proposed solutions of other shareholders.

Market-related risks

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 67

Market risk

Shareholders of the public joint-stock company INVL Baltic Farmland bear the risk of incurring losses due to adverse changes in the

market price of the shares. The stock price drop may be caused by negative changes in assets value and profitability of the company,

general stock market trends in the region and the world. Trading of shares of the public joint-stock company INVL Baltic Farmland

may depend on comments of the brokers and analysts and published independent analyzes of the company and its activities. The

unfavourable analysts' outlook of the shares of the public joint-stock company INVL Baltic Farmland may adversely affect the market

price of the shares. Non-professional investors assessing the shares are advised to seek the assistance of intermediaries of public

trading or other experts in this field.

Liquidity risk

If demand for shares decreases or they are deleted from the stock exchange, investors will face the problem of realization of shares.

If the financial situation of the public joint-stock company's INVL Baltic Farmland deteriorates, the demand for company's shares

may drop, which will lead to fall in share price.

Dividend payment risk

Dividend payment to the shareholders of the public joint-stock company INVL Baltic Farmland is not guaranteed and will depend on

the profitability, investment plans and the overall financial situation of the company.

Tax and legal risk

Changes in the equity-related legislation or state tax policy can change shares attractiveness of the public joint-stock company

INVL Baltic Farmland. This may reduce the liquidity of the shares of the company and/or price.

Inflation risk

When inflation increases, the risk, that the stock price change may not offset the current rate of inflation, appears. In this case, the

real returns from capital gain on market shares for traders may be less than expected.

16.3. The main indications about internal control and risk management systems related to the

preparation of consolidated financial statements

The Audit Committee supervises preparation of the consolidated financial statements. systems of internal control and financial risk

management and how the company follows legal acts that regulate preparation of consolidated financial statements.

The Company is responsible for the supervision and final review of the consolidated financial statements. To order to manage these

functions properly, the Company is using an external provider of relevant services (Invalda INVL, AB). The Company, together with

the accounting service provider constantly reviews International Financial Reporting Standards (IFRS) in order to implement in time

IFRS changes, analyses company’s and group’s significant deals, ensures collecting information from the group’s companies and

timely and fair preparation of this information for the financial statements, periodically informs the Board of the Company about

the preparation process of financial statements.

Accounting of all the Company Group‘s entities is provided by the same external accounting service provider (Invalda INVL AB) by

using the unified accounting system, the standard chart of accounts and by applying unified accounting principles. Standardized

data collection files prepared by Excel program are used for preparation of consolidated numbers. It also facilitates the automatic

reconciliation and elimination of balances and transactions between subsidiaries in the preparation of consolidated accounts. Internal

control of the financial numbers of the Group’s entities and of the Group financial statements is provided by CFO of external

accounting service provider.

17. Significant investments made during the reporting period

During the reporting period INVL Baltic Farmland, AB has not made any acquisitions.

18. Information about significant agreements to which the issuer is a party, which would come into force,

be amended or cease to be valid if there was a change in issuer‘s controlling shareholder

There are no significant agreements of the company which would come into force, be amended or cease to be valid if there was a

change in issuer‘s controlling shareholder.

19. Information on the related parties’ transactions

Information on the related parties’ transactions is disclosed in Notes 16 of consolidated financial statements for the year ended 31

December 2021.

In addition, information regarding Transactions with Related Parties, according to the Law on Companies article 37 (2) , is published

on the Company‘s web site – „For Investors“ → „Related parties transactions“. The link to the Company‘s web site:

https://invlbalticfarmland.com/en/investor-relations/legal-documents/

At the time the report was published, the Company provides information about Company‘s Transactions with Related Parties in the

Annex 3 part 5 of the consolidated annual report.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 68

Pursuant to paragraph 10 of Article 37 (2) of the Law on Companies of the Republic of Lithuania, the Company report the amounts

of the Company's transactions with related parties, which were implemented in the ordinary course of business and with the same

related party in the financial year.

Name (Related party*)

Loan balance,

EUR 01-01-

2021

Loans granted,

EUR

Repaid loans,

EUR

Interest

calculated, EUR

Repaid

interests,

EUR

Amount of

loan, EUR

31-03-2021

Avižėlė, UAB

Code 303113077

Gynėjų str. 14, Vilnius, Lithuania

138,562

-8,562

5,980

-2,050

133,930

Beržytė, UAB

Code 30112915

Gynėjų str. 14, Vilnius, Lithuania

306,794

15,000

-16,794

13,351

-12,196

306,155

Dirvolika, UAB

Code 303112954

Gynėjų str. 14, Vilnius, Lithuania

191,730

-21,000

7,969

-8,049

170,650

Duonis, UAB

Code 303112790

Gynėjų str. 14, Vilnius, Lithuania

253,967

-18,000

10,982

-11,047

235,902

Žemgalė, UAB

Code 303112744

Gynėjų str. 14, Vilnius, Lithuania

269,899

10,000

-29,899

11,284

-4,921

256,363

Linažiedė, UAB

Code 303112922

Gynėjų str. 14, Vilnius, Lithuania

82,738

5,000

-7,738

3,492

-3,492

80,000

Puškaitis, UAB

Code 303112769

Gynėjų str. 14, Vilnius, Lithuania

301,147

20,000

-100,000

10,684

-6,456

225,375

Kvietukas, UAB

Code 303112687,

Gynėjų str. 14, Vilnius, Lithuania

123,470

-13,000

5,147

-2,715

112,902

Laukaitis, UAB

Code 303112694

Gynėjų str. 14, Vilnius, Lithuania

246,843

1,258

-21,843

10,562

-4,572

232,248

Vasarojus, UAB

Code 303112776

Gynėjų str. 14, Vilnius, Lithuania

642,446

-35,000

27,804

-30,250

605,000

Lauknešys, UAB

Code 303112655

Gynėjų str. 14, Vilnius, Lithuania

134,512

-24,000

5,384

-2,958

112,938

Žiemkentys, UAB

Code 303112648

Gynėjų str. 14, Vilnius, Lithuania

446,701

-45,000

18,682

-20,383

400,000

Pušaitis, UAB

Code 303113102

Gynėjų str. 14, Vilnius, Lithuania

98,375

-3,000

4,320

-4,332

95,363

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 69

Sėja, UAB

Code 303113013

Gynėjų str. 14, Vilnius, Lithuania

70,268

-30,000

2,523

-2,631

40,160

Žemynėlė, UAB

Code 303112559,

Gynėjų str. 14, Vilnius, Lithuania

119,431

609

-9,000

5,086

-2,615

113,511

Žalvė, UAB

Code 303113045,

Gynėjų str. 14, Vilnius, Lithuania

211,712

1 053

-21,712

8,879

-3,866

196,066

Ekotra, UAB

Code 303112623

Gynėjų str. 14, Vilnius, Lithuania

291,108

-60,000

11,260

-12,368

230,000

Total

3,546,563

* Company’s relationship with the other counterparty – the Companies are 100 percent managed by INVL Baltic Farmland, AB

20. Information on harmful transactions in which the issuer is a party

There were no harmful transactions (those that are not in line with issuer‘s goals, not under usual market terms, harmful to the

shareholders‘ or stakeholders‘ interests, etc.) made in the name of the issuer that had or potentially could have negative effects in

the future on the issuer‘s activities or business results. There were also no transactions where a conflict of interest was present

between the managing bodies of the Company, controlling shareholders‘ or other related parties‘ obligations to the issuer and their

private interests.

21. Significant events since the end of the financial year

There were no events since the end of the financial year.

22. Estimation of Issuer’s and Group’s activity last year and activity plans and forecasts

22.1. Evaluation of implementation of goals for 2021

The initial forecast of INVL Baltic Farmland for year 2021 was income of EUR 665 thousand and net profit of EUR 385 thousand.

INVL Baltic Farmland had revenue of EUR 665 thousand in 2021 and earned unaudited net profit of EUR 1,411 thousand for the

year. Profit was forecasted under the assumption that the value of agricultural land holdings in the balance sheet would not change

and the change in the value of trade receivables by the buyers was not assessed, but a valuation conducted by the company

Matininkai showed that land holding value had increased by 8.2% to EUR 16.62 million compared to previous year, or EUR 5.36

thousand per hectare. In addition, EUR 1 thousand reversal of impairment of trade receivables was recognized and due to decrease

of overdue debts during the year the administration fee was increased by EUR 19 thousand. Excluding these non-estimated factors

and the related income tax expense, INVL Baltic Farmland's profit would be EUR 359 thousand. Therefore, after assessing the

favourable market trends that allowed to increase the value of assets, it can be stated that INVL Baltic Farmland has accomplished

and exceeded the calculated profit forecasts for 2021.

22.2. Activity plans and forecasts

At the time of issuing this report, the budget of 2022 year has not been approved. Upon approval, the Company will inform about

the activity plans and forecasts in a separate notice.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 70

V. OTHER INFORMATION

23. Additional non - financial information

As the Company has only one employee (director) (there were 2 employees working at INVL Baltic Farmland and INVL Baltic

Farmland subsidiary companies on 31 December 2021), the Company is not subject to the requirements for the preparation of a

non-financial statement.

24. References to and additional explanations of the data presented in the annual financial statements

and consolidated financial statements

All data is presented in consolidated and company’s financial statements explanatory notes of 2021.

25. Information on financial risk management objectives used for hedging measures which hedge

accounting and of price risk, credit risk, liquidity risk and cash flow risk where the company group uses

financial instruments and is an important evaluation of the property, own capital, liabilities, revenue and

expenses

The information is disclosed in Note 3 to the consolidated and the company's 2021 financial statements.

26. Information about activities of the Issuer and companies comprising the issuer’s group in the field of

research and development

INVL Baltic Farmland, AB did not deliver major researches and expansion projects in 2021.

27. Information about agreements of the Company and its managing bodies, members of the formed

committees, or the employees’ agreements providing for compensation in case of the resignation or in

case they are dismissed without a due reason or their employment is terminated in view of the change

of the control (official offering) of the Company.

There are no agreements of the company and the Members of the Board, or director providing for compensation in case of the

resignation or in case they are dismissed without a due reason or their employment is terminated in view of the change of the

control of the Company.

28. Information about any control systems in the employee share plan that are not exercised directly by

employees

The Issuer does not apply control systems to share-based payment schemes to its employees.

29. Information on audit company

The company have not approved criteria for selection of the audit company, but normally ‘big 4’ audit firms (Deloitte, KPMG,

PricewaterhouseCoopers and Ernst and Young) are invited to participate. In the General Extraordinary Shareholders’ Meeting of the

company held 21 October 2020 the audit company PricewaterhouseCoopers, UAB was elected to provide audit services on annual

financial statements of the company for the financial year of 2021. It was decided to conclude an agreement with the audit company

to carry out of the audit of the annual financial statements of the AB INVL Baltic Farmland for 2020, 2021, 2022 financial years and

establish the payment in the amount of EUR 11,100 per year (VAT will be calculated and paid additionally in accordance with the

order established in legal acts). The amount of remuneration for audit services will be recalculated (increased) every year according

to the average annual inflation of April month of the current year published by the Department of Statistics under the Government

of the Republic of Lithuania, calculated according to the harmonized index of consumer prices (HICP). The Board of the INVL Baltic

Farmland, AB reserves the right to increase the remuneration of the audit company by no more than 20 percent annually from the

remuneration paid to the audit firm in the previous year in accordance with the terms of the audit services agreement. In 2021 the

actual cost of audit services was EUR 11,189 after inflation indexation.

Audit company

PricewaterhouseCoopers, UAB

Address of the registered office

J. Jasinskio str. 16B, LT-03163, Vilnius

Enterprise code

111473315

Telephone

(+370 5) 239 2300

Fax

(+370 5) 239 2301

E-mail

vilnius@lt.pwc.com

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 71

Website

www.pwc.com/lt

No internal audit is performed in the company.

30. Data on the publicly disclosed information

The information publicly disclosed of INVL Baltic Farmland, AB during 2021 is presented on the company’s website (Company‘s web

site section „Investor Relations“ → „Regulated information“.

The link: https://invlbalticfarmland.com/en/news/).

Table 30.1. Summary of publicly disclosed information

Date of disclosure

Brief description of disclosed information

18.03.2021

Audited results of INVL Baltic Farmland group of 2020

18.03.2021

INVL Baltic Farmland plans to earn EUR 385 thousand net profit in 2021

18.03.2021

Convocation of the General Ordinary Shareholders Meeting of INVL Baltic Farmland and draft resolutions

on agenda issue

18.03.2021

Regarding proposal of the Board of INVL Baltic Farmland to allocate dividends for the year 2020

09.04.2021

Resolutions of the General Shareholders Meeting of INVL Baltic Farmland

09.04.2021

Audited annual information of INVL Baltic Farmland for 2020

09.04.2021

Regarding approval of dividend allocation of INVL Baltic Farmland for the year 2020

06.05.2021

Procedure for the payout of dividends for the year 2020

12.05.2021

AB INVL Baltic Farmland factsheet for 3 months of 2021

26.07.2021

Unaudited results of INVL Baltic Farmland for 6 months of 2021

03.11.2021

AB INVL Baltic Farmland unaudited Interim information for 9 months of 2021

10.12.2021

INVL Baltic Farmland investor's calendar for 2022

Director Eglė Surplienė

(The document is signed with a qualified electronic signature)

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 72

APPENDIX 1. INFORMATION ABOUT GROUP COMPANIES, THEIR CONTACT

DETAILS

Company

Registration information

Type of activity

Contact details

Ekotra, UAB

Code 303112623

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Puskaitis, UAB

Code 303112769

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Zemynele, UAB

Code 303112559

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Kvietukas, UAB

Code 303112678

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Lauknesys, UAB

Code 303112655

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Vasarojus, UAB

Code 303004626

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Laukaitis, UAB

Code 303112694

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Ziemkentys, UAB

Code 303112648

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Zemgale, UAB

Code 303112744

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Avizele, UAB

Code 303113077

Registration address Gyneju str. 14, Vilnius;

Legal form – private limited liability company

Registration date 01.08.2013

Investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Berzyte, UAB

Code 303112915

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Duonis, UAB

Code 303112790

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Pusaitis, UAB

Code 3031131032

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 73

Zalve, UAB

Code 303113045

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Seja, UAB

Code 303113013

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Dirvolika, UAB

Code 303112954

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Linaziede, UAB

Code 303112922

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 01.08.2013

investments into

agricultural land. Rent

of the agricultural land.

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

Cooperor, UAB

Code 303252162

Registration address Gyneju str. 14, Vilnius

Legal form – private limited liability company

Registration date 27.02.2014

Carries no activity

Telephone +370 5 279 0601

E-mail farmland@invaldainvl.com

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 74

APPENDIX 2. CORPORATE GOVERNANCE CODE

INVL Baltic Farmland, AB (hereinafter - “the Company”), acting in compliance with Article 12 (3) of the Law on Securities of the

Republic of Lithuania and paragraph 24.5 of the Listing Rules of AB Nasdaq Vilnius, hereby discloses how it complies with the

Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its specific provisions or recommendations. In

case of non-compliance with this Code or some of its provisions or recommendations, the specific provisions or recommendations

that are not complied with must be indicated and the reasons for such non-compliance must be specified. In addition, other

explanatory information indicated in this form is provided.

Although the form for filling in the Corporate Governance Code of Nasdaq Vilnius listed companies is based on the “comply or

explain” principle, the Company provides an explanation in the “Comment” section in all cases, even if it fully complies with the

principle.

1. Summary of the Corporate Governance Report:

Short history:

The public joint-stock company INVL Baltic Farmland was established on 29 April 2014 on the basis of a part of assets split-off from

one of the leading asset management groups in the Baltic region Invalda INVL. INVL Baltic Farmland manages shares of 18

companies investing into agricultural land that are owning about 3 thousand hectares of agricultural land in Lithuania. More than

98% of land is rented to farmers and agricultural companies.

Shares of INVL Baltic Farmland are listed on Nasdaq Vilnius stock exchange since 4 June 2014.

About Company's activities:

The administration of the INVL Baltic Farmland group owned land, according to the basic property administration agreement signed

on 30 June 2015, is transmitted to the owned company INVL Farmland Management (for further information please see paragraph

3.3. “Information about the Issuer‘s group of companies” of this annual consolidated report). On 28 December 2020 the Basic

Property Administration Agreement’s Amendment No. 20150630/01 was concluded, based on which the term of the Basic Property

Administration Agreement was extended until 31 December 2025.

As the Company has signed the property administration agreement it employs a minimum number of people. As of 31 December

2021 the Company and group had 2 employees, while Invalda INVL, AB provides accounting services and preparation of the

documents related with bookkeeping for INVL Baltic Farmland, AB.

About operating environment:

It is prohibited for one person to have more than 500 hectares of land in Lithuania since 2014. That‘s why INVL Baltic Farmland

development is limited and the generated funds are directed to the payment of dividends to shareholders.

Corporate governance structure:

- The Company’s managing bodies consists of the Board, elected for the 4 years term of office, and the manager, elected by the

Board (for further information please about the Issuer's governing bodies and the composition of the committees in Chapter III

"Issuer's bodies" of this consolidated annual report). The Board’s and the manager’s activities are concentrated on the fulfilment

of the Company’s strategic objectives taking count of the shareholders’ equity value increase.

- The Supervisory Board is not formed. Nevertheless, the Board and the Director acts in close cooperation seeking to obtain the

maximum benefit for the Company and its shareholders. The Board periodically reviews and assesses Company’s activity results.

- The Chairman of the Board is not and has not been the manager of the Company. His current or past office constitutes has no

obstacles to conduct independent and impartial supervision.

- Members of the Board are elected by the General Shareholders’ Meeting. They are independent and in their actions seek the

benefit to the Company and its shareholders. The Board of the Company conducts an annual self-assessment of its activities.

- The Company has an Audit Committee consisting of 2 independent members. Due to simplicity of the Company’s management

structure and small number of employees, it is not expedient to form the Nomination and Remuneration committees.

Accountability to the Company's shareholders:

- The Company discloses and updates all information required for evaluation by the governing bodies of the Company: Information

about the manager, composition of the Board, managers and Board members’ education, work experience and participation in

other companies is disclosed in Company’s periodical reports and website.

- The company discloses information via Nasdaq news distribution service so that the public in Lithuania and other EU countries

should have equal access to the information. The information is disclosed in Lithuanian and English. The company publishes its

information prior to or after the trade sessions on the Nasdaq Vilnius. The company does not disclose information that may have

an effect on the price of shares in the commentaries, interview or other ways as long as such information is publicly announced

via Nasdaq news distribution service.

- Shareholders of the Company have equal opportunities to get familiarized and participate in adopting decisions important to the

Company. The procedures of convening and conducting of the General Shareholders’ Meeting comply with the provisions of legal

acts and provide the shareholders with equal opportunities to participate in the meetings get familiarized with the draft resolutions

and materials necessary for adopting the decision in advance, also give questions to the Board members.

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2. Structured table for disclosure:

Principles/ Recommendations

Yes/No/

Not Applicable

Commentary

Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights

The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance

framework should protect the rights of shareholders.

1.1. All shareholders should be provided with access to the information

and/or documents established in the legal acts on equal terms. All

shareholders should be furnished with equal opportunity to participate in

the decision-making process where significant corporate matters are

discussed.

YES

The Company discloses all

regulated information

(including notices on

convening shareholders'

meetings) through the news

distribution platform of AB

Nasdaq Vilnius. This ensures

that this information is

available to the widest possible

audience in the Republic of

Lithuania and other EU

countries. Information is

provided simultaneously in

both Lithuanian and English.

The Company publishes

information before or after the

trading session of Nasdaq

Vilnius AB.

1.2. It is recommended that the company’s capital should consist only of

the shares that grant the same rights to voting, ownership, dividend and

other rights to all of their holders.

YES

The Company timely updates

the information on its website

and complies with the

requirements of Part 5 of the

Information Disclosure

Guidelines “On the Publication

of Regulated and Other

Information on the Issuer's

Website” approved by the

decision of the Supervisory

Authority of the Bank of

Lithuania.

1.3. It is recommended that investors should have access to the

information concerning the rights attached to the shares of the new issue

or those issued earlier in advance, i.e. before they purchase shares.

YES

All shareholders have equal

rights to participate in the

general meetings of

shareholders of the Company.

1.4. Exclusive transactions that are particularly important to the

company, such as transfer of all or almost all assets of the company which

in principle would mean the transfer of the company, should be subject

to approval of the general meeting of shareholders.

YES

All shareholders of the

Company have equal

opportunities to get

acquainted and participate in

making decisions that are

important for the Company.

The approval of the General

Meeting of Shareholders is

obtained in the cases specified

in Section V of the Law on

Companies falling within the

competence of the General

Meeting of Shareholders.

1.5. Procedures for convening and conducting a general meeting of

shareholders should provide shareholders with equal opportunities to

participate in the general meeting of shareholders and should not

prejudice the rights and interests of shareholders. The chosen venue,

date and time of the general meeting of shareholders should not prevent

active participation of shareholders at the general meeting. In the notice

of the general meeting of shareholders being convened, the company

should specify the last day on which the proposed draft decisions should

be submitted at the latest.

YES

Shareholders are informed

about convening of the

General Meetings of

Shareholders in accordance

with the requirements of

legislation and the Company’s

articles of association –

adhering to the notification

deadlines and methods and

means of announcement. The

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opportunity to participate in

the Meeting is supplemented

by the option of voting by

ballot or authorizing another

person to represent the

shareholder. The General

Meeting of Shareholders is

always held at the Company’s

headquarters. In the notice of

the General Meeting of

Shareholders being convened,

the Company does not restrict

the right of shareholders to

submit new draft decisions

either before or during the

meeting, and this is clearly

stated in the notice of the

General Meeting of

Shareholders being convened

in both Lithuanian and English.

1.6. With a view to ensure the right of shareholders living abroad to

access the information, it is recommended, where possible, that

documents prepared for the general meeting of shareholders in advance

should be announced publicly not only in Lithuanian language but also in

English and/or other foreign languages in advance. It is recommended

that the minutes of the general meeting of shareholders after the signing

thereof and/or adopted decisions should be made available publicly not

only in Lithuanian language but also in English and/or other foreign

languages. It is recommended that this information should be placed on

the website of the company. Such documents may be published to the

extent that their public disclosure is not detrimental to the company or

the company’s commercial secrets are not revealed.

YES

All documents and information

relevant to the Company's

general meetings of

shareholders, including the

notice of the convened

meeting, draft resolutions,

draft resolutions of the

meeting are public and

simultaneously published in

Lithuanian and English through

the Nasdaq Vilnius regulated

notice distribution system and

additionally published on the

Company's website in the

Regulated Information

sections. and Shareholders'

Meetings.

1.7. Shareholders who are entitled to vote should be furnished with the

opportunity to vote at the general meeting of shareholders both in person

and in absentia. Shareholders should not be prevented from voting in

writing in advance by completing the general voting ballot.

YES

Shareholders of the Company

may exercise their right to

vote in the General Meeting in

person or through a

representative upon issuance

of proper proxy or having

concluded an agreement on

the transfer of their voting

rights in the manner compliant

with the legal regulations, also

the shareholder may vote by

completing the General Voting

Ballot in the manner provided

by the Law on Companies.

1.8. With a view to increasing the shareholders’ opportunities to

participate effectively at general meetings of shareholders, it is

recommended that companies should apply modern technologies on a

wider scale and thus provide shareholders with the conditions to

participate and vote in general meetings of shareholders via electronic

means of communication. In such cases the security of transmitted

information must be ensured and it must be possible to identify the

participating and voting person.

Shareholders can vote via an

attorney or by completing the

general voting bulletin, as for

now shareholders cannot

participate and vote in General

Shareholders’ Meetings via

electronic means of

communication.

1.9. It is recommended that the notice on the draft decisions of the

general meeting of shareholders being convened should specify new

candidatures of members of the collegial body, their proposed

remuneration and the proposed audit company if these issues are

included into the agenda of the general meeting of shareholders. Where

it is proposed to elect a new member of the collegial body, it is

recommended that the information about his/her educational

background, work experience and other managerial positions held (or

proposed) should be provided.

YES

According to the Board’s rules

of procedure, at least 10 days

before the General

Shareholders’ Meeting, where

it is planned to elect Board

members (member), the

information about the

candidates to the Board will be

fully disclosed to the

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Principle 2: Supervisory board

2.1. Functions and liability of the supervisory board

The supervisory board of the company should ensure representation of the interests of the company and its shareholders,

accountability of this body to the shareholders and objective monitoring of the company’s operations and its management bodies

as well as constantly provide recommendations to the management bodies of the company.

The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system.

For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.

For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated parties defined in Article 31(7)

and (8) of the Law on Companies of the Republic of Lithuania.

shareholders with the

indication of the candidates’

names, surnames, their

membership in supervisory

and management bodies of

other companies, shareholding

of other companies exceeding

1/20, and all other

circumstances that can affect

the independence of the

candidate as well as the data

on their education,

qualifications, professional

experience, other important

information.

1.10. Members of the company’s collegial management body, heads of

the administration

or other competent persons related to the company

who can provide information related to the agenda of the general meeting

of shareholders should take part in the general meeting of shareholders.

Proposed candidates to member of the collegial body should also

participate in the general meeting of shareholders in case the election of

new members is included into the agenda of the general meeting of

shareholders.

YES

The Board members inform the

Chairman of the Board in case

of the changes of the data. The

information of these changes

shall be disclosed to the

shareholders in the Company’s

periodical reports.

2.1.1. Members of the supervisory board should act in good faith, with

care and responsibility for the benefit and in the interests of the company

and its shareholders and represent their interests, having regard to the

interests of employees and public welfare.

NOT APPLICABLE

Due to its size, it is not expedient

to form the Supervisory Board.

Considering that only collegial

management body - the Board is

formed in the Company. It

performs all essential

management functions and

ensures accountability and control

of the Director of the Company.

2.1.2. Where decisions of the supervisory board may have a different

effect on the interests of the company’s shareholders, the supervisory

board should treat all shareholders impartially and fairly. It should ensure

that shareholders are properly informed about the company’s strategy,

risk management and control, and resolution of conflicts of interest.

2.1.3. The supervisory board should be impartial in passing decisions that

are significant for the company’s operations and strategy. Members of

the supervisory board should act and pass decisions without an external

influence from the persons who elected them.

2.1.4. Members of the supervisory board should clearly voice their

objections in case they believe that a decision of the supervisory board is

against the interests of the company. Independent

members of the

supervisory board should: a) maintain independence of their analysis and

decision-making; b) not seek or accept any unjustified privileges that

might compromise their independence.

2.1.5. The supervisory board should oversee that the company’s tax

planning strategies are designed and implemented in accordance with the

legal acts in order to avoid faulty practice that is not related to the long-

term interests of the company and its shareholders, which may give rise

to reputational, legal or other risks.

2.1.6. The company should ensure that the supervisory board is provided

with sufficient resources (including financial ones) to discharge their

duties, including the right to obtain all the necessary information or to

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seek independent professional advice from external legal, accounting or

other experts on matters pertaining to the competence of the supervisory

board and its committees.

2.2. Formation of the supervisory board

The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective and

fair corporate governance.

2.2.1. The members of the supervisory board elected by the general

meeting of shareholders should collectively ensure the diversity of

qualifications, professional experience and competences and seek for

gender equality. With a view to maintain a proper balance between the

qualifications of the members of the supervisory board, it should be

ensured that members of the supervisory board, as a whole, should have

diverse knowledge, opinions and experience to duly perform their tasks.

NOT APPLICABLE

Due to its size, it is not expedient

to form the Supervisory Board.

Considering that only collegial

management body - the Board is

formed in the Company. It

performs all essential

management functions and

ensures accountability and control

of the Director of the Company.

2.2.2. Members of the supervisory board should be appointed for a

specific term, subject to individual re-election for a new term in office in

order to ensure necessary development of professional experience.

2.2.3. Chair of the supervisory board should be a person whose current

or past positions constituted no obstacle to carry out impartial activities.

A former manager or management board member of the company should

not be immediately appointed as chair of the supervisory board either.

Where the company decides to depart from these recommendations, it

should provide information on the measures taken to ensure impartiality

of the supervision.

2.2.4. Each member should devote sufficient time and attention to

perform his duties as a member of the supervisory board. Each member

of the supervisory board should undertake to limit his other professional

obligations (particularly the managing positions in other companies) so

that they would not interfere with the proper performance of the duties

of a member of the supervisory board. Should a member of the

supervisory board attend less than a half of the meetings of the

supervisory board throughout the financial year of the company, the

shareholders of the company should be notified thereof.

2.2.5. When it is proposed to appoint a member of the supervisory board,

it should be announced which members of the supervisory board are

deemed to be independent. The supervisory board may decide that,

despite the fact that a particular member meets all the criteria of

independence, he/she cannot be considered independent due to special

personal or company-related circumstances.

2.2.6. The amount of remuneration to members of the supervisory board

for their activity and participation in meetings of the supervisory board

should be approved by the general meeting of shareholders.

2.2.7. Every year the supervisory board should carry out an assessment

of its activities. It should include evaluation of the structure of the

supervisory board, its work organization and ability to act as a group,

evaluation of the competence and work efficiency of each member of the

supervisory board, and evaluation whether the supervisory board has

achieved its objectives. The supervisory board should, at least once a

year, make public respective information about its internal structure and

working procedures.

Principle 3: Management Board

3.1. Functions and liability of the management board

The management board should ensure the implementation of the company’s strategy and good corporate governance with due

regard to the interests of its shareholders, employees and other interest groups.

3.1.1. The management board should ensure the implementation of the

company’s strategy approved by the supervisory board if the latter has

been formed at the company. In such cases where the supervisory board

is not formed, the management board is also responsible for the approval

of the company’s strategy.

The Company does not prepare or

approve separate strategies of

the Company. The Company's

objectives are disclosed in the

Company's annual reports,

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Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf

notices on material events, which

are published on the Company's

website, in Nasdaq Vilnius

regulated notice distribution

system, in the Central Regulated

Information Database.

3.1.2. As a collegial management body of the company, the management

board performs the functions assigned to it by the Law and in the articles

of association of the company, and in such cases where the supervisory

board is not formed in the company, it performs inter alia the supervisory

functions established in the Law. By performing the functions assigned to

it, the management board should take into account the needs of the

company’s shareholders, employees and other interest groups by

respectively striving to achieve sustainable business development.

YES

The Board's functions are

discussed in the Consolidated

Annual Report 11.2. section.

3.1.3. The management board should ensure compliance with the laws

and the internal policy of the company applicable to the company or a

group of companies to which this company belongs. It should also

establish the respective risk management and control measures aimed at

ensuring regular and direct liability of managers.

YES

The Management Board ensures

that the Company complies with

laws and internal policies of the

Company and, it also ensures the

accountability of the management

in accordance with the

established internal measures of

governance and control.

3.1.4. Moreover, the management board should ensure that the

measures included into the OECD Good Practice Guidance

on Internal

Controls, Ethics and Compliance are applied at the company in order to

ensure adherence to the applicable laws, rules and standards.

YES

The Management Board ensures

compliance with applicable laws,

regulations, and standards.

3.1.5. When appointing the manager of the company, the management

board should take into account the appropriate balance between the

candidate’s qualifications, experience and competence.

YES

When appointing the manager of

the company, the management

board takes into account the

candidate’s qualifications,

experience, and competence.

3.2. Formation of the management board

3.2.1. The members of the management board elected by the supervisory

board or, if the supervisory board is not formed, by the general meeting

of shareholders should collectively ensure the required diversity of

qualifications, professional experience and competences and seek for

gender equality. With a view to maintain a proper balance in terms of the

current qualifications possessed by the members of the management

board, it should be ensured that the members of the management board

would have, as a whole, diverse knowledge, opinions and experience to

duly perform their tasks.

YES

The Company follows the

recommendations of this

paragraph. The members of the

management board have the

necessary variety of knowledge,

opinions, and experience to

perform their tasks properly.

3.2.2. Names and surnames of the candidates to become members of the

management board, information on their educational background,

qualifications, professional experience, current positions, other important

professional obligations and potential conflicts of interest should be

disclosed without violating the requirements of the legal acts regulating

the handling of personal data at the meeting of the supervisory board in

which the management board or individual members of the management

board are elected. In the event that the supervisory board is not formed,

the information specified in this paragraph should be submitted to the

general meeting of shareholders. The management board should, on

yearly basis, collect data provided in this paragraph on its members and

disclose it in the company’s annual report.

YES

The curriculum vitae of the

candidates to become members

of the management board and

information on the candidates‘

participation in the activities of

other companies is submitted at

the shareholder meeting together

with draft resolutions without

violating the requirements of the

legal acts regulating the handling

of personal data.

3.2.3. All new members of the management board should be familiarized

with their duties and the structure and operations of the company.

YES

After the election, all members of

the management board shall be

familiarized with their rights and

obligations under the legal acts of

the Republic of Lithuania and the

Articles of Association of the

Company. Members of the

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For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons defined in Article 33(7) of the

Law on Companies of the Republic of Lithuania.

management board are regularly

informed at the Board meetings

and individually, as required or

per own request of the members,

about the Company’s activities

and its changes, material changes

in the legal acts regulating the

Company’s activities, and other

circumstances affecting the

Company’s activities.

3.2.4. Members of the management board should be appointed for a

specific term, subject to individual re-election for a new term in office in

order to ensure necessary development of professional experience and

sufficiently frequent reconfirmation of their status.

YES

According to the Articles of

Association of the Company, the

members of the management

board are elected for a term of

four years, without limiting the

number of their terms. The

Articles of Association of the

Company provide for the

possibility of re-election of the

entire management board or its

individual member

3.2.5. Chair of the management board should be a person whose current

or past positions constitute no obstacle to carry out impartial activity.

Where the supervisory board is not formed, the former manager of the

company should not be immediately appointed as chair of the

management board. When a company decides to depart from these

recommendations, it should furnish information on the measures it has

taken to ensure the impartiality of supervision.

YES

The Chair of the Management

Board is a person who has never

been the manager of the

Company. The Chair of the

Company’s Management Board is

not an employee of the Company

and is a Company’s shareholder.

It is the Company’s belief that

these facts are sufficient to state

that the Chair of the Management

Board is capable of acting

impartially and taking decisions

which represent and protect the

rights of shareholders.

3.2.6. Each member the management board should give sufficient time

and attention to perform the duties of a member of the Board. If a

member of the management Board participated in less than half of the

board meetings during the financial year of the Company, the Company's

Supervisory Board should be informed if the Supervisory Board is not

formed in the Company - the General Shareholder Meeting.

YES

In 2021, the Management Board

members attended the

Management Board meetings (a

quorum was present during all

meetings), with each member

devoting sufficient time to

perform the duties of the

Management Board member.

3.2.7. In the event that the management board is elected in the cases

established by the Law where the supervisory board is not formed at the

company, and some of its members will be independent

, it should be

announced which members of the management board are deemed as

independent. The management board may decide that, despite the fact

that a particular member meets all the criteria of independence

established by the Law, he/she cannot be considered independent due to

special personal or company-related circumstances.

The Board was re-elected until

2018, i.e. until the amendments

to the Law enter into force.

Therefore the evaluation of the

independence of the Board

members has not been carried

out.

3.2.8. The general meeting of shareholders of the company should

approve the amount of remuneration to the members of the management

board for their activity and participation in the meetings of the

management board.

NOT APPLICABLE

No remuneration is paid to the

members of the Board. As the

members of the Board are also

shareholders of the Company,

more detailed information on

dividends paid to the members of

the Board as well as other

amounts of cash and guarantees

provided is disclosed in paragraph

14 of the Annual Report.

3.2.9.The members of the management board should act in good faith,

with care and responsibility for the benefit and the interests of the

YES

According to the information

available to the Company, the

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company and its shareholders with due regard to other stakeholders.

When adopting decisions, they should not act in their personal interest;

they should be subject to no-compete agreements and they should not

use the business information or opportunities related to the company’s

operations in violation of the company’s interests.

members of the Management

Board act in good faith with

respect to the Company, following

the interests of the Company and

not their own or those of third

parties, adhering to the principles

of honesty, reasonableness,

confidentiality, and responsibility,

trying to remain independent

during the decision-making.

3.2.10. Every year the management board should carry out an

assessment of its activities. It should include evaluation of the structure

of the management board, its work organization and ability to act as a

group, evaluation of the competence and work efficiency of each member

of the management board, and evaluation whether the management

board has achieved its objectives. The management board should, at

least once a year, make public respective information about its internal

structure and working procedures in observance of the legal acts

regulating the processing of personal data.

YES

The Board once a year conducts

self-assessment of its activities.

Principle 4: Rules of procedure of the supervisory board and the management board of the company

The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure

efficient operation and decision-making of these bodies and promote active cooperation between the company’s management

bodies.

4.1. The management board and the supervisory board, if the latter is

formed at the company, should act in close cooperation in order to attain

benefit for the company and its shareholders. Good corporate governance

requires an open discussion between the management board and the

supervisory board. The management board should regularly and, where

necessary, immediately inform the supervisory board about any matters

significant for the company that are related to planning, business

development, risk management and control, and compliance with the

obligations at the company. The management board should inform he

supervisory board about any derogations in its business development

from the previously formulated plans and objectives by specifying the

reasons for this.

YES/NO

The Supervisory Board is not

formed. Nevertheless, the Board

and the Director acts in close

cooperation seeking to obtain the

maximum benefit for the

Company and its shareholders.

The Board periodically reviews

and assesses Company’s activity

results.

4.2. It is recommended that meetings of the company’s collegial bodies

should be held at the respective intervals, according to the pre-approved

schedule. Each company is free to decide how often meetings of the

collegial bodies should be convened but it is recommended that these

meetings should be convened at such intervals that uninterruptable

resolution of essential corporate governance issues would be ensured.

Meetings of the company’s collegial bodies should be convened at least

once per quarter.

YES

The Board meetings are held at

least once per quarter.

4.3. Members of a collegial body should be notified of the meeting being

convened in advance so that they would have sufficient time for proper

preparation for the issues to be considered at the meeting and a fruitful

discussion could be held and appropriate decisions could be adopted.

Along with the notice of the meeting being convened all materials relevant

to the issues on the agenda of the meeting should be submitted to the

members of the collegial body. The agenda of the meeting should not be

changed or supplemented during the meeting, unless all members of the

collegial body present at the meeting agree with such change or

supplement to the agenda, or certain issues that are important to the

company require immediate resolution.

YES

The Board meetings are being

convened by the Chairman. The

Chairman of the Board informs

members about the meeting by

phone or by email.

4.4. In order to coordinate the activities of the company’s collegial bodies

and ensure effective decision-making process, the chairs of the

company’s collegial supervision and management bodies should mutually

agree on the dates and agendas of the meetings and close cooperate in

resolving other matters related to corporate governance. Meetings of the

company’s supervisory board should be open to members of the

management board, particularly in such cases where issues concerning

the removal of the management board members, their responsibility or

remuneration are discussed.

The Company may not implement

this recommendation since only

the Board is formed.

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The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the Republic of Lithuania provides

that public-interest entities (including but not limited to public limited liability companies whose securities are traded on a regulated market of the Republic of Lithuania and/or

of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit committee may

be carried out by the collegial body performing the supervisory functions).

Principle 5: Nomination, remuneration and audit committees

5.1. Purpose and formation of committees

The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory

board is not formed, of the management board which performs the supervisory functions by ensuring that decisions are based on

due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of interest.

Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body

with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by the collegial

body.

5.1.1. Taking due account of the company-related circumstances and the

chosen corporate governance structure, the supervisory board of the

company or, in cases where the supervisory board is not formed, the

management board which performs the supervisory functions, establishes

committees. It is recommended that the collegial body should form the

nomination, remuneration and audit committees

YES/NO

Due to the Company’s

management type, transfer of the

management of the Company and

an absence of employees, the

Nomination and Remuneration

Committees are not formed. Audit

Committee members are elected

by the General Shareholders

Meeting.

5.1.2. Companies may decide to set up less than three committees. In

such case companies should explain in detail why they have chosen the

alternative approach, and how the chosen approach corresponds with the

objectives set for the three different committees.

5.1.3. In the cases established by the legal acts the functions assigned to

the committees formed at companies may be performed by the collegial

body itself. In such case the provisions of this Code pertaining to the

committees (particularly those related to their role, operation and

transparency) should apply, where relevant, to the collegial body as a

whole.

5.1.4. Committees established by the collegial body should normally be

composed of at least three members. Subject to the requirements of the

legal acts, committees could be comprised only of two members as well.

Members of each committee should be selected on the basis of their

competences by giving priority to independent members of the collegial

body. The chair of the management board should not serve as the chair

of committees.

5.1.5. The authority of each committee formed should be determined by

the collegial body itself. Committees should perform their duties

according to the authority delegated to them and regularly inform the

collegial body about their activities and performance on a regular basis.

The authority of each committee defining its role and specifying its rights

and duties should be made public at least once a year (as part of the

information disclosed by the company on its governance structure and

practice on an annual basis). In compliance with the legal acts regulating

the processing of personal data, companies should also include in their

annual reports the statements of the existing committees on their

composition, the number of meetings and attendance over the year as

well as the main directions of their activities and performance.

5.1.6. With a view to ensure the independence and impartiality of the

committees, the members of the collegial body who are not members of

the committees should normally have a right to participate in the

meetings of the committee only if invited by the committee. A committee

may invite or request that certain employees of the company or experts

would participate in the meeting. Chair of each committee should have

the possibility to maintain direct communication with the shareholders.

Cases where such practice is to be applied should be specified in the rules

regulating the activities of the committee.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 83

5.2. Nomination committee

5.2.1. The key functions of the nomination committee should be the

following:

1) to select candidates to fill vacancies in the membership of supervisory

and management bodies and the administration and recommend the

collegial body to approve them. The nomination committee should

evaluate the balance of skills, knowledge and experience in the

management body, prepare a description of the functions and capabilities

required to assume a particular position and assess the time commitment

expected;

2) assess, on a regular basis, the structure, size and composition of the

supervisory and management bodies as well as the skills, knowledge and

activity of its members, and provide the collegial body with

recommendations on how the required changes should be sought;

3) devote the attention necessary to ensure succession planning.

NOT APPLICABLE

Due to simplicity of the

Company’s management

structure and small number of

employees, it is not expedient to

form the Nomination and

Remuneration committees.

5.2.2. When dealing with issues related to members of the collegial body

who have employment relationships with the company and the heads of

the administration, the manager of the company should be consulted by

granting him/her the right to submit proposals to the Nomination

Committee.

5.3. Remuneration committee

The main functions of the remuneration committee should be as

follows:

1) submit to the collegial body proposals on the remuneration policy

applied to members of the supervisory and management bodies and

the heads of the administration for approval. Such policy should

include all forms of remuneration, including the fixed-rate

remuneration, performance-based remuneration, financial incentive

schemes, pension arrangements and termination payments as well as

conditions which would allow the company to recover the amounts or

suspend the payments by specifying the circumstances under which it

would be expedient to do so;

2) submit to the collegial body proposals regarding individual

remuneration for members of the collegial bodies and the heads of the

administration in order to ensure that they would be consistent with

the company’s remuneration policy and the evaluation of the

performance of the persons concerned;

3) review, on a regular basis, the remuneration policy and its

implementation.

NOT APPLICABLE

Due to simplicity of the

Company’s management

structure and small number of

employees, it is not expedient to

form the Nomination and

Remuneration committees.

5.4. Audit committee

5.4.1. The key functions of the audit committee are defined in the legal

acts regulating the activities of the audit committee .

YES

In its activities, the Audit

Committee of the Company

follows the legal acts regulating

the activities of the Audit

Committee, as well as the

regulations of the Audit

Committee approved by the

General Meeting of Shareholders

of the Company.

5.4.2. All members of the committee should be provided with detailed

information on specific issues of the company’s accounting system,

finances and operations. The heads of the company’s administration

should inform the audit committee about the methods of accounting for

significant and unusual transactions where the accounting may be subject

to different approaches.

YES

The members of the Committee

shall be provided with all the

detailed information necessary for

the performance of its functions.

5.4.3. The audit committee should decide whether the participation of the

chair of the management board, the manager of the company, the chief

finance officer (or senior employees responsible for finance and

accounting), the internal and external auditors in its meetings is required

(and, if required, when). The committee should be entitled, when needed,

YES

After the members of the Audit

Committee decide who must

attend the meeting of the

Committee, these persons shall

be invited, ensuring that the

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 84

to meet the relevant persons without members of the management

bodies present.

members of the managerial

bodies would not be present at

the same meeting.

5.4.4. The audit committee should be informed about the internal

auditor’s work program and should be furnished with internal audit

reports or periodic summaries. The audit committee should also be

informed about the work program of external auditors and should receive

from the audit firm a report describing all relationships between the

independent audit firm and the company and its group.

NOT APPLICABLE

Due to the size of the Company,

the Company does not have an

internal audit function

5.4.5. The audit committee should examine whether the company

complies with the applicable provisions regulating the possibility of

lodging a complaint or reporting anonymously his/her suspicions of

potential violations committed at the company and should also ensure

that there is a procedure in place for proportionate and independent

investigation of such issues and appropriate follow-up actions.

NOT APPLICABLE

Due to the size of the Company,

the audit committee does not

examine paragraph 5.4.5.

5.4.6. The audit committee should submit to the supervisory board or,

where the supervisory board is not formed, to the management board its

activity report at least once in every six months, at the time that annual

and half-yearly reports are approved.

YES/NO

The activity report is submitted

once a year, together with the

annual ordinary shareholders

meeting.

Principle 6: Prevention and disclosure of conflicts of interest

The corporate governance framework should encourage members of the company’s supervisory and management bodies to avoid

conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to members of

the supervisory and management bodies.

Any member of the company’s supervisory and management body should

avoid a situation where his/her personal interests are or may be in conflict

with the company’s interests. In case such a situation did occur, a

member of the company’s supervisory or management body should,

within a reasonable period of time, notify other members of the same

body or the body of the company which elected him/her or the company’s

shareholders of such situation of a conflict of interest, indicate the nature

of interests and, where possible, their value.

YES

Management board members

avoid situations where their

personal interests may be in

conflict with the Company’s

interests.

Principle 7: Remuneration policy of the company

The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent

potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the

administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long-term

strategy.

7.1. The company should approve and post the remuneration policy on

the website of the company; such policy should be reviewed on a regular

basis and be consistent with the company’s long-term strategy.

YES

The remuneration policy is

published on the Company's

website.

7.2. The remuneration policy should include all forms of remuneration,

including the fixed-rate remuneration, performance-based remuneration,

financial incentive schemes, pension arrangements and termination

payments as well as the conditions specifying the cases where the

company can recover the disbursed amounts or suspend the payments.

YES/NO

The Manager of the Company

receives only a fixed-rate

remuneration .

7.3. With a view to avoid potential conflicts of interest, the remuneration

policy should provide that members of the collegial bodies which perform

the supervisory functions should not receive remuneration based on the

company’s performance.

YES

The members of the Board of the

Company may only be paid up

with annual bonuses, which shall

be granted by the decision of the

General Meeting of Shareholders

of the Company in accordance

with the procedure established by

legal acts and appointment

thereof shall be disclosed in the

consolidated annual report of the

Company.

7.4. The remuneration policy should provide sufficient information on the

policy regarding termination payments. Termination payments should not

exceed a fixed amount or a fixed number of annual wages and in general

NOT APPLICABLE

The Company’s Remuneration

Policy does

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 85

should not be higher than the non-variable component of remuneration

for two years or the equivalent thereof. Termination payments should not

be paid if the contract is terminated due to inadequate performance.

7.5. In the event that the financial incentive scheme is applied at the

company, the remuneration policy should contain sufficient information

about the retention of shares after the award thereof. Where

remuneration is based on the award of shares, shares should not be

vested at least for three years after the award thereof. After vesting,

members of the collegial bodies and heads of the administration should

retain a certain number of shares until the end of their term in office,

subject to the need to compensate for any costs related to the acquisition

of shares.

NOT APPLICABLE

The Company has no system of

employee incentivisation or

remuneration with Company

shares.

7.6. The company should publish information about the implementation

of the remuneration policy on its website, with a key focus on the

remuneration policy in respect of the collegial bodies and managers in the

next and, where relevant, subsequent financial years. It should also

contain a review of how the remuneration policy was implemented during

the previous financial year. The information of such nature should not

include any details having a commercial value. Particular attention should

be paid on the major changes in the company’s remuneration policy,

compared to the previous financial year.

YES

The remuneration policy is

published on the Company's

website.

7.7. It is recommended that the remuneration policy or any major change

of the policy should be included on the agenda of the general meeting of

shareholders. The schemes under which members and employees of a

collegial body receive remuneration in shares or share options should be

approved by the general meeting of shareholders.

YES

The Company's remuneration

policy and its amendments are

approved by the Company's

General Meeting of Shareholders.

Principle 8: Role of stakeholders in corporate governance

The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements and

encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial sustainability.

In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local

community and other persons having certain interests in the company concerned.

8.1. The corporate governance framework should ensure that the rights

and lawful interests of stakeholders are protected.

YES

The Company respects the rights

of stakeholders and their

legitimate interests.

8.2. The corporate governance framework should create conditions for

stakeholders to participate in corporate governance in the manner

prescribed by law. Examples of participation by stakeholders in corporate

governance include the participation of employees or their

representatives in the adoption of decisions that are important for the

company, consultations with employees or their representatives on

corporate governance and other important matters, participation of

employees in the company’s authorized capital, involvement of creditors

in corporate governance in the cases of the company’s insolvency, etc.

YES

All stakeholders are provided with

the possibility to participate in

corporate governance in the

manner prescribed by law.

8.3. Where stakeholders participate in the corporate governance process,

they should have access to relevant information.

YES

The stakeholders involved in the

corporate governance process

shall be granted access to the

necessary information, without

prejudice to the interests of the

Company and other related

parties.

8.4. Stakeholders should be provided with the possibility of reporting

confidentially any illegal or unethical practices to the collegial body

performing the supervisory function.

The Company does not provide

possibility of reporting

confidentially any illegal or

unethical practices

Principle 9: Disclosure of information

The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues, including

the financial situation, operations and governance of the company.

9.1. In accordance with the company’s procedure on confidential

information and commercial secrets and the legal acts regulating the

processing of personal data, the information publicly disclosed by the

company should include but not be limited to the following:

YES

The information referred to below

in this recommendation is

disclosed in notifications of

material events published

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 86

through the Nasdaq Vilnius

Information Disclosure System,

the Company’s website, and the

Company’s annual and interim

information documents, to the

extent required by legislation and

the International Financial

Reporting Standards applicable in

the European Union. The

information is also disclosed in

presentations to investors of the

Company.

9.1.1. operating and financial results of the company;

YES

Company publishes interim and

annual reports.

9.1.2. objectives and non-financial information of the company;

YES

Company publishes interim and

annual reports.

9.1.3. persons holding a stake in the company or controlling it directly

and/or indirectly and/or together with related persons as well as the

structure of the group of companies and their relationships by specifying

the final beneficiary;

YES

Published on the Company's

website.

9.1.4. members of the company’s supervisory and management bodies

who are deemed independent, the manager of the company, the shares

or votes held by them at the company, participation in corporate

governance of other companies, their competence and remuneration;

YES

Information is provided on the

Company’s website and in its

interim and annual reports

9.1.5. reports of the existing committees on their composition, number

of meetings and attendance of members during the last year as well as

the main directions and results of their activities;

The Company does not provide

information related to this item.

9.1.6. potential key risk factors, the company’s risk management and

supervision policy;

YES

The Company does not provide

information related to this item.

9.1.7. the company’s transactions with related parties;

YES

The Company publishes on its

website the general risk factors of

the business area in which the

Group operates; group-specific

risk factors; risk factors related to

the Company's shares.

9.1.8. main issues related to employees and other stakeholders (for

instance, human resource policy, participation of employees in corporate

governance, award of the company’s shares or share options as

incentives, relationships with creditors, suppliers, local community, etc.);

YES

The Company publishes the

Company's transactions with

related parties on its website.

9.1.9. structure and strategy of corporate governance;

YES

The information is provided in

interim and annual reports.

9.1.10. initiatives and measures of social responsibility policy and anti-

corruption fight, significant current or planned investment projects.

This list is deemed minimum and companies are encouraged not to

restrict themselves to the disclosure of information included into this list.

This principle of the Code does not exempt companies from their

obligation to disclose information as provided for in the applicable legal

acts.

NOT APPLICABLE

Due to the size of the Company,

minimum information related to

the environment, employees,

research and development is

published.

9.2. When disclosing the information specified in paragraph 9.1.1 of

recommendation 9.1, it is recommended that the company which is a

parent company in respect of other companies should disclose

information about the consolidated results of the whole group of

companies.

YES

The Company prepares a

consolidated report and

consolidated financial statements

9.3. When disclosing the information specified in paragraph 9.1.4 of

recommendation 9.1, it is recommended that the information on the

professional experience and qualifications of members of the company’s

supervisory and management bodies and the manager of the company

as well as potential conflicts of interest which could affect their decisions

should be provided. It is further recommended that the remuneration or

other income of members of the company’s supervisory and management

YES

The Company discloses in its

consolidated annual report

information on the total amount

of annual remuneration and other

income paid to the Company’s key

management and members of the

managerial bodies, as well as

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 87

bodies and the manager of the company should be disclosed, as provided

for in greater detail in Principle 7.

education, qualifications and

participation in the activities and

capital of other companies.

9.4. Information should be disclosed in such manner that no shareholders

or investors are discriminated in terms of the method of receipt and scope

of information. Information should be disclosed to all parties concerned

at the same time.

YES

The Company publishes all

information through the

information disclosure system of

the Nasdaq Vilnius Stock

Exchange and on the Company's

website so that it is accessible to

everyone and at the same time.

Principle 10: Selection of the company’s audit firm

The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.

10.1. With a view to obtain an objective opinion on the company’s

financial condition and financial results, the company’s annual financial

statements and the financial information provided in its annual report

should be audited by an independent audit firm.

YES

The Company is audited by an

independent audit company UAB

PricewaterhouseCoopers

10.2. It is recommended that the audit firm would be proposed to the

general meeting of shareholders by the supervisory board or, if the

supervisory board is not formed at the company, by the management

board of the company.

YES

The management board of the

Company (manager in AB Pieno

logistika of the Company Group)

submits the candidacy of the audit

company to the meeting of

shareholders. The Audit Company

shall be approved by the general

meeting of shareholders of the

Company.

10.3. In the event that the audit firm has received remuneration from the

company for the non-audit services provided, the company should

disclose this publicly. This information should also be available to the

supervisory board or, if the supervisory board is not formed at the

company, by the management board of the company when considering

which audit firm should be proposed to the general meeting of

shareholders.

YES

In 2021 the audit firm did not

provided non audit services.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 88

APPENDIX 3. COMPANY'S MANAGEMENT REPORT

(Prepared in accordance with the Law of the Republic of Lithuania on Financial Reporting by Undertakings (IX-575) in force from 1

January 2021)

1. reference to the applicable corporate governance code and the place of its publication, and (or) reference to the

all necessary published information regarding management practices of the entity

The Company discloses the information regarding the compliance with the applicable Corporate Governance Code in Appendix

2 of the consolidated report of 2021. The Company publishes its annual reports in the website of the Company (Company‘s

web site section „Investor Relations“ → „Reports“. The link: https://invlbalticfarmland.com/en/investor-relations/financial-

information-and-reports/).

2. in case of derogation from the provisions of the applicable corporate governance code and (or) when the

provisions are not complied with, such provisions and the reasons thereof shall be indicated

The Company discloses such information in 2 table sections “Yes/No/Irrelevant” and “Commentary” of Appendix 2 of the

consolidated report of 2021 “Corporate Governance Code“. The company will provide an explanation in the " Commentary"

section in all cases follow the recommendations.

3. information regarding the level of risk and risk management – management of risks related to the financial

reporting, risk mitigation measures, and internal control systems implemented at the entity shall be described

The Company provides information regarding the level of risk, risk management, and implemented internal control systems,

as well as the measures, in Clause 16.3. of the consolidated report of 2021.

4. information regarding significant directly or indirectly managed holdings

The Company provides information regarding the significant directly or indirectly managed holdings in Note 5 of the explanatory

note of the financial statements of 2021.

5. Information regarding transactions with related parties, according to the Law on Companies article 37

(by

specifying the counterparty (legal form, name, code, register of the legal entity in which the person is stored, premises

(address); name, surname, address of the natural person and the value of the transaction);

Information regarding Transactions with Related Parties, according to the Law on Companies article 372 , is published on the

Company‘s web site – „For Investors“ → „Related parties transactions“. The link to the Company‘s web site:

https://invlbalticfarmland.com/en/investor-relations/legal-documents/

The Company provides information about Transactions with Related Parties at the moment of the release of the Annual report:

At the time the report was published, the Company provides information about Company‘s Transactions with Related Parties

published on the Company's web site:

Related party

Company’s

relationship with

the other

counterparty

Date and value of the transaction

Other

information

Avižėlė, UAB

Code 303113077

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/01 of 30-12-2016 for the amount of EUR 136

thousand. The loan was repaid on 31-12-2019.

On 29th January 2019 loan agreement No. BFARM/190129/01 for

the amount of EUR 4 thousand. The loan was repaid on 31-12-

2019.

On 31st December 2019 loan agreement No. BFARM/191231/01 for

the amount of EUR 139,586.90 The loan was repaid on 31-12-2020.

On 31st December 2020 loan agreement No. BFARM /201231/01

for the amount of EUR 138,561.80. The loan was repaid on 31-12-

2021.

On 31st December 2021 loan agreement No. BFARM/211231/06 for

the amount of EUR 133,929.88.

Beržytė, UAB

Code 30112915

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/171229/01 of 29-12-2017 for the amount of EUR 305

thousand. The loan was repaid on 31-12-2019.

On 29th January 2019 loan agreement No. BFARM/190129/02 for

the amount of EUR 15 thousand. The loan was repaid on 31-12-

2019

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 89

On 31st December 2019 loan agreement No. BFARM/191231/02 for

the amount of EUR 310,210.71. The loan was repaid on 31-12-

2020.

On 28th December 2020 loan agreement No. BFARM/201228/01 for

the amount of EUR 10 thousand. The loan was repaid on 31-12-

2020.

On 31st December 2020, loan agreement No. BFARM /201231/02

for the amount of EUR 306,794.28.

On 6th December 2021 loan agreement No. BFARM/211206/02 for

the amount of EUR 15 thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/201231/02 of 31-12-2020 for the amount of EUR 290

thousand.

Dirvolika, UAB

Code 303112954

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/03 of 31-12-2014 for the amount of EUR 215

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/141231/03 of 31-12-2014 for the amount of EUR 205

thousand.

On 31st December 2020, loan agreement No. BFARM /141231/03

for the amount of EUR 191 thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/141231/03 of 31-12-2014 for the amount of EUR 170

thousand.

Duonis, UAB

Code 303112790

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/03 of 30-12-2016 for the amount of EUR 270

thousand. The loan was repaid on 31-12-2019.

On 29th January 2019 loan agreement No. BFARM/190129/03 for

the amount of EUR 10 thousand. The loan was repaid on 31-12-

2019.

On 19th December 2019 loan agreement No. BFARM/191219/01 for

the amount of EUR 5 thousand. The loan was repaid on 31-12-

2019.

On 31st December 2019 loan agreement No. BFARM/191231/03 for

the amount of EUR 263,028.03.

On 31st December 2020 partial modification of the loan agreement

BFARM / 191231/03 of 31-12-2019 for the loan amount of EUR 253

thousand.

On 31st December 2021 partial modification of the loan agreement

BFARM / 191231/03 of 31-12-2019 for the loan amount of EUR 235

thousand.

Žemgalė, UAB

Code 303112744

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/04 of 30-12-2016 for the amount of EUR 297

thousand. The loan was repaid on 31-12-2019.

On 29th January 2019 loan agreement No. BFARM/190129/04 for

the amount of EUR 8 thousand. The loan was repaid on 31-12-

2019.

On 31st December 2019 loan agreement No. BFARM/191231/04 for

the amount of EUR 283,842.84. The loan was repaid on 31-12-

2020.

On 30th December 2020 loan agreement No. BFARM / 200630/01

for the amount of EUR 1,000. The loan was repaid on 31-12-2019.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 90

On 31st December 2020 loan agreement No. BFARM / 201231/03

for the amount of EUR 269,899.47.

On 6th December 2021 loan agreement No. BFARM/211206/01 for

the amount of EUR 10 thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/201231/03 of 31-12-2020 for the amount of EUR 240

thousand.

Linažiedė, UAB

Code 303112922

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/06 of 31-12-2014 for the amount of EUR 88

thousand.

On 29th January 2019 loan agreement No. BFARM/190129/05 for

the amount of EUR 7 thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/141231/06 of 31-12-2014 for the amount of EUR 83

thousand. The loan was repaid on 31-12-2020.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/190129/05 of 29-01-2019 for the amount of EUR 7

thousand. The loan was repaid on 31-12-2020.

On 31st December 2020, loan agreement No. BFARM /201231/04

for the amount of EUR 82,738.20.

On 31st December 2021, loan agreement No. BFARM/211231/01

for the amount of EUR 5 thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/201231/04 of 31-12-2020 for the amount of EUR 75

thousand.

Puškaitis, UAB

Code 303112769

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/07 of 31-12-2014 for the amount of EUR 320

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/141231/07 of 31-12-2014 for the amount of EUR 300

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM/141231/07 of 31-12-2014 for the amount of EUR 300

thousand.

On 6th December 2021, loan agreement No BFARM/211206/03 for

the amount of EUR 20 thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/141231/07 of 31-12-2014 for the amount of EUR 200

thousand.

Kvietukas, UAB

Code 303112687,

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/05 of 30-12-2016 for the amount of EUR 179

thousand.

On 29th January 2019 loan agreement No. BFARM/190129/06 for

the amount of EUR 11 thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/161230/05 of 30-12-2016 for the amount of EUR 139

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/190129/06 of 29-01-2019 for the amount of EUR 11

thousand.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 91

On 31st December 2020 partial modification of the loan agreement

No. BFARM/161230/05 of 30-12-2016 for the amount of EUR 112

thousand.

On 31th December 2020 partial modification of the loan agreement

No. BFARM/190129/06 of 29-01-2019 for the amount of EUR 11

thousand.

On 31th December 2021 partial modification of the loan agreement

No. BFARM/161230/05 of 31-12-2021 for the amount of EUR 99

thousand.

On 31th December 2021 partial modification of the loan agreement

No. BFARM/190129/06 of 29-01-2019 for the amount of EUR 11

thousand.

Laukaitis, UAB

Code 303112694

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/06 of 30-12-2016 for the amount of EUR 259

thousand. The loan was repaid on 31-12-2019.

On 29th January 2019 loan agreement No. BFARM/190129/07 for

the amount of EUR 11 thousand. The loan was repaid on 31-12-

2019.

On 19th December 2019 loan agreement No. BFARM/191219/02 for

the amount of EUR 10 thousand. The loan was repaid on 31-12-

2019.

On 31st December 2019 loan agreement No. BFARM/191231/05 for

the amount of EUR 258,210.94. The loan was repaid on 31-12-

2020.

On 28th December 2020 loan agreement No. BFARM / 201228/02

for the amount of EUR 10 thousand. The loan was repaid on 31-12-

2020.

On 31st December 2020 loan agreement No. BFARM / 201231/05

for the amount of EUR 246.843,39. The loan was repaid on 31-12-

2021.

On 31st January 2021 loan agreement No. BFARM/211231/02 for

the amount of EUR 232,247.82.

Vasarojus, UAB

Code 303112776

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/171229/02 of 23-12-2017 for the amount of EUR 645

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/171229/02 of 23-12-2017 for the amount of EUR 640

thousand.

On 31th December 2020 partial modification of the loan agreement

No. BFARM / 171229/02 of 29-12-2017 for the amount of EUR 640

thousand.

On 31th December 2021 partial modification of the loan agreement

No. BFARM/171229/02 of 29-12-2017 for the amount of EUR 605

thousand.

Lauknešys, UAB

Code 303112655

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/11 of 31-12-2014 for the amount of EUR 147

thousand. The loan was repaid on 31-12-2019.

On 31st December 2019 loan agreement No. BFARM/191231/06 for

the amount of EUR 134,437.12.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 191231/06 of 31-12-2019 for the amount of EUR 134

thousand. The loan was repaid on 31-12-2021.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 92

On 31st December 2021 loan agreement No. BFARM/211231/03 for

the amount of EUR 112,937.94.

Žiemkentys, UAB

Code 303112648

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/12 of 31-12-2014 for the amount of EUR 498

thousand.

On 25th March 2019 loan agreement No. BFARM/190325/01 for the

amount of EUR 5 thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/141231/12 of 31-12-2014 for the amount of EUR 465

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/190325/01 of 25-03-2019 for the amount of EUR 5

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 141231/12 of 31.12.2014 for the amount of EUR 440

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 190325/01 of 25/03/2019 for the amount of EUR 5

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/141231/12 of 31/12/2014 for the amount of EUR 395

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/190325/01 of 25/03/2019 for the amount of EUR 5

thousand.

Pušaitis, UAB

Code 303113102

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/141231/13 of 31-12-2014 for the amount of EUR 112

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/141231/13 of 31-12-2014 for the amount of EUR 110

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 141231/13 of 31-12-2014 for the amount of EUR 98

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/141231/13 of 31-12-2014 for the amount of EUR 95

thousand.

Sėja, UAB

Code 303113013

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/171229/03 of 29-12-2017 for the amount of EUR 100

thousand.

On 29th January 2019 loan agreement No. BFARM/190129/08 for

the amount of EUR 10 thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/171229/03 of 29-12-2017 for the amount of EUR 100

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/190129/08 of 29-01-2019 for the amount of EUR 10

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 171229/03 of 29-12-2017 for the amount of EUR 60

thousand.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 93

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 190129/08 of 29-01-2019 for the amount of EUR 10

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/171229/03 of 29-12-2017 for the amount of EUR 30

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM / 190129/08 of 29-01-2019 for the amount of EUR 10

thousand.

Žemynėlė, UAB

Code 303112559,

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 14th November 2018 loan agreement No. BFARM/181114/02 for

the amount of EUR 7 thousand.

On 31st December 2018 partial modification of the loan agreement

No. BFARM/161230/07 of 30-12-2016 for the amount of EUR 120

thousand. The loan was repaid on 31-12-2019.

On 31st December 2018 partial modification of the loan agreement

No. BFARM/181114/02 of 14-11-2018 for the amount of EUR 7

thousand. The loan was repaid on 31-12-2019.

On 31st December 2019 loan agreement No. BFARM/191231/07 for

the amount of EUR 124,082.31.

On 28th December 2020 loan agreement No. BFARM / 201228/03

for the amount of EUR 7 thousand. The loan was repaid on 31-12-

2021.

On 31st December 2020 partial modification of the loan agreement

No. BFARM / 191231/07 of 31-12-2019 for the amount of EUR 112

thousand. The loan was repaid on 31-12-2021.

On 31st December 2021 loan agreement No. BFARM/211231/04 for

the amount of EUR 113,511.67.

Žalvė, UAB

Code 303113045,

Gynėjų str. 14,

Vilnius, Lithuania

Entities

100 percent

managed by INVL

Baltic Farmland,

On 14th November 2018 loan agreement No. BFARM/181114/01 for

the amount of EUR 18 thousand.

On 31st December 2018 partial modification of the loan agreement

No. BFARM/171229/04 of 29-12-2017 for the amount of EUR 232

thousand. The loan was repaid on 31-12-2019.

On 31st December 2018 partial modification of the loan agreement

No. BFARM/181114/01 of 14-11-2018 for the amount of EUR 18

thousand. The loan was repaid on 31-12-2019.

On 31st December 2019 loan agreement No. BFARM/191231/03 for

the amount of EUR 10 thousand. The loan was repaid on 31-12-

2019.

On 31st December 2019 loan agreement No. BFARM/191231/08 for

the amount of EUR 232,373.22 The loan was repaid on 31-12-2020.

On 28th December 2020 loan agreement No. BFARM / 201228/04

for the amount of EUR 10 thousand. The loan was repaid on 31-12-

2020. The loan was repaid on 31-12-2021.

On 31st December 2020 loan agreement No. BFARM / 201231/06

for the amount of EUR 211,711.73. The loan was repaid on 31-12-

2021.

On 31st December 2021 loan agreement No. BFARM/211231/05 for

the amount of EUR 196,065.56.

Ekotra, UAB

Code 303112623

Gynėjų str. 14,

Vilnius, Lithuania

100 percent

managed by INVL

Baltic Farmland,

On 31st December 2018 partial modification of the loan agreement

No. BFARM/151231/01 of 31-12-2015 for the amount of EUR 312

thousand.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 94

Entities

On 19th December 2019 loan agreement No. BFARM/191219/04 for

the amount of EUR 10 thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/151231/01 of 31-12-2015 for the amount of EUR 280

thousand.

On 31st December 2019 partial modification of the loan agreement

No. BFARM/191219/04 of 19-12-2019 for the amount of EUR 10

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM/151231/01 of 31-12-2015 for the amount of EUR 280

thousand.

On 31st December 2020 partial modification of the loan agreement

No. BFARM/191219/04 of 19-12-2019 for the amount of EUR 10

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/151231/01 of 31-12-2015 for the amount of EUR 220

thousand.

On 31st December 2021 partial modification of the loan agreement

No. BFARM/191219/04 of 19-12-2019 for the amount of EUR 10

thousand.

1. information regarding the shareholders who have special rights of control and the description of such rights

There are no shareholders having special rights of control in the Company.

2. information regarding all current restrictions on voting rights (such as the restrictions on voting rights of persons having

a certain percentage or number of the votes, the deadlines by which voting rights may be exercised or systems, according to

which the property rights granted by the securities are to be separated from the holder of those securities)

No restrictions on voting rights are applied in the Company.

3. information regarding the rules governing the appointment and dismissal of board members, as well as the

amendment of the company’s articles of association

The Board members of the Company act in accordance with the Law on Companies of the Republic of Lithuania, Articles of

Association of the Company, Rules of Procedure of the Board, as well as other applicable legislation. The Board members of the

Company always act for the benefit of the Company and its shareholders.

The procedure for changing the Articles of Association of INVL Baltic Farmland is no different from stated in the Law on

Companies of the Republic of Lithuania.

4. information regarding the powers of the board members

The Board members of the Company act in accordance with the Law on Companies of the Republic of Lithuania, Articles of

Association of the Company, Rules of Procedure of the Board, as well as other applicable legislation, and have no special powers.

The Board members of the Company always act for the benefit of the Company and its shareholders.

5. information regarding the competence of the general meeting of shareholders, the rights of shareholders and

implementation thereof, if such information is not established in the applicable legislation

The company provides information regarding the competence of the general meeting of shareholders, the rights of shareholders,

and implementation thereof, as well as the procedure for convening the meetings of shareholders, in Clause 11.1.2. of the

consolidated annual report of 2021.

6. information regarding the composition of the management, supervisory bodies, and the committees thereof, as

well as the fields of activity of the aforesaid bodies and the manager of the company

The company provides information on the Board members of the Company, the director, Audit Committee Members of the

Company in Clauses 11.2, 11.3. and 13 of the consolidated annual report of 2021, defining the boundaries of the management's

activities, also mentions other important information related to the positions held.

7. description of diversity policy applicable in appointing the manager of the company, management, and supervisory

bodies, related to the aspects such as age, gender, education, professional experience; objectives of such policy,

methods of implementation thereof, and results of the reference period. if the diversity policy is not applied, the

reasons thereof shall be indicated

Taking into account the current organizational structure of the company and the fact that the administration of the INVL Baltic

Farmland group owned land, according to the basic property administration agreement signed on 30 June 2015, is transmitted

to the owned company INVL Farmland Management, INVL Baltic Farmland, as the company has signed the property

administration agreement it employs a minimum number of people; election of the members of the Board the Company as well

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 95

as the manager of the Company is not subject to diversity policies. On 28 December 2020 December 28 the Basic Property

Administration Agreement’s Amendment No. 20150630/01 was concluded, based on which the term of the Basic Property

Administration Agreement was extended until 31 December 2025.

8. Information on all agreements between shareholders (their terms and conditions)

The Company's shareholders do not have mutual agreements.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 96

APPENDIX 4. COMPANY'S OPERATING AND FINANCIAL INDICATOR

FORMULAS AND DEFINITIONS

In according with the guidelines on Alternative Performance Indicators which were published by the European Securities and Markets

Authority in 2015 and came into force on 3 July 2016, the Company provide definitions and formulas (below) of the company's

operating and financial indicators.

The Company's performance and financial indicators are used to evaluate the Company's financial position or status. For these

indicators, the Company's investor can obtain additional information to help understand the Company's financial position and

strategy.

All the information stated in Appendix 4 is provided on the website of the Company (Company‘s web site section „For Investors“ →

„Reports“ → „Indicator formulas“. The link: https://invlbalticfarmland.com/en/investor-relations/financial-information-and-

reports/)

 Dividend yield – the set value of dividends paid per share for the last financial year divided by the price per share at the end

of a financial period.

The set value of dividends paid per share for the last financial year

Dividend yield = ———————————————————————————————————————

The price per share at the end of a financial period

This is a particularly an important valuation measure for investors seeking regular income. The higher the yield, the higher the

payout for the shareholder compared to the price of the share.

 Book value per share – the Group's equity divided by the number of shares, excluding the Group's own shares, at the end of

a financial period.

The Group's equity

Book value per share = —————————————————————————————————————————————————

The number of shares, excluding the Group's own shares, at the end of a financial period

The book value per common share indicates the euro value remaining for common shareholders after all assets are liquidated

and all debtors are paid.

 Price to Book ratio – the ratio of the share price at the end of a financial period to the book value per share.

The share price at the end of a financial period

Price to Book ratio = ————————————————————————————

The book value per share

Price-to-book ratio compares a firm's market to book value by dividing price per share by book value per share. This shows how

the valuation is covered by equity.

 Dividends/Net profit – Ratio between the dividends allocated at the ongoing year for the year before and ongoing year net

profit of the Company.

Ratio between the dividends allocated at the ongoing year for the year before

Dividends/Net profit = ———————————————————————————————————————————

Ongoing year net profit of the Company

The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative to the net income of the

company. It is the percentage of earnings paid to shareholders in dividends.

 Return on Equity (ROE) – the ratio of net income to average equity for a financial period, measured in percentage terms.

Net income

Return on Equity (ROE) (measured in percentage terms) = ————————————————————————

Average equity for a financial period

Return on equity excludes debt in the denominator and compares net profit for the period with total average shareholders’ equity.

It measures the rate of return on shareholders’ investment and is, therefore, useful in comparing the profitability of the Group

with its competitors.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 97

 Average equity is an arithmetical average of the beginning equity and ending equity for the financial period.

Average equity = (The beginning equity for the financial period + The ending equity for the financial period) / 2

 Return on Assets (ROA) – the ratio of net income to average total assets for a financial period, measured in percentage

terms.

Net income

Return on Assets (ROA) (measured in percentage terms) = ——————————————————————————

Average total assets for a financial period

Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives a manager, investor,

or analyst an idea as to how efficient a company's management is at using its assets to generate earnings.

 Average total equity is an arithmetical average of the beginning total assets and ending total assets for the financial period.

Average total equity = (The beginning total assets for the financial period + The ending total assets for the financial period) / 2

 Liquidity ratio – the ratio of current assets to current liabilities.

Current assets

Liquidity ratio = ———————————————

Current liabilities

Liquidity ratio is a financial metric used to determine a debtor's ability to pay off current debt obligations without raising external

capital.

 Operating profit margin – the ratio of operating profit to sales, measured in percentage terms.

Operating profit

Operating profit margin (measured in percentage terms) = —————————————————

Sales

Operating margin measures how much profit a company makes on a euro of sales, after paying for variable costs of production

such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company’s operating profit by

its net sales.

 Pretax profit margin – the ratio of pretax profit to sales, measured in percentage terms.

Pretax profit

Pretax profit margin (measured in percentage terms) = ——————————————————

Sales

The pretax profit margin is the ratio of a company's pre-tax earnings to its total sales. The higher the pretax profit margin, the

more profitable the company.

 Operating profit excluding revaluation of investment property margin – the ratio of operating profit excluding net gain

from fair value adjustments on investment property to sales, measured in percentage terms.

Operating profit excluding revaluation of investment property margin (measured in percentage terms) = (Operating profit - The

net gain from fair value adjustments on investment property) / Sales

Operating profit excluding revaluation of investment property margin measures how much profit a company makes on a euro of

sales, after paying for variable costs of production such as wages and raw materials, but before paying interest or tax and

excluding effects of investment property revaluation. It is calculated by dividing a company’s operating profit by its net sales.

 Price earnings ratio (P/E) – the share price at the end of a financial period divided by earnings per share (EPS).

The share price at the end of a financial period

Price earnings ratio (P/E) = —————————————————————————————

Earnings per share (EPS)

To determine the P/E value, one simply must divide the current stock price by the earnings per share (EPS). It is used to compare

a company against its own historical record or to compare aggregate markets against one another or over time.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 98

 Net profitability – net profit divided by sales, expressed in percentage terms.

Net profit

Net profitability (expressed in percentage terms) = ——————————————

Sales

The net profitability is equal to how much net income or profit is generated as a percentage of revenue. It illustrates how much

of each euro in revenue collected by a company translates into profit.

 EBITDA (earnings before interest tax depreciation and amortization) profitability – operating profit excluding net

profit from a revaluation of investment assets with depreciation and amortization added back divided by sales, expressed in

percentage terms.

EBITDA (earnings before interest tax depreciation and amortization) profitability (expressed in percentage terms) = (Operating

profit - Net profit from a revaluation of investment assets + Depreciation and amortization) / Sales

Earnings before interest tax depreciation and amortization as a percentage of revenue. EBITDA margin can provide an investor,

business owner or financial professional with a clear view of a company's operating profitability and cash flow.

 Capitalization – the market value of a company’s equity.

Capitalization (EUR) = (Amount of shares (units) – Amount of company’s owned shares (units) * Share Price (EUR)

Capitalization defines the market value of a company which depends on the price and volume of the company’s stock at a given

time. Capitalization shows the net worth of a company at a given time by market participants.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 99

APPENDIX 5. REMUNERATION REPORT

The Remuneration Report 2021 (hereinafter referred to as the Report) of the public limited liability company INVL Baltic Farmland

(hereinafter referred to as the Company or AB INVL Baltic Farmland) was prepared in compliance with the provisions of the

Remuneration Policy approved by the decision of the Company’s General Meeting of Shareholders dated 23 March 2020.

The Remuneration Policy of the Company is applicable to the Managers of the Company (the Chief Executive Officer and the

members of the Board of the Company).

Brief overview of the Company’s activities in 2021

AB INVL Baltic Farmland holds the shares of the private limited liability companies that invest in agricultural land. AB INVL Baltic

Farmland holds a 100 % stake in 18 private limited liability companies which own approximately 3,000 ha of agricultural land in

Lithuania. More than 98 % of the land holdings is leased to farmers and agricultural businesses.

On 30 June 2015, the companies, the land owners, and AB INVL Baltic Farmland signed a property administration agreement with

INVL Farmland Management which administers the land plots owned by the companies in order to ensure the growth of income

for the shareholders and to raise the value of the land holdings. On 28 December 2020, an amendment to the agreement was

signed and the validity period of the property administration agreement was extended until 31 December 2025.

In 2021, AB INVL Baltic Farmland received income totalling EUR 665 thousand, whereas its audited net profit amounted to

EUR 1,411 thousand. (in 2019, the consolidated net profit of the Company amounted to EUR 895 thousand and the Group’s income

totalled EUR 649 thousand). In the long-term, the Company seeks to earn a profit from the growth in land lease revenue and an

increase in the land value. Based on the data of the property valuation carried out in the last quarter of 2021, the value of the

land plots grew by 8.2 % during the year, up to EUR 16.62 million. The average value per hectare is EUR 5.36 thousand.

Corporate governance

AB INVL Baltic Farmland has a single-person management body – the Chief Executive Officer (Director) of the Company and a

collegial management body – the Board. No Supervisory Council is formed at the Company.

Report on the remuneration of the Chief Executive Officer of the Company in 2021

The Chief Executive Officer (CEO) of the Company was paid a fixed monthly salary of EUR 170.15 under the employment contract.

The norm of working time is 1 hour per day. The salary of the CEO of the Company was determined by the decision of the Board

of 1 July 2015 and it has not been changed.

Accordingly, in 2021, the CEO of the Company was paid a fixed salary of EUR 2044. The fixed salary of the CEO of the Company

accounted for 100 per cent of the remuneration since the appointment in 2015.

No other agreements on additional pension or retirement conditions were concluded with the CEO of the Company, the termination

terms of the employment contract were not amended, and the payments related to the termination of the employment contract

do not differ from those established in the applicable legislation.

No postponement of the remuneration was applied to the CEO of the Company, and the possibility of recovering the variable

portion of the remuneration was not exercised.

The CEO of the Company did not obtain any indirect benefit from the Company, and no stock options were granted by the Company

to the CEO.

The CEO of the Company did not receive remuneration from any company in which the Company holds more than 50 % of the

shares.

In 2021, the salary to the CEO of the Company was paid without any derogation from the approved Remuneration Policy.

Report on the remuneration of the members of the Company’s Board in 2021

The members of the Board of the Company may receive only the shares of profit allocated by the decision of the General Meeting

of Shareholders under the procedure established by the law and the allocation of which is disclosed in the consolidated annual

report of the Company.

Upon the allocation of the Company’s profit for 2020 by the decision of the General Meeting of Shareholders dated 9 April 2021,

no shares of profit were allocated to the members of the Company’s Board. The members of the Company’s Board or the companies

controlled by them are the shareholders of the Company and together with other shareholders they receive dividends either

directly or through the controlled companies.

No agreements were concluded with the members of the Company’s Board on the basis of which they perform their duties.

The members of the Company’s Board did not obtain any indirect benefit from the Company and they were not granted any stock

options by the Company.

The members of the Company’s Board did not receive any remuneration from any company in which the Company holds more

than 50 % of its shares.

INVL BALTIC FARMLAND, AB

ANNUAL REPORT OF 2021 | 100

In 2021, no other payouts were made to the members of the Company’s Board, and there were no derogations from the

Remuneration Policy.

Information on the remuneration paid in 2017-2021, the operating results of the Company and their changes

During the period from 1 January 2017 until 31 December 2021, there were no other employees in the Company, except for the

Chief Executive Officer of the Company who was paid a fixed salary; therefore, the Company is unable to provide information on

the average salary of its employees or its changes. The table below contains the remuneration of the Company’s management

bodies and the Company’s annual operating results and their changes over the last five years:

2017

2018

2019

2020

2021

Amount of CEO

remuneration*, EUR

1,969

2,046

2,043

2,044

Change in CEO remuneration,

2.71

3.91

-0.15

0.05

0.00

Annual bonuses to members of

the board

Net profit of the Company,

thousand. EUR

885

1,113

1,136

895

1,411

Change in the Company’s net

profit, %

-25.8

25.8

2.1

-21.2

57.7

* Since 2019 the gross salary amount was increased by 1.289 times because the employer’s taxes were transferred to the employee under the

requirements of the applicable legislation of the Republic of Lithuania. For the sake of comparability, the 2017-2018 amounts were recalculated using

the coefficient. The differences in remuneration were caused by the time off work (vacation, sick leave).

Other important information

The Chief Executive Officer of the Company is paid a stable monthly salary. The Company has no approved policy under which the

variable portion of the remuneration would be paid to its Managers.

The Remuneration Policy of the Company does not provide for any severance pay policy. The Company complies with the respective

requirements of the applicable legislation related to severance pay.

The Company has no system establishing employee incentives or remuneration with the Company’s shares.

By implementing the Remuneration Policy in 2021, the Company sought to achieve the following objectives:

i. To ensure a competitive salary of the Managers corresponding with the Company’s financial results;

ii. To increase the Company’s transparency and the accountability of its Managers and to provide conditions for its

shareholders, potential investors and stakeholders to have a detailed and reliable view of the remuneration assigned

to each Manager;

iii. To avoid conflicts of interest and to ensure the proper implementation of the principles laid down in the Remuneration

Policy.

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 INVL Baltic Farmland 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 INVL Baltic Farmland AB (the “Company”) and its

subsidiaries (together - the “Group”) as at 31 December 2021, 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 28 February 2022.

What we have audited

The Company’s and the Group’s separate and consolidated financial statements comprise:

● the consolidated and Company’s statements of financial position as at 31 December 2021;

● the consolidated and Company’s statements of comprehensive income for the year then ended;

● the consolidated and Company’s statements of changes in equity for the year then ended;

● the consolidated and Company’s statements of cash flows for the year then ended; and

● the notes to the consolidated and Company’s 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 Company’s 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.

Our

audit

approach

Overview

•

Overall

Company

and

Group

materiality:

€149

thousand

and

€149

thousand,

representing

total

equity

the

Company

and

the

Group,

respectively.

•

Our

audit

covered

all

reporting

units

within

the

Group.

•

Our

audit

scope

covered

all

the

Group's

revenues

and

all

the

Group's

total

assets.

•

Valuation

investment

properties

part

designing

our

audit,

determined

materiality

and

assessed

the

risks

material

misstatement

the

Company's

and

consolidated

financial

statements

(together

“

the

financial

statements

”

particular,

considered

where

management

made

subjective

judgements;

for

example,

respect

significant

accounting

estimates

that

involved

making

assumptions

and

considering

future

events

that

are

inherently

uncertain.

all

our

audits,

also

addressed

the

risk

management

override

internal

controls,

including,

among

other

matters,

consideration

whether

there

was

evidence

bias

that

represented

risk

material

misstatement

due

fraud.

Materiality

The

scope

our

audit

was

influenced

our

application

materiality.

audit

designed

obtain

reasonable

assurance

whether

the

financial

statements

are

free

from

material

misstatement.

Misstatements

may

arise

due

fraud

error.

They

are

considered

material

individually

aggregate,

they

could

reasonably

expected

influence

the

economic

decisions

users

taken

the

basis

the

financial

statements.

Based

our

professional

judgement,

determined

certain

quantitative

thresholds

for

materiality,

including

the

overall

Company

and

Group

materiality

for

the

financial

statements

whole

set

out

the

table

below.

These,

together

with

qualitative

considerations,

helped

determine

the

scope

our

audit

and

the

nature,

timing

and

extent

our

audit

procedures

and

evaluate

the

effect

misstatements,

any,

both

individually

and

aggregate

the

financial

statements

whole.

Overall

Company

and

Group

materiality

Overall

materiality

applied

the

Company

and

the

Group

amounted

€

149

thousand

and

€

149

thousand

(2020:

€

140

thousand

and

€

140

thousand),

respectively.

How

determined

total

equity

the

Company

and

the

Group,

respectively.

Rationale

for

the

materiality

benchmark

applied

chose

the

Company's

and

Group's

equity

the

benchmark

because,

our

view,

appropriate

measure

underlying

performance,

and

the

benchmark

against

which

the

performance

the

Company,

the

Group

and

other

companies

this

industry

most

commonly

measured

users,

and

generally

accepted

benchmark. The key driver of the business and determinant

of the Company’s and the Group’s value is investments into

various properties. For this reason, the key area of focus in

the audit of the financial statements of the Company and the

Group is the valuation of investment properties. Accordingly,

an overall Company and Group materiality was based on

total equity.

We chose 1 %, which is within the range of acceptable

quantitative materiality thresholds.

We agreed with the Audit Committee that we would report to them misstatements identified during our

audit above € 14,9 thousand, the same for the Company and the Group, 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

Valuation of investment properties

Refer to Notes 2.18 and 10 to the financial

statements on pages 18 and 28, respectively.

The Group’s investment properties represent

the most significant category of the Group’s

assets. Investment properties are accounted at

fair value. Management estimated the fair

value of the Group’s investment properties to

be € 16,620 thousand at 31 December 2021,

as compared to € 15,364 thousand at 31

December 2020.

Net gain from fair value adjustments on

investment property amounts to € 1,256

thousand (2020: € 683 thousand) in the

consolidated statement of comprehensive

income.

The valuation of all of the Group‘s investment

properties was based on the independent

external valuations. Valuations took into

account evidence of market transactions for

properties and locations comparable to those

of the Group.

Given the materiality of investment properties,

the net gain from fair value adjustments had a

significant impact on the consolidated financial

statements. We also focused on this area as

the conclusions are dependent upon significant

Our procedures in relation to management

expert’s valuation of investment properties

included:

• evaluation of the independent external valuers’

competence, capabilities and objectivity;

• assessing the methodology used and the

appropriateness of the key assumptions based on

our knowledge of the agricultural land market;

• checking the accuracy and relevance of the input

data used;

• examining selected independent valuations by

obtaining market prices of agricultural land plots in

the same geographical area from independent

source, adjusting those for productivity

parameters and comparing price per hectare of

selected land plots to those used by management

expert.

Because of the subjectivity involved in

determining valuations for investment properties,

we determined a range of values that were

considered reasonable to evaluate the

independent property valuations used by

management. The valuations used by the Group

were within an acceptable range. We also

considered whether or not there was bias in

determining individual valuations and found no

evidence of bias.

judgement involved in performing the valuation

and they are most sensitive to the assumptions

underlying those valuations. In particular, the

most significant inputs into this valuation

approach are price per hectare and

adjustments for differences in key attributes

such as land size and productivity.

For this reason, due to existence of significant

estimation uncertainty, we have given specific

audit focus and attention to this area.

We found the key assumptions were supported by

the available evidence and the disclosures in Note

10 to be appropriate.

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 the 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.

The group comprises of 18 entities: the Company and its subsidiaries, all located in Lithuania. All

entities were audited by one engagement team in Lithuania. The group audit team performed full

scope audit procedures on the financial statements of the Company and its subsidiaries.

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 and the remuneration 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, we considered whether the consolidated annual report

includes the disclosures required by the Law of the Republic of Lithuania on Consolidated Financial

Reporting by Groups of Undertakings, the Law of the Republic of Lithuania on Financial 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 for the financial year for which the financial

statements are prepared, is consistent with the financial statements; and

● the consolidated annual report has been prepared in accordance with the Law of the Republic of

Lithuania on Consolidated Financial Reporting by Groups of Undertakings and the Law of the

Republic of Lithuania on Financial Reporting by Undertakings.

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 separate and 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 Company’s and the

Group’s separate and consolidated financial statements, including the consolidated annual report, for

the year ended 31 December 2021 (the “Single Electronic Reporting Format of the separate and

consolidated financial statements”).

Description of a subject matter and applicable criteria

The Single Electronic Reporting Format of the separate and 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 separate and

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 separate and 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 separate and 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 separate and 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 separate and 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 separate and 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 separate and 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 separate and consolidated financial

statements, including the preparation of the XHTML format and marking up the separate and

consolidated financial statements;

• verification whether the XHTML format was applied properly;

• evaluating the completeness of marking up the separate and 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 Company’s and 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 separate and consolidated financial

statements for the year ended 31 December 2021 complies, in all material aspects, with the ESEF

Regulation.

Appointment

We were first appointed as auditors of the Company and the Group as at 1 December 2014. Our

appointment has been renewed annually by shareholder resolution representing a total period of

uninterrupted engagement appointment of 8 years.

The key audit partner on the audit resulting in this independent auditor’s report is Rasa Selevičienė

On behalf of PricewaterhouseCoopers UAB

/signed with electronic signature/

Rasa Selevičienė

Assurance Director

Auditor's Certificate No.000504

Vilnius, Republic of Lithuania

28 February 2022

The auditor's electronic signature is used herein to sign only the Independent Auditor's Report