UAB "ORKELA"

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023,

PREPARED IN ACCORDANCE WITH LITHUANIAN FINANCIAL REPORTING STANDARDS

UAB "ORKELA"  
Company code: 304099538, Jogailos st. 4, Vilnius 
The Company’s Financial Statements 31 December 2023 
(all amounts presented in EUR unless otherwise indicated) 
 
2 
Contents 
 
Balance sheet ....................................................................................................................................................................................3 
Income statement ..............................................................................................................................................................................5 
Statement of Changes in Equity .........................................................................................................................................................6 
Cash Flow Statement .........................................................................................................................................................................8 
Notes to the financial statements ..................................................................................................................................................... 10 
1.  General information ............................................................................................................................................................ 10 
2.  Accounting policy ................................................................................................................................................................ 10 
3.  Notes .................................................................................................................................................................................. 14 
3.1.  Investment property ........................................................................................................................................................... 14 
3.2.  Amounts receivable within one year .................................................................................................................................. 15 
3.3.  Cash and cash equivalents ................................................................................................................................................ 15 
3.4.  Prepaid expenses and accrued income ............................................................................................................................. 15 
3.5.  Structure of the authorised capital ..................................................................................................................................... 15 
3.6.  Project of profit distribution................................................................................................................................................. 15 
3.7.  Rights and commitments not disclosed in the balance sheet ............................................................................................. 15 
3.8.  Amounts payable and other liabilities ................................................................................................................................. 16 
3.9.  Accrued expenses and deferred income ............................................................................................................................ 16 
3.10.  General and administrative expenses ................................................................................................................................ 16 
3.11.  Interest and other similar income and expenses ................................................................................................................ 16 
3.12.  Income tax and deferred income tax .................................................................................................................................. 17 
3.13.  Financial relations with the company’s management and other related parties ................................................................. 17 
3.14.  Subsequent events ............................................................................................................................................................ 17 
3.15.  Going concern .................................................................................................................................................................... 17 
Orkela UAB 2023 Annual Report ..................................................................................................................................................... 19 
Orkela UAB Governance Report ...................................................................................................................................................... 23 
 
   

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Balance sheet

Notes

31 December

2023

31 December

2022

ASSETS

NON-CURRENT ASSETS

33 933 147

19 082 679-

INTANGIBLE ASSETS

1.1.

Development work

1.2.

Goodwill

1.3.

Software

1.4.

Concessions, patents, licenses, trademarks and similar rights

1.5.

Other intangible assets

1.6.

Prepayments for intangible assets

TANGIBLE ASSETS

3.1.

33 933 147

19 082 679-

2.1.

Land

2.2.

Buildings and structures

2.3.

Plant and equipment

2.4.

Vehicles

2.5.

Other equipment, fittings and tools

2.6.

Investment property

2 699 591

2 522 547-

2.6.1.

Land

2 699 591

2 522 547-

2.6.2.

Buildings

2.7.

Prepayments for tangible assets and assets under construction

31 233 556

16 560 132-

FINANCIAL ASSETS

3.1.

Shares in group companies

3.2.

Intercompany loans

3.3.

Intercompany amounts receivable

3.4.

Shares in associates

3.5.

Loans to associates

3.6.

Receivables from associates

3.7.

Long-term investments

3.8.

Amounts receivable after one year

3.9.

Other financial assets

OTHER NON-CURRENT ASSETS

4.1.

Deferred tax asset

4.2.

Biological assets

4.3.

Other assets

CURRENT ASSETS

123 561

2 782 591-

INVENTORIES

109

152-

1.1.

Raw materials, materials and consumables

1.2.

Production and work in progress

1.3.

Finished goods

1.4.

Goods for resale

1.5.

Biological assets

1.6.

Non-current tangible assets held for sale

1.7.

Prepayments

109

152-

AMOUNTS RECEIVABLE WITHIN ONE YEAR

3.2.

60 899

199 854-

2.1.

Trade receivables

2.2.

Intercompany amounts receivable

2.3.

Amounts receivable from associates

2.4.

Other amounts receivable

60 899

199 854-

SHORT-TERM INVESTMENTS

3.1.

Shares in group companies

3.2.

Other investments

CASH AND CASH EQUIVALENTS

3.3.

62 553

2 582 585-

PREPAID EXPENSES AND ACCRUED INCOME

3.4.

7 090

18 817-

TOTAL ASSETS

34 063 798

21 884 087-

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Balance Sheet (cont’d)

Notes

31 December

2023

31 December

2022

EQUITY AND LIABILITIES

EQUITY

2 513 913-

(875 831)

CAPITAL

1 050 000-

1 000 000-

1.1.

Share capital

3.5.

1 050 000-

1 000 000-

1.2.

Unpaid share capital (–)

1.3.

Own shares, stock (–)

SHARE PREMIUM

3.5.

12 385 500-

8 935 500-

REVALUATION RESERVE

RESERVES

4.1.

Legal reserve

4.2.

Acquisition of own shares

4.3.

Other reserves

RETAINED EARNINGS (LOSS)

3.6.

(10 921 587)

(10 811 331)

5.1.

Profit (loss) of the reporting year

(110 256)

(4 251 298)

5.2.

Profit (loss) of the previous years

(10 811 331)

(6 560 033)

GRANTS, SUBSIDIES

PROVISIONS

Pensions and similar provisions

Deferred tax liability

Other provisions

AMOUNTS PAYABLE AND OTHER LIABILITIES

31 527 595-

22 746 318-

NON-CURRENT AMOUNT PAYABLE AND LIABILITIES

3.8.

28 019 433-

20 261 899-

1.1.

Financial debts

23 277 089-

14 517 452-

1.2.

Amounts owed to credit institutions

1.3.

Advances received

1.4.

Trade payables

1 070 266-

1 506 104-

1.5.

Payables under the bills and checks

1.6.

Intercompany amounts payable

3.13.

3 672 078-

4 238 343-

1.7.

Amounts payable to associates

1.8.

Other amounts payable and non-current liabilities

CURRENT AMOUNTS PAYABLE AND LIABILITIES

3.8.

3 508 162-

2 484 419-

2.1.

Current portion of financial debts

652 601-

285 069-

2.2.

Amounts owed to credit institutions

2.3.

Advances received

2.4.

Trade Payables

2 813 774-

2 188 138-

2.5.

Payables under the bills and checks

2.6.

Intercompany amounts payable

2.7.

Amounts payable to associates

2.8.

Corporate income tax liabilities

2.9.

Employment related liabilities

29 918-

1 632-

2.10.

Other amounts payable and current liabilities

11 869-

9 580-

ACCRUED EXPENSES AND DEFERRED INCOME

3.9.

22 290-

13 600-

TOTAL EQUITY AND LIABILITIES

34 063 798-

21 884 087-

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

These financial statements were signed electronically:

Director Anastasija Pocienė

Company representative in charge of accounting Marina Lysova

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Income statement

Notes

31 December

2023

31 December

2022

Sales revenue

Cost of sales

Fair value adjustments of biological assets

GROSS PROFIT (LOSS)

Selling expenses

General and administrative expenses

3.10.

(409 119)

(239 548)

Other operating results

Income from investments into shares of parent, subsidiaries and

associates

Income from other long-term investments and loans

10.

Other interest and similar income

3.1., 3.11.

1 927 949-

11.

Impairment of the financial assets and short-term investments

12.

Interest and other similar expenses

3.11.

(1 629 086)

(4 011 750)

13.

PROFIT (LOSS) BEFORE TAXATION

(110 256)

(4 251 298)

14.

Income tax

3.12.

15.

NET PROFIT (LOSS)

(110 256)

(4 251 298)

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

These financial statements were signed electronically:

Director Anastasija Pocienė

Company representative in charge of accounting Marina Lysova

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Statement of Changes in Equity

capital

premium

Own shares

(-)

Revaluation reserve

Legal reserve

Other

reserves

Retained

earnings

(losses)

Total

Non-current

tangible

assets

Financial

assets

Compulsory

reserve or

emergency

(reserve)

capital

Reserve for

acquiring

own shares

1. Balance at the end of the reporting

(yearly) period before previous

2 500-

(6 763 760)

(6 761 260)

2. Result of changes in accounting policies

3. Result of correcting material errors

4. Recalculated balance at the end of the

reporting (yearly) period before previous

2 500-

(6 763 760)

(6 761 260)

5. Increase (decrease) in the value of non-

current tangible assets

6. Increase (decrease) in the value of effective

hedging instruments

7. Acquisition (sale) of own shares

8. Profit (loss) not recognised in the profit

(loss) statement

9. Net profit (loss) of the reporting period

(4 251 298)

10. Dividends

11. Other payments

12. Formed reserves

13. Used reserves

14. Increase (decrease) of share capital or

shareholders’ contributions (shares’

repayment)

997 500-

8 935 500-

9 933 000-

15. Other Increase (decrease) of share capital

16. Contributions to cover losses

203 727-

17. Balance at the end of the previous

reporting (yearly) period

1 000 000-

8 935 500-

(10 811 331)

(875 831)

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Statement of Changes in Equity (cont’d)

capital

premium

Own shares

(-)

Revaluation reserve

Legal reserve

Other

reserves

Retained

earnings

(losses)

Total

Non-current

tangible

assets

Financial

assets

Compulsory

reserve or

emergency

(reserve)

capital

Reserve for

acquiring

own shares

18. Increase (decrease) in the value of non-

current tangible assets

19. Increase (decrease) in the value of

effective hedging instruments

20. Acquisition (sale) of own shares

21. Profit (loss) not recognised in the profit

(loss) statement

22. Net profit (loss) of the reporting period

(110 256)

23. Dividends

24. Other payments

25. Formed reserves

26. Used reserves

27. Increase (decrease) of authorised capital

or shareholders’ contributions (shares’

repayment)

50 000

3 450 000

3 500 000-

28. Other Increase (decrease) of share capital

29. Contributions to cover losses

30. Balance at the end of the reporting

period

1 050 000

12 385 500

(10 921 587)

2 513 913-

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

These financial statements are electronically signed:

Director Anastasija Pocienė

Company representative in charge of accounting Marina Lysova

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Cash Flow Statement

Notes

31 December

2023

31 December

2022

(restated)

Cash flows from operating activities

1.1.

Net profit (loss)

(110 256)

(4 251 298)

1.2.

Depreciation and amortisation expenses

1.3.

Elimination of results of disposals of fixed tangible and intangible

assets

1.4.

Elimination of results of financing and investing activities

3.11.

(298 863)

4 011 750-

1.5.

Elimination of results of other non-cash transactions

1.6.

Decrease (increase) in intercompany amounts receivable and

receivables from associates

1.7.

Decrease (increase) in other amounts receivable after one year

1.8.

Decrease (increase) in deferred tax asset

1.9.

Decrease (increase) in inventories, except prepayments

1.10.

Decrease (increase) in prepayments

43-

(152)

1.11.

Decrease (increase) in trade receivables

1.12.

Decrease (increase) in intercompany amounts owed and amounts

owed by associates

1.13.

Decrease (increase) in other receivables

17 701-

12 945-

1.14.

Decrease (increase) in short-term investments

1.15.

Decrease (increase) in prepaid expenses and accrued income

11 727-

17 277-

1.16.

Increase (decrease) in provisions

1.17.

Increase (decrease) in long-term trade payables and prepayments

1.18.

Increase (decrease) in long-term amounts payable under the bills and

checks

1.19.

Increase (decrease) in long-term intercompany payables and payables

to associates

1.20.

Increase (decrease) in trade with short-term trade payables and

advances received

37 294-

(22 381)

1.21.

Increase (decrease) in amounts payable under the bills and checks

1.22.

Increase (decrease) in short-term intercompany payables and

payables to associates

1.23.

Increase (decrease) in corporate income tax liabilities

1.24.

Increase (decrease) in employment related liabilities

28 286-

399-

1.25.

Increase (decrease) in other amounts payable and liabilities

2 289-

(2)

1.26.

Increase (decrease) in accruals and deferred income

8 690-

10 000-

Net cash flows from operating activities

(303 089)

(221 462)

Cash flows from investing activities

2.1.

Acquisition of fixed assets (excluding investments)

(12 659 605)

(10 211 854)

2.2.

Disposal of fixed assets (excluding investments)

2.3.

Acquisition of long-term investments

2.4.

Disposal of long-term investments

2.5.

Loans granted

2.6.

Loans recovered

2.7.

Dividends and interest received

2.8.

Other increases in cash flows from investing activities

2.9.

Other decreases in cash flows from investing activities

Net cash flows from investing activities

(12 659 605)

(10 211 854)

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Statement of Cash Flows (cont’d)

Notes

31 December

2023

31 December

2022

(restated)

Cash flows from financing activities

3.1.

Cash flows related to entity's owners

3.1.1.

Issue of shares

3.1.2.

Owner's contributions to cover losses

3.1.3.

Purchase of own shares

3.1.4.

Dividends paid

3.2.

Cash flows related to other financing sources

10 442 662-

12 985 121-

3.2.1.

Increase in financial debts

11 806 936-

14 704 640-

3.2.1.1.

Loans received

3.2.1.2.

Issue of bonds

11 806 936-

14 704 640-

3.2.2.

Decrease in financial debts

(1 249 784)

(1 599 999)

3.2.2.1.

Loans repaid

3.2.2.2.

Redemption of bonds

(149 949)

(1 233 285)

3.2.2.3.

Interest paid

(1 099 835)

(366 714)

3.2.2.4.

Finance leases payments

3.2.3.

Increase in entity’s other liabilities

3.2.4.

Decrease in entity’s other liabilities

3.2.5.

Other increases in cash flows from financing activities

3.2.6.

Other decreases in cash flows from financing activities

(114 490)

(119 520)

Net cash flows from financing activities

10 442 662

12 985 121-

Adjustments due to changes in exchange rates on the balance

of cash and cash equivalents

Increase (decrease) of net's cash flows

(2 520 032)

2 551 805-

Cash and cash equivalents at the beginning of the period

2 582 585-

30 780-

Cash and cash equivalents at the end of the period

62 553-

2 582 585-

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

These financial statements were signed electronically:

Director Anastasija Pocienė

Company representative in charge of accounting Marina Lysova

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Notes to the financial statements

1. General information

UAB Orkela, company code 304099538 (hereinafter referred to as the Company) is a private limited liability company registered

with the State Enterprise Centre of Registers on 24 September 2015. Registered as the value-added taxpayer since 10 March

2016. The Company’s data is collected and stored with the Register of Legal Entities of the Republic of Lithuania.

As at 31 December 2023 and 31 December 2022, the shareholder of the Company is closed-end investment fund intended for

informed investors Lords LB Special Fund IV, managed by UAB Lords LB Asset Management (company code 301849625,

registered address Jogailos st. 4, Vilnius).

31 December 2023

31 December 2022

Number of

Share of the

stock held

Number of

Share of the

stock held

Lords LB Special Fund IV

42 000

100%

40 000

100%

Total:

42 000

100%

40 000

100%

As at 31 December 2023 the Company‘s authorised share capital amounted to EUR 1 050 000 (31 December 2022 – EUR 1

000 000), share capital is divided into 42 000 (31 December 2022 – 40 000) ordinary registered shares with the par value of EUR

25 each. As at 31 December 2023 the Company's share capital is fully paid. The Company does not have its own shares.

The Company’s registered office address is Jogailos st. 4, Vilnius.

The main activity of the Company is real estate development and construction.

As at 31 December 2023 and 31 December 2022 the Company had no branches or representative offices.

As at 31 December 2023 the average number of employees was 2 (31 December 2022 – 1).

2. Accounting policy

The financial statements are prepared in accordance with the legal acts regulating financial accounting and preparation of financial

statements in the Republic of Lithuania and Lithuanian Financial Reporting Standards.

The Company’s financial year coincides with a calendar year.

The figures in these financial statements are presented in the currency of the Republic of Lithuania - Euro (EUR).

The company complies with the criteria of a public interest entity established in the Companies’ Financial Reporting Law when

preparing financial statements.

2.1. Investment property

Investment property is real estate held to earn income and / or capital gains.

The cost of acquired investment property consists of the purchase price and any directly attributable costs. Directly attributable

costs may include legal fees, property transfer fees and other transaction costs. This accounting principle applies for the whole

duration of construction of investment property. The Company classified the investment property under development as

investment property in the balance sheet and accounts it at cost less any impairment losses.

Upon completion of investment property, the Company uses the fair value method to account for investment property. The fair

value of investment property is determined based on valuation reports of an independent valuer. The valuation by an independent

valuer is performed at least once a year (if there are significant changes that could lead to a significant change in the value of the

assets, valuations are performed more frequently).

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

2.2. Financial assets and financial liabilities

Financial assets include cash and cash equivalents and amounts receivable.

Financial assets are recorded when the Company receives or obtains a contractual right to receive cash or any other financial

assets. Amounts receivable are carried at cost less impairment losses. Cash and cash equivalents are stated at cost.

When it is probable that the Company will not be able to recover the amounts receivable, the impairment loss is recognised, which

is determined as the difference between the carrying amount of the assets and the present value of future cash flows discounted

using the effective interest rate.

Financial liabilities include amounts payable for goods and services received and liabilities under bond agreements issued, loans

received.

Financial liabilities are recorded when the Company undertakes a commitment to pay cash or settle with any other financial assets.

Amounts payable for goods and services are accounted for at cost.

Bonds issued are classified as financial liabilities redeemable in one lump sum or in instalments according to a fixed redemption

schedule. Bonds issued and loans received are initially recognised at cost, which is equal to the amount of funds received.

Transaction costs are recognised as financing expenses. Subsequently, financial liabilities are measured at amortised cost using

the effective interest rate method. The Company has issued non-convertible bonds.

2.3. Effective interest rate method

Effective interest rate method is a method of calculation of amortised cost of financial assets and liabilities and distribution of

interest income and expenses over a certain period. Effective interest rate is an interest rate that discounts the estimated future

cash flows (including all paid or received taxes that are an integral part of the effective interest rate, transaction costs and other

extras or discounts) to the net carrying amount of the initial recognition within the intended period of financial asset and liabilities

or (if applicable) within a certain shorter period.

2.4. Foreign currencies

All currency items in the balance sheet are valued in euros using the exchange rate prevailing at the date of the balance sheet.

Assets purchased in foreign currency and accounted for in the balance sheet at the cost are valued in euros using the exchange

rate prevailing at the acquisition date. Assets whose fair value is determined in a foreign currency are valued in euros in the

balance sheet using the exchange rates at the date when the fair value was determined. Foreign currency transactions are valued

in euros using the exchange rate prevailing at the date of the transaction. Differences resulting from the settlement of amounts

recorded in foreign currencies at different exchange rates are recognised as income or expenses of the reporting period.

2.5. Sales revenue

Revenue is recognised on an accrual basis. The amount of income is estimated at fair value, considering granted and expected

discounts, returns and rebates.

When a service transaction is completed in the same period as it is initiated, revenue is recognised in the same period and

measured at the amount specified in the contract. When services, according to the service transaction, are provided for more than

one reporting period, revenue is allocated to the periods in which the services are rendered.

The Company’s typical operating income consists of rental income. Where the Company operates as an intermediary rather than

the main service provider, income and expenses are offset.

2.6. Cost of sales and operating expense

Expenses are recognised on an accrual and comparison basis in the accounting period the income related to the costs is

generated. Expenses incurred during the reporting period, which cannot be attributed directly to specific revenue earned and will

not generate any revenue in subsequent reporting periods, are recognised as expenses when incurred. Expenses are measured

at fair value.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

2.7. Borrowing costs

Interest on loans and bond agreements are recognised in the income statement on an accrual basis.

2.8. Income tax

Income tax calculations are based on profit for the year after assessing deferred income tax. Income tax is calculated in

accordance with the requirements set forth in the Lithuanian legislation.

In 2023, the corporate income tax rate applied to companies in the Republic of Lithuania was 15% (in 2022 - 15%).

Taxable losses can be carried forward to other reporting periods for an unlimited number of periods, except for the losses incurred

through transfer of securities and (or) derivative financial instruments. Such carryforward is cancelled if the Company ceases to

carry on the activity giving rise to the loss, unless the Company ceases to carry on the activity for any reasons beyond its control.

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

only be reduced by taxable income earned from the transactions of the same nature. With effect from 1 January 2014, tax losses

available for carry forward can be used to reduce taxable income of the current tax year by maximum 70%.

Deferred tax is calculated using the balance sheet liability method. Deferred income tax reflects the net tax effects of temporary

differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for

income tax purposes. Deferred tax assets and liabilities are measured using the tax rates expected to be applied to taxable income

in the years in which those temporary differences are expected to be recovered based on tax rates enacted or substantially

enacted at the balance sheet date.

Deferred tax asset is recognised in the balance sheet to the extent the management believes it will be realised in the foreseeable

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

the deferred tax asset is not recognised in the financial statements.

2.9. Impairment

An impairment loss is recognised whenever events or changes in circumstances indicate that the carrying amount may not be

recovered. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment is recognised in the income

statement. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment

loss recognised for the asset no longer exists or has decreased. The reversal is accounted for under the same article of the

income statement as the impairment loss.

2.10. Recoverable amount

Recoverable amount is calculated as the higher of two values: the fair value less costs to sell and the asset’s value in use. An

asset’s value in use is calculated by discounting future cash flows to their present value using a pre-tax discount rate that reflects

current market assumptions about the time value of money and the risks specific to the asset.

2.11. Offsetting

Offsetting of receivables and payables with the same third party shall take place when there is a sufficient legal basis for doing

so.

2.12. Subsequent events

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

2.13. Contingencies

Contingent liabilities are not recognised in the financial statements. They are described in the financial statements, except those

cases when the probability that resources generating economic benefit will be lost is very low.

2.14. Significant accounting estimates and judgments

The preparation of financial statements in accordance with Lithuanian financial reporting standards requires from the management

to make certain judgments and estimates, based on assumptions that have effect on the application of policies and reported

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

amounts of assets and liabilities, income and expenses and the disclosure of uncertainties. The significant estimates in these

financial statements are the valuation assumptions of investment assets. Future events may change the assumptions used in the

estimates. The effect of such changes in estimates will be accounted for in the financial statements when determined.

2.15. Financial risk management

The Company is exposed to a variety of financial risks in the course of its operations. Risk management is performed by

management.

The following main financial risk management procedures are applied in the Company’s operations:

Credit risk

The Company is not subject to significant credit risk concentration. Credit risks or the risks of counterparties defaulting, are

controlled by the application of credit terms and monitoring procedures. Credit risk is controlled by the Company itself and, if

necessary, assisted by credit risk management companies.

Foreign exchange risk

The Company has no significant concentration of foreign exchange risk, because the major portion of settlements are conducted

in the euro (EUR).

Liquidity risk

The Company is a special purpose development company that does not earn income on its own in the short term. The Company’s

activities are financed by the shareholder, taking into account the progress of the project and the need for working capital.

The Company’s policy is to maintain sufficient cash and cash equivalents or to secure funding from the parent fund and credit

institutions to meet the obligations set out in its strategic plans.

Interest rate risk

The Company’s income and operating cash flows are substantially independent from changes in market interest rate. The

Company has no significant interest-bearing assets.

The most significant balance sheet items of the Company sensitive to changes in interest rates are issued bonds. Liabilities are

with fixed interest rates, but the fixed interest rate is calculated based on related party transfer pricing, which is as close as possible

to the arm’s length principle. The Company does not use any financial instruments to manage interest rate risk.

Related parties

Parties are considered to be related when one party has the ability to control or influence the other party in making financial and

operational decisions.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

3. Notes

3.1. Investment property

Land

Construction-in-

progress

Total

Carrying amount as at the end of the previous

financial year

2 522 547-

16 560 132-

19 082 679-

Acquisition cost

At the end of the previous financial year

4 601 561-

21 405 440-

26 007 001-

Financial year changes:

- acquisitions

12 922 519-

- disposals and written-off assets (-)

- transfers from one heading to another +/(-)

At the end of financial year

4 601 561-

34 327 959-

38 929 520-

Revaluation

At the end of the previous financial year

Financial year changes:

- increase (decrease) in value +/(-)

- disposed and written off assets (-)

- transfers from one heading to another +/(-)

At the end of financial year

Depreciation

At the end of the previous financial year

Financial year changes:

- depreciation in financial year

- written back (-)

- disposed and written off assets (-)

- transfers from one heading to another +/(-)

At the end of financial year

Impairment

At the end of the previous financial year

(2 079 014)

(4 845 308)

(6 924 322)

Financial year changes:

- increase (decrease) in value +/(-)

177 044-

1 750 905-

1 927 949-

- written back (-)

- disposed and written off assets (-)

- transfers from one heading to another +/(-)

At the end of financial year

(1 901 970)

(3 094 403)

(4 996 373)

Carrying amount at the end of financial year (a)+(b)-

(c)-(d)

2 699 591-

31 233 556-

33 933 147-

As at 31 December 2023 investment assets consist of a land plot and buildings under construction located on Vasario 16-osios st.

1, Vilnius. The investment property was purchased in March 2016. On 8 March 2021 the Company received a construction permit

and in September 2021 has begun the construction works.

The recoverable value of all the Company's investment assets (i.e. land together with buildings under construction) at the 31

December 2023 was determined based on the property valuation performed by the independent property valuer UAB "Newsec

valuations" in December 2023, the asset was valued as of 30 November 2023. Investment property was valued using the discounted

cash flow method, using a 16 percent discount rate (2022 – 16 percent) and a 5,75 percent capitalization rate (2022 – 6 percent).

Cash flows are forecasted for a period of 2 years with the assumption that the average long-term vacancy rate will be 2-5 percent

and the average income growth will be 2,9 percent. According to the report of an independent property valuer, the value of the

company's total investment assets, calculated using the discounted cash flow method, amounted to EUR 33 100 000. As a result

of the fair value of the asset being higher than its carrying amount, a reversal of impairment of the investment property was

recognised for the year ended 31 December 2023 in the amount of EUR 1 927 949. The amount of the impairment reversal has

been allocated to the individual groups of investment property in proportion to their carrying amounts.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Sensitivity analysis of the value of investment property

The recoverable amount of the investment property was determined using a yield rate of 5,75%. An increase in the yield rate of

0,5% would reduce the recoverable amount of the investment property by EUR 4 050 000 and a decrease in the yield rate of 0,5%

would increase the recoverable amount of the investment property by EUR 4 810 000. Other assumptions remain unchanged as

the yield rate changes.

3.2. Amounts receivable within one year

31 December 2023

31 December 2022

VAT receivable

59 311

166 522

Other amounts receivable

1 588

33 332

Total:

60 899

199 854

3.3. Cash and cash equivalents

31 December 2023

31 December 2022

Cash in investment account

45 253

173 938

Cash in bank accounts

17 300

2 408 647

Total:

62 553

2 582 585

The company has opened an investment account, from which money can be transferred to a current bank account only after

submitting a request to the bank.

3.4. Prepaid expenses and accrued income

31 December 2023

31 December 2022

Prepaid insurance expenses

7 090

18 817

Total:

7 090

18 817

3.5. Structure of the authorised capital

The Company's share capital as at 31 December 2023 is EUR 1 050 000 (31 December 2022 – EUR 1 000 000). In 2023 the

Shareholder decided to increase the Company's share capital by issuing 2 000 ordinary registered shares with a nominal par value

of EUR 25 each. The issue price was EUR 3 500 000. Since the issue price exceeded the nominal share price, additional share

premium of EUR 3 450 000 was formed. Share premium as at 31 December 2023 is EUR 12 385 500 (31 December 2022 – EUR

8 935 500). All shares are paid.

3.6. Project of profit distribution

At the time of approval of these financial statements, the profit (loss) distribution project has not been prepared by the Management.

3.7. Rights and commitments not disclosed in the balance sheet

Taxes

The Tax Authorities have not performed a full-scope tax investigation at the Company. The Tax Authorities may inspect accounting,

transaction and other documents, accounting records and tax returns for the current and previous 3 calendar years at any time, and

where appropriate, for the current and previous 5 or 10 calendar years and impose additional taxes and penalties.

On 4 January 2024 the State Tax Inspectorate initiated a tax investigation of the Company. The investigation targets included

corporate income tax for years 2021-2022 and value-added tax for the period from 1 January 2021 to 31 October 2023. In March

2024, the tax investigation was finished, and no deficiencies were identified.

Management of the Company is not aware of any circumstances which would cause calculation of additional significant liabilities

due to unpaid taxes.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

3.8. Amounts payable and other liabilities

Within one year

After one, but no

later than five

years

After five

years

Financial debts:

1. Financial debts

652 601

23 277 089

2. Intercompany amounts payable (note 3.13.)

3 672 078

Other debts:

1. Trade payables

2 813 774

1 070 266

2. Employment related liabilities

29 918

3. Other payables and short-term liabilities

11 869

Total:

3 508 162

28 019 433

The Company has signed an agreement for the distribution of the Company's bonds worth EUR 40 million. During 2023 the

Company issued 8 974 units of secured non-convertible bonds with a par value of EUR 1 000 each. As at 31 December 2023 the

total amount of Company’s issued secured non-convertible bonds was 23 502 units (31 December 2022 - 14 528 units) and had an

obligation to issue 47 units of secured non-convertible bonds, which were issued in January 2024. The interest rate is fixed and

interest is payable semi-annually. The bonds mature on 19 January 2025. Entire investment property of the Company is pledged

as a security for settlement of liabilities towards bond holders.

After one year, but no later than five years, trade payables are retained amounts payable to contractors, which will be paid after

construction is completed. These long-term liabilities are not interest bearing.

3.9. Accrued expenses and deferred income

31 December 2023

31 December 2022

Accrued bond distribution expenses

12 874

Accrued audit expenses

7 800

13 000

Other accrued expenses

1 616

600

Total:

22 290

13 600

3.10. General and administrative expenses

2023

2022

Remuneration and other related expenses

114 170

58 981

Donations

92 000

Legal services

91 396

85 222

Operating taxes

45 731

44 400

Accounting and audit

23 200

18 340

Insurance

21 278

21 310

Other

21 344

11 295

Total:

409 119

239 548

3.11. Interest and other similar income and expenses

2023

2022

Bond interest expenses

1 503 753-

782 128

Impairment of investment property/(reversal of impairment)

(1 927 949)

3 081 010

Other financial and investment expenses

125 333-

148 612

Total:

(298 863)

4 011 750

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

3.12. Income tax and deferred income tax

Deferred income tax is calculated at the rate of 15%.

As at 31 December 2023 the Company had EUR 903 645 (31 December 2022 – EUR 612 999) of unrecognised deferred tax asset

from accumulated tax losses and EUR 749 456 (31 December 2022 – EUR 1 038 648) of unrecognized deferred tax asset from

impairment of investment property. Deferred tax asset has not been recognized due to uncertainties related to generation of

sufficient taxable profit in the foreseeable future. Accumulated tax losses are carried forward for an indefinite time.

3.13. Financial relations with the company’s management and other related parties

The average number of executives in 2023 is 1. The Company’s management is considered to be a director with whom there were

no transactions other than salaries in 2023 and 2022.In 2023, the management’s total remuneration amounted to EUR 30 933.

Transactions with other related parties

The transactions with other related parties and their balance as at the end of the reporting period were as follows:

Title of article

Revenue from

intercompany

transactions

Intercompany

transaction

costs

Amounts

receivable

Amounts

payable

31 December 2023

172 735

3 672 078

Related party 1

172 735

3 672 078

31 December 2022

324 347

4 238 343

Related party 1

324 347

4 238 343

In 2023 the Company issued additional EUR 2 948 000 bond emission with a maturity date 19 May 2025, interest rate is fixed. The

interest rate of the first bond emission is fixed, and maturity date is 21 April 2026. In 2023 the Company capitalized EUR 3 500 000

of bonds and accrued interest, redeemed bonds and paid interest in total amount of EUR 187 000. As at 31 December 2023 the

amount of unredeemed bonds was EUR 3 217 710 (31 December 2022 - EUR 3 548 512) and accrued interest payable was EUR

454 368 (31 December 2022 - EUR 689 831).

3.14. Subsequent events

In January 2024, the Company distributed 11 066 units of secured non-convertible bonds with par value of EUR 1 000 each.

In January 2024, Related party 1 acquired 350 000 units of non-convertible Company bonds with par value of EUR 1 each.

There were no other subsequent events.

3.15. Going concern

As at 31 December 2023 the Company’s current liabilities exceeded its current assets by EUR 3 399 801 (current liabilities amounted

to EUR 3 530 452, current assets – EUR 130 651). The primary current liabilities consisted of payables to suppliers for construction

works and interest payable on issued secured non-convertible bonds.

The Company's shareholder Lords LB Special Fund IV considers the Company's project under development to be a going concern

and plans to attract additional financing from either new or existing investors necessary to ensure the Company's ability to meet its

legal and financial obligations and to ensure the continuity of the project under development.

The Company is a special purpose development entity that does not earn income on its own in the short term. The Company’s

activities are financed by the shareholder and by the funds attracted through external bonds, considering the progress of the project

and the need for working capital. The Company has signed an agreement for the external distribution of Company’s bonds

amounting to EUR 40 million and until 31 December 2023 distributed bonds with par value of EUR 23.5 million. During the first

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

quarter of 2024, the Company distributed another tranche of bonds with a par value of EUR 11.1 million. The Company plans to

raise additional external financing of around EUR 5.4 million by issuing bonds in 2024.

The entire amount of long-term external bonds (EUR 23.3 million as at 31 December 2023) of the Company matures in January

2025. It is expected that by January 2025 the construction of the substantial part of the buildings will be completed, lease contracts

with tenants signed and external financing obtained for redemption of bonds emission that is due on 19 January 2025. However, as

at the date of approval of these financial statements, no financing agreements were signed for settlement of Company’s liabilities

as they fall due. The negotiations with potential tenants are still in progress.

The financial statements for the year ended 31 December 2023 have been prepared on the assumption that the Company will be

able to continue as a going concern in the foreseeable future. The going concern assessment is based on the following assumptions:

• the Company will successfully raise EUR 24 million financing from bond emission and equity contribution for completing

of a substantial portion of construction works during 2024;

• in the beginning of year 2025 the Company will successfully raise EUR 40 million of external financing for the redemption

of existing bonds that will be due on 19 January 2025.

The above events and conditions indicate, however, that a material uncertainty exists that may cast significant doubt on the

Company’s ability to continue as a going concern.

These financial statements were signed electronically:

Director Anastasija Pocienė

Company representative in charge of accounting Marina Lysova

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Orkela UAB 2023 Annual Report

Kay data about the Company

UAB Orkela (hereinafter referred to as 'the Company') is a private limited liability company registered with the State Enterprise

Registrų Centras on 24 September 2015. The Company's main activity is real estate development and construction. The Company

owns a plot of land and a compound of buildings located at Vasario 16-osios g. 1, Vilnius.

Registered office address: Jogailos str. 4, Vilnius.

The Company has no branches or representative offices.

Shareholders of the Company: Lords LB Special Fund IV, a closed-end investment fund for informed investors (hereinafter

referred to as the ‘the Shareholder’), is managed by the management company Lords LB Asset Management UAB (company code

301849625, registered office at Jogailos st. 4, Vilnius), which owns 100% of the Company’s shares.

Shares: As at 31 December 2023 the Company's authorised capital was EUR 1 050 000. It is divided into 42 000 ordinary registered

shares with a nominal value of EUR 25 (twenty-five euro).

The Company’s Director: Anastasija Pocienė.

The Company acts in accordance with the Articles of Association of the Company and in compliance with all applicable requirements

of the Civil Code, the Law on Companies and other laws and regulations.

Highlights of 2023

• On 2

January 2023, the Company entered into a lease agreement with the main project tenant for 18,082 square meters of

space in the Project, where Royal Russell branded school with student accommodation services will operate.

• In Q1 2023, the Company issued two tranches of bonds totaling 5 571 units (EUR 5 571 000 nominal value) out of its total bond

issue with a nominal value of EUR 40 million.

• In Q2 2023, the Company issued one tranche of bonds consisting of 852 units (EUR 852 000 nominal value) out of its total bond

issue with a nominal value of EUR 40 million.

• On 14

November 2023 the Bank of Lithuania approve the Base Prospectus for the bond issuance.

• On 16

November 2023, the Company terminated the lease agreement with Royal Russell branded school.

• In Q4 2023 the Company issued one tranche of bonds consisting of 2 551 units (EUR 2 551 000 nominal value) out of its total

bond issue with a nominal value of EUR 40 million.

• A total of 8 974 bonds (with EUR 8 974 000 nominal value) were issued in 2023.

Key events after the end of the financial year

• In January 2024, the Company issued 11 066 units of secured non-convertible bonds (with a nominal value of EUR 11 066 000)

from the total 40 million EUR emission (nominal value).

An overview of the Company's position, performance and development, and a description of the principal risks and

uncertainties faced

The Company's main activity is real estate development and construction. The Company is developing a lyceum and hotel complex

next to the Church and Monastery of the Apostles St. Philip and James (hereinafter referred to as ‘the Project’). The Company

expects to complete the Project in 2024.

The Company is a special purpose development vehicle which does not generate income on its own in the short term. However,

upon completion of the development of the Project, the Company expects to generate rental income from the property. The

Company intends to finance its operations by attracting external financing during the Project development phase, and the

Company's Shareholder also considers the Company’s ongoing project as continuous and plans to provide such financial and other

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

support to the extent economically justified to ensure the continuity of the Company’s operation and the fulfillment of financial and

legal obligations.

The main risks faced by the Company are:

• Construction costs and risks to Project success. At the outset of the Project, completion of construction works by the end

of 2023 was anticipated. However, a change in the Project development scenario (from a hotel/school complex to educational

institutions with integrated services and back to a hotel/school complex) resulted in a delay in construction works, necessitating

a revision of the construction schedule. The completion of the Project may be further delayed due to the termination of the lease

agreement. As a result of these events, the Company reviewed the Project's development scenario and construction schedule.

According to the revised Project development scenario, the Project premises will accommodate educational institutions (such

as kindergartens and/or primary and/or secondary schools), office and commercial spaces, a hotel including several restaurants

and cafes, and an underground car park. Based on the revised construction schedule, project completion is expected around

the end of 2024. However, additional delays in project completion can be expected due to additional design works that may

impact the Project's construction schedule. Furthermore, as the Company has transitioned to a multi-tenant strategy, the

Company's success in securing tenants and outfitting the Project premises for different tenants may also affect the final

completion date of the entire project.

Despite changes in the rental scenario of the Project multiple times, by the end of 2023 the Project’s completion ratio is more

than 70 percent. The Company expects to complete the construction of the Project without significant deviations from the

planned cost structure, considering that the major construction works have already been completed.

However, it is necessary to consider that the situation in global markets and the supply chain of construction materials is subject

to frequent changes due to Russia-Ukraine war and related economic and geopolitical situation in the region. Also, due to the

existing uncertainty about the Project’s completion by the end of 2024, these factors pose a risk of increased construction costs

or inability to procure construction materials necessary for the Project’s completion, which could reduce the overall profitability

of the Project, delay Project’s completion and consequently affect the Company’s operations and financial position.

Furthermore, the Company cannot guarantee the absence of any disputes with the suppliers or its ability to maintain business

relationships with existing suppliers. Any disruption in the Company’s supply chain due to issues with a supplier or any decrease

in the reliability of such supplier may require the Company considerable time and expense to rectify deficiencies and could affect

its reputation, thereby negatively impacting its reputation and profitability.

• Economic environment (domestic and international) and insolvency risk. The Company's activities and results depend on

economic processes within Lithuania and internationally. Currently, regional and global economies are unbalanced due to the

ongoing Ukraine-Russia conflict, significant increases in interest rates, volatility in energy prices, and the prolonged impact of

Covid-19 recovery. Lithuania is facing unprecedented inflation rates, which reduce overall attractiveness of the investment

market and constrain economic forecasting. These factors likely contribute to the current slowdown in Lithuania's real estate

market.

Even if there is currently no significant economic downturn in Lithuania, a downturn could lead to reduced demand for the

Company's services, and the risk of insolvency among tenants and/or contractors may increase. This could negatively impact

the Company's business strategy and results, affecting the potential positive returns from the Project. It is important to note that

the Company expects to start earning rental income upon project completion and handover of premises to tenants. Despite

having multiple tenants in the Project and the potential for higher revenue generation, ensuring full occupancy only upon

completion of the Project is low. Therefore, the income generated in the initial years may be lower than expected.

• Litigation risk. The Company's activities may expose it to litigation (either as an applicant or as a respondent), the outcome of

which cannot be predicted in advance. If a dispute were to be resolved against the Company, it may adversely affect its business,

financial position and reputation, as the Company may have to pay the damages awarded, including the opponent's legal costs

(the Company would also incur legal costs of its own). All of this may affect the Company's ability to properly meet its obligations

to Investors.

Development prospects

One of the Company's main objectives is to ensure the proper and timely development of real estate projects. The Company is

currently focused on the development of the ongoing Project, the construction works and the requirements of the existing tenant.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Analysis of financial and non-financial performance

During 2023, the Company incurred a net loss of EUR 110 thousand (as compared with a EUR 4 251 thousand loss in 2022). The

bulk of the 2023 loss was made up of financing costs, however, in 2023, a reversal of EUR 1 928 thousand in impairment of

investment property was recognized. The Company does not generate any revenue on its own during the development phase of

the Project and, as a consequence, is incurring both gross operating and net losses.

The Company's assets as at 31 December 2023 amounted to EUR 34 064 thousand (EUR 21 884 thousand as at 31 December

2022).

The Company's performance ratios

Ratio

2023

2022

Debt ratio = liabilities / total assets

0,81

0,87

Overall liquidity ratio = current assets / current liabilities

0,04

1,12

In 2023 and 2022 the Company's liabilities consisted of the Company's bonds purchased by the Shareholder and accrued interest

payable, as well as external bonds issued.

Information about the Director

Other management positions held by Anastasija Pocienė, Director of UAB Orkela:

Person

Legal form

Name

Registration

number

Address

Position

Anastasija Pocienė

Limited Liability

Company (UAB)

Orkela UAB

304099538

Jogailos st. 4, Vilnius

Director

Anastasija Pocienė

Limited Liability

Company (UAB)

Orkelos valdymas UAB

304427020

Jogailos st. 4, Vilnius

Director

Anastasija Pocienė

Limited Liability

Company (UAB)

Vilniaus miesto

projektai UAB

303089021

Jogailos st. 4, Vilnius

Director

Anastasija Pocienė

Collective Investment

Fund (CIF)

Lords LB Special Fund

III

I028

Jogailos st. 4, Vilnius

Fund Manager

Anastasija Pocienė

Collective Investment

Fund (CIF)

Lords LB Special Fund

I032

Jogailos st. 4, Vilnius

Fund Manager

Anastasija Pocienė

Collective Investment

Fund (CIF)

Uptown Development

Fund

I185

Jogailos st. 4, Vilnius

Fund Manager

There were no transactions with the Company's Director other than salaries. Salaries are fixed by an employment contract and

bonuses are awarded by a Shareholder decision and managerial order.

Environmental protection

The Company's activities are fully compliant with the legal requirements. The Company has signed a General Contracting

agreement for the Project under development. The Company's partner is a certified company operating in accordance with the

requirements of the integrated quality, environmental and occupational health and safety management system – LST EN ISO

9001:2015, LST EN ISO 14001:2015 and LST 1977:2008/OHSAS 18001:2007, respectively.

Business plans and projections of the Company

The Company will focus all its attention on Project contracts with new tenants and operators, as well as on the development and

construction works in the coming years.

Other required disclosures

Combating corruption and bribery, including bribery of foreign officials in international transactions

Employees of the Company, in carrying out their daily activities, adhere to the procedures established by the Company. These

measures are implemented to reduce both external and internal bribery risks. The Company follows the Conflict of Interest

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Management Policy approved by the Shareholder Management Company (hereinafter referred to as the Management Company),

which sets out the key business conduct standards. This policy applies to all employees of the Management Company and the

Company. It serves as the foundation of ethical business conduct, aiming to systematically organize activities and facilitate decision-

making based on business ethics principles.

The Company does not engage in research and development activity.

As at 31 December 2023 and 2022 the Company had no branches or representative offices.

The Company did not acquire, dispose of or hold any of its own shares during the reporting year.

Taking into account the open military aggression started by Russia against Ukraine and its people on 24 February 2022 and the

imposition of new wide-ranging sanctions and restrictive measures by the EU and its allies against the Russian Federation and the

Republic of Belarus, compliance with these obligations is ensured in conducting the Company's business activities. The Company

has taken the actions required in line with the international sanctions implemented in the Republic of Lithuania. The Company

ensures that it has no suppliers, partners and customers that are listed among the sanctioned persons. In 2023, no internationally

sanctioned persons have been identified among the Company's customers, investors, suppliers and partners for the purposes of

implementing these sanctions.

This annual report was signed electronically

Director Anastasija Pocienė

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Orkela UAB Governance Report

Corporate Governance Report Form

UAB Orkela (hereinafter referred to as the "Company"), in accordance with Article 12(3) of the Securities Law of the Republic of

Lithuania and Clause 25.4 of the Listing Rules of AB Nasdaq Vilnius, discloses its compliance with the AB Nasdaq Vilnius Code of

Corporate Governance for Listed Companies, and with its specific provisions or guidelines. If there is a failure to comply with this

Code or any of its provisions or guidelines, this Report shall include an indication of the specific provisions or guidelines that are

not being complied with and the reasons for non-compliance, as well as any other explanatory information as specified in this form.

1. Free-form summary of the Corporate Governance Report:

The bodies of the Company, as provided for in its Articles of Association, are the General Meeting of Shareholders and the Director

as the sole governing body. The Company's supreme body is the General Meeting of Shareholders. The Company does not have

a Supervisory Board or a Management Board. The Company has a quantitative representation rule, whereby a Director and a proxy

act jointly on behalf of the Company.

The Company has no branches or representative offices and its main economic and commercial activity is the development of the

territory located at 1 Vasario 16-osios Street, Vilnius, Lithuania.

2. Structured table:

PRINCIPLES / GUIDELINES

YES / NO / NOT

APPLICABLE

COMMENTS

1.1. All shareholders should have equal access to the

information and/or documents provided for in the legislation

and should be able to participate in decisions of importance

to the Company.

Not applicable

The Company has a sole shareholder.

1.2. It is recommended that the capital of the Company

should consist only of shares that give the holders of such

shares equal voting, ownership, dividend and other rights.

Yes

The Company has only one shareholder.

1.3. It is recommended that investors should be given the

opportunity to familiarise themselves with the rights attached

to new or existing shares in advance, i.e. before purchasing

them.

Not applicable

The Company's shares are not offered to the

public (i.e. only the Company's bonds are

publicly traded).

1.4. Exceptional transactions of major importance, such as

the disposal of all or substantially all of the Company's

assets, which would in effect constitute a disposal of the

Company, should be subject to the approval of the General

Meeting of Shareholders.

Yes

The Company is guided by the provisions of

the Law of the Republic of Lithuania on

Companies and its Articles of Association

when making decisions on the transfer of the

Company's assets.

1.5. The procedures for organising and participating in the

General Meeting of Shareholders should give shareholders

equal opportunities to participate in the General Meeting of

Shareholders and should not prejudice the rights and

interests of the shareholders. The choice of the place, date

and time of the General Meeting should not preclude the

active participation of shareholders in the General Meeting.

In the notice of the General Meeting of Shareholders, the

Company should indicate the latest date on which the

proposed draft resolutions may be submitted.

Not applicable

The Company has a sole shareholder.

1.6. In order to ensure the right of shareholders living abroad

to access information, it is recommended that, where

possible, the documents prepared for the General Meeting

of Shareholders be made public in advance not only in

Lithuanian, but also in English and/or in other foreign

languages. It is also recommended that the minutes of the

General Meeting of Shareholders upon signature and/or the

decisions adopted at the General Meeting be made public

not only in Lithuanian but also in English and/or other foreign

languages. It is recommended that this information be

published on the Company's website. The scope of

Not applicable

The Company has a sole shareholder in

Lithuania.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

publication of such documents may be limited if their public

disclosure would be detrimental to the Company or would

disclose the Company's trade secrets.

1.7. Shareholders entitled to vote should be able to vote at

the shareholders' meeting either by attending it in person or

in absence. Shareholders should not be prevented from

voting in advance in writing by completing a single ballot

paper.

Yes

The Company has a sole shareholder who

may exercise the right to vote at the General

Meeting of Shareholders in person or in

absence.

1.8. In order to increase shareholders' ability to participate in

General Meetings of Shareholders, it is recommended that

Companies should increase the use of modern technology

to enable shareholders to participate and vote in General

Meetings of Shareholders by means of electronic

communications. In such cases, the security of the

information transmitted must be guaranteed and the identity

of the person who participated and voted must be

established.

The Company does not yet offer the

possibility for the sole shareholder to

participate in meetings electronically. The

shareholder may exercise its rights in the

ways described in section 1.7 of this Report.

1.9. It is recommended to disclose in the notice of the draft

resolutions of the convened General Meeting of

Shareholders the new nominations of members of a collegial

body, the remuneration proposed for them and the proposed

appointment of the audit firm, if these issues are included in

the agenda of the General Meeting of Shareholders. When

proposing to elect a new member of the collegial body, it is

recommended that the member's educational background,

work experience and other management positions held (or

proposed to be held) be disclosed.

Not applicable

The Company has a single-person

management body, i.e. the Director.

The sole shareholder of the Company decides

on the appointment of the proposed audit firm.

1.10. Members of the Company's collegial body, executive

officers or other competent persons associated with the

Company who may provide information relating to the

agenda of the General Meeting of Shareholders should be

present at the General Meeting of Shareholders. Proposed

candidates for membership of the collegial body should also

attend the General Meeting if the election of new members

is on the agenda of the General Meeting.

Not applicable

The Company has a single-person

management body, i.e. the Director.

Principle 2: Supervisory Board

2.1. Functions and responsibilities of the Supervisory Board

The Supervisory Board of the Company should ensure the representation of the interests of the Company and its shareholders, the

accountability of the Supervisory Board to the shareholders and the objective and impartial supervision of the Company's activities

and its management bodies, as well as to make recommendations to the Company's management bodies on an ongoing basis.

The Supervisory Board should ensure the integrity and transparency of the Company's financial accounting and control system.

PRINCIPLES / GUIDELINES

YES / NO / NOT

APPLICABLE

COMMENTS

2.1.1. Members of the Supervisory Board should act

in good faith, diligently and responsibly in the best

interests of the Company and its shareholders and

represent their interests, taking into account the

interests of the employees and the public good.

Not applicable

The Company does not have a Supervisory Board.

2.1.2. Where the Supervisory Board's decisions may

affect the interests of the Company's shareholders

differently, the Supervisory Board should treat all

shareholders impartially. It should ensure that

shareholders are adequately informed about the

Company's strategy, risk management and controls,

and the management of conflicts of interest.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

2.1.3. The Supervisory Board should be impartial in

making decisions relevant to the Company's

operations and strategy. The work and decisions of

the members of the Board of Supervisors should not

be influenced by those who elected them.

2.1.4. Members of the Supervisory Board should

expressly object if they consider that a decision of the

Supervisory Board may be detrimental to the

Company. Independent

members of the

Supervisory Board should: a) remain independent in

their analysis and decision-making; b) neither seek

nor accept any undue benefits that might cast doubt

on the independence of the members of the

Supervisory Board.

2.1.5. The Supervisory Board should oversee that the

Company's tax planning strategies are designed and

implemented in accordance with the law to avoid

malpractices that are not in the long-term interests of

the Company and its shareholders, which may give

rise to reputational, legal or other risks.

2.1.6. The Company should ensure that the

Supervisory Board is provided with sufficient

resources (including financial resources) to carry out

its duties, including access to all relevant information

and the right to seek independent professional advice

from external legal, accounting or other specialists on

matters within the competence of the Supervisory

Board and its committees.

2.2. Formation of the Supervisory Board

The procedure for the formation of the Supervisory Board should ensure the proper management of conflicts of interest and the

effective and fair governance of the Company.

PRINCIPLES / GUIDELINES

YES / NO / NOT

APPLICABLE

COMMENTS

2.2.1. The members of the Supervisory Board elected by

the General Meeting of Shareholders should collectively

ensure a diversity of qualifications, professional

experience and competences, as well as a gender

balance. In order to maintain an appropriate balance

between the qualifications of the members of the

Supervisory Board, it should be ensured that the members

of the Supervisory Board as a whole have a broad range

of knowledge, views and experience to perform their tasks

properly.

Not applicable

The Company does not have a Supervisory

Board.

2.2.2. Members of the Supervisory Board should be

appointed for a fixed term, with the possibility of individual

re-election for a new term of office, in order to ensure the

necessary growth in professional experience.

In the sense of this Code the criteria of independence of the members of the supervisory board are understood the same way as criteria of unrelated

persons defined in paragraphs 7 and 8 of Article 31 of the Law on Companies of Republic of Lithuania

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

2.2.3. The Chairperson of the Supervisory Board should

be a person whose current or former position would not be

an obstacle to the impartial exercise of his/her functions. A

former director or member of the Management Board of

the Company should not be immediately appointed as

Chair of the Supervisory Board. Where the Company

chooses not to comply with these guidelines, information

should be provided on the measures taken to ensure

operational impartiality.

2.2.4. Each member should devote sufficient time and

attention to his or her duties as a member of the

Supervisory Board. Each member of the Supervisory

Board should undertake to limit his/her other professional

commitments (in particular managerial positions in other

Companies) in such a way that they do not interfere with

the proper performance of his/her duties as a member of

the Supervisory Board. If a member of the Supervisory

Board attended less than half of the Supervisory Board

meetings during the Company's financial year, the

Company's shareholders should be informed.

2.2.5. Where the appointment of a member of the

Supervisory Board is proposed, it should be disclosed

which members of the Supervisory Board are considered

independent. The Supervisory Board may decide that a

particular member, although meeting the criteria for

independence, cannot be considered independent

because of particular personal or Company-related

circumstances.

2.2.6. The amount of remuneration for members of the

Supervisory Board for their activities and participation in

Supervisory Board meetings should be approved by the

Company's General Meeting of Shareholders.

2.2.7. The Supervisory Board should carry out an

evaluation of its own performance each year. It should

include an assessment of the structure, work organisation

and ability to act as a group, as well as an assessment of

the competence and effectiveness of each member of the

Supervisory Board and an assessment of whether the

Supervisory Board has achieved its stated performance

objectives. The Supervisory Board should publish, at least

once a year, relevant information on its internal structure

and operating procedures.

Principle 3: The Management Board

3.1. Functions and responsibilities of the Management Board

The Management Board should ensure the implementation of the Company's strategy, as well as the proper governance of the

Company, taking into account the interests of shareholders, employees and other stakeholders.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

3.1.1. The Management Board should ensure the

implementation of the Company's strategy approved by

the Supervisory Board, if one is established. In cases

where the Supervisory Board is not formed, the

Management Board is also responsible for approving the

Company's strategy.

Not applicable

The Company has a single-person management

body, i.e. the Director. The Company does not

have a Management Board.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

3.1.2. The Management Board, as the collegial

management body of the Company, shall perform the

functions assigned to it by the Law and the Articles of

Association of the Company, and in cases where the

Company does not have a Supervisory Board, it shall,

inter alia, perform the supervisory functions provided for in

the Law. In carrying out its functions, the Management

Board should take into account the needs of the Company,

shareholders, employees and other stakeholders, as

appropriate, in order to build a sustainable business.

Not applicable

The Company has a single-person management

body, i.e. the Director. The Company does not

have a Management Board.

3.1.3. The Management Board should ensure compliance

with the law and the Company's internal policies

applicable to the Company or the group of Companies to

which it belongs. It should also put in place appropriate

risk management and control measures to ensure regular

and direct accountability of managers.

Not applicable

The Company has a single-person management

body, i.e. the Director. The Company does not

have a Management Board.

3.1.4. The Management Board should also ensure that the

Company has in place the measures included in the

OECD Good Practice Guidance

on Internal Controls,

Ethics and Compliance to ensure compliance with the

applicable laws, regulations and standards.

Not applicable

The Company has a single-person management

body, i.e. the Director. The Company does not

have a Management Board.

3.1.5. In appointing the Chief Executive Officer of the

Company, the Management Board should take into

account an appropriate balance of qualifications,

experience and competences.

Not applicable

The Company does not have a Management

Board.

In the case of the Company, the sole shareholder

appoints the Director of the Company, taking into

account the balance of qualifications, experience

and balance of competencies of the candidate.

3.2. Formation of the Management Board

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

3.2.1. The members of the Management Board elected by the

Supervisory Board or by the General Meeting of Shareholders

where no Supervisory Board is established should collectively

ensure diversity of qualifications, professional experience and

competences and strive for a gender balance. In order to

maintain an appropriate balance between the qualifications of

the members of the Management Board, it should be ensured

that the members of the Management Board as a whole have

a broad range of knowledge, views and experience to perform

their tasks properly.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.2. The names of the candidates for election to the

Management Board, information on their education,

qualifications, professional experience, positions held, other

relevant professional commitments and potential conflicts of

interest should be disclosed, without prejudice to the

requirements of the legislation governing the processing of

personal data, at the meeting of the Supervisory Board at

which the Management Board or its individual members will

be elected. If the Supervisory Board is not established, the

information set out in this point should be submitted to the

General Meeting of Shareholders. The Management Board

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

should compile the data on its members referred to in this

point each year and report it in the Company's annual report.

3.2.3. All new members of the Management Board should be

familiarised with their duties, the Company's structure and

activities.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.4. Members of the Management Board should be

appointed for a defined period, with the possibility of individual

re-election for a new term, in order to ensure the necessary

growth in professional experience and sufficiently frequent

reconfirmation of their status.

3.2.5. The Chair of the Management Board should be a person

whose current or former position would not be an obstacle to

the impartial performance of their duties. Where the

Supervisory Board is not established, the former CEO of the

Company should not be immediately appointed to the position

of Chair of the Management Board. Where the Company

chooses not to comply with these guidelines, information

should be provided on the measures taken to ensure

functional impartiality.

3.2.6. Each member should devote sufficient time and

attention to fulfilling his/her duties as a member of the

Management Board. If a member of the Management Board

attended less than half of the Management Board meetings

during the financial year of the Company, the Supervisory

Board of the Company, or, in its absence, the General Meeting

of Shareholders should be informed.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.7. If, in the cases provided for in the Law, some of the

members of the Management Board will be independent

where the Management Board is elected in the absence of a

Supervisory Board,

, it should be published which members of

the Management Board are considered independent. The

Management Board may decide that a particular member,

although meeting all criteria for independence set out in the

Law, cannot be considered independent because of particular

personal or Company-related circumstances.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.8. The amount of remuneration for members of the

Management Board for their activities and participation in

Management Board meetings should be approved by the

Company's General Meeting of Shareholders.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.9. Management Board members should act in good faith,

diligently and responsibly in the best interests of the Company

and its shareholders and represent their interests, taking into

account the interests of other stakeholders. When adopting

decisions, they should not act in their personal interest; they

should be subject to no-compete agreements and they should

not use the business information or opportunities related to the

Company’s operations in violation of the Company’s interests.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

3.2.10. Each year, the Management Board should carry out an

evaluation of its own performance. It should include an

assessment of the structure, work organisation and ability to

act as a group, as well as an assessment of the competence

and effectiveness of each member of the Management Board

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

For the purposes of this Code, the criteria for independence of the members of the Management Board shall be understood in the same way as

the criteria for non-affiliated persons as defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

and an assessment of whether the Management Board has

achieved its stated performance objectives. The Management

Board should, at least once a year, publish relevant

information on its internal structure and operating procedures,

without prejudice to the requirements of the legislation on the

processing of personal data.

Principle 4: Working procedures of the Company's Supervisory Board and Management Board

The Company's procedures for the work of the Supervisory Board, if established, and the Management Board should ensure the

effective work and decision-making of these bodies and promote active cooperation between the Company's bodies.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

4.1. The Management Board and the Supervisory Board, if

established, should work closely together for the benefit of

both the Company and its shareholders. Good corporate

governance requires an open discussion between the

Management Board and the Supervisory Board. The

Management Board should regularly and, if necessary,

promptly inform the Supervisory Board of all matters of

importance to the Company relating to planning, business

development, risk management and control, and compliance

with the Company's obligations. The Management Board

should inform the Supervisory Board of actual deviations in the

development of the business from the previously formulated

plans and objectives, stating the reasons for this.

Not applicable

The Company has a single-person

management body, i.e. the Director. The

Company does not have a Management

Board.

4.2. It is recommended that meetings of the Company's

collegial bodies be held at appropriate intervals in accordance

with a pre-approved schedule. It is up to each Company to

decide on the frequency with which meetings of the collegial

bodies should be convened, but it is recommended that they

should be held at such a frequency as to ensure the

uninterrupted consideration of the Company's important

governance issues. Meetings of the Company's collegial

bodies should be convened at least once a quarter every year.

4.3. The members of the collegial body should be informed in

advance of the convening of the meeting in order to allow

sufficient time for adequate preparation on the issues to be

deliberated at the meeting and for a discussion leading to the

adoption of decisions. The members of the collegial body

should be provided with all relevant material relating to the

agenda of the meeting together with the notice of the meeting.

The agenda should not be amended or supplemented during

a meeting unless all members of the collegial body are present

and agree to such amendment or supplementation or unless

there is an urgent need to deal with important matters of the

Company.

4.4. In order to coordinate the work of the Company's collegial

bodies and to ensure an efficient decision-making process, the

Chairpersons of the Company's collegial supervisory and

management bodies should coordinate the dates and agendas

of their meetings and should cooperate closely in resolving

other issues related to the governance of the Company.

Meetings of the Company's Supervisory Board should be open

to the members of the Company's Management Board, in

particular when the meeting deals with issues related to the

removal of Management Board members, their liability and

remuneration.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Principle 5: Nomination, Remuneration and Audit Committees

5.1. Purpose and formation of committees

The committees established within the Company should enhance the effectiveness of the Supervisory Board and, in the absence

of a Supervisory Board, of the Management Board, which performs supervisory functions, by ensuring that decisions are taken after

due deliberation and by helping to organise the work in such a way as to ensure that decisions are not affected by material conflicts

of interest.

The Committees should act independently and in a principled manner and make recommendations in relation to the decision of the

collegial body, but the final decision rests with the collegial body itself.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

5.1.1. Depending on the specific circumstances of the

Company and the chosen governance structure of the

Company, the Supervisory Board of the Company and, in

cases where no Supervisory Board is established, the

Management Board, which performs supervisory functions,

may form committees. It is recommended that the collegial

body form Nomination, Remuneration and Audit

committees.

Yes

The Company does not have a collegial

management body. An audit committee has been

formed. The issue of the establishment of the

Nomination and Remuneration Committees will

be addressed in the future after analyzing the

situation, assessing financial costs, and other

factors, while implementing best practices in the

market. The preparation of financial statements,

internal control, and financial risk management

systems, as well as compliance with laws

regulating the preparation of financial

statements, fall under the supervision of the Audit

Committee.

5.1.2. Companies may decide to form fewer than three

committees. In such a case, Companies should provide

an explanation of why they have chosen the alternative

approach and how the chosen approach meets the

objectives set out for the three separate committees.

5.1.3. The functions assigned to the committees formed

within Companies may be performed by the collegial body

itself in the cases provided for by law. In such a case, the

provisions of this Code relating to committees (in particular

as regards their role, functioning and transparency) should,

where appropriate, apply to the entire collegial body.

Not applicable

The Company does not have a collegial

management body. An audit committee has been

formed.

5.1.4. Committees set up by a collegial body should

normally have at least three members. Subject to legal

requirements, committees may only consist of two

members. The members of each committee should be

selected primarily on the basis of their expertise, with a

preference for independent members of the collegial body.

The Chair of the Management Board should not be the

Chair of committees.

Yes

Due to the simplicity of the Company's

management structure, Nomination and

Remuneration Committees are not formed. The

audit committee consists of two members with

financial education and audit experience.

5.1.5. The mandates of each committee formed

should be determined by the collegial body itself.

Committees should carry out their duties in accordance with

their mandates and regularly inform the collegial body of

their activities and results. The mandates of each

committee, defining its role and specifying its rights and

responsibilities, should be published at least once a year

(as part of the information the Company publishes annually

about its governance structure and practices). Companies

Yes

In 2023, the audit committee was composed of 2

members. Throughout the year, a total of 4

meetings were held, with both members

attending each meeting. The main activities of

the audit committee were as follows:

1. providing recommendations related to the

selection, appointment, reappointment, and

dismissal of the external audit firm, as well as the

terms of the contract with the audit firm;

Legislation may provide for an obligation to set up an appropriate committee. For example, the Law on Audit of Financial Statements of the Republic

of Lithuania stipulates that companies of public interest (including, but not limited to, companies whose securities are traded on the regulated market

of the Republic of Lithuania and/or any other Member State) are required to establish an audit committee (the legislation provides for exemptions

when the functions of the audit committee may be performed by a collegial body exercising oversight functions).

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

should also publish each year in their annual report, without

prejudice to the requirements of the legislation on the

processing of personal data, the composition, number of

meetings and attendance of members of the existing

committees during the previous year, as well as the main

lines of their activities and their performance.

2. monitoring the performance of the external

audit process;

3. monitoring the adherence of the external

auditor and audit firm to principles of

independence and objectivity;

4. monitoring the financial reporting process.

Currently, the Company does not have a

separate internal audit function.

5.1.6. In order to ensure the independence and objectivity

of the committees, members of the collegial body who are

not members of the committee should normally only be

entitled to attend committee meetings upon invitation. The

Committee may invite or require the attendance of certain

employees of the Company or experts. The chair of each

committee should be able to communicate directly with

shareholders. The cases in which this should be done

should be specified in the rules governing the work of the

committee.

Yes

Due to the simplicity of the Company's

management structure, Nomination and

Remuneration Committees are not formed. The

audit committee's regulations grant the right to

committee members to invite Company

employees responsible for the areas under

consideration by the committee to their meetings,

as well as external partners such as auditors, to

provide all necessary information. They can also

receive required explanations within their

competence limits and demand necessary

actions to fulfill committee functions.

5.2. Nomination Committee

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

5.2.1. The main functions of the Nomination Committee

should be: (1) to select candidates for vacancies in the

supervisory and management bodies and executive

positions and to recommend them to the collegial body for

consideration. The Nomination Committee should assess

the balance of skills, knowledge and experience within the

governing body, develop a description of the functions and

skills required for the specific position and assess the time

required to implement the appointment;

(2) regularly assess the structure, size, composition, skills,

knowledge and performance of the supervisory and

governing bodies, and make recommendations to the

collegial body on how to achieve the necessary

changes;

(3) give due attention to succession planning.

Not applicable

Due to the nature of the Company's governance,

a nomination committee is not formed.

5.2.2. The Chief Executive Officer of the Company should

be consulted on matters relating to members of the

collegial body who have an employment relationship with

the Company and to the administration executives, giving

him/her the right to make proposals to the Nomination

Committee.

5.3. Remuneration Committee

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

The main functions of the Remuneration Committee should

be:

(1) to submit proposals to the collegial body for

consideration on the remuneration policy applicable to

members of supervisory and management bodies and to

the executive management. Such policy should cover all

forms of remuneration, including fixed remuneration,

performance-based remuneration, financial incentive

schemes, pension schemes, severance payments, as well

Not applicable

Due to the nature of the Company's governance,

a remuneration committee is not formed.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

as conditions that allow the Company to recover sums or to

suspend payments, indicating the circumstances that

would make it appropriate to do so;

2) to propose to the collegial body the individual

remuneration of the members of the collegial bodies and

executives, in order to ensure that it is in line with the

Company's remuneration policy and the assessment of the

performance of these individuals;

3) to review the remuneration policy and its implementation

on a regular basis.

5.4. Audit Committee

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

5.4.1. The main functions of the Audit Committee are

defined in the legislation governing the work of the audit

committee.

Yes

The Audit Committee carries out the functions

defined in the legislation governing the audit

committee.

5.4.2. All members of the Committee should be provided

with detailed information relating to the specific accounting,

financial and operational details of the Company. The Audit

Committee should be informed by the Company's senior

management of the accounting treatment of significant and

unusual transactions, which may be accounted for in

different ways.

Yes

The Company's director provides the Audit

Committee with all necessary information. The

Audit Committee functions as an advisory body

on matters within its scope of activity, operating

at the company level. Its main functions include:

1. overseeing the preparation of the Company's

financial statements and the audit process;

2. ensuring compliance with independence and

objectivity principles by the Company's auditors

and audit firms;

3. assessing transactions with related parties.

5.4.3. The Audit Committee should decide whether (and if

so, when) the Chair of the Management Board, the Chief

Executive Officer, the Chief Financial Officer (or senior

finance and accounting staff), the internal auditor and the

external auditor should attend its meetings. The Committee

should be able to meet the persons concerned, if

necessary, without the presence of members of the

management bodies.

Yes

Audit committee members have the discretion to

invite Company employees, officials, candidates

for specific positions, or other individuals to their

meetings and receive necessary explanations

within their competence limits. They can also

demand necessary actions to fulfill the

committee's functions.

5.4.4. The Audit Committee should be informed of the work

programme of the internal auditors and receive internal

audit reports or a periodic summary. The Audit Committee

should also be informed of the work programme of the

external auditors and should receive a report from the audit

firm describing any relationship between the independent

audit firm and the Company and its group.

Yes

The Company does not have an internal auditor.

The Audit Committee has direct contact with the

external auditors.

5.4.5. The Audit Committee should review the Company's

compliance with the applicable provisions governing the

ability of employees to complain or report anonymously

about allegations of wrongdoing within the Company and

should ensure that procedures are in place for a

proportionate and independent investigation of such

matters and for appropriate follow-up.

Not applicable

The Company has two employees.

5.4.6. The Audit Committee should report to the

Supervisory Board, or to the Management Board if no

Supervisory Board is set up, at least once every six months,

at the time of the approval of the annual and half-yearly

reports.

The Audit Committee submits such a report to its

electing body at the latter's request or whenever

the Audit Committee deems it necessary.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

Principle 6: Avoidance and disclosure of conflicts of interest

The Company's governance framework should encourage members of the Company's supervisory and management bodies to

avoid conflict of interest and ensure a transparent and effective mechanism for disclosure of conflict of interest by members of the

Company's supervisory and management bodies.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

6.1 A member of the Company's supervisory and

management body should avoid a situation where his or

her personal interests conflict or may conflict with the

interests of the Company. If such a situation does arise, a

member of the supervisory or management body of the

Company should, within a reasonable period of time,

inform the other members of the same body or the body of

the Company that elected him/her or the shareholders of

the Company of the existence of such a conflict of interest,

indicating the nature and, if possible, the value of the

interest.

Yes

The Company's management bodies have a duty

to avoid and declare conflicts of interest.

Principle 7: The Company's remuneration policy

The Company's remuneration policy and the procedures for its review and publication should prevent potential conflicts of interest

and abuse in the determination of the remuneration of the members of the collegial bodies and the executive management, as well

as ensure the openness and transparency of the Company's remuneration policy, including the Company's long-term strategy.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

7.1. The Company should adopt and publish a

remuneration policy on the Company's website, which

should be regularly reviewed and be in line with the

Company's long-term strategy.

Not applicable

The Company does not currently have an

approved remuneration policy setting the

remuneration of its executives. There is no such

obligation under the legislation, as only the

Company's bonds are publicly traded.

7.2. The remuneration policy should cover all forms of

remuneration, including fixed remuneration, performance-

based remuneration, financial incentive schemes, pension

schemes, severance payments, as well as clauses that

provide for cases where the Company may recover

amounts paid or suspend payments.

7.3. In order to avoid potential conflicts of interest, the

remuneration policy should provide that the members of

the collegial bodies exercising supervisory functions

should not receive remuneration that is linked to the

Company’s performance.

7.4. The remuneration policy should provide sufficient

detail on the severance pay policy. Severance payments

should not exceed a fixed amount or a fixed number of

annual salaries and should generally not exceed a fraction

of two years' fixed remuneration or its equivalent.

Severance payments should not be paid if the contract is

terminated because of poor performance.

7.5. If the Company operates a financial incentive scheme,

the remuneration policy should include sufficient details on

the retention of shares after vesting. In the case of a

share-based award, the shares should not vest for at least

three years after the award. After vesting, members of the

collegial bodies and chief executives should retain a

certain number of shares until the end of their term of

office, subject to the need to cover any costs associated

with the acquisition of the shares.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

7.6. The Company should publish on the Company's

website information on the implementation of its

remuneration policy, which should focus on the

remuneration policy of the collegial bodies and the

management for the next and, where appropriate, the

following financial year. It should also provide an overview

of how the remuneration policy was implemented in the

previous financial year. This type of information should not

contain information of commercial value. Particular

attention should be paid to material changes in the

Company's remuneration policy compared to the previous

financial year.

7.7. It is recommended that the remuneration policy or any

material change to the remuneration policy should be

included in the agenda of the General Meeting of

Shareholders. Schemes that remunerate members of the

collegial body and employees with shares or share options

should be approved by the General Meeting of

Shareholders.

Not applicable

The Company does not have any schemes that

compensate employees with shares or share

options.

Principle 8: The role of stakeholders in the governance of the Company

The Company's corporate governance framework should recognise the rights of stakeholders as enshrined in law or in mutual

agreements and promote active cooperation between the Company and stakeholders in order to create wealth, jobs and financial

stability for the Company. In the context of this principle, stakeholders include investors, employees, creditors, suppliers, customers,

the local community and other persons with an interest in the Company.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

8.1. The Company's governance framework should

ensure that the rights and legitimate interests of

stakeholders should be respected.

Yes

The Company ensures that the rights and

legitimate interests of stakeholders are respected.

8.2. The Company's governance framework should allow

stakeholders to participate in the governance of the

Company in accordance with the law. Examples of the

participation of stakeholders in the governance of the

Company could include the participation of employees or

their representatives in important decisions of the

Company, consultations with employees or their

representatives on the governance of the Company and

on other important issues, participation of employees in

the share capital of the Company, the inclusion of creditors

in the governance of the Company in cases of the

insolvency of the Company, and others.

Yes

Stakeholders participate in the governance of the

Company in accordance with applicable law.

8.3. Where stakeholders are involved in the governance

of the Company, they should be given access to relevant

information.

Yes

The relevant information is provided in accordance

with applicable legal requirements.

8.4. Stakeholders should be able to report illegal or

unethical practices in confidence to the collegial body

exercising the supervisory function.

Yes

Conditions are in place for the stakeholders to

confidentially report illegal or unethical practices to

the Company's Director.

Principle 9: Disclosure of information

The Company's governance framework should ensure that timely and accurate disclosures are made on all material matters

relating to the Company, including its financial position, performance and corporate governance.

PRINCIPLES / GUIDELINES

YES / NO /

NOT

APPLICABLE

COMMENTS

9.1. Without prejudice to the Company's procedures for

confidential information and trade secrets, as well as the

requirements of the legislation governing the processing of

Yes

The information described below is disclosed in

material event notices published through the

Nasdaq Vilnius Stock Exchange disclosure

system, on the Company's website, in the

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

personal data, the Company's public disclosure of

information should include, but not be limited to:

Company's annual and interim information

documents, to the extent required by law and the

Business Reporting Standards applicable in

Lithuania.

9.1.1. the Company's performance and financial results;

Yes

The Company publishes interim and annual

financial statements.

9.1.2. the Company's business objectives and non-

financial information;

Yes

The Company publishes semi-annual and annual

reports, and the information is published as

described above.

9.1.3. the persons owning or controlling a shareholding in

the Company, directly and/or indirectly, and/or jointly with

affiliated persons, as well as the structure of the group of

companies and the interrelationships between them,

specifying the ultimate beneficiary;.

Yes

This information is published in the Company's

financial statements and Annual Report to the

extent the Company deems necessary.

9.1.4. the members of the supervisory and management

bodies of the Company, which of them are considered to

be independent, the Chief Executive Officer of the

Company, their holdings of shares or votes in the

Company and their participation in the management of

other Companies, their competence and remuneration;

Yes

This information is published in the Company's

financial statements and Annual Report to the

extent the Company deems necessary.

9.1.5. reports from the existing committees on their

composition, number of meetings and attendance of

members at the meetings during the previous year, as well

as on the main activities and performance of their

activities;

Yes

The company has established an Audit

Committee. Further details about its activities are

disclosed in sections 5.1.4 and 5.1.5.

9.1.6. the foreseeable material risk factors, the Company's

risk management and oversight policies;

Yes

This information is published in the Company's

financial statements and annual report to the

extent the Company deems necessary.

9.1.7. the Company's transactions with affiliated parties;

Yes

This information is published in the Company's

financial statements.

9.1.8. key issues relating to employees and other

stakeholders (e.g. human resources policies, employee

participation in the governance of the Company, incentives

involving award of the Company's shares or share options,

relations with creditors, suppliers, the local community,

etc.);

Yes

Relevant information, to the extent deemed

necessary by the Company, is published in the

Company's Annual Report.

9.1.9. the company's governance structure and strategy;

Yes

This information is published in the Company's

financial statements.

9.1.10. initiatives and measures in the areas of social

responsibility policy, anti-corruption, and major investment

projects underway or planned. This list is to be considered

as a minimum and Companies are encouraged to go

beyond the disclosures contained herein. This principle of

the Code does not relieve the Company from its obligation

to disclose information as required by law.

Not applicable

Not applicable to the Company, given its size.

9.2. For the disclosures referred to in paragraph 9.1.1 of

Guideline 9.1, it is recommended that a Company that is

the parent of other Companies should disclose information

on the consolidated results of the whole group.

Not applicable

The Company has no subsidiaries and does not

prepare consolidated accounts.

9.3. In the disclosures referred to in paragraph 9.1.4 of

Guideline 9.1, it is recommended to provide information on

the professional experience and qualifications of the

members of the Company's supervisory and management

bodies and of the Company's CEO, and on any potential

conflicts of interest that could affect their decisions. It is

also recommended to disclose the remuneration or other

income received from the Company by the members of the

supervisory and management bodies of the Company and

the Company's manager, as further detailed in Principle 7.

Not applicable

As the legislation does not require disclosure of

remuneration, this information is not disclosed.

UAB "ORKELA"

Company code: 304099538, Jogailos st. 4, Vilnius

The Company’s Financial Statements 31 December 2023

(all amounts presented in EUR unless otherwise indicated)

9.4. Disclosures should be made in such a way that

no shareholders or investors are discriminated against in

the manner and extent to which they receive information.

Information on should be disclosed to everyone at the

same time.

Yes

The Company's information is published in

Lithuanian and English in the Nasdaq Vilnius

regulated announcement publication system and

on its website.

Principle 10: Selection of the Company's audit firm

The Company's mechanism for selecting the audit firm should ensure the independence of the audit firm's report and opinion.

PRINCIPLES / GUIDELINES

YES / NO / NOT

APPLICABLE

COMMENTS

10.1. In order to obtain an objective opinion on the

Company's financial position and financial performance, the

Company's set of annual financial statements and the

financial information contained in the Annual Report should

be reviewed by an independent audit firm.

Yes

The Company is audited by the

independent auditor KPMG Baltics UAB.

10.2. It is recommended that the nomination of the audit firm

be proposed to the General Meeting of Shareholders by the

Company's Supervisory Board or, in the absence of such a

Supervisory Board, by the Company's Management Board.

Yes

The Company submits the nomination of

the audit firm to the General Meeting of

Shareholders.

10.3. If the audit firm has received fees from the Company

for non-audit services, the Company should disclose this

publicly. This information should also be made available to

the Company's Supervisory Board or, in the absence of a

Supervisory Board, to the Company's Management Board

when considering which audit firm to propose to the General

Meeting of Shareholders.

Not applicable

The audit firm provided only audit services

to the Company in 2023.