Zwack Unicum : Annual Report

SÁNDOR ZWACK

Chairman of the Board of Directors

Dear Shareholders!

After a challenging 2020, the 2021/2022 business year of Zwack Unicum was a very successful one, as you can see from our results. The pandemic became slowly manageable, trade found its way, and gastronomy was up and running again, albeit with much difficulty, which is also reflected in our results.

At the same time, a lot of new and unprecedented problems have emerged on the markets that will affect our results in the future, too. Retail is changing, with online shopping getting stronger and the turnover of small shops and discount stores also increasing, which indicate a change in consumer habits. The weekend bulk purchases experienced in the past are now split between more and smaller purchases close to home. In both retail and gastronomy, the lack of skilled workforce is a major problem. Some of our gastronomy partners were unable to open or work at the previous level due to the lack of staff. At the same time, wages started to grow, inflation started to rise already last year, which we are all experiencing in terms of prices, especially food prices. All these factors strongly impacted this past business year and will impact the next one even more. The above changes were well and predictably tracked by our annual planning, with sales getting very strong during the spring and summer and wages growing despite these changes. Wage increase was reflected in a shift of consumer demand towards higher value products, and the winners of this were mostly our premium brands. Our sales team started the season with a strong plan and willingness to act, the consumption increased, so we closed the year with a very positive result, by a volume growth of 24.3% compared to the previous 2020/2021 business year.

The significant volume growth was largely driven by our flagship product, Unicum. Once again, the launch of a highly successful new product, Unicum Barista, a new Unicum with Arabica coffee, contributed to the volume growth of the Unicum brand by almost 60%, thanks to the strong distribution built up, as well as an extremely positive consumer reception. The super premium Unicum Riserva strengthened once again even this year, showing an

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extremely healthy growth year after year now. In addition to the domestic market, Unicum also had a strong year in export markets. In Italy, the brand was one of the fastest growing brands by its growth of 38.2% and, as a whole, it also managed to increase its sales in other regions. Duty free also showed a strong growth by the second half of 2021, in parallel with the resumption of passenger traffic.

In addition to business success, protecting the health of our employees remains a priority for us. Last year we protected our workers by making the appropriate decisions in every covid wave. If necessary, by ordering to work from home, answering questions and dispelling misunderstandings about vaccinations, communicating medical facts, providing masks and gloves. Our human resources department organized screening opportunities (lung screening, lab testing, eye screening) and, when necessary, organized care or aftercare of covid patients. We are proud that our colleagues had a vaccination rate of over 90% already in autumn 2021, and thanks to the standards followed, as well as the extensive and continuous information provided by us, we managed to keep the number of cases very low.

The virus situation, followed by the unfortunate war situation close to us, also showed that sustainability and environmental protection is getting more important and can have more tangible benef its. Our Company is committed to follow this path in the future as well, and will provide details of our efforts in our sustainability reports, which we now plan to publish annually.

Dear shareholders, our company results show that the business year we just closed was a very successful one. But we don't sit back, as we clearly see the many challenges ahead of us in terms of rising inflation, increasing raw material and energy prices. However, ending the year it is important to stop and celebrate our achievements. For me now, like last year, our successful corporate results showed how important it was to retain our staff, to protect our employees, whose hard work brought us these good results once again this year.

Sándor Zwack

DR. HUBERTINE UNDERBERG-RUDER

Chair of the Supervisory Board

The success of the last business year we are happy to present to you, dear Shareholder, is based on our core values. Tradition and innovation are core values of Zwack deeply rooted in the genes of our company. Continuous renewal is a must while the world is undergoing fundamental changes in such a short period of time. None of us have experienced anything comparable before and these changes did not only affect the economy, but they also have a strong social impact on our Company, our employees, and our consumers. These changes are a game changer. That is why we decided during the peak year of the pandemic to continue innovating.

Thanks to this, the Company started the year with a very successful launch: Unicum Barista, aged in oak casks with arabica coffee, was introduced to the market. The new product reflected the relevant consumer insights so well, that it was a huge success and Unicum has once again become the focus of interest in the bar and restaurant world. In addition, we introduced under the Hubertus brand a new unfiltered 60% Hubertus with a new look, targeting the young age group. On top came two new flavor variants under the Kalinka brand.

However, innovation is by far broader understood than just product development. Following our mission in the sustainability field at Zwack, we are committed to protecting the environment and reducing our impact on nature and climate. For us, a family Company, it is very important what we responsibly pass on to future generations. Therefore, the Board of Directors, the Supervisory Board and the management of the Company jointly decided on a number of long-term environmental investments that will significantly reduce the Company's carbon footprint in the coming years. I am proud to report that e.g. the CO2 emissions of the three production sites

including the offices were reduced by 35-45% over the last three years.

Covid didn't stop and we again suffered more waves this year. Our human resource department and the whole management team managed with admirable flexibility to organize the work smoothly over and over again as the situation required. The main focus was on the health of our employees last year as well, our employees were supported by continuous supply of protective devices, by medical care and screening and by organizing hospital care whenever necessary.

Summarizing: Our last year is a success story. The Company managed to show its market power once again. We recovered from the effects of the pandemic and our brands started to grow strongly again. Our sales increased despite various waves of infection and with the opening of gastronomy the numbers skyrocketed. In the second half of the year, we could see that consumers seized every opportunity to spend time and have fun together. Restaurants, bars, nightclubs were full of people talking, having fun, and enjoying the time they could spend together again. We were among the first to open and this was highly appreciated by our gastronomic partners.

The success of last year, reflected in the Company's results, once again showed that continuous adaptation and the tracking of changes along with long-term thinking and planning is a successful business strategy and it will be in the future as well. The Supervisory Board would like to say thank you to the Management and each and every employee of the Company again this year and would like to assure them of our continuous support.

Dear Shareholders, we are also thanking you for the trust you placed again in our Company.

Dr. Hubertine Underberg-Ruder

ZWACK UNICUM PLC. ANNUAL REPORT 2021 - 2022

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Distribution of voting shares of Zwack Unicum Plc.

Peter Zwack

& Consorten HAG

50% +1 share

Diageo Holdings

Netherlands B.V.

26%

50% 26%

24%

Public

24% -1 share

ZWACK UNICUM PLC. ANNUAL REPORT 2021 - 2022

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Table of contents

LETTER TO SHAREHOLDERS	3
DISTRIBUTION OF VOTING SHARES OF ZWACK UNICUM PLC.	4
DECLARATIONS*	6
FINANCIAL CALENDAR	6
ZWACK UNICUM PLC. - SEPARATE FINANCIAL STATEMENTS FOR THE FINANCIAL	7
YEAR ENDED 31 MARCH 2022
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR	10
ENDED 31 MARCH 2022
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS IN COMPLIANCE	38
WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
BUSINESS AND MANAGEMENT REPORT	43
ON THE FINANCIAL YEAR ENDED ON 31 MARCH 2022*
REPORT OF THE SUPERVISORY BOARD AND THE AUDIT BOARD	50
ON THE 2021-2022 BUSINESS YEAR
SUPERVISORY BOARD	52
BOARD OF DIRECTORS	53
MANAGEMENT OF THE COMPANY	54
MARKETING HIGHLIGHTS OF THE 2021-2022 BUSINESS YEAR	55
SPIRITS FROM THE ZWACK HOUSE	68
IZABELLA ZWACK WINE SELECTION	74
KEY CONTACTS	76

*This is an English translation of the separate financial statements for the financial year between

1 April 2021 and 31 March 2022 issued in Hungarian. The content of the English translation is consistent with the content of the separate financial statements prepared in xhtml format.

ZWACK UNICUM PLC. ANNUAL REPORT 2021 - 2022

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Declarations

We, the undersigned Zwack Unicum Liqueur Industry and Trading Public Limited Company, hereby declare that the facts and statements contained in the Annual Report covering the Company's business year of 2021-2022 (1 April 2021 - 31 March 2022) are true in all respects, and that the Annual Report does not hide any fact that is of importance in assessing the situation of the Company.

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

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

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

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

Budapest, 24 May 2022

Katalin Hollósi	Balázs Szűcs
Chief Accountant	Investor Correspondent

based on the power of attorney provided by:

Sándor Zwack	Frank Odzuck
Chairman of the Board	Chief Executive Officer

Financial calendar

E V E NT	DATE
Payment of dividend	As from 27 July 2022
Publication of the report about the first quarter of 2022/2023*	9 August 2022
Publication of the report about the first half year of 2022/2023*	8 November 2022
Publication of the report about the first three quarter of	7 February 2023
2022/2023*
Publication of the report about the financial year 2022/2023*	26 May 2023
Annual General Meeting	28 June 2023
* not final dates

ZWACK UNICUM PLC. ANNUAL REPORT 2021 - 2022

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Zwack Unicum Plc. - Separate financial statements for the financial year ended 31 March 2022

PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

Statement of financial position

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022

		31 MARCH	31 MARCH
	NOTE	2022	2021
		(HUF mill)	(HUF mill)
ASSETS
NON-CURRENT ASSETS
	3 491	3 652
Property, plant and equipment	5	3 309	3 442
Intangible assets	6	78	85
Investment in associate	7	0	16
Employee loans	8	1	0
Deferred tax asset	20	103	109
CURRENT ASSETS		11 601	9 406
Inventories	9	3 140	2 800
Trade and other receivables	10	3 382	2 617
- including: Current tax		0	77
Cash and cash equivalents	11	5 079	3 989
TOTAL ASSETS		15 092	13 058
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
	8 812	7 012
Share capital		2 000	2 000
Share premium		165	165
Retained earnings		6 647	4 847
LIABILITIES		6 280	6 046
NON-CURRENT LIABILITIES		558	531
Other liabilities	12	558	531
CURRENT LIABILITIES		5 722	5 515
Trade and other liabilities	13	5 722	4 255
- including: Current tax		167	0
Short term loans	13	0	1 250
Provisions	14	0	10
TOTAL EQUITY AND LIABILITIES		15 092	13 058

The Financial statements were accepted by the Board of Directors on 24 May 2022 and signed on their behalf by:

based on the power of attorney provided by:

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

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

ZWACK UNICUM PLC. ANNUAL REPORT 2021 - 2022