![]() Annual Report and Accounts 2022 BALTIC CLASSIFIEDS GROUP PLC #### BALTIC CLASSIFIEDS GROUP PLC #### Annual Report and Accounts 2022 ![]() ![]() #### Contents STRATEGIC REPORT 3 StrategicHighlights 6 Chair's Statement 8 CEO'sStatement 10 MarketOverview 12 Our Business at a Glance • Our business model • Our market position • Our strategy • Our purposeand culture 16 Moving our Strategy Forward 17 Section 172(1) Statement and Engagement with our Stakeholders 22 Financial Review 28 Operational Review 30 Sustainability Report • The Task Force for Climate-Related Financial Disclosure (“TCFD”) Report 41 Risk Management 41 Principal risks anduncertainties 45 Viability Statement GOVERNANCE REPORT 48 Corporate GovernanceReport • Introduction by the Chair of the Board Trevor Mather • Board of Directors • Corporate Governance Statement 2022 • Board leadership and company purpose • Statementofengagementwith employees • Statement of engagement with otherbusiness relationships • Division of responsibilities • Boardcomposition, succession andevaluation • Audit, risk and internal control 66 Nomination CommitteeReport 70 AuditCommittee Report 76 Directors' Remuneration Report 98 Directors'Report FINANCIAL STATEMENTS 106 Independent Auditor's report to the members of Baltic Classieds Group PLC 112 Consolidated Statement of Prot or Loss and Other ComprehensiveIncome 113 Consolidated Statement of Financial Position 114 Consolidated Statement of Changes in Equity 115 Consolidated Statement of Cash Flows 116 Notes to the consolidated nancial statements 148 CompanyStatementof Financial Position 149 Company Statement of Changes in Equity 150 Notes to the Company nancial statements ADDITIONAL INFORMATION 157 Glossary 157 Shareholder Information #### BALTIC CLASSIFIEDS GROUP PLC #### Annual Report and Accounts 2022 ![]() ## STRATEGIC REPORT 3 Strategic Highlights 6Chair's Statement 8CEO's Statement 10 MarketOverview 12 Our Business at a Glance • Our business model • Our market position • Our strategy • Our purposeand culture 16 Moving our Strategy Forward 17 Section 172(1) Statement and Engagement with our Stakeholders 22 Financial Review 28 Operational Review 30 Sustainability Report • The Task Force for Climate-Related Financial Disclosure (“TCFD”) Report 41 Risk Management 41 Principal risks and uncertainties 45 Viability Statement ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 3 STRATEGIC REPORT #### Strategic Highlights The Group’s objective is to #### provide trusted marketplaces #### to connect sellers and buyers #### across the Baltic region through #### “easy-to-use” and “feature-rich” #### portals that result in an efcient #### transaction experience for all #### parties. We believe the Group achieves this with its portfolio of leading brands, individually strong market positions and generally scalable business model. Weaimtocontinuetodeliverprotablegrowthbyfurther monetisingourportfolioofleadingonlineclassiedsportals throughsystematicpriceincreasesofourcoreclassieds products, supported by a strong value proposition and new features and products (including listings promotions), the development of ancillary services and selective bolt-on acquisitions and in-market consolidation in the Group’s existing markets and beyond. #### Operational highlights Visits per month 2021: average 69.2m visits per month 2020: average 56.8m visits per month 65.1m Trac 3 #### Financial highlights Revenue +21% +19% 0.49 #### € cents € cents 6.40 1.7x Revenue of €51.0m (2021: €42.3m) Adjusted EBITDA of €39.3m (2021: €33.0m) (2021: (0.02) € cents)(2021: 3.43 € cents) (2021:6.0x) 99% (2021:100%) Cash conversion Adjusted EBITDA Basic EPSAdjusted basic EPS 77% (2021:78%) Adjusted EBITDA margin 1 Leverage 2 1-2 See Financial review statement and note 6 3 Note: there were changes to the cookie consent policy (general obligation to consent within the framework of data protection for all cookies that are not necessary for technical reasons). Leadership position over closest competitor 4.4x 8.3x 32.1x 29.0x 19.7x 9.6x #### Autoplius #### CVbankas #### Auto24 #### AruodasSkelbiuKV ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 4 STRATEGIC REPORT Inadditiontoincreasingmonetisationofthecoreclassieds services, the Group aims to grow revenue by offering ancillary products and services, with the overall objective of enhancing the transaction journey of consumers and listers in the Baltic markets. How we measure progress • Developments • Innovations • Partnerships 2022 progress Auto: We have introduced a car price analysis tool for dealers on Lithuanian vertical,utilising archived data to indicatetheaveragepriceandsellingdurationforspecic cars. InEstoniaweexpandedourcarnancingproducts offering -in collaborationwith anancing provider,we now intermediate in offering a full-service car rental for new vehicles. Real Estate: We introduced a secure 2FA login to B2C clients’ accounts on both Lithuanian and Estonian Nr.1 portals. We have alsoimplemented virtual numbers on a limited number of C2C customers in Lithuania. Jobs & Services: We have implemented virtual numbers for C2C clients on our services platform in Lithuania. On our Jobs board employers can now increase the exposure of their listings by reaching a target audience of job seekers. Generalist: Onourbiggest generalistin Lithuaniaa bulk shipping feature has been implemented making it more convenient to ship several parcelsat the same time. In addition, sellers’ contact details are now securely hidden behind the registration wall. ▸ More details in our Operational Review (page 28). Associated risks • Competition risk • Technology risks 1 “2022”means the nancialyear (12 months) ended30 April2022, “2021” meansthe nancial year ended30 April2021, “2020” meansthe nancial year ended30 April 2020 2 “Yield” refers to the change in average monthly revenue per active (Auto or Real Estate) or listed (Generalist) C2C listing 3, 4, 6 See Financial review statement and note 6 5 ARPU is monthly average revenue per user (in Auto – per dealer, in Real Estate – per broker, in Jobs & Services – per client) Grow ancillary revenue through existing and new partnerships Focus on driving monetisation of core services The Group is considered to be at an early monetisation stage. The primary growth driver and focus of the Group is to drive increased monetisation of its core services, by increasing average revenue per B2C lister and average revenue from each C2C lister. Increased monetisation can take different forms, including pricing actions and product and packaging development (including listing promotions) enabling upsell and cross-sell. How we measure progress • Revenue • C2C yield • B2C ARPU 2022 progress We ended our year 2022 1 with the highest ever yearly revenue in all four business units, exceeding expectations at the time of the Initial Public Offering (“IPO”) during which we targeted c.15% growth for the Group. Group’s revenue grew 21% to €51.0 million (2021: €42.3 million of which €0.4 million from a business that was divested at the very end of 2021 and therefore not owned in 2022). Excluding revenue fromthedivestedbusinessfromourcomparativegures, our revenue grew 22% this year. At the start of the period reported on, we increased the yield from C2C ads across all of our business units and ended this year with the following growth in yield 2 : Improvements to our products and packages for B2C customerstowardstheendofthersthalfoftheperiod reported supported price increases in our Auto, Real Estate and Jobs & Services business lines and contributed to revenue in the second half of the year. Monthly average revenue per user (“ARPU” 5 ) has grown: +40% in Auto 3 +22% in Real Estate +8% in Generalist 4 +8% in Auto +15% in Real Estate +29% in Jobs & Services 6 Associated risks • Geopolitical risk • Risk of disruption to our customer and / or supplier operations • Competition risk • Laws & regulations risk • Technology risks Strategic Highlights continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 5 STRATEGIC REPORT 1 Leadershipposition basedon timeonsite except forAuto24.Auto24has no signicant verticalcompetitor; next relevant player isGeneralistportal, therefore the comparative market share is calculated by applying the Generalist portal automotive listings ratio (the number of active automotive listings to the total number of active listings on the portal at the end of the period) to that portal time on site 2-5 See Financial review statement and note 6 While the Group already demonstrates high operating leverage,andoperationalandcosteciency,itis committed to continue optimising costs and maintaining high cash conversion. However, the commitment to a leanandecientorganisationdoesnotpreventthe Group from making strategic investments, for example in technology, to maintain its market-leading position and strong value proposition for listers and consumers, and to support the sustainability of a growing organisation. The Group has a robust process of assessing business areas requiring further investments, and a streamlined approach to implementing internal change, with recent examples including the increased investment in the technology team and additional security infrastructure. How we measure progress • Adjusted EBITDA and margin • Operating prot and adjusted operating prot • Cash conversion • Cash generated from operating activities • Basic EPS • Adjusted basic EPS 2022 progress We ended our year 2022 with the highest ever adjusted yearlyprotability,exceedingexpectationsatthetime oftheIPO.Asareminder,atIPOwewerecondentinthe sustainability of Group margin prior to the impact of listed company costs. Wehavesignicantlyimprovedcybersecurityby implementing DDOS protection and bot management systems, migrated all services to a new infrastructure and set up a new infrastructure to accommodate a disaster recovery site. In addition, at the end of February 2022, we supported a fewNGOs, helpingUkraine andUkrainians eeingthe warin their country, with €0.2 million worth of donations. DuetotheRussianinvasionofUkraineandconsequentlythe internet population reading the news rather than shopping online / searching for a property or a car, we estimate that we lost around 1% of growth this year, both in revenue and EBITDA margin. Despite the above and additional public listed company costs this year, our Adjusted EBITDA 2 grew 19% (from €33.0 million in 2021 to €39.3 million in 2022). We ended our year with 77% Adjusted EBITDA margin (78% in 2021). Adjustedoperating prot 3 grew 20% to €38.5 million (€32.2 million in 2021). Reportedoperatingprotdecreased13%to€13.6million reectingIPOrelatedfeesintheyear2022(€15.7million in 2021). Reported cash generated from operating activities grew from €33.1 million in 2021 to €34.1 million in 2022, which is already after €6.4 million of IPO fees paid during the year. Cash conversion 4 was 99%. Basic EPS for 2022 was 0.49 € cents (2021: (0.02) € cents). Adjusted basic EPS 5 was 6.40 € cents (2021: 3.43 € cents). Associated risks • Geopolitical risk • Risk of disruption to our customer and / or supplier operations • Technology risks Continuously improving the Group’s scalability and maintaining high levels of operational eciency while making necessary investments The Group will continue to leverage the existing strong market positions of its portals, their high brand recognition andtractodrivemorelistingsandtracacrossits portals. As more listings are added, consumer audience tracisexpectedtoincrease,andthemoretrac increases, the more attractive its portals are, which again attracts more listings. These network effects are expected to continue to support more revenue growth through an increase in income from listing fees, subscription fees and other revenue sources. How we measure progress • Audience lead versus closest competitor • Trac to our sites 2022 progress During the last two years, all our leading sites have increased their audience lead 1 overthe closestcompetitor. Leadership position in times has changed accordingly: Comparedto pre-COVID-19,trac toour siteswas at record level. In 2022, the Group’s portals reached on average 65.1 million monthly visits (Source: Google Analytics). During the year 2021, it was 69.2 million monthly visits on average and during the pre-COVID-19 period, in 2020, it was 56.8 million average monthly visits. Associated risks • Geopolitical risk • Risk of disruption to our customer and / or supplier operations • Competition risk • Laws & regulations risk #### Drive trac through leading market #### positions and network effects Autoplius 2022 2021 2020 CVbankas Auto24 Aruodas Skelbiu KV 0102030 32.1 29.0 19.7 9.6 4.4 8.3 Strategic Highlights continued ![]() #### Chair’s Statement #### Overview BalticClassiedsGroupisahighlyprotable,high-growth business at an early stage of its monetisation journey. Its portfolioofclassiedsbusinessesacrossEstonia,Latvia andLithuaniaaretheclearmarketleadersintheirrespective sectors and have proven themselves to be extraordinarily resilientinatimeofsignicant macroeconomic uncertainty. The Group is led by a passionate and committed management team that has deep classieds experience and has created an environment of rapid decision making, of trust and of fun. I am delighted that we could bring such a high quality business, operating entirely in the Baltic region, to the London StockExchange. Weentered thePremium Segment oftheLSEinJuly2021andhavesubsequentlybeenincluded in the FTSE 250 Index. The Group is making good progress intermsofcompliancewiththeUKCorporateGovernance Code 2018. For a more detailed understanding of this, see the Corporate Governance Report on pages 48 to 65. However, I do ask the readers of this report to understand there are some differences that come with a business listed intheUKwithoperationspurelyintheBalticsregion.For example,the businesshasbeen operatingina highination environment which drives differences in the remuneration approach (see Remuneration Committee Report on pages 76 to 97), and the ethnic minority groups in the Baltics aresignicantlydifferentwhichmakesusthinkdifferently about diversity (see Nomination Committee Report on pages 66 to 69). The Grouphas delivered our strongest ever nancialresults withboth revenue andprotexceedingour guidanceset out at the IPO. #### Employees The past 12 months have thrown up some extraordinary challenges for our employees. On top of the health challenges, the pandemic has meant continued home working across our businesses for most of the year. Additionally, the history of and proximity to Russia for the Baltic countries combined with the deep connections, for all those who are affected by the waror have family members so affected, has caused worry and emotional turmoil that I can only imagine. Despite this, we have achieved everything we set out to do and more, bringing the Company to the public markets and exceeding expectations set out at that time. On behalf of the Board, I want to thank all of our employees for their remarkable contribution and dedication this year, and for serving both our consumers and our B2C customers so well. #### Board Preparing for the IPO meant restructuring BCG’s organisational structure, setting up a new top holding entity intheUKandestablishinganewBoardofDirectors.Iwas delighted to have been asked to chair the Board and believe mypreviousexperienceastheCEO ofAutotrader GroupPLC (“Autotrader”) throughout its transition from a private to a public company will contribute positively to the business. Ed Williams, the current Chair of Autotrader and the ex- CEOofRightmovePLChastakentheSeniorIndependent Director role and is Chair for the Remuneration Committee. Kristel Volver, Group CFO of the largest media company in the Baltics joined our Board as an Independent Non- Executive Director and Chair of the Audit Committee. I am delighted that we could bringsuch a high quality business, operating entirely in the Baltic region, #### to the London Stock Exchange Trevor Mather Chair “ 6 Baltic Classieds Group PLC Annual Report and Accounts 2022 ![]() Funds advised by Apax Partners (“Apax”) now account for 35.29% ofissued sharecapital as at30 April2022. Untilits shareholding falls below 10%, funds advised by Apax have a right under a Relationship Agreement to nominate up to two Nominee Directors, of which Tom Hall is currently in place alongside a nominated Board Observer. Tom brings in a vast experience in internet and consumer business and knows BCG well since Apax’s acquisition of the Group in 2019. On17May2022,JurgitaKirvaitienėjoinedtheBoardas an Independent Non-Executive Director and will join all of the Board Committees. Her 18 years of experience at PwC wheresheservedontheManagementBoardinLithuania and on otherboards will bolsterthe nance and operational experience on the Board. With this appointment we have brought all our Committees intofull compliancewith theUKCorporate Governance Code 2018. #### Environmental, Social and Governance I am pleased to report that the Company set up the Group’s Environmental, Social and Governance (“ESG”) working group that is the driver of ESG initiatives and amain tool for the Board to oversee progress in this area (refer to Sustainability Report on page 30 for more detail). Our Sustainability Report also includes reporting under the recommendations of the Taskforce for Climate-related Financial Disclosures. Wehavealsomadeasignicantincreaseinourcharitable giving programme this year, and aim to continue to do so in the coming year. The Board recognises we are only at the start of our ESG journey, and that this journey may have different directionsthan many companies given the Baltic operations - there is more to do. #### Returns to Shareholders and dividends The primary proceeds raised through the IPO were predominately used to reduce our net external debt to a level more appropriate for a publicly listed company. The opportunitywasalsotakentorenanceandenterintoa newtermloanfacilityata signicantlylowerrateofinterest. TheBoardiscondentinourabilitytodeliversustainable returns to Shareholders and aim to return all of the surplus cash we generate to Shareholders. In line with our intentions expressedintheProspectus,wearerecommendinganal dividendof 1.4€centsper share for2022.Thenaldividend will be paid, subject to Shareholder approval, on 14 October 2022. Whilst we will prioritise further acquisitions as the primary use of excess cash, now that our debt is below 2X net leverage, we will be initiating a share buy-back program that will facilitate the return of cash to Shareholders. More details on our capital policy can be found in the Financial review on page 22. #### Looking ahead I have been enormously impressed yetnot surprised by theprogress ofBalticClassiedsGroup overthe pastyear. I am excited that we can soon kickstart our capital policy of returning all excess cash to our Shareholders and I am condentthatthebusinesswillcontinuetodevelopand growbothquicklyandprotably -inlinewiththeguidance we set out at the IPO. Trevor Mather Chair 6 July 2022 #### The Group has delivered #### our strongest ever nancial results with both revenue and #### Adjusted EBITDA exceeding our #### guidance set out at the IPO Trevor Mather Chair “ Baltic Classieds Group PLC Annual Report and Accounts 2022 7 Chair’s Statement continued STRATEGIC REPORT Revenue +21% +19% Revenue of €51.0m (2021:€42.3m) Adjusted EBITDA of €39.3m (2021: €33.0m) Adjusted EBITDA ![]() This year has been the busiest and most successful in BCG’s historyandarecordyearintermsofnancialperformance.I am incredibly proud of all of the employees who have helped to achieve the best performance ever despite living through a 3 rd wave of the pandemic and geopolitical tensions. The period has also seen strong audience numbers on our sites, and record numbers of automotive dealers and job advertisers utilising our products and services. We implemented successful pricing and package changes across all of our business units, in C2C at the beginning and the end of the period, and in B2C at the middle of the year. The excellent results achieved this year have provided ongoing momentum moving us into the next nancial year. • Tractooursiteswas65.1millionvisitspermonth which means that on average, a resident in the Baltics visits one of our sites 11 times every month. • Our time on site leadership position over the nearest competitorincreasedforallveofourlargestsites compared to the same period in 2020 with Autoplius at 4.4x (vs 3.3x), Auto24 at 32.1x (vs 15.4x), Aruodas at 29.0x (vs 12.3x), Skelbiu at 19.7x (vs 15.1x) and CVBankas at 8.3x (vs 3.8x). • The number of real estate brokers grew 1% if compared to the same period in 2021, we have more automotive dealers (+4%) and more employers (+47%) utilising our sites to advertise than ever before. • The combination of increased prices of the goods and services being advertised on our sites, quicker speed of sale and changes to our packages has led to increased yields in Automotive (B2C +8%, C2C +40%), Real Estate (B2C +15%, C2C +22%), CVbankas (+29%) and Skelbiu (+8%). I am delighted that BCG has become a listed company on theLondon StockExchange.TheIPOhas allowedusto make all of our employees Shareholders of the Company. The team’s motivation is higher than ever as we focus on continuing to deliver outstanding products and services to our customers. WefeltitwaspartofourdutytohelpUkrainianrefugees arriving in our region. We have therefore developed tools in our portals to help integrate refugees in local society faster anddonated€233,000tonon-protorganisationshelping Ukrainians which also makes our employees proud. #### Market context The Baltic region was under various COVID-19related restrictions for the period from October 2021 to April 2022.Despitethis,LithuaniaandEstonia,beingourmain markets,wereamongtherstcountriesintheEUtoreach their pre-COVID-19 GDP levels. Our Company, as well as the Baltics economy in general, showed huge resilience to increased geopolitical tension in the region. On 24 February, theonsetoftheRussianinvasionofUkraine,peoplewere readingmorenewsthanever.Accordingly,ourtracKPIs temporarily dropped 20-30%. However, this was short-lived, and by the second to third week of the war, KPIs began to recover rapidly. By thefourth to fth week, business results exceeded pre-war levels. The Baltics economy exports just below 1% of locally produced goods to Russia which, coupled with government actions such as building liquid gas terminals and infrastructure, helps to reduce public uncertainty and makes us fully independent from gas imports fromRussia. TheBaltic statesbecame therst in Europe to stop Russian gas imports. At the date of this statement the Baltic states have also stopped importing Russian oil and electricity. #### CEO’s Statement #### This year has been the busiest, most #### successful in BCG’s history and a #### record year in terms of nancial #### performance Justinas Šimkus CEO “ 8 Baltic Classieds Group PLC Annual Report and Accounts 2022 ![]() Similarly to other countries around the world, the Baltics economiesfacehighination.Thisresultsinhigherreal estate and automotive prices, increasing the commission pool of our customers which in turn is supportive to our Company’s growth, while being part of the Eurozone secures our Shareholders’ investment. • Despite the supply chain issues, the used car market has demonstrated a modest growth of 3% in the last 12 months. Demand to change vehicles has remained high, driving up the average price per used car (by 24% YoY) and increasing the speedof sale. This has meant dealers have maintained or increased their protability.However, thenumber ofdaysavehicle is advertised has reduced by 14% putting downward pressure on the stock of vehicles on our sites. • The real estate market has emerged strongly post lock-down. The number of transactions were 9% higher year-on-year and the average price of an apartment has increased by 10%. The larger commission pool benets our customers. • The employment market has seen unprecedented growth. Companies have faced a substantial labour shortage. The number of employers using Cvbankas.lt increased by 47% and averagesalaries have grown by 11%, leading to companies increasing their investment in employee search and selection. • eCommerceactivitieshavesignicantlyincreased because of lock-downs. The numbers of online buyers and sellers grew rapidly with many transactions moving online. This has helped the growth of our Generalist platforms and ancillary products like deliveries. Justinas Šimkus Chief Executive Ofcer 6 July 2022 9 Baltic Classieds Group PLC Annual Report and Accounts 2022 CEO’s Statement continued ![]() 2020 Source: State Enterprise Centre of Registers Lithuania, Land Register Latvia, Land Board Estonia 20212022 2019 Source: Swedbank (prices per square metre); State Enterprise Centre of Registers Lithuania, Land Register Latvia, Land Board Estonia (number of transactions) 20202021 0 50 100 150 200 250 0 500 1,000 1,500 2,000 10 #### Automotive market BalticClassiedsGroupcurrentlyoperatesitsautomotive portals in Lithuania and Estonia. During the last 12 months, ending April 2022 there were 50,200 new and 445,700 used car transactions in the Lithuanian and Estonian automotive market, including local used car sales and imports of used cars, primarily from Western Europe. Although we observed high consumer demand for both new and used cars, the market continues to be affected by supply chain issues. Worldwide supply chain issues as well as chip shortages continue to have an effect on new car deliveries and as a result buyers are waiting longer to receive ordered vehicles. This has a knock-on effect within the used car market, as consumers, while not being able to acquire a new vehicle, decide to buy used ones, or postpone the decision to sell a currently owned one. Therefore, it hasbecomemoredicultforBalticautomotivedealersto acquireusedcarsabroadforimport,makingitdicultto satisfy pent up local demand. #### Market Overview #### Real estate market TheGroupcurrentlyoperatesonlineclassiedsportalsin therealestatemarketsofLithuania,Estoniaand Latvia. Afterthe recoveryoftherst COVID-19shockin thespring of 2020, the real estate market continued to grow in terms of the number of transactions and property prices. During the last 12 months ending April 2022, the real estate market was particularly active. In addition to this, since thebeginningofthewarinUkraine,thedemandforrental propertyintheBalticshasbeenincreasing.Ukrainians eeing thewar in their country and eastern companies transferring their operations to the Baltics, have also contributed to the upturn in demand. Furthermore, the construction of new developments is becoming more expensive and complicated. Several developers have postponed the start of construction because of supply-chain disruptions or increased prices for construction materials. The already-high construction costs are expected to increase even more, putting upward pressure on the average price level in all Baltic capitals. Due to the active real estate market, the total number of transactions was 9% higher in 2022 compared to 2021. The number of transactions of apartments for sale in Vilnius, Riga and Tallinn grew 20% in calendar year 2021. The average price per square metre of an apartment for sale has increased by 10% on averageacross Baltic capital cities in the calendar year 2021. This larger commission pool benetsourcustomersandalsogeneratesmorerevenue for the portals. 0 100 200 300 400 500 New vehicles Used vehicles Total number of transactions, thousands Average real estate prices per m 2 Average used vehicle price 2020 Source: Regitra, Autotyrimai and Maanteeamet Number of transactions in Lithuania and Estonia, thousands Number of transactions in Lithuania, Latvia and Estonia during nancial years 2020, 2021, 2022, thousands 202120222020 Source: Company information Average used car price in Lithuania and Estonia, Euros. Average real estate prices per square metre based on apartment prices in Vilnius, Riga and Tallinn during calendar years 2019, 2020, 2021, Euros. 20212022 0 2,000 4,000 6,000 8,000 Initially it was expected that the delivery levels of new vehicles would return to normal, pre-pandemic levels by theendofcalendaryear2022,butthewarinUkrainehas put further pressure on car component supply chains. As a result, based on Autovista Group forecasts, expectations of market recovery have been pushed further into calendar year 2023 with used car volumes to follow afterwards. Despite the constraints, the used car market has demonstrated a modest growth of 3% in the last 12 months, while new car sales have increased by 14% albeit still below the level of 2020. The lasting imbalance in car supply and demand has continued to push up used car prices. The average used car price has continued to grow by 24% in the last 12 months to €9,357. Growing prices and shorter sales times help increase dealers commission pool. STRATEGIC REPORT 223.9249.5271.3 1,5471,6981,875 7,0047,2539,357 51.8 504.9 44.0 433.8 50.2 445.7 ![]() #### Generalist market TheGroup currently operatesGeneralistportals inLithuania andEstonia.E-commercegrowthinLithuaniaandEstonia was accelerated by COVID-19 pandemic limitations on physical retail in calendar years 2020 and 2021. Customer habits evolved to increasingly shopping online which translated into a higher number of online buyers, sellers and transactions. The Lithuanian andEstonian e-commerce marketshave, #### Jobs market TheGroupcurrentlyoperatesonlineclassiedsportals inthejobsandservicesmarketsofLithuania.Agrowing economyinLithuaniadrivesademandforemployees.A rapid recovery after the short crisis at the beginning of the COVID-19 pandemic resulted in an unprecedented growth oftheLithuanianemploymentmarket-during2022there were 46% more job advertisements listed on CVbankas compared with the prior year. Therapideconomicrecoveryisreected inthedecreasing unemployment. The average unemployment rate in Lithuania has decreasedfrom 8.5% to 7.1% incalendar year 2021. Decreasing unemployment increased the competition between employers. Companies have faced labour shortages which was also highlighted by lower jobseekers’ activity - a trend that is seen worldwide. Competition for employees was also fueled in general by a growing number of companies that are looking for employees, accordingly the number of employers using CVbankas increased by 47% in 2022. The average gross salary in Lithuania has increased by 11% during calendar year 2021. Growing salaries support the trend of higher investment in employee search and selection. While increased spend for job advertisement listings and value added services are driven mainly by an increased demand for employees, the increasing competition among companies, lower jobseeker activity and growing salaries, in turn, increases competition among employers and decreases employee turnover. combined, grown at approximately 22% CAGR between calendar years 2015 and 2019, 37% between calendar years 2019 and 2020, and 24% between calendar years 2020 and 2021 (retail value RSP (retail selling price), source: Euromonitor). Growth in calendar year 2021 (second pandemic year) slowed a little compared to calendar year 2020 (rstpandemic year), butstill remainedat a highlevel. Supportive underlying market conditions helped to grow our Generalist platforms and ancillary products for example, deliveries. 2019 2019 Source: The Lithuanian Department of StatisticsSource: The Lithuanian Department of Statistics Average unemployment rate in Lithuania during calendar years 2019, 2020, 2021. Retail value RSP for calendar years 2015-2026, excluding sales tax, current prices, million Euros. Average monthly gross wage in Lithuania during calendar years 2019, 2020, 2021, Euros. 2020 2020 2021 Source: Euromonitor 0% 2% 4% 6% 8% 0 500 1,000 1,500 2,000 20152016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E Lithuania 319401 501 614 740 1,0461,288 1,611 1,954 2,318 2,674 3,079 Estonia260310 376 463 538 708 881 1,0621,2341,3911,5471,703 Total579711 877 1,078 1,2781,754 2,168 2,673 3,187 3,709 4,221 4,782 2021 11 Average unemployment rateAverage monthly gross wage STRATEGIC REPORTMarket Overview continued 6.3%8.5%7.1% 1,2961,4291,579 ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 12 STRATEGIC REPORT #### Our Business at a Glance # We love # transactions! BCGisproudtobetheleadingonlineclassiedsgroupin the Baltics, owning and operating 12 online portals across a range of sectors and industries, as shown in the Our Brands section below. Our portals areamongst themost visitedsites inLithuania and Estonia.Thevast majorityof theGroup’s tracis direct tracreaching58%.Acombinationofdirectandsearch channels to our websites comprise from 79% to 94% in eachofthem,whenthevastmajorityofthesearchtrac isnotpaid.Verylittlesearchtracispaidandtotal Group advertising and marketing expenses are below 2% from Group revenue. Based on the number of user visits and the number of online listings across the Group portals, BCG is foremost in theonlineclassiedsmarket.In2022,theGroup’sportals were visited on average 65.1 1 million times per month which means that on average, a resident in the Baltics visits one of our sites 11 times every month. We consider using our portals as one of the easiest ways to advertise and therefore transact realestate, auto, and other items, as well as job seeking, recruiting or locating a service provider. #### Our brands 1 Note: there were changes in the cookie consent policy (general obligation to consent within the framework of data protection for all cookies that are not necessary for technical reasons). ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 13 STRATEGIC REPORT #### Our business model Our success is the result of a proactive and consumer- focused business model incorporating both vertical and Generalist online portals as illustrated in the table below. Our brands include vertical portals which serve particular industries and facilitate promotion, advertisement and saleswithinspecicsectors.Theseportalsattractahigh proportion of loyal and returning business customers (B2C listers who have a subscription-based contract). However, it is also highly used by individual customers and the general population (C2C listers carrying out one-off transactions). We also operate Horizontal or Generalist portals, such as general marketplace, online auction and price comparison websites, used by individual customers and the general population. #### Our brandsLithuania #### Estonia #### Latvia #### Automotive Real Estate Jobs and #### Services #### Generalist % of BCG revenue for 2022 36% 25% 19% 20% The benets of this combined-offer business model are: • the large choice for prospective consumers and maximum possible audience; • the ability to cross-list between the vertical and Generalist portals widens reach, increases available contentandprovidesopportunitytodiverttrac from Generalist portals to higher monetising vertical portals; and • strong brand awareness across a wide network. Our Business at a Glance continued ![]() The Group’s portals attract a large and highly engaged consumer audience. As of 30 April 2022, the Group’s portals were amongthe most visitedwebsites in Lithuaniaand Estonia. According to April 2022 ratings from SimilarWeb, (which also include websites such as Facebook, Youtube, news portals) Skelbiu was the 5 th , Autoplius - 8 th and Aruodas and Auto24 - 13 th in their respective countries. Our portals leadership position 1 compared to the closest competitor (in times) has been strong and increasing. The Balticsbenet from highlevels ofdigital adoption, underpinned by internet access and 4G mobile penetration. The percentage of the population using the internet at home standsat 87%inLithuania, 91%in Latviaand92% inEstonia (source: Statista). The region also performs highly in the fastestpublicwiglobalrankingwithLithuaniaranked1 st , Estonia 3 rd andLatvia15 th (based on 2021 calendar year data). The high level of digitalisation supports the Group’s business and operations and its ability to effectively execute its growth strategy. Our successful business model, based on the combined- offer of Vertical and Generalist platforms, has been supported by strategic decisions to ensure its sustainability. These include: • Investingint-forpurpose,long-termtechnology capability. All technology is developed in-house and on aportal-specicbasis.Thisallowsanagileapproach while ensuring shared components and applications across the platforms. This investment has resulted in a scalable infrastructure that is capable of handling increasing levels of trac. • Focusing on cash generation with excellent margins. BCG’s market leader position and strong brand identity allow a low marketing spend and the organisational structure supports shared corporate functions and minimal capital expenditure. • Concentrating on talent recruitment and retention. BCG prides itself on attracting a highly skilled and ecientworkforce.TheGroup’scoreHR objectiveisto attract high potential and highly motivated employees and give them room to grow and develop. For our strategic aims see Moving our Strategy Forward on page 16. Autoplius 2022 2021 2020 CVbankas Auto24 Aruodas Skelbiu KV 0102030 32.1 29.0 19.7 9.6 4.4 8.3 #### Our market position #### Our strategy 1 Leadershippositionbasedontimeonsiteexceptfor Auto24.Auto24 has no signicant verticalcompetitor; next relevant player isGeneralistportal, therefore the comparative market share is calculated by applying the Generalist portal automotive listings ratio (the number of active automotive listings to the total number of active listings on the portal at the end of the period) to that portal time on site 14 STRATEGIC REPORTOur Business at a Glance continued ![]() #### Our purpose and culture ### Connectingconsumers withlisters BCG exists to connect consumers with listers and help themtransactmoreeasily.TheBoardissatisedthat the Group’s purpose, values and strategy are aligned with its culture. Our governance framework, organisational structure and culture contribute signicantly to the delivery of our business model and the support of our purpose. To achieve our purpose, we are focused on the following strategic goals: • To enhance the transaction experience • To provide the easiest solution for sellers and buyers to nd each other • To ensure a simple way of advertising for our consumers and listers • To be the main solution for our consumers and listers transaction needs ▸ See page 17 for information on our Stakeholders and our approach to engagement ▸ See page 30 for information on our approach to Sustainability 15 STRATEGIC REPORTOur Business at a Glance continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 16 STRATEGIC REPORT #### Moving our Strategy Forward #### Our Company values and behaviours For over more than a decade, our CEO Justinas Šimkus and COO Simonas Orkinas and their long-standing team have built a collection of market-leading businesses and strong brands. Every day weconnect buyers and sellers and facilitate transactions from cars and real estate, job offers to services and consumer goods from both professional and private listers. The digital marketplaces we operate promote trust, fairness and eciency. The values and behaviours that we believe in are: • Trustworthiness • Entrepreneurship • Less is more • Getting things done • Marketplace is our hobby • Work is fun #### Our priority We are committed to being a responsible business. Our priority is to protect and support our people, customers, Stakeholders and the environment around us. #### Our strategic aims and Board activity Our strategic delivery is based on ve strategic aims: • Driving monetisation of core services. Through various means including pricing actions, product and packaging developing, enabling upsell and cross-sell. • DrivemorelistingsandtracacrosstheGroup’s portals. Useourmarketpositionandbrandrecognition todrive tracand increaselistings,resulting inmore revenue growth through listing fees, subscriptions fees and other sources. • Grow ancillary revenue through existing and new partnerships. The offer of ancillary products and services will grow revenue and also help achieve the overarching objective of enhancing thetransaction journey for consumers and listers. • Pursue strategic opportunities through acquisitions. The Group constantly evaluates its portfolio to optimise value creation and will continue its pursuit of attractive options for inorganic growth, particularly through bolt-on acquisitions and in-market consolidation in the Group’s existing markets, and ## We are committed to being a ## responsible business. potentially new markets outside of the Baltics with a strong focus on similarly high-quality, market-leading businesses. • Continuously improving the Group’s scalability and maintaining high levels of operational eciency while making necessary investments. While the Group already demonstrates high operating leverage and operationaland costeciency,itis committedto continue optimising costs and maintain high cash conversion. #### Our Stakeholders • Investors • Customers • Employees • Suppliers • Regulatory bodies • Environment and community Responsible business and #### Environment, Social and Governance #### (“ESG”) The Sustainable Development Goals (“SDGs”) (also known astheGlobalGoals),wereadoptedbytheUnitedNations in 2015. Our approach to responsible business aligns quite naturally withthe goalsand wehave identied vethat are most material to our business and where we contribute the most: • Responsible consumption and production • Climate action • Gender equality • Decent work and economic growth • Peace, justice, and a strong institution ▸ For more on our culture see pages 12. ▸ For our S172(1) Statement and more on Engagement with our Stakeholders see page 17. ▸ For more on our ESG see page 30. ![]() Section 172(1) Statement and #### Engagement with our Stakeholders Companies Act 2006, Section 172(1) “A director of a company must act in the way, he considers, in good faith, would be most likely to promotethe successof thecompany forthe benet of its members as a whole, and in doing so have regard (amongst other matters) to the following factors: (a) the likely consequences of any decision in the long term; (b) the interests of the company’s employees; (c) the need to foster the company’s business relationships with suppliers, customers and others; (d) the impact of the company’s operations on the community and the environment; (e) the desirability of the company maintaining a reputation for high standards of business conduct; and (f) the need to act fairly as between members of the company.” #### Section 172(1) Statement “Promoting the success of the Company for the benet of all its stakeholders”. TheBoardof Directorsconrmsthatduringtheyear under review, it has acted to promote the long-term success of the Company for thebenet of Shareholders, whilst having due regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006 (“Section 172(1)”). The Board of BalticsClassiedsGroupPLCissubjecttoalltheduties codied in law, which includes Section 172(1). The Board has direct engagement principally with our employees and Shareholders but is also kept fully apprised of the material issues of other Stakeholders through the Executive Directors, reports from other members of Senior Management and external advisors. Pages 18 to 21 outline the ways in which we have engaged with key Stakeholders and focuses on the following key areas: • Who the key Stakeholders are and why they are important to the Group • Board oversight and engagement mechanisms • Principal issues that matter to each Stakeholder group • Principal Board decisions and how they tie into Section 172(1) (a) to (f) • Future consequences and planned actions • Diculties for the Board in making these decisions. The Board considers ‘Principal Decisions’ to be those decisions which entail signicant long-term implications and consequences for the Company and/or its Stakeholders – todistinguish these from the normal,ordinary course decision-making processes that the Board engages in. ▸ The Board’s Principle Decisions can be found on pages 18 to 21. ▸ Statement of Engagement with Employees on page 56. ▸ Statement of Engagement with Suppliers, Customers and others on page 57. 17 STRATEGIC REPORT ![]() Stakeholder Principal issues that matter to the Stakeholder Board oversight and engagement mechanisms #### INVESTORS Why we value them Securing our Shareholders’ trust through continuous engagement ensures their ongoing investment and support. We have a clear responsibility to engage with Shareholders as the owners of our business as well as appealing to new Shareholders so their views are an important driver of our strategy. Access to capital if required. • Sustainable, protable growth over the long-term • Immediate returns on their investment • Dividend policy • Share price • Understanding the risks to the business • Good governance and transparency • Good performance in Environmental, Social and Corporate Governance areas • Values and culture of the Company • Oversight of internal and external audit processes to protect their investments • Investor Roadshows (organised by Bank of America) • Regular personal meetings with potential investors in response • Fireside chats with brokers • RNS newswires • Annual Report and Accounts • Regular updates on corporate website • Annual General Meeting • Electronic communications to Shareholders • Views of voting agencies Future consequences/ planned actions • Board strategy day planned for September 2022 • Views of voting agencies has led to a greater understanding of Shareholder interest and has fed into key policies such as our Board Diversity Policy Difculties • Dividend decision-making, balancing the desire of Shareholders for immediate returns, against the need to preserve liquidity and ensure the sustainability of the business • Purpose setting, aimed at delivering against Shareholders’ needs for long-term, sustainable and protable growth Board decision and which S172(1) (a) to (f) factors it considered • Approved the Company Purpose (a), (b), (c), (d), (e), (f) • Approving the declaration of a dividend (a), (b), (e), (f) • Approving BCG’s ESG strategy (a), (b), (d) #### Engagement with our Stakeholders Board activity, Stakeholders and S172(1) considerations The following table summarises Board activity, Stakeholders and S172(1) statement. For more information on Board activity and how it links to the culture, see page 54. 18 Section 172(1) Statement and Engagement with our Stakeholders continued STRATEGIC REPORT ![]() Stakeholder Principal issues that matter to the Stakeholder Board oversight and engagement mechanisms #### CUSTOMERS Why we value them Customers, both individual consumers and retail customers, will drive the growth and reputation necessary for sustaining long-term growth and value for Shareholders. • Competitive rates • Functionality and intuition of sites • Reputation • Pragmatic approach • Market reach and wide network • Excellent customer service and complaints procedures • Training on new functionalities • Checks to ensure credibility of sellers and measures to protect customers • Data protection • Relevant health and safety standards • Senior Managers for each business unit feed customer relationship information back to the Board • The Board intentionally drive strategy and decision-making to improve the customer experience Future consequences planned actions • Our customer service teams gather feedback from customers about technical solutions and new functionalities with their preferences and recommendations. Major business clients are sometimes even consulted before launching new products. Their feedback can directly alter this product. The Board receives a summary of all such feedback when discussing strategies for each business line which can directly affect its decision making Difculties • Balancing customer needs and expectations • Diculties regarding data protection • Customer protection (e.g. protection against third-party fraud) Board decision and which S172(1) (a) to (f) factors it considered • Approving new price changes (a) , (c) • Discussing and approving new products or changes to existing ones (a) , (c) #### SUPPLIERS Why we value them Reliable and resourceful suppliers support our business infrastructure and are essential for smooth operational performance and the delivery of long-term strategic development and objectives. • Prompt and accurate payment • Long-term partnerships • Collaboration • Responsible sourcing • Regulatory compliance • The Company’s nancial performance • Growth prospects • Reputation • Performance reports discussed and considered at Board Future consequences/ planned actions • Continuous development of our supplier management framework to strengthen our collaboration with strategic suppliers who are instrumental in enabling the realisation of our strategic objectives Difculties • Our customers are facing supply chain issues (especially in the Auto business line) that have an indirect impact on the Group’s operations Board decision and which S172(1) (a) to (f) factors it considered • Board approval of larger supplier contracts based on authority matrix (c) , (e) Baltic Classieds Group PLC Annual Report and Accounts 2022 19 Section 172(1) Statement and Engagement with our Stakeholders continued STRATEGIC REPORT ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 20 STRATEGIC REPORT Stakeholder Principal issues that matter to the Stakeholder Board oversight and engagement mechanisms #### EMPLOYEES Why we value them BCG prides itself on a close and united employee community. Our employees bring ambition, expertise and fresh perspectives that contribute to the values and culture of BCG and are essential for the delivery of our strategic objectives. It is vital for BCG’s long-term success that we nurture an environment where people feel valued, motivated, and able to develop. • An inclusive and diverse working environment • Positive culture, team spirit • Opportunities for career and personal development • Having a voice • A safe and secure workplace • Good pay and benets • Gender equal pay • Whistle-Blowing Policy and procedure for raising concerns • Good working practices • Safe working environment • Modern Slavery Policy • Regular online engagement within teams whilst remote working • Every employee is a Shareholder which fosters a feeling of ownership, unity and is an incentive for good performance • Continuous improvement of policies and employee benet schemes • Regular and scheduled meetings within Business Units where employees have the opportunity to ask questions of Senior Management; the feedback from these sessions is fed back to the Board during vertical strategy sessions • CEO, CFO and COO update at every Board meeting which includes relevant workforce updates • Regular social activities for example, virtual beer tasting, a Christmas party • Consultation (in the form of a poll and conversation) with regards the return to oce-working post-COVID-19 Future consequences/ planned actions • Virtual or face-to face team gatherings for social occasions, team lunch and similar initiatives that support the Group’s efforts on building Group culture Difculties • Engaging with the workforce due to the virtual nature of most of 2022, especially staff onboarding Board decision and which S172(1) (a) to (f) factors it considered • Board approval of code of conduct related policies (b) • Board approval of PSP scheme and Free Share awards (a), (b) #### REGULATORY #### BODIES Why we value them Active and regular engagement with regulators in the Baltics and the UK helps to ensure we understand changing regulatory requirements and can continue to meet these requirements. • Legal and safe operations with compliance with relevant regulations • Worker pay and conditions • Waste management and environmentally sound practices • Consumer protection • Product safety • Health and safety • Privacy and security • Gender equal Pay • Board oversight and approval of lings with Companies House • FPPP compliance for IPO • Preparation of rst TCFD report Future consequences/ planned actions • To continue to observe, comply and be responsive to regulation and regulatory requirements Difculties • The ongoing supervisory proceedings initiated by the Estonian Competition Authority. See note 24 to the consolidated nancial statements for further detail Board decision and which S172(1) (a) to (f) factors it considered • Board approval of IPO documents and half-yearly results (a) , (e) , (f) Section 172(1) Statement and Engagement with our Stakeholders continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 21 STRATEGIC REPORT Stakeholder Principal issues that matter to the Stakeholder Board oversight and engagement mechanisms #### ENVIRONMENT AND #### COMMUNITY Why we value them Recognising where we can make meaningful contributions to the wider society enables us to strengthen our relationships with consumers, customers and the wider community whilst also having a positive environmental and social impact. • Recognised environmental and societal standards • Environmental and social issues, including climate change, carbon emissions, food and road safety, human rights, waste management, and recycling • Having a positive impact on the community • Environmental and socially responsible business practices and credentials • Board involvement in the preparation of the ESG reporting in the Annual Report and Accounts • Senior Management reports to the Board on social and environmental concerns arising within their business units Future consequences/ planned actions • ESG Working group - building upon the work that it has started in order to achieve full compliance with the TCFD recommendations Difculties • Ensuring our procedures and processes are established in order to comply with the TCFD recommendations whilst noting that this is our rst year as a company listed on the London Stock Exchange Board decision and which S172(1) (a) to (f) factors it considered • Board approval and continuing support for a business model which inherently benets the environment e.g. encourages reusing and recycling; low carbon emissions (a) , (d) , (e) • Board approval for a signicant donation to non-governmental organisations helping Ukraine upon the invasion by Russia (a) , (c) , (d) , (e) Further information as to how the Board has had regard to S172(1) (a) to (f) can be found in the following pages: Section 172(1) (a) to (f)Where can you nd more in our Annual Report Page reference S172(1) (a) Consequence of any decision in the long-term Moving our strategy forward Risk Management Board leadership and Company purpose 16 41 53 S172(1) factors 117 S172(1) (b) Interests of employees Section 172(1) Statement Engagement with our Stakeholders Sustainability report Board leadership and Company purpose Statement of engagement with employees Board activity and culture Board activity throughout the year Non-nancial information statement 17 30 53 56 54 60 102 S172(1) factors 117 S172(1) (c) Fostering business relationships with suppliers, customers and others Moving our strategy forward Section 172(1) Statement Engagement with our Stakeholders Board leadership and Company purpose Statement of engagement with other business relationships Non-nancial information statement 16 17 53 57 102 S172(1) factors 117 S172(1) (d) Impact of operations on the community and the environment Moving our strategy forward Section 172(1) Statement Engagement with our Stakeholders Board leadership and Company purpose Non-nancial information statement 16 17 53 102 S172(1) factors 117 S172(1) (e) Maintaining high standard of business conduct Moving our strategy forward Section 172(1) Statement Engagement with our Stakeholders Board leadership and Company purpose Non-nancial information statement 16 17 53 102 S172(1) factors 117 S172(1) (f) Acting fairly between members Section 172(1) Statement Engagement with our Stakeholders Division of Responsibilities 17 58 Section 172(1) Statement and Engagement with our Stakeholders continued ![]() #### Financial Review #### Revenue Group’s revenue grew 21% to €51.0 million (2021: €42.3 million of which €0.4 million from a business that was divested at the very end of 2021 and therefore not owned in 2022). Excluding the divested business revenue from the comparative gure, our revenue grew 22% this year. Compared to 2020, which was largely beforeCOVID-19, and excluding the impact of acquisitions and disposals within the comparative period, our revenue in 2022 increased by 35% (2020:€32.3million). Thisgrowth ratereectsthat we also grew in 2021 despite the fact we did not introduce major changes to our pricing in 2021, usually an annual event. Compared to 2020, which was largely before COVID-19, and excluding the impact of acquisitions and disposals within the comparative period, our revenue in 2022 increased by 35% (2020: €32.3million). This growth rate reflects that we also grew in2021 despite thefact we didnot introduce major changes to our pricing in 2021, usually anannual event. Lina Mačienė CFO “ Focusing on 2022, most of the percentage increase represents underlying organic growth in revenue. A small partofthegrowthreectssomewaivingoflistingfeesto Real Estate and Auto B2C customers in the H1 prior year, when the Baltic countries experienced the rst wave of COVID-19. DuetotheRussianinvasionofUkraineandconsequentlythe internet population reading the news rather than shopping online / searching for a property or a car, we estimate that we lost around 1% of growth this year, which dropped down to the bottom line as well. This was an immediate and short- term impact on revenue which bounced back in a few weeks to pre-war levels and our normal run-rate. 2022 €m2021 €m2020 €m A) Revenue less acquisitions & disposals43.635.332.3 B) Revenue from businesses disposed in 2021-0.40.4 C) Revenue from businesses acquired in 20207.46.51.5 D) Total Revenue51.042.334.3 Reported revenue growth in 2022 (D: 2022 vs 2021)21% -- Revenue growth in 2022 excluding the disposed business (A+C: 2022 vs 2021) 22% -- 2-yearrevenuegrowthexcludingdisposalsand acquisitionsduring the period (A: 2022 vs 2020) 35% -- The main drivers of revenue growth were increases in the number of advertisers across our business sectors, an increase in the number of advertisements/active C2C listings across all our business sectors except Autos, and an increase in the average spend per customer/advertisement across all our businesses. In May 2021, we introduced C2C price changes for most ofourportals,reectedinthereportedrevenuenumbers. In September and October 2021, we introduced B2C price and package changes for the Real Estate, Auto and Jobs portals, reecting improvements to ourproposition. In April 2022, we introduced C2C price changes in the main portals - these made a limited contribution to 2022 revenue, with the full contribution to be seen in 2023. 22 Baltic Classieds Group PLC Annual Report and Accounts 2022 ![]() 0 10 20 30 40 50 2022 2021 Auto +9% +11% +17% +6% +97% +21% +22% Auto 1 Real Estate Generalist Jobs & Services Revenue Revenue 2 1 Auto (excluding 0.4 million from business divested in 2021) 2 Revenue excluding business divested in 2021 0 50 100 150 200 250 300 2022 2021 Auto +4% +1% +47% (18%) +2% +3% +8% +15% +29% +40% +22% +8% AutoAutoAuto Real Estate Real Estate Real Estate Real Estate Jobs 1 Generalist 3 Jobs 1 Generalist 3 1 CVbankas.lt only 2 the Group presents the average monthly revenue per active C2C auto listing on the basis of the C2C revenue generated by auto listings only, excluding any C2C revenue generated from vehicle parts, vehicles other than autos and other C2C listings. 3 Skelbiu.lt only 4 ARPU - monthly average revenue per user (in Auto – per dealer, in Real Estate – per broker, in Jobs & Services – per client) B2C – No. of Dealers B2C – No. of Brokers B2C – No. of Customers C2C – No. of Active Ads 2 C2C – No. of Active Ads C2C – No. of Listings B2C – ARPU 4 (€) B2C – ARPU (€) B2C – ARPU (€) C2C – Rev. per Ad (€) 2 C2C – Monthly Rev. per Ad (€) C2C – Revenue per Listing (€) Revenue grew healthily in all four of our business areas. However, we saw a much wider range of organic growth (Jobs & Services up 97% down to Generalist up 6%) than we have seen historically. We believe that this, in large part, reectstheindirectconsequencesofCOVID-19(e.g.pent up demand in the employment market, recovering foot tracto physicalstoresversusmajor shifttoe-commerce last year) as seen in many countries. We are seeing strengthening network effects across all business units as a growing number of customers drive content, which in turn encourages greater engagement for our audience. In all three business units, the number of B2C customers has increased: • Automotive dealers by 4% (from 3,356 in 2021 to 3,489 in 2022) mainly due to small dealers switching to B2C subscriptions rather than placing advertisements as if they were C2C customers. • Real Estate brokers by 1% (from 4,809 in 2021 to 4,855 in 2022). • Jobs customers by 47% due to signicantly increased demand by companies for employees in the market (from 1,521 in 2021 to 2,243 in 2022). In C2C, a gradual increase in listings is primarily due to growing activity in the underlying market in Real Estate and Generalist. In Automotive, the average monthly number of active advertisements is down 18% primarily due to shortened selling time (which means each advert is active for less time) and fewer market transactions than pre- COVID-19, inuenced by global car shortages. The majority of our C2C price changes were implemented in Spring 2021, and our B2C price changes throughout Autumn 2021. Organically, excluding the disposed Autoleht revenue (sold at the end of 2021 and amounting to €0.4 million in 2021), the Auto business line grew 11%. The reported Auto business line revenue has grown 9% during 2022 (from €16.8 million in 2021 to €18.3 million in 2022). The Jobs & Services business line revenue almost doubled - growing 97% (from €5.0 million in 2021 to €9.8 million in 2022). Real Estate has also contributed a solid growth to Group revenue – the business line grew 17% (from €10.7 million in2021 to €12.5 million in 2022). Generalist revenues grew 6% (from €9.8 million in 2021 to €10.4 million in 2022). In terms of ARPU in our B2C segment: • AutomotiveARPUwasup8%duetopriceand packaging changes in September and October 2021. ARPUgrowthwas somewhatdepressedbydealers reducing package sizes in the context of low inventory levels and an increased number of smaller dealers. We expect further upside from the price changes in the longer-term when inventory levels recover, and dealers increase their packages. • RealEstateARPUwasup15%partiallydueto the discounts in the comparative period, but also customers benetingfroman increasednumber of transactions and subscription fee and packaging changes which took effect from September 2021 to January 2022 and were aimed at both growth inARPUandincentivisingcustomerstochoose individual and more premium accounts with brokers. Baltic Classieds Group PLC Annual Report and Accounts 2022 23 Financial Review continued STRATEGIC REPORT ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 24 STRATEGIC REPORT Aruodas.lt took actions to increase the quality of the content by reducing the number of duplicate advertisements which reduced the number of listings per broker from 15 to 10 in basic and from 25 to 15 in mid-range packages as well as introducing a new, top package tier. • JobsandServicesARPUwasup29%dueto increased prices, a higher number of advertisements percompanyandintensiedusageofvalue- added services. Consequently, our jobs portal CVbankas.lt is almost twice as big revenue-wise than it was a year ago and, as the market leading job board, isbenetingfromfavourableunderlyingmarkettrends which are driving record job vacancy and employee search activity. Increased prices were implemented for new and renewing customers in September 2021 and will continue to be rolled out to all customers over the next 12 months. In terms of ARPU in our C2C segment: • Automotive average revenue per active advertisement was up 40% due to price changes and rising average transaction values (the average car price on our portals grew 24%). • Real Estate average revenue per active advertisement was up 22% due to price changes and rising average transaction values (apartment prices per square metre in Baltic capitals have increased by 10%). • Generalist average revenue per listing was up 8% due to price changes, rising average transaction values and the introduction of a “two in one” package allowing listing in both Generalist Skelbiu.lt and Vertical Autoplius.lt sites in new categories. #### Operating costs Our reported operating costs for 2022 included costs relating to our IPO in July, namely the direct costs of fees paid to advisors and the costs of a free share award to our employees, listedintheProtability and Alternative Performance Measures section below. TheGrouphasbeenoperatinginahigherination environmentforquite afewyearsandrecently, inationwas double-digit. However, our costs represent a relatively small partofthe revenue andthis didnot signicantlyaffect our protability.Onthecontrary,risingrealestate,carprices and average salary are supportive to our revenue growth in Real Estate, Auto and Jobs & Services. The majority of our operating costs are people costs. Our team grew from 124 FTEs in April 2021 to 127 FTEs in April 2022. The total labour costs were €8.9 million and included €1.4 million free share awards to employees as a one-off. In line with the intention stated in the Prospectus, after Admission, the Group gifted, on an unrestricted basis, to all employees in good standing, free shares (with the number per employee based on length of service with the business and ranging between €3 and €15 thousand in value). Executive Directors and the rest of the Senior Management team did not receive free shares under this arrangement. Excluding one-off free share awards, investment into our 1 Leverage iscalculated as Netdebt over thelast twelve months (LTM) ofAdjusted EBITDA. The Group’s loan facility includesa Total Leverage Ratio covenant(see note 18 to the consolidated nancial statements). people increased by 25% to €7.5 million (2021: €6.0 million). We appreciate and invest in talent, therefore the majority of the increase in people costs was driven by annual salary reviews and the cost of a performance share plan (“PSP”) in the amount of €0.6 million. The cost of the PSP should continueincreasing graduallyduringtherstthree-year period after the IPO based on the assumption that the PSP will award a list of employees yearly with three-year nominal value options. Thereafter, the cost should be relatively constant. Other Group costs comprise marketing, IT and general administrative expenses. At the end of February 2022, we supportedseveralNGOsassistingUkraineandUkrainians eeingthewarintheircountrybydonating€0.2million. This has not been treated as an adjusting item. #### Net nance expense BCG started its life as a public company with 2.75x leverage 1 (as at 30 April 2021 the leverage was 6.04x) and asignicantlylowereffectiveinterestrateontheexternal debtcomparedtopreviousnancingarrangements.Instead of a 6% interest rate prior to the IPO, the Group was paying a 2% interest rate from the lower gross debt amount borrowed atIPO.However,thefulleffectofthereducednancecost wasnotyetvisiblethisyearasnetnancecostsof€11.2 million in 2022 included: • €5.1 million upfront fee that was written off upon the repayment of the debt under the Senior Facility Agreement (“SFA”) in July 2021 (as it is related to our IPOrenancingarrangement,weconsideritbeinga one-off cost item); • €1.6 million SFA fee relating to an early repayment condition(asitisalsorelatedtoourIPOrenancing arrangement, we consider it being a one-off cost item); and • 2-month interest costs relating to our pre-IPO debt facility. #### Tax The Group tax charge of €0.05 million (2021: €1.9 million) represented an effective tax rate of 1.9% in 2022 (2021: 105.2%). Group tax charge is a net of: • currenttaxexpenseof€3.1million(2021:€3.5million); and • change in deferred tax which is positive €3.1million (2021: €1.6 million) and includes €1.3 million deferred tax relating to the upfront fee write-off in the event of the early debt repayment under the pre-IPO SFA inJuly2021(asitisrelatedtoourIPOrenancing arrangement, we consider it being a one-off item). CompaniesundercommoncontrolinLithuaniaintendto form a tax group to offset the taxable losses to taxable protsinaccordancewithprevailingtaxregulations, therefore the current tax expense amount has decreased this nancial year. Financial Review continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 25 STRATEGIC REPORT IFRS Measures 2022 €m Adjusted Measures 2022 €m IFRS Measures 2021 €m Adjusted Measures 2021 €m IFRS Measures change €m Adjusted Measures change €m IPO related fees-(7.4)-(0.3)-- Free share awards-(1.4)---- Acquisition related costs---(0.1)-- Amortisation of intangibles arising from acquisitions (PPA) -(16.1)-(16.1)-- IPO renancing: Senior Facility Agreement (SFA) related early repayment condition -(1.6)---- IPO renancing: SFA related upfront fee write off -(5.1)---- IPO renancing: SFA capitalised upfront fee related deferred tax liability write off -1.3---- Tax effect on IPO related fees-0.1---- Deferred tax effect of amortisation of intangibles arising from acquisitions -1.4-1.4-- Tax effect of amortisation of intangibles arising from acquisitions -(28.8)-(15.1)-- Total Adjusting Items-(28.8)-(15.0)-- Revenue51.051.042.342.3 21%21% Net income (prot / (loss) for the period) 2.431.2(0.1)14.9 n.m.109% WANS, million 488.5488.5435.3435.3-- EPS, € cents0.496.40(0.02)3.43 n.m. 86% Taxation(0.0)(2.8)(1.9)(3.3)(98%)(15%) Net nance costs (11.2)(4.5)(13.9)(13.9)(20%)(68%) Operating prot 13.638.515.732.2 (13%)20% Depreciation and amortisation(16.9)(0.7)(17.0)(0.8)(0%)(9%) EBITDA30.539.332.733.0 (7%)19% EBITDA margin59.9%77.1%77.3%78.1% (17.4% pts)(1.0% pts) #### Protability and Alternative #### Performance Measures TheGrouphasidentiedcertainAlternativePerformance Measures (“APMs”) that it believes provide additional useful information on the performance of the Group. TheseAPMsarenotdenedwithinIFRSandarenot considered to be a substitute for, or superior to, IFRS measures. These APMs may not be necessarily comparable to similarly titled measures used by other companies. Directors use these APMs alongside IFRS measures when budgeting and planning, and when reviewing business performance. Costs arising in connection with the IPO both in 2022 and 2021 have been isolated in recognition of the nature, infrequency, and materiality of this capital markets transaction. These comprise IPO related legal and advisory 1 See note 17 to the consolidated nancial statements fees,freeshareawardstoemployeesandrenancing related amounts. For clarity, since the IPO, where share-based payment charges arise because of the operation of the Group’s post- IPO Remuneration Policy, such as the PSP plan, these are not treated as adjusting items and the cost is deducted fromtheAPMsdened below. Otheradjustingitemsin2021 are associated with M&A transactions. They are material, non-recurring and outside the ordinary course of business. As detailed at the IPO, BCG intends to return one third of adjusted net income 1 (denedastheprot/(loss)forthe period adjusted for the post-tax impact of the IPO costs, IPO renancingarrangementrelated nanceand taxitems, M&A costs and the post-tax impact of the amortisation of intangibles arising from acquisitions) each year via aninterimandnaldividend.Forthispurpose,weshow amortisation of acquired intangibles and the tax effect on it together with the adjusting items in the following table. Financial Review continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 26 STRATEGIC REPORT €m 30 April 2022, €m 30 April 2021, €m Bank Loan principal amount 84.0214.3 Customer credit balances2.32.2 Total debt86.3216.5 Cash19.917.1 Net debt66.4199.4 Adjusted EBITDA LTM 39.333.0 Leverage1.7x6.0x 1 See note 6 to the consolidated nancial statements 2 Capex refers to acquisition of intangible assets and property, plant and equipment line information in the Consolidated statement of cash ows 3 Net debt is calculated as total debt (bank loans and Osta.ee customer credit balances) less cash. Adjusted net income grew 109% and reached €31.2 million (€14.9 million in 2021). Despite IPO related costs, reported net income grew to €2.4 million (€(0.1) million in 2021) mainlydue toarrangedrenancing atIPOandtherefore signicantly lowereffective interestrate on the external debt compared to previous nancing arrangements. Adjustedoperatingprotgrew20%to€38.5million(€32.2 million in2021) and reported operating protdecreased 13%to€13.6millionreectingIPOrelatedfeesintheyear 2022(€15.7millionin2021).Operatingprotandadjusted operatingprotisused toreviewbusinessperformance. Adjustedoperatingprotiscalculatedbyreferenceto theprot/(loss)fortheperiodandadjustingthistoadd back incometax expense, netnance costs, IPOcosts, IPO renancingarrangementrelatednanceandtaxitems, M&A costs and acquired intangibles amortisation. EBITDAiscalculatedbyreferencetotheprot/(loss)forthe period and adjusting this to add back income tax expense, netnance costs,depreciationand amortisation. Reported EBITDA includes all IPO related fees, free share awards and renancing costs. Adjusted EBITDA 1 grew 19% to €39.3 million (€33.0 million in 2021) and is calculated by reference to EBITDA for the period and adjusting this for the costs related to IPO, acquisitions and disposals in the period and one-off costs thatdo notreecttheunderlying operationsofthebusiness (but including ongoing operating costs of being a public company). Management uses this measure to monitor compliance with the Group’s nancial covenant and the leverage as per the loan agreement, which is described in note 18 to the consolidated nancial statements. Adjusted EBITDA margin, which is calculated by dividing adjusted EBITDA for the period by revenue for the period, was 77% despite additional public listed company related costs and our support to NGOs. We estimate that we lost around 1% of EBITDA margin due to the invasion. Adjusted EBITDA margin in 2021 was 78%. #### Earnings per Share (“EPS”) Basic EPS for 2022 was 0.49 € cents based on the WANS during 2022 of 488,467,552. ((0.02) € cents for 2021 based on WANS of 435,265,078). Adjusted basic EPS is adjusted for the same items that are used to adjust the Adjusted Net Income. Adjusted basic EPS for the year 2022 was 6.40 € cents (3.43 € cents for 2021). There is no dilution effect from the employee share arrangements this year. #### Cash ow and cash conversion Reported cash generated from operating activities grew from €33.1 million in 2021 to €34.1 million in 2022, calculated after consideration of €6.4 million of IPO fees paid during the year. If adjusted for, cash generated from operating activities grew 22% to €40.5 million, prior to deducting IPO fees payments. Generated cash was used to reduce the loan liability by partially paying down the debt. We also bought 2.1 million of Company shares (paying €3.4 million) to the Employee BenetTrust(“EBT”)forfutureemployeeawards(the numberofoptionsgrantedinourrstyearwas1.0million shares). During 2022, in addition to ongoing capital expenditure requirements, we have set up a new infrastructure to accommodate a disaster recovery site for our Estonian and Latviansites. OurCashconversion(calculated asadjusted EBITDA minus Capex 2 (of €0,4 million) divided by adjusted EBITDA) was at 98.9% (99.8% in 2021). #### Net debt and leverage Externalrenancing wasarrangedonIPO,reducingthe Group’s external loan from €214.3 million to €98 million. Since then, €14 million of the existing debt has been voluntarily repaid. Compared to the end of 2021, net debt 3 was reduced by €133.0 million to €66.4 million (as at 30 April 2021: €199.4 million) with leverage at 1.7x (as at 30 April 2021: 6.0x). Financial Review continued ![]() #### Capital allocation We intend to use all the cash we generate in a year, within that same year or shortly thereafter for the below: • AsdetailedattheIPO,aftertherstyearasapublic company, BCG intends to return one third of adjusted netincomeeachyearviaaninterimandnal dividend, split approximately one third and two thirds, respectively. TheBoardproposed anal dividend,with such dividend expected to be paid on 14 October 2022 subject to nal shareholder approval at the AGM. • We will continue to consider value-creating M&A opportunities.Alloptionsfornancingattractive acquisition opportunities remain open, including using cash, increasing our debt and even seeking additional equity capital. However, using cash is the preferred option and this would most likely not affect dividends but might reduce capacity for share buy-backs. • Because our leverage is already below 2.0x and we do not have any particular target level of debt, we intend using a combination of share buy-backs and debt repayment from the balance of cash. We also intend to keep our capital policy under review and may revise it from time to time. #### Going concern TheGroupgeneratedsignicantcashfromoperations during the period. As at 30 April 2022 the Group had drawn none of the €10 million unsecured Revolving Credit Facility (“RCF”) and had cash balances of €19.9 million. The €10 million RCF is committed until July 2026. Lina Mačienė Chief Financial Ofcer 6 July 2022 27 Baltic Classieds Group PLC Annual Report and Accounts 2022 Financial Review continued ![]() Our rstsuccessful yearas apublic company listedon theLondonStockExchangehaspassed.TheInitialPublic Offering (“IPO”) brought new challenges and experiences in theelds ofinvestorrelations, legalandnance,but BCG’s business operations have remained the same as before, that is to say: entrepreneurial, agile and pragmatic. At BCG we continued to operate our business mostly remotely throughout the period due to the COVID-19 pandemic restrictions. We were able to do this successfully as our technology enables our people to work remotely as smoothly and productively as if they were working in the oce. This is the second year where industries have been operating in a pandemic environment. Businesses have adapted to a restrictive environment, learned how to successfully continue their activities and customers have become used to pandemic safety measures and have importantlyregainedtheirconsumercondence.During this time, we have continued supporting industries by continuously developing products and features in all of our business lines. Let’stake a brieflook atkey product developments in2022 business line by business line: #### Automotive We have introduced a car price analysis tool on Autoplius.lt. This system utilises archived data to indicate theaverage priceandselling durationforspeciccars.We also introduced webinars for dealers, focusing primarily on improving client experience. This helps to strengthen relationships with our customers as well as creating a better car buyer’s experience which has a positive indirect effect on our marketplace. We improved our B2C offering on Autoplius.lt by introducing twotiersofpackagesinsteadofone.Intherstpackage there are features such as dealership branding, a price analysis tool, ads export to the horizontal marketplace and a map. The second package, which is more expensive, is designed for premium clients who want maximum exposure and the biggest number of leads. This package includes all the features ofthe rst packageplus abump up forads and an enhanced listing view. OnAuto24.eeweexpandedour offeringof carnancing products.Incollaborationwithournancingservicespartner we now offer a full-service car rental for new vehicles. This is a very convenient product for customers who are looking for a new car but do not want to worry about maintenance of the vehicle. The car leasing product has been upgraded by lifting the price threshold to €40,000. This step has broadened the addressable market, particularly given the trend of growing car prices in the market. For business customers, we replaced an existing third Auto24.ee service package with an upgraded one. Similarly to Autoplius.lt this is the most expensive and the most effective package. #### Real Estate We introduced a secure 2FA login to B2C clients’ accounts on Aruodas.lt and KV.ee. This increases the security of user accounts and the quality of listings. In addition, we have implemented virtual telephone numbers for C2C clients on Aruodas.lt. Virtual numbers provide C2C customers with more security in a sense that they prevent fraudster attacks as actual phone numbers of C2C customers are not visible but calls from virtual numbers get forwarded to actual phone numbers. This has initially been rolled out to a limited number of customers in order to gain important feedback and streamline the technology before launching it at a full scale. The Virtual numbers project strongly contributes to the privacy of personal data and the marketing of our service. We added a third B2C package on top of the existing two in Aruodas.lt. The third package is optimised for premium brokers who have the biggest number of properties and seek the best branding and maximum exposure of their ads. In the Estonian market we also introduced premium #### Operational Review During this time, we have continued supporting industries by continuously developing products and features in all of our business lines. Simonas Orkinas COO “ 28 Baltic Classieds Group PLC Annual Report and Accounts 2022 ![]() packages. Instead of two, we now offer four options on KV.ee. Both the third and the fourth are premium packages, but the fourth includes listing on two property platforms (KV.ee and City24.ee) at once. It helps to attract customers to list on both our Real Estate portals in a very convenient way, providing the best service whilst providing a maximum number of leads. #### Jobs and Services Asthecompetitionfortalentintensies,wedeveloped a new value added service - a tool for employers which helps attract more applicants on CVbankas.lt. Employers can increase the exposure of their listings by reaching a target audience of job seekers. In addition, we implemented automatic translation of the portal’s content to make it more attractive to foreign job seekers. A price list review was implemented, and as a result, prices increased by 15- 25%. At the same time, more than ten integrations with applicant tracking systems were made to onboard big clients on CVbankas.lt. #### Generalist Thedeliveryproductreceivedasignicantupgradeon Skelbiu.lt. A bulk shipping feature has been implemented making it more convenient to ship several parcels at the same time. We also made important changes on the platform to increase the level of privacy and fraud prevention. Sellers’ contact details are now securely hidden behind the registration wall. Aside from all the consumer facing developments, substantial progress has been made ‘under the hood’. In2022wesignicantlyimprovedcybersecurityby implementing DDOS protection and bot management systems, migrated all services to a new infrastructure and set up a new infrastructure to accommodate a disaster recovery site. Simonas Orkinas Chief Operating Ofcer 6 July 2022 29 Baltic Classieds Group PLC Annual Report and Accounts 2022 Operational Review continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 30 STRATEGIC REPORT #### Sustainability Report The Group is committed to being a responsible business and our priority is to protect our people, support our customers and Stakeholders and continue to protect the environment around us. Our Environmental, Social and Governance (“ESG”) strategy can be split into two main components: • being a sustainable business by limiting our impact on the environment, providing a secure and diverse workplace for our employees and ensuring strong governance; and • helping customers to make more sustainable choices and encouraging a circular economy through four of our business lines: Real Estate, Auto, Generalist and Jobs and Services. #### Alignment with wider global goals The SustainableDevelopment Goals (“SDGs”),also known asthe GlobalGoals, were adoptedby the UnitedNations in2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. Our approach to responsible business aligns quite naturally with the goals and we have identied ve that are most material to our business and where we contribute the most. The Board has reviewed and approved BCG’s ESG strategy. To ensure we follow and continue to evolve our strategy and make progress towards our goals, this year we established an ESG working group which consists of the CEO, the COO and is chaired by the CFO. The Chair serves as a sponsor to the ESG working Group and is actively involved in its activities. The Board fully supports the initiatives of the ESG working group and gives Board level oversight on environmental, social and governance issues to look over ourprogressinfulllingourESGgoals.Formoreinformation on the ESG working group, see the TCFD Report on page 31. Many of the Group’s portals, by their nature, play a key part in facilitating the circular economy, in promoting the reuse and repair of unwanted assets, whether they be vehicles or vehicle parts traded through our Automotive portals, or used goods traded through our Generalist portals. We are highly focused to provide a safe, happy and supportive working environment. The Group seeks to treat all of its employees equally, regardless of gender, age, disability, health, nationality, ethnic origin, religion, political belief, gender identity, family status or lifestyle, including when evaluating performance and making hiring and promotion decisions. We run our business in a responsible manner and being trustworthy is one of our toppriorities.Wearecommittedtopreventingslaveryandhumantracking, we require the highest standards of honesty and integrity in allour business relationships, and we are committed to supporting human rights through our compliance with national laws and internal policies. ▸ See more on the policies and processes relating to these in our Non- Financial information statement on page 102. We seek to minimise the environmental impact of our business activities, including in relation to the recycling of paper and plastic, and extensive use of digital documentation, including e-signatures and e-contracts to reduce paper usage. We believe in thepower of diversity to establish a creative workplace. The Group actively supports women choosing careers in the technology industry. As of 30 April 2022, 51% of employees were female. ▸ For more information on the gender of our Board, Senior Management and workforce see page 63. Gender equality Climate action Decent work and economic growth Peace, justice, and a strong institution Responsible consumption and production ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 31 STRATEGIC REPORT #### The Task Force for Climate-Related Financial Disclosure #### (“TCFD”) Report #### TCFD compliance statement WearepleasedtoconrmthatwehaveincludedinourTCFD Report, the material climate-related nancial disclosures that are consistent with the four overarching thematic recommendations, supported by the 11 recommended disclosures. (Further to the TCFD additional guidance “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures” (2021 TCFD Annex) which was released in October 2021.) Our focus in the coming years will be to strengthen our environmental target setting. We are planning to start work onsettingspecictargetstoreduceourcarbonfootprint. Meanwhile, we will continue to contribute to environmental sustainability by offsetting our carbon emissions. The following table shows where recommended TCFD disclosures can be found: TCFD recommended disclosureCompliance Governance 1. Describe the board’s oversight of climate-related risks and opportunities 2. Describe management’s role in assessing and managing climate-related risks and opportunities The Board’s oversight of climate-related risks and opportunities and Management’s role in assessing and managing climate-related risks and opportunities are described in the Governance section of this TCFD Report. Strategy 3. Describe the climate-related risks and opportunities the organisationhasidentiedovertheshort,mediumand long-term 4. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and nancial planning 5. Describe the resilience of the organisation’s strategy, taking into consideration different climate scenarios The material climate-related risks and opportunities and the impacttheymayhaveon theGrouphavebeenidentiedand are disclosed in the Strategy section of this TCFD Report. The climate-related risks and opportunities were stress- tested in three different climate scenarios and the resilience of our strategy are described in the Strategy section of this Report. Risk Management 6. Describe the organisation’s processes for identifying and assessing climate-related risks 7. Describe the organisation’s processes for managing climate-related risks 8. Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management The Group’s processes for identifying, assessing and managing climate-related risks are described in the Risk management section of this TCFD Report. Climate-related risks are captured and documented in a Risk Register in the same manner other risks are documented. This process is described in the Risk management section of this Report and the Risk management section in the Strategic Report. Metrics and Targets 9. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process 10. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (“GHG”) emissions, and the related risks 11. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets Our carbon neutrality and net zero goals are described in the Climate-related Targets section of this TCFD Report. Scope 1 and 2 greenhouse gas (“GHG”) emissions, energy consumption, water consumption and information on electricity are disclosed in the Energy and Greenhouse Gas Report. Sustainability Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 32 STRATEGIC REPORT #### Governance Board oversight and Management’s role. The Board has overall responsibility for the Group’s preparedness for adapting to climate change. To ensure the Boardhassucient oversightofBCG’s sustainable business strategy and performance, including climate- related targets, the Board has assigned climate-related responsibilities to the ESG working group. The ESG working group was established in January 2022 and consists of the CEO, the COO, the CFO and the Chair as a sponsor. The CFO leads the ESG working group and has overall accountability for climate change action. During the Board meetings, the Board is updated on climate-related risks and opportunities, environmental metrics, including Company’s carbon footprint, environmental reporting obligations and progress towards our climate-related goals. During 2022, the ESG working group organised a discussion with Senior Management to identify and assess climate- related risk and opportunities and the owners of the risks and mitigations strategies, which were documented in the ESG Risk Register. Portal managers as risk owners, are responsible for assessing and managing climate-related risks for their respective business areas. They follow and prepare for new environmental regulations, changing market tendencies and increasing customer environmental awareness. The ESG working group is responsible for assessing and managing climate-related risks that are general to the Group and monitoring emerging regulatory requirements. Climate-related areas which have been discussed by the ESG working group during the year included: • governance and strategy around climate-related issues; • climate-related risk management; • impact on the environment by the Group; • climate-related target setting; and • environmental reporting. Areas of focus for the ESG working group in the next nancial year will be: • working on environmental target setting; • tracking the environmental impact by the Group, including carbon emissions; and • continuous to monitoring and analysis of climate- related risks and opportunities. During Board meetings, Board members receive updates on the topics discussed during ESG working group meetings. During the year ended 30 April 2022, the Board was regularly updated on climate-related issues facing the Group, including the areas covered in the ESG group meetings. The aforementioned topics were discussed in the February 2022 and March 2022 Board meetings. In addition, at the April 2022 Board meeting, the Board reviewed and approved changes to the Risk Register relating to climate issues. Because of the business specics, during thenancial year there were no other material changes to business activities nor additional expenditure, acquisitions or divestitures budgeted for the next year, in relation to the Company’s strategy regarding climate issues. #### Strategy Climate-related risks and opportunities. Due to BCG’s Business Model, the Group operates in a low- carbon environment, where the environmental impact of the Group is low. However, the accelerating climate change may have an impact on BCG’s business. The Group have identiedthephysicalandtransitionrisksaswellasclimate- related opportunities that may arise in the future. Physical risks resulting from climate change can be event driven or longer-term shifts in climate patterns. Transitioning to a lower-carbon economy may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change. The Group considered climate-related physical and transitional risks and opportunities that could potentially arise during three different time horizons: • short term (now-2025) • medium term (2026-2035) • long term (2036-2050) The Group also considered the risks and opportunities by the four main business lines: • Real Estate • Automotive • Generalist • Jobs and Services Senior Management also discussed the potential impact oftheidentiedclimate-relatedrisksandopportunities inrelationtonancialplanning,businessandstrategy, including impact on products and services, supply chain, adaptation to climate change and the Group’s operations. See the following tables where we discuss: physical risks, transitionrisks,opportunities;andtimehorizonsinwhich they are most likely to arise. Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 33 STRATEGIC REPORT Physical risks Increased severity of extreme weather events Increased severity of extreme weather events due to accelerating global warming may disrupt commercial customers' behaviour, affect the availability of websites and result in disruption to the provision of services from our service providers. These consequences may lead to a decrease in revenue. All business lines Rising mean temperatures Rising mean temperaturesmay result in heatwaves, which would increase cooling costs in oces and data centres. All business lines Extreme variability in weather patterns Increases in extreme winter weather would increase heating costs in oces. All business lines Specic risk Description of risk and its impact Business line impacted and Timehorizon Transitional risks Opportunities Internal combustion engine vehicles ban A ban on internal combustion engine vehicles in the Baltics may lead to reduced volume of ads, which would result in lower revenue of the Auto segment. Currently, there are no regulations regarding the banning of internal combustion engine vehicles in the Baltics. Auto Higher taxation on transactions of internal combustion engine vehicles Increasing the current taxation on transactions of internal combustion engine vehicles may reduce the volume of adverts, which would resultin lower revenue of the Auto segment. Auto Consumers switching to electric vehicles If consumers shift to electric vehicles, we will have to tailor our business by adding additional lters and features to improve the search and sales of electric vehicles. Auto EnergyPerformance Certicate becomes mandatory in ads IfEnergy PerformanceCerticatesbecome mandatory,we willhaveto addadditional lters in our Real Estate portals. Real Estate Consumers shifting to sustainable realestate If consumers shift to sustainable real estate, we may have to adjust to the market and add additional lters relating to the environmental sustainability of real estate. Real Estate Property detailreporting becomes more onerousfor non-professionals/privates If property detail reporting becomes more onerous for non-professionals/privates due to increasing environmental regulations, the volume of ads from privates may decrease, leading to a decrease in revenue of the Real Estate segment. Real Estate New regulations reduce stock on the market If stock is reduced on the market due to increasing environmental regulations, the volume of transactions and ads will decrease, leading to a decrease in revenue of the Real Estate segment. Real Estate Opening of new market segments, such as advertising EV charging infrastructure Increasing environmental regulations and awareness may create new market segments, such as electric vehicle charging infrastructure. This would allow us to develop and launch services in the Auto segment, for instance, integrating charging station offerings into electric vehicle ads, which may result in higher revenue. Auto Introduction of yearly internal combustion engine vehicle ownership tax While increasing the current taxation on transactions of internal combustion engine vehicles may reduce the volume of ads, the introduction of yearly internal combustion engine vehicle ownership tax may lead to higher volumes of ads of more polluting vehicles. This would increase revenue in the Auto segment. Auto New environmental regulations reduce mortgage availability Reduced mortgage availability due to environmental regulations may decrease the number of transactions and increase the length of ads being advertised, leading to higher revenue in the Real Estate segment. Real Estate Increased cost of materials Climate change and environmental regulations may result in increasing raw material prices. Increased prices in the primary market may increase the secondary market and increase the number of ads and revenue in Generalist portals. Generalist Increased climate awareness Increased climate awarenessand people shifting to a circular economy may increase the secondary market and increase the number of ads and revenue in Generalist portals. Generalist Fullling environmental reporting and sustainability goals Achieving our climate-related goals and being an environmentally responsible business may lead to enhanced reputation with Shareholders, customers and investors and an increase in share price and revenue. Improved investor relations may also result in higher availability and lower cost of capital. All business lines Short termMedium term Long term Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 34 STRATEGIC REPORT #### Climate scenarios After the climate-related risks and opportunities were identiedandassessed,themostsignicantrisksand opportunities were stress-tested in the selected three climate scenarios based on assumptions of NGFS (Network for Greening the Financial System) climate scenarios: Orderly: this scenario assumes early, ambitious action to a net zero CO 2 emissions economy. ThenancialimpactontheGroup’snancialplanningwasassessedbytheSeniorManagementbasedontheGroup’spast experience. The nancial impact is summarised in the following table: Immaterial nancial impactLow nancial impactMedium nancial impactHigh nancial impact Disorderly: this scenario assumes action that is late, disruptive, sudden and/or unanticipated. Hot house world: this scenario assumes limited action leads toa hothouseworld withsignicantglobal warmingand,as a result, strongly increased exposure to physical risks. The assumptions of the scenarios are summarised in the following table: Scenario 1 "Orderly" Scenario 2 "Disorderly" Scenario 3 "Hot house world" Policy action Early policy action Late policy action (from 2030) No policyaction Transition Smooth transitionDisruptive transition Business as usual Time horizons Now-20252026-2035 2036-2050 Temperature Global temperatures increase to between 1.5-2 degrees above pre-industrial levels Global temperatures increase to between 1.5-2 degrees above pre-industrial levels Global temperatures increase to over 3 degrees above pre- industrial levels Sea level rise LowLow High Risks Low physical and transition risks Higher transitionrisk Higher physical risks Estimatedcarbon prices Estimated range – $135- $5,550 USD/tCO 2 e in 2030, $245-$13,000 USD/tCO 2 e in 2050 (IPCC SR1.5) Estimated range – $135- $5,550 USD/tCO 2 e in 2030, $245-$13,000 USD/tCO 2 e in 2050 (IPCC SR1.5) Estimated range – $10-$200 USD/tCO 2 e in 2030, $45-$960 USD/tCO 2 e in 2050 (IPCC SR1.5) Type of risk / opportunity Specic risk / opportunity Scenario 1 "Orderly" Now-2025 Scenario 2 "Disorderly" 2026-2035 Scenario 3 "Hot house world" 2036-2050 Physical risks Changing weather patterns and increased severity of extreme weather events Transitional risks Internal combustion engine vehicles ban Higher taxation on transactions of internal combustion engine vehicles Propertydetail reportingbecomes moreonerous for non- professionals/privates New regulations reduce stock on the market Opportunities Opening of new market segments, such as advertising EV charging infrastructure Introduction ofyearlyinternalcombustion enginevehicleownership tax New environmental regulations reduce mortgage availability Increased cost of materials Increased climate awareness Fullling environmental reporting and sustainability goals Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 35 STRATEGIC REPORT Management has considered the risks and nancial impact assessmentandconcludedthatthenancialimpact of climate-related risks on the Group’s operations are immaterial or low (<1% of annual revenue) in scenarios “Orderly”and“Disorderly”.Underthescenario“Hothouse world”,physicalriskscouldhaveamediumnancialimpact. Given the “Hot house world” scenario assumptions, Management believes that increased severity of extreme weather events due to accelerating global warming may haveamediumnancialimpact oncapitalexpenditures, operating costs and revenues: • extremeweathereventsmaycauseoodingsin the areas of our data centres, that would disrupt the operation of our servers and temporarily affect revenues, operating costs and capital expenditures; • extreme weather events may disrupt the internet connection and temporarily affect the availability of our websites, leading to nancial impact onrevenues; and • extreme weather events may temporarily impact commercial customers’ behaviour during such events, leading to fewer new ads on our websites and a decrease in revenue. Management has considered the potential impact on nancialplanning thatmay ariseinthe future.For thenext nancialyear,Managementdoesnotforeseeanymaterial impactonthenancialplanningthatmayarisefrom climate-related issues. Given the uncertainty of the transition to a low-carbon economy and the temperature increase limits achieved, the results of the scenario analysis, enable us to better understand and build resilience to prepare for the potential worst case impacts of climate change. From ouranalysis we know that transition risks could potentially be most signicantunderScenario1“Orderly”andScenario2 ”Disorderly” though there are differences in their timings and materialityof nancialimpacts.Ontheother hand,Scenario 3 “Hothouse world”could havethe biggestnancial impact due to the physical climate-related risks. To ensure we are building long-term resilience as a business, we will use the outputs of this phase of the TCFD programme to improve our strategies and decision making. The ESG working group will continue to monitor and analyse climate-related risks with the oversight of the Board. #### Risk management The Board has overall responsibility for risk management and the ESG working group is responsible for identifying, analysing and agreeing the mitigation, transfer, acceptance or control of climate-related risks. We continually mature our capacity and capability to manage risk and uncertainty to build and maintain long-term resilience.Climate-related risksareidentied, assessedand managed according to our Risk Management framework (page 41). Risks are assessed based on their likelihood and potential impact with the combination of the two measures dening theoverall score of eachrisk so theycan be rated. Climate-related risks are captured and documented in a Risk Register, identifying the risk category, the likelihood oftheriskoccurring,theimpactifitdoesoccur,aspecic owner for each risk, the risk trend and the mitigation plan for each risk. During 2022, an ESG risk register was prepared to identify and routinely assess climate-related risks and opportunities. These risks and opportunities are disclosed in the Strategy section of this report. Each member of the Senior Management has endorsed the risk management framework and, as risk owners, are responsible for assessing and managing climate-related risks for their respective business areas. The ESG working group is responsible for assessing and managing climate-related risks that are general to the Group and monitoring emerging regulatory requirements. #### Metrics and targets Our goal is to be carbon neutral. We recognise the seriousness of the climatecrisis. For this reason we set a goal to be carbon neutral and achieved it for our 2022 emissions by offsetting our carbon footprint throughUNFCCC-certiedclimatefriendlyprojectsthat reduce, avoid or remove greenhouse gas emissions from the atmosphere. IncollaborationwiththeUnitedNationCarbonoffset platform, we offset 200 tCO2e to neutralise our 2022 carbon footprint, including our Scope 1, Scope 2 and additional 5% of our total emissions. To achieve carbon neutrality we have funded two renewable energy related emission reduction projects: a hydroelectric plant in Chile and a wind power project in India. Our goal to be carbon net zero by 2050 We are at the start of our carbon net zero journey, and we are committed to accelerating the transformative change needed to reach global net zero greenhouse gas (“GHG”) emissions by 2050 or earlier in accordance with the Paris Agreement. We knowthatit willtaketime tocreatea specicroadmap towards our net zero target and reduce our emissions. In the coming years we are planning to start work on setting specictargetsinournetzerojourney.Meanwhile,wewill continue to contribute to environmental sustainability by offsetting our carbon emissions. While the environmental goal setting is still in process, climate-related performance metrics have not been incorporated into our remuneration policies yet. #### Next steps in our TCFD journey During the following year, we will be focusing on: • an analysis and update of current disclosures against the TCFD requirements; • a review of the effectiveness of the current systems of internal control and risk management for climate- related risks; and • evolving our environmental sustainability goals. Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 36 STRATEGIC REPORT #### Energy and Greenhouse Gas Report We recognise that businesses have a responsibility to protect the environment and understand the impact their operations have. In order to better evaluate the impact our Company has on the environment we have started reporting GHG emissions. The following table summarises the Group’s GHG emissions for this nancial year. 2022 1 Units Scope 1 direct emissions Combustionof fueland operation offacilities 48.6Tonnes CO 2 e Scope 2 indirect emissions 2 Purchased electricity, heating and cooling (location-based) 324.3Tonnes CO 2 e Purchased electricity, heat and cooling (market-based) 141.7Tonnes CO 2 e Scope 1 & 2 total CO 2 e (location-based) 372.9Tonnes CO 2 e Scope 1 & 2 total CO 2 e (market-based) 190.3Tonnes CO 2 e CO 2 e per employee 3 (locationbased) 3.0Tonnes CO 2 e CO 2 e per million revenue 4 (location-based) 7.3Tonnes CO 2 e CO 2 e per employee 3 (market-based) 1.5Tonnes CO 2 e CO 2 e per million revenue 4 (market-based) 3.7Tonnes CO 2 e Globalenergy consumption 692.8MWh 1 All emissions incurred by the Group were Global, there were no emissions incurred in the UK. 2 Including the electricity of Scope 2 data centres. 3 Carbon emissions divided by average number of FTE employees during the year - 126. 4 Carbon emissions divided by revenue in millions - €51 million. #### Methodologies ThecalculationsofGHGemissionsalignwiththeUK Government’s ‘Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance’. The GHG reporting period is aligned to this nancial reporting year. The methodology used to calculate emissionsis basedonthe nancialconsolidationapproach, asdened intheGreenhouseGas Protocol, ACorporate Accounting and Reporting Standard. Direct emission data have been converted into CO2 equivalent using 2021 emission conversion factors published by the Department for Environment, Food and Rural Affairs (Defra) and the Department for Business, Energy & Industrial Strategy (BEIS). Indirect location- based electricity emissions data was converted into CO2 equivalent using conversion factors published by The Joint Research Centre (JRC) - the European Commission’s science and knowledge service (v. 2018). Indirect market- based electricity emissions data was converted into CO2 equivalent using European Residual Mixes 2018 published by Association of Issuing Bodies. #### Scope 1 Scope 1 emissions cover natural gas combustion within boilers and road fuel combustion within owned/leased vehicles across all the Group companies. During 2022, we reported road fuel combustion from 11 Company owned/ leased vehicles. #### Scope 2 Scope 2 emissions cover purchased electricity, heat and coolingforownuseacrossalltheGroupoceslocatedin Vilnius, Tallinn, Tartu and Riga, as well as electricity from data centres falling under Scope 2. In accordance with the UKGovernment’s‘EnvironmentalReportingGuidelines: Including Streamlined Energy and Carbon Reporting Guidance’, location-based and market-based methods for purchased electricity emission were used. All electricity, heatandcoolingpurchasedwasoutsideoftheUK: Lithuania, Latvia, Estonia, Poland. #### Intensity ratio Emissions have also been calculated using an ‘intensity metric’, which will enable the Group to monitor how well we are controlling emissions on an annual basis, independent ofuctuationsinthelevelsoftheiractivity.Inrespectof Scope 1 and 2, our use of energy is driven by our people and therefore the most suitable metric is ‘Emissions per employee’, based on the average number of employees during the year. The emissions have also been calculated in relation to our turnover – ‘Emissions per million revenue’, whichdeterminescosteciencybasedoncomparing carbon emissions to overall business revenue. Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 37 STRATEGIC REPORT #### Helping customers to make more sustainable choices We are proud that many of the Group’s portals, by their nature, play a key part in facilitating the circular economy, in promoting the reuse and repair of unwanted assets, whether they be vehicles or vehicle parts traded through our Automotive portals, or used goods traded through our Generalist portals. As such they provide a channel of green commerceto divert secondarygoods from landll,recycling or disuse, and allow increasingly environmentally conscious consumers and businesses to reduce their environmental impact. In addition, the online nature of the transactions facilitated by the Group, and in particular the Jobs and Services portal that connects local workers and service providers with those in need of their services, all help to minimise GHG emissions related to unnecessary travel. #### Real Estate Residential real estate represents an important sector in the Baltics, which has some of the highest home ownership ratesinEurope.TheGroup’sRealEstateonlineclassieds portals play a key role in the Baltic property market, which allowsus tomakeasignicant environmentalcontribution to the real estate sector. Our Real Estate platforms help to reduceunnecessary travelto visit estateagents’ oces and unsuitable properties by allowing our customers to uploadhighqualityphotographs,videotours,oor plans and property descriptions online. In addition, we constantly develop new tools on our platforms to help customers save time and resources. Currently, various features are integrated in the ads so that customers can save their resources and help the environment. In order to save time and unnecessary travel, the ads feature the possibility to check a location on the map, giving both a route and street view option. In addition, our customers are able to deliver 3D tours and videos to home hunters, reducing the number of in-person viewings and travel emissions. In order to provide more environmental information, some of our Real Estate portals have introduced a feature enabling homehunterstoviewaverageheatingpricesinaspecic building, along with energy class and air quality, including data about ambient air pollutants, Nitrogen dioxide (NO 2 ) and Coarse Particulate Matter (PM 10 ). #### Automotive Promoting new technologies that help the environment and introducingcleaner,moreecientfueltypes isan important issue for us. Our Auto portals have taken steps to make it easier for car buyers to search for more environmentally friendlyvehicles.Weintroducedltersforfueltype, includingEV,Plug-inandHybrids,as wellas EVspecic features, including battery capacity, pollution fees, EC range, CO 2 emissions. In addition, we publish an article series for consumers relating to EV’s and videos about available EV’s. #### Generalist Our onlineclassieds andmarketplaceportals notonly provide one of the most effective channels for people to market and discover products and services across the Baltics, but also helps our customers to make a choice that helps the environment. Buying pre-owned items instead of something new, whether it is a bicycle or a laptop, on our Generalist portals means less items need to be manufactured and less items are destinedfor landll. All of this promotes a circular economy and translates to savings in GHG emissions and less wasted materials. #### Jobs and Services The Group’s Jobs and Services portals also allow customers tomakemore sustainablechoicesbyndingaservice they need online. Our Jobs portal connects job seekers with recruiters online and Service portals connect local workers and service providers with those in need of their services. This helps to minimise GHG emissions related to unnecessary travel. The Jobs portals also allow job seekers to better identify jobs with a possibility of remote interview and encourages recruiters to organise such interviews by adding a remote interview tag on the ad. #### Electricity consumption The total electricity consumption for 2022, for Scope 2 was 333.7 MWh. In 2022, we had no energy supply agreements for which we were directly responsible. However, we contacted our service providers and reviewed the details of the electricity supply we report under Scope 2. We established that 34% of electricity consumed by the Group in 2022 was from renewable sources. #### Energy eciency We are consciousof theenergy consumptionin ouroces andthuswetrytomakeenergyconsumptionasecient aspossible.TheyearwemovedintoourVilniusocewe installed smart lighting with motion detectors to keep the light on only when employees are around. Also, since the beginning of COVID-19 pandemic, during 2021 and 2022, we replaced the vast majority of our stationary computers with newerandmoreecientlaptopsthatuselessenergyfor employees working both in oces and at home. #### Water Our total water consumption during 2022 was 216 cubic metres. Thewaterusage isderived from ouroces in Vilnius, Tallinn, Tartu and Riga. Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 38 STRATEGIC REPORT #### People and culture #### Culture Over more than a decade, our CEO, Justinas Šimkus and COO, Simonas Orkinas and their long-standing team have built a collection of market-leading businesses and strong brands. Every day we connect buyers and sellers and facilitate transactions from cars and real estate, job offers to services and consumer goods from professional and private listers. The digital marketplaces we operate promote trust, fairness and eciency. #### Equal opportunities We are committed to providing equal opportunities to all our employees. The Group seeks to treat all of its employees equally, regardless of gender, age, sexual orientation, social status, disability, race, ethnicity, religion, or personal beliefs and provide equal opportunities to work conditions, including, training, recruitment and redundancy, security, and equal pay. The Group values employee diversity and is committed to recruiting employees based only on experience, competence, qualication,andthe rightabilitiesforthe position. We are highly focused on providing a safe, happy, and supportive working environment. For this reason, we do not tolerate any discrimination related to gender, age, sexual orientation, social status, disability, race, ethnicity, religion, or personal beliefs in our workplace. All employees receive equal pay according to their qualication,levelofresponsibility,workresults,experience, and other objective criteria. #### Gender diversity The Group also believes in the power of diversity to establish a creative workplace. The Group actively supports women choosing careers in the technology industry. The Board is keen to strengthen and maintain female representation in senior roles and BCG has been a contributor to theFTSE Women LeadersReview, aninitiative which aims to increase female leadership within the FTSE 350. We are proud to be ranked among the FTSE 250 Top Ten Best Performersinthe2021FTSEWomenLeadersReviewand to be number one within the Technology sector of the FTSE 350 with 47.4% of women in leadership positions. #### Employees with disabilities Applications for employment by people with disabilities are given full and fair consideration bearing in mind the respective aptitudes and abilities of the applicant concerned and our ability to make reasonable adjustments to the role and the work environment. In the event of existing employees becoming disabled, all reasonable effort is made to ensure that appropriate training is given and their employment within the Group continues. Training, career development and promotion of a disabled person is, as far as possible, identical to that of an able bodied person. #### Our values Work is fun Less is more Getting things done Entrepreneurship Marketplace is our hobby Trustworthiness All Employees by Gender #### Gender diversity of employees Male Female 49% 51% Executive Directors and their direct reports 1 Male Female 53% 47% 1 BasedontheguresfortheHampton-Alexanderreport 2021 (October 31, 2021) ▸ For gender gures for the Board and the Senior Management see page 63. Sustainability Report continued ![]() #### Recruitment The competence and commitment of the Group’s employees are important factors for the Group’s success. Our success also depends on the ability to attract, train, motivate andretainhighlyqualiedindividuals,whilstbuilding ourcorporateculture.TheGroupfacessignicantand increasing competitionfor qualiedpersonnel, including those in information technology positions. The Group has historically offered the Senior Management and key employees investment opportunities in the Group in order toattractandretainhighlyqualiedindividuals.Asof30 April 2022, we had an average of eight years of tenure per employee and 14 years of tenure per Senior Management employee. #### Employee share incentive scheme Wewantouremployeestobenetdirectlyfromtheir contribution to the Group’s success. The Group currently operates a Performance Share Plan (“PSP”) that is subject to a service and a non-market performance condition. The PSP scheme consists of share options for Executive Directors and certain key employees with a vesting period of 3 years. On 27 July 2021, the Group awarded 1,041,745 share options under the PSP scheme. In addition to the PSP scheme, 392,405 free shares were awarded to all employees of the Group with the number per employee based on length of service with the business and ranging between €3,000 and €15,000 in value. The total value of the shares awarded amounted to €968,000. Fringe benettaxwaspaidbytheGroup.Executive Directorsand the Senior Management team did not receive free shares under this arrangement. ▸ See more on the Employee share incentive scheme in theNotestotheconsolidatednancialstatementson page 116. #### Wellbeing of employees We are committed to taking care of our employees’ health and wellbeing. For this reason, we award employees who have worked for BCG for over two years with a healthcare plan scheme for employees’ medical needs. #### Social and community issues The Group has donated €0.2 million to support the struggle ofUkrainiansduringthewar.Donationshavealreadybeen made to charity organisations. €0.1 million was donated to the Red Cross and €0.1 million was donated to a local non- government organisation “Blue&Yellow” that provides non- lethal suppliestoUkraine. Anadditional€33 thousandwas donated to other initiatives, which help civilians who are forced to leave their homeland and ee from the war zone. In addition to these donations, in order to ease the challengesfacedbyUkrainianrefugeesandpeopleof Ukraine,weencouragesellersandlandlordsofrealestate to provide accommodation with a discount or free of chargeforUkrainianrefugees.Meanwhile,ourAutoportal is encouraging auto dealers and sellers to donate unused vehiclestoUkraine.Inaddition,wearetranslatingcontent on our portals to the Ukrainian language. 39 STRATEGIC REPORTSustainability Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 40 STRATEGIC REPORT #### Ethics and compliance #### Data security and privacy In order to ensure our portals are secure, we have implemented technical measures, including DDoS protectionandstrictrewallrules.Allcriticalpartsofthe infrastructure are secured from the public and our software is up-to-date with critical security patches applied. We conduct penetration testing, content moderation and apply strict password policies to ensure security and mitigate the risk of cyber crime. Security incidents are detected via security tools such asCloudareWAFandinternalmonitoringsystems. Additionally, we implement public media monitoring and react to feedback from customers to ensure we are proactive in dealing with cyber threats. We are committed to ensuring that the personal information we collect and use is appropriate for the purpose, does not constitute an invasion of privacy and is held securely, responsibly and transparently. Where required, users have to consent with our terms of services, Privacy Policy and Cookies consent management platform. #### Human rights BCG is committed to acting in an ethical manner with integrity and transparency in all business dealings and to investing in the creation of effective systems and controls across the Group to safeguard against adverse human rights impacts. BCG’s policy is to engage only with suppliers who meet our ethical standards. Potential suppliers are assessedbased on their geographical location, nature of services provided and their reputation. We safeguard our employees through a framework of policies and statements including Modern Slavery, Privacy, Document Retention and GDPR policies. #### Modern slavery We are committed to addressing the potential risks of modern slavery and human rights abuses within the Group and in its supply chain and we will take steps to review and, where appropriate, further improve our processes to ensure that we mitigate these risks appropriately. Should anyinstancesofmodernslaverybeidentied,webelieve the Group is well positioned to deal with and address these. #### Anti-Bribery and Anti-Corruption The Group has an employee handbook to ensure a consistent standard of behaviour across the Group which includes its Mission Statement and Values and an Anti-Bribery and Corruption Policy (among other policies). BCG requires all third-party intermediaries to comply with the Anti-Bribery and Corruption Policy, which is intended to limit the risk of any malpractice or any unprofessional or unacceptable behaviour occurring across the Group’s supply chain. #### Whistle-Blowing BCG has adopted a Group-wide Whistle-Blowing Policy designed to provide our employees with an effective and available mechanism to help prevent malpractice occurring across our working environment. TheCFOofBalticClassiedsGrouphasBoardresponsibility for monitoring and evaluating Whistle-Blowing arrangements. The CFO will update the Audit Committee as and when whistleblowing concerns have been received, the investigations completed and any actions arising as a result. From time to time, the CFO will also review the organisation’s Whistle-Blowing arrangements and ensure they are subject to independent retrospective review. There were no Whistle-Blowing reports made during the nancial year. The implementation and effectiveness of the Group’s compliance function and policies is reviewed periodically by the Audit Committee and is supported by periodic reviews andrisk assessmentsperformedby theGroup’snanceand legal teams. Sustainability Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 41 STRATEGIC REPORT #### Risk Management #### Principal risks and uncertainties #### Risk management framework The Company does not have a separate risk committee and the Board has overall responsibility for determining the nature and extent of the principal risks it is willing to take and for ensuring that risks are effectively managed across the Group. The Group operates a cautious attitude to risk and its risk appetite is low. The Board performs a robust review and assessment of the risks, and considers potential emerging risks. Risks are then assessed based on their likelihood and potential impactwiththecombinationofthe twomeasuresdening the overall score of each risk so they can be rated. Risks are all captured and documented in a Risk Register, identifying the risk category, the likelihood of the risk occurring,theimpactifitdoesoccur,aspecicownerfor each risk, the risk trend and the mitigation plan for each risk. During the year ended 30 April 2022, the CFO was ultimately responsible for maintaining this register, with input from the CEO and the COO. The register then formed the basis for monitoring risks and ongoing risk discussions within the Board. The Board reviewed the Risk Register at both the November 2021 and April 2022 Board meetings. The Company’s internal control framework is based on athreelinesofdefencemodel.Therstline ofdefence comprises operational management, which is responsible for the direct management of risk. This includes ensuring appropriate mitigating controls are in place and thatthey are operating effectively. The second line of defence is made up of the Company’s internal compliance and oversightfunctionssuchascompanysecretarial,nance and legal. The third line includes external audit reporting to the Audit Committee, it will also include outsourced internal audit once it starts running. The Board has carried out a robust assessment of the emerging and principal risks facing the Group. This included an assessment of the likelihood and impact of each risk identied,andthemitigatingactionsbeingtaken.The principalrisksanduncertaintiesidentied,alongwiththe potential impact and key mitigations, are detailedin this section. We recognise that the Group is exposed to risks wider than those listed, however we have disclosed those that we believe are likely to have the greatest impact on the Group’s performance and those that have been the subject of discussion at Board meetings this year. #### Geopolitical risk Description & impact Mitigation Developments in 2022 Further escalation or prolonged war inUkrainecouldresultinunrestand instability in the Baltic countries. Such situations could impact consumer behaviour (e.g. reducing spending / investing), seller activity (e.g. disruption in retailing), or impact investor perception of the business. • Monitoring the situation in the region and changes in consumer behaviour • Maintainingaexiblecostbasethat can respond to changing conditions RussianaggressiontowardsUkraine resulted in a temporary 20-30% drop inthe Group’s tracKPIs.However, they recovered quickly and four to ve weeks after the invasion the Group’s results were alreadyexceeding pre- invasion levels. This shows that our Company as well as Baltic economies in general show resilience to the increased geopolitical tension in the region. Risk trend Key Stable DecreasingIncreasing Emerging and principal risks EmergingrisksaredenedbytheGroupaspotentialbut not actual future risks that are often dicult toquantify but may materially affect the Group. Acquisition risk. Risk that we make an acquisition which subsequentlyfailsto delivertheexpectedbenets through poor integration, over payment, business failure, competition authority review, or other negative factors. There is also a risk that attractive opportunities are not available, affecting investor perception of the Group’s outlook. An explanationofhowthe Company managesnancial risksisalsoprovidedinnote20totheconsolidatednancial statements. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 42 STRATEGIC REPORT #### Disruption to our customer and / or supplier operations Description & impact Mitigation Developments in 2022 Disruption to the Group’s customers’ and / or suppliers’ operations conducting day-to-day business such as a prolonged recovery from the pandemic or any other similar events may impact on the Group’s ability to deliver desired results. • Remaining market leaders in respective verticals while offering value-adding products and packages • Continual improvements to our platforms • Developing our product proposition to continue meeting our customers’ needs and evolving business models • Maintaining a healthy liquidity headroom with the yet unused revolving credit facility of €10 million as at 30 April 2022, together with a signicant forecast headroomversus its covenant The Baltic region was under various COVID-19 related restrictions for the period from October 2021 to April 2022.Despitethis,Lithuaniaand Estonia, being our main markets, were amongthe rstcountriesin theEUto reach their pre-COVID-19 GDP levels. Risk trend #### Technology Description & impact Mitigation Developments in 2022 Cyber-attacks. The Group is at greater risk from cyber threats due to its large scale and prominence. As the business is entirely dependent on information technology to provide its services, successful attacks have the potential to directly affect revenue. Major data breach. Cyber-attack or the Group’s own failures, resulting in disabling of platforms or systems, or resulting in a major data breach, could have an adverse impact on the Group’s reputation, loss of trust and loss of revenueand /or prots.Databreaches,a common form of cyber-attack, can have a massive negative business impact and oftenarisefrominsucientlyprotected data. Disruption to availability of services. The availability and reliability of services to the Group’s customers is of paramount importance. Any downtime or disruption to consumer or advertiser services can have an adverse impact on the business (complaints and credits for customers, consumer usage, and potential reputational impact). Therefore, the availability of third-party services, which are necessary when using the services provided by the Group, such as internet provision, mobile communication, are also crucial. • Ongoing investment in security systems to ensure our systems remain robust • Ongoing monitoring of external threats • Regular testing of the security of the IT systems and platforms including penetration testing • Disaster recovery and business continuity plan in place and reviewed and tested regularly • Internal audit programme which is outsourced to Deloitte, and includes a review of cyber security is to be launched in 2023 Ahead of the IPO, the Group performed a review of its technology systems, data protection environment and disaster recovery plans. Following thisreview,theGroupsignicantly improved its cybersecurity by implementing DDOS protection and bot management systems, migrated all services to a revised infrastructure and set up a new infrastructure to accommodate a disaster recovery site. Risk trend Key Stable DecreasingIncreasing Principal risks and uncertainties continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 43 STRATEGIC REPORT #### Competition Description & impact Mitigation Developments in 2022 The Group might be affected by new competitors in existing markets or new spheres of activities. Also, changes in technology or consumer behaviour affect the way that people search for cars, real estate, jobs or generalist products, which may lead to a loss of consumer audience. There is a risk of a new entrant to the market with a new business model (for example, providing services free of charge), affecting the Group’s audience, content and revenue. Furthermore,astheGroupdiversies into new and adjacent markets, the competitor set widens. • Constant monitoring of major competitors in adjacent business areas • Continuous investment into buying experience optimisation in order to ensure we are reaching a broad demographic • Continuous development of cross- linkages between Group’s horizontals and verticals • Continuous development of C2C offering to provide value-for-money and differentiated service to private listers During the last two years all our leading sites have increased their audience leadovertheclosestcompetitor;a number of customers also showed positive trends: the number of automotive dealers has grown by 4% versus the same period in 2021, we have more employers (+47%) utilising our sites to advertise than ever before and we maintained roughly the same number of real estate brokers. Risk trend #### Laws & regulations Description & impact Mitigation Developments in 2022 The Group is subject to certain competition and antitrust laws. Antitrust laws may limit the market power and pricing or other actions of any particular rm. Companies can be subject to legal action or investigations and proceedings by national and supranational competition and antitrust authorities and claims from its clients and business partners for alleged infringements of competition and antitrust laws, which could result innesorotherformsofliabilityor otherwise damage the companies’ reputation. Such laws and regulations could limit or prohibit the ability to grow in certain markets. Future acquisitions by the Group could be impacted by applicable antitrust laws and could be unsuccessful if the necessary competition approvals by competition authorities are not obtained. • A dedicated internal expertise within the business who are responsible for identifying, assessing and responding to upcoming changes in laws and regulations, and we utilise external specialists where necessary In 2022, the Group had successfully defended its position in the investigationbytheLithuanian Competition Council which was closed in June 2021. The supervisory proceedings initiated by the Estonian Competition Authority are still ongoing. The proceedings cannotleadtoimpositionofnesto any Group company, however, a precept ordering the Group companies to end any ongoing infringements could be imposed or the Estonian Competition Authority could potentially initiate misdemeanour proceedings that wouldentitletheimpositionofane of up to €400 thousand. See note 24 to the consolidated nancialstatements for further detail. Risk trend Key Stable DecreasingIncreasing Principal risks and uncertainties continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 44 STRATEGIC REPORT #### Climate change Description & impact Mitigation Developments in 2022 From a long-term perspective, the Group is subject to physical climate risks directly related to climate change and transitional climate risks, which may arise due to transitioning to a lower- carbon economy. Increased severity of extreme weather events due to accelerating global warming may result in disruption to provision of services from our service providers, affectthe availability of websites and change commercial customers’ behaviour. New regulations relating to the reduction of carbon emissions and increasing customer climate change awareness may affect the Group’s operations and the volume of listings and encourage us to adapt our business to the new regulations and changing market tendencies. • The Group is committed to contributing to the climate change cause by being environmentally responsible, reducing carbon emissions, shifting to renewable energy and offsetting carbon emissions • We are already taking actions to adapt to the increasing customer climate change awareness and are ready to adjust if new environmental regulations arise: adopt the platforms for eco-friendly products, introduce necessarylters,educatevisitors, enrich ad data with environmental impact related information In 2022, the Group set a goal to become net zero by 2050 and be carbon neutral from 2022 onwards. Currently 1/3 of electricity used by the Group is derived from renewable sources. In coming years we will continue to improve our sustainability goals and environmental reporting Risk trend Key Stable DecreasingIncreasing Principal risks and uncertainties continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 45 STRATEGIC REPORT #### Viability Statement Based on the going concern assessment discussed in note 2 of the nancialstatements, the Directorshave areasonable expectation that the Group has adequate resources to continue in operational existence for the 12 months from thedateofapprovalofthenancialstatements.Forthis reason, they continue to adopt the going concern basis in preparing the nancial statements. Asrequiredbythe UKCorporate GovernanceCode2018(the “Code”), the Directors have assessed the long-term viability of theGroup overaperiodsignicantlylongerthan12 monthsfromtheapprovalofthesenancialstatements.The Directors have assessed the Group’s prospects considering itscurrentnancialposition,itsrecenthistoricalnancial performance and the principal and emerging risks and uncertainties on page 41. The Directors have determined that a period of three years to April 2025 is an appropriate period over which to provide itsviability statementas itreectsreasonable expectations in terms of the reliability and accuracy of operational forecasts and the fact that any projections looking out furtherthanthreeyearsaresignicantlylessmeaningful given the pace of change in the digital market. This process includes an annual review of the ongoing plan, led by the Group Executive Directors in conjunction with the Group portal managers. The latest updates to the plan were nalised inApril 2022.The planmakescertain assumptions aboutoperationalKPIs,revenue,prot,cashowandkey nancialratiosover thethree–year period.TheGroup’s funding position has also been considered, with focus on the ongoing compliance with the covenants attached to the Group’s external debt. The strategic plan has been subject to robust downside stresstestingwhichinvolvedexingseveralmain assumptions underlying the plan to assess the impact of severe but plausible scenarios. Analysis was performed to evaluatethepotentialnancialimpact overthe periodofthe Group’s principal risks occurring, including: • the impact of any major data breach as a result of a cyber-attack; • adverse changes to the business environment due to competition or disruption to our customer and / or supplier operations; and • a continuing geopolitical tension in the neighbouring countries. Specicscenariosthathavebeenmodelledinclude downside scenarios in relation to: • growth of revenues: either limited or at growth rate; • effectonoperatingcosts:databreachrelatednes, increased marketing costs; and • effectonnancialcosts:higherinterestmargindue to a higher leverage as a result of a limited revenue growth and a higher cost base. A plausible combination of these scenarios was also assessed. The objective of the scenario modelling was to project cash owsgenerated bytheGroupto ensuretheGroup remains cash positive during the assessment period and to project a total leverage ratio to make sure a healthy covenant headroom is maintained during this period. It was taken into account that the Group’s term loan of €84 million is due in July 2026 only and during the assessment period the Group has access to a revolving credit facility that amounts to €10 million and is available until July 2026. In all scenarios tested, the Group remained cash positive and witha signicant covenant headroom over the three-year period. Other factors providing comfort to the Directors about the Group’s long-term viability in the face of adverse economic conditions include that the Group has high margins, signicantfree cashowgeneration andan abilitytoadjust the discretionary dividend to enhance liquidity. Therefore the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of the assessment. The Company’s Strategic report, set out on pages 3 to 45, was approved by the Board on 6 July 2022 and signed on its behalf by: Justinas Šimkus Chief Executive Ofcer 6 July 2022 ![]() ![]() ## GOVERNANCE REPORT 48 Corporate GovernanceReport • Introduction by the Chair of the Board Trevor Mather • Board of Directors • Corporate Governance Statement 2022 • Board leadership and company purpose • Statement of engagement with employees • Statement of engagement with other business relationships • Division of Responsibilities • BoardComposition, Succession and Evaluation • Audit, risk and internal control 66 Nomination CommitteeReport 70 Audit CommitteeReport 76 Directors' RemunerationReport 98 Directors' Report ![]() #### Governance Highlights • #### Admission to the London Stock Exchange on 5 July 2021 • Post Admission: ▸ Formal adoption of Company purpose and strategic objectives ▸ Formal adoption of the Board Diversity Policy ▸ Embedding the governance framework to work towards Code compliance ▸ The appointment of an additional Independent Non-Executive Director I am delighted that we could bringsuch a high quality business, operating entirely in the Baltic region, #### to the London Stock Exchange Trevor Mather Chair “ 48 GOVERNANCE REPORT #### Corporate Governance Report ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 49 GOVERNANCE REPORT #### Introduction by the Chair of the Board #### Trevor Mather #### Dear Shareholder On behalf of the Board, I am pleased to present the Group’s rstCorporateGovernanceReportsinceAdmissionto tradingontheMainMarketoftheLondonStock Exchange on 5 July 2021. This Corporate Governance Report explains the key features of the Group’s governance frameworkand how it complies withtheFinancialReportingCouncil’sUKCorporate Governance Code 2018 (the “Code”). #### Governance framework In preparation for Admission, the Board carried out a review of the existing governance structure in conjunction with various external advisors, in order to identify any measures that would need to be implemented prior to Admission. The review also enabled the Directorsto satisfy themselves thattheywereabletoprovidetheconrmationthatwas required on Admission that the Company has established procedures in place which provide a reasonable basis for the Board to make proper judgments on an ongoing basis as tothe nancialposition andprospectsof theGroup. This Corporate Governance Report discusses the framework for controlling and managing the Group in further detail. #### Code compliance As set out in the Prospectus, the Board is committed to the highest standards of corporate governance and to full compliancewiththeCode.Duringthis,ourrstyearpost Admission, we recognise that we are still embedding our processes and have worked hard to comply with all of the Principles and Provisions of the Code. With the appointment ofJurgitaKirvaitienėtotheBoardasanIndependentNon- Executive Director shortly after the yearend, the Board is now compliant with all Code requirements on gender diversity and got closer to achieving a full compliance in terms of Board’s independence. We believe itonly makes sense to conduct Board evaluations and External Audit evaluations once we have had a full year as a public company. Post IPO, we have had no need for our External Auditors to act as our supplier of non-audit services. The details on where we have not complied by the endofthenancialyearcanbefoundonpage52andwe anticipate that we will achieve full compliance during this next nancial year. #### Purpose and culture The Company has always focused on, and continues to focus on using our love of transactions to ensure a better experience for our buyers and sellers. During the year, the Board agreed on values and strategic aims to support that goal. For more on this see ‘Moving our strategy forward’ on page 16. We recognise that our success and culture are inextricably linked and over the years, our Senior Management have lived a culture where employees are carefully selected and highly valued, resulting in very high retention rates across the business. BCG boasts a committed and motivated team whichenjoysarelativelyatstructureandduringtheyear we were pleased to offer free share awards to all employees in good standing (except for the Senior Management team who already hold shares). #### Board diversity During the year, the Board approved its Board Diversity Policy. For more on this, see the Nomination Committee Report on page 66. We are pleased to report that shortly after the year end, on 17 May 2022, the Board approved the appointment of a new IndependentNon-ExecutiveDirector.JurgitaKirvaitienė bringsextensivenancial,audit,internalauditanda diverse Board experience to BCG. With her appointment, the Board is now compliant with all Code requirements on gender diversity. The Group will also begin searching for an additional Non-Executive Director in 2023 where seeking diversity on more dimensions and with greater relevance and sensitivity to the Baltic environment will be a key criteria. #### Stakeholder engagement We spent considerable time engaging with Stakeholders and the Group’s new Shareholders both in the course of the IPO and during the period after, to help us get to know their objectives and also to ensure they understand the business. A full review of Stakeholder engagement can be found in the Strategic Report on page 17. #### TCFD and climate change We recognise that climate change is a key concern for allbusinesses.Iampleasedtoincludeourrstreporton Taskforce for Climate-related Financial Disclosures on page 31. For more on our ESG strategy see page 32. Iam very happy to be part of the recently formed ESG working group. We are at the start of this journey and look forward to expanding our focus in this area in the forthcoming years. #### 2022 Annual General Meeting Our 2022 Annual General Meeting (“AGM”) will be held at 11:00 am local time on Wednesday 28 September 2022 in theheadquartersofBalticClassiedsGroupatSaltoniškių 9B,Vilnius,LT-08105Lithuania.MyselfandotherDirectors will join the meeting either in person or via teleconference. We strongly encourage all Shareholders to cast their votes by proxy, and to send any questions in respect of AGM business to cosec@balticclassieds.com. Trevor Mather Chair 6 July 2022 ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 50 GOVERNANCE REPORT #### Board of Directors The Directors have skills and experience relevant to the sector in which the Group operates in orderto effectively set the strategic direction and purpose of the Group. #### Trevor Mather Chair Appointed: 2021 Nationality: British Independent: No Experience: Trevor was Chief Executive of Autotrader from June 2013 until February 2020. Previously, Trevor was President and CEO of ThoughtWorks, a global IT and software consulting company. Before his time at ThoughtWorks, Trevor spent almost ten years at Andersen Consulting (now Accenture). Trevor holds an M.Eng. in Aeronautics and Astronautics from Southampton University. Key external appointments: Trevor holds directorships in the following companies: Mather Property Limited; Mather Consultancy Services Limited; Mather Charitable Foundation; and MF MidCo limited. Committee membership: Nomination Committee (Committee Chair), Remuneration Committee. #### Justinas Šimkus Chief Executive Ofcer Appointed: 2021 Nationality: Lithuanian Independent: No Experience: Justinas joined the Group in 2005 as CEO of Diginet LTU. Justinas holds a BSc in Management and Business Administration from Vilnius University and an MSc in International Business from Vilnius University. Key external appointments: Justinas holds directorships in the following companies: UAB EIKA Real Estate Fund; UAB EIKA Development Fund; and UAB EIKA Residential Fund. Committee membership: None #### Lina Mačienė Chief Financial Ofcer Appointed: 2021 Nationality: Lithuanian Independent: No Experience: Lina joined the Group in 2017 as CFO. She previously worked at PwC in its audit and assurance services department from 2010 until 2017. Lina holds a BSc in Economics from Kaunas University of Technology and an MSc in Management and Business Administration from ISM University of Management and Economics. Key external appointments: None Committee membership: None #### Simonas Orkinas Chief Operating Ofcer Appointed: 2021 Nationality: Lithuanian Independent: No Experience: Simonas joined the Group in 2007 as Skelbiu. lt Portal Manager, in 2009 was appointed COO of the Group and was appointed CEO of Diginet LTU in August 2019. Simonas holds a BSc in Business Management from Vilnius University. Key external appointments: None Committee membership: None ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 51 GOVERNANCE REPORT #### Ed Williams Senior Independent Non-Executive Director Appointed: 2021 Nationality: British Independent: Yes Experience: Ed was appointed Chair of Autotrader prior to its otation on the London Stock Exchange in March 2015. He served as an independent director of idealista, the privately owned Spanish property portal from 2015 to 2020. Ed was founding Chief Executive of Rightmove, serving in that capacity from 2000 until his retirement from the business in 2013. Key external appointments: Chair of the Board of Autotrader Group PLC Committee membership: Remuneration Committee (Committee Chair) Audit Committee, Nomination Committee. #### Tom Hall Non-Executive Director Appointed: 2021 Nationality: British Independent: No Experience: Tom joined the Group in July 2019. He leads the Internet/Consumer team in Europe for Apax, where he has worked for over 20 years. He has led many of Apax’s marketplace investments, including Autotrader, idealista and SouFun. Key external appointments: Tom serves on the Boards of idealista, MatchesFashion, NEXT and Wehkamp. Tom also holds directorships in the following companies: Apax Partners LLP, idealista Global S.A., MF Midco Limited, MF Topco Limited, RFS Holland Holding BV, RFS Statutory Holding BV, Takko Fashion GmbH, Wehkamp Management Pooling Company BV, Stichting Administratiekantoor Co- Investment STAK, Stichting Administratiekantoor Sweet Equity STAK, and Tinka Holding BV. Committee membership: Nomination Committee. #### Kristel Volver Independent Non-Executive Director Appointed: 2021 Nationality: Estonian Independent: Yes Experience: Kristel worked in the audit department at KPMG from 2012 to 2015, was deputy head of Group Finance Estonia for Nordea from 2015 to 2017 and Group CFO for Eesti Meedia (Postimees Grupp). She holds a BSc and MSc in Finance from the University of Tartu and has been a certied auditor since 2016. Key external appointments: Since 2019, Kristel has been a board member of MM Grupp OÜ and is currently a member of the supervisory boards of Postimees Grupp AS, Magnum AS, Apollo Group OÜ, iDeal Group AS, 15min UAB, AS Kroonpress and TVNET Latvia. Kristel also holds directorships in the following companies: Semetron AS; Beinita Kodu AS; Leta SIA; Balti Meediamonitooringu Grupp OÜ; and Linnamäe Lihatööstus AS. Committee membership: Audit Committee (Committee Chair), Remuneration Committee, Nomination Committee. #### Jurgita Kirvaitienė Independent Non-Executive Director Appointed: 17 May 2022 Nationality: Lithuanian Independent: Yes Experience: JJurgita built her career at PwC from 1997 to 2015 where she progressed to become a Director and a member of the Management Board for Lithuania. Subsequently she became General Manager, and Board member, of a FinTech startup, and supplemented this with being a member of the Audit Committee at Maxima Grupe. Jurgita has a BSc in Business Administration and an MSc in International Business from Vilnius University, completed an International EMBA at the Baltic Management Institute, is a fellow member of ACCA, has been a certied auditor since 2003 and was President of the Lithuanian Chamber of Auditors from 2010 to 2014. Key external appointments: Jurgita now works part-time as an Internal Audit Consultant at Baltic Economist UAB Committee membership: Audit Committee, Remuneration Committee, Nomination Committee Board of Directors continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 52 GOVERNANCE REPORT #### Corporate Governance Statement 2022 This Corporate Governance Statement as required by the UKFinancialConductAuthority’sDisclosureGuidanceand Transparency Rules 7.2 (“DTR 7.2”), together with the rest of the Corporate Governance Report and the Committee Reports forms part of the Directors’ Report and has been prepared in accordance with the principles of the Financial ReportingCouncil’sUKCorporateGovernanceCode2018 (the “Code”). A copy of the Code can be found on the Financial Reporting Council’s website: www.frc.org.uk. The Company’s obligation is to state whether it has complied with the relevant principles and provisions of the Code, or to explain why it has not done so up to the date of this Annual Report and Accounts. Additional requirements under the DTR 7.2 are covered in greater detail throughout the Annual Report and Accounts for which we provide reference as follows: • The Group’s risk management and internal control are found on page 41. • Information with regards to share capitalis presented in the Directors’ Report from page 100. • Information on Board and Committee composition can be found on pages 50 to 51. • Information on Board diversity can be found on pages 63 to 64. The Company has applied the principles of the Code and has complied with the Principles and Provisions of the Code during the nancial year, except for as outlined below: Code Principle and Provision Area Explanation Provision 11 At least half the board, excluding the chair, should be non-executive directors whom the board considers to be independent Shortly after the year-end on 17 May 2022, the Board appointed Jurgita Kirvaitienė as an additional Independent Non-Executive Director. Following this appointment, the Company has one Chair, three Independent Non-Executive Directors, one Non- Independent Non-Executive Director and three Executive Directors. The Company will continue with its recruitment to achieve full compliance in the year ahead. See page 62 for more information on Board independence. Provision 21 and 22 Annual Board evaluation Whilst no formal Board evaluation hasbeen held during this nancial year, there is a plan to conduct a Board effectiveness review in the Autumn of 2022 which will be reported in the Annual Accounts forthe nancial year ending 2023. Principle M Annual external audit evaluation An annual evaluation reviewing the effectiveness of the external audit process has not yet been performed as the Company considers that an evaluation of a full audit cycle will be more effective. The Audit Committee plans to carry out a formal evaluation of the performance and effectiveness of the External Auditors in the rst half of the next nancialyear once a full year audit cycleis complete. Principle M Formal policy on the engagement of the external auditor to supply non-audit services A formal policy on the engagement of the External Auditor to supply non-audit services is planned to be developed in the rst half of the nancial yearending 2023. In the period between the Admission and the publication of this Annual Report there has been no requirement for any non-audit services where the External Auditor would be considered as a supplier. Provision 24 Audit Committee with minimum membership of three At the point of IPO, the Board made clear that it was looking to appoint an additional Independent Non-Executive Director by the AGM and that it was aware that at that point in time it was not compliant with this provision due to having two members only. Shortly after the year-end, on 17 May 2022, the Board appointed Jurgita Kirvaitienė as Independent Non-Executive Director and invited her to join all current Board Committees including the Audit Committee. Following this appointment, the Company is compliant with Provision 24. Key areas in this sectionPage reference Board leadership and Company purpose53 Division of responsibilities58 Composition, succession and evaluation62 Audit, risk and internal control65 Remuneration65 ![]() Code Principle A Effective BoardSee page 53 B Purpose, strategy, values and cultureSee page 53 C Prudent and effective controls and Board resources See page 55 D Stakeholder engagementSee page 55 E Workforce policies and practicesSee page 57 #### Board Leadership and Company Purpose #### Effective Board The Board understands that a successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable success of the company, generating value for Shareholders and contributing to wider society. The Board has a deep industry knowledge brought from their past and current professional experience. Most Board members are also investors in the Company, therefore promoting success is in their best interest. #### Purpose, strategy, values and culture Since incorporation, the Board of BCG has been heavily focused on ensuring that the Company was ready for premiumlistingontheLondonStockExchange.Notonly did it achieve listing but it also joined the FTSE 250 in September 2021 all whilst simultaneously delivering a strong nancial performance. During the course of the year, the Board dedicated time on the Board agenda to discuss and approve the Company purpose and time has been set aside for a full strategy session shortly after the year-end in September 2022 where it is anticipated that strategic objectives will be set and we look forward to providing our Stakeholders with a full update on this in the Annual Report and Accounts for the nancial year ending 2023. The Group has an entrepreneurial,team-focused and ambitiousculture rmlybasedinprinciples ofequalityand inclusivity. The Board recognises the contribution of this culturetothesuccessof thebusinessandissatisedthatit is aligned with the Company’s purpose, values and strategy, indeed, the Board describes this as the Company’s “super- power”. The Board monitors the culture of the Group through updates at each Board meeting from the CEO, CFO and COO who are directly responsible for workforce issues. These updates are on people, culture, inclusivity and talent. 53 GOVERNANCE REPORT ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 54 GOVERNANCE REPORT #### Board activity and culture The following table summarises some of the Board activity and how it links to the culture of the organisation. For more information on Board activity, Stakeholders and S172(1) Statement see page 17: Board activity Link to culture Free shares gifted to all employees in good standing 1 Ensuring the employees can feel a greater connection to the Company and further motivation to succeed. Aligning employees' interests with those of Shareholders. Performance Share Plan programme for key employees of the Group Align Management and Shareholders’ interests to create long-term value. Incentivising and motivating key employees. Discussions in the Remuneration Committee around wider employee remuneration and rewards Enables assessment and oversight to ensure that employees’ remuneration and rewards are supportive of employees’ motivation. Purpose and values Working with the team to build a collection of market-leading businesses and strong brands. The digital marketplaces we operate promote trust, fairness and eciency. Board supports an open culture BCG has a dynamic and motivated team. We like to have fun and enjoy working together and that is our superpower. CEO, CFO and COO directly responsible for workforce issues Ensuring the Board is intrinsically connected to the employees. The Executive Directors work alongside the workforce who have a direct connection to the Board and understand that the culture is set from the top. Discussions around the strategy of each of the four vertical business areas Gives the Board a chance to engage with the portal managers directly to discuss all things in their business areas including their markets, customer and employee needs that enables knowledge sharing, motivation and team building. Board reviews and approves Modern Slavery Statement and monitors the Gender Pay Gap Enables assessment of the broader culture of the Group and its relationships with suppliers and employees. Board reviews and approves key workforce-related policies including Whistle-Blowing and Conicts of Interest Gives the Board oversight to ensure that policies reect the values and desired behaviours of employees. UpdatestotheBoardonemployeemattersincluding recruitment, retention, wellbeing and diversity Enables the Board to gauge the culture and to identify areas where change is necessary to improve the culture. 1 Except for the Senior Management team. ▸ For more on purpose, values and strategy see the Strategic Report on page 12. ▸ For more on engagement with the workforce see Engagement with our Stakeholders on page 17 and the Statement of Engagement with employees on page 56. Board Leadership and Company Purpose continued ![]() Prudent and effective controls and #### Board resources As part of the IPO, the governance framework of the Company was analysed and updated to ensure that it was robustandtforpurpose.TheBoardprovidesleadership within a framework of prudent and effective controls. The Board has clear Board roles and divisions of responsibility. The framework of the Board and its Committees provides clearly-stated duties and responsibilities and clear lines of accountability and effective oversight. These controls ensure timely decision-making at the correct level. As part of the Board and Committee review which is scheduled to be completed in the Autumn of 2022, the Board will also review its Schedule of Matters Reserved for the Board and all Committee Terms of Reference. A good governance structure is not static and as the Group grows and develops, the Board continues to monitor the framework so it remains appropriate to the business. The Board provides support to Senior Management in implementing strategic priorities, as well as oversight and constructive challenge. Board materials, quality of information and resourcesas a whole were discussed by the Board during the year and itwasidentiedthatmoreresourcesmightberequiredin thenanceteamwhichresultedinadditionalsupport.An internal Board effectiveness review will be carried out by the Chair ofthe Company earlyin the newnancial year whenit was agreed it would drive more meaningful results. During the year, no Director raised any concerns about the operation of the Board or the management of the Company. #### Stakeholder engagement We conducted a comprehensive programme of investor and analyst meetings prior to Admission. Lookingforward,theBoardhasdenedaninvestor relations programme that aims to ensure both that existing and potential investors understand the Group’s strategy and business, and that Executive Management are able to devote appropriate time to business leadership and Shareholder value creation. The Executive Directors will give formal presentations to investors and analysts on the half-year and full-year results (in December and July respectively), following which, these updates will be posted on the Group’s investor relations section of the website and available to all Shareholders.A summary of these results presentations is also delivered to the employees later that same day. There is also an ongoing programme of meetings with investors, fund managers and analysts in addition to a number of conferences wherethe Executives meet in 1:1 and group settings with current and potential investors. These meetings cover a range of topics including strategy, performance and governance, with care taken to ensure that any price sensitive information is released to all Shareholders at the same time. During the period between theIPOandthenancialyear-endtheExecutiveDirectors had 67 investor meetings, all of them remote. The Chair will engage directly with our major Shareholders to discuss governance matters, performance against strategy and any material changes. The Chair of the Remuneration Committee consulted with major Shareholders in relation to our Remuneration Policy. The Board is kept informed of the views and opinions of Shareholders and analysts. Directors receive regular updates from the CEO and the CFO, as well as share register analyses and market reports from the Company’s corporate brokers Bank of America ML. Tom Hall is a Non-Executive Director and sits on the Board as a Shareholder Director representing Major Shareholder Apax Partners. For more information on this relationship see Board independence on page 62. During the year, the Board answered questions from the investors on a range of topics including the growth story, resilience to historic market disruptions and how it feels to be a public company. 55 Board Leadership and Company Purpose continued GOVERNANCE REPORT ![]() #### Statement of Engagement with Employees - The engagement method used by the Board for the purposes of Provision 5 of the Code is that the Executive Directors take direct responsibility for workforce related issues and the CEO, CFO and COO provide updates atevery Board meeting which includes relevant workforce updates. This engagement method is effective due to the management structure of the Group, the Board is particularly hands-on, engaged and committed to ensuring that it understands the composition and views of employees. The Board met with the workforce through a variety of communications and forums throughout the IPO process and meets various components of the workforce face-to- face whenever it physically convenes in any of the BCG oces.This hasbeen limitedthisyeardue tothe pandemic, but will increase moving forward. Additionally, an ESG sub-committee will bring forward proposals for formal employee engagement, with an expectation that this will include regular meetings between Non-Executive Directors and nominated or elected employees. Any themes or issues will be taken back into the Board room and addressed as appropriate. We will report on this engagement inthe Annual Reportfor the nancialyear ending 2023. Since the start of March 2020, Senior Management agreed to put appropriate protocols in place to support employees whilst working from home and, when appropriate, in the oceduringtheCOVID-19pandemic.Processeswere introduced to ensure regular contactbetween in-house teams, but also across the whole Group ranging from virtual meetings to online social events. More recently there Sch 7.11(1)(b) Companies (Miscellaneous Reporting) Regulations 2018, – Employee engagement has been a consultation which involved an anonymous online poll where employees were asked to express their preferences with regards to thereturntooce-working post-COVID-19. Shortly after the IPO, the Company made each employee a Shareholder which has fostered a feeling of ownership, unity and an incentive for good performance. As a result, the team’s motivation is higher than ever as we focus on continuing to deliver outstanding products and services to our customers. ▸ See page 39 for more information on the free share award to employees. The Company has a dynamic and motivated team that likes to have fun and enjoy working together. The Company believes that is the cornerstone to its strength and continued long-term success. At the year end, BCG had 140 employees (on a headcount basis) and an experienced Senior Management team with an average tenure at BCG of 14 years. The Company is an equal opportunities employer and is working hard to create an environment for our employees that is free from discrimination, harassment andvictimisation, reectingour commitmenttocreating a diverse workforce and an inclusive environment that supports all individuals irrespective of their gender, age, race, disability, sexual orientation, or religion. This statement should be read in conjunction with Engagement with our Stakeholders on page 17, the Non- nancial information statement on page 102 and Board principal decisions on pages 18 to 21. 56 Baltic Classieds Group PLC Annual Report and Accounts 2022 57 GOVERNANCE REPORT #### Statement of Engagement with Other BusinessRelationships- The Directors have regard for the need to foster the Company’s business relationships with suppliers, customers and others, and this regard effects the principal decisions taken by the Company during the nancial year. #### Stakeholder analysis During the year, the Executive Directors and other key members of the Senior Management undertook a Stakeholder analysis workshop to consider all of the Group’s Stakeholders, their material interests and engagement mechanisms with them. The resulting Stakeholder matrix was reviewed by the Board and feeds into the Board’s activity and the Board’s decision making process. The Stakeholder analysis provides the Board with assurance that the potential impacts on our Stakeholders are being carefully considered by Management when developing plans for Board approval. By thoroughly understanding our key Stakeholder groups, the Board can factor their needs and concerns into boardroom discussions. This statement should be read in conjunction with our Section 172(1) Statement and Engagement with our Stakeholders on page 17, the Non-Financial Information Statement on page 102 and Board Principal Decisions on pages 18 to 21. Sch 7.11B(1)Companies (Miscellaneous Reporting) Regulations 2018 #### Workforce policies and practices The Board takes responsibility for all workforce policies and practices which are consistent with the Company values and support its long-term sustainable success. The Board reviews and approves all signicantpolicies that impact our workforce. The Executive Directors take direct responsibility for all workforce related issuesto ensure that they align with the Group’s values and purpose. The Board understands that a diverse range of experience, expertise and perspectives contributes to the success of the Company. In its workforce strategy, the Company set out that it aims to attract high potential, highly motivated employees and that upon appointment, these employees will be given the space to develop and grow. The workforce is currently 49% male and 51% female. Policies are published on the Company intranet. Our employeesarerequiredtoconrmtheirunderstandingof these policies upon recruitment and on an annual basis. Where relevant, training is given to the workforce such as for Whistle-Blowing and Anti-Bribery and Corruption. All employees (including the Board) are required to notify the Company as soon as they become aware of a situation that couldgive riseto aconict orpotential conictof interest. Theregister of potentialconicts of interest is regularly reviewed to ensure it remains up to date. The Board is satised thatpotential conictshavebeen effectively managed throughout the year (see page 61). The Board approves the Remuneration Policy for the Executive Directors and, via the Remuneration Committee, has oversight of the wider workforce remuneration practices (further information on page 76). As a business, we seek to conduct ourselves with honesty and integrity and believe that it is our duty to take appropriate measures to identify and remedy any malpractice within or affecting the Company. Our employees embrace our high standards of conduct and are encouraged to speak out if they witness any wrongdoing which falls short of those standards. We have a Board approved Whistle-Blowing policy. To date, there have been no reports made under this policy. For more information on workforce policies and practices see the Non-nancial information statement on page 102. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 58 GOVERNANCE REPORT #### Division of Responsibilities #### Responsibilities of the Board The Board is committed to the highest standards of corporate governance. The Board is collectively responsible for the long-term success of the Group. The business of the Group is managed by the Board who may exercise all the powers of the Company. The Board delegates certain matters to the Board Committees, and delegates the detailed implementation of matters approved by theBoard and the day-to-day operational aspects of the business to its Executive Management. At the date of listing, the Board comprised the Chair, the CEO, the CFO, the COO, a Non-Executive Director appointed by the Major Shareholder, a Senior Independent Non-Executive Director (“SID”) and an Independent Non-Executive Director. Shortly after the year-end on 17 May 2022, the Board appointedJurgitaKirvaitienėasanadditionalIndependent Non-Executive Director. The Board sets the Group’s purpose, values and strategy andsatisesitselfthatthesearealignedwithculture; provides entrepreneurial leadership, promoting long-term sustainablesuccessandShareholdervaluecreation;and oversees the Group’srisk management processes and internal control environment. TheBoardremainscondentthatindividualmembers willcontinuetodevotesucienttimetoundertaketheir responsibilities effectively. There is a clear division between Executive and Non- Executive responsibilities. The Statementof division of responsibilities between the Chair and the CEO and the role of the SID is available on the Company website. The Schedule of matters reserved for the Board is also available on the Company website. Both will be reviewed annually as part of the Board effectiveness process. Code principles F Board rolesSee page 58 G IndependenceSee page 62 H External commitmentsSee page 61 I Board eciency: Key Board activities See page 61 #### Board roles Chair • Leads the Boardand is responsible for the overall effectiveness of Board governance • Sets the Board’s agenda, with emphasis on strategy, performance and value creation • Ensures good governance • Shapes the culture of the Board, promoting openness and debate Chief Executive Ofcer • Develops strategies, plans and objectives for proposing to the Board • Leadstheorganisationtoensurethedeliveryofthe strategy agreed by the Board Chief Financial Ofcer • ProvidesstrategicnancialleadershipoftheGroup and runs the nance function on a day-to-day basis Chief Operating Ofcer • Runs the Group on a day-to-day basis and implements the Board’s decisions • Heads the IT Team Senior Independent Non-Executive Director • Acts as a sounding board for the Chair • Available to Shareholders if they require contact both generally and when the normal channels of Chair, CEO or CFO are not appropriate • Leads theannual appraisalof theChair’sperformance and the search for a new Chair, when necessary Non-Executive Directors • Demonstrate independence and impartiality (other than the Nominee Director) • Bring experience and special expertise to the Board • Constructively challenge the Executive Directors • Monitor the delivery of the strategy within the risk and control framework set by the Board • Monitor the integrity and effectiveness of the Group’snancialreporting,internalcontrolsandrisk management systems Company Secretary • Responsible for advising the Board and assisting the Chair in all corporate governance matters ![]() #### Leadership structure The Board is responsible for providing leadership to the Group. The structure of the Board and its Committees and the Executive Management ensures controls and oversight with a balanced approach to risk aligned with the Group’s culture. The Board delegates certain matters to its three permanent Committees, the Terms of Reference of which are available on the Company website. The table below shows the role of each of the Board Committees: #### Board Committees Audit Committee Assist the Boardin discharging its responsibilities withregardto: nancial reporting; externaland internal auditsand controls, includingreviewingandmonitoringtheintegrityoftheGroup’sAnnualandInterimnancialstatements;reviewingandmonitoring the extent of thenon-audit work undertaken by ExternalAuditors; advising on the appointment ofExternal Auditors; overseeing the Group’s relationship withits External Auditors;reviewingthe effectiveness of the externalaudit process; and reviewing the effectiveness of the Group’s internal audit, internal controls, Whistle-Blowing and fraud systems. Remuneration Committee Assists the Board in determining its responsibilities in relationto Executive Directors’ remuneration, including making recommendations to the Board on the Company’s policy on Executive remuneration, including setting the overarching principles, parameters and governance framework of the Group’s Remuneration Policy and determining the individual remuneration and benets package ofeach of the ExecutiveDirectors, the Chair andmembers of the Executive Management team (being therst layer of management below the level of the Board and reporting to the CEO, including the Company Secretary). Nomination Committee Assists the Board in discharging its responsibilities relating to the composition and make-up of the Board and any Committees of the Board. It is also responsible for periodically reviewing the Board’s structure and identifying potential candidates to be appointed as Directors or Committee members as the need may arise. #### Senior Management The Senior Management is responsible for the day-to- day running of the business, carrying out and overseeing operational management and implementing the strategies the Board has set. The Senior Management is small and agile and is made up of the three Executive Directors and eight portal managers. The Senior Management meets regularly and no less than weekly. Portal managers come to any Board meetings where their subject is being discussed and are encouraged to stay for the whole Board meeting. 59 Division of Responsibilities continued GOVERNANCE REPORT ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 60 GOVERNANCE REPORT #### Board activities throughout the year The following table sets out some of the Board’s key activities since the incorporation of BCG on 26 April 2021: Area Key Actions Links to S172(1) (a) to (f) Stakeholder group Strategy and operations • Approved the IPO transaction • Reviewed of the strategies of Group’s verticals • Approved major pricing actions (a) , (b) , (e) , (f) Investors Suppliers Customers Employees Leadership and employees • Engaged in a search for an additional Independent Non-Executive Director • Reviewed the employee requirements following the IPO • Approved PSP scheme and free share awards (b) Employees Culture • Approved free share awards to all employees in good standing 1 • Approved code of conduct related policies • Instructed the formation of the ESG Working group of which the Chair is a sponsor and the Board has oversight (a) , (b) , (c) , (d) Employees Finance and Investor Relations • Approved the 2022 forecast and 2023 annual budget • Approved the Group’s capital policy • Received reports and updates on investor relations activities (a) , (c) , (e) Investors Suppliers Customers Business performance • Reviewed strategic and operational performance • Reviewed nancial performance against budget (a) , (c) , (d) , (e) Investors Suppliers Customers Governance • Approved the numerous procedures and controls needed to comply with the regulation and governance of a listed company (b) , (c) , (e) , (f) Investors Employees Suppliers Customers 1 Except for Senior Management Companies Act 2006, Section 172(1) A director of a company must act in the way, he considers, in good faith, would be most likely to promotethe successofthecompanyfor thebenetof its members as a whole, and in doing so have regard (amongst other matters) to the following factors: (a) the likely consequences of any decision in the long-term; (b) the interests of the company’s employees; (c) the need to foster the company’s business relationships with suppliers, customers and others; (d) the impact of the company’s operations on the community and the environment; (e) the desirability of the company maintaining a reputation for high standards of business conduct; and (f) the need to act fairly as between members of the company. Division of Responsibilities continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 61 GOVERNANCE REPORT Board and Committee meetings and #### attendance The Board’s plan is to have a combination of remote and face-to-face meetings. During the period, due to the pandemic, the Board and its Committees conducted most meetings remotely through video calls to enable the Board to continue to function and maintain the integrity of our governance structure. The Board plans to have more physical meetings as planned at the IPO which would be heldineitherofVilnius,TallinnorLondonassoonasis practical and safe to do so. The table below sets out attendance at the scheduled meetings during the year. Attendance is expressed as the number of scheduled meetings attended out of the number of such meetings possible or applicable for the Director to attend. During the period, the Non-Executive Directors held one additional meeting without the Executive Directors present. In the event a Director was unable to attend a meeting they still received all the papers for the meeting and were updated on matters discussed at the meeting. External commitments and conicts of #### interest The Company is mindful of the time commitment required fromNon-ExecutiveDirectorsin ordertoeffectivelyfull their responsibilities on the Board, particularly providing constructive challenge and holding Senior Management to account and utilising their diverse skills and experience to benet the Company and provide strategic guidance. As part of any appointment process, any prospective Directors are asked to provide details of any other roles or signicant obligationsthat mayaffectthe timeavailable for them to commit to the Company. The Chair and the Board are then kept informed by each Director of any proposed external appointmentsor othersignicant commitments as they arise which are monitored. BoardDirector Board Audit Committee Nomination Committee Remuneration Committee Trevor Mather 14 / 143 / 3 1 2 / 24 / 4 Justinas Šimkus 14 / 143 / 3 1 2 / 2 1 4 / 4 1 Lina Mačienė 14 / 143 / 3 1 2 / 2 1 4 / 4 1 Simonas Orkinas 14 / 143 / 3 1 2 / 2 1 4 / 4 1 Ed Williams 14 / 143 / 32 / 24 / 4 Tom Hall 12 / 143 / 3 1 2 / 24 / 4 1 Kristel Volver 14 / 143 / 32 / 24 / 4 1 Attended by invitation The Chair’s approval is required prior to a Director taking on any additional external appointment. The Chair’s approval willonly begivenonce theChairis satisedand theDirector conrmsthat,asfarastheyareaware,thereareno conicts of interest. Non-Executive Director Tom Hall is a partner of Apax Partners and a director of other entities in which the funds advised by Apax Partners have an interest. The Major Shareholder is controlled by funds advised by Apax Partners. Each Director’s biographical details andsignicant time commitments outside of the Company are set out in the Board biographies on pages 50 to 51. #### Change in Directors’ commitments Shortly after the year-end on 17 May 2022, the Board appointedJurgitaKirvaitienėasanadditionalIndependent Non-Executive Director. For more details on this appointment see the Nomination Committee Report on page 66. #### Conicts of interest The Companies Act 2006 provides that Directors must avoid a situation where they have, or may have, a direct orindirectinterestthatconicts,orpossiblymayconict, with the Company’s interests. Boards of public companies mayauthoriseconictsandpotentialconicts,where appropriate, if their company’s articles of association permit, which the Articles do. The Board has established formal procedures for the declaration, review and authorisation ofany conicts of interest of Board members. As part of the induction process, a newly appointed Director will be required to disclose anyconictsofinteresttotheCompany.Thereafter,each Director has anopportunity todisclose conicts atthe beginning of each Board and Committee meeting and as part of an annual effectiveness review. During the year, none of the Directors declared to the Companyanyactualorpotentialconictsofinterest between any of their duties to the Company and their private interests and/or other duties, except in the case of the Executive Directors, each of whom holds the position of Director of the Company and director of a number of Group subsidiary companies. Board eciency and information for #### Directors The Chair is responsible for ensuring that all of the Directors are properly briefed on issues arising at Board meetings and that they have full and timely access to accurate, relevant information. To enable the Board to discharge its duties, all Directors receive appropriate information, including briengpapersdistributedinadvanceoftheBoard meetings. Directors can, where they judge it to be necessary to discharge their responsibilities as Directors, obtain independent professional advice at the Company’s expense. The Board Committeeshave access to sucientresources to discharge their duties, including external consultants and advisors and access to internal resources and relevant personnel. The Directors also have access to theadvice and services of the Company Secretary as required. Division of Responsibilities continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 62 GOVERNANCE REPORT BoardComposition, Successionand #### Evaluation Code Principle J Appointments to the BoardSee page 62 K Board compositionSee page 62 L Annual Board evaluationSee page 52 #### Independence Chair Independent NED Non-Independent Director 1 2 4 30 April 2022 17 May 2022 1 3 4 30 April 2022 17 May 2022 #### Appointments to the Board The Board is collectively responsible for the long-term success of the Group. The business of the Group is managed by the Board who may exercise all the powers of the Company. The Board delegates certain matters to the Board Committees, and delegates the detailed implementation of matters approved by the Board and the day-to-day operational aspects of the business to its Senior Management. During the period under review, the Board was composed of three Executive Directors and four Non-Executive Directors. One Non-Executive Director represents a Major Shareholder, for details on this see page 7. Details of all appointments are disclosed in the Prospectus. Biographies for each Director are available on pages 50 to 51. Shortly after the year-end,theBoardappointedJurgitaKirvaitienėasan additional Independent Non-Executive Director bringing itstotalnumbertothreeExecutiveDirectorsandveNon- Executive Directors. #### Succession planning The Nomination Committee is responsible for succession planning and continues to focus both on the optimal composition of the Board and for emergency situation planning. For more on the Nomination Committee’s responsibilities in relation to succession planning, see page 66. #### Board composition During the year, each Director participated in a diversity, skills and experience analysis as part of a process to ensure that the composition of the Board has the appropriate balance of skills and experience. Factors that are taken into account when assessing the composition of the Board include a broad range of diversity characteristics as indicated below and particular skills and experience considered to be relevant to this particular Group in this sector. Board independence and tenure is also considered. TheBoardissatisedthatithastheappropriaterangeof skills, experience, independence and knowledge of the Group to enable it to effectively discharge its duties and responsibilities. The matrix on page 64 details some of thekeyskillsandexperiencethattheBoardhasidentied as valuable to the effective oversight of the Group and execution of its strategy. #### Board tenure The Non-Executive Directors post IPO, were all appointed on 2 June 2021, and Jurgita was appointed on 17 May 2022 and therefore there is no issue with Board tenure. #### Independence The Code recommends that at least half the board of directors of a company, excluding the Chair, should comprise non-executive directors whom the board considers to be independent. Noting that the Chair is only independent upon appointment. As at the year-end date, the Company did not comply with the Code requirement to have at least half of the Board members as independent (Provision 11). Shortly after the year-end on 17 May 2022, the Board appointed an additional Independent Non-Executive Director bringing the number of Independent Non-Executive Directors to three. WearecondentthatthisisasolidbasisforourBoard andissucientforprovidingaconstructivechallenge and to provide an independent view on the running of the Company. We will continue to monitor the composition and diversity of the Board. The balance of independence is in favour of the ‘Non- Independent’ due to the role of Non-Executive Director Tom Hall. Pursuant to the Relationship Agreement, the Major Shareholder may appoint one Non-Executive Director to the Board for so long as it (together with any of its Associates) holds voting rights over 10% or moreof the Company’s issued share capital. The Major Shareholder’s rst appointed representative Director is Tom Hall. Tom is therefore not an Independent Non-Executive Director. If the Major Shareholder’s shareholding fell below 10% then Tom Hall would no-longer serve on the Board and the ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 63 GOVERNANCE REPORT Board #### Gender Diversity Senior Management 1 Executive Management direct reports 2 Male Female Male Female MaleFemale Full Board 523211 Non-Executive Directors Executive Directors 73%50% 50% 27% Independent and Non-Independent Directors would equal 3 and 3 respectively plus the Chair. The Major Shareholder will consult in advance with the Nomination Committee regarding the identity of any Director proposed to be nominated by it. In addition, for so long as the Major Shareholder (together with any of its Associates) holds voting rights over 10% or more of the Company’s issued share capital, the Major Shareholder’s representative Director shall be a member of the Nomination Committee and shall be entitled to attend as an observer all meetings of the Audit Committee and the Remuneration Committee. #### Diversity and Inclusion The Board considers a truly diverse Board, representative of its Stakeholders, leads to better outcomes and improved decision making. The Board is keen to strengthen and maintain female representation in senior roles and this year the Company contributedtotheFTSEWomenLeadersReview,aninitiative which aims to increase female leadership within the FTSE 350. The Group is proud to be acknowledged by the 2021 FTSEWomenLeadersReviewandrankedamongTopTen Best Performers within the FTSE 250 and to be number one within the Technology sector of the FTSE 350. Although we acknowledge that we still have far to go, particularly in light of the recommendations to increase female board representation to 40% by 2025. Likemostorganisations,particularlythoseinthetechnology sector,thereissignicantroomforimprovementinterms of diversity. We understand that at present there is a lack of ethnic diversity both on our Board and in our workforce. We continue to be an equal opportunities employer and we recruit based on talent, skill and experience. Figures above taken as at 30 April 2022 1 Senior Management team is made up of the three Executive Directors and eight portal managers 2 Executive Management direct reports here are dened as the direct reports of the three Executive Directors, including eight portal managers. Board engagement with Diversity and Inclusion: • Board skills and experience analysis and review • Approved the Board Diversity Policy • Monitoring diversity levels across the organisation For more information on Diversity and Inclusion in the workforce, see page 38 in the Strategic Report. Board Induction, Training and #### Professional Development Prior to Admission, the Company’s external lawyers provided all Directors with training in respect of their legal, regulatory and governance duties, responsibilities and obligations. Board members also received technical training on Board policies including: • Anti-Bribery • Anti-Money Laundering • Fraud Prevention • Whistle-Blowing • Conicts of interest • Board and Committee procedures and constitutional documents including Matters Reserved for the Board and Committee Terms of Reference All Directors who had not previously worked with the Group then participated in a range of meetings with members of the Senior Management to familiarise them with the business and its strategy and goals. Equivalent arrangements will be put in place for future Board appointments when induction will be the responsibility of the Chair and the Company Secretary. Board Composition, Succession and Evaluation continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 64 GOVERNANCE REPORT 5 7 3 6 7 3 2 2 3 1 1 1 1 #### Diversity characteristics Figures above taken as at 30 April 2022 Age 30-35 35-40 50-55 55-60 Disability None Highest level of education Masters Bachelors Nationality Lithuanian British Estonian Ethnicity White Gender Male Female #### Combination of skills and experience as identied by the Board Knowledge of operating classieds businesses Pricing and packaging Finance M&A Technology and innovation Digital business 7 6 4 6 4 6 Figures above taken as at 30 April 2022 The Board receives regular corporate governance updates including: • Market Abuse Regulations including their responsibilities as a PDMR and other matters pertaining to the Share Dealing Code and insider dealing • Investor relations and understanding our investor base and share register • TCFD Reporting Board meetings generally include one or more presentations from Senior Management on areas of strategic focus. Specic business-relatedpresentations aregivento the Board by Senior Management and external advisors when appropriate. #### Board effectiveness review Therstevaluationoftheoperationandeffectivenessof the Board, its Committees and individual Directors will take place duringthe nancialyear ending2023.The Board intends to comply with the Code recommendation that an externally facilitated evaluation should take place at least every three years and for the Chair and the Company Secretary to carry out internal Board and Committee reviews for the intervening years. Annual General Meeting and Director #### re-election The Company’s Articles of Association specify that a Director appointed by the Board must stand for election attherstAGMsubsequenttosuchappointmentandat eachAGMthereafter,everyDirectorshallretirefromoce and seek re-election by Shareholders. This is in line with the Code, which recommends that Directors should be subject to annual re-election. All Directors, having been appointed during the period under review, will stand for election at the Company’s 2022 AGM. The Board therefore recommends that Shareholders approve the resolutions to be proposed at the Annual General Meeting 2022 relating to the election of the Directors. Board Composition, Succession and Evaluation continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 65 GOVERNANCE REPORT #### Audit, Risk and Internal Control The Board’s objective is to give Shareholders a fair, balanced and understandable assessment of the Group’s position and prospects for the business model and strategy and it has responsibility for preparing the Annual Report. The Board is also responsible for maintaining adequate accounting records and seeks to ensurecompliance with statutory and regulatory obligations. An explanation from the Directors about their responsibility for preparing the nancialstatementscanbefoundintheStatementof Directors’ Responsibilities in the Directors’ Report. The Board, with the assistance of the Audit Committee, monitors and oversees the Group’s riskmanagement process. At least twice a year theBoard reviews and approvestherisksidentiedandthemitigationplan suggested by the Executive Management. The Board has established a management structure with denedlinesofresponsibilityandcleardelegationof authority. This includescontrols relatingto the nancial reporting process. As part of preparation for the IPO, the Financial Position and Prospects ProceduresReport (the “FPPP”) was produced where the Group’s internal controls environment was reviewed.During thenancial year,the AuditCommittee followed up on the remaining open action points that were identied in the FPPP until all were closed. Code Principle M Effectiveness of External Auditor and Internal Audit and integrity of accounts See page 52 N Fair, balanced and understandable assessment of Company’s prospects See page 103 O Internal nancial controls and risk management See page 65 #### Remuneration The Board is conscious that remuneration policies and practices must be designed to support strategy and promote the long-term sustainable success of the Group. It delegates responsibility to the Remuneration Committee to ensure that there are formal and transparent procedures for developing policy on Executive remuneration and determining Director and Executive Manager remuneration. Code Principle P Linking remuneration with purpose and strategy See page 76 Q A formal and transparent procedure for developing policy See page 76 R Independent judgment and discretionSee page 76 The Audit Committee is in the process of establishing an Internal Audit function which it anticipates reporting on inthenextnancialyear.TheBoardwasveryinvolvedin prioritising therisks tobe covered by theInternal Auditrst. On behalf of the Board, the Audit Committee plans to review the Group’s internal control systems, enabling the Executive Management to consider how to manage or mitigate risk in line with the Group’s risk strategy. How the Board has assessed the Group’s longer-term viability can be found on page 45, the adoption of the Going Concern basis on page 118 and the Directors’ assessment of whether the Annual Report and Accounts is fair, balanced and understandable can be found on page 103. ![]() The Committee and the Group were proud to be acknowledged by the FTSE Women Leaders Review as among the Top Ten Best Performers within the FTSE 250 and to be number one within the Technology sector of the FTSE 350, with 33% of Executive Directors being female. Nomination Committee membership Trevor Mather - Chair - Appointed on 2 June 2021 Non-Executive Director Kristel Volver - Appointed on 2 June 2021 Independent Non-Executive Director Ed Williams - Appointed on 2 June 2021 Senior Independent Non-Executive Director Tom Hall - Appointed on 2 June 2021 Non-Executive Director Jurgita Kirvaitienė - Appointed on 17 May 2022 Independent Non-Executive Director ▸ Committee meeting attendance can be found on page 61. ▸ Committee Terms of Reference can be found on our corporate website at: balticclassieds.com/corporate-governance. Trevor Mather Chair of the Nomination Committee “ #### Nomination Committee Report 66 GOVERNANCE REPORT ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 67 GOVERNANCE REPORT #### Key responsibilities Board and Executive Management Composition: • Review the structure, size and composition of the Board, its Committees and the Executive Management team; and • Evaluate the combination of skills, experience, diversity, independence and knowledge on the Board, its Committees and the Executive Management team. Succession planning: • review the leadership needs of the organisation, both Executive and Non-Executive Directors with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace; • ensure plans are in place for orderly succession to the Board and the Executive Management positions, taking into account the challenges and opportunities facing the Group and the skills and expertise needed on the Board and in the Executive Management team in the future; • have oversight over talent development with a view to monitoring and overseeing the development of a diverse pipeline within the Group; and • identify and nominate potential candidates for Board vacancies as and when they arise, in line with succession planning. #### Main activities during the Year Since Admission on 5 July 2021, the Committee has met twice and its key activities were: • formal adoption of the Committee’s Terms of Reference; • succession planning for the Board and for the Executive Management team; • reviewing gender and ethnic diversity, including the adoption of a Board Diversity Policy; and • post year-end, appointment of a new Independent Non-Executive Director. Board effectiveness: • review the independence and time commitment of the Non-Executive Directors; • review and act upon the results of the Board performance evaluation process and assess how effectively members work together to achieve objectives; and • review the interaction between the Board and its Committees. Diversity and Inclusion • oversee Diversity and Inclusion across the Group and to monitor progress made against objectives. #### Planning for Financial Year Ending 2023 • Internal Board evaluation anticipated to take place during the rst half of the 2023 nancial year. • Continued succession planning of Board and Senior Management team. • Induction of the newly appointed Independent Non- Executive Director. • Search for a further Independent Non-Executive Director with an ethnically diverse background (representative of the Baltic region). • Continued activities and monitoring around diversity. #### Dear Shareholders On behalf of the Board, I am pleased to present the Company’srstNominationCommitteeReport,forthe nancial year ending 30 April 2022. #### Board composition As part of the preparation for the Admission there was a Group corporate restructure which resulted in the incorporationofBalticsClassiedsGroupPLCandthe appointment of its full Board of Directors. The appointment process concentrated on independence, diversity and ensuring a combination of skills including listed company and committee experience to complement the Executive Directors. I am delighted to say that, as promised at the IPO, shortly after the year end we appointed a further Independent Non- Executive Director. On17May2022,JurgitaKirvaitienėwasappointedtothe Board as an additional Independent Non-Executive Director. After an extensive network search and fantastic response from our advert on our own CVBankas, we had a strong shortlist, and we are delighted to welcome Jurgita who brings extensivenancial, audit,internal auditand adiverse Board experience to BCG. The appointment of Jurgita strengthens our female representation on the Board and brings the number of Independent Non-Executive Directors to three. We feel this is a good foundation for offering a constructive challenge and independent oversight of the running of the Company. Nomination Committee Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 68 GOVERNANCE REPORT Appointment to the Board of Independent Non-Executive Director The appointment process includes the following stages: Evaluate Board composition and determine ideal capabilities of proposed appointee Advertise role and determine long list of potential candidates Rene short list of potential candidates and complete interviews Consideration and approval by Nomination Committee Consideration and approval by Board Evaluate the Board’s skills, experience, independence, diversity and knowledge and utilise this to develop a specication which reects the role and specic capabilities required. Advertise the role using open advertising and by instructing external recruitment advisors with the necessary expertise. Identify a long list of potential candidates based on, amongst other things, experience, merit and diversity. Determine a short-list and invite the potential candidates to complete a formal interview process. Interview process facilitated by various Board members but specically the Chair, Chief Executive Ocer and Audit Committee Chair. Nomination Committee to consider the short-listed candidates and feedback from the interview process from both interviewers and interviewee. Determine the preferred candidate and recommend their appointment to the Board for approval. Board to consider, and if thought t, approve the proposed appointment of the preferred candidate. Market announcement is made by the end of the next working day following the Board’s decision. TheBoardissatisedthatithastheappropriaterangeof skills, experience, independence and knowledge of the Group to enable it to effectively discharge its duties and responsibilities. Details of the key skillsand experience thattheBoardhasidentiedasvaluabletotheeffective oversight of the Group and execution of its strategy can be found on page 64. #### Diversity and Inclusion The Committee regards breadth of Board representation as a key area of focus. During the course of the year, the Committee has met to consider and approve a Board Diversity Policy and already meets the Hampton-Alexander target for 33% representation of women on theBoard. At the date of this report, the Board has 37.5% female representation. The Board commits to comply with the FCA target of 40% of women on the Board by 2024 and it already complies with the recommendation of one of the senior Board positions (in our case our CFO) being female. The Committee and the Group were proud to be acknowledgedbytheFTSE WomenLeadersReviewas among the Top Ten Best Performers within the FTSE 250 and to be number one within the Technology sector of the FTSE 350, with 33% of Executive Directors being female. Across all levels of employment, theGroup employs 49% colleagues who identify as male and 51% colleagues who identify as female. The FRCUK CorporateGovernance Code2018 (the“Code”) recommends that at least half the board of directors of a company, excluding the Chair, should comprise Non- Executive Directors whom the board considers to be independent. At the year-end, excluding the Chair, our Board was composed of three Executive Directors and three Non- Executive Directors, two of whom are Independent. Following the appointment of Jurgita, this number (excluding the Chair) is three Executive directors, three Independent Non- Executive Directors and a Non-independent Non-Executive Director. • Details of all appointments are disclosed in the Prospectus. • Biographies for each Director are available on pages 50 to 51. • For more information on the appointment of Jurgita, see the process described below. #### Skills, experience and diversity #### evaluation The Board is collectively responsible for the long-term success of the Group. The business of the Group is managed by the Board who may exercise all the powers of the Company. The Board delegates certain matters to the Board Committees, and delegates the detailed implementation of matters approved by the Board and the day-to-day operational aspects of the business to its Executive Management. Nomination Committee Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 69 GOVERNANCE REPORT The Board is aware of the recommendations of the Parker Review to include one or more Directors from a diverse ethnicbackground(asdenedbytheParkerReview)and discussions on how to improve this for the Group have begun andwill bea focus forthe nextnancial year.Ethnic diversityis anidentierforaminoritypopulationsubgroup which is broadly accepted to be a combination of national origin, racial origin, and cultural identity. It is clear that who is in a minority or majority subgroup of any population will vary by country and region and given that Baltic Classieds Group operates all business in the Baltic region, due consideration needs to be given to this and the difference to that of the UK or the US needs to be considered. We understand the FCA is introducing ‘comply or explain’ disclosure requirements for companies with nancialyears starting after April 2022, to state that at least one member of the board should be from an ethnic minority background excluding white ethnic groups (as set out in categories used by the Oce for NationalStatistics(“ONS”).Given that national minorities are recognised in Lithuania, Estonia and LatviaandtheONSstatesthatNationalityisanaspectof ethnicity;especiallywheresignicantmigrationhastaken place, we believe our starting point should be to open up the discussion of diversity further, starting with national considerations. Seegures1,2and3forthecurrentethnicitydistribution in each ofLithuania, Latvia and Estonia whichare countries relevant to the Group in terms of employees and Directors. Lithuanians Poles Russian Belarussian Ukrainian Other Latvian Russian Belarussian Ukrainian Poles Other Estonian Russian Belarussian Ukrainian Poles Other Figure 2. Latvian population by ethnicity Figure 3. Estonian population by ethnicity Figure 1. Lithuanian population by ethnicity Here we can clearly see the ethnic diversity of these countries does include white ethnic groups. In terms of openness and transparency of our Diversity and Inclusion, we feel this data is important to demonstrate both the context and the pool of resources available to the Group. Compliance with this new disclosure requirementwill not be as straight-forward for the Group as it might be for those entities located in the United Kingdom by comparison The Group will continue opening up the discussion around diversity. When considering Board appointments and hiring or promoting to leadership positions, the Group will continue to take account of its diversity targets, while seeking to ensure that each post is offered on merit. #### Induction and training Prior to Admission, the Company’s external lawyers provided all Directors with training in respect of their legal, regulatory and governance duties, responsibilities and obligations. All Directors who had not previously worked with the Group then participated in a range of meetings with members of the Senior Management team to familiarise them with the business and its strategy and goals. Equivalent arrangements will be put in place for future Board appointments. Board meetings generally include one or more presentations from Senior Management on areas of strategic focus. Specic business-relatedpresentations aregivento the Board by Senior Management and external advisors when appropriate. For our newest Board member, an induction plan has been created including 1:1 meetings with Executive Directors, and a pack of material covering Company history, business overview, Company culture, governance and nances as well as the key IPO documents prepared. #### Board evaluation As thisis therst yearoperating asa Board,the Board has decided that the most effective time to carry out a Board effectiveness review will be in the early part of the next nancialyear.TheBoardintendstocomplywiththeCode recommendation that an externally facilitated evaluation should take place at least every three years. #### Election and re-election of Directors In accordance with the Code, all Directors will offer themselves for election by Shareholders at the AGM. Both the Committee and the Board are satised that all Directors continue to be effective in, and demonstrate commitment to, their respective roles on the Board and that each makes a valuable contribution to the leadership of the Company. The Board therefore recommends that Shareholders approve the resolutions to be proposed at the 2022 AGM relating to the election of the Directors. I will be available at the AGM to answer any questions about the work of the Nomination Committee. Trevor Mather Chair of the Nomination Committee 6 July 2022 Source: Ofcial Statistics Portal of Lithuania, Ofcial Statistics Portal of Latvia, Statistics Estonia Nomination Committee Report continued ![]() The Annual Report, taken as a whole, is fair, balanced and understandable Audit Committee membership Kristel Volver - Chair - Appointed on 2 June 2021 Independent Non-Executive Director Ed Williams - Appointed on 2 June 2021 Independent Non-Executive Director Jurgita Kirvaitienė - Appointed on 17 May 2022 Independent Non-Executive Director Kristel Volver Chair of the Audit Committee “ #### Audit Committee Report 70 GOVERNANCE REPORT ▸ Committee meeting attendance can be found on page 61. ▸ Committee Terms of Reference can be found on our corporate website at: balticclassieds.com/corporate-governance. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 71 GOVERNANCE REPORT #### Key responsibilities • To assist the Board in discharging its responsibilities withregardto:nancialreporting;externaland internal audits and controls, including reviewing and monitoring the integrity of the Group’s annual and interim nancial statements. • Reviewing and monitoring the extent of the non-audit work undertaken by the External Auditor, advising on the appointment of the External Auditor, overseeing the Group’s relationship with its External Auditor, reviewing the effectiveness of the external audit process. • Reviewing the effectiveness of the Group’s internal audit, internal controls, Whistle-Blowing and fraud systems. #### Main activities during the year Since Admission on 5 July 2021 the Committee met three times and its key activities were: • Formally adopting the Committee’s Terms of Reference • Review of the Group’s progress in regards to the areas for improvement identied in the Group’s Financial Position, Prospects and Procedures Report (“FPPP”) prior to Admission. • Approving the appointment of KPMG as the Group’s External Auditor. • Discussion and approval of the Group’s approach to internal audit for 2023, development of a plan for subsequent 2 years. • Review of the Group’s GDPR , disaster recovery and cybersecurity arrangements. • Assessment of the integrity of the Group’s half- yearreport, consideringthe applicationof nancial reporting and governance standards. • Review of Management’s approach to any key judgmental areas of reporting and the related comments of the External Auditor. • InlinewiththeUKCorporateGovernanceCode2018 (the “Code”), all members of the Audit Committee are independent. The Chair of the Committee has recent andrelevantnancialexperienceandbothmembers are deemed to have competence relevant to the sector in which the Company operates. • The Committee notes the Code’s requirement for a Company of its size to have an Audit Committee membershipofthree;withJurgitaKirvaitienėjoining the Board and the Audit Committee as an Independent Non-Executive Director shortly after the year-end on 17 May 2022, the Company became compliant in this regard. • All Board members and external as well as Internal Auditors may attend meetings by invitation. • The Group’s External Auditor is KPMG. • Deloitte has been engaged to start providing internal audit serviceswhich will commencein the rsthalf of the next nancial year. #### Planning for nancial year ending April 2023 • Oversee and scrutinise the preparation of the Group’s nancialstatements fortheyearended 30April2022 and assess whether suitable accounting policies have been adopted. • Assess the Group’s going concern and viability statements. • Assess the use of Alternative Performance Measures in the Annual Report. • ConrmtotheBoardthattheAnnualReportisfair, balanced and understandable. • Develop and implement a formal policy on the engagement of the External Auditor to supply non- audit services. • Monitor and review the effectiveness of the internal audit function. • Review the effectiveness of the external auditprocess. • Review the adequacy and effectiveness of the Group’s anti-money laundering systems and controls. • Review the adequacy and effectiveness of the Group’s compliance function. • Review the Group’s internal controls systems, procedures for detecting fraud and Whistle-Blowing procedures. Audit Committee Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 72 GOVERNANCE REPORT #### Dear Shareholders IampleasedtopresenttheGroup’srstAuditCommittee report. This report provides a summary of the Committee’s role and activities for the period from Admission on 5 July 2021totheendofthenancialyearended30April2022 and sets out the work that the Committee has performed in respect of this Annual Report. In accordance with the Code, the Committee is composed entirely of Independent Non-Executive Directors and the Chair of the Company is not a member of the Audit Committee. We did not comply with the Code’s requirement to have a minimum of three members at year-end, however with Jurgita Kirvaitienė joiningtheBoard andtheAudit Committee as an Independent Non-Executive Director shortly after the year-end on 17 May 2022, we became compliantinthisregard.Ifulltherequirementfora Committeemembertohaverecentandrelevantnancial experience, and all members have competence in consumer and digital businesses. New Audit Committee members alsohaverecentandrelevantnancialexperience.The biographies of each member of the Committee are set out on pages 50 to 51. From the date of Admission on 5 July 2021 until the end of nancialyearended30April2022,therewerethreeAudit Committee meetings. All meetings were attended by both Committee members. The Group’s External Auditor, KPMG, attended two out of three Audit Committee meetings held during the nancial year. The rest of the Board attended the meetings by invitation. Both KPMG and the newly appointed Internal Auditor, Deloitte, will regularly attend future meetings as invited. The External Auditor has direct access to me as the Audit Committee Chair to raise any concerns outside of formal Committee meetings. The Committee also plans to periodically set time aside to seek the views of the External Auditor, without the presence of Management. The rstsuchmeetingtookplaceaftertheendofthenancial year ended 30 April 2022. The Committee’s Terms of Reference include: monitoring theintegrity oftheGroup’snancial reporting; effectiveness oftheinternalcontrolandinternalaudit;andthe independence and effectiveness of external audit. The Internal Audit function will be outsourced to Deloitte, who will provide the Group with specialist expertise in delivering a risk-based review programme. During the year, the main focus of the Committee was ontheapproachtowardstheinternalauditandnancial reporting. The plan for the upcoming year is to review the effectiveness of both the internal and external audit as well as reviewing the adequacy and effectiveness of certain controls and procedures within the Group. The Committee has reviewed the content in this 2022 Annual Report and considers that it explains the Group’s strategy, nancial performance and position in a way which we believe to be fair, balanced and understandable. Whilst this Audit Committee Report contains some of the matters addressed during the year, it should be read in conjunction with the External Auditor’s report starting on pages 106 to 111 and the nancial statements in general. At the 2022 AGM, Shareholders will vote on the Board’s recommendation to re-appoint KPMG as the Group’s ExternalAuditor.Duringthenancial yearending2023,the Committee will carry out a review of the effectiveness and continued independence of KPMG. #### Financial reporting The Committee is responsible for reviewing the appropriateness of the Group’s half-year report and annual nancial statements. InthepreparationoftheGroup’snancialstatementsforthe nancial year ended30 April2022, theCommittee assessed the accounting principles and policies adopted, Alternative Performance Measures used and whether Management had made appropriate estimates and judgments. In doing so, the Committee discussed Management reports and enquired into judgments made. The Committee reviewed the reports prepared by the External Auditor on the 2022 Annual Report. TheCommittee,togetherwithManagement,identied signicantareasofnancialstatementriskandjudgment as described below. Audit Committee Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 73 GOVERNANCE REPORT #### Signicant area Audit Committee action Revenue recognition Asmorefullydescribedinnote3tothenancialstatements, the Group’s revenue is derived from listing fees on the Group’splatforms,advertisingandnancialintermediation services. There are a number of different duration service packages available for customers. In line with IFRS15, the Group recognises this revenue over time based on service usage. Revenue is an area of focus, in particular the timing of recognition of revenue. The Group’s revenue is accounted over time based on service usage. The Committee reviewed the rationale and the process implemented to account for the revenue based on usage and disclosure around revenue recognition made by Management. TheCommitteewassatisedwiththeexplanationsprovided and conclusions reached in relation to revenue recognition. Going concern and viability statement The Directors must satisfy themselves as to the Group’s viabilityandconrmthattheyhaveareasonableexpectation that it will continue to operate and meet its liabilities as they fall due. The period over which the Directors have determined it is appropriate to assess the prospects of theGrouphasbeendenedasthreeyears. Inaddition,the Directors must consider if the going concern assumption is appropriate. In assessing the validity of the viability and going concern statements detailed on page 45, the Committee reviewed the work undertaken by Management to assess the Group’s resilience to the Principal Risks set out on pages 41 to 44 under various stress test scenarios. The Committee concluded that the viability time period of three years remainedappropriate. TheCommittee wassatisedthat sucientrigour wasbuilt intotheprocess toassess going concern and viability over the designated periods. Goodwill TheGrouphasasignicantbalanceofgoodwillthatarose duringacquisitionsanditisconsideredtobeasignicant estimate. An impairment review is performed of goodwill balances by the Group on a ‘value in use’ basis. This requires judgment in estimatingthe future cashows and thetime period over which they occur, arriving at an appropriate discount rate toapplytothecashowsaswellasanappropriatelong- term growth rate. Each of these judgments has an impact ontheoverallvalueofcashowsexpectedandtherefore theheadroombetweenthecashowsandcarryingvalues of the cash generating units. The Committee has reviewed the assumptions made and judgments applied by Management and, after due discussion, was content with the outcome of the impairment review. Group restructure / IPO As part of the preparation for the IPO in July 2021, the Group completedaseriesofreorganisationstepsandrenanced the external debt. Subsequent to the successful IPO, the Group has completed a number of steps to simplify its legal entity structure. The Committee reviewed the assumptions made in respect ofthe reorganisation andlegal entitysimplicationand was satised that these were appropriately accounted for under IFRS. TheCommitteehassatiseditselfthataccountingfor the Group reorganisation using common control merger accountingisappropriate.TheCommitteeisalsosatised with the disclosure and accounting policy, and the adequacy of related party disclosures. Share based payments The Company has two share-based payment arrangements, accounted for under IFRS 2. These require the use of valuation models and certain assumptions in determining their fair value at grant date and in the recognition of charges in the income statement. Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity settled share-based payment transactions. The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The Committee has reviewed the judgments made in this area by Management and, after due discussion, was content with the assumptions made and the judgments applied. The Audit Committee has also considered the opinion of KPMG as to the reasonableness of the assumptions made in estimating the share-based payment charge. Audit Committee Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 74 GOVERNANCE REPORT Is the report fair? • Is the whole story presented and has any sensitive material been omitted that should have been included? • Arekey messagesin thenarrativealigned withthe KPIsand aretheyreected inthe nancial reporting? Is the report balanced? • Do you get the same messages when reading the front end and back end of the Annual Report independently? • Are threats identied and appropriately highlighted? • Are the Alternative Performance Measures explained clearly with appropriate prominence? • Arethekeyjudgmentsreferredtointhenarrativereportingandsignicantissuesreported in this Committee Report consistent with disclosures of key estimation uncertainties and critical judgments set out in the nancial statements? • How do these judgments compare with the risks that KPMG are planning to include in their Auditor’s Report? Is the report understandable? • Is there a clear and cohesive framework for the Annual Report? • Are the important messages highlighted appropriately throughout the Annual Report? • Is the Annual Report written in easy to understand language and are the key messages clearly drawn out? • Is the Annual Report free of unnecessary clutter? Conclusion Following its review, the Committee is of the opinion that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group’s position, performance, business model and strategy. #### Fair, balanced and understandable At the request of the Board, the Committee has reviewed the content of the Annual Report and considered whether, taken as a whole, in its opinion it is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position, performance, business model and strategy. The Committee was provided with a draft of the Annual Report and the opportunity to comment where further clarity or informationshouldbeadded.Thenaldraftwasthen recommended for approval by the Board. When forming its opinion, the Committee had regard to discussions held with Management and reports received from theExternal Auditor. To aid with forming its opinion, the Committee considered the questions below. #### Internal Audit The Committee has undertaken a review of internal audit providers, with the decision made by the Committee to appoint Deloitte as the Group’s outsourced Internal Audit function. They are accountable to the Audit Committee and use a risk-based approach to provide independent assurance over the adequacy and effectiveness of the control environment. Theinternalauditplanforthenancialyearending2023 was approved by the Audit Committee held on 21 March 2022 withworkcommencing duringthe rsthalf ofthe nancialyearending2023.Itwillcoverabroadrangeof corenancialandoperationalprocessesandcontrols, focusingonspecicriskareas.TheCommitteewillreview Deloitte’s performance annually as Internal Auditor. Audit Committee Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 75 GOVERNANCE REPORT External Auditor One of the Committee’s roles is to oversee the relationship with the External Auditor, KPMG, and to evaluate the effectiveness of the service provided and their ongoing independence. The Committee received and discussed KPMG’s review of the half-year report to 31 October 2021 anditsauditofthenancialstatementsforthenancial year ended 30 April 2022. The Committee Chair met with representatives from KPMG without Management present and also with Management without representatives of KPMG present, to ensure that there were no issues in the relationship between Management and the External Auditor to be addressed. There were none. One of the Committee’s roles is to evaluate the effectiveness of audit services provided and ongoing independence. Due to the ten-month only period between Admission to listing and the publication of this report, the Committee plans to carry out a formal evaluation of the performance andeffectivenessoftheExternalAuditorinthersthalf ofthenextnancialyearoncethewholeyearauditcycle is complete. A statement will be included in the 2023 Annual Report detailing the upcoming review of KPMG. The recommendation to reappoint KPMG in the future will depend on continuing satisfactory performance and value for money. Non-audit services provided by the External Auditor The External Auditor is primarily engaged to carry out statutory audit work. There may be other services where the External Auditor is considered to be the most suitable supplier by reference to their skills and experience. The Committee is planning to develop a formal policy on the engagement of the External Auditor to supply non-audit services in the rst half of the nancial year ending 2023. Duringthenancialyearended30April2022,KPMGcharged the Group €0.1 million for audit-related assurance services, that includes fees for the half-year review. During this nancial year,KPMG alsochargedthe Group€0.8million for transaction related and other assurance services that relate to the IPO, which will not be repeated in the future. No other non-audit services were procured from KPMG during the nancial year ended 30 April 2022. Statement of Compliance: The Statutory Audit Services forLargeCompaniesMarket Investigation(MandatoryUse of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 (the “Order”) A competitive tender was carried out in 2019 and KPMG was rstappointedasstatutoryAuditorofGroup’stop holdingcompanyprecedingBalticClassiedsGroupPLC for the year ended 30 April 2020. KPMG was contracted in 2021 to provide offering and Admission related reporting accountant’s services and was also appointed as a statutory Auditor of the Company following its Admission to listing. The current external audit engagement partner is Kate Teal. The Order has applied to the Company since September 2021,whenBalticClassiedsGroupPLCenteredthe FTSE 250 index.TheCompanyconrmsitscompliance with the Order and intends to provide further information on its approach to re-tender of the audit in the Annual Report of the Company for the year ending 30 April 2023. Any recommendation by the Audit Committee in relation to the (re-) appointment of the statutory Auditor will take account of the statutory Auditors’ skills, experience and performance, and the value for money offered. #### Shareholder engagement In compliance with the Code, I will be available at the 2022 AGM to answer any questions. Kristel Volver Chair of the Audit Committee 6 July 2022 Audit Committee Report continued ![]() The Remuneration Committee believes the new remuneration approach put in place at Admission complies with best practice and serves the interests of the Company and Shareholders. Remuneration Committee membership Ed Williams - Chair - Appointed on 2 June 2021 Independent Non-Executive Director Kristel Volver - Appointed on 2 June 2021 Independent Non-Executive Director Trevor Mather - Appointed on 2 June 2021 Chair of the Board (Independent on appointment) Jurgita Kirvaitienė - Appointed on 17 May 2022 Independent Non-Executive Director Ed Williams Chair of the Remuneration Committee “ #### Directors’ Remuneration Report 76 GOVERNANCE REPORT ▸ Committee meeting attendance can be found on page 61. ▸ Committee Terms of Reference can be found on our corporate website at: balticclassieds.com/corporate-governance. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 77 GOVERNANCE REPORT #### Key responsibilities • Determines the policy for rewarding Directors and the rest of the Senior Management (the “Remuneration Policy”) and oversees how the Group implements the Remuneration Policy. • Oversees the level and structure of remuneration arrangements for Senior Management, approves share incentive plans and recommends them tothe Board and Shareholders. • Reviews workforce remuneration and related policies with the alignment of incentives and rewards with culture. #### Main activities during the year • The Committee reviewed its membership and formally adopted its Terms of Reference. • Deloitte was appointed as remuneration advisor. Deloitte is a founding member of the Remuneration Consultants Group and adheres to its Code in relation toexecutiveremunerationconsultingintheUK.The CommitteeissatisedthattheDeloitteengagement team, which provided remuneration advice to the Committee, does not have connections with Baltics ClassiedGroupPLCoritsDirectors.TheCommittee issatisedthattheadvicereceivedisobjective, independent and free of undue inuence. • The Director’s Remuneration Philosophy and Policy was approved and will be subject to a vote at the 2022 AGM. • Approval was given toawards under the Company’s Performance Share Plan shortly after Admission. • In line with the FRC UK Corporate Governance Code 2018 (the “Code”), all members of the Committee have relevant business experience. • The Chair of the Committee has previous experience chairing the Remuneration Committee of another (at the time) FTSE 250 business and has attended dozens of Remuneration Committee meetings in his capacities as CEO of Rightmove PLC and Chair of Autotrader PLC. • Executive Directors, Tom Hall (Non-ExecutiveDirector) and third-party remuneration consultants attend meetings by invitation. • No individual takes part in any decision relating to their own remuneration. Deloitte’s fees are charged on a time and materials basis. During the year, Deloitte was paid €35,523 for advice provided to the Committee. Deloitte was also contracted to provide Internal Audit services (see Audit Committee Report), but did not provide any other service to the Group during the year. #### Dear Shareholders IampleasedtopresentBalticsClassiedGroup’srst Directors’ Remuneration Report as a listed company for the nancial year ended 30 April 2022. The Directors’ Remuneration Report, as approved by the Board, comprises three parts: Part 1: Annual statement: this statement being my annual report on the activities of the Remuneration Committee during the year; Part 2: the Directors’ Remuneration Philosophy and Policy: this explains how Directors will be paid from the Admission on 5 July 2021 and will be subject to a binding vote at the 2022 AGM; and Part 3: Annual Remuneration Report: which explains how the Directors have been rewarded during the nancialyearended30April2022andanyother matters not covered in the previous two parts. It will be subject to an advisory vote at the 2022 AGM. ThenumbersinPart3areforthefullnancialyear.The Remuneration Policy relates to the ten months of this reporting period in which the Company was public. This distinction in reality makes relatively little difference to the reported numbers, as compared to if the Company had become public at the start of the nancial year. The report (excluding the Remuneration Policy (on pages 79 to 94) will be subject to advisory Shareholder approval at the 2022 AGM to be held on 28 September 2022. #### Remuneration compliance This reportcomplieswithSchedule 8 ofthe Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008, as amended in 2013 and 2018, theFRC UKCorporateGovernance Code2018and theFRC Listing Rules. Directors’ Remuneration Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 78 GOVERNANCE REPORT #### Committee composition The Remuneration Committee comprises the two Non- Executive Directors, namely Ed Williams and Kristel Volver, together with the Company Chair, Trevor Mather. Their biographies are set out on pages 50 to 51. Shortly after year end,on17May2022,JurgitaKirvaitienėwasappointedto the Board as an Independent Non-Executive Director. As intended, she also joined the Remuneration Committee (see the Nomination Committee Report on page 66). #### Context of remuneration On 5 July 2021, the Company was admitted to the premium listingsegmentoftheOcialListoftheFinancialConduct AuthorityandtotradingontheLondonStockExchange’s Main Market for listed securities. It became a constituent of the FTSE 250 in September 2021. With effect from the IPO, new remuneration arrangements were introduced covering both the Executive Directors and the other members of the Board. All full-time employees of the business, including the Executive Directors, are based in the three Baltics countries. This has a number of consequences. Firstly, it was agreed that all Board members should be compensated in line with the lower levels of remunerationprevalentinLithuania,wheremostemployees are resident, rather than in line with remuneration levels in thecountryoflisting-theUK.Secondly,comparablelocal market public companies to use for benchmarking were not available. Thirdly, while policies and reporting should be fully compliant with the UK Listing best practice,there are certain disclosures only required with regard to UK employees, such as the CEO pay ratio. We believe that all theremuneration arrangements put in placeare verymodest, reect bottomquartile levels, and further,havebeenadjusteddowntoreectLithuanian costs of living. We believe the structure of the remuneration is amongst the simplest, quite possibly the simplest, of any in the FTSE 250. Shareholders should be reassured that, while Executive Directors have not been involved in determiningtheir ownremuneration,theyhave,as signicant Shareholders themselves, been supportive of these arrangements. Therefore, in relation to our current Executive Directors and, most likely, future Executive Directors appointed from existing employees, we believe that these remuneration arrangements will be motivational. It is on these arrangements that approval for the Policy is being sought at the 2022 AGM. They are intended to last for a minimum of three years. On reading the details, you will see thattheyhaveactuallybeendesignedexplicitlyforave-year period, though any continuation would be subject to a further Shareholder vote at the 2025 AGM or before. #### Prior remuneration Prior remuneration was disclosed in the Prospectus for the IPO. No elements of remuneration prior to the IPO have carriedforwardtotheDirectors.Theirnancialinterestsin the Company are now reected solely through their holdings of Ordinary Shares in the Company and the Remuneration Policy set out here. Directors did not participate in an award of free shares made shortly after the Company’s Admission. #### Malus, clawback and minimum #### shareholding requirements The Committee reviewed the malus, clawback provisions and minimum shareholding requirements.Given these were considered best practice (or better) at the time of the Admission of the company in July 2021, and there havebeen no material changes in recommendations from advisory organisations, we considered our current policy to be appropriate. #### COVID-19 The Remuneration Committee is of the view that there was no aspect of COVID-19 which should give rise to any variation to remuneration arrangements. #### Wider employee remuneration The Committee reviews remuneration arrangements across the Company to ensure that differences from Executive DirectorsarejustiedandthatCompanyremuneration overall, is modest and appropriate. The Committee receives regular updates regarding remuneration arrangements across the Group. These updates are taken into consideration when determining the Remuneration Policy for the Executive Directors and in particular, when considering any changes to policy and increasesin the levelof xed remuneration. We can report that all remuneration for the rest of the Senior Management is structured in the same way as for Executive Directors, and that the levels of base salary and long-term incentives are, in the opinion of the Committee, modest and appropriate. The Baltic countries do not operate any government approved schemes to encourage employee share ownership. Nonetheless, the Directors believe that widespread employee share ownership is a good thing. The Board has sought to encourage this in two ways. Firstly, through a free award of shares of between €3 and €15 thousand in value depending on length of tenure, to all employees in good standing (except for the Senior Management team), following the IPO. The awards were not subject to performance criteria or holding periods. No Director was able to participate in this free award. Secondly, the PSP has been, and may continue to be used, from year-to-year to ensure that employees important to the future of the Company have a potential opportunity to establish and build an equity stake. This means that the number of employees who receive awards under the PSP every year as part of their standard remuneration, may be low. But many of those receiving an award may do so without it being part of their formal remuneration entitlement and without an expectation being set that they would receive such an award the following year. Executive Director remuneration for 2022 Executive Director remuneration for 2022 consisted entirely of a base salary (with no pension or other meaningful level of benets)and anaward undertheCompany’sPSP,its choice of mechanism for putting in place long-term incentives. These were implemented as set out in the Prospectus and no #### Part 1: Annual Statement Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 79 GOVERNANCE REPORT subsequent changes were made during 2022. The amounts are set out in Part 3 of this Remuneration Report. The Policy of the Company is not to have an annual bonus. Therefore, the Remuneration Committee has not been called upon to make any judgment as to whether criteria have been met, let alone apply discretion to any aspect of remuneration for any employee. #### Director remuneration for 2023 At IPO, base remuneration for Executive Directors was set at a lower level to help manage costs as the business transitionstobeingaUKlistedcompany.Asoutlinedin the Prospectus, the intention is that salary increases in the initial years are likely to be above the increases to the wider workforce salaries as the Executive Directors transition to salary levels determined by the Remuneration Committee to be appropriate for the long-term. The Executive Directors acceptedtherststepintheunwindingofthesalary discounts, representing increases of €25,000 for the CEO, €20,000 for the COO and €15,000 for the CFO. The schedule for the unwinding of these discounts through to 2026 is set out and explained in Part 2 of this Remuneration Report. The Committee approved a 10% increase for Executive Director base salaries after applying the unwinding of the salary discounts. This is in line with the policy of increasing Director remuneration at or below the average increase to base salaries received by the wider workforce. A 10% increase to the Chair’s remuneration was approved by the Committee, also in line with the above policy. The Board reviewed Non- Executive remuneration and increased it by 10%, maintaining alignment among all Directors. Nochanges topensionsorbenetshave beenapproved for 2023. The Committee will review every year, the basis of and targets set,fortheLongTermIncentivePlan.Theperformancetarget for 2023 awards will continue to be based on adjusted EPS 1 . Our rationale for using this measure is set out in Part 2 of this Report. #### Shareholder engagement We look forward to engaging with Shareholdersand other Stakeholders. I would welcome any feedback or comments on the Directors’ Remuneration Report. I will be available at the 2022 AGM to answer any questions, Ed Williams Chair of the Remuneration Committee 6 July 2022 The Company’s proposed Remuneration Policy (the “Policy”) is included in this section on pages 79 to 94. At the 2022 AGM to be held on 28 September 2022, a resolution to adopt the Policy will be put to Shareholders for approval. The Policy is set to apply, subject to shareholder approval through to the 2025 AGM. This Part of the report is broken into two distinct sections: Section 2.1 provides a narrative description of theprocess adopted by the Committee in developing the Policy, including the objectives the Committee set itself, the culture, beliefs and needs of the Company itself, the main challenges we encountered and the steps we took to address potential conictsofinterest.Itincludesreferencedatausedin reaching our recommendations. Section 2.2 sets out our formal Directors Remuneration Policy including the terms of employment and the actual remuneration levels which the Committee established. It differs in a number of important respects from the policy ofmostUKpubliclylistedcompanies,withthedifferences accounted for by the aims of simplicity, transparency and objectivity. To a lesser extent differences may also beinuencedbytheLithuaniancontextandthehistoryof key Executives as founders and owners. We believe any assessment of the Policy as set out in section 2.2 would stronglybenetfromreectingonthenarrativeinsection 2.1. Part 2: The Directors’ Remuneration Philosophy and #### Policy 2.1 The Process by which the #### Committee formulated the Policy Approach We decided at the outset that the remuneration approach forallDirectorswouldbebasedonLithuanianlevelsand employment practices. All three Executive Directors are based in and employed in Lithuania.The majority of employees are basedin Lithuania,whichis alsothevenue forthemajority of Board meetings. However, the business is listed in London. In comparison to theUK, remuneration in Lithuania: • is substantially lower; • has been increasing in real terms considerably faster thanintheUKastheBalticcountriesheadtowards average EClevels of wealth; and • is, at the present time at least, the subject of substantially higherination, runningat the timeof writingatover18%,signicantlyhigherthantheUK rate. As a consequence, investors should anticipate substantially lower levels of compensation, but should expect those levels to rise faster inboth nominal and realterms than in the UK. 1 Adjusted EPS in the Director’s Remuneration Report is basic EPS adjusted for M&A impact as determined by the Committee. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 80 GOVERNANCE REPORT Therst phaseof ourworkconsisted ofthreeparallelsteps: 1. Determining the objectives we sought to achieve through our approach to Executive remuneration. 2. Understanding the culture and needs of the Company, including the existing approach to remuneration. 3. Seeking base data to inform the decision as to what constitutes a responsible and reasonable level of Executive remuneration. Our overall approach to determining remuneration arrangements for the Baltics Classieds Group, as a public company, is summarised below: #### Phase 1 Determine remuneration objectives Establish the culture and needs of the business Formulate initial proposed structure and quantum of remuneration Review with remuneration advisors Discuss with CEOAgree with Executive Revise proposals and devise LTIP scheme rules Implement LTIP scheme, set targets and implement service contracts Seek base data on remuneration Identify Lithuanian plc peer group Identify Lithuanian private company remuneration Identify UK listed peer group Identify broad FTSE benchmark data Adjust benchmark data for Lithuania Select relevant benchmark data based on the Company #### Phase 2 Phase 3 Phase 4 Thersttwoofthesesteps werestraightforward;thethird was challenging. We then went on to formulate our policy and set the quantum of remuneration before discussing our proposals with the CEO.Wereected onhis feedback, beforeimplementing the Remuneration Policy, setting targets and drawing up service contracts for all the Directors. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 81 GOVERNANCE REPORT 1. Objectives We set ourselves the following objectives: 1.1 Establish an approach to, and level of, remuneration that is likely to result in BCG retaining its existing Executive team. 1.2 Establish an approach to and level of remuneration that is likely to be capable of attracting future talent, particularly should it be required at the Executive Director level. 1.3 Establish an approach which not only is consistent with the culture of the Company but actively supports the culture andneeds ofthe Company, including,for example,aligning allExecutivebenets withthe restof the organisation. 1.4 Ensure that the overall level of remuneration is modest by public company standards and is appropriate for the local living standards of the Baltics states where the executives reside and where the business is operated from, rather than the UK where the Company is listed. 1.5 Create a structure that is signicantly simpler than found in the considerable majority of public companies. 1.6 Ensure the structure and targets are aligned with the strategy of the business. 1.7 Create a structure intended to be durable and where Shareholders know what to expect over a number of years. We believe the right Executives prefer to focus at all times on what is right for the business and that continuously reopening and adjusting the approach to remuneration rarely, if ever, results in more motivated executives. 1.8 Articulate our policy in a simple and transparent way with the minimum of jargon, including expressing things wherever reasonably possible in terms of absolute values of money rather than in a series of ratios and percentages. 1.9 Conform with public company best practices in relation to protectingShareholders from excess remuneration being paid in the case of poor business performance and particularly with regard to any instances of unethical or more generally reputational damaging behaviour by Executives. This includes Director shareholding requirements, holding periods, Board discretion on payments and clawback provisions. 1.10 Settargetsthataresubject toauditable,objectiveandindependentlyveriablemeasureswithout theneedfor Board discretion or opaque formulae. 1.11 Ensure that for any given absolute level of remuneration, Executives receive it in a way that maximises its effectiveness to them in terms of making them feel valued. 1.12 Avoidasfaraspossible,approachesthatcouldgiverisetosignicantrewardstoExecutivesarisingincidental to their performance in running the business. 1.13 EnsurethatExecutives’remunerationdoes notinuence,norisaffectedpositivelyornegativelybythe decisionstheBoardtakesoncapitalpolicy(e.g.distributingorretainingcashinthebusiness;distributing through dividends or using share buy-backs). 1.14 Adopt a process in determining remuneration, and in administering remuneration, which is consistent with the focus on low costs exhibited in every other area of the business. 1.15 Ignore the impact of pre-existing equity ownership and additional equity ownership resulting from the IPO (i.e. the triggering of the private equity incentive scheme) on future reward structures and levels. Webelievewe havebeenlargely, though notentirely, successfulin fulllingtheseobjectives. Abriefself-assessment isincluded at the end of this section, though the true measure will be how it works in practice. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 82 GOVERNANCE REPORT 2. Culture and needs of the Company We identied the following features of the Company: Specically on Executive remuneration 2.1 The Company has historically adopted the same structure for remuneration across all employees, with the only exception being that a group of Senior Management participating in a long-term equity-based incentive scheme, typical of those employed by private equity owners. 2.2 Performance based incentives related to the overall performance of the business not personal performance measures. 2.3 The Company did not pay annual bonuses to any employee and, over the years, has gone to considerable effort to remove annual bonuses from companies it has acquired. 2.4 TheCompany hasabsolutelyminimal employeebenets,with thosebenetsthat doexist,open toall employees. 2.5 Awards in the private equity Management Incentive Plan were not based on Executives’ base salaries. Wider cultural factors 2.6 The Company has a relentless focus on simplicity and clarity in everything it does and is extremely cost conscious. 2.7 The Company has a history of making acquisitions in the Baltic region. Part of the acquisition process is to move employees and Executives of the acquired business into the BCG remuneration structure rapidly. 2.8 The Executives seek to be, and are expected by staff to be, exemplars of all the behaviours that they valuein others, including when it comes to remuneration. 2.9 The Executivessee theirownremuneration asa signicantcomponentof theoverall costsof thebusiness. Their remuneration caninuence thelevelof remunerationpaid totheir direct reports.They seekstrongprot growth, including from limiting the growth of the cost base. 2.10 TheCEOhasahistoryofsignicantequityownership.FollowingtheIPO,theprivateequitymanagement incentive scheme will leave the Executive Directors and other long-term employees with substantial equity in the business. In line with a high proportion of Baltic companies, receiving remuneration in the form of dividendsisanormalpartoftheremuneration,mostlikelyreectingthespeciceconomichistoryofthe region and wide differences in taxation rates on income (above 40%) and dividends (around 15%). 2.11 The Lithuaniagovernment doesnot operateany shareownership schemeswhich givefavourable treatment or which incentivise a wide range of employees to buy shares in their business. 3. Base Data We sought comparative evidence for remuneration packages from the following sources: • Comparable listed companies in the Baltics region: The only othersizeable on-line classieds business is inLatvia, isprivate andcontinuesto beownedby the founders.Evenopeningthedenitionofcomparator companies to cover all media and all technology, theonlypubliccompanyidentiedwasa€25million market capitalisation investment vehicle for investing in small software businesses. The remuneration consultants we approached also did not believe that comparable data was available. • Seeking to identify direct comparator public companies outside the Baltics region: The comparable set was limited and the remuneration packages were self-evidently excessive for BCG in its Baltics context. WethereforedecidedtouseUKdatabutadjustedfor PurchasingPowerParity(“PPP”)andaspecicdifference inrelationto theLithuaniantaxstructure.Basedon the likely market capitalisation, we looked at the average remunerationamongnon-nancialservicescompanies ranked between 251 and 350 in the FTSE index (ranging from market capitalisations of around €1.5 billion down to €0.75 billion) as at May 2021. This information is readily available publicly. The numbers were converted to Eurosandadjustedto73.3%ofUKlevelsusingtheOECD PPPratiosaveragedfortheveyearsfrom2016to2021. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 83 GOVERNANCE REPORT Anupward adjustmentof12% wasmade toreectthat Lithuaniaappliesvirtuallyallemploymentrelatedtaxesto employees and not the employer (see Note 1). Note 1 On1January2019,Lithuaniatransferred responsibility for virtually all payroll relatedtaxes and social insurance (national insurance) to the individual. The Lithuaniangovernment mandated that at the introduction of this change all base salaries should be increased by 28.9%. The result was no change to the cost to companies of employing people and no change to employees’ take-home pay, but a big difference to employee gross income. Contrasting this to Estonia and Latvia,taxesontheemployertherecanamountto up to 30% of the total cost of employment. Headline salaries are commensurately lower, even if the cost to the employer and the take home pay of the employee are the same. As 13.8% would be paidby the companyonUK basedexecutivecompensation, we adjusted up our benchmark data to be on a like- for-like basis, by 12% (being the 13.8% less the small remaining 1.77% employer deduction in Lithuania). The above process gave us the benchmark data set out in Table 1. #### Table 1 - Benchmark data FTSE 251-350 excluding nancial services InEurosadjustingforLithuaniancostofliving,benetsanddifferentapproachtoemployer/employeepayrolltaxation/social insurance CEO (€ thousands) CFO (€ thousands) COO (€ thousands) Chair 1 (€ thousands) NED (€ thousands) Audit chair (€ thousands) Remco chair (€ thousands) Single gure remuneration - Upper quartile 1,548957-18143109 - Median977635-1444077 - Lower quartile 650393-1303666 Salaries - Upper quartile 448310-18143109 - Median3992632391444077 - Lower quartile 343240-1303666 Maximum annual bonus - Upper quartile 806458----- - Median592337----- - Lower quartile 431260----- Maximum LTIP - - Upper quartile 1,019555----- - Median751438----- - Lower quartile 593361----- 1 Chair includes chairing committees Determining the benchmark level of #### compensation We took the view that therewere a number of factors likely to mean that the actual benchmark for remuneration would be at the lower end of the range for FTSE 251-350 companies (even after adjusting for Lithuanian cost of living): • The operational scale of the business, including relatively low number of employees; • Theabsenceofsignicantinternationaltravel requirements; • The relative absence of risk factors including reputational risk and the likelihood of needing to, or beingrequiredto,operateinavisiblepubliccontext; and • The culture of the Company. WealsoconsideredtheextenttowhichLithuanian Executives worked in an international market for talent. The skill set of the Executives is highly transferable within the European marketplace in amarket sector attracting a lot of interest from large technology and media companies. The Executives haveexcellent English language skills, further assisting them to operate internationally. On the other hand,givenlimiteduseofthe Lithuanian(andEstonian) languages by non-nationals, it might be hard for non- Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 84 GOVERNANCE REPORT localExecutivestobefullyeffectiveworkinginLithuania. In the end, we decided not to attempt to factor in any special considerations regarding consideration of local or international levels of remuneration beyond adjusting for Lithuanian costs of living. Ultimately,wefeltthatlowerquartileFTSE251-350 remuneration, after conversion to Euros and the overall downwardadjustmenttoreectLithuanianpurchasing parityandadjustedforthespecictaxconsideration described above, was a sensible starting point. Table 2 sets out the lower quartile CEO, CFO, Chair and Non- Executive Directors remuneration for public companies in the FTSE 251-350 expressed in Euros and with the adjustments described above. #### Table 2 - Benchmark level of compensation Based on the lower quartile bottom 100 of the FTSE 350, converted to Euros and adjusted for different approach to taxation and for purchasing power parity compensation would be: CEO (€ thousands) CFO (€ thousands) COO (€ thousands) Chair (€ thousands) NED (€ thousands) Audit chair (€ thousands) Remco chair (€ thousands) Single gure remuneration 649,9392,8-130,036,16,56,1 Salary343,0239,7218,0130,036,16,56,1 Maximum annual bonus 431,1259,9236,4---- Maximum LTIP 592,8361,0328,3---- Total maximum remuneration 1 366,9860,7782,7130,036,16,56,1 Structure of remuneration compared to #### benchmarks Remuneration for executives in the FTSE 251-350 group almost invariably consists of ve elements: 1. a base salary; 2. pension; 3. other benets; 4. an annual bonus; and 5. a Long-Term Incentive Plan (“LTIP”) We concluded that it was in the best interestsof the Company and Shareholders not to introduce a new benets package, nor a pension scheme, nor to introduce an annual bonus scheme. This decision was in accordance with the wishes of the CEO, our own assessment of the needs of the Company and our previously stated objective to be simple and transparent. In particular, our experience of annual bonus schemes, both as previous executive directors and as non-executive directors of other companies, is thatthey are the least transparent and most time-consuming aspect of executive remuneration. With the right executives they make no actual difference to executive behaviour or positive contributionto motivation.Throughsupercially aligning remuneration more closely to performance, including non-nancialperformance,inpracticewebelievethey do so poorly by comparison with long-term equity-based incentive plans. In considering a remuneration approach based on only two of the normal ve elements: • wedecidednottofactorinanyspecicrecompense to Executives for the absence of benets or pensions. We believe thatShareholders would be sympathetic at some point in the future, if the Company felt it was in the best interests of employees to offer a pension scheme, for Executive Directors to participate in such a schemeon an equalbasis with allother employees; and • we also did not attempt to formulaically adopt a higher level of long-term incentives because of the absence of an annual bonus. However, we took the view that our ultimate recommendations need not be constrained by standard salary multiples for the LTIP,providedthat theabsolutevalue oftheLTIPwas well within the normal range for FTSE 250-350 ranked companies. The Remuneration Committee therefore proposed remuneration at the levels set out in Table 3. The Remuneration Committee expects to increase remuneration for all Directors annually in line with any basic rise in employee salaries applied across the Company. We consider the use of Performance Share Plan as the basisfortheLTIPtobethemostappropriateform,inline with widespread practice. IPO-related success payments and #### awards Frequently, companies approaching an IPO put in place some form of one-off compensation, generally for one of three reasons (from the narrowest through to the broadest): 1. specically, to reectthe enormous extra workloadon key individuals, especially the CFO; 2. to reward the executive team for the success of the IPO, and specically to give the executives an initial equity stake in the business, generally in the circumstances that executives are not and would not otherwise be holders of equity stakes in the business; or Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 85 GOVERNANCE REPORT 3. to provide a retention mechanism given that in a public company environment it will normally be at least 3 years before any long-term incentives put in place as a public company will vest and 5 years before executives can actually realise the value. While we greatly appreciated the efforts of the Executive Directors and particularly the CFO, we felt that the pre- existing Management Incentive Programme (“MIP”) offered ample reward, in the form of shares in the business, to the Executives for achieving a successful IPO. Therefore, the rsttwo reasonsdidnot apply. Inconsultation withthe CEO, we formed the view that it was not necessary to put in place a scheme to “bridge” the period prior to the public company schemes being realised. The Company has very high retention rates and most employees in a scheme, should it have been implemented, would have already been with the Company for more than ten years and would have beneted from the MIP. #### Holding periods, minimum #### shareholdings, malus and clawback #### provisions We believe thatShareholders should be protected against payment for failure and particularly with regard to any improper behaviour on the part of Directors of the Company and in relation to termination of employment. We therefore have adopted best practice policies and intend to update them as thinking continues to evolve. Currently this means: • A holding period of a minimum of ve years from award of shares under the LTIP. • A minimum shareholding amount of €1 million for the CEO and €0.5 million for other Executive Directors. Where Executive Directors do not have that level of holding on appointment, they will be required to retain at least half of all future vested shares until they reach that level. • Wide ranging and lengthy malus / clawback provisions in the following circumstances: ▸ material misstatement of nancial information; #### Table 3 - Proposal for 2026 Proposal for FY2026 CEO (€ thousands) CFO (€ thousands) COO (€ thousands) Chair (€ thousands) NED (€ thousands) Audit chair (€ thousands) Remco chair (€ thousands) SID (€ thousands) Single gure remuneration -------- Salary350,0210,0280,0120,030,07,57,52,5 Maximum annual bonus -------- Maximum LTIP 700,0300,0500,0----- Total maximum remuneration 1 050,0510,0780,0120,030,07,57,52,5 Median for FTSE251-350 in Euros 2 079,31 239,7-172,447,48,68,6- ▸ serious misconduct; ▸ material failure of risk management; ▸ serious reputational damage; ▸ serious corporate failure; ▸ error in the number on shares awarded; ▸ error in calculating performance or performance calculations based of misleading data; and/or ▸ other circumstances of a similar nature at the discretion of the Non-Executive Directors. Malus and clawback provisions will apply for a period ofveyearsfromaward.Therewillbenotimelimit in applying malus / clawback provisions from actions through the legal system against Directors or through deliberate concealment of information by Executives that subsequently becomes known to the Board, subject to the provisions being implemented within two years of the completion of the legal action or the information becoming available. • Paymentonterminationislimitedtoclearlydenedand limited contractual obligations regarding base salary and notice period. In addition, the CEO’s appointment as a Director of the Company is terminable by him or the Company on 12 months’ written notice and each of the other Executive Directors’ appointments asa Director of the Company is terminable by each of them and the Company on six months’ written notice. The Company has the ability to terminate the appointment of each of the Executive Directors of the Company with immediate effect by making a payment in lieu of notice which shall consist of the fee payableto them in respect of their role as a Directorof the Company for the unexpired period of notice. The Company’s policy is not to enter into employment agreements or letters of appointment with a notice period greater than 12 months. • “Good leaver” provisions focused on allowing an open dialogue between Executives and Non-Executives, particularly asitreects retirement from thebusiness, to encourage succession planning to be done in a collaborative manner. Good leaver provisions will automatically apply in the case of death, resignation Directors’ Remuneration Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 86 GOVERNANCE REPORT through ill-health, injury or disability, and on retirement as a full-time Executive (to be tested after two years). The Remuneration Committee will also have discretion in considering someone to be a good leaver, with redundancy being the most probable circumstance in which to exercisethis discretion. In the event of someone being determined to be a “Good leaver” awards would normally be prorated for time in employment and remain subject to vesting on the normal vesting date. There is Committee discretion to allow awards to vest on leaving, taking into account performance against targets and pro-rating for time. • Holding periods post-termination or retirement will be enforced in full for two years and any pro-rata amounts in line with how they would have vested should the retired Executive still have been in employment. #### Setting of targets in the Long-Term #### Incentive Plan TheprimarybusinessstrategyoftheBalticClassieds Group is the rapid organicgrowth of revenues and prots in our core geographicalon-line classied advertising market. Therefore, it seems self-evident that the best alignment of strategy with long-term Executive compensation is broadly in the area of revenue and prot growth. We decided on balance to set 100% of the performance target based on the three-year growth in adjusted EPS. This target is strongly aligned with the strategy of the business to grow revenues rapidly in its core businesses and to do soathighprotmargins.“AdjustedEPS”intheDirector’s Remuneration Report is a basic EPS after adjustments that are likely to be restricted to those arising from mergers and acquisitions as determined by the Committee. Basic EPS is an audited number. Our reasons for preferring this over other targets (or over a mix of targets) is set out below. Ouraimisto makethe operationoftheLTIPneutral,in terms of the capital return policy of the business. This is in order to address the challenge that businesses undertaking signicantlevels ofsharebuy-backsdo so,atleastinpart, to advantage executives in long-term incentive schemes. In part, neutrality is achieved by awarding additional shares to executives equivalent to the value of dividends that would have been received on shares awarded but not vested. The other aspect is the potential of share buy-backs which boost earnings per share. In practice, we believe that the level of share buy-backs is unlikely to have a material impact on adjusted EPS over the next three-year period. Nonetheless, in setting the adjusted EPS targets we havefactored in an expectation that, in addition to paying dividends, the Company will both repay debt and buy-back shares. Should the Company buy-back shares as the result of receivingsignicantproceedsfromthedisposalofa businessorthroughtakingonsignicantadditionaldebt, to do so, we would intend to “normalise” adjusted EPS by using the number of shares outstanding prior to such an event. Should the capital policy of the business materially diverge from that assumed when setting the adjusted EPS targets, and that difference materially affects the level of vesting of thePSP, the RemunerationCommittee will reect that at the time of vesting. The adjusted earnings per share number will be extracted from our relevant accounts. In considering other potential choices of targets, we looked at a number of options in some detail and at some length. Revenue growth versus earnings per share The primary strategic goal of the business is to continue to grow revenue strongly, organically. We would not foregoanopportunitytosecureprotablerevenuegrowth opportunities simply because the new revenue might be at a lower long-term margin than the high margins on existing revenue. Nonetheless the ultimate purpose of strongrevenuegrowthistodriveprotgrowth.Hence,we consideredaprotrelatedtargetaspreferabletoapurely revenue target. Total Shareholder Return The most time and effort was spent on the extent to which the long-term targets should be aligned with shareholder value creation through the inclusion of a Total Shareholder Return (“TSR”) test. We have decided at this timenot to introduce a TSR component, though we believe relative TSR is a good measure in principle. Our reasons for not adopting a TSR component are: • diculty in identifying a meaningful peer group of companies against which to benchmark; • risk of inappropriate outcomes if benchmarked against a much wider set of companies (e.g. FTSE 250) not least because the benchmark would be expressed in GBP but BCG’s entire earnings are in Euros. Attempting to adjust for differences in exchange rates would not be simple, transparent or, most likely, audited; and • ability to achieve a key positive feature of TSR, that neutralises the effect of different capital policies, by other means (e.g. the inclusion of dividends during the period up to vesting). ESG-related targets ESG-related targets are now present in a high proportion of annual bonus schemes. The actual measures often appear to us as relatively subjective and the timeframe of 12 months is poorly aligned to the realities of speed of change in terms of many aspects of ESG (e.g. carbon emissions, gender diversity, gender pay gap). As we do not have an annual bonus scheme this issue does not affect BCG. ESG targets are starting to make an appearance in long-term incentive plans but are yet to be the norm. The Company is at an early stage in developing its ESG approach, so we considered it inappropriate to set targets that would determine Executive remuneration inthree to veyears when we had yet to even identify our priorities and areas in which we can make the biggest impact. Once we have a robust ESG framework we will reconsider including one or more ESG measures. Directors’ Remuneration Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 87 GOVERNANCE REPORT Non-nancial targets Intermsofnon-nancialtargets,our viewwasthatnooneor two single KPIs stood out as most important to the business. Our view is that managing any business is complex. There are many factors and KPIs which Executives need to take into account and the focus on each varies over time. Over a three-year timeframe material changes to individual KPIs in areas such as audience visiting the Company’s websites, the level of organic revenue growth, operating margin and even wider measures such as customer and employeesatisfaction,arelikelytobereectedinthe operating prot of the Company. In a complex world of changing priorities, we do not believe that selecting one or two additional performance measures is likely to align Executive remuneration better to Shareholder value and Stakeholder value more generally. Impact of acquisitions Acquisitions have long been a part of the strategy of the BalticsClassiedsGroup.Acquisitionshavetheabilityto distort EPS, our preferred performance measure. Where acquisitions are small relative to the size of the overall Group, we would not expect to adjust for the impact ofacquisitions.Wherean acquisitionismoresignicant relative to the size of the Group, we would seek to adjust targets to the best of our ability to make them fair to Shareholders and participants in the LTIP. #### Publication of targets Investors should expect targets to be published as part of the Annual Report published before the awards are made. The Board reserves the right not to make disclosures prior to grant where the nature of the target might be commercially sensitive or sensitive in the wider geo-political context. #### Timing and pricing of share awards #### under the long-term incentive scheme We propose to grant awards once a year. The performance target for the grant will be set and published ahead of the grant date. Inrecentyears,signicantgyrationsinshareprices have raised the question of share awards being made at articiallylowprices.TheNon-ExecutiveDirectorshave sympathy with this point of view. However, the exercise of discretion in this context by Non-Executive Directors puts them in an invidious and asymmetric position: who are they to say that the market as a whole is mispriced or that their company is being mispriced compared to other companies; why are they expected to exercise discretion on downturns (which may or may not prove to be the bottom of the market) but not exercise discretion in the instance of strong rises (which may or may not be the peak of the market). Just such a challenge currently exists given the undoubted effectoftheRussianinvasionofUkraineonBCG’sshare price. To help address this concern, the price used will be the average daily closing price of the shares in the period of the last three months before the grant date. We acknowledge that this could result in the award of a larger or smaller number of shares than would be awarded at the share price on the day of grant. However, we believe the approach is both a strong alignment with Shareholders and the best way to avoid subjectivejudgment. Though from time-to- time awards may be made at what seem like favourable (or unfavourable) prices, relative to the price on the day of the award, the continuity embedded in the approach even these out over time, the ultimate value realisation for Executives isatleastveyearsaway,andinanyevent,provided performance conditions are met, the Executive Directors will be getting shares that have a value. #### Discussion with CEO TheCEOconrmedthattheproposedstructureof remuneration was in line with the culture of the organisation. He was also strongly supportive of the provisions intended to protect the interest of Shareholders. Theonlysignicantareaofconcernwasinrelationtothe proposed base salaries. These were seen as representing a substantial addition to the cost base of the business, especially at a time when there were a number of other costs arising from being a public company. As the Company grows he felt that the proposed amounts would be less of a dragon prots,especiallyiffed ingraduallyover anumber of years. As a result, he proposed that he and his Executive Director colleaguesreceiveaverysignicantlylowerlevelofbase salary than proposed. Annual salaries could then be increased inanumberof stepsoverve yearsto reachthe levels that were supported by external data and proposed by the Remuneration Committee. ThecostofawardsunderanyLTIPwereseenaslessof an issue in terms of their impact on the cost base of the Company in that the cost would naturally be phased in over three years based on the way accounting policies determine how their costs are allocated. The Remuneration Committee indicated that they could see no basis on which they could insist Executives receive higher remuneration than Executives felt was appropriate. A phased approach, as proposed by the CEO, would result insignicantannualrisesinbasesalaryforanumberof years, something that typically received adverse comment by advisory organisations and some institutional investors. The Remuneration Committee accepted the CEO’s proposal, with the following caveats: • the Committee wished to make it explicit to Shareholders as to what the Committee considered the correct base salary levels were for the Executive Directors, even if the contractual agreement between the Company and the Executives was at a lower level. As a consequence, the Board could seek Shareholder approval to higher salary levels than those contractually agreed, to be referred to as the “standard base salary”; • a schedule be provided to Shareholders (Table 4) showing the transition from the initial post-IPO base salariesoverveyearstothe“standardbasesalary” (which would be adjusted upward each year in line Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 88 GOVERNANCE REPORT with the basic salary increases applied widely within the business). By mutual agreement between the Remuneration Committee and the Executive Directors, the transition could be completed in lessthan the ve years as set out in Table 4 and/or with larger increases in any year towards but not exceeding the standard base salary; and • the Committee felt that the proposed awards under the LTIPshould stand.Given thelong-termnature of theLTIP,thefact that awardsshouldonly vest if theCompanyhassignicantlygrown(given the adjusted EPS performance target) and the way in which accounting policy would see the costs of the LTIP“layerin”overtime,theCommitteefeltthat concerns about increased costs were less relevant to this scheme than to base salaries. Therefore, for the purposesoftheLTIP,thestandardbasesalarywould be used in relation to award levels and minimum shareholdings. #### Table 4 - Migration route to standard base salaries in 2026 FY2022 (€ thousands) FY2023 (€ thousands) FY2024 (€ thousands) FY2025 (€ thousands) FY2026 (€ thousands) Salary LTIP Max rem Salary LTIP Max rem Salary LTIP Max rem Salary LTIP Max rem Salary LTIP Max rem CEO 2507009502757009753007001,0003257001,0253507001,050 CFO 150300450165300465180300480195300495210300510 COO 200500700220500720240500740260500760280500780 Assessment of the remuneration arrangements against factors identied in the #### Corporate Governance Code 2018 (the “Code”) OurPolicyhasbeendesignedwithregardtothesixfactorslistedintheCode:clarity;simplicity;risk;predictability;proportionality; and alignment to culture. #### Clarity We believe the Policy has clarity. Aboveall,theclarityowsfrom the simplicity. Clarity is enhanced through extensive use of absolute values rather than percentage ratios. Clarity of outcome is further enhanced by reducing the need and opportunity for the Board to exercise discretion. #### Predictability Predictabilityagainowsprimarily from simplicity. The approach has been explicitly thought about in terms of a timeframe of longer than three years. As implemented, themostsignicantelement of unpredictability in terms of outcomes may prove to be the future path of the share price. #### Simplicity We believe the Policy is self- evidently simple. This starts at the highest level by only having two of whatarenormallyveelements of remuneration: we have salary and long-term incentives, we do not have otherbenets,pensions or an annual bonus. The absence of an annual bonus we consider ofparticularbenetinachieving simplicity. #### Proportionality The nature and quantum of remuneration has been considered withspecicconsiderationforthe Baltics. The Committee retains discretion to adjust for unforeseen factors, of which the most likely, in the opinion of the Committee, would be the effect of acquisitions or the effectofasignicantchangeto capital policy. We do not envisage situations where the ultimate rewards for the Executive Directors could be driven materially by any other factor than the share price. #### Risk Appropriate limits are set out in the Policy and within the plan rules. The long-term nature of what we would hope will be the majority of remuneration encourages a long-term sustainable mindset. Clawback and malus provisions fully meet with best practice. #### Alignment to culture The culture of BCG is focused on simplicity, high growth, with low costs, and a long-term ownership mind-set. We believe the Policy clearly aligns with this culture. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 89 GOVERNANCE REPORT #### Self-assessment AstheCommitteesetitselfalargernumberofmorespecicobjectivesthanthesixsetoutintheCode,wehaveattempted a simple self-assessment. Table 5 below attempts a qualitative self-assessment by the Remuneration Committee of how the resulting remuneration arrangements hold up against the objectives set at the start of the process. #### Table 5 - Self-assessment 1 Establish an approach to, and level of, remuneration that is likely to result in BCG retaining its existing Executive team Yes 2 Establish an approach to and level of remuneration that is likely to be capable of attracting future talent, particularly should it be required at the Executive Director level Probably if internal or from Baltics; probably not if recruiting internationally 3 Establish an approach which not only is consistent with the culture of the Company but actively supports the culture and needs of the Company Yes 4 Ensure that the overall level of remuneration is modest by public company standards Yes 5 Create a structure that is signicantly simpler than found in the considerable majority of public companies Yes 6 Ensure the structure and targets are aligned with the strategy of the business Yes 7 Create a structure intended to be durable and where Shareholders know what to expect over a number of years To be seen 8 Articulate our Policy in a simple and transparent way with the minimum of jargon Yes 9 Conform with public company best practices in relation to protecting Shareholders from excess remuneration being paid in the case of general poor business performance and particularly with regard to any instances of unethical or more generally, reputational damaging behaviour by Executives. This includes Director shareholding requirements, holding periods, Board discretion on payments and clawback provisions Yes 10 Set targets that are subject to auditable, objective and independently veriable measures without the need for Board discretion or opaque formulae Yes 11 Ensure that for any given absolute level of remuneration, Executives receive it in a way that maximises its effectiveness to them in terms of making them feel valued To be seen 12 Avoid as far as possible approaches that could give rise to signicant rewards to Executives arising incidental to their performance in running the business We believe so 13 Ensure that Executive remuneration does not inuence, nor is affected positively or negatively by the decisions the Board takes on capital policy Yes 14 Adopt a process in determining remuneration, and in administering remuneration, which is consistent with the focus on low costs exhibited in every other area of the business Yes 15 Ignore the impact of pre-existing equity ownership and additional equity ownership resulting from the IPO on future reward structures and levels Only partly Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 90 GOVERNANCE REPORT 2.2. Terms of Employment and Remuneration Most of the Policy has been described as part of the philosophy and process. However, in this section we aim to bring all the information on the actual terms of employment and remuneration into a single place. Executive Directors Base salary Purpose and link to strategy To retain and attract Executive Directors to deliver the strategy Operation TheCommitteehassetbasesalarybasedonave-yeartransitiontoreachtypicallower quartile non-nancial FTSE 250-350 base salaries (adjusted for LithuanianPurchasing Power Parity and approach to payroll tax) Changes normally effective from 1 May Maximum opportunity The base salary for each year will normally be as indicated in Table 4 of this report plus the application of any market adjustment applied each year to wider Company employees The Committee may make further salary adjustments in exceptional circumstances For 2022 maximums were €250,000 for CEO, €200,000 for COO and €150,000 for CFO Performance measures Not applicable Benets Purpose and link to strategy To maintain the low cost base, simplicity and consistency with other employees of the Company Operation No benets are payable Maximum opportunity Shouldbenetsbeintroducedforallemployees,ExecutiveDirectorswouldbeeligibleon the same basis OneofforongoingbenetsmaybeprovidedintheeventthatanExecutiveisrequiredto relocate or in other exceptional circumstances Performance measures Not applicable Pensions Purpose and link to strategy To maintain the low-cost base, simplicity and consistency with other employees of the Company Operation No pensions are payable Maximum opportunity Should pensions be introduced for all employees, Executive Directors would be eligible on the same basis Performance measures Not applicable Annual Bonus Purpose and link to strategy To maintain the low cost base, simplicity and consistency with other employees of the Company Operation No annual bonuses are payable Maximum opportunity The Committee does not envisage revisiting the question of annual bonuses prior to 2025 Performance measures Not applicable Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 91 GOVERNANCE REPORT Long-term Incentive Plan The Company provides its long-term incentives under a Performance Share Plan (“PSP”). Purpose and link to strategy • To retain and attract Executive Directors to deliver the strategy • The PSP aligns the interest of selected employees with those of Shareholders and may act as a retention tool • To achieve simplicity and transparency and minimise the need for the Committee to exercise discretion Operation • PSP awards are made annually in the form of conditional shares or nominal cost options. The intention is to use a share price based on the average of the dailyclosing share prices for the previous three months. Awards normally vest over a period not shorter than three years and in the case of nominal cost options would normally be exercisable up to 10 years from grant • Performance condition(s) apply and will be disclosed in the annual report prior to award. Normally 25% of awards vest for threshold level of performance • Awards will normally be subject to a further two-year holding period • The valueof dividends paidbetween grantand vestingwill accrue tothe benetof PSP participants • Exceptionally, at the discretion of the Committee, settlements may be made in cash Maximum opportunity • The maximum annual award is set by the scheme rules at 250% of base salary (with an allowance for 300% in exceptional circumstances) • The Policy for the next three years is to award an absolute value of € 700,000 for the CEO, € 500,000 for the COO and € 300,000 for the CFO • In no case would these awards represent greater than 200% of the long-term target base salary as set out in Table 4 Performance measures • The intention is to use adjusted EPS, with the Committee exercising discretion primarily inrelationtothesignicantimpactofacquisitions,demergersorvariationsinshare capital • The rules of the PSP offer discretion to the Board to vary the choice of performance measures / targets prior to setting those targets • The Committee reserves the right to adjust PSP vesting levelsif it considers that the outcome would not otherwise reect the performance of the Companyor the individual. The Committee may adjust targets, provided such changes do not make the targets materially less dicult to satisfy than envisaged at the time of award The IPO prospectus provided for an initial post-IPO award of shares, under the new PSP and with the terms for such an award materially in line with that described immediately above. The level of awards and performance targets are set out in Part 3 of this Report. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 92 GOVERNANCE REPORT Share ownership guidelines, malus and clawback Purpose and link to strategy • Help ensure Executive remuneration is aligned with the interest of Shareholders Operation • Executive Directors are expected to hold shares in the Company of at least the following values: CEO €1 million, others €0.5 million • ShouldExecutive Directorsnotholdsucientshares tomeettheguidelinethey willbe required to retain at least half of all vested shares received under any scheme • Executive Directors are expected to maintain their minimum holding for two years following their departure from the Company • Clawback provisions apply to the PSP relatingto a wide range of circumstances including material misstatement, reputational damage, misconduct, business failure, or error in setting or applying the PSP • Clawback can be applied for up to three years from vesting or until up to one year following the resolution of litigation, if longer Maximum opportunity • Not applicable Performance measures • Undercertaincircumstances,theCommitteehasthediscretiontowaivetheminimum share ownership guideline. Situations of personal hardship would be the most likely to be considered #### Employment contracts and leaving #### policy The Executive Directors are each subject to a Board appointment letter, under the law of England and Wales, and a service contract, under the law of the Republic of Lithuania. All six contracts are dated 3 June 2021. The Boardappointmentlettersareforaxed-termandthe servicecontractsarerollingcontractswithnoxedexpiry date. The Board appointment letters are terminable on written notice by either party, or earlier if employment ceases earlier under the service contracts. The notice period is 12 months for the CEO and six months for other Executive Directors. The Board appointment letters require, at the Company’s discretion, the Executive to resign from employment effective on termination of their Board appointment. The appointment letters and service contracts are available for inspection at the 2022 AGM and at the Company’s registered oce. In the event of early termination, a payment in lieu of notice may be based only for the outstanding notice period and may be paid monthly or as one or more lump sums at the discretion of the Committee. Except for instances of retirement, long-term ill-health or other compassionate reasons, payments will normally be subject to mitigation based on the individualtakingreasonable stepstond an alternative position. The Committee may make any other payments in good faith to discharge existing legal obligations or to settle claims arising from the termination. The Board appointment letters and the service contracts of Executive Directors contain provisions to secure intellectual property rights. The Board appointment letters provide for 12 months non-solicitation. The Company retains the right, at its discretion, to apply post-employment non-compete provisions for up to 12 months via the service contracts, subjecttothepaymentofasignicantproportionofthe employee’s base salary during that period (as required to have condence of enforceability in Lithuanian). ThetreatmentofleaversundertheCompany’sLong- term Incentive Plan is determined by the rules of the PSP. Outstanding awards will lapse unless the leaver is deemed by the Committee to be a “good leaver”. Death is automatically considered as a “good leaver” and awards would vest immediately subject to the Committee’s reasonable assessment of the extent to which performance criteria are likely to be met. The Committee has discretion to determine that other leavers are “good leavers”, with discretion likely to be considered in cases where the individual is leaving for reasons of retirement, redundancy, long-term illness or compassionate reasons, considered to be in good faith. The Committee will determine the basis of vesting with a presumption that vesting takes place on the same basis and against the same performance conditions as if the person had stayed and the proportion vested be adjusted pro-rata for the proportion of the vesting period during which the individual was actually employed. The normal period for exercising an option is 12 months from vesting. #### Remuneration outcomes in different #### performance scenarios The following charts illustrate how the composition of the Executive Directors’ remuneration packages varies under threedifferentperformancescenarios:belowthreshold; mid-range;and maximum,both asapercentage oftotal remuneration opportunity and as a total value. It should be noted that these scenarios are for illustrative purposes only andhave beendeterminedusing theapproachspecied intheregulations.Theyshouldnotbeconstruedasprot forecasts or a prediction of share price movements. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 93 GOVERNANCE REPORT #### Modeling of performance scenario impact on remuneration packages Assumptions: • Below threshold = xed pay only • Mid-range = xed pay plus 25% vesting under the PSP • Maximum = xed pay plus 100% PSP vesting • Maximum +share pricegrowth =xed payplus 100% PSP vesting with a 50% increase in share price applied to the PSP award Salary levels used in the illustration are agreedExecutive salariesfor2023.PSPguresreectPSPawardsthat will be granted to the Executives in 2023. Aside from the maximum + share price growth scenario, no share price increase is assumed and any dividend equivalents payable are not included. #### Recruitment Policies When determining the remuneration package for a newly appointed Executive Director, the Committee would seek to apply the following principles: • the service contract terms and notice period would be in line with that of the previous holder of that position, or the COO, in the event of it being a new role; • the package should be market competitive to facilitate therecruitmentofindividualsofsucientcalibreto lead the business. At the same time, the Committee would intend to pay no more, nor less, than it believes is necessary to secure the required talent. In practice, where an issue with existing levels of Executive Director remuneration is likely to arise is if the relevant “market” is the pan-European talent pool of on-line executive talent. However, our aspiration, and given language constraints, the more likely scenario would be that the relevant “market” is the Baltic region, with the Company itself a leading source of local talent; • we would seek to determine a remuneration package withintheexistingstructureofbasesalaryandLTIP, including conforming to the rules and limits set in the PSP rules. Should this not prove possible, we would disclose any additional components in the relevant Remuneration Report, together with our view of the implications for the remuneration of other Executive Directors and the wider workforce; • Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous employer as a result of the appointment, the Committee may offer compensatory payments or awards, in such form as the Committee considers appropriate, taking into account all relevant factors including the form of awards, expected value and vesting time frame of forfeited opportunities. The guiding principle of such an arrangement would be that such payment or awards were no more than a reasonably assessed “like-for-like” compensation. The Committee may grant awards in such circumstances relying on the exemption intheListingRuleswhich allowsforgrant of awards to facilitate, in unusual circumstances, the recruitment of an Executive Director without seeking prior Shareholder approval; • the Committee may provide assistance with relocation, with a strong emphasis of one-off costs as opposed to ongoing payments; and • in the event of the appointment of an internal candidate, pre-existing entitlements would normally be honoured. Should the employee not meet the shareholding guidelines at the time of appointment, the requirement to retain half of all vested shares until the requirement be met would only be applied to awards made subsequent to the new appointment. 0 300 600 900 1200 1500 € thousands #### CEO Below threshold 100% 303 Mid-range 63% 478 37% Max 30% 1,003 70% Max with share price growth 22% 1,353 52% 26% #### COO Below threshold 100% 242 Mid- range 66% 367 34% Max 33% 742 Max with share price growth 24% 992 50% 67% 26% #### CFO Below threshold 100% 182 Mid-range 71% 257 29% Max 38% 482 Max with share price growth 29% 632 48% 62% 23% Share price growth PSP Fixed pay Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 94 GOVERNANCE REPORT #### Wider Executives and employees Remuneration arrangements are determined throughout the Group based on the same principles as for Executive Directors. The rest of the Senior Management team does not receive annual bonuses or sales bonuses (sales bonuses exist at more junior levels). Participation in PSP is determined each year, with no employee (other than the Executive Directors) having an entitlement to participation as part of their terms of employment. The intention, initially, is to target awards to key employees, often different groups of employees each year, with the hope of creating widespread retention incentives and subsequently meaningful shareholdings. The level of awards is determined as a set of absolute amounts not percentages of salary. It would be rare for any oneindividualtoreceivesignicantlymorethan50%of base salary (and in the few cases where they do, this would typicallyreectcomparativelylower basesalariesinthe rst place). The Chair and Non-Executive Directors serve the Company on the basis of renewable letters of appointment which can be terminated by six months’ written notice by either party. No compensation is awarded ontermination.Lettersof appointment are available for inspection at the 2022 AGM and the Company’s registered oce. Consideration of the views of #### employees TheCommitteedoesnotconsultwithemployeesspecically on its Remuneration Policy for Directors. However, the Policy puts consistency in treatment as a key principle. Chair and Non-Executive Director remuneration and terms of employment Purpose and link to strategy • To enable the Company to attract and retain experienced skilled Chair and Non- Executive Directors (“NEDs”) Operation • NEDs receive a fee, paid in cash. In the case of NEDs (other than the Chair) there is a supplementary fee for chairing (but not being a member of) a Board Committee and for the Senior Independent Director • The Chair is paid a xed fee in cash • Changes normally effective from 1 May • Reasonable costs in relation to travel and accommodation are payable where supported by appropriate proof of having been incurred • TheCompanymaypayanadditionalfeesshouldtheCompanyrequiresignicant additional time commitment in exceptional circumstances • NEDs do not participate in any other form of remuneration or benets Maximum opportunity • Fees paid to NEDs are subject to consideration byand approval of the Board, Chair’s fee is subject to Committee approval • Until 2025changes are likelyto belimited toincreases inline withthe annualmarket adjustment applied widely within the Company #### Investor consultation The Committee will consider Shareholder views throughout the year and at the 2022 AGM. It intends to consult with major Shareholders in advance of making material changes. Asthisisourrstyear asacompanylistedontheLondon StockExchangewehaveundertakenspecicinvestor consultation on the Policy set out in the Report. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 95 GOVERNANCE REPORT Those parts of this report which are subject to audit have been identied as such. #### Pay and benets Implementation of policy in 2022 Component of pay Implementation forFY 2022 Base salaries • CEO: €250,000 • CFO: €150,000 • COO: €200,000 • The base salaries for Executive Directors were set at IPO. PSP • Details of the awards granted at IPO are set out on page 95. NED fees • Chair fee: €120,000 • Non-Executive Director base fee: €30,000 • Senior Independent Director: €2,500 • Audit and Remuneration Committee Chairs: €7,500 #### Single total gure for remuneration (audited) Theremuneration ofthe Directorsof theCompany duringthenancial yearended 30April2022 fortimeserved asa Director 1 is as follows: Base salary and fees 2 (€ thousands) PSP (€ thousands) Total remuneration (€ thousands) Total xed remuneration (€ thousands) Total variable remuneration (€ thousands) Executive Directors Justinas Šimkus224- 224 224- Lina Mačienė 155- 155 155- Simonas Orkinas187- 187 187- Non-Executive Directors Trevor Mather107- 107 107- Ed Williams35- 35 35- Kristel Volver41- 41 41- Tom Hall-- - -- 1 Executive Directors entered into service contracts on 3 June 2021 while Non-Executive Directors were appointed on 2 June 2021. Salary and fees in the table above are provided for the whole nancial year. 2 The annual base salaries for the CEO, COO and CFO were €250,000, €200,000 and €150,000 respectively from the Admission only. #### Part 3: Annual Remuneration Report #### PSP awards during the year (audited) Nominal cost share options granted in the year under the PSP scheme are shown below. Date of grant No. of shares granted Share price used 1 (€) Face value of award 2 (€ thousands) Multiple of salary % award vesting at threshold (% maximum) Performance period 3 CEO27 July 2021364,6111.92700280%25%1 May 2021 - 30 April 2024 CFO27 July 2021156,2621.92300200%25%1 May 2021 - 30 April 2024 COO27 July 2021260,4361.92500250%25%1 May 2021 - 30 April 2024 1 IPO share price of £ 1.65 / € 1.92 was used for the rst set of PSP awards 2 Awards are determined based on a xed monetary value 3 PSP awards will normally be eligible to vest three years from grant (27 July 2024) based on performance over the three years to 30 April 2024 and continued employment. Performance targets starting at adjusted EPS 4 for 2024 of 4 € cents per share for 25% of the award and then in a straight line to 5 € cents per share for 100% vesting. 4 Adjusted EPS in the Director’s Remuneration Report is basic EPS adjusted for M&A impact as determined by the Committee. Directors’ Remuneration Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 96 GOVERNANCE REPORT Benecially owned shares as at 30 April 2022 1 Number of awards held under the PSP conditional on performance Number of vested but unexercised nominal cost options Target shareholding guideline (€ m) Shareholding value as at 30 April 2022 2 (€ m) Executive Directors Justinas Šimkus22,737,463364,611-1.036.4 Lina Mačienė 2,269,713156,262-0.53.8 Simonas Orkinas3,444,696260,436-0.55.8 Non-Executive Directors Trevor Mather4,614,418---7.3 Ed Williams4,910,936---7.7 Kristel Volver515,151---0.8 Tom Hall----- 1 Includesshares ownedbyconnectedpersons. Onlybeneciallyowned sharescounttowardsthe shareholding guideline.Therehavebeen nochangesin share ownership between 1 May 2022 and 6 July 2022. 2 Based on the share price at close of business on 29 April 2022 of £1.32 / €1.57. #### Share interests (audited) Executive Directors are required to maintain a certain minimum level of shareholding in the Company: €1 million Euros for the CEO and €0.5 million Euros for other Executive Directors. In relation to existing Executive Directors, the minimum value of shareholding acts as a restriction on selling shares to the extent that doing so would cause the shareholding to fall below the minimum shareholding guideline. All existing Executive Directors meet their shareholding guideline. In the event of the appointment of a new Executive Director with no shares or fewer shares than the minimum shareholding guideline applied to them, they will be expected to retain at least half of any award of shares made to them by the Company that vest until the guideline is met. Non-Executive Directors do not have shareholding guidelines. Awards held under the PSP are subject to a holding period of two years after vesting. The following table sets out the number of shares held or potentially held by Directors (including their connected persons where relevant) as at 30 April 2022, or at the date of retiring from the Board. #### TSR Performance The following graph shows the 10-month TSR performance of the Company from the start of conditional share dealing on30June2021untilthenancialyear-endon 30April 2022, against the FTSE All-Share index. This peer group was selected as it represents a broad equity market index, of which the Company is a constituent. The TSR graph shows the growth in the value of a hypothetical holding of £100 invested on 30 June 2021 and will be updated yearly with the intention to build up to a 10-year rolling period in future annual reports. #### CEO remuneration The followingtable summarisesthe CEOsingle gure. This table outlines the proportion of PSP awards vesting in that year asa percentageof themaximum opportunity. Like the TSR chart, this table will be updated annually to build up to a 10-year rolling period. CEO single gure 2022 CEO total remuneration (€ thousands)224 PSP vesting (% of maximum) 1 - 1 No PSP awards vested during 2022. #### Percentage change in the remuneration As this is the rstyear of reporting Directors’ remuneration, there is no prior year comparison to disclose. Such disclosure will be included in next year’s report. Since the year-end and to the date of this Annual Report and Accounts, there have been no changes in the shareholdings shown in the table above. #### Relative importance of spend on pay The following table shows the Group’s actual spend on pay for all employees compared to distributions to shareholders. The average number of employees has also been included for context. Revenue and Adjusted EBITDA have also been disclosed as these are two key measures of Group performance. 2022 (€ thousands) Employee costs (refer note7 to the consolidated nancial statements) 8,886 Dividends paid to shareholders (refer note17 to the consolidated nancial statements) - Purchase of own shares (refer note16 to the consolidated nancial statements) 3,418 Average number of employees (refer note7 to the consolidated nancial statements) 126 Revenue (refer to Consolidated statement of protor loss and other comprehensive income) 50,959 Adjusted EBITDA (refer note6 to the consolidated nancial statements) 39,281 Directors’ Remuneration Report continued 60 90 120 150 Jun 21 Aug 21 £ value of £100 invested at 29 June 2021 Oct 21 Dec 21 Feb 22 Apr 22 Baltic Classieds Group PLC FTSEAll-Share ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 97 GOVERNANCE REPORT Migration route to standard base salaries in 2026 FY2022 (€ thousands) FY2023 (€ thousands) FY2024 (€ thousands) FY2025 (€ thousands) FY2026 (€ thousands) Salary LTIP Max remSalary LTIP Max remSalary LTIP Max remSalary LTIP Max remSalary LTIP Max rem CEO 2507009503037001,0033307001,0303587001,0583857001,085 CFO 150300450182300482198300498215300515231300531 COO 200500700242500742264500764286500786308500808 #### CEO pay ratio TheCompanyhaslessthan250employeesintheUKand therefore is not required to disclose the CEO pay ratio. #### Executive Directors’ service contracts The details of each Executive Director’ service contract are noted in the following table: Date of service contractNotice period Justinas Šimkus3 June 202112 months Lina Mačienė 3 June 20216 months Simonas Orkinas3 June 20216 months Non-Executive Directors’ terms of #### appointment The NEDs do not have service contracts with the Company but instead have letters of appointment. The date of appointment and the most recent reappointment and the length of service for each NED are shown in the following table: Date of appointment Length of service as at 2022 AGM Trevor Mather2 June 20211 year Ed Williams2 June 20211 year Kristel Volver2 June 20211 year Tom Hall2 June 20211 year Payments for loss of oce and/or #### payments to former Directors (audited) No payments forloss ofoce, norpayments toformer Directors were made during 2022. #### Executive Directors’ external #### appointments External appointments are listed on pages 50 to 51. #### How remuneration will be implemented #### for 2023 The Remuneration Committee reviewed the base salaries for Executive Directors and the fees for the Chair with regard to 2023.Ination inLithuania at thetime ofthe review was 16.6% (April 2022).The Lithuanian Department of Statistics onlyissuesaveragewageinationmeasureseverythree months, the most recent rate was 5.1% (October - December 2021). The considerable majority of employees in the business will receive a pay rise of at least 10% for 2023. The Remuneration Committee agreed to a 10% pay rise for Executive Directors on top of the phased increase in base salary explained previously. The Remuneration Committee also agreed to a 10% pay rise for the Chair. The Board proposed and agreed a 10% increasein all fees for Non- Executive Directors. Component of pay Implementation forFY 2023 Base salaries • CEO: €302,500 • CFO: €181,500 • COO: €242,000 PSP • In 2023 the Executives will be awarded the below values of three year nominal cost share options each: ▸ CEO: €700,000 ▸ CFO: €300,000 ▸ COO: €500,000 • Performance will be measured based on adjusted EPS for 2025 of 7.5 € cents for 25% to vest and then straight line to 8.5 € cents for 100% to vest NED fees • Chair fee: €132,000 • Non-Executive Director base fee: €33,000 • Senior Independent Director: €2,750 • Audit and Remuneration Committee Chairs: €8,250 As a consequence, the future base salaries for Executive Directors as they transition to public company levels, will be increased by 10% for years 2024 to 2026 and may be subject to further market adjustment. Statement of Shareholder voting at the #### 2022 AGM The Remuneration Committee welcomes feedback on an ongoing basis and this Report seeks to describe and explain our remuneration decisions clearly. ThisistherstPolicyandDirectors’RemunerationReport submitted to Shareholders. Disclosure of the voting results at the 2022 AGM will be presented in the Annual Report on Remuneration for 2023. I hope that having read the Directors’ Remuneration Report continued information in this Report, and considering the performance of the Group during the year since the IPO, you will vote in support of the Directors Remuneration Report and the Remuneration Policy at the 2022 AGM. I will be available at the 2022 AGM to answer any questions. On behalf of the Board Ed Williams Chair of the Remuneration Committee 6 July 2022 ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 98 GOVERNANCE REPORT TheDirectorsofBalticClassiedsGroupPLCpresenttheir report, together with the audited accounts for the year ended 30 April 2022. As permitted by Section 414 C(11) of the Companies Act 2006, some matters required to be included in the Directors’ Report in accordance with the Companies Act 2006 and Listing Rule 9.8.4R oftheFinancialConductAuthority’s ListingRules,haveinsteadbeenincludedintheStrategic Report. These disclosures are incorporated by reference in the Directors’ Report. The Strategic Report can be found on pages 3 to 45. #### Directors’ Report #### Directors’ Report disclosures This Directors’ Report should be read in conjunction with the Strategic Report (pages 3 to 45), which includes the ESG Report (pages 30 to 40), and the Corporate Governance Statement (page 52), which are incorporated by reference into this Directors’ Report. The Company has chosen in accordance with Section 414C (11) of the Companies Act 2006 to provide disclosures and information in relation to a number of matters which are covered elsewhere in this Annual Report and Accounts. These matters, together with those required under the 2013 Large and Medium sized Companies andGroups (Accounts and Report Regulations 2008), are cross referenced in the following table. #### Disclosure Guidance and Transparency #### Rule 4.1.8 The Strategic Report and the Directors’ Report (or parts thereof), together with sections of this Annual Report incorporated by reference, are the “Management Report” for the purposes of DTR 4.1.8 Topic Section of the report Page Fair review of the Company’s business Management Report, as dened in the Directors' Report 3 Principal risks and uncertainties Management Report, as dened in the Directors' Report 3 StrategyStrategic Report3 Business ModelStrategic Report3 Gender BreakdownSustainability Report Corporate Governance Report 30 48 Important events impacting the business Strategic Report3 Likely future developments Strategic Report3 Financial key performance indicators Financial review22 Non-nancial key performance indicators Financial review Sustainability Report 22 30 Financial instrumentsNotes to the consolidated nancial statements 116 Environmental mattersSustainability Report30 Employees with disabilities Sustainability Report30 Employee engagementS172 (1) Statement Statement of engagement with employees Corporate Governance Report 17 56 48 Engagement with suppliers, customers and others in a business relationship with the Company S172 (1) Statement Statement of engagement with employees Corporate Governance Report 17 56 48 Social, community and human rights issues Section 172(1) Statement Statement of engagement with other business relationships 17 57 Natural ResourcesSustainability Report30 Board activity and cultureCorporate Governance Report48 Board diversityCorporate Governance Report Nomination Committee Report 48 66 Directors' induction and training Board Composition, Succession and Evaluation Nomination Committee Report 62 66 Topic Section of the report Page Information Required by Listing Rules 9.8.4 (R) Directors’ interests in SharesDirectors’ Remuneration Report 76 Going concern and viability statements Strategic Report3 Long-term incentive schemes Directors’ Remuneration Report 76 Information Required by Listing Rules 9.8.6(8)\* Climate-related disclosuresThe Task Force for Climate-Related Financial Disclosure Report 31 Information Required by DTR 7.2 Corporate Governance Statement Corporate Governance Report 48 #### This Annual Report The Directors are required under the Companies Act 2006 to prepare a Strategic Report for the Company and Group. The Strategic Report contains the Directors’ explanation of the basis on which the Group preserves and creates value over the longer term and the strategy for delivering the objectives of the Group. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 99 GOVERNANCE REPORT Percentage of voting right attached to Ordinary Shares of £0.01 Nature of holding Date of notication of interest Antler EquityCo S.à r.l.35.290000Direct25 January 2022 BlackRock, Inc.10.250000Indirect30 March 2022 Kayne Anderson Rudnick Investment Management, LLC 9.006000Direct26 April 2022 Justinas Šimkus4.547493Direct6 July 2021 These gures represent the number of shares and percentage held as at the date of notication to the Company. Subsequent to the year-end, the following notications were received by the Company: Percentage of voting right attached to Ordinary Shares of £0.01 Nature of holding Date of notication of interest BlackRock, Inc.10.040000Indirect7 June 2022 The Companies Act 2006 requires that the Strategic Report must: • contain a fair review of the Group’s business and contain a description of the principal risks and uncertainties facing the Group; and • be a balanced and comprehensive analysis of the development and performance of the Group’s business duringthenancialyearandthepositionoftheGroup’s business at the end of that year, consistent with the size and complexity of the business. The information that fulls the strategic reportrequirements isset out in the Strategic Report on pages 3 to 45. The Non-Financial information statement on page 102 forms part of the Strategic Report. The Strategic Report and the Directors’ Report, together with the sections of this Annual Report incorporated by reference,have been drawn up and presented in accordance with and in reliance upon applicable English company law and the liabilities of the Directors in connection with that report shall be subject to the limitations and restrictions provided by such law. #### Corporate governance arrangements During the nancialyearended30April 2022, wehave applied the principles of good governance contained in theUKCorporateGovernanceCode2018(the“Code”).Our #### Board of Directors DetailsoftheDirectorsoftheCompanywhowereinoce during the year under review are set out on pages 50 to 51. There were no appointments to or resignations from the Board during thenancial year. #### Powers of the Directors Subject to the Company’s Articles of Association (the “Articles”), the Companies Act 2006 and any special resolution of the Company, the business of the Company is managed by the Board, who may exercise all the powers of the Company. In particular, the Board may exercise all the powers of the Company to borrow money, to guarantee, to indemnify, to mortgage or charge any of its undertakings, property, assets and uncalled capital and to issue debentures and other securities and to give security for any debt, liability or obligation of the Company or of any third party. Appointment and replacement of #### Directors The appointment and replacement of Directors is governed by theArticles, theUK Corporate Governance Code2018 (the “Code”), the Companies Act 2006 and related legislation. Appointment of Directors: Directors may be appointed by ordinary resolution of the Shareholders, or by the Board. Appointment of a Director from outside the Group is on the recommendation of the Nomination Committee, whilst internal promotion is a matter decided by the Board unless it is considered appropriate for a recommendation to be requested by the Nomination Committee. ComplianceStatement forthisnancial year2022ison page 52. Further details on how we have applied the Code can be found in the Corporate Governance Report on pages 48 to 65. #### Results and dividends ThenancialstatementssetouttheresultsoftheGroup forthenancialyearended30April2022andareshown onpage112.TheDirectorsrecommendanaldividendof 1.4 € cents per Ordinary Share, giving total dividends per Ordinary Share of 1.4 € cents for the year ended 30 April 2022.SubjecttonalapprovalbyShareholdersofthe recommendednaldividend,thedividendtoShareholders for 2022 will total €7.0 million. If approved, the Company will paythenaldividendon14October2022toShareholders on the register of members at 9 September 2022. #### Substantial Shareholders The table below shows the holdings in the Company’s issued sharecapitalwhichhadbeennotiedtotheCompany pursuant to the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules. The information below wascorrectatthedateofnotication.Itshouldbenoted that these holdings may have changed since the Company was notied. Directors’ Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 100 GOVERNANCE REPORT Pursuant to the Relationship Agreement, the Major Shareholder will be able to appoint one Non-Executive Director to the Board for so long as it (together with any of its Associates) holds voting rights over 10% or more of the Company’s issued share capital. The Major Shareholder will consult in advance with the Nomination Committee regarding the identity of any Director proposed to be nominated by it. TheMajorShareholder’s rst appointedrepresentative Director is Tom Hall. ADirector appointedby theBoard holdsoceonly untilthe next Annual General Meeting of the Company and is then eligible for reappointment. Retirement of Directors: At every Annual General Meeting of theCompany,eachDirectorshallretirefromoceandmay offer himself or herself for reappointment by the members. Removal of Directors by special resolution: The Company may, by special resolution, remove any Director before the expiration of their periodof oce. Vacationofoce: TheoceofaDirectorshallbevacated if:(i)theyresign;(ii)theirresignationisrequestedbyallof the other Directors (not fewerthan three in number);(iii) they have been suffering from mental or physical ill health and theBoardresolvesthattheirocebevacated;(iv)theyare absent without the permission of the Board from meetings of the Board (whether or not an alternative Director appointed by them attends) for six consecutive months and the Board resolvestheiroceisvacated;(v)theybecomebankrupt; (vi) theyare prohibitedby law frombeing a Director; (vii) they ceaseto beaDirectorby virtue oftheCompaniesAct2006; or (viii)they areremovedfrom ocepursuant tothe Articles. #### Directors’ indemnities and insurance TheCompanymaintainsappropriate Directors’andOcers’ liability insurance cover in respect of any potential legal action brought against its Directors. The Company has also indemnied each Director to the extentpermitted by law against any liability incurred in relation to acts or omissions arising in the ordinary course of their duties. The indemnity arrangements are qualifying indemnity provisions under the Companies Act 2006 and were in force throughout the year. #### Signicant related party agreements Atnotimeduringthenancialyearended30April2022, did any of the Directors, any close members of a Director’s family or any controlling Shareholder of the Company, have a material interest in any contract with the Company or any of its subsidiaries. There is no person with whom the Group has a contractual or other arrangement that is essential to the business of the Company. #### Share capital The Company’s authorised and issued Ordinary Share capital as at 30 April 2022 comprised a single class of Ordinary Shares. As at 6 July 2022, being the last practicable date prior to publication of this report, the Company’s issued share capital comprised 500,392,405 fully paid Ordinary Shares of £0.01 each. Details of the Ordinary Share capital and shares issued during the year canbe found in note 15to the nancial statements. Rights and restrictions attaching to #### shares The Company’s shares when issued are credited as fully paid and free from all liens, equities, charges, encumbrances and other interests. All shares have the same rights (including voting and dividend rights and rights on return of capital) and restrictions as set out in the Articles, described below. Except in relation to dividends that may have been declared and rights on liquidation of the Company, the Shareholders have norights to share inthe prots of the Company. The Company’s shares are not redeemable. However, the Company may purchase or contract to purchase any of the shares on market, subject to the Companies Act 2006 and the requirementsof the Listing Rules. Subject to the Articles of Association, the Companies Act and other Shareholders’ rights, shares in the Company may be issued with such rights and restrictions as the Shareholders may by ordinary resolution decide, or if there is no such resolution, as the Board may decide provided it does not conict with anyresolution passed bythe Shareholders. At a General Meeting of the Company held on 29 June 2021, it was resolved that following Admission the Directors be and are generally and unconditionally authorised to allot shares or grant rights to subscribe for or convert any security into shares up to an aggregate nominal amount of £166,666,666.66 and up to an aggregate nominal amount of £333,333,333.33 in connection with an offer by way of a rights issue to Ordinary Shareholders in proportion to their existing shareholdings and to holders of other equity securities as required by the rights of those securities or asthe Directors see otherwiset. The Company will,at the AGM,continue to seek authority to allot shares on the basis of the authorities sought in the 2021 General Meeting. These rights and restrictions will apply to the relevant shares as if they were set out in the Articles of Association. Subject to the Articles of Association, the Companies Act and other Shareholders’ rights, unissued shares are at the disposal of the Board. #### Restrictions on transfer of securities in #### the Company Thereare nospecic restrictions onthe transferofsecurities in the Company, which is governed by its Articles of Association and prevailing legislation, save as set out below. The transferor of a share is deemed to remain the holder until the transferee’s name is entered in the register. The Board can decline to register any transfer of any share that is not a fully paid share. The Company does not currently have any partially paid shares. The Board may also decline to register a transfer of a certiedshareunlesstheinstrumentoftransfer:(i)isduly stampedorcertiedorotherwiseshowntobeexempt from stamp duty and is accompanied by a relevant share certicate;(ii)isinrespectofonlyoneclassofshare;and (iii) if to joint transferees, is in favour of not more than four such transferees. Registrationof atransfer ofan uncertied share may be refused in the circumstances set out in the Uncertied Securities Regulations 2001. Directors’ Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 101 GOVERNANCE REPORT The Company is not aware of any agreements between Shareholders that may result inrestrictions on the transfer of securities. #### Power for the Company to buy-back its #### shares The Company proposes to seek authorisation from its Shareholders at its AGM on 28 September 2022 to purchase in the market up to 10% of its issued Ordinary Shares (excluding any treasury shares), subject to certain conditions laid out in the authorising resolution. This standard authority is renewable annually. #### Voting rights Shareholders will be entitled to vote at a general meeting whether on a show of hands or a poll, as provided in the Companies Act. Where a proxy is given discretion as to how to vote on a show of hands, this will be treated as an instruction by the relevant Shareholder to vote in the way in which theproxy decides to exercise the discretion.This is subject to any special rights or restrictions as to voting which are given to any shares or upon which any shares may be held at the relevant time and to the Articles of Association. If more than one joint holder votes (including voting by proxy), the only vote which will count is the vote of the person whose name is listed rston the register forthe share. #### Restrictions on voting Unless the Directors decide otherwise, a Shareholder cannot attend or vote at any general meeting of the Company or upon a poll or exercise any other right conferred by membership in relation to general meetings or polls if they have not paid all amounts relating to those shares which are due at the time of the meeting, or if they have been served with a restriction notice(asdenedintheArticlesofAssociation)after failure to provide the Company with information concerning interests in those shares required to be provided under the Companies Act. The Company is not aware of any agreements between Shareholders that may result in restrictions of voting rights. #### Change of control The Group’s term loan and credit facility arrangements contain provisions that, where the parties are unable to agree the implications of any change of control, on notice being given to the Group, the lenders may exercise their discretion to require repayment of a loan under the agreement concerned. #### Post-balance sheet events Details of post-balance sheet events are given in note 26 of the consolidated nancial statements. #### Articles of Association The Company has not adopted any special rules regarding the appointment and replacement of Directors or the amendment of the Articles of Association, other than as provided forunder UK company law. #### Amendment of Articles of Association The Company’s Articles may be amended by a Special Resolution of the Company’s Shareholders. The existing Articles of Association were adopted on 29 June 2021. #### Company status and branches BalticClassiedsGroupPLCistheholdingcompanyofthe Baltic Classiedsgroup ofcompanies and hasno branches. Itislisted ontheLondonStockExchange mainmarketwith a premium listing, and is registered in England and Wales (company number 13357598). #### Key Stakeholders The long-term success of the Group is dependent on its relationships with its key Stakeholders. On pages 17 to 21 we outline the ways in which we have engaged with key Stakeholders, the material issues they have raised with us, and how these issues have been taken into account in the Board’s decision-making processes. #### Statement of Engagement with #### Employees The Board recognises the importance of attracting, developing and retaining the right people. In accordance with best practice, we have employment policies in place which provide equal opportunities for all employees, irrespective of sex, race, colour, disability, sexual orientation, religious beliefs or marital status. Further information on the Board’s methods for engaging with the workforce are on page 56. #### Employees with disabilities Applications for employment by people with disabilities are given full and fair consideration bearing in mind the respective aptitudes and abilities of the applicant concerned and our ability to make reasonable adjustments to the role and work environment. In the event of existing employees becoming disabled, all reasonable effort is made to ensure that appropriate training is given and their employment within the Company continues. Training, career development and promotion of a disabled person is, as far as possible, identical to that of an able bodied person. #### Statement of Engagement with #### Suppliers, Customers and Others Details on the methods used to build strong business relationships with the Company’s suppliers, customers and partners and the effect of those interests on decision-making can be found in the Engaging with our Stakeholders section on pages 17 to 21 and the Corporate Governance Report on page 48. #### Political donations There wereno political donations during thenancial year. Directors’ Report continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 102 GOVERNANCE REPORT #### Research and development activities The Company has dedicated in-house software design and development teams, with primary focus on IT and improvements to customer interfaces. #### Greenhouse Gas Emissions In line with our commitment to transparent and best practice reporting, we have included a Sustainability report on page 30. This includes our Task Force on Climate-related Financial Disclosures (“TCFD”) and our Streamlined Energy and Carbon Reporting (“SECR”) disclosures on page 31, along with our annual GreenHouse Gas (“GHG”) emissions footprint and anintensityratioappropriateforourbusiness,whichfull the requirements of the Companies Act 2006 (Strategic and Directors’ Report) Regulations 2013. #### Future developments of the business The Group’s likely future developments including its strategy are described in the Strategic Report on pages 3 to 45. #### Going concern and viability The Group’s going concern statement is contained within the consolidatednancialstatementsonpage118.Thelong- term Viability Statement is set out on page 45. #### Annual General Meeting BalticClassiedsGroupPLC’s2022AGMwillbeheld atSaltoniškiųst.9B,LT-08105Vilnius,Lithuaniaon28 September 2022 at 11.00 am local time. The Notice of the Meeting together with explanatory notes is contained in the circular to Shareholders that accompanies the Annual Report and Accounts. In the event we receive 20% or more votes against a recommended resolution at a general meeting, we would announce the actions we intend to take to engage with our Shareholders to understand the result in accordance with the Code. We would follow this announcement with a further update within six months of the meeting, with an overview of our Shareholders’ views on the resolutions and the remedial actions we have taken. Disclosure of information to the Auditor KPMG LLP, which was appointed in2021, has expressed itswillingnesstocontinueinoceastheGroup’sAuditor and, accordingly, resolutions to reappoint it and to authorise the Audit Committee, for and on behalf of the Directors, to determine its remuneration will be proposed at the AGM. These are resolutions 13 to 14 set out in the Notice of the Meeting. In accordance with Section 418 of the Companies Act 2006, theDirectorswhoheldoceatthedateofapprovalofthis Directors’ Report conrm that, so far as they are each aware, there is no relevant audit information of which the Company’s Auditor is unaware and that each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and ensure that the Auditor is aware of such information. #### Non-nancial information statement Thefollowingtable setsoutwhereStakeholderscannd relevant non-nancialinformation withinthis AnnualReport, further to the Financial Reporting Directive requirements contained in Sections 414CA and 414CB of the Companies Act 2006. Where possible it also states where additional information can be found that supports these requirements. Reporting topic Policies and standards which govern our approach Annual Report and Accounts section reference Page Environmental N/ASustainability Report30 Employees • Whistle-Blowing Policy • Disciplinary rules and procedures policy Section 172(1) Statement Sustainability Report 17 30 Social and community matters • Modern Slavery Statement • Diversity Policy Section 172(1) Statement Sustainability Report 17 30 Respect for human rights • Modern Slavery Statement • Privacy Policy • Document Retention Policy • GDPR Policy Section 172(1) Statement Sustainability Report 17 30 Anti-bribery and corruption • Anti-Bribery and Anti-Corruption Policy • Gifts and Entertainment Policy Sustainability Report30 Business model N/A Our Business at a Glance; Our purpose, values and strategy 12 Principal risks and uncertainties • Risk register Risk Management Sustainability Report 41 30 Non-nancial KPIs N/A Market overview Financial review Sustainability Report 10 22 30 Directors’ Report continued Baltic Classieds Group PLC Annual Report and Accounts 2022 103 GOVERNANCE REPORT Statement of Directors’ responsibilities in respect of the Annual Report and nancial statements The Directors are responsible forpreparing this Annual Report andtheGroupandparentCompanynancialstatementsin accordance with applicable law and regulations. Company law requires the Directors to prepare Group and parentCompany nancial statementsfor eachnancial year. UnderthatlawtheyarerequiredtopreparetheGroupnancial statementsinaccordancewithUK-adoptedinternational accounting standards and applicable law and have elected topreparetheparentCompanynancialstatementsin accordancewithUKaccountingstandardsandapplicable law, including FRS 102 The Financial Reporting Standard applicable in theUK and Republic of Ireland. Under companylawthe Directorsmust notapprove the nancialstatementsunlessthey aresatisedthattheygive a true and fair view of the state of affairs of the Group and parentCompanyandoftheGroup’sprotorlossforthat period. In preparing each of the Group and parent Company nancial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable, relevant,reliable and prudent; • fortheGroupnancialstatements,statewhetherthey have been prepared in accordance with UK-adopted international accounting standards; • fortheparentCompanynancialstatements,state whetherapplicableUKaccountingstandardshave been followed, subject to any material departures disclosed and explained in the parent Company nancial statements; • assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related togoing concern; and • use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. The Directors are responsiblefor keeping adequate accountingrecordsthataresucienttoshowandexplain the parent Company’s transactions and disclose with reasonable accuracy at any time thenancial position of the parent Company andenable them to ensure that itsnancial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessarytoenablethepreparation ofnancialstatements that are free from material misstatement,whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Underapplicablelawandregulations,theDirectorsare also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. The Directors are responsible for the maintenance and integrityofthecorporateandnancialinformationincluded onthecompany’swebsite.LegislationintheUKgoverning thepreparationanddisseminationofnancialstatements may differ from legislation in other jurisdictions. Responsibility statement of the Direc- tors in respect of the Annual Report and nancial statements We conrmthat to the best ofour knowledge: • thenancialstatements,preparedinaccordancewith the applicable set of accounting standards, give a true and fairview of theassets, liabilities, nancialposition and prot or lossof theCompany andthe undertakings included in theconsolidation taken as a whole;and • the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group’s position and performance, business model and strategy. The Directors’ Report is approved by the Board and signed on its behalf by Justinas Šimkus Chief ExecutiveOfcer 6 July 2022 Directors’ Report continued ![]() ![]() ## FINANCIAL STATEMENTS 106 Independent Auditor's report to the members of Baltic Classieds Group PLC 112 Consolidated Statement of Prot or Loss and Other Comprehensive Income 113 Consolidated Statement of Financial Position 114 Consolidated Statement of Changes in Equity 115 Consolidated Statement of Cash Flows 116 Notes to the consolidated nancial statements 148 Company Statement of Financial Position 149 Company Statement of Changes in Equity 150 Notes to the Company nancial statements Baltic Classieds Group PLC Annual Report and Accounts 2022 106 FINANCIAL STATEMENTS Independent auditor’s report to the #### members of Baltic Classieds Group PLC 1. Our opinion is unmodied 2. Key audit matters: our assessment of risks of material #### misstatement WehaveauditedthenancialstatementsofBaltic ClassiedsGroupPLC(“theCompany”)fortheyear ended 30 April 2022 which comprise the Consolidated StatementofProtorLossandOtherComprehensive Income, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and the related notes, including the accounting policies in note 1. In our opinion: • thenancialstatementsgiveatrueandfairviewof the state of the Group’s and of the parent Company’s affairs as at 30 April 2022 and of the Group’sprot for the year then ended; • the Group nancial statements have been properly prepared inaccordance with UK-adopted international accounting standards; • theparentCompanynancialstatementshavebeen properlypreparedinaccordancewithUKaccounting standards, including FRS 102 The Financial Reporting Standard applicable inthe UK and Republic ofIreland; and Key audit matters are those matters that, in our professional judgement,wereofmostsignicanceintheauditofthe nancialstatementsandincludethemostsignicant assessed risks of material misstatement (whether or not due tofraud) identied byus, includingthose which hadthe greatest effecton:the overallauditstrategy; theallocation ofresourcesintheaudit;anddirectingtheeffortsofthe engagement team. We summarise below the key audit matter in arriving at our audit opinion above, together with our key audit procedures to address this matter and, as required for public interest entities,our results from those procedures. This matter was addressed, and our results are based on procedures undertaken, in the context of, and solely forthe purpose of, ouraudit of the nancial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on this matter. The risk (group and parent company): #### Initial Public Offering (“IPO”) and Group #### restructure – accounting treatment Refertopage73(AuditCommitteeReport),page121 (accountingpolicy)and page137 to138 (nancialdisclosures). The IPO and associated group restructure (and other • thenancialstatementshavebeenpreparedin accordance with the requirements of the Companies Act 2006. #### Basis for opinion We conducted our audit in accordance with International Standardson Auditing(UK) (“ISAs(UK)”) andapplicable law. Our responsibilities are described below. We believe thatthe auditevidencewehaveobtained isasucient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee. Wewererstappointed asstatutoryauditorby thedirectors on 17 August 2021. The period of total uninterrupted engagementis fortheonenancial year ended30April 2022.Wehavefullledourethicalresponsibilitiesunder, and we remain independent of the Group in accordance with, UK ethicalrequirements including theFRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided. ancillary transactions such as the capital reduction) are signicantunusualtransactionsintheyear.Inthegroup nancial statements,accounting forthe restructureand the IPO involved careful application of accounting treatments, such as common control transaction accounting and the presentationofcomparativeamountsasiftheUKgroup had always been in existence. In the group and parent companynancialstatements,accountingfortheIPO involved careful application of accounting treatments such as whether share issue costs are directly attributableto new shares and can be recorded within share premium, and the applicationofUKcompanylaw reliefsrelatingtocapitaland reserves. The uncommon nature of these transactions, the fact that certain steps in the IPO and restructure involved transactions with related parties, and unfamiliarity of the groupwithUKcompanylawincreasestheriskofanerror arising in the accounting for and disclosures of the IPO and group restructure. Our procedures included: • Assessment of external expert: Evaluated the competence, objectivity and independence of the expert engaged by the Group to prepare anaccounting steps paper outlining the entries to be recorded as part of the IPO and restructure process. ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 107 FINANCIAL STATEMENTS 3. Our application of materiality and an overview of the #### scope of our audit Materialityforthegroupnancialstatementsasawholewas set at €0.60m, determined with reference to a benchmark of groupprot beforetax, normalisedto excludethis year’s non-recurring costs relating to free share awards, the IPO costsandSeniorFacilityAgreementearlyrepaymentne and upfront fee write off, as disclosed in note 17 (of which it represents 3.4%). Materialityfortheparentcompanynancialstatementsasa whole was set at €0.21, which is the component materiality for the parent company determined by the group audit engagement team. This is lower than the materiality we would otherwise have determined with reference to parent company total assets, of which it represents less than 1%. In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the riskthat individually immaterial misstatements in individual account balances adduptoamaterialamountacrossthenancialstatements as a whole. Performance materiality was set at 65% of materiality for thenancialstatementsasawhole,whichequatesto £0.39m for the group and €0.13m for the parent company. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk. We agreed to report to the Audit Committee any corrected or uncorrectedidentied misstatements exceeding€0.03m, inaddition tootheridentied misstatementsthatwarranted reporting on qualitative grounds. Of the group’s 8 reporting components, we subjected 4 to full scope audits for group purposes. • Accounting analysis: Evaluated the accounting for thefollowingwithreferencetoUK-adoptedIFRSfor thegroup,FRS102fortheparentcompany,andUK company law (for both group and parent company): ▸ common control accounting for the insertion of Baltic Classieds Group PLC as thenew top company in the group ▸ shareforshareexchangetoinsertBalticClassieds Group PLC as the new top company in the group, ▸ share issue related transaction costs recorded in share premium (rather than expensed), and ▸ parent company investments in subsidiaries and the related group and parent company share capital and reserves impacts arising from the group restructure. • Tests of detail: Inspected the related legal documentation, board minutes, resolutions and other documentation to agree the amounts recorded for each step of the IPO and subsequent group re- organisation. • Tests of detail: Evaluated whether the costs recorded in share premium relatedto the issuance of new shares are directlyattributable to issuing new shares, and assessed the judgments involved in splitting costs between issuance of new shares and listing existing shares. We performed an assessment of whether an overstatement of costs deducted against sharepremium identiedthrough theseprocedures was material. • Assessing application: Assessed whether the common control and share-for-share exchange accounting treatments were applied as stated in the basis of preparation for consolidation by reconciling the opening reserves to the prior year comparatives and auditing adjustments made for the retrospective restatement of share capital and share premium. We performed an assessment of whether in the group nancialstatementsanomissionofnon-controlling interestsidentiedthroughtheseprocedureswas material, taking into account qualitative aspects of the nancial statements as a whole. • Assessing transparency: Assessed the transparency of disclosures relating to the IPO, with particular focusonequityandcashowitems,suchasshare issues and share capital reduction, common control accounting impacts and disclosure of the entries involving related parties. We performed the tests above rather than seeking to rely on any of the group’s or company’s controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our results: The results of our testing were satisfactory and we consider the accounting and disclosure of the IPO and group restructure to be acceptable. The components within the scope of our work accounted for the following percentages of the group’s results: Number of components Group revenue Group prot before tax Group total assets Audits for group reporting purposes494%87%99% Total494%87%99% Independent auditor’s report to the members of Baltic Classieds Group PLC continued Baltic Classieds Group PLC Annual Report and Accounts 2022 108 FINANCIAL STATEMENTS For the residual components, we performed analysis at an aggregated group level to re-examine our assessment that therewereno signicantrisks ofmaterialmisstatement within these. The Group team instructed component auditors as to the signicantareas tobecovered,includingthe relevantrisks detailed above and the information to be reported back. The Group team approved the component materialities, which ranged from €0.50m to €0.21m, having regard to themix ofsize andriskprole oftheGroup acrossthe components. On account of travel restrictions in place during the performance of the audit, the Group team did not visit the component auditors and instead senior members of the Group audit team held regular video conference meetings with all in scope component auditors. These meetings We considered the potential impacts of climate change onthenancialstatementsaspartofplanningouraudit. Taking into account the nature of the business operations, our risk assessment of climate change to long term assets and the solvency of the group we did not identify any risks The directors havepreparedthe nancial statementson the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group’s and the Company’s nancialpositionmeans thatthisisrealistic.Theyhave also concluded that there are no material uncertainties thatcouldhavecastsignicantdoubtovertheirabilityto continue as a going concern for at least a year from the date of approval ofthe nancialstatements (“the goingconcern period”). We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affectthe Group’sand Company’snancial resourcesor ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Group’s andCompany’savailable nancialresources and metrics relevant to debt covenants over this period were: • Major data breach caused by cyber attacks; and • The impact on growth caused by increased competition or unfavourable effects to the Baltic markets due to prolonged war in Ukraine. We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectivelyagainst thelevelof available nancialresources and covenants indicated by the Group’s nancial forecasts. Our procedures also included a critical assessment of the assumptions in the Group’s base case and downside scenarios, in particular in relation to the recent geopolitical instability in Ukraine on the economicsituation in the Baltic region (and its impact on the Group), and our knowledge of the entity and the sector in which it operates. We also involved explanation of Group audit instructions, involvement in planning audit procedures, discussing progress updates andemergingndings,reviewingoutcomesoftesting performedanddiscussingauditndings.TheGroupaudit team reviewed the audit documentation of component audits through various stages of their audits. The Group team also attended component virtual closing meetings. At thesemeetings, thendings reportedtothe Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditor. The work on 2 of the 4 components was performed by component auditors and the rest, including the audit of the parent company, was performed by the Group team. The scope of the audit work performed was predominately substantivex as we placed limited reliance upon the Group’s internal control over nancial reporting. that signicantly impactthe nancial statements of the Group or our audit. We read the disclosure of climate related information in the front half of the annual report and considered consistency with the nancial statements and our audit knowledge. compared past budgets to actual results to assess the directors’ track record of budgeting accurately. We considered whether the going concern disclosure in note 1to thenancial statements givesa fulland accurate description of the directors’ assessment of going concern, including the identied risks. Our conclusions based on this work: • we consider that the directors’ use of the going concern basis of accounting in the preparation of the nancial statements is appropriate; • wehavenotidentied,andconcurwiththedirectors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast signicant doubt on theGroup’s or Company’s ability to continue as a going concern for the going concern period; • we have nothing material to add or draw attention to in relation to the directors’ statement in Note 2 tothe GroupandNote 1tothe Companynancial statements on the use of the going concern basis of accounting with no material uncertainties that may castsignicantdoubtover theGroupandCompany’s use of that basis for the going concern period, and we found the going concern disclosure in those notes to be acceptable; and • therelatedstatementundertheListingRulessetout on page 118is materially consistent withthe nancial statements and our audit knowledge. However, as we cannot predict all future eventsor conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Company will continue in operation. 4. The impact of climate change on our audit 5. Going concern Independent auditor’s report to the members of Baltic Classieds Group PLC continued Baltic Classieds Group PLC Annual Report and Accounts 2022 109 FINANCIAL STATEMENTS 6. Fraud and breaches of laws and regulations – ability #### to detect Identifying and responding to risks of material misstatement due to fraud To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: • Enquiring of directors, the audit committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. • Reading Board and audit committee minutes. • Considering remuneration incentive schemes and performance targets for management, directors and other staff. • Using analytical procedures to identify any unusual or unexpected relationships; and • Our forensic specialists assisted us in identifying key fraud risks. This included holding a discussion with the engagement partner, engagement manager and component auditors. Wecommunicatedidentiedfraudrisksthroughoutthe audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group audit team to full scope component audit teams of relevant fraud risks identied attheGroup level and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the Group level. As required by auditing standards, and taking into account possiblepressurestomeetprottargets,weperform procedures to address therisk of management override of controls and the risk of fraudulent revenue recognition, in particular: • the risk that Group and component management may be in a position to make inappropriate accounting entries; and • the risk that C2C revenue is overstated through recording revenues in the wrong period. We did not identify any additional fraud risks. We also performed procedures including: • Identifying journal entries and other adjustments to test for all full scope components based on risk criteriaandcomparingtheidentiedentriesto supporting documentation. These included those posted to unusual accounts; • Evaluatedthebusiness purposeofsignicant unusual transactions; and • Assessing signicant accounting estimates for bias. Identifying and responding to risks of material misstatement related to compliance with laws and regulations Weidentiedareasoflawsandregulationsthatcould reasonably be expected to have a material effect on the nancialstatementsfromourgeneralcommercialand sector experience, through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. Wecommunicatedidentiedlawsandregulations throughout our team and remained alert to any indications of non-compliance throughout the audit. This included communication from the Group audit team to full-scope component audit teams of relevant laws and regulations identiedattheGrouplevel,andarequestforfullscope component auditors to report to the Group audit team any instances of non-compliance with laws and regulations that could give rise to a material misstatement at the Group level. The potential effect of these laws and regulations on the nancial statements varies considerably. Firstly, the Group is subject to laws and regulations that directlyaffectthenancialstatementsincludingnancial reporting legislation (including related companies legislation),distributableprotslegislationandweassessed the extent of compliance with these laws and regulations as part ofour procedures onthe related nancialstatement items. Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the nancial statements, forinstance through theimposition of nes orlitigation. We identied thefollowing areasas those most likely to have such an effect: data protection laws, anti-bribery, employment law, competition law, consumer protection and certain aspects of company legislation recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some materialmisstatementsinthenancialstatements,even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations Independent auditor’s report to the members of Baltic Classieds Group PLC continued Baltic Classieds Group PLC Annual Report and Accounts 2022 110 FINANCIAL STATEMENTS isfromtheeventsand transactionsreected inthenancial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. The directors are responsible for the other information presentedintheAnnualReporttogetherwiththenancial statements.Ouropiniononthenancialstatementsdoes not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, indoingso,considerwhether,basedonournancial statements audit work, the information therein is materially misstatedorinconsistentwiththenancialstatementsor our audit knowledge. Based solely on that work we have not identied material misstatements in the other information. #### Strategic report and directors’ report Based solely on our work on the other information: • wehavenotidentiedmaterialmisstatementsinthe strategic report and the directors’ report; • in our opinion the information given in those reports forthenancialyearisconsistentwiththenancial statements; and • in our opinion those reports have been prepared in accordance with the Companies Act 2006. #### Directors’ remuneration report In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. #### Disclosures of emerging and principal #### risks and longer-term viability We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging and principal risks and theviabilitystatement,andthenancialstatementsandour audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to: • thedirectors’conrmationwithinViabilitystatement (page 45) that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Emerging and Principal Risks disclosures describing these risks and how emerging risks are identied,and explaininghowthey are beingmanaged and mitigated; and • the directors’ explanation in the Viability statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualications or assumptions. We are also required to review the Viability statement, set out on page 45under the Listing Rules. Based on theabove procedures, we have concluded that the above disclosures are materiallyconsistent withthe nancialstatementsand our audit knowledge. Our work is limited to assessing these matters in the context of only the knowledge acquired during our nancial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absenceof anything to report on these statements is not a guarantee as to the Group’s and Company’s longer-term viability. #### Corporate governance disclosures We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporategovernancedisclosuresandthenancial statements and our audit knowledge. Based on those procedures, we have concluded that each ofthefollowingismateriallyconsistentwiththenancial statements and our audit knowledge: • the directors’ statement that they consider that the annualreportandnancialstatementstakenas a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of theAuditCommittee,includingthesignicantissues that the audit committee considered in relation to thenancialstatements,andhowtheseissueswere addressed; and • the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems. We are required to review the part of the Governance Statement relating to the Group’s compliance with the provisionsof theUKCorporateGovernanceCodespecied by theListing Rulesfor our review. We havenothing to report in this respect. 7. We have nothing to report on the other information in #### the Annual Report Independent auditor’s report to the members of Baltic Classieds Group PLC continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 111 FINANCIAL STATEMENTS Kate Teal (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 66 Queen Square Bristol BS1 4BE 6 July 2022 8. We have nothing to report on the other matters on which we are required to report by exception 9. Respective responsibilities 10. The purpose of our audit work and to whom we owe our responsibilities Under the Companies Act 2006, we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent Company nancialstatements andthe part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or #### Directors’ responsibilities As explained more fully in their statement set out on page 103, the directors are responsible for: the preparation of the nancial statementsincluding beingsatised thattheygive atrueandfairview;suchinternalcontrolastheydetermineis necessary toenable thepreparation ofnancial statements that are free from materialmisstatement, whether due to fraudorerror;assessingtheGroupandparentCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated togoing concern;and usingthe going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. • certain disclosures of directors’ remuneration specied by law are not made; or • we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. #### Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whetherthenancialstatementsasawholearefreefrom material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) willalways detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they couldreasonablybeexpectedtoinuencetheeconomic decisionsofuserstakenonthebasisofthenancial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities . TheCompanyisrequiredtoincludethesenancial statements in an annual nancial report prepared using the singleelectronicreportingformatspeciedintheTD ESEF Regulation. This auditor’s report provides no assurance over whether theannual nancialreport hasbeen prepared in accordance with that format. Independent auditor’s report to the members of Baltic Classieds Group PLC continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 112 FINANCIAL STATEMENTS #### Consolidated Statement of Prot or Loss #### and Other Comprehensive Income #### For the year ended 30 April 2022 Note 2022 (€ thousands) 2021 (€ thousands) Revenue550,95942,268 Other income67 Expenses6(37,349)(26,565) Operating prot 13,61615,710 Finance income81382 Finance expenses8(11,309)(13,935) Net nance costs (11,171)(13,933) Prot / (loss) before tax 2,4451,777 Income tax expense9(46)(1,870) Prot / (loss) for the period 2,399(93) Other comprehensive income/(loss)-- Total comprehensive income/(loss) for the year 2,399(93) Attributable to: Owners of the Company 2,399(93) Earnings / (loss) per share (€ cents) Basic and diluted100.49(0.02) ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 113 FINANCIAL STATEMENTS #### Consolidated Statement of Financial #### Position #### At 30 April 2022 Note 2022 (€ thousands) 2021 (€ thousands) Assets Property, plant and equipment474211 Intangible assets and goodwill11400,489416,909 Right-of-use assets12457761 Non-current assets401,420417,881 Trade and other receivables132,9702,571 Prepayments18946 Cash and cash equivalents1419,91417,115 Current assets23,07319,732 Total Assets424,493437,613 Equity Share capital155,822506,509 Own shares held16(3,418)- Capital reorganisation reserve15(286,904)(287,033) Other reserves-27 Retained earnings611,877(11,229) Total equity327,377208,274 Loans and borrowings 1882,478210,413 Deferred tax liabilities95,8448,901 Non-current liabilities88,322219,314 Current tax liabilities941,293 Loans and borrowings 183232,713 Payroll related liabilities866770 Trade and other payables194,4583,601 Contract liabilities53,1431,648 Current liabilities8,794 10,025 Total liabilities97,116229,339 Total equity and liabilities424,493437,613 These nancial statements were approved by the board of directors on 6 July 2022 and were signed on its behalf by: Justinas Šimkus Director Company registered number: 13357598 ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 114 FINANCIAL STATEMENTS #### Consolidated Statement of Changes in #### Equity #### For the year ended 30 April 2022 Note Share Capital (€ thousands) Share premium (€ thousands) Own shares held (€ thousands) Capital reorganisation reserve (€ thousands) Other reserves (€ thousands) Retained earnings (€ thousands) Total Equity (€ thousands) Balance at 1 May 202015506,452--(287,033)-(11,109)208,310 Loss for the period -----(93) (93) Other comprehensive income ------- Total comprehensive income -----(93)(93) Issuance of preference shares 1557----- 57 Transfer to reserves----27(27) - Balance at 30 April 2021506,509--(287,033)27(11,229)208,274 Prot for the period -----2,399 2,399 Other comprehensive income ------- Total comprehensive income -----2,3992,399 Transactions with owners: Group restructure and IPO 1575,26543,143-129(27)- 118,510 Transfer arising from capital reduction 15(575,956)(43,143)---619,099- Share issue post IPO154----(4)- Share based payments23-----1,612 1,612 Purchase of shares for performance share plan 16--(3,418)--- (3,418) Balance at 30 April 20225,822-(3,418)(286,904)-611,877327,377 ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 115 FINANCIAL STATEMENTS #### Consolidated Statement of Cash Flows #### For the year ended 30 April 2022 Note2022 (€ thousands) 2021 (€ thousands) Cash ows from operating activities Prot / (loss) for the period 2,399(93) Adjustments for: Depreciation and amortisation616,89416,966 Amortisation of up-front fee and borrowing costs85,580938 Impairment loss on trade receivables135923 (Prot) / Loss on property, plant and equipment disposals -20 Taxation9461,870 Net nance costs 85,60612,997 Share-based payments231,612- Other non-cash items93- Working capital adjustments: (Increase) in trade and other receivables(521)(452) (Increase) / Decrease in prepayments(128)158 Increase in trade and other payables966252 Increase in contract liabilities1,495387 Cash generated from operating activities 34,10133,066 Corporate income tax paid(4,403)(3,420) Interest and commitment fees paid(8,870)(12,950) Net cash inow from operating activities 20,82816,696 Cash ows from investing activities Acquisition of intangible assets and property, plant and equipment(433)(78) Proceeds from sale of property, plant and equipment-75 Acquisition of subsidiaries, net of cash acquired-(25,000) Other investments-(11) Net cash used in investing activities(433)(25,014) Cash ows from nancing activities Proceeds from issuance of share capital15121,33957 Proceeds from loans and borrowings1896,65015,000 Repayment of loans and borrowings18(228,295)(10,000) Capitalised borrowing costs(677)- Payment of lease liabilities(305)(339) Share issue related expenses15(2,874)- Purchase of own shares for performance share plan16(3,418)- Net cash from nancing activities (17,580)4,718 Net cash inow from operating, investing and nancing activities 2,815(3,600) Differences on exchange(16)- Net Increase / (Decrease) in cash and cash equivalents 2,799(3,600) Cash and cash equivalents at the beginning of the year17,11520,715 Cash and cash equivalents at the end of the year19,91417,115 Baltic Classifieds Group PLC Annual Report and Accounts 2022 116 FINANCIAL STATEMENTS #### Notes to the consolidated nancial #### statements 1. General information Baltic Classifieds Group PLC(the“Company”)isaCompanyincorporatedintheUnitedKingdomanditsregisteredoceis HighdownHouse,YeomanWay,Worthing,WestSussex,UnitedKingdom,BN99 3HH(Companyno.13357598).Theconsolidated nancial statementsas atand for theyear ended30 April 2022comprise theCompany and itssubsidiaries (togetherreferred to asthe “Group”).The principalbusinessof theGroupis operatingleadingonlineclassieds portals forautomotive,real estate, jobs and services, and general merchandise in the Baltics. 2. Principles of preparation of consolidated nancial #### statements Theseconsolidatednancialstatementshave beenpreparedasat,andfortheyear ended30April2022.Theseconsolidated nancialstatements,whichhavebeenaudited,havebeenpreparedinaccordancewiththeDisclosureGuidanceandTransparency Rules of the Financial Conduct Authority and with UK-adopted international accounting standards (“UK-adopted IFRS”). TheGroupnancialstatementsconsolidatethoseoftheCompanyanditssubsidiaries(togetherreferredtoasthe“Group”). The parentcompany nancial statementspresent information aboutthe Company asa separate entityand not aboutits group. TheGroupnancialstatementshavebeenpreparedandapprovedbytheDirectorsinaccordancewithUK-adoptedIFRS.The Company has electedto prepare its parent company nancial statementsin accordance with FRS 102; theseare presented on pages 148 to 155. BalticClassiedsGroupPLCwas incorporatedon26April2021 andon 5July2021was admittedtotradingonthe LondonStock Exchange. At the same time as the Admission, the Company acquired 88.42 per cent of the share capital of ANTLER TopCo S.à r.l and100%of ANTLER ManagementS.A.thatowned theresidual11.58%ofthe share capitalofANTLERTopCo S.àr.l inashare for shareexchange, thereby insertingBaltic ClassifiedsGroup PLC asthe Parent Companyof theGroup thatincludes ANTLER MidCo S.à r.l. ThesearetherstsetofconsolidatednancialstatementsoftheCompany.Byapplyingtheprinciplesofcommoncontrol accounting, this group reorganisation has been accounted for as a business combination outside of the scope of a business combinationasdenedunderIFRS3.Bookvalueaccountinghasbeenadopted,meaningthatthecarryingvaluesofassets and liabilities ofthe parties to thecombination were not adjusted tofair value on consolidation, and theresults and cashows ofANTLERTopCoS.àr.l.andBalticClassiedsGroupPLCwerebroughtintotheconsolidatednancialstatementsofBaltic Classieds Group PLC as if Baltic Classieds Group PLC had always owned ANTLER TopCo S.à r.l. Thecomparativenancialinformationfortheyearended30April2021aretheconsolidatedresultsofANTLERTopCoS.àr.l. (seebelow).TheyconstitutethenancialstatementsofANTLERTopCoS.a.r.l,ANTLERPIKCoS.ar.landtheconsolidated nancial statementsof ANTLER MidCoS.à r.l..The consolidatednancial statements ofANTLER MidCo S.àr.lwere presented as part of the Prospectus submitted as part of the Admission. As the comparative information presented in these consolidated nancialstatementsalso includesANTLER TopCoS.a.r.l andANTLERPIKCo S.ar.lthereareimmaterialdifferencesbetweenthis nancial information and thatpreviously presented as part of the Prospectus. Theapplication of UK-adopted IFRS (rather than IFRSs as adoptedfor use in the EU)did not requireany adjustment to the nancialinformation related to ANTLER MidCo S.à r.l. BalticClassiedsGroupPLChasadoptedthenancialreportingframeworkofthegroupbelowit,whichhaspreviouslypresented nancial statementsunder EU adopted InternationalFinancial Reporting Standardsand given thereare no differences between the UKand EUadopted InternationalFinancial ReportingStandards, theGroupdoes notconsider itselfto bea rsttime adopter of UK-adopted IFRS. Theaudited consolidatednancial statementsofANTLER MidCoS.a.r.lfor nancialyearended 30April2021 areavailable on requestfrom theCompany’s registered oce.Historic FinancialInformationin respectof ANTLER MidCoS.a.r.l isalso available in Part B of the Prospectus submitted as part of Admission which can be found on the Company’s website. Thecomparativeguresfor thenancialyearended30 April2021arenotthestatutory accountsofBalticClassieds Group PLC for that nancial year as this is the rst set of nancial statements. Baltic Classieds Group PLC Annual Report and Accounts 2022 117 FINANCIAL STATEMENTS #### Basis of measurement Theseconsolidatednancialstatementshavebeenpreparedonthehistoricalcostbasis,unlessotherwisestatedinthe accounting policies below. #### Basis of consolidation Subsidiaries are entities controlled by the Group. Control exists when the Group has existing rights that give it the ability to direct the relevant activities of an entity and has theability to affect the returns the Group will receive as a result of its involvement with the entity. In assessing control, potential voting rights are taken intoaccount. The nancial statements of subsidiaries are included in the consolidated nancial statements from the date that control commences until the date that control ceases. #### Functional and presentation currency These consolidatednancial statements arepresented in Euro (€), whichis the Company’s functionalcurrency. All amounts are rounded to the nearest thousand (€ 000), except where otherwise indicated. The Group companies use Euro (€) as a functional currency considering the nature of the Group companies’ revenue, costs, and debt instruments.The Company and itsdirect subsidiary BCGHoldco Limited areUK based companies andtheir share capital is denominated in British pound (£). All equity transactions of these companies that took place during the year ended 30 April 2022 as well as a majority of operating expenses incurred are in British pound (£). However, while being the ultimate holding companies, Baltic ClassiedsGroup PLC andBCG Holdco Limited follow thefunctional currency oftheir operating subsidiaries, i.e.Euro (€),asthatisthecurrency theyaremostexposed to.Therewerenosignicant transactionsincurrenciesotherthan Euro (€) during the preceding nancial year ended 30 April 2021. #### Use of estimates and judgments The preparation ofthe consolidated nancialstatements, in accordance withUK-adopted IFRS,requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised or in any future periods affected. Estimates The below accounting estimate is considered to be critical to the reporting of results of operations and nancial position: • Carrying values of goodwill. An impairment review is performed of goodwill balances by the Group on a ‘value in use’ basis.Thisrequiresjudgmentinestimatingthefuturecashows,thetimeperiodoverwhichtheyoccur,andinarriving atan appropriatediscount rateto applytothe cashowsaswell asan appropriatelongterm growthrate. Eachofthese judgments has an impact on the overall value of cashows expected and therefore the headroom between the cashows and carrying values of the cash generating units. Key assumptions and uncertainties for impairment are disclose in note 11. Other important estimates: • Useful lives of intangible assets. A useful life is assigned to an acquired intangible asset based on the estimated period of time an asset is likely to remain in service. This judgement has an impact on the amortisation expense for any given period. Useful lives of intangible assets are disclosed in note 3. • Share-based payments. Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions.The fair value of services received in return forshare options is calculated with reference to the fair value of the award on the date of grant. Black-Scholes model has been used to calculate the fair value and the Directors have therefore made estimates with regard to the inputs to that model and the period over which the share award is expected to vest (see note 23). Judgments The below judgment is also considered to be important to the reporting of results of operations and nancial position: • Deferred tax asset. An unrecognised deferred tax asset of €3.9m (30 April 2021: €4.0m) has not been recognised in relation totaxlossesincurredbytheCompany’sindirectsubsidiaryUABAntlerGroup.Deferredtaxassetsarerecognisedonly totheextentthatitisprobablethatfuturetaxableprotswillbeavailableagainstwhichthetemporarydifferencescan beutilised.Recognition,therefore,involvesjudgementregardingtheprobabilityoffuturetaxableprotoftheindirect subsidiary being available. Taxable losses carried forward for which no deferred tax asset is recognised are discussed in note 9 (d). Notes to the consolidated nancial statements continued 2. Principles of preparation of consolidated nancial statements continued Baltic Classieds Group PLC Annual Report and Accounts 2022 118 FINANCIAL STATEMENTS #### Going concern The Directors have made an assessment of theGroup’s ability to continue as a going concern covering a period of at least 12 months from the date of approval of these consolidated nancial statementsand has a reasonable expectation that the Group has adequate resources to continue in operational existence over this period. The Group meets its day-to-day working capital requirements from cash balances, if needed the Group also has access to a revolving credit facility that amounts to €10m and is available until July 2026. As at 30 April 2022 no amounts of the revolving credit facility were drawn down. The bank loan matures in July 2026 and its availability is subject to continued compliance with certain covenants, it becomes repayable on demand in the case of a change in control. The Group voluntarily repaid €14m of the loan during the FY 2022, the outstanding balance at the year end amounts to €84m. The Group had cash balances of €19.9m at the year end. During thenancial yearended 30April 2022the Group hasgenerated aprot of€2.4m, however itwas highlyaffected by the one-off IPOand Free Share Awards related expenses(note 6). TheDirectors also prepared detailedcash owforecasts for the periodending12monthsfromthedateofapproval oftheseconsolidatednancialstatements.Theassumptionsusedinthe cashow forecastsarebased ontheGroup’shistorical performanceand theDirectors’experienceof theindustry andtakesinto account both internal and external factors. Stress case scenarios have been modelled to make the assessment of going concern to take into account severe but plausible potential impacts of a major data breach, adverse changes to the competitive environment and a continuing geopolitical tensions in the neighbouring countries. The stress testing indicates that the Group would be ableto withstand the impact, remain cash generative and be able to continue to comply with debt covenants for the assessment period. Consequently,the Directors are condent that theGroup will have sucient fundsto continue to meetits liabilities as they fall dueforatleast12monthsfromthe dateofapprovaloftheseconsolidatednancialstatementsandtherefore haveprepared these consolidated nancial statements on a going concern basis. #### Effective new standards as at 1 May 2021 Thefollowing amendmentstostandardshavebeenadoptedby theGroupfor thersttimefor thenancialyear beginningon 1 May 2021: • COVID-19-Related Rent Concessions (Amendment to IFRS 16); • Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). The adoption of these amendments has had no material effect on the Group’s consolidated nancial statements. #### Standards issued but not yet effective There are a few amendments to IFRSthat have been issued by the IASB that become mandatory in a subsequent accounting periods including: • Reference to the Conceptual Framework (Amendments to IFRS 3); • Property, Plant and Equipment – Proceeds before Intended Use (Amendments to IAS 16); • Onerous Contracts – Cost of Fullling a Contract (Amendment to IAS 37); • Annual Improvements to IFRS Standards 2018-2020; • Classication of Liabilities as Current or Non-Current (Amendments to IAS 1); • IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts; • Denition of Accounting Estimates (Amendments to IAS 8); • Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2); • DeferredTaxrelated toAssets andLiabilities arising froma SingleTransaction(Amendments to IAS 12)(not yetendorsed by EU). TheGrouphasevaluatedthesechanges,andnoneareexpectedtohaveasignicantimpactontheseconsolidatednancial statements. Notes to the consolidated nancial statements continued 2. Principles of preparation of consolidated nancial statements continued Baltic Classieds Group PLC Annual Report and Accounts 2022 119 FINANCIAL STATEMENTS 3. Signicant accounting policies The Grouphas consistently appliedthe accountingpolicies to allthe periods presentedin these consolidatednancial statements. #### Revenue Revenue ismeasured basedonthe considerationspecied inacontract withacustomer andis recognisedatthe pointwhen the performance obligationsare satised.The Groupapplies theve-step revenuerecognition modelin accordancewith IFRS 15 as follows. (a) Identication of the contract with a customer (b) Identication of performance obligations (c) Determination of the transaction price (d) Allocating the transaction price to individual performance obligations (e) Recognition of revenue when performance obligations are satised TheGroup’s revenue streamsinclude listingsrevenue, advertisingrevenue, nancialintermediationandancillary revenue.The different types of services offered to customers along with the nature and timing of satisfaction of performance obligations are set as follows: Listing fees The Groupoperates leadingonlineclassieds portalsfor automotive,real estate,jobs andservices,and generalmerchandise. Listing fees revenue is generated from both private (“C2C”) and business customers (“B2C”). Private customers pay a fee in advance to advertise their product (automotive, real estate, general merchandise) on the Group’s platformforaspeciedperiod.Revenueisdeferreduntilthecustomerobtainscontrolovertheservices.Controlisobtained by customers across the life of thecontract as their product is continuously listed. Contracts for these services are typically entered into for a period of between a day and a year. Business customers pay fees to obtain a “service pack” which allows the customer to advertise a set number of listings during a period, unused listings cannot be rolled over. Revenue is deferred until the customer obtains control over the services. Control is obtained by the customers across the life of the performance obligation being provided, which is either the set period in the contract, or the period of service, if shorter. B2C typically invoice monthly, although some contracts are annual contracts and have 7-60 days settlement terms. The Group applies a xed price to all listings, both C2C and B2C. OneoftheGroup’sgeneralmerchandiseplatforms,Osta.eeallowsacustomertollane-walletwithmoneythatcanthen be used to pay for services provided by the Group. The customer can cash out at any time. This cash balance is therefore accountedforasanancialliabilitylabelled‘customercreditbalances’withintradeandotherpayablesintheconsolidated statement ofnancial positionand as cashwithin cashand cash equivalents. This cashis physicallyseparated fromthe restin a dedicated bank account and, although there is no formal restriction on this cash, the Group’s policy is keep the cash balance at a level not lower than the e-wallet balance. No revenue is recognised unless the customer purchases a product provided by the Group using money from their e-wallet. Revenue is then recognised in accordance with the product purchased. Advertising Advertising revenue comprises fees (net of rebates) from business customers for banner advertising on the Group’s platforms. The customer pays fees to advertise on the Group’s platforms. Revenue is deferred until the customer obtains control over the services. Control is obtained by the customers over the life of the advertisement. Customers are typically invoiced monthly and have a 7-60 days settlement term. The Group has rebate agreements with some customers. The Group estimates, based on agreed metrics, the discount which is then applied in determining the transaction price for advertising. The estimate is updated throughout the term of the contract and is settled annually. The rebate amounts are not material. Ancillary Ancillary revenue comprises revenue from nancial intermediation, subscription services and other. Ancillary revenueis recognisedastheGroup satisesitsperformanceobligation bybringingleads toacustomeror byproviding otheragreedservices.Financialintermediationrevenuecomprisescommissionfeesfromnancialinstitutionsfordirecting potential customersfrom the Group’s portals to nancingoffers suchinstitutions provide. At thebeginning ofeach month the Groupagreescertain tracmetrics withnancialinstitutions andissuesinvoices forthecommission oraminimum agreedfee. Notes to the consolidated nancial statements continued Baltic Classieds Group PLC Annual Report and Accounts 2022 120 FINANCIAL STATEMENTS Revenue is recognisedas the Group satisesits performanceobligation by directing potentialcustomer trac tothe nancial institutions. The revenue accounting policy across business lines is the same for each revenue stream, i.e. advertising revenue is accounted for the same in both automotive and real estate business lines. The timing of the satisfaction of performance obligations usually is the same as the typical timing of payment or recognition of trade receivable; when it is not, a contract liability is recognised. #### Other income and expenses Other income and expenses comprise gains or losses from disposal of property, plant and equipment, intangible assets, as well as other income and costs not directly related to the primary activities of the Group. #### Finance income and nance costs Finance income and expenses comprise interest receivable and payable, realised and unrealised exchange gains and losses regarding trade receivables, trade payables and loans denominated in foreign currencies. Interest income is recognised as it accrues in prot or loss, using the effective interest method. Finance costs comprise interest expense on borrowings and unwinding of discounts on provisions. Borrowing costs that are not directlyattributable to the acquisition,construction or productionof a qualifying assetare recognisedin prot orloss using the effective interest method. Foreign currency gains and losses are reported on a net basis. #### Income tax Incometaxontheprotorlossfortheperiodcomprisescurrentanddeferredtax.Incometaxisrecognisedinprotorloss except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,and if they relate to income taxes levied by the same tax authority. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probablethat futuretaxable protswill beavailable againstwhich theycan beutilised. Deferred taxassets arereviewedat each reporting date and are reduced to the extent that it is no longer probable that the related tax benet will be realised. #### Segment information Operating segment information is reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM, who is responsible for allocating resources, assessing performance of the operating segment and making strategic decisions, has been identied as the Board of Baltic Classieds Group PLC. #### Earnings per share Basic earnings per share and diluted earnings per share are presented for ordinary shares. Basic earnings pershare is calculated bydividing prot / (loss)attributable to owners of theCompany by the weightedaverage number of shares outstanding. Dilutedearningspershareadjusttheguresusedinthedeterminationofbasicearningspersharetotakeintoaccountthe weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 121 FINANCIAL STATEMENTS #### Consolidation (a) Business combinations Business combinations are accounted for using the acquisition method when control is transferred to the Group. The considerationtransferredin theacquisitionis measuredatfair value,as arethe identiablenetassets acquired.Anygoodwill thatarisesistestedannuallyforimpairment.Anygainonabargainpurchaseisrecognisedinprotorlossimmediately. Transaction costs are expensed as incurred, except if related to the issuance of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are recognised in prot or loss. Any contingent consideration is measured at fair value at the date of acquisition. If the obligation to pay contingent consideration meetsthe denitionof anancialinstrument andisclassied asequity,it isnotremeasured, andsettlement isaccounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in prot or loss. (b) Non-controlling interests (hereinafter - NCI) NCIaremeasuredinitiallyattheirproportionateshareoftheacquiree’sidentiablenet assetsatthedateofacquisition.Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. (c) Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI andothercomponentsofequity.Anyresultinggainorlossisrecognisedinprotorloss.Anyinterestretainedintheformer subsidiary is measured at fair value when control is lost. (d) Transactions eliminated on consolidation All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full. #### Acquisitions from entities under common control A “business combination involving entities or businesses under common control” is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. Business combinations under common control are excluded from the scope of IFRS 3 Business Combinations. For business combinations among entities under common control, the Group elects to apply the common control exclusion in IFRS 3 and where this is the case applies an accounting policy reecting the “predecessor value method” or “book valueaccountingmethod”.Underthismethod,ratherthanacquisitionaccountinginaccordancewithIFRS3,theacquiredassets and liabilities of the acquired business are recorded at their existing carrying “book” values, as such no goodwill is recorded. A business combination involving entities under common control was completed in the current period and is described in note 15. #### Foreign currency Transactions in foreign currencies are translated to the functional currency of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using theexchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. #### Intangible assets and goodwill (a) Recognition and measurement Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. Other intangible assets, including customer relationships, software and trademarks, that are acquired by the Group and have nite useful lives, are measured at cost less accumulated amortisation and any accumulated impairment losses. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 122 FINANCIAL STATEMENTS (b) Research and development Costs associated with maintaining software programmes are recognised as an expense as incurred. Material development coststhat are directly attributabletothedesignand testingofidentiableand uniquesoftwareproductscontrolledbytheGroup are recognised as intangible assets where the following criteria are met: • it is technically feasible to complete the software so that it will be available for use • management intends to complete the software and use or sell it • there is an ability to use or sell the software • it can be demonstrated how the software will generate probable future economic benets • adequatetechnical,nancialandotherresourcestocompletethedevelopmentandtouseorsellthesoftwareareavailable, and • the expenditure attributable to the software during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software include employee costs. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. Research expenditure and development expenditure that do not meet the criteria above are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. (c) Subsequent expenditure Subsequentexpenditureiscapitalisedonlywhenitincreasesthefutureeconomicbenetsembodiedinthespecicassetto which it relates.All other expenditure, including expenditure oninternally generated goodwill and brands, is recognised in prot or loss as incurred. (d) Amortisation Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line methodovertheirestimatedusefullivesandisrecognisedinprotorloss.Goodwillisnotamortised.Estimatedusefullives are as follows: Trademarks and domains10 years Relationship with clients5-7 years Other intangible assets3-7 years #### Property, plant and equipment (a) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment, and is recognised within other operating income/other operating expenses in prot or loss. (b) Subsequent expenditure The expenditure of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if itis probable that thefuture economic benetswithin the part will owto the Group,and its costscan be measured reliably. The carrying amount of the replaced part is derecognised. The cost of the day-to-day servicing of property, plant and equipment are recognised in prot or loss as incurred. (c) Depreciation Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residualvalue. Depreciation is recognisedin protor loss ona straight-line basisover theestimated usefullives of eachpart of an itemof property,plant and equipment, sincethis most closelyreects the expected pattern ofconsumption of thefuture economicbenetsembodiedintheasset.Depreciationiscalculatedfromtherstdayofthenextmonthwhentheassetis available for use, using the straight-line method. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 123 FINANCIAL STATEMENTS Leasedassets aredepreciatedover theshorterofthelease termandtheirusefullives unlessitisreasonably certainthatthe Group will obtain ownershipby the end ofthe lease term. Land isnot depreciated. The estimated usefullives of property,plant and equipment for current and comparative periods are as follows: Buildings15-20 years Vehicles4-10 years Other3-6 years The useful lives, residual values and depreciation method are reviewed annually to ensure that the depreciation period and other estimates are consistent with the expected pattern of economic benets from items in property, plant and equipment. #### Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if thecontractconveystherighttocontroltheuseofanidentiedassetforaperiodoftimeinexchangeforconsideration.To assesswhether acontract conveysthe righttocontrol theuse ofthe identiedasset,the Groupuses thedenitionof alease in IFRS 16 Leases. As a lessee At commencement oron modication ofa contract thatcontains alease component, theGroup allocates the considerationin the contract to each lease component on the basis of its relative stand-alone prices. The Group recognises a right-of-use asset and a lease liability at the lease commencementdate. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or thecostoftheright-of-useassetreectsthattheGroupwillexerciseapurchaseoption.Inthatcasetheright-of-useasset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. TheGroupdeterminesitsincrementalborrowingratebyobtaininginterestratesfromvariousexternalnancingsourcesand makes certain adjustments to reect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: • Fixed payments, including in-substance xed payments • Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date • Amounts expected to be payable under a residual value guarantee • The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in the future lease payments arising froma change in an index or rate, if there is a change in the Group‘s and the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group’s changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance xed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in prot or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Grouppresents right-of-use assets thatdo not meet the denitionof investment property in`Right-of-use assets’ and lease liabilities in `long-term lease liabilities` and `short-term lease liabilities` in the statement of nancial position. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 124 FINANCIAL STATEMENTS #### Impairment of non-nancial assets At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication of impairment. If any such indications exist, then the asset’s recoverable amount is estimated. Forimpairmenttesting,assetsaregroupedtogetherintothesmallest groupofassetsthatgeneratescashinowsfrom continuing use, that are largely independent of the cash inows of other assets (the “cash-generating unit, or CGU”). The recoverable amount ofan asset orCGU is thegreater of its value inuse and itsfair value less coststo sell. Value inuse is basedon theestimated futurecashows, discountedto theirpresentvalue usinga pre-taxdiscount ratethatreects current market assessments of the time value of money and the risks specic to the asset or CGU. An impairmentloss isrecognisedif thecarrying amount ofan assetor CGUexceeds itsrecoverableamount. Impairmentlosses arerecognisedinprotorloss.Impairmentlossisreversedtotheextentthattheasset’scarryingamountdoesnotexceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been recognised. #### Cash and cash equivalents Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cashwith original maturities ofthree months or lessand that aresubject to an insignicant riskof change in value. In the statement of cash ows, cash and cash equivalents include cash at banks. #### Financial instruments Anancialinstrument isanycontractthatgivesrise toanancialassetof oneentityandanancialliability orequityinstrument of another entity. (a) Financial assets (i) Initial recognition and measurement The Group qualies nancial assets to one of the following categories: • measured at amortised cost • measured at fair value through other comprehensive income • measured at fair value through prot or loss Theclassication ofnancial assetsatinitial recognition dependson thenancialasset’s contractualcash owcharacteristics andtheGroup’sbusinessmodelformanagingthem.Withtheexception oftradereceivablesthatdonotcontainasignicant nancing component,the Groupinitially measures anancial assetat itsfair value plus,in thecase ofa nancialasset notat fair value through prot or loss, transactioncosts. Trade receivables that do notcontain a signicant nancing component are measured at the transaction price determined under IFRS 15. TheGroup’sbusinessmodelformanagingnancialassetsreferstohowtheGroupmanagesitsnancialassetsinorderto generatecashows.Thebusinessmodeldetermineswhethercashowswillresultfromcollectingcontractualcashows, selling the nancial assets, or both. Purchasesorsalesofnancialassetsarerecognisedonthetradedate,i.e.,thedatethattheGroupcommitstopurchaseor sell the asset. (ii) Subsequent measurement After initial recognition, the Group measures a nancial asset at amortised cost (debt instruments). (iii) Financial assets at amortised cost (debt instruments) The Group measures nancial assets at amortised cost if both of the following conditions are met: • Thenancialassetisheld withina businessmodelwiththeobjectivetoholdnancialassets inorder tocollect contractual cash ows and • Thecontractual termsofthe nancialassetgive riseonspecied datestocash owsthataresolely paymentsofprincipal and interest on the principal amount outstanding Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in prot or loss when the asset is derecognised, modied or impaired. The Group’s nancial assets at amortised cost includes trade, other current and non-current receivables and contract assets. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 125 FINANCIAL STATEMENTS (iv) Impairment of nancial assets As relevant for: • Financial assets measured at amortised cost • Contract assets TheGroupmeasureslossallowancesatanamountequaltolifetimeECLs,exceptforthefollowing,whicharemeasuredat 12-month ECLs: • debt securities that are determined to have low credit risk at the reporting date • other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the nancial instrument) has not increased signicantly since initial recognition Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs. Whendeterminingwhetherthecreditriskofanancialassethasincreasedsignicantlysinceinitialrecognitionandwhen estimating ECLs,theGroup considersreasonableand supportable informationthatis relevantandavailable withoutundue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, and includes forward-looking information. The Group considers a nancial asset to be in default when the nancial asset is more than 180 days past due. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a nancial instrument. 12-month ECLsare theportion of ECLsthat resultfrom defaultevents thatare possiblewithin the 12months afterthe reporting date (or a shorter period if the expected life of the instrument is less than 12 months). ThemaximumperiodconsideredwhenestimatingECLsisthemaximumcontractualperiodoverwhichtheGroupisexposed to credit risk. (v) Measurement of ECLs ECLs area probability-weighted estimate ofcredit losses. Creditlosses are measured as the presentvalue of all cashshortfalls (i.e. the difference between the cashows due to the entity inaccordance with the contract and thecash ows that the Group expects to receive). ECLs are discounted at the effective interest rate of the nancial asset. (vi) Presentation of allowance for ECL in the statement of nancial position Loss allowances for nancial assets measured at amortised cost are deducted from the gross carrying amount of the assets. (vii) Write-off ThegrosscarryingamountofanancialassetiswrittenoffwhentheGrouphasnoreasonableexpectationsofrecovering anancialassetinitsentiretyoraportionthereof.Forindividualandcorporatecustomers,theGroupindividuallymakesan assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no signicant recovery from the amount written off. However, nancial assets that are written off could still be subject to enforcement activities in order to comply with the procedures for recovery of amounts due. (b) Financial liabilities (i) Initial recognition and measurement Financialliabilitiesareclassied,atinitialrecognition,asnancialliabilitiesatfairvaluethroughprotorloss,loansand borrowingsandpayables.All nancialliabilitiesarerecognisedinitially atfairvalueand,in thecaseofloans andborrowingsand payables, netofdirectlyattributabletransactioncosts.The PredecessorandtheGroup’snancial liabilitiesincludetradeand otherpayables,loansandborrowings, leaseliabilitiesandnancialliabilitiesmeasuredatfairvaluewithchangesrecognised in prot or loss. (ii) Subsequent measurement The measurement of nancial liabilities depends on their classication. After initial recognition, the Group’s loans, borrowings and other payables are subsequently measured at amortised cost using theEIR method.Gainsand lossesarerecognised inprot orloss,whenthe liabilitiesarederecognised aswellas throughthe EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as nance expenses in prot or loss. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 126 FINANCIAL STATEMENTS (c) Offsetting of nancial instruments Financial assets andnancial liabilities are offset and thenet amount is reportedin the statement of nancialposition if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realize the assets and settle the liabilities simultaneously. #### Payroll related liabilities Short-term payroll related liabilities are expensed as the related service is provided. These include salaries and wages, social security contributions, vacation payouts, compensation for illness, bonuses, allowances, severance payments, vacation accruals, allof which arerecognised ascosts when an employee has fullledhis duties inexchange for thereceived allowance. #### Share-based payments Equity-settled awards are valued at the grant date, and the fair value is charged as an expense in the income statement spread over the vesting period. Fair value of the awards are measured using Black-Scholes pricing model. The credit side of the entry is recordedin equity. Cash-settled awards are revaluedat each reporting datewith the fairvalue of theaward chargedto the prot and loss account over the vesting period and the credit side of the entry recognised as a liability. #### Provisions Provisions on obligations are accounted for only when the Group has legal obligation or irrevocable commitment as a result ofpastevents,anditisprobablethatanoutowofresourcesembodyingeconomicbenetswillberequiredtosettleit,and theamountofobligationcanbemeasuredreliably.Provisionsaredeterminedbydiscountingtheexpectedfuturecashows at apre-tax rate that reectscurrent market assessments ofthe time valueof money and therisks specicto the liability. The unwinding of the discount is recognised as nance expenses. #### Ordinary shares Incremental costs directly attributable to the issue of ordinary shares are recognised as deductions from equity. Income tax relating to transaction costs of equity transactions is accounted for in accordance with IAS 12. #### Own shares held TheEmployeeBenetTrust(‘EBT’)providesfortheissueofsharestoGroupemployeesprincipallyunderPerformanceSharePlan scheme.The Grouphas controlof theEBT andtherefore consolidatestheEBT inthe Groupnancial statements.Accordingly, shares in the Company held by the EBT are included in the balance sheet at cost as a deduction from equity. #### Capital reorganisation reserve The capital reorganisation reserve arose on consolidation as a result of the share for share exchange transactions that took placeon5July2021(note15).ItrepresentsthedifferencebetweenthenominalvalueofsharesissuedbyBalticClassieds Group PLC in this transaction and the share capital and other capital reserves of ANTLER TopCo S.a.r.l. #### Dividends Dividend distributionto the Company’s shareholdersis recognised asa liability inthe Group’snancial statements inthe period inwhichthedividendisapprovedbytheCompany’sshareholdersinthecaseofnaldividends,orthedateatwhichtheyare paid in the case of interim dividends. #### Contingencies Contingent liabilitiesare not recognised inthe consolidated nancialstatements butare disclosed unless thepossibility ofan outow of resources embodying economic benets is remote. Contingentassetsarenotrecognisedintheconsolidatednancialstatements,unlesstherealisationofincomeisvirtually certain. They are disclosed in the consolidated nancial statements when an inow of economic benet is probable. #### Subsequent events Events that provide additional evidence on conditions that existed at the end of the reporting period (the adjusting events) are recognised in thenal statements. Other subsequent events are not adjustingevents and aredisclosed in the notes ifmaterial. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued Baltic Classieds Group PLC Annual Report and Accounts 2022 127 FINANCIAL STATEMENTS #### Alternative performance measures In the analysis of the Group’s nancial performance, certain information disclosed in the nancial statements may be prepared on a non-GAAP basis or has been derived from amounts calculated in accordance withIFRS but are not themselves an expressly permittedGAAPmeasure.Thesemeasuresarereportedinlinewiththewayinwhichnancialinformationisanalysedby managementanddesignedtoincreasecomparabilityoftheGroup’syear-on-yearnancialposition,basedonitsoperational activity. The key alternative performance measures presented by the Group are: • Adjusted Operating prot which iscalculated by reference tothe prot (loss) for the period and adjusting this toadd back income taxexpense, net nancecosts, IPOcosts, IPO renancing arrangementrelated nance andtax items,M&A costs and acquired intangibles amortisation. • EBITDAwhichiscalculatedbyreferencetotheprot/(loss)fortheperiodandadjustingthistoaddbackincometax expense, net nance costs, depreciation and amortisation. • Adjusted EBITDA which is calculated by reference to EBITDA for the period and adjusting this for the costs related to IPO, acquisitionsanddisposalsintheperiodandone-offcoststhatdonotreecttheunderlyingoperationsofthebusiness (but including ongoing operating costs of being a public company). • Adjusted EBITDA Margin which is calculated by dividing Adjusted EBITDA for the period by revenue for such period. • Adjusted NetIncome which isdened as theprot /(loss) for theperiod adjusted forthe post-tax impactof the IPOcosts, IPOrenancingarrangementrelatednanceandtaxitems,M&Acostsandthepost-taximpactoftheamortisationof intangibles arising from acquisitions. • Adjusted basic EPS is adjusted for the same items that are used to adjust the Adjusted Net Income. • Net Debt which is calculated as total debt (bank loans and Osta.ee customer credit balances) less cash. • LeveragewhichiscalculatedasNetDebtoverlasttwelvemonths(LTM)ofAdjustedEBITDA.TheGroup’sloanfacility includes a Total Leverage Ratio covenant (see note 18). The Directors believe that these alternative performance measures provide a helpful measure of the Group’s business performanceandyear-on-yeartrends,asIPOrelatedexpensesorone-offFreeShareAwardsaresignicantbutdonotreect operational activity. 4. Operating segments Operatingsegmentsare identiedonthebasisofinternal reportsaboutcomponentsoftheGroup thatareregularlyreviewed by the chief operating decisionmaker (“CODM”) in order to allocateresources to the segments and to assess their performance. The CODM has been identied as the Board of Baltic Classieds Group PLC. The mainfocus of the Group is operatingleading online classieds platformsfor automotive, real estate, jobsand services, and general merchandise in the Baltics. The Group’s business is managed on a consolidated level. The Board views information foreachclassiedplatformatarevenuelevelonlyandthereforetheplatformsareconsideredproductsbutnotaseparate lineofbusinessorsegment.TheGroupconsidersitselfaclassiedbusinessoperatinginawell-denedandeconomically similar geographical area, the Baltic countries. And therefore the Board views detailed revenue information but only views costs andprotinformationataGrouplevel.Assuch,managementconcludedthatBCGhasoneoperatingsegment,whichalso represents one reporting segment. The revenue break-down is disclosed by primary geographical markets, key revenue streams and revenue by business lines in accordance with IFRS 15 in note 5. Notes to the consolidated nancial statements continued 3. Signicant accounting policies continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 128 FINANCIAL STATEMENTS 5. Revenue In the following tables, revenue from contracts with customers is disaggregated by primary geographical markets, key revenue streams and revenue by business lines. Primary geographicmarkets 2022 (€ thousands) 2021 (€ thousands) Lithuania 35,23627,915 Estonia14,62013,332 Latvia 1,1031,021 Total50,95942,268 Key revenue streams 2022 (€ thousands) 2021 (€ thousands) Advertising revenue3,7313,661 Listings revenue 43,72535,091 - Listings revenue: B2C 24,59018,187 - Listings revenue: C2C 19,13516,904 Ancillary revenue 1 3,5033,516 Total50,95942,268 Revenue by business lines 2022 (€ thousands) 2021 (€ thousands) Automotive18,29316,822 - Advertising revenue1,1221,111 - Listings revenue: B2C 7,4326,629 - Listings revenue: C2C 6,5075,847 - Ancillary revenue3,2323,235 Real Estate12,45110,655 - Advertising revenue1,9031,782 - Listings revenue: B2C 7,0526,051 - Listings revenue: C2C 3,4392,778 - Ancillary revenue5744 Generalist10,3979,798 - Advertising revenue701763 - Listings revenue: B2C 1,2821,218 - Listings revenue: C2C 8,2007,587 - Ancillary revenue214230 Jobs & Services9,8184,993 - Advertising revenue75 - Listings revenue: B2C 8,8224,289 - Listings revenue: C2C 988692 - Ancillary revenue17 Total50,95942,268 1 Ancillaryrevenueincludesrevenuefromnancialintermediation,subscriptionservices,andother.Financialintermediationrevenueaccountsfor94%ofthetotal ancillary revenue for the year ending 30 April 2022 and 85% of the total ancillary revenue for the year ending 30 April 2021. Due to the large number of customers the Group serves, there are no individual customers whose revenue is greater than 10% of the Group’s total revenue in all periods presented in these nancial statements. Notes to the consolidated nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 129 FINANCIAL STATEMENTS #### Contract liabilities Contract liabilities 1 include advanced consideration received for which revenue is received as or when services are provided. The movement of contract liabilities is provided below: 2022 (€ thousands) 2021 (€ thousands) Opening balance1,4641,121 Recognised in revenue in the period(4,333)(1,121) Advanced consideration received5,8511,464 Closing balance2,9821,464 1 Contract liabilities amount in the statement of nancial position also include prepayments received from customers. 6. Operating prot #### Operating prot reconciliation with the Adjusted EBITDA 2022 (€ thousands) 2021 (€ thousands) Operating prot 13,61615,710 Depreciation and amortisation16,89416,966 EBITDA30,51032,676 Acquisition related costs 1 -75 IPO related fees 2 7,393256 Free share awards 3 1,378- Adjusted EBITDA39,28133,007 Adjusted EBITDA margin77.1%78.1% 1 Fees and costs incurred in relation to the acquisition of eight legal entities including Auto24.ee. 2 Fees and costs incurred in relation to the Initial Public Offering (IPO). 3 Costs related to Free Share Awards to employees of the Group (note 23). 2022 (€ thousands) 2021 (€ thousands) Operating prot is after charging the following: Labour costs 1 (note 7)(8,886)(6,047) Depreciation and amortisation(16,894)(16,966) Advertising and marketing services(841)(756) IT expenses(692)(546) Impairment (loss) / reversal on trade receivables and contract assets (59)(23) Other 2 (9,977)(2,227) (37,349)(26,565) 1 For the year ended 30 April 2022 labour costs include €1,378 thousand free share awards related expenses (note 23). For the year ended 30 April 2021 labour costs include €36 thousand of Auto24 acquisition related expenses. 2 Other expenses include 1 and 2 from the table below. Notes to the consolidated nancial statements continued 5. Revenue continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 130 FINANCIAL STATEMENTS #### Services provided by the Company’s auditors 2022 (€ thousands) 2021 (€ thousands) Fees payable for audit services: Audit of the Company and consolidated nancial statements (244)(73) Audit of the Company’s subsidiaries pursuant to legislation(103)(77) Total audit remuneration(347)(150) Fees payable for other services: - Audit related assurance services(110)- - Transaction related services(532)- - Other assurance services(267)- - Tax advisory services-(4) Total non-audit remuneration(909)(4) Total(1,256)(154) Transaction related and other assurance services provided by the Company’s auditors during the year ended 30 April 2022 relate to the IPO. Refer to Audit Committee Report on page 70 for further detail. 7. Employee numbers and costs The average number of persons employed (including Executive Directors but excluding 4 Non-Executive Directors) during the year, analysed by category, was as follows: 2022 (number) 2021 (number) Administration120127 Key Management Personnel (note 22)66 Total126133 The aggregate payroll costs of these persons were as follows: 2022 (€ thousands) 2021 (€ thousands) Wages and salaries(6,219)(5,369) Social security costs(645)(678) (6,864)(6,047) Share-based payment costs (note 23)(2,022)- Total(8,886)(6,047) Notes to the consolidated nancial statements continued 6. Operating prot continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 131 FINANCIAL STATEMENTS 8. Net nance costs 2022 (€ thousands) 2021 (€ thousands) Other nancial income 1382 Total nance income 1382 Interest expenses 1 (9,426)(13,396) Commitment and agency fees(132)(497) Other nancial expenses 2 (1,734)(16) Interest unwind on lease liabilities(17)(26) Total nance expenses (11,309)(13,935) Net nance costs recognised in prot or loss (11,171)(13,933) 1 Interest expense for the year ended 30 April 2022 contains €5,075 thousand of upfront fee that was written off upon the repayment of Senior Facility Agreement in July 2021. 2 Other nancial expenses for the year ended 30 April 2022 contain €1,618 thousand of Senior Facility Agreement related early repayment condition. 9. Income taxes #### (a) Tax recognised in prot or loss 2022 (€ thousands) 2021 (€ thousands) Current tax expense Current year(3,102)(3,519) Deferred tax expense Change in deferred tax 1 3,0561,649 Tax expense(46)(1,870) 1 Change in deferred tax for the year ended 30 April 2022 contains €1,266 thousand of deferred tax liability related to the upfront fee that was written off upon the repayment of Senior Facility Agreement in July2021. In this case DTL arosedue to tax differences in Luxembourg as a sinceliquidated Group company ANTLER HoldCo Sàrl was the borrower in case of previous Senior Facility Agreement. Tax losses can be transferred between companies within the same tax group effectively reducing consolidated income tax expense. #### (b) Reconciliation of effective tax rate 2022 (€ thousands) 2021 (€ thousands) Prot (loss) before tax 2,4451,777 Tax using the consolidating entity’s domestic tax rate (2022 UK 19%, 2021 Luxembourg 25%) (465)(444) Effect of tax rates in foreign jurisdictions726(509) Non-deductible expenses(1,614)(199) Tax-exempt income-899 Reversal of a temporary timing difference1,307140 Current year losses for which no deferred tax asset is recognised-(1,757) (46)(1,870) Notes to the consolidated nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 132 FINANCIAL STATEMENTS #### (c) Movement in deferred tax balances For the year ended 30 April 2021: Net balance at 30 April 2020 (€ thousands) Recognised in prot or loss (€ thousands) Recognised in OCI (€ thousands) Acquired in business combinations (€ thousands) Net balance at 30 April 2021 (€ thousands) Deferred tax asset (€ thousands) Deferred tax liability (€ thousands) Intangible assets amortisation (9,216)1,264--(7,952)-(7,952) Front-end commission fee (1,447)140--(1,307)-(1,307) Other temporary differences 113245--358358- Tax assets (liabilities) before set-off (10,550)1,649--(8,901)358(9,259) Set-off of tax 1 -----(358)358 Net tax assets (liabilities) (10,550)1,649--(8,901)-(8,901) For the year ended 30 April 2022: Net balance at 30 April 2021 (€ thousands) Recognised in prot or loss (€ thousands) Recognised in OCI (€ thousands) Acquired in business combinations (€ thousands) Net balance at 30 April 2022 (€ thousands) Deferred tax asset (€ thousands) Deferred tax liability (€ thousands) Intangible assets amortisation (7,952)1,691--(6,261)-(6,261) Front-end commission fee (1,307)1,307----- Other temporary differences 35859--417417- Tax assets (liabilities) before set-off (8,901)3,057--(5,844)417(6,261) Set-off of tax 1 -----(417)417 Net tax assets (liabilities) (8,901)3,057--(5,844)-(5,844) 1 Set-off is allowed as it is the same jurisdiction (Lithuania). Summary of taxation rates by country is presented below: 2022 (€ thousands) 2021 (€ thousands) United Kingdom 19%19% Lithuania 15%15% Latvia 1 20%20% Estonia 1 20%20% Luxembourg 25%25% 1 0% income tax rate applies in Estonia and Latvia if there are no prot distributions. Notes to the consolidated nancial statements continued 9. Income taxes continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 133 FINANCIAL STATEMENTS #### (d) Unrecognised deferred tax asset TheGroup’saccumulatedtaxlossesconsistsoftaxlossesincurredbytheCompany’sindirectsubsidiaryUABAntlerGroup. Nodeferred taxassetshavebeenrecognisedinrespect tothesetaxlossesasitisnotprobable thatfuturetaxableprotwill beavailable againstwhichUAB AntlerGroupcanuse thebenetstherefrom. Theapplicabletaxrateis 15%.Grossamountof taxablelossesfortheyearended30April2021alsoincludedlossesincurredbyANTLERHoldCoSàrl,anindirectsubsidiary which was liquidated in February 2022. 2022 (€ thousands) 2021 (€ thousands) Gross amountTax effectGross amountTax effect Tax losses(26,229)(3,934)(26,547)(3,995) (26,229)(3,934)(26,547)(3,995) #### (e) Tax losses carried forward TaxlossescarriedforwardincludelossesincurredbytheCompany’sindirectsubsidiaryUABAntlerGroup,theyamountto €26,229 thousand. AccordingtoLithuanianlegislation,deductibletaxlossescarriedforwardcanbeusedtoreducethetaxableincomeearned during the reporting year by maximum 70%. Tax losses can be carried forward for an indenite period. Tax losses carried forward by expiration: 2022 (€ thousands) 2021 (€ thousands) Expire in 2037-(61) Expire in 2038-(69) Does not expire(26,229)(26,417) Total(26,229)(26,547) 10. Earnings per share 2022 (€ thousands) 2021 (€ thousands) Weighted average number of shares outstandingnumber488,467,552435,265,078 Prot (loss) attributable to owners of the Company € thousands2,399(93) Basic earnings per share € cents 0.49(0.02) Basic earnings per share (EPS) amounts are calculated by dividing net prot for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. The weighted average number of shares for the current and the comparative periods has been stated as if the Group share for share exchange (note 15) has occurred at the beginning of the comparative periods. In calculating diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive shares. The Group’s potentially dilutive instruments are in respect of share-based incentives granted to employees. Options under the Performance Share Plan are contingently issuable shares and are therefore only included within the calculation of diluted EPS if the performance conditions are satised. Although the Group started operating a Performance Share Plan (note 23), the potential ordinary shares are not treated as dilutive as the PSP performance condition was not satised for the year ended 30 April 2022. Notes to the consolidated nancial statements continued 9. Income taxes continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 134 FINANCIAL STATEMENTS 11. Intangible assets and goodwill Goodwill (€ thousands) Trade-marks and domains (€ thousands) Relationship with clients (€ thousands) Other intangible assets (€ thousands) Total (€ thousands) Cost Balance at 1 May 2020328,73263,31750,7101,535444,294 Disposals-(97)-(188) (285) Balance at 30 April 2021328,73263,22050,7101,347444,009 Balance at 1 May 2021328,73263,22050,7101,347444,009 Disposals---(23) (23) Balance at 30 April 2022328,73263,22050,7101,324443,986 Accumulated amortisation and impairment losses Balance at 1 May 2020-4,3756,3089410,777 Amortisation-6,3319,824340 16,495 Disposals-(13)-(159) (172) Balance at 30 April 2021-10,69316,13227527,100 Balance at 1 May 2021-10,69316,13227527,100 Amortisation-6,3239,824273 16,420 Disposals---(23) (23) Balance at 30 April 2022-17,01625,95652543,497 Carrying amounts Balance at 1 May 2020328,73258,94244,4021,441433,517 Balance at 30 April 2021328,73252,52734,5781,072416,909 Balance at 30 April 2022328,73246,20424,754799400,489 #### Impairment testing for cash generating units containing goodwill The following carrying amounts of goodwill are allocated to each cash-generating unit within the Group: 2022 (€ thousands) 2021 (€ thousands) Diginet LTU UAB 228,515228,515 AllePal OU 82,02782,027 Kinnisvaraportaal OU 13,97613,976 City24 SIA3,0393,039 VIN Solutions OU 1,1751,175 328,732328,732 The reconciliation of the weighted average number of shares is provided below: Number of shares Issued ordinary shares at 1 May 2020435,265,078 Weighted average number of ordinary shares at 30 April 2021435,265,078 Issued ordinary shares at 1 May 2021435,265,078 Effect of ordinary shares issued at 5 July 2021 53,206,784 Effect of ordinary shares issued at 19 October 2021 208,566 Effect of ordinary shares purchased by EBT at 25 March 2022 (note 16) (212,876) Weighted average number of ordinary shares at 30 April 2022488,467,552 Notes to the consolidated nancial statements continued 10. Earnings per share continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 135 FINANCIAL STATEMENTS ThesmallestgroupsofassetsthatgeneratecashinowsfromcontinuingusearelegalentitiesbasedinLithuania,Estonia andLatvia.Therecoverableamountofeachcashgeneratingunit asat30April2022and2021wasdeterminedbased onthe valueinusecalculationsthatusecashowprojectionsbasedontheve-yearnancialforecastspreparedbymanagement. Thepost-taxdiscountratesappliedtothepost-taxcashowsarederivedfromthepost-taxweightedcostofcapital.The assumptions used in the calculation of the Group’s weighted average cost of capital are benchmarked to externally available data. The terminal growth rate was determined based on management’s estimate of the long-term growth rate, consistent with assumptions that would be made by a reasonable market participant. Budgeted revenues and expenses were estimated based on past performance and management’s expectation of growth from pricing, volume and product development. Due, in part, to rapid technological changes, evolving industry standards and changing needs and preferences of listers and consumers, the Group’scompetitivelandscapeischangingrapidly.Itis,therefore,dicultfortheGrouptoaccuratelyassessorpredictthe Group’s future competitors and the competitive threats the Group may be facing. The key assumptions used for the value in use calculations are as follows: 2022 In percent Diginet LTU UAB AllePal OÜ Kinnisvara- portaal OÜ City24 SIA VIN SolutionsOÜ Revenue growth rate11-15%11-13%8-9%11-19%4-7% Discount rate (pre-tax)8.75%9.02%9.02%9.58%9.02% Terminal value growth rate2%2%2%2%2% 2021 In percent Diginet LTU UAB AllePal OÜ Kinnisvara- portaal OÜ City24 SIA VIN SolutionsOÜ Revenue growth rate10-15%7-12%2-9%5-11%10-12% Discount rate (pre-tax)9.48%9.16%9.16%9.68%9.16% Terminal value growth rate2%2%2%2%2% The value in use forecasts assume a double digit growth in revenue in the initial 5 year period. Key driversto future growth rates are dependent on the Group’s ability to maintain and grow income streams. The level of headroom may change if different growthrateassumptionsoradifferentpre-taxrateswereusedinthecashowprojections.Thereforerevenuegrowthand discount rate are considered to be key assumptions. Sensitivity analysis has been performed in assessing the recoverable amounts of goodwill. There are no changes to the key assumptions of revenue growth or discount rate that are considered by the management to be reasonably possible, which give riseto animpairment ofgoodwill relating toany ofthe CGU’s, with theexception ofKinnisvaraportaal OÜ(“KVP”) andVin Solutions OÜ (“VIN”) (see below). KVP is part of real estate business line in Estonia while VIN is part of automotive business line in Estonia. Forboth KVPandVIN apre-taxdiscountrate of9.02%has beenappliedbased ontheweightedaverage costofcapitalreecting specic principalrisks anduncertainties to theseentities. Forecastscashows assumestable organicgrowth dueto increased revenue via price increases or product development. Sensitivity analysis has been performed in assessing the recoverable amounts of goodwill. Management has considered reasonably possible although not currently expected changes in threekey assumptions being revenue growth, pre-tax discount rate and terminalgrowth. Management has identiedthat for KVP and VINa reasonably possible changein these assumptions could cause the carrying value to exceed the recoverable amount. The amounts by which these two assumptions would need to change individually and collectively for the estimated recoverable amount to be equal to the carrying amount are set out below: • Increasing the pre-tax discount rate by 3 percentage points (“pp”) for KVP and by 2pp for VIN would lead to an impairment charge of €1,4m for KVP and €0.2m for VIN; • Decreasing revenue growth in the initial 5 year period by 4pp for VIN would not lead to a material impairment charge; • Increasing the pre-tax discount rate by 1pp and decreasing the revenue growth by 2pp for KVP which would not lead to a material impairment charge; • Increasing the pre-discount rate by 1pp and decreasing the revenue growth by 1pp for VIN which would not lead to a material impairment charge; • Decreasing terminal growth rate by 1pp for VIN which would not lead to a material impairment charge. Having completed the impairment review for the yearended 30 April 2022, no impairment has been recognised in relation to any of the CGU’s (for the period ended 30 April 2021: no impairment). Notes to the consolidated nancial statements continued 11. Intangible assets and goodwill continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 136 FINANCIAL STATEMENTS 12.Right-of-useassets Buildings (€ thousands) Vehicles (€ thousands) Other (€ thousands) Total (€ thousands) Cost Balance at 30 April 2020929145191,093 Acquisitions-108- 108 Re-assessment67210 79 Balance at 30 April 2021996255291,280 Acquisitions-2215 37 Disposals-(89)- (89) Re-assessment30-- 30 Balance as at 30 April 20221,026188441,258 Accumulated depreciation and impairment losses Balance at 30 April 2020165284197 Depreciation2555710 322 Balance at 30 April 20214208514519 Depreciation256439 308 Disposals-(26)- (26) Balance as at 30 April 202267610223801 Carrying amounts Balance at 30 April 202076411715896 Balance at 30 April 202157617015761 Balance at 30 April 20223508621457 13. Trade and other receivables 2022 (€ thousands) 2021 (€ thousands) Trade receivables3,0022,524 Expected credit loss (-) on trade receivables(71)(84) Other short term receivables39131 Total2,9702,571 Trade and other receivables (except for loan receivables) are non-interest bearing. The Group has recognised impairment losses in the amount of €71 thousand as at 30 April 2022 (€84 thousand as at 30 April 2021). Change in impairment losses for trade receivables, nettedwith recoveries, for nancialperiod amountedto €59thousand asat 30April 2022and €23thousand asat 30 April 2021. As at 30 April 2021, all trade receivables were pledged to secure the bank loans (see note 18). As at 30 April 2022, there are no pledges on trade receivables (see note 18). Notes to the consolidated nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 137 FINANCIAL STATEMENTS Reconciliation of changes in impairment allowance for trade receivables: (€ thousands) Balance at 30 April 2020(107) Recoveries53 Write offs46 Changes in allowance and allowance recognised for new nancial assets originated (76) Balance at 30 April 2021(84) Recoveries77 Write offs72 Changes in allowance and allowance recognised for new nancial assets originated (136) Balance as at 30 April 2022(71) 14. Cash and cash equivalents The balance of the Group’s cash and cash equivalents as at 30 April 2022 and 30 April 2021 comprises of cash in banks.The credit rating of banks the Group holds its cash and cash equivalents varies from A1 to Baa1 as per Moody’s ratings. As at 30 April 2021, cash in major bank accounts was pledged to secure the bank loans. As at 30 April 2022, there are no pledges on bank accounts (see note 18). As at 30 April 2022 and 30 April 2021, there are no restrictions on cash in Group’s bank accounts. 15. Equity Number of shares Share capital amount (€ thousands) Share premium amount (€ thousands) Balance as at 1 May 2020435,265,079506,452- Redeemable preference share issued-57- Balance as at 1 May 2021435,265,079506,509- Group restructure: - Redeemable preference share redeemed-(57)- - Share issue for IPO64,734,92175,32248,959 - Share issue related transaction costs--(5,816) Nominal value of ordinary shares reduced and share premium cancelled to create distributable reserves -(575,956)(43,143) Shares issued to satisfy Free share awards (note 23)392,4054- Balance as at 30 April 2022500,392,4055,822- BCG was incorporated on 26 April 2021 with 1 ordinary share with a value of £1 (€1.15) per share allotted. On 27 April 2021 the company issued 1 redeemable preference share with a value of £49,999 (€57,487) per share. On 5 July 2021 BCG was inserted into the Group’s holding structure via a share for share exchange with the shareholders of a previous top holding entity, ANTLER TopCo S.a.r.l: 1) BCGissued 38,740,076 ordinaryshares at £1(€1.16) each inthe share forshare exchange to acquireANTLER Management S.A. that was a minority shareholder of ANTLER TopCo S.a.r.l. 2)BCGissued396,525,002ordinarysharesat£1(€1.16)eachintheshareforshareexchangetoacquiretherestofANTLER TopCo S.a.r.l. 3) 1 redeemable preference share with a value of £49,999 (€57,487) per share was redeemed. On 5 July 2021 BCG issued 64,734,921 ordinary shares with a value of £1 (€1.16) each that were listed at £1.65 (€1.92) on the London Stock Exchange. Share issue related expenses amounting to €5,816 thousand were set against the share premium that arose during the listing, out of which €2,942 thousand relate to the underwriting fee that reduced the cash received from the IPO proceeds. On 23 September 2021 BCG undertook a Court approved capital reduction to create distributable reserves. The entire amount standing to the credit of BCG share premium account was cancelled and the nominal value of each ordinary share in issue in the capital of BCG was reduced from £1 (€1.15) to £0.01 (€0.01). This created a total of €619,100 thousand in distributable reserves. Notes to the consolidated nancial statements continued 13. Trade and other receivables continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 138 FINANCIAL STATEMENTS On 19 October 2021 BCG issued 392,405 shares with a value of £0.01 (€0.01) each to be gifted, on an unrestricted basis, to all employees other than the Executive Directors and the rest of the Senior Management team. Share capital and share premium in the comparative periods have been stated as if the Group share for share exchange has occurred at the beginning of the comparative periods. For this reason, a capital reorganisation reserve has been created which comprises a difference between the recalculated share capital amount and the total of share capital and share premium of ANTLER TopCo S.a.r.l. Included within shares in issue at 30 April 2022 are 2,100,000 (nil in previous period) shares held by the Employee Benet Trust (“EBT”) (note 16). 16. Own shares held Shares held by EBT Amount (€ thousands) Number Balance as at 1 May 2021-- Purchase of shares for performance share plan 1 (3,418)2,100,000 Balance as at 30 April 2022(3,418)2,100,000 1 Shares were purchased on 25 March 2022 at a price of £1.35 (€1.62) per share. Stamp duty reserve tax amounting to €16 thousand were capitalised to the cost. 17.Dividends No interim dividend was declared for the year ended 30 April 2022 and therefore no dividends have been paid out in the period. The proposednal dividendfor theyear ended30 April2022 of1.4€ centsper share, totalling€6,976 thousands,issubject to approval by shareholders at the AnnualGeneral Meeting (“AGM”) and hencehas not been includedas a liability inthe nancial statements. Dividends will be paid in euros however shareholders will have an opportunity to opt for a payment in British pounds. The Directorsintend toreturn onethird ofAdjustedNet Income(as denedbelow)each yearvia aninterim andnaldividend, split one third and two thirds, respectively. TheAdjustedNetIncomeisdenedastheprot/(loss)fortheperiodadjustedforthepost-taximpactoftheIPOcosts,IPO renancingarrangementrelatednanceandtaxitems,M&Acostsandthepost-taximpactoftheamortisationofintangibles arising from acquisitions. The Adjusted Net Income for the year ended 30 April 2022 as well as for the year ended 30 April 2021 is as follows: 2022 (€ thousands) 2021 (€ thousands) Prot / (loss) for the period 2,399(93) Acquisition related costs 1 -75 Tax effect of Acquisition related costs -- IPO related fees 2 7,393256 Tax effect of IPO related fees (70)- Free share awards 3 1,378- IPO renancing: Senior Facility Agreement related early repayment condition 4 1,618- IPO renancing: Senior Facility Agreement related upfront fee write off 5 5,075- IPO renancing: Senior Facility Agreement capitalised upfront fee related deferred tax liability write off 6 (1,266)- Amortisation of intangibles arising from acquisitions (PPA) 7 16,14716,142 Deferred tax effect of amortisation of intangibles arising from acquisitions (1,434)(1,434) Adjusted Net Income31,24014,946 1 Fees and costs incurred in relation to the acquisition of eight legal entities including Auto24.ee. 2 Fees and costs incurred in relation to the Initial Public Offering (IPO). 3 Costs related to Free Share Awards to employees of the Group (note 23). 4 Previous Senior Facility Agreement related early repayment ne. 5 Previous Senior Facility Agreement related capitalised upfront fee write off. 6 Previous Senior Facility Agreement capitalised upfront fee related deferred tax liability write off. 7 Amortisation of trademarks and domains and amortisation of relationship with clients (note 11). Notes to the consolidated nancial statements continued 15. Equity continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 139 FINANCIAL STATEMENTS 18. Loans and borrowings Non-current liabilities 2022 (€ thousands) 2021 (€ thousands) Bank loan82,311210,051 Lease liabilities 167362 82,478210,413 Current liabilities 2022 (€ thousands) 2021 (€ thousands) Bank loan1212,412 Lease liabilities 202301 3232,713 Bank loan: Period endMaturity Loan currency Effective interest rate Amount (€ thousands) Bank Loan 30 April 20222026 July€4.04% 1 82,432 Bank Loan 30 April 20212026 July€6.08%212,463 1 Effective interest rate for the year ended 30 April 2022 includes 2 months of since repaid loan. In July 2021 the Group drew down a new loan consisting of Facility B (€98,000 thousand) and agreed on a new revolving credit facility of €10,000 thousand. The previous loan was fully repaid in July 2021. Due to early repayment the Group paid an early repaymentconditionthatamountedto€1,618thousand(includedwithinothernancialexpensesfortheyearended30April 2022). The Group also wrote off a capitalised upfront fee that amounted to €5,075 thousand (included within interest expenses for the year ended 30 April 2022) and a related deferred tax liability that amounted to €1,266 thousand (included within deferred tax expenses for the year ended 30 April 2022). As at 30 April 2022 the loan comprised of Facility B (outstanding balance: €84,000 thousand as €14,000 thousand were repaid duringthenancialyear),theundrawnrevolvingcreditfacilityamountedto€10,000thousand.Asat30April2021theloan comprised of Facility A1 (outstanding balance: €35,000 thousand), Facility A2 (€17,500 thousand), Facility B1 (€115,000 thousand) and Facility B2 (€31,410 thousand). Capitalised debt issue costs amounted to €1,689 thousand and €5,243 thousand for the year ended 30 April 2022 and 30 April 2021 respectively. Interest payable amounted to €121 thousand and €3,411 thousand for the year ended 30 April 2022 and 30 April 2021 respectively. The loanagreement prescribesa Total Leverage Ratiocovenant. Total Leverage Ratio iscalculated as NetDebt over lasttwelve months(LTM)ofAdjustedEBITDAandshallnotexceed5.50:1.Asat30April2022theGroupcompliedwiththecovenant prescribed in the loan agreement. As perthe same agreement,the interest margin foreach facilityis tied tothe Total Leverage Ratio ateach interest calculation date on a semi-annual basis: Total Leverage Ratio Facility B Margin (% p.a.) Revolving Facility Margin (% p.a.) Greater than 4.50:13.503.50 Equal to or less than 4.50:1 but greater than 4.00:13.003.00 Equal to or less than 4.00:1 but greater than 3.50:12.752.75 Equal to or less than 3.50:1 but greater than 3.00:12.502.50 Equal to or less than 3.00:1 but greater than 2.75:12.252.25 Equal to or less than 2.75:1 but greater than 2.50:12.002.00 Equal to or less than 2.50:11.751.75 Notes to the consolidated nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 140 FINANCIAL STATEMENTS For the borrowings received from the bank, the following pledges and securities were granted as of 30 April 2022: group companies shares. The following pledges and securities were granted as of 30 April 2021: loan receivables, cash in major bank accounts and trademarks. The carrying amount of pledged assets is as follows: Pledged assets 2022 (€ thousands) 2021 (€ thousands) Group companies shares 1 332,227705,369 Current receivables (including intragroup)-58,837 Bank accounts-5,742 Trademarks- 39,947 332,227809,895 1 As dened in the loan agreement, the pledged assets include the shares held by Group companies (see the full list of subsidiaries in note 25): the shares of UAB Antler Group that are held by BCG HoldCo limited. the shares of Baltics Classieds Group OÜ and UAB Diginet LTU that are held by UAB Antler Group the shares of AllePal OÜ that are held by Baltics Classieds Group OÜ #### Reconciliation of movements of liabilities to cashows arising from nancing #### activities Borrowings (€ thousands) Lease liabilities (€ thousands) Total (€ thousands) Balance as at 1 May 2020206,481818207,299 Changes from nancing cash flows - Proceeds from loans and borrowings15,000- 15,000 - Repayment of borrowings(10,000)- (10,000) - Payment of lease liabilities-(339) (339) Total changes from nancing cash ows 5,000(339)4,661 Other liability related changes - New leases-184 184 - Interest expenses13,39626 13,422 - Interest paid(12,414)(26) (12,440) Total other liability related changes9821841,166 Balance as at 30 April 2021212,463663213,126 Balance as at 1 May 2021212,463663213,126 Changes from nancing cash flows - Proceeds from loans and borrowings96,650- 96,650 - Repayment of borrowings(228,295)- (228,295) - Payment of lease liabilities-(305) (305) Total changes from nancing cash ows (131,645)(305)(131,950) Other liability related changes - New leases-67 67 - Lease disposal -(56) (56) - Capitalised borrowing costs(676)- (676) - Capitalised borrowing costs write off5,075- 5,075 - Interest expenses4,35117 4,368 - Interest paid(7,136)(17) (7,153) Total other liability related changes1,614111,625 Balance as at 30 April 202282,43236982,801 Notes to the consolidated nancial statements continued 18. Loans and borrowings continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 141 FINANCIAL STATEMENTS 20. Financial risk management In its activities,the Group is exposed tovarious nancial risks: market risk(including interest rate risk), credit riskand liquidity risk. The Directors are responsible for creation and control of overall risk management policy in the Group. Risk management policies are established to identify and analyse the risks faced by the Group, and to set appropriate risk limitsandcontrols.Riskmanagementpoliciesandsystemsarereviewedonaregularbasistoreectchangesinthemarket conditions and the Group‘s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. From time to time, the Group may use derivative nancial instruments in order to hedge against certain risks. The note below presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing the risk, and the Group’s management of capital. #### (a) Credit risk CreditriskistheriskofGroup’snanciallossifacustomerorcounterpartyfailstocomplywithcontractualobligations.Creditrisk is controlled by applying credit limits depending on the risk prole of the customer and monitoring debt collection procedures. The carryingamount of nancial assetsrepresentsthe maximum credit exposure. The maximumexposure to credit risk atthe reporting date was as follows: Note 2022 (€ thousands) 2021 (€ thousands) Trade receivables132,9312,440 Other short term receivables1339131 Cash and cash equivalents1419,91417,115 22,88419,686 TheGroup’sexposuretocreditriskisinuencedmainlybytheindividualcharacteristicsofeachcustomer.However,management also considers the factors that mayinuence the credit risk of its customer base, including thedefault risk associated with the industry and country in which customers operate. Creditriskrelatedtoloansreceivableismanagedbymonitoringcounterparty’sprotabilityandtheircashowprojections. Credit risk related to cash and cash equivalent balances is managed by monitoring credit ratings of the Group’s banks. #### Expected credit loss assessment for trade receivables The Group allocates each exposure to a credit risk grade based on datathat is determined to be predictive of the risk of loss (including butnot limited toexternal ratings,audited consolidated nancialstatements, management accountsand cashow projections and available press information about customers) and applying experienced credit judgement. Credit risk grades are dened using qualitative andquantitative factors that are indicative of the risk of default andare aligned to external credit rating denitions from agencies. AnECLrateiscalculatedbasedondelinquencystatusandactualcreditlossexperienceoverthepastthreeyears.These ratesaremultipliedbyscalarfactorstoreectdifferencesbetweeneconomicconditionsduringtheperiodoverwhichthe historical data has been collected, current conditions and the Group’s viewof economic conditions over the expected lives of the receivables. 19. Trade and other payables 2022 (€ thousands) 2021 (€ thousands) Trade payables235322 Accrued expenses344203 Other tax1,578849 Customer credit balances2,2892,210 Other payables1217 4,4583,601 Notes to the consolidated nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 142 FINANCIAL STATEMENTS The trade receivables do not have a signicant nancing component. The Group’s credit terms on sales to business customers are 7-60 days from receipt of the invoice by the customer. For sales to private customers, the Group collects payments instantly at the time of the transaction and is not exposed to credit risk. The Group applies the simplied approach for trade receivables. The Group has elected to use a provision matrix to calculate lifetime ECLs, which is based on: • Historical default rates over the expected life of the trade receivables • Adjustment for forward-looking estimates Impairment allowance – analysis as at 30 April 2022: ECL rate Trade receivables (€ thousands) Impairment allowance (€ thousands) Not past due (0.4%)2,101(9) 1 – 30 days past due (0.3%)378(1) 31 – 60 days past due (1.1%)147(2) 61 – 90 days past due (2.0%)71(1) > 90 days past due (19.2%)305(58) (2.4%) 3,002(71) Impairment allowance – analysis as at 30 April 2021: ECL rate Trade receivables (€ thousands) Impairment allowance (€ thousands) Not past due (0.2%)1,825(4) 1 – 30 days past due (1.1%)306(3) 31 – 60 days past due (4.6%)113(5) 61 – 90 days past due (8.4%)63(5) > 90 days past due (30.1%)217(67) (3.3%) 2,524(84) For the movement in impairment allowance see note 13. #### (b) Liquidity risk Liquidity risk is the risk thatthe Group will encounter diculty in meeting theobligations associated with its nancial liabilities that are settled by delivering cash or another nancial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sucient liquidity to meetits liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. TheGroup‘spolicyistomaintainsucientamounts ofcash andcash equivalentsviaoperations,borrowingsandcreditfacilities to meet its commitments at a given date. This policy excludes the potential impact of extreme circumstances that cannot be reasonably predicted, such as natural disasters. Cash owbudgeting isperformed bythe Group’s managementand theGroup’s liquidity requirementsare monitored toensure it has sucient cash to meet operational needs. TheGrouphasaccesstoacreditfacilitywiththecurrentlenderatatotalofEUR94000thousands.Allofthecommitment maturesinJuly2026.At30April2022,EUR84000thousandswasdrawnunderthecreditfacilitiesavailable.Theundrawn revolving credit facility amounted to €10,000 thousand. The covenant of this credit facility is discussed in note 18. Notes to the consolidated nancial statements continued 20. Financial risk management continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 143 FINANCIAL STATEMENTS Thetablebelowsummarisestheremainingcontractualmaturitiesofnancialliabilitiesasat30April of2022,including estimated interest payments: Financial liabilities Carrying amount (€ thousands) Contractual cash ows (€ thousands) Up to 1 year (€ thousands) 1-2 years (€ thousands) 2-5 years (€ thousands) More than 5 years (€ thousands) Bank loan82,432(91,501)(1,764)(1,769)(87,968)- Lease liabilities 369(472)(273)(134)(65)- Trade payables235(235)(235)--- Other payables2,301(2,301)(2,301)--- 85,337(94,509)(4,573)(1,903)(88,033)- ThetablebelowsummarisestheremainingcontractualmaturitiesoftheGroup’snancialliabilitiesasat30Aprilof2021, including estimated interest payments: Financial liabilities Carrying amount (€ thousands) Contractual cash ows (€ thousands) Up to 1 year (€ thousands) 1-2 years (€ thousands) 2-5 years (€ thousands) More than 5 years (€ thousands) Bank loan212,463(286,684)(13,097)(13,194)(39,620)(220,773) Lease liabilities 663(779)(312)(260)(207)- Trade payables322(322)(322)--- Other payables2,227(2,227)(2,227)--- 215,675(290,012)(15,958)(13,454)(39,827)(220,773) #### (c) Market risk Market risk is the risk that changes in market prices- such as foreign exchange rates and interest rates - will affect the Group’s income or thevalue of itsholdings of nancialinstruments. The objective ofmarket riskmanagement is to manageand control market risk exposures within acceptable parameters, while optimizing the return. (i) Currency risk EUR isthe functionalcurrency of eachlegal entitycomprising theGroup, as wellas theGroup’s reporting currency. The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than EUR. The Group is not using any nancial instruments to hedge against the foreign currency exchange risk. Asat30April2022,theGrouphasnosignicantmonetaryassetsandliabilitiesdenominatedinothercurrenciesthanEUR except for €1.7m cash held in GBP. As at 30 April 2021 the Group had no monetary assets and liabilities denominated in other currencies than EUR. (ii) Interest rate risk The Group’s income andoperating cash owsare substantially independentof changes inmarket interest rates. TheGroup has no signicant interest-bearing assets. At the reporting date, the interest rate prole of the Group’s interest-bearing nancial instruments was as follows: Carrying amount 2022 (€ thousands) 2021 (€ thousands) Instruments with a variable interest rate Bank loan82,311209,052 82,311209,052 Notes to the consolidated nancial statements continued 20. Financial risk management continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 144 FINANCIAL STATEMENTS #### Cash ow sensitivity analysis for variable rate instruments A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and prot or loss by the amounts shown below. The analysis assumes that all other variables remain constant. 2022 Impact of nancial instruments on prot before tax Financial instruments by class Increase Impact to nance costs (€ thousands) Decrease Impact to nance costs (€ thousands) Variable rate instruments+100 bp(840)-100 bp840 2021 Impact of nancial instruments on prot before tax Financial instruments by class Increase Impact to nance costs (€ thousands) Decrease Impact to nance costs (€ thousands) Variable rate instruments+100 bp(2,143)-100 bp2,143 #### c) Capital management Equity in combination with net debt is considered to be capital for capital management purposes. The Group’s policy is to maintain the condenceof creditors and themarket, to fundbusiness development opportunities inthe future and complywith external capital requirements. Fair value of nancial instruments TheGroup’sprincipalnancialinstrumentsnotcarriedatfairvalue aretradeandotherreceivables,tradeandotherpayables, non-current and current borrowings. The management of the Group is of the opinion that carrying amount of trade and other receivables, trade and other payables is a reasonable approximation of fair value due to their short-term nature. Basedonthediscountedcashowanalysisperformed,managementconsidersthattheborrowingscarryingamountisa reasonable approximationoffair value.Thediscounted cashowanalysiswas performed usingamarket rateofinterest and principal payments discounted to a present value using interest rate as a discount rate. AnumberoftheGroup’saccountingpoliciesanddisclosuresrequiredeterminationoffairvalue,forbothnancialandnon- nancial assets and liabilities. Fair value hierarchy When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level2:inputsotherthanquotedpricesincludedinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group recognised transfers between the fair value hierarchy from the end of the reporting period in which the change occurred. Below listed are nancial assets and nancial liabilities: 2022 Carrying amount (€ thousands) Level 1 (€ thousands) Level 2 (€ thousands) Level 3 (€ thousands) Total (€ thousands) Trade and other receivables2,970---- Cash and cash equivalents19,914---- Loans and borrowings (82,432)-(82,432)-(82,432) Trade and other payables(4,458)---- (64,006)-(82,432)-(82,432) Notes to the consolidated nancial statements continued 20. Financial risk management continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 145 FINANCIAL STATEMENTS 2021 Carrying amount (€ thousands) Level 1 (€ thousands) Level 2 (€ thousands) Level 3 (€ thousands) Total (€ thousands) Trade and other receivables2,571---- Cash and cash equivalents17,115---- Loans and borrowings (212,463)-(212,463)-(212,463) Trade and other payables(3,601)---- (196,378)-(212,463)-(212,463) 21. Related party transactions During the period ended 30 April 2022 the transactions with related parties outside the consolidated Group included: • remuneration of key management personnel (note 22), including share option awards under the PSP scheme (note 23); • beforetheIPOapartofANTLERManagementS.A.shareswereacquiredbythethreeExecutive Directorstogetherwith other key employeesas part of management incentive program that existed since BCG acquisition by funds advised by Apax Partners (“Apax”) in FY 2020; shares were purchased at a value equal to the price paid by Apax in FY 2020; • at the IPO three Non-Executive Directors purchased shares of ANTLER TopCo Sàrl outside the Offer at the IPO price; • share for share exchange transaction during the reorganisation for the IPO (note 15) where three Executive Directors, three Non-Executive Directorsand Directors of Group Companies exchangedthe shares they held in ANTLER Management S.A. and ANTLER TopCo Sàrl for the like-for-like amount of shares in Baltic Classieds Group PLC. During the year ended 30 April 2021 there were no transactionswith related parties outside the consolidated Group except for the remuneration of key management personnel (note 22). 22. Remuneration of key management personnel and #### other payments Key management personnel comprise three Executive Directors (CEO, CFO, COO), four Non-Executive Directors (since July 2021 only) and Directors of Group companies. Remuneration of key management personnel in the reporting period, including social security and related accruals, amounted to €969 thousand for the period ended 30 April 2022 and €560 thousand for the period ended 30 April 2021. Remuneration of Directors of the Board (three Executive and four Non-Executive Directors) in the reporting period, including social security and related accruals, amounted to €748 thousand. As the Board was formed in the reporting period only, the closest comparative to the remuneration of the Directors of the Board would be the remuneration of three Executive Directors which, including social security and related accruals, amounted to €345 thousand for the year ended 30 April 2021. During the period ended 30 April 2022 the Executive Directors of the Group were granted a set number of share options under the PSP scheme. Share-based payment expenses amounted to €509 thousands for the period ended 30 April 2022 (nil in previous period). None of the options vested during the reporting period. See note 23 for further detail. During the year ended 30 April 2022 and 30 April 2021, key management personnel of the Group did not receive any loans, guarantees, no other payments or property transfers occurred and no pension or retirement benets were paid. 23. Share-basedpayments #### Performance Share Plan The Group currently operates a Performance Share Plan (PSP) that is subject to a service and a non-market performance condition. The estimate of the fair value of the PSP is measured using Black-Scholes pricing model. The total charge in the period relating to the PSP scheme was €644 thousand (nil in previous periods). The PSP plan consists of share options for Executive Directors and certain key employees with a vesting period of 3 years. If the options remain unexercised aftera period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest, unless under exceptional circumstances. Notes to the consolidated nancial statements continued 20. Financial risk management continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 146 FINANCIAL STATEMENTS On 27 July 2021, the Group awarded 1,041,745 share options under the PSP scheme. For these awards, the Group’s performance is measured by reference to the Group’s Earnings per Share in FY2024. See Directors’ Remuneration Report for further detail. The fair value of the 2021 award was determined to be €2.56 per option using a Black-Scholes pricing model. The resulting share-based payments charge is being spread evenly over the period between the grant date and the vesting date. The assumptions used in the measurement of the fair value at grant date of the PSP awards are as follows: Grant dateCondition Share price at grant date (€) Exercise price (€) Expected volatility (%) Vesting period (years) Risk-free rate (%) Dividend yield (%) Fair value per option (€) 27 July 2021 EPS dependent 2.620.0153%3(0.20)%0.78%2.56 The expectedvolatility was determinedusing UK listedpeers’ historical volatility average asat the dateof option valuation own data was not available due to a relatively recent Admission. The number of options outstanding and exercisable as at 30 April 2022 was as follows: 20222021 (number)(number) Outstanding at beginning of pe-riod-- Options granted in the period1,041,475- Options exercised in the period-- Options forfeited in the period-- Outstanding at period ending1,041,475- #### Free Share Awards In addition to the PSP scheme, as it was intended and noted in the Prospectus (section 11.2 (Company-wide remuneration) of Part XVII (Additional Information)) 392,405 of free shares were awarded to all employees of the Group with the number per employee based on length of service with the business and ranging between €3,000 and €15,000 in value. The total value of the shares awarded amounted to €968 thousand. Fringe benet tax was paid by the Group, it amounted to €410 thousand. Executive Directors and the rest of Senior Management team did not receive free shares under this arrangement. 24. Contingent liabilities and contingent assets As at 30 April 2022 as well as at 30 April 2021, there was no on-going litigation, which could materially affect the consolidated nancial position of the Group. As disclosed inthe Prospectus, Diginet LTU UAB, a Groupcompany, was subjectto an investigation bythe Lithuanian CompetitionCouncil(“LCC”)followingacomplaintbyUABOberHaus(the“Claimant”),arealestatebroker,whoallegedthat the Group’s Lithuanian real estate portal had abused its position in the real estate online classieds markets by applying unfair highlistingprices.InDecember2020,theLCCconcludedafteranin-depthanalysisthatthepricestoB2ClistersandC2C listers were notunfair or restrictive tocompetition and closedthe investigation. In January2021, Claimant appealedthe LCC’s decision with the court of rstinstance, asking the court to annul the LCC’s decision andto return the case back to the LCC for further investigation arguing that the LCC erred in applying the necessary legal standards for evaluation of unfair prices. On 17 June 2021, the court of rst instance declined to annul the LCC’sdecision and dismissed the Claimant’s appeal. The Group had successfullydefendeditspositionastheClaimantrefusedtouseitsrighttoappealthedecisiontotheLithuanianSupreme Administrative Court and the case is closed. In March 2019 the Estonian Competition Authority (“ECA”) initiated supervisory proceedings against the AllePal OÜ and KinnisvaraportaalOÜ,theoperatorsoftworealestateonlineclassiedportals,basedonthecomplaintledbyvariousreal estate companies and portals (“Claimants”). The Claimants alleged that the Group had abused its position by unfairly limiting theconditionsforXMLdataexchangeandapplyingexcessivelyhighprices.On12November2021theECAterminatedthe supervisory proceedingswithregardtothepart thatconcernedthe conditionsofXML dataexchange.TheGroupisco-operating with the ECA and although the Group expects that the supervisory proceedings will be terminated without any material effect tothenancialpositionoroperationsoftheGroup,theGroupcannotmakeanyassurancesthattheECAwillnotndany infringements. As the ECA or any other Estonian authorities have not initiated any misdemeanour (or criminal) proceedings againstany Groupcompany, theongoing supervisoryproceedingscannot leadto anyimpositionof nestoany Groupcompany, however, if the ECA concludes that AllePal OÜ and Kinnisvaraportaal OÜ abused their position, the ECA could issue a precept ordering these Group companies to end any ongoing infringements. Notes to the consolidated nancial statements continued 23. Share-based payments continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 147 FINANCIAL STATEMENTS On4 February2022theECA initiatedsupervisory proceedingsagainstAllePal OÜ,theoperatorof realestateonline classied portal,basedonthecomplaintledbyRealesOÜ.RealesOÜhadenteredintoaserviceagreementwithAllePalOÜforthe insertion of real estate adson the both real estate online classied portals, and according to the complaint, AllePal OÜ unfairly refused to provide the service to Reales OÜ by terminating the agreement. According to AllePal OÜ, the service agreement was terminated because the claimant used the services to provide real estate ads brokerage or aggregation services and did notengageinrealestatebrokerage,forwhichtherealestateonlineclassiedsportalsareintended.AllePalOÜactivelyco- operates with the ECA and provides all necessary information and also holds negotiations with Reales OÜ in order to develop a suitable contract and the pricing for the service needed by the claimant. On March 15, 2022, Reales OÜ submitted an additional complaint to initiate additional supervisory proceedings against AllePal OÜ, which alleges that the pricing difference between the prices offered to the business and private customers indicates the abuse of a dominant position. On 1 April 2022 the ECA decided not to initiate additional proceedings and investigate the raised question within the ongoing supervisory proceedings. As the ECA nor any other Estonian authorities have initiated any misdemeanour (or criminal) proceedings against any Group company,theongoingsupervisoryproceedingscannotleadtoanyimpositionofnestoanyGroupcompany.However,ifthe ECA concludes that AllePal OÜ and Kinnisvaraportaal OÜ abused their position, the ECA could issue a precept, ordering these Group companies to end any ongoing infringements. 25. List of subsidiaries Company name Registered oce Registration Number Activity Share in capital Held directly? BCG HOLDCO Limited Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH 13415193 Acquiring participations 100% Yes ANTLER Management SA 1-3 Boulevard de la Foire, Luxembourg B235771 Liquidated on 21 April 2022 -- ANTLER TopCo Sàrl 1-3 Boulevard de la Foire, Luxembourg B235647 Liquidated on 21 April 2022 -- ANTLER PiKCo Sàrl 1-3 Boulevard de la Foire, Luxembourg B235730 Liquidated on 31 March 2022 -- ANTLER MidCo Sàrl 1-3 Boulevard de la Foire, Luxembourg B235872 Liquidated on 10 March 2022 -- ANTLER HoldCo Sàrl 1-3 Boulevard de la Foire, Luxembourg B234342 Liquidated on 24 February 2022 -- UAB Antler Group V. Nagevičiaus 3, Vilnius, Lithuania 305147427 Management and consulting services 100%No UAB Diginet LTU Saltoniškių 9B-1, Vilnius, Lithuania 126222639 Online classieds 100%No OÜ AllePal Pärnu mnt. 141, Tallinn, Estonia 12209337 Online classieds 100%No OÜ Kinnisvaraportaal Pärnu mnt. 141, Tallinn, Estonia 10680295 Online classieds 100%No OÜ VIN SolutionsTuru 2, Tartu, Estonia14071883 Information services 100%No OÜ Baltic Classieds Group Pärnu mnt. 141, Tallinn, Estonia 14608656 Online classieds 100%No SIA City24 Gustava Zemgala 78 - 1, Rīga, Latvia 40003692375 Online classieds 100%No 26. Subsequent events On 1 July 2022, the Company’s indirect subsidiary City24 SIA acquired GetaPro business in exchange for €1.6 million in cash. It was anassets acquisition.GetaPro isa servicesclassieds portaloperating inLatvia andEstonia. Webelieve this acquisition will allow us to increase our presence in the services classieds market in the Baltics. Notes to the consolidated nancial statements continued 24. Contingent liabilities and contingent assets continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 148 FINANCIAL STATEMENTS #### Company Statement of Financial Position #### As at 30 April 2022 Notes 2022 (€ thousands) Fixed assets Investments4508,064 Current assets Debtors: amounts falling due within one year5113,181 Cash at bank or in hand61,979 Creditors: amounts falling due within one year Amounts due from subsidiary undertakings7(4,988) Other creditors7(842) Net current assets109,330 Total assets less current liabilities617,394 Capital and reserves Called up share capital105,822 Retained earnings620,707 Own shares held11(3,418) Prot and loss for the period (5,717) Total Capital and reserves617,394 The accompanying notes form part of these nancial statements. The nancial statements ofBaltic Classieds Group PLC, company number 13357598,were approved andauthorised for issue by the board and were signed on its behalf on 6 July 2022. Justinas Šimkus Director ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 149 FINANCIAL STATEMENTS #### Company Statement of Changes in Equity #### For the period from incorporation 26 April 2021 to 30 April 2022 Called up share capital (€ thousands) Share premium (€ thousands) Own shares held (€ thousands) Retained earnings (€ thousands) Total equity (€ thousands) Balance at 26 April 2021 ----- Prot / (loss) for the period ---(5,717)(5,717) Other comprehensive income ----- Total comprehensive income --- (5,717)(5,717) Transactions with owners: Group restructure and IPO 581,77443,143--624,917 Transfer arising from capital reduction (575,956)(43,143)-619,099- Share issue post IPO4--(4)- Share based payments---1,6121,612 Acquisition of treasury shares --(3,418)- (3,418) Balance at 30 April 2022 5,822-(3,418)614,990617,394 The accompanying notes form part of these nancial statements. Baltic Classieds Group PLC Annual Report and Accounts 2022 150 FINANCIAL STATEMENTS #### Notes to the Company nancial statements 1. Accounting policies Baltic ClassiedsGroup PLC (“theCompany”) isa public companylimited byshares, incorporated inEngland, United Kingdom onthe26thofApril2021withregistrationnumber13357598andlistedontheLondonStockExchange.TheCompanyis registered anddomiciledintheUK.Principalplaceof thebusinessisHighdownHouse,Yeoman Way,Worthing,West Sussex, United Kingdom, BN99 3HH. #### Statement of compliance and basis of preparation The nancialstatementsof BalticClassieds GroupPLC have beenpreparedin compliancewith UnitedKingdom Accounting standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland (“FRS 102”) and the Companies Act 2006. The Companynancial statements have been prepared underthe historical costconvention, as modied forthe revaluation of certain nancial assets and liabilities through prot or loss. The current year nancial information presented is at and from the date of incorporation 26 April 2021 to 30 April 2022. The Companyuses the Euro (EUR)as functional currencyand presentationcurrency. Foreigncurrency transactionsare translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at month-end exchange rates ofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheprotorlossfortheperiod.Non- monetary items measured at fair value are measured using the exchange rate when fair value was determined. The Company nancial statements have been rounded to the nearest thousand except where otherwise indicated. AspermittedbySection408of theCompanies Act2006,anentityprotandlossaccountisnotincluded aspartofthepublished consolidatednancialstatementsBalticClassiedsGroupPLC.Thelossforthenancialperioddealtwithinthenancial statements of the parent company was €5,717 thousands. TheCompany’sparentundertaking,BalticClassieds Group PLCincludes theCompanyinitsconsolidated nancialstatements. Theconsolidated nancialstatements ofBaltic ClassiedsGroupPLCare prepared inaccordancewith theUK adopted InternationalFinancialReportingStandardsand areavailabletothepublic.In thesenancial statements,theCompany is considered to be a qualifying entity and has applied the exemptions available under FRS 102 in respect of the following disclosures: • statement of comprehensive income with related notes; • cash ow statement with related notes; and • key management personnel compensation. #### Going concern Thenancial statementshavebeenpreparedonagoing concernbasiswhichtheDirectors considertobeappropriate forthe following reasons. TheDirectorshavepreparedcashowforecastsforaperiodof12monthsfromthedateofapprovalofthesenancialstatements which indicate that, taking accountof reasonably possible Company will have sucient funds to meet itsliabilities as they fall due for that period. In making this assessment the Directors have considered the fact that the Company’s activities are principally as a holding company with long-term investments in subsidiaries. For the currentyear started from incorporation 26 April to 30 April 2022 the Company incurred a loss, however this resulted due to the one-off IPO related expenses. The Company’s assets consist of investments in subsidiary undertakings, and intercompany loan receivable balances. Consequently,the Directors are condentthat theCompany will have sucientfunds tocontinue to meetits liabilities asthey fall dueforat least12months fromthe dateof approvalof thenancial statementsandthereforehave prepared thenancial statements on a going concern basis. #### Signicant accounting judgments and key sources of estimation uncertainty Inpreparingthenancialstatements,managementisrequiredtomakeestimates andassumptions thataffecttheapplicationof policies and reported income, expenses, assets, and liabilities. Estimates and judgments are continually reviewed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. Actual results may differ from the initial estimate or judgement and any subsequent changes are Baltic Classieds Group PLC Annual Report and Accounts 2022 151 FINANCIAL STATEMENTS accounted forwith and effect onthe nancialstatements at thetime such updatedinformation becomes available. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period inwhichtheestimatesarerevisedorinanyfutureperiodsaffected.Therearenosignicantjudgmentsorkeysourcesof estimation uncertainty for the Company. #### Other judgments and sources of estimation uncertainty The Company considers Share-based payments for accounting estimates to be important to the reporting of Company’s results of operationsand nancial position.Share-based payment arrangements inwhich the Companyreceivesgoods or servicesas consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. The fair value of services received in return for share options is calculated with reference to the fair value of the award on the date of grant. Black-Scholes model has been used to calculate the fair value and the Directors have therefore made estimates with regard to the inputs to that model and the period over which the share award is expected to vest. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these nancial statements. #### Share-based payment transactions Equity-settled awards arevalued at the grant date. Fair value of the awards are measured using Black-Scholes pricing model. In theconsolidatednancial statements,on theassumptionthatthearrangement isequity-settled,thetransactionistreatedasan equity-settled share-based payment, as the group has received services in consideration for the group’s equity instruments. An expense is recognised in the group income statement for the grant date fair value of the share-based payment over the vesting period,withacreditrecognisedinequity.IntheparentCompany’sseparatenancialstatements,thereisnoshare-based payment charge, as no employees are providing services to the parent. The parent would therefore record a debit, recognising an increase in the investment in the subsidiaries as a capital contribution from the parent and a credit to equity. In the subsidiaries’ nancialstatements,theawardistreated asanequity-settledshare-basedpayment.Anexpenseforthegrantdatefairvalue of the award is recognised over the vesting period, with a credit recognised in equity. The credit to equity is treated as a capital contribution, as the parent is compensating the subsidiaries’ employees with no cost to the subsidiaries. #### Investment in subsidiaries Theseare separatenancial statementsofthe Company.The costmethodis appliedtoinvestments inothercompanies. The cost price increases when funds are added through capital increase or when group contributions are made to subsidiaries. #### Taxation TheCompany’sprot fortheperiod arisesmostlyfrom thereceiptof BCGHoldcoLimited intercompanyloaninterest income. Any interest income received by the company is taxable as a loan relationship. However, the corresponding expense on BCG HoldcoLimitedshouldbedeductibleforthetaxpurposes.Groupreliefallowslossestobesurrenderedfromloss-making companiestoprotable companiesinthesamegroup. GivenBCGHoldcoLimitedand BalticClassiedsGroupPLC areinthe same group for group relief purposes and BCG Holdco Limited would be able to surrender its losses to Baltic Classieds Group PLC,there isnonettaxpayable asaresultoftheloan.Inaddition,Baltic ClassiedsGroupPLCprovides taxablesuppliesfor managementservicetoUABAntlerGroupbasedonmanagementagreement,howeverincurredadministrationcostscover revenue and as a result, no provision for Corporation tax is needed in these nancial statements. #### Shares held by the Employee Benet Trust TheEmployeeBenetTrust(‘EBT’)providesfortheissueofsharestoGroupemployeesprincipallyunderPerformanceSharePlan scheme.The Grouphas controlof theEBT andtherefore consolidatestheEBT inthe Groupnancial statements.Accordingly, shares in the Company held by the EBT are included in the balance sheet at cost as a deduction from equity. #### Financial instruments The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of nancial instruments. (a) Financial assets Basicnancialassets,includingtradeandotherreceivables,cashandbankbalances,loanstoGroupcompaniesareinitially recognisedattransactionprice(unlessthearrangementconstitutesanancingtransaction)andaresubsequentlycarriedat amortised cost using the effective interest method. (b) Financial liabilities Basicnancialliabilities,includingtradeandotherpayablesthatareclassiedasdebt,areinitiallyrecognisedattransaction price, unless thearrangement constitutes anancing transaction, where thedebt instrument is measured atthe present value Notes to the Company nancial statements continued 1. Accounting policies continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 152 FINANCIAL STATEMENTS of the future receipts discounted at a market rateof interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.Accountspayableareclassiedascurrentliabilitiesifpaymentisduewithinoneyearorless.Ifnot,theyarepresented as non-current liabilities. Trade payables are recognised initially attransaction price and subsequently measured at amortised cost using the effective interest method. #### Dividend distribution Dividend distributionto the Company’s shareholdersis recognised asa liability inthe Group’snancial statements inthe period inwhichthedividendisapprovedbytheCompany’sshareholdersinthecaseofnaldividends,orthedateatwhichtheyare paid in the case of interim dividends. 2. Services provided by the Company’s auditor 2022 (€ thousands) Fees payable for audit services: Audit of the Company and consolidated nancial statements (244) Fees payable for other services: - Audit related assurance services(104) - Transaction related services(532) - Other assurance services(267) Total(1,147) Transaction related and other assurance services provided by the Company’s auditors during the year ended 30 April 2022 relate to the IPO. Refer to Audit Committee Report on page 70 for further detail. 3. Directors’ remuneration The Company has no employees other than the Directors. Full details of the Directors’ remuneration and interests are set out in the Directors’ remuneration report on page 76, Employee numbers and costs in note 7 and Remuneration of key management personnel and other payments in note 22 to the consolidated nancial statements. 4. Investmentin subsidiaries 2022 (€ thousands) Balance at 26 April 2021- Incorporation of BCG Holdco Limited at 24 May 2021 - Acquisition of ANTLER Management S.A 45,076 Acquisition of ANTLER TopCo S.à r.l. 461,376 Share based payments1,612 Investment in subsidiaries at 30 April 2022. 508,064 On 3 June 2021 BCG Group undertook a group reorganisation whereby the Company in exchange for the allotment of ordinary sharesacquiredANTLERManagementS.A38,740,076ordinarysharesat£1(€1.16)andANTLERTopCoS.àr.l.396,525,002 ordinary shares at £1 (€1.16). Therefore, the Company incorporated on 26 April 2021, became the ultimate parent of the trading group immediatelycontrolled by AntlerGroup UAB. Subsequently, BCG HoldcoLimited acquired ANTLER TopCo S.à r.l. from the CompanyandANTLER ManagementS.Ainexchangeforsharesin BCGHoldcoLimited.ClosingbalanceoftheInvestmentin subsidiariesat 30April2022consistsof €506,452thousandinvestmentinBCG HoldcoLimitedandshare basedpaymentsin amount to €1,612 thousand. Additions to share based payments in the year relate to equity-settled share-based payments granted to the employees of subsidiary companies. Subsidiary undertakings are disclosed within note 25 to the consolidated nancial statements. Notes to the Company nancial statements continued 1. Accounting policies continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 153 FINANCIAL STATEMENTS 5. Debtors: amounts falling due within one year 2022 (€ thousands) Intercompany loan to BCG HoldCo Limited 112,915 Amounts owed by subsidiary undertakings180 Other short-term receivables86 113,181 #### Terms, repayment of intercompany loan TheloanisusedtonancetherepaymentoftheindebtednessofANTLERHoldCoS.a.r.l.anditssubsidiaries.Theloanis repayableonimmediatelyon demandbythelender. Theborrowermayprepayorrepayanyorall oftheLoanat anytimeandbear interest atrateof2.5% plus6monthsEURIBOR. Theloanisnot expectedtobepaid within1yearin thecourseofthe normal operating cycle. 6. Cash and cash equivalents 2022 (€ thousands) Cash at bank1,979 1,979 There were no restrictions on cash and cash equivalents held at 30 April 2022. 7. Creditors: amounts falling due within one year 2022 (€ thousands) Trade creditors(6) Taxation and social security(590) Accruals(246) Amounts owed to subsidiary undertakings(4,988) (5,830) Theproposalofthenaldividendfortheyearended30April2022isasubjecttoapprovalbyshareholdersattheAnnual GeneralMeeting, thereforeadvance paymentsexecuted byUAB AntlerGroupin thisregard wasrecognisedas amountsowed tosubsidiaryundertakingsinthenancialstatements.Theamountofsubsidiaryundertakingsalsoconsistsoftheadvance payments for the services provided within one year of the Company. 8. Financial instruments Financial instruments utilised by the Company during the year ended 30 April 2022 may be analysed as follows: 2022 (€ thousands) Financial assets measured at amortised cost115,160 115,160 Financial assets specied and detailed disclosed in notes 5 and 6. Notes to the Company nancial statements continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 154 FINANCIAL STATEMENTS 2022 (€ thousands) Financial liabilities measured at amortised cost(5,830) (5,830) Financial liabilities specied and detailed disclosed in note 7. Current assets and liabilities Financial instruments included within current assets and liabilities (excluding cash and borrowings) are generally short term in nature and accordingly their fair values approximate to their book values. 9. Financial risk management Initsactivities,theCompanyisexposedtovariousnancialrisks:marketrisk(includinginterestraterisk),creditriskand liquidity risk. The Board of Directors is responsible for creation and control of overall risk management policy in the Company. Credit riskis thecurrent or prospectiverisk toearnings andcapital arising froma debtor’s BCGHoldco Limitedfailure to meet the terms of intercompany loan with the Company or if a debtor otherwise fails to perform. The credit risk on cash in banks is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.Cash in banksis theonly nancial assetexposed to creditrisk. BarclaysBank UKPLC had acredit rating of Fitch A+, Moody’s A1 as at 30 April 2022. The Company can take on exposure to marketrisk, which means the risk for the Company to incur losses due to the adverse uctuations inthe market parameterssuch asinterest rates (interestrate risk)and currency exchangerates (foreign currency risk). Interest rate risk is the risk to experience losses because of unfavorable changes of interest rate. A company granting a loan witha xedinterestwillexperience supposedlosses(i.e., willgetless incomethanit couldget),if theinterestrate onthemarket is going up, and the company which has taken a loan will experience the supposed losses, if the interest rate goes down. In case a oating interest rate is establishedin the contract, market uctuations will have an impact on the nancial income/expenses earned/incurredbythepartiesinvolved.SinceaoatinginterestrateisappliedtotheloangrantedbyTheCompanytoBCG Holdco Limited, The Company and BCG Holdco Limited bear the interest rate risk. Foreigncurrencyexchangeriskisassociatedwithpotentialprotvariability,whichmaybecausedbyuctuationsofforeign currencies exchange rates. EURis the functionalcurrency of the Company. The Companyis exposed to currencyrisk on sales, purchasesandborrowingsthataredenominatedinacurrencyotherthanEUR.Asat30April2022,theCompanyhasno signicantmonetaryassetsandliabilitiesdenominatedincurrenciesotherthanEURexceptfor€297thousandcashheldin GBP and one-off payable VAT €589 thousand regarding IPO transaction costs of non-recoverable VAT part. Liquidityriskisunderstoodasincapabilitytofullundertakenobligationsinduetimewithoutexperiencingunacceptable losses. Having in mind that both the Company and BCG HoldcoLimited are related parties, the Company assumes liquidity risk to the limited extent. 10. Share capital and share premium Number of shares Share capital amount (€ thousands) Share premium amount (€ thousands) Incorporation of Baltic Classieds Group PLC: 1 ordinary and 1 redeemable preference shares issue 257- Redeemable preference share redeemed(1)(57)- Shares issued to acquire ANTLER Management S.A 38,740,07645,076- Shares issued to acquire ANTLER TopCo S.à r.l. 396,525,002461,376- Share Issue for IPO64,734,92175,32248,959 Share issue related transaction costs--(5,816) Nominal value of ordinary shares reduced and share premium cancelled to create distributable reserves -(575,956)(43,143) Shares issued to satisfy Free share awards392,4054- Balance as at 30 April 2022500,392,4055,822- Notes to the Company nancial statements continued 8. Financial instruments continued ![]() Baltic Classieds Group PLC Annual Report and Accounts 2022 155 FINANCIAL STATEMENTS Fully paid ordinary shares, which have a par value of GBP 0.01, carry one vote per share and carry a right to dividends. BalticClassiedsGroupPLCwasincorporatedon26April2021with1ordinarysharewithavalueof£1(€1.15)pershare allotted. On 27 April 2021 the company issued 1 redeemable preference share with a value of £49,999 (€57,487) per share. On 5 July 2021 BCG was inserted into the Group’s holding structure via a share for share exchange with the shareholders of a previous top holding entity, ANTLER TopCo S.a.r.l: 1) BCGissued 38,740,076 ordinaryshares at £1(€1.16) each inthe share forshare exchange to acquireANTLER Management S.A. that was a minority shareholder of ANTLER TopCo S.a.r.l. 2)BCGissued396,525,002ordinarysharesat£1(€1.16)eachintheshareforshareexchangetoacquiretherestofANTLER TopCo S.a.r.l.. 3) 1 redeemable preference share with a value of £49,999 (€57,487) per share was redeemed. On 5 July 2021 BCG issued 64,734,921 ordinary shares with a value of £1 (€1.16) each that were listed at £1.65 (€1.92) on the London Stock Exchange. Share issue related expenses amounting to €5,816 thousand were set against the share premium that arose during the listing. On 23 September 2021 BCG undertook a Court approved capital reduction to create distributable reserves. The entire amount standing to the credit of BCG share premium account was cancelled and the nominal value of each ordinary share in issue in the capital of BCG was reduced from £1 (€1.15) to £0.01 (€0.012). This created a total of €619,100 thousand in distributable reserves. On 19 October 2021 BCG issued 392,405 shares with a value of £0.01 (€0.012) each to be gifted, on an unrestricted basis, to all subsidiaries’ employees other than the executive directors and senior management team. 11. Own shares held 2022 (€ thousands) Own shares held(3,418) (3,418) On 25 March 2022 EBT bought Baltic Classieds Group PLC 2.1m shares £1.35 (€1.62) per share. 12.Dividends No interim dividend was declared for the year ended 30 April 2022 and therefore no dividends have been paid out in the period. The proposednal dividendfor theyear ended30 April2022 of1.4€ centsper share, totalling€6,976 thousands,issubject to approval by Shareholders at the Annual General Meeting (“AGM”) and hencehas not been included as a liabilityin the nancial statements. Dividends will be paid in euros however Shareholders will have an opportunity to opt for a payment in British pounds. 13. Related party transactions During theyear, a managementcharge of€274.7 thousandwas providedto UABAntler groupin respectof services rendered. At the year end, balances outstanding with other Group undertakings were €113,095 thousand for debtors as set out innote 5 and €4,988 thousand for creditors as set out in note 7. Related party transactions for remuneration of key management personnel are disclosed within note 21 to the consolidated nancial statements. 14. Ultimate parent company and parent company of #### larger group The Company is a parent and the ultimate controlling party. The largest group in which the results of the Company are consolidated is that headed by Baltic Classieds Group PLC with registered oce in Highdown House, Yeoman Way, Worthing, West Sussex, UnitedKingdom, BN993HH. Noothergroupnancial statementsincludethe resultsofthe Company.The consolidatednancial statements of Baltic Classieds Group are available to the public and may be obtained from www.balticclassieds.com Notes to the Company nancial statements continued 10. Share capital and share premium continued ![]() ## ADDITIONAL INFORMATION 157 Glossary 157 Shareholder Information Baltic Classieds Group PLC Annual Report and Accounts 2022 157 Additional Information #### Glossary 2020 – means the nancial year ended 30 April 2020. 2021 – means the nancial year ended 30 April 2021. 2022 – means the nancial year ended 30 April 2022. AGM – means Annual General Meeting. Apax – means funds advised by Apax Partners ARPU – means average revenue per user. Admission – means the admission of the ordinary shares of the Company to the premium listing segment of the Ocial List and to trading on the London Stock Exchange’s main market for listed securities which occurred on 5 July 2021. B2C listers – means listers that have a subscription-based contract with the Group for online classieds services and products. C2C listers – means listers that transact with the Group through one- off transactions for online classieds services and products and do not have a subscription-based contract with the Group for online classieds services and products. CEO – means chief executive ocer. Major Shareholder – means ANTLER EquityCo S.à r.l., an entity controlled by funds advised by Apax Partners. Marketplace – means a place where products and/or services are bought and sold. Performance Share Plan – means the long-term incentive arrangement for the Executive Directors and other eligible employees. Portals – means online classieds websites. Prospectus – means the Company’s prospectus dated June 2021 and prepared in connection with the Company’s Admission. Relationship Agreement – means an agreement governing the relationship between the Company and the Major Shareholder. Senior Management – means the Executive Directors and all portal managers. Verticals – means specialised portals, listing products and services of a specic market, such as automotive, real estate and jobs and services. CFO – means chief nancial ocer. Code – means the UK Corporate Governance Code published by the FRC in 2018. COO - means chief operating ocer. Deloitte – means Deloitte LLP or Deloitte Lietuva, UAB both being members of the Deloitte organisation, a global network of independent rms. Executive Directors – means Justinas Šimkus, Lina Mačienė and Simonas Orkinas. Generalist portals – means portals with no specialisation, listing a wide range of products and services to consumers. KPI – Key performance indicator. KPMG – means KPMG LLP, a UK limited liability partnership and a member rm of the KPMG global organisation of independent member rms. Listers – means C2C and B2C listers. Listing – means an ad posted on a portal. Management Incentive Programme (MIP) – means an equity incentive plan designed to reward and incentivise eligible employees. #### Shareholder Information #### Share capital The Company’s authorised and issued Ordinary Share capital as at 30 April 2022 comprised a single class of Ordinary Shares. As at 6 July 2022, being the last practicable date prior to publication of this report, the Company’s issued share capital comprised 500,392,405 fully paid Ordinary Shares of £0.01 each. DetailsoftheOrdinarySharecapitalandsharesissuedduringtheyearcanbefoundinnote15totheconsolidatednancial statements. #### AGM TheAGMwillbeheldatSaltoniškiųst.9B,LT-08105Vilnius,Lithuaniaon28September2022at11.00amlocaltime.Further details can be found in the Notice of Meeting sent to Shareholders, which is also available at www.balticclassieds.com. #### Shareholder queries Please contact our Registrar, Equiniti Limited, directly for all enquiries about your shareholding: Online:https://help.shareview.co.uk By post: Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA By telephone:0371 384 2310 International callers:+44 (0)371 384 2030 Callsare chargedatthe standard geographicrate andwillvary byprovider. Callsoutsidethe UnitedKingdomwill bechargedat the applicableinternational rate.Linesareopen8.30 amto5.30pm,Monday toFriday excluding publicholidaysinEnglandand Wales. Baltic Classieds Group PLC Annual Report and Accounts 2022 158 Additional Information #### Electronic Shareholder communication We encourage our Shareholders to opt for electronic communications as opposed to hardcopy documents by post. This has a number of advantages for the Company and its Shareholders. Increaseduse of electronic communications will deliver savings to the Company in terms of administration, printing and postage costs, as well as increasing the speed of communication and provision of information in a convenient form. Less paper also reduces our impact on the environment. Ifyouwouldliketoreceivenoticationsbyemail,youcanregisteryouremailaddressbytheSharePortalhttps://help.shareview. co.ukor bywriting toEquinitiLimited, AspectHouse,Spencer Road,Lancing,West Sussex,BN99 6DA.Please notethatif you hold your shares corporately or in a CREST account, you are not able to use the Share Portal to inform us of your preferred method of communication and should instead write to Equiniti Limited. #### Warning about share fraud Shareholders should be aware that they may be targeted by certain organisations offering unsolicited investment advice or the opportunity to buy or sell worthless or non-existent shares. Should you receive any unsolicited calls or documents to this effect, you are advisednot to give out any personal details or to hand over any money without ensuring that the organisation is authorised by the United Kingdom Financial Conduct Authority (“FCA”) and doing further research. If you are unsure or think you may have been targeted you should report the organisation to the FCA. For further information, please visit the FCA’s website at www.fca.org.uk/scamsmart/share-bond-boiler-room-scams, email consumer.queries@fca.org. uk orcall the FCAconsumer helpline on0800 111 6768if callingfrom the United Kingdomor +4420 7066 1000if calling from outside the United Kingdom. #### Share price information The Company’sOrdinary Sharesare listedon theLondon StockExchange.The priceof theCompany’ssharesis availableon the Corporate Website at www.balticclassieds.com. #### Financial calendar 1 28 September 2022Annual General Meeting December 2022Half-year results announcement July 2023Final results announcement 1 Dates are provisional #### Company Information Registered oce:Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH Company number:13357598 Company Secretary: Miglė Pranaitytė Independent Auditor: KPMG LLP #### Forward-looking Statements Certain Statements made in this Annual Report are Forward-looking Statements. Such Statements are based on current expectations, forecasts and assumptions and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results expressed or implied in these Forward looking Statements. They appear in a number of places throughout this Annual Report and include Statements regarding the intentions, beliefs or currentexpectationsoftheDirectorsconcerning,amongstotherthings,theGroup’sresultsofoperations,nancialcondition, liquidity, prospects, growth, objectives, strategies and the business. Nothing in this Annual Report should be construed as a protforecast.AllForward-lookingStatementsinthisAnnualReportaremadebytheDirectorsingoodfaithbasedonthe information and knowledge available to them as at the time of their approval of this Annual Report. Persons receiving this report shouldnotplaceunduerelianceonForward-lookingStatements.Unlessotherwiserequiredbyapplicablelaw,regulationor accounting standard, the Group does not undertake any obligation to update or revise publicly any Forward-looking Statements, whether as a result of new information, future events, future developments or otherwise. All Intellectual Property Rights in the content and materials in this Annual Report vests in and are owned absolutely by Baltic Classieds GroupPLC unless otherwise indicated,including in respectof or in connectionwith but not limitedto all trademarks and the Report’s design, text, graphics, its selection and arrangement. Shareholder Information continued This page has been intentionally left blank Baltic Classieds Group PLC Annual Report and Accounts 2022 159 This page has been intentionally left blank Baltic Classieds Group PLC Annual Report and Accounts 2022 160 ![]() This document is printed on sustainably sourced paper ![]() Head oce Saltoniškių st. 9b, LT-08105 Vilnius, Lithuania + 370 5 207 5061 balticclassieds.com Registered in England and Wales. Registered oce address: Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH. Company number: 13357598