AB LINAS AGRO GROUP

CONSOLIDATED AND

COMPANY ‘S

FINANCIAL STATEMENTS

AND CONSOLIDATED

ANNUAL REPORT

FOR THE FINANCIAL YEAR

ENDED JUNE 30, 2023

Prepared in accordance with international

Financial reporting standards,

As adopted by the european union,

Presented together with independent auditor’s report

CONFIRMATION OF THE RESPONSIBLE PERSONS

CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS

CONSOLIDATED ANNUAL REPORT

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023

(all amounts are in thousand euros unless otherwise stated) 0

AB LINAS AGRO GROUP

CONSOLIDATED AND COMPANY ‘S

FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR 2022/2023

ENDED JUNE 30, 2023

PREPARED IN ACCORDANCE WITH INTERNATIONAL

FINANCIAL REPORTING STANDARDS,

AS ADOPTED BY THE EUROPEAN UNION,

PRESENTED TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 1

CONTENT

CONSOLIDATED AND COMPANY’S STATEMENTS OF FINANCIAL POSITION

CONSOLIDATED AND COMPANY’S STATEMENTS OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

COMPANY‘S STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED AND COMPANY’S STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

General information

Equity attributable to shareholders of the Company

Accounting principles

Grants and subsidies

Group structure and changes in the Group

Borrowings

Segment information

Lease liabilities

Intangible assets

Provisions

Property, plant and equipment

Trade payables

Right-of-use Assets

Other non–current liabilities, other current liabilities, and

contract liabilities

Investment property

Cost of sales

Non-current receivables and prepayments

Operating expenses

Biological assets

Other income (expenses)

Inventories

IIncome (expenses) from financing activities

Non-current assets held for sale

Income tax

Prepayments

Basic and diluted earnings per share

Trade receivables

Financial assets and liabilities and risk management

Other accounts receivable and contract assets

Commitments and contingencies

Other financial assets and derivative financial instruments

Related parties’ transactions

Cash and cash equivalents

Partly owned subsidiaries

Subsequent events

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 2

CONSOLIDATED AND COMPANY’S

STATEMENTS OF FINANCIAL POSITION

ASSETS	Notes		Group	Company
		As at 30 June	As at 30 June	As at 30 June	As at 30 June
		2023	2022	2023	2022
Non-current assets
Intangible assets	5	3,025	2,759	134	156
Property, plant and equipment	6	174,463	166,215	890	1,067
Right-of-use assets	7	30,536	24,720	68	44
Investment property	8	399	562	–	–
Biological assets
Animals, livestock and poultry	10	11,786	13,233	–	–
Non-current financial assets
Investments in subsidiaries	3	–	–	179,876	173,016
Investments in associates	3	–	–	2,799	3,241
Other investments and prepayments for financial assets		531	27	513	10
Non-current receivables	9	5,048	815	–	–
Non-current receivables from related parties	9, 33	750	750	84	6,053
Net investment, related with sublease	9	–	–	11,071	9,739
Total non-current financial assets		6,329	1,592	194,343	192,059
Non-current prepayments	9	1,017	1,166	–	–
Deferred income tax asset	29	8,323	7,139	284	693
Total non-current assets		235,878	217,386	195,719	194,019
Current assets
Biological assets
Crops	10	31,848	29,222	–	–
Poultry	10	10,091	8,302	–	–
Inventories	11	266,637	243,876	–	–
Current prepayments 1	13	5,564	11,588	305	352
Current accounts receivable
Trade receivables	14	312,204	300,061	–	–
Receivables from related parties	33	4,670	5,817	14,884	11,169
Income tax receivable		1,057	67	–	–
Other accounts receivable and contract assets	15	10,607	8,684	43	6
Total current accounts receivable		328,538	314,629	14,927	11,175
Current net investment, related with sublease	9	–	–	418	314
Derivative financial instruments	16	1,531	1,182	–	–
Other current financial assets	16	972	3,022	–	–
Cash and cash equivalents	17	13,264	20,810	114	222
Non-current assets held for sale	12	–	22,958	–	–
Total current assets		658,445	655,589	15,764	12,063
Total assets		894,323	872,975	211,483	206,082

(cont’d on the next page)

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

Comparative information for marked groups has been recalculated in the financial statements. In 2023, the Company reviewed accounts grouping methodology in

the financial statements and adjusted the comparative figures for 2021/2022 in order to reflect more accurately the amount of lease liabilities. In the Comparative

figures 2021/2022, the figures were reclassified in amount EUR 312 thousand from “Current prepayments” to the” Current portion of lease labilities”, in order to

more accurately reflect the Company liabilities under the requirements of IFRS 16.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 3

CONSOLIDATED AND COMPANY’S

STATEMENTS OF FINANCIAL POSITION (CONT‘D)

EQUITY AND LIABILITIES	Notes		Group	Company
		As at 30	As at 30	As at 30	As at 30
		June 2023	June 2022	June 2023	June 2022
Equity attributable to shareholders of the Company
Share capital	1	46,715	46,514	46,715	46,514
Share premium	1	23,928	23,642	23,928	23,642
Legal and other reserves	18	8,593	6,319	8,116	6,319
Own shares (-)	18	(426)	(440)	(426)	(440)
Foreign currency translation reserve	18	(130)	(17)	–	–
Amounts related to non-current assets held for sale recognized	18, 12	–	(3,592)	–	–
directly in equity
Total foreign currency translation reserve	18	(130)	(3,609)	–	–
Retained earnings		205,472	197,383	50,908	51,511
Total equity attributable to equity holders of the parent		284,152	269,809	129,241	127,546
Non-controlling interest	34	14,479	10,142	–	–
Total equity		298,631	279,951	129,241	127,546
Liabilities
Non-current liabilities
Grants and subsidies	19	8,565	8,285	–	–
Non-current borrowings	20, 33	28,415	22,305	1,136	4,386
Lease liabilities	21	35,098	31,867	10,916	8,831
Non-current trade payables		1	–	1	–
Deferred income tax liability	29	1,401	2,063	–	–
Provisions 3	22	1,642	1,913	28	35
Other non-current liabilities 2-3	24	105	503	–	189
Total non-current liabilities		75,227	66,936	12,081	13,441
Current liabilities
Current portion of non-current borrowings	20,33	9,175	20,641	–	–
Current portion of lease liabilities 1	21	10,820	7,659	430	43
Current borrowings	20, 33	244,824	213,550	64,494	63,325
Trade payables	23	198,631	205,687	16	40
Payables to related parties	33	273	–	4,682	296
Income tax payable		1,765	7,467	–	–
Derivative financial instruments	16	531	3,091	–	–
Contract liabilities 2	24	3,206	3,201	–	296
Provisions 3	22	552	610	–	–
Other current liabilities 2-3	24	50,688	47,899	539	1,095
Liabilities related to non-current assets held for sale	12	–	16,283	–	–
Total current liabilities		520,465	526,088	70,161	65,095
Total equity and liabilities		894,323	872,975	211,483	206,082

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

Comparative information for marked groups has been recalculated in the financial statements. In 2023, the Company reviewed accounts grouping methodology

in the financial statements and adjusted the comparative figures for 2021/2022 in order to reflect more accurately the amount of lease liabilities. In the

Comparative figures 2021/2022, the figures were reclassified in amount EUR 312 thousand from “Current prepayments” to the” Current portion of lease

labilities”, in order to more accurately reflect the Company liabilities under the requirements of IFRS 16.

Comparative information for marked groups has been recalculated in the financial statements. In 2023, the Company reviewed accounts grouping methodology

in the financial statements and adjusted the comparative figures for 2021/2022 in order to reflect more accurately the distribution of items in the financial

statements. In the Comparative figures 2021/2022, the figures were reclassified in amount EUR 296 thousand from “Other current liabilities” to the” Contract

liabilities”, in order to more accurately reflect the Company liabilities under the requirements of IFRS 15. 116-118.

Comparative information for marked groups has been recalculated in the financial statements. In 2023, the Group reviewed accounts grouping methodology in

the financial statements and adjusted the comparative figures for 2021/2022 in order to reflect more accurately the distribution of items in the financial

statements. As Group does have a significant amount of the provisions, in order to represent, the more accurate figures, the Company under the IAS 1,54(I), has

disclosed the Provisions in the statement of the financial positions, and reclassed the amount of EUR 2,523 thousand from “Other current liabilities” to

“Provisions”.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 4

CONSOLIDATED AND COMPANY’S

STATEMENTS OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

	Notes		Group		Company
		30 June	30 June	30 June	30 June
		2023	2022	2023	2022
Revenue from contracts with customers	4	1,999,617	1,895,667	1,601	1,709
Dividend income		–	–	9,177	15,306
Cost of sales	25	(1,861,648)	(1,706,808)	–	–
Gross profit		137,969	188,859	10,778	17,015
Operating (expenses)	26	(95,646)	(96,356)	(2,302)	(3,180)
Expenses of impairment of trade receivables, contract	13,14,15	(3,495)	(3,194)	–	–
assets and other receivables
Other income	27	13,201	22,691	51	35
Other (expenses)	27	(7,120)	(5,581)	(817)	(202)
(Impairment loss) of non-current assets held for sale	12	–	(2,800)	–	–
Loss on disposal of a foreign operation	12	(313)	–	–	–
Reclassification of foreign currency translation	12	(3,104)	–	–	–
reserve related to a foreign operation disposal
Operating profit (loss)		41,492	103,619	7,710	13,668
Income from financing activities	28	3,607	2,293	843	804
(Expenses) from financing activities	28	(19,339)	(15,071)	(3,179)	(2,530)
Profit (loss) before tax		25,760	90,841	5,374	11,942
Income tax	29	(4,943)	(13,584)	(409)	191
Net profit (loss)		20,817	77,257	4,965	12,133
Net profit (loss) attributable to:
Shareholders of the Company		18,134	74,809	4,965	12,133
Non-controlling interest		2,683	2,448	–	–
		20,817	77,257	4,965	12,133
Basic earnings per share (EUR)	30	0.13	0.49	–	–
Diluted earnings per share (EUR)	30	0.12	0.46	–	–
Other comprehensive income
Other comprehensive income, to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign		(334)	(3)	–	–
operations into the Group’s presentation currency
Exchange differences on translation of foreign
operations into the Group’s presentation currency		3,819	–	–	–
related to disposal of a foreign operation
reclassification to profit or loss
Amounts recognized directly in equity relating to non- current assets held for sale		–	(3,660)	–	–
Cash flow hedges – effective portion of change in fair value	16	1,220	–	–	–
Cash flow hedges – reclassified to profit or loss	16	(680)	–	–	–
Total other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods		4,025	(3,663)	–	–
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:		–	–	–	–
Total other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods		–	–	–	–
Total other comprehensive income (loss), net of tax		4,025	(3,663)	–	–
Total comprehensive income, net of tax		24,842	73,594	4,965	12,133
Total comprehensive income, net of tax attributable to:
The shareholders of the Company		22,090	71,214	4,965	12,133
Non-controlling interest	34	2,752	2,380	–	–
		24,842	73,594	4,965	12,133

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

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 5

CONSOLIDATED STATEMENT OF CHANGES IN

EQUITY

				Attributed to the shareholders of the Company
	No-	Share	Own	Share	Legal and	Foreign	Retained	Subtotal	Non-	Total
	tes	capital	shares	premium	other	currency	earnings		contro-
					reserve	transla-			ling
						tion			interest
						reserve
Balance as at 1 July 2021		46,093	(445)	23,038	6,146	(14)	119,333	194,151	2,070	196,221
Net profit (loss)		–	–	–	–	–	74,809	74,809	2,448	77,257
Total other comprehensive income (loss) to be reclassified		–	–	–	–	(3,595)	–	(3,595)	(68)	(3,663)
to profit or loss in subsequent
periods
Total comprehensive income, net of tax		–	–	–	–	(3,595)	74,809	71,214	2,380	73,594
Disposal of own shares		–	5	–	–	–	(5)	–	–	–
Dividends declared by the subsidiaries	34	–	–	–	–	–	–	–	(94)	(94)
Reserves made	18	–	–	–	33	–	(33)	–	–	–
Share capital increase	1	421	–	604	(1,025)	–	–	–	–	–
Non-controlling interest arising	3	–	–	–	–	–	–	–	10,776	10,776
on acquisition of subsidiaries
Share-based payments	30	–	–	–	1,165	–	–	1,165	–	1,165
Acquisition of non-controlling		–	–	–	–	–	3,279	3,279	(4,990)	(1,711)
interest
Balance as at 30 June 2022		46,514	(440)	23,642	6,319	(3,609)	197,383	269,809	10,142	279,951
Balance as at 1 July 2022		46,514	(440)	23,642	6,319	(3,609)	197,383	269,809	10,142	279,951
Net profit (loss)		–	–	–	–	–	18,134	18,134	2,683	20,817
Total other comprehensive income to be reclassified to profit or loss in subsequent		–	–	–	477	3,479	–	3,956	69	4,025
periods
Total comprehensive income, net of tax		–	–	–	477	3,479	18,134	22,090	2,752	24,842
Disposal of own shares		–	14	–	–	–	(14)	–	–	–
Dividends		–	–	–	–	–	(5,000)	(5,000)	–	(5,000)
Dividends declared by the subsidiaries	34	–	–	–	–	–	–	–	(1,638)	(1,638)
Transfer to legal reserve	18	–	–	–	607	–	(607)	–	–	–
Reserves made	18	–	–	–	(53)	–	53	–	–	–
Share capital increase	1	201	–	286	(487)	–	–	–	–	–
Non-controlling interest arising		–	–	–	–	–	(4,705)	(4,705)	4,705	–
on acquisition of subsidiaries
Share-based payments	30	–	–	–	1,730	–	–	1,730	–	1,730
Disposal of non-controlling		–	–	–	–	–	–	–	(540)	(540)
interest
Acquisition of non-controlling		–	–	–	–	–	228	228	(942)	(714)
interest
Balance as at 30 June 2023		46,715	(426)	23,928	8,593	(130)	205,472	284,152	14,479	298,631

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

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 6

COMPANY‘S STATEMENT OF CHANGES IN

EQUITY

No-

tes

Share capital

Own shares

premium

Legal reserve

and other

reserves

Retained

earnings

Total

Balance as at 1 July 2021

46,093

(445)

23,038

6,146

39,416

114,248

Net profit (loss)

–

12,133

Total comprehensive income, net of tax

–

12,133

Share-based payments

–

1,165

–

1,165

Disposal of own shares

–

(5)

–

Share capital increase

421

–

604

(1,025)

–

Reserves made

–

(33)

–

Balance as at 30 June 2022

46,514

(440)

23,642

6,319

51,511

127,546

Balance as at 1 July 2022

46,514

(440)

23,642

6,319

51,511

127,546

Net profit (loss)

–

4,965

Total comprehensive income, net of tax

–

4,965

Dividends

–

(5,000)

Share-based payments

–

1,730

–

1,730

Disposal of own shares

–

(14)

–

Share capital increase

201

–

286

(487)

–

Transfer to legal reserve

–

607

(607)

–

Reserves made

–

(53)

–

Balance as at 30 June 2023

46,715

(426)

23,928

8,116

50,908

129,241

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

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 7

CONSOLIDATED AND COMPANY’S

STATEMENTS OF CASH FLOWS

	Notes		Group		Company
		30 June	30 June	30 June	30 June
		2023	2022	2023	2022
Cash flows from (to) operating activities
Net profit (loss)		20,817	77,257	4,965	12,133
Adjustments for non-cash items:
Depreciation and amortization	5,6,8	27,685	26,926	135	105
Subsidies amortization	19	(587)	(747)	–	–
(Gain)/Loss on disposal of property, plant and equipment	27	(829)	(2,694)	40	–
Subsequent measurement of sublease		–	–	758	–
Change in allowance and write-offs for receivables	13,14,15	3,495	3,194	–	–
Impairment of investments into associates	27	–	202	–	202
(Reversal of) impairment losses on inventories write down to net realizable value	11	2,684	(99)	–	–
Change of provision for onerous contracts	25	(8)	(39)	–	–
Change in contract assets and accrued expenses		4,009	6,260	(270)	(440)
Change in fair value of biological assets	25	(4,378)	(12,732)	–	–
Change in accrued share-based payment	30	1,730	1,165	43	463
Gain on bargain purchase	3	–	(1,272)	–	–
Loss on disposal of a foreign operation	12	313	–	–	–
Impairment loss on non-current assets held for sale	12	–	2,800	–	–
Reclassification of foreign currency translation reserve related	12	3,104	–	–	–
to a foreign operation disposal
Change in deferred income tax	29	(1,192)	378	409	(191)
Current income tax expenses	29	6,135	13,206	–	–
Expenses (income) from change in fair value of financial	27	2,606	(3,873)	–	–
instruments
Dividend (income)		–	–	(9,176)	(15,306)
Interest (income) and other financial (income)	28	(3,607)	(2,293)	(843)	(804)
Interest and other financial expenses	28	19,339	15,071	3,179	2,530
		81,316	122,710	(760)	(1,308)
Changes in working capital:
(Increase) decrease in biological assets		1,502	(2,181)	–	–
(Increase) decrease in inventories incl. right of return asset		(28,074)	(53,074)	–	–
(Increase) decrease in prepayments		5,967	1,316	47	1,699
(Increase) decrease in trade and other accounts receivable		(12,454)	(49,552)	(2,154)	(1,949)
(Increase) decrease in restricted cash	16	(56)	343	–	–
Increase (decrease) in contract liabilities, refund liabilities, trade, and other accounts payable		(25,782)	(18,311)	2,011	(1,064)
Income tax (paid)		(9,492)	(7,128)	–	–
Net cash flows from (to) operating activities		12,927	(5,877)	(856)	(2,622)

(cont’d on the next page)

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

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 8

CONSOLIDATED AND COMPANY’S

STATEMENTS OF CASH FLOWS (CONT‘D)

	Notes		Group		Company
		30 June	30 June	30 June	30 June
		2023	2022	2023	2022
Cash flows from (to) investing activities
(Acquisition) of intangible assets, property, plant and equipment and investment property	5,6,8	(27,056)	(19,294)	(30)	(88)
Proceeds from sale of intangible assets, property, plant		3,806	12,309	112	–
and equipment and investment property
(Acquisition) of subsidiaries (less received cash balance in the Group), including payments for subsidiaries acquired	3	(660)	(66,689)	(687)	(66,891)
in prior periods
Disposal of subsidiaries (less disposed cash balance in the Group)	12	6,500	–	–	–
(Prepayment) for financial assets		(503)	–	(503)	–
(Acquisition) of associates and joint ventures		–	(202)	–	–
Loans (granted)		(364)	(392)	(8,505)	(12,673)
Repayment of granted loans		25	2,491	8,678	22,240
Interest received	28	3,725	2,293	492	804
Dividends received		–	–	11,432	5,017
Net cash flows from (to) investing activities		(14,527)	(69,484)	10,989	(51,591)
Cash flows from (to) financing activities
Proceeds from loans	31	197,623	211,096	16,100	61,365
(Repayment) of loans	31	(174,358)	(109,141)	(18,470)	(11,320)
Lease (payments)	31	(9,928)	(10,637)	(708)	(359)
Grants received	19	1,675	3,722	–	–
Interest (paid)	28	(13,627)	(15,071)	(2,163)	(1,828)
Dividends (paid)	31	(5,000)	–	(5,000)	–
Dividends (paid) to non-controlling interest	31	(1,638)	(94)	–	–
(Acquisition) of non-controlling interest 11		(714)	(1,711)	–	–
Net cash flows from (to) financing activities		(5,967)	78,164	(10,241)	47,858
Net (decrease) increase in cash and cash equivalents		(7,567)	2,803	(108)	(6,355)
Net foreign exchange difference		(21)	–	–	–
Cash and cash equivalents at the beginning of the year	17	20,810	18,007	222	6,577
Cash and cash equivalents at the end of the year	17	13,264	20,810	114	222

(cont’d on the next page)

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

Comparative information for marked groups has been recalculated in the financial statements. In 2023, the Company reviewed accounts grouping methodology

in the financial statements and adjusted the comparative figures for 2021/2022 in order to reflect more accurately the distribution of items in the financial

statements.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 9

CONSOLIDATED AND COMPANY’S

STATEMENTS OF CASH FLOWS (CONT‘D)

Supplemental information of cash flows:	Notes	Group		Company
	30 June	30 June	30 June	30 June
	2023	2022	2023	2022
Non-cash investing activity:
Property, plant and equipment acquisitions financed by lease	3,840	9,457	–	–
Acquisition of right-of-use assets	14,956	8,632	40	–
Proceeds from loans	–	–	–	3,187

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

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 10

NOTES TO THE FINANCIAL

STATEMENTS

1. GENERAL INFORMATION

AB Linas Agro Group (hereinafter the Company or the parent) is a public limited liability company registered in the Republic of Lithuania.

The Company was registered on 27 November 1995.

The address of its registered office is as follows: Subačiaus St. 5, LT-01302 Vilnius, Lithuania.

The principal activities of the Group are described in Note 4.

The financial year of the Group starts on 1 July of the calendar year and ends on 30 June of the following calendar year.

As at 30 June 2023 and as at 30 June 2022 the shareholders of the Company were:

	As at 30 June 2023		As at 30 June 2022
	Number of	Percentage	Number of	Percentage
	shares held		shares held
Akola ApS (Denmark)	109,909,167	68.23 %	109,909,167	68.52 %
Darius Zubas	17,049,995	10.58 %	17,049,995	10.63 %
UAB INVL Asset Management	8,224,156	5.11 %	9,065,182	5.65 %
Other shareholders (private and institutional investors)	25,902,615	16.08 %	24,370,054	15.20 %
Total	161,085,933	100.00 %	160,394,398	100.00 %

All the shares of the Company are ordinary shares with the par value of EUR 0.29 each as at 30 June 2023 (EUR 0.29 each as at 30 June 2022)

and were fully paid as at 30 June 2023 and as at 30 June 2022.

The Company holds 737,972 of its own shares, percentage 0.46%, as at 30 June 2023 (761,972 as at 30 June 2022). Subsidiaries and other

related companies did not hold any shares of the Company as at 30 June 2023 and as at 30 June 2022.

All of the Company’s 161,085,933 ordinary shares are included in the Official list of Nasdaq Vilnius stock exchange (ISIN code LT0000128092).

The Company’s trading ticker in Nasdaq Vilnius stock exchange is LNA1L.

As at 30 June 2023 the number of employees of the Group was 4,887 (5,031 as at 30 June 2022).

As at 30 June 2023 the number of employees of the Company was 20 (17 as at 30 June 2022).

The Company’s management approved these financial statements on 6 October 2023. The shareholders of the Company have a statutory right

to approve these financial statements or not to approve them and to require preparation of a new set of financial statements.

During the financial year ending 30 June 2023, the Company’s authorized capital was increased by EUR 201 thousand and amounted to

EUR 46,715 thousand as at the end of the financial year. During the financial year ending 30 June 2022, the authorized capital has been increased

in the EUR 421 thousand and amounted to EUR 46 514 thousand as at 30 June 2022.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 11

2. ACCOUNTING PRINCIPLES

If not stated otherwise, the Company’s separate financial statements are prepared using the same accounting policies as the ones used by the

Group.

The principal accounting policies adopted in preparing the Group’s financial statements for the year ended 30 June 2023 are as follows:

2.1. BASIS OF PREPARATION

The financial statements have been prepared on a historical cost basis, except for biological assets, commitments to purchase agricultural

produce (unrecognized firm commitment), derivative financial instruments, which have been measured at fair value.

These financial statements were prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European

Union (hereinafter the EU).

IFRSs and their interpretations, announced and adopted by the European Union, effective for the current reporting period

The following new Standards, amendments to Standards and new Interpretations approved by the International Accounting Standards Board

(IASB) and adopted by the EU are applicable for the reporting period:

• Property, Plant and Equipment – Proceeds before Intended Use (Amendments to IAS 16);

• Onerous Contract – Costs of Fulfilling a Contract (Amendment to IAS 37);

• Annual Improvements to IFRS Standards 2018-2021;

• Reference to the Conceptual Framework (Amendments to IFRS 3).

The Group and the Company anticipates that the adoption of these standards, revisions and interpretations had no material impact on the

financial statements.

Standards and Interpretations in issue not yet adopted

At the date of authorisation of these financial statements the following standards, amendments to existing standards and interpretations were

issued, however the Group and the Company does not plan to adopt these standards early.

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

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

• IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance

• Initial Application of IFRS 17 and IFRS 9 – Comparative Information (Amendments to IFRS 17)

• Definition of Accounting Estimates (Amendments to IAS8)

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

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback.

The Group and the Company has elected not to adopt these standards, revisions and interpretations. The Group and the Company anticipates

that the adoption of these standards, revisions and interpretations will have no material impact on the financial statements of the Group and the

Company in the period of initial application.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 12

2. ACCOUNTING PRINCIPLES(CONT’D)

2.2. FUNCTIONAL AND PRESENTATION CURRENCY

The amounts shown in these financial statements are presented in the local currency of the Republic of Lithuania, euro (EUR). The functional

currency of the Group companies operating in Lithuania is EUR. The functional currencies of foreign subsidiaries are the respective foreign

currencies of the country of residence. Items included in the financial statements of these subsidiaries are measured using their functional

currency.

Transactions in foreign currencies are initially recorded in the functional currency as at the date of the transaction. Monetary assets and liabilities

denominated in foreign currencies are converted at the functional currency rate of exchange as at the date of the statement of financial position.

Currency exchange differences are presented under financial activities income/ expenses caption in the Group’s financial statements.

The assets and liabilities of foreign subsidiaries are converted into EUR at the reporting date using the exchange rate as at the date of the

statement of financial position, and their statements of comprehensive income are converted using average exchange rates for the year. Currency

exchange differences are recognized in a separate component of equity. On disposal of a foreign subsidiary, the deferred cumulative amount

recognized in other equity relating to that foreign operation is reclassified in the statement of profit or loss and other comprehensive income.

2.3. PRINCIPLES 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 date, using consistent accounting policies.

Subsidiary is an entity directly or indirectly controlled by the Company. The Company controls an entity when it can or has a right to receive a

variable return from this relation and it can have impact on these returns due to the power to govern the entity to which the investment is made.

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

on which control is transferred out of the Group. All intercompany transactions, balances and unrealized gains and losses on transactions among

the Group companies have been eliminated. The equity and net income attributable to non-controlling shareholders’ interests are shown separately

in the statement of financial position and the statements of profit or loss and other comprehensive income.

In the parent’s separate financial statements investments into subsidiaries are accounted for using the cost method. The carrying value of

investments is reduced to recognize an impairment loss of the value of the investments, such reduction being determined and made for each

investment individually.

Losses of a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

Acquisitions and disposals of non-controlling interest by the Group are accounted as equity transaction: the difference between the carrying

value of the net assets acquired from/disposed to the non-controlling interests in the Group’s financial statements and the acquisition

price/proceeds from disposal is accounted directly in equity.

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

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

consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the

contingent consideration, which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 either in profit or loss. If the

contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity. For each business combination,

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

net assets. Acquisition costs incurred are expensed and included in administrative expenses. Acquisition costs incurred are capitalized in separate

financial statements of the Company.

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

is remeasured to fair value at the acquisition date through statements of profit or loss and other comprehensive income.

Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for non-

controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net

assets of the subsidiary acquired, the difference is recognized in the statement of profit or loss and other comprehensive income.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 13

2. ACCOUNTING PRINCIPLES(CONT’D)

2.3. PRINCIPLES OF CONSOLIDATION (cont’d)

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill

acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit

from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the

operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill

disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit

retained.

2.4. INVESTMENTS INTO ASSOCIATES

An associate is an entity in which the Group has significant influence. The Group recognizes its interests in the associates applying the equity

method. The financial statements of the associates are prepared for the same reporting year as the Group, using consistent accounting policies.

Adjustments are made to bring in line any dissimilar accounting policies that may exist. Impairment assessment of investments into associates is

performed when there is an indication that the asset may be impaired, or the impairment losses recognized in prior years no longer exist.

Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the

associate.

Investments into associates in the Company’s separate financial statements are carried at cost less impairment.

2.5. INTANGIBLE ASSETS (OTHER THAN GOODWILL)

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is fair value

as at the date of acquisition. Intangible assets are recognized if it is probable that future economic benefits that are attributable to the asset will

flow to the Group and the Company and the cost of asset can be measured reliably.

The useful lives of intangible assets can be either definite or indefinite.

After initial recognition intangible assets with finite lives are measured at cost less accumulated amortization and any accumulated impairment

losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. Gains or losses arising from derecognition

of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized

in statement of profit or loss and other comprehensive income when the asset is derecognized. Intangible assets with finite lives are assessed for

impairment whenever there is an indication that the intangible asset may be impaired.

The useful lives, residual values and amortization method are reviewed annually to ensure that they are consistent with the expected pattern of

economic benefits from items in intangible assets other than goodwill.

Intangible assets with indefinite lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit

level. The assessment of indefinite life is reviewed annually to determine whether indefinite life continues to be supportable. If not, the change in

useful life from indefinite to finite is made on a prospective basis.

Licenses

Amounts paid for licenses are capitalized and then amortized over their validity period of 3 – 7 years. Disclosed as other intangible assets in

Note 5.

Software

The costs of acquisition of new software are capitalized and treated as an intangible asset if these costs are not an integral part of the related

hardware. Software is amortized over a period of 3 – 10 years.

Costs incurred in order to restore or maintain the future economic benefits that the Group expects from the originally assessed standard of

performance of existing software systems are recognized as an expense when the restoration or maintenance work is carried out.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 14

2. ACCOUNTING PRINCIPLES(CONT’D)

2.6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

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

attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the property, plant

and equipment is ready for its intended use, such as repair and maintenance costs, are normally charged to the statement of profit or loss and

other comprehensive income in the period the costs are incurred.

Depreciation is computed on a straight-line basis over the following useful lives:

Buildings and structures	5–80 years
Machinery and equipment	2–25 years
Vehicles	1–15 years
Other property, plant and equipment	1–30 years

The useful lives, residual values and depreciation method are reviewed periodically to ensure that they are consistent with the expected pattern

of economic benefits from items in property, plant and equipment.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the

carrying value may not be recoverable.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or

disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying

amount of the asset) is included in the statements of profit or loss and other comprehensive income in the year the asset is derecognized.

Construction in progress is stated at cost. This includes the cost of construction, plant and equipment and other directly attributable costs.

Construction in progress is not depreciated until the relevant assets are completed and ready for the intended use.

2.7. INVESTMENT PROPERTY

Land plots rented to third parties are considered to be investment property. Investment property is stated at cost less accumulated depreciation

and is adjusted for recognized impairment loss.

The initial cost of investment property comprises its purchase price, including non-refundable purchase taxes and any directly attributable costs

of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the investment property is ready for its

intended use, such as repair and maintenance costs, are normally charged to the statement of profit or loss and other comprehensive income in

the period the costs are incurred.

Depreciation is calculated on the straight-line method to write-off the cost of each asset (except of land) to their residual values over their

estimated useful life of 8 – 40 years.

An item of investment property is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any

gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the

asset) is included in the statement of profit or loss and other comprehensive income in the year the asset is derecognized.

Transfers to and from investment property are made when and only when there is evidence of change in an asset’s use.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 15

2. ACCOUNTING PRINCIPLES(CONT’D)

2.8. FINANCIAL ASSETS (EXCEPT FOR DERIVATIVE

FINANCIAL INSTRUMENTS DESIGNATED AS HEDGING

INSTRUMENTS)

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets initial recognition and measurement

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

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

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

business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group

initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are

‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is

performed at an instrument level.

The Group’s business model for managing financial assets refers to how the Group manages its financial assets in order to generate cash flows.

The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

A regular way purchases or sales of financial assets are recognized on the trade date, i.e., the date that the Group commits to purchase or sell

the asset.

Financial assets subsequent measurement

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

- Amortized cost (debt instruments)

- Fair value through OCI with recycling of cumulative gains and losses upon derecognition (debt instruments). As at 30 June 2023 the

Group did have a hedge items (commitments to purchase gas and grains). For additional information see Note 16

- Fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments).

- Fair value through profit or loss.

Financial assets at amortized cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortized cost if both of the following conditions are

met:

- The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows

and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest

on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains

and losses are recognized in the statement of profit or loss and other comprehensive income when the asset is derecognized, modified or impaired.

The Group’s financial assets at amortized cost includes trade, other current and non-current receivables, loans granted.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 16

2. ACCOUNTING PRINCIPLES(CONT’D)

2.9. DERECOGNITION OF FINANCIAL ASSETS AND

LIABILITIES

Financial assets

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

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

- the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay

to a third party under a ‘pass through’ arrangement; or

- the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and

rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred

control of the asset.

When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks

and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the

asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying

amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Financial liabilities

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

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

exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the

respective carrying amounts is recognized in the statement of comprehensive income.

2.10. BIOLOGICAL ASSETS

The Group’s biological assets include animals and livestock, poultry, and crops.

Animals and livestock are accounted for at fair value less costs to sell. The fair value of milking cows is measured using discounted cash flows

method (level 3). Other livestock is measured at comparable market prices (level 2).

Poultry is accounted for at fair value less costs to sell. The fair value of poultry is measured based on future value of chickens/meat broilers/eggs

less costs to maintain (level 3).

Crops are accounted for at fair value less costs to sell. The fair value of crops is measured at comparable market prices based on expected yield

(level 3).

Agricultural produce harvested from an entity’s biological assets is measured at its fair value less estimated costs to sell at the point of harvest.

The measured value of the harvested yield is then considered to be the cost of inventories.

As at 30 June 2023 and 30 June 2022, the management of the Group treats all animals and livestock (excluding eggs and broilers) as non-

current assets and all crops, eggs and broilers as current.

All changes in fair value of biological assets were accounted for under cost of sales caption in the statements of profit or loss and other

comprehensive income.

2.11. INVENTORIES

Inventories are valued at the lower of cost and net realizable value, after impairment evaluation for obsolete and slow-moving items.

Net realizable value is the selling price in the ordinary course of business, less the costs of completion and distribution. Cost of raw materials

that are segregated for specific projects is determined using specific identification method; cost of other inventory is determined by the first-in,

first-out (FIFO) method. The cost of finished goods and work in progress includes the applicable allocation of fixed and variable overhead costs

based on a normal operating capacity. Unrealizable inventory has been fully written off.

Under inventories caption the Group also accounts for commitments to purchase agricultural produce (the change in the fair value of the firm

commitment) (Note 2.15).

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 17

2. ACCOUNTING PRINCIPLES(CONT’D)

2.12. CASH AND CASH EQUIVALENTS

Cash includes cash on hand and cash in bank accounts. Cash equivalents are short-term, highly liquid investments that are readily convertible to

known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.

For the purposes of the cash flows statement, cash and cash equivalents comprise cash on hand and in current bank accounts as well as deposits

in bank with original term of three months or less.

Restricted cash held as a deposit for trading in the futures exchange is accounted as other current financial asset.

2.13. NON-CURRENT ASSETS HELD FOR SALE

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

assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing

use. This condition is regarded as met only when the sale is highly probable, and the asset is available for immediate sale in its present condition.

Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the

date of classification.

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

2.14. FINANCIAL LIABILITIES

Financial liabilities initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings and payables.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable

transaction costs. The Company’s and Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,

derivatives, and finance lease liabilities.

Subsequent measurement

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

Financial liabilities at fair value through profit or loss

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

recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also

includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as

defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging

instruments. Gains or losses on liabilities held for trading are recognized in the statement of comprehensive income. The Group has not designated

any financial liabilities as at fair value through the statement of profit or loss and other comprehensive income during the years ended 30 June

2022 and 2023.

This is the category most relevant to the Group and The Company. After initial recognition, loans, borrowings and other payables are subsequently

measured at amortized cost using the EIR method. Gains and losses are recognized in the statement of comprehensive income when the liabilities

are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

The EIR amortization is included as finance costs in the statement of comprehensive income.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 18

2. ACCOUNTING PRINCIPLES(CONT’D)

2.15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE

ACCOUNTING

The Group engages in derivative financial instruments transactions, such as futures contracts, to hedge purchase and sale price fluctuation risk

and interest rate swaps to hedge cash flows fluctuation risk. On the agreement date and subsequently derivative financial instruments are

accounted for at fair value. Fair value is derived from quoted market prices for futures (level 1) and using valuation models for interest rate swaps

(level 2 and 3). The estimated fair values of these contracts are reported in the statement of financial position as assets for contracts having a

positive fair value and liabilities for contracts with a negative fair value. Gain or losses from changes in the fair value of derivative financial

instruments are recognized in the statements of profit or loss and other comprehensive Income.

Other derivatives not used for hedge accounting are also accounted for at fair value (level 2 and 3 as described in Note 2.26) with gain or losses

from changes in the fair value recognized in the statements of profit or loss and other comprehensive income.

For the purposes of hedge accounting, hedges are classified into two categories: (a) fair value hedges which hedge the exposure to changes in

the fair value of a recognized asset or liability or an unrecognized firm commitment; and (b) cash flow hedges which hedge exposure to variability

in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a forecasted transaction.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group

will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge

ineffectiveness and how the hedge ratio is determined).

A hedging relationship qualifies for hedge accounting if it meets all the following effectiveness requirements:

- There is ‘an economic relationship’ between the hedged item and the hedging instrument.

- The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship.

The hedging relationship ratio is the same as that calculated by comparing the amount of insured units with the amount of the hedging

instrument that the Group actually uses to insure the hedged items.

Fair value hedges

In relation to fair value hedges, which meet the conditions for hedge accounting, any gain or losses from re-measuring the hedging instrument

to fair value is recognized immediately in the statements of profit or loss and other comprehensive income. The hedged item is adjusted for fair

value changes relating to the risk being hedged and the difference is recognized as an asset or liability with a corresponding gain or loss recognized

in the statements of profit or loss and other comprehensive income.

When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm

commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in the statements of

profit or loss and other comprehensive income.

Any gains or losses arising from changes in the fair value of the hedging instruments, which do not qualify for hedge accounting, are taken

directly to the statements of profit or loss and other comprehensive income for the period.

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

accounting.

Cash flow hedges

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

is determined to be an effective hedge is recognized initially as other comprehensive income in comprehensive income statement and the

ineffective portion is recognized in the statements of profit or loss and other comprehensive income (profit or loss). The gains or losses on effective

cash flow hedges recognized initially in equity are either transferred to the statements of profit or loss and other comprehensive income in the

period in which the hedged transaction impacts the statement of profit or loss and other comprehensive income or included in the initial

measurement of the cost of the related asset or liability.

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

taken directly to the statements of profit or loss and other comprehensive income (profit or loss) for the period.

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

accounting. Any cumulative gain or loss on the hedging instrument recognized in equity remains in equity until the forecasted transaction occurs.

Where the hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to the statements

of profit or loss and other comprehensive income (profit or loss)

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 19

2. ACCOUNTING PRINCIPLES(CONT’D)

2.16. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date of whether

the fulfilment of the arrangement is dependent on the use of a specific asset or assets, or the arrangement conveys a right to use the asset.

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

low-value assets. The Group and the Company recognize lease liabilities to make lease payments and right-of-use assets representing the right

to use the underlying assets.

Right-of-use assets

Initial recognition of right-of-use assets

At the commencement date, the Group and the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

the amount equal to the lease liability at its initial recognition, lease payments made at or before the commencement of the lease (less any lease

incentives received), any initial direct costs incurred by the Group and the Company, and an estimate of costs to be incurred by the Group and the

Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the

condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The Group and the Company

incur an obligation to cover these costs at the commencement date or because they have used the asset held under a lease for a period of time.

The Group and the Company recognizes these costs as part of the cost of right-of-use asset when the Group and the Company incurs an obligation

for these costs.

Subsequent measurement of the right-of-use assets

After initial recognition, the Group and the Company measures the right-of-use asset at cost. Under the cost model, the Group and the Company

measures a right-of-use asset at cost: less any depreciation and any accumulated impairment losses adjusted for any remeasurement of the lease

liability. The right-of-use assets are depreciated under the depreciation requirements of IAS 16, Property, Plant and Equipment. If, under the lease

agreement, ownership of the leased asset transfers to the Company and the Group at the end of the lease term or the cost reflects the exercise

of a purchase option, the Group and the Company depreciates the right-of-use asset from the commencement date to the end of the useful life

of the right-of-use asset. Otherwise, the lessee depreciates the right-of-use asset from the commencement date to the earlier of the end of the

useful life of the right-of-use asset or the end of the lease term as follows:

- Land from 4 to 99 years

- Premises from 5 to 65 years

- Machinery and equipment from 2 to 25 years

- Vehicles from 1 to 12 years

- Other right-of-use assets from 1 to 30 years

Lease liabilities

Initial recognition of the lease liability

At the commencement date, the Group and the Company measure the lease liabilities at the present value of lease payments that are not paid

at that date. The lease payments are discounted using the interest rate implicit in the lease if that rate can be readily determined. If that rate cannot

be readily determined, the Group and the Company use the incremental borrowing rate. At the commencement date, the lease payments included

in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are

not paid at the commencement date: fixed payments, less any lease incentives receivable; variable lease payment that depend on an index or a

rate, initially measured using the index or rate as at the commencement date; amounts expected to be payable by the lessee under residual value

guarantees; the exercise price of a purchase option if the Group and the Company is reasonably certain to exercise that option; payments of

penalties for terminating the lease, if the lease term reflects the Group and the Company exercising an option to terminate the lease. Variable

lease payments that depend on an index or a rate include, for example, payments linked to a consumer price index, payments linked to a benchmark

interest rate (such as LIBOR) or payments that vary to reflect changes in market rental rates.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 20

2. ACCOUNTING PRINCIPLES(CONT’D)

2.16. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

(cont‘d)

Subsequent measurement of the lease liability

After the commencement date, a lessee measures the lease liability by increasing the carrying value to reflect interest on the lease liability;

reducing the carrying value to reflect the lease payments made; and remeasuring the carrying value to reflect any reassessment or lease

modifications, or to reflect revised in-substance fixed lease payments.

Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining

balance of the lease liability. The periodic rate of interest is the discount rate or if applicable the revised discount rate.

After the commencement date, the Group and the Company recognize in profit or loss, unless the costs are included in the carrying value of

another asset applying other applicable Standards: interest on the lease liability; and variable lease payments not included in the measurement of

the lease liability in the period in which the event or condition that triggers those payments occurs.

Remeasurement of the lease liability

After the commencement date, the lease liability is remeasured to reflect changes to the lease payments. The Group and the Company recognize

the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying value of the right-of-

use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, a lessee shall recognize any remaining

amount of the remeasurement in profit or loss.

Revised discount rate

The Group and the Company remeasures the lease liability by discounting the revised lease payments using a revised discount rate, if there is a

change in the lease term. The Group and the Company determine the revised lease payments on the basis of the revised lease term or, if there is

a change in the assessment of an option, purchase the underlying asset, assessed considering the events and circumstances. The Group and the

Company determine the revised lease payments to reflect the change in amounts payable under the purchase option.

If there is a change in the lease term or in the assessment of an option to purchase, the Group and the Company determine the revised discount

rate as the interest rate implicit in the lease for the of the lease term, if that rate can be readily determined, or the lessee’s incremental borrowing

rate at the date of reassessment, if the interest rate implicit in the lease cannot be readily determined.

Unchanged discount rate

The Group and the Company remeasures the lease liability by discounting the revised lease payments, if either:

- there is a change in the amounts expected to be payable under a residual value guarantee. The Group and the Company determines the

revised lease payments to reflect the change in amounts expected to be payable under the residual value guarantee.

- there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments, including

for example a change to reflect changes in market rental rates following a market rent review. The Group and the Company remeasure

the lease liability to reflect those revised lease payments only when there is a change in the cash flows (i.e. when the adjustment to the

lease payments takes effect). The Group and the Company determine the revised lease payments for the remainder of the lease term

based on the revised contractual payments.

The Group and the Company apply an unchanged discount rate, unless the change in lease payments results from a change in floating interest

rates. In that case, the lessee apply a revised discount rate that reflects changes in the interest rate.

Lease modifications

A lessee accounts for a lease modification as a separate lease if both:

- the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

- the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any

appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification the Group and the Company:

- allocate the consideration in the modified contract;

- determine the lease term of the modified lease; and

- remeasure the lease liability by discounting the revised lease payments using a revised discount rate.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 21

2. ACCOUNTING PRINCIPLES(CONT’D)

2.16. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

(cont‘d)

For a lease modification that is not accounted for as a separate lease, the Group and the Company account for the remeasurement of the lease

liability by:

- decreasing the carrying value of the right-of-use asset to reflect the partial or full termination of the lease for lease modifications that

decrease the scope of the lease. The Group and the Company recognize in the statement of profit or loss and other comprehensive

income any gain or loss relating to the partial or full termination of the lease.

- making a corresponding adjustment to the right-of-use asset for all other lease modifications.

The Group and the Company present lease liabilities separately from other liabilities in the statement of financial position. Interest expenses on

the lease liability are presented separately from the depreciation charge for the right-of-use asset. Interest expense on the lease liability is a

component of finance costs, which is presented in the statement of profit and loss and other comprehensive income.

Short-term and low-value lease

The Group and the Company apply the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those

leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). They also apply low-

value asset lease recognition exemption to office equipment that are considered to be low value. Lease payments for a short-term and low value

lease are recognized as expenses in the statement of profit or loss and other comprehensive incomes on a straight-line basis over the lease period.

Group as a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease

component on the basis of their relative standalone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental

to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this

assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease

classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a

head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.

As part of the evaluation of sub-leases it is needed to determine whether the intermediate lessors shall present the sub-lease revenue on a

gross or net basis (i.e., reduced for head lease expenses). In performing this evaluation reference is made to the principal-agent provisions from

IFRS 15.

Control of an asset (goods and services) refers to the ability to direct the use of and obtain substantially all of the remaining benefits from the

land. Control also means the ability to prevent others from directing the use of, and receiving the benefit from, a good or service. The customer’s

ability to receive the benefit from the goods or services is represented by its right to substantially all of the cash inflows, or the reduction of the

cash outflows generated by the goods or services.

With reference to IFRS 16 the intermediate lessor classifies the sublease as a finance lease since 1 January 2019. Maturity analysis of lease

receivables, showing the undiscounted lease payments to be received after the reporting date is disclosed in Note 9.

Assets leased out under operating leases are included in property, plant and equipment and investment property in the statement of financial

position. They are depreciated over their expected useful lives on a basis consistent with similar property, plant and equipment of the Group. Rental

income is recognized on a straight-line basis over the lease term.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 22

2. ACCOUNTING PRINCIPLES(CONT’D)

2.17. SHARE CAPITAL

Ordinary shares are stated at their par value. Any excess of the consideration received for the shares sold over their par value is shown as share

premium. Incremental external costs directly attributable to the issue of new shares are accounted for as a deduction from share premium.

2.18. PROVISIONS

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow

of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the

obligation. The Group re-evaluates provisions at each reporting date and adjusts them in order to present the most reasonable current estimate.

If the effect of the time value of money is material, the amount of provision is equal to the present value of the expenses, which are expected to

be incurred to settle the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest

expenses.

Onerous contracts provision

Onerous contracts provision is recognized when the Group has a present obligation (legal or constructive) to purchase the goods from a third

party in the future for a price higher than the market selling price at the reporting date or to sell the goods to a third party in the future for a price

lower than the market purchase price at the reporting date. The difference between the value of the contract and its market price at the reporting

date is charged to cost of sales in the statements of profit or loss and other comprehensive income. Such accounting treatment of the Group’s

contracts is applied as long as these contracts have not been accounted for as derivatives.

2.19. NON-CURRENT EMPLOYEE BENEFITS

According to the requirements of Lithuanian Labor Code, each employee leaving the Group at the age of retirement is entitled to a one-off

payment in the amount of 2 months’ salary. In addition, employees of the Group are entitled to employment benefits which are approved by the

Board of the Company.

The actuarial gains and losses are recognized in other comprehensive income.

The past service costs are recognized as an expense on a straight-line basis over the average period until the benefits become vested. Any gains

or losses appearing as a result of curtailment and/or settlement are recognized in the statements of profit or loss and other comprehensive income

as incurred.

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

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

financial position. Present value of the non-current obligation to employees is determined by discounting estimated future cash flows using the

discount rate which reflects the interest rate of the Government bonds of the same currency and similar maturity as the employment benefits.

Actuarial gains and losses are recognized in other comprehensive income as incurred.

Share-based payments

Employees of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for

equity instruments (equity-settled transactions). As further described in Note 30, employees of the Group are granted share options.

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model,

further details of which are given in Note 30.

That cost is to be recognized in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over the

period in which the service conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each

reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of

equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss and other comprehensive incomes for a period

represents the movement in cumulative expense recognized as at the beginning and end of that period.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 23

2. ACCOUNTING PRINCIPLES(CONT’D)

2.19. NON-CURRENT EMPLOYEE BENEFITS (cont‘d)

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the

likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest.

Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-

vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or

performance conditions.

No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.

Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting

condition is satisfied, provided that all other performance and/or service conditions are satisfied.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details

are given in Note 30).

2.20. GRANTS AND SUBSIDIES

Government grants and subsidies (hereinafter grants”) are recognized where there is reasonable assurance that the grant will be received, and

all attached conditions will be complied with.

Grants received in the form of cash intended for the purchase, construction or other acquisition of non-current assets are considered as asset-

related grants. The amount of the asset related grants is recognized as deferred income in the financial statements as used in parts according to

the depreciation of the assets associated with this grant. In the statements of profit or loss and other comprehensive income, a relevant expense

account is reduced by the amount of grant amortization.

Grants received as a compensation for the expenses or unearned income of the current or previous reporting period, also, all the grants, which

are not grants related to assets, are considered as grants related to income. The income-related grants are recognized as used in parts to the

extent of the expenses incurred during the reporting period or unearned income to be compensated by that grant.

2.21. INCOME TAX

The Group companies are taxed individually, irrespective of the overall results of the Group. Income tax charge is based on profit for the year and

considers deferred taxation. The charge for taxation included in these financial statements is based on the calculation made by the management

in accordance with tax legislation of the Republic of Lithuania and respective countries, where the Group companies are registered.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable

or receivable in respect of previous years. The amount of current tax payable or receivables the best estimate of the tax amount expected to be

paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the

reporting date.

In the year ended 30 June 2023 and 30 June 2022, the standard income tax rate for the Group non-co-operative companies operating in

Lithuania was – 15%.

For companies operating in Lithuania 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 not designated for hedging. The transferable tax loss cannot cover more than 70% of the

taxable profit of the current year. Such carrying forward is disrupted if the company changes its activities due to which these losses were 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 not designated for hedge (as described in Note 16) 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. For companies

operating in Latvia and Denmark tax losses can be carried forward for indefinite period.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 24

2. ACCOUNTING PRINCIPLES(CONT’D)

2.21. INCOME TAX (cont‘d)

Income tax for the foreign subsidiaries is accounted for according to tax legislation of those foreign countries. The standard income tax rates in

the foreign countries are as follows:

	Financial year ended
	30 June 2023	30 June 2022
Republic of Latvia 1	–	–
Republic of Estonia 2	–	–
Kingdom of Denmark	22%	22%
Ukraine	18%	18%
Belarus	20%	18%
Russia	20%	20%

In Latvia, effective from 1

January 2018 Under the Corporate Income Tax Law, corporate income tax is payable at the time when profit is distributed. As a result,

the taxable base comprises distributed profits and notional distributed profits. Resident companies are subject to tax at a rate of 20% on the gross taxable

amount. The net taxable base (distributed profits and notional distributed profits) is divided by coefficient of 0.8 when determining the gross taxable base for the

tax period.

In Estonia, the taxation of profit of operating subsidiaries is deferred until the profit appropriation moment, i.e. payment of dividends. The dividends paid by the

Group’s companies in Estonia are taxed at the withholding tax rate of 20% as at 30 June 2023 (20% as at 30 June 2022).

Deferred taxes are calculated using the balance sheet liability method. Deferred taxes reflect the net tax effects of temporary differences

between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred

tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences

are expected to be recovered or settled based on tax rates enacted or substantially enacted at the reporting date.

Deferred tax assets have been recognized in the statement of financial position to the extent the management believes they will be realized in

the foreseeable future, based on taxable profit forecasts. If it is believed that part of the deferred tax is not going to be realized, this part of the

deferred tax asset is not recognized in the financial statements.

2.22. REVENUE RECOGNITION

Revenue from sales of grain, feedstuff, fertilizers, seeds, agricultural production and other food products

Revenue from contracts with customers is recognized at a point in time when control of the goods (grain, feedstuff, fertilizers, seeds, agricultural

production and cattle, milk and poultry food products) are transferred to the customer at an amount that reflects the consideration to which the

Group expects to be entitled in exchange for those goods. The Group has concluded that it is the principal in its revenue arrangements, except

for Neuss/Spyck contracts described in Note 2.27, because:

- The Group controls the goods before transferring them to the customer;

- The Group is primarily responsible for goods supply and bears risk of non-performance;

- The Group has latitude in establishing price either directly or indirectly.

Where the Group has signed master framework agreements with the clients, majority of such contracts are not enforceable on their own without

a specific purchase order. Every purchase order generally represents a contract with the customer in these cases, and each contract includes a

single performance obligation.

The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the

transaction price needs to be allocated (e.g. warranties, transportation, storage). Generally, the Group’s contracts do not include such promises.

If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in

exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly

probable that significant revenue reversal will not occur when the associated uncertainty is resolved. Some contracts for the sale of equipment

provide customers with a right of return which gives rise to variable consideration. For goods that are expected to be returned, instead of revenue,

the Group recognizes a refund liability. A right of return asset (and corresponding adjustment to cost of sales) is also recognized for the right to

recover the goods from a customer.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 25

2. ACCOUNTING PRINCIPLES(CONT’D)

2.22. REVENUE RECOGNITION (cont‘d)

Revenue from sales of machinery and equipment

In some contracts, the Group transfers control of an equipment to a customer and grants the customer the right to return the product for various

reasons after the use of the term. An asset recognized for the Group's right to recover the equipment from a customer on settling a refund liability

shall initially be measured by reference to the former carrying amount of the equipment less any expected costs to recover those products

(including potential decreases in the value to the Group of returned products). At the end of each reporting period, the Group updates the

measurement of the asset arising from changes in expectations about products to be returned. The Group presents the asset separately from the

refund liability, under captions: Inventories (Note 11) and Other non–current liabilities (Note 24).

Revenue from customer specific project contracts

Performance obligations arising from the project contracts with customers (for example to install grain storage facilities) are fulfilled over time

and respectively the revenue is recognized over time if any of the following criteria are met: (a) the customer simultaneously receives and consumes

the benefits provided by the Group’s performance as the Group performs; (b) the Group’s performance creates or enhances an asset that the

customer controls as the asset is created or enhanced; or (c) the Group’s performance does not create an asset with an alternative use and the

Group has an enforceable right to payment for performance completed to date. If the Group can reasonably measure its progress towards complete

satisfaction of the performance obligation, the Group recognizes revenue and expenses in relation to each contract over time, based on the

progress of performance. The progress of performance is assessed based on the proportion of the costs incurred in fulfilling the contract up to

date over to the total estimated costs of the contract. Group uses an input method in measuring progress because there is a direct relationship

between the Group’s effort (i.e., based on the labour hours incurred, and materials used) and the output produced which provides a faithful

depiction. When the Group is not be able to reasonably measure the outcome of a performance obligation (for example, in the early stages of a

contract), but the Group expects to recover the costs incurred in satisfying the performance obligation, the Group recognizes revenue only to the

extent of the costs incurred until such. When it is determined that the costs of the contract are expected to exceed the revenue, the entire

estimated loss amount is recognized in the statement of profit or loss and other comprehensive income.

Contract modification (scope or price, or both) is accounted for as a separate contract with customer, if the scope of the contract increases

because of the addition of promised goods or services that are distinct and the price of the contract increases by an amount of consideration that

reflects the Group’s stand-alone selling prices of the additional promised goods or services in the circumstances of the particular contract.

Otherwise, the contract modification is accounted as (a) termination of the existing contract and the creation of a new contract, if the remaining

goods or services are distinct from the goods or services transferred on or before the date of the contract modification or (b) part of the existing

contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at

the date of the contract modification.

The effect that the contract modification has on the transaction price, and on the Group’s measure of progress towards complete satisfaction of

the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the

contract modification.

Provisions for loss making contracts are recognized when the Group has a present obligation (legal or constructive) to complete the construction

contract for the third party for the price that is lower than the total estimated cost to perform the contract as of the date of the financial statements.

The difference (loss) between the contract price and the total estimated cost of delivery under the contract is recognized in the statement of

comprehensive income.

When fulfilling the contracts, the Group can receive short-term prepayments from its customers. Applying the practical expedient, the Group is

not adjusting the price allocation by the financing component, if at the inception of the contract it is expected that the time period from the

customer payment for goods/services till the delivery of these goods/services will not exceed one year.

In addition, the Group applied the practical expedient and did not disclose the aggregate amount of the transaction price allocated to the

performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period because each performance obligation

is part of a contract that has an original expected duration of one year or less.

The Company recognizes revenue from management services over time, using a delivery method to measure provision of the services, because

the customer simultaneously receives and consumes the benefits provided by the Company.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 26

2. ACCOUNTING PRINCIPLES(CONT’D)

2.22. REVENUE RECOGNITION (cont‘d)

Other income

Other occasional revenue from the sale property, plant or equipment is recognized at a point in time, when sold items are delivered to client and

control is transferred.

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

Under Other income caption is recognized grants related to income for agricultural activity. The income-related grants are recognized as used in

parts to the extent of the expenses incurred during the reporting period or unearned income to be compensated by that grant (Note 2.20).

In addition, the management considers the effect of other matters to the revenue recognition such as the existence of significant financing

components, non-cash consideration, consideration payable to the customer and warranties. None of these are present in the Group’s contracts

with the customers. Warranties provided by the Group are only an assurance-type and are not provided as the Group’s separate service and not

treated as a separate performance obligation. Such warranties are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent

Assets. The Group does not incur material costs to acquire or fulfil the contract.

Due to the Group’s business nature, apart from what is described in this Note, the management did not make any other significant accounting

judgements, estimates and assumptions relating to revenue from contracts with customers recognition, as there are no complex/multi-elemental

goods or services, no variable consideration, financing component, volume rebates, discounts, contract cost or amounts payable to the customers.

Contract assets – accrued revenue

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring

goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned

consideration that is conditional.

Trade receivables

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

before payment of the consideration is due). Refer to accounting policies of financial assets, Note 2.8.

Contract liabilities – prepayments received

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of

consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract

liability is recognized when the payment is made. Contract liabilities are recognized as revenue when the Group performs under the contract.

2.23. EXPENSE RECOGNITION

Expenses are recognized on the basis of accrual.

The amount of expenses is usually accounted for as the amount paid or due to be paid, excluding VAT. In those cases when long period of

payment is established and the interest is not distinguished, the amount of expenses is estimated by discounting the amount of payment using

the market interest rate.

2.24. IMPAIRMENT OF NON-FINANCIAL ASSETS

The Group assesses at each reporting date whether there is an indication that a non-financial asset may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required (e.g. goodwill), the Group estimates the asset’s recoverable amount. An asset’s

recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an

individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable

amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate

valuation model is used. These calculations are corroborated by independent valuations, valuation multiples, or other available fair value indicators.

Impairment losses are recognized in the statement of profit or loss and other comprehensive income in those expense categories consistent

with the function of the impaired asset.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 27

2. ACCOUNTING PRINCIPLES(CONT’D)

2.24. IMPAIRMENT OF NON FINANCIAL ASSETS (cont‘d)

For non-financial assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously

recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable

amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s

recoverable amount since the last impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable

amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss

been recognized for the asset in prior years. Such reversal is recognized in the statements of profit or loss and other comprehensive income.

2.25. SEGMENT INFORMATION

In these financial statements an operating segment means a constituent part of the Group participating in production of an individual product or

provision of a service or a group of related products or services, whose operating results are regularly reviewed by the Group’s management to

make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

For management purpose the Group is organized into five operating segments based on their products and services as follows:

- the grain, oilseed and feed segment include trade in wheat, rapeseed, barley and other grains and oilseeds, suncake and sunmeal, sugar

beet pulp, soymeal, vegetable oil, rapecake, feed, premixes, production and trade of feedstuffs, grain storage and logistics services;

- the products and services for farming segment includes sales of fertilizers, seeds, plant protection products, machinery and equipment,

grain storage facilities, spare parts and other equipment to agricultural produce growers and grain storage companies;

- the agricultural production segment includes growing of grains, rapeseed and others as well as sales of harvest, breeding of livestock

and sales of milk and livestock. Milk is sold to local dairy companies, other production is partly used internally, partly sold;

- food products segment includes whole cycle poultry business (incubation of hatching eggs, broiler breeding, production of poultry and

its products, feed manufacturing for self-supply, retail sale of chicken meat and its products), production and wholesale of flour and flour

mixes, instant foods, production, and wholesale of breadcrumbs and breading mixes;

- the other products and services segment includes Trade in pest control and hygiene products, production and sales of extruded products,

pet food, provision of veterinary pharmaceutical services and trade in products, provision of fumigation and sanitation services.

In these financial statements, information about geographical areas means a constituent part of the Group revenue from external customers

attributed to the Group’s country of domicile and attributed to all foreign countries in total from which the Group derives revenue and non-current

assets other than financial assets and deferred tax assets located in the Group’s country of domicile and located in all foreign countries in total in

which the Group holds assets.

2.26. FAIR VALUE MEASUREMENT

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

at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability

takes place either:

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

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

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

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

assuming that market participants act in their economic best interest.

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

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

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,

authorized the use of relevant observable inputs and authorized the use of unobservable inputs.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 28

2. ACCOUNTING PRINCIPLES(CONT’D)

2.26. FAIR VALUE MEASUREMENT (cont‘d)

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

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

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

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

observable.

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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determine whether transfers have

occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value

measurement as a whole) at the end of each reporting period.

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

Company have determined classes of assets and liabilities based on the nature, characteristics and risks of asset or liability and the level of the

fair value hierarchy as explained above.

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS

The preparation of financial statements in conformity with International Financial Reporting Standards requires management to make judgments,

estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingencies.

Significant accounting judgments

The significant areas of judgment used in the preparation of these financial statements are described as follows.

Principal versus agent assessment

The Group determined that, as a general it acts as the principal in providing goods and services because:

- controls goods and services before they are delivered to the customer;

- is responsible for the overall execution of the contract with the client and is at risk of default;

- has a choice of price setting.

Accounting for trading contracts

Within grains and oilseeds as well as feedstuffs segments, the Group’s activity is an agricultural goods intermediary (buying and selling different

types of grain, oilseeds, rapeseed, etc.). The Group buys and sells agricultural goods at a fixed price for a specified delivery period in the future.

The terms of the Group’s contracts permit net settlement; however, in practice, contracts result in physical delivery, except for rapeseed extraction

delivered on term FOB Neuss/Spyck. The Group acts as an intermediary by entering into purchase and sales contracts with producers and users

of the agricultural goods, creating links within the value chain for the agricultural goods for a stable customer base, making profits from a distributor

margin rather than from fluctuations in price or a broker traders’ margin. As a result, the Group’s purchases and sales contracts are entered into

in accordance with the expected purchase and sale requirements and, therefore, have not been accounted for as derivatives within the scope of

IFRS 9, except for those contracts which are hedged (Note 2.15) and contracts concluded on terms FOB Neuss/Spyck which are usually net

cash settled.

Receivables from agricultural produce growers and payments on agricultural produce growers’ behalf

Within its agricultural inputs segment, the Group is engaged in selling fertilizers and plant protection products to agricultural produce growers as

well as pays on behalf of agricultural produce growers to suppliers of seeds or directly pays to agricultural produce growers (Notes 13 and 14.

The balances arising from these transactions are non-interest bearing and are generally settled within 120–- 360 days by delivering grain to the

Group. These transactions constitute common arrangements in the industry, they are entered into between distributors and agricultural produce

growers under similar terms, and usual settlement is by delivery of grain, as opposed to an unconditional right to receive cash; therefore, no

discounting is performed on these balances. Trade receivables arising on sales of fertilizers and plant protection products are presented within

trade receivables caption in the statement of financial position, while payments on behalf of agricultural produce growers, which do not derive from

sales transactions, are presented as prepayments in the statement of financial position.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 29

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (CONT‘D)

Significant accounting estimates

The significant areas of estimation used in the preparation of these financial statements relate to depreciation (Notes 2.6, 2.7, 6, 7 and 8), fair

value estimation of biological assets (Notes 2.10 and 10), impairment evaluation (Notes 2.24, 5, 6, 7, 8, 9, 11, 12, 13, 14 and 15), estimation of

fair value of assets acquired and liabilities assumed in business combinations (Note 3), assessment of net realizable value of inventories (Note

2.11 and Note 11), assessment of provision for onerous contracts (Note 2.18) and assessment of fair value of share based payments (Note 30).

Future events may occur which will cause the assumptions used in arriving at the estimates to change. The effect of any changes in estimates will

be recorded in the financial statements, when determinable.

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 discussed further.

Accounting estimates regarding war in Ukraine

Group operations in Belarus and Russian markets

During previous financial year and until the end of September of this financial year the Group had operations in the Russian market (Wholesale

of products for crop growing veterinary products, premixes, and seeds for gardening). Also, the Company has operations in the Belarussian market

(Wholesale of products for crop growing veterinary products, premixes, and seeds for gardening). As at the date of these financial statements, the

Group had no significant positions of assets or liabilities in these markets.

Presented below is the Group‘s summarized exposure as at 30 June 2023 ( in EUR’000):	Total	Total (subsidiaries registered
		in Russia and Belarus):
Trade and other receivables from Russian entities	8	8
Trade and other liabilities to the Russian entities	598	598
Trade and other receivables from Belarus entities	5 126	5 126
Trade and other liabilities to the Belarus entities	108	108

Revenue from contracts with customers from Russia only represent revenue by companies that are registered in Russia and Belarus (OOO

VitOMEK (entity code 1117746107291), OOO VitOMEK (entity code 1157746009398), IOOO Belfidagro (feed additives trading) until full loss

of control during 2022-2023

t quarter).

Revenue from contracts with customers from Russia for financial year ended 30 June 2023 were EUR 16,221 thousand, from which EUR

16,221 thousand are revenue of subsidiaries registered in Russia and Belarus.

Revenue from contracts with customers from Belarus mainly represent revenue by two companies that are registered in Belarus (until one of

these full loss of control during 2022-2023

d quarter).

Revenue from contracts with customers from Belarus for the period ended 30 June 2023 were EUR 12,249 thousand, from which EUR 12,162

thousand are revenue of subsidiaries registered in Russia and Belarus.

Subsidiaries registered in Russia and Belarus controlled by the Group

The Group had operations in Russian and Belarusian markets through subsidiaries OOO VitOMEK (entity code 1117746107291),

OOO VitOMEK (entity code 1157746009398), IOOO Belfidagro (feed additives trading) and OOO KLM (feed materials and feed additives

trading, supply of seeds, plant care products, fertilizers, provision of veterinary pharmaceutical services and trade in products). During the first

quarter of 2022 Group‘s Management made a decision to dispose of these entities in 12 month period (at the date of the financial statements,

three companies were sold (Notes 3 and 12). The agreements for the sale of the companies were signed on 25 August 2022, and the Group lost

ownership and control from 1 September 2022 – OOO VitOMEK (inc. no. 1117746107291), from 27 September 2022 – OOO VitOMEK

(inc. no. 1157746009398) and from 9 November 2022 – IOOO Belfidagro. OOO KLM is not sold yet as at 30 June 2023 (Note 12).

Subsidiaries registered in Ukraine controlled by the Group and Group‘s operations in Ukrainian market

The Group conducts operations in the Ukrainian market through its subsidiary, TOV LINAS AGRO UKRAINA (representative office). In

February 2022, following the recognition of self-proclaimed republics of Donetsk and Lugansk by the Russian Federation and its subsequent

invasion of Ukraine, the military conflict escalated and spread to other regions of that country. As at the date these consolidated financial

statements were authorised for issue, the situation in Ukraine is extremely volatile and inherently uncertain.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 30

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (CONT‘D)

As at 30 June 2023 Group‘s property, plant and equipment, machinery, inventory, trade and other receivables, other assets, trade, and other

liabilities, related to subsidiary operating in Ukraine were not significant. Revenue from contracts with customers during this year ended

30 June 2023 of Group‘s subsidiary, operating in Ukraine was not significant.

The Group‘s revenue from contracts with customers from Ukraine this year ended 30 June 2023 were EUR 8,986 thousand. (30 June 2022

the Group’s revenues from the contracts with the customers were EUR 2,880 thousand).

The Group’s Management has evaluated the following key areas which could be affected by uncertainties caused by the war in Ukraine: going

concern, impairment, residual value and useful life of property, plant and equipment, assessment of expected credit losses, impairment of goodwill,

net realizable value of inventory, classification of financial instruments as current and non-current, lease contracts. Based on the assessment of

the Group’s the effect of the war in Ukraine on financial statements was not significant; however, due to dynamics and volatility of the military

operations in Ukraine it is difficult to reliably measure the ultimate financial impact.

Valuation of biological assets

As at 30 June 2023 and 30 June 2022, the Group did not have an independent appraisal of its biological assets. According to IFRS, such assets

must be recorded at fair value. Biological assets mostly consist of three groups: animals and livestock, poultry and crops which are accounted for

at fair value less costs to sell (Note 2.10).

The fair value of biological assets of the Group is determined on a recurring basis. The management determines key assumptions based on

historical figures and the best estimate as at the reporting date. Applied unobservable assumptions are challenged on a regular basis and adjusted

after back testing is performed. Other observable inputs used are based on publicly available sources (prices in the market). The management of

the Group constantly analyses the changes in fair value and assesses what has the biggest influence on it – quantity produced, sales prices and

etc.

Animals and livestock are valued in two ways: milking cows are valued using discounted cash flows method less costs to sell (level 3) and other

groups of livestock at market prices less cost to sell at the reporting date (level 2). Crops are valued at market prices based on expected yield less

costs to sell at the reporting date (level 3).

Poultry are valued in the following way: hatching chicken are valued based on the future value of the produced eggs less costs to maintain the

chicken until end of its production period, slaughter costs as well as costs to sell at the reporting date (level 3). Meat broilers are valued based on

average age of the chicken and its respective market value between the value range of day one and value at the moment of slaughtering the

chicken (level 3).

Milking cows

The management of the Group decided to assess fair value of milking cows based on the discounted cash flow method because there is no

active reliable market for such livestock and because this method is the most accurate estimation of the fair value of milking cows.

As at 30 June 2023 the key assumption used to determine fair value of milking cows is the estimated milk selling price for the expected average

productive life of a milking cow (EUR 0.403 for the year ending 30 June 2024 and EUR 0.403 for the year ending 30 June 2025) which was

estimated based on publicly available average market prices used to calculate the expected future cash inflows as well as pre-tax discount rate

(8.94%). As at 30 June 2022 the key assumptions used to determine fair value of milking cows were the estimated milk selling price (EUR 0. 45

for the year ending 30 June 2023 and EUR 0.45 for the year ending 30 June 2024) which was estimated based on publicly available average

market prices used to calculate the expected future cash inflows as well as pre-tax discount rate (5.21%).

The following table demonstrates the sensitivity of the fair value of milking cows to a reasonably possible change in key assumptions and its

effect on profit or loss. There is no effect to other comprehensive income.

	30 June 2023		30 June 2022
	Possible change	Effect on fair value	Possible change	Effect on fair value
Milk price	+ 15 %	495	+ 15 %	655
Milk price	- 15 %	(495)	- 15 %	(653)
Discount rate	+ 1 p.p.	(73)	+ 1 p.p.	(82)
Discount rate	- 1 p.p.	73	- 1 p.p.	86

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 31

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (CONT‘D)+IB

Crops

As at 30 June 2023 and 2022, the key assumptions used to determine fair value of crops are the estimated yield ranges depending on the type

of crops (2.9– 10.0 tones/ha for grain cultures and 60 – 65 tones/ha for beet cultures for the year ending 30 June 2023 and 3.0– 8.0 tones/ha

for grain cultures for the year ending 30 June 2022) and the expected sales price, which was based on the estimated future grain and oilseeds

sales price of the deliveries taking place September – December of the respective year.

The following table demonstrates the sensitivity of the fair value of crops to a reasonably possible change in key assumptions and its effect on

profit or loss. There is no effect to other comprehensive income.

	30 June 2023		30 June 2022
	Possible change	Effect on fair value	Possible change	Effect on fair value
Yield	+ 5 %	1,311	+ 5 %	1,238
Yield	- 5 %	(1,311)	- 5 %	(1,238)
Price	+ 5 %	1,311	+ 5 %	1,238
Price	- 5 %	(1,311)	- 5 %	(1,238)

Poultry

As at 30 June 2023 and 2022, the main assumptions used to determine fair value of hatching chicken are the price of the incubation eggs

(EUR 0.15-0.24 for the unit; EUR 0.15-0.28 for the unit in previous financial year) which was estimated based on publicly available yearly average

market price and the average number of hatching eggs produced per hatching chicken in the lifetime178.5 units for financial year (178.5 units –

previous financial year).

The following table demonstrates the sensitivity of the fair value of hatching chickens to a reasonably possible change in key assumptions and

its effect on profit or loss. There is no effect to other comprehensive income.

		30 June 2023		30 June 2022
	Possible change	Effect on fair value	Possible change	Effect on fair value
Number of eggs per	+ 5 %	(35)	+ 5 %	289
lifecycle/price of eggs
Number of eggs per	- 5 %	46	- 5 %	(289)
lifecycle/price of eggs

As at 30 June 2023 and 2022, the main assumptions used to determine fair value of broilers are the market price of chickens (EUR 0.41 for

1 day old and EUR 3.24 for 36 days old) which was estimated based on actual purchases/sales taking place close to the 30 June 2023 and

broiler weight of 2.39 kg as at 36 days old (as at 30 June 2022 – 2.22 kg as at 36 days old).

The following table demonstrates the sensitivity of the fair value of broilers to a reasonably possible change in key assumptions and its effect on

profit or loss. There is no effect to other comprehensive income.

		30 June 2023		30 June 2022
	Possible change	Effect on fair value	Possible change	Effect on fair value
Weight	+ 5 %	(45)	+ 5 %	390
Weight	- 5 %	67	- 5 %	(390)
Price	+ 5 %	(658)	+ 5 %	390
Price	- 5 %	658	- 5 %	(390)

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 32

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (CONT‘D)

Impairment of property, plant and equipment (excluding land)

The Group makes an assessment, at least annually, whether there are any indications that property, plant and equipment have suffered

impairment. If that is the case, the Group makes an impairment test. The recoverable amount of cash-generating units (CGU) is determined based

on value in use calculations that use a discounted cash flow model. The cash flows are derived from the forecast for the next five years and do

not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset base of the

cash-generating unit being tested.

As at 30 June 2023 and 30 June 2022, there were no reasonably possible changes in the key assumptions which would cause the carrying

amount of property, plant and equipment to exceed its recoverable amount, except for the already impaired assets.

Impairment of land (accounted for as property, plant and equipment and investment property)

The Group makes an assessment, at least annually, whether there are any indications that land accounted for as property, plant and equipment

and investment property has suffered impairment. If that is the case, the Group makes an impairment test. The recoverable amount of land is

determined as fair value less cost to sell based on comparable market prices for similar land provided by independent valuators.

As at 30 June 2023 and 30 June 2022, there were no reasonably possible changes in the key assumptions which would cause the carrying

amount of land to exceed its recoverable amount, except for the already impaired assets.

Impairment of the Company’s investments in subsidiaries and loans granted

As at 30 June 2023 and 30 June 2022, the Company has investments in subsidiaries and associates. The Company makes an assessment, at

least annually, whether there are any indications that investments in subsidiaries and associates have suffered impairment.

The recoverable amount of Latvian poultry business cash generating unit (CGU), comprising investments into and loans granted to

AS Putnu Fabrika Kekava, SIA Lielzeltini, SIA Cerova and SIA Broileks, was determined based on the value in use calculations that use a

discounted cash flow model. Carrying value of the Company’s investments and loans amounts to EUR 18,965 thousand as at 30 June 2023

(as at 30 June 2022 – EUR 18,965 thousand). The above-mentioned subsidiaries were assessed as one cash generating unit. Cash generating

unit was determined to be all entities operating in poultry business in a specific geographical location (Latvia). The cash flows are derived from

the forecast for the next five years and a terminal value which was calculated with a terminal growth of 2%. As at 30 June 2023, the recoverable

amount of the investment into subsidiaries AS Putnu Fabrika Kekava, SIA Lielzeltini, SIA Cerova and SIA Broileks is most sensitive to the pre-tax

discount rate of 10.06 % (9.78% as at 30 June 2022) which is used for the discounted cash flow model.

As at 30 June 2023 and 2022, there were no reasonably possible changes in the key assumptions which would cause the carrying amount of

the investment into AS Putnu Fabrika Kekava, SIA Lielzeltini, SIA Cerova and SIA Broileks to exceed its recoverable amount.

The recoverable amount of Lithuanian poultry business cash generating unit (CGU), comprising investments into and loans granted to AB Vilniaus

Paukštynas, AB Kaišiadorių Paukštynas and AB Zelvė was determined based on the value in use calculations that use a discounted cash flow

model. The carrying value of these investments and loans amounts to EUR 9,537 thousand as at 30 June 2023 (as at 30 June 2022 -

EUR 6,726 thousand). The above-mentioned subsidiaries have been assessed as separate cash generating units. The cash flows are derived from

the forecast for the next five years and a terminal value which was calculated with a terminal growth of 2%. As at 30 June 2023, the recoverable

amount of the investment into subsidiaries AB Vilniaus Paukštynas, AB Kaišiadorių Paukštynas and AB Zelvė is most sensitive to the pre-tax

discount rate of 10.85% (9.78% as at 30 June 2022) which is used for the discounted cash flow model. As at 30 June 2023, there were no

reasonably possible changes in the key assumptions which would cause the carrying amount of the investment into the before mentioned

companies to exceed its recoverable amount.

There were no indications of impairment of investments in other subsidiaries, except for the ones described above.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 33

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (cont‘d)

Impairment of goodwill

The amount of EUR 1,971 thousand goodwill was recognized upon the acquisition of SIA Paleo. This goodwill was assigned to a cash-generating

unit associated with the fertilizer trade in Latvia. As at 30 June 2017 an impairment of EUR 1,121 thousand was accounted in the statement of

financial position (Note 5).

The Group performed its annual impairment test as at 30 June 2023 and 30 June 2022. The tests showed that there is no need for additional

impairment of goodwill as at 30 June 2023 and 30 June 2022.

The recoverable amount of mentioned cash generating unit was determined based on the value in use calculations that use a discounted cash

flow model. The cash flows are derived from the forecast for the next five years. The impairment test was performed using the following key

assumptions:

	30 June 2023	30 June 2022
Discount rate	8.61 %	5.47 %
Terminal growth rate	2 %	2 %

Assessment of inventories net realizable value

The management of the Group makes estimates and assumptions in order to value inventories at lower of cost or net realizable value. The main

factors incorporated in management assessment of inventories net realizable value are the follows:

1) ageing of inventories,

2) subsequent sales prices,

3) signed contracts to sell,

4) market prices.

Future events may occur which will cause the assumptions to change. The effect of any changes in estimates will be recorded in the financial

statements, when determinable.

Trade receivables allowance

The determination as to whether a trade receivable is collectable involves management judgment and significant estimates. Specific factors

management considers, when determining if allowance for trade receivable must be accounted for are as follows:

1) age of the balance,

2) location of customers,

3) existence of collateral,

4) recent historical payment patterns as well as data on subsequent collections,

5) forward looking estimates (expected inflation rate, GDP or etc.).

Future events may occur which will cause the assumptions to change. The effect of any changes in estimates will be recorded in the financial

statements, when determinable.

Share based payments

Estimating fair value for share-based payment the transactions requires determination of the most appropriate valuation model, which depends

on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including

the expected life of the share option, volatility and dividend yield and making assumptions about them. Under the agreements grant in 2018, the

measurement of the fair value of equity-settled transactions with employees at the grant date, the Group uses an average value derived from

binomial and the Black-Scholes-Merton option pricing share options incentive. For the agreements of Option transactions with a grant date of

28 February 2020 and 29 October 2021, the fair value is calculated on the grant date by applying the share price on the stock exchange on that

day, since these contracts only provide for the employment condition of the Group employee during the stipulated period and the value of the

option is not adjusted. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 30.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 34

2. ACCOUNTING PRINCIPLES(CONT’D)

2.27. USE OF SIGNIFICANT ACCOUNTING JUDGMENTS AND

ESTIMATES IN THE PREPARATION OF FINANCIAL

STATEMENTS (cont‘d)

2.28. CONTINGENCIES

Contingent liabilities are not recognized in the financial statements, except for contingent liabilities associated with business combinations. They

are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

2.29. SUBSEQUENT EVENTS

Subsequent events that provide additional information about the Group’s position at the reporting date (adjusting events) are reflected in the

financial statements. Subsequent events that are not adjusting events are disclosed in the notes when material.

2.30. OFFSETTING AND ROUNDING

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

certain IFRS specifically requires or allows such set-off.

Numbers in tables may vary as they are written in round figures up to one thousand euros.

Such rounding variations are not material for the financial statements.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 35

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP

As at 30 June 2023 and as at 30 June 2022, the Company held these directly and indirectly controlled subsidiaries (hereinafter the Group):

Investments into Company’s subsidiaries

	Place of	Effective share of the			Cost of investment		Main activities
	registration	stock held by the Group			in the Company
		30 June	30 June	30 June		30 June
		2023	2022	2023	2022		Wholesale trade of grains and oilseeds,
AB Linas Agro	Lithuania	97.06%	100%	60,273	59,147		feedstuffs and agricultural inputs
1							Management of the subsidiaries engaged in
UAB Linas Agro Konsultacijos 1	Lithuania	100%	100%	9,384	9,384		agriculture
UAB Dotnuva Baltic	Lithuania	100%	100%	10,618	10,688		Trade of machinery and equipment for
							warehousing of grains, certified seeds
UAB Dotnuva Seeds	Lithuania	100%	–		69	–	Production of certified seeds
2							Preparation and warehousing of grains for
UAB Linas Agro Grūdų Centrai 2	Lithuania	97.98%	100%	5,507	5,500
							trade
UAB Jungtinė Ekspedicija	Lithuania	100%	100%	341	341		Expedition and ship’s agency services
UAB Landvesta 1	Lithuania	100%	100%	1,973	704		Rent and management of agricultural
							purposes land
UAB Landvesta 2	Lithuania	100%	100%	793	439		Rent and management of agricultural
							purposes land
UAB Landvesta 3	Lithuania	100%	100%	636	–		Rent and management of agricultural
							purposes land
UAB Landvesta 4	Lithuania	100%	100%	1,136	–		Rent and management of agricultural
							purposes land
UAB Landvesta 5	Lithuania	100%	100%	1,570	844		Rent and management of agricultural
							purposes land
UAB Landvesta 6	Lithuania	100%	100%	1,004	–		Rent and management of agricultural
							purposes land
Noreikiškės UAB	Lithuania	100%	100%	765	765		Rent and management of agricultural
							purposes land
UAB Lineliai	Lithuania	100%	100%	714	714		Rent and management of agricultural
							purposes land
AS Putnu fabrika Kekava	Latvia	97.19%	97.16%	6,139	6,139		Broiler breeding, slaughtering and sale of
							products
SIA Lielzeltini	Latvia	100%	100%	5,854	5,854		Broiler breeding, slaughtering and sale of
							products, feedstuffs
SIA Cerova	Latvia	100%	100%	790	790		Egg incubation and chicken sale
SIA Broileks	Latvia	100%	100%	47	47		Chicken breeding and sale
UAB Kekava Foods LT	Lithuania	100%	100%	3	3		Dormant company
UAB Kormoprom Invest	Lithuania	100%	100%		1,081	1,081	Management services
UAB TABA holding	Lithuania	100%	100%		62,693	62,121	Management services
							Chicken raising for meat and eggs
Akcinė bendrovė Vilniaus Paukštynas	Lithuania	84.93%	84.37%		6,770	6,740	production, production of poultry and its
							products
UAB Agro Logistic Service	Lithuania	100%	100%		1,716	1,716	Wholesale of feedstuffs for fodder and
		Investments into subsidiaries			179,876	173,016	premixes production
		(Less) impairment		–	–
					179,876	173,016

On 28 March 2022, UAB Zemvaldos Turto Konsultacijos was merged with UAB Linas Agro Konsultacijos

On 22 March 2022, UAB Linas Agro Grūdų Centras, UAB Karčemos Bendrovė and UAB KUPIŠKIO GRŪDAI was merged with UAB Linas Agro Grūdų Centrai

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 36

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP (CONT’D)

Investments into Company’s associates

Place of

registration

Effective share of

the stock held

by the Group

Cost of investment

in the Company

Main activities

		30 June	30 June	30 June	30 June
		2023	2022	2023	2022
SIA Linas Agro	Latvia	96,58%	100%	–	–	Wholesale trade of grains and oilseeds,
						agricultural inputs
UAB Gerera	Lithuania	97.06%	100%	–	–	Dormant company
Linas Agro A/S (under liquidation)	Denmark	97.06%	100%	–	–	Dormant company
UAB Landvesta 3	Lithuania	–	100%	–	199	Rent and management of agricultural
						purposes land
UAB Landvesta 4	Lithuania	–	100%	–	159	Rent and management of agricultural
						purposes land
UAB Landvesta 6	Lithuania	–	100%	–	83	Rent and management of agricultural
						purposes land
LLC LINAS AGRO UKRAINE	Ukraine	97,06%	100%	–	–	Representative office
Linas Agro OŰ	Estonia	97.06%	100%	–	–	Supply of products for crop growing
SIA PFK Trader	Latvia	97.19%	97.16%	–	–	Retail trade of food production
Biržai District Medeikių ŽŪB	Lithuania	98.39%	98.39%	–	–	Growing and sale of crops
Šakiai District Lukšių ŽŪB	Lithuania	98.82%	98.82%	–	–	Mixed agricultural activities
Panevėžys District Aukštadvario ŽŪB	Lithuania	99.54%	99.54%	–	–	Mixed agricultural activities
Sidabravo ŽŪB	Lithuania	96.25%	96.25%	–	–	Mixed agricultural activities
Kėdainiai District Labūnavos ŽŪB	Lithuania	98.95%	98.95%	–	–	Mixed agricultural activities
UAB Užupė	Lithuania	100%	100%	1	1	Rent and management of agricultural
						purposes land
UAB Paberžėlė	Lithuania	100%	100%	–	–	Rent and management of agricultural
						purposes land
Panevėžys District Žibartonių ŽŪB	Lithuania	99.90%	99.90%	1	1	Mixed agricultural activities
SIA Dotnuva Baltic	Latvia	100%	100%	–	–	Trade in agricultural machinery and
						equipment for grain elevators
AS Dotnuva Baltic	Estonia	100%	100%	–	–	Trade in agricultural machinery and
						equipment for grain elevators
						Production of certified seeds
SIA Dotnuva Seeds	Latvia	100%	–	–	–
UAB GeoFace	Lithuania	98.53%	100%	–	–	Software development
UAB Dotnuva rent	Lithuania	100%	100%	–	–	Rent of agricultural machinery and
						equipment
SIA Linas Agro Graudu Centrs	Latvia	97.98%	100%	–	–	Preparation and warehousing of grains
Kėdainiai District ŽŪB Nemunas	Lithuania	67.98%	67.44%	–	–	Mixed agricultural activities
UAB KG Group LT 11	Lithuania	–	89.09%	–	–	Dormant company
Uždaroji Akcinė Bendrovė Šlaituva	Lithuania	89.59%	73.95%	–	–	Production and wholesale of breadcrumbs
						and breading mixes
UAB Baltic Fumigation Service	Lithuania	89.59%	89.09%	–	–	Fumigation service
UAB KG Mažmena	Lithuania	89.59%	89.09%	–	–	Retail trade
Akcinė Bendrovė Zelvė	Lithuania	72.38%	72.05%	363	363	Broiler breeding
UAB Avocetė	Lithuania	84.93%	84.37%	–	–	Management services

Akcinė Bendrovė Kauno Grūdai

Lithuania

89.59%

89.09%

–

Production and wholesale of flour and flour

products, compound feed, extruded

products, and instant foods; wholesale of

feed materials’ fumigation, disinsection,

disinfection and deratization services

On 16 June 2023 company UAB KG Group LT has been deregistered

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 37

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP (CONT’D)

Investments into Company’s associates

	Place of	Effective share of			Cost of investment		Main activities
	registration	The stock held			in the Company
		by the Group
		30 June		30 June	30 June
		30 June 2022
		2023		2023	2022
Uždaroji Akcinė Bendrovė Kauno
11	Lithuania	–	89.09%		–	–	Rent of real estate
Grūdai ir Partneriai
Uždaroji Akcinė Bendrovė KG	Lithuania	84.93%	84.37%		–	–	Consultation and business management
Distribution
Uždaroji Akcinė Bendrovė Lietbro	Lithuania	84.93%	84.37%		–	–	Broiler breeding
Uždaroji Akcinė Bendrovė	Lithuania	84.93%	84.37%		–	–	Dormant company
GASTRONETA
UAB VPK Valdymas	Lithuania	84.93%	84.48%		–	–	Consultation and business management
Cooperative Baltoji plunksnelė	Lithuania	83.33%	82.88%		–	–	Dormant company
Akcinė Bendrovė Kaišiadorių							Chicken raising for meat and eggs
Paukštynas	Lithuania	84.92%	84.60%	2,435	2,435		production, production of poultry and its
Uždaroji Akcinė Bendrovė							products
Domantonių Paukštynas	Lithuania	89.50%	89.00%		–	–	Broiler breeding
Uždaroji Akcinė Bendrovė Kaišiadorių	Lithuania	84.92%	84.60%		–	–	Dormant company
Paukštyno Mažmena
UAB Uogintai	Lithuania	84.92%	84.60%		–	–	Dormant company
UAB Kaišiadorių Skerdykla 22	Lithuania	–	84.60%		–	–	Dormant company
Uždaroji Akcinė Bendrovė Alesninkų	Lithuania	84.92%	84.60%		–	–	Broiler breeding
Paukštynas
Uždaroji Akcinė Bendrovė KG	Lithuania	84.93%	84.48%		–	–	Freight transport services
Logistika
UAB VP Valda	Lithuania	84.93%	84.37%		–	–	Rent of real estate
UAB KP Valda	Lithuania	84.92%	84.60%		–	–	Rent of real estate
							Production and wholesale of compound feed,
SIA KG Latvija	Latvia	89.59%	89.09%		–	–	wholesale of feed materials and products for
							crop growing
KG Eesti OÜ	Estonia	89.59%	89.09%		–	–	Dormant company
KG Polska Sp.zo.o.	Poland	89.59%	89.09%		–	–	Wholesale of feed materials
Nordic Agro Investment Limited	United	89.59%	89.09%		–	–	Management services
	Kingdom
IOOO Belfidagro” 33	Belarus	–	89.09%		–	–	Production and wholesale of premixes
							Wholesale of products for crop growing
OOO KLM	Belarus	62.72%	62.37%		–	–	veterinary products, premixes, and seeds for
OOO VitOMEK (entity code							gardening
44	Russia	–	97.27%		–	–	Production of premixes
1117746107291)
OOO VitOMEK (entity code							Wholesale of premixes, compound feed and
4	Russia	–	97.27%		–	–
1157746009398)	The						feed materials
KG Khumex B.V.	Netherlands	50.00%	50.00%	202	202		Distribution of poultry products
		Investments into associates		3,001	3,443
		(Less) impairment		(202)	(202)
				2,799	3,241

On 1 December 2022 after reorganization company UAB Kauno Grūdai ir Partneriai was merged with UAB Linas Agro Grūdų centrai and on 9 January 2023

company was deregistered

On 20 June 2023 company UAB Kaišiadorių Skerdykla has been deregistered

On 9 November 2022 approval of the Belarusian competition authority MART (Ministry of Antitrust Regulation and Trade) was received and Belarusian

registered

company IOOO Belfidagro was sold, and Group has lost ownership rights and control.

On 25 August 2022 OOO VitOMEK (entity code 1117746107291) and OOO VitOMEK (entity code 1157746009398) was sold. Ownership rights and control

was transferred on 1 September 2022 and 27 September 2022.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 38

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP(CONT’D)

Changes in the Group and the Company for the financial year ended 30 June 2023

On 5 July 2022, authorized capital of AB Linas Agro was increased by EUR 5,134 thousand by non-monetary contribution from

AB Kauno Grūdai.

On 22 July 2022, AB Linas Agro concluded a syndicated credit agreement with Credit Suisse AG, Swedbank AB and AB SEB Bankas for the

amount of EUR 170,000 thousand.

On 25 August 2022, Agreements on sale of share in OOO VitOMEK (Moscow, the Russian Federation) and OOO VitOMEK (Tver, the Russian

Federation), and also IOOO Belfidagro were concluded. IOOO Belfidagro deal was subject to the approval of the Belarusian competition authority

MART (Ministry of Antitrust Regulation and Trade), so the parties signed a preliminary share purchase agreement, which stipulates that the buyer

must obtain clearance from the competition authority.

On 1 August 2022 the Company signed loan contract with UAB Kormoprom Invest for an amount of EUR 2,800 thousand.

During July and September 2022, Luminor Bank AS Lithuania operating through the Lithuanian branch of Luminor Bank AS granted short-term

loans for a total amount of EUR 118,000 thousand to twelve subsidiary companies of AB Linas Agro Group.

On 5 September 2022, authorized capital of UAB Linas Agro Grūdų Centrai was increased by EUR 3,867 thousand with a non-monetary

contribution from AB Linas Agro.

On 21 October 2022 the Company signed loan contract with UAB Kormoprom Invest for an amount of EUR 2,200 thousand.

On 2 November 2022 Authorized capital of SIA Linas Agro increased by EUR 367 thousand by non-monetary contribution of SIA KG Latvia.

On 9 November 2022 approval of the Belarusian competition authority MART (Ministry of Antitrust Regulation and Trade) was received and

Belarusian registered company IOOO Belfidagro was sold, and Group has lost ownership rights and control.

On 30 November 2022 the share capital of Užupės ŽŪB was reduced by paying EUR 691 thousand to its shareholders.

On 1 December 2022 the reorganization was completed, UAB Kauno grūdai ir partneriai was merged to UAB Linas Agro Grūdų centrai. After

reorganization UAB Linas Agro Grūdų centrai share capital has increased by EUR 3,743 thousand.

On 1 December 2022, a new wording of the Articles of Association of AB Linas Agro Group, ISIN code LT0000128092 (hereinafter – “the

Company“), was registered in the Register of Legal Entities (enclosed). The new wording of the Articles of Association was approved on

28 October 2022 during the Annual General Meeting of the Company's Shareholders, together with the decision to increase the authorized capital

of the Company by EUR 201 thousand , issuing 691,535 new ordinary registered shares, and to change the number of members of the Company's

Board of Directors from 6 to 7 and to establish the Company's Supervisory Board, which is to be made up of three members. The newly issued

shares were acquired by employees and/or members of the corporate bodies of the Company who had entered into a share option agreement

with the Company back in 2018 and provided the Company with a notice of exercise of the option in 2022. The shares are fully paid by the

Company from the reserve set up by the Company for share granting.

On 20 December 2022 the Company signed loan contract with UAB TABA Holding for an amount of EUR 11,100 thousand.

On 21 December 2022 the Company granted loan to AB Linas Agro for an amount of EUR 7,000 thousand.

During January – March 2023, the Company transferred 4,000 units of own shares to the employees of the group in accordance with the rules

for granting shares of AB Linas Agro Group.

On 17 March 2023 Užupė ŽŪB was reorganized into UAB Užupė – the initial capital of the company was dissolved and a statutory capital of

EUR 2,5 thousand was formed.

On 20 March 2023 the authorized capital of UAB GeoFace was increased by EUR 300 thousand.

On 30 March 2023 the authorized capital of TOV Linas Agro Ukraina was increased by EUR 167 thousand.

On 27 April 2023 the authorized capital of UAB Dotnuva Baltic was increased by EUR 800 thousand.

On 8 May 2023 was established new company UAB Dotnuva Seeds, the authorized capital is EUR 8 thousand.

On 9 May 2023 reorganisation of UAB Dotnuva Baltic was authorized and a new version of the articles of association was registered. The

authorized capital of UAB Dotnuva Baltic was decreased by EUR 70 thousand.

On 9 June 2023 UAB Dotnuva Seeds established new company SIA Dotnuva Seeds, the authorized capital of the established company

EUR 500 thousand.

On 27 June 2023 the Company bought the shares of UAB Landvesta 1, UAB Landvesta 2, UAB Landvesta 3, UAB Landvesta 4,

UAB Landvesta 5 and UAB Landvesta 6 from AB Linas Agro.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 39

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP (CONT’D)

On 29 June 2023 the Company transferred 9,000 units of own shares to the employees of the group in accordance with the rules for granting

shares of AB Linas Agro Group.

On 30 June 2023 the Company granted loan to UAB Dotnuva Baltic for an amount of EUR 1,500 thousand.

During December-June 2023 the Company bought subsidiary companies shares from non-controlling shareholders for an amount of EUR 715

thousand, the difference of EUR (229) thousand, between the amounts transferred and the book value of the purchased part, was recognized in

equity. AB Kauno Grūdai bought 15.15 % of UAB Šlaituva shares for EUR 550 thousand, UAB TABA Holding bought 0,5% of AB Kauno Grūdai

shares for EUR 133 thousand and other companies shares for EUR 32 thousand.

Changes in the Group and Company for the financial year ended 30 June 2022

On 9 July 2021 authorized capital of Linas Agro OU was increased by EUR 150 thousand.

On 15 July 2021, the Company acquired controlling stakes in AB Kauno Grūdai, AB Kaišiadorių Paukštynas, AB Vilniaus Paukštynas, and related

companies, acting together as KG Group. Acquisition value – EUR 73,469 thousand (including EUR 200 thousand paid for joint venture company

KG Khumex B.V., the acquisition was finalized on 9 September 2021). The Company acquired controlling stakes in 34 companies operating in the

fields of poultry business, grain, flour, instant products production, feed and premix production, and trade in veterinary products. The main reasons

for the acquisition – synergies between AB Linas Agro Group companies and KG Group companies, more variety in food business, potential to

offer clients full chain from the field to the table”. The business combination is accounted with acquisition method. In the case of the acquisition

of this business, the minority share is valued at a proportional share of the identified net assets of the acquired entity. The acquisition costs incurred

were written off by including them in the Groups’ administrative expenses. The acquisition costs were capitalized in the Company’s long-term

financial assets. The companies are registered and operate in Lithuania, Latvia, Estonia, Poland, Belarus, Russia, and the Netherlands. The financial

statements at the provisional fair value are presented below:

AB Kauno Grūdai group and related companies

EUR‘000

Acquisition date for consolidation purposes

1 July 2021

Fair value		Current portion of non-current borrowings	5,165
Intangible assets	919	Current portion of lease liabilities	1,034
Property, plant and equipment	49,069	Current borrowings	49,687
Investment property	215	Trade payables	112,282
Right-of-use assets	3,111	Derivative financial instruments	2,076
Poultry	2,470	Other current liabilities and contract liabilities	17,611
Non-current receivables and other financial assets	2,189	Total current liabilities	187,855
Deferred income tax-asset	5,007	Total liabilities	211,176
Total non-current assets	62,980	Total identifiable net assets at fair value	84,045
Poultry	4,123	Non-controlling interest measured at the	(10,776)
		proportionate share of the net assets at fair value
Inventories	81,346	Goodwill	–
Prepayments	4,387	Total purchase consideration	73,269
Trade receivables	134,644	Cash consideration transferred*	69,570
Other accounts receivable and contract assets	3,702	Other non-cash settlements	1,581
Cash and cash equivalents	4,039	Contingent consideration	2,118
Total current assets	232,241	Less: cash acquired	(4,039)
Total assets	295,221	Total purchase consideration, net of cash acquired	65,531
Grants and subsidies	2,611
Lease liabilities	3,324
Non-current borrowings	16,288	* As of 30 June 2021, the Company made EUR 2,000 thousand
Deferred income tax liabilities	499	prepayment for companies of KG Group shares to acquire.
Other non-current liabilities	599
Total non-current liabilities	23,321

During July – August 2021 the Company concluded syndicated credit agreement with AB SEB bank, AB Swedbank and Luminor bank AS for

the loan of EUR 46,290 thousand and ensured it by pledge of assets.

On 11 August 2021 authorized capital of SIA KG Latvia was increased by EUR 1,500 thousand.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 40

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP (CONT’D)

On 27 October 2021, the Company signed loan agreement with AB Kauno Grūdai, total limit is EUR 550 thousand.

On 29 October 2021 during the Annual General Meeting of the Company Shareholders, decision to increase Company’s authorized capital by

EUR 421 thousand was taken.

On 22 November 2021, a new wording of the Articles of Association of the Company was registered in the Register of Legal Entities – the

authorized capital of the Company was increased by EUR 421 thousand, issuing 1,454,000 new ordinary registered shares of the Company. The

newly issued shares were subscribed by the employees and/or members of the corporate bodies of the Company who have concluded the Share

Option Agreement of the Company in 2018 and accordingly submitted notice to the Company regarding the use of the option in 2021. The New

Shares are granted free of charge and they are paid by the Company from the reserve set up by the Company for shares issue.

On 22 November 2021 the Company‘s registered office was changed, new office is registered at Subačiaus st. 5, Vilnius, Republic of Lithuania.

On 23 November 2021 authorized capital of TOV Linas Agro Ukraina was increased by EUR 84 thousand.

On 29 November 2021 authorized capital of UAB KG Mažmena was increased by EUR 2,100 thousand.

On 20 December 2021 AB Kauno Grūdai signed an agreement with UAB Nordic estate to sell unexploited real estate. The transaction price is

EUR 4 000 thousand. It was used to repay syndicated credit with AB SEB bank, AB Swedbank and Luminor bank.

On 21 December 2021, the Company signed loan agreement with AB Kauno Grūdai, total limit is EUR 4,000 thousand.

On 23 December 2021 authorized capital of KG Eesti OU was increased by EUR 650 thousand.

On 30 December 2021 authorized capital of UAB Linas Agro Konsultacijos was decreased by EUR 16,000 thousand.

On 30 December 2021 authorized capital of UAB Lineliai was decreased by EUR 244 thousand.

On 10 January 2022, the Company acquired 100% shares of UAB Agro Logistic Service. Acquisition value – EUR 1,700 thousand. The Company

acquired controlling stakes in the company operating in the field of wholesale of feedstuffs for fodder and premixes production. The main reason

of this acquisition – substantial synergy with KG Group which was acquired at the beginning of the financial year. The business combination is

accounted for using the acquisition method. Financial statements at the provisional fair value are presented below:

UAB Agro Logistic Service	EUR‘000
Acquisition date for consolidation purposes	1 January 2022
Fair value
Non-current assets	5
Inventory	6,552
Goods in transit	16,049
Trade receivables	1,159
Other accounts receivable	269
Derivative financial instruments	100
Cash and cash equivalents	8
Accruals and deferred income	2
Total assets	24,144
Prepayments	(8,670)
Trade payables	(12,065)
Income tax liabilities	(194)
Work relationship liabilities	(13)
Other accounts payable and liabilities	(230)
Total current liabilities	(21,172)
Total identifiable net assets at fair value	2,972
Gain on bargain purchase	(1,272)
Cash consideration transferred	1,700
Less: cash acquired	(8)
Total purchase consideration, net of cash acquired	1,692

On 1 March 2022 authorized capital of UAB GeoFace increased by EUR 706 thousand.

On 7 April 2022 AB Kauno Grūdai acquired 100% shares of KG Polska Sp.zo.o.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 41

3. GROUP STRUCTURE AND CHANGES IN THE

GROUP (CONT’D)

On 13 April 2022, the Company signed a loan agreement with AB Kauno Grūdai, total limit is EUR 930 thousand.

On 11 May 2022 UAB TABA Holding acquired minority shares of AB Kauno Grūdai additionally and now owns 89% of the Company.

On 11 May 2022 the Company signed a loan agreement with UAB TABA Holding for EUR 1,700 thousand

On 12 May 2022 AB Linas Agro entered into a credit agreement with Credit Europe Bank N.V. for a EUR 45,000 thousand loan (limit increase

in amount of EUR 15,000 thousand).

On 16 May 2022 UAB KG Distribution sold 20% SIA Novabaltic shares.

On 16 May 2022 Authorized capital of Linas Agro OU increased by EUR 2,050 thousand.

On 16 May 2022 the Company acquired 100% shares of UAB Kekava Foods LT.

During May 2022, the Group acquired 1.42% shares of AB Vilniaus Paukštynas for EUR 28 thousand, 2.19% shares of

AB Kaišiadorių Paukštynas for EUR 11 thousand, 20.29% shares of KG Polska Sp.zo.o. for EUR 4 thousand and 3.09% shares of

AB Kauno Grūdai for EUR 1,669 thousand. The shares were acquired from the non-controlling shareholders. The difference of

EUR 3,279 thousand of gain between the consideration transferred and the carrying value of the interest acquired has been recognized within

equity.

Consolidated and Company‘s Financial Statements of AB „Linas Agro Group for the financial year 2022/23 ended 30 June 2023 (all amounts are in thousand euros unless otherwise stated) 42

4. SEGMENT INFORMATION

For management purpose, the Group is organized into five operating segments based on their products and services as follows:

- the grain, oilseed and feed segment includes trade in wheat, rapeseed, barley and other grains and oilseeds, suncake and sunmeal, sugar

beet pulp, soymeal, vegetable oil, rapecake and other feedstuffs, grain storage and logistics services;