Raport

Investment Friends SE

Harju maakond, Tallinn, Kesklinna linnaosa, Tornimäe tn 5, 10145, Estonia

Registry code: 14617862

Email: info@ifsa.pl

ANNUAL REPORT

INVESTMENT FRIENDS SE

AS AT JUNE 30, 2023

FOR THE PERIOD SINCE 01/07/2022 TILL 30/06/2023

PREPARED IN ACCORDANCE WITH

INTERNATIONAL FINANCIAL REPORTING STANDARDS

TALLINN 9.10.2023

INVESTMENT FRIENDS SE

GENERAL INFORMATION

Company’s name: INVESTMENT FRIENDS SE

Registry code: 14617862

Address: Harju maakond, Tallinn, Kesklinna linnaosa, Tornimäe tn 5, 10145

E-mail: info@ifsa.pl

Website: www.ifsa.pl

Reporting period: 01/07/2022 - 30/06/2023

Auditor: Number RT OÜ, Eve Leppik, license no: 230

Members of the Supervisory Board

Wojciech Hetkowski

Jacek Koralewski

Małgorzata Patrowicz

Anna Kajkowska

Members of the Management Board

Agnieszka Gujgo

Table of contents:

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

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

III. LETTER OF THE MANAGEMENT BOARD...........................................................................................5

IV. MANAGEMENT REPORT.........................................................................................................................6

V. CORPORATE GOVERNANCE REPORT …………………………………..……….……………………………..11

VI. . RENUMERATION REPORT…………………………………………………………..…………………………….17

VII. FINANCIAL STATEMENTS……............................................................................................................18

VIII. STATEMENT OF COMPLIANCE.…………………………………………………………………………………40

INDEPENDENT AUDITOR’S REPORT …………………………………………………………………………….....41

II. SELECTED FINANCIAL DATA

Selected financial data

Year

01/07/2022 -

30/06/2023

in thous EUR

Year

01/07/2021 -

30/06/2022

in thous EUR

Revenue from interest

Profit (loss) from operating activities

Profit (loss) before taxes

Profit (loss) for the period

Net cash flows (outflows) from operating

activities

-21

Total assets

1 469

2 669

Short-term liabilities

Equity

1 418

2 618

Share capital

405

8 100

Weighted average number of shares (in pcs.)

4 122 740

4 500 000

Profit (loss) per share (EUR)

0,02

Book value per share (EUR)

0,35

0,58

III. LETTER OF THE MANAGEMENT BOARD

Dear Sir or Madame,

On behalf of the Management Board of Investment Friends SE, I present to you the Annual Report

for the period since July 1, 2022 till June 30, 2023 . It is a year filled with operations aimed at

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

the Shareholders participating in the General Meetings. Financial activity in the scope of granting

loans ensured stability for the Company. The steps taken in previous years and their effects allow us

to think, that the decision of changing the strategy of the Company’s development, taken a few

years ago, brought measurable effects, which resulted in positive financial result.

Despite the obvious challenges facing the company, such as the development of the economy and

the achievement of profits earned by operations that satisfy shareholders, the board's intention is

to carry out stable operations in accordance with current laws and company standards, as well as

to create stable operations for the company by maintaining the interest yield.

Agnieszka Gujgo

Member of the Management Board

IV. MANAGEMENT REPORT

The main fields of activity

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

granting loans. The Company, implementing its business profile in the field of granting loans, has

concluded agreements with Polish and Estonian entities. The Company intends to continue its

operations in the area of lending activities.

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

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

General (macroeconomic) development

The Company undertakes financial activities, especially related to granting loans to business

entities, mostly to related parties.

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

polish market. Entrepreneurs who have not obtained financing from a bank, usually reach out to

companies which provide lending services and declare high flexibility depending on the needs of

a particular customer and their collateral capabilities.

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

business such as lending services, but on the other hand it gives an opportunity to earn above-

average profits in a relatively short time.

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

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

• monetary policy of central banks,

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

• situation on foreign markets.

The Company notices development potential in the field of providing financial services for this

kind of entities and, accordingly, intends to continue its business activity in this segment. As at

the date of publication of the annual report, Investment Friends SE has one major borrower, a

related party, whose operating activity is focused on investments in the capital market, therefore

the fulfilment of the loan repayment obligation may be indirectly affected by the level of interest

rates, which may affect the valuation of assets on stock exchanges.

During the period described in this report, interest rates in the euro zone, to which Estonia

belongs, ranged from 0% in July 2022 to 4% in June 2023. However, interest rates in Poland in

the corresponding period, set by the Ministry of Finance, ranged from 6.50% to 6.75%.

Financial instruments, financial risk management objectives and policies

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

liquidity risk, credit risk, risk related to financial collaterals. The Management Board is

responsible for establishing of risk management in the Company as well as for supervision of

their compliance. The purpose of the Company's risk management policies is to identify and

analyse the risks to which the Company is exposed, establishing appropriate restrictions and

controls, as well as by monitoring adjusted the risks and limits accordingly. The Management

Board identifies potential risks by analysing each transaction of the Company. Due to the simple

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

manner. The management board is responsible for designing, introducing, and ensuring

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

education of the management board allows to minimize the influence of risks on the operating

activity. The company's management board monitors risks on an ongoing basis and manage it in a

logical and systematic way, in accordance with established methods.

Description of significant external and internal factors

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

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

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

- the proper realization by the Borrowers of their obligations resulting from concluded loan

agreements, as well as course of execution process and vindication of loans terminated, if such

agreements occur,

- borrowers' field of activity and related risks,

- efficiency of administrative and legal procedures,

- opportunity to gain new borrowers,

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

- access to external financing sources,

- cooperation with other financial entities.

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

risk).

Due to the fact that the Company conducts lending activities, it is exposed to various types of

risks, the types and significance of which depend on the scope of its activities in the financial

markets, in particular: liquidity risk; market risk, including interest rate risk and currency risk.

These risks are described in detail in the Description of significant factors of risks section of this

report.

Structure of the share capital

As at the balance-sheet date of 30/06/2022 Investment Friends SE holds 4 500 000 issued

shares.

As at the balance-sheet date of 30/06/2023 Investment Friends SE holds 4 050 000 issued

shares.

As at the date of publication of the report the Company holds 4 050 000 shares.

During the financial year, the Company's share capital was reduced by 6 885 000 euros, from

7 290 000 euros to 405 000 euros. Changes concerned redemption of shares and reducing the

value of shares.

The share capital was reduced by reducing the nominal value of all Company shares from EUR

1.80 to EUR 0.10.

Share capital of the Company

-Since 29/06/2021 the share capital of the Company amounts to: EUR 900 000 and is divided

into 9 000 000 bearer shares without par value

- Since 15/12/2021 the share capital of the Company amounts to: EUR 8 100 000 and is divided

into 81 000 000 bearer shares without par value

-Since 27/05/2022 the share capital of the Company amounts to: EUR 8 100 000 and is divided

into 4 500 000 bearer shares without par value

-Since 29/08/2022 the share capital of the Company amounts to: EUR 405 000 and is divided

into 4 050 000 bearer shares without par value.

More detailed information about changes in the share capital is given on pages 36 (note 6).

Information about the company and shareholders

As at the balance sheet date 30/06/2023 Investment Friends SE has no subsidiaries, and it does

not create its own consolidation group.

According to the best knowledge of the Management Board the direct shareholder is Patro

Invest OǕ headquartered in Tallinn that owns 62,716% contribution in the share capital and

62,716% of votes at the general Meeting of Shareholders of the Company as at 30/06/2023.

As at 30/06/2023 the Company did not own any capital investments in the form of shares and

stock of other entities.

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

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

holding 5% or more of voting rights at the General Meeting of the Company.

No.

Shareholder

Number of

% of shares

Number of votes

% of votes

PATRO INVEST OÜ

(indirectly Damian

Patrowicz)

2 540 000

62,716

2 540 000

62,716

total

4 050 000

100

4 050 000

100

The table below presents shareholding structure as at 30/06/2022. It presents shareholders

holding 5% or more of voting rights at the General Meeting of the Company.

No.

Shareholder

Number of

% of shares

Number of votes

% of votes

PATRO INVEST OÜ

(indirectly Damian

Patrowicz )

2 971 824

66,04

2 971 824

66,04

total

4 500 000

100

4 500 000

100

Shares owned by members of the company’s management and supervisory board:

Members of the Management Board

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

the Management Board do not hold directly or indirectly shares of the Company.

Members of the Supervisory Board

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

the Supervisory Board do not hold directly or indirectly shares of the Company.

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

members of the management board of the company established by legislation.

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

of the management board of a company established by the Estonian Commercial Code, in

particular § 308, § 309 and others. Section V of the Company's Articles of Association contains

principles similar to the general rules of the Commercial Code. Information about the

description of management and supervisory bodies and their composition have been described

in the corporate governance report.

Competences and election of the supervisory board

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

members of the Company’s Management Board are appointed and dismissed by the Supervisory

Board, which also decides on the remuneration of members of the Management Board. Members

of the Supervisory Board are elected by the Company's general meeting of shareholders.

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

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

Company’s Articles of Association is included in the General Meeting of Shareholders’

competencies.

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

valid resolutions, if more than half of all votes are represented at the General Meeting, if the

applicable legal acts do not provide for a higher majority of votes.

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

a majority of votes, in accordance with point 4.5, the Management Board of the Company within

three weeks, but not earlier than after seven days, convenes a new general meeting with the

same agenda. In this way, the General Meeting is competent to adopt resolutions regardless of

the number of votes represented. Resolutions of the general meeting are adopted, when more

than half of all votes represented at the General Meeting support the resolution, and there is no

other requirement arising from applicable legal acts.

List of the most important events in the reporting period

- On 25/08/2022 the Extraordinary General Meeting of the Company's Shareholders was held. Entitled

Shareholders decided to adopt the following resolutions:

- Amendment of the Company's articles of association and approval of the new version of the

Company's articles of association

- On 29/08/2022 the Company provided information on the registration of amendments to the

Company's Articles of Association, pursuant to Resolution No. 1 of the Extraordinary General

Meeting of Shareholders of 25/08/2022.

In relations to the registration, the actual wording of point 2.1 and 2.4 of the Company’s Articles

of Association is as follows:

2.1. The minimum share capital of the Company is EUR 400,000 (four hundred thousand) and

the maximum share capital is EUR 1,600,000 (one million six hundred thousand).

“2.4 The minimum number of Company shares without par value is 4 000 000 (four million)

shares and the maximum number of Company shares without par value is 16 000 000 (sixteen

million) shares.“

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

Friends SE amounts to EUR 405 000 and the actual number of shares issue by the Company is

4 050 000 .

As a result of these changes the Company's share capital was reduced by 6 885 000 euros, from

7 290 000 euros to 405 000 euros. Changes concerned redemption of shares and reducing the

value of shares.

The share capital was reduced by reducing the nominal value of all Company shares from EUR

1.80 to EUR 0.10.

Information on average employment

The Company did not has any employees in the financial year lasting since July 1, 2022, to June

30, 2023 and in the previous financial year since July 1, 2021 to June 30, 2022.

Information regarding the selected auditor and the contract signed with them.

According to the Company’s Articles of Association, the right to elect a certified auditor is at the

General Meeting of Shareholders. On 04/05/2022, the General Meeting of Shareholders elected

the auditing company Number RT OÜ as the auditor.

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

Company and Number RT OÜ which was established on market conditions. The audit fee for the

financial year lasting since 01/07/2022 to 30/06/2023 amounted to 4.800 EUR and the audit

fee for the previous financial year lasting since 1/07/2021 to 30/06/2022 amounted to 4.800

EUR.

Selected ratios of Investment Friends SE:

RATIO

30/06/2023

30/06/2022

EBITDA (in thous EUR)

ROA

0,052

0,025

ROE

0,054

0,026

EBITDA- earnings before interest, taxes and depreciation

ROA – return on assets, ( profit (loss) for the period/ total assets)

ROE – return on equity,(profit (loss) for the period/equity)

V. CORPORATE GOVERNANCE REPORT

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

Companies 2021 and Corporate Governance Principles is available on the Company's website

www.ifsa.pl, in the "Regulations" section, the "Good practices" on corporate governance.

In 2022/2023 Investment Friends SE was subject to the corporate governance standards

contained in the document “Best Practice for GPW Listed Companies 2021”, which were adopted

by resolution of the Stock Exchange Supervisory Board no. 13/1834/2021 of March 29, 2021 for

companies listed on the WSE Main Market - "Best Practices of WSE Listed Companies 2021"

(Best Practices 2021, DPSN2021).

In fulfilling disclosure requirements regarding the application of corporate governance

standards, Investment Friends SE is guided by the principles of an effective and transparent

information policy and communication with the market and investors. The company was

informed on 30.07.2022 in stock exchange announcement No. 1/2021. of the current corporate

governance principles "WSE Listed Companies Good Practices 2021".

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

corporate governance principles,

The Company undertook to apply all corporate governance principles contained in ‘Best Practice

for GPW Listed Companies 2021’, except for the following:

DISCLOSURE POLICY, INVESTOR COMMUNICATIONS

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

possible after the end of each reporting period; should that not be feasible for substantial

reasons; companies publish at least preliminary financial estimates as soon as possible.

Comments of the Company

The Company publishes periodic reports within deadlines arising

from applicable Estonian law.

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

strategy, including in particular:

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

sustainable development.

Comments of the Company: The activity of the Company bases on granting large-value cash

loans. Therefore, the activity of the Company does not have significant impact on the

environment. The Company makes efforts to ensure that its activity have the least possible

impact on the natural environment.

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

equal treatment of women and men, decent working conditions, respect for employees’ rights,

dialogue with local communities, customer relations.

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

development and respect for social and employee rights and interests are applied in the strategy

of its activity. In this regard, the Company complies with all applicable laws and guidelines. As at

the time of publication of this report no written rules have been drawn up because there are no

employees.

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

companies publish on their website information concerning the framework of the strategy,

measurable goals, including in particular long-term goals, planned activities and their status,

defined by measures, both financial and non-financial. ESG information concerning the strategy

should among others:

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

measures, as well as information on the adopted development strategy both on the Company’s

website and publishing current and periodic reports. The Company indicated that it does not

publish information on its development plans and the progress of their implementation

separately. The Company also does not publish forecasts.

1.4.1 explain how the decision-making processes of the company integrate climate change,

including the resulting risks.

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

Company's activity on the natural environment, the Company does not publish additional

explanations in this scope.

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

the average monthly pay (including bonuses, awards and other benefits) of women and men in

the last year, and present information about actions taken to eliminate any pay gaps, including a

presentation of related risks and the time horizon of the equality target.

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

Company’s application of the rules of respect for respecting social and employee matters has not

been formalized, the Company does not publish additional information in the scope covered by

this point.

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

support of culture, sports, charities, the media, social organisations, trade unions, etc. If the

company pay such expenses in the reporting year, the disclosure presents a list of such expenses.

Comments of the Company: The company does not conduct sponsorship activities.

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

and other companies hold at least on an annual basis a meeting with investors to which they

invite in particular shareholders, analysts, industry experts and the media. At such meetings, the

management board of the company presents and comments on the strategy and its

implementation, the financial results of the company and its group, and the key events impacting

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

management board of the company publicly provides answers and explanations to questions

raised.

Comments of the Company: The Company is not included in the WIG20, mWIG40 or sWIG80

index. The company gives comprehensive explanations within the bounds of law to all questions

of shareholders and investors. The Company maintain electronic communication with investors.

Separate meeting with investors, analysts, industry experts and media representatives are not

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

investors.

MANAGEMENT BOARD, SUPERVISORY BOARD

2.1. Companies should have in place a diversity policy applicable to the management board and

the supervisory board, approved by the supervisory board and the general meeting, respectively.

The diversity policy defines diversity goals and criteria, among others including gender,

education, expertise, age, professional experience, and specifies the target dates and the

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

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

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

governing bodies and its key managers are taken by the General Meeting and the Supervisory

Board.

2.3. At least two members of the supervisory board meet the criteria of being independent

referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision, and have

no actual and material relations with any shareholder who holds at least 5% of the total vote in

the company.

Comments of the Company: The Decision to elect Members of the Supervisory Board is within

the competence of the General Meeting of Shareholders. Shareholders acts on the basis of their

competences and trust in individual candidates, appoint the composition of the Supervisory

Board. Depending on the decision of the General Meeting, the Company may or may not fulfil this

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

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

of the Supervisory Board is independent, and assessment of the risk resulting from this is within

the competence of the General Meeting.

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

prepares and presents an annual report about activities of supervisory board to the general

meeting once per year.

Comments of the Company: In accordance with the applicable provisions of the Estonian law,

the Company does not publish or submit to the General Meeting for approval a report on

activities of the Supervisory Board.

INTERNAL SYSTEMS AND FUNCTIONS

3.9. The supervisory board monitors the efficiency of the systems and functions referred to in

principle 3.1 among others on the basis of reports provided periodically by the persons

responsible for the functions and the company’s management board and makes annual

assessment of the efficiency of such systems and functions according to principle 2.11.3.

In case when the company has an audit committee, it monitors the effectiveness of the systems

and functions referred to in principle 3.1, however, it does not exempt the Supervisory Board

from preparing an annual assessment of the effectiveness of these systems and functions.

Comments of the Company: In accordance with the applicable provisions of the Estonian law,

the Company does not publish or submit a report on activities of the Supervisory Board to the

General Meeting for approval.

GENERAL MEETING, SHAREHOLDER RELATIONS

4.1. Companies should enable their shareholders to participate in a general meeting by means of

electronic communication (e-meeting) if justified by the expectations of shareholders notified to

the company, provided that the company is in a position to provide the technical infrastructure

necessary.

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

participate in the general meeting by means of electronic communication (meeting) are too high.

Nevertheless, the Management Board indicates, that the structure of the Company’s

shareholding means that the shareholders are not interested in participating in the Company’s

general meeting in electronic form. At the same time, the Company's Articles of Association and

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

Meeting by means of electronic communication.

4.3. Companies provide a public real-life broadcast of the general meeting.

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

Meeting are too high. At the same time, the Management Board indicates that the Company's

shareholding structure causes the lack of interest in the General Meeting. At the same time, the

Company's Articles of Association and the General Meeting Regulations do not prescribe

transmission of the meeting.

4.6. To help shareholders participating in a general meeting to vote on resolutions with adequate

understanding, draft resolutions of the general meeting concerning matters and decisions other

than points of order should contain a justification, unless it follows from documentation tabled

to the general meeting. If a matter is put on the agenda of the general meeting at the request of a

shareholder or shareholders, the management board requests presentation of the justification of

the proposed resolution, unless previously presented by such shareholder or shareholders.

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

not publish any additional justification for the draft resolutions of the General Meeting. So far,

the shareholders of the Company have not expressed interest in the additional discussion of the

matter of the General Meetings.

Shareholders with major holdings of shares

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

Meeting as at 30/06/2023, based on the statements received by the Company under applicable

laws.

No.

Direct shareholder

Number of

% of shares

Number of

votes

% of votes

Patro Invest OÜ

2 540 000

62,716

2 540 000

62,716

total

4 050 000

100,00

4 050 000

100,00

Structure of indirect shareholding as at 30/06/2023

No.

Indirect shareholder

Number of

% of shares

Number of

votes

% of votes

Damian Patrowicz

2 540 000

62,716

2 540 000

62,716

* Damian Patrowicz holds 100% of Patro Invest OU

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

Meeting of Shareholders as at 30/06/2022, based on the declarations received by the Company

pursuant to the rules in force – in accordance with the data presented in the annual report for

the financial year 2021/2022.

No.

Direct

shareholder

Number of

% of shares

Number of

votes

% of votes

Patro Invest OÜ

(indirectly Damian

Patrowicz )

2 971 824

66,04

2 971 824

66,04

total

4 500 000

100

4 500 000

100

Structure of indirect shareholding as at 30/06/2022

No.

Indirect

shareholder

Number of

%of shares

Number of

votes

% of votes

Damian

Patrowicz

2 971 824

66,04

2 971 824

66,04

* Damian Patrowicz holds 100% of Patro Invest OU

Holders of securities that give specific control rights and a

description of those rights

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

Restrictions on voting rights

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

Restrictions on transferability of ownership of the Company's shares

In accordance with the Articles of Association of Investment Friends SE there are no

restrictions on transferability of ownership of the Company's shares.

Rules governing the appointment and removal of management members and their rights

The listed company Investment Friends SE is managed by the Management Board, its Members

act in the interest of the company and are responsible for its activities. The activities of the

Management Board includes, in particular, managing the company, commitment to setting its

strategic goals and their implementation, as well as ensuring the company efficiency and

security.

The company is supervised by an effective and competent Supervisory Board. Members of

the Supervisory Board act in the interest of the Company and are guided by the independence of

their own opinions and decisions. The Supervisory Board in particular makes recommendations

on the Company's strategy and controls the work of the management board in achieving

strategic goals and monitors the achieved results.

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

Members of the Supervisory Board are elected by the Company's general meeting of

shareholders. (Article of Association, point IV)

Amendments to the Articles of Association

Amendments to the Articles of Association require a resolution of the General Meeting . The

notice convening a General Meeting whose agenda includes amendments to the Articles of

Association should contain existing provisions of the Articles of Association and the proposed

amendments. Where justified by a significant scope of the intended amendments, the notice may

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

amended provisions.

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

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

Proceedings of the General Meetings and its powers

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

Commercial Code, the Articles of Association of Investment Friends SE and the applicable capital

market laws.

Composition of the Management Board and description of the

activities of the Investment Friends SE management and supervisory bodies

in 2022/2023

Management Board:

Agnieszka Gujgo

Supervisory Board

Wojciech Hetkowski

Jacek Koralewski

Małgorzata Patrowicz

Anna Kajkowska

The main task of the Management Board is to manage the Company's activities and represent it,

but is also responsible for planning, implementing, and ensuring adequate and effective actions

aimed at achieving the goal. The Supervisory Board exercises permanent supervision over the

Company's activities in all areas of its operations. The main duties of supervisory board

members also include appointing, dismissing, and suspending members of the Company's

management board, delegating members of the supervisory board to perform tasks in replace

the members of the management board. Due to the simple structure of the Company, there are

no problems with communicating information in a timely manner between the Management

Board and the Supervisory Board.

Description of the company’s internal control systems and risk management with regard

to the process of preparing financial statements.

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

Company and its effectiveness in terms of the correctness of preparing financial statements and

periodical reports. Financial statements and periodic reports are prepared based on financial

data from the financial and accounting system, where they are recorded in accordance with the

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

the correctness of the preparation of periodic financial statements is conducted thanks to the

annual financial audits carried out by independent auditors. In the reporting period the financial

report was prepared by a professional entity – the auditing firm „Galex”, which provided

accounting services for the Company on the basis of the outsourcing agreement. By using the

services of a specialized office, the Management Board is able to analyze the formal correctness

of the submitted documents, prepare mandatory financial statements, including quarterly, half-

year and annual financial statements.

VI. REMUNERATION REPORT

This remuneration report has been prepared in accordance with the remuneration principles of

the Company’s Management Board member. The member of the Management Board is

remunerated pursuant to the signed contract. The remuneration report discloses the

remuneration and benefits paid to the member of the Management Board in the financial year

2022/2023.

The Management Board of the Company consist of one member - Agnieszka Gujgo. The contract

of Agnieszką Gujgo, a member of the Management Board, was signed on 18/06/2021 and his

term of office is valid until 18/06/2024.

Management Board Members are selected by the Supervisory Board of the Company based on

their expertise in the sector the Company is operating, in addition the candidate’s leadership and

management experience is taken into account as well as the commitment to the Company. The

Management Board member is not paid any remuneration. No share options are issued to the

management.

VI. FINANCIAL STATEMENTS

1. STATEMENT OF FINANCIAL POSITIONS

STATEMENT OF FINANCIAL POSITION

Note

June 30, 2023,

(in thous. EUR)

June 30 2022

(in thous. EUR)

A s s e t s

Current assets

1 469

2 669

Short-term receivables

1 432

2 652

Cash and cash equivalents

Short-term accruals

T o t a l A s s e t s

1 469

2 669

E q u i t y and l i a b i l i t i e s

Equity

1 418

2 618

Share capital

405

8 100

Share premium

6 435

301

Exchange differences

108

-176

Other reserves

206

Retained earnings

-5 736

-5 813

Short-term liabilities

Trade liabilities

Other provisions

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

1 469

2 669

Book value of equity

1 418

2 618

Number of shares (in pcs)

4 050 000

4 500 000

Book value per one share (in EUR)

0,35

0,58

Diluted number of shares (in pcs)

4 050 000

4 500 000

Diluted book value per share (in EUR)

0,35

0,58

The annual financial statements notes on pages 22-39 are an integral part of the annual financial

statements.

2. STATEMENT OF PROFIT OR LOSS

STATEMENT OF PROFIT OR LOSS

Note

Period ended

on 30/06/2023

(in thous. EUR)

Period ended on

30/06/2022

(in thous. EUR)

Revenue from interest

Gross profit (loss) on sales

General and administrative costs

Profit (loss) from operational activity

Financial revenues

Profit (loss) before income tax

Profit (loss) for the period

Weighted average number of shares

4 122 740

4 500 000

Earnings (loss) per one ordinary share (EUR)

0,02

The weighted diluted average number of shares (pcs)

4 122 740

4 500 000

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

0,02

The annual financial statements notes on pages 22-39 are an integral part of the annual financial

statements.

3. STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF COMPREHENSIVE INCOME

Period ended on

30/06/2023

(in thous. EUR)

Period ended on

30/06/2022

(in thous. EUR)

Profit (loss) for the period

Other comprehensive income (loss), including:

284

-30

Exchange differences

284

-30

Total comprehensive income (loss) for the period

361

The annual financial statements notes on pages 22-39 are an integral part of the annual financial

statements.

4. STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CHANGES IN EQUITY

Period ended on

30/06/2023

(in thous. EUR)

Period ended on

30/06/2022

(in thous. EUR)

Opening balance of equity

2 618

2 580

Opening balance of share capital

8 100

900

Changes in share capital

-7 695

7 200

a) increases (due to) – reduction the nominal value of the

7 200

b) decreases (due to) - reduction of the nominal value of

the shares

-7 695

Closing balance of share capital

405

8 100

Opening balance of share premium

301

7 501

Changes in share premium

6 134

-7 200

a) increases (due to) – reduction of the nominal value of

the shares

7 695

b) decreases (due to) - reduction of the nominal value of

the shares

-1 561

-7 200

Closing balance of share premium

6 435

301

Opening balance of other reserves

206

Closing balance of other reserves

206

Opening balance of retained earnings

-5 813

-5 881

Increases (due to)

a) profit/loss for the period

Closing balance of retained earnings

-5 736

-5 813

Opening balance of exchange differences

-176

-146

Changes in exchange rate differences

284

-30

a) increases

284

b) decreases

- 30

Closing balance of exchange differences

108

-176

Closing balance of equity

1 418

2 618

The annual financial statements notes on pages 22-39 are an integral part of the annual financial

statements.

5. CASH FLOW STATEMENT

CASH FLOW STATEMENT

(indirect method)

Period ended on

30/06/2023

(in thous. EUR)

Period ended on

30/06/2022

(in thous. EUR)

Operating activity

Profit (loss) for the period

Total adjustments

-56

-89

Difference between interest calculated and received

-90

Granted loans

-1250

-21

Repayments received

1161

Changes in reserves

Changes in liabilities

-2

Change in accruals

Net cash flows (outflows) from operating activities

-21

Net cash flows (outflows) total

-21

Exchange differences

-1

Change in cash balances

-21

Cash balance at the beginning of the period

Cash balance at the end of the period

The annual financial statements notes on pages 22-39 are an integral part of the annual financial

statements.

Notes to the financial statement

Note 1.

Accounting policies

1.1 General information

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

company based on Polish capital, operates in Estonia and Poland.

The financial statements of the Company for 2022/2023 were signed by the member of

management Board of Investment Friends SE SE on 9.10.2023

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

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

which also includes the financial statements, is approved by the general meeting of shareholders.

Shareholders have the right not to approve the annual report prepared by the Management

Board and approved by the Supervisory Board and to request that a new report is prepared. The

Annual General Meeting of Shareholders, one of the items on the agenda of which is the approval

of the annual report of Investment Friends SE for 2022/2023, is planned on 15.11.2023.

1.2. Basis of preparation of financial statements

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

International Financial Reporting Standards as endorsed in the European Union (“IFRS (EU)”).

The Company has consistently applied the accounting policies throughout all periods presented,

unless stated otherwise.

The annual financial statements for 2022/2023 have been prepared on a going concern basis.

The preparation of annual financial statements in conformity with IFRS (EU) requires the use of

certain critical accounting estimates. It also requires management to exercise its judgment in the

process of applying the Company’s accounting policies. Changes in assumptions may have a

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

management of the Company believes the underlying assumptions in the preparation of annual

financial statements for 2022/2023 are appropriate.

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

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

flows, and explanatory notes.

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

thousand (€000), except when otherwise indicated. The original annual financial statements of

the Company have been prepared is English. In case of the conflict with Polish or Estonian

translation, the English version shall prevail.

1.3. Functional and reporting currency

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

currency is euro (EUR).

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

Central Bank as at the balance sheet day.

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

exchange rate being the arithmetic average exchange rates announced by the European Central

Bank for the financial year.

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

When an IFRS (EU) specifically applies to a transaction, other event, or condition, the accounting

policy or policies applied to that item shall be determined by applying the IFRS (EU). In the

absence of an IFRS (EU) that specifically applies to a transaction, other event or condition,

management shall use its judgement in developing and applying an accounting policy that

results in information that is relevant to the economic decision-making needs of users and

reliable.

The Company selects and applies its accounting policies consistently for similar transactions,

other events, and conditions, unless an IFRS (EU) specifically requires or permits categorization

of items for which different policies may be appropriate. If an IFRS (EU) requires or permits such

categorization, an appropriate accounting policy shall be selected and applied consistently to

each category.

The Company changes an accounting policy only if the change is required by IFRS (EU) or results

in the financial statements providing reliable and more relevant information about the effects of

transactions, other events, or conditions on the entity’s financial position, financial performance,

or cash flows. When a change in accounting policy is applied retrospectively the Company

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

presented and the other comparative amounts disclosed for each prior period presented as if the

new accounting policy had always been applied.

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

in profit or loss in the period of the change, if the change affect that period only or the period of

the change and future periods, if the change affects both. The Company corrects material prior

period errors retrospectively in the first set of financial statements authorized for issue at their

discovery by restating the comparative amounts for the prior period(s) presented in which the

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

opening balances of assets, liabilities and equity for the earliest prior period presented.

1.5. Impact of new and revised standards and interpretations

The accounting policies applied in the preparation of these financial statements are the same as

those used by the Company in the financial statements for the year ended 30 June 2022.

Revised standards effective for annual reporting periods beginning on or after 1 January 2023

Certain new or revised standards and interpretations have been issued that are mandatory for

the Company’s annual reporting periods beginning on or after 1 January 2023 and that have not

been adopted by the Company ahead of effective date.

Amendments to IAS 1 „Presentation of Financial Statements“ and IFRS Practise Statement 2

„Making Materiality Judgments“- amendments aim to help entities provide accounting policy

disclosures that are more useful by:

 requiring companies to disclose their material accounting policies rather than their

significant accounting policies;

 clarifying that accounting policies related to immaterial transactions, other events or

conditions are themselves immaterial and as such need not be disclosed; and

 clarifying that not all accounting policies that relate to material transactions, other

events or conditions are themselves material to a company’s financial statements.

The Board of IFRS also amended IFRS Practice Statement 2 to include guidance and two

additional examples on the application of materiality to accounting policy disclosures.

The amendments are consistent with the refined definition of material: “Accounting policy

information is material if, when considered together with other information included in an

entity’s financial statements, it can reasonably be expected to influence decisions that the

primary users of general purpose financial statements make on the basis of those financial

statements”.

Effective for annual reporting periods beginning on or after 1 January 2023. The EU has

approved the changes.

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

statements when initially applied.

Amendments to IAS 1 „Presentation of Financial Statements“ (classification of liabilities as

current and non-current) – amendments are aimed to promote consistency in applying the

requirements by helping the companies determine whether liabilities and other liabilities with

uncertain settlement dates should be classified as current (to be settled within 12 months) or

non-current. The amendments clarify what is meant by the right to defer settlement; that a right

to deferral must exist at the end of the reporting period; that classification is unaffected by the

likelihood that an entity will exercise its deferral right and that only if the embedded derivative

in a convertible liability is itself an equity instrument would the terms of a liability not impact its

classification.

Effective for annual reporting periods beginning on or after 1 January 2023. The EU has

approved the changes.

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

statements when initially applied.

Amendments to IAS 8 „Accounting Policies, Changes in accounting Estimates and Errors“ –

amendments introduce a new definition for accounting estimates. According to the new

definition, accounting estimates are "monetary amounts in financial statements that are subject

to measurement uncertainty". Entities should develop accounting estimates when the

accounting policies require the measurement of items in the financial statements that are

subject to measurement uncertainty. The amendments clarify that a change in an accounting

estimate resulting from new information or new developments is not a correction of an error.

Effective for annual reporting periods beginning on or after 1 January 2023. The EU has

approved the changes.

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

statements when initially applied.

Other changes

Other new standards, amendments to standards and interpretations that are not yet effective

are not expected to have a significant impact on the Company’s financial statements.

Changes in standards

Annual Improvements to IFRS Standards 2018–2020 (the Company will apply the amendment

for annual periods beginning on or after 1 January 2022). Not yet endorsed for use in the EU.

IFRS 9 - Amendments clarify which fees to consider when assessing whether or not the terms of

a converted debt Instrument have changed - only fees paid or received between the borrower

and the lender (including payments made or received by the borrower or lender on behalf of

another party).

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

statements when initially applied.

Other new standards, amendments to standards and interpretations that are not yet effective

are not expected to have a significant impact on the Company’s financial statements.

Annual improvements to IFRS standards 2018-2020 – Effective for annual periods beginning

on or after 1 January 2022. Early application is permitted.

Improvements to IFRS (2018-2020) include two amendments to the standards:

The amendments to IFRS 9 Financial instruments clarify that, when assessing whether an

exchange of debt instruments between an existing borrower and lender is on terms that are

substantially different, the fees to include together with the discounted present value of the cash

flows under the new terms include only fees paid or received between the borrower and the

lender, including fees paid or received by either the borrower or lender on the other's behalf.

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

statements when initially applied.

Other changes

Other new standards, amendments to standards and interpretations that are not yet effective

are not expected to have a significant impact on the Company’s financial statements.

1.6. Financial assets (IFRS 9, IAS 32)

Classification

The Company classifies financial assets into the following measurement categories:

- those at fair value (either through other comprehensive income or through profit or

loss);

- those carried at amortised cost.

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

and the contractual terms of the cash flows.

Registration and derecognition

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

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

assets are derecognised when the rights to receive cash flows from the asset have expired or

have been transferred and the Company has transferred substantially all risks and rewards of

ownership.

Measurment

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

financing component and are initially measured at transaction price) are initially measured at

fair value and in the case of assets do not measure at fair value through profit or loss, related

acquisition costs of assets are added to the initial value.

Debt instruments

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

managing its financial assets and the contractual cash flows of the financial assets.

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

interest payable are recognised at amortised cost using the effective interest rate method.

Impairment losses are deducted from the adjusted acquisition cost. Interest income, foreign

exchange gains and losses and impairment losses are recognised in the income statement.

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

income / expense”.

As of 30 June 2022, and 30 June 2023 and during 2022/2023, financial assets of the Company

were classified as at amortised cost.

Impairment of financial assets

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

carried at amortized cost consist of loan receivables, other receivables, cash, and cash

equivalents.

Expected credit losses are probability-weighted estimated credit losses. Credit loss is the

difference between the contractual cash flows of the Company and the expected cash flows of

the Company, discounted at the original effective interest rate.

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

amount that estimates several different outcomes, (ii) the time value of money and (iii)

reasonable and reasonable information available at the end of the reporting period conditions

and forecasts of future economic conditions.

The Company measures impairment as follows:

- cash and cash equivalents at low credit risk (senior management considers a low credit

risk assessment of at least one of the major credit rating agencies) to be equivalent to

expected credit losses within 12 months;

- for all other financial assets, the amount of credit losses expected to be incurred over a

12-month period, unless the credit risk (i.e., the expected life of the financial asset in

default) has increased significantly after initial recognition; if the risk is significantly

increased, the credit loss is measured at an amount equal to the expected credit loss over

a lifetime.

Loans and receivables

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

that are not quoted in an active market. Loans and receivables are initially recognised at their

fair value plus transaction costs. After initial recognition, loans and receivables are carried at

amortised cost using the effective interest rate method. This method is used to calculate interest

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

losses.

Impairment is based on expected credit loss. The principle of expected credit loss is to show the

overall trend in the deterioration or improvement in the credit quality of a financial asset.

Impairment losses on financial assets classified at amortised cost are recognised as a provision

for impairment.

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

date, consider all relevant information, including information about past events, current

conditions, reasonable and reasonable future events, and forecasts of economic conditions. At

the end of each reporting period, the Company conducts a review to determine whether there

has been a material increase in risk compared to the last estimate. Indicators of increased credit

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

difficulties of the debtor, possible bankruptcy or restructuring of the debtor. Impairment

charges are recognised in the income statement under “Other operating costs”. If receivables are

uncollectible, they are written off together with a provision for impairment.

Receivables are generally recognised as current assets when they are due to be settled within 12

months after the balance sheet date. Receivables that are due later than 12 months after the

balance sheet date are recognised as non-current assets. Financial assets that do not include

SPPI (Solely Payment of Principal and Interest) cash flows are recognised at fair value through

Information on financial instruments profit or loss.

Information on financial instruments

June 30, 2023

Classes of financial instruments

Amortized cost

Financial

liabilities

measured at

amortized cost

Total

Total financial assets

1 469

Loans granted

1 432

Cash and cash equivalents

other receivables

June 30, 2022

Classes of financial instruments

Amortized cost

Financial

liabilities

measured at

amortized cost

Total

Total financial assets

2 669

Loans granted

2 652

Cash and cash equivalents

other receivables

Professional judgment

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

guided by its subjective judgment, determines, and applies accounting policies which will ensure

that the financial statements will contain correct and reliable information and :

 correctly, clearly, and fairly present the assets and financial situation of the Company, the

results of its activities and cash flows,

 reflect the economic content of the transaction,

 are objective,

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

 is complete in all material respects.

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

risk of non-repayment. If there is no risk of repayment, we value the loans at their nominal

value. There are conducted proper analysis.

The Management Board makes decisions considering all the potential consequences of its

decisions. Hence, the decision-making process is based on multi-stage analysis of, inter alia,

borrowers' collaterals.

Uncertainty of estimates

When applying the accounting principles in force in the Company, the Management Board is

obliged to make estimates, judgments, and assumptions regarding the amounts of valuation of

individual assets and liabilities. The estimates and related assumptions are based on historical

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

estimated values. The preparation of the financial statements requires the Management Board of

the Company to make estimates, as much of the information contained in the financial

statements cannot be measured precisely. The Management Board verifies the adopted

estimates based on changes in the factors considered when making them, new information or

past experiences. Therefore, the estimates made as of June 30, 2023 may be changed in the

future.

In the report for 2022/2023, the Management Board assesses that there are no other significant

areas with regard to which there is a risk related to uncertainty of estimates.

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

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

investments (up to three months) that are readily convertible into a known amount of cash and

which are subject to an insignificant risk of changes in value.

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

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

using the indirect method whereby net profit or loss is adjusted for the effects of transactions of

a non-cash nature, any deferrals, or accruals of past or future operating cash receipts or

payments, and items of income or expense associated with investing or financing cash flows.

1.8. Share Capital (IAS 1)

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

shares are recognised as a reduction of equity. Treasury shares repurchased by the parent

company are recognised as a reduction of equity (in the line item “Treasury shares”).

Disbursements and contributions related to treasury shares are recognised in equity.

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

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

are recognized in the share premium. In the event of buyout of shares, the amount paid for the

shares is charged to equity and is disclosed in the statement of financial position under equity.

The costs of issuing shares, incurred when establishing a joint-stock company or increasing the

share capital, reduce the entity's supplementary capital to the amount of the excess of the issue

value over the par value of the shares, and the remaining part is classified as financial costs.

1.10. Statutory reserve capital (IAS 1)

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

Republic of Estonia. During each financial year, at least 5% of the net profit shall be transferred

to reserve capital until reserve capital reaches one-tenth of share capital. Reserve capital may be

used to cover a loss or to increase share capital. Payments shall not be made to shareholders

from reserve capital. In the statement of financial position statutory reserve is recognised in

other reserves.

1.11. Earnings per share (IAS 33)

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

equity holders of the Company by the weighted average number of shares outstanding during

the year. Diluted earnings per share is calculated by dividing the profit attributable to equity

holders of the Company (after adjusting for interest on the convertible preference shares) by the

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

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

shares.

1.12. Financial liabilities (IFRS 9, IAS 32)

All financial liabilities (trade payables, other short and long-term liabilities, borrowings, etc.) are

initially recognised at their fair value, less any transaction costs. They are subsequently

recognised at amortised cost, using the effective interest rate method.

The amortised cost of the current financial liabilities generally equals their nominal value;

therefore, current financial liabilities are stated in the statement of financial position at

redemption value. To calculate the amortised cost of non- current financial liabilities, they are

initially recognised at fair value of the proceeds received (net of transaction costs incurred) and

an interest expense is calculated on the liability in subsequent periods using the effective

interest rate method.

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

balance sheet date or the Company does not have an unconditional right to defer settlement of

the liability for at least 12 months after the balance sheet date. Interest-bearing liabilities that

are due within 12 months after the balance sheet date, but which are refinanced after the

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

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

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

conditions set forth in the agreement.

1.13. Provisions and contingent liabilities (IAS 37)

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

because of a past event it is probable that the Company will be required to settle the obligation,

and a reliable estimate can be made of the amount of the obligation.

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

the present obligation at the end of the reporting period, considering the risks and uncertainties

surrounding the obligation. When a provision is measured using the cash flows estimated to

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

the effect of the time value of money is material).

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

recovered from a third party, a receivable is recognized as an asset if it is virtually certain that

reimbursement will be received.

Contingent liabilities

Contingent liabilities are those liabilities the realization of which is less probable than non-

realization or the amount of which cannot be measured sufficiently reliably. The Company does

not recognize contingent liabilities but discloses brief description of the nature of the contingent

liability and, where practicable an estimate of its financial effect; an indication of the

uncertainties relating to the amount or timing of any outflow; and the possibility of any

reimbursement unless the possibility of any outflow in settlement is remote.

1.14. Revenue recognition (IFRS 15)

Interest income

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

transaction will flow to the Company and the amount of the revenue can be measured reliably.

Interest income is recognized on an accrual basis.

1.15. Operating segments (IFRS 15, IFRS 8)

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

expenditures. The segment reporting is presented in respect of operating and geographical

segments. The Company operates in only one business area, therefore the segment reporting is

not relevant.

1.16. Income tax (IAS 12)

Corporate income tax in Estonia

According to the Income Tax Act entered into force in Estonia on 1 January 2000, it is not the

company's profits that are taxed but net dividends paid. Income tax is paid on dividends, fringe

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

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

2019, it is possible to apply a more favourable tax rate on dividend payments (14/86). The more

favourable tax rate can be applied to a dividend distribution that amounts to up to three

preceding years’ average dividend distribution that has been taxed at 20/80 rate.

1.17. Related parties (IAS 24)

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

statements. A related party transaction is a transfer of resources, services, or obligations

between a reporting entity and a related party, regardless of whether a price is charged. Such

transactions could have an effect on the profit or loss and financial position of the Company. For

this reason, knowledge of the Company’s transactions, outstanding balances, including

commitments, and relationships with related parties may affect assessments of its operations by

users of financial statements, including assessments of the risks and opportunities facing the

Company.

The Company discloses the related party relationship when control exists, irrespective of

whether there have been transactions between the related parties.

The Company considers key members of the management (supervisory and management board),

their close relatives and entities under their control or significant influence as well as associated

companies as related parties.

1.18. Events after the reporting period (IAS 10)

Events after the reporting period are those events, favourable and unfavorable, that occur

between the end of the reporting period and the date when the financial statements are

authorized for issue. Events after the reporting period are those that provide evidence of

conditions that existed at the end of the reporting period (adjusting events after the reporting

period) and those that are indicative of conditions that arose after the reporting period (non-

adjusting events after the reporting period).

Note 2

Description of significant factors of risks and threats

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

risk, liquidity risk, credit risk. The Management Board is responsible for establishing of the risk

management rules and supervising of its respecting. The principles of risk management aim are

to identify and analyse the risks that the Company is exposed to, by establishing appropriate

limits and controls.

Interest rate risk

During the period described in this report, interest rates in the euro zone, to which Estonia

belongs, ranged from 0% in July 2022 to 4% in June 2023. However, interest rates in Poland in

the corresponding period, set by the Ministry of Finance, ranged from 6.50% to 6.75%.

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

contract interest rate. The interest rates below are based on the date of the loan and the interest

rate in effective date.

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

instruments was as follows:

Interest rate

Fixed/variable interest

rate

Damar Patro UU

2,5%

fixed

Patro Administracja Sp. z

o.o.

fixed

Patro Invest sp. z o.o. w

likwidacji

24,5%

fixed

Patro Invest OU

fixed

Credit risk

Credit risk represents a potential loss that could arise if a Company’s counterparty in a

transaction is unable to meet its contractual obligations and provide cash flows. Credit risk is

mainly related to loans granted by the Company, cash and cash equivalents, deposits, trade

receivables. The scope of the Company's credit risk is most affected by the specific

circumstances of each customer. At the same time, the Company's management also follows the

general circumstances such as the legal status of the client (private or public company), the

geographical location of the client, the field of operation, the state of the economy and future

economic forecasts. To reduce the credit risk, customers' payment discipline and their ability to

meet their commitments are monitored daily.

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

30/06/2023

in thous.EUR

Total

Maturity date

< 1 year

1-2 years

2-3 years

above 3

years

Cash

Loans granted

1 432

Other

receivables

Total

1 469

The maturity dates of the assets as at 30/06/2022

30/06/2022

in thous.EUR

Total

Maturity date

< 1 year

1-2 years

2-3 years

above 3

years

Cash

Loans granted

2 652

Other

receivables

Total

2 669

Liquidity risk

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

final maturity of assets and liabilities, analysing working capital and maintaining an access to

different sources of funding. The aim of the Company is to maintain the balance between funding

continuity and flexibility, through using sources of funding such as loan, overdraft facility.

Risk of shares price’s fluctuations and limited liquidity

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

of turnover. It might result in sale or purchase of the qualifying holding of the Company’s shares

will relate to a necessity to accept significantly less favourable price than the reference price.

The Company cannot also exclude significant, temporary limitations of liquidity which may

significantly hamper sales or purchase of the Company’s shares.

Currency risk

The Company do not own significant financial instruments whose fair value and future cash flow

related to them may fluctuate due to changes in currency exchange rates. Therefore, the impact

of changes in exchange rates on the Company's results was not estimated. There is a currency

risk in connection with the loans granted in PLN. The risk related to the possibility of

fluctuations in the exchange rate of one currency in relation to another may lead to both

deterioration of the financial situation of the entity and its improvement as a result of a decrease

in a given receivable or an increase in this receivable. Financial assets and liabilities recognized

in euros and polish zloty did not carry considerable risk. In the last financial year, a strong

strengthening of PLN was noticeable both against EUR (+5,9%, from 4,44 into 4,70) and

USD (+10%, from 4,07 into 4,49).

Risk related to related parties

There are interpretations indicating the possibility of emerging risks consisting in the negative

impact of links between members of the Company’s bodies on their decisions. This applies to the

impact of these links on the Company’s Supervisory Board regarding the day-to- day supervision

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

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

Meeting, and in the interest of the members of the Supervisory Board it is to perform their duties

in a reliable and lawful manner.

Risk related to the shareholding structure

As at the balance sheet date 62,716% of the share capital and 2 540 000 votes at the Company’s

General Meeting belong directly to Patro Invest OU, as a result of which the above Shareholder

has a significant impact on the resolutions adopted at the Company’s General Meeting.

Risk related to the economic situation in Poland and Estonia

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

entities including the Company, because the success of development of companies investing in

financial instruments and conducting financial services largely depends on the conditions of

running a business. In case of realization the transfer of the seat of the Company to Estonia, risk

in the above scope will applies to the new registered office in Republic of Estonia.

Risk related to the armed conflict in Ukraine

Due to the ongoing armed conflict in Ukraine, the Company’s operations are moderately exposed

to the consequences of the war. As at the date of publication of the report, the Company does not

anticipate extending the conflict beyond the territory of Ukraine therefore, no impact on the

operating activities of the Company is expected.

Management judgements

As at the day of preparation of the annual report, the Management Board according to their best

knowledge, does not recognize any threat in terms of fulfilling his obligations and financial

liquidity. The Company settles its liabilities systematically and has not taken any credits or loans

taken or other significant obligations. The Company dedicates its financial resources for

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

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

Company is the granting of loans, the proper and prompt fulfillment of the contractual

obligations of the borrowers has a significant impact on the Company's results and maintaining.

Note 3

Capital management

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

confidence and to ensure the future development of business operations.

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

implementation of planned investments, so that it can generate returns for shareholders.

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

ratio and the loans and other sources of financing / EBITDA ratio. In order to maintain financial

liquidity and creditworthiness allowing obtaining external financing at a reasonable level of

costs, the Company assumes maintaining the equity ratio at a level not lower than 0.5, while the

ratio: credits, loans, and other sources of financing / EBITDA at the level of up to 2.0.

30/06/2023

(in thous.EUR)

30/06/2022

(in thous.EUR)

Equity

1 418

2 618

Net value of assets

1 418

2 618

Total assets

1 469

2 669

Total liabilities

Equity ratio*

0,97

0,98

Net profit/loss

EBITDA***

Debt to capital ratio **

0,51

0,50

* Equity ratio = equity / total assets

**Debt to capital ratio = total liabilities /(total liabilities+total equity)

***EBITDA = profit (loss) for the period + taxes + interest costs + deprecation

EXPLANATORY NOTES

Note 4

Financial assets

30/06/2023

Borrower

12 months

period

1-5

years

Interest

rate

Currency

Repayment

date

Collaterals

Damar Patro

1 402

2,5%

EUR

30/06/2024

blank

promissory

note with note

agreement

Patro Invest

EUR

30/06/2023

blank

promissory

note with note

agreement

Patro Invest

Sp. z o.o. w

likwidacji

24,5%

PLN

25/10/2019

blank

promissory

note with note

agreement

Total

1 432

As of June 30, 2023, all loans were granted to related entities and are disclosed in note 9.

30/06/2022

Borrower

12 months

period

1-5

years

Interest

rate

Currency

Repayment

date

Collaterals

Damar Patro

1 797

2,5%

EUR

30/06/2023

blank

promissory

note with note

agreement

Patro

Administracja

Sp. z o.o.*

849

PLN

30/06/2022

blank

promissory

note with note

agreement

Patro Invest

Sp. z o.o. w

likwidacji

11,20%-

23%

PLN

25/10/2019

blank

promissory

note with note

agreement

Total

2 652

* The loan to Patro Administracja Sp.z o.o. was repaid fully in July 2022.

As of June 30, 2022, all loans were granted to related entities and are disclosed in note 9.

Note 5

Cash and cash equivalents

CASH AND CASH EQUIVALENTS

30/06/2023

(in thous.

EUR)

30/06/2022

(in thous.

EUR)

Cash on the bank accounts

Cash and cash equivalents, total

BPS SA bank accounts are borrowed from IFSE UU with headquarter in Tallinn.

Note 6

Share capital

SHARE CAPITAL

30/06/2023

(in thous.

EUR)

30/06/2022

(in thous.

EUR)

Opening balance of share capital

8 100

900

Increase of share capital from share premium

7 200

Decrease of share capital due to the nominal value of shares

decrease

-7 695

Closing balance of share capital

405

8 100

As at the date of publication the report and as of June 30, 2023 the share capital is EUR 405 000

EUR and is divided into 4 050 000 shares with book value of EUR 0,10.

During the financial year, the Company's share capital was reduced by 6 885 000 euros, from

7 290 000 euros to 405 000 euros. Changes concerned redemption of shares and reducing the

value of shares.

The share capital was reduced by reducing the nominal value of all Company shares from EUR

1.80 to EUR 0.10.

As of June 30, 2022 share capital is EUR 8 100 000 and is divided into 4 500 000 shares with

book value of EUR 1,80.

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

Meeting as at 30/06/2023.

No.

Shareholder

Number of

% of shares

Number of

voted

% of votes

PATRO INVEST OÜ

(indirectly Damian

Patrowicz)

2 540 000

62,716

2 540 000

62,716

total

4 050 000

100

4 050 000

100

Note 7

Book value per share

Book value of equity as at 30/06/2023

1 418 thous. EUR

Number of shares as at 30/06/2023

4 050 000

Book value per share (in EUR)

0,35 EUR

Diluted number of shares

4 050 000

Diluted book value per share (in EUR)

0,35 EUR

Book value of equity as at 30/06/2022

2 618 thous. EUR

Number of shares as at 30/06/2022

4 500 000

Book value per share (in EUR)

0,58 EUR

Diluted number of shares

4 500 000

Diluted book value per share (in EUR)

Profit per share

Profit per share as at 30/06/2023

Weighted average number of shares 4 122 740

Profit/loss for 12 months 77 thous. EUR

Profit/loss per one ordinary share 0,02 EUR

Profit per share as at 30/06/2022

Weighted average number of shares 4 500 000

Profit/loss for 12 months 68 thous. EUR

Profit/loss per one ordinary share 0,02 EUR

0,58 EUR

Note 8

Revenues from the interest

REVENUE FROM THE INTEREST

01/07/2022 –

30/06/2023

(in thous. EUR)

01/07/2021 –

30/06/2022 (in

thous. EUR)

Revenues from interest

- including: from related entities

Information on revenues from related entities can be found in note 9.

Revenue by geographical regions (location of customer)

Below we present revenues from clients divided into operating areas.

GEOGRAPHICAL AREA FOR

FINANCIAL ACTIVITY

01/07/2022 – 30/06/2023

(in thous. EUR)

01/07/2021 –

30/06/2022 (in thous.

EUR)

Estonia

Poland

Total for the financial activity

Information on leading clients.

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

an external single client which exceed 10% of the entity's total revenues:

 Client no. 1 –51% of total revenues

 Client no. 2 –40% of total revenues

In the period 01/07/2021-30/06/2022 the Company achieved revenues from transactions with

an external single client which exceed 10% of the entity's total revenues:

 Client no. 1 –48% of total revenues

 Client no. 2 –45% of total revenues

Note 9

Balances and transactions with related entities

Parent company: Patro Invest OÜ in Tallinn .

Patro Invest OÜ loan in amount of 1250 th.EUR was offset with the liability for the shares.

* Loan granted for Patro Invest OÜ taken over by Patro Administracja Sp. o. o. on 30/06/2021

Balances and

transactions with

related entities for the

period ended on

30/06/2023 (in thous

EUR)

Interest

revenues

Loans granted

Repayments of

loans granted

Receivables

from loans and

interest at the

end of period

Parent company:

Patro Invest OU

1250

Key members of the management and all companies directly or indirectly owned by them :

Patro Invest sp. z o.o. w

likwidacji

Damar Patro UU

359

1 402

Patro Administracja sp. z

o.o.*

803

Total (Notes 4,8)

1 250

2 412

1 432

Investment Friends SE signed a debt assignment agreement on 01/09/2021. Under this

agreement, the entire debt of Patro Invest OÜ in relation to Investment Friends SE as at June 30.

* Loan granted for Patro Invest OÜ taken over by Patro Administracja Sp. o. o. on 30/06/2021.

Remuneration of the Supervisory Board and the Management Board:

No remuneration paid to the members of the management board and supervisory board in

financial year and previous year.

The company did not employ any employees in the financial year and previous year.

Note 10

Contingent assets and liabilities

Pending court cases:

1. Legal case regarding imposing of administrative punishment on the Company by the Polish

Supervision Authority (KNF).

In the opinion of Management Board, it will not entail any costs.

A tax authorities have the right to review the Company tax records for up to 5 years after

submitting the tax declaration and upon finding errors, impose additional taxes, interest, and

fines. The tax authorities have not performed any tax audits at the Company during 2022-2023.

Note 11

Significant events after the balance sheet date

There were no significant events after June 30, 2023.

At the moment, the war in Ukraine has not affected the situation of the Company. Company

doesnot expect military actions in Ukraine to have a negative impact on the operating activities

of the company.

Balances and

transactions with

related entities for the

period ended on

30/06/2022 (in thous

EUR)

Interest

revenues from

Loans

granted

Repayments

of loans

granted

Receivables from

loans and interest

at the end of period

Parent company:

Patro Invest OU

Key members of the management and all companies directly or indirectly owned by them :

Patro Invest sp. z o.o.

Damar Patro UU

1 797

Patro Administracja sp.

z o.o.*

849

Total (Notes 4,8)

2 652

VII. STATEMENT OF COMPLIANCE

The Management Board confirms that the management report, corporate governance report and

remuneration report as set out on pages 6 to 17 gives a true and fair view of the key events that

occurred during the reporting period and their impact on the financial statements contains a

description of the key risks and uncertainties and reflects material transactions with related

parties.

The Management Board confirms the correctness and completeness of Investment Friends SE

financial statements for the year 2022/2023 as set out on pages from 18 to 39 and that:

 the accounting policies used in preparing the financial statements are in compliance with

International Financial Reporting Standards as adopted by the European Union;

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

performance and cash flows of the Company;

 Investment Friends SE is going concern.

Signatura

Member of the Management Board of the Issuer

Agnieszka Gujgo

INDEPENDENT AUDITOR’S REPORT

To t h e S h a r e h o l d e r s o f INVESTMENT FRIENDS SE

Qualified Opinion

We h a v e a u di t e d t h e fi n an c i al s t at e m en t s o f INVESTMENT FRIENDS SE (the Company),

which comprise the statement of financial position as at June 30, 2023, and the statement of

profit or loss, statement of comprehensive income, statement of cash flows and st atement of

changes in equity for the year then ended, and notes to the financial statements, including a

summary of significant accounting policies.

In our opinion, except for the possibl e effects of the matter described in the Basis for Qualified

Opinion section of our report the accompanying financial statements present fairly, in all

material respects, the financial position of the Company as at June 30, 2023, and its financial

performance and its cash flows for the year then ended in accordance with International

Financial Reporting St andards (IFRS) as adopted by the European Union.

Basis for Qualified Opinion

The Company's statement of financial position as of 30.06.2023 contains loan and interest

receivables against the related company Damar Patro UÜ in the amount of 1402 thousand

euros. Damar Patro UÜ's assets mainly consist of funds in investment accounts, which ar e

recognized at fair value. In the year ended on 30 June 2023, the fair value of Damar Patro

UÜ's investment portfolios has decreased, and the company's li abilities exceed its assets. Due

to the above, we did not get enough certainty whether the balance sheet value of the

receivables might be overvalued and whether and in which extent the receivables requir e a

writing down.

We co n d uc t e d o u r a ud i t i n ac c o rd a nc e w i th I n t er n a ti o na l S t an d a rd s o n Aud i t in g (Estonia) (ISA

(EE)s). Our responsibilities u nder those standard s are further descri bed in the Auditor’s

Responsibilities for the Audit of the Financial Statements section of our report.

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

basis for our opinion.

Independence

We are i ndependent of the Company in accordance with the International Code of Ethics for

Professional Accountant s (including Internation al Independence Standards) i ssued by the

International Ethics Standards Board for Accountants (IESBA Code). We have fulfilled our

other ethical responsibilities in accordance with the IESBA Code.

To the best of o ur knowledge an d belief, we declare that non-audit services that we have

provided to the Company are in accordance with the applicable law and regulations in the

Republic of Est onia and that we have not provided non-audit services that are prohibited under

§ 59

of the Auditors Activities Act of the Republic of Estonia.

Key Audit Matters

Key audit matters are thos e matters t hat, in our professional judgment, were of most

significance in our audit of the financi al statements of the current per iod. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters. For each matter

below, our description of how our audit addressed the matter is provided in that context.

Key audit matter

How our audit addressed the key audit

matter

Va l u a t i o n o f l o a n r e c e i v a b l e s

As disclosed in the Note 4 “Financial

assets” to the financial statements,

financial assets consist of loans and

interests in the amount of 1432 thousand

euros which corresponds to 100% of the

Company’s assets. All of these loans are

loans to the related parties.

The value of these loans i s as sessed using

the amortized cost method as described in

the Note 1 to the financial statements.

Va l u a t i o n o f r e c e i v a b l e s i s a s u b j e c t i v e

area due to the level of judgement applied

by the management, based on

management’s past experience and

assumptions.

Our audit procedures included, amongst

others:

• We ex a mi n e d t h e te r m s of t he l o a n

agreements and checked the

accounting data compliance with

the agreements.

• We c he c k ed th e ba l an c e s w it h t h e

balance confirmations.

• We e xa m i ne d a n d a na l y ze d t h e

financial data of the borrowers; we

reviewed whether management’s

judgements are in accordance with

our understanding.

• We c h e ck e d th e r ec e i ve d p ay m e nt s

of the loans after the post balance

sheet date.

• We as s es s e d th e a de q u ac y o f t h e

disclosed information and

compliance with IFRS

requirements.

Other Information, including the Management Report

Management is responsible for the other information. The other information comprises the

Selected Financial Data, the Management Report, the Corporate Governance Report and the

Remuneration Report (b ut does not include the financial sta tements and our audito r’s report

thereon). Our opinion on the financial statements does not cover the other information,

including the Management report.

In connection with our audit of the financial statements, our responsibility is to read the other

information identified above and, in doing so, consider whether the other information is

materially inconsistent with the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. With respect to the Management r eport, we also

performed the procedures required by the Auditors Activities Act. Those procedures include

considering whether the Management report is consistent, in all material respects, with the

financial statements and i s prepared in accordance with the requirements of the Accounting

Act.

As descr ibed in the "Basis for Qual ified Opi nion" sect ion, we did not get suffic ient cert ainty

about possible impairment of receivables in the statement of financi al posit ion. We are not able

to make conclusions whether other information has been misrepresented in connection to this

matter.

In accordance with the Securities Market Act with respect to the Remuneration Report, our

responsibility is to consider whether the Remuneration Report includes the information in

accordance with the requirements of Article 135

of the Securities Market Act.

Based on the work underta ken in the course of our a udit, in our opinion:

● the information given in the Management report for the financial year for which the financi al

statements are prepared is consistent, in all material respects, with the financial statements;

and

● the Management report has been prepared in accordance with the requirements of the

Accounting Act;

● the Remuneration Report has been prepared in accordance with Article 135

of the

Securities Market Act.

Responsibilities of Management and Those Charged with Governance for the Financial

Statements

Management i s responsibl e for the pr eparation an d fair presentation of the fi nancial stat ements

in accordance with International Financial Reporting Standards (IFRS) as adopted by the

European Union and for such internal control as management determines is necessary to

enable the preparation of financial statements that ar e free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the

Company’s ability to continue as a goi ng concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless management either

intends to liquidate the Company or to cease operations, or has no realistic alternative but to

do so.

Those charged with governance a re responsible for overseeing t he Company’s financial

reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our obje ctives are to obtain reasonable assurance ab out whether the financial statements as

a whole are f ree from material misstatement, whether due t o fraud or error, and to issue an

auditor ’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (EE) will alway s detect

a material misstatement when it exists. Misstat ements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance wi th ISAs (EE), we exercise professional judgment and

maintain professi onal skepticism thro ughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements,

whether due to frau d or error, design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resul ting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of inter nal control.

• Obtain an understandi ng of internal contr ol relevant to the audi t in order to design a udit

procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting polici es used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the g oing concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty

exists related to events or condi tions that may cast significant doubt on the Company’s

ability to continue as a going concer n. If we conclude that a material uncertainty exists,

we are req uired to dr aw atten tion in ou r audi tor’s report to th e rel ated d isclosures in the

financial statements or, if such disclosures are inadequate, to modify our opinion. Our

conclusions are based on the audit evidence obtained up to the date of our auditor’s

report. However, future events or conditions may cause the Company to cease to

continue as a going concern.

• Evaluate the overa ll presentation, s tructure and content of the financi al statements,

including the disclosures, and whether the financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identif y during our audit.

We also provide thos e charged with govern ance with a statement that we have compli ed with

relevant ethical requirements regarding independence, and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charg ed with governance, we det ermine those

matters that were of mos t significance in the audi t of the financial stat ements of the current

period and are therefore the key audit matters. We describe these matters in our auditor’s

report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we det ermine that a matter should not be communicated in our

report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

Appointment and period of our audit engagement

We were first appoin ted as auditors of Investment Friends SE for the financial year ended 30

June 20 20. Our appointment has been renewed by shareholder resolutions, representing the

total period of our uninterrupted engagement appointment for Investment Friends SE of 4

years.

/digitally signed/

Eve Leppik

License No 230

Company: Number RT OÜ

License: 263

Linnu tee 21a, Tallinn 11317

09. October 2023