Zwack Unicum : Annual Report

SÁNDOR ZWACK

Chairman of the Board of Directors

Dear Shareholders!

Our last few business years have been affected by the pandemic, and by the impacts of war and inflation. Despite all these socioeconomic challenges, our Company continues to develop, thanks to our belief in the values of tradition and innovation, sustainable operation and the strong commitment of our employees. In this business year, our flexible and quick reactions allowed us again to successfully manage the additional costs and administrative burdens caused by inflationary pressure and new regulations.

In our previous business year, the temporarily strengthened purchasing power due to state subsidies and tax allowances resulted in high base year sales, which, on the other hand, caused a slight decline in the first quarter of our current business year, however, by the end of the year we had made up for this and thus closed another successful business year. Although global impacts have eased, the extended producer responsibility (EPR), the re-regulation of the glass return system (DRS) and high domestic inflation created significant additional costs and workload. However, by the second half of our business year, the growth of both main raw material prices and energy and packaging material prices moderated or decreased significantly. In addition, our previous energy efficiency investment and the purchase of green electricity also resulted in energy cost savings.

Thanks to the combined efforts of our sales and marketing team, we were able to reach our consumers strongly throughout the seasons, thanks to an effective pricing and promotional strategy, as well as brand awareness and brand building campaigns. Two years after its launch, Unicum Barista continued to grow, for which, as a marketing support, we introduced Barista coffee and made it available on our own sales channels. We unified the labelling of the Unicum range, streamlined our seasonal gift box offerings. We continued to build the Unicum brand image on digital

3

channels and for the first time promoted the Unicum brand in three seasons (Easter, Summer, Christmas) with a media campaign. We once again supported the awareness of Unicum Riserva with a media campaign during the Christmas season.

Thanks to all these efforts, we managed to close the year domestically with just a 1% decrease in volume and a 7% increase in net sales results. A significant part of our revenue growth came from Unicum and its variations (11%), as well as the increase in revenue from Hubertus and Kalinka. Despite a 6% decrease in our overall export turnover due to a decline in palinka exports, Unicum maintained its previous year's export performance overall with growth in key markets such as Italy (+4%) and Duty-Free (+11%).

In addition to our business results, we can also be proud of our sustainability and corporate responsibility achievements. Our energy efficiency investment made last year in heat pumps and solar panels delivered cost savings already in the first year. To alleviate the pressure on our employees caused by inflation and the international situation, during the business year we included extra benefits in wages, which were improved by inflation-linked wage increases and we also maintained the home office option unchanged.

Dear shareholders, we can be proud of this year's success. The employees and management of our Company are committed to work in the spirit of innovation and flexibility, worthy of a market-leading company, aware that adaptation to future challenges and sustainability are key to the success and continued growth of our business. As a family company, we continue to place a high priority on caring for our wider environment and local communities, on responsible corporate governance and on appreciating our employees.

Sándor Zwack

DR. HUBERTINE UNDERBERG-RUDER

Chair of the Supervisory Board

Today we report to you on another challenging yet successful year of our company. Facing many unique, new challenges - geopolitical tensions, epidemics, and increased inflation - the team persistently and fruitfully developed our business. Based on the blending of progressive spirit and rooted tradition the commitment of our employees, played again a key role in this process. Thanks to timely, suitable responses to these challenges, especially the impacts of inflation and the administrative burdens arising from new regulations were effectively managed.

We continued to look after our company values, such as tradition and innovation, sustainability, resilience and efficiency ensuring the effective operation of our Company. In this context our brands are at the core of our attention and activity. They embody hundreds of years of tradition while the team is striving to keep them fresh like all communication around them: up to date corporate and brand building solutions provide the basis for our standing and progress. Corporate operations guided by the principles of sustainability, responsibility and efficiency with a modern outlook drive our progress - while flexibility along with resilience is a hallmark of our Company proven by history.

Continuous innovation is the driver of our success

• next to brand building this is also true for the rapid adjustment regarding the commercial channels. Growing consumer confidence in our brands, with e.g., Unicum Plum and Unicum Barista attracting new consumers to the brand. Unicum Riserva was suitable to do likewise in the luxury drinks segment. Our Kalumba gin brand has achieved the role of a leading standard gin in just 5 years. In addition, our Unicum House, the Museum and Visitors' Centre, which is unique in

Hungary, acquaints new people with our House with outstanding results. A record of almost 30,000 visitors enabled them to build a bond to our appreciated brand. Our export activity is constantly evolving. As part of our strategy, special attention is thus given to selected foreign markets. In the case of the Italian market, the team is building brand awareness supported by a TV campaign for several years now. This way an improved presence of the Unicum brand and engagement in the important Italian amaro herbal liqueur segment was achieved. Further strengthening the presence of the brand in neighboring countries and Germany is a future target. Involving more and integrated communication channels and developing listing strategies to meet the increasing demand and expectations, and to achieve profitable growth through our export activities.

Sustainability is not only a matter of the heart for us with a proven commitment, but it pays also off. The result of the companies' green investments are energy savings and reduced energy costs. These innovative solutions increase efficiency and sustainability and thus contribute to environmental protection. For more information on sustainability visit zwackunicum.hu.

Dear shareholders, we are proud to report that our Company continues to grow while adapting well to the changing market environment. Innovation, tradition, sustainability and efficiency remain key to our continued success. The Supervisory Board would like to say thank you to the Management and each and every Employee of the Company again this year. We are also thanking you for the trust you placed in the Company and assure you of our continued work to deserve this also in the future.

Dr. Hubertine Underberg-Ruder

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

4

Distribution of voting shares of Zwack Unicum Plc.

Peter Zwack

& Consorten HAG

50% +1 share

Diageo Holdings

Netherlands B.V.

26%

50% 26%

24%

Public

24% -1 share

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

5

Table of contents

LETTER TO SHAREHOLDERS	3
DISTRIBUTION OF VOTING SHARES OF ZWACK UNICUM PLC.	4
DECLARATIONS*	6
FINANCIAL CALENDAR	6
ZWACK UNICUM PLC. - FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR	7
ENDED 31 MARCH 2024
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR	10
ENDED 31 MARCH 2024
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS IN COMPLIANCE	37
WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
BUSINESS AND MANAGEMENT REPORT	43
ON THE FINANCIAL YEAR ENDED ON 31 MARCH 2024*
REPORT OF THE SUPERVISORY BOARD AND THE AUDIT BOARD	50
ON THE 2023-2024 BUSINESS YEAR
SUPERVISORY BOARD	52
BOARD OF DIRECTORS	53
MANAGEMENT OF THE COMPANY	54
MARKETING HIGHLIGHTS OF THE 2023-2024 BUSINESS YEAR	55
SPIRITS FROM THE ZWACK HOUSE	70
IZABELLA ZWACK WINE SELECTION	76
KEY CONTACTS	78

*This is an English translation of the financial statements for the financial year between 1 April 2023 and 31 March 2024 issued in Hungarian. The content of the English translation is consistent with the content of the financial statements prepared in xhtml format.

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

6

Declarations

We, the undersigned Zwack Unicum Liqueur Industry and Trading Public Limited Company, hereby declare that the facts and statements contained in the Annual Report covering the Company's business year of 2023-2024 (1 April 2023 - 31 March 2024) are true in all respects, and that the Annual Report does not hide any fact that is of importance in assessing the situation of the Company.

Financial reports (Statement of Financial Position, Statement of Comprehensive Income, Cash Flow, Statement of Changes in Equity and Notes to the Financial Statements) presented in the Annual Report were prepared according to the applicable accountancy regulations and our best knowledge. Financial reports give real and authentic picture of the assets, liabilities, financial situation and profit of the issuing company.

Business and Management Report, which is part of the Annual Report, gives authentic picture of the situation, development and achievement of the issuing company, reciting the major risks and factors of uncertainty.

The Company has fulfilled the periodic and extraordinary duties of disclosure, as required by the Capital Market law.

The Company's audit has been provided by KPMG Hungária Kft. The Auditor of the Company did not receive other assignment than the audit of the annual report of the Company.

Budapest, 23 May 2024

Katalin Hollósi	Balázs Szűcs
Chief Accountant	Investor Correspondent

based on the power of attorney provided by:

Sándor Zwack	Frank Odzuck
Chairman of the Board	Chief Executive Officer

Financial calendar

E V E NT	DATE
Payment of dividend	As from 31 July 2024
Publication of the report about the first quarter of 2024/2025*	6 August 2024
Publication of the report about the first half year of 2024/2025*	5 November 2024
Publication of the report about the first three quarters of 2024/2025*	4 February 2025
Publication of the report about the financial year 2024/2025*	22 May 2025
Annual General Meeting	25 June 2025
* not final dates

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

Zwack Unicum Plc. - Financial statements for the financial year ended 31 March 2024

PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION

7

Statement of financial position

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment

Intangible assets

Employee loans

Deferred tax asset

CURRENT ASSETS

Inventories

Trade receivables

Other financial receivables

Non-financial receivables

Cash and cash equivalents

TOTAL ASSETS

EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY

Share capital

Share premium

Retained earnings

LIABILITIES

NON-CURRENT LIABILITIES

Leases

Long-term employee benefits

Deferred income

CURRENT LIABILITIES

Trade and other payables

Leases

Amount payable (due) to customers

Current income tax

Employee benefits

Other taxes and other non-financial liabilities

Provisions

TOTAL EQUITY AND LIABILITIES

NOTE

5

6

7

19

8

9

9

9

10

11

11

11

12

12

12

12

12

12

13

31 MARCH 2024

(HUF mill)

1. 920
   3 755
   77
   0
   88

1. 043

1. 686

1. 433
   173
   129

1. 622

14 963

8 766

2 000

165

6 601

6 197

683

37

573

73

5 514

2 416

8

654

57

1 087

1 285

7

14 963

31 MARCH 2023

(HUF mill)

1. 121
   3 946
   75
   1
   99

1. 312
   4 517
   3 149
   109
   104
   3 433

15 433

1. 260

1. 000
   165

1. 095
   6 173
   680
   24
   573
   83

1. 493

1. 543
   6
   547
   195
   883
   1 306
   13

15 433

The Financial statements were accepted by the Board of Directors on 23 May 2024 and signed on their behalf by:

based on the power of attorney provided by:

Katalin Hollósi	Balázs Szűcs	Sándor Zwack	Frank Odzuck
Chief Accountant	Investor Correspondent	Chairman of the Board	Chief Executive Officer

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

8

Statement of comprehensive income

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024

	NOTE
REVENUE, GROSS OF EXCISE TAX AND PUBLIC HEALTH PRODUCT
TAX
Excise tax
Public health product tax
REVENUE, NET OF EXCISE TAX AND PUBLIC HEALTH PRODUCT TAX	14
Material-type expenses
Employee benefits expense	15
Depreciation and amortization	5-6
Other operating expenses	16
OPERATING EXPENSES, EXCLUDING EXCISE TAX AND PUBLIC
HEALTH PRODUCT TAX RELATED TO SALES
Other operating income	17
PROFIT FROM OPERATIONS
Interest and other financial income
Interest expense
NET FINANCIAL INCOME (COST)	18
PROFIT BEFORE TAX
Income tax expense	19
PROFIT FOR THE YEAR
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
BASIC AND DILUTED EARNINGS PER SHARE (HUF/SHARE)
See Note 1 (a)

Statement of changes in equity

2024

(HUF mill)

36 938

(14 442)

0

22 496

(8 949) (4 146) (629) (5 407)

(19 131)

101

3 466

213

(43)

170

1. 636
   (730)

1. 906

1. 906

1 453

2023

(HUF mill)

35 364

(12 517) (1 632)

21 215

(8 511)

(3 685)

(600)

(4 651)

(17 447)

100

3 868

293

(1)

292

4 160

(712)

3 448

3 448

1 724

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024

BALANCE AT 31 MARCH 2022

BALANCE AT 1 APRIL 2022

Profit for the year

Other comprehensive income

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

Dividend related to financial year ended 31 March 2022 (HUF 1 500 per share)

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS BALANCE AT 31 MARCH 2023

BALANCE AT 1 APRIL 2023

Profit for the year

Other comprehensive income

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

Dividend related to financial year ended 31 March2023 (HUF 1 700 per share)

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS BALANCE AT 31 MARCH 2024

SHARE

CAPITAL

(HUF mill)

1. 000

1. 000

1. 000

1. 000

2 000

SHARE

PREMIUM

(HUF mill)

165

165

165

165

165

RETAINED EARNINGS

(HUF mill)

1. 647

1. 647

3 448

0

3 448

(3 000) (3 000)

1. 095

1. 095

2 906

0

2 906

(3 400) (3 400) 6 601

TOTAL

(HUF mill)

1. 812

1. 812

3 448

0

3 448

(3 000)

(3 000)

1. 260

1. 260

2 906

2 906

(3 400)

(3 400)

8 766

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Cash flow statement

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024

PROFIT BEFORE TAX

Net financial (income)

Adjustment for depreciation and amortization (Gain) on disposal of fixed assets Increase/(decrease) in trade creditors and other liabilities Decrease/(increase) in inventories

(Increase) in trade and other receivables

Loss/(gain) on unrealized foreign exchange rate difference (Decrease)/increase in other liabilities

CASH GENERATED FROM OPERATIONS

Interest paid

Income tax paid

CASH FLOW FROM OPERATING ACTIVITIES

Purchases of property, plant and equipment

Purchases of intangible assets

Interest received

Proceeds from sale of property, plant and equipment

CASH FLOW USED IN INVESTING ACTIVITIES

Dividends paid

Payment of lease liabilities

CASH FLOW USED IN FINANCING ACTIVITIES

CHANGE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents, beginning of the year

Exchange (loss) on cash and cash equivalents

CASH AND CASH EQUIVALENTS, END OF THE YEAR

2024

(HUF mill)

3 636

(170)

629

(76)

51

831

(223)

9

(6)

4 681

(43)

(857)

3 781

(503)

(29)

205

137

(190)

(3 400)

(2)

(3 402)

189

3 433

0

3 622

9

2023

(HUF mill)

4 160

(292)

600

(73)

(124)

(1 377)

(17)

(1)

13

2 889

(1)

(680)

2 208 (1 212) (26)

298

119

(821)

(3 000)

(14)

(3 014) (1 627)

5 079

(19)

3 433

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

10

Notes to the Financial statements for the financial year ended 31 March 2024

PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION

NOTE 1 - GENERAL BACKGROUND

(a) The Company and the nature of its operations

The Zwack Unicum Plc. (hereafter referred to as "the Company") is incorporated in Hungary and it is manufacturer and distributor mainly of alcoholic beverages. The Company seat is located at 26 Soroksári út, Budapest, 1095. The web site of the Company is www.zwackunicum.hu.

Zwack Unicum Plc. is listed on the Budapest Stock Exchange.

Peter Zwack & Consorten HAG ("PZ HAG", AT-1190 Wien, Heiligenstadter Strasse 43.) is the ultimate majority owner and parent company of Zwack Unicum Plc. holding 50% + 1 share of the issued shares (registered ordinary shares), that is not obliged to prepare and publish consolidated financial statement under the law. The ultimate owners of PZ HAG are members of the Zwack and Underberg families.

REGISTERED ORDINARY SHARES OF THE COMPANY COMPRISE:

PZ HAG

Diageo Holdings Netherlands B.V. Public

TOTAL

2024

%

50% +1 share

26%

24% -1 share

100%

(HUF mill)

1 000

520

480

2 000

2023

%

50% +1 share

26%

24%-1 share

100%

(HUF mill)

1 000

520

480

2 000

The total number of authorized ordinary shares is 2 000 000 (31 March 2023: 2 000 000) with a par value of HUF 1 000 per

share (31 March 2023: HUF 1 000 per share). All shares are issued and fully paid. Each share carries the same voting rights.

Basic and diluted earnings per share have been calculated based on the profit for the year and the total number of ordinary shares in issue.

The total number of authorized redeemable liquidity preference shares is 35 000 (2023: 35 000) with a par value of HUF 1 000. All these shares were issued to senior managers under a cash settled share-based compensation plan as described under Note 20. The share capital does not include the redeemable liquidity preference shares. Dividends relating to these redeemable liquidity preference shares are recognised as part of Employee benefits expense. For further details refer to Note 15.

(b) Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ("EU IFRS" or "IFRS") as adopted by the European Union and in accordance with the provisions applicable to entities preparing annual financial statements in accordance with EU IFRS of Act C of 2000 on Accounting in force in Hungary (hereinafter referred to as "Hungarian Accounting Law").

The financial statements have been prepared in millions of Hungarian Forints (HUF) on a historical cost basis, except for the following items, which are measured on an alternative basis on each reporting date:

ITEMS

derivative financial instruments (refer to Note 2 (f) (5))

net defined benefit liability (refer to Note 2 (p)(2))

liabilities for cash-settled share based payment arrangements (refer to Note 2 (p) (2)-(4))

MEASUREMENT BASIS

Fair value

Present value of the defined benefit obligation Fair value

The financial statements of the Company were approved for issue on 23 May 2024 by the Company's Board of Directors (the Board), however, the Annual General Meeting (AGM) of the owners, authorized to accept these financials, has the right to require amendments before acceptance.

The preparation of financial statements in conformity with EU IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2 (r).

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

11

Standards issued but not yet effective

New amendments to standards adopted by the EU but not yet effective as at the reporting date:

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022, effective for annual periods beginning on or after 1 January 2024)
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Deferral of Effective Date (issued on 23 January 2020 and 15 July 2020 and 31 October 2022, effective for annual periods beginning on or after 1 January 2024)

The Company did not choose to adopt any of them early.

The following new standards and amendments to standards issued are not yet effective as at the reporting date, and have not yet been endorsed by the EU:

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on 15 August 2023, effective for annual periods beginning on or after 1 January 2025)
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrange- ments (issued on 25 May 2023, effective for annual periods beginning on or after 1 January 2024)

These new standards and amendments to standards are not expected to have a material impact on these financial statements in the period when they will be initially applied.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The following new amendments to standards applied initially by the Company from 1 April 2023, but none of them has a material impact on these financial statements:

• IFRS 17 Insurance Contracts and amendments to IFRS 17 (standard issued on 18 May 2017 and the amendments issued on 25 June 2020, effective for annual periods beginning on or after 1 January 2023)
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021, effective for annual periods beginning on or after 1 January 2023)
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (issued on 12 February 2021, effective for annual periods beginning on or after 1 January 2023)
• Amendments to IFRS 17: Initial application of IFRS 17 and IFRS 9 - Comparative Information (issued on 9 December 2021, applicable on initial application of IFRS 17)
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 6 May 2021, effective for annual periods beginning on or after 1 January 2023)
• Amendments to IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (issued on 23 May 2023, effective for annual periods beginning on or after 1 January 2023, but the exception shall be applied immediately)

(a) Segment reporting

The CEO of Zwack Unicum Plc., is the Company's chief operating decision maker ('CODM'), as the CEO is responsible for allocating resources to, and assessing the performance of the Company on a monthly basis. Operating results are only reviewed at the Company level by the CODM hence the Company is deemed to be one segment. The balances in the reports reviewed by the CODM are in line with those presented in these financial statements.

(b) Foreign currency translation

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in HUF, which is the company's functional and presentation currency.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the official rates of exchange prevailing at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Transactions in foreign currencies are translated into the functional currency at the date of the transaction. All resulting foreign exchange differences are included in other operating expenses/income.

(c) Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is calculated on a straight line basis (or by reference to physical output) from the time the assets are deployed over their estimated useful lives.

Assets in the course of construction are stated at cost.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are recognized as an expense in profit or loss when they are incurred.

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

12

Useful lives are as follows:
Buildings	15 - 50 years
Plant and equipment	7 - 10 years
Motor vehicles	4/6 years, or 150 000/160 000 km
Other assets	2 - 7 years
Land is not depreciated.

On an annual basis, the Company reviews the useful lives and residual values.

Gains and losses on disposals are determined as the difference between the proceeds and the carrying amount of the asset. Such gains and losses are recognised in profit or loss in other operating income or expenses.

(d) Intangible assets

Trademarks and licences are shown at historical cost. Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of 5 - 10 years.

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of 3 - 6 years.

(e) Impairment of non-financial assets

Non-financial assets other than inventories and deferred tax assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level which generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Non- financial assets for which impairment was recognized are reviewed for possible reversal of the impairment at each reporting date. Impairment losses are presented in 'Other operating expenses'.

(f) Financial instruments

1. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not measured at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. Trade receivables are without a significant financing component, therefore these are initially measured at the transaction price, and do not have a contractual interest rate. This implies that the effective interest rate for these receivables is zero.

1. Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at: amortised cost; fair value through other comprehensive income (FVOCI) - debt instruments; FVOCI - equity instruments; or fair value through profit or loss (FVTPL).

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at

FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

For the purposes of the business model assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the

ZWACK UNICUM PLC. ANNUAL REPORT 2023 - 2024

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS