APB APRANGA

Consolidated and Company’s Financial Statements,

Consolidated Annual Report

for the year ended 31 December 2023

3 April 2024

Vilnius

CONFIRMATION OF THE COMPANY’S RESPONSIBLE PERSONS

Hereby we confirm, that by our knowledge Consolidated Financial Statements for the year 2023

prepared in accordance with International Financial Reporting Standards as adopted by the EU are

true and fairly present assets, liabilities, financial position, profit or loss and cash flows of APB Apranga,

as well as of Apranga Group consolidated companies.

As well we confirm that by our knowledge Consolidated Annual Report for the year 2023 includes a fair

review of the development and performance of the business and the position of APB Apranga and

Apranga Group in relation to the description of the main risks and contingencies faced thereby.

Apranga Group General Manager

Rimantas Perveneckas

Apranga Group Chief Financial Officer

Gabrielius Morkūnas

T A B L E OF C O N T E N T

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

Translation note:

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

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

However, in all matters of interpretation of information, views or opinions, the original language version of the

accompanying documents takes precedence over this translation.

1 FINANCIAL STATEMENTS 4-7

1.1 Statements of comprehensive income 4

1.2 Statements of financial position 5

1.3 Statements of changes in equity 6

1.4 Statements of cash flows 7

2 NOTES TO THE FINANCIAL STATEMENTS 8-40

3 CONSOLIDATED ANNUAL REPORT 41-135

3.1 Consolidated Annual Report 41-53

Renumeration Report 50-51

3.2 Governance Report 54-81

3.3 Social Responsibility Report 82-135

S T A T E M E N T S OF C O M P R E H E N S I V E I N C O M E 1 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

STATEMENTS OF COMPREHENSIVE INCOME

			GROUP		COMPANY
			Year ended		Year ended
			31 December		31 December
	Note	2023	2022	2023	2022
Revenue from contracts with customers	6	269 696	242 899	104 443	96 797
Cost of sales	5	(145 554)	(131 555)	(60 500)	(54 992)
GROSS PROFIT		124 142	111 344	43 943	41 805
Selling (costs)	5	(80 768)	(73 462)	(24 530)	(24 474)
General and administrative (expenses)	5	(21 932)	(18 803)	(12 902)	(11 439)
Other income	6	59	790	10 311	16 193
OPERATING PROFIT		21 501	19 869	16 822	22 085
Finance income	7	269	37	284	50
Finance (costs)	7	(1 438)	(1 161)	(1 003)	( 540)
PROFIT BEFORE INCOME TAX		20 332	18 745	16 103	21 595
Income tax (expense)	8	(3 559)	(3 110)	( 904)	( 887)
PROFIT FOR THE YEAR	4	16 773	15 635	15 199	20 708
Other comprehensive income		-	-	-	-
TOTAL COMPREHENSIVE INCOME		16 773	15 635	15 199	20 708
Total comprehensive income attributable to:		16 773	15 635	15 199	20 708
Owners of the Company		16 773	15 635	15 199	20 708
Non-controlling interests		-	-	-	-
Basic and diluted earnings per share (in EUR)	11	0,30	0,28	0,27	0,37

The notes on pages 8 to 40 are an integral part of these financial statements.

These financial statements were approved by Management Board on 3 April 2024 and signed by:

_____________________________ ___________________________

Rimantas Perveneckas Gabrielius Morkūnas

General Director Chief Financial Officer

S T A T E M E N T S OF F I N A N C I A L P O S I T I O N 1 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

STATEMENTS OF FINANCIAL POSITION

		GROUP			COMPANY
ASSETS		As at 31 December		As at 31 December
NON-CURRENT ASSETS	Note	2023	2022	2023	2022
Property, plant and equipment	12	24 052	20 992	12 019	11 614
Intangible assets	13	1 483	1 072	1 441	1 044
Investments in subsidiaries	14	-	-	5 095	5 095
Prepayments	16	142	273	63	134
Trade and other receivables	19	528	2 409	80	40
Right-of-use assets	25	58 785	53 281	24 455	23 830
Other financial assets	17	2 600	2 600	2 600	2 600
Total non-current assets		87 590	80 627	45 753	44 357
CURRENT ASSETS
Inventories	15	50 607	41 386	27 297	22 206
Prepayments	16	1 525	1 503	1 524	1 375
Trade and other receivables	19	2 638	1 781	10 482	10 701
Cash and cash equivalents	20	17 665	22 978	7 974	8 375
Total current assets		72 435	67 648	47 277	42 657
TOTAL ASSETS		160 025	148 275	93 030	87 014
EQUITY AND LIABILITIES		GROUP		COMPANY
EQUITY	Note	2023	2022	2023	2022
Ordinary shares	21	16 035	16 035	16 035	16 035
Legal reserve	22	1 604	1 604	1 604	1 604
Foreign currency translation reserve		( 53)	( 53)	-	-
Retained earnings		46 072	44 781	31 721	32 004
Total equity		63 658	62 367	49 360	49 643
NON-CURRENT LIABILITIES
Deferred tax liabilities	9	2 301	2 194	366	407
Non-current lease liabilities	25	47 629	43 465	19 765	19 639
Non-current employee benefits		194	132	194	132
Total non-current liabilities		50 124	45 791	20 325	20 178
CURRENT LIABILITIES
Borrowings	23	-	-	6 360	2 032
Current lease liabilities	25	14 306	12 717	5 616	5 018
Current income tax liability		579	701	320	591
Trade and other payables	24	31 358	26 699	11 049	9 552
Total current liabilities		46 243	40 117	23 345	17 193
Total liabilities		96 367	85 908	43 670	37 371
TOTAL EQUITY AND LIABILITIES		160 025	148 275	93 030	87 014

The notes on pages 8 to 40 are an integral part of these financial statements.

These financial statements were approved by Management Board on 3 April 2024 and signed by:

_____________________________ ___________________________

Rimantas Perveneckas Gabrielius Morkūnas

General Director Chief Financial Officer

S T A T E M E N T S OF C H A N G E S IN E Q U I T Y 1 . 3

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

STATEMENTS OF CHANGES IN EQUITY

GROUP	Note	Share	Legal	Translation	Retained	Total
		capital	reserve	reserve	earnings
Balance at 1 January 2022		16 035	1 604	( 53)	56 792	74 378
Comprehensive income
Profit for the year 2022		-	-	-	15 635	15 635
Total comprehensive income		-	-	-	15 635	15 635
Transactions with owners
Dividends	10, 22	-	-	-	(27 646)	(27 646)
Balance at 31 December 2022		16 035	1 604	( 53)	44 781	62 367
Comprehensive income
Profit for the year 2023		-	-	-	16 773	16 773
Total comprehensive income		-	-	-	16 773	16 773
Transactions with owners
Dividends	10, 22	-	-	-	(15 482)	(15 482)
Balance at 31 December 2023		16 035	1 604	( 53)	46 072	63 658

COMPANY

Note

capital

Legal

reserve

Retained

earnings

Total

Balance at 1 January 2022

16 035

1 604

38 942

56 581

Comprehensive income

Profit for the year 2022

20 708

Total comprehensive income

20 708

Transactions with owners

Dividends

10, 22

(27 646)

Balance at 31 December 2022

16 035

1 604

32 004

49 643

Comprehensive income

Profit for the year 2023

15 199

Total comprehensive income

15 199

Transactions with owners

Dividends

10, 22

(15 482)

Balance at 31 December 2023

16 035

1 604

31 721

49 360

The notes on pages 8 to 40 are an integral part of these financial statements.

These financial statements were approved by Management Board on 3 April 2024 and signed by:

_____________________________ ___________________________

Rimantas Perveneckas Gabrielius Morkūnas

General Director Chief Financial Officer

S T A T E M E N T S OF C A S H F L O W 1 . 4

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

STATEMENTS OF CASH FLOW

			GROUP		COMPANY
			Year ended 31		Year ended 31
			December		December
OPERATING ACTIVITIES	Note	2023	2022	2023	2022
Profit (loss) before income taxes		20 332	18 745	16 103	21 595
ADJUSTMENTS FOR:
Depreciation and amortization	5	19 427	19 037	7 524	7 545
Impairment charge (reversal)	12, 25	( 74)	( 303)	( 70)	( 208)
Write-down (reversal) of inventories to net realisable value	5	719	( 421)	161	( 337)
Loss (gain) on disposal of property, plant and equipment	6	9	( 466)	( 2)	( 466)
Write-off of property, plant and equipment		105	188	( 10)	75
Fair value change of financial assets	17	-	( 79)	-	( 79)
Dividend income	6	( 33)	( 103)	(10 283)	(15 503)
Interest expenses	7	1 438	1 161	1 003	540
Total		41 923	37 759	14 426	13 162
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Decrease (increase) in inventories	15	(9 940)	(5 056)	(5 252)	(3 344)
Decrease (increase) in receivables	16, 19	823	1 269	( 909)	404
Increase (decrease) in payables	24, 26	4 557	4 541	1 538	1 571
Cash generated from operations		37 363	38 513	9 803	11 793
Income taxes paid	8, 9	(3 574)	(2 493)	(1 216)	( 412)
Interest paid	7	(1 438)	(1 161)	(1 003)	( 540)
Net cash from operating activities		32 351	34 859	7 584	10 841
INVESTING ACTIVITIES
Interest received		269	37	284	50
Dividends received	6	33	103	10 283	15 503
Loans granted		(71 200)	(39 000)	(77 670)	(45 872)
Loans repayments received		71 200	39 000	78 430	46 972
Purchases of property, plant and equipment and intangible assets	12, 13	(12 381)	(4 458)	(3 295)	(2 127)
Proceeds on disposal of property, plant and equipment		2 640	1 763	21	1 221
Proceeds on disposal of financial assets at fair value	17	-	579	-	579
Investment in subsidiaries	14	-	-	-	( 132)
Net cash from investing activities		(9 439)	(1 976)	8 053	16 194
FINANCING ACTIVITIES
Dividends paid	3	(15 472)	(27 596)	(15 472)	(27 596)
Proceeds from borrowings		-	-	102 201	20 405
Repayments of borrowings	23	-	( 200)	(97 873)	(23 773)
Payment of principal portion of lease liabilities	25	(12 753)	(11 852)	(4 894)	(4 888)
Net cash from financing activities		(28 225)	(39 648)	(16 038)	(35 852)
NET INCREASE (DECREASE) IN CASH		(5 313)	(6 765)	( 401)	(8 817)
CASH AND CASH EQUIVALENTS:
AT THE BEGINNING OF THE PERIOD	20	22 978	29 743	8 375	17 192
AT THE END OF THE PERIOD	20	17 665	22 978	7 974	8 375

The notes on pages 8 to 40 are an integral part of these financial statements.

These financial statements were approved by Management Board on 3 April 2024 and signed by:

_____________________________ ___________________________

Rimantas Perveneckas Gabrielius Morkūnas

General Director Chief Financial Officer

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

1. GENERAL INFORMATION

APB Apranga, (hereinafter “the Company”), was incorporated and commenced its operations in March 1993 in Lithuania. The

Company’s main office is situated in Ukmerges str. 362, Vilnius, Lithuania. The Company has legal form of public limited liability

company under the Law on Companies of Republic of Lithuania. The principal activity of the Company and its subsidiaries

(hereinafter “the Group”) is retail trade of apparel in Baltic countries.

The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a

nominal value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are

paid in full and give the owners equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code

LT0000102337) that comprise Company‘s share capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange.

At 31 December 2023, the Company had 7 017 shareholders (as per shareholders list prepared in accordance with SRD II

directive). At 31 December the Company‘s shareholders were:

	Number of	% of total	Number of	% of total
	shares	ownership	shares	ownership
Shareholder	2023		2022
UAB MG Investment	36 169 099	65,4	36 187 499	65,4
UAB Minvista	5 795 929	10,5	5 795 929	10,5
Other	13 326 932	24,1	13 308 532	24,1
Total	55 291 960	100,0	55 291 960	100,0

The ultimate parent company whose financial statements are available for public use is UAB MG Grupė. The ultimate

controlling individual of the Group is Mr. D. J. Mockus:

At 31 December the Group consisted of the Company and the following its wholly owned subsidiaries:

Name	Country	Ownership interest in %	Ownership interest in %
		31 12 2023	31 12 2022
UAB Apranga LT	Lithuania	100%	100%
UAB Apranga BPB LT	Lithuania	100%	100%
UAB Apranga PLT	Lithuania	100%	100%
UAB Apranga SLT	Lithuania	100%	100%
UAB Apranga MLT	Lithuania	100%	100%
UAB Apranga HLT	Lithuania	100%	100%
UAB Apranga OLT	Lithuania	100%	100%
UAB Apranga Ecom LT	Lithuania	100%	100%
SIA Apranga	Latvia	100%	100%
SIA Apranga LV	Latvia	100%	100%
SIA Apranga BPB LV	Latvia	100%	100%
SIA Apranga PLV	Latvia	100%	100%
SIA Apranga SLV	Latvia	100%	100%
SIA Apranga MLV	Latvia	100%	100%
SIA Apranga HLV	Latvia	100%	100%
SIA Apranga OLV	Latvia	100%	100%
SIA Apranga Ecom LV	Latvia	100%	100%
OU Apranga*	Estonia	100%	100%
OU Apranga Estonia	Estonia	100%	100%

Apranga APB

code 121933274

DARIUS JUOZAS MOCKUS

100,0%

65,3%

MG grupė UAB

code 125459336

34,7%

Minvista UAB

code 110685692

100,0%

MG Investment UAB

code 123249022

65,4%

10,5%

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Name		Country	Ownership interest in %	Ownership interest in %
			31 12 2023	31 12 2022
OU Apranga BEE	Estonia		100%	100%
OU Apranga PB Trade	Estonia		100%	100%
OU Apranga ST Retail	Estonia		100%	100%
OU Apranga MDE	Estonia		100%	100%
OU Apranga HEST	Estonia		100%	100%
OU Apranga Ecom EE	Estonia		100%	100%

* At 31 December 2023 the Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of shares (At 31 December

2022: 14.91% and 85.09%, respectively)

At 31 December the Group‘s number of stores was:

		Total number of shops			Shops, where premises are owned by
					Group
	Country	2023	2022	2023	2022
Lithuania		100	100		5	5
Latvia		44	44		-	-
Estonia		25	24		-	-
Total		169	168		5	5

At 31 December 2023 the Group and the Company employed 2 249 and 760 people respectively (2022: 2 139 and 740 people

respectively).

These financial statements were approved by Management Board on 3 April 2024. The shareholders of the Company have a

statutory right to approve or not these financial statements and to require preparation of a new set of the financial statements.

2. MATERIAL ACCOUNTING POLICY INFORMATION

The material accounting policies applied in the preparation of these financial statements are set out below. These policies

have been consistently applied to all the years presented, unless otherwise stated.

The financial statements are presented in Euro and all values are rounded to the nearest thousand, except when otherwise

indicated. The numbers in tables may not coincide due to rounding of particular amounts to EUR thousand. Such rounding

differences are not material to these financial statements.

2.1 BASIS OF PREPARATION

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by

the European Union (IFRS).

These financial statements have been prepared under the historical cost convention, except for financial asset at fair value

through profit (loss) or other comprehensive income as described in Note 17.

These financial statements comprise the Group’s consolidated financial statements and the Company’s separate financial

statements. The Group and Company have prepared the financial statements on the going concern basis..

2.2 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

International Financial Reporting Standards require that in preparing the financial statements, management of the Company

and the Group make estimates and assumptions that affect the reported amounts of assets and liabilities and required

disclosure at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

period. Actual results could differ from those estimates. There are no areas involving a higher degree of judgement or

complexity, or areas where assumptions and estimates are significant to the financial statements, except for the following:

(a) Impact of war in Ukraine

Assessment of the impact of the Russian military invasion of the Republic of Ukraine

Russian Federation invaded to Republic of Ukraine on 24 February 2022. The EU and rest of the world, including global bodies,

took measures immediatly to respond to the military aggression of the Russian Federation against the Republic of Ukraine.

Introduced restrictive measures fueled inflation and soaring utility bills, which indirectly impacted the Company and the

Group. However, the management of the Company were able to successfully adapt to the challenges and sustain the business

performance.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

(b) Revenue recognition

Management judgment is needed to determine whether revenue for certain sales transactions should be recorded on a gross

basis or on a net basis. Revenue is recognised on a gross basis where the role of the Group/Company is that of principal in a

transaction. The gross (without VAT) basis represents sales price after discounts, with any related costs charged to expenses.

The Group/Company has concluded that it is the principal in its revenue arrangements including all online sales, because:

- The entity controls the goods or services before transferring them to the customer;

- The entity is primarily responsible for the supply of goods and services and bears risk of non-performance, all custumers

returns are accepted into stores/warehouse;

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

At the end of each year, the Group/Company also assesses the decrease in accounting income due to customers’ right to

return goods after the end of the accounting period.

The useful lives of tangible and intangible assets are determined by management at the time the asset is acquired and

reviewed on an annual basis for appropriateness. The lives are based on historical experiences with similar assets as well as

anticipation of future events, which may impact their useful life.

(d) Impairment of property, plant and equipment and right-of-use assets

Each shop is considered to represent a separate cash generating unit for impairment test. Cash generating units, which had

indications of impairment loss, i.e. suffered operational loss, are tested. The Group and the Company have tested its leasehold

improvements, right-of-use assets and other property, plant and equipment, whether those posess impairment loss, in

accordance with the accounting policies stated in Note 2.6. The Group and the Company have used “value in use” calculations

to test for impairment as information on fair value less costs to sell was not available. These calculations require the use of

estimates as described in Note 12 and Note 25.

The management reviewed the main assumptions used for the measurement of the recoverable value of property, plant and

equipment and right-of-use assets. The Russian military invasion of the Republic of Ukraine has no material impact on the

assumptions made for future cash flows. Results of impairment assessment are disclosed in Note 12 and Note 25.

(e) Inventory write-down to net realizable value

In accordance with the accounting policies stated in Note 2.8 the Group and the Company recognise inventory at the lower

of cost and net realizable value less cost to sell. The Group and the Company evaluate whether the value of inventory

recognised at cost is not lower that its net realisibale value based on the historical data and actual subsequent results of

inventory items sold below costs. Net realisable values are disclosed in Note 15.

Management has assessed the level of inventories and determined that the book value of inventories as of 31 December 2023

and 2022 does not exceed the net realisable value. Results of inventories write-down to net realizable value are disclosed in

Note 15.

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

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

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

the lease, if it is reasonably certain not to be exercised.

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

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

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

termination. After the commencement date, the Company/Group reassesses the lease term if there is a significant event or

change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to

terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset).

(g) Leases - Estimating the incremental borrowing rate

The Company/Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental

borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company/Group would have to pay to

borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-

use asset in a similar economic environment. The IBR therefore reflects what the Company/Group ‘would have to pay’, which

requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing

transactions) or when they need to be adjusted to reflect the terms and conditions of the lease.

The Company/Group estimates the IBR using observable inputs (such as market interest rates) when available and is required

to make certain entity-specific or country-specific adjustments. IBR used in 2023 varies from 1.0 to 4.7 per cent (from 1.0 to 4.0

per cent in 2022).

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

(h) Options granted

The Company/Group has options granted for non-financial assets and lease rights, which are not recognized as they do not

meet the criteria of a financial instrument. Based on historical information and numerous extentions of the cooperation

agreements and intensions of cooperation, the management of the Group believes that the agreement parties will not use

any above options. In the unlikely event of happening, the selling price would be approximate fair value of the items/goods.

For more details, refer to Note 27.

(i) Climate-related risks

The Company/Group has assessed climate-related risks and concluded that they does not have a material impact on the

business performance, continuity of operations, impairment of assets value or allowances.

2.3 ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current year, the Company and the Group have adopted all of the new and revised Standards and Interpretations that

are relevant to its operations and effective for accounting periods beginning on 1 January 2023.

(a) The following new standards, amendments and interpretations are mandatory for accounting periods beginning

on or after 1 January 2023:

• IFRS 17: Insurance Contracts

Management concluded that the newly adopted IFRS had no impact for financial statements.

• IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates

(Amendments)

Management concluded that the newly adopted amendments to IFRS had no impact for financial statements.

• IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies

(Amendments)

The Amendments are effective for annual periods beginning on or after January 1, 2023. The amendments provide

guidance on the application of materiality judgements to accounting policy disclosures. In particular, the amendments

to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’

accounting policies. Also, guidance and illustrative examples are added in the Practice Statement to assist in the

application of the materiality concept when making judgements about accounting policy disclosures. The

Group/Company assessed its accounting policies disclosure and disclosed material accounting policies only.

• IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments)

The amendments are effective for annual periods beginning on or after January 1, 2023. The amendments narrow the

scope of and provide further clarity on the initial recognition exception under IAS 12 and specify how companies should

account for deferred tax related to assets and liabilities arising from a single transaction, such as leases and

decommissioning obligations. The amendments clarify that where payments that settle a liability are deductible for tax

purposes, it is a matter of judgement, having considered the applicable tax law, whether such deductions are

attributable for tax purposes to the liability or to the related asset component. Under the amendments, the initial

recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible

temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability

and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal.

The impact of the amendments on the financial statements of the Group/Company is disclosed in Note 9.

• IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (Amendments)

The amendments are effective immediately upon issuance, but certain disclosure requirements are effective later. The

Organisation for Economic Co-operation and Development’s (OECD) published the Pillar Two model rules in December

2021 to ensure that large multinational companies would be subject to a minimum 15% tax rate. On 23 May 2023, the

IASB issued International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12. The amendments introduce a

mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of

the Pillar Two model rules and disclosure requirements for affected entities on the potential exposure to Pillar Two

income taxes. The Amendments require, for periods in which Pillar Two legislation is (substantively) enacted but not yet

effective, disclosure of known or reasonably estimable information that helps users of financial statements understand

the entity’s exposure arising from Pillar Two income taxes. To comply with these requirements, an entity is required to

disclose qualitative and quantitative information about its exposure to Pillar Two income taxes at the end of the

reporting period. The disclosure of the current tax expense related to Pillar Two income taxes and the disclosures in

relation to periods before the legislation is effective are required for annual reporting periods beginning on or after 1

January 2023, but are not required for any interim period ending on or before 31 December 2023.

The Group/Company does not expect material impact of the amendments on the the financial statements as effective

income tax rate is above 15% in Lithuania and for Latvia and Estonia acruals of deffered tax liabilities are made with 20%

effective income tax rate.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

(b) The following new standards, amendments to existing standards and interpretations have been issued and adopted

by the European Union or are in the process of adoption by the European Union but are not yet effective and have not

been early adopted by the Group and the Company:

• IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)

The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application

permitted, and will need to be applied retrospectively in accordance with IAS 8. The objective of the amendments is to

clarify the principles in IAS 1 for the classification of liabilities as either current or non-current. The amendments clarify

the meaning of a right to defer settlement, the requirement for this right to exist at the end of the reporting period, that

management intent does not affect current or non-current classification, that options by the counterparty that could

result in settlement by the transfer of the entity’s own equity instruments do not affect current or non-current

classification. Also, the amendments specify that only covenants with which an entity must comply on or before the

reporting date will affect a liability’s classification. Additional disclosures are also required for non-current liabilities

arising from loan arrangements that are subject to covenants to be complied with within twelve months after the

reporting period. The Company and the Group have not yet evaluated the impact of the implementation of these

amendments.

• IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendments)

The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application

permitted. The amendments are intended to improve the requirements that a seller-lessee uses in measuring the lease

liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the accounting for leases unrelated

to sale and leaseback transactions. In particular, the seller-lessee determines ‘lease payments’ or ‘revised lease payments’

in such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use it

retains. Applying these requirements does not prevent the seller-lessee from recognising, in profit or loss, any gain or

loss relating to the partial or full termination of a lease. A seller-lessee applies the amendment retrospectively in

accordance with IAS 8 to sale and leaseback transactions entered into after the date of initial application, being the

beginning of the annual reporting period in which an entity first applied IFRS 16. The Company and the Group have not

yet evaluated the impact of the implementation of these amendments.

• IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements

(Amendments)

The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application

permitted. The amendments supplement requirements already in IFRS and require an entity to disclose the terms and

conditions of supplier finance arrangements. Additionally, entities are required to disclose at the beginning and end of

reporting period the carrying amounts of supplier finance arrangement financial liabilities and the line items in which

those liabilities are presented as well as the carrying amounts of financial liabilities and line items, for which the finance

providers have already settled the corresponding trade payables. Entities should also disclose the type and effect of non-

cash changes in the carrying amounts of supplier finance arrangement financial liabilities, which prevent the carrying

amounts of the financial liabilities from being comparable. Furthermore, the amendments require an entity to disclose

at the beginning and end of the reporting period the range of payment due dates for financial liabilities owed to the

finance providers and for comparable trade payables that are not part of those arrangements. The amendments have

not yet been endorsed by the EU. The Company and the Group have not yet evaluated the impact of the implementation

of these amendments.

• IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments)

The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with earlier application

permitted. The amendments specify how an entity should assess whether a currency is exchangeable and how it should

determine a spot exchange rate when exchangeability is lacking. A currency is considered to be exchangeable into

another currency when an entity is able to obtain the other currency within a time frame that allows for a normal

administrative delay and through a market or exchange mechanism in which an exchange transaction would create

enforceable rights and obligations. If a currency is not exchangeable into another currency, an entity is required to

estimate the spot exchange rate at the measurement date. An entity’s objective in estimating the spot exchange rate is

to reflect the rate at which an orderly exchange transaction would take place at the measurement date between market

participants under prevailing economic conditions. The amendments note that an entity can use an observable

exchange rate without adjustment or another estimation technique. The amendments have not yet been endorsed by

the EU. The Company and the Group have not yet evaluated the impact of the implementation of these amendments.

• Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint

Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in

dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main

consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether

it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not

constitute a business, even if these assets are housed in a subsidiary. In December 2015 the IASB postponed the effective

date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting.

The amendments have not yet been endorsed by the EU. The Company and the Group have not yet evaluated the

impact of the implementation of these amendments.

The Group plans to adopt the above mentioned standards and interpretations on their effectiveness date provided they are

endorsed by the EU.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

2.4 CONSOLIDATION

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the

Company (its subsidiaries). The Group controls an entity when the group is exposed to, or has rights to, variable returns from

its involvement with the entity and has the ability to affect those returns through its power over the entity.

For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in

euro, which is the functional currency of the Company and the Group, and the presentation currency for the consolidated

financial statements.

2.5 INTANGIBLE ASSETS

Intangible assets expected to provide economic benefit to the Company and the Group in future periods are measured at

cost less subsequent accumulated amortisation and impairment losses.

Amortisation is calculated on a straight-line basis to write off the cost of each asset over the estimated useful life as follows:

Software	3-5 years
Licences and rights acquired	5-9 years

Amortisation is accounted for as selling expense.

The Group and the Company have no intangible assets with indefinite useful life.

2.6 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment (hereinafter “PPE”) is stated at historical cost, less accumulated depreciation and impairment

losses.

Leasehold improvements, that meet definition of PPE, are capitalised in the statement of financial position and depratiated

over the lease term.

Compensation received from shopping malls in connection with the setting up of shops is related to the compensation of

PPE, not to rent fees, and consequently the cost of acquisition of property, plant and equipment is reduced. Compensations

that do meet the definition of lease incentive, are accounted for under IFRS 16, see Note 2.13. The Company and the Group did

not received such compensations in 2023 and 2022.

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

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

the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and

maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation is charged so as to write-off the cost of PPE to their residual value over their estimated useful lives, using the

straight-line method, on the following basis:

Buildings	15-50 years
Plant and equipment	5-20 years
Leasehold improvements	4-10 years
Other PPE	3-6 years

All depreciation of property, plant and equipment is recognised in the statement of comprehensive income and accounted

for as selling expenses.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period.

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

its recoverable amount (Note 2.2). Impairment of PPE as well as reversals of impairment during the year are included into

selling costs caption in the statement of comprehensive income.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds

and the carrying amount of the asset and is recognized in other income caption in the statement of comprehensive income.

The Group and the Company capitalise borrowing costs that relate to assets that take more than 12 months to get ready for

use. Otherwise borrowing costs are recognised as expenses of the current reporting period. As at 31 December 2023 and at 31

December 2022 the Group and the Company did not have such qualifying assets and did not capitalize interest.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

2.7 INVESTMENTS IN SUBSIDIARIES

In the Company’s separate financial statements investments in subsidiaries are accounted for at cost less impairment. Cost

also includes direct attributable costs of investment.

Dividends received are credited to the Company’s statement of comprehensive income.

2.8 INVENTORIES

Inventories are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. Net

realizable value represents the estimated selling price less all estimated costs to be incurred in selling. Unrealisable inventory

has been fully written-off. Impairment losses are recognized as an expense immediately (under cost of sales caption).

2.9 FINANCIAL ASSETS AND LIABILITIES

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 amortised cost, fair value through other

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

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

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

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

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

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

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to

cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is

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

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

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

contractual cash flows, selling the financial assets, or both.

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

commits to purchase or sell the asset.

Subsequent measurement

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

a) Amortised cost (debt instruments), see Note 17;

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

(debt instruments), see Note 17;

c) Fair value through other comprehensive income (OCI) with no recycling of cumulative gains and losses upon derecognition

(equity instruments). The Group/Company did not have such items as at 31 December 2023 and 2022;

d) Fair value through profit or loss, see Note 17.

Financial assets at amortised cost (debt instruments)

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

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

cash flows; and

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

and interest on the principal amount outstanding.

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

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

modified or impaired.

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

current receivables/payables and loans granted.

Financial assets at fair value through profit or loss

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

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

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near

term. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair

value through profit or loss, irrespective of the business model.. Financial assets at fair value through profit or loss are carried

in the statement of financial position at fair value with net changes in fair value recognised in other income caption in the

statement of comprehensive income.

The Group/Company in order to make efficient use of the available free cash, in 2018 acquired collective investment scheme

(fund units), which fair value (level 3) as at 31 December 2023 and as at 31 December 2022 is EUR 2 600 thousand (Note 17).

Impairment of financial assets

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

held at fair value through profit or loss.

At the end of every reporting period it is assessed whether credit risk significantly increased from initial recognition taking

into account change in probability of default during the life-time of the instrument. During this process the Group/Company

classifies debt instruments into stages 1, 2 and 3:

• Stage 1: on initial recognition the Group/Company recognizes a 12-month ECL. Stage 1 debt instruments include instruments

which credit risk improved and which were transferred back from Stage 2.

• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Group/Company records an

allowance for the lifetime ECL. Stage 2 debt instruments include instruments which credit risk improved and which were

transferred back from Stage 3. Group/Company considers that significant increase in credit risk when debt is overdue more

than 30 days or when it is visible from financial information that debtor is experiencing financial difficulties.

• Stage 3: For loans considered credit-impaired, the Group/Company recognises the lifetime expected credit losses for these

loans. The method is similar to that for Stage 2 assets, with the probability of default set at 100%..

In 2022 and 2023 there were no transfers between the different stages.

In 2022 and 2023 there were no financial instruments which credit risk significantly increased.

For loans granted the Group/Company calculates ECLs based on an expected cash shortfalls, discounted at an approximation

to the EIR. A cash shortfall is the difference between the cash flows that are due to the Group/Company in accordance with

the contract and the cash flows that the Group/Company expects to receive. The Group/Company did not recognize allowance

for loans granted because based on probability of default, loss given default, exposure at default and forward looking

information the allowance is not material.

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

does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.

For that purpose the Group/Company has established a provision matrix that is based on its historical credit loss experience,

adjusted for forward-looking factors specific to the debtors and the economic environment.

The Group/Company considers a financial asset in default when contractual payments are 90 days past due or when

indications exist that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency

in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where

observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears

or economic conditions that correlate with defaults. A financial asset is written off when there is no reasonable expectation of

recovering the contractual cash flows. The Group/Company did not recognize allowance for trade receivables, intercompany

trade receivables, loans and other receivables because based on historical as well as forward looking information the

allowance is not material.

Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with

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

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 recognised initially at fair value and, in the case of loans and borrowings

and payables, net of directly attributable transaction costs. The Group’s/Company’s financial liabilities include trade and other

payables, loans and borrowings including bank overdrafts and finance lease liabilities.

Subsequent measurement

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

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Loans, borrowings and other payables

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

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

well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium

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

statement of comprehensive income.

Offsetting of financial instruments

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

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

realise the assets and settle the liabilities simultaneously.

Derecognition of financial instruments

Financial assets

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

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

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

ii) The Group/Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to

pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a)

the Group/Company has transferred substantially all the risks and rewards of the asset, or (b) the Group/Company has neither

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

When the Group/Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through

arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither

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

Group/Company continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the

Group/Company also recognises an associated liability. The transferred asset and the associated liability are measured on a

basis that reflects the rights and obligations that the Group/Company has retained.

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/Company could be required to repay

(amount of the guarantee).

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. 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 recognised in the

statement of comprehensive income.

2.10 SHARE CAPITAL

(a) Ordinary shares

Ordinary shares are stated at their par value. Consideration received for the shares sold in excess 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.

2.11 RESERVE

(a) Foreign currency translation reserve

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

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

investment. Upon disposal of the corresponding assets, the cumulative revaluation of translation reserves is recognised as

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

(b) Legal reserves

Legal reserve is included into other reserves. Legal reserve is compulsory under the Lithuanian regulatory legislation. Annual

transfers of 5 per cent of net result are required until the reserve reaches 10 per cent of share capital. The legal reserve cannot

be used for payment of dividends and it is established to cover future losses only.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

2.12 INCOME TAX

(a) Current income tax

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

may transfer the estimated tax losses (or part thereof) to another Group company in Lithuania, which has a right to reduce

the taxable profit with the respective amount of the tax looses transferred for the same taxable period.

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 respective country in which group entity operates.

The tax currently payable is based on taxable profit for the reporting period. 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. Starting from 1 January 2014 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. Taxable profit differs from net profit as reported in the statement of comprehensive income

because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that

are never taxable or deductible. The Group’s and the Company’s liability for current tax is calculated using tax rates that have

been enacted at the end of the reporting period.

The income tax rate applied for the Company and subsidiaries operating in Lithuania was 15 per cent in 2022 and in 2023. In

Latvia and Estonia income tax rate on reporting period and prior taxable profits is nil. In Latvia and 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 Latvia and Estonia are taxed at the withholding tax rate of 20% of their gross amounts as at 31

December 2023 (20% as at 31 December 2022).

Amendments to the Estonian Income Tax Act that entered into force on 1 January 2018 enable companies to use a 14%

reduced tax rate for regular dividend payments. The 14% reduced tax rate can be applied to dividends distributed on or after

1 January 2019 as follows: the 14% rate is applicable to the amount equal to a third of the last financial year's dividend

distribution, while the portion of the distribution exceeding this threshold shall remain taxable at 20%. The reduced rate can

be used on the share of the distribution equal to the company's last three years' average profit distributions.

(b) Deferred income tax

Deferred income tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets

and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is

accounted for using the statement of financial position liability method.

Deferred income tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except

where the Group and the Company are able to control the reversal of the temporary difference and it is probable that the

temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at the end of the reporting period and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred income tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority

and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

2.13 LEASES

The Company or the Group as lessee

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

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

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

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

representing the right to use the underlying assets.

Right-of-use assets

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

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

adjusted for any remeasurement of lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter

of the lease term and the estimated useful lives of the assets, as follows:

•	Premises	1 to 15 years
•	Motor vehicles	1 to 5 years

If ownership of the leased asset transfers to the Company/Group at the end of the lease term or the cost reflects the exercise

of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.9, Impairment of non-

financial assets.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Lease liabilities

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

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

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

expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option

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

term reflects the Company/Group exercising the option to terminate. Variable lease payments that do not depend on an index

or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

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

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

The Company’s/Group’s lease liabilities are included in Non-current lease liabilities and Current lease liabilities (see Note 25).

Short-term leases and leases of low-value assets

The Company/Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have

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

lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value (below EUR

5 thousand). Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line

basis over the lease term.

2.14 EMPLOYEE BENEFITS

(a) Social security contributions

The Company and the Group pay social security contributions to the state Social Security Fund (the Fund) on behalf of its

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

plan is a plan under which the Group and the Company pay fixed contributions into the Fund and will have no legal or

constructive obligations to pay further contributions if the Fund does not hold sufficient assets to pay all employees benefits

relating to employee service in the current and prior period. Social security contributions are recognised as expenses on an

accrual basis and included in payroll expenses.

(b) Long-term 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.

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

The past service costs are recognised 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 recognised in the statement of

comprehensive income as incurred. The past service costs are recognized in the statement of comprehensive income as

incurred.

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

credit method. 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 the

statement of other comprehensive income as incurred. In 2023 and 2022 there were no material amounts.

Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or

whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company and the Group recognise

termination benefits when it is demonstrably committed to either terminate the employment of current employees

according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer

made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are

discounted to present value.

(d) Bonus plans

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

past practice that has created a constructive obligation.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

2.15 RECOGNITION OF REVENUE AND RELATED EXPENSES

Revenue recognition

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

at an amount that reflects the consideration to which the Group/Company expects to be entitled in exchange for those

services or goods. The Group/Company has concluded that it is the principal in its revenue arrangements, because:

- The entity controls the goods or services before transferring them to the customer;

- The entity is primarily responsible for the supply of goods and services and bears risk of non-performance;

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

Sales of goods are recognized when the Company or another Group entity sells a product to the customer. Retail sales are

usually in cash or by credit card. The recorded revenue includes credit card fees payable for the transaction. Such fees are

included in operating expenses. Online sales of goods are recognized when the Company or another Group entity sends a

product to the customer.

Every sale of goods that the Group/Company makes is a separate performance obligation with separately identifiable fixed

price. The Group/Company does not have any customer loyalty progammes.

The Company recognises revenue from management services provided to subsidaries over time, based on expenses incured

to measure provision of the services, because the customer simultaneously receives and consumes the benefits provided by

the Company.

Other occasional revenue from the sale of property, plant or equipment is recognised at a point in time, when sold items are

delivered to client and control is transfered.

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

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/Company‘s contracts with the customers.

Assets and liabilities arising from rights of return

Right of return assets

A right-of-return asset is recognised for the right to recover the goods expected to be returned by customers. The asset is

measured at the former carrying amount of the inventory, less any expected costs to recover the goods and any potential

decreases in value. The Group/Company updates the measurement of the asset for any revisions to the expected level of

returns and any additional decreases in the value of the returned products.

Refund liabilities

A refund liability is recognised for the obligation to refund some or all of the consideration received (or receivable) from a

customer. The Group’s/Company’s refund liabilities arise from customers’ right of return. The liability is measured at the

amount the Group/Company ultimately expects it will have to return to the customer. The Group/Company updates its

estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period.

The Group/Company does not incur material costs to acquire or fulfill the contract.

2.16 DIVIDEND DISTRIBUTION

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

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

2.17 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net profit attributed to the shareholders of the Company and the Group

from average weighted number of ordinary registered shares in issue, excluding ordinary registered shares purchased by the

Group and the Company and held as treasury shares, if any.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

3. FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

The risk management function within the Group and the Company are carried out in respect of financial risks (credit, market

(which consist of currency, interest rate and price) and liquidity). The primary objectives of the financial risk management

function are to establish risk limits, and then ensure that exposure to risks stays within these limits. The operational and legal

risk management functions are intended to ensure proper functioning of internal policies and procedures to minimize

operational and legal risks.

The financial risks relate to the following financial instruments: financial assets at fair value through profit or losstrade

receivables, cash and cash equivalents, trade and other payables, borrowings and guarantees provided on behalf of the

Company to goods suppliers and guarantees issued by the Company to lessors of premises. The accounting policy with

respect to these financial instruments is described in previous section.

Credit risk

Credit risk is managed by Group management. Credit risk arises from cash and cash equivalents and deposits with banks and

financial institutionsas well as credit exposures to wholesale and retail customers, including outstanding receivables and

committed transactions. For banks and financial institutions, only independently rated parties (or subsidiaries of such parties)

with high credit ratings are accepted. Sales to wholesale customers are rare and immaterial, therefore risk control only

assesses the credit quality of the customer, taking into account its financial position, past experience and future factors. Sales

to retail customers are settled in cash or using major credit cards, therefore there is no credit risk.

Company’s credit risk arising from trade receivables from subsidiaries, loans to subsidiaries and guarantees issued for the

benefit of subsidaries is managed by controlling financial performance of subsidiaries on a monthly basis. All the subsidiaries

having Company’s loans have been profitable during the financial year, generated strong positive cash flows, historically none

of them had liquidity issues. Management has also assessed the projected future information that will not have a material

adverse effect on the Company’s subsidiaries. Therefore, in the management’s opinion, the credit risk is low.

The Company and the Group have no significant concentration of credit risk, except for cash which is held in two banks, which

parent companies having high credit ratings, and loans granted to subsidiaries.

Liquidity risk

Liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of

committed credit facilities. Due to the dynamic nature of the underlying businesses, the Group and the Company treasury

maintain flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Group’s and the Company’s liquidity reserve (comprises undrawn borrowing

facility (Note 23) and cash and cash equivalents (Note 20) on the basis of expected cash flow. This is generally carried out at

local level in the operating companies of the Group in accordance with practice set by the Group. In addition, the Group’s and

the Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary

to meet these; and maintaining debt financing plans.

The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the

remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are

the contractual undiscounted cash flows.

GROUP	Less than 1	Between 1 and	Between 1 and	More than 3	Total
	month	12 months	3 years	years
As at 31 December 2023
Borrowings	-	-	-	-	-
Lease liabilities	1 222	13 084	22 743	30 804	67 853
Trade and other payables	13 957	3 775	-	-	17 732
Total	15 179	16 859	22 743	30 804	85 585
As at 31 December 2022
Borrowings	-	-	-	-	-
Lease liabilities	1 076	11 640	21 225	23 302	57 243
Trade and other payables	12 489	3 908	-	-	16 397
Total	13 565	15 548	21 225	23 302	73 640

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

COMPANY	Less than 1	Between 1 and	Between 1 and	More than 3	Total
	month	12 months	3 years	years
As at 31 December 2023
Borrowings	-	6 360		-	6 360
Lease liabilities	476	5 140	9 415	12 510	27 541
Trade and other payables	3 767	1 800	-	-	5 567
Total	4 243	13 300	9 415	12 510	39 468
As at 31 December 2022
Borrowings	-	2 032		-	2 032
Lease liabilities	423	4 595	8 709	11 349	25 076
Trade and other payables	3 537	1 650	-	-	5 187
Total	3 960	8 277	8 709	11 349	32 295

Change in liabilities arising from financing activities:

	As at 31	Dividends	Dividends	Proceeds	Repayments	As at 31
GROUP	December	declared	paid	from	of	December
	2022			borrowings	borrowings	2023
Borrowings	-	-	-	-	-	-
Dividends payable	166	15 482	(15 472)		-	176
Total	166	15 482	(15 472)	-	-	176

	As at 31	Dividends	Dividends	Proceeds	Repayments	As at 31
COMPANY	December	declared	paid	from	of	December
	2022			borrowings	borrowings	2023
Borrowings	2 032	-	-	102 201	(97 873)	6 360
Dividends payable	166	15 482	(15 472)		-	176
Total	2 198	15 482	(15 472)	102 201	(97 873)	6 536

	As at 31	Dividends	Dividends	Proceeds	Repayments	As at 31
GROUP	December	declared	paid	from	of	December
	2021			borrowings	borrowings	2022
Borrowings	200	-	-	-	( 200)	-
Dividends payable	116	27 646	(27 596)		-	166
Total	316	27 646	(27 596)	-	( 200)	166

	As at 31	Dividends	Dividends	Proceeds	Repayments	As at 31
COMPANY	December	declared	paid	from	of	December
	2021			borrowings	borrowings	2022
Borrowings	5 400	-	-	20 405	(23 773)	2 032
Dividends payable	116	27 646	(27 596)		-	166
Total	5 516	27 646	(27 596)	20 405	(23 773)	2 198

Changes in lease liabilities are disclosed in Note 25.

Market risk

Cash flow and fair value interest rate risk

The Company has loans to subsidiaries with floating interest rates, but the cash flow risk is mitigated by applying the same

variable element of interest rate on those loans as the banks are charging the Company.

Loans granted and received at variable rates expose the Group to cash flow interest rate risk, which horewer has no material

impact on profit or equity of the Group. Loans granted and received at fixed rates expose the Company to fair value interest

rate risk, which horewer has no material impact on profit or equity of the Company.

The Company’s and Group’s borrowings consist of loans with floating interest rate, which are related to EURIBOR and EONIA.

The Company and the Group did not use any derivative financial instruments in order to control the risk of interest rate

changes.

Trade and other receivables and payables are interest-free and have settlement dates within one year.

The Group’s and the Company’s cash flow and fair value interest rate risk is periodically monitored by the Group’s

management. It analyses its interest rate exposure on a dynamic basis taking into consideration refinancing, renewal of

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

existing positions, alternative financing. Based on these scenarios, the Group and the Company calculate the impact on profit

and loss of a defined interest rate shift. The scenarios are run only for receivables and liabilities that represent the major

interest-bearing positions.

Based on the performed simulations, the Company's management believes that if the interest rate increases or decreases by

1 percent, the Group's profit for the period or equity for the period would not change in 2023 (in 2022 - 0 euros), while the

Company's would change by EUR 46 thousand (in 2022 – EUR 15 thousand).

Foreign exchange risk

The Company and the Group have a policy to synchronize the cash flows from expected sales in the future with the expected

purchases and other expenses in each foreign currency. Substantially all the Group’s payables and receivables are short-term

and in addition expenses in foreign currencies are insignificant (less than 10%) as compared to those in Euro.

The Group operates in Lithuania, Latvia and Estonia, and during the reporting period used Euro currency. Since Estonia, Latvia

and Lithuania introduced the Euro (respectively, since 1st January 2011, 1st January 2014 and 1st January 2015), so there is no

exchange rate fluctuations.

(b) Capital risk management

The Group’s and the Company’s objectives when managing capital, which includes ordinary shares, legal reserve, foreign

currency translation reserve and retained earnings, are to safeguard the Group’s and the Company’s ability to continue as a

going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal

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

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

reduce debt.

Consistent with others in the industry, the Group and the Company monitor capital on the basis of the gearing ratio. This ratio

is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current

borrowings’ as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is

calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.

Pursuant to the Lithuanian Law on Companies the authorised share capital of a public limited liability company must be not

less than EUR 40 thousand and of a private limited liability company must be not less than EUR 2.5 thousand. In addition, for

all entities the shareholders’ equity should not be lower than 50 per cent of the company’s registered share capital. As at 31

December 2023 and at 31 December 2022 UAB Apranga Ecom LT did not comply with the requirements. Business activities

of UAB Apranga Ecom LT are terminated since 2019 November month.

Pursuant to the Latvian Commercial Law the authorised share capital of a private limited liability company must be not less

than EUR 2.8 thousand. As at 31 December 2023 and 31 December 2022, all of the Company’s Latvian subsidiaries complied

with these requirements.

Pursuant to the Estonian Commercial Code the authorised share capital of a private limited liability company must be not

less than EUR 2.5 thousand. In addition, the shareholders’ equity should not be lower than 50 per cent of the company’s share

capital. As at 31 December 2023 and as at 31 December 2022 all of the Company’s Estonian subsidiaries complied with these

requirements.

In addition, the Group has to comply with the total equity over total assets covenant imposed in the agreement with Luminor

Bank AS. As at 31 December 2023 and as at 31 December 2022, the Group complied with the covenant.

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 Group and the Company use valuation techniques that are appropriate in

the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable

inputs and minimising the use of unobservable inputs.

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

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

whole:

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

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

indirectly observable;

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

unobservable.

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

determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the

lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. No transfers

occurred in 2022 and 2023. Fair value measurements are disclosed in Note 17.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

4. SEGMENT INFORMATION

Management has determined the operating segments based on the reports reviewed by the General Director and other 6

Directors (responsible for managing, sales and marketing, human resources, purchases, development and finance) that are

used to make strategic decisions.

The Directors consider the business from both a geographic and product perspective to certain extent. From product

perspective Directors review only sales volume and gross margin, as presented in the statment of the comprehensive income

by brand name. Gross margins of different brands are not significantly different, therefore can be aggregated into one

reportable segment. Geographically, Directors separately consider operations in Lithuania, Latvia and Estonia depending on

where the stores are located. Different legislation, consumer habits and economic situation substantially affect the average

sales and expenses in each country, therefore Directors believe that each country represents a separate reportable segment.

All financial information, including the measure of profit and total assets, is analysed on a country basis. Liabilities are

measured on a Group basis only and are not individually measured on a country basis.

The segment information provided to the Chief Operating Decision Makers for the reportable segments for the year ended 31

December is as follows:

					Inter-	Total in
31 December 2023	Lithuania	Latvia	Estonia	Total	company	consolidated
					elimina-	financial
					tions	statements
Total segment revenue	182 689	66 272	42 291	291 252	-
Inter-segment revenue*	(20 270)	( 643)	( 643)	(21 556)	-
Stores income from external customers	162 419	65 629	41 648	269 696	-	269 696
(note 6)
Gross profit margin	45,6%	46,4%	47,1%	46,0%		46,0%
Other income (expenses):
Rent (Note 25)	(5 303)	(2 377)	( 967)	(8 647)	( 33)	(8 680)
Utilities	(1 374)	( 627)	( 385)	(2 386)		(2 386)
Renumeration and social security	(26 906)	(8 045)	(5 470)	(40 421)		(40 421)
contributions
Depreciation and amortisation	(11 527)	(4 879)	(3 021)	(19 427)		(19 427)
Impairment (charges)	93	287	( 306)	74		74
Other income	7 355	-	-	7 355	(7 296)	59
Other (expenses)	(22 046)	(10 177)	(6 966)	(39 189)	7 329	(31 860)
Finance income	464	151	64	679	( 410)	269
Finance (costs)	(1 333)	( 256)	( 259)	(1 848)	410	(1 438)
Income tax (expense)	(2 140)	(1 124)	( 295)	(3 559)		(3 559)
Profit (loss) for the year	11 348	3 401	2 024	16 773	-	16 773
Total assets	120 938	35 553	19 173	175 664	(15 639)	160 025
Additions to non-current assets (except for leases)	5 800	5 706	875	12 381	-	12 381

					Inter-	Total in
31 December 2022	Lithuania	Latvia	Estonia	Total	company	consolidated
					elimina-	financial
					tions	statements
Total segment revenue	164 735	59 280	37 634	261 649	-
Inter-segment revenue*	(17 431)	( 692)	( 627)	(18 750)	-
Stores income from external customers	147 304	58 588	37 007	242 899	-	242 899
(note 6)
Gross profit margin	45,6%	46,0%	46,6%	45,8%		45,8%
Other income (expenses):
Rent (Note 25)	(4 972)	(2 120)	( 939)	(8 031)	( 30)	(8 061)
Utilities	(2 445)	( 660)	( 581)	(3 686)		(3 686)

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

					Inter-	Total in
31 December 2022	Lithuania	Latvia	Estonia	Total	company	consolidated
					elimina-	financial
Renumeration and social security					tions	statements
contributions	(23 866)	(6 864)	(4 680)	(35 410)		(35 410)
Depreciation and amortisation	(11 273)	(4 716)	(3 048)	(19 037)		(19 037)
Impairment (charges)	185	183	( 65)	303		303
Other income	6 978	65	50	7 093	(6 303)	790
Other (expenses)	(18 449)	(8 326)	(5 931)	(32 706)	6 333	(26 373)
Finance income	57	11	3	71	( 34)	37
Finance (costs)	( 760)	( 208)	( 227)	(1 195)	34	(1 161)
Income tax (expense)	(1 900)	( 865)	( 345)	(3 110)		(3 110)
Profit (loss) for the year	10 700	3 446	1 489	15 635	-	15 635
Total assets	109 696	31 840	18 597	160 133	(11 858)	148 275
Additions to non-current assets (except for leases)	2 371	255	1 832	4 458	-	4 458

*inter-segment revenue consists of sales of the Company's goods to subsidiaries Apranga SIA and Apranga OU and

subsidiaries sale of remnants of goods to the Company.

In 2023, the Group’s profitability before taxes decreased to 7.5% (2022: 7.7%): in Lithuania decreased to 8.3% (2022: 8.6%), in

Latvia decreased to 6.9% (2022: 7.4%), in Estonia increased to 5.6% (2022: 5.0%). The profitability before taxes is calculated as

follows: profit (loss) for the year before income tax divided by store income from external customers.

The total carrying value of non-current assets located in Lithuania is EUR 57 440 thousand (2022: EUR 54 378 thousand), and

the total of these non-current assets located in other countries is EUR 30 150 thousand (2022: EUR 26 049 thousand).

5. EXPENSES BY NATURE

For the year ended 31 December cost of sales consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Cost of goods sold	144 835	131 976	60 343	55 325
Write-down (reversal) of inventories to net realisable	719	( 421)	157	( 333)
value
Total cost of sales	145 554	131 555	60 500	54 992

For the year ended 31 December selling costs consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Rent	8 680	8 061	2 351	2 268
Utilities	2 386	3 686	873	1 529
Remuneration	27 804	24 603	10 171	9 686
Social security contributions	2 916	2 486	185	175
Depreciation and amortization	19 427	19 037	7 524	7 545
Impairment charge (reversal)	( 74)	( 303)	( 70)	( 208)
Advertising and marketing	2 714	2 722	1 819	1 941
Franchise expenses	11 357	7 884	102	100
Bank commissions	1 614	1 279	392	347
Labelling, packing and repairing	895	1 096	455	490
Logistics and distribution	2 397	2 466	299	303
Business trips	652	445	429	298
Total selling costs	80 768	73 462	24 530	24 474

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

For the year ended 31 December general and administrative expenses consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Remuneration	9 277	7 949	7 311	6 145
Social security contributions	424	372	131	109
Other personnel related expenses	1 669	1 136	772	553
IT and communications	1 527	1 430	950	937
Repair and maintenance	3 710	3 300	1 617	1 514
Taxes (excluding income tax)	380	231	195	131
Consulting expense	221	234	212	231
Audit fee	201	166	47	42
Other expenses	4 523	3 985	1 667	1 777
Total general and administrative expenses	21 932	18 803	12 902	11 439

6. REVENUE FROM CONTRACTS WITH CUSTOMERS

For the year ended 31 December revenue from contracts with customers consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Stores income	269 540	242 534	77 355	73 684
Wholesale income	38	35	19 731	16 610
Management fees	-	-	7 291	6 173
Other income	118	330	66	330
Total revenue from contracts with customers	269 696	242 899	104 443	96 797

For the year ended 31 December stores income consisted of the following:

		GROUP		COMPANY
	Chain	2023	2022	2023	2022
Economy		26 041	25 714	16 715	16 557
Youth		65 516	57 789	17 117	15 298
Footwear		3 521	3 870	1 896	2 135
Business		51 260	44 731	15 797	14 921
Luxury		26 461	24 229	15 421	14 334
Zara		84 992	74 366	-	-
Outlets		11 749	11 835	10 409	10 439
Total		269 540	242 534	77 355	73 684

For the year ended 31 December other income consisted of the following:

		GROUP		COMPANY
	2023		2022	2023	2022
Rent income		23	21	26	24
Gain from disposal of PPE, net		3	466	2	466
Changes in fair value of financial assets, net		-	200	-	200
Dividends		33	103	10 283	15 503
Total other income		59	790	10 311	16 193

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

7. FINANCE INCOME AND COSTS

For the year ended 31 December finance income consisted of the following:

		GROUP			COMPANY
	2023		2022	2023		2022
Interest income		269	37		284	50
Total finance income		269	37		284	50

For the year ended 31 December finance costs consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Interest on bank borrowings	48	100	48	100
Interest expense on lease liabilities	1 390	1 061	560	419
Interest on borrowings from subsidiaries	-	-	395	21
Total finance costs	1 438	1 161	1 003	540

8. INCOME TAX EXPENSE

Domestic income tax is calculated at 15 per cent of the estimated profit for the year.

The total income tax charge can be reconciled to the accounting profit before tax as follows:

	GROUP		COMPANY
	2023	2022	2023	2022
Profit before tax	20 332	18 745	16 103	21 595
Tax at the domestic income tax rate	3 050	2 812	2 415	3 239
Tax effect of income not subject to tax	( 111)	( 57)	(1 626)	(2 382)
Tax effect of expenses that are not deductible in determining	249	47	115	30
taxable profit
Effect of different tax rates of foreign subsidiaries	371	308	-	-
Tax expense	3 559	3 110	904	887
Effective income tax rate	17,5%	16,6%	5,6%	4,1%

For the year ended 31 December income tax expense consisted of the following:

	GROUP			COMPANY
	2023	2022	2023		2022
Current income tax expense	3 451	2 983		945	869
Deferred tax	108	127		( 41)	18
Total income tax expense	3 559	3 110		904	887

9. DEFERRED INCOME TAX

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

	GROUP		COMPANY
	2023	2022	2023	2022
At beginning of year	(2 194)	(2 067)	( 407)	( 389)
Comprehensive income statement (charge) credit	( 107)	( 127)	41	( 18)
At end of year	(2 301)	(2 194)	( 366)	( 407)

In 2023 and 2022 deferred income tax asset and liability related to the entities operating in Lithuania were calculated at

15 per cent rate. Deferred income tax liability related to the entities operating in Latvia and Estonia were calculated at 20 per

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

cent rate as at 31 December 2023 and as at 31 December 2022 for the accrued undistributed profit of these subsidiaries, since

these undistributed profits are planned to be paid out as dividends during the coming years (Note 2.16). The 20 percent rate

applies to gross dividends (25 per cent to net dividends).

Deferred tax assets and liabilities recognised as follows:

	GROUP			COMPANY
	2023	2022	2023	2022
Deferred tax assets:
Lease liabilities IFRS 16	5 835	5 712	3 770	3 855
Inventory write down	456	387	270	246
Accruals	133	17	71	13
Impairment of property, plant and equipment	24	12	2	8
Total deferred tax assets	6 448	6 128	4 113	4 122
Deferred tax liability:
Right-of-use assets IFRS 16	(5 740)	(5 712)	(3 702)	(3 855)
Undistributed profits of subsidiaries	(2 073)	(1 936)	-	-
Depreciation of property, plant and equipment	( 936)	( 674)	( 777)	( 674)
Total deferred tax liabilities	(8 749)	(8 322)	(4 479)	(4 529)
Total deferred tax (liabilities) assets, net	(2 301)	(2 194)	( 366)	( 407)

As at 1 January 2022 deferred tax asset from lease liabilities IFRS 16 was equal to deffered tax liability from right-of-use assets

IFRS 16 for the Group and the Company amounted to EUR 6 174 thousand and EUR 4 179 thousand, respectively.

10. DIVIDENDS PER SHARE

	2023	2022
Approved dividends	15 482	27 646
Weighted average number of ordinary shares in thousand (Note 21)	55 292	55 292
Approved dividends per share, EUR	0.28	0.50

In 2023, the Annual Shareholder’s Meeting approved to pay dividends 0.28 cent per share to the shareholders for 2022 year.

In respect of the current 2023 year, the Board of Directors propose to pay 0.24 EUR dividend per share to the shareholders

(Note 22). This dividend is subject to approval by the shareholders at the Annual Shareholder’s Meeting and has not been

included as a liability in these financial statements.

11. EARNINGS PER SHARE

	GROUP			COMPANY
	2023	2022	2023	2022
Profit (loss) for the year	16 773	15 635	15 199	20 708
Weighted average number of ordinary shares in thousand (Note 21)	55 292	55 292	55 292	55 292
Basic and diluted earnings per share, EUR	0.30	0.28	0.27	0.37

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

earnings per share.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

12. PROPERTY, PLANT AND EQUIPMENT

At 31 December property, plant and equipment consisted of the following:

		Plant and	Leasehold		Construction
GROUP	Buildings	equipment	improve-	Other PPE	in progress	Total
			ments
Cost
At 31 December 2021	9 807	2 124	11 628	44 289	187	68 035
Additions	423	42	645	631	2 080	3 821
Disposals and write-offs	(1 267)	( 40)	(3 283)	(2 745)	-	(7 335)
Transfers	-	-	858	975	(1 833)	-
At 31 December 2022	8 963	2 126	9 848	43 150	434	64 521
Additions	104	35	686	2 140	8 783	11 748
Disposals and write-offs	-	( 7)	(2 853)	(6 333)	-	(9 193)
Transfers	-	-	4 758	4 449	(9 207)	-
At 31 December 2023	9 067	2 154	12 439	43 406	10	67 076
Accumulated depreciation
At 31 December 2021	4 323	663	6 687	30 935	-	42 608
Charge for the year	211	135	1 579	4 340	-	6 265
Disposals and write-offs	( 518)	( 40)	(2 607)	(2 687)	-	(5 852)
At 31 December 2022	4 016	758	5 659	32 588	-	43 021
Charge for the year	254	140	1 470	3 962	-	5 826
Disposals and write-offs	-	( 7)	( 168)	(6 094)	-	(6 269)
At 31 December 2023	4 270	891	6 961	30 456	-	42 578
Impairment charge
At 31 December 2021	-	-	293	234	-	527
Charge for the year (reversal)			( 95)	76		( 19)
At 31 December 2022	-	-	198	310	-	508
Charge for the year (reversal)			53	( 115)		( 62)
At 31 December 2023	-	-	251	195	-	446
Carrying amount
At 31 December 2021	5 484	1 461	4 648	13 120	187	24 900
At 31 December 2022	4 947	1 368	3 991	10 252	434	20 992
At 31 December 2023	4 797	1 263	5 227	12 755	10	24 052

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

		Plant and	Leasehold		Construction
COMPANY	Buildings	equipment	improve-	Other PPE	in progress	Total
			ments
Cost
At 31 December 2021	9 807	2 124	6 618	12 998	-	31 547
Additions	423	42	7	466	567	1 505
Disposals and write-offs	(1 267)	( 40)	(1 937)	(1 398)	-	(4 642)
Transfers	-	-	432	-	( 432)	-
At 31 December 2022	8 963	2 126	5 120	12 066	135	28 410
Additions	104	34	28	1 334	1 190	2 690
Disposals and write-offs	-	( 7)	-	(1 468)	-	(1 475)
Transfers	-	-	1 104	211	(1 315)	-
At 31 December 2023	9 067	2 153	6 252	12 143	10	29 625
Accumulated depreciation
At 31 December 2021	4 323	663	3 738	9 539	-	18 263
Charge for the year	211	135	872	1 070	-	2 288
Disposals and write-offs	( 518)	( 40)	(1 862)	(1 391)	-	(3 811)
At 31 December 2022	4 016	758	2 748	9 218	-	16 740
Charge for the year	254	140	838	978	-	2 210
Disposals and write-offs	-	( 7)	-	(1 353)	-	(1 360)
At 31 December 2023	4 270	891	3 586	8 843	-	17 590
Impairment charge
At 31 December 2021	-	-	70	49	-	119
Charge for the year (reversal)			( 36)	( 27)		( 63)
At 31 December 2022	-	-	34	22	-	56
Charge for the year (reversal)			( 24)	( 16)		( 40)
At 31 December 2023	-	-	10	6	-	16
Carrying amount
At 31 December 2021	5 484	1 461	2 810	3 410	-	13 165
At 31 December 2022	4 947	1 368	2 338	2 826	135	11 614
At 31 December 2023	4 797	1 262	2 656	3 294	10	12 019

The Group's and the Company's depreciation expense is recognized in the statements of comprehensive income under selling

costs.

At 31 December 2023 the Group’s and the Company’s buildings with the carrying amount of EUR 4 314 thousand (2022: EUR

4 947 thousand) have been pledged as security for outstanding loans from financial institutions (Note 23).

As of December 31 2023 and as of December 31 2022, the Company has leased one premises to third parties.

At 31 December the acquisition cost of the fully depreciated property, plant and equipment still in use was as follows:

	GROUP		COMPANY
	2023	2022	2023	2022
Plant and equipment	998	1 002	983	987
Leasehold improvements	276	42	66	-
Other PPE	12 337	15 891	4 896	4 941
Total	13 611	16 935	5 945	5 928

The main cash generating unit of the Group and the Company is a store. The Group and the Company have tested PPE used

in stores operations for impairment in accordance with the accounting policies stated in Note 2.6.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Estimation of the value in use was based on the discounted post-tax cash flows (DCF) of the latest available business plan.

DCF was estimated over remaining useful life of leasehold improvements (vast majority of premises are leased). For the

calculation of future cash flows in 2024 and in later years, each cash generating unit was assessed individually. Net sales and

personnel costs growth rates were established on brand or country level. The weighted average cost of capital (further –

WACC) of 13-14 per cent post-tax (WACC of 13 per cent post-tax - in 2022) was used for value in use estimation.

Based on the calculations performed the management concluded that impairment in the amount of EUR 446 thousand for

the Group (2022: EUR 508 thousand) and EUR 16 thousand for the Company (2022: EUR 56 thousand) should be recorded

against PPE in the statement of financial position. The Group and the Company in 2023 reversed impairment losses of EUR

62 thousand and EUR 40 thousand respectively (2022: reversed impairment losses of EUR 19 thousand and EUR 63 thousand

for the Group and the Company respectively).

Impairment losess reversed in the period were mostly related to non-current assets of CGUs, which were closed during the

year, as well as to the decrease of carrying value of non-current assets associated to operating CGUs due to depreciation.

However, a slight increase in WACC has offset some of the effect.

If future operating cash flows in 2024 and in later years were reduced by 5 per cent, the Group and the Company in 2023 would

have recognized additional PPE impairment amounting to EUR 12 thousand and EUR 10 thousand, respectively.

If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 percentage

point higher than management estimates (for example 14-15 per cent instead of 13-14 per cent), neither the Group nor the

Company in 2023 would have recognised additional impairment against PPE.

The Management does not expect material changes in estimations made in the near future, except those disclosed in

Note 2.2 (a).

13. INTANGIBLE ASSETS

At 31 December intangible assets consisted of the following:

		GROUP			COMPANY
	Licenses			Licenses
	and rights	Software	Total	and rights	Software	Total
	acquired			acquired
Cost
At 31 December 2021	502	1 336	1 838	392	1 316	1 708
Additions	123	514	637	108	514	622
Write-offs	-	( 42)	( 42)	-	( 42)	( 42)
At 31 December 2022	625	1 808	2 433	500	1 788	2 288
Additions	89	544	633	90	515	605
Write-offs	-	( 5)	( 5)	-	( 1)	( 1)
At 31 December 2023	714	2 347	3 061	590	2 302	2 892
Accumulated amortisation
At 31 December 2021	277	925	1 202	189	905	1 094
Charge for the year	92	109	201	83	109	192
Write-offs	-	( 42)	( 42)	-	( 42)	( 42)
At 31 December 2022	369	992	1 361	272	972	1 244
Charge for the year	75	147	222	66	142	208
Write-offs	-	( 5)	( 5)	-	( 1)	( 1)
At 31 December 2023	444	1 134	1 578	338	1 113	1 451
Carrying amount
At 31 December 2021	225	411	636	203	411	614
At 31 December 2022	256	816	1 072	228	816	1 044
At 31 December 2023	270	1 213	1 483	252	1 189	1 441

The Group's and the Company's amortisation expense is recognized in the statements of comprehensive income under selling

costs.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

At 31 December the acquisition cost of fully amortized intangible assets still in use was as follows:

		GROUP			COMPANY
	2023		2022	2023		2022
Licenses		159	159		84	84
Software		822	781		808	764
Total		981	940		892	848

14. INVESTMENTS IN SUBSIDIARIES

The Company’s investments in subsidiaries at 31 December are as follows:

Name	Country of		Ownership,	Cost	Ownership,
	incorporation	2023		2022
			%		%
UAB Apranga LT	Lithuania	724	100	724	100
UAB Apranga BPB LT	Lithuania	145	100	145	100
UAB Apranga PLT	Lithuania	87	100	87	100
UAB Apranga SLT	Lithuania	87	100	87	100
UAB Apranga MLT	Lithuania	87	100	87	100
UAB Apranga HLT	Lithuania	75	100	75	100
UAB Apranga OLT	Lithuania	50	100	50	100
UAB Apranga Ecom LT	Lithuania	10	100	10	100
SIA Apranga	Latvia	2 175	100	2 175	100
SIA Apranga LV	Latvia	153	100	153	100
SIA Apranga BPB LV	Latvia	86	100	86	100
SIA Apranga PLV	Latvia	86	100	86	100
SIA Apranga SLV	Latvia	85	100	85	100
SIA Apranga MLV	Latvia	86	100	86	100
SIA Apranga HLV	Latvia	50	100	50	100
SIA Apranga OLV	Latvia	50	100	50	100
SIA Apranga Ecom LV	Latvia	3	100	3	100
OU Apranga *	Estonia	447	100	447	100
OU Apranga Estonia	Estonia	128	100	128	100
OU Apranga BEE	Estonia	96	100	96	100
OU Apranga PB Trade	Estonia	221	100	221	100
OU Apranga ST Retail	Estonia	96	100	96	100
OU Apranga MDE	Estonia	2	100	2	100
OU Apranga HEST	Estonia	50	100	50	100
OU Apranga Ecom EE	Estonia	17	100	17	100
Total investments		5 095		5 095

* At 31 December 2023 the Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of

shares (At 31 December 2022: 14.91% and 85.09%, respectively).

The changes in investments are as follows:

	2023	2022
Beginning of the year	5 095	4 963
Increase in share capital of UO Apranga PB Trade	-	125
Increase in share capital of OU Apranga Ecom EE	-	7
At end of the year	5 095	5 095

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

15. INVENTORIES

	GROUP		COMPANY
	2023	2022	2023	2022
Goods for resale	53 320	43 844	28 323	23 220
Write-down of goods for resale to net realisable value*	(4 332)	(3 613)	(1 798)	(1 637)
Return assets	879	507	184	66
Goods in transit	131	135	131	135
Packaging and other materials	609	513	457	422
Total	50 607	41 386	27 297	22 206
*Acquisition cost of write-down of goods for resale to net	20 514	18 024	10 372	9 022
realisable value

At 31 December 2023 inventories of the Group and the Company have been pledged as security for outstanding loans from

financial institutions (Note 23). The total carrying amount of Group’s pledged inventories as at 31 December 2023 was EUR

11 296 thousand, Company’s - EUR 7 896 thousand (EUR 11 296 thousand and EUR 7 896 thousand as at 31 December 2022,

respectively).

16. PREPAYMENTS

At 31 December prepayments consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Prepayments	1 667	1 776	1 587	1 509
Less non-current portion of prepayments	( 142)	( 273)	( 63)	( 134)
Current portion of prepayments	1 525	1 503	1 524	1 375

The major share of prepayments are prepayments to suppliers for goods, which are subsequently used to settle amounts due.

17. FINANCIAL INSTRUMENTS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items at 31 December below:

		GROUP		COMPANY
	Category - Financial		Category - Financial
	assets at amortised cost		assets at amortised cost
Assets as per statement of financial position:	2023	2022	2023	2022
Trade and other receivables	3 166	4 190		10 562	10 741
Cash and cash equivalents	17 665	22 978		7 974	8 375
Total	20 831	27 168		18 536	19 116

		Category - at fair value		Category - at fair value
Shares of Verslo Trikampis UAB (level 3)	2 600	2 600	2 600	2 600
Long-term Government bonds (level 1)	-	-	-	-
Total	2 600	2 600	2 600	2 600
Total financial assets	23 431	29 768	21 136	21 716

In 2014, the Company has acquired the long-term bonds issued by the Lithuanian Government, which were recorded as

financial assets at fair value through other comprehensive income. In May 2022, upon maturity long-term bonds issued by the

Lithuanian Government were redeemed from the Company for EUR 579 thousand, due to which the Company incurred a loss

of EUR 121 thousand. The Group and the Company did not possess any state securities as at 31 December 2023 as and at 31

December 2022.

In June 2018, the Company acquired shares of the investment company UAB Verslo trikampis (formerly UAB LIM Verslo

Trikampio NT Fondas), which are recognized as financial assets at fair value through profit or loss. Refer to the accounting

policies in Note 2.9, Financial assets and liabilities.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

In 2022, the Group and the Company recognized profit of EUR 200 thousand from increase in value of investments in shares

of UAB Verslo Trikampis. In 2023, the management concluded that fair value of the investment in shares of UAB Verslo

Trikampis corresponded to the book value, therefore the Group and the Company did not recognize any gain from change in

value in 2023.

		GROUP			COMPANY
	Category - Financial			Category - Financial
	liabilities measured at			liabilities measured at
	amortised cost			amortised cost
	2023	2022		2023	2022
Liabilities as per statement of financial position:
Borrowings		-	-	6 360	2 032
Lease liabilities		61 935	56 182	25 381	24 657
Trade and other payables		17 732	16 397	5 567	5 187
Total		79 667	72 579	37 308	31 876

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

a) The carrying amount of current trade and other accounts receivable, current trade and other accounts payable and

current borrowings approximates their fair value due to short term maturities (Level 3);

b) The value of investment in Verslo trikampis UAB fund is calculated as the number of fund units held multiplied by

the value of the fund unit as at reporting date (Level 3). The valuation of the fund is performed using DCF model.

18. CREDIT QUALITY OF FINANCIAL ASSETS

Total credit risk exposure of the Group and the Company is provided below. Since there are no material overdue or with

increased credit risk items, provision matrix is not provided in these financial statements.

	GROUP		COMPANY
	2023	2022	2023	2022
Financial assets at fair value	2 600	2 600	2 600	2 600
Trade and other receivables with no history of counterparty	3 145	4 190	1 388	956
defaults
Receivables from related parties (Note 26)	21	-	9 174	9 785
Cash at bank or their parent companies that have high credit	13 089	19 388	7 164	7 690
ratings (cash on hand or in transit is excluded)
Total	18 855	26 178	20 326	21 031

19. TRADE AND OTHER RECEIVABLES

At 31 December trade and other receivables consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Trade receivables from subsidiaries (Note 26)	-	-	8 183	9 575
Loans to subsidiaries (Note 26)	-	-	970	210
Loans and other receivables from related parties (note 26)	21	-	21	-
Trade receivables from unrelated parties	271	470	135	217
Other receivables	2 874	3 720	1 253	739
Total	3 166	4 190	10 562	10 741
Less non-current portion of other receivables	( 528)	(2 409)	( 80)	( 40)
Current portion	2 638	1 781	10 482	10 701

The major share of other receivable are deposits related to internet sales and receivables from suppliers for returned goods.

There were no expected significant credit lossess identified and, consequently, no allowance was accounted for as at 31

December 2023 and 2022. There were no receivables past due in 2023 and 2022.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above,.

The Group and the Company do not hold any collateral as security.

All the Company’s loans granted to subsidiaries are denominated in EUR currency.

The interest rate at 31 December 2023 is 2.5 per cent (2022: 2.5 per cent), maturity date – 31 December 2024 (2022: 31 December

2023).

20. CASH AND CASH EQUIVALENTS

At 31 December cash and cash equivalents consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Cash at bank	13 089	19 388	7 164	7 690
Cash on hand	644	817	254	181
Cash in transit	3 932	2 773	556	504
Total	17 665	22 978	7 974	8 375

Cash in certain bank accounts and future cash inflows into these accounts were pledged to banks as security for credit

facilities granted. At 31 December 2023, the cash balances of the Group and the Company in the pledged accounts amounted

to EUR 7 163 thousand (2022: EUR 7 686 thousand) (Note 23).

Cash and cash equivalents include the following for the purposes of the cash flow statement:

	GROUP		COMPANY
	2023	2022	2023	2022
Cash and cash equivalents	17 665	22 978	7 974	8 375
Total	17 665	22 978	7 974	8 375

Presented below is the analysis of the credit quality of balances of cash and cash equivalents, except cash on hand and cash

in transit, based on ratings established by the rating agency S&P (parent banks of the banks in whose accounts the Group's

revenues are collected):

	GROUP		COMPANY
	2023	2022	2023	2022
A+	13 089	19 388	7 164	7 690
Total	13 089	19 388	7 164	7 690

21. SHARE CAPITAL

At 31 December 2023 issued share capital of the Company consisted of 55 291 960 (2021 and 2022: 55 291 960) ordinary shares

at par value of EUR 0.29 each. All issued shares are fully paid.

Subsidiaries did not hold any shares of the Company as of 31 December 2023 and 2022. The Company did not hold its own

shares as of 31 December 2023 and 2022.

22. LEGAL RESERVE AND PROFIT DISTRIBUTION

Under Lithuanian Law on Companies the Company has to allocate 1/20 of its net profit to the legal reserve until it reaches 1/10

of the Company’s authorised capital (up to EUR 1 604 thousand as at 31 December 2023 and 31 December 2022). Legal reserve

is fully formed.

On 27 April 2023 the Company’s shareholders’ meeting resolved to pay EUR 15 482 thousand in dividends (EUR 0.28 per one

share) for 2022 year. On 28 April 2022 the Company’s shareholders’ meeting resolved to pay EUR 27 646 thousand in dividends

(EUR 0.50 per one share) for 2021 year.

In respect of the current year, the Board of directors propose a dividend of EUR 13 270 thousand to be paid to the shareholders.

This dividend amount is subject to approval by shareholders at the Annual Shareholder’s Meeting.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

23. BORROWINGS

At 31 December the carrying amounts of the borrowings consisted of the following:

		GROUP		COMPANY
	2023		2022	2023	2022
Long term borrowings
Bank credit lines and loans		-	-	-	-
Total		-	-	-	-
Short term borrowings
Bank credit lines and loans		-	-	-	-
Borrowings from subsidiaries		-	-	6 360	2 032
Total		-	-	6 360	2 032
Total borrowings		-	-	6 360	2 032

The bank credit lines are secured by cash in certain of bank accounts (Note 20), some of buildings (Note 12) and part of

inventories (Note 15).

At 31 December all amounts of the borrowings are denominated in EUR currency.

The weighted average interest rates at the end of the reporting period were as follows:

	GROUP		COMPANY
	2023	2022	2023	2022
Bank credit lines and loans	5-6%	3-4%	5-6%	3-4%
Bank overdraft	5-6%	3-4%	5-6%	3-4%
Borrowings from subsidiaries	-	-	4,0%	2,0%

Exposure of the Group’s and the Company’s borrowings to interest rate changes and the contractual repricing dates fall into

period of 6 month or less.

The Group’s and the Company’s borrowing facilities contracted but undrawn as at the end of the reporting period were EUR

10 282 thousand (2022: EUR 16 705 thousand), and can be utilised until 31 May 2025.

The Group has to comply with financial covenants imposed in the agreements with Luminor Bank AS and SEB bankas AB,

such as equity to assets, financial debt to EBITDA as well as net financial debt to EBITDA. As at 31 December 2023 and as at 31

December 2022, the Group complied with all financial covenants. Definition of EBITDA is provided in the section No. 11

“Alternative Performance Indicators” of annual report and on the Group’s website.

24. TRADE AND OTHER PAYABLES

At 31 December trade and other payables consisted of the following:

	GROUP		COMPANY
	2023	2022	2023	2022
Payables to subsidiaries	-	-	-	-
Payables to other related parties	115	113	115	113
Trade payables	11 267	10 029	3 111	2 922
Employee benefits and related payables	6 449	5 571	3 417	3 022
Contract liabilities	721	667	182	175
Refund liabilities	1 394	841	314	128
Taxes, except income taxes, payable	5 062	4 064	1 569	1 168
Accrued expenses and other payables	6 350	5 414	2 341	2 024
Total	31 358	26 699	11 049	9 552

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

25. LEASES

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:

		GROUP			COMPANY
	Premises	Vehicles	In total	Premises	Vehicles	In total
As at 1 January 2023	53 012	269	53 281	23 596	234	23 830
Additions	18 643	228	18 871	5 484	216	5 700
Impairment (charge) reversal	12	-	12	30	-	30
Depreciation (expense)	(13 215)	( 164)	(13 379)	(4 966)	( 139)	(5 105)
As at 31 December 2023	58 452	333	58 785	24 144	311	24 455

		GROUP			COMPANY
	Premises	Vehicles	In total	Premises	Vehicles	In total
As at 1 January 2022	63 933	261	64 194	27 839	221	28 060
Additions	1 220	155	1 375	559	131	690
Impairment (charge) reversal	284	-	284	145	-	145
Depreciation (expense)	(12 425)	( 147)	(12 572)	(4 947)	( 118)	(5 065)
As at 31 December 2022	53 012	269	53 281	23 596	234	23 830

The Group and the Company have tested right-of-use assets for impairment in accordance with the accounting policies stated

in Note 2.6. Estimation of the value in use was calculated using the same method and using the same indicators as in Note 12.

Based on the calculations performed the management concluded that impairment in the amount of EUR 572 thousand for

the Group (As at 31 December 2022: EUR 584 thousand) and EUR 53 thousand for the Company (As at 31 December 2022: EUR

83 thousand) should be recorded against right-of-use assets in the statement of financial position as at 31 December 2023.

The Group in 2023 have recognised the impairment reversal of right-of-use assets of EUR 12 thousand (impairment reversal of

EUR 284 thousand was recognized in 2022), the Company have recognised the impairment reversal of right-of-use assets of

EUR 30 thousand (impairment reversal of EUR 145 thousand was recognized in 2022). Impairment of right-of-use assets is

recognized in the statement of comprehensive income under selling costs.

Impairment losess reversed in the period were mostly related to non-current assets of CGUs, which were closed during the

year, as well as to the decrease of carrying value of non-current assets associated to operating CGUs due to depreciation.

However, a slight increase in WACC has offset some of the effect.

If future operating cash flows in 2024 and in later years were reduced by 5 per cent, the Group and the Company in 2023 would

have recognized additional right-of-use assets impairment amounting to EUR 33 thousand and EUR 23 thousand, respectively.

If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 per cent

higher than management estimates (for example 14-15 per cent instead of 13-14 per cent), the Group and the Company in 2023

would have recognised by EUR 1 thousand higher impairment against right-of-use assets.

Set out below are the carrying amounts of lease liabilities (presented under “Current lease liabilities” and “Non-current lease

liabilities”) and the movements during the period:

	Group	Company
As at 1 January 2023	56 182	24 657
Additions	18 871	5 700
Accretion of interest	1 390	560
Payments	(14 354)	(5 525)
Rent discounts	( 154)	( 11)
As at 31 December 2023	61 935	25 381
Current	14 306	5 616
Non-current	47 629	19 765

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

	GROUP	COMPANY
As at 1 January 2022	67 075	28 858
Additions	1 375	690
Accretion of interest	1 061	419
Payments	(12 913)	(5 307)
Rent discounts	( 416)	( 3)
As at 31 December 2022	56 182	24 657
Current	12 717	5 018
Non-current	43 465	19 639

As at 31 December 2023 present value of payments for leases which are not yet commenced but to which the Group and the

Company are committed amounted to EUR 3 306 thousand and EUR 0 (as at 31 December 2022 amounted to EUR 10 113

thousand and EUR 1 670 thousand respectively).

The following are the amounts recognized in profit or loss:

	GROUP	COMPANY
		2023
Depreciation expense of right-of-use assets (included in selling costs)	13 379	5 105
Interest expense on lease liabilities (included in finance costs)	1 390	560
Expenses relating to short-term leases (included in selling costs)	407	278
Impairment charge (reversal), (included in selling costs)	( 12)	( 30)
Variable lease payments (included in selling costs)	8 427	2 085
Rent discounts (included in selling costs)	( 154)	( 11)
Total amount recognized in profit or loss	23 437	7 987

	GROUP	COMPANY
	2022
Depreciation expense of right-of-use assets (included in selling costs)	12 572	5 065
Interest expense on lease liabilities (included in finance costs)	1 061	419
Expenses relating to short-term leases (included in selling costs)	17	17
Impairment charge (included in selling costs)	( 284)	( 145)
Variable lease payments (included in selling costs)	8 460	2 254
Rent discounts (included in selling costs)	( 416)	( 3)
Total amount recognized in profit or loss	21 410	7 607

The Company/Group has lease contracts for Premises that contain variable payments based on the turnover of stores located

in those Premises. Management’s objective is to align the lease expense with the revenue earned. The Company/Group

accounted short-term leases and rent discounts as variable lease payments. The following provides information on the

Company’s/Group’s variable lease payments in 2023 and 2022, including the magnitude in relation to fixed payments:

		GROUP			COMPANY
	Fixed	Variable	In total	Fixed	Variable	In total
	payments	payments		payments	payments
Year ended 31 December 2023
Fixed payments	2 082		2 082	1 765		1 765
Variable rent with minimum payment	12 215	5 904	18 119	3 700	1 979	5 679
Variable rent only	-	2 776	2 776	-	373	373
Total	14 297	8 680	22 977	5 465	2 352	7 817
Year ended 31 December 2022
Fixed payments	1 969		1 969	1 650		1 650
Variable rent with minimum payment	11 346	5 558	16 904	3 660	1 963	5 623
Variable rent only	-	2 486	2 486	-	288	288
Total	13 315	8 044	21 359	5 310	2 251	7 561

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

26. RELATED PARTY TRANSACTIONS

The parties are considered related when one party has the possibility to control the other or have significant influence over

the other party in making financial and operating decisions. There is no allowance for intercompany receivables as expected

credit losses are immaterial.

The Company’s and the Group’s transactions with related parties and balances arising from these transactions as of 31

December were as follows:

Accounts payable			Accounts receivable		Income			Purchases
Related parties			and loans granted
2023		2022	2023	2022	2022		2023	2022
UAB MG Grupė	12	13	-	-	-	-	123	108
(the ultimate parent company)
As per ultimate parent company associated companies:
UAB Mineraliniai vandenys	-	-	-	-	-	-	29	36
UAB Mediafon Technology	11	8	-	-	-	-	112	75
UAB MG Investment	-	4	-	-	-	-	31	53
UAB Minvista	-	-	21	-	224	25	-	-
LNK Group	1	1	-	-	-	2	-	-
UAB Eminta	91	87	-	-	-	-	905	865
UAB MV GROUP	-	-	-		-	-	-	-
Total	115	113	21	-	224	27	1 200	1 137

2023

Prevailing types of related party contracts are rent, management service fee, advertising, centralised services

(telecommunications, utilities and etc.).

The Company’s transactions with subsidiaries and balances arising from these transactions as of 31 December were as follows:

	Borrowings and			Loans and accounts			Income		Purchases
Subsidiaries	accounts payable			receivable
	2023	2022	2023	2022		2023	2022	2023	2022
UAB Apranga LT	2 500	748		94	86	3 940	6 206	197	102
UAB Apranga BPB LT	700	250		53	24	916	1 544	43	23
UAB Apranga PLT	500	169		28	17	754	867	25	11
UAB Apranga SLT	400	-		39	19	902	1 097	28	20
UAB Apranga MLT	1 500	865		126	36	999	2 018	69	34
UAB Apranga HLT	760	-		60	22	633	1 030	21	2
UAB Apranga OLT	-	-		74	8	301	560	7	3
UAB Apranga Ecom LT	-	-		-	-	-	-	-	-
SIA Apranga	-	-		4 836	5 734	14 195	12 537	120	101
SIA Apranga LV	-	-		39	47	1 979	1 837	89	61
SIA Apranga BPB LV	-	-		9	7	304	479	9	8
SIA Apranga PLV	-	-		2	8	288	328	8	5
SIA Apranga SLV	-	-		11	6	355	528	10	7
SIA Apranga MLV	-	-		36	18	878	802	33	16
SIA Apranga HLV	-	-		25	11	341	308	5	1
SIA Apranga OLV	-	-		14	8	276	49	6	2
SIA Apranga Ecom LV	-	-		-	-	-	-	-	-
OU Apranga	-	-		3 593	3 444	8 475	6 615	48	50
OU Apranga Estonia	-	-		32	39	1 473	987	51	40
OU Apranga BEE	-	-		3	6	63	56	10	5
OU Apranga PB Trade	-	-		54	197	64	60	4	2
OU Apranga ST Retail	-	-		4	4	55	44	9	4
OU Apranga MDE	-	-		9	35	287	266	13	7
OU Apranga HEST	-	-		12	9	317	305	5	-
OU Apranga Ecom EE	-	-		-	-	-	-	-	-
Total	6 360	2 032		9 153	9 785	37 795	38 523	810	504

Prevailing types of intra-group transactions are centralised supplies of goods for resale, management service fees, centralised

purchasing of services (telecommunications, IT, utilities and etc.), financing, distribution of earnings. Dividend income received

from the subsidiaries is presented in ‘Income received’ together with other income. In 2023, the Company received EUR 10

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

250 thousand dividend income from subsidiaries (in 2022 - EUR 15 400). This article also accounted for sales of goods to

subsidiaries SIA Apranga and OU Apranga, which in 2023 amounted to EUR 11 934 thousand and EUR 7 758 thousand

respectively (EUR 10 755 thousand and EUR 5 820 thousand in 2022, respectively).

The debts of Group companies are offset each month, and the remaining portion of the debt is paid no later than in 30 days.

The Company’s/Group’s and related parties debts are paid within 30 days.

The Company has concluded short-term loan agreements with its subsidiaries, which, in case of need, are borrowed for 1

month Euribor plus margin interests.

Guarantees provided on behalf of related parties

Guarantees provided on behalf of related parties are disclosed in Note 27.

Compensation of key management personnel

The General Director and other Directors of the Company are considered to be the key management of the Group. There were

7 members of the key management as at 31 December 2023 (7 members of the key management as at 31 December 2022). 2

of them also belong to the Management Board, which consists of 6 members.

	GROUP		COMPANY
	2023	2022	2023	2022
Remuneration	3 261	2 984	3 174	2 904
Social security	58	52	56	51
Average number of key managers	7	7	7	7

On 27 April 2023 and on 28 April 2022 the Company’s shareholders’ meetings decided not to pay out annual bonuses to the

key management.

27. COMMITMENTS AND CONTINGENCIES

Legal proceedings

As of 31 December 2023 and 2022 the Company and the Group were not involved in any legal process, which in the opinion of

management, could have a material impact on the financial statements.

Guarantees

As of 31 December 2023, guarantees issued by the credit institutions on behalf of the Company to secure the obligations of its

subsidiaries to their goods suppliers totaled EUR 15 447 thousand (31 December 2022: EUR 13 698 thousand). The letters of

credit and guarantees provided to goods suppliers by the credit institutions on behalf of the Group as of 31 December 2023

amounted to EUR 16 718 thousand (31 December 2022: EUR 15 295 thousand).

As of 31 December 2023, the Company’s guarantees issued to secure the obligations of its subsidiaries to their landlords totaled

EUR 474 thousand (31 December 2022: EUR 482 thousand).

As of 31 December 2023 and 2022 the Company had no guarantees to the credit institutions issued to secure the borrowings

of subsidiaries.

The management of the Group believes that the subsidiaries on behalf of which guarantees were issued will meet their

liabilities to the creditors, therefore, no provisions in respect of these guarantees were accounted for in the financial

statements as at 31 December 2023 and 31 December 2022.

Options granted

Options for assets

The Group issued irrevocable call options to INDITEX Group granting the right to purchase assets (leasehold improvements

and PPE located in the premises of shops and inventory) of subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga

PLT, UAB Apranga SLT, UAB Apranga MLT, UAB Apranga HLT, UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA

Apranga PLV, SIA Apranga SLV, SIA Apranga MLV, SIA Apranga OLV, SIA Apranga HLV, OU Apranga Estonia, OU Apranga BEE,

OU Apranga PB Trade, OU Apranga ST Retail, OU Apranga MDE and OU Apranga HEST operating brands of INDITEX Group

(ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO). The options are exercisable

in 2025 and are firmly and irrevocably granted thus the Group cannot waive them.

The Group also issued irrevocable call options to ALDO Group granting the right to purchase assets (PPE located in the

premises of shops and inventory) of Company and subsidiaries SIA Apranga and OU Apranga operating the brand of ALDO.

The options are exercisable in 2027 and are firmly and irrevocably granted thus the Group cannot waive them.

N O T E S TO T H E F I N A N C I A L S T A T E M E N T S 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Options for lease rights

Subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga PLT, UAB Apranga SLT, UAB Apranga MLT, UAB Apranga

HLT, UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA Apranga PLV, SIA Apranga SLV, SIA Apranga MLV, SIA

Apranga OLV, SIA Apranga HLV, OU Apranga Estonia, OU Apranga BEE, OU Apranga PB Trade, OU Apranga ST Retail, OU

Apranga MDE and OU Apranga HEST operating brands of INDITEX Group (ZARA, ZARA HOME, BERSHKA, PULL AND BEAR,

STRADIVARIUS, MASSIMO DUTTI and OYSHO) granted irrevocable options exercisable in 2025 by virtue of which INDITEX

Group might acquire the lease rights and might become lessee in all or part of the lease agreements for the premises where

ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO stores are located.

Company and its subsidiaries SIA Apranga and OU Apranga operating brand ALDO granted irrevocable options exercisable

in 2027 by virtue of which ALDO Group might acquire the lease rights and might become lessee in the lease agreements for

the premises where ALDO stores are located.

Based on historical information and numerous extentions of the cooperation agreements and terms of cooperation the

management of the Group believes that the agreement parties will not use any above options.

28. EVENTS AFTER THE REPORTING PERIOD

After the end of the reporting period, there were no events that had a significant impact on the activities of the Company and

the Group.

APB APRANGA

Consolidated Annual Report

For the year ended 31 December 2023

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

1. GENERAL INFORMATION

Consolidated annual report is prepared for the year ended 31 December 2023.

Name of the Issuer: public limited liability trade company “Apranga”

Legal form: public limited liability company

Date and place of registration: 1

March 1993, Board of Vilnius City

Code of Enterprise: 121933274

Registered office: Ukmerges str. 362, Vilnius, LT-14311, Lithuania

Telephone number: +370 5 2390808

E-mail address: info@apranga.lt

Internet address: www.aprangagroup.com

At 31 December 2023 Apranga Group (hereinafter the Group) consisted of the parent company APB Apranga (hereinafter the

Company) and its 100 per cent owned 25 subsidiaries. The principal activity of the Company and its subsidiaries is retail trade of

apparel in Baltic countries.

Structure of the Group at 31 December 2023:

For more information on subsidiaries refer to Note 1 and Note 14 to Consolidated financial statements.

2. OPERATING HIGHLIGHTS

In 2023, the Group’s priorities were influenced by the restrictive measures imposed amid continuing Russia’s invasion to Ukraine,

sustained high inflation, especially in the first half of the year, rapid growth of salaries and utilization of new technologies.

2.1. RETAIL MARKET OVERVIEW

The retail turnover (including VAT) of Apranga Group reached EUR 326.4 million in 12 months 2023 and was by 11.3% higher than

in 2022. In 2023, the retail turnover of Apranga Group in Lithuania reached EUR 196.9 million and increased by 10.6% year-on-

year. In 2023 the retail turnover of Apranga Group in Latvia was EUR 79.5 million and increased by 12.1% year-on-year, in Estonia

was EUR 50.0 million and grew by 12.6% year-on-year.

According to the data of the official statistics departments of Lithuania, Latvia and Estonia, the market of retail trade, except of

motor vehicles and motorcycles, in the Baltic states the year 2023 generated over 39.8 billion euros (without VAT) and grew

around 2% at current prices compared to the year 2022.

The change of consumer prices in Baltic retail market in the year 2023 compared to the previous year averaged to around 9%.

In this period the price index change in Lithuania was 9%, Latvia 10% and Estonia 9%. Consumer confidence index in the Euro

area has been consistently increasing throughout the year 2023 and rose from -20.6 to -16,0 (+4,6 p.). Despite minor fluctuations

Baltic countries’ consumer confidence index also shows upward trend. In Lithuania the index increased from -5.4 to +2.2(+7.6 p.),

Latvia from -32.4 to -17.0 (+15.4 p.), Estonia from -32.7 to -32.4 (+0.3 p.).

The companies participating in the textile, clothing and footwear market of the Baltic states generated around 1,9 billion euros

(without VAT), which is 7% higher turnover in the year 2023 compared to the previous year 2022.

APB "APRANGA"

LITHUANIA LATVIA ESTONIA

SIA "Apranga" OÜ "Apranga"

UAB "Apranga LT" SIA "Apranga LV" OÜ "Apranga Estonia"

UAB "Apranga BPB LT" SIA "Apranga BPB LV" OÜ "Apranga BEE"

UAB "Apranga PLT" SIA "Apranga PLV" OÜ "Apranga PB Trade"

UAB "Apranga SLT" SIA "Apranga SLV" OÜ "Apranga ST Retail"

UAB "Apranga MLT" SIA "Apranga MLV" OÜ "Apranga MDE"

UAB "Apranga HLT" SIA "Apranga HLV" OÜ "Apranga HEST"

UAB "Apranga OLT" SIA "Apranga OLV"

UAB "Apranga Ecom LT" SIA "Apranga Ecom LV" OÜ "Apranga Ecom EE"

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The change of consumer prices index in the clothing and footwear industry in Baltic retail market in year 2023 compared to the

corresponding period of the previous year averaged to around 6%. In this period the price index change in Lithuania was 3.5%,

Latvia 3.6% and Estonia 10.4%. Lithuania remains the largest market of retail trade of textile, clothing and footwear in specialized

stores in the Baltic countries, generating about 50% of the Baltic states market turnover.

Retail turnover of Group‘s stores by countries (EUR thousand, VAT included):

Country

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Lithuania

196 884

178 024

146 003

10,6%

34,8%

Latvia

79 513

70 900

46 409

12,1%

71,3%

Estonia

50 009

44 416

36 010

12,6%

38,9%

Total:

326 406

293 340

228 422

11,3%

42,9%

Retail turnover of Group‘s stores by countries (EUR thousand, VAT excluded)*:

Country

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Lithuania

162 728

147 134

121 017

10,6%

34,5%

Latvia

65 716

58 601

38 539

12,1%

70,5%

Estonia

41 674

37 016

30 159

12,6%

38,2%

Total:

270 118

242 752

189 714

11,3%

42,4%

*The difference between turnover (VAT excluded) shown in the Annual report and stores income disclosed in Note 6 of the

Financial statements is due to return of goods (see Note 24).

In 2023, the turnover (VAT included, taking into account actual returns during the calendar year 2023, this ratio is also used in all

comments below) of the retail chain operated by Apranga Group amounted to EUR 196.9 million in the main domestic market

of Lithuania, or by 10.6% more than in 2022. The share of Lithuanian chain turnover comprised 60.3%, or by 0,4 percentage points

less than in 2022.

The retail turnover of the Apranga Group chain in foreign markets (Latvia and Estonia) reached EUR 129.5 million in 2023, or by

12.6% more, than in 2022. The foreign turnover share in total Group’s turnover has increased from 39.3% to 39.7% during the year.

The retail turnover of Apranga Group by quarters (EUR thousand, VAT included):

Year

2023

65 123

82 517

83 606

95 159

326 406

2022

52 614

75 077

81 130

84 519

293 340

2021

25 547

55 692

76 929

70 253

228 422

2023/2022, %

23,8%

9,9%

3,1%

12,6%

11,3%

2023/2021, %

154,9%

48,2%

8,7%

35,5%

42,9%

The retail turnover of Apranga Group by quarters (EUR thousand, VAT excluded):

Year

2023

53 882

68 280

69 180

78 776

270 118

2022

43 539

62 133

67 141

69 939

242 752

2021

21 415

46 328

63 813

58 159

189 714

2023/2022, %

23,8%

9,9%

3,0%

12,6%

11,3%

2023/2021, %

151,6%

47,4%

8,4%

35,4%

42,4%

The online turnover of the Group was as follows (EUR thousand, VAT included):

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Online turnover

39 860

33 672

48 256

18,4%

-17,4%

Relative weight in total turnover

12,2%

11,5%

21,1%

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The online turnover of the Group was as follows (EUR thousand, VAT excluded):

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Online turnover

33 008

27 884

40 613

18,4%

-18,7%

Relative weight in total turnover

12,2%

11,5%

21,4%

The Group's online turnover increased by 18,4% in the 12 months of the year, and its relative weight in total turnover increased

from 11.5% to 12.2% compared to the corresponding period of the previous year. In year 2021, online turnover was significantly

higher due to the Covid-19 related temporary closure of physical stores.

Retail turnover of Group‘s stores by chains (EUR thousand, VAT included) was as follows:

Chain

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Economy

31 535

31 102

22 524

1,4%

40,0%

Youth

79 346

69 998

55 064

13,4%

44,1%

Footwear

4 263

4 679

3 201

-8,9%

33,2%

Business

62 064

54 100

42 545

14,7%

45,9%

Luxury

32 087

29 280

25 263

9,6%

27,0%

Zara

102 871

89 853

69 515

14,5%

48,0%

Outlets

14 240

14 328

10 310

-0,6%

38,1%

Total

326 406

293 340

228 422

11,3%

42,9%

Apranga, Promod, s.Oliver, Tom Tailor, Orsay;

Aprangos galerija, Moskito, Mango, Bershka, Pull & Bear, Stradivarius, Oysho, A|X Armani Exchange;

City, Massimo Dutti, Marella, Pennyblack, Coccinelle, Tommy Hilfiger, Zara Home, Calvin Klein Underwear, Liu Jo, MAX&Co.;

Burberry, Emporio Armani, Hugo Boss, Ermenegildo Zegna, MaxMara, Weekend MaxMara, Marina Rinaldi, Mados linija, Nude, Sandro, Maje, Hugo.

Retail turnover of Group‘s stores by chains (EUR thousand, VAT excluded) was as follows:

Chain

12 months

2023

12 months

2022

12 months

2021

2023/2022, %

2023/2021, %

Economy

26 094

25 733

18 639

1,4%

40,0%

Youth

65 650

57 915

45 618

13,4%

43,9%

Footwear

3 528

3 873

2 650

-8,9%

33,1%

Business

51 348

44 761

35 310

14,7%

45,4%

Luxury

26 567

24 242

21 402

9,6%

24,1%

Zara

85 162

74 387

57 553

14,5%

48,0%

Outlets

11 768

11 841

8 543

-0,6%

37,8%

Total

270 118

242 752

189 714

11,3%

42,4%

1 Apranga, Promod, s.Oliver, Tom Tailor, Orsay;

2 Aprangos galerija, Moskito, Mango, Bershka, Pull & Bear, Stradivarius, Oysho, A|X Armani Exchange;

3 City, Massimo Dutti, Marella, Pennyblack, Coccinelle, Tommy Hilfiger, Zara Home, Calvin Klein Underwear, Liu Jo, MAX&Co.;

4 Burberry, Emporio Armani, Hugo Boss, Ermenegildo Zegna, MaxMara, Weekend MaxMara, Marina Rinaldi, Mados linija, Nude, Sandro, Maje, Hugo.

2.2. DEVELOPMENT AND MODERNIZATION OF THE RETAIL CHAIN

In 2019-2023 the dynamics of the number of stores and sales area was as follows:

31 12 2023

31 12 2022

31 12 2021

31 12 2020

31 12 2019

The number of stores

169

168

169

179

186

Stores area (thousand sq. m.)

90,8

90,6

92,6

93,8

During the year 2023 Apranga Group opened 12 new stores, renovated 8 stores, out of which 5 stores were enlarged and 3

stores were moved to another shopping mall, and closed 11 stores. Currently Apranga Group operates the chain of 169 stores

(100 in Lithuania, 44 in Latvia and 25 in Estonia) covering the gross area of 90.8 thousand sq. m., or by 0.2% more than a year

ago.

The total area of stores by countries was as follows (thousand sq. m):

Country

31 12 2023

31 12 2022

31 12 2021

2023/2022, %

2023/2021, %

Lithuania

49,4

51,0

51,3

-3,1%

-3,7%

Latvia

27,9

26,4

26,8

5,6%

4,2%

Estonia

13,5

13,2

12,6

2,2%

7,5%

Total:

90,8

90,6

0,2%

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The number of stores by countries was as follows:

Country

31 12 2023

31 12 2022

31 12 2021

2023/2022, %

2023/2021, %

Lithuania

100

102

0,0%

-2,0%

Latvia

0,0%

-4,3%

Estonia

4,2%

19,0%

Total:

169

168

169

0,6%

0,0%

At 31 December the number of stores by chains was as follows:

Chain

31 12 2023

31 12 2022

31 12 2021

2023/2022, %

2023/2021, %

Economy

5,3%

-23,1%

Youth

-4,2%

-2,1%

Footwear

-9,1%

0,0%

Business

4,9%

10,3%

Luxury

6,7%

14,3%

Zara

-10,0%

Outlets

0,0%

Total

169

168

169

0,6%

0,0%

The number of economy chain stores has significantly decreased due to closure of Promod and Orsay brand stores in years 2021

and 2022.

Net investments into retail chain expansion and modernization amounted to EUR 9.7 million in 2023. Investments (acquisitions)

by assets type are presented in Note 12 (“Property, plant and equipment”) and Note 13 (“Intangible assets”) of Notes to

consolidated and Company’s financial statements. Investments (acquisitions) by segments are disclosed in Note 4 (“Segment

information”). The Group is not engaged in activities related to research and experimental development, except to the extent of

process improvement. Group uses the latest technology and the latest technology processes that meet environmental

standards and help reduce the negative impact on the environment.

2.3. MAIN INDICATORS

In addition to the key figures defined or specified in the applicable IFRS financial reporting framework, the Group also provides

key financial ratios derived from or based on the prepared financial statements. These are known as Alternative Performance

Measures (APM). Definitions of APM are provided in the section No. 11 “Alternative Performance Indicators” of this report and on

the Group’s website.

The Group’s profit before income tax amounted to EUR 20.3 million in 12 months 2023, while profit before taxes was EUR 18.7

million in 12 months of 2022, i.e., 8.5% more than in the corresponding period of the previous year.

EBITDA of the Group totalled EUR 40.9 million in 2023, and it was EUR 38.9 million in corresponding previous year period. EBITDA

margin has decreased from 16.0% to 15.2% during the year. ROE and ROA ratios increased to 26.2% and 10.4%, respectively.

Main Group Indicators

2023

2022

2021

2020

2019

Net sales, EUR thousand

269 696

242 899

189 745

169 958

205 005

Net sales in foreign markets, EUR thousand

107 277

95 595

68 502

71 424

83 197

Gross profit, EUR thousand

124 142

111 344

82 230

71 146

89 210

Gross profit margin, %

46,0%

45,8%

43,3%

41,9%

43,5%

Operating profit, EUR thousand

21 501

19 869

14 278

7 038

11 929

Operating profit margin, %

8,0%

8,2%

7,5%

4,1%

5,8%

Profit before income tax, EUR thousand

20 332

18 745

13 211

5 961

10 994

Profit before income tax margin, %

7,5%

7,7%

7,0%

3,5%

5,4%

Profit (loss) for the period, EUR thousand

16 773

15 635

10 896

4 936

9 240

Profit (loss) for the period margin, %

6,2%

6,4%

5,7%

2,9%

4,5%

EBITDA, EUR thousand

40 928

38 906

34 076

27 340

31 006

EBITDA margin, %

15,2%

16,0%

18,0%

16,1%

15,1%

Earnings (losses) per share (EPS), EUR

0,30

0,28

0,20

0,09

0,17

Price-to-Earnings ratio (P/E), times

8,8

7,6

10,7

23,6

12,6

Dividend / Profit for the period*, %

79,1%

99,0%

182,7%

0,0%

Return on equity (end of the period), %

26,3%

25,1%

14,6%

7,8%

15,8%

Return on assets (end of the period), %

10,5%

6,6%

3,1%

6,0%

Net debt to equity, %

-27,7%

-36,8%

-39,7%

-28,5%

-10,1%

Current ratio, times

1,6

1,7

2,0

1,9

1,4

* The year 2023 dividends proposed by the Board, not approved.

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The operating expenses of the Group totaled to EUR 102.6 million in 12 months 2023 and increased by 12.2%, comparing to the

same period 2022. Operating expenses increased more than sales, which grew by 11,0%. In 2022, the operating expenses of the

Group were reduced by EUR 0.45 million due to a positive result of a long-term assets sales. Adjusted for the effect of

beforementioned sale, the increase of the operating expenses of the Group in 2023 was 11.7% compared to corresponding period

of prior year.

Main Group Indicators

2023

2022

Change

Net sales, EUR thousand

269 696

242 899

11,0%

Net sales in foreign markets, EUR thousand

107 277

95 595

12,2%

Gross profit, EUR thousand

124 142

111 344

11,5%

Operating expenses

(102 641)

(91 475)

12,2%

Operating profit, EUR thousand

21 501

19 869

8,2%

Profit before income tax, EUR thousand

20 332

18 745

8,5%

Net profit (losses), EUR thousand

16 773

15 635

7,3%

EBITDA, EUR thousand

40 928

38 906

5,2%

The Group’s level of inventories during the last 12 months increased by 22.3% to EUR 50.6 million. Company’s inventories

increased by 22.9%. The supply of goods for the spring-summer 2024 season started earlier, which contributed to the increase

of the Group‘s inventory level by EUR 3.4 million.

For additional information on the operations by countries of the Group refer to Note 4 to the Consolidated financial statements.

2.4. PERSONNEL

The number of employees on 31 December 2023 and average salary by categories in 2023 were as follows:

Group

Company

Group

Company

Employee category

Number of employees

Average monthly salary, EUR

Administration

189

130

4 323

4 845

Stores' personnel

1 987

557

1 258

1 377

Logistics

1 724

Total

2 249

760

1 533

2 010

In 2023 the number of employees in the Group and the Company has increased by 110 (5.1%) and 20 (2.7%), respectively.

The number of employees by education level on 31 December 2023 was as follows:

Education level

Group

Company

Higher

490

311

Professional

331

Secondary

502

146

Primary

Student

899

209

Total:

2 249

760

2.5. TRADING INFORMATION

The price of the Company shares in 12 months 2023 increased by 23.1% from EUR 2.16 per share to EUR 2.66 per share. The

maximum share price for the 12 months period was EUR 2.96 per share, minimum share price - EUR 2.12 per share. The market

capitalization of the Company increased from EUR 119 million at the beginning of the year to EUR 147 million at the end of

December 2023. The weighted average price of 1 share during the reporting period was EUR 2.58. Company’s share turnover was

EUR 10.2 million in 12 months 2023.

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Company and OMX Baltic Benchmark GI index change for the period 2019-2022:

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

3. OPERATING PLANS

Restrictive measures imposed after Russia‘s invasion of Ukraine on 24 February 2022 had no significant impact on the Company’s

and Group‘s performance, no operations had been suspended and no significant direct losses related to the restrictive measures

had been incurred, however, the uncertainty exists. In any case, the Company's management is ready to respond promptly to

the changing situation by making the necessary decisions to ensure the stability of operations.

The Group plans to reach EUR 350 million turnover (including VAT) in 2024, or by 7% higher than actual year 2023 turnover. In

2024, the Group plans to renovate or open 12-15 stores. The net investment is planned to be about EUR 5-7 million.

4. BUSINESS PHILOSOPHY

• We work and strive to work only with the fastest-growing, commercially the most successful global brands and chains

operating in different markets and acceptable to our market;

• We never make compromises in the selection of the best locations for stores (“Location – more important than money”,

“We have to be where we can not not to be”;

• We aim to install stores according to the highest European design and technology requirements;

• We strive to use in best the power of the obvious market leader, as well as rapid development opportunities in competitive

environment.

5. ENVIRONMENTAL PROTECTION

Group uses the latest technology and the latest technology processes that meet environmental standards and help reduce the

negative impact on the environment (for example, the Group uses the paper packaging materials instead of plastic in more than

90% of its stores), promote rational management and use of resources. It constantly seeks way to cut electricity costs at the

stores, the headquarters and logistic warehouse. All stores use energy-efficient LED bulbs that not only have a longer service life

but also use less electricity. Spaces in the administration building are segmented to use the lighting as efficiently as possible

and to have it only in those areas where employees are present.

The origin of electricity used in all stores is ensured by the green electricity certificate. The Group choose electricity suppliers

based on the sustainable use of natural resources in the production of energy.

When upgrading stores, we abide by the principle that, despite the decisions taken, we must introduce technologies that reduce

or do not increase resource consumption.

More information about the Group’s environmental protection is presented in the Group’s 2023 Consolidated Social

Responsibility Report.

6. CONSOLIDATION

In order to ensure the fairness of preparation consolidated financial statements and to reduce associated risks, the unified

centralised accounting and business information management system has been implemented in all Group companies. All

Group companies use the standard chart of accounts and apply unified accounting principles.

More information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the

Consolidated financial statements.

7. SECURITIES

The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a nominal

value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full

and give the owners equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code LT0000102337) that

comprise Company‘s share capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange. For more information on the

share capital of the Company refer to Note 21 to Consolidated financial statements.

Neither Company, nor its subsidiaries directly or indirectly acquired own shares. By the knowledge of the Company’s

management, there are no restrictions imposed on transfer of Company’s shares. All Company‘s shares give equal rights to

shareholders and there are no shareholders with special control rights.

By the knowledge of the Company’s management, there are no restrictions imposed on voting rights.

By the knowledge of the Company’s management, there are no agreements among shareholders which may limit transfer of

shares, or their voting rights.

Each owner of the ordinary registered share has the following property rights:

1) To receive part of the company‘s profit (dividend);

2) To receive a part of the assets of the company in liquidation;

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

3) To receive shares without payment if the share capital is increased out of the company‘s funds, except the cases specified

in the Law on Companies.

4) To have the pre-emption right to acquire the shares or convertible debenture issued by the company, except in cases when

General Shareholder‘s Meeting pursuant to Law on Companies decides to withdraw the pre-emption right in acquiring the

company‘s issued shares for all shareholders;

5) As provided by laws to lend to the company, however the company borrowing from its shareholders has no right to

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

higher than the average interest rate offered by commercial banks of the locality where the lender has his/her place of

residence or business, which was in effect on the day of conclusion of the loan agreement. In such a case the company and

shareholders are prohibited from negotiating a higher interest rate;

6) To receive Company‘s funds in event the share capital is decreased on purpose to pay Company‘s funds to shareholders;

7) Shareholders have other property rights provided by laws of the Republic of Lithuania.

Each owner of the ordinary registered share has the following non-property rights:

1) To attend and vote in General Shareholder‘s Meetings. One ordinary registered share grants to its owner one vote at the

General Shareholders‘ Meeting. The right to vote at the General Shareholder‘s Meeting may be withdrawn or restricted in

cases established by laws of the Republic of Lithuania, also in cases when share ownership is contested;

2) To submit to the company in advance the questions related to the issues on the agenda of the general meeting of

shareholders;

3) To receive information on the company as provided by Law on Companies;

4) To file a claim to the court requesting compensation of damage to company resulting from non-performance or improper

performance of the duties of the Manager of the Company or members of the Board of the company which duties have

been prescribed by law and these Articles of Association of the company as well as in other cases as may be prescribed by

law;

5) Other non-property rights prescribed by law.

At 31 December 2023, the Company had 7 017 shareholders. Company‘s shareholders which owned or had under management

more than 5% of share capital were:

Shareholder

Enterprise

code

Address

Number of

% of total

ownership

UAB MG Investment

123249022

Aukštaičių 7, Vilnius, Lithuania

36 169 099

65,4%

UAB Minvista

110685692

Aukštaičių 7, Vilnius, Lithuania

5 795 929

10,5%

There are no material agreements where the Company is a counterparty and which may come into force, or may change, or

may end with the change of control over the Company. Information about related party transactions is provided in the Note 27

to the Consolidated financial statements.

At 24 July 2017 the Company concluded an open-ended agreement with SEB bankas AB (entity code: 112021238, address:

Konstitucijos av. 24, LT-08105 Vilnius) on supervision of securities accounts.

8. GOVERNANCE REPORT

For the Governance Report and the full text of Compliance Report with the Governance Code for the companies listed on the

Nasdaq Vilnius stock exchange refer to Annex “Governance Report” to this annual report.

9. CONSOLIDATED SOCIAL RESPONSIBILITY REPORT

The Group’s Consolidated Social Responsibility Report is provided in Annex “Social Responsibility Report” to this annual report.

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

10. REMUNERATION REPORT

The Supervisory Board is not formed in the Company, therefore the Company’s Remuneration Policy applies to the Head of the

Company and Members of the Management Board of the Company in accordance with the relevant requirements and essential

principles on the basis of which the remuneration is paid.

No agreements are concluded with the Members of the Management Board regarding their activities as Members of the

Management Board in the Company. Only Independent Members of the Management Board of the Company are remunerated

for their work at the Board. The Members of the Management Board of the Company, who are also employees of the Company,

receive remuneration only for the direct duties they perform under the employment contract, i.e. their remuneration for direct

functions in the Company and being a Member of the Board (performance of the duties of member of the Board) are not related

in any way and are not dependent on each other. The Members of the Management Board of the Company, who are not

employees of the Company or do not serve as Independent Members of the Management Board, are not additionally

incentivised, they are not paid for their work in the Management Board of the Company, therefore, such members of the Board

perform their duties of a member of the Management Board of the Company free of charge.

The employment contract with the Head of the Company is concluded for an indefinite period. The Head of the Company, as

provided by the Law on Companies, is elected and removed from office, his remuneration is determined, his job description is

approved, he is promoted and penalized based on the Management Board decision. In his / her activities, the Head of the

Company follows the laws, other legal acts, the Company's Articles of Association, decisions of the General Meeting of

Shareholders, as well as decisions of the Management Board. The amounts of allowances, notice periods related to the

termination of employment or term of office are determined taking into account the requirements established in the specific

labour laws. Employment contracts with the Head of the Company are not normally subject to prior agreements on severance

pay, supplementary pensions or early retirement arrangements.

The remuneration of the Head of the Company consists of:

- a fixed part of the remuneration, which is agreed upon and approved by the Management Board of the Company in each

individual case and which does not change and is paid to the Head of the Company on a monthly basis, regardless of the

Company's performance;

- a variable part of remuneration, which depends on the performance of the Company, including its subsidiaries (hereinafter -

the Group), i.e. this is a concrete percentage of Group's profit, which is approved by the Management Board of the Company.

This variable part of the remuneration is paid once a calendar quarter, based on the Group's results for the previous quarter. The

ratio of variable to fixed part depends only on the Group's performance.

The amount of variable remuneration (as a percentage of the Group's profit) for the Head of the Company is determined and

approved by the Management Board of the Company so as to comply with the Company's and the Group's business strategy,

long-term goals and operational interests, to ensure shareholders' interests, to promote sound and efficient management and

risk management to the extent of decision making, would help to avoid conflicts of interest, ensure compliance with the code

of ethics and conduct.

There are no agreements between the Company, members of its management bodies, or its employees regarding special

compensations in case of their resignation, or dismiss without legitimate reason, or the end of their duties connected with the

change of the Control over the Company.

Annual remuneration of the members of the Management Board - the Company's employees, EUR thousand (before taxes):

Name, Surname

Position

Fixed

part

Variable

part

Total

Variable

part, %

Darius Juozas Mockus

Chairman of the Board

Vidas Lazickas

Member of the Board

Rimantas Perveneckas

General Director

271

565

836

68%

Ilona Simkuniene

Member of the Board, Purchasing Director

161

353

514

69%

Ramunas Gaidamavicius

Member of the Board, Development Director

111

283

394

72%

Jonas Jukštys

Member of the Board, independent

Gintaras Juškauskas

Member of the Board, independent

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Annual remuneration and Group’s performance in 2019-2023:

2023

2022

2021

2020

2019*

Remuneration, EUR thousand

Rimantas Perveneckas

836

767

487

430

477

Ilona Šimkūnienė

514

465

307

265

298

Ramūnas Gaidamavičius

394

355

241

204

233

Average Employee Total Remuneration

Costs**

18,4

17,3

13,1

10,0

13,3

Group performance

Net sales, EUR thousand

269 696

242 899

189 745

169 958

205 005

EBT, EUR thousand

20 332

18 745

13 211

5 961

10 994

EBITDA, EUR thousand

40 928

38 906

34 076

27 340

31 006

* Tax reform has been implemented at the beginning of 2019.

** Average employee total remuneration costs ratio is computed using a total headcount, including part-time employees. Part-time

employees make up more than half of the total Group‘s employees.

The Management Board members and the Head of the Company do not receive any other parts of remuneration, bonuses,

premiums, incentives other than those provided for in Remuneration Policy.

The Management Board members and the Head of the Company have not received any remuneration from other companies

belonging to the Group.

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

11. ALTERNATIVE PERFORMANCE MEASURES

With regard to the requirements of the European Securities and Markets Authority (ESMA) Guidelines on Alternative

Performance Measures, an overview of the Alternative Performance Measures (APM) used, their definition and calculation are

provided below and also on Apranga APB website at: https://aprangagroup.lt/en/investors/investor-relations/alternative-

performance-measures

Performance measure

Formula and components used for the

calculation

Interpretation

Net sales

A sum of stores income, wholesales and other income

from contracts with customers

Revenue from contracts with customers

EBITDA

Profit before finance income and finance costs,

income tax, depreciation and amortization

EBITDA is used as a relevant measure for investors to be

able to understand profit generation before investments

in fixed assets. It also shows the ability to repay loans and

pay interests

Alternative calculation:

EBIT before depreciation and amortization.

EBITDA margin, %

EBITDA divided by net sales

Shows the profitability of the company and is used to

compare companies in the same business sector

EBIT

Profit before finance income and finance costs and

income tax

A business performance indicator that shows the

company's ability to make a profit, regardless of the

method of financing (then determines the optimal use of

debt vs. equity)

EBIT margin, %

EBIT divided by net sales

Shows the profitability of the company and is used to

compare companies in the same business sector

Net investment

Purchases of long-term assets – Disposal of long-term

assets

In the activities of Apranga APB, part of the investment

into installation of the store is often disposed to the

owner of the premises. Therefore, to reflect the real

impact on cash flows and operating costs (depreciation),

it is appropriate to use the net investment measure

Net debt

Borrowings - Cash and cash equivalents

Shows the level of real debt to financial institutions

(Non-current and current borrowings, excluding IFRS

16 lease liabilities, less cash and cash equivalent)

Net debt to equity

Net debt / Equity (at the end of the reporting period)

Shows the level of financial debts compared to equity.

The ratio is used to evaluate a company's financial

leverage. The debt/equity ratio is also referred to as a risk

or gearing ratio. The higher the value of this ratio, the

lower the solvency of the company

Earnings per share (EPS)

Profit for the period / Number of shares

Earnings per share serve as an indicator of a company's

profitability. It shows the portion of a company's profit

allocated to each share of common stock

Price-to-Earnings ratio

(P/E)

Share price (at the end of the reporting period) /

Earnings per share (EPS)

The price-earnings ratio indicates the price investors pay

for one euro of the company’s earnings. This ratio is very

versatile and is suitable for comparing not only for

companies of the same sector but also very different

companies

Dividend payout ratio, %

Dividend / Profit for the period

Shows which the part of the company's profit is paid by

dividends

Return on equity (ROE)

Profit for the period / Equity (at the end of the

reporting period)

The ratio shows the percentage return the company

earns from equity. Higher ROE ratio is considered as

better

Return on assets (ROA)

Profit for the period / Assets (at the end of the

reporting period)

The ratio shows the percentage return the company

earns from assets. The higher the ratio, the more efficient

use of assets

Current ratio

Current Assets (at the end of the reporting period) /

Current Liabilities (at the end of the reporting period)

The current ratio is a liquidity ratio that measures a

company's ability to pay short-term and long-term

obligations

C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

12. PUBLICLY ANNOUNCED INFORMATION

The Company in 2023 publicly announced and broadcasted through Nasdaq Vilnius Globe Newswire and own webpage the

following information:

Date

Title

2023.01.03

Turnover of Apranga Group in December 2022 and total year 2022

2023.02.01

Turnover of Apranga Group in January 2023

2023.02.28

Apranga Group interim information for 12 months of 2022

2023.03.01

Turnover of Apranga Group in February 2023

2023.04.03

Turnover of Apranga Group in March 2023

2023.04.04

Notice of the Annual General Meeting of APB „APRANGA“ shareholders

2023.04.04

Draft resolutions of the Annual General Meeting of APB APRANGA shareholders to be held on April 27th, 2023

2023.04.26

Apranga Group interim report for three months of 2023

2023.04.27

Resolutions of the Annual General Meeting of Apranga APB shareholders

2023.04.27

Apranga APB annual report 2022

2023.05.02

Turnover of Apranga Group in April 2023

2023.05.05

Ex-dividend date and procedure for the payment of Apranga APB dividends for the year 2022

2023.06.01

Turnover of Apranga Group in May 2023

2023.06.23

Notification on manager's related party transactions

2023.06.27

Notification on manager's related party transactions

2023.06.27

Notification on manager's related party transactions

2023.06.28

Notification on manager's related party transactions

2023.06.28

Notification on manager's related party transactions

2023.07.03

Turnover of Apranga Group in June 2023

2023.07.27

Apranga Group interim report for 6 months of 2023

2023.08.01

Turnover of Apranga Group in July 2023

2023.08.28

Notification on Apranga APB manager's related party transactions

2023.08.29

Notification on Apranga APB manager's related party transactions

2023.08.30

Notification on Apranga APB manager's related party transactions

2023.09.01

Turnover of Apranga Group in August 2023

2023.09.12

Notification on Apranga APB manager's related party transactions

2023.10.02

Turnover of Apranga Group in September 2023

2023.10.26

Apranga Group interim information for the 9 months of 2023

2023.10.26

Correction: Apranga Group interim information for the 9 months of 2023

2023.11.03

Turnover of Apranga Group in October 2023

2023.12.01

Turnover of Apranga Group in November 2023

2023.12.14

The turnover and expansion plans of Apranga Group in 2024

2023.12.22

Apranga Group investor's calendar for the year 2024

Contents of above mentioned announcements can be obtained on Nasdaq Vilnius Stock Exchange webpage

https://nasdaqbaltic.com/statistics/en/instrument/LT0000102337/news? and on Company‘s webpage

http://aprangagroup.lt/en/investors/news-and-material-events.

202 3 G O V E R N A N C E R E P O R T

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

The public trade company APRANGA (hereinafter referred to as the “Company”) essentially follows the Corporate Governance

Code for the Companies Listed on the Nasdaq Vilnius stock exchange adopted and valid as on 31 December 2023. Corporate

Governance Code is publicly available at: https://nasdaqbaltic.com/market-regulation/nasdaq-vilnius-rules/

RISKS

In its activities the Group is exposed to various risks (regulatory, operational, investment, market, competition, economic cycle,

macroeconomic factors, etc.), but only some of which may significantly affect the Group's results.

The Group's activities are significantly influenced by overall economic situation (and especially by the economic cycles) in

countries where the Group operates. Considering risks related to Russia’s invasion to Ukraine, the restrictive measures

imposed had no significant impact on the Company’s performance, no operations had been suspended and no significant

direct losses related to the restrictive measures had been incurred, however, the risk remains and will be monitored and

managed closely.

The competition-related risk. In its activities the Group is exposed to increasingly intense competition in the clothing market.

The Group, in order to manage this risk and to meet the customer service quality standard requirements, continuously carries

out chain expansion and modernization, improves its sales and marketing strategies, carries out market research, improves

customer service and implements a consistent business process optimization and cost reduction program. In its activities, the

Group consistently follows the principles of transparency and fair competition.

Weather conditions influences the Group's activity and results to some extent as well. The Group's operating results are

planned assuming that the weather conditions will be normal, i.e., usual for the Baltic region. Unfavorable weather conditions

may negatively affect the Group's turnover, at the same time, financial performance and inventories level.

The main features of the Group’s internal control and risk management systems related to preparation of consolidated

financial statements.

The Group’s consolidated financial statements are prepared in accordance with the International Financial Reporting

Standards (IFRS) as adopted by the European Union. Chief financial officer (CFO) of the Company and the Audit Committee

supervises preparation of the consolidated financial statements, systems of internal control and financial risk management

and how the Company follows legal acts that regulate preparation of consolidated financial statements. CFO of the Company

is responsible for the preparation supervision and the final revision of the consolidated financial statements. He constantly

reviews International Financial Reporting Standards (IFRS) in order to implement in time IFRS changes, analyses Company’s

and group’s significant transactions, ensures collecting information from the Group’s companies and timely and fair

preparation of this information for the financial statements. In order to ensure that the consolidated financial statements are

prepared correctly and on time, the Group has established appropriate rules and the procedures which regulates the

principles, methods, and rules of accounting and preparation and presentation of consolidated financial statements. More

information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the

Consolidated financial statements and in part 6 to the Consolidated annual report.

The types of financial risks that Group faces and risk management are described in Note 3 to the Consolidated Financial

Statements. The latest information on the risks related to the Group is also provided in Note 2.2 and Note 27 to the

Consolidated Financial Statements.

CORPORATE GOVERNANCE

The management bodies of the Company specified in the Articles of Association are as follows: General Shareholders' Meeting,

a collegial management body – Board, and a single-person management body – Manager of the Company. The Law of the

Republic of Lithuania on Companies provides that Lithuanian companies at their discretion could have only one collegial

governing body. There is no Supervisory Council in the Company. The Board consists of six members who are elected for the

term of four years, represents the shareholders, and performs supervision and control functions.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Competence of General Shareholders‘ Meeting is the same as specified by the Law on Companies. The General Meeting shall

have the exclusive right to:

1) Amend the Articles of Association of the Company;

2) Change the registered office of the Company;

3) Elect the members of the Board;

4) Remove the Board or its members;

5) Select and remove the firm of auditors, set the conditions for auditor remuneration;

6) Take a decision on the approval of the Remuneration policy;

7) Determine the class, number, nominal value and the minimum issue price of the shares issued by the Company;

8) Take a decision regarding conversion of shares of one class into shares of another class, approve share conversion

procedure;

9) Take a decision to change the number of shares of the same class issued by the Company and the nominal value of the

share, without changing the size of the authorized capital;

10) Approve the set of annual financial statements;

11) Take a decision on profit/loss appropriation;

12) Take a decision on the formation, use, reduction and liquidation of reserves;

13) Approve a set of interim financial statements compiled in order to make a decision on the allocation of dividends for a

period shorter than the financial year;

14) Take a decision on the allocation of dividends for a period shorter than the financial year;

15) Take a decision to issue convertible debentures;

16) Take a decision to withdraw for all the shareholders the right of pre-emption in acquiring the shares or convertible

debentures of a specific issue of the Company;

17) Take a decision to increase the authorised capital;

18) Take a decision to reduce the authorised capital, except where otherwise stipulated by the Law on Companies;

19) Take a decision on approval of the Rules for granting shares to employees and/or members of bodies;

20) Take a decision for the Company to purchase own shares;

21) Take a decision on the reorganisation or division of the Company and approve the terms of reorganisation or division;

22) Take a decision to transform the Company;

23) Take a decision to restructure the Company;

24) Take a decision to liquidate the Company, cancel the liquidation of the Company, except where otherwise provided by

the Law on Companies;

25) Elect and remove the liquidator of the Company, except where otherwise provided by the Law on Companies.

Competence of General Shareholders‘ Meeting additionally includes adoption of the resolutions on the composition of the

Audit Committee of the Company, including the appointment and removal of individual members of the Audit Committee,

and approving the charter of the Audit Committee.

General Shareholders' Meeting has a right to amend the Articles of Association under the qualified majority of votes, which

may not be less than 2/3 of all votes the shareholders attending at the Meeting, except for the exceptions specified by Law on

Companies. For more information on the rights and restrictions granted to shareholders, see Note 7, Securities.

The Board, consisting of six members, is elected by General Shareholders' Meeting for a 4 year term. Company‘s Board

members election and revocation procedure is the same as specified by Law on Companies. Since supervisory board is not

formed in the Company, the Board performs, among other things, the supervisory functions established by the Law on

Companies. Company’s Board activity is conducted by chairman of the Board. The Board elects its chairman from among its

members. The Board continues in office for the period established in the Articles of Association or until a new Board is elected

and assumes the office but not longer than until the annual General Shareholders' Meeting during the final year of its term of

office.

Board of Company considers and approves:

1) The activity strategy of the Company;

2) The annual and interim report of the Company;

3) The management structure of the Company and the positions of the employees;

4) The positions to which employees are recruited by competition;

5) Regulations of branches and representative offices of the Company;

6) Description of the procedure for participation and voting in the general meeting of shareholders by means of electronic

communication.

The Board adopts the following resolutions:

1) Resolutions for the Company to become an incorporator or a member of other legal entities;

2) Resolutions to establish branches and representative offices of the Company;

3) Resolutions to invest, dispose of or lease the tangible long-term assets the book value whereof exceeds 1/20 of the share

capital of the Company (calculated individually for every type of transaction);

4) Resolutions to pledge or mortgage the tangible long-term assets the book value whereof exceeds 1/20 of the share capital

of the Company (calculated for the total amount of transactions);

5) Resolutions to offer surety or guarantee for the discharge of obligations of third persons the amount whereof exceeds

1/20 of the share capital of the Company;

6) Resolutions to acquire the tangible long-term assets the price whereof exceeds 1/20 of the share capital of the Company;

7) Resolutions regarding issuance of debenture of the Company (except issuance of convertible debenture);

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

8) Other resolutions within the competence of the Board as prescribed by the Law on Companies, Articles of Association or

the resolutions of the General Shareholders' Meeting.

The Board analyses and assesses the documents submitted by the Manager of the Company on:

1) The implementation of the activity strategy of the Company;

2) The organisation of the activities of the Company;

3) Financial standing of the Company;

4) The results of economic activities, income and cost estimates, the stocktaking data and other accounting data of changes

in the assets.

The Board elects and removes from office the Manager of the Company, fixes his/her remuneration and sets other terms of

the employment agreement, approves his/her job description, provides incentives and imposes penalties.

The Board analyses and assesses the Company's draft set annual financial statement and draft of profit/loss distribution and

together with feedback, proposals and with the annual report of the Company submits them to the General Shareholders'

Meeting.

The Board is responsible for convening and arrangement of the General Shareholders' Meeting in due time.

The Board performs the supervisory functions set out in Article 34, Part 11 of the Law on Companies.

The Board analyzes and evaluates the draft of the Company's remuneration policy and submits it together with feedback and

proposals to the General Meeting of Shareholders.

Each member of the Board is entitled to initiate convening of the Board meeting. The Board may adopt resolutions and its

meeting shall be deemed to have taken place when the meeting is attended by 2/3 and more of the members of the Board.

The resolution of the Board is adopted if more votes for it are received than the votes against it. In the event of a tie, the

Chairman of the Board shall have the casting vote. The member of the Board is not entitled to vote when the meeting of the

Board discusses the issue related to his/her activities on the Board or the issue of his/her responsibility.

The Manager of the Company – General Director - is a single-person management body of the Company. The Manager of the

Company acts at his/her own discretion in relation of the Company with other persons.

The Manager of the Company is elected and removed from office by the Board which also fixes his/her salary, approves his/her

job description, provides incentives and imposes penalties. The employment agreement is concluded with the Manager of

the Company and is signed on behalf of the Company by the Chairman of the Board or other person authorized by the Board.

In his/her activities the Manager of the Company complies with laws and other legal acts, Articles of Association, General

Shareholders' Meeting resolutions, Board resolutions, his/her job descriptions.

The Manager of the Company acts on behalf of the Company and is entitled to enter into the transactions at his/her own

discretion. The Manager of the Company may conclude the following transactions provided that there is a decision of the

Board to enter into these transactions: to invest, dispose of or lease the tangible long-term assets the book value whereof

exceeds 1/20 of the share capital of the Company (calculated individually for every type of transaction); to pledge or mortgage

the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated for the

total amount of transactions); to offer surety or guarantee for the discharge of obligations of third persons the amount whereof

exceeds 1/20 of the share capital of the Company; to acquire the tangible long-term assets the price whereof exceeds 1/20 of

the share capital of the Company as well as to conclude transactions with related parties as provided by Law on Companies.

The Manager of the Company is responsible for:

1) The organization of the Company‘s activity and implementation of its objectives;

2) The drawing up of the set of annual financial statements and the drafting of the annual report of the Company;

3) Preparation of the draft description of the procedure for participation and voting in the general meeting of shareholders

by means of electronic communication;

4) The drawing up of a draft of procedure of the assessment and conditions for transactions with related parties that are

concluded under normal market conditions in the course of normal economic activity;

5) The drawing up of a draft remuneration policy;

6) The drawing up of a draft remuneration report;

7) Public announcement of the remuneration policy and remuneration report on the Company's website;

8) Concluding an agreement with the auditor or firm of auditors;

9) Submission of information and documents to the shareholders, General Shareholders' Meeting and the Board in cases

prescribed by Law on Companies or at their request;

10) Submission of the documents and data of the Company to manager of the Register of Legal Entities;

11) Submission of documents to the Bank of Lithuania and Central Securities Depository;

12) Public announcement of information prescribed by Law on Companies in a source indicated in Articles of Association;

13) Submission of information to shareholders;

14) Preparation of the draft decision of the distribution of dividends for the period, shorter than a financial year, composition

of the set of the interim financial reports and the preparation of the interim report for the decision of the distribution of

dividends for the period, shorter than a financial year;

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

15) Notification to the shareholders and the Board about the most important events that have a significance for the

company's activities

16) Preparation of draft rules for granting shares;

17) The performance of other duties prescribed by laws as well as in the Articles of Association and the job descriptions of

the Manager of the Company.

The Manager of the Company organizes daily activities of the Company, hires and dismisses employees, concludes and

terminates employment contracts with them, provides incentives and imposes penalties.

The Manager of the Company is responsible for preparation of the draft share subscription agreement and its data correctness.

The Manager of the Company issues authorizations and procuration within the scope of its competence.

The Manager of the Company is accountable and regularly reports to the Board on the implementation of Company‘s activity

strategy, the organization of the Company‘s activity, the financial standing of the Company, the results of economic activity,

the income and cost estimates, the stocktaking data and other accounting data of changes in the assets.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

MANAGEMENT OF THE COMPANY

BOARD OF THE COMPANY

On 28 April 2022 the Annual General Meeting of Company shareholders elected Company‘s members of the Board for new 4-

year term. 27

April 2026 is the end term for Company‘s Board. Company’s Board consist of six members, two of them are

independent.

Darius Mockus

Chairman of the Board

Darius Mockus (born in 1965) - Chairman of the Board since 2 May 2002 (member of the Board since 23 March 1995). Education:

Vilnius University, Faculty of Economics, Industrial Planning. He has no Company shares. With related companies Minvista

UAB (Code of Enterprise: 110685692; Registered office: Aukštaičių g. 7, Vilnius) and MG Investment UAB (Code of Enterprise:

123249022; Registered office: Aukštaičių g. 7, Vilnius) he has 41 965 028 shares, representing 75.90% of the share capital and

votes.

Information on current management positions in other companies:

Company name

Company code

Registered office

Current position

UAB MG grupė

125459336

Aukštaičių g. 7, Vilnius, Lithuania

President - the main position

UAB MV GROUP

125313192

Aukštaičių g. 7, Vilnius, Lithuania

Chairman of the Board

UAB DARNU GROUP

123010339

Aukštaičių g. 7, Vilnius, Lithuania

Chairman of the Board

Information on shareholdings in other companies above 5%:

MG Grupė UAB - 100% of the share capital;

Minvista UAB – 100% of the share capital.

Information about participation in other organizations:

President of Honour of the Lithuanian Tennis Union.

Ilona Šimkūnienė

Member of the Board, Purchasing Director

Ilona Šimkūnienė (born in 1963) - Apranga group Purchasing Director, Member of the Board of APB Apranga since 27 March

1998, in the Company since 1985. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics. She has no

Company shares.

Information on positions in other companies:

Company name

Company code

Registered office

Current position

UAB Apranga LT

300021271

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga BPB LT

300509648

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga PLT

300551572

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga SLT

301519684

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga MLT

302627022

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga HLT

304042131

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga OLT

304757395

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

UAB Apranga Ecom LT

304184173

Ukmergės 362, Vilnius, Lithuania

Chairman of the Board

Apranga LV SIA

40003672631

Elizabetes iela 51, Riga, Latvia

Chairman of the Board

Apranga BPB LV SIA

40003887840

Elizabetes iela 51, Riga, Latvia

Chairman of the Board

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Company name

Company code

Registered office

Current position

Apranga PLV SIA

40003887747

Elizabetes iela 51, Riga, Latvia

Chairman of the Board

Apranga SLV SIA

50103201281

Elizabetes iela 51 - 1A, Riga, Latvia

Chairman of the Board

Apranga MLV SIA

40103486301

Elizabetes iela 51 - 1A, Riga, Latvia

Chairman of the Board

Apranga HLV SIA

40203202205

Elizabetes iela 51 - 1A, Riga, Latvia

Chairman of the Board

Apranga OLV SIA

50203162031

Elizabetes iela 51 - 1A, Riga, Latvia

Chairman of the Board

Apranga Ecom LV SIA

40103972857

Elizabetes iela 51 - 1A, Riga, Latvia

Chairman of the Board

Apranga Estonia OU

11026132

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga BEE OU

11419148

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga PB Trade OU

11530250

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga ST Retail OU

11530037

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga MDE OU

12617929

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga HEST OU

14075697

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga Ecom EE OU

14004869

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Has no shareholdings in other companies above 5%.

Vidas Lazickas

Member of the Board

Vidas Lazickas (born in 1965) - Member of the Board of APB Apranga since 29 April 2011. Education: Vilnius University, Faculty

of Economics, specialization in Production Management and Organization. He has 265 138 shares of the Company,

representing 0.48% of the share capital and votes.

Information on current management positions in other companies:

Company name

Company code

Registered office

Current position

UAB MG Grupė

125459336

Aukštaičių g. 7, Vilnius, Lithuania

Economics and Finance

Director - the main position

UAB MG Investment

123249022

Aukštaičių g. 7, Vilnius, Lithuania

General Director

UAB Eminta

303140423

Aukštaičių g. 7, Vilnius, Lithuania

Director

UAB Euvalda

123248988

Aukštaičių g. 7, Vilnius, Lithuania

Director

UAB MG Media

211616910

Aukštaičių g. 7, Vilnius, Lithuania

General Director

UAB Minvista

110685692

Aukštaičių g. 7, Vilnius, Lithuania

Director

UAB MV GROUP Distribution

121702328

Aukštaičių g. 7, Vilnius, Lithuania

Chairman of the Board

UAB Laisvas ir nepriklausomas

kanalas

123026090

Šeškinės g. 20, Vilnius, Lithuania

Chairman of the Board

UAB Mediafon“

124424581

Olimpiečių g. 1 - 31, Vilnius, Lithuania

Chairman of the Board

UAB Mediafon Carrier Services

304065315

Olimpiečių g. 1 - 31, Vilnius, Lithuania

Chairman of the Board

UAB Mediafon Datapro

304065322

Olimpiečių g. 1 - 31, Vilnius, Lithuania

Chairman of the Board

UAB MV GROUP

125313192

Aukštaičių g. 7, Vilnius, Lithuania

Member of the Board

UAB MV GROUP Asset

Management

304145213

Aukštaičių g. 7, Vilnius, Lithuania

Member of the Board

Įmonių grupė Alita AB

302444238

Miškininkų g. 17, Alytus, Lithuania

Member of the Board

OU MV GROUP Distribution EE

11021347

Kalmari tee 10, Rae vald, Harjumaa,

Estonia

Member of the Board

SIA MV GROUP Distribution LV

40003787568

Medus iela 7, Ryga, Latvia

Member of the Board

MV GROUP Distribution PL

Sp.Zo.o

140330387

22 Annopol Street, 03-236 , Warsaw,

Poland

Member of the Board

AB MV GROUP Production

132082782

Aukštaičių g. 7, Vilnius, Lithuania

Member of the Board

UAB DARNU GROUP

123010339

Aukštaičių g. 7, Vilnius, Lithuania

Member of the Board

Has no shareholdings in other companies above 5%.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Ramūnas Gaidamavičius

Member of the Board, Development Director

Ramūnas Gaidamavičius (born in 1968) - APB Apranga group Development Director, Member of the Board of APB Apranga

since 30 April 2010, in the Company since 2002. Education: Vilniaus University of Technology, Faculty of Mechanics,

specialization in Machine Building. He has 5 000 shares of the Company, representing 0.01% of the share capital and votes.

Information on positions in other companies:

Company name

Company code

Registered office

Current position

UAB Apranga LT

300021271

Ukmergės 362, Vilnius, Lithuania

Member of the Board

Apranga SIA

40003610082

Elizabetes iela 51, Riga, Latvia

Chairman of the Board

Apranga LV SIA

40003672631

Elizabetes iela 51, Riga, Latvia

Member of the Board

Apranga BPB LV SIA

40003887840

Elizabetes iela 51, Riga, Latvia

Member of the Board

Apranga PLV SIA

40003887747

Elizabetes iela 51, Riga, Latvia

Member of the Board

Apranga SLV SIA

50103201281

Elizabetes iela 51 - 1A, Riga, Latvia

Member of the Board

Apranga MLV SIA

40103486301

Elizabetes iela 51 - 1A, Riga, Latvia

Member of the Board

Apranga HLV SIA

40203202205

Elizabetes iela 51 - 1A, Riga, Latvia

Member of the Board

Apranga OLV SIA

50203162031

Elizabetes iela 51 - 1A, Riga, Latvia

Member of the Board

Apranga Ecom LV SIA

40103972857

Elizabetes iela 51 - 1A, Riga, Latvia

Member of the Board

Apranga OU

11274427

Rotermanni mnt 18/1, Tallinn, Estonia

Chairman of the Board

Apranga Estonia OU

11026132

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga BEE OU

11419148

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga PB Trade OU

11530250

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga ST Retail OU

11530037

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga MDE OU

12617929

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga HEST OU

14075697

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Apranga Ecom EE OU

14004869

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Has no shareholdings in other companies above 5%.

Jonas Jokštys

Member of the Board, independent

Jonas Jokštys (born in 1982) – Member of Board of APB Apranga since 29

April 2021. Education: Stocholm School of Economics

in Riga (2000-2003) Bachelor of Economics and Business Administration and London School of Economics and Political

Science (2005-2006) Master of Philosophy and Political Science. He has no Company shares.

Information on positions in other companies:

Company name

Company code

Registered office

Current position

UAB Elmoris VG

305710509

Titnago g. 13A, Vilnius, Lithuania

Member of the Board

UAB Vendos

304472649

S. Konarskio g. 2-29, Vilnius, Lithuania

Director

APB Imum

305646914

S. Konarskio g. 2-29, Vilnius, Lithuania

Director

UAB Žemaitijos žemė

305704335

Vaidilutės g. 61, Vilnius, Lithuania

Director

Has no shareholdings in other companies above 5%.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Gintaras Juškauskas

Member of the Board, independent

Gintaras Juškauskas (born in 1970) - Member of Board of APB Apranga since 29th April 2021. Education: Vilnius University,

Finance faculty (1998-2003), Master of Economics and Vilnius University, Law faculty (2010-2013), Master of Law. He has no

Company shares.

Information on positions in other companies:

Company name

Company code

Registered office

Current position

Gintaro Juškausko IĮ

302720373

Vanaginės g. 87, Vilnius, Lietuva

Director

UAB Merits

301678932

Gedimino pr. 54B-1, Vilnius, Lietuva

Associate Partner

Has no shareholdings in other companies above 5%.

MANAGEMENT OF THE COMPANY AND THE GROUP

The key management members of the Company and the Group as of 31 December 2023:

Name, Surname

Position

Number of

shares owned*

Part in the

share capital

Start at

company

Rimantas Perveneckas

General Director

800 770

1,45%

1983

Ilona Šimkūnienė

Purchasing Director

1985

Ramūnas Gaidamavičius

Development Director

5 000

0,01%

2002

Gabrielius Morkūnas

Chief Financial Officer

2021

Aušra Tartilienė

Inditex chain Director

1989

Irma Marcinkienė

Sales and Marketing Director

1 863

0,003%

2000

Audronė Martinkutė

Personnel Director

360

0,001%

2002

* with related parties

Information about General director of the Company and the Group:

Rimantas Perveneckas

General Director

Rimantas Perveneckas (born in 1960) - APB Apranga group General Director, Member of the Board of APB Apranga since 23

February 1993, in the Company since 1983. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics.

He has 800 770 shares of the Company, representing 1.45% of the share capital and votes. Has no positions in other companies.

Has no shareholdings in other companies above 5%.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Information about CFO of the Company and the Group:

Gabrielius Morkūnas

Chief Financial Officer

Gabrielius Morkūnas (born in 1990) - Apranga Group Finance and Economics Director, in the Company since 2021. Education:

Mykolo Romerio University, Bachelor of Economics and Finance.

Information on positions in other companies:

Company name

Company code

Registered office

Current position

UAB Apranga BPB LT

300509648

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga PLT

300551572

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga SLT

301519684

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga MLT

302627022

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga HLT

304042131

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga OLT

304757395

Ukmergės 362, Vilnius, Lithuania

Member of the Board

UAB Apranga Ecom LT

304184173

Ukmergės 362, Vilnius, Lithuania

Member of the Board

Apranga OU

11274427

Rotermanni mnt 18/1, Tallinn, Estonia

Member of the Board

Has no shareholdings in other companies above 5%.

AUDIT COMMITTEE

The Audit Committee consists of 3 members, 2 of them are independent. The Audit Committee is elected for a 4-year term.

Committee members are appointed and dismissed by the Company's general meeting of shareholders at the proposal of the

Management Board

The main functions of the Audit Committee are:

- To inform the General Director of the Company of the outcome of the statutory audit;

- To monitor the financial reporting process and submit recommendations to ensure its integrity;

- To monitor the effectiveness of the Company’s internal quality control and risk management systems, having impact on

the financial reporting of the Company;

- To monitor the statutory audit of the annual and consolidated financial statements;

- To review and monitor the independence of the statutory auditors or the audit firms;

- To be responsible for the procedure for the selection of statutory auditor(s) or audit firm(s).

The General Shareholders Meeting hold on 27 April 2017 approved the new Charter of the Audit Committee.

The General Shareholders Meeting hold on 27 April 2021 approved three members of the Audit Committee for the new 4-year

term: Rita Zakalskienė (the independent member of the Committee, Chair of the committee), Justina Puškorė (the

independent member of the Committee) and Rasa Rulevičiūtė (an employee of the Company).

In 2023, 2 Audit Committee meetings were held. Following issues were discussed during the meetings of the Committee:

discussing the notes of the external auditors' to the financial statements for 2022; also planned for 2023 the scope of the audit

and the terms of the audit; and other issues.

Information on major share packages controlled either directly or indirectly

Details of the shares are provided in Note 14 to the Consolidated financial statements, Investments In Subsidiaries.

Information on transactions with related parties

No transactions with related parties as provided for in art. 37(2) of the Law on Companies of the Republic of Lithuania were

concluded in 2023.

Information on shareholders having special control rights

All shares of the Company are of one class ordinary registered shares granting their owners (shareholders) equal rights. Details

of the shares are provided in Note 7 to the Consolidated financial statements, Securities .

Information of amendments to the Company‘s Articles of Association

In 2023, there were no amendments of the Company‘s Articles of Association.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Information on all agreements between shareholders

The Company does not have any information on agreements between shareholders.

Information on the varied policy applicable to the election of the Company‘s chief manager, the members of governing

and supervisory boards

The Company does not have the variety policy applicable to the election of the chief manager and the members of governing

and supervisory bodies. During the procedure of selection of candidates to the Company‘s board of directors, governing and

supervisory boards, the candidates shall be subject to requirements that do not discriminate a candidate on grounds of age,

sex,education, or professional experience. During the selection of a candidate, the Company does not set any restrictions for

nomination of a candidature on grounds of sex or age. Considering the specificity of the Company‘s business activity and the

status of a state-owned company, unbiased requirements which are only related to the functions and competences of the

members of a governing boards and the professional experience and education proportionate to these functions and

competences are set.

Disclosure of Compliance with the Corporate Governance Code for the Companies Listed

son NASDAQ Vilnius

The public trade company APRANGA (hereinafter referred to as the “Company”), acting in compliance with Article 12(3) of the

Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB NASDAQ OMX Vilnius, hereby

discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its

specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or

recommendations, the specific provisions or recommendations that are not complied with must be indicated and the reasons

for such non-compliance must be specified. In addition, other explanatory information indicated in this form must be

provided.

Summary of the Corporate Governance Report:

Apranga APB is the parent company of the Group, registered in the Republic of Lithuania. At the end of 2023, it managed 25

daughter companies established in the three Baltic States. The Group’s core business is the retail sale of clothing. Of the 26

companies that make up the Group, 23 represent specific brands (Zara, Bershka, Pull&Bear, Stradivarius, Massimo Dutti, Zara

Home and Oysho) on the basis of franchise agreements concluded with Inditex, a leader in the global apparel retail market.

Three companies (APB Apranga, SIA Apranga and OÜ Apranga) represent brands other than Inditex (single-brand stores) as

well as their own retail chains (multi-brand stores): Apranga, Apranga Galerija, City, Mados Linija, etc.

Corporate governance activities are concentrated in the Group’s parent company, APB Apranga, which coordinates finances,

legal, strategic planning and control, human resources and training, business management and development, information

technology, ordering and pricing, marketing and advertising, and other general areas within the Group’s companies. The

Group uses a centralized management model, and practically all management functions are concentrated at the Group’s

headquarters in Vilnius.

The Group’s main company, APB Apranga, has been listed on the Nasdaq Vilnius Stock Exchange since 1997. The company

has been on the Baltic Main List since 2005. The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into

55,291,960 ordinary registered shares (ISIN code LT0000102337) with a nominal value of EUR 0.29 each, where each share

grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners equal rights.

On 31 December 2023, APB Apranga had 7 017 shareholders. The main parent company, whose financial statements are made

public, is UAB MG grupė. The main person controlling the Group is Mr. D. J. Mockus, who, together with related companies,

holds 41 965 028 APB Apranga shares, accounting for 75.90% of the authorized capital and total votes.

According to the Company’s articles of association, the bodies of the Company are the general meeting of shareholders, the

collegial management body – the management board, and the sole management body – the manager of the Company. A

supervisory board is not formed at the Company. Six members are elected to the management board by the general meeting

of shareholders for a maximum period of four years. The Company’s management board is made up of board chair D.J. Mockus

and board members Ilona Šimkūnienė, Vidas Lazickas, Gintaras Juškauskas (independent), Jonas Jokštys (independent) and

Ramūnas Gaidamavičius. The management board elects and removes the manager of the Company – the general director.

The Company has an audit committee consisting of three members, two of whom are independent. The audit committee is

elected for a period of four years. The members of the committee are appointed and removed by the Company’s general

meeting of shareholders on the recommendation of the Company’s management board. On 27 April 2017, the authority of

the audit committee and the composition of the audit committee consisting of three (3) members were approved by the

decision of the general meeting of shareholders. Members of the audit committee: Rita Zakalskienė (the independent

member of the Committee, Chair of the committee) and Justina Puškorė (the independent member of the Committee), Rasa

Rulevičiūtė (an employee of the Company).

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

Structured table for disclosure:

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights

The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance

framework should protect the rights of shareholders.

1.1. All shareholders should be provided with

access to the information and/or documents

established in the legal acts on equal terms. All

shareholders should be furnished with equal

opportunity to participate in the decision-making

process where significant corporate matters are

discussed.

Yes

The Company adheres to the Information Disclosure

Guidelines and provides important information to investors

in a timely, accurate, clear and comprehensive manner on

its website https://aprangagroup.lt/lt/investuotojams, in the

Nasdaq Vilnius Information Disclosure System, in the

Central Storage Facility, and in presentations to investors by

the manager and senior management of the Company,

thus providing equal access to it to all of the Company’s

shareholders.

The Company complies with the requirements provided in

the Law on Companies concerning the right of shareholders

to information and the provision thereof.

The Company adheres to the decision-making procedures

prescribed to the competence of the general meeting of

shareholders by the Law on Companies as well as the

Company’s articles of association, and gives shareholders

equal opportunities to vote on the adoption of relevant

decisions at general meetings of shareholders (it is

permitted to vote by completing a ballot, represent a

shareholder by proxy, etc.; information about upcoming

general meetings of shareholders and related material is

also published in English).

1.2. It is recommended that the company’s

capital should consist only of the shares that grant

the same rights to voting, ownership, dividend

and other rights to all of their holders.

Yes

The Company’s capital only consists of ordinary registered

intangible shares, which grant each shareholder equal

voting, ownership, dividend and other rights, depending on

the number of shares held.

1.3. It is recommended that investors should

have access to the information concerning the

rights attached to the shares of the new issue or

those issued earlier in advance, i.e. before they

purchase shares.

Yes

The Company provides information concerning the rights

attached to newly or previously issued shares in preliminary

prospectuses, in its annual and interim reports, and on its

website.

1.4. Exclusive transactions that are particularly

important to the company, such as transfer of all

or almost all assets of the company which in

principle would mean the transfer of the

company, should be subject to approval of the

general meeting of shareholders.

Decisions on the transfer, lease, investment, pledge or

mortgage of fixed assets with a book value of more than 1/20

of the authorized capital in accordance with the Company’s

articles of association, which were approved by decision the

general meeting of shareholders, are taken by the

Company’s management board. The competence of the

general meeting of shareholders provided for in the

Company’s articles of association does not differ from its

competence as provided for in the Law on Companies. In

any event, under the Law on Companies, approval of the

general meeting of shareholders does not relieve the

management board of responsibility for decisions made.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

1.5. Procedures for convening and conducting

a general meeting of shareholders should provide

shareholders with equal opportunities to

participate in the general meeting of

shareholders and should not prejudice the rights

and interests of shareholders. The chosen venue,

date and time of the general meeting of

shareholders should not prevent active

participation of shareholders at the general

meeting. In the notice of the general meeting of

shareholders being convened, the company

should specify the last day on which the proposed

draft decisions should be submitted at the latest.

Yes

Shareholders are informed about upcoming general

meetings of shareholders in accordance with the

requirements of legislation and the Company’s articles of

association – adhering to the notification deadlines and

methods and means of announcement. The opportunity to

participate in the meeting is supplemented by the option of

voting by ballot or authorizing another person to represent

the shareholder. All shareholders are also notified about

upcoming general meetings of shareholders in advance on

the Investor Calendar. The general meeting of shareholders

is always held at the Company’s headquarters. A working

day is always chosen for the date, and the time is always

during the first half of the day or around lunchtime, so

public transport can also be used to attend. In the notice of

the general meeting of shareholders being convened, the

Company does not restrict the right of shareholders to

submit new draft decisions either before or during the

meeting, and this is clearly stated in the notice of the

general meeting of shareholders being convened in both

Lithuanian and English.

1.6. With a view to ensure the right of

shareholders living abroad to access the

information, it is recommended, where possible,

that documents prepared for the general

meeting of shareholders in advance should be

announced publicly not only in Lithuanian

language but also in English and/or other foreign

languages in advance. It is recommended that

the minutes of the general meeting of

shareholders after the signing thereof and/or

adopted decisions should be made available

publicly not only in Lithuanian language but also

in English and/or other foreign languages. It is

recommended that this information should be

placed on the website of the company. Such

documents may be published to the extent that

their public disclosure is not detrimental to the

company or the company’s commercial secrets

are not revealed.

Yes

The notice of the general meeting of shareholders being

convened, draft decisions, the general voting ballot, and

other related documents (for example, when amending the

articles of association – the articles of association and the

proposed amendments) are published/presented not only

in Lithuanian, but in English as well (thus far, there has not

been a need to prepare documents in other foreign

languages). Minutes of the general meeting of shareholders

(decisions taken during the meeting) are also published on

the Company’s website in English (for example:

https://aprangagroup.lt/en/investors/corporate-

governance/shareholders-meetings/3755-resolutions-of-

the-annual-general-meeting-of-apranga-apb-

shareholders-9)

1.7. Shareholders who are entitled to vote

should be furnished with the opportunity to vote

at the general meeting of shareholders both in

person and in absentia. Shareholders should not

be prevented from voting in writing in advance by

completing the general voting ballot.

Yes

Shareholders are furnished with these opportunities –

information is provided about them in advance in the notice

of the general meeting of shareholders being convened.

The general voting ballot can also be completed in English.

1.8. With a view to increasing the

shareholders’ opportunities to participate

effectively at general meetings of shareholders, it

is recommended that companies should apply

modern technologies on a wider scale and thus

provide shareholders with the conditions to

participate and vote in general meetings of

shareholders via electronic means of

communication. In such cases the security of

transmitted information must be ensured and it

must be possible to identify the participating and

voting person.

Shareholders are not yet provided with these conditions

because the security of transmitted information and

identification of the participating and voting person must

first be ensured by necessary and proportionate means. The

Company has not yet introduced such electronic means of

communication. We believe that these opportunities to

vote at the meeting:

- voting in person at the meeting;

- voting by proxy;

- voting upon concluding a voting trust agreement;

voting in advance by completing the general voting

ballot (in English as well), including its transmission to the

Company via electronic means of communication;

are versatile and sufficient, and that shareholders’ rights to

participate and vote at the meeting are properly

implemented.

1.9. It is recommended that the notice on the

draft decisions of the general meeting of

shareholders being convened should specify new

candidatures of members of the collegial body,

their proposed remuneration and the proposed

Yes

If these issues are on the agenda of the general meeting of

shareholders, new candidatures of members of the collegial

body, information about his/her educational background,

work experience and other managerial positions held and

the proposed audit company are specified in the draft

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

audit company if these issues are included into

the agenda of the general meeting of

shareholders. Where it is proposed to elect a new

member of the collegial body, it is recommended

that the information about his/her educational

background, work experience and other

managerial positions held (or proposed) should

be provided.

decisions of the general meeting of shareholders.

Remuneration of collegial body members is determined by

the Remuneration Policy approved by the general meeting

of shareholders.

All candidates for members of the Company’s collegial body

also inform the general meeting of shareholders what

position they hold and where, and how their other activities

are related to the Company and other legal entities related

to the Company, as defined in Article 19(9) of the Law on

Companies.

All information about elected management board

members is provided on the Company`s website.

1.10. Members of the company’s collegial

management body, heads of the administration

or other competent persons related to the

company who can provide information related to

the agenda of the general meeting of

shareholders should take part in the general

meeting of shareholders. Proposed candidates to

member of the collegial body should also

participate in the general meeting of

shareholders in case the election of new

members is included into the agenda of the

general meeting of shareholders.

Yes

Members of the Company’s collegial body, heads of the

administration, or other competent persons related to the

Company take part in the general meeting of shareholders

if they can provide information related to the agenda of the

general meeting of shareholders.

Proposed candidates for members of the collegial body also

participate whenever possible.

Principle 2: Supervisory board

2.1. Functions and liability of the supervisory board

The supervisory board of the company should ensure representation of the interests of the company and its shareholders,

accountability of this body to the shareholders and objective monitoring of the company’s operations and its management

bodies as well as constantly provide recommendations to the management bodies of the company.

The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system.

2.1.1. Members of the supervisory board should

act in good faith, with care and responsibility for

the benefit and in the interests of the company

and its shareholders and represent their interests,

having regard to the interests of employees and

public welfare.

Not applicable

A supervisory board is not formed at the Company.

2.1.2. Where decisions of the supervisory board

may have a different effect on the interests of the

company’s shareholders, the supervisory board

should treat all shareholders impartially and fairly.

It should ensure that shareholders are properly

informed about the company’s strategy, risk

management and control, and resolution of

conflicts of interest.

Not applicable

2.1.3. The supervisory board should be impartial

in passing decisions that are significant for the

company’s operations and strategy. Members of

the supervisory board should act and pass

decisions without an external influence from the

persons who elected them.

Not applicable

2.1.4. Members of the supervisory board should

clearly voice their objections in case they believe

that a decision of the supervisory board is against

the interests of the company. Independent

members of the supervisory board should: a)

maintain independence of their analysis and

Not applicable

For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.

For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated

parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

decision-making; b) not seek or accept any

unjustified privileges that might compromise

their independence.

2.1.5. The supervisory board should oversee that

the company’s tax planning strategies are

designed and implemented in accordance with

the legal acts in order to avoid faulty practice that

is not related to the long-term interests of the

company and its shareholders, which may give

rise to reputational, legal or other risks.

Not applicable

2.1.6. The company should ensure that the

supervisory board is provided with sufficient

resources (including financial ones) to discharge

their duties, including the right to obtain all the

necessary information or to seek independent

professional advice from external legal,

accounting or other experts on matters

pertaining to the competence of the supervisory

board and its committees.

Not applicable

2.2. Formation of the supervisory board

The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective

and fair corporate governance.

2.2.1. The members of the supervisory board

elected by the general meeting of shareholders

should collectively ensure the diversity of

qualifications, professional experience and

competences and seek for gender equality. With

a view to maintain a proper balance between the

qualifications of the members of the supervisory

board, it should be ensured that members of the

supervisory board, as a whole, should have diverse

knowledge, opinions and experience to duly

perform their tasks.

Not applicable

2.2.2. Members of the supervisory board should

be appointed for a specific term, subject to

individual re-election for a new term in office in

order to ensure necessary development of

professional experience.

Not applicable

2.2.3. Chair of the supervisory board should be a

person whose current or past positions

constituted no obstacle to carry out impartial

activities. A former manager or management

board member of the company should not be

immediately appointed as chair of the supervisory

board either. Where the company decides to

depart from these recommendations, it should

provide information on the measures taken to

ensure impartiality of the supervision.

Not applicable

2.2.4. Each member should devote sufficient

time and attention to perform his duties as a

member of the supervisory board. Each member

of the supervisory board should undertake to limit

his other professional obligations (particularly the

managing positions in other companies) so that

they would not interfere with the proper

performance of the duties of a member of the

supervisory board. Should a member of the

supervisory board attend less than a half of the

meetings of the supervisory board throughout

the financial year of the company, the

shareholders of the company should be notified

thereof.

Not applicable

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

2.2.5. When it is proposed to appoint a member

of the supervisory board, it should be announced

which members of the supervisory board are

deemed to be independent. The supervisory

board may decide that, despite the fact that a

particular member meets all the criteria of

independence, he/she cannot be considered

independent due to special personal or company-

related circumstances.

Not applicable

2.2.6. The amount of remuneration to members

of the supervisory board for their activity and

participation in meetings of the supervisory board

should be approved by the general meeting of

shareholders.

Not applicable

2.2.7. Every year the supervisory board should

carry out an assessment of its activities. It should

include evaluation of the structure of the

supervisory board, its work organization and

ability to act as a group, evaluation of the

competence and work efficiency of each member

of the supervisory board, and evaluation whether

the supervisory board has achieved its objectives.

The supervisory board should, at least once a year,

make public respective information about its

internal structure and working procedures.

Not applicable

Principle 3: Management Board

3.1. Functions and liability of the management board

The management board should ensure the implementation of the company’s strategy and good corporate governance with

due regard to the interests of its shareholders, employees and other interest groups.

3.1.1. The management board should ensure

the implementation of the company’s strategy

approved by the supervisory board if the latter has

been formed at the company. In such cases where

the supervisory board is not formed, the

management board is also responsible for the

approval of the company’s strategy.

Yes/No

The Company does not prepare or approve a separate

Company strategy. The Company prepares, approves and

publishes the Company’s one-year operational plans.

Company’s objectives are disclosed in the Company’s

annual reports and notifications of material events, which

are published in the same sources as provided in the answer

to 1.1.

3.1.2. As a collegial management body of the

company, the management board performs the

functions assigned to it by the Law and in the

articles of association of the company, and in such

cases where the supervisory board is not formed

in the company, it performs inter alia the

supervisory functions established in the Law. By

performing the functions assigned to it, the

management board should take into account the

needs of the company’s shareholders, employees

and other interest groups by respectively striving

to achieve sustainable business development.

Yes

As a collegial management body of the Company, the

management board performs the functions assigned to it

by the Law and in the articles of association of the Company.

Since supervisory board is not formed in the Company, the

board performs, among other things, the supervisory

functions established by the Law on Companies.

In performing the functions assigned to it, the

management board takes into account the needs of the

Company, shareholders, employees and other interest

groups; the objective of the management board is

essentially to achieve sustainable business development. At

the end of the year, the Company’s management board

approves next year’s budget, considering not only

expansion and planned investments, but also potential staff

salary increases, allocation of investments for employee

training and development, implementation of IT systems

and security, etc.

3.1.3. The management board should ensure

compliance with the laws and the internal policy

of the company applicable to the company or a

group of companies to which this company

belongs. It should also establish the respective risk

management and control measures aimed at

ensuring regular and direct liability of managers.

Yes/No

Compliance with the provisions of laws and the Company’s

internal policies is ensured by the management board, as

well as by the person or persons delegated by the

management board, and department heads and/or jurists,

within the scope of activities of the laws/policies.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

3.1.4. Moreover, the management board should

ensure that the measures included into the OECD

Good Practice Guidance

on Internal Controls,

Ethics and Compliance are applied at the

company in order to ensure adherence to the

applicable laws, rules and standards.

Yes/No

Some of the measures are applied. In 2019, the

management board approved and published the Code of

Ethics and Conduct, which contains, in addition to the

OECD Good Practice Guidance, other rules and principles

relevant to the Company’s operations. At the very beginning

of 2024, Rules on Implementation of the Corruption

Prevention Policy were approved in the Company`s group,

which, among other things, include the obligation to

declare private interests in the group companies, appoints

a person responsible for corruption prevention in the group,

and training materials to update the information were

shared with the employees of the Company's group.

3.1.5. When appointing the manager of the

company, the management board should take

into account the appropriate balance between

the candidate’s qualifications, experience and

competence.

Yes

When appointing the manager of the Company, the

management board takes into account the appropriate

balance between the candidate’s qualifications, experience

and competence.

3.2. Formation of the management board

3.2.1. The members of the management board

elected by the supervisory board or, if the

supervisory board is not formed, by the general

meeting of shareholders should collectively

ensure the required diversity of qualifications,

professional experience and competences and

seek for gender equality. With a view to maintain

a proper balance in terms of the current

qualifications possessed by the members of the

management board, it should be ensured that the

members of the management board would have,

as a whole, diverse knowledge, opinions and

experience to duly perform their tasks.

Yes/No (due to

gender

equality)

The management board is made up of persons of different

professional experience and competences. The

management board is composed of experts in corporate

governance, economics and finance, taxes, procurement,

expansion and development who possess the diverse

knowledge, opinions and experience necessary for the

proper and effective functioning of the management board

and the interests of the Company. All members of the

management board are closely acquainted with the

activities of the Company, and two out of six members of the

management board are employees of the Company – heads

of administration. Even though only one of the six members

of the management board is a woman, there are no

requirements for the composition of the management

board that may discriminate on the basis of sex in any way.

3.2.2. Names and surnames of the candidates to

become members of the management board,

information on their educational background,

qualifications, professional experience, current

positions, other important professional

obligations and potential conflicts of interest

should be disclosed without violating the

requirements of the legal acts regulating the

handling of personal data at the meeting of the

supervisory board in which the management

board or individual members of the management

board are elected. In the event that the

supervisory board is not formed, the information

specified in this paragraph should be submitted

to the general meeting of shareholders. The

management board should, on yearly basis,

collect data provided in this paragraph on its

members and disclose it in the company’s annual

report.

Yes

The names and surnames of the candidates to become

members of the management board, information on their

educational background, qualifications, professional

experience, current positions, other important professional

obligations and potential conflicts of interest are disclosed

to the general meeting of shareholders in accordance with

the requirements of the legislation regulating the

processing of personal data and the internal legislation

approved by the Company establishing the principles of

data protection and processing, in all cases with the prior

informed consent of the individual. The aforementioned

data are presented in the Company's annual report.

3.2.3. All new members of the management

board should be familiarized with their duties and

the structure and operations of the company.

Yes

New members of the management board are familiarized

with their duties, the structure and operations of the

Company, and other information relevant to the activities of

a management board member.

3.2.4. Members of the management board

should be appointed for a specific term, subject to

individual re-election for a new term in office in

Yes

The members of the management board are appointed for

a four-year term or, when electing individual members –

until the end of the term of office of the current

Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

order to ensure necessary development of

professional experience and sufficiently frequent

reconfirmation of their status.

management board. Members of the management board

who have responsibly carried out their duties, devoted time

to the work of the management board, and participated in

meetings, and who would like to continue to play an active

role in the activities of the management board, always have

the opportunity to be nominated and re-elected.

3.2.5. Chair of the management board should be

a person whose current or past positions

constitute no obstacle to carry out impartial

activity. Where the supervisory board is not

formed, the former manager of the company

should not be immediately appointed as chair of

the management board. When a company

decides to depart from these recommendations,

it should furnish information on the measures it

has taken to ensure the impartiality of

supervision.

Yes

The chair of the management board is a person who has

never been the manager of the Company. The chair of the

Company’s management board is not an employee of the

Company and is a shareholder representative. It is the

Company’s belief that these facts are sufficient to state that

the chair of the management board is capable of acting

impartially and taking decisions which represent and

protect the rights of shareholders.

3.2.6. Each member should devote sufficient

time and attention to the performance of duties

as a member of the management board. If a

member of the management board has attended

less than half of the meetings of the management

board over the course of the Company’s financial

year, the Company’s supervisory board – or, if a

supervisory board is not formed at the Company,

the general meeting of shareholders – should be

informed.

Yes

The Company believes that each member devotes sufficient

time and attention to their duties as member of the

management board, actively participates in the meetings of

the management board, and devotes time to prepare for

them. Thus far, there have been no members who have

attended less than half of the meetings of the management

board over the course of the Company’s financial year, but

such information could be submitted to the general

meeting of shareholders.

3.2.7. In the event that the management board

is elected in the cases established by the Law

where the supervisory board is not formed at the

company, and some of its members will be

independent

, it should be announced which

members of the management board are deemed

as independent. The management board may

decide that, despite the fact that a particular

member meets all the criteria of independence

established by the Law, he/she cannot be

considered independent due to special personal

or company-related circumstances.

Yes

In cases when management board is elected, it is

announced, which members of the management board are

deemed as independent.

3.2.8. The general meeting of shareholders of

the company should approve the amount of

remuneration to the members of the

management board for their activity and

participation in the meetings of the management

board.

Yes

Remuneration Policy, which indicates the amount of

remuneration to the members of the board (at the moment

to the independent ones only), is approved by the general

meeting of shareholders of the company.

3.2.9. The members of the management board

should act in good faith, with care and

responsibility for the benefit and the interests of

the company and its shareholders with due

regard to other stakeholders. When adopting

decisions, they should not act in their personal

interest; they should be subject to no-compete

agreements and they should not use the business

information or opportunities related to the

company’s operations in violation of the

company’s interests.

Yes/No

The Company believes that the members of the

management board act in good faith, with care and

responsibility for the benefit and the interests of the

Company and its shareholders with due regard to other

stakeholders, and that they do not act in their personal

interest when adopting decisions.

The Company is of the opinion that the duties of

confidentiality that the members of the management

board are subject to by law are sufficient to ensure their

loyalty and trustworthiness, so non-compete agreements

are not concluded with the members of the management

board and their activities are not additionally restricted by

such agreements.

Members of the management board are introduced to the

list of confidential information and trade secrets approved

by the management board.

The members of the Company’s management board are

prohibited by law from using the business information or

opportunities related to the Company’s operations in

For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons

defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

violation of the company’s interests and by the Rules on

Implementation of the Corruption Prevention Policy of the

Company`s group.

3.2.10. Every year the management board should

carry out an assessment of its activities. It should

include evaluation of the structure of the

management board, its work organization and

ability to act as a group, evaluation of the

competence and work efficiency of each member

of the management board, and evaluation

whether the management board has achieved its

objectives. The management board should, at

least once a year, make public respective

information about its internal structure and

working procedures in observance of the legal

acts regulating the processing of personal data.

The management board does not carry out an annual

assessment of its activities.

Principle 4: Rules of procedure of the supervisory board and the management board of the company

The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure

efficient operation and decision-making of these bodies and promote active cooperation between the company’s management

bodies.

4.1. The management board and the supervisory

board, if the latter is formed at the company,

should act in close cooperation in order to attain

benefit for the company and its shareholders.

Good corporate governance requires an open

discussion between the management board and

the supervisory board. The management board

should regularly and, where necessary,

immediately inform the supervisory board about

any matters significant for the company that are

related to planning, business development, risk

management and control, and compliance with

the obligations at the company. The management

board should inform he supervisory board about

any derogations in its business development from

the previously formulated plans and objectives by

specifying the reasons for this.

Not applicable

A supervisory board is not formed at the Company.

4.2. It is recommended that meetings of the

company’s collegial bodies should be held at the

respective intervals, according to the pre-

approved schedule. Each company is free to

decide how often meetings of the collegial bodies

should be convened but it is recommended that

these meetings should be convened at such

intervals that uninterruptable resolution of

essential corporate governance issues would be

ensured. Meetings of the company’s collegial

bodies should be convened at least once per

quarter.

Yes

Meetings of the management board are held at the respective

intervals, according to the pre-approved schedule, usually once

per quarter.

4.3. Members of a collegial body should be notified of

the meeting being convened in advance so that

they would have sufficient time for proper

preparation for the issues to be considered at the

meeting and a fruitful discussion could be held

and appropriate decisions could be adopted.

Along with the notice of the meeting being

convened all materials relevant to the issues on the

agenda of the meeting should be submitted to the

members of the collegial body. The agenda of the

meeting should not be changed or supplemented

during the meeting, unless all members of the

collegial body present at the meeting agree with

such change or supplement to the agenda, or

Yes

The members of the management board are notified of the

meeting of the management board being convened in advance

so that they have sufficient time for proper preparation for the

issues to be considered at the meeting and a fruitful discussion

can be held. Along with the notice of the meeting being

convened, all materials relevant to the issues on the agenda of

the meeting are submitted to the members of the management

board, and the members of the management board can always

request additional information if they consider that the

information provided is inadequate.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

certain issues that are important to the company

require immediate resolution.

4.4. In order to coordinate the activities of the

company’s collegial bodies and ensure effective

decision-making process, the chairs of the

company’s collegial supervision and management

bodies should mutually agree on the dates and

agendas of the meetings and close cooperate in

resolving other matters related to corporate

governance. Meetings of the company’s

supervisory board should be open to members of

the management board, particularly in such cases

where issues concerning the removal of the

management board members, their responsibility

or remuneration are discussed.

Not applicable

A supervisory board is not formed at the Company.

Principle 5: Nomination, remuneration and audit committees

5.1. Purpose and formation of committees

The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory

board is not formed, of the management board which performs the supervisory functions by ensuring that decisions are based

on due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of

interest.

Committees should exercise independent judgment and integrity when performing their functions and provide the collegial

body with recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by

the collegial body.

5.1.1. Taking due account of the company-

related circumstances and the chosen corporate

governance structure, the supervisory board of

the company or, in cases where the supervisory

board is not formed, the management board

which performs the supervisory functions,

establishes committees. It is recommended that

the collegial body should form the nomination,

remuneration and audit committees

Yes/No

Nomination and remuneration committees are not formed at

the Company, as the Company believes that the management

board, in performing its functions, partially performs the

functions of the said committees. The Company’s management

board selects and appoints the manager of the Company and

makes recommendations to the manager of the Company on

the appointment of senior management. The management

board will provide feedback and suggestions on the

remuneration policy approved in the Company under the valid

legislation. The Company’s management board approves the

Company’s strategic and budget plans and controls their

implementation and analyzes and evaluates the reports of the

Company’s manager and senior management on

implementation of the Company’s approved budget plans and

the use of funds. In compliance with the requirements of the

Law on the Audit of Financial Statement (Official Gazette, 2008,

No. 82-3233), the Company has formed an audit committee

consisting of three members, two of whom are independent.

The audit committee is elected for a period of four years. The

members of the committee are appointed and removed by the

Company’s general meeting of shareholders on the

recommendation of the Company’s management board. On 27

April 2017, the authority of the audit committee was approved

by the decision of the general meeting of shareholders.

5.1.2. Companies may decide to set up less than

three committees. In such case companies should

explain in detail why they have chosen the

alternative approach, and how the chosen

approach corresponds with the objectives set for

the three different committees.

Yes

See answer to 5.1.1.

The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the

Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities are

traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit

committee (the legal acts provide for the exemptions where the functions of the audit committee may be carried out by the collegial body

performing the supervisory functions).

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

5.1.3. In the cases established by the legal acts

the functions assigned to the committees formed

at companies may be performed by the collegial

body itself. In such case the provisions of this Code

pertaining to the committees (particularly those

related to their role, operation and transparency)

should apply, where relevant, to the collegial body

as a whole.

Yes

See answer to 5.1.1.

5.1.4. Committees established by the collegial

body should normally be composed of at least

three members. Subject to the requirements of

the legal acts, committees could be comprised

only of two members as well. Members of each

committee should be selected on the basis of

their competences by giving priority to

independent members of the collegial body. The

chair of the management board should not serve

as the chair of committees.

Yes/No

Yes, as far as the audit committee is concerned.

See answer to 5.1.1.

The chair of the audit committee is not the chair of the

management board; furthermore, the chair of the audit

committee is an independent member of the audit

committee.

5.1.5. The authority of each committee formed

should be determined by the collegial body itself.

Committees should perform their duties

according to the authority delegated to them and

regularly inform the collegial body about their

activities and performance on a regular basis. The

authority of each committee defining its role and

specifying its rights and duties should be made

public at least once a year (as part of the

information disclosed by the company on its

governance structure and practice on an annual

basis). In compliance with the legal acts

regulating the processing of personal data,

companies should also include in their annual

reports the statements of the existing

committees on their composition, the number of

meetings and attendance over the year as well as

the main directions of their activities and

performance.

Yes/No

The authority of the audit committee laying down the

procedure for the formation of the committee, the number

and composition of members and requirements for

members, the period of membership of the committee, the

rights and obligations of the committee, the procedure for

organizing meetings and making decisions, the scale of the

information provided to the committee and the procedure

for its provision, etc. are approved by the body that elected

this body (its members) – the general meeting of

shareholders. The members of the audit committee are

presented to the meeting by the management board.

The authority of the audit committee defining its role and

specifying its rights and duties was made public after it was

approved in 2017, and is not additionally published by the

Company every year if there are no changes.

The information provided for in this paragraph is published

annually in the annual report.

5.1.6. With a view to ensure the independence

and impartiality of the committees, the members

of the collegial body who are not members of the

committees should normally have a right to

participate in the meetings of the committee only

if invited by the committee. A committee may

invite or request that certain employees of the

company or experts would participate in the

meeting. Chair of each committee should have

the possibility to maintain direct communication

with the shareholders. Cases where such practice

is to be applied should be specified in the rules

regulating the activities of the committee.

Yes

It is the audit committee’s right and prerogative to decide

who to invite to participate in meetings of the management

board (excerpts from the Audit Committee Charter):

“4.3. The Company’s general director, the chair of the

management board and/or members of the management

board and external auditors may participate in the

meetings of the Committee. In addition, the Company’s

finance and economics director and other employees of the

Company may be invited to participate in the meetings of

the Committee.”

“3.8. The Committee shall be accountable to the

Company’s general meeting of shareholders. The

Committee shall submit an activity report to the general

meeting of shareholders together with the complete set of

financial statements submitted by the management board

for approval.”

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

5.2. Nomination committee

5.2.1. The key functions of the nomination

committee should be the following:

1) to select candidates to fill vacancies in the

membership of supervisory and management

bodies and the administration and recommend the

collegial body to approve them. The nomination

committee should evaluate the balance of skills,

knowledge and experience in the management

body, prepare a description of the functions and

capabilities required to assume a particular position

and assess the time commitment expected;

2) assess, on a regular basis, the structure, size and

composition of the supervisory and management

bodies as well as the skills, knowledge and activity of

its members, and provide the collegial body with

recommendations on how the required changes

should be sought;

3) devote the attention necessary to ensure

succession planning.

Not applicable

See answer to 5.1.1.

5.2.2. When dealing with issues related to

members of the collegial body who have

employment relationships with the company and

the heads of the administration, the manager of

the company should be consulted by granting

him/her the right to submit proposals to the

Nomination Committee.

Not applicable

See answer to 5.1.1.

5.3. Remuneration committee

The main functions of the remuneration committee

should be as follows:

1) submit to the collegial body proposals on the

remuneration policy applied to members of the

supervisory and management bodies and the heads

of the administration for approval. Such policy

should include all forms of remuneration, including

the fixed-rate remuneration, performance-based

remuneration, financial incentive schemes, pension

arrangements and termination payments as well as

conditions which would allow the company to

recover the amounts or suspend the payments by

specifying the circumstances under which it would

be expedient to do so;

2) submit to the collegial body proposals regarding

individual remuneration for members of the

collegial bodies and the heads of the administration

in order to ensure that they would be consistent

with the company’s remuneration policy and the

evaluation of the performance of the persons

concerned;

3) review, on a regular basis, the remuneration policy

and its implementation.

Not applicable

See answer to 5.1.1. The remuneration policy is drafted and

approved as provided by the amendments to the Law on

Companies.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

5.4. Audit committee

5.4.1. The key functions of the audit committee

are defined in the legal acts regulating the

activities of the audit committee

Yes

5.4.2. All members of the committee should be

provided with detailed information on specific

issues of the company’s accounting system,

finances and operations. The heads of the

company’s administration should inform the

audit committee about the methods of

accounting for significant and unusual

transactions where the accounting may be

subject to different approaches.

Yes

The approved Audit Committee Charter provides for the

following:

“3.3. The Committee shall be entitled:

3.3.1. to obtain any information or documents when

performing the Committee’s duties;

3.3.2. to obtain full information related to the specific

features of the Company’s accounting, finances and

operations. At the request of the members of the

Committee or at its own initiative, the Company’s

administration should inform the Committee about the

methods of accounting for significant and unusual

transactions where the accounting may be subject to

different approaches, as well as about activities in

preferential trade areas and/or activities carried out through

special-purpose entities (companies, organizations) in order

to determine whether these activities are justified.

3.4. The Committee shall submit requests for

information or documents to the Company’s general

director. The Company’s general director shall provide the

Committee member(s) with access to the information or

documents.”

The Audit Committee Charter does not provide for any

exceptions in which information may be withheld.

The audit committee or its members may exercise these

established rights without restriction.

5.4.3. The audit committee should decide

whether the participation of the chair of the

management board, the manager of the

company, the chief finance officer (or senior

employees responsible for finance and

accounting), the internal and external auditors in

its meetings is required (and, if required, when).

The committee should be entitled, when needed,

to meet the relevant persons without members of

the management bodies present.

Yes

The audit committee is free to choose who to invite to its

meetings, or to meet without inviting anyone to the

meeting. The participation of members of the management

bodies is only possible at the direction of the audit

committee. Since there is one employee of the Company on

the audit committee, the committee may, if necessary,

arrange a meeting with the necessary employee of the

Company without members of the management bodies

present. The committee is free to decide on meetings with

other necessary persons (not employees) and acts

independently. See also answer to 5.1.1.

5.4.4. The audit committee should be informed

about the internal auditor’s work program and

should be furnished with internal audit reports or

periodic summaries. The audit committee should

also be informed about the work program of

external auditors and should receive from the

audit firm a report describing all relationships

between the independent audit firm and the

company and its group.

Not applicable

/Yes

The Company does not have any internal auditors. The audit

committee is informed about the work program of external

auditors and receives from the audit firm a report

describing all relationships between the independent audit

firm and the Company and its group.

Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council of

16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements of the

Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

5.4.5. The audit committee should examine

whether the company complies with the

applicable provisions regulating the possibility of

lodging a complaint or reporting anonymously

his/her suspicions of potential violations

committed at the company and should also

ensure that there is a procedure in place for

proportionate and independent investigation of

such issues and appropriate follow-up actions.

The procedure for reporting suspicions of potential

violations committed at the Company is established and

posted on the Company’s website, as regulated by the Law

on Whistleblower Protection. There is an internal channel

for the proportionate and independent investigation of

such issues and appropriate follow-up actions, and there are

reporting rules in place (link below). In the rules, the audit

committee is not designated as a supervisory body for

compliance with the relevant provisions of the Company

and has not done so thus far. More about reports:

https://aprangagroup.lt/lt/investuotojams/bendroves-

valdymas/apb-apranga-valdymo-principai

5.4.6. The audit committee should submit to the

supervisory board or, where the supervisory board

is not formed, to the management board its

activity report at least once in every six months, at

the time that annual and half-yearly reports are

approved.

The committee is accountable to the Company’s general

meeting of shareholders. The committee submits an

activity report to the general meeting of shareholders

together with the complete set of financial statements

submitted by the management board for approval.

Principle 6: Prevention and disclosure of conflicts of interest

The corporate governance framework should encourage members of the company’s supervisory and management bodies to

avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to

members of the supervisory and management bodies.

Any member of the company’s supervisory and

management body should avoid a situation where

his/her personal interests are or may be in conflict

with the company’s interests. In case such a

situation did occur, a member of the company’s

supervisory or management body should, within a

reasonable period of time, notify other members of

the same body or the body of the company which

elected him/her or the company’s shareholders of

such situation of a conflict of interest, indicate the

nature of interests and, where possible, their value.

Yes

As of the beginning of 2024 the Rules on the

Implementation of the Corruption Prevention Policy were

approved and are valid and applicable to the management

bodies of the Company. The Rules, among other things,

provide for the obligation to declare private interests in the

event of circumstances that may cause a conflict of

interests.

Prior to the adoption of the aforementioned Rules, the

general principles of avoiding conflicts of interest provided

for in the Code of Ethics and Conduct of the Company's

group were followed.

To the Company’s knowledge, the members of the

Company’s management body avoid situations in which

their personal interests are or may be in conflict with those

of the Company. The members of the Company’s

management body are informed of their duty to report,

within a reasonable period of time, such a conflict of interest

to the other members of the same body, or to the body of

the Company that elected them, or to the shareholders of

the Company and from now also to the person responsible

for the corruption prevention in the group.

Principle 7: Remuneration policy of the company

The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent

potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the

administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long-

term strategy.

7.1. The company should approve and post the

remuneration policy on the website of the

company; such policy should be reviewed on a

regular basis and be consistent with the

company’s long-term strategy.

Yes

https://aprangagroup.lt/en/investors/corporate-

governance/principles-of-corporate-governance

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

7.2. The remuneration policy should include all

forms of remuneration, including the fixed-rate

remuneration, performance-based

remuneration, financial incentive schemes,

pension arrangements and termination

payments as well as the conditions specifying

the cases where the company can recover the

disbursed amounts or suspend the payments.

Yes/No

The remuneration policy is drafted and adopted in

accordance with the requirements of the Law on

Companies and actual situation in the Company. The

remuneration policy does not cover factors that are not

applied in the Company or for which there is no established

practice or generally applicable principles in the Company.

7.3. With a view to avoid potential conflicts of

interest, the remuneration policy should

provide that members of the collegial bodies

which perform the supervisory functions

should not receive remuneration based on the

company’s performance.

Yes

According to the Remuneration Policy, remuneration for

work in the board is received only by independent members

of the board and is fixed.

7.4. The remuneration policy should provide

sufficient information on the policy regarding

termination payments. Termination payments

should not exceed a fixed amount or a fixed

number of annual wages and in general should

not be higher than the non-variable

component of remuneration for two years or

the equivalent thereof. Termination payments

should not be paid if the contract is terminated

due to inadequate performance.

Severance pay policy is not established in the remuneration

policy. The amount of severance pay would be decided on a

case-by-case basis, taking into account the Company's

interests, principles of reasonableness, proportionality,

fairness and integrity as well as consensus reached between

the parties, contribution to the Company's activities and

reasons for dismissal.

7.5. In the event that the financial incentive scheme

is applied at the company, the remuneration

policy should contain sufficient information

about the retention of shares after the award

thereof. Where remuneration is based on the

award of shares, shares should not be vested at

least for three years after the award thereof.

After vesting, members of the collegial bodies

and heads of the administration should retain a

certain number of shares until the end of their

term in office, subject to the need to

compensate for any costs related to the

acquisition of shares.

No financial incentive scheme, as defined by the Law on

Markets in Financial Instruments, is applied at the

Company.

7.6. The company should publish information

about the implementation of the remuneration

policy on its website, with a key focus on the

remuneration policy in respect of the collegial

bodies and managers in the next and, where

relevant, subsequent financial years. It should

also contain a review of how the remuneration

policy was implemented during the previous

financial year. The information of such nature

should not include any details having a

commercial value. Particular attention should

be paid on the major changes in the company’s

remuneration policy, compared to the previous

financial year.

Yes

The remuneration report is published together with the

Company's annual report how the content requirements of

such a report are provided by the Law on Corporate

Financial Statements.

7.7. It is recommended that the remuneration

policy or any major change of the policy should

be included on the agenda of the general

meeting of shareholders. The schemes under

which members and employees of a collegial

body receive remuneration in shares or share

options should be approved by the general

meeting of shareholders.

Yes

Approval of the remuneration policy or any major change of

the policy is within the competence of the general meeting

of shareholders.

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

Principle 8: Role of stakeholders in corporate governance

The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements

and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial

sustainability. In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers,

clients, local community and other persons having certain interests in the company concerned.

8.1. The corporate governance framework should

ensure that the rights and lawful interests of

stakeholders are protected.

Yes

The Company respects the rights of different stakeholders

and their rights entrenched in the laws.

8.2. The corporate governance framework should

create conditions for stakeholders to

participate in corporate governance in the

manner prescribed by law. Examples of

participation by stakeholders in corporate

governance include the participation of

employees or their representatives in the

adoption of decisions that are important for the

company, consultations with employees or

their representatives on corporate governance

and other important matters, participation of

employees in the company’s authorized

capital, involvement of creditors in corporate

governance in the cases of the company’s

insolvency, etc.

Yes

The Company has never prohibited or restricted the right,

and always strives to create conditions for stakeholders to

participate in corporate governance in the manner

prescribed by law.

For example, a work council has been formed at the

Company which represents the interests of employees and

participates in corporate governance within its

competence.

8.3. Where stakeholders participate in the

corporate governance process, they should

have access to relevant information.

Yes

8.4. Stakeholders should be provided with the

possibility of reporting confidentially any illegal

or unethical practices to the collegial body

performing the supervisory function.

The company has a general procedure for reporting

violations, see the answer to 5.4.5, as established by the Law

on Whistleblower Protection.

Principle 9: Disclosure of information

The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues,

including the financial situation, operations and governance of the company.

9.1. In accordance with the company’s procedure

on confidential information and commercial

secrets and the legal acts regulating the

processing of personal data, the information

publicly disclosed by the company should

include but not be limited to the following:

The information referred to below in this recommendation

is disclosed in notifications of material events published

through the Nasdaq Vilnius Information Disclosure System,

the Company’s website, and the Company’s annual and

interim information documents, to the extent required by

legislation and the International Financial Reporting

Standards applicable in the European Union. The

information is also disclosed in presentations to investors by

the manager and senior management of the Company.

9.1.1. operating and financial results of the company;

Yes

9.1.2. objectives and non-financial information of the

company;

Yes

9.1.3. persons holding a stake in the company or

controlling it directly and/or indirectly and/or

together with related persons as well as the

structure of the group of companies and their

relationships by specifying the final

beneficiary;

Yes

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

9.1.4. members of the company’s supervisory and

management bodies who are deemed

independent, the manager of the company,

the shares or votes held by them at the

company, participation in corporate

governance of other companies, their

competence and remuneration;

Yes

9.1.5. reports of the existing committees on their

composition, number of meetings and

attendance of members during the last year as

well as the main directions and results of their

activities;

Yes/No

See the answer given in 5.1.5.

9.1.6. potential key risk factors, the company’s risk

management and supervision policy;

Yes

9.1.7. the company’s transactions with related

parties;

Yes

9.1.8. main issues related to employees and other

stakeholders (for instance, human resource

policy, participation of employees in corporate

governance, award of the company’s shares or

share options as incentives, relationships with

creditors, suppliers, local community, etc.);

Yes/No

Most of this information is disclosed in the Company’s

corporate social responsibility report (Annex 2).

9.1.9. structure and strategy of corporate

governance;

Yes/No

The Company’s governance structure and management

principles are published on the Company’s website and in

its financial statements. One-year operational plans are

publicly disclosed.

9.1.10. initiatives and measures of social responsibility

policy and anti-corruption fight, significant

current or planned investment projects.

This list is deemed minimum and companies are

encouraged not to restrict themselves to the

disclosure of information included into this list. This

principle of the Code does not exempt companies

from their obligation to disclose information as

provided for in the applicable legal acts.

Yes

9.2. When disclosing the information specified in

paragraph 9.1.1 of recommendation 9.1, it is

recommended that the company which is a

parent company in respect of other

companies should disclose information

about the consolidated results of the whole

group of companies.

Yes

Information is disclosed about the Company and the

consolidated results of its daughter companies.

9.3. When disclosing the information specified in

paragraph 9.1.4 of recommendation 9.1, it is

recommended that the information on the

professional experience and qualifications of

members of the company’s supervisory and

management bodies and the manager of the

company as well as potential conflicts of

interest which could affect their decisions

should be provided. It is further

recommended that the remuneration or

other income of members of the company’s

supervisory and management bodies and the

manager of the company should be

disclosed, as provided for in greater detail in

Principle 7.

Yes

All information is on the Company’s website; also see the

answers to 3.2.2 and 7.1.

9.4. Information should be disclosed in such

manner that no shareholders or investors are

discriminated in terms of the method of

receipt and scope of information. Information

should be disclosed to all parties concerned

at the same time.

Yes

All information is disclosed as provided for in 9.1 and related

answers; no shareholders or investors are discriminated in terms

of the method of receipt and scope of information. Information

is disclosed to all parties concerned at the same time.

Information is disclosed in accordance with the applicable

legislation of the Republic of Lithuania. The Company makes

information publicly available through the Nasdaq Vilnius

Information Disclosure System, thus ensuring simultaneous

G O V E R N A N C E R E P O R T 3 . 2

APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius

FOR THE YEAR ENDED 31 DECEMBER 2023

(all tabular amounts are in EUR thousands unless otherwise stated)

PRINCIPLES/ RECOMMENDATIONS

YES / NO/

NOT

APPLICABLE

COMMENTARY

disclosure to investors. Information is also immediately placed in

the Central Storage Facility.

Notifications of material events are disclosed in Lithuanian and

English, before or after the Nasdaq Vilnius Stock Exchange

trading session.

The Company also publishes the information published through

the Nasdaq Vilnius Information Disclosure System and placed in

the Central Storage Facility on the Company’s designated

investor website http://apranga.lt/lt/investuotojams, where the

information is presented in Lithuanian and English.

Principle 10: Selection of the company’s audit firm

The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.

10.1. With a view to obtain an objective opinion on

the company’s financial condition and

financial results, the company’s annual

financial statements and the financial

information provided in its annual report

should be audited by an independent audit

firm.

Yes

An independent audit firm audits the complete set of

consolidated financial statements for the Company and its

group of companies in accordance with the International

Financial Reporting Standards applicable in the European

Union. The audit firm also performs an audit of the annual

report.

10.2. It is recommended that the audit firm would

be proposed to the general meeting of

shareholders by the supervisory board or, if

the supervisory board is not formed at the

company, by the management board of the

company.

Yes

The audit firm is proposed to the general meeting of

shareholders by the Company’s management board.

10.3. In the event that the audit firm has received

remuneration from the company for the non-

audit services provided, the company should

disclose this publicly. This information should

also be available to the supervisory board or, if

the supervisory board is not formed at the

company, by the management board of the

company when considering which audit firm

should be proposed to the general meeting of

shareholders.

Not applicable

The Company’s audit firm did not provide non-audit

services to the Company during the reporting year and did

not receive remuneration from the Company for this.

S O C I A L R E S P O N S I B I L I T Y R E P O R T 2 0 2 3

SUSTAINABILITY WITHIN THE GROUP 9

SUSTAINABILITY PRINCIPLES AND COMMITMENTS

SUSTAINABILITY MANAGEMENT

RISK MANAGEMENT

EU TAXONOMY FOR SUSTAINABLE ACTIVITIES

STAKEHOLDER INVOLVEMENT

MATERIALITY OF SUSTAINABILITY TOPICS

KEY SUSTAINABILITY DIRECTIONS

ENVIRONMENT 26

ENERGY AND CLIMATE

SETTING UP ECO-FRIENDLY STORES

PACKAGING OPTIMISATION AND WASTE

REDUCTION

SOCIAL FACTORS 35

WORKING CONDITIONS AND EMPLOYEE

WELLBEING

EMPLOYEE TRAINING AND DEVELOPMENT

EMPLOYEE HEALTH AND SAFETY

CONTENT

ECONOMIC (GOVERNANCE) AREA 45

BUSINESS ETHICS AND COMPLIANCE

RESPONSIBILITY IN THE SUPPLY CHAIN

RESPONSIBILITY TO SOCIETY

51GRI INDEX

ABOUT THE APRANGA GROUP 4

ABOUT THE SOCIAL

RESPONSIBILITY REPORT

BUSINESS MODEL

STRUCTURE OF GROUP COMPANIES IN 2023

TRANSPORT OF GOODS AND LOGISTICS

HUMAN RIGHTS

KEY FIGURES 6

Social Responsibility Report 2023 2

ABOUT THE

SOCIAL

RESPONSIBILITY

REPORT

The Sustainability Report is prepared for the

period from 1 January 2023 to 31 December

2023 and covers the activities of Apranga Joint

Stock Company (hereafter referred to as "the

Group"; registration address Ukmergės 362,

Vilnius) in Lithuania, Latvia and Estonia. The

sustainability report is published as part of the

Consolidated Annual Report.

The Sustainability Report is prepared for the

second year in a row in accordance with the

Global Reporting Initiative (GRI) standards (the

newest GRI version of 2021). The report shows

how our activities contribute to the United

Nations Sustainable Development Goals. In this

report, we aim to disclose all known

information and explain the circumstances

where certain indicators are not available or are

insufficiently detailed by the standard

requirements. The content of the report is

based on a materiality matrix of sustainability

topics, highlighting the ones that all

stakeholders found the most relevant. The

materialitymatrix was developed in 2022 and

revised in 2023 while preparing this report. A

double materiality assessment is foreseen in

2024, and the material topics will be updated.

The disclosures also follow the guidelines and

recommendations of the Bank of Lithuania,

Nasdaq and the European Commission on the

disclosure of non-financial information, and

comply with the requirements of the legislation

of the Republic of Lithuania. The social

responsibility report is subject to statutory

audit requirements.

The Group's Corporate Social Responsibility

(Sustainability) Report is publishedtogether

with the Financial Statements in accordance

with the requirements applicable to issuers on

the Group's website www.aprangagoup.lt and

is publicly available. No comments were

received on the previous year's report, but it is

noted that the Bank of Lithuania's guidance on

the Taxonomy disclosure requirements was

received and taken into account while

preparing this report.

With our Sustainability Report we are

committed to being open and disclosing all

known and relevant information. Our

disclosures are intended to provide a basis for

the assessment of our performance and the

achievement of our objectives.

GRI 2-1 GRI 2-3 GRI 2-5

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

ABOUT THE

APRANGA

GROUP

Apranga Group is the leading clothing retailer

in the Baltics, striving to implement the

principles of leadership in its direct business

activities and in its relations with all

stakeholders. In our performance we are

committed to a future in which our core values

become the unquestionable standards of

business ethics.

Since 1993, when the first Apranga store was

opened in Vilnius, we have been growing every

year and creating a retail chain that meets the

expectations and requirements of today's

shoppers. We have grown from one store to a

Group with hundreds of outlets operating in

the three Baltic States by meeting our own

mmm

standards of quality and customer service. Our

experience includes cooperation with the

world's most renowned leaders in the fashion

business, the adoption and application of best

practices in the local market, and the

application of high standards of business ethics

not only for ourselves but also for our partners.

Our future lies in a constant desire to improve,

finding a way to balance the enthusiasm that

drives us forward with the lessons we have

already learned.

Our leadership and importance in society is not

only about our market share but also about

how we contribute to the common well-being.

INTEGRITY TRANSPARENCY RESPONSIBILITY

are the everyday principles that guide our relationships with all

stakeholders.

GRI 2-6

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

CEO

LETTER

When it is time to take stock of the past year,

the best feeling is that the new goals and

objectives for this year are already taking shape

in one's mind. That is our habit and our

strength - our drive to outperform competitors

and delight our customers. Every year, we set

new goals, celebrate the results, and learn from

the challenges we have faced. Valuing the

lessons learned takes time but is perhaps even

more important than achieving all your goals

every year.

I want us to reflect on the past year, which we

consider a record year in terms of

achievements, not just for our successes but

also for the valuable experience gained. Each

year is the foundation on which we build our

common future. The more diverse this base is,

beyond just light shades, the more sustainable

our future will be.

We consistently strive to ensure that our

present actions contribute to a future where we

will not have to lament, 'We failed to learn this

lesson.' Together with every employee,

manager and the Group's entire management

team, we understand that responsibility is a

personal one - and that each of us must see the

commitments we make as a task for the

organisation and ourselves.

Apranga Group is more than 30 years old. We

have achieved a lot, perhaps more than we

could have hoped for, but as we look to the

future, we see how much more we can do. By

building on our strengths and combining our

individual efforts, we have become a

community that is ready for any challenge.

CEO of Apranga Group

Rimantas Perveneckas

GRI 2-22

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

KEY

FIGURES

20222023

168

STORES

169

STORES

200

BRANDS

200

BRANDS

COUNTRIES

2139

EMPLOYEES

2249

EMPLOYEES

270 MILLION EUR

GROUP REVENUE

(EXCLUDING VAT)

COUNTRIES

243 MILLION EUR

GROUP REVENUE

(EXCLUDING VAT)

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

GRI 2-2

BUSINESS

MODEL

The business model of Apranga Group (the

Group) remained unchanged last year. The

number of companies remained unchanged –

the Group consists of the parent company APB

(joint stock trading company) Apranga,

established and operating in Lithuania, and 25

subsidiaries established in Lithuania, Latvia and

Estonia. No new companies were established

last year. The Group has no associates to co-

manage. The core activity of all Group

companies is clothing retailing. The parent

company APB Apranga has been listed on the

Nasdaq Vilnius Stock Exchange since 1997. It

has been listed on the Baltic Main List since

2005.

APB Apranga is a member of the Lithuanian

Association of Trading Companies (LPĮA). No

new associations or organisations were joined

last year. The previous reports did not mention

that APB Apranga is a member of the Vilnius

Chamber of Commerce, Industry and Crafts.

Subsidiaries are divided into two groups:

Franchisees are supplied by the Inditex Group.

SIA Apranga and OÜ Apranga (non-franchised

companies) operating on the Latvian and

Estonian markets, are supplied by APB Apranga

(except for rare exceptions where goods are

delivered directly from suppliers).

The non-franchised companies sell their goods

in the Latvian and Estonian markets, while in

Lithuania the goods are sold by APB Apranga

itself. The pattern of subsidiaries has remained

unchanged over the past year.

The Group's sales revenue consists of revenue

from its retail chain (169 stores in Lithuania,

Latvia and Estonia) and revenue from online

sales. As in previous years, more than 95% of

sales revenue comes from the clothing

category (including online sales). The

remaining sales revenue comes from sales of

footwear and household goods in the

respective specialised stores.

In 2023, the Group continued the development

of its multi-channel strategy, based on the

integration of bricks-and-mortar and online

stores. In 2023, the COVID-19 pandemic did not

have a significant impact on the Group's

operations and online trading, resulting in an

online sales revenue of approximately 12.2%

during the reporting period, in line with the

overall multi-year trend, except for the periods

of active trading restrictions.

The core business functions and management

are concentrated in the parent company APB

Apranga. Subsidiaries carry out only a small

number of functions. Meanwhile, APB Apranga

employs the vast majority of the Group's

administrative staff, as well as all logistics and

warehouse employees.

(Zara, Bershka, Pull&Bear, Stradivarius,

Massimo Dutti and Zara Home operators in

each of the three Baltic States and Oysho in

Lithuania and Latvia, as well as e-commerce

companies representing Inditex brands in the

three Baltic States), which represent a

specific brand and operate under franchise

agreements with the world's largest clothing

supplier, the Inditex Group (hereafter referred

to as "franchisees").

(SIA Apranga, OÜ Apranga) which do not

operate under franchise agreements or with

a relatively small number of franchise

agreements (hereafter referred to as "non-

franchised companies").

GRI 2-6

companies

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

STRUCTURE

OF GROUP

COMPANIES

IN 2023

GRI 2-6

OÜ „Apranga Estonia“

OÜ „Apranga BEE“

OÜ „Apranga PB Trade“

OÜ „Apranga ST Retail“

OÜ „Apranga MDE“

OÜ „Apranga HEST“

OÜ „Apranga“

APB „APRANGA“

LITHUANIA LATVIA ESTONIA

UAB „Apranga LT“

UAB „Apranga BPB LT“

UAB „Apranga PLT“

UAB „Apranga SLT“

UAB „Apranga MLT“

UAB „Apranga HLT“

UAB „Apranga OLT“

UAB „Apranga Ecom LT“

SIA „Apranga LV“

SIA „Apranga BPB LV“

SIA „Apranga PLV“

SIA „Apranga SLV“

SIA „Apranga MLV“

SIA „Apranga HLV“

SIA „Apranga“

SIA „Apranga OLV“

SIA „Apranga Ecom LV“

OÜ „Apranga Ecom EE“

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

GRI 2-23

SUSTAINABILITY

WITHIN THE

GROUP

In 2023, the Group drafted its Sustainability

Strategy and Policy documents, based on the

stakeholder survey performed and materiality

matrix created in 2022. All the Group's top

managers were involved in the preparation of

the documents. The documents set out the

Group's long-term objectives and an action

plan to achieve them consistently. These

documents have not been submitted to the

Board for approval given that the Group plans

to carry out a double materiality assessment in

2024 in accordance with the European

Sustainability Reporting Standards and to

adjust its Sustainability Strategy and Policy

documents on the basis of the results.

Nevertheless, the work carried out has allowed

for a more detailed definition of the agenda for

the reporting period and for the planning of

future work, as it is anticipated that the Group's

long-term objectives and commitments will not

change significantly following the double

materiality assessment, and should new

material topics arise, they will be included and

disclosed in the Group's Annual Report.

This report has been prepared in accordance

with the GRI standards and the requirements

for compliance with the Taxonomy Regulation

as adopted by the European Commission. A list

of GRI disclosures is provided in the Annex to

the report (GRI Index).

All information is collected centrally, ensuring

that it is reviewed by a responsible person at

the submission stage. The data collected is

double-checked with the involvement of top

managers responsible for the relevant

operational areas. The information contained in

the report is approved by the CEO.

The Group's activities are guided by national

legislation and key human rights instruments,

as well as by the Code of Ethics and Conduct,

which sets out, enshrines and explains the

fundamental principles by which the Group

seeks to ensure integrity, transparency and

accountability. They are binding on all

employees of the Group.

The Group also has a Remuneration Policy, a

Violence and Harassment Prevention Policy, a

Whistleblowing Policy and other internal

documents. During the reporting period, the

Group's Gifts Policy was developed. The

Company pays great attention to the

protection of data, including personal data; all

related requirements are enshrined in internal

documents, such as the Personal Data

Protection Policy and other internal

documents, which describe in more detail the

obligations to ensure the protection of data

(including personal data).

GRI 2-24

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

We commit ourselves to sustainable

development at the choice of our partners.

We are market leaders and use our strenghts

to drive change for a better future.

IMPLEMENTATION

GRI 2-23

SUSTAINABILITY

PRINCIPLES AND

COMMITMENTS

This report has been prepared in an open and

good faith manner, with the aim of being

informative and useful to all stakeholders. It is

guided by the principles we openly declare:

GRI 2-24

We never compromise on decisions that will

affect the well-being of our employees, the

commonwealth and the impact on the

environment.

We are open - we want to learn from best

practices and share our knowledge.

We strive to equip our stores to create the

best working and service conditions. When

thinking of our employees and customers

we choose optimality and the highest

European standards of innovation and

technology.

DECISIONS

RESULTS IMPACT

The Group's Sustainability Report consists of an

introductory section and three main chapters -

Environmental, Social and Governance -

covering all the material topics identified by

stakeholders. For more on their identification

and disclosure, see the section Materiality of

sustainability topics.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

GRI 2-17

SUSTAINABILITY

MANAGEMENT

Organisation increasingly considers

sustainability management each year, and

during the reporting period, we drafted the

Group's Sustainability Strategy and Policy

documents. Currently, sustainability

management is the responsibility of the

company's CEO and the Board, to whom he/she

reports on the company's overall performance.

The governance of the Company is based on

the provisions of the Civil Code of the Republic

of Lithuania, the Company Law of the Republic

of Lithuania and the Company Statute.

The CEO of the company, together with the

Board, also takes strategic decisions on

sustainability management. The Board is

composed of six members (1 woman, 5 men),

two of whom are independent, to ensure that it

represents the widest possible range of

stakeholders. The CEO of the company is not

the chairman of the Board. The Board is elected

by the General Meeting of Shareholders for a

term of four years, in accordance with the

Company Law of the Republic of Lithuania and

Company Statute. During the reporting period,

the company had no diversity policy for the

election of its governance and supervisory

bodies, but there is no discrimination on the

basis of age, gender, education or professional

experience.

During the reporting period, the company had

no job position for sustainability management,

but it would consider the necessity for such a

position in the future. The responsibility for

setting and implementing the sustainability

objectives currently lies with the management

team in their respective areas of activity.

Sustainability indicators are reviewed once per

calendar year, normally after the end of the

reporting period.

The review and approval of the information

provided, including material topics, is the

mmm

GRI 2-18

responsibility of the company's CEO and

designated staff. The Chief Executive Officer is

accountable and reports regularly to the Board

on the implementation of the Company's

business strategy. The Company's Annual

Report (together with the Sustainability Report)

is presented by the Company's CEO to the

Board and then submitted to the General

Meeting of Shareholders for approval.

Potential conflicts of interest in the

management of sustainability topics are

governed by the organisation's Code of Ethics

and Conduct, and each responsible person has

an obligation to declare potential conflicts of

interest if they are involved in the planning,

implementation, or reporting on sustainability

topics. In order to identify potential conflicts of

interest, the Group's Code of Ethics and

Conduct and internal documents provide for

the obligation to complete a declaration of

interests, which is updated at least once every 2

calendar years, or in the event of any changes

that may give rise to a conflict of interest.

Conflicts of interest are disclosed on the basis

of declarations of interest submitted and

internal Group documents, without an

exhaustive list of specific criteria.

There were no critical concerns related to

sustainability topics during the reporting

period. Each member of the Board shall have

the right of initiative to convene a meeting of

the Board, if necessary or if such concerns are

received. During the reporting period, there

were no measures in place to enhance the

knowledge and experience of the highest

governance body (Board and top management)

in the field of sustainable development, nor was

there an evaluation of their performance in this

area.

Stakeholders can submit concerns or reports

related to sustainability management either

directly to the responsible persons or through

the anonymous Whistleblower channel at

pranesk@apranga.lt. Alternatively, any

communications may be made to the general

email address info@apranga.lt.

GRI 2-13 GRI 2-14

GRI 2-9 GRI 2-10

GRI 2-19 GRI 2-16

GRI 2-15 GRI 2-15

GRI 2-11 GRI 2-12

GRI 2-26

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

GRI 2-25

Social Responsibility Report 2023

SUSTAINABILITY

MANAGEMENT

The General Meeting of Shareholders approves

the Company's Remuneration Policy. The

members of the Board are not remunerated for

their service on the Board, except for the

independent members of the Board.

The remuneration of a company's CEO consists

of:

Remuneration policy for the Board

and the CEO

a fixed remuneration component agreed,

approved and amended by the Board on a

case-by-case basis with the CEO, which shall

be fixed and paid to the CEO on a monthly

basis, irrespective of the Company's

performance;

a variable remuneration component that

depends on the performance of the

Company, including its subsidiaries (the

Group), i.e. on the profit of the Group, the

amount of which - a specific percentage -

shall be approved by the Board. This variable

amount is paid once per calendar quarter,

based on the Group's performance in the

previous quarter. The ratio between the

variable and fixed components depends

solely on the performance of the Group.

The amount of the variable remuneration

component (percentage of the Group's profit)

for the Company's CEO shall be determined

and approved by a decision of the Company's

Board of Directors in such a way as to be

consistent with the business strategy, long-

term objectives and operational interests of the

Company and the Group, to safeguard the

interests of shareholders, to promote sound

and effective Company governance and risk

management in the scope of the decisions

taken, to avoid conflicts of interest, and to

ensure adherence to the Code of Ethics and

Conduct.

The Board and the CEO of the Company do not

receive any other remuneration, bonuses,

allowances or incentives.

Depending on the content of the reports

received, they are dealt with by the responsible

department, always involving the legal

department, which ensures that the report is

dealt with competently. The company is

covered by operational and other insurances

and, where necessary, the insurer is involved in

compensation proceedings.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

RISK

MANAGEMENT

The identification and assessment of risks is

carried out by the highest governance body of

the organisation - the Board, together with the

company's top managers who make up the

Directorate. This assessment informs the

organisation's planning and provides the

means to manage risks or the potential

consequences of unmanaged or inadequately

managed risks.

Geopolitical security risks. Amidst the ongoing

conflict initiated by Russia in Ukraine,

geopolitical security continues to be a

significant concern in 2023. The organization

remains unaffected directly, as it has no

operations in Russia or Ukraine and no ties to

any third country in regions experiencing active

hostilities. "However, the lingering uncertainty

stemming from Russian aggression remains a

prominent factor influencing the economic and

security landscape across all the Baltic States.

Public health risks, previously defined as

epidemiological risks, continue to be

monitored, although the Group did not

experience any related restrictions in 2023.

However, all risks related to public health are

deemed relevant, as government regulations

may have a significant impact on the Group's

business model. The management of these

risks is based on experience and proven actions

to respond to potential risk factors. The Group

complies with the requirements and

recommendations of the authorities in all

operational markets, actively encourages

employees to take care of their own health, and

strives to ensure safe conditions for both

employees and customers.

Economic risk. The main risks are: the high cost

of raw materials for producers, the

unpredictable price of energy resources, rising

supply chain costs and potential disruptions,

and the general economic situation. In 2023,

while inflation risk stabilized and did not

significantly affect business performance, its

associated factors may have influenced the

economic situations of both employees and

customers. The cost of energy resources has

bbb

also stabilised relatively well, and the Group's

investments in renewable energy have

additionally lessened the impact of this factor.

Unemployment rates, the purchasing power

parity index and retail sales in the Baltics

remained among the most relevant indicators.

Risks of climate change impacts. Climate

change is a persistent and increasingly

significant risk in the Group's operations. The

textile manufacturing industry has an impact

on the environment and is exposed to

environmental change, therefore we aim to

make the impact of climate change one of our

priority risk areas. The Group's business model

does not include manufacturing processes, but

it is dependent on textile production by third

parties. The Group aims to implement the

principles of sustainable operations while at the

same time ensuring its partners' responsibility

to reduce their impact on climate change. We

understand our responsibilities and potential

risks not only in our direct operations but also

along the entire value chain. The Group is

working to ensure that goods entering the

market are sustainably collected at the end of

their life cycle, thus contributing to waste

reduction. Increasing regulation in the textile

manufacturing sector may affect the Group's

business model. However, this should not be

seen as a risk, but rather as an opportunity to

invest time and effort to prepare in advance

and anticipate changes in the business model

to allow for adaptation.

Competition risks. Despite growing

competition, especially in the e-commerce

segment, the Group confidently maintains its

position as the leading clothing retailer in the

Baltic States. The Group's strategy is based on a

multi-channel strategy and it is actively

investing in its e-commerce activities, as well as

in the renewal and efficiency of the bricks and

mortar store network and in the integration of

the two channels with each other. We

constantly monitor the market situation and

make sure that competition is fair for all

parties. Recent changes in the market have led

to a more open market with more e-commerce

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

RISK

MANAGEMENT

players entering the market, but this change

has had no significant impact as the Group

further invests and competes actively in this

segment.

For the sector as a whole, we see our

competitors as partners with whom we can

achieve more by working together on

regulatory, social or environmental issues than

we can by working alone. We are open to

cooperation and constructive dialogue, and are

committed to a relationship based on mutual

respect and in compliance with all applicable

legislation.

Employee-related risks. The year 2023 was not

notable for atypical indicators relating to

employees and employee turnover. The Group

invests in employee well-being, training and

integration to mitigate any potential risks to its

operations or performance. The organisation

considers the well-being of its employees to be

one of itscore values and strives to improve

working conditions by providing additional

benefits and career opportunities.

The main long-term risks related to staff

remain:

Strengthening our relationship with our

employees and building a corporate culture

remains our priority.

As in previous periods, the risk assessment is

carried out by listing extensive factors and

ranking the most significant ones. The principle

is not only to list priority risks and plan their

possible management, but also to discuss other

less likely factors to ensure a rapid response if

needed.

staff recruitment and hiring;

seamless integration into work processes;

staff retention, turnover reduction;

improving employee satisfaction.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

EU TAXONOMY

FOR SUSTAINABLE

ACTIVITIES

The European Union (EU) Taxonomy (Taxonomy

Regulation (EU) 2020/852 and the delegated

acts adopted thereon) is a classification system

for sustainable economic activities, which aims

to channel private investment into

environmentally sustainable activities that

contribute to the EU Green Deal for Europe to

become the first climate-neutral continent. The

Taxonomy defines criteria based on scientific

evidence to assess the sustainability of

operations.

Taxonomy-eligible economic activities are

defined as activities described in the delegated

acts of the Taxonomy Regulation that have the

potential to contribute to one or more of the

EU's environmental objectives:

Climate change mitigation

Climate change adaptation

The sustainable use and protection of water

and marine resources

The transition to a circular economy

Pollution prevention and control

The protection and restoration of

biodiversity and ecosystems

Today, many economic activities are not yet

defined in the Taxonomy, but this does not

mean that they cannot be carried out in an

environmentally sustainable way. The

classification of activities as either taxonomy-

eligible or non-eligible does not inherently

indicate their sustainability or lack thereof.

Taxonomy-aligned activity is defined as

meeting the technical screening criteria of the

Taxonomy, i.e. making a significant

contribution to at least one of the six

environmental objectives and causing no

significant harm to the other five.

In this overview, we provide information on the

taxonomy-eligible activities conducted and

their compliance with the Taxonomy criteria

according to the main indicators: revenue,

capital expenditure (CapEx) and operating

mmm

expenses (OpEx) - disclosed in the tables

provided further.

Given the potential for differing interpretations

of the Taxonomy's wording and terminology,

alongside the ongoing process of clarifying

these aspects, we offer our interpretation of

activity assessment within the Taxonomy

framework. This interpretation is informed by

external expert guidance and the best

information currently available. Our disclosures

and methodology for calculating the indicators

may change in the future, depending on

possible new official interpretations of the EU

Taxonomy.

Calculation of Taxonomy indicators

Revenue. Currently, our core business activities

do not fall within the sectors covered by the EU

Taxonomy. The delegated acts of the Taxonomy

Regulation do not describe either the Group's

primary or secondary economic activities.

Consequently, the Group is deemed not to

generate any income from taxonomy-eligible

activities, eliminating the need for further

analysis. However, the Group has identified a

number of investment-related activities that

we believe can be included in the CapEx

indicator under the Regulation.

CapEx. In 2023, certain long-term asset

additions made by the Group may be

associated with the following activities as

defined in the Taxonomy:

Installation, maintenance and repair of

energy efficiency equipment (acquisitions of

lighting, HVAC systems).

Installation, maintenance and repair of

renewable energy technologies (extension

of the solar power plant).

Transport by motorbikes, passenger cars

and light commercial vehicles (acquisitions

of cars).

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

These investments can contribute to climate

change mitigation and adaptation objectives.

There were no investments in the Group in

2023 that could contribute to the other four

environmental targets under the Taxonomy.

The calculation of the CapEx denominator is

defined in the Taxonomy. In applying the

definition, we have included in the

denominator the total amount of additions to

long-term assets during 2023, encompassing

right-of-use assets (which are non-taxonomy-

eligible) accounted for under IFRS 16,

constituting the largest portion of our

acquisitions.

OpEx. The Group's expenses attributable to

taxonomy-eligible activities, such as car repairs

and air-conditioning maintenance, which meet

the Taxonomy's definition of an OpEx indicator,

amount to less than 1%. Therefore, this indicator

is deemed insignificant within our business

model, and the operational expenditure (OpEx)

value for taxonomy-eligible activities is

recorded as €0. Apranga Group predominantly

rents individual premises for its operations,

owning very few buildings. The maintenance of

these rented premises would not qualify as a

taxonomy-eligible activity. The Group's total

OpEx, according to Taxonomy (denominator),

comprises repair, maintenance, short-term

lease, cleaning of premises, repair and

maintenance of IT assets costs, which include

expenses related to taxonomy-non-eligible

activities.

Technical screening of activities

Our evaluation of the technical screening

criteria applicable to our activities/investments

indicates that we only partially fulfill them. The

Group has not conducted any climate risk and

vulnerability assessment at either the Group

level or within individual projects.

Consequently, the activities/investments fail to

meet one of the criteria for causing no

significant harm, specifically in terms of

adaptation to climate change. In this case, the

compliance of the activities with the remaining

criteria becomes irrelevant - the activity is

overall defined as not meeting the criteria.

We aim to contribute to the EU's

environmental objectives and align our

activities with best sustainability practices. mm

Minimum safeguards

The Group applies minimum safeguards in its

operations to ensure the protection of

employees and human rights, the fair payment

of taxes, anti-corruption, and fair competition

and complies with all applicable legislation. The

Group's commitments are described in more

detail in other sections of the Social

Responsibility Report. According to the

Taxonomy, economic activities can only be

considered environmentally sustainable if they

are carried out in compliance with minimum

safeguards as defined by the Organisation for

Economic Co-operation and Development, the

United Nations, and other international

agreements (see more in the Taxonomy

Regulation).

Hence, we intend to take the Taxonomy

Regulation into account in our future

investment planning, so that as much as

possible of our investments/activities will be

classified as taxonomy-aligned.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Revenue according to Taxonomy, 2023

Substantial contribution

criteria

Do no significant harm criteria

Economic

activity

NACE

code(s)

Absolute

revenue

2023

Proportion of

revenue 2023

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water and

marine

resources

Circular

economy

Pollution

Biodiversity

and

ecosystems

Minimum

safeguards

Taxonomy-

aligned

proportion

of revenue

2023

Category

(enabling)

Category

(transitional)

thousand

Eur

Y/N

A. Taxonomy-eligible activities:

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Revenue of

environmentally

sustainable

activities

(Taxonomy-

aligned) (A.1)

A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

Not applicable

Revenue of

Taxonomy-

eligiblebut not

environmentally

sustainable

activities (not

Taxonomy-

aligned

activities)(A.2)

Total: A.1 + A.2

B. Taxonomy-non-eligible activities

Revenue of

Taxonomy-non-

eligible

activities (B)

270,024

100%

TOTAL: A + B

270,024

100%

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

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ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Capital Expenditure (CapEx) according to Taxonomy, 2023

Substantial contribution

criteria

Do no significant harm criteria

Economic

activity

NACE

code(s)

Absolute

Taxonomy

CapEx in

2023

Percentage

of capital

expenditure,

2023

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water

and

marine

resources

Circular

economy

Pollution

Biodiversity

and

ecosystems

Minimum

safeguards

Taxonomy-

aligned

proportion of

Taxonomy

CapEx,

2023

Category

(enabling)

Category

(transitional)

thousand

Eur

Y/N

A. Taxonomy-eligible activities:

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Taxonomy CapEx of

environmentally

sustainable

activities

(Taxonomy-aligned)

(A.1)

A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

7.3. Installation,

maintenance and

repair of energy

efficiency equipment

F42, F43,

M71, C16,

C17, C22,

C23, C25,

C27, C28,

S95, C33

272

0.95%

7.6. Installation,

maintenance and

repair of renewable

energy technologies

F42, F43,

M71, C16,

C17, C22,

C23, C25,

C27, C28

104

0.36%

6.5. Transport by

motorbikes,

passenger cars and

light commercial

vehicles

H49, N77

228

0.80%

Taxonomy CapEx of

Taxonomy-

eligiblebut not

environmentally

sustainable

activities (not

Taxonomy-aligned

activities)(A.2)

604

2.11%

Total: A.1 + A.2

604

2.11%

B. Taxonomy-non-eligible activities

Taxonomy CapEx of

Taxonomy-non-

eligible activities (B)

28,008

97.89%

TOTAL: A + B

28,612

100%

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Operating Expenditure (OpEx) according to Taxonomy, 2023

Substantial contribution

criteria

Do no significant harm criteria

Economic

activity

NACE

code(s)

Absolute

operating

expenses

in 2023

Percentage

of operating

expenses,

2023

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water and

marine

resources

Circular

economy

Pollution

Biodiversity

and

ecosystems

Minimum

safeguards

Taxonomy-

aligned

percentage

of operating

expenses,

2023

Category

(enabling)

Category

(transitional)

thousand

Eur

Y/N

A. Taxonomy-eligible activities:

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Operating

expenses of

environmentally

sustainable

activities

(taxonomy-

aligned) (A.1)

A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

Not applicable

Operating

expenses of

taxonomy-

eligible,but

environmentally

unsustainable

(not taxonomy-

aligned) activities

(A.2)

Total: A.1 + A.2

B. Taxonomy-non-eligible activities

Operating

expenses of

taxonomy-non-

eligible activities

(B)

3,175

100%

TOTAL: A + B

3,175

100%

CONTENT

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GRI INDEX

Social Responsibility Report 2023

Stakeholder

Description

How we engage and

communicate

Key sustainability

topics

How we meet expectations

Employees

Administrative and

logistics staff and

sales staff in the

three Baltic

countries

Email, HR

management

system, intranet,

face-to-face

conversations,

meetings,

information boards

in common areas

Occupational health

and safety;

Employee training

and development;

Working conditions

and employee well-

being

Improved working conditions,

supplementary health

insurance, training, career

opportunities (both horizontal

and vertical), flexible working

hours

Consumers

Lithuanian, Latvian,

Estonian residents,

tourists

Newsletters, social

networks, media

Organic products,

sustainable

packaging, product

quality

Eliminating plastic bags,

taxing a part of paper bags

(with proceeds going to

charity), expanding

sustainable assortment, and

responsible handling of

defective products

Shareholders

and the Board

Board members and

shareholders or their

representatives

Shareholders'

meetings, board

meetings

Occupational health

and safety;

Attracting talent;

Working conditions

and employee well-

being; Innovation

and technology

We invest in eco-friendly

stores, reduce CO2 emissions,

invest in renewable energy,

reduce staff turnover by

investing in training and

improving working conditions

Business

partners

Main partners in the

markets in which

the company

operates, selected

on the basis of

turnover per

calendar year

Email, meetings,

teleconferencing,

calls

Energy and climate;

Occupational health

and safety; Business

ethics and

compliance

We follow a code of ethics and

conduct, comply with the law

in the markets in which we

operate, invest in renewable

energy, and set sustainability

targets for our partners

STAKEHOLDER

INVOLVEMENT

To ensure that the Group's activities meet all

stakeholders' expectations for sustainable

performance and to ensure continuous

implementation of the best possible

sustainability practices, it is essential for us to

regularly consult and engage with our

stakeholders. We consider our stakeholders to

be those groups that are significantly affected

by our activities and/or find them highly

relevant or those that have a significant impact

on our Group.

This report is based on the 2022 materiality

assessment described further (in 2023,

materiality assessment was not carried out). A

double materiality assessment is foreseen for

2024, including an analysis of financial

materiality.

At the end of 2022, to assess the relevance of

the sustainability criteria to the Group's

operations, we conducted a stakeholder survey

and an analysis of the retail sector on

sustainability topics. An electronic survey was

sent to stakeholders, in which respondents

indicated their priorities and made

suggestions. Stakeholders were defined in

terms of their ability to collect responses and

their representativeness, a list that is planned

to be expanded in the future. The survey

identified the following groups of stakeholders:

GRI 2-29

CONTENT

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Social Responsibility Report 2023

Stakeholder

Description

How we engage and

communicate

Key sustainability

topics

How we meet expectations

Regulators

Controlling

authorities setting

the rules of conduct

in the markets for

public limited

companies

correspondence,

meetings

Business ethics and

compliance

We follow a code of ethics and

conduct and comply with the

law in the markets in which

we operate

Future

generations

Children of

employees aged 12

and over

Media, direct

communication to

employees

Occupational health

and safety; Diversity,

equality and

inclusion; Innovation

and technology

Involving family members in

the company's activities.

Social campaign "when I grow

up I will be", where children

try out their parents'

professions, giving them the

opportunity to try out a career

from the age of 17 in a job at

the stores

Associations

Organisations

participated by

Group's companies

Meetings, email,

remote meetings

Preventing

corruption; Setting

up eco-friendly

stores; Sustainable

assortment;

Optimising

packaging and

reducing waste

Code of Ethics and Conduct,

other procedures

Beneficiaries and

social partners

Organisations with

beneficiary status

being granted

support during the

calendar year; Non-

governmental

organisations joined

in joint activities

Email, calls,

meetings, remote

meetings

Eco-friendly store

design; Sustainable

assortment;

Packaging

optimisation and

waste reduction;

Working conditions

and employee well-

being; Climate

change and energy

consumption

Investing in eco-friendly

stores, reducing CO2

emissions, investing in

renewable energy, reducing

staff turnover by investing in

training and improving

working conditions, running a

second-hand clothing

collection programme, setting

priorities for the Group's

sponsorship policy

Media

Media outlets in the

Baltic States

Press releases,

meetings, emails

Working conditions

and employee well-

being, Preventing

corruption,

Ecofriendly

products,

Sustainable

packaging, Product

quality

We follow the Code of Ethics

and Conduct, comply with the

law, disclose information

openly and clearly, strive to

develop good practices in our

communication with the

media, so that all stakeholders

have access to information on

equal terms

Environment

Social factors

Good governance

Packaging optimisation and

waste reduction

Energy and climate

Animal welfare

Setting up eco-friendly stores

Transport and logistics impact

Occupational health and safety

Employee training and

development

Human rights

Involvement in communities

and society

Diversity, equality and inclusion

Working conditions and

employee wellbeing

Talent attraction

Product safety and quality

Prevention of corruption

Business ethics and compliance

Responsibility in the supply

chain (social and

environmental)

Data privacy

Protection of consumer rights

Management practices

Marketing and labelling

Sustainable assortment

Innovation and technology

The survey included topics on the environment, social factors and good governance, respondents

ranked them according to their priorities and could suggest their topics.

During the reporting period, the Group has made preparations for a double materiality assessment

and expects to complete this exercise in 2024. After the new assessment, material topics will be

reviewed, potentially prompting adjustments to the Group's Sustainability Strategy and Policy.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

MEDIUM

HIGH

IMPORTANT

MODERATELY

IMPORTANT

VERY IMPORTANT

LOW

IMPORTANCE FOR STAKEHOLDERS

IMPACT ON SOCIETY, ENVIRONMENT AND APRANGA

GROUP'S PERFORMANCE

Occupational health and

safety

Working conditions and

employee wellbeing

Packaging optimisation

and waste reduction

Employee training and

development

Community and society

engagement

Diversity, equality and

inclusion

Animal welfare

Innovation and technology

Human rights

Attracting talent

Setting up eco-friendly

stores

Energy and climate

Business ethics and

compliance

Prevention of corruption

Data privacy

Protecting consumer rights

Governance practices

Marketing and labelling

Transport and logistics

impact

Responsibility in the supply

chain

Sustainable assortment

- environmental; - social; - governance/economic

Packaging optimisation

and waste reduction

Setting up eco-friendly

stores

Energy and climate

Transport and logistics

impact

Occupational health and

safety

Working conditions and

employee wellbeing

Employee training and

development

Business ethics and

compliance

Responsibility in the supply

chain (social and

environmental)

Sustainable assortment

MATERIALITY OF

SUSTAINABILITY

TOPICS

Based on the results of the survey, the sector

analysis and the recommendations of the Bank

of Lithuania as the supervisory authority, a

materiality matrix was developed which took

into account the views of all stakeholders. The

management principles for all material

mmmmm

sustainability topics are described in

accordance with GRI requirements in this

report, in chapters arranged by topic. A total of

10 material topics were identified in the areas of

the environment, social factors and good

governance.

The Group's 10 key sustainability topics are:

GRI 3-1 GRI 3-2

GRI 3-3

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

KEY

SUSTAINABILITY

DIRECTIONS

In 2023, the organisation has drafted its

Sustainability Policy and Strategy documents,

setting out short- and long-term objectives and

an action plan to achieve them. However, in the

light of the changing regulatory environment

and the new requirements coming into force in

the short term in relation to the Corporate

mmm

Sustainability Reporting Directive, the

documents have not been finalised.

Nevertheless, the organisation continues to be

active in achieving the project's objectives and

presents its key sustainability directions in this

report:

Reducing environmental impact -

reducing the environmental impact of

all activities: CO2 emissions, energy

consumption, waste generation

Employee well-being -

looking after the health and emotional

well-being of employees, encouraging

their development and providing career

opportunities within the company

Sustainable and responsible

business development -

fostering a culture of ethical

business, ensuring transparency

and regulatory compliance

Circular fashion initiative - contributing

to the promotion of responsible fashion

consumption and the transition to a

circular economy through various

means

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Sustainability

area

Material topic

Strategic (long-term) sustainability directions

Sustainable

development goals

Environmental

Energy and

climate

Aiming to reduce the CO2 footprint by 30% by 2030

Aiming forclimate neutrality, including suppliers.

Ensuring that the Group uses only green electricity.

Transport and

logistics impact

Ensuring that at least 50% of new car purchases

each year are hybrid or electric.

Ensuring that at least 90% of the car fleet is made

up of hybrid and electric cars

by 2030.

Organising the transportation of goods to ensure

the most efficient use of resources.

Setting up eco-

friendly stores

Continuing investments in energy-efficient

technologies when building new or refurbishing

present stores.

Obliging suppliers responsible for setting up or

refurbishing shops to use sustainable materials and

to comply with internationally recognised

environmental standards.

Packaging

optimisation and

waste reduction

Reducing the use of customer shopping bags per

turnover and/or sales receipts by 40% (compared to

2022 figures).

Eliminating the use of plastic bags.

Aiming for at least 90% of bags offered to

customers at stores to be priced.

To direct the profits from shopping bag sales

towards charity.

Replacing packaging with more eco-friendly

alternatives: packaging from recycled and other

sustainably sourced materials.

Further developing and promoting projects that

encourage consumers to return second-hand

clothes to shops for reuse or recycling.

Social

Working

conditions and

employee

wellbeing

Ensuring the mental and emotional well-being and

satisfaction of staff, and improving work-life

balance.

Extending supplementary health insurance

coverage to workers in all locations.

Adding a Diversity Policy to Group's policies or

expanding existing policies to address diversity

issues more broadly.

Zero incidents of discrimination in the workplace.

Occupational

health and safety

Further ensuring occupational safety and

promoting employee health. Zero accidents or

injuries each year.

Implementing measures to improve occupational

health, monitoring, staff safety and culture and to

create a safe and clean working environment.

Employee

training and

development

Continue to organise presentations of various types

for company staff with external speakers.

Developing the e-learning platform - including and

updating specific learning topics. Ensuring that

each employee is provided with a minimum of 6

hours per year for training and development.

Human rights

Surveying suppliers and ensuring that not only does

the organisation live up to its publicly declared

commitments, but also demands it from its

suppliers and partners.

All sustainability topics identified as material are considered strategic and their implementation is

aligned with the United Nations Sustainable Development Goals framework.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Sustainability

area

Material topic

Strategic (long-term) sustainability directions

Sustainable

development goals

Economic

(governance)

Responsibility in

the supply chain

Introducing supplier surveys for all existing and

new suppliers to ensure that they are committed

to environmental, social and good governance

issues.

Sustainable

assortment

Ensuring that a growing portion of the assortment

is labeled as sustainable, demonstrating to

customers that the products comply not only with

required legislation but also with environmental,

social, and governance standards.

Ensuring transparency of the products sold and to

the greatest possible extent disclosing the value

chain to the end user.

Business ethics

and compliance

Developing a detailed anti-corruption policy or

expanding on it in the organisation's Code of

Ethics and Conduct.

Adopting an anti-corruption training programme

for staff and updating the knowledge of Board

members and top management on anti-

corruption.

Ensuring that at least 90% of administrative staff

and employees in managerial positions are familiar

with

anti-corruption policy.

Developed supplier questionnaire should be

delivered to suppliers and partners together with

the information on procedures and policies

adopted by the organisation and with a consistent

access to the content.

Zero confirmed cases of corruption.

Zero significant instances of non-compliance with

the law.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

ENVIRONMENT

When publishing the Group's greenhouse gas

(GHG ) emissions each year, we aim to make

the calculations as detailed as possible

andinclude all relevant factors. As before, we

disclose in this report that the calculations we

publish are estimated emissions and do not

reflect all CO2 equivalent emissions associated

with the Group's activities. We strive tobe as

accurate as possible, so we take into account

the latest methodologies and guidelines to

calculate GHG emissions clearly and accurately.

In the 2022 report, we have disclosed our

emissions calculations for the first time and

consider this year as the base year from which

the strategic targets are set. Where new factors

are introduced, methodologies are changed or

significant circumstances arise, we will reflect

this in the calculations and benchmarks

accordingly.

The verification of the 2022 indicators revealed

that electricity consumption was not properly

accounted for, with all of it being attributed to

green electricity. Errors were found in the

assessment of the origin of electricity

purchased indirectly (through intermediaries

from whom the commercial space is rented).

When it became clear that the origin of

indirectly purchased electricity could not be

accurately assessed due to geopolitical reasons

and the resulting energy crisis, a decision was

taken to classify all indirectly purchased

electricity as non-green. All the electricity

purchased directly by APB Apranga is certified

as green electricity. In view of the inaccuracies

identified, this report recalculates the GHG

emissions in 2022 related to purchased

electricity. Derivatives of energy consumption

indicators have been adjusted accordingly.

The Apranga Group's business is exclusively

clothing retailing in brick-and-mortar and

online stores. The Group is not involved in any

processes related to the production,

nevertheless it is aware that its activities are an

integral part of the global textile industry.

The Group emphasizes its adherence to high

environmental standards and its commitment

to reduce its ecological footprint. The

environmental topics are selected on the basis

of relevance and include Energy and climate,

GRI 2-4

Setting up eco-friendly stores, Transport and

logistics of goods, and Optimising packaging

and waste management.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Direct (Scope 1)

GHG emissions

Energy indirect (Scope 2)

GHG emissions

Other indirect (Scope 3)

GHG emissions

Fuel for energy

Transport

Gas leaks/freons

Purchased electricity

Purchased thermal energy

Waste

Raw materials purchased

Business travel

Energy losses and fuel recovery

Upstream transport services

Downstream transport services

ENERGY AND

CLIMATE

n this report, the Apranga Group publishes the

estimated greenhouse gas (GHG) emissions of

its activities in CO2 equivalent. This publication

identifies the emission sources and their

calculation methodologies, indicating the

Scope to which the emission source belongs.

No additional sources were assessed, but

factors were updated if they were found to be

overestimated. In 2023, the methodology for

the assessment of purchased heat

consumption was revised in cooperation with

owners of rented premises. The Scope 2

emission factors for 2022 have also been

updated, once the values for the respective

years have become available.

The knowledge and methodologies of market-

based financial institutions and energy

mmmmm

suppliers were used to calculate GHG

emissions. The publication of estimated

emissions follows the standards and

recommendations of the Greenhouse gas

protocol (GHG) and the Global Reporting

Initiative (GRI). The calculation of emissions

includes not only CO2, but also other

greenhouse gases (CO2, NH4, CH4, HFCs)

emitted during the activities, converting the

gases to CO2 equivalents according to standard

coefficients, and indicating the final total

number as CO2 equivalent. Emission

consolidation method: operational control. For

Scope 2 emissions, all GHGs were considered,

but the details in the emission factor sources

were not always available.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Due to its extremely low impact, the Group has

not included water (a water borehole used in

the administration and logistics centre using

electricity accounted for in the total electricity)

among the factors in the calculation of GHG

emissions. These indicators have no impact on

the final result. Nevertheless, the Group is

actively promoting a culture of responsible

consumption, encouraging efforts to reduce

printed documents, reuse paper, and promptly

report potential plumbing issues to the persons

in charge.

GHG emissions

Measurement

units

2022⁵

2023

Change

2023/2022, %

Change

2023/2022,

t CO2 eq.

Direct (Scope 1)² GHG

emissions

t CO2 eq.

388.2

345.2

-11%

-43.0

Energy indirect

(Scope 2)³ GHG

emissions

t CO2 eq.

6 228.5¹

3 714.61¹

-40%

-2 513.9

Other indirect

(Scope 3)⁴ GHG

emissions

t CO2 eq.

1 570.2

1 803.2

+15%

+233.0

Viso:

t CO2 eq.

8 186.9

5 863.0

-28%

-2 323.9

Notes: ¹Calculated using the "market based method", based on actual electricity purchases. If calculated using the "location based method", i.e. based

on the country-specific nature of energy production, the Company's indirect (Scope 2) GHG emissions would be 3,817.5 tCO2eq. in 2022 and 3,939.9

tCO2eq. in 2023.

Sources of emission factors and global warming potential (GWP) indicators: ²IPCC, EEA/EMEP Guidebook 2019; ³AIB, emission factors provided by heat

suppliers, ⁴DEFRA, IPCC, IEA, Cornell Hotel Sustainability Benchmarking (CHSB) index 2021

⁵This report recalculates the GHG emissions in 2022 related to purchased electricity. Derivatives have been adjusted accordingly.

We have assessed key intensity indicators for our operational emissions (Scopes 1+2+3), which will

also allow us to more effectively compare our performance and the goals we are aiming at in the

future.

GHG emissions intensity

2022¹

2023

Change 2023/2022, %

t CO2 eq./EUR 1 million turnover

33.74

21.73

-36%

t CO2eq/thousand sq m of retail

space

90.36

64.86

-28%

Note: ¹This report recalculates the GHG emissions in 2022 related to purchased electricity. Derivatives have been adjusted accordingly.

GRI 305-1 GRI 305-2

GRI 305-3

GRI 305-4

GRI 305-5

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

In 2023, the Group experienced one incident

related to the operation of autonomous energy

generation devices. This incident involved the

use of a fuel that is typically utilized for energy

generation in our own facilities. The

Administration and Logistics Complex is

equipped with back-up generators using diesel

or natural gas, and it was the latter fuel that

was usedwhen the electricity supply was

interrupted through no fault of the

organisation. This incident consumed 300 cubic

metres of natural gas. The Group does not have

autonomous devices at other sites where it

operates that directly use fuel for energy.

Vehicle emissions were calculated by taking an

inventory of the car fleet owned and analysing

the amount of fuel purchased and kilometres

driven. The Group's car fleet totals 73 vehicles.

Their average age at the end of the reporting

period is 4.2 years (3.7 at the end of 2022). The

average age of the cars increased due to fewer

new car purchases, and longer delivery times

which resulted in some ordered cars not being

delivered by the end of the reporting period.

Last year, the Group'soperations no longer

consisted of the lowest standard (EURO4)

vehicles - the entire fleet now consists of

EURO5 and EURO6 vehicles. 16 of the vehicles

in use are hybrids.

In total, the Group consumed 139 thousand

litres of fuel (diesel and petrol) during the year,

a 5% decrease compared to the previous year,

and drove 1,794 thousand kilometres (2,248

thousand kilometres in 2022). On average, one

Direct GHG emissions

Gas leaks/freons are materials that boil and

evaporate at low temperatures and are used for

heat transfer. The Group uses them in the

ventilation and air conditioning systems of its

administrative and commercial premises. To

estimate the GHG emission equivalent, the

annual amount of refill refrigerant was

calculated in kilograms, with an emission factor

assigned to the type of material. It is estimated

that 2 kg of R-410A refrigerant was used for

refill per year, with a CO2 emission equivalent

of 4 t or 50% less than in 2022. Note: Freon use

is mainly influenced by the technical need to

upgrade equipment and is little impacted by

the Group's performance in the absence of

unusual incidents.

Energy indirect GHG emissions

From 2022, the Group accurately accounts for

the electricity consumed at all owned or

leased facilities. During the reporting period,

total electricity consumption was 14,635 MWh,

almost 9% less than the previous year (16,017

MWh). In 2023, all directly purchased electricity

had green energy certificates. Together with

indirectly purchased electricity, green energy

accounted for 60% of the Group's electricity

consumption. The Group is working towards

the goal that all electricity consumed for its

own use should have green certificates of

origin.

Purchased electricity

2023

Directly

Indirectly

LITHUANIA

Green energy

1 693 545

4 901 592

Without certificate or origin unknown



1 753 036

LATVIA

Green energy



1 748 858

Without certificate or origin unknown



2 413 650

ESTONIA

Green energy



473 236

Without certificate or origin unknown



1 650 791

TOTAL (kWh)



14 634 708

car drove 24.5 thousand kilometres per year.

Total calculated car fleet emissions are 340 t.

CO2 equivalent, which is 10.3% lower than in the

same period a year ago.

CONTENT

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REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Until 2023, the Group did not assess the heat

energy consumed to heat the commercial

premises, except in cases where the heat

energy was purchased directly. The 2023 report

includes a heat factor in the calculation of GHG

emissions, which is calculated according to the

cost approach for district heating, taking into

account the local factor.

In 2022, the organisation installed a 0.55MW

solar power plant on the roof of its

administration and logistics centre in Vilnius,

which will provide clean energy for a large part

of the building's electricity needs. A total of

1,325 modules have been installed on the

complex, covering a total area of 2,732 square

metres. The installation of the solar power plant

was designed to maximise efficiency, so the

most advanced solutions were chosen to

mmmm

ensure the performance of the plant. The

project is estimated to pay-off in 4-5 years and

to make a significant contribution to reducing

emissions over its planned 40-year lifetime.

2023 was the first year in which the solar power

plant operated for a full season, generating 653

MWh of electricity. Most of it was consumed by

the Group.

Each year, we invest in state-of-art

technologies to reduce our consumption of

natural resources and to contribute to their

preservation. In developing the Group's store

network, we not only take into account

technological solutions, but also educate our

staff on the benefits and importance of saving

resources.

GRI 302-1

Direct and indirect energy consumption

Direct fuel consumption from non-renewable

sources:

Measurement units

2022

2023

Diesel and petrol

5.0

4.56

Natural gas

0.01

Energy purchased and consumed, of which:

58.0

53.22

Electricity

57.7

52.68

Heat

0.4*

12.82

Total energy consumption in the organisation:

63.0

70.08

Note: Total energy consumption is calculated according to the GRI 302-1 formula. Conversion factors from convert-measurement-units.com are used to

convert energy quantities to TJ.

* The 2022 calculations do not include consumption of district heating.

Energy intensity

2022

2023

TJ / million EUR of revenue

0.26

TJ / thousand sq. m. of retail space

0.70

0.78

Note: The energy intensity is calculated according to the GRI 302 Energy methodology.

GRI 302-3

Other indirect GHG emissions

The factors analysed in Scope 3 were waste, raw

material procurement, business travel and

accommodation, energy losses and fuel

extraction, upstream and downstream

mmmmm

transport services. The total emissions of these

factors are 1,803.2 t CO2 equivalent. Each of

these factors is discussed in more detail in the

following chapters of this report.

CONTENT

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RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

The Group generates waste from its various

operational processes and from the use of

materials for its own purposes. The Group

accounts responsibly for the waste generated

by its activities and ensures that the amount of

waste recycled corresponds to the legal

requirements, in accordance with the

agreements with waste handlers. The following

managed waste was declared on the

Lithuanian market during the reporting period:

Waste generated in

Lithuania* during the

use of materials for

Group's own purposes

(2023)

Total (t)

Of which

recycled

waste (t)

Remaining

waste (t)

Metal

0.79

Fractions not

otherwise specified

202.32

Bulky waste

1.82

Paper and cardboard

packaging

93.733

92.588

1.145

Mixed construction

and demolition waste

31.8

Other plastic

packaging

81.231

81.133

0.098

Industrial lead-acid

batteries (hazardous

waste)

0.369

Screens, monitors and

their equipment

(hazardous waste)

0.492

Small IT and

telecommunications

equipment

(hazardous waste)

0.08

Small equipment

0.216

Small IT and

telecommunications

equipment

0.672

Total

413.523

173.721

239.802

SETTING UP ECO-

FRIENDLY STORES

We use only state-of-art technologies in new

and refurbished stores, in line with best

practice environmental standards. We follow

them not only when choosing the equipment

for our retail spaces, but also during the

installation process. All stores use energy-

saving LED bulbs with higher efficiency and

longer lifetime. In the Administration Building,

the spaces are segmented to ensure that

lighting is used as efficiently as possible and

only in areas occupied by employees. The

administration and logistics complex uses

geothermal heating energy, the emissions of

which are accounted for together with the total

electricity consumed.

When renovating our stores, we do our best to

follow the principle that despite decisions

already made we must implement

technologies that reduce or do not increase our

resource consumption. Last year saw the

opening of 4 new stores, 8 store expansions

and renovations or partial renovations. The

Group renovated ~7 thousand square metres of

retail space, while 11 stores were closed.

in 2023 the Group opened 4 new stores,

expanded and renovated or partially renovated 8

stores.

GRI 2-4 GRI 306-1

9 out of 169

stores have collection

points where customers

can bring their used

textiles

Notes: Waste is sent for recycling under contracts with waste handlers,

but the Group cannot guarantee that all or part of the waste will

actually be recycled.

The quantities of waste reported and recycled in the 2022 report were

inaccurately defined as they included packaging placed on the market.

From 2023 onwards, the quantities of waste generated in internal

operations are identified through the waste log, so it is not appropriate

to compare this year's data with the previous period. Packaging placed

on the market is also accounted for and managed in accordance with

legislation.

* Due to the absence of national waste accounting procedures in Latvia

and Estonia, it is not possible to report the quantities of waste

generated in these markets in the same level of detail.

The Take Back Project is implemented in

partnership with NGOs in Lithuania, Latvia and

Estonia. 49 Inditex stores have collection points

where customers can bring their used textiles.

They are then diverted for recycle/upcycle,

charity or energy recovery.

GRI 306-2 GRI 306-3 GRI 306-4

TURINYS

CONTENT

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SUSTAINABILITY

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GROUP

ENVIRONMENT

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(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Type of bags

Number of stores in

2023

Number of stores in

2022

Change 2023/2022

Share of stores in the

Group in 2023

Paper

158

157

93.5

Plastic

2.4

Both types

4.1

Total

169

168

100%

failure to phase out the use of plastic bags on

time, as bag consumption decreased, which in

turn prevented the Group from disposing of the

purchased bags in time.

It is estimated that charging for the shopping

bags reduces their consumption by ~40%. More

detailed calculations are planned for the end of

the next reporting period, when information for

the full period is available.

Packaging waste placed on the market in

Lithuania is accounted for by a commitment to

manage at least 80% of the packaging placed

on the market by the contracted waste

manager, or by the payment of statutory waste

management and recycling fees.

PACKAGING

OPTIMISATION

AND WASTE

REDUCTION

While keeping our promise to reduce waste

and optimise packaging, we remain committed

to eliminating the use of plastic shopping bags

in our stores. The target to eliminate the use of

these bags by 2024 has not been met, the

reasons for which are set out below. Within the

Group, 93.5% of stores use paper bags

exclusively, the same as a year ago, taking into

account the change in the total number of

operated stores.

In 2023, the Group introduced a chargeable bag

policy to further reduce waste and raise

consumer awareness. In total, chargeable bags

are offered at 91 of the stores - more than half

of all Group's retail outlets. It was the decision

to charge for shopping bags that led to the

mmm

Paper, 93.5%

Plastic, 2.4%

Both, 4.1%

of stores in the Group use only

paper bags

93.5 %

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

In 2023, employees spent a total of 1,174 nights

in hotels during their business trips (mostly in

Lithuania, Latvia and Estonia), with a GHG

Protocol based CO2 emission equivalent of

13.25 tonnes. In 2022, 1,635 nights were

recorded, with an estimated emission of 23.68

tonnes.

TRANSPORT OF

GOODS AND

LOGISTICS

The Group operates a car fleet of 73 vehicles. It

is regularly maintained and updatedto reduce

its GHG emissions. In total, there are 7 trucks

and 66 cars, 16 of which are hybrids. The fleet of

hybrid cars has more than doubled (in 2022,

there were 7 such vehicles). The Group's car

fleet is now limited to EURO5 and EURO6

vehicles. The Group's transport and logistics

activities are not limited to the car fleet it

manages, but are largely carried out by third

parties that provide transport services from

suppliers as well as delivery services to

customers.

It is difficult to estimateall emissions related to

logistics, so a cost accounting approach was

applied in this case, which showed that these

emissions are the main sources of emissions in

our operations, amounting to 340.5 and 977 t

CO2 equivalent respectively. In this context, the

Group has put in placemeasuresto reduce

emissions from these sources, including a

supplier questionnaire to ensure partner

commitment in the value chain (not yet

implemented during the reporting period).

During the year, the Group's employees

travelled 1,091 thousand kilometres by plane for

work purposes, almost the same as theprevious

year. The trips were about acquiring new

collections, maintaining relationships with

partners and coordinating work between

different countries. A significant share of these

trips are flights between Vilnius-Riga-Tallinn

airports, necessary for the Group's daily

operations in other countries. In all cases, the

necessity of such trips is assessed and, where

possible, alternative travel arrangements are

made. The estimated CO2 emission equivalent

of all trips is 166.35 tonnes (158.85 tonnes in

2022). Travel by taxi amounted to 7,974

kilometres (8,400 km in 2022) and added

another 1.66 tonnes of CO2 equivalent (1.75

tonnes in 2022).

73 vehicles, of

which are:

Hybrids cars, 16

Trucks, 7

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

SOCIAL

FACTORS

We aim to strengthen our relationships each

year not only with our employees and their

families but also with society at large. We are

part of society and it is our responsibility to

strengthen the segments of society that are

relevant to our activities. We recruit a lot of

young people, our staff is prevailed by women,

and young professionals choose us at the start

of their careers and then decide which career

path to take. Our aim is to provide them with

opportunities, choices and information and to

do our best to encourage some of them

connect their future with a career at Apranga.

Apranga Group does not tolerate any violation

of human rights, advocates full equality and

promotes the integration of the most

vulnerable groups of people. We are constantly

reviewing and improving our remuneration

policy and aim to create a remuneration system

that is transparent and fair, regardless of

gender, nationality, race, religion or other

beliefs.

We comply with all local laws and respect and

follow international agreements. We offer work

opportunities to people of all ages,

backgrounds and experience without

prejudice.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

New employees

Employee turnover

Total number in

each category,

2023

Number of new

employees

Rate per category

(%)

Employee

turnover

Rate per category

(%)

By gender:

Women

2 062

2 038

99%

1 961

96%

Men

187

157

84%

146

78%

By age:

Up to 30

1 587

1 681*

-%*

1 629*

-%*

30-50

510

185*

-%*

122*

-%*

Over 50

152

12*

-%*

21*

-%*

By location:

Lithuania

1 420

1 361

96%

1 320

93%

Latvia

520

517

99%

452

87%

Estonia

309

317

102%

335

108%

WORKING

CONDITIONS AND

EMPLOYEE

WELLBEING

In 2023 , the number of employees in the Group

increased, mainly in the retail division. As of 31

December 2023, the Group had 2,249

employees, an increase of 110 employees

compared to the previous year (2,139). This

indicator covers both full-time and part-time

employees. The head count method was used

to calculate the indicator at the end of the

reporting period.

In 2023, a total of 2,195 new workers were

recruited, most of them aged under 30. This

confirms that we are often one of the first

career stops for young people, and we strive to

provide them with a supportive and

comfortable working environment.

Notes: According to the definition by GRI Standards, employee turnover includes employees who leave the organization voluntarily or due to dismissal,

retirement, or death in service. The rate per category is calculated according to the GRI Standards: the number of new staff / staff who left the

organisation in a given category divided by the total number of staff in that category. This information has been reported for the first time.

* For the breakdown of new employees by age group, workers in Estonia were not included in the calculations due to lack of information. Accordingly,

the share and change by category were not calculated by age group.

GRI 401-1

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Employee Turnover Ratio is one of the most

important factors in our business (calculated as

the number of employees whi left the

organisation during the reporting period

divided by the total number of employees at

the end of the period). We try to meet the

needs of all our employees, but given the

Group's position in society, we realise that

many young people will choose us and only

some of them will go on to have a career with

our organisation. In this context, we monitor if

the Employee Turnover Ratio is changing

abnormally in terms of the long-term average

and assess the reasons behind it.

The staff turnover rate in 2023 was 93%, 26

percentage points lower thanin 2022, when it

was 119%. However, it should be noted that in

2023, in line with GRI standards and usingnew

accounting tools, the employee turnover

indicator has been removed from the intra-

corporate turnover rate, whereby an

employee's employment with one Group

company is terminated and started with

another one. This could have had a significant

impact, as the organisation always tries to take

into account the employee's preferences

regarding the job or position whenever

possible.

The organisation encourages the development

of staff competences and career progression

through a variety of means, and always

provides opportunities for its employees to

progress to higher level positions. Eliminating

intra-group turnover from the calculations, it is

clear that a significant amount of job position

changes are taking place within the Group,

confirming that employees are given the

conditions and opportunities to choose their

preferred job position.

Country

Employee

turnover in

2023

Employee

turnover in

2022

Change

2023/2022,

percentage

points

Lithuania

93%

92%

+1%

Latvia

87%

136%

-49%

Estonia

108%

128%

-20%

Group:

93%

119%

-26%

The employee turnover rate for 2023 is lower

than the multi-annual average for the reasons

outlined above. It is, therefore, not appropriate

to compare it with previous periods, but the

adjustments made will allow this year's

indicator to be used as a benchmark for the

future.

Last year, the highest staff turnover was

recorded in the retail division (104%), which is in

line with the general trend over previous

periods. It is worth noting that turnover in

administration (19%) and logistics (57%) has

been declining, but is little different from 2022.

Employee turnover

2023

2022

Administration

19%

28%

Logistics

57%

60%

Retail

104%

122%

The Group continues to invest consistently in

improving its Employee Turnover Ratio

performance. In the exit surveys, the main

reason for leaving remains needs of one of the

largest groups of employees (students) for

vocational training or exercising their

profession. Changing of residence was also

often cited as a reason. The organisation always

tries to offer a job in another location if the

employee requests it.

All employees in Lithuania who have

completed the required period of service (3

months) are covered by supplementary health

insurance at the employer's expense. For those

who have worked formore than five years, a

higher amount of cover is provided as a reward

for loyalty to the company. In Latvia,

supplementary health insurance is available for

administrative staff in accordance with

statutory requirements. In Estonia, employees

are entitled to reimbursement of gym fees. It is

envisaged that the supplementary health

insurance scheme will be expanded across the

Group, taking into account the needs of

employees according totheir location.

Looking at the total number of employees in

Lithuania, Latvia and Estonia at the end of the

period, the biggest change was recorded in the

retail chain division with 1,987 employees - 96

more than a year ago. The Group's retail

employees account for 88% of thetotal

workforce.

GRI 2-4 GRI 401-2

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Unit

Number of

employees

in 2023

Number of

employees

in 2022

Change

2023/2022

Administration

189

183

Logistics

Retail

1987

1891

+96

Total

2249

2139

+110

Location

2023

2022

Women

Men

Women

Men

Lithuania, Latvia

and Estonia

together

2 062

(93%)

187 (7%)

1 948

(91%)

191 (9%)

Lithuania

1 296

(92%)

124 (8%)

1 221

(91%)

135 (9%)

Latvia

471

(91%)

49 (9%)

423

(91%)

42 (9%)

Estonia

295

(95%)

14 (5%)

304

(95%)

14 (5%)

The expansion and optimisation of the retail

network has had no significant impact on

employee numbers or turnover. In all cases of

store closing, relocating or refurbishing, their

existing employees were offered alternative

jobs. Their turnover ratio is also reflected in the

Ratio, as is the number of employees who have

changed their job positions within the

organisation in all commercial, logistics and

administrative departments.

If an employee's function becomes redundant

for reasons related to the Group's activities, a

notice period of 1 month applies (2 weeks

notice if the employment relationship lasts up

to 1 year). The duration doubles if the employee

has less than 5 years to retire, triples if he or she

has a child under 14 or a disabled child under 18

as well as for pregnant, disabled employees,

employees with a sickness certificate and if the

employee has less than 2 years left until

retirement. The Group (the business transferor)

must inform employees of the reorganisation,

restructuring and transfer of the business or

part of it at least 10 days in advance.

In cases where employees choose a different

career path, we always ask for feedback on

their experience at Apranga. Based on the

responses, we aim to improve our

organisational culture and respond to the

needs of our employees not only to retain staff

but also to improve existing working

conditions.

The number of employees in the administration

and logistics departments increased slightly, to

the extent necessary to cope with the increase

in workload, taking into account the Group's

increase in revenues. The number of employees

in the retail division increased by 96, also due to

the increase in workload. In terms of efficiency

in retail management, the number of

employees per 100 square metres of retail

space in 2023 is approximately 2.2 (2.1 in 2022).

In this regard it can be said that the efficiency

of the management of the retail chain has

remained largely unchanged.

The gender distribution of the workforce

remained unchanged last year, with women

making up the majority of the workforce (93%),

as in the previous reporting period. This ratio

remains stable, with 1 to 2% fluctuations, and is

in line with the several years' average.

Retail, 1987

Administration, 189

Logistics, 73

GRI 2-7 GRI 402-1

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

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ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Lithuania

Latvia

Estonia

Total

number,

2023

Women

Men

Women

Men

Women

Men

Permanent staff

(permanent contract)

1 295

124

469

295

2 246

Temporary agents

(fixed-term contracts)

Non-guaranteed hours

employees

Full-time employees

543

113

827

Part-time employees

753

389

182

1422

The gender distribution of the Directorate of Administration (Directors of the main divisions and the

CEO) has remained stable and is close to balance, with 4 women and 3 men . The gender

distribution of the highest governance body, the Board, is 5 men and 1 woman . Women are the

CEOs of major companies in Latvia and Estonia.

Apranga highly values the importance of the

family for the public good and is aware of its

duty to do its best to help address the potential

difficulties in the labour market after having

children. We always secure their job positions

for employees on maternity or paternity leave

and try to offer flexible working conditions if

needed. During the reporting period, 65

employees (64 women and 1 man) became

entitled to parental leave. During the same

period, 41 women and 1 man returned to work

after parental leave. By collecting data on

employees who have returned from parental

leaveand are still working 12 months after their

return, we found that as of 31 December 2023,

the Group employed 16 women and 1 man who

meet this definition. This indicator will be

further refined in future disclosures as the

information available does not cover all

locations.

A breakdown of the number of employees by location and gender shows that the majority of

employees in all countries work on permanent contracts. The distribution of positions by contract

types shows that a significant number of staff choose to work part-time to meet their needs.

GRI 2-7

Women, 92

Men, 8

GRI 401-3

Employees by gender, %

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Education

2023

2022

Change

2023/2022

Higher

education

499

552

-10%

Professional

322

247

+30%

Secondary

529

588

-11%

Student

899

752

+20%

Total

2 249

2 139

+5%

The average age of employees in the Group decreased to 26 years and 8 months.

Number of employees in the Group by education at 31 December 2023:

499

322

529

899

Higher

education

Professional Secondary Student

Over the past year, we have continued our

Employee Ambassadorship project. After

noticing the high level of employee

engagement and the value they bring, we have

intensified our focus on the project. In the last

year, 25 participants started the project, of

which 16 continued after more than 3 months.

We informed our employees about the project

and sought to increase its visibility on all social

media networks. We prefer our employees to

be our ambassadors, sharing their stories,

experiences, and career paths. We also actively

encourage them to engage more on social

media. With the Diverse but United (liet.

"Skirtingi, bet vieningi") campaign we want to

emphasise that we value all our employees

regardless of their age, gender or position. We

want to be an organisation where the

employee is the greatest value.

We strive to maintain a good work/leisure

balance by allowing employees to choose both

their working hours and workload. We have

always strived to ensure that all employees

have equal opportunities to arrange work

schedules that suit their personal or family

needs, full-time study or vocational training,

and administrative staff was further given the

opportunity to choose their own individual start

and end times in agreement with their line

manager.

1000

600

800

400

200

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

EMPLOYEE

TRAINING AND

DEVELOPMENT

Continuing our intensive training programme,

we have continued to use a hybrid training

model for staff, i.e. with both face-to-face and

remote training. The total duration of training

in the organisation, counting only training

hours and excluding the number of

participants, was 581 hours per year. We

counted that employees received training in

various formats 2,503 times.

The total duration of the training was 254 hours

in Lithuania, 194 hours in Latvia and 133 hours

in Estonia. Accordingly, employees registered

for training 1,397 times in Lithuania, 684 times

in Latvia and 422 times in Estonia. The average

number of training hours per employee has not

been calculated.

The Group has identified positions where

employees' performance and career

progression are regularly reviewed: store

managers and responsible employees have at

least two interviews per year (mid-term and

annual) to assess their performance and career

progression. Interviews are only waived when a

change of manager leads to a shorter

evaluation period than required. In 2023, a total

of 170 annual interviews (excluding mid-term

interviews) took place, of which 106 in

Lithuania, 44 in Latvia and 20 in Estonia.

It is no coincidence that 90% of store managers

started their careers with the Group, mostly as

sales consultants, which shows that the

organisation is creating the conditions for its

employees to move up the ranks.

Other retail staff members are also subject to

annual and interim interviews, but no statistics

are kept. Annual interviews discuss and

evaluate employees' competences as well as

the achievement of objectives and agree on

further work and individual objectives. The mid-

term interviews discuss the first half of the year

- the challenges and achievements, and the

GRI 404-2 GRI 404-3

objectives set. Organised by HR managers, the

aim is to listen to employees, share feedback

and work together to improve.

Try a Career project

We also continued the Talent Academy's

project Try a Career aiming to provide

employees with the opportunity to grow and

prepare for/sample their desired position in the

store. On average, the project lasts about half a

year and is carried out twice a year. The project

selects talent who then learn on-the-job in-

store and through in-house training and

remote meetings with the HR manager. The

project is based on the principle of 70%

practice - learning by doing, 20% reflection and

10% knowledge. The implementation of the

project coincided with the end of the calendar

year, so we do not have the final results yet.

Preliminarydata shows that 8 out of 22

candidates in Lithuania have successfully

completed the project, indicatinga success rate

of 36%.

E-learning system

Another important tool that helps both the

mentor and the new employee is the E-

learning system. It contains basic theoretical

material that is important and interesting to

learn. This mentoring programme allows you to

train a new sales consultant within 2 months.

New mentors receive periodic training on

mentoring, how to train and how to use the

tools developed by the company. The same

logic is used to prepare for higher positions in

the store. Each position has a specific form

which is adapted to the situation and learning

priorities.

CONTENT

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REPORT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

2023

Minor accidents at work

Total number of hours worked per year

by all employees

3,101,727*

Number of minor accidents (injuries)

per million hours worked

1.93

Health risk factors

Administrative

department

Logistics and retail

departments

Repetitive

movements

Working posture

Working with video

terminals

Repetitive movements

Working posture

Working with video

terminals

Manual handling of loads

EMPLOYEE

HEALTH AND

SAFETY

Ensuring safe working conditions and taking

care of employees' health has always been a

priority for the organisation. We start from day

one with training, regular health checks and

providing tools to take care of one's health. We

have clear rules and responsibilities to create

safe working conditions for everyone, because

we believe it is everyone's right. All employees

in Lithuania with 3 months' service are covered

by supplementary health insurance at the

employer's expense; those with more than five

years' service are given a higher amount of

cover as a reward for their loyalty to the

company. It is envisaged that the

supplementary health insurance scheme will

be extended across the Group. Employees are

legally obliged to undergo periodic health

checks and can only be present at workplace

with proof of this. No additional health and

safety management system is in place.

To ensure the safety of our employees when

travelling on business trips and when using

company transport in general,we regularly

maintain the technical condition of the car fleet

we manage.

The logistics department can be considered the

most hazardous in terms of occupational safety

in our operations, so we have very clear

requirements and controls in place. It features

a conveyor system that eliminates the need to

lift inventory to higher heights, thus avoiding

both potential injuries and the risk of tipping.

Safety zones are marked in all areas where

electric lifting equipment is used. Employees

are provided with natural daylight and

disinfection stations.

GRI 403-1 GRI 403-6

In March 2023, the Group underwent an

occupational safety audit organised by an

independent assessor. It assessed workplace

safety in administrative, logistics and retail

departments. In response to the audit

recommendations, new occupational safety

documentation for all departments was

prepared in 2023. All staff in the retail and

logistics department were briefed on the new

safety rules as soon as possible, and a briefing

process was also carried out in the

administration department. In response to the

recommendations, the Group organised

occupational safety training and reinforced the

responsibility of managers to ensure

compliance with occupational safety rules.

In 2023, the Group recorded 6 minor workplace

accidents. All of them have been reported to

the relevant public authorities and measures

have been taken to identify and prevent their

causes. In all cases, the accidents were found

not to be the fault of the employer. We have a

zero-tolerance approach to occupational safety

violations and consider an employee's right to

feel safe to be a fundamental value.

Note: The rate of minor accidents per million hours worked is

calculated according to the GRI standards formula: the number of

accidents is divided by the total number of hours worked by all workers

per year and multiplied by one million. This information has been

reported for the first time.

*Of the total, 2 582 959 hours were worked by retail department staff,

148 118 hours by logistics staff and 370 650 hours by administrative staff.

The number of hours worked by logistics and administrative staff is an

estimate based on the number of full-time equivalent (FTE) employees

on 31 December 2023.

GRI 403-9

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

HUMAN

RIGHTS

We consider human rights to be an

unquestionable value and are committed to

taking action to guarantee them throughout

the whole value chain. In the markets in which

we operate, we comply with all local laws and

international agreements defining human

rights and freedoms. We do not restrict

employees' rights of expression, speech and

other rights in any way.

Our activities have no negative impact on the

protection of human rights, and employees are

encouraged to report and discuss any possible

future threats. No such reports were received

during the reporting period. The Group does

not discriminate against its employees or third

parties on the basis of race, sex, nationality,

political or religious beliefs, health or any other

grounds.

The organisation does not operate in countries

or territories where there is a higher risk of

child or forced labour, and many of its suppliers

and overseas partners are registered in EU

countries that are also outside the area of

increased risk. Nevertheless, the organisation

holds itself and its partners to the highest

standards of human rights protection, and does

not tolerate child labour, forced labour or other

restrictions on employees rights. No such

incidents were reported during the reporting

year, either in the organisation's operations or

among suppliers. The organisation believes

that the principles of human rights enshrined

in the European Union must be respected in all

suppliers' activities.

As part of its commitment to human rights, the

organisation intends to introduce a supplier

GRI 406-1

GRI 408-1 GRI 409-1 GRI 407-1 GRI 414-1

GRI 308-1

questionnaire to ensure the protection of

fundamental human rights in the activities of

all suppliers. During the reporting period, the

supplier questionnaire has not yet been

applied.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

ECONOMIC

(GOVERNANCE) AREA

The Group is guided by a Code of Ethics and

Conduct. Its provisions shall be reviewed and

updated as necessary. Procedures are also in

place for the Submission of Whistleblowing

Information, which ensures that staff can safely

submit material information relating to or

mmm

Shareholder

Share of votes, %

MG investment, UAB

65.4

Minvista, UAB

10.5

Total

number,

head count

Share,

Administrative staff who are

informed about the anti-

corruption policy (Code of Ethics

and Conduct) and/or have

received anti-corruption training

189

100

Managing staff who are informed

about the anti-corruption policy

(Code of Ethics and Conduct)

and/or received anti-corruption

training

100

BUSINESS

ETHICS AND

COMPLIANCE

GRI 2-27

Board members have received anti-

corruption training

100%

We advocate open and honest communication

with shareholders and fairness in information

provided to the market. We always strive to be

an example of how the Group can shape good

business practice through disclosure.

In 2023, APB Apranga distributed profits and

announced the share of profits to be paid to

shareholders.

The structure of major shareholders remained

unchanged last year. APB Apranga is majority-

owned by investment holding MG investment,

UAB. Shareholders of the company who control

more than 5% of the votes at the shareholders'

meeting:

In 2023, there were no material changes in the

Board of APB Apranga, the Group's parent

company. Six members of the Board, two of

whom are independent, continued to govern

the company in 2023. All Board members have

received anti-corruption training, and all new

employees are made aware of the

organisation's Code of Ethics and Conduct,

work rules and other binding documents.

helping to prevent possible irregularities. It

should be noted that there were no confirmed

reports in the previous year.

The Group remains publicly and openly

committed to complying with all laws and

regulations and to behaving ethically both

internally and with third parties. Our aim is to

minimise , by all means , any damage that may

arise from the intentional or unintentional

actions of the persons involved. During the

reporting period, the Group did not experience

any significant instances of non-compliance

with laws and regulations.

No specialised corruption prevention and

compliance training was provided during the

reporting period. The vast majority of top level

and departmental managers are familiar with

the training material and have acquired the

competences to deal responsibly with any form

of corruption. All new employees are informed

of the Group's Code of Ethics and Conduct and

undertake to comply with it. To date, the

Group's anti-corruption policy is defined by the

Code of Ethics and Conduct, but a separate,

comprehensive Anti-Corruption Policy will be

developed in 2024, applicable for all Group

employees. The Group's legal department

regularly reviews and updates information on

significant legislation to combat potential

corruption.

Notes: Total number of administrative and managing staff in 2023 - 189.

* Including two top managers in Latvia and Estonia who are classified

as local staff.

GRI 205-2

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GRI INDEX

Social Responsibility Report 2023

GRI 205-3 GRI 418-1

The protection of personal data is also

enshrined in our Code of Ethics and Conduct,

which applies not only to employees, but also

to related parties, further strengthening

security.

The Group has a Personal Data Protection

Officer who not only ensures compliance with

the rules, but also informs employees of

changes in key legislation or preventive actions

in the event of threats to personal data.

In 2023, there were no incidents related to the

protection of personal data or violations of

personal privacy.

We are committed to transparent and ethical

business and aim to prevent any potential

corruption in our operations.

The Group is strongly opposed to all forms of

corruption and bribery, active or passive,

including the promise, offer or consideration of

a payment or gift to an intermediary, business

partner, official, political party, foreign official in

international business transactions, or any

other third party, with the intent to bribe the

recipient, supplier, or other third party, to

improperly perform functions, duties, or

decisions, and vice versa. The group advocates

fair and transparent communication with

public authorities. In 2023, the administration

reminded over 100 suppliers across all Baltic

countries about ethical business principles and

the gift policy. They encouraged suppliers to

opt for tangible gifts and informed them of the

mandatory rules for giving and accepting gifts

by employees.

Within the company, fair business policies and

transparent communication with customers,

suppliers, contractors, subcontractors and

other third parties are encouraged. The

company always follows the "four eyes"

principle when purchasing goods, thus

preventing any appearance of unfair practices.

In 2023, the Group recorded 5 cases related to

the protection of tangible assets. In all cases,

the zero tolerance principle was applied. There

were no cases of any other form of corruption

or bribery.

To protect the privacy of our customers and to

ensure their legitimate expectations, we

carefully comply with the European Union's

General Data Protection Regulation (GDPR).

We instruct the staff responsible for processing

the data on how to use the information

entrusted to us by our customers in a

responsible and secure way.

HR and IT professionals maintain and manage

personal data related to target marketing and

other functions used in retail and online

commerce with the utmost care and

responsibility, following strict procedures.

CONTENT

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GROUP

SUSTAINABILITY

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GROUP

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(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

RESPONSIBILITY

IN THE SUPPLY

CHAIN

GRI 308-1

The Group recognises that its activities also

have indirect impacts on nature, people and

communities along the value chain and must

take responsibility for reducing them.

Although our core business is clothing retailing,

the pathway starts with the growing,

preparation and processing of raw materials,

which are highly sensitive in an overall ESG

context. In the downstream process of

production environmental, social and economic

sustainability indicators are equally important.

Together with the whole logistics chain, we

must recognise that our obligations go beyond

our direct activities and we must therefore

implement policies responsibly to manage the

risks of this topic.

One of the measures envisaged is a supplier

questionnaire to be adopted as an integral part

of the sustainability strategy, which will help to

ensure that we not only make our own

commitments, but also make efforts to make

our values relevant to all the parties involved.

To date, the Group's suppliers have not been

assessed on environmental and/or social

criteria. The 2024 report is expected to include

the results of the assessment of sustainability-

related risks in the supply chain.

By working with the largest and most globally

recognised fashion brands, we aim not only to

meet their sustainability policy commitments,

but also to serve as an example to others who

have not yet embarked on this path. We believe

that our positive example of taking a non-

coercive approach to partner selection, while

educating and enlightening, will help to ensure

that more and more of our partners, both in the

local market and abroad, will take their

sustainability commitments seriously.

GRI 414-1

CONTENT

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GRI INDEX

Social Responsibility Report 2023

RESPONSIBILITY

TO SOCIETY

The Group is guided by its own donor

framework, which identifies the main areas and

priorities for donor support. Each year is based

on long-term priorities, but also takes into

account the overall situation.

2023 The group has joined an initiative with

partner Inditex to donate the proceeds from

the sale of the shopping bags to the World

Wildlife Fund (WWF), an international

organisation fighting climate change. More

than €100 thousand has been earmarked for

this purpose.

To promote an active lifestyle and health, the

Group continued its cooperation with the

Lithuanian Basketball League, supported the

Lithuanian Padel Federation and the Dalia

Kutkaitė Artistic Gymnastics Academy.

Last year, we supported homes for the elderly

and children's charities to reduce social

exclusion and help the most vulnerable in

society. Together with Children's Dreams, we

made 100 children's dreams of warm clothes

come true, and provided financial support to

NGO "Gydytojai klounai" (Clown Doctors) and

NGO "Gerų darbų dirbtuvės" (Good Deed

Workshop), which aim to brighten the daily

lives of sick children and help premature

babies.

The Group has focused on emotional health by

expanding and strengthening its cooperation

with NGOs, and has become a supporter of the

"Jaunimo linija" and "Vaikų linija" organisations

that provide such support. We collaborate with

these organizations to establish donation boxes

at our stores, providing customers with the

chance to support their initiatives.

The Group's own employees have also

contributed to the organisation's support. A

cake day was organised, where staff donated to

the NGO "Gydytojai klounai".

The total amount of support granted during

the reporting period was €152 thousand. In

2022, the total amount of support was €132

thousand, and in 2021 - €76,491.

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

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ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

The Group's tax bill amounted to €67.4 million,

13% higher than the €59.7 million in2022. The

main reason for the increase in tax payable was

the Group's growing turnover.

The staff wage bill grew last year, with an

average increase of 12% in the fixed part

oftheirsalaries. Salaries were reviewed for all

staff, taking into account their current salary

and seniority.

Tax payable

42.7

2016

mln. Eur Change,

2017 2018 2019 2020 2021 2022 2023

-20

-10

45.7

44.7

-2.2

8.2

48.4

39.2

-19

44.9

14.5

59.7

67.4

CONTENT

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ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

GRI

INDEX

Statement of use

Apranga Group, APB has reported in

accordance with the GRI Standards for the

period from 1 January to 31 December 2023.

GRI 1 used

GRI 1: Foundation 2021

Applicable GRI Sector Standards

Not applicable

GRI 2: General Disclosures 2021

Disclosure

Location

1. The organisation and its reporting practices

2-1

Organizational details

3 p.

2-2

Entities included in the organization’s sustainability

reporting

7 p.

2-3

Reporting period, frequency and contact point

3, 54 p.

2-4

Restatements of information

27, 32, 38 p.

2-5

External assurance

3 p.

2. Activities and workers

2-6

Activities, value chain and otherbusiness relationships

4, 7, 8 p.

2-7

Employees

39, 40 p.

2-8

Workers who are not employees

Information not available. Such statistics are not

maintained as the Group has outlets in its own and

leased premises, where certain facilities and

maintenance services are provided by landlords and

their third parties.

3. Governance

2-9

Governance structure and composition

11 p.

2-10

Nomination and selection of the highest governance body

11 p.

2-11

Chair of the highest governance body

11 p.

2-12

Role of the highest governance body in overseeing the

management of impacts

11 p.

2-13

Delegation of responsibility for managing impacts

11 p.

2-14

Role of the highest governance body in sustainability

reporting

11 p.

2-15

Conflicts of interest

11 p.

2-16

Communication of critical concerns

11 p.

2-17

Collective knowledge of the highest governance body

11 p.

2-18

Evaluation of the performance of the highest governance

body

Not applicable

2-19

Remuneration policies

11 p.

2-20

Process to determine remuneration

The Group's Remuneration Policy is not publically

disclosed

2-21

Annual total compensation ratio

Non-disclosure of information is in accordance with

the General Data Protection Regulation and the

Personal Data Protection Policy adopted by the

organisation

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Disclosure

Location

4. Strategy, policies and practices

2-22

Statement on sustainable development strategy

5 p.

2-23

Policy commitments

9, 10 p.

2-24

Embedding policy commitments

9, 10 p.

2-25

Processes to remediate negative impacts

11 p.

2-26

Mechanisms for seeking advice and raising concerns

11 p.

2-27

Compliance with laws and regulations

46 p.

2-28

Membership associations

The Group is a member of the Lithuanian Association

of Trading Companies (LPĮA).

5. Stakeholder engagement

2-29

Approach to stakeholder engagement

20 p.

2-30

Collective bargaining agreements

The Group has no a collective agreement with

employees

GRI 3: Key Sustainability Themes 2021

3-1

Process to determine material topics

22 p.

3-2

List of material topics

22 p.

3-3

Management of material topics

22 p.

Economic topics

GRI 205: Anti-corruption 2016

205-2

Communication and training about anti-corruption policies

and procedures

46 p.

205-3

Confirmed incidents of corruption and actions taken

47 p.

Environmental topics

GRI 302: Energy 2016

302-1

Energy consumption within the organisation

31 p.

302-3

Energy intensity

31 p.

GRI 305: Emissions 2016

305-1

Direct (Scope 1) GHG emissions

29 p.

305-2

Energy indirect (Scope 2) GHG emissions

29 p.

305-3

Other indirect (Scope 3) GHG emissions

29 p.

305-4

GHG emissions intensity

29 p.

305-5

Reduction of GHG emissions

29 p.

GRI 306: Waste 2020

306-1

Waste generation and significant waste-related impacts

32 p.

306-2

Management of significant waste-related impacts

32 p.

306-3

Waste generated

32 p.

306-4

Waste diverted from disposal

32 p.

GRI 308: Supplier Environmental Assessment 2016

308-1

414-1 New suppliers that were screened

using environmental criteria

44, 48 p.

CONTENT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

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ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

Disclosure

Location

Social topics

GRI 401: Employment 2016

401-1

New employee hires and employeeturnover

37 p.

401-2

Benefits provided to full-time employees that are not

provided to temporary or part-time employees

38 p.

GRI 402: Labor/Management Relations 2016

402-1

Minimum notice periods regarding operational changes

39 p.

GRI 403: Occupational health and safety 2018

403-1

Occupational health and safety management system

43 p.

403-6

Promoting employee health

43 p.

403-9

Work-related injuries

43 p.

GRI 404: Training and Education 2016

404-2

Programs for upgrading employee skills and transition

assistance programs

42 p.

404-3

Percentage of employees receiving regular performance

and career development reviews

42 p.

GRI 406: Non-discrimination 2016

406-1

Incidents of discrimination and corrective actions taken

44 p.

GRI 407: Freedom of Association and Collective Bargaining 2016

407-1

Operations and suppliers in which the right to freedom of

association and collective bargaining may be at risk

44 p.

GRI 408: Child labour 2016

408-1

Operations and suppliers at significant risk for incidents of

child labour

44 p.

GRI 409: Forced or Compulsory Labor 2016

409-1

Operations and suppliers at significant risk for incidents of

forced or compulsory labour

44 p.

GRI 414: Supplier Social Assessment 2016

414-1

414-1 New suppliers that were screened

using social criteria

44, 48 p.

GRI 418: Customer Privacy 2016

418-1

Substantiated complaints concerning breaches of customer

privacy and losses of customer data

47 p.

CONTENT

ABOUT THE SOCIAL

RESPONSIBILITY

REPORT

ABOUT THE APRANGA

GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023

INFORMATION

ON COMMENTS

TO THE REPORT

The Sustainability (Social Responsibility Report)

provides the Group's non-financial information

to stakeholders. The report is produced once a

year and is submitted together with the Annual

report. The report is made publicly available on

the company's website in both Lithuanian and

English. The report has been prepared in

accordance with the requirements of the Law

on Consolidated Financial Reporting by Groups

of Undertakings of the Republic of Lithuania,

the European Commission's Guidelines on Non-

Financial Reporting, and the Bank of

Lithuania's recommendations on non-financial

reporting. Comments and queries on the report

can be submitted to marketingas@apranga.lt.

No comments were received on the 2022 Social

Responsibility Report, except for the Bank of

Lithuania's recommendations on the disclosure

of EU Taxonomy indicators, which have been

taken into account in this report.

GRI 2-3

CONTENT

ABOUT THE SOCIAL

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REPORT

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GROUP

SUSTAINABILITY

WITHIN THE

GROUP

ENVIRONMENT

SOCIAL FACTORS

ECONOMIC

(GOVERNANCE) AREA

GRI INDEX

Social Responsibility Report 2023