ANNUAL REPORT

INVESTMENT FRIENDS SE

AS AT JUNE 30, 2024

FOR THE PERIOD SINCE 01/07/2023 TILL 30/06/2024

PREPARED IN ACCORDANCE WITH

INTERNATIONAL FINANCIAL REPORTING STANDARDS (EU)

TALLINN 8/11/2024

Investment Friends SE

Estonia, Harju county, Tallinn, Tornimae Str 5, 10145

Registry code: 14617862

Email: info@ifsa.pl

INVESTMENT FRIENDS SE

GENERAL INFORMATION

Company's name: INVESTMENT FRIENDS SE

Registry code: 14617862

Address: Estonia, Harju County, Tallinn, Tornimae Str. 5, 10145

E-mail: info@ifsa.pl

Website: www.ifsa.pl

Reporting period: 01/07/2023 - 30/06/2024

Auditor: KPMG Baltics OÜ

Members of the Supervisory Board

Wojciech Hetkowski

Jacek Koralewski

Małgorzata Patrowicz

Anna Kajkowska

Members of the Management Board

Agnieszka Gujgo

2

Table of contents:

I. GENERAL INFORMATION ABOUT THE ISSUER………………………………..2

II. SELECTED FINANCIAL DATA............................................................................4

III. MANAGEMENT LETTER....................................................................................6

IV. MANAGEMENT REPORT....................................................................................7

V. CORPORATE GOVERNANCE REPORT ………….……..…………………….…..13

VI. REMUNERATION REPORT……………………………….……………………..…….21

VII. FINANCIALSTATEMENTS...............................................................................22

VIII. STATEMENT OF COMPLIANCE…………………………..………………..………52

IX. MANAGEMENT BOARD'S PROPOSAL ON PROFIT DISTRIBUTION...53

X. NDEPENDENT AUDITOR’S REPORT ………………………………….......…....54

3

II. SELECTED FINANCIAL DATA

Selected financial data

Year

01/07/2023 -

30/06/2024

In EUR thous.

Year

01/07/2022 -

30/06/2023

In EUR thous.

Net interest income

35

87

Profit (loss) from operational

activities

4

71

Profit (loss) before tax

2

77

Net profit (loss)

2

77

Net cash flow from operating

activities

-14

21

Current assets

1 476

1 469

Short-term liabilities

54

51

Equity

1 422

1 418

Share capital

6 885

405

Weighted average number of

ordinary shares

32 466 575

4 122 740

Profit (loss) from continuing

operations per share (EÜRO)

0,00

0,02

Profit (loss) per share (EÜRO)

0,00

0,02

Book value per share (EÜRO)

0,02

0,35

4

II. a Effective interest income

Effective interest income

Year

01/07/2023-

30/06/2024

in thous. EUR

Year

01/07/2022-

30/06/2023

in thous. EUR

Interest revenue

391

390

Other interest income

0

0

Interest expenses

0

0

Interest income

391

390

5

III. MANAGEMENT LETTER

Dear Sirs,

we provide the annual report of Investment Friends SE (hereinafter ‘the Company’)

presenting the financial results and key facts of the Company's operations for the

period from July 1, 2023 to June 30, 2024.

The Company has consistently implemented activities aimed at achieving the goals

set for the Management Board, which at the same time were also the expectations

the Shareholders participating in the General Meetings. The steps taken in previous

years and their effects allow us to think, that the decision of changing the strategy

of the Company’s development, taken a few years ago, brought measurable effects,

which resulted in positive financial result and financial activity in the scope of

granting loans ensured stability for the Company.

Agnieszka Gujgo

Member of the Management Board

6

IV. MANAGEMENT REPORT

The main fields of activity

In the reporting period, the main activity of the Company was financial activity,

including granting loans. The Company, implementing its business profile in the

field of granting loans, has concluded agreements with Polish and Estonian

entities. The Company intends to continue its operations in the area of lending

activities.

In the reporting period, the Company obtained revenues mainly from its financial

service activity, i.e., interest on loans granted.

General (macroeconomic) development

The Company undertakes financial activities, especially related to granting loans

to business entities, mostly to related parties.

In the opinion of the Management Board, activity in this area is developing

especially in the Polish market. Entrepreneurs who have not obtained financing

from a bank, usually reach out to companies which provide lending services and

declare high flexibility depending on the needs of a particular customer and their

collateral capabilities.

Financial markets are characterized by high volatility, which increases the risk of

running a business such as lending services, but on the other hand it gives an

opportunity to earn above-average profits in a relatively short time.

The key factors influencing the volatility of stock prices on financial markets

include:

• economic situation – in the country and in the world,

• monetary policy of central banks,

• internal situation of the Company or on a given market,

• situation on foreign markets.

The Company notices development potential in the field of providing financial

services for this kind of entities and, accordingly, intends to continue its business

activity in this segment.

Financial instruments, financial risk management objectives and policies

The main risks arising from financial instruments of the Company are: interest

rate risk, liquidity risk, credit risk, risk related to financial collaterals. The

Management Board is responsible for establishing of risk management in the

Company as well as for supervision of their compliance. The purpose of the

7

Company's risk management policies is to identify and analyse the risks to which

the Company is exposed, establishing appropriate restrictions and controls, as

well as by monitoring adjustment of the risks and limits accordingly. The

Management Board identifies potential risks by analysing each transaction of the

Company. Due to the simple structure of the Company, there are no problems with

communicating information in a timely manner. The Management Board is

responsible for designing, introducing, and ensuring adequate and effective

actions aimed at achieving the goal. Also, appropriate experience and education

of the Management Board allows to minimize the influence of risks on the

operating activity. The Company's Management Board monitors risks on an

ongoing basis and manages it in a logical and systematic way, in accordance with

established methods.

Description of significant external and internal factors

Considering the specifics of the activity, i.e., financial service activities in the field

of granting loans, the results are currently and will be significantly influenced by:

- the general market prosperity on lending market and the level of interest rates,

- the proper realization by the borrowers of their obligations resulting from

concluded loan agreements, as well as course of execution process and

vindication of loans terminated, if such agreements occur,

- borrowers' field of activity and related risks,

- efficiency of administrative and legal procedures,

- opportunity to gain new borrowers,

- the economic situation and investing circumstances in Poland, Estonia, and the

region,

- access to external financing sources,

- cooperation with other financial entities.

- changes in market prices, such as foreign exchange rates, interest rates

(including currency risk).

The risk related to the possibility of fluctuations in the exchange rate of one

currency against another may lead to both a deterioration of the financial

situation of the entity and its improvement. The Company's revenues and cash

flows from operating activities are dependent on changes in market interest

rates, because one cash loan agreement is concluded with a variable interest rate.

Significant risk factors are described on pages 39-43 of the annual report.

Structure of the share capital

As at the balance-sheet date of 30/06/2024 and as at the date of publication of

the report the Company holds 68 850 000 issued shares.

During the financial year, the Company's share capital was increased by EÜR

6 480 000 from EÜR 405 000 to EÜR 6 885 000.

The changes were a result of a bonus issue of Shares.

8

Share capital of the Company

- As of the balance sheet date of 30/06/2023, the Company's share capital

amounted to EÜR 405 000,

- As of the balance sheet date of 30/06/2024 the Company's share capital

amounted to EÜR 6 885 000.

As of the balance sheet date 30/06/2024, the Company's equity is less than 50%

of its share capital and does not meet the requirements of § 301 of the Estonian

Commercial Code. The Management Board of Investment Friends will propose a

reduction of the share capital to the General Meeting of Shareholders.

Information about the Company and shareholders

As at the balance sheet date 30/06/2024 Investment Friends SE has no

subsidiaries, and it does not create its own consolidation group.

At the end of the previous financial year, i.e., as of 30/06/2023 the Company also

did not have any subsidiaries and did not form its own consolidated group.

According to the best knowledge of the Management Board the direct

shareholder is Patro Invest OÜ headquartered in Tallinn, Estonia that owns 63,85

% contribution in the share capital and 63,85 % of votes at the General Meeting

of Shareholders of the Company.

As at 30/06/2024 and 30/06/2023 the Company did not own any capital

investments in the form of shares and stock of other entities.

Qualifying holding pursuant to the provisions of § 9 of the Securities Market

Act.

The table below presents shareholding structure as at 30/06/2024

It presents shareholders holding 5% or more of voting rights at the

General Meeting of the Company.

Damian Patrowicz holds 100% of Patro Invest OÜ

9

No.

Shareholder

Number of

shares

% of shares

Number of

votes

% of votes

1

PATRO

INVEST OÜ

43 961 150

63,85

43 961 150

63,85

total

68 850 000

100

68 850 000

100

The table below presents shareholding structure as at 30/06/2023. It

presents shareholders holding 5% or more of voting rights at the General

Meeting of the Company.

Damian Patrowicz holds 100% of Patro Invest OÜ

Board members

Members of the Board of Directors as of the balance sheet date and as of the date

of publication of the interim report do not directly or indirectly hold any shares

in the Company.

Members of the Supervisory Board

As at the balance sheet date and as at the date of publication of the annual report,

members of the Supervisory Board do not hold directly or indirectly shares of the

Company.

Provisions and rules for the election, appointment, resignation, and dismissal

of the members of the Management Board of the Company established by

legislation.

There are general rules for the election, appointment, resignation, and dismissal

of the members of the Management board of a Company established by the

Estonian Commercial Code, in particular § 308, § 309 and others. Section V of the

Company's Articles of Association contains principles similar to the general rules

of the Commercial Code. Information about the description of management and

supervisory bodies and their composition have been described in the corporate

governance report

Competences and election of the Supervisory Board

In accordance with the provisions of point 5.3. of the Company's Articles of

Association, members of the Company’s Management Board are appointed and

dismissed by the Supervisory Board, which also decides on the remuneration of

members of the Management Board. Members of the Supervisory Board are

elected by the Company's General Meeting of shareholders.

10

No.

Shareholder

Number of

shares

% of shares

Number of

votes

% of votes

1

PATRO

INVEST OÜ

2 540 000

62,716

2 540 000

62,716

total

4 050 000

100

4 050 000

100

Resolutions and rules for amendment of the articles of association of the

company

In accordance with point 4.9.1 of the Company's Articles of Association, any

amendment of the Company’s Articles of Association is included in the General

Meeting of Shareholders’ competencies.

In accordance with point 4.5 of the Articles of Association, the General Meeting is

able to adopt valid resolutions, if more than half of all votes are represented at

the General Meeting, if the applicable legal acts do not provide for a higher

majority of votes.

If an enough number of shareholders does not participate in General Meeting, in

order to ensure a majority of votes, in accordance with point 4.5, the Management

Board of the Company within three weeks, but not earlier than after seven days,

convenes a new General Meeting with the same agenda. In this way, the General

Meeting is competent to adopt resolutions regardless of the number of votes

represented. Resolutions of the eneral Meeting are adopted, when more than half

of all votes represented at the General Meeting support the resolution, and there

is no other requirement arising from applicable legal acts. .

List of the most important events in the reporting period

- On January 11, 2024, the Company published on its website www.ifsa.pl and

in current report ESPI No. 2/2024, a document prepared in connection with the

intention to apply for the admission and introduction of 64.800.000 (sixty-four

million, eight hundred thousand) shares of Investment Friends SE without a

nominal value for trading on the regulated market operated by the Warsaw Stock

Exchange in Warsaw S.A.

The above-mentioned document was prepared and published as a result of the

adoption of Resolution No. 3 by the General Meeting of Shareholders regarding

the issue of Shares on January 11, 2024.

- on January 30, 2024, the Company informed Shareholders by publishing an

appropriate announcement that the Commercial register (Ariregister) of Estonia

has registered the increase in the share capital of Investment Friends SE resulting

from the resolutions adopted at the Ordinary General Meeting of Shareholders on

January 11, 2024.

From the date of registration of the articles of association, the share capital of

Investment Friends SE amounts to EÜR 6 885 000 and it is divided into 68 850

000 shares without the nominal.

Information on average employment

The Company did not have any employees in the financial year lasting since July

1, 2023 to June 30, 2024 and in the previous financial year since July 1, 2022 to

June 30, 2023.

11

Information regarding the selected auditor and the contract signed with

them.

The Company has signed an agreement for the audit of the annual financial

statements for the period covered by this report with the audit Company KPMG

Baltics OÜ registration number 10096082.

Remuneration for the Auditor will be paid according to the Agreement concluded

between the Company and KPMG Baltics OÜ, which was established on market

conditions.

Selected ratios of Investment Friends SE

RATIO

30/06/2024

30/06/2023

ROA

0,001

0,052

ROE

0,001

0,054

ROA – Return on Assets:, the ratio of a Company's net profit to the value of its assets (net

profit / assets)

ROE – Return on Equity: the ratio of a Company's net profit to the value of its equity (net

profit / equity)

12

V. CORPORATE GOVERNANCE REPORT

The Company's statement regarding the compliance with the Best Practice for

GPW Listed Companies 2021 and Corporate Governance Principles is available

on the Company's website www.ifsa.pl, in the "Regulations" section, the "Good

practices" on corporate governance.

During the reporting period, Investment Friends SE was subject to the corporate

governance standards contained in the document “Best Practice for GPW Listed

Companies 2021”, which were adopted by resolution of the Stock Exchange

Supervisory Board no. 13/1834/2021 of March 29, 2021 for companies listed on

the WSE Main Market - "Best Practices of WSE Listed Companies 2021" (Best

Practices 2021, DPSN2021).

In fulfilling the disclosure requirements regarding the application of corporate

governance standards, Investment Friends SE is guided by the principles of an

effective and transparent information policy and communication with the market

and investors. The Company was informed on July 30,2022 by the stock exchange

announcement No. 1/2021. of the current corporate governance principles "WSE

Listed Companies Good Practices 2021".

The scope of the Company’s deviation from clauses of the collection of

adopted corporate governance principles,

The Company undertook to apply all corporate governance principles contained

in ‘Best Practice for GPW Listed Companies 2021’, except for the following:

DISCLOSÜRE POLICY, INVESTOR COMMÜNICATIONS

1.2. Companies make available their financial results compiled in periodic reports

as soon as possible after the end of each reporting period; should that not be

feasible for substantial reasons; companies publish at least preliminary financial

estimates as soon as possible.

Comments of the Company: The Company publishes periodic reports within

deadlines arising from applicable Estonian law.

1.3. Companies integrate ESG (environmental, social, and governance) factors in

their business strategy, including in particular:

1.3.1. environmental factors, including measures and risks relating to climate

change and sustainable development.

Comments of the Company: The main activity of the Company is granting loans.

The company is unable to determine the ESG impact of the loans granted.

1.3.2. social and employee factors, including among other actions taken and

planned to ensure equal treatment of women and men, decent working

13

conditions, respect for employees’ rights, dialogue with local communities,

customer relations.

Comments of the Company: The Company explains that the principles of

sustainable development and respect for social and employee rights and interests

are applied in the strategy of its activity. In this regard, the Company complies

with all applicable laws and guidelines. As at the time of publication of this report

no written rules have been drawn up because there are no employees.

1.4. To ensure quality communications with stakeholders, as a part of the

business strategy, companies publish on their website information concerning

the framework of the strategy, measurable goals, including in particular long-

term goals, planned activities and their status,defined by measures, both financial

and non-financial. ESG information concerning the strategy should among

others:

Comments of the Company: The Company publishes a number of financial and

non-financial measures, as well as information on the adopted development

strategy both on the Company’s website and publishing current and periodic

reports. The Company indicated that it does not publish information on its

development plans and the progress of their implementation separately. The

Company also does not publish forecasts.

1.4.1 explain how the decision-making processes of the Company integrate

climate change, including the resulting risks.

Comments of the Company: Due to the above-mentioned in point 1.3.1. marginal

impact of the Company's activity on the natural environment, the Company does

not publish additional explanations in this scope.

1.4.2. present the equal pay index for employees, defined as the percentage

difference between the average monthly pay (including bonuses, awards and

other benefits) of women and men in the last year, and present information about

actions taken to eliminate any pay gaps, including a presentation of related risks

and the time horizon of the equality target.

Comments of the Company: Due to the fact that as at the date of submitting this

statement, the Company’s application of the rules of respect for respecting social

and employee matters has not been formalized, the Company does not publish

additional information in the scope covered by this point.

1.5. Companies disclose at least on an annual basis the amounts expensed by the

Company in support of culture, sports, charities, the media, social organisations,

trade unions, etc. If the company pay such expenses in the reporting year, the

disclosure presents a list of such expenses.

Comments of the Company: The Company does not conduct sponsorship

activities.

1.6. Companies participating in the WIG20, mWIG40 or sWIG80 index hold on a

quarterly basis and other companies hold at least on an annual basis a meeting

with investors to which they invite in particular shareholders, analysts, industry

experts and the media. At such meetings, the Management Board of the Company

14

presents and comments on the strategy and its implementation, the financial

results of the Company and its group, and the key events impacting the business

of the Company and its group, their results and outlook. At such meetings, the

Management Board of the Company publicly provides answers and explanations

to questions raised.

Comments of the Company: The Company is not included in the WIG20, mWIG40

or sWIG80 index. The Company gives comprehensive explanations within the

bounds of law to all questions of shareholders and investors. The Company

maintain electronic communication with investors. Separate meeting with

investors, analysts, industry experts and media representatives are not organized

due to the lack of interest in this form of obtaining information about the

Company by investors.

MANAGEMENT BOARD, SÜPERVISORY BOARD

1. Companies should have in place a diversity policy applicable to the

Management Board and the Supervisory Board, approved by the Supervisory

Board and the General Meeting, respectively. The diversity policy defines

diversity goals and criteria, among others including gender, education, expertise,

age, professional experience, and specifies the target dates and the monitoring

systems for such goals. With regard to gender diversity of corporate bodies, the

participation of the minority group in each body should be at least 30%

Comments of the Company: Crucial personnel decisions in relations to the

Company’s governing bodies and its key managers are taken by the General

Meeting and the Supervisory Board.

2.3. 2.3. At least two members of the Supervisory Board meet the criteria of being

independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and

Public Supervision, and have no actual and material relations with any

shareholder who holds at least 5% of the total vote in the Company.

Comments of the Company: The Decision to elect Members of the Supervisory

Board is within the competence of the General Meeting of Shareholders.

Shareholders acts on the basis of their competences and trust in individual

candidates, appoint the composition of the Supervisory Board. Depending on the

decision of the General Meeting, the Company may or may not fulfil this criterion

periodically, depending on the selected composition of the Supervisory Board.

Currently, the Supervisory Board does not fulfil the independence criteria, as only

one member of the Supervisory Board is independent, and assessment of the risk

resulting from this is within the competence of the General Meeting.

2.11. In addition to its responsibilities laid down in the legislation, the

Supervisory Board prepares and presents an annual report about activities of

Supervisory Board to the General Meeting once per year.

Comments of the Company: In accordance with the applicable provisions of the

Estonian law, the Company does not publish or submit to the General Meeting for

approval a report on activities of the Supervisory Board.

15

INTERNAL SYSTEMS AND FÜNCTIONS

3.9. The Supervisory Board monitors the efficiency of the systems and functions

referred to in principle 3.1 among others on the basis of reports provided

periodically by the persons responsible for the functions and the Company’s

Management Board and makes annual assessment of the efficiency of such

systems and functions according to principle 2.11.3.

In case when the Company has an audit committee, it monitors the effectiveness

of the systems and functions referred to in principle 3.1, however, it does not

exempt the Supervisory Board from preparing an annual assessment of the

effectiveness of these systems and functions.

Comments of the Company: In accordance with the applicable provisions of the

Estonian law, the Company does not publish or submit a report on activities of

the Supervisory Board to the General Meeting for approval.

GENERAL MEETING, SHAREHOLDER RELATIONS

4.1. Companies should enable their shareholders to participate in a General

Meeting by means of electronic communication (e-meeting) if justified by the

expectations of shareholders notified to the Company, provided that the

Company is in a position to provide the technical infrastructure necessary.

Comments of the Company: The Company considers that the costs of enabling

shareholders to participate in the General Meeting by means of electronic

communication (meeting) are too high. Nevertheless, the Management Board

indicates, that the structure of the Company’s shareholding means that the

shareholders are not interested in participating in the Company’s General

Meeting in electronic form.

At the same time, the Company's Articles of Association and the Regulations of

the General Meeting do not prescribe the possibility of participating in the

Meeting by means of electronic communication.

4.3. Companies provide a public real-life broadcast of the General Meeting.

Comments of the Company: The Company recognizes that the costs of

broadcasting the General Meeting are too high. At the same time, the

Management Board indicates that the Company's shareholding structure causes

the lack of interest in the General Meeting. At the same time, the Company's

Articles of Association and the General Meeting Regulations do not prescribe

transmission of the meeting.

4.6. To help shareholders participating in a General Meeting to vote on

resolutions with adequate understanding, draft resolutions of the General

Meeting concerning matters and decisions other than points of order should

contain a justification, unless it follows from documentation tabled to the General

Meeting. If a matter is put on the agenda of the General Meeting at the request of

a shareholder or shareholders, the Management Board requests presentation of

16

the justification of the proposed resolution, unless previously presented by such

shareholder or shareholders.

Comments of the Company: As at the date of publication of this statement, the

Company does not publish any additional justification for the draft resolutions of

the General Meeting. So far, the shareholders of the Company have not expressed

interest in the additional discussion of the matter of the General Meetings.

Shareholders with major holdings of shares

The table below presents shareholders holding 5% or more of voting rights

at the General Meeting as at 30/06/2024, based on the statements received by

the Company under applicable laws.

Damian Patrowicz holds 100% in Patro Invest OU

The table below presents the shareholders holding 5% or more votes at the

General Meeting of Shareholders as at 30/06/2023, based on the declarations

received by the Company pursuant to the rules in force – in accordance with the

data presented in the annual report for the financial year 2022/2023.

Damian Patrowicz holds 100% in Patro Invest OU

17

Lp.

Shareholder

Number of

shares

% of shares

Number of

votes

% of votes

1

PATRO INVEST

OÜ

43 961 150

63,85

43 961 150

63,85

total

68 850 000

100

68 850 000

100

Lp.

Shareholder

Number of

shares

% of

shares

Number of

votes

% of votes

1

PATRO INVEST

OÜ

2 540 000

62,716

2 540 000

62,716

total

4 050 000

100

4 050 000

100

Holders of securities that give specific control rights and a

description of those rights

Investment Friends SE shares do not confer any specific control rights.

Restrictions on voting rights

Such restrictions do not apply to the Company's shares.

Restrictions on transferability of

ownership of the Company's shares

In accordance with the Articles of Association of Investment Friends SE there are

no restrictions on transferability of ownership of the Company's shares.

Rules governing the appointment and removal of Management

members and their rights

The listed Company Investment Friends SE is managed by the Management

Board, its Members act in the interest of the Company and are responsible for its

activities. The activities of the Management Board includes, in particular,

managing the company, commitment to setting its strategic goals and their

implementation, as well as ensuring the company efficiency and security.

The company is supervised by an effective and competent Supervisory

Board. Members of the Supervisory Board act in the interest of the Company and

are guided by the independence of their own opinions and decisions. The

Supervisory Board in particular makes recommendations on the Company's

strategy and controls the work of the Management Board in achieving strategic

goals and monitors the achieved results.

The Members of the Management Board are appointed by the Supervisory Board

and the

Members of the Supervisory Board are elected by the Company's General Meeting

of shareholders. (Article of Association, point IV).

Amendments to the Articles of Association

Amendments to the Articles of Association require a resolution of the General

Meeting . The notice convening a General Meeting whose agenda includes

amendments to the Articles of Association should contain existing provisions of

the Articles of Association and the proposed amendments. Where justified by a

significant scope of the intended amendments, the notice may include a draft of

18

a new text of the Articles of Association together with a list of its new or amended

provisions.

The text of the Articles of Association is available on the Company's website at:

http://www.ifsa.pl/statut.php

Proceedings of the General Meetings and its powers

The General Meetings of the Company are held in accordance with the rules

set out in the Commercial Code, the Articles of Association of Investment Friends

SE and the applicable capital market laws.

Composition of the Management Board and description of the

activities of the Investment Friends SE Management and Supervisory

body

in 2023/2024

Management Board:

Agnieszka Gujgo

Supervisory Board

Wojciech Hetkowski

Jacek Koralewski

Małgorzata Patrowicz

Anna Kajkowska

The main task of the Management Board is to manage the Company's activities

and represent it, but is also responsible for planning, implementing, and ensuring

adequate and effective actions aimed at achieving the goal. The Supervisory

Board exercises permanent supervision over the Company's activities in all areas

of its operations. The main duties of Supervisory Board members also include

appointing, dismissing, and suspending members of the Company's Management

Board, delegating members of the Supervisory Board to perform tasks in replace

the members of the Management board. Due to the simple structure of the

Company, there are no problems with communicating information in a timely

manner between the Management Board and the Supervisory Board.

Description of the Company’s internal control systems and risk

management with regard to the process of preparing financial statements.

Due to the simplified structure and relatively limited number of financial risks,

the Company's Management Board has not developed and implemented a written

procedure for the internal control and risk management system in the

preparation of financial statements, however the Company approaches financial

reporting with the greatest care.

19

The Management Board of the Company is responsible for the internal control

system in the Company and its effectiveness in terms of the correctness of

preparing financial statements and periodical reports. Financial statements and

periodic reports are prepared based on financial data from the financial and

accounting system, where they are recorded in accordance with the principles of

the adopted accounting policy in accordance with the Accounting Act. The audit

of the correctness of the preparation of periodic financial statements is

conducted thanks to the annual financial audits carried out by independent

auditors. In the reporting period, the financial report was prepared by the

Management Board of the Company and consulted with a professional entity - the

Galex Law Firm, which provides consulting services on a contractual basis. Üsing

the consulting services of the specialized Law Firm, the Management Board is

able to conduct an analysis of the formal correctness of the submitted documents,

prepare mandatory financial reports, including quarterly, half-yearly and annual

financial reports.

20

VI. REMUNERATION REPORT

This remuneration report has been prepared in accordance with the

remuneration principles for the Company’s Management Board member.

The Management Board of the Company consists of one board member. Mrs.

Agnieszka Gujgo was initially appointed by the Supervisory Board to serve on the

Board of Directors on 18/06/2018 for a three-year term. Subsequently, the term

was extended by resolution of the Supervisory Board. The current term of office

runs until 18/06/2027.

Management Board Members are selected by the Supervisory Board of the

Company based on their expertise in the sector the Company is operating,

A member of the Management Board does not receive a remuneration. Members

of the Company's Supervisory Board also do not receive remuneration. Members

of the Management Board and Supervisory Board are not granted remuneration

in the form of financial instruments.

Investment Friends SE is not a member of a capital group, therefore it is not

required to report remuneration received from the entitites belonging to the

same capital group.

21

VII. FINANCIAL STATEMENTS

1. STATEMENT OF FINANCIAL POSITION

SSTATEMENT OF FINANCIAL POSITION

Note

30 June 2024

(in thous. EUR)

30 June 2023

(in thous. EUR)

A s s e t s

Current assets

2

1 476

1 469

Short-term receivables

4

1 452

1 432

Cash and cash equivalents

5

22

35

Short-term accruals

2

2

T o t a l A s s e t s

1 476

1 469

L i a b i l i t i e s

Equity

1 422

1 418

Share capital

6

6 885

405

Differences from conversion to EÜRO

110

108

Share premium

161

6 435

Reserves

0

206

Retained earnings / Ündistributed profit (loss)

-5 734

-5 736

II. Short-term liabilities

54

51

Trade payables

1

1

Provisions

53

50

T o t a l e q u i t y a n d l i a b i l i t i e s

1 476

1 469

Book value of equity

7

1 422

1 418

Number of shares, authorised and fully paid

7

68 850 000

4 050 000

Book value pershare (in EUR)

7

0,02

0,35

Diluted number of shares (in pcs)

7

68 850 000

4 050 000

Diluted book value per share (in EUR)

7

0,02

0,35

The annual financial statements notes on pages 26-51 are an integral part of the annual

financial statements.

22

2. STATEMENT OF PROFIT OR LOSS

STATEMENT OF PROFIT OR LOSS

Note

Period ended on

30/06/2024

(in thous. EUR)

Period ended on

30/06/2023

(in thous. EUR)

Net interest income

8

35

87

Gross profit (loss) on sales

35

87

General and administrative costs

35

16

Other operating revenues

4

0

Profit (loss) from operational activity

4

71

Financial revenues

0

6

Financial costs

2

0

Profit (loss) before tax

2

77

Net profit (loss)

2

77

Weighted average number of ordinary shares

32 466 575,00

4 122 740,00

Profit (loss) per ordinary share (in EURO)

0,00

0,02

Diluted weighted average number of ordi-

nary shares (in units)

32 466 575,00

4 122 740,00

Diluted profit (loss) per one share (in EUR)

0,00

0,02

The annual financial statements notes on pages 26-51 are an integral part of the annual

financial statements.

3. STATEMENT OF OTHER COMPREHENSIVE INCOME

STATEMENT OF OTHER COMPRE-

HENSIVE

INCOME

Period ended on

30/06/2024

(in thous. EUR)

Period ended on 31/06/2023

(in thous. EUR)

Net profit (loss) for the period

2

77

Other comprehensive income (loss), in-

cluding:

2

284

- differences from conversion to EÜRO - will

not be reclassified to the income statement

2

284

Total other comprehensive income (loss)

for the period

4

361

The annual financial statements notes on pages 26-51 are an integral part of the annual

financial statements.

23

4.STATEMENT OF CHANGES IN EQÜITY

STATEMENT OF CHANGES IN EQUITY

Note

Period ended on

30/06/2024

(in thous. EUR)

Period ended on

30/06/2023

(in thous. EUR)

Opening balance of equity (OB)

1 418

2 618

Opening balance of share capital

6

405

8 100

Changes in share capital

6

6 480

-7 695

a) increases (due tos) – reduction the

nominal value of the shares

6

6 480

0

b) decreases (due to) - reduction of

the nominal value of the shares

0

-7 695

Closing balance of share capital

6

6 885

405

Supplementary capital at the beginning of

the period

6 435

301

Changes in supplementary capital

6 274

6 134

a) increases (due to) the result of the

nominal value of shares

0

7 695

b) decreases (due to) decrease in the

nominal value of shares

-6 274

-1 561

Supplementary capital at the end of the

period

161

6 435

Other reserves at the beginning of the pe-

riod

206

206

Changes in other capital reserves

206

0

a) increases (due to) decrease in

share capital

0

0

b) Decreases (due to) increase in

share capital

206

0

Other reserve capital at the end of the pe-

riod

0

206

Retained earnings

-5 728

-5 813

increase (due to)

2

77

(a) profit/loss for the period

2

77

decrease (due to)

0

0

b) coverage of loss from supple-

mentary capital

0

0

Retained earnings

-5 734

-5 736

Foreign exchange differences at the begin-

ning of the period

108

-176

Changes in exchange rate differences

2

284

increases

2

284

decreases

0

0

Exchange rate differences at the end of

the period

110

108

Closing balance at the end of the period

1 422

1 418

The annual financial statements notes on pages 26-51 are an integral part of the annual

financial statements

24

5.CASH FLOW STATEMENT

CASH FLOW STATEMENT

(indirect method)

Note

Period ended on

30/06/2024

(in EUR thousands)

Period ended

on 30/06/2023

(in EUR thousands)

Operating activities

A.I. Gross profit (loss)

2

77

A.II. Adjustments total

-16

-56

Difference between accrued and received in-

terest

9

-18

33

Loans granted

0

-1250

Received loan repayments

0

1161

Change in reserves

3

2

Change in receivables and accruals

-1

0

Change in liabilities

0

-2

A.III. Net cash flow from operating activities

-14

21

B. Exchange differences

1

-1

Net cash flow, total (A.III+/-B)

-13

20

Balance change in cash

-13

20

Cash at the beggining of the period

35

15

Cash at the end of the period

22

35

The annual financial statements notes on pages 26-51 are an integral part of the annual

financial statements.

25

Notes to the financial statements

Note 1.

Accounting policy

1.1 General information

Investment Friends SE (hereinafter referred to as the “Company” or “Investment

Friends ”), a Company based on Polish capital, operates in Estonia and Poland.

The financial statements of the Company for 2023/2024 were signed by the member

of Management Board of Investment Friends SE on 8/11/2024.

In accordance with the requirements of the Commercial Code of the Republic of

Estonia, the annual report prepared by the Management Board and approved by

the Supervisory Board, which also includes the financial statements, is approved by

the General Meeting of Shareholders. Shareholders have the right not to approve

the annual report prepared by the Management Board and approved by the

Supervisory Board and to request that a new report is prepared.

1.2. Basis of preparation of financial statements

The Company’s 2022/2023 annual financial statements have been prepared in

conformity of International Financial Reporting Standards as endorsed in the

European Ünion (“IFRS (EÜ)”). The Company has consistently applied the

accounting policies throughout all periods presented, unless stated otherwise.

The annual financial statements for 2023/2024 have been prepared on a going

concern basis.

The preparation of annual financial statements in conformity with IFRS (EÜ) requires

the use of certain critical accounting estimates.

It also requires management to exercise its judgment in the process of applying the

Company’s accounting policies. Changes in assumptions may have a significant

impact on the financial statements in the period the assumptions changed. The

management of the Company believes the underlying assumptions in the

preparation of annual financial statements for 2023/2024 are appropriate. These

annual financial statements consist of statements of financial position, statement of

profit or loss, statement of comprehensive income, statement of changes in equity,

statement of cash flows, and explanatory notes.

The annual financial statements are presented in euros and all values are rounded

to the nearest thousand (€000), except when otherwise indicated. The original annual

financial statements of the Company have been prepared is English. In case of the

conflict with Polish or Estonian translation, the English version shall prevail.

1.3. Functional and reporting currency

The functional currency of the Company is Polish zloty (PLN) and reporting

(presentational) currency is euro (EÜR).

26

Balance sheet items are calculated according to the exchange rate announced by

the European Central Bank as at the balance sheet day.

Items in the statement of profit or loss and in the cash flow statement are

converted at the exchange rate being the arithmetic average exchange rates

announced by the European Central Bank for the financial year.

1.4. Accounting policies, changes in accounting estimates and errors (IAS 8)

When an IFRS (EÜ) specifically applies to a transaction, other event, or condition,

the accounting policy or policies applied to that item shall be determined by

applying the IFRS (EÜ). In the absence of an IFRS (EÜ) that specifically applies to

a transaction, other event or condition, management shall use its judgement in

developing and applying an accounting policy that results in information that is

relevant to the economic decision-making needs of users and reliable.

The Company selects and applies its accounting policies consistently for similar

transactions, other events, and conditions, unless an IFRS (EÜ) specifically

requires or permits categorization of items for which different policies may be

appropriate. If an IFRS (EÜ) requires or permits such categorization, an

appropriate accounting policy shall be selected and applied consistently to each

category.

The Company changes an accounting policy only if the change is required by IFRS

(EÜ) or results in the financial statements providing reliable and more relevant

information about the effects of transactions, other events, or conditions on the

entity’s financial position, financial performance, or cash flows. When a change

in accounting policy is applied retrospectively the Company adjusts the opening

balance of each affected component of equity for the earliest prior period

presented and the other comparative amounts disclosed for each prior period

presented as if the new accounting policy had always been applied.

The effect of a change in an accounting estimate shall be recognized prospectively

by including it in profit or loss in the period of the change, if the change affect that

period only or the period of the change and future periods, if the change affects

both. The Company corrects material prior period errors retrospectively in the

first set of financial statements authorized for issue at their discovery by restating

the comparative amounts for the prior period(s) presented in which the error

occurred; or if the error occurred before the earliest prior period presented,

restating the opening balances of assets, liabilities and equity for the earliest

prior period presented.

27

1.5. Impact of new and revised standards and interpretations

The accounting policies used in the preparation of these financial statements are

the same as those used by the Company in its financial statements for the year

ended June 30, 2023, except as described below.

Üpdated standards effective for annual reporting periods beginning on or after

January 1, 2024.

Certain new or revised standards and issued interpretations that are effective for

the Company's annual reporting periods beginning on or after January 1, 2024

and that were not adopted by the Company prior to their effective date.

Amendments to IAS 1 Presentation of Financial Statements (Classification of

liabilities as current or non-current) – the amendments aim to ensure

consistency in the application of the requirements by helping companies

determine whether liabilities and other obligations with an uncertain settlement

date should be classified as current (to be settled within 12 months) or non-

current. The

amendments clarify what is meant by a right to defer settlement; that the right to

defer must exist at the end of the reporting period; this classification is not

affected by the probability that the entity will exercise the right to defer

repayment; and that only if the derivative embedded in the convertible liability is

itself an equity instrument will the terms of the liability not affect its

classification.

Valid for annual reporting periods beginning on or after 1 January 2023. The EÜ

has approved the changes.

The Company does not expect the amendments to have a material impact on its

financial statements upon initial adoption.

Amendments to IAS 7 "Statement of Cash Flows" - the amendments aim to

disclose information about suppliers' financing mechanisms that enable users of

financial statements to evaluate the effect of these mechanisms on the entity's

liabilities and cash flows and on its exposure to liquidity risk.

Valid for annual reporting periods beginning on or after 1 January 2024. The EÜ

has approved the changes.

The Company does not expect the amendments to have a material impact on its

financial statements upon initial adoption.

Amendments to IFRS 7 Financial Instruments – Disclosures (Supplier Financing

Arrangements) – the amendments are intended to draw attention to other factors

that an entity may consider when making disclosures, which include, but are not

limited to, whether the entity:

• has committed sources of financing (e.g. in the form of corporate

bonds) or other financing means (e.g. available credit lines) that it can use to meet

liquidity needs;

•

•

holds deposits with central banks to meet liquidity needs;

has well-diversified sources of funding;

28

• is exposed to significant concentrations of liquidity risk related to its

assets or funding sources;

• has internal control processes and contingency plans for managing

liquidity risk;

• has instruments that contain contingent accelerated repayment

provisions (e.g. in the event of a deterioration in the entity's credit rating);

• has instruments that could require the posting of collateral (e.g. margin

calls in the case of derivatives);

• has instruments with an option to settle the financial obligation by

delivering cash (or another financial asset) or by delivering its own shares;

• has instruments that provide for settlement by way of set-off or has

used or has access to facilities under supplier financing arrangements that provide

the entity with deferred payment terms or the entity's suppliers with early payment

terms.

Valid for annual reporting periods beginning on or after 1 January 2024. The EÜ has

approved the changes.

The Company does not expect the amendments to have a material impact on its

financial statements upon initial adoption.

1.6. Financial assets (IFRS 9, IAS 32)

Classification

The Company classifies financial assets into the following measurement categories:

− those at fair value (either through other comprehensive income or

through profit or loss);

− those carried at amortised cost.

The classification depends on the Company's business model for managing its

financial assets and the contractual terms of the cash flows.

Registration and derecognition

Purchases and sales of financial assets under normal market conditions are recognized

on the trade date, the date on which the Company commits to purchase or sell the

asset. Financial assets are derecognised when the rights to receive cash flows from

the asset have expired or have been transferred and the Company has transferred

substantially all risks and rewards of ownership.

29

Measurement

Financial assets (unless they are receivables from a buyer that does not have a

significant financing component and are initially measured at transaction price)

are initially measured at fair value and in the case of assets do not measure at fair

value through profit or loss, related acquisition costs of assets are added to the

initial value.

Debt instruments

Subsequent recognition of debt instruments depends on the Company's business

model for managing its financial assets and the contractual cash flows of the

financial assets.

Assets held for the purpose of collecting contractual cash flows that have only

cash flows and interest payable are recognised at amortised cost using the

effective interest rate method. Impairment losses are deducted from the adjusted

acquisition cost. Interest income, foreign exchange gains and losses and

impairment losses are recognised in the income statement.

Gains or losses on derecognition are recognised in the income statement under

“Other operating income / expense”.

As of 30 June 2023, and 30 June 2024 and during 2023/2024, financial assets of

the Company were classified as at amortised cost.

Impairment of financial assets

The impairment loss model is applied to financial assets at amortized cost.

Financial assets carried at amortized cost consist of loan receivables, other

receivables, cash, and cash equivalents.

Expected credit losses are probability-weighted estimated credit losses. Credit

loss is the difference between the contractual cash flows of the Company and the

expected cash flows of the Company, discounted at the original effective interest

rate.

Measurement of expected credit loss takes into account: (i) an unbiased and

probabilistic amount that estimates several different outcomes, (ii) the time

value of money and (iii) reasonable and reasonable information available at the

end of the reporting period conditions and forecasts of future economic

conditions.

30

The Company measures impairment as follows:

− cash and cash equivalents at low credit risk (senior management consid-

ers a low credit risk assessment of at least one of the major credit rating

agencies) to be equivalent to expected credit losses within 12 months;

− for all other financial assets, the amount of credit losses expected to be

incurred over a 12-month period, unless the credit risk (i.e., the expected

life of the financial asset in default) has increased significantly after initial

recognition; if the risk is significantly increased, the credit loss is meas-

ured at an amount equal to the expected credit loss over a lifetime.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. Loans and

receivables are initially recognised at their fair value plus transaction costs. After

initial recognition, loans and receivables are carried at amortised cost using the

effective interest rate method. This method is used to calculate interest income

on the receivable in subsequent periods. Financial assets are adjusted for

impairment losses.

Impairment is based on expected credit loss. The principle of expected credit loss

is to show the overall trend in the deterioration or improvement in the credit

quality of a financial asset. Impairment losses on financial assets classified at

amortised cost are recognised as a provision for impairment.

Expected credit losses are probability-weighted estimated credit losses that, at

the reporting date, consider all relevant information, including information about

past events, current conditions, reasonable and reasonable future events, and

forecasts of economic conditions. At the end of each reporting period, the

Company conducts a review to determine whether there has been a material

increase in risk compared to the last estimate. Indicators of increased credit risk

include, but are not limited to, overdue payments over 30 days, significant

financial difficulties of the debtor, possible bankruptcy or restructuring of the

debtor. Impairment charges are recognised in the income statement under “Other

operating costs”. If receivables are uncollectible, they are written off together

with a provision for impairment.

Receivables are generally recognised as current assets when they are due to be

settled within 12 months after the balance sheet date. Receivables that are due

later than 12 months after the balance sheet date are recognised as non-current

assets. Financial assets that do not include SPPI (Solely Payment of Principal and

Interest) cash flows are recognised at fair value through Information on financial

instruments profit or loss.

Impairment of Credits and Loans

31

The Company’s impairment estimation is based on the "Expected Credit Loss"

(ECL) concept. Consequently, the Company determines impairment allowances

based on expected credit losses, considering future economic conditions in

assessing the credit risk of a given exposure.

The methodology and assumptions used to estimate the impairment of credit

exposures are regularly monitored to reduce discrepancies between estimated

and actual losses. To assess the adequacy of impairment allowances established

through both individual and collective analysis, a periodic historical review

(backtesting) is conducted, no less than annually, and results are used to define

actions aimed at improving the process quality.

The implemented impairment model applies to financial assets classified under

IFRS 9 as financial assets measured at amortized cost or at fair value through

other comprehensive income. According to IFRS 9, credit exposures are

categorized as follows:

Stage 1 – non impaired exposures where the expected credit loss is

estimated over a 12-month period.

Stage 1 – non impaired exposured identified with a significant increase in

credit risk, where the expected credit loss is calculated over the entire

lifetime of the financial asset.

Stage 3 – exposures with identified impairment indicators for which the

expected credit loss is calculated over the entire lifetime of the financial

asset.

Measurement of Expected Credit Loss

Since the implementation of IFRS 9 in 2018, the Company's impairment

estimation has relied on the Expected Credit Loss (ECL) model. This approach

necessitates the calculation of impairment allowances based on expected credit

losses and incorporates projections of future economic conditions when

assessing the credit risk of each exposure. The impairment model applies to

financial assets classified under IFRS 9 as financial assets measured at amortized

cost or at fair value through other comprehensive income. According to IFRS 9,

credit exposures are classified as follows:

Stage 1 – non-impaired exposures where the expected credit loss is

estimated over a 12-month horizon

Stage 2 - non-impaired exposures with a significant increase in credit risk

(SICR), where the expected credit loss is estimated over a lifetime

horizon, i.e., until the exposure's maturity.

Stage 3 – impaired exposures there the expected credit loss is estimated

over a lifetime horizon (until the financial asset is fully recovered)

In accordance with IFRS 9, the Company has adopted the definition of default,

both for expected credit losses and for impairment assessment, which includes

the following criteria:

32

▪ a delay in payment exceeding 90 days from the due date of the receivable.

Üpon repayment of a financial asset previously classified as in default, the

Company reclassifies the relevant financial assets as not impaired.

Information on financial instruments

As at 30/06/ 2024

Classes of financial instruments

Amortised cost

Total

Financial assets total

1 476

1 476

Loans granted

1 451

1 451

- including interest

75

75

Cash and cash equivalents

22

22

Short-term accruals

2

2

Total financial liabilities

54

54

Trade and other liabilities

1

1

Short-term reserves

53

53

As at 30/06/ 2023

Classes of financial instruments

Amortised cost

Total

Financial assets total

1 469

1 469

Loans granted

1 432

1 432

-including interest

55

55

Cash and cash equivalents

35

35

Other receivables

2

2

Professional judgment

If a given transaction is not regulated by any standard or interpretation, the

Management Board, guided by its subjective judgment, determines, and applies

accounting policies which will ensure that the financial statements will contain

correct and reliable information and :

− correctly, clearly, and fairly present the assets and financial situation of

the Company, the results of its activities and cash flows,

− reflect the economic content of the transaction,

− are objective,

− is prepared in accordance with the principle of prudent valuation,

33

− is complete in all material respects.

When valuating the loans, the debtor's solvency is taken into account. We take

into account the risk of non-repayment. If there is no risk of repayment, we value

the loans at their nominal value. There are conducted proper analysis.

The Management Board makes decisions considering all the potential

consequences of its decisions. Hence, the decision-making process is based on

multi-stage analysis of, inter alia, borrowers' collaterals.

Uncertainty of estimates

When applying the accounting principles in force in the Company, the

Management Board is obliged to make estimates, judgments, and assumptions

regarding the amounts of valuation of individual assets and liabilities. The

estimates and related assumptions are based on historical experience and other

factors considered relevant. The actual results may differ from the adopted

estimated values. The preparation of the financial statements requires the

Management Board of the Company to make estimates, as much of the

information contained in the financial statements cannot be measured precisely.

The Management Board verifies the adopted estimates based on changes in the

factors considered when making them, new information or past experiences.

Therefore, the estimates made as of June 30, 2024 may be changed in the future.

In the report for 2023/2024, the Management Board assesses that there are no

other significant areas with regard to which there is a risk related to uncertainty

of estimates.

Areas where the disclosure of information may be necessary depending on

specific facts and circumstances:

• recognition and measurement of provisions, if there is uncertainty regarding

the outcome of legal proceeding - as of the balance sheet date, the Company is not

involved in any ongoing legal proceedings; therefore, it does not recognize or

measure any provisions in this regard.

• recognition and measurement of liabilities related to uncertain tax positions -

as of the balance sheet date, the Company does not have any uncertain tax

positions, therefore, it does not recognize or measure liabilities related to such

positions.

• measurement of liabilities for long-term employee benefits - as of the balance

sheet date, the Company does not employ any personnel; therefore, there is no

need to measure liabilities related to any employee benefits.

These and other matters are subject to the disclosure requirements outlined in

IAS 1 only when there is a significant risk of material adjustments to the carrying

amounts of assets and liabilities in the next reporting period.

34

1.7. Cash and cash equivalents, cash flows (IAS 7)

Cash and cash equivalents are cash at bank and on hand, short-term extremely

high liquidity investments (up to three months) that are readily convertible into

a known amount of cash and which are subject to an insignificant risk of changes

in value.

The statement of cash flows reports cash flows during the period classified by

operating, investing, and financing activities. The Company reports cash flows

from operating activities using the indirect method whereby net profit or loss is

adjusted for the effects of transactions of a non-cash nature, any deferrals, or

accruals of past or future operating cash receipts or payments, and items of

income or expense associated with investing or financing cash flows.

1.8. Share Capital (IAS 1)

Ordinary shares are included within equity. The expenditures related to the issue

of ordinary shares are recognised as a reduction of equity. Treasury shares

repurchased by the parent Company are recognised as a reduction of equity (in

the line item “Treasury shares”). Disbursements and contributions related to

treasury shares are recognised in equity.

1.9. Capital from sales of shares above their nominal value (IAS 1)

The differences between the fair value of the payment received and the nominal

value of shares are recognized in the share premium. In the event of buyout of

shares, the amount paid for the shares is charged to equity and is disclosed in the

statement of financial position under equity.

The costs of issuing shares, incurred when establishing a joint-stock Company or

increasing the share capital, reduce the entity's supplementary capital to the

amount of the excess of the issue value over the par value of the shares, and the

remaining part is classified as financial costs.

1.10. Statutory reserve capital (IAS 1)

Reserve capital is formed to comply with the requirements of the Commercial

Code of the Republic of Estonia. During each financial year, at least 5% of the net

profit shall be transferred to reserve capital until reserve capital reaches one-

tenth of share capital. Reserve capital may be used to cover a loss or to increase

share capital. Payments shall not be made to shareholders from reserve capital.

In the statement of financial position statutory reserve is recognised in other

reserves.

1.11. Earnings per share (IAS 33)

Basic earnings per share is calculated by dividing the profit for the year

attributable to ordinary equity holders of the Company by the weighted average

35

number of shares outstanding during the year. Diluted earnings per share is

calculated by dividing the profit attributable to equity holders of the Company

(after adjusting for interest on the convertible preference shares) by the weighted

average number of shares outstanding during the year plus the weighted average

number of shares that would be issued on conversion of all the dilutive potential

shares into shares.

1.12. Financial liabilities (IFRS 9, IAS 32)

All financial liabilities (trade payables, other short and long-term liabilities,

borrowings, etc.) are initially recognised at their fair value, less any transaction

costs. They are subsequently recognised at amortised cost, using the effective

interest rate method.

The amortised cost of the current financial liabilities generally equals their

nominal value; therefore, current financial liabilities are stated in the statement

of financial position at redemption value. To calculate the amortised cost of non-

current financial liabilities, they are initially recognised at fair value of the

proceeds received (net of transaction costs incurred) and an interest expense is

calculated on the liability in subsequent periods using the effective interest rate

method.

A financial liability is classified as current when it is due to be settled within 12

months after the balance sheet date or the Company does not have an

unconditional right to defer settlement of the liability for at least 12 months after

the balance sheet date. Interest-bearing liabilities that are due within 12 months

after the balance sheet date, but which are refinanced after the balance sheet date

as long-term, are recognised as short-term interest-bearing liabilities. Also,

borrowings are classified as short-term if the lender had at the balance sheet date

the contractual right to demand immediate payment of the borrowing due to the

breach of conditions set forth in the agreement.

1.13. Provisions and contingent liabilities (IAS 37)

Provisions are recognized when the Company has a present obligation (legal or

constructive) because of a past event it is probable that the Company will be

required to settle the obligation, and a reliable estimate can be made of the

amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration

required to settle the present obligation at the end of the reporting period,

considering the risks and uncertainties surrounding the obligation. When a

provision is measured using the cash flows estimated to settle the present

36

obligation, its carrying amount is the present value of those cash flows (when the

effect of the time value of money is material).

When some or all the economic benefits required to settle a provision are

expected to be recovered from a third party, a receivable is recognized as an asset

if it is virtually certain that reimbursement will be received.

Contingent liabilities are those liabilities the realization of which is less probable

than non-realization or the amount of which cannot be measured sufficiently

reliably. The Company does not recognize contingent liabilities but discloses brief

description of the nature of the contingent liability and, where practicable an

estimate of its financial effect; an indication of the uncertainties relating to the

amount or timing of any outflow; and the possibility of any reimbursement unless

the possibility of any outflow in settlement is remote.

1.14. Revenue recognition (IFRS 15)

Interest income

Interest income is recognized when it is probable that the economic benefits

associated with the transaction will flow to the Company and the amount of the

revenue can be measured reliably. Interest income is recognized on an accrual

basis.

Interest income includes interest related to financial instruments measured at

amortized cost and financial assets measured at fair value through other

comprehensive income using the effective interest rate method. The effective

interest rate method is a way of calculating the amortized cost of a financial asset

or liability and allocating interest income or expense and certain fees (that are an

integral part of the effective interest rate) to the appropriate period. The effective

interest rate is the rate that exactly discounts estimated future cash flows (over

the life of the financial instrument) to the gross carrying amount of the

asset/amortized cost of the liability. In calculating the effective interest rate, the

Company estimates cash flows considering all contractual terms of the financial

instrument, but does not take into account any potential future losses from

defaulted loans. This calculation includes all fees paid or received between the

parties to the agreement that are integral to the effective interest rate.

Interest income includes interest and fees (received or due) recognized in the

effective interest rate calculation for loans and advances. Üpon recognizing the

impairment of a financial instrument measured at amortized cost and those

measured at fair value through other comprehensive income, interest income is

recognized in the income statement but is calculated based on the newly

37

determined carrying amount of the financial instrument (i.e., the amount reduced

by the impairment allowance).

1.15.Operating segments (IFRS 15, IFRS 8)

A segment is a distinguishable component of the Company, which generates

revenues and incurs expenditures. The segment reporting is presented in respect

of operating and geographical segments. The Company operates in only one

business area, therefore the segment reporting is not relevant.

1.16. Income tax (IAS 12)

Corporate income tax in EstoniaAccording to the Income Tax Act entered into

force in Estonia on 1 January 2000, it is not the company's profits that are taxed

but net dividends paid. Income tax is paid on dividends, fringe benefits, gifts,

donations, costs of reception of guests, non-business payments and transfer price

adjustments. The effective income tax rate is 20/80 on net dividends paid out.

Starting from 2019, it is possible to apply a more favourable tax rate on dividend

payments (14/86). The more favourable tax rate can be applied to a dividend

distribution that amounts to up to three preceding years’ average dividend

distribution that has been taxed at 20/80 rate.

1.17. Related parties (IAS 24)

A related party is a person or entity that is related to the entity that is preparing

its financial statements. A related party transaction is a transfer of resources,

services, or obligations between a reporting entity and a related party, regardless

of whether a price is charged. Such transactions could have an effect on the profit

or loss and financial position of the Company. For this reason, knowledge of the

Company’s transactions, outstanding balances, including commitments, and

relationships with related parties may affect assessments of its operations by

users of financial statements, including assessments of the risks and

opportunities facing the Company.

The Company discloses the related party relationship when control exists,

irrespective of whether there have been transactions between the related parties.

The Company considers key members of the management (Supervisory and

Management Board), their close relatives and entities under their control or

significant influence as well as associated companies as related parties.

1.18. Events after the reporting period (IAS 10)

Events after the reporting period are those events, favourable and unfavourable,

that occur between the end of the reporting period and the date when the

financial statements are authorized for issue. Events after the reporting period

38

are those that provide evidence of conditions that existed at the end of the

reporting period (adjusting events after the reporting period) and those that are

indicative of conditions that arose after the reporting period (non-adjusting

events after the reporting period).

Note 2.

Description of significant factors of risks and threats

The main types of risk arising from the Company's financial instruments include

interest rate risk, liquidity risk, credit risk. The Management Board is responsible

for establishing the risk management rules and supervision. The principles of

risk management aim to identify and analyse the risks that the Company is

exposed to, by establishing appropriate limits and controls.

Interest rate risk

When determining the loan terms for each borrower, the Company individually

negotiates the contract interest rate. The interest rates below are contracted

rates.

At the balance sheet date, the interest rate structure of the Company’s interest-

bearing financial instruments was as follows:

The Company has no liabilities related to received loans.

As at 30/06/2023 the interest rate structure of the Company’s financial

instruments was as follows:

The Company has no liabilities related to received loans.

39

Interest rate

Fixed/variable

interest rate

Damar Patro ÜÜ

2,5%

Fixed

Patro Invest sp. z o.o. w likwidacji

24,5%

Fixed

Interest rate

Fixed/variable

interest rate

Damar Patro ÜÜ

2,5%

Fixed

Patro Administracja Sp. z o.o.

5%

Fixed

Patro Invest sp. z o.o. w likwidacji

24,5%

Fixed

Credit risk

a) Credit Risk Assessment – credit risk refers to the potential loss that may occur

if a counterparty in a transaction fails to meet its contractual obligations, resul-

ting in the inability to provide expected cash flows. The Company's credit risk is

primarily associated with loans granted by the Company, cash and cash equiva-

lents, and deposits. The scope of the Company’s credit risk is largely influenced

by specific circumstances. Additionally, the Company’s Management considers

general factors such as the legal status of the client (private or public entity), the

client’s geographical location, industry sector, current economic conditions, and

future economic forecasts. To mitigate credit risk, the payment discipline of cu-

stomers and their ability to meet obligations should be monitored on a daily ba-

sis.

(b) Credit quality of financial assets – The Company applies a simplified approach

to measuring expected credit loss under IFRS 9, using lifetime expected credit

losses.Historical loss rates are adjusted to account for current and forward-loo-

king information on macroeconomic factors that may affect the ability of custo-

mers to settle their receivables. Based on the principles outlined above, the im-

pact of impairment losses on the Company's cash flows was insignificant.

The Company is exposed to risks arising from fluctuations in exchange rates,

which is why a sensitivity analysis of exchange rate changes and their impact on

net profit and equity has been added. However, the Company is not exposed to

risk arising from changes in interest rates, as it has not granted or received any

loans with variable interest rates.

Information regarding financial assets, along with a descpription of the collateral

held, has been discloded in note 4.

Liquidity risk

Liquidity risk management process bases on monitoring estimated cash-flows,

and adjusting final maturity of assets and liabilities, analysing working capital

and maintaining an access to alternate sources of funding. The aim of the

Company is to maintain the balance between funding continuity and flexibility,

through using sources of funding such as loan overdraft facility.

Maturity dates of liabilities as of 30/06/2024

40

30/06/2024

in thous. EÜR

Total

Repayment date

< 1 year

1-2 years

2-3

years

over 3

years

Trade liabilities

1

1

0

0

0

Other liabilities

0

0

0

0

0

Other obligations

53

53

0

0

0

Total

54

54

0

0

0

Maturity dates of liabilities as of 30/06/2023

Current financial liquidity ratio as of 30/06/2023 indicates that for every one

eur of short-term liabilities there were EÜR 28,80 of current assets, meanwhile,

as of 30/06/2024 EÜR 27,33. It should be noted that this is a positive outcome,

as the ratio does not fall within the optimal range in both examined years and its

level for the financial year 2022/2023 may indicate excess liquidity.

The maturity dates of assets as at 30/06/2024

30/06/2024

in thous. EÜR

Total

Repayment date

< 1 year

1-2 years

2-3

years

over 3

years

Cash

22

22

0

0

0

Loans granted

1 451

1 451

0

0

0

-including interest

75

75

0

0

0

Other receivables

2

2

0

0

0

Total

1 475

1 475

0

0

0

The maturity dates of assets as at 30/06/2023

30/06/2023

in thous. EÜR

Total

Repayment date

< 1 year

1-2 years

2-3 years

over 3

years

Cash

35

35

0

0

0

Loans granted

1 432

1 432

0

0

0

-including interest

55

55

0

0

0

Other receivables

2

2

0

0

0

Total

1 469

1 469

0

0

0

The entities that the Company provides financing to are related parties; therefore,

therethe Company does not have a control policy. The related parties have

received loans for investments in the stock market or for granting further loans.

The Company is exposed to credit risk concentration. Currently, the Company has

two significant borrowers. The Company continuously monitors the entities it

finances. Management assesses the likelihood of a borrower's insolvency at its

41

30/06/2023

in thous. EÜR

Total

Repayment date

< 1 year

1-2 years

2-3

years

over 3

years

Trade liabilities

1

1

0

0

0

Other liabilities

0

0

0

0

0

Other obligations

50

50

0

0

0

Total

51

51

0

0

0

discretion. Management considers the possibility of borrower insolvency based

on its own assessment.

Risk of shares price’s fluctuations and limited liquidity

Immanent feature of market trading is the shares’ price fluctuations and short-

term fluctuations of turnover. It might result in sale or purchase of the qualifying

holding of the Company’s shares will relate to a necessity to accept significantly

less favourable price than the reference price. The Company cannot also exclude

significant, temporary limitations of liquidity which may significantly hamper

sales or purchase of the Company’s shares.

Currency risk

Liquidity risk management process bases on monitoring estimated cash-flows,

and adjusting final maturity of assets and liabilities, analysing working capital

and maintaining an access to different sources of funding. The aim of the

Company is to maintain the balance between funding continuity and flexibility,

through using loans.

Due to the stable exchange rate of euro to zloty, the financial assets and liabilities

denominated in these currencies were not subject to significant risk. The

euro/zloty exchange rate is characterized by a low level of volatility.

To illustrate the currency risk arising from fluctuations in exchange rates, the

Company conducted a sensitivity analysis:

Change in

exchange rate

Exchange rate

after the change

Interest

EÜR’000

Impact on

gross

result

EÜR’000

Impact on

net result

EÜR’000

Impact on

equity

EÜR’000

+ 10%

4,8115

35

4

4

4

+ 5%

4,5928

35

3

3

3

- 5%

4,1554

35

-2

-2

-2

- 10%

3,9367

35

-4

-4

-4

Risk related to related parties

There are interpretations indicating the possibility of emerging risks consisting

in the negative impact of links between members of the Company’s bodies on

their decisions. This applies to the impact of these links on the Company’s

Supervisory Board regarding the day-to- day supervision of the Company’s

operations. While assessing the probability of such a risk, one should consider

the fact that the supervisory bodies are subject to the control of another body –

the General Meeting, and in the interest of the members of the Supervisory Board

it is to perform their duties in a reliable and lawful manner.

42

Risk related to the shareholding structure

As at the balance sheet date 63,85% of the share capital and 43 961 150 votes at

the Company’s General Meeting belong directly to Patro Invest OÜ, as a result of

which the above Shareholder has a significant impact on the resolutions adopted

at the Company’s General Meeting.

Risk related to the economic situation in Poland and Estonia

The economic situation in Poland has a significant impact on the financial results

achieved by all entities including the Company itself, because the success of

development of companies investing in financial instruments and conducting

financial services largely depends on the conditions of running a business.

Risk related to the armed conflict in Ukraine

Due to the ongoing armed conflict in Ükraine, the Company’s operations are

moderately exposed to the consequences of the war. As at the date of publication

of the report, the Company does not anticipate extending the conflict beyond the

territory of Ükraine therefore, no impact on the operating activities of the

Company is expected.

Management judgements

As at the day of preparation of the annual report, the Management Board

according to their best knowledge, does not recognize any threat in terms of

fulfilling his obligations and financial liquidity. The Company settles its liabilities

systematically and has not taken any credits or loans taken or other significant

obligations. The Company dedicates its financial resources for conducted lending

activity and intends to develop this activity gradually. Possible surpluses are

located on temporary deposits in safe banks. Because of the fact that the main

activity of the Company is the granting of loans, the proper and prompt

fulfillment of the contractual obligations of the borrowers has a significant

impact on the Company's results and maintaining.

Note 3.

Capital management

The Management Board’s policy is to maintain a solid capital base to maintain

investor confidence and to ensure the future development of business operations.

The company manages its capital to maintain the ability to continue operations,

including the implementation of planned investments, so that it can generate

returns for shareholders.

In line with market practice, the Company monitors capital, among others, based

on the equity ratio and the loans and other sources of financing / EBITDA ratio.

43

The equity ratio

intangible

assets)

In order to

maintain

external

financing

*Equity

ratio

**EBITDA =

Profit

N

ot

e

4

As at

30/06/2024

is calculated

to the balance

financial

at a reasonable

= equity / total

(loss) on

as the

sheet

liquidity

assets

operating

EXPLANATORY

Financial

ratio

total.

and

level of

activities

of the net

creditworthiness

costs.

+ deprecation

NOTES

assets

val

ue

of

assets

(equity

allowing

obtaining

l

e

s

s

4

4

Selected data

30/06/2024

(in EÜR thousands)

30/06/2023

(in EÜR thousands)

Equity

1 422

1 418

Balance sheet total

1 476

1 469

Equity ratio*

0,96

0,97

Net profit/(loss) for the period

2

77

EBITDA**

4

71

Borrower

12 months

period -

principal

12

months

period –

interest

1-5

years

Interest

rate

Currency

Repayment

date

Collateral

s

Damar Patro

ÜÜ

1 376

60

0

2,5%

EÜR

30/06/2025

Investment

Friends SE is

entitled for

each of these

loans to fill in

the bill of ex-

change in the

amount of the

Borrower's ob-

ligation resul-

ting from the

concluded loan

agreement, re-

duced by the

payments

made by the

Borrower to-

wards this ob-

ligation and

increased by

the value of

unpaid inte-

rest, as well as

Patro Invest

Sp. z o.o. w

likwidacji *

0

15

0

24,5%

PLN

25/10/2019

As at June 30,

2024 disclosed

in note

*In the years

2019

receivables

from

amount of

EÜR 51

amounting to

EÜR Patro

Invest Sp. z

in full to the

Company Płock.

As at

30/06/2023

all

the

9

.

and 2020

the

Company

958,44. The

14 789,34

o.o. w

likwidacji

Patro

loans were

the Company

Patro

impairment

EÜR. After

with

Administracja

granted

Invest SP.

did

the balance

registered

Sp.

to the related

made an impairment

z o.o. w

not cover

sheet

office in

z o.o. with

entities

charge

likwidacji in the

amount of

date the claim Płock

was transferred

registered

and

was

o

n

the

total

inter

est

fr

o

m

office

in

4

5

any default in-

terest and

other inciden-

tal costs in the

event of fai-

lure to repay

the full amo-

unt of the loan

together with

incidental lia-

bilities within

the required

time limit.

Total

1 376

75

0

Borrower

12 months

period

1-5 years

Interest

rate

Currency

Repayment

date

Collaterals

Damar Patro ÜÜ

1 402

0

2,5%

EÜR

30/06/2024

Investment

Friends SE is

entitled for each

of these loans to

fill in the bill of

exchange in the

amount of the

Borrower's

obligation

resulting from the

concluded loan

agreement,

reduced by the

payments made

by the Borrower

towards this

obligation and

increased by the

value of unpaid

interest, as well

as any default

interest and other

incidental costs

in the event of

failure to repay

Patro Invest OÜ

16

0

9%

EÜR

30/06/2023

Patro Invest Sp.

z o.o. w

likwidacji

14

0

24,5%

PLN

25/10/2019

the full amount of

the loan together

with incidental

liabilities within

the required time

limit.

Total

1 432

0

* The loan for Patro Invest OÜ was repaid fully in July 2023.

As at June 30, 2023 all the loans were granted to the related entities and was

disclosed in note 9.

Note 5

Cash and cash equivalents

The Company on the basis of agreement concluded with IFSE ÜÜ with registered

office in Tallinn ( Estonia) shares two bank account with this Company in curren-

cies PLN and EÜRO.

Note 6

Share capital

In the reporting year 2023/2024 the share capital of the Company increased by

EÜR 6 480 thous. as a result of the issuance of the premium, i.e., from the surplus

accumulated in the reserve capital (6 274 thous. EÜR) and other reserve capitals

(EÜR 206 thous. to 6 885 thous.)

SHARE CAPITAL

June 30

2024

In thous. EUR

June 30

2023

In thous.

EUR

Opening balance of share capital

405

8 100

Increase of share capital

6 480

0

Decrease of share capital due to the nominal value of

shares decrease

0

7 695

Closing balance of share capital

6 885

405

46

CASH AND CASH EQUIVALENTS

June 30

2024

In thous. EUR

June 30

2023

In thous. EUR

Cash on the bank accounts

22

35

Cash and cash equivalents, total

22

35

In case the equity capital is lower than 50% of the share capital, in order to meet

§ 301 of the Estonian Commercial Companies Code, the Board proposes to the

General Meeting to take action to reduce the share capital of the Company. The

Company convenes a relevant General Meeting, during which the share capital is

reduced to the reserve capital. In this way, the requirement of § 301 of the

Estonian Commercial Companies Code is met.

Share capital as

of 30.06.2024

Type of action

Number of shares

Share capital

Ordinary shares

68 850 000

6 885 000 euro

TOTAL

68 850 000

6 885 000 euro

As of June 30, 2024, the number of shares without nominal value is 6,885,000. As

of the balance sheet date, there are no rights or restrictions associated with each

class of shares, and there are no shares transferred for issue under an agreement

or other contracts.

Share capital as

of 30.06.2023

Type of action

Number of shares

Share capital

Ordinary shares

4 050 000

405 000 euro

TOTAL

4 050 000

405 000 euro

47

RESERVE CAPITAL

June 30

2024

In thous.

EUR

June 30

2023

In thous.

EUR

Opening balance of reserve capital

6 435

301

Increase in reserve capital due to the result of nominal

value of shares

0

7 695

Decrease in reserve capital due to the decrease of the

nominal value of shares

6 274

1 561

Closing balance of reserve capital

161

6 435

As of June 30, 2023, the number of shares without nominal

As of June 30, 2023, there were no rights or restrictions

shares, and there were no shares reserved for issuance

agreements.

Note 7

Book value per share

Book value of equity as of 30.06.2024

Number of shares as of 30/06/2024

Book value per share (in EÜRO)

Diluted number of shares

Diluted book value per share (in EÜRO)

Book value of equity as of 30.06.2023

value was 405,000.

on particular classes of

under options or other

1 422 thous. EÜR

68 850 000

0,02 EÜR

68 850 000

0,02 EÜR

1 418 thous. EÜR

Number of shares as of 30.06.2023

4 050 000

Book value per share (in EÜRO)

0,35 EÜR

Diluted number of shares

4 050 000

Diluted book value per share (in EÜRO)

Profits per share

Profit per share as at 30/06/2024

Weighted average number of shares 32 466 575

Profit/loss for 12 months 2 thous. EÜR

Profit/loss per one ordinary share 0,00 EÜR

Profit per share as at 30/06/2023

Weighted average number of shares 4 122 740

Profit/loss for 12 months 77 thous. EÜR

Profit/loss per one ordinary share 0,02 EÜR

Note 8

In accordance with the requirements of IFRS 8, operating

identified based on internal reports on those elements

regularly verified by persons deciding about allocating

ment and assessing its financial results. The Company

activity of providing other financial services.

The Company’s main activity is granting loans, there are

ment reporting is not applicable.

48

0,35 EÜR

segments should be

of the Company that are

resources to a given seg-

conducts a homogeneous

no other activities, seg-

Revenues from interest

NET INCOME FROM SALES OF PRODUCTS

(MATERIAL STRUCTURE - TYPES OF ACTIVITY)

30 June

2024

in thous. EUR

30 June

2023

in thous. EUR

revenues from interest

35

87

- including: from related entities

35

87

Data on revenues from related entities can be found in note 9

Geographical information

Below we present revenues from clients divided into operating areas.

GEOGRAPHICAL AREA FOR

FINANCIAL ACTIVITY

01/07/2023 –

30/06/2024

(in thous. EUR)

01/07/2022 –

30/06/2023

(in thous. EUR)

Estonia

35

78

Poland

0

9

Total for the financial activity

35

87

Information on leading clients.

In the period 01/07/2023-30/06/2024 the Company achieved revenues from

transactions with an external single client which exceed 10% of the entity's total

revenues:

• Client no. 1 –100% of total revenues

In the period 01/07/2022-30/06/2023 the Company achieved revenues from

transactions with an external single client which exceed 10% of the entity's total

revenues:

• Client no. 1 – 51% of total revenues

• Client no. 2 – 40% of total revenues

49

Division into reporting

Note 9

Balances

Parent Company: Patro

OÜ is a natural person Damian

shareholder of Fon SE, Atlantis

segments

and transactions

Invest OÜ in

Patrowicz).

SE, Investment

with related

Tallinn (100%

shareholder

The

parent

Friend

s

entities

of

Patro Company

is also Capital

SE.

Inves

t

the

main

50

Reporting segments

01/07/2023 – 30/06/2024

(in thous. EUR)

Estonia

Poland

Assets

1 459

17

Commitments

54

0

Profit/loss

14

-12

Related party

transactions for the

period ended

30/06/2024

Interest

income

loans granted

loans repaid

Loan and

interest

receivables

Parent

Company:

Patro Invest

OÜ

0

0

18

0

Key Management Board members and all companies they directly or indirectly own:

Patro Invest sp. z o.o. w

likwidacji

0

0

0

15

Damar Patro

ÜÜ

35

0

0

1 437

total (note: 4,8)

35

0

18

1 452

Related party

transactions for the

period ended

30/06/2023

Interest

income

loans granted

loans repaid

Loan and

interest

receivables

Loan and interest receivables:

Patro Invest

OÜ

44

1 250

1 250

16

Key Management Board members and all companies they directly or indirectly own::

Patro Invest sp. z o.o. w

likiwdacji

7

0

0

14

Damar Patro

ÜÜ

35

0

359

1 402

Patro Administracja sp.

z o.o.*

1

0

803

0

total (note 4,8)

87

1 250

2 412

1 432

Remuneration of the Supervisory Board and the Management Board:

No remuneration of Management and Supervisory Board members for the fiscal

year and the previous year.

Note 10

Contingent assets and liabilities

Tax authorities have the right to inspect the Company's tax records for up to 5

years after the filing of the tax return and, in the event of errors, impose

additional taxes, interest and penalties.

The tax authorities did not conduct any tax audits at the Company in 2023-2024.

Note 11

Significant events after the balance sheet date

Assessing all available information corresponding to the next twelve months

from the end of the reporting period, the Management Board of the compan pre-

pared a report for the period from 01/07/2023 to 30/06/2024, assuming the

Company's continued operations. The Company has been profitable to date and

continues to be so. It has easy access to financial resources. According to the Ma-

nagement, this does not require a detailed analysis or the search for alternative

sources of financing.

Due to the fact that as of the balance sheet date the Company's equity is less than

50% of the share capital, i.e., it does not meet the requirements of § 301 of the

Estonian Commercial Code, the Issuer's Management Board will propose to the

Shareholders at the next General Meeting to adopt an appropriate resolution to

reduce the share capital.

After the balance sheet date, the receivable from Patro Invest Sp. z o.o. in liquida-

tion with its registere office in Płock resulting from unpaid interest on the loan

concluded on January 26, 2017 (annexed on October 5, 2018 and March 15, 2019)

was transferred in its entirety to Patro Administracja Sp. z o.o. withits registered

office in Płock by an assignment agreement concluded on September 25, 2024 for

theamount of PLN 223,888.93i.e. 52.5 thousand euro (according to the NBP ex-

change rate of 24/09/2024. Patro Administracja sp. z o. o. settled the amount in

accordance with the assignment agreement.

At present, the war in Ükraine does not have an impact on the Company's

situation. Investment Friends SE does not anticipate that military actions in

Ükraine will negatively affect the Company's operational activities.

51

VIII. STATEMENT OF COMPLIANCE

The Management Board confirms that the Management report, corporate

governance report and remuneration report as set out on pages 7 to 21 gives a

true and fair view of the key events that occurred during the reporting period and

their impact on the financial statements contains a description of the key risks

and uncertainties and reflects material transactions with related parties..The

Management Board confirms the correctness and completeness of Investment

Friends SE financial statements for the year 2023/2024 as set out on pages from

22 to 51 and that:

• the accounting policies used in preparing the financial statements are in

compliance with International Financial Reporting Standards as adopted

in the European Ünion;

• the financial statements give a true and fair view of the financial position,

financial performance and cash flows of the Company;

• Investment Friends SE is going concern.

Signature

Member of the Management Board of the Issuer

Agnieszka Gujgo

52

IX. MANAGEMENT BOARD'S PROPOSAL ON PROFIT DISTRIBUTION

In accordance with § 332 of the Estonian Commercial Companies Code, the

Management Board hereby proposes to the General Meeting of Shareholders that

the Company's profit after tax (net profit) for the financial year 2023/2024,

amounting to EÜR 2,000, as disclosed in the Company's annual separate financial

statements for the year ended 30/06/2024, be allocated as follows:

- the amount of EÜR 2,000 (two thousand euros) shall be allocated to the

Company's reserve capital.

The Management Board decides to request the Supervisory Board to assess this

proposal for the distribution of the Company's net profit for the financial year

2023/2024 and to submit it for consideration to the General Meeting of

Shareholders, in accordance with § 332 of the Estonian Commercial Code.

Signature

Member of the Management Board of the Issuer

Agnieszka Gujgo

53

KPMG Baltics OÜ

Ahtri 4

Tallinn 10151

Estonia

Telephone

Fax

Internet

+372 6 268 700

+372 6 268 777

www.kpmg.ee

Independent Auditors’ Report

To the shareholders of Investment Friends SE

The Auditor’s Report of the Annual Financial Statements

Opinion

We have audited the financial statements of Investment Friends SE (the Company), which comprise the statement of

financial position as at 30 June 2024, the statement of profit and loss, other comprehensive income and the statements

of cash flows and changes in equity for the year then ended, and notes, comprising material accounting policies and

other explanatory information.

In our opinion, the financial statements presented on pages from 22 to 51 present fairly, in all material respects, the

financial position of the Company as at 30 June 2024, and its financial performance and its cash flows for the year then

ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (Estonia). Our responsibilities under

those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section

of our report. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants

(Estonia) (including Independence Standards) and we have fulfilled our other ethical responsibilities in accordance with

these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the

financial statements of the current period. These matters were addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Value of the loans granted

Granted loans consist of loans granted and interest in the amount of 1 452 thousand euros, which is 98,4% of the

company's assets. Of the loans granted, 100% are loans to related parties.

We refer to the following note in the financial statements: Note 4 "Financial Assets."

The key audit matter

How the matter was adressed in our audit

The value of the loans granted is assessed using the

amortized cost method, as described in Note 1 of the

financial statements.

The valuation of these loans is an area of estimation, as

it relies on management's assessments based on their

past experience and assumptions.

During the audit procedures, we performed, among

other things, the following:

• Reviewed the terms of loan agreements and

verified the consistency of accounting data with the

agreements;

• Verified the accuracy of balances with confirmation

of balances;

• Reviewed and analyzed the financial data of the

borrowers and ensured that management’s

assessments were consistent with our

understanding;

• Checked the receipt of loan payments after the

balance sheet date;

• Assessed the adequacy of the disclosed

information and its compliance with IFRS

requirements.

KPMG Baltics OÜ, an Estonian limited liability company and a

member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG

International”), a Swiss entity. Reg no 10096082.

Other Information

Management is responsible for the other information. The other information comprises the management report, letter

of the management board, corporate governance report, remuneration report, selected financial data and general

information about the issuer, but does not include the financial statements and our auditors’ report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit, or otherwise appears to be materially misstated. With respect to the remuneration report, our

responsibility also includes considering whether the remuneration report has been prepared in accordance with the

requirements of Article 135

3

(3) of the Securities Market Act.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report in this regard. In our opinion, the remuneration report has

been prepared in accordance with the requirements of Article 135

3

(3) of the Securities Market Act.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with

International Financial Reporting Standards as adopted by the European Union, and for such internal control as

management determines is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic

alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

International Standards on Auditing (Estonia) will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing (Estonia), we exercise professional judgment and maintain

professional scepticism throughout the audit. We also:









Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based

on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may

cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the

financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based



on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may

cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,

and whether the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing

of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during

our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical

requirements regarding independence, and communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence and where applicable, actions taken to eliminate threats or

safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most

significance in the audit of the financial statements of the current period and are therefore the key audit matters. We

describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or

when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because

the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such

communication.

Other Requirements of the Auditors' Report

We were appointed by those charged with governance on 8 May 2024 to audit the financial statements of Investment

Friends SE for the year ended 30 June 2024. Our total uninterrupted period of engagement is 1 year, covering the

period ended on 30 June 2024.

We confirm that we have not provided to the Company the prohibited non-audit services (NASs) referred to in Article

5(1) of EU Regulation (EU) No 537/2014. We also remained independent of the audited entity in conducting the audit.

KPMG Baltics OÜ

Licence No 17

Eero Kaup

Certified Public Accountant, Licence No. 459

Tallinn, 8 November 2024