Feerum S A : 2. Consolidated financial report of the Capital Group of the Company for the financial year 2023

FEERUM S.A. Capital Group.

Consolidated financial statements

for the period from 1 January 2023 to 31 December 2023

Town

Date

CHOJNÓW

30 APRIL 2024

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

TABLE OF CONTENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	3
CONSOLIDATED STATEMENT OF INCOME	5
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	6
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	7
CONSOLIDATED STATEMENT OF CASH FLOWS	9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	10
General information	10
Basis of preparation and accounting principles	14
1.	Significant events affecting the Group's financial position in 2023	37
2.	Correction of an error and change in accounting policy	38
3.	Operating segments	38
4.	Intangible assets	41
5.	Property, plant and equipment	43
6.	Leasing assets and liabilities	44
7.	Financial assets and liabilities	46
8.	Deferred tax assets and liabilities	51
9.	Stocks	53
10.	Trade and other receivables	54
11.	Cash and cash equivalents	56
12.	Equity	56
13.	Employee benefits	58
14.	Trade and other payables	59
15.	Reserves	60
16.	Accruals and deferred income	61
17.	Assets and liabilities from contracts with customers	63
18.	Operating income and expenses	64
19.	Financial income and expenses	65
20.	Income tax	66
21.	Earnings per share and dividends paid	67
22.	Cash flow	68
23.	Related party transactions	69
24.	Contingent assets and liabilities	70
25.	Risks relating to financial instruments	73
26.	Capital management	78
27.	Events after the balance sheet date	79
28.	Other information	81
29.	Approval for publication	83

2 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS

Notes

2023-12-31

2022-12-31

Non-current assets

Goodwill		-	-
Intangible assets	4	24 829	27 131
Property, plant and equipment	5	37 871	41 646
Investment property		-	-
Investments in subsidiaries		-	-
Investments in associates		-	-
Trade and other non-current receivables		1 374	2 286
of which Non-current prepaid expenses		-	-
Other non-current financial assets	7	4	4
Deferred tax assets	8	2 335	1 861
Non-current assets		66 413	72 928
Current assets
Stocks	9	65 504	75 730
Assets from contracts with customers	17	6 340	1 292
Trade and other short-term receivables	10, 16	11 410	15 412
of which Short-term prepaid expenses		256	313
Current income tax receivable		196	3
Other short-term financial assets		-	-
Cash and cash equivalents	11	2 015	12 979
Current assets excluding non-current assets classified as held for sale		85 465	105 416
Assets classified as held for sale		393	-
Current assets		85 858	105 416
Total assets		152 271	178 344

3 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONT.)

LIABILITIES	Notes	2023-12-31	2022-12-31
Equity
Core capital	12	33 383	33 383
Own shares (-)		-	-
Share premium account		9 366	9 366
Other reserves		2 117	2 117
Retained earnings		70 740	71 447
of which net profit (loss) for the year attributable to equity holders of the parent		(707)	4 736
company
Equity attributable to equity holders of the parent company		115 606	116 313
Non-controlling interests		-	-
Equity		115 606	116 313
Commitments
Long-term liabilities
Loans, borrowings, other debt instruments	7	-	3 510
Financial leasing	6	239	692
Other non-current financial liabilities		-	-
Trade and other non-current liabilities	14, 16	4 068	5 558
of which Accruals and deferred income		4 068	5 558
Deferred tax liability	8	2 230	1 665
Employee benefit obligations and provisions	13	291	257
Other long-term provisions		424	925
Long-term liabilities		7 252	12 607
Current liabilities
Trade and other payables	14, 16	9 494	10 884
of which Accruals and deferred income		1 585	1 869
Liabilities from contracts with customers		-	1 480
Current income tax liabilities		0	551
Loans, borrowings, other debt instruments	7	17 412	30 377
Financial leasing	6	372	517
Other short-term financial liabilities		-	-
Employee benefit obligations and provisions	13	1 812	1 845
Other short-term provisions		323	3 770
Current liabilities excluding liabilities included in groups held for sale		29 413	49 424
Liabilities related to non-current assets held for sale		-	-
Current liabilities		29 413	49 424
Total liabilities		36 665	62 031
Total liabilities		152 271	178 344

4 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

CONSOLIDATED STATEMENT OF INCOME

	(CALCULATION OPTION)			Notes		from 01.01 to		from 01.01 to
				31.12.2023		31.12.2022
	Continuing operations
	Sales revenue			3		63 272		75 993
	Cost of sales					51 297		58 358
	Gross profit (loss) from sales					11 975		17 635
	Selling costs					1 038		954
	General and administrative expenses					7 079		7 825
	Other operating income			18		433		275
	Other operating expenses			18		1 376		674
	Profit (loss) on sale of subsidiaries (+/-)					-		-
	Operating profit (loss)					2 915		8 457
	Financial income			19		50		1 051
	Financial costs			19		3 588		3 346
	Share of profit (loss) of equity accounted investees (+/-)					-		-
	Profit (loss) before tax					(623)		6 162
	Income tax			20		84		1 426
	Net profit (loss) from continuing operations					(707)		4 736
	Discontinued operations
	Net profit (loss) from discontinued operations					-		-
	Net profit (loss)					(707)		4 736
	Net profit (loss) attributable to:
	- shareholders of the parent company					(707)		4 736
	- non-controlling entities					-		-
NET PROFIT (LOSS) PER ORDINARY SHARE (PLN)
	Specification	Notes	from 01.01 to	from 01.01 to
	31.12.2023		31.12.2022
			PLN / share	PLN / share
	from continuing operations	21
	- basic		(0,07)			0,50
	- diluted		(0,07)			0,50
	from continuing and discontinued operations	21
	- basic		(0,07)			0,50
	- diluted		(0,07)			0,50

5 / 84

	Name of Issuer:	Feerum Capital Group
	Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:			Polish zloty (PLN)
	Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
					Note		from 01.01 to		from 01.01 to
						31.12.2023		31.12.2022
					s
	Net profit						(707)		4 736
	Other comprehensive income
	Other comprehensive income that will not be reclassified to profit or loss, before				-		-
	taxation
	Other comprehensive income to be reclassified to profit or loss, before taxation				-		-
	Other comprehensive income before tax						-		-
	Other comprehensive income after tax
	Total income						(707)		4 736
	Comprehensive income attributable to:
	- shareholders of the parent company						(707)		4 736
	- non-controlling entities						-		-

6 / 84

	Name of Issuer:	Feerum Capital Group
	Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
	Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
								Share			E q u i t y
										attributable to
				Note	Capital	Own		premium	Other	Retained	owners of the	Total
				basic	shares		account	reserves	earnings	parent	equity
				s		(-)
	Balance as at 01.01.2023				33 383	-		9 366	2 117	71 447	116 313	116 313
	Changes in accounting policies				-	-		-	-	-	-	-
	Correction of fundamental error*				-	-		-	-	-	-	-
	Balance as amended				33 383	-		9 366	2 117	71 447	116 313	116 313
	Changes in equity from 01.01 to 31.12.2023
	Share issue				-	-		-	-	-	-	-
	Increase (decrease) due to share-based payment transactions, equity			-	-		-	-	-	-	-
	Change in group structure (transactions with non-controlling parties)			-	-		-	-	-	-	-
	Dividends				-	-		-	-	-	-	-
	Net profit for the period from 01.01 to 31.12.2023			-	-		-	-	(707)	(707)	(707)
	Other comprehensive income after tax for the period 01.01 to 31.12.2023		-	-		-	-	-	-	-
	Total comprehensive income				-	-		-	-	(707)	(707)	(707)
	Transfer to retained earnings (sale of revalued fixed assets)			-	-		-	-	-	-	-
	Total changes in equity				-	-		-	-	(707)	(707)	(707)
	Balance at 31.12.2023				33 383	-		9 366	2 117	70 740	115 606	115 606

7 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT.)

				Share			E q u i t y
						attributable to
	Note	Capital	Own shares	premium	Other	Retained	owners of the	Total
	basic	(-)	account	reserves	earnings	parent	equity
	s
Balance as at 01.01.2022		33 383	-	9 366	2 117	66 711	111 577	111 577
Changes in accounting policies		-	-	-	-	-	-	-
Correction of fundamental error*		-	-	-	-	-	-	-
Balance as amended		33 383	-	9 366	2 117	66 711	111 577	111 577
Changes in equity from 01.01 to 31.12.2022
Share issue		-	-	-	-	-	-	-
Increase (decrease) due to share-based payment transactions, equity		-	-	-	-	-	-	-
Change in group structure (transactions with non-controlling parties)		-	-	-	-	-	-	-
Dividends		-	-	-	-	-	-	-
Net profit for the period from 01.01 to 31.12.2022		-	-	-	-	4 736	4 736	4 736
Other comprehensive income after tax for the period 01.01 to 31.12.2022		-	-	-	-	-	-	-
Total comprehensive income		-	-	-	-	4 736	4 736	4 736
Transfer to retained earnings (sale of revalued fixed assets)		-	-	-	-	-	-	-
Total changes in equity		-	-	-	-	4 736	4 736	4 736
Balance at 31.12.2022		33 383	-	9 366	2 117	71 447	116 313	116 313

8 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

CONSOLIDATED STATEMENT OF CASH FLOWS

INDIRECT METHOD	Notes	from 01.01 to	from 01.01 to
31.12.2023	31.12.2022
Cash flow from operating activities
Profit (loss) before tax		(623)	6 162
Corrections:	22
Depreciation		7 255	6 893
Impairment of fixed assets		-	-
Profit (loss) on sale of non-financial fixed assets		(59)	(117)
Interest costs		2 767	3 017
Interest income		(50)	(42)
Dividend income		-	-
Other corrections		-	-
Change in stocks		10 226	(13 970)
Change in receivables (including accruals)		5 032	1 803
Change in liabilities (including accruals)		(3 216)	(4 479)
Change in provisions		(3 725)	(325)
Change in assets from contracts with customers		(5 048)	2 802
Change in liabilities from contracts with customers		(1 480)	1 480
Adjustments and changes in working capital		11 702	(2 938)
Cash flow from operations (used in operations)		11 079	3 224
Income tax paid (refund), included in operating activities		(739)	(1 198)
Net cash from operating activities		10 340	2 026
Cash flow from investing activities
Expenditure on the acquisition of intangible assets		(269)	(23)
Proceeds from the sale of intangible assets		-	-
Expenditure on the acquisition of property, plant and equipment		(910)	(162)
Proceeds from sale of property, plant and equipment		59	120
Loan repayments received		-	-
Loans granted		-	-
Expenditure on the acquisition of other financial assets		(393)	-
Proceeds from government grants received		-	-
Interest received		50	42
Dividends received		-	-
Net cash from investing activities		(1 463)	(23)
Cash flow from financing activities
Proceeds from borrowings		116	2 200
Repayment of loans		(16 591)	(13 329)
Repayment of finance lease liabilities		(599)	(808)
Interest paid		(2 767)	(3 017)
Dividends paid		-	-
Net cash from financing activities		(19 841)	(14 954)
Change in cash and cash equivalents before exchange differences		(10 964)	(12 951)
Change due to exchange rate differences		-	-
Change in cash and cash equivalents		(10 964)	(12 951)
Cash and cash equivalents at beginning of period		12 979	25 930
Cash and cash equivalents at the end of the period		2 015	12 979

9 / 84

Name of Issuer:	Feerum Capital Group
Period covered by the financial statements:	01.01.2023- 31.12.2023	Reporting currency:	Polish zloty (PLN)
Level of rounding:	all amounts are expressed in thousands of Polish zloty (unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

General information

1. Information about the parent company

Name of Reporting Entity or other identifying information: Feerum Joint Stock Company.

Explanation of changes to the name of the reporting entity or other identifying information since the end of the previous reporting period: there have been no changes

Registered office: Poland, 59-225 Chojnów, 6 Okrzei Street

Legal form: public limited company

Country of registration: Poland

Address of the registered office of the unit: 59-225 Chojnów, ul. Okrzei 6

Principal place of business: 59-225 Chojnów, ul. Okrzei 6

Description of the nature and core business of the entity: The principal activity of the Group is the manufacture, sale and installation of grain dryers, silos, and other equipment used in the

storage and drying complexes for agricultural production.

Name of parent company: Feerum Joint Stock Company

Name of the group's ultimate parent company: Feerum Joint Stock Company

The parent company of the Feerum S.A. Capital Group [hereinafter referred to as 'Capital Group', 'Group'] is Feerum S.A. [hereinafter referred to as the 'Parent Company'].

The parent company was established by a Notarial Deed of 15.01.2007. The parent company is entered in the Register of Entrepreneurs of the National Court Register in the District Court for Wrocław- Fabryczna - IX Economic Division under the KRS number 0000280189. The parent company has been assigned the statistical number REGON 020517408.

The parent company's registered office is located at ul. Okrzei 6 in Chojnów 59-225. The parent company's registered office is also its principal place of business.

The shares of the Parent Company are listed on the Warsaw Stock Exchange. Pursuant to the agreement entered into, as of 18 December 2023, the function of market maker for the shares of the Parent Company is performed by Santander Bank Polska Spółka Akcyjna - Santander Biuro Maklerskie - a separate organisational unit of Santander Bank Polska Spółka Akcyjna with its registered office in Warsaw (KRS 0000008723).

1. Information on restructuring transformations in the Group

In October 2012, the share capital of the parent company was increased from the initial amount of PLN 4,673 thousand to PLN 25,683 thousand through the issue of series C and D shares (the capital increase was registered on 4 October 2012 and 23 October 2012 respectively). The shares of the new issues were taken up by Daniel Janusz and Magdalena Łabudzka-Janusz in exchange for cash and in-kind contributions in the form of shares in the share capital of Feer-Pol sp. z o.o. As a result of the aforementioned actions, a Capital Group was formed, in which the Parent Company acted as the parent company to two subsidiaries: Feer-Pol sp. z o.o. and (indirectly through Feer-Pol sp. z o.o.) Pearl Corporation Sp. z o.o. SKA (the legal successor of Pol-Silos sp. z o.o.).

On 27 May 2013, Pearl Corporation Sp.z.o.o. was acquired by FEERUM S.A.. As a result of further restructuring activities of the FEERUM Group, Pol-Silos Sp.z.o.o. was transformed into Pearl Corporation Sp.z.o.o. SKA. The company was entered in the National Court Register on 17 September 2013. Subsequent actions resulted in the transformation of Pearl Corporation Sp. z. o.o. SKA. into Pearl Invest Sp. z. o.o. The company became a legal entity on 14 January 2014.

10 / 84