Theon International PLC

Annual Report • Jun 14, 2024

Letter to the Shareholders

CEO Christian Hadjiminas on the 2023 financial year

Dear Shareholders and Readers,

THEON INTERNATIONAL PLC (THEON), a leading manufacturer of Night Vision and Thermal Imaging systems for defense and security applications with a global footprint, this Annual Report, presents its full year results for 2023. Demonstrating outstanding financial results, adaptability, and commitment to innovation, THEON has achieved unprecedented success, setting new benchmarks in the industry.

THEON started its operations in 1997 from Greece and today plays a leading role in the industry with an international presence, including offices in Greece, Cyprus, USA, UAE,

Switzerland and Singapore, as well as 3 production facilities in Athens, Wetzlar (Germany) and Plymouth (USA). Through this network of companies, offices and facilities around the world, THEON has more than 150.000 systems in service with Armed and Special Forces around the world. The company's constantly growing customer base now spans 69 countries across the globe, including 26 NATO members.

In FY2023, THEON's order intake reached a record €506 million, marking a 51,7% increase compared to FY 2022. Additionally, the Soft order backlog stood at €540,2 million, equivalent to 2,5 times the revenue of 2023. THEON achieved €218,7 million in revenue, marking a year-on-year growth of 53,0%, with an Adjusted EBIT of €56,8 million, representing a margin of 26,0%. Over the last 5 years the company has been growing at an average rate of 50% per year, maintaining its very high profitability level.

These results fill us with satisfaction and pride and they justify ΤΗΕΟΝ ΙΝΤΕRNATIONAL PLC's successful listing of its shares on the regulated market of Euronext Amsterdam on February 7 2024, achieving one of the first IPOs in Europe this year.

We are proud that we have delivered more than what we have been saying on our road to IPO. Throughout 2023, THEON has expanded its reach and market presence, solidifying its position as a global leader in the night vision systems for defense industry.

One of the milestones I could mention, is the five-year \$500 million IDIQ contract for the supply of the Squad Binocular Night Vision Goggle systems (SBNVG) to the US Marine Corps (USMC) that Elbit Systems of America is awarded, with THEON as subcontractor. Another one, in consortium with its partner Hensoldt, THEON was also awarded with a second amendment for an additional 19.500 night vision goggles, as well as options for an additional 50.000 for Belgium and Germany.

THEON continues to invest in research and development, implementing more than 400 training hours, hiring 50% more people in R&D department, and introducing new groundbreaking products that address evolving customer needs and market trends, like TALOS family, its first Stabilized Multisensory system that is officially launched during DSEI London 2023 Exhibition. Due to its commitment to innovation, THEON has started developing new technologies in Image Fusion and Augmented Reality (AR) systems for the company's man portable product range, offering complete, connected soldier optronic solutions to its customers worldwide. We continue to develop and introduce new products, with the ARMED Ecosystem being demonstrated to various potential customers in Europe, the US and Japan. For the IRIS system we have now received our first orders and we expect the same to happen with ORION fused NV goggles and THEA heads-up display. In platform-based systems, we are now participating in our first tender for platform-based multi-sensor systems. Our product portfolio is at the cutting edge of technology and will be even more digitized and AI-enabled in the future.

One of THEON's strengths is the customization of systems to particular requirements of end users. With a fast-track design and prototyping procedure, the company is able to respond to modification requests in a very short time, comparing to similar companies in the industry. Prioritizing customer satisfaction above all, 2023 saw deepen relationships with existing customers and forge partnerships with new clients, resulting in record-high levels of customer satisfaction and retention.

This busy and successful 2023 was accompanied by a series of special achievements. THEON was included on FINANCIAL TIMES & STATISTA list with the 1000 Fastest Growing companies in Europe, while the company has earned for 2023 the Great Place To Work Certification™, evident that the company stands out as one of the top companies to work for. Throughout 2023, THEON has actively participated in various Corporate Social Responsibility initiatives, supporting vulnerable social groups, fostering employee volunteering, managing its environmental footprint, supporting diverse workplace, increasing female hires by 4%, increasing employees' engagement.

We have delivered strong performance in 2023 and continue to see good momentum in the business. We believe we are well positioned to continue driving growth, both through organic growth as well as through acquisitions. We raised almost €100 million in gross proceeds in our IPO with the goal of accelerating our inorganic growth. Thus, we have created a task force who is sourcing potential investments and is identifying a pipeline of opportunities. For these acquisitions, we intend to grow within our core night vision and thermal imaging sector, as well as expanding into adjacent markets.

For FY2024, despite the fluid international economic environment, and the geopolitical instability, THEON anticipates another year of growth, expecting revenue to be in the range of €330-350 million, and to achieve an EBIT margin in the mid-twenties. We expect to spend €10-12 million in capex this year and we are also in the position to announce our intention to have a dividend payout of 40% of net income realized in 2023. In the medium-term, we expect to continue growing in line with our addressable market, and to maintain an EBIT margin in the mid-twenties.

None of this would be possible without the commitment and dedication of our people, and I want to acknowledge and thank them for their professionalism and hard work.

I would also like to thank our shareholders for their trust in THEON and its management team, for the commitment and support to our company. We are all fully aware of the fact that the results of 2023 increase our responsibility towards our customers, the capital market, the society.

CEO & Vice Chairman of the Board of Directors Christian Hadjiminas

Leter of the Chair of the Board

Another turbulent year has passed, marked by the continuation of the war in Ukraine into its second year and the outbreak of new conflicts, such as the war in the Gaza Strip between Israel and Hamas last autumn.

The tension between Armenia and Azerbaijan in the Caucasus persists, and the geopolitical situation in the Balkans remains concerning. Along Israel's northern borders, Hezbollah continues to provoke, prompting retaliatory strikes by Israel. The Houthis have used missiles and armed drones to attack Israel and merchant ships in the Red Sea, threatening the freedom of navigation in a region crucial for international trade. Additionally, the recent elections in Taiwan and the upcoming US elections could further impact the global geopolitical landscape.

These conflicts and regional tensions are significantly influencing defense budgets and procurement programs worldwide. In 2023, Asian countries increased their defense budgets by an average of 4.7%, while NATO member states

have committed to spending 2% of their national GDP on defense. By 2024, two-thirds of NATO Allies are expected to meet or exceed this target, a significant increase from only three Allies in 2014.

In our product markets, THEON continues to observe an international trend recognizing the importance of night fighting capabilities and the necessity for troops to be fully equipped with adequate night vision and thermal imaging systems. In Europe, we anticipate further increases in defense spending in 2024 as the situation in Ukraine remains unchanged. In Asia, various tenders and procurement programs for Night Vision equipment are set to commence this year. In the USA, several large programs for Night Vision Systems are currently underway and gaining momentum, including the NVD Next and FCS programs for Grenade Launchers and Heavy Machine Guns.

Our long-term planning for the development of our company was solidified on the 7th of February 2024, when THEON successfully listed its shares on the regulated market of Euronext Amsterdam and raised almost 100 million Euros in gross proceeds to be used for new investments and acquisitions.

This year, we anticipate another year of growth for THEON, expecting our revenue to be in the range of 330-350 million Euros. The achievements of THEON are the result of hard work, high-tech engineering, reliable and competitive products, careful planning, and a corporate culture that prioritizes customer satisfaction above all. This is our heritage, this is our identity, these are the values of THEON.

Chair of the Board of Directors Kolinda Grabar-Kitarović

Corporate Governance Report

Introduc�on

Theon Interna�onal Plc is a public limited company, incorporated under the laws of Cyprus on August 10, 2021 as a private limited liability company and converted to a public limited company as of September 15, 2021, with the name Theon Interna�onal Plc ("the Company"), under registra�on number HE 424549 of the Department of Registrar of Companies and Intellectual Property of the Republic of Cyprus, in accordance with the Cyprus Companies' Law Cap. 113 (hereina�er the "Law"). The Company's registered office address is at 5 Agiou Antoniou Street, Muskita Building 2, 1st floor, apartment 102, 2002, Strovolos, Nicosia, Cyprus. During FY 2023, the Board of Directors of the Company comprised three execu�ve directors.

In view of the lis�ng of the Company's shares on Euronext Amsterdam, which took place during February 7th, 2024, the Company amended its Ar�cles of Associa�on ("AoA") on November 23rd, 2023, and a new Board of Directors was elected by the General Mee�ng of the Company's Shareholders on January 19th, 2024, consis�ng of seven (7) directors, divided into (3) three Execu�ve Directors and four (4) Non-Execu�ve Directors.

By virtue of the Company's Shareholders resolu�on passed on January 19th, 2024, the Company further established its corporate governance framework incorpora�ng the requirements of the Cyprus Stock Exchange Corporate Governance Code and certain principles and best prac�ces as set out in the Dutch Corporate Governance Code. The policies adopted by virtue of the aforemen�oned resolu�on, apply to the Company and its subsidiaries (hereina�er referred to as the "Group").

Board of Directors

As of January 19th, 2024, the Company, in accordance with the Law has a one-tier board structure consisting of the following three Executive Directors ("Executive Directors") and four Non-Executive Directors ("Non-Executive Directors" and together with the Executive Directors, hereafter referred to as the "Directors"). The Board of Directors was elected to serve for a 3-year term as per the AoA.

Name	Age	Position	First appointed in	Appointed until
		Company's founder
Christianos Hadjiminas	63	Vice-Chair of the Board of Directors, and CEO	September-21	January-27
Stelios Anastasiou	67	Executive Director	September-21	January-27
Philippe Mennicken	47	Business Development Director Executive Director	January-24	January-27
Stathis Potamitis	67	Non-Executive Director, Non independent	January-24	January-27
Hans Peter Bartels	62	Non-Executive Director, Non independent	January-24	January-27
Kolinda Grabar-Kitarović	55	Chair of the Board of Directors and Non-Executive Director, Independent	January-24	January-27
Maria Athienitou Anastasiou	47	Non-Executive Director, Independent	January-24	January-27

The Board of Directors is responsible for the continuity of the Company and the businesses of the Group. The Directors are responsible for the Company's general affairs and are in charge of the oversight of the day-to-day management, formulating the strategy and policies, as well as setting and achieving the Company's objectives. The Directors focus on long-term value creation for the Company and the businesses of its Group thereby considering the interests of all its subsidiaries and how group-wide strategies and policies contribute to the interests of each subsidiary and the interests of the Group as a whole, over the long-term. The suitability of Directors to serve on the Board of Directors of the Company is governed by the Suitability Policy of the Company. The Executive Directors are responsible for the Company's day-to-day management. The Non-Executive Directors supervise the Executive Directors' policy and performance of duties as well as the Company's general affairs and business, and advise the Executive Directors.

The Non-Executive Directors shall in particular have regard to and supervise the manner in which the Executive Directors implement the long-term value creation strategy and regularly discuss the strategy, the implementation of the strategy and the principal risks associated with it.

The Terms of Reference of the Company's Board, adopted on January 19th, 2024, set out the description of specific responsibilities for the Chair of the Board of Directors and further details on procedures for holding meetings, decision making and overall functioning of the Board of Directors, including maintaining internal governance arrangements, processes and mechanisms that are consistent, well-integrated and

conducive to the alignment of the respective business objectives, strategies and risk management framework of the Company and its Group.

In accordance with the Company's AoA and the Terms of Reference of the Company's Board, the minimum number of Directors, whether Executive Directors or Non-Executive Directors, shall be three (3) and the maximum number of Directors shall be nine (9).

The Company ensures that a balance of independent Non-Executive Directors and Executive Directors is maintained, with a view to safeguard that no individual Director or small group of them can dominate in terms of decision-making.

The Directors of the Company can delegate one or more of their powers to committees, with these committees established consisting of a member, or members of the Board of Directors, as they think fit. Any committee established to that effect, must follow the relevant rules or procedures as these are set out by the Board of Directors of the Company and the AoA. The Company has currently established two committees, the Audit and Risk Committee and the Nominations and Remuneration Committee.

Board Commitees

Audit and Risk Commitee

The Audit and Risk Committee's role is to assist the Board of Directors with the discharge of its responsibilities in relation to financial reporting, including reviewing the Company's and its subsidiaries annual financial statements and accounting policies, internal and external audits and controls, reviewing and monitoring the scope of the annual audit and the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors as well as reviewing the effectiveness of the internal audit, internal controls, whistleblowing and fraud systems in place.

The Company's Terms of Reference of the Audit Committee provide, inter alia, that:

• the Audit and Risk Committee will meet as often as is required for its proper functioning, but at least four times each year to coincide with key dates in the financial reporting and audit cycle;
• the Audit and Risk Committee will consist of at least three members, all of which to be financially literate and with at least one member of the Audit and Risk Committee to be a financial expert with relevant knowledge and experience of financial administration and accounting for listed companies or other large legal entities;
• more than half of the members of the Audit and Risk Committee and its chair must be independent within the meaning of the Dutch Corporate Governance Code and of the CSE Corporate Governance Code; and
• the Audit and Risk Committee may not be chaired by the Chair of the Board of Directors or by a former Executive Director.

The Audit and Risk Committee is currently chaired by Maria Athienitou Anastasiou and its members Kolinda Grabar-Kitarović, Dr. Hans-Peter Bartels and Maria Athienitou Anastasiou are for the majority independent.

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Nomina�ons and Remunera�on Commitee

The Nominations and Remuneration Committee assists the Board of Directors in reviewing the structure, size and composition of the Board of Directors and proposes appointments and reappointments. It periodically assesses the functioning of individual Directors and is also responsible for reviewing the remuneration policy and succession plans for the Directors.

The Terms of Reference of the Nominations and Remuneration Committee as described above, provide, inter alia, that:

• the Nominations and Remuneration Committee will meet as often as is required for its proper functioning, but at least two times each year;
• the Nominations and Remuneration Committee will consist of at least three members;
• more than half of the members of the Nominations and Remuneration Committee, and its chair, must be independent within the meaning of the Dutch Corporate Governance Code and of the CSE Corporate Governance Code; and
• the Nominations and Remuneration Committee may not be chaired by the Chair of the Board of Directors or by a former Executive Director.

The Nominations and Remuneration Committee is chaired by Stathis Potamitis and its members are Kolinda Grabar-Kitarović, Maria Athienitou Anastasiou and Stathis Potamitis. All members meet the requirements of members of the Nominations and Remuneration Committee pursuant to the terms of reference, as further described above.

Biographical details of the Directors of the Board

Christian Hadjiminas. Vice-Chair of the Board of Directors and CEO.

Christian Hadjiminas graduated in 1981 from Columbia University with a B.A. in Economics (Magna Cum Laude) and in 1983 from Wharton Business School (University of Pennsylvania) with an MBA in Business and Finance. After working as a Senior Trader at Phibro-Salomon Inc. in 1987, he set up his first company in New York and soon thereafter in 1989, he moved his business to Greece and established EFA VENTURES in Athens. Mr. Hadjiminas is today the owner of EFA GROUP, a "marketing" construct referring to a set of companies with a leading-edge position in the international market with more than 30 years of experience, in the fields of Aerospace, Security, Defense, and Industrial cooperation. Mr. Hadjiminas is also the President of the Hellenic Entrepreneurs Association - EENE and Head of EENE International, as well as the Founder and Honorary President of the Wharton Alumni Club of Greece.

Stelios Anastasiou. Executive Director.

Stelios Anastasiou graduated from LCCI Higher Stage with a degree in accounting and from the English College Commercial Department. He is a certified accountant technician, a member of the Association of Accounting Technicians and a licensed auditor by the Ministry of Finance of Cyprus. He worked at PwC in Nicosia (Cyprus) between 1987 and 1999, where he was promoted to the role of Senior Manager. Since 1999, he has worked at Dynasource Consultancy Limited where he has been acting in his current position as Director.

Philippe Mennicken. Executive Director and Business Development Director.

Philippe Mennicken graduated in 2000 from Université de Liège, Belgium with a B.A. in Mechanical Engineering, graduated in 2001 from College of Aeronautics, Cranfield University, UK with an MSc in Aerospace Dynamics and in 2006 from Management Research Centre, University of Bristol with an MSc in Strategic Management. After working as a product support engineer at Goodrich Aero and technical sales manager at SKF Aerospace in the UK, he then worked as an Offset & Industrial Cooperation Manager at Epicos S.A. in Athens. He joined Theon Sensors S.A. in Athens in April 2010 as the Business Development Manager and has been acting in his current position as the Business Development Director since January 2013.

Stathis Potamitis. Non-Executive Director.

Stathis Potamitis graduated from the University of Toronto (Canada) with a B.A. degree in 1997, LL.B degree in 1986 and with an M.A. degree in 1991. He is the founder and managing partner of an independent law firm, Potamitisvekris, where he has been a managing partner since 1996 and has been acting in his current position as senior partner since 2022. He is admitted to practice law in Athens, Thessaloniki and previously was a qualified attorney at law in the State of New York.

Hans-Peter Bartels. Non-Executive Independent Director.

Hans-Peter Bartels graduated from the Max Planck School in Kiel in 1980. After he finished his military service, he began studying political science, sociology and ethnology at the Christian Albrechts University in Kiel in 1981, which he completed in 1986 with a master's degree. He also holds a PhD in Political Science. Bartels was a member of the German Bundestag from 1998 until he was appointed as Defense Commissioner in 2015. From 2015 to 2020 he served as the Armed Forces Commissioner of the German Bundestag and has been President of the Society for Security Policy since May 2022. He has been a member of the supervisory board of ThyssenKrupp Marine Systems since 2023.

Kolinda Grabar-Kitarović. Non-Executive Independent Director.

Kolinda Grabar-Kitarović graduated from the University of Zagreb with a B.A. degree in Arts in 1993 and with a M.A. degree in Arts in 2000. She became Minister Counsellor at the Ministry of Foreign Affairs in Croatia in 2001 and served as a Minister of European integration between December 2003 and February 2005, and as Minister of Foreign Affairs and European Integration from February 2005 until January 2008. She worked as Assistant Secretary General for Public diplomacy at NATO between 2011 and 2014. In 2015, she was elected as President of the Republic of Croatia and served until 2020. Since 2020, she has been a member of the International Olympic Committee.

Maria Athienitou Anastasiou. Non-Executive Independent Director.

Maria Athienitou Anastasiou graduated in 1997 from Reading University with a B.A. degree in Management and Business Administration and in 1999 from the City Business School (CASS) with MSc degree in Internal Auditing and Management. Since 2000, she has been working at current PricewaterhouseCoopers Ltd in Cyprus where she has been focused on providing regulatory compliance services in the financial sector. She holds the Advanced Certificate of Professional Competency from the CySEC and the Certified Accounting Technician qualification from the Association of Certified Chartered Accountants.

General Mee�ng of Shareholders

The holding of the General Meeting of the Company is subject to the provisions of the Law and the AoA. Under its current AoA, the Company shall in each year hold a general meeting as its Annual General Meeting, in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than 15 months shall elapse between the date of one Annual General Meeting and that of the next.

The Annual General Meeting shall be held at such place and time as the Directors shall decide (the Directors are not restricted as to the location of the Annual General Meeting) and article 55 of the Articles of Association permits both physical and hybrid meetings.

The Directors may, whenever they think fit, also convene an extraordinary General Meeting. Under the Law, extraordinary General Meetings can also be convened by the request of shareholders holding at least 10% of the paid in capital of the Company.

The Annual General Meeting and the meeting convened for the passing of a special resolution shall be convened by at least twenty-one (21) days' notice, and any other general meeting of the Company shall be convened by at least fourteen (14) days' notice. The notice shall be exclusive of the date on which it is served or deemed to be served and of the date specified for the holding of the meeting. The notice must specify the place, date and time of the General Meeting and, in the event of special business, the general nature of such business and shall be given in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company in general meetings, to such persons as are entitled to receive such notices from the Company.

Corporate Governance Framework

On January 19th, 2024, the Company established the following corporate governance policies complying with the with the applicable laws and regula�ons:

Conflict of Interest Policy

The conflict of interest policy ("Conflicts of Interest Policy") of the Company sets out the procedure for the prevention, detection and management of an actual or a potential "conflict of interest" (as defined therein). The Conflict of Interest Policy applies to conflicts of interest of -inter alia- the members of the Board of Directors, the executive committees, the executive officers, the employees of the Company and its subsidiaries, and the shareholders holding shareholding percentage or voting rights equal or higher than the 5% of the Company's issued share capital.

Suitability Policy

The suitability policy ("Suitability Policy") of the Company is aimed at supporting and promoting diversity and conveying broad range of skills and experiences within the Board of Directors, ensuring quality staffing and effective operation evaluation. Suitability criteria identified in the Suitability Policy apply to all Board of Directors members, regardless of their status as Executive, Non-Executive, or Independent Non-Executive members, and include both individual and collective criteria. Individual criteria include, inter alia, adequate knowledge, expertise and competencies, ethical conduct and reputation, conflict of interests, independence of judgment and commitment (devotion of sufficient time), while collective criteria concern the collective expertise altogether and diversity of the board.

Market Abuse Regula�on Policy

The market abuse regulation policy ("MAR Policy") of the Company is aimed at regulating the management and handling of inside information, and the obligations of the persons within the Company and its subsidiaries who are discharging material duties as well as for the persons that are closely associated with them ("Relevant Persons").

Whistleblowing Policy

The whistleblowing policy ("Whistleblowing Policy") of the Company is aimed at encouraging and urging all employees of the Company and its subsidiaries to report violations as soon as they come to their attention and to express concerns regarding violation within the entities. The Whistleblowing Policy defines a whistle-blower as an employee, officer, consultant, intern, secondee or agent of the Company or its subsidiaries who reports or publicly discloses information on breaches occurred in the context of his or her work-related activities. The violations the employees are encouraged and urged to report include information and reasonable suspicions, about actual or potential illegal acts, omissions and breaches, which occurred or are very likely to occur in the Company.

Remunera�on Policy

The Remuneration Policy of the Board of Directors ("Remuneration Policy") is primarily aimed at ensuring that the Directors' compensation is aligned with the Company's short and long-term business plans to foster value creation for customers, shareholders, employees and local communities. Pursuant to the Remuneration Policy, the remuneration of Non-Executive Directors consists of fix pay which is designed to compensate for the time required to fulfil their duties. The remuneration of the Executive Directors consists of a combination of a fixed component that is in line with the role's scope and responsibilities, benefits and variable component that includes short-term and long-term incentives. The Company's policy

is to consider the remuneration levels in other companies of similar size, with roles of comparable scope and responsibility when determining the fixed component of Executive Director's compensation.

Related Party Transac�ons Management Framework

The Company's Related Party Transactions Managing Framework ("RPT Framework") sets out the rules and procedures regarding the identification, evaluation, approval, and disclosure of transactions with related parties in accordance with relevant provisions of corporate legislation as well as rules and provisions aimed at ensuring transparency and effective supervision of the Company's contracts or transactions with related parties. Pursuant to the RPT Framework, a transaction with a Related Party encompasses any transaction that establishes a provisional relationship between the Company and the Related Party, regardless of whether a price is charged.

Internal Audit Func�on

The Company's Internal Audit Charter ("Internal Audit Charter") provides for the scope of operations, purpose, authority, and responsibility of the Internal Audit function. The Internal Audit function establishes the internal audit activity's position within the organization, including the nature of the Internal Audit Function's functional reporting relationship with the Audit and Risk Committee, authorizes access to records, personnel, and physical properties relevant to the performance of engagements, defines the scope and purpose of internal audit activities, in accordance with and as defined in the International Standards for the Professional Practice of Internal Auditing, with the view to assist the Company accomplishing its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

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Management Report21
Principal ac�vity and nature of opera�ons of the Group 21
Future developments of the Group 21
Existence of branches 21
Principal risks and uncertain�es21
Share capital21
Share buy-back disclosures21
Board of Directors21
Dividends22
Financial Results22
Corporate governance 22
Events a�er the repor�ng date22
Independent Auditors22
Significant events for the financial year 202323
Financial highlights24
Capital expenditure25
Research and development 25
Selected Performance, Capital Structure and Liquidity Indicators 26
Non-Financial Repor�ng 27
Business Model and Sustainable Development27
Sustainability Approach 29
Sustainability Pillars 29
Stakeholder engagement and materiality30
Environmental Responsibility maters32
Responsible Energy Management (Energy consump�on and reduc�on)32
Waste Management and Recycling33
Social Responsibility maters 35
Product safety and quality 35
Supply Chain management37
Health and Safety38
Research and Development (R&D) 39
Training and Development40

Employee wellbeing42
Social contribu�on and volunteering43
Responsible Governance maters 45
The Group's Governance Structure45
Export and customs control 45
Data privacy and cybersecurity47
Compliance and An�-Corrup�on 48
Business Ethics49
Compliance with applicable legisla�on49
Diversity & Inclusion and Human Rights52
Diversity & Inclusion 52
Poten�al effects of the Ukrainian, Gaza, Yemen crisis54
Outlook 54
Projected developments in 2024 55
Independent Auditors' Report56
Consolidated statement of financial posi�on (1/2) 63
Consolidated statement of financial posi�on (2/2) 64
Consolidated statement of profit or loss and other comprehensive income65
Consolidated statement of changes in equity66
Consolidated statement of cash flows67
Notes to the consolidated financial statements68
1. Repor�ng en�ty 68
2. Basis of accoun�ng 70
3. Basis of measurement71
4. Func�onal and presenta�on currency71
5. Consolidated Financial Statements71
6. Use of judgements and es�mates72
a. Judgment72
b. Assump�ons and es�ma�on uncertain�es72
7. Material accoun�ng policies73
a. Consolida�on73
b. Foreign currency74
c. Property, plant and equipment 75
d. Investment property76

e.	Intangible assets76
f.	Impairment of tangible & intangible assets 77
g.	Leases 78
h.	Inventories79
i.	Trade accounts receivable 79
j.	Cash and cash equivalents79
k.	Share capital 79
l.	Loans and borrowings 79
m.	Income tax 80
n.	Deferred tax80
o.	Employee benefits81
p.	Government grants82
q.	Provisions83
r.	Revenue recogni�on83
s.	Dividend distribu�on85
t.	Financial assets and financial liabili�es85
u.	Borrowing cost88
v.	Trade accounts payable 88
w.	Deriva�ves and hedge accoun�ng88
x.	Earnings per share 89
y.	Expenses89
z.	Share buy back90
8.	Adop�on of new Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards by the European Union (EU)90
a.	New Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards adopted by the EU90
b.	Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards not endorsed by the EU91
9.	Revenue 93
a.	Disaggrega�on of revenue from contracts with customers93
b.	Contract balances94
10.	Income and expenses94
a.	Other income94
b.	Other expenses95

c.	Expenses by nature95
11.	Net finance costs 96
12.	Earnings per share 96
a.	Profit for the year a�er tax96
b.	Weighted – average number of ordinary shares (basic and diluted)	97
13.	Employee benefits97
a.	Actuarial assump�ons97
b.	Defined benefit liability 98
c.	Sensi�vity analysis98
14.	Income taxes99
15.	Deferred tax100
16.	Inventories101
17.	Trade accounts receivable and other receivables 102
18.	Cash and cash equivalents103
19.	Property, plant and equipment 104
a.	Reconcilia�on of carrying amount104
b.	Impairment105
c.	Security105
d.	Property, plant and equipment under construc�on105
e.	Leased property, plant and equipment 105
20.	Intangible assets106
a.	Reconcilia�on of carrying amount106
b.	Impairment test106
21.	Investment property107
22.	Equity-accounted investees108
23.	Other financial assets109
24.	Prepayments110
25.	Capital and reserves 111
26.	Capital Management 113
27.	Loans and borrowings113
a.	Loan balances113
b.	Reconcilia�on of movements115
c.	Terms and repayment schedule 116
28.	Contract liabili�es116

29.	Government grants116
30.	Trade accounts payable and Accrued and other current liabili�es 117
31.	Provisions117
32.	List of subsidiaries118
33.	Leases 120
34.	Commitments & Con�ngencies122
a.	Guarantees 122
b.	Indirect and con�ngent indebtedness122
c.	Tax liabili�es122
35.	Related par�es123
a.	Parent and ul�mate controlling party 123
b.	Key Management personnel123
c.	Key Management personnel compensa�on123
d.	Other related party transac�ons123
e.	Share buy-back 125
36.	Financial risk Management125
a.	Market risk125
b.	Credit risk125
c.	Liquidity risk127
d.	Interest rate risk128
e.	Currency risk129
f.	Price risk 130
g.	Capital risk 131
37.	Correc�on of errors132
38.	Adjusted earnings before interest, tax, deprecia�on and amor�za�on (adjusted EBITDA)139
39.	Subsequent events 140

Board Of Directors and Other Principal Officers

Board of Directors:	Christianos Hadjiminas (Vice-Chairperson of the Board of Directors and Chief Executive Officer) Stelios Anastasiou
	Hans Peter Dr. Bartels (appointed on 19 January 2024)
	Kolinda Grabar-Kitarovic (appointed on 19 January 2024)
	Philippe Jean Mennicken (appointed on 19 January 2024)
	Maria Athienitou (appointed on 19 January 2024)
	Petros Christou (resigned on 19 January 2024)
Company Secretary:	Stelios Anastasiou (appointed on 19 January 2024)
	Petros Christou (resigned on 19 January 2024)
Independent Auditors:	KPMG Limited
	Chartered Accountants
	14 Esperidon Street, 1087 Nicosia, Cyprus
	P.O. Box 21121
	1502 Nicosia, Cyprus
Registered office:	5 Agiou Antoniou
	Muskita Building 2, 1st Floor, Office 102
	2002 Nicosia, Cyprus
Bankers:	Alpha Bank
	Optima Bank
	Commerzbank
	Aegean Baltic Bank
	United Bank Limited
	First Abu Dhabi Bank
	National Bank of Greece
	Piraeus Bank
	Liechtensteinische Landesbank AG
	OCBC Macau
	United Overseas Bank
Lawyers:	Potamitis Vekris
	George Karavokiris
	L. Papaphilippou & Co. LLC
	Ioannides Demetriou
	Clifford Chance, Frankfurt
	Bird & Bird LLP, Bird & Bird Advokatpartnerselskab
	Sitz der Gesellschaft: Berlin Amtsgericht
	Sheppard Mullin
	Lee & Ko
	RASK Attorneys-at-Law
	TGS Baltic Estonia
	Mashora Law Firm
Registration number:	ΗΕ 424549

Management Report

The Board of Directors of Theon Interna�onal Plc (the "Company") presents to the members its Management Report together with the audited Consolidated Financial Statements of the Company and its subsidiaries for the year ended 31 December 2023, prepared in accordance with Interna�onal Financial Statements ("IFRS") as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap 113.

Principal ac�vity and nature of opera�ons of the Group

The main ac�vi�es of the Group, that remain unchanged from prior year, is the produc�on and trade of a large range of sensors, and in par�cular night vision systems, thermal systems (thermal sights) as well as other innova�ve electro-op�cal equipment and equipment for applica�on to Defense and Security.

Future developments of the Group

The Board of Directors does not expect any significant changes or developments in the opera�ons, financial posi�on and performance of the Group in the foreseeable future.

Existence of branches

The holding Company of the Group does not maintain any branches.

Principal risks and uncertain�es

The principal risks and uncertain�es faced by the Group are disclosed in Note 36 of the financial statements.

Share capital

Changes to share capital are disclosed in Note 25 of the financial statements.

Share buy-back disclosures

Share buy-back disclosures are disclosed in the Consolidated Statement of Changes in Equity of the financial statements.

Board of Directors

The members of the Company's Board of Directors as at 31 December 2023 and at the date of this report are presented on page 6. On 19 January 2024, Petros Christou resigned from his posi�on as Director and Hans Peter Dr. Bartels, Kolinda Grabar-Kitarovic, Philippe Jean Mennicken and Maria Athienitou were appointed as Directors.

In accordance with the holding Company's Ar�cles of Associa�on all Directors presently members of the Board con�nue in office.

There were no significant changes in the assignment of responsibili�es and remunera�on of the Board of Directors.

Dividends

On 16th August 2023, the Company in General Meeting approved the distribution of dividend amounting to €10.000.000 (2022: nil).

Financial Results

The Group's results for the year are set out on pages 63-64. The net profit for the year attributable to the shareholders of the Group amounted to €36.095.588 (2022: €30.000.618). On 31 December 2023 the total assets of the Group were €210.522.998 (2022: €157.410.231) and the net assets of the Group were €77.357.508 (2022: €64.263.932)

Corporate governance

As the Company was listed in February 2024, there is no legal requirement for the Company to provide a corporate governance statement for the year ended 31 December 2023.

Events after the reporting date

Any significant events that occurred after the end of the reporting period are described in note 39 of the consolidated financial statements.

Independent Auditors

The Independent Auditors, KPMG Limited, were appointed in replacement of the previous auditors, PKF ABAS Limited, and have expressed their willingness to continue in office and a resolution giving authority to the Board of Directors to set their remuneration will be proposed at the Annual General Meeting.

CEO & Vice Chairman of BoD Christian Hadjiminas Nicosia, 19 April 2024

Significant events for the financial year 2023

• A. During the International Defense Equipment Expo (IDEX 2023) held in Abu Dhabi from 20th to 24th February, the Group entered into a strategic partnership agreement with the International Golden Company (IGG), a leading defense and security company and supplier to the UAE Armed Forces. This agreement left a significant impression, especially considering its alignment with similar important agreements signed by European defense industry giants for cooperation with the UAE, such as Safran (France) and Escribano (Spain). The new agreement pertains to the production of the Company's most advanced products which have been joinly designed with international partners and production scheduled to commence towards the end of 2023.
• B. In June 2023, the Group completed the expansion of its exis�ng building facili�es by 3.200 m2 in order to increase produc�on capacity for its products resul�ng from an expansion of its opera�ons.
• C. In July 2023, the Group submited a documenta�on folder to the General Secretariat for Research and Innova�on (GSRI) for expenditure of €708.230 on research and development incurred in 2022.
• D. Un�l 19th September 2023, the Company was listed on the Emerging Companies Market of the Cyprus Stock Exchange. Therea�er, the Company delisted its shares. It is noted that, on the same date, the Company's shares were also delisted from the Central Securi�es Depository and Central Registry, in accordance with Ar�cle 19 of the Securi�es and Cyprus Stock Exchange
• E. In December Elbit Systems of America (Elbit America) is awarded, through an interna�onal tender, a five-year \$500 million IDIQ contract for the supply of the Squad Binocular Night Vision Goggle (SBNVG) to the US Marine Corps (USMC). THEON SENSORS will provide to Elbit America, as its exclusive subcontractor, its dedicated night vision binocular NYX in a Semi Knock Down Kit format, where final manufacturing and dissemina�on of the complete SBNVG solu�on will be performed at Elbit America's Roanoke, Virginia facility. In addi�on, THEON SENSORS will provide its night vision spare and repair parts, logis�cs support and test ar�cle refurbishment throughout the contract term.
• F. On 18 December, the Group signed two framework agreements with dura�on of up to 7 and up to 5 years with the NATO Support and Procurement Agency (NSPA) for the supply of thermal weapon sights and thermal monoculars. Another contract award was received by a European NATO member state for its Extra Long Range THERMIS systems.

Financial highlights

2023 marked a significant milestone for the Group as it attained its highest sales and profitability since its inception , despite operating within an intensely competitive environment. Our market share expansion was accompanied by an notable 53,07% growth in sales, a 38,54% increase in Operating profit and a 38,14% rise in adjusted EBITDA.

The Group con�nues to emphasise on foreign markets, aiming to secure even larger shares with innova�ve products and con�nuous support to our customers. Foreign markets con�nue to be a key priority of the Group with domes�c sales accoun�ng for just 0.8% of total turnover.

*Total number of shares at 31 December 2023: 60.000.000. As at 31 December 2022: 200.000, but for compara�ve purposes the calcula�ons were performed using 2023 total number of shares.

Turnover amounted to €218.722.904 (2022: €142.894.760), while the opera�ng profit for the year, was €55.737.571 (2022: €40.194.574).

Opera�ng Cash Flow has improved significantly €35.261.597 (2022 €-7.139.754), an indicator that confirms the Company's strong financial posi�on.

The rise in working capital requirements, driven by increased sales and the execu�on of €7,7m worth of investments, led to higher borrowing. However, the gearing ra�o has improved significantly, with holdings exceeding total lending and a gearing ra�o of -0,3% from 14,2%.

in euro	2022	2023	Varriance
Long-term loan obligations	3.661.356	32.742.460	29.081.104
Short-term loan obligations	31.293.899	32.777.312	1.483.413
Total debt	34.955.255	65.519.772	30.564.517
Less: Cash and cash equivalents	(24.035.134)	(65.639.067)	(41.603.933)
Net debt	10.920.121	(119.295)	(11.039.416)
Equity	64.263.932	77.357.508	13.093.576
Non-current liabilities	4.011.809	33.069.037	29.057.228
Total capital employed	68.275.741	110.426.545	42.150.804
Leverage ratio	16,0%	(0,1%)

Capital expenditure

The Group's total investments in the period from 1.1.2023 to 31.12.2023 amounted to €7.662.561. The Group's Management team will con�nue to dynamically implement the budgeted €10m investment programme in 2024, placing emphasis on automa�ng produc�on capacity and new systems as well as laboratories for the R&D department.

Research and development

The Group invests significant funds in research and in the development of op�cal systems with emphasis on new innova�ve products that ensure a compe��ve edge. In 2023, expenditure of the research and development department amounted to €2.807.368 compared to €1.985.022 in the same period during the previous year, an increase of +41,42%. This increase was accompanied by the recruitment of 7 new technicians with high levels of training in different special�es.

Selected Performance, Capital Structure and Liquidity Indicators

		2023		2022
Return on	Net profit after tax	36.095.588		30.000.618
Equity (ROE)	= = Equity	= 77.357.508	0,47	64.263.932	=	0,47
	Adjusted EBITDA	57.741.171		41.708.362
Adjusted EBITDA Margin	= = Revenue	= 218.722.904	0,26	142.894.760	=	0,29
	Debt	65.519.772		34.955.255		0,35
Debt ratio	= = Debt + Equity	142.877.280	=	0,46	99.219.187	=
	Current assets = =	188.783.452	1,89	135.382.825	=	1,52
Current ratio	Current Liabilities	100.096.453	=	89.134.490
	Adjusted EBIT	56.471.087		40.232.475
ROCE	= = Invested capital	= 110.426.545	0,51	68.275.741	=	0,59

Non-Financial Repor�ng

The Group (or "Theon") , through this non-financial Statement, complies with the provisions of the EU Direc�ve 2014/95/EU (Non-Financial Repor�ng Direc�ve) ("NFRD") which was incorporated into Cypriot legisla�on by Law N.51(I)/2017 (amendment law of the Companies Law Cap.113) . The nonfinancial Statement presents details regarding the Group's ac�vi�es across various thema�c areas, including:

• Environmental Responsibility maters;
• Social Responsibility maters;
• Responsible Governance;
• Diversity & Inclusion and Human Rights

This Statement focuses on the non-financial performance of the Group for the year ended 31 December 2023 and contains informa�on in connec�on with the policies and other arrangements maintained by the Group with regards to the thema�c areas above (where applicable) as well as relevant Key Performance Indicators ("KPIs") to convey the Group's performance. It is noted that the material topics and associated metrics presented herein relate to the Group's ac�vi�es in Greece, which account for the vast majority of the Group's principal ac�vi�es and opera�ons.

Business Model and Sustainable Development

The Group is opera�ng in the defence and security sensor systems sector, primarily ac�ve in the optronics market. The optronics market is a sub-segment of the Global Defence Market, which includes businesses that design, develop, manufacture, market, sell and service high-tech op�cal systems and devices, such as, amongst other things, night vision and thermal imaging devices for military and security applica�ons and/or dual-use goods ("Optronics Market").

Theon boasts a global presence spanning 69 countries, including 24 countries that are part of NATO. In addi�on, it has established market-leading posi�ons in Germany and Belgium, among others. Notably, the Group holds a prominent posi�on in Gulf Coopera�on Council ("GCC") na�ons and its rapid growth in the US through the supply contracts with the Department of Defence and the US Marine Corps reinforces its strong presence across diverse global markets.

The Group's core target customers are defence and security forces and its typical end-customers are governments (na�onal governments, as well as suprana�onal organisa�ons, such as OCCAR and NSPA) and organisa�ons that allocate budgets and make procurement decisions for their defence and security forces.

The Group's Management con�nuously assesses the various trends and factors that may affect the Group's development. In view of the war crisis and conflict in Ukraine, the Group recognises that there has been an increase in the defence budgets in Europe and elsewhere both to replenish equipment that was provided in support to Ukraine or to update legacy equipment. In addi�on, the conflict in Ukraine has shi�ed the focus of new procurements of warfare equipment to core land based and amphibious figh�ng capabili�es, which is in turn driving innova�on and growth in the optronics and sensors market. Notwithstanding the conflict in Ukraine, the Group's Management also remains vigilant of the poli�cal rivalries and tension currently taking place in the Gaza Strip in that increased tensions throughout the

Middle East resul�ng directly or indirectly from this conflict will, over �me, also have a pronounced effect on the Global Defence Market.

Looking ahead, the Group is strategically posi�oned to facilitate both organic and inorganic growth opportuni�es. The Group believes that its current capabili�es will enable it to explore a diverse range of growth possibili�es in the coming years, underpinned by a carefully cra�ed strategy. More specifically, the main areas of focus for the Group are expected to be:

• Market Tailwinds: The Group an�cipates significant upside poten�al with recurring contract possibili�es driven by increased defence spending in Europe and around the world, as a result of current geopoli�cal developments.
• New Product Innova�on: The Group's future growth is expected to be driven by new technologies and products, including, amongst others, the fused night vision and thermal goggle, the heads-up display and addi�onal mul�sensory pla�orms expected to be launched in the near future, all of which aim to support the development of military advancements, such as the "future soldier" or "digital soldier". To this end, the Group is examining to acquire new technologies in order to expedite the development of new more advanced products in the Optronics Market.
• Adjacent Products: The Group has a strategic vision for expansion into adjacent end markets, specifically targe�ng civil and commercial markets such as law enforcement, firefigh�ng and hun�ng equipment as well as engaging in co-development of a thermal sight for sports and hun�ng.
• Geographical Expansion: The Group is commited to accelera�ng its growth in the US market and further developing entry into new markets for the Group, with poten�al joint ventures in key geographies, including the U.S., South Korea, and the Middle East. Addi�onally, the Group is exploring mergers and acquisi�ons ("M&A") as a means of further geographical expansion, allowing it to enter new markets globally. Addi�onal targets may be iden�fied for the purposes of ver�cal integra�on of the supply of certain main components.
• Core Night Vision and Thermal Imaging Markets: The Group is exploring strategic opportuni�es to enhance its opera�onal efficiency and overall business growth through ver�cal integra�on with in-house capabili�es in the image intensifier tubes sectors and innova�ng and reengineering exis�ng products, tailored for applica�ons in law enforcement, firefigh�ng, sports and recrea�onal hun�ng, as well as advancing the development of a mari�me pla�orm.
• Adjacent Markets: The Group gears up to introduce innova�ve products such as telescopic sights, AR goggles, lasers, and displays for various pla�orms. In addi�on to this product expansion, the Group is considering the acquisi�on of smaller companies (with an annual sales turnover of up to Euro 30 million), such as those specialising in adjacent products like electronics and night vision systems, laser systems, thermal imaging, and fire control systems..

The Group recognises that there is an increasing demand from various stakeholders such as consumers and investors for organisa�ons to establish and maintain environmental, social and governance prac�ces including prac�ces safeguarding diversity and inclusion, an�-corrup�on and human rights. In its efforts to grow sustainably but also promote sustainability, the Group's values and strategy are centered around environmental, social, and governance factors. This represents the Group's commitments and plans for a more sustainable future through diverse ini�a�ves and projects in the long run. As a first step, the Group has been con�nuously monitoring its ac�vi�es to confirm alignment with the United Na�ons Sustainable Development Goals (SDGs) and to this date, the Group has contributed posi�vely to 13 out of the 17 SDGs.

The non-financial Statement follows the GRI Standards of the Global Repor�ng Ini�a�ve ("GRI"), as well as the standards of the Integrated Repor�ng Framework of the Interna�onal Integrated Repor�ng Council ("IIRC"), and the Sustainability Accoun�ng Standards Board ("SASB").

Sustainability Approach

Sustainability Pillars

The Group is commited to sustainable development, balancing economic viability with social responsibility and environmental stewardship. Its mission extends beyond providing superior systems; it encompasses reduc�on of its environmental footprint, enhancement of its social impact and fostering economic prosperity. At the heart of its opera�ons lies the commitment to environmental protec�on through sustainable prac�ces, ac�ve support for vulnerable communi�es via targeted ini�a�ves, the wellbeing of its employees, and an unwavering dedica�on to transparency and ethical conduct in all business rela�onships. To effec�vely integrate these values, the Group has developed a sustainability framework structured around three founda�onal pillars:

• I. Environmental Stewardship: Environmental stewardship guides Theon's commitment to ac�vely try to minimise its environmental footprint, endorsing eco-friendly prac�ces and leading innova�on towards a sustainable future. Through the enactment of strategies such as lower energy consump�on and monitoring of carbon emissions, Theon ac�vely contributes to the principles of a circular economy, ensuring that opera�ons not only minimise environmental impact but also create a posi�ve, regenera�ve cycle for the benefit of the planet and future genera�ons.
• II. Social Responsibility: Theon's commitment extends beyond environmental stewardship to incorporate social responsibility. At the heart of the Group, employees are the dynamic force that drive its success and represent its corporate spirit. At Theon, the employee's wellbeing is priori�sed as it is recognised that a thriving workforce is essen�al for the sustained growth and success of the Group. Through inves�ng in professional development opportuni�es and con�nuous training, and crea�ng a suppor�ve work environment, it is ensured that employees not only excel professionally but also find fulfilment in their personal lives as well. Theon's social responsibility commitment goes beyond its corporate walls, as it is ac�vely engaged in partnerships with organisa�ons that aid vulnerable groups, to address social challenges and posi�vely contribute to the reduc�on of inequali�es.
• III. Economic Prosperity: Theon embeds its economic growth in the founda�onal values of transparency, integrity, and accountability. The commitment to these principles extends into every aspect of work, crea�ng a corporate culture that aims for excellence. Theon mandates strict adherence to laws and a zero-tolerance approach towards bribery and corrup�on, and staunch support for fair market prac�ces. Maintaining a strong code of ethics means more than just adhering to laws and strict company policies, it is about crea�ng a deep-rooted sense of accountability in every task. Theon places a strong emphasis on robust stakeholder engagement, recognising its cri�cal role in governance and as a cornerstone of its journey towards enduring economic success and stability.

Stakeholder engagement and materiality

The Group strongly believes in the vital importance of every stakeholder within its ecosystem. Robust communica�on systems have been established to ac�vely engage with stakeholders, aiming not only to comprehend their unique needs but also to cul�vate strong, mutually beneficial rela�onships. The commitment to open dialogue serves as the cornerstone of the Group's approach, with the aim to drive collabora�ve success, fostering a community where every stakeholder feels heard and valued.

Theon places a significant emphasis on materiality assessment which is an insigh�ul process that carefully iden�fies and priori�ses the environmental, social and governance factors essen�al to stakeholders and the sustainable success of the Group. It serves as a strategic roadmap guiding the Group in addressing key issues and enhancing performance by priori�sing the most impac�ul environmental, social and governance factors. It aligns the Group's ini�a�ves with stakeholders' expecta�ons and ensures that a focus approach towards sustainable growth and con�nuous improvement has been adopted.

The materiality assessment has been developed based on the GRI Standards, SASB and follows a threestep approach. Firstly, material issues are iden�fied through a comprehensive research and analysis taking into account the SASB standard and the Group's strategic priori�es. Then, the assessment and ranking of iden�fied material issues takes place followed by the valida�on and evalua�on of relevant targets by management, always taking into considera�on the strategic priori�es of the Group. The results of the materiality assessment are presented in the materiality matrix below:

Materiality Analysis		SDGs
	Environmental Material topics
1	Responsible energy management (energy consump�on & reduc�on)
2	Waste management and recycling
Social Material topics
3	Product safety and quality
4	Supply chain management
5	Health and safety
6	Research and development
7	Training and development
8	Employee well being
9	Social contribu�on and volunteering
	Governance Material topics
10	Exports and customs control
11	Data privacy and cybersecurity
12	Compliance and an�-corrup�on
13	Business ethics

Environmental Responsibility maters

The Group, reinforced by its Environmental Stewardship, takes into considera�on the increasing importance of environmental protec�on and is commited to meet the customer requirements while promo�ng sustainable development through effec�ve management of natural resources, reducing its environmental impacts and con�nuous environmental monitoring of its ac�vi�es. In addi�on, the Group's goal is to employ a ra�onal use of natural resources, energy, raw and auxiliary materials in the produc�on process and at the same �me reduce and minimise where possible, liquid, solid or gaseous effluents. It is also important for the Group to achieve and maintain compliance of all its opera�ons with the relevant European and na�onal laws and regula�ons underpinning the protec�on of the environment.

In view of the above, the Group maintains an Environmental Policy emphasising its dedica�on to strategic goals for environmentally responsible opera�ons and reflects its proac�ve stance towards the reduc�on of its environmental footprint. In line with its Environmental Policy, the Group has developed a comprehensive Environmental Management System cer�fied in accordance with the interna�onal standard ISO 14001:2015 to con�nuously perform environmental assessments of its ac�vi�es. Internal audits pertaining to the ISO 14001 standard were carried out in 2021, 2022 and 2023.

In order to achieve its strategic goals, the Group conducts an analysis of the environmental impacts prior to the adop�on and introduc�on of new produc�on processes and products, and offers con�nuous training, educa�on and encouraging all employees to ac�vely par�cipate in improving the Group's environmental performance. In addi�on, the Group also collects informa�on from its partners including customers, suppliers, contractors and government agencies, with a view to support its commitment to reduce its environmental impact. The Group aims to contract and collaborate with environmentally responsible suppliers who must meet high standards, including implemen�ng the ISO 9001 Quality Management System and ISO 28000:2007. In view of this, the Group communicates its environmental commitments to its suppliers through an assessment (due diligence) that incorporates specific environmental criteria.

Furthermore, the Group places a strong emphasis on employee engagement in connec�on with sustainability maters and training, to ensure that the team is well equipped with the knowledge and tools to contribute to the Group's commitment to environmental responsibility. In par�cular, the Group has invested in enhancing the environmental awareness of its employees through a tailor-made environmental training provided to all employees, regardless of their posi�on or hierarchical level. The said Environmental Awareness Training forms part of the onboarding process as well as the emergency response exercise conducted on an annual basis.

Responsible Energy Management (Energy consump�on and reduc�on)

The Group has developed a plan focused on responsible energy management and carbon emissions reduc�on. To ensure transparency and accountability, a number of Key Performance Indicators have been established to measure the progress towards the said plan's objec�ves, whilst ensuring a con�nuous improvement in environmental performance. More specifically, the Group reduced its electricity consump�on from 725.365kWh in 2022 to 651.038kWh in 2023 which represents a reduc�on of c.11%.

In addi�on, the Group also reduced its CO2 emissions from 422tn in 2022 to 381tn in 2023 represen�ng a reduc�on of c.10%.

Electricity Consump�on (kWh)
Year	kWh
2022	725.365,40
2023	651.037,91

CO2 Emissions (tn)
Year	tn
2022	422
2023	381

Furthermore, in its efforts to iden�fy opportuni�es to increase its energy efficiency and the use of renewable energy and hence mi�gate its climate change impacts, the Group has implemented addi�onal ini�a�ves such as installing photovoltaic panels on the roo�op of Theon produc�on facility in Koropi, Greece. As previously men�oned, the Group consistently adheres to environmental regula�ons, as also evidenced by its annual repor�ng of fluorinated gases to the European Union and conduc�ng Energy Efficiency Audits for its produc�on facili�es located in Koropi, Greece (57 Ioannou Metaxa and 62 Ioannou Metaxa).

Another ini�a�ve undertaken by the Group relates to the implementa�on of the principles of 'Green IT', aiming at the op�mal management of energy needs in a way that u�lises alterna�ve energy sources and takes care of the natural environment. The key concept of 'Green IT' is the alignment between the economic viability and op�mal efficiency of infrastructure with the social and ethical responsibili�es arising from the need to reduce the energy and environmental footprint of businesses. The Group embeds these principles in its opera�ons and encourages the use of environmentally friendly technologies and so�ware tools, such as virtual energy management and telecommu�ng.

Waste Management and Recycling

The Group endorses the principles of circular economy and acknowledges the crucial role that waste management plays in shaping its ecological footprint and has implemented comprehensive strategies to reduce waste and responsibly handle and recycle materials. By adop�ng such prac�ces and con�nuously monitoring waste streams from its ac�vi�es, the Group ensures that resources are used efficiently, and that waste is either recycled, reused or disposed of in an environmentally responsible manner. Par�cularly, the amount of waste produced by the Group's opera�ons is submited to electronic waste registra�on and hazardous waste management is performed by adequately cer�fied subcontrac�ng companies. The Group minimises waste quan��es at all loca�ons through process op�miza�on and the implementa�on of advanced waste management technologies.

The Group has managed to increase its non-hazardous waste management materials as follows:

• Paper (2023: 9,800tn, 2022: 7,140tn);
• Plas�c (2023: 2,770tn, 2022: 2,150tn); and
• Aluminium / Metals (2023: 0,340tn, 2022: 0,170tn)

In connec�on with hazardous waste management, the Group achieved the following relevant metrics:

• Glues (2023: 0,022tn, 2022: 0,038tn);
• Organic Chemical Materials (2023: 0,044tn, 2022: 0,033tn); and
• Machinery Soap Oils (2023: 1,5tn, 2022: 1,0tn)

Non-Hazardous Waste Management (tn)
Material	2022 (tn)	2023 (tn)
Paper	7,140	9,800
Plas�c	2,150	2,770
Aluminium	0,170	0,340

Hazardous Waste Management (tn)
Material	2022 (tn)	2023 (tn)
Glues	0,038	0,022
Organic Chemical Materials	0,033	0,044
Machinery Soap Oils	1,000	1,500

The Group's opera�ons are subject to a variety of environmental challenges, all of which mandate careful aten�on and strategic planning. Amongst these challenges, two broad categories emerge: physical and transi�on risks. Physical risks include the tangible threats caused by environmental factors and natural disasters such as excessive heatwaves, storms, floods, droughts and wildfires. Transi�on risks relate to the transi�on to a lower carbon economy and include, for example, the evolving regulatory, technological and market aspects in connec�on with climate-change mi�ga�on and the environment. In addi�on, the Group recognises that the u�lisa�on of hazardous substances imposes safety and environmental risks, requiring strict compliance with environmental regula�ons. Through its Environmental Policy, Theon is proac�ve in mi�ga�ng such risks by staying informed about environmental and climate related regula�ons, as well as implemen�ng sustainable prac�ses which include, amongst others, responsible energy and waste

management, the performance of regular environmental and impact assessments and the execu�on of strict protocols for the management of hazardous substances.

Social Responsibility maters

In line with its Social Responsibility pillar, the Group is commited to the professional and personal growth of its workforce and at the same �me it is ac�vely engaged in societal maters being responsible for ensuring high quality products to its customers and fostering an inclusive environment for all its stakeholders.

The Group is dedicated to crea�ng a suppor�ve and fulfilling work environment that fosters loyalty and long-term commitment, achieving a high reten�on rate of 98% per month in 2023. In 2023, the total number of employees at Theon Sensors was 303. The Group's employees play a vital role in the organisa�on's development and their well-being is of paramount importance to the Group. For this reason, the Group con�nues to invest in employee welfare and educa�on, providing comprehensive benefit packages and opportuni�es for personal and professional development. At the same �me, the Group, over its history, established an excep�onal track record of maintaining a safe and secure working environment for its employees. The Group maintains a strong record on reported workplace accidents across all produc�on sites. To ensure the overall health and safety of its workforce, the Group has implemented comprehensive safety protocols, including regular employee training programs, strict adherence to industry best prac�ces, and con�nuous monitoring of poten�al hazards.

Moreover, the Group is commited to social responsibility extending beyond the workplace. Through various philanthropic ac�vi�es, it strives to make a posi�ve impact on the local community, suppor�ng causes that align with core values and fostering a sense of purpose among employees.

In recogni�on of the above, the Group has been cer�fied as a Great Place to Work for 2023 awarded by Great Place to Work Ⓡ Hellas.

The Group is one of the leaders in the industry with a global presence and important partnerships, by tailoring its products to meet the unique requirements of its customers. The Group's goal is to offer innova�ve and high-quality products that guarantee flexibility, effec�veness and efficiency in the military opera�ons. Through the customiza�on of its products, the consulta�on of each client about its specific needs and the complete a�er sales support, the Company maintains excellent client rela�onships, which is a key element for its interna�onal success.

Product safety and quality

The Group designs and manufactures cu�ng-edge optoelectronic devices across both man-portable pla�orm-based systems that allow the visualisa�on of images in low light or obscure condi�ons using different state-of-the-art technologies. Securing product safety and quality is of vital importance to the Group.

The Group recognises its profound obliga�on that holds towards its customers and the world. All products undertake rigorous scru�ny to meet industry standards as well as the Group's uncompromising quality standards. The advanced produc�on facility in Greece upholds NATO security clearance and conducts thorough tes�ng of all systems in accordance with standard military test procedures prior to their launch. The Group's unique compe��ve edge lies on the u�lisa�on of its extensive range of in-house designed and assembled test and measurement equipment. The Group's process capabili�es include Research, Design

& Prototyping, Tes�ng & Evalua�on, Product Development & Enhancement, Enhanced Automa�on & Technology and A�ermarket Support & Moderniza�on.

In view of the above, the Group maintains and implements a Quality Management System ("QMS"), in accordance with the requirements of the interna�onal standard ISO 9001:2015, ISO 14001:2015 and ISO 28000:2007 aiming at the con�nual effec�veness improvement of all of its processes. Quality assurance, which is implemented throughout the produc�on process from design to final achievement of the product, is implemented for both internal and external purposes. Internal Quality Assurance provides trust to management while external quality assurance provides trust to customers or third par�es and is aligned with Quality Control func�ons.

A�er determining the specifica�ons and requirements regarding produc�on and product disposal, a program is implemented, through which the scope of Quality Assurance is the "preven�on of error" by ensuring quality at all stages of produc�on.

Through the QMS, all the processes applied in Theon are defined as well as resources, criteria and

methods to ensure that both the opera�on and the control of these processes are effec�ve. A cri�cal part of quality assurance procedures is the quality control process. Quality control is implemented in different parts of the Group's processes such as incoming inspec�on, during produc�on, and outgoing inspec�on.

Theon is also a NATO Security cer�fied organisa�on. Its Facility Security Plan is approved by the Hellenic Ministry of Defence regarding the applica�on of measures that ensure the security of sensi�ve products, military material, documenta�on and other informa�on as well as personnel security. The Group, registered in the Defence Material Manufacturers Registry of the Hellenic MoD, has consistently demonstrated excep�onal performance in contract fulfilment, earning cer�ficates of achievement from numerous clients.

The Group acknowledges the poten�al risks associated with keeping in pace with evolving technology, poten�ally leading to unsuccessful future products. Custom product requirements pose challenges, including high R&D investments and difficul�es in assessing reliability. Poten�al supplier failures to meet contractual obliga�ons could also hinder �mely fulfilment of customer orders. Adap�ng swi�ly to evolving customer needs and technological changes is impera�ve for sustaining compe��veness and ensuring future success.

As described above, the Group's fundamental principle and commitment, as well as the philosophy of its staff, is to deliver products and services that meet contractual obliga�ons, adhere to relevant laws and regula�ons, and achieve the quality objec�ves established for each contract. To achieve this, Theon:

• Develops a company's business development plan incorpora�ng internal and external factors through SWOT analysis and conducts ongoing stakeholder analysis via a risk assessment process. It also con�nuously reviews and enhances product features, where possible, as well as the efficiency of its processes, thereby improving the QMS as a whole;
• Establishes measurable quality objec�ves at the company, departmental/ process, and project levels. These objec�ves are established and reviewed as to the point of achievement during the Management review of the QMS by the leadership and at the end of each project, respec�vely;
• Provides the resources needed for the unobstructed, effec�ve and efficient opera�on of each department;

• Invests in the con�nual upskilling, advising and training of its staff so as they enhance the quality in all their ac�vi�es; and
• Monitors, measures and evaluates cri�cal parameters and processes, in order to ensure quality objec�ves achievement.

The Group is subject to provisions on product safety in all countries and jurisdic�ons where it delivers products and could therefore be held liable in cases concerning damage caused by defec�ve products manufactured. As a principle, each delivered product leaves the produc�on site with a product safety record sta�ng compliance with all applicable product safety laws.

A product is defec�ve if it does not provide for the safety which one is en�tled to expect, taking into account all circumstances, in par�cular (i) its presenta�on, (ii) the use to which it could reasonably be expected that it would be put, and (iii) the �me when it was put into circula�on. The Group recognises the risk that if a defec�ve product causes a person's death, injury to the body, damage to health, or damage to an item of property, the Group is obliged to compensate the injured person for the respec�ve damage under certain circumstances. To ensure this risk is mi�gated, the Group ensures compliance with the safety requirements and also provides consumers with the necessary informa�on in order to assess a product's inherent risks and take necessary measures to avoid such threats.

Supply Chain management

Aiming to provide high quality equipment, the Group cooperates with an extensive network of suppliers both in Greece and abroad. The Group incorporates best prac�ces and principles ensuring accountability and transparency, and thoroughly assesses all its suppliers prior to any collabora�on, as well as evalua�ng exis�ng suppliers on an ongoing basis.

The Group uses an interna�onal supply chain for the produc�on of all components. This supply chain is par�ally supported by the in-house Computer Numerical Control ("CNC") workshop and mostly outsourced, with par�cular regard to the supply of specific intermediate products, such as image intensifier tubes ("IITs"), lenses, metal bodies and plas�c parts, which are necessary for the manufacture of its technological products.

Purchases from suppliers (%)
Year	Foreign Suppliers (%)	Local Suppliers (%)
2022	94%	6%
2023	91%	9%

The most relevant suppliers are based in the EU (Germany, Greece, France, and Netherlands), Asia and the U.S. In 2023, 91% of Theon Sensors' suppliers were foreign whereas 9% of its suppliers were from the local market (Greece) (please refer to the table above). Due to the strict regulatory requirements concerning the Group's products, the Group needs to abide by strict selec�on criteria, including pricing, accessibility, quality and track-record, and policies to ensure that also outsourced services and components and the

37

relevant suppliers comply with such requirements. The Group also keeps a record of the approved suppliers and partners, which is updated every year ("Approved Suppliers-Partners"). For this reason, the Group maintains a Procurement Policy and Process for selec�ng its suppliers with its primary objec�ve being to ensure that the quality of every piece of equipment or hardware, and every product supplied meets the prescribed standard and that the service delivered by the supplier complies with the specifica�ons already set.

The Group acknowledges supply chain risks stemming from reliance on specific suppliers for key components like IITs, which have faced shortages due to increased global demand. In addi�on, as the Group's supply chains are subject to sales and export restric�ons, any delays or failures to comply with such restric�ons may lead to increased costs in the form of fines and penal�es as well as pose reputa�onal risks. The Group is ac�vely managing such challenges to ensure con�nued opera�ons and compliance with regula�ons.

Overall, the Group aims to establish a good rela�onship and a long-term collabora�on with its suppliers, while seeking to intensify coopera�on and expand the number of suppliers in the future in order to ensure that the services delivered by the suppliers con�nue to comply with the Group's specifica�ons and that all products of the Group are compa�ble and fully tested for compliance with military standards. In addi�on, by par�cipa�ng in tender procurement procedures, the Group benefits from sales volume forecasts and is able to organise its supply chain more efficiently, par�cularly the supply of IITs, which have the most significant effect on the Group's ability to meet customer demand. The Group also deals with its suppliers mainly by means of purchase orders, governed by standard terms and condi�ons provided either by the Group itself, or by the relevant supplier.

Health and Safety

Providing a work environment that ensures the health and safety of its employees, contractors and suppliers is of utmost importance to the Group. Aiming at zero accidents and occupa�onal illnesses, the Company ensures the promo�on of health and safety in the workplace and the achievement of con�nuous improvement in this area. For this reason, the Group maintains a Health and Safety policy which underpins its commitment to protec�ng both its people and property by maintaining a safe and healthy workspace in accordance with industry standards and legisla�ve requirements, aiming to eliminate any foreseeable hazards which may result in property damage, accidents or personal injury/ illness.

The Group's approach to health and safety relies on three aspects:

• Safety Task Force Groups;
• Safety culture and awareness trainings; and
• Risk iden�fica�on and assessment.

Safety Task Force Groups

To manage poten�al risks effec�vely and comprehensively, the Group implements safety protocols and procedures to assure a safe workplace environment. In view of this, Safety Taskforce Groups have been launched including employees from all departments. Their main task is to assure the iden�fica�on of poten�al safety issues and risks and their immediate communica�on to the responsible manager, in order to take precau�onary measures and avoid poten�al incidents. To achieve that, Safety Task Force Groups perform regular safety inspec�ons in all premises and opera�ons.

Safety culture and awareness trainings

The Group has developed awareness ini�a�ves including an internal training program for all its employees, wide collabora�on with companies specialised in health and safety issues and the construc�on of fully equipped medical facili�es within its premises.

In addi�on, Theon Sensors has also offered First Aid training organised in coopera�on with a company specialised in the provision of training services. Through these training sessions, fourteen (14) employees have been successfully trained and cer�fied to the CARPA method and the use of a defibrillator. Following the safety awareness ini�a�ve, two (2) of the First Aid trained employees have been placed to each working shi� as an addi�onal precau�onary measure for the successful coordina�on of a medical emergency situa�on.

Besides CARPA training, a fire safety session has also been conducted and a Fire Safety Team has been established which reports to the Fire Safety Commander and is responsible for any fire safety or evacua�on event, as well as respec�ve drills organised at least once per year.

Risk identification and assessment

Theon regularly conducts hazard iden�fica�on and assessment in coopera�on with its dedicated Safety Technician. The results of these assessments are included in the writen Occupa�onal Risk Assessment that is available to all employees and is revised on a 3-year basis. The last revision of the Occupa�onal Risk Assessment has been made in 2020.

The Group seeks to achieve zero accidents and eliminate relevant risks and has established specific indicators for recording and effec�vely monitoring health and safety performance, as indicated in the table below:

Health and Safety - Accidents and Injuries KPIs
KPI	2023	2022
Lost Time Incidents (LTIs)	0	1
Lost Time Injury Frequency Rate (LTIFR) for employees	0	2,5
Absenteeism Rate (AR) for employees	2%	1,27%

Research and Development (R&D)

The Group's R&D efforts are focused on in-house product development and can last from six (6) months up to two (2) years, with poten�ally longer dura�ons in areas where opera�onal safety is a cri�cal feature. Within the R&D department, there is a range of highly skilled professionals in op�cs, mechanics and electronics who run the process. The Group ini�ates the development of a product either upon a market need, or a tender requirement. This begins with the specifica�on review, followed by detailed design work which integrates optomechanical components alongside electronic hardware and so�ware development. The phases of integra�on, prototyping and design verifica�on ensure a successful product before releasing to produc�on.

The Group has con�nuous interac�on with its end-users, u�lising their feedback for con�nuous improvement and customiza�on of the product throughout its life cycle. In addi�on, the Group protects its innova�ve solu�ons, handling them as trade secrets and confiden�al informa�on, for�fied by contracts with various counterpar�es.

As the Group operates in a highly compe��ve market, it con�nuously develops new products and technology improvements to retain its market share. Addi�onal new product development may be required to compete in certain tenders and larger projects.

Therefore, the Group invests constantly in research and in the fields of op�cs, mechanics and electronics with a focus on new innova�ve products that may ensure a compe��ve advantage. In the year ended December 31, 2023, the expenditures in the research and development amounted to €2.234.174,80 (compared to €1.985.082, for the year ended December 31, 2022, corresponding to an increase of +12,55%). In 2023, the Group employed 57 highly qualified technicians for R&D ac�vi�es in various fields.

The Group recognizes the poten�al risks associated with R&D expenditures, such as the risk of technology or product developments not mee�ng expected market demand or facing compe��on from superior alterna�ves. Furthermore, unforeseen circumstances resul�ng from ineffec�ve resource alloca�on may impact the success of R&D investments, poten�ally resul�ng in missed opportuni�es or fu�le expenditure. However, the Group remains steadfast in its commitment to prudent resource alloca�on and proac�ve management of R&D ini�a�ves to navigate and address these challenges effec�vely.

Training and Development

The Group supports the con�nuous advancement of its workforce, and it is dedicated to cul�va�ng the professional growth and development of its employees through comprehensive training ini�a�ves. It recognizes that by inves�ng in its workforce, this will enhance the individual capabili�es and will also strengthen the collec�ve capacity to innovate and excel in a constantly changing environment. By providing tailored training programs for the needs and objec�ves of the employees, it will enable them to atain their maximum poten�al and drive the success of the organisa�on forward.

The Group approves and encourages a wide range of training programmes including:

• Training in hard and so� skills;
• Employee coaching and mentoring;
• Onboarding trainings;
• On-the-job trainings;
• Learning of foreign languages; and
• Global history workshops and reading material (provided by the Group).

In s�mula�ng professional advancement, Theon Sensors introduced in 2022 the "Power Week" aimed at enhancing the so� skills of the employees. The "Power Week" also ran in 2023 and it atracted 166 individuals from various departments. Designed to equip par�cipants with the necessary so� skills, the program fostered a dynamic learning environment where collabora�ve exchange and hands on experience thrived. In a commitment to inclusivity and accessibility, this program was conducted remotely enabling all employees to par�cipate regardless of loca�on, including also the produc�on workers who work in shi�s. In addi�on, to ensure the top quality of the training, this ini�a�ve was conducted in collabora�on with three leading educa�onal companies in Greece.

In 2023, and as shown in the tables below, the total number of employees trained was 112 including members of the Management under a total of 391 hours.

Total number of employees trained by hierarchical level in 2023
Employees (Hierarchical level)
Technical employees	28
Administra�on employees	77
Middle Management	5
Upper Management	2
Total	112

Total training hours by hierarchical level in 2023
Employees (Hierarchical level)
Technical employees	120
Administra�on employees	239
Middle Management	20
Upper Management	12
Total	391

Beyond providing training to its internal stakeholders, the Group provides training to its end-customers/ users. In par�cular, the Group provides training performed by skilled and experienced personnel, including either operator training such as in-person demonstra�ons on equipment handling, or technical training, such as on maintaining and repairing the devices. In both cases, trainees receive relevant documenta�on, such as manuals, prepared by the Group's dedicated training and integrated logis�cs support departments. Especially for the technical training, the Group also offers hands-on training to technical personnel of the end-users.

Employee wellbeing

The Group maintains a dedicated team of highly skilled and experienced employees who competently handle ac�vi�es from design through to manufacturing. Its management approach to employee experience remains holis�c, ensuring that every interac�on and touchpoint within the Group is designed to enhance the overall wellbeing and sa�sfac�on of its employees.

The Group has been cer�fied as a Great Place to Work for 2023, standing out for its excellent work environment and corporate culture, following an evalua�on carried out by the organisa�on Great Place to Work Hellas. The evalua�on of the working environment was done by the employees of the Group. Through this evalua�on, the employees acknowledged the Group for its corporate culture and working environment as a whole, for the investment that it undertakes in the con�nuous improvement of the skills of its employees the broadening of their horizons, as well as their cultural and digital upskilling and reskilling.

The survey confirmed that the Group promotes meaningful rela�onships based on equality and jus�ce, with 89% and 87% of employees sta�ng that people are treated fairly and regardless of their race and sexual orienta�on respec�vely. In addi�on, high levels of staff trust in their management were noted, with 92% of employees believing that management is honest and ethical in their business prac�ces.

Holistic approach on employee experience

The employee onboarding process is essen�al for the successful integra�on of new hires into the organisa�on. This procedure includes ac�vi�es which allow new employees to complete an ini�al newhire orienta�on process, as well as learn about the Group and its structure, culture, vision, mission and values. Moreover, during the onboarding process, employees become familiar with the "Employees Handbook" which includes all corporate documents and policies outlining areas such as Human Resources forms, guidelines and other procedures about working at the Group.

In addi�on, the Group's integrated performance management system plays a pivotal role in driving workforce produc�vity, fostering higher employee engagement, reducing turnover and maximising revenue per employee. The performance management system supports the Group through:

• Providing a fair basis for awarding compensa�on based on merit;
• Helping managers distribute and achieve departmental goals;
• Helping employees clearly define and understand their responsibili�es;
• Iden�fying employees for advancement within the Group;
• Providing criteria for the evalua�on of employees performance; and
• Sugges�ng ways in which employees can improve their performance.

Employee survey

Theon Sensors conducts employee surveys on a regular basis aiming to understand its employees' aspira�ons, concerns and sugges�ons so that it can iden�fy areas for improvement, celebrate its strengths, and align its strategies with their needs and expecta�ons.

In 2023, 77% of the Group's employees par�cipated in the survey and a staggering 77% of the Group's employees claimed they enjoy being part of the team.

Additional employee benefits

In fostering a comprehensive reward system, the Group has developed an addi�onal employee benefits' plan that is offered to all employees despite their job posi�on or hierarchical level and includes both health care and economic benefits. Medical plan is provided for all staff and all their first level family members a�er three months of employment within the Company.

Fostering employee wellbeing

Under the corporate commitment for the provision of safe, equal, and inclusive workplace, the Group has included employee's wellbeing in its corporate strategic approach in order to atract and retain top human capital. The corporate devo�on to wellbeing of its people is highlighted through the following ini�a�ves:

• Promo�ng engagement through empowering employees to par�cipate in social events and cultural ac�vi�es;
• Christmas children's party;
• Running team;
• Gym subscrip�on;
• Webinars in connec�on with physical and mental health;
• 24/7 psychological support line, in collabora�on with an expert organisa�on in occupa�onal health and safety;
• Healthy way of living through promo�ng a balanced ea�ng patern; and
• Corporate band (musical band consis�ng of Group employees including members of the Management).

The Group recognizes the cri�cal importance of retaining technical and skilled personnel for its opera�ons. Intense industry compe��on heightens the risk of losing talent to compe�tors or facing challenges in recrui�ng new employees. For this reason, and as evidenced by the ac�vi�es/ ini�a�ves referred to above, the Group ensures that both the wellbeing of its employees as well as their professional growth con�nue to remain top priori�es.

Social contribu�on and volunteering

The Group places special emphasis on social contribu�on, reflec�ng its commitment to contribute in the posi�ve transforma�on of the world. The Group's mission extends beyond its core opera�ons as it recognises the importance of ac�ng with a strong sense of responsibility towards the society and the communi�es in which it operates. Guided by these principles, the Group has established a framework consis�ng of the following four (4) pillars of social contribu�on, with the ac�ve par�cipa�on and devo�on of its employees aiming to further amplify this commitment.

Support vulnerable groups

Acknowledging the importance of refining the lives of those in need, the Group is dedicated to crea�ng a more inclusive and equitable world for all. The Group ac�vely supports organisa�ons that address the challenges faced by vulnerable social groups. The goal of the Group is to magnify the impact of those organisa�ons, developing greater social awareness and improving the quality of life for those they serve. The Group provides support to the following organisa�ons:

• Dona�on to "The Smile of the Child" organisa�on: The organisa�on is dedicated to assis�ng children who have experienced abuse, live in poverty, or have health challenges, ensuring they and their caregivers have the condi�ons necessary for a dignified life.
• SOS Villages: To ensure the adequate care that every child deserves, the Group extends its support to the organisa�on "SOS Children's Villages", which provides shelter to every child in need.
• ELEPAP: The organisa�on is open to infants, children and adults and provides therapeu�c programs, educa�on and medical care to them as well as support and counselling services to their families.
• Odyssea: Odyssea is a non-profit organisa�on that supports young vulnerable people to have access to employment opportuni�es in society.

Employee volunteering

Employee volunteering is a core value embedded in the Group's culture. The Group encourages and supports its employees who dedicate their �me and skills in order to make a difference in the communi�es served. Encouraged to offer to the society and inspired by a shared sense of social responsibility, employees ac�vely engage in various volunteering programs that champion the values of sports, solidarity and environmental responsibility, strengthening the collec�ve impact and represen�ng the Group's commitment to corporate ci�zenship. Some of the volunteering programs in which the Group's employees were involved include:

• Odyssea Social Cooking;
• Christmas and Easter Bazaar for Smile of the Child, SOS Villages and ELEPAP; and
• Tree plan�ng (the team managed to plant 1000 samplings).

Support of education and science

Educa�on stands as a cornerstone in the Group's social contribu�on framework. The Group supports promising young professionals through sponsorships, acknowledging their poten�al and inves�ng in their growth and development. Furthermore, the Group offers internship opportuni�es providing valuable hands-on experience and mentorship to the next genera�on of talent. In 2023, three (3) students undertook internships at the Group.

The Group extends its support through sponsorship for conferences, webinars, events, and workshops which cover a broad spectrum of subjects from defence, security, aerospace and emerging technologies to economic growth and entrepreneurship. In these events organised by the Group, esteemed speakers are brought to enrich discussions and the ac�ve par�cipa�on of the company's management is evident through their involvement in panel discussion. An illustra�on of the sponsorship ini�a�ves undertaken by the Group includes the dona�on that facilitated the par�cipa�on of the "Robocores", a dynamic team of young students, in the WRO 2022 Educa�onal Robo�cs Olympiad, where they secured the second place.

Support of culture

The aim of the Group is to cul�vate a profound reverence for Greek culture, both domes�cally and interna�onally. Through various ini�a�ves such as sponsorship to Greek museums and cultural ins�tu�ons the company ac�vely contributes to the preserva�on and promo�on of Greece's rich history and heritage on a global scale. The Group's support has been channelled to notable establishments including:

• The crea�on of Maria Callas statue for the construc�on of the Maria Callas Museum;
• The Benaki Museum to support its cultural work; and
• The Artefact Athens for the implementa�on of the exhibi�on "Reality check chapter II:inner sanctum" at the Psychiatric Hospital of A�ca in Dafni.

In addi�on, the Group has supported official fes�ve events organised both by embassies abroad in Greece, as well as by Greek embassies and ins�tu�ons in various countries around the world.

Responsible Governance maters

The Group's Governance Structure

The Group's internal structure reflects the dynamic corporate governance prac�ces adopted which allow a constant flow of informa�on in real �me, op�mising responsiveness whilst minimising or elimina�ng poten�al risks to sensi�ve informa�on and incidents of corrup�on.

For FY 2023, the Group had a one-�er board structure consis�ng of three (3) execu�ve directors ("Execu�ve Directors"), for the new corporate governance framework that the Group adopted and implements as of 19/1/2024 in the frame of the IPO and lis�ng to Euronext Amsterdam Stock Exchange, please refer to the Corporate Governance Report. The members of the Board of Directors combine unparalleled industry knowledge with extensive experience, providing stable and decisive leadership that nurtures growth and innova�on in the Group.

The Board of Directors ("Board") is responsible for the con�nuity and the businesses of the Group. The Directors are responsible for the Group's general affairs and are in charge of the oversight of the day-today management, formula�ng the strategy and policies and se�ng the Group's objec�ves. The Directors focus on the long-term value crea�on for the Group, thereby considering the interests of all subsidiaries and how Group-wide strategies and policies contribute to the interest of each subsidiary and the interest of the Group as a whole, over the long-term.

Export and customs control

Naviga�ng the exports legal framework is a major challenge for the Group, due to the par�culari�es of business opera�ons, products, and global reach. The Group is required to comply with three dis�nct and interrelated levels of legisla�on: na�onal, EU, and interna�onal.

As products in the Group's por�olio qualify as military goods or, alterna�vely, as dual-use goods or military services under export control regula�ons, they are subject to strict sales and export restric�ons. '

In par�cular, as to European law, the regulatory framework concerning customs is the Union Customs Code (Regula�on (EU) No 952/2013), with the powers of the customs authori�es being further set out in the na�onal laws of the Member States.

Since the products are sold worldwide and given that most of them are to a large extent export controlled, these goods and services are subject to export control regula�ons of the country in which the relevant Group's affiliate is located.

In addi�on, the Group procures goods from suppliers worldwide, who might also be subject to export restric�ons. Such export restric�ons from suppliers could also impose further legal requirements when the Group provides goods and services to customers. To this end, expor�ng companies have to comply

with, in par�cular, European export control regula�ons, as well as the U.S. re-export regula�ons (for example, the ITAR/EAR), applicable depending on (i) the kind of product and the purpose for which the product has been developed, (ii) the country of des�na�on, (iii) the intended use of the exported goods, and (iv) as part of the U.S. re-export regula�ons, the classifica�on status of the receiving company.

Furthermore, some of the Group products qualify as dual-use items. Dual-use items are goods, so�ware and technology that can be used for both civilian and military applica�ons. To that end, the Group complies with EU export control regime for dual-use items, governed by Regula�on (EU) 2021/821 of May 21, 2021 ("Dual-Use Regula�on") entered into force on September 9, 2021 and repealed Council Regula�on (EU) 428/2009 of May 5, 2009. The Dual-Use Regula�on provides for common EU control rules, a common EU dual-use items list and harmonized policies for implementa�on.

The Group acknowledges the complexi�es of export and customs control, par�cularly in complying with laws governing military items and naviga�ng diverse export regimes across jurisdic�ons, which may entail addi�onal costs and administra�ve burdens. Moreover, evolving export restric�ons pose risks to component suitability and availability, poten�ally impac�ng customer access, underscoring the importance of proac�ve supply chain management to ensure regulatory compliance and sustain opera�onal con�nuity while safeguarding the Group's reputa�on.

Therefore, compliance with all applicable restric�ons and controls is essen�al for the Group. The Group places a strong emphasis on comprehensive due diligence processes for each business deal involving clients, suppliers, and business partners, ensuring that all necessary authorisa�ons and cer�fica�ons are obtained. The Contracts & Purchasing and Business Development departments play a vital role in this process and are considered to be at the heart of the Group's opera�ons, as they are responsible for naviga�ng the complex legal landscape and ensuring compliance with export control regula�ons.

By diligently adhering to the export control laws and regula�ons, the Group aims to mi�gate the risks associated with sales and export restric�ons.

By staying informed and proac�ve, the Group aims to ensure compliance with all applicable restric�ons and controls, safeguarding its business, assets, and prospects. Remaining aware and vigilant of the dynamic nature of the interna�onal trade landscape is paramount for effec�vely and efficiently responding to any changes in governments' composi�on, elec�ons, media coverage, geopoli�cal events, and policy changes, which may lead to the introduc�on of new or more stringent restric�ons and controls.

Finally, countries like the United States, as well as suprana�onal organisa�ons like the EU and the United Na�ons, impose sanc�ons or other restric�ve measures against countries/territories, organisa�ons, groups, non-state en��es, and individuals who infringe upon interna�onally accepted behaviour and norms, or otherwise pose na�onal security or foreign policy risks. As both embargoes and trade sanc�ons can occur or change at any moment, and compliance with them is of highest importance, the Group puts significant effort in remaining up to date, with any developments and abide accordingly with relevant sanc�ons frameworks.

Data privacy and cybersecurity

The IT infrastructure plays a pivotal role in the opera�ons of the Group, serving as a cornerstone for various func�ons including product development, manufacturing, sales, customer support, administra�on, as well as communica�on channels, both internally and externally. Moreover, it facilitates the management with crucial financial data indispensable for strategy implementa�on, while ensuring controls, compliance, and uniform repor�ng across the Group. Given the strategic significance of IT systems and the sensi�ve informa�on handled, the Group has implemented rigorous measures to forestall incidents such as IT breaches and cyber-atacks. The Group has not observed any incidents of viola�ons or data forgery in 2023.

As an advanced technology-based solu�ons provider and a government contractor with access to highly confiden�al government informa�on, the Group is subject to stringent secrecy obliga�ons. The Group's exposure to na�onal security or other sensi�ve government data accentuates the risk of security breaches or disrup�ons posed by unauthorised access to its IT networks and related systems. Moreover, compliance with the EU Regula�on no. 679/2016 ("GDPR") and similar data protec�on rules mandates adherence to stringent data security protocols.

The Group acknowledges notable risks related to data protec�on and cybersecurity. Compliance with GDPR and similar regula�ons is pivotal to avoid poten�al fines or penal�es from regulatory authori�es. Moreover, the threat of cyber-atacks, encompassing various risks such as computer viruses and phishing atacks, emphasizes the importance of implemen�ng robust cybersecurity measures to protect the Group's IT infrastructure. Addi�onally, the risk of data breaches due to third-party non-compliance or cyber-atacks remains a concern, necessita�ng proac�ve risk management strategies to safeguard the Group's data integrity and opera�onal con�nuity.

Theon has proac�vely adopted an array of measures including employee awareness campaigns and training, dedicated cyber-security teams, and increased investments in IT infrastructure, which surged from €280.254,00 in 2020 to €527.274,00 in 2022.

Addi�onally, Theon's IT infrastructure and systems are protected externally and internally by firewalls and the latest versions of the firmware available. The Group has also implemented a so�ware, Veeam, in both of its Greek sites to automa�cally backup and synchronise repositories, and the Quality Network Appliance Provider ("QNAP") archive, a disaster recovery procedure and back-up facility, in order to mi�gate the IT risks.

In rela�on to the system maintenance, the Group has adopted a proac�ve approach in the IT asset lifecycle management for core and backbone IT infrastructure and implemented a dedicated so�ware to monitor the lifecycle of the Group's products.

The Group must also rely on the safeguards put in place by customers, suppliers, vendors, subcontractors or other third par�es to minimise the impact of cyber threats, other security threats or business disrup�ons. These third par�es may have varying levels of cybersecurity exper�se and safeguards, and their rela�onships with government contractors may increase their likelihood of being targeted by cyber threats. The Group's commercial arrangements with these third par�es include.

Compliance and An�-Corrup�on

In the defence industry, mee�ngs and nego�a�ons with officials from foreign countries are part of the day to day business conduct and, as such, the reputa�on of both par�es involved has to remain intact at all �mes. To achieve this, the Group sets the elimina�on of corrup�on as a top strategic priority and strives to create condi�ons that leave no room for such phenomena in its opera�ons.

The Group addresses and communicates this issue through its Code of Ethics and Business Conduct, which, amongst others, clarifies that poli�cal contribu�ons are absolutely forbidden by anyone in the Group. The Group's staff have been instructed neither to atempt to give nor accept any favourable treatment from any party. Significant emphasis is also placed on dealing fairly with all other counterpar�es, as is the only way to conduct business at the Group and it is expected from all employees, execu�ves, and partners in general to respect the Group's rules and principles.

The Group acknowledges significant compliance risks related to an�-corrup�on and an�-money laundering regula�ons, par�cularly within jurisdic�ons like Greece, the United Kingdom, and the United States. Compliance efforts are complicated due to the evolving nature of sanc�ons and regulatory regimes, posing challenges in interpreta�on and implementa�on. In addi�on, the industry's suscep�bility to corrup�on, compounded by interna�onal sales in high-risk jurisdic�ons, emphasizes the importance of stringent compliance measures. While non-compliance could lead to adverse consequences such as fines and reputa�onal harm, the Group remains commited to maintaining robust compliance policies to mi�gate these risks.

In tandem with these regulatory challenges, the Group remains steadfast in its commitment to uphold a rigorous code of business conduct. Therefore, the Group has implemented a structured set of guidelines se�ng out its organisa�on's processes, standards, and best prac�ces to aggregate and harmonise its opera�ons with the applicable established regula�ons and legisla�on, which is enforced and overseen by the Legal Department of the Group in coordina�on with the Contracts and Purchasing Department, which handles the compliance issues of the day to day business, including export control.

Compliance issues are closely monitored on an ongoing basis ensuring both the smooth performance of the Group's contractual obliga�ons and the adherence to the corresponding regulatory framework. To this end, the Group ensures its staff and employees periodically receive accommodated training and updates on any legal and regulatory developments that need to be strictly followed when doing business. External advisors and counsels are also engaged by the Group on an ad-hoc basis to provide tailored-made advice and solu�ons and support the Group when bespoke solu�ons are required.

The Group conducts its business ac�vi�es in accordance with applicable an�-corrup�on laws, rules, and regula�ons, and its Code of Ethics and Business Conduct. The Group recognises the corrosive effect that corrup�on has on democracy and good governance and is commited to ensuring that the Group and those who conduct business on its behalf do so with integrity and the highest ethical business standards and in full compliance with the U.S. Foreign Corrupt Prac�ces Act, the U.K. Bribery Act, and other applicable an�-corrup�on laws.

Furthermore, the Group has zero tolerance for bribery and corrup�on in any form in its business dealings. The Code of Ethics and Business Conduct applies to all officers, members of the Board of Directors, and employees of the Group, and, by writen agreement, all appropriate provisions apply to any domes�c or interna�onal representa�ve, distributor, reseller, consultant, agent, or any other person or firm by whatever name known, of any na�onality, who is conduc�ng business for or on behalf of the Group.

The Group has experienced zero allega�ons of corrup�on and/ or bribery in 2023.

Business Ethics

The Group promotes transparency, integrity, accountability, and ethical behaviour throughout its organisa�on and entrusts its people with the responsibility to further its ambi�on and commitment to responsible business conduct beyond its borders. In view of this, the Group adopted a Code of Ethics and Business Conduct ("Code"). The Code reaffirms the Group's core business principles and ethos and is addressed to all of its employees, members of the Board, officers, associates, contractors, as well as any agents or third par�es when represen�ng or coopera�ng with the Group.

In the Code, Theon reiterates its unwavering commitments towards con�nuous compliance with the applicable legisla�on, elimina�on of instances of bribery and corrup�on, respec�ng confiden�ality at all �mes and prac�sing fair dealing in accordance with established rules of compe��on. Specifically, the Code of Ethics and Business Conduct covers mainly the following areas of business:

• Compliance with applicable legisla�on;
• Avoiding conflicts of interest;
• No bribery an�-corrup�on clauses business courtesies;
• Poli�cal contribu�ons;
• Health & safety quality;
• Compe��on and fair dealing;
• Accuracy in business record keeping;
• Sensi�ve informa�on / confiden�ality;

Compliance with applicable legisla�on

The Group is fully commited to compe�ng in strict compliance with all appropriate laws and regula�ons in all jurisdic�ons of countries in which it operates. The Group, as well as each person to whom this Code applies to, shall at all �mes be in full compliance with all na�onal, European and interna�onal laws, rules and regula�ons which apply to the Group's and its counterpar�es' business, regarding data privacy, compe��on and an�-trust, an�-bribery, an�-money laundering and an�-corrup�on legisla�on including, amongst others, the Organisa�on for Economic Development ("OECD") Conven�on and recommenda�ons and guidelines thereto, the United Na�ons Conven�on against Corrup�on ("UNCAC"), the Foreign Corrupt Prac�ces Act ("FCPA") legisla�on and the European Commission's applicable rules and regula�ons and their implementa�on thereof.

The Group, as well as each person to whom this Code applies to, does not, and will not, whether directly or indirectly, breach or evade the laws of any country in which it seeks to do business in, even if such illegality cons�tutes "customary" business or prac�ce. Accordingly, full compliance with all laws applicable to the Group's business opera�ons is the very minimum to be demonstrated.

Avoiding conflicts of interest

The Group's conflicts of interest arrangements and procedures are derived from the Code and the applicable Greek legal and regulatory framework. All Group personnel and any other persons to which this

Code applies to, must avoid any actual or threatened conflict of interest between the Group's and their own (private) interests, whether by way of rela�onship or ac�vity and regardless of whether such conflict may impair their ability to render fair and objec�ve judgements or effec�vely perform their du�es.

In addi�on, on January 19th, 2024, the Board of Directors of Theon Interna�onal PLC approved the "Conflicts of Interest Policy" for the Group. Theon's arrangements and procedures in connec�on with conflicts of interest are designed to prevent, manage, and eliminate cases of conflicts of interest and, in par�cular, specify what cons�tutes a conflict of interest as well as outline the general principles, rules, and regula�ons for their preven�on and management. Arrangements and procedures regarding conflicts of interest apply to all "Covered Persons", including members of the Board, execu�ve officers, employees, and shareholders with a par�cipa�on rate or vo�ng rights equal to or higher than 5% of the company's issued share capital.

The Group requires all actual and poten�al conflicts of interest to be communicated, discussed, documented, and managed appropriately. It also specifies procedures for the preven�on of conflicts of interest, measures for the disclosure and management of the conflicts of interest, and condi�ons under which a member of the Board or Senior Execu�ve Officer may have a conflict of interest.

The Conflicts of Interest Policy is enforced by the Group compliance func�on, which is responsible for evalua�ng and managing conflicts of interest, as well as maintaining a record of all declared cases.

No bribery - anti-corruption clauses - business courtesies

Neither the Group, nor any person to whom this Code applies to, shall offer, authorise or provide, whether directly or indirectly, a bribe, kick-back or benefit (including facilita�on of payments, favours, gratui�es or anything of value to the recipient), in return for an unfair business advantage resul�ng from an act or omission on behalf of such bribed party. Such acts are prohibited regardless of the reason, the persons involved, the means (pecuniary or other) or whether they involve intermediaries or not.

Political contributions

Poli�cal contribu�ons are strongly prohibited and Theon is, at all �mes, compliant with all applicable public disclosure requirements and any applicable legisla�on.

Health & safety – quality

The Group, in compliance with applicable legisla�on, takes any steps necessary to assure a healthy and safe work environment for its employees and business invitees, while offering extensive training in this regard. The services provided by Theon must be delivered in a manner unreservedly respec�ng the health and safety of any employees and customers.

The Group is subject to provisions on product safety in all countries and jurisdic�ons where it delivers products and could therefore be held liable in cases concerning damage caused by defec�ve products manufactured. As a principle, each delivered product leaves the produc�on site with a product safety record sta�ng compliance with all applicable product safety laws.

The Group is commited to preven�ng accidental loss of resources, including employees and physical assets, striving to provide and maintain a safe and healthy work environment in compliance with industry standards and legisla�ve requirements. The aim is to eliminate any foreseeable hazards that may result in property damage, accidents, or personal injury/illness.

The responsibility for health and safety is shared among all employees, with safety being the direct responsibility of all managers, supervisors, employees, and contractors. All management ac�vi�es comply with company safety requirements related to planning, opera�on, and maintenance of facili�es and equipment.

Competition and fair dealing

Dealing fairly with companies or individuals whom the company does business with, as well as its compe�tors, is considered of paramount importance to the company which treats this as the only way forward. For this reason, neither the Group nor its employees, officers or third par�es represen�ng it may take any unfair advantage by way of manipula�ng any person, misrepresen�ng or concealing facts of material nature, abusing any privileged informa�on or in any other manner prac�sing unfair dealing.

Accuracy in business record keeping

Theon and its employees shall safely maintain an accurate and complete financial record to be able to make responsible business decisions. It shall also be ensured that any transac�ons are accurately documented and completely reflected in the company's books. False or ar�ficial entries aiming to alter, conceal or destroy any document to misrepresent a circumstance or transac�on are prohibited.

Sensitive information / confidentiality

Disclosure of Theon non-public informa�on to third par�es may irreparably harm the company and its business. It is for this reason that the company requires its employees and contractors to demonstrate the highest level of confiden�ality in rela�on to the informa�on entrusted with them in the context of their employment or otherwise coopera�on unless disclosure is expressly authorised or required by law. Any obliga�on rela�ng to confiden�ality remains binding even a�er the termina�on of employment or coopera�on, regardless of the reason.

Whistleblowing Policy

Theon maintains, amongst others, arrangements and prac�ces around whistleblowing, which aim at encouraging and urging all employees of the Group to report viola�ons within the Group as soon as they come to their aten�on and to express concerns regarding viola�ons within the Group.

Anyone from an employee, officer, consultant, intern, secondee or agent of the Group is encouraged and urged to report any viola�ons including informa�on and reasonable suspicions about actual or poten�al illegal acts, omissions and breaches, which occurred or are very likely to occur in the Group. The Group's arrangements also set out repor�ng channels that enable named or anonymous repor�ng, in wri�ng and/ or orally, as well as an inves�ga�ve process monitored by a compliance officer.

The inves�ga�ve process commences with the receipt of a report, followed by an evalua�on of the reported viola�on and whether it falls under the scope of the whistleblowing arrangements and prac�ces. If the reported viola�on is considered credible, the compliance officer, alone or with the assistance of third par�es, decides whether the case is to be closed or if it requires further inves�ga�on. Writen feedback and update on the progress of the inves�ga�on is provided to the repor�ng person. The compliance officer decides whether disciplinary measures need to be imposed, based on the result of the inves�ga�on process. The Group keeps a record of all the reports. In addi�on, specific measures have been established for protec�on against retalia�on.

On January 19th, 2024, the Board of Directors of Theon approved the Whistleblowing Policy.

Diversity & Inclusion and Human Rights Diversity & Inclusion

The Group is commited to workforce diversity, crea�ng equal opportuni�es, and advancing a culture of inclusion where everyone feels valued and able to achieve their full poten�al. A culture of belonging is about uni�ng different backgrounds, beliefs, abili�es and experiences in an environment where everyone feels valued and works together to achieve meaningful outcomes. Any form of discrimina�on shall be avoided, and to contribute effec�vely, individuals must ac�vely promote understanding, empathy and open communica�on. This culture outlines the responsibility to create an inclusive environment and respect the dignity and diversity of all people. It guides how the Group engages with one another and inspires in order to take purposeful ac�on to support the customers, employees and local communi�es.

Diversity, equity and inclusion ("DEI") is everyone's responsibility within the Group. Theon sets out the principles and requirements by which the Group enhances DEI throughout. Arrangements regarding DEI are applicable—but not limited—to the prac�ces and policies on recruitment and selec�on; compensa�on and benefits; professional development and training; promo�ons; transfers; social and recrea�onal programs, layoffs, termina�ons; and the ongoing development of a work environment built on the premise of gender and diversity equity. These arrangements apply to all employees and anyone conduc�ng work on behalf of the Group. The DEI strategy is guided by internal and external insights, global best prac�ces, and con�nual employee feedback, which together remind the Group that while diversity changes by loca�on, inclusion is the same everywhere. This approach allows the Group to con�nually evaluate its Global DEI strategy to ensure it remains relevant to meet the changing demands of the communi�es it serves.

On January 19th, 2024, the Board of Directors of Theon approved the Diversity, Equity & Inclusion Policy. The Group aims to support equality, equal opportuni�es and diversity in the work environment, and it is also commited to suppor�ng community-driven projects that enhance social inclusiveness. In 2023, Theon Sensors carried out tailor-made seminars to its employees in connec�on to bullying, diversity and inclusion and harassment. During 2022, Theon Sensors has developed a tailor-made training regarding employee harassment in the workplace in coopera�on with the organisa�on Women on Top (WoT) that is specialised in women's professional and economic empowerment and equality at work. WoT mission is to contribute to everyone having equal opportuni�es in public life, through individual empowerment and change in their educa�onal, work and social environment. Through the "Women in Science" program, Theon Sensors, in collabora�on with ADECCO, creates new jobs for women scien�sts, giving them the opportunity to work in the largest Company in Greece opera�ng in the aerospace, defence, new technologies and security market, next to experienced execu�ves to gain professional experience and develop their skills. Ac�vely suppor�ng that equal opportuni�es for all in the workplace are non-nego�able, the "Women in Science" program is addressed to women scien�sts with an academic background in STEM (Natural Sciences, Technology, Engineering Science and Mathema�cs), who will be employed in Theon Sensors.

Furthermore, with the aim of prac�cal and substan�al support of equality, equal opportuni�es and diversity in the working environment, Theon Sensors signed the Diversity Charter. Par�cipa�on in the "Diversity Charter" confirms the Company's commitment to respec�ng human rights and shaping a culture based on inclusion, promo�ng equal opportuni�es to all employees, without exclusion or discrimina�on, and fully accep�ng and integra�ng uniqueness at work.

and RemuneraƟon CommiƩee plays a key role in ensuring diversity by idenƟfying and proposing suitable candidates for the Board. The said arrangements and pracƟces aim at ensuring that independent nonexecuƟve members consƟtute at least one third of the Board, contribuƟng to diversity of thought. These arrangements have been designed to promote diversity at mulƟple levels and to ensure this diversity is maintained and valued. Aiming to uphold its diversity and inclusion principles, The Board recently welcomed (as of January 2024) a female non-execuƟve Director, and it is currently composed of five (5) male members and one (1) female member.

The tables below indicate the levels of diversity across Theon Sensors:

Number of Employees in 2023
Gender	Number of employees
Men	232
Women	71

Employee distribuƟon by gender and hierarchical level in 2023
Hierarchical Levels	Men	Women	Total
Upper Management	14	1	15
Middle Management	10	1	11
AdministraƟon Employees	65	24	89
Technical Employees	143	45	188

Employee distribuƟon by age and gender
Age range	2022		2023
	Men	Women	Men	Women
<30	39	21	50	28
30-50	120	26	159	36
51+	15	9	20	10

PotenƟal effects of the Ukrainian, Gaza, Yemen crisis

The Group does not operate in the affected areas, nor does it have a large exposure to commodiƟes affected by the crisis in Yemen, Ukraine, and Gaza (such as energy or agriculture, so its financials have not been affected. In any case, because this is an ongoing event, management is monitoring developments and is ready to take the necessary measures if necessary.

Especially given the risks the Red Sea crisis is throwing Yemen. The Group is not exposed to any Supply risk. It conƟnuously assesses the situaƟon and its possible impact and promptly takes all the necessary and effecƟve measures and acƟons to minimize any impact on its business.

Outlook

The Group seeks to achieve balanced growth, to operate with respect for the environment and to bolster the local -and by extension the naƟonal- economy while retaining exisƟng jobs and creaƟng new ones.

On a global level, recent geopoliƟcal events have driven spending increases in virtually all countries in the world, with each region being driven by their own specific threat areas, and hence having different spending paƩerns. This global momentum driven by geopoliƟcal tensions translates into significant growth in defense budgets globally, to the tune of 5,2% per annum over the next 5 years. Theon is acƟve in the defense electronics segment, which is expected to grow at a significantly higher pace than the market, at about 10% per annum over the same period. Theon's addressable market consists of dismounted, and vehicle based EO/IR systems, which is expected to see even faster growth of 11,5% CAGR, driven by a renewed focus on dismounted capabiliƟes, which are seen to be growing at over 16% per annum.

Values such as sound management, prevenƟng potenƟal risks or problems, reducing costs without imperiling high-quality levels and being consistent to customers and other partners have long been key for the Company and its management team.

As a result of our long-standing commitment to quality products / services / merchandise and sound partnerships, the Group has become firmly established in the field as a reliable partner for clients and our goal, in the current compeƟƟve economic environment, is to retain our current posiƟon in the night vision systems manufacturing sector.Given the increased challenges we face, investment in even beƩer-quality technical characterisƟcs for end products, merchandise and services offered to clients will be our key strategic focus for the years to come.

Projected developments in 2024

The Company's Management team has posiƟvely assessed those current developments that will contribute to the further development of our sector and mainly in the field of night-vision and thermal systems. This is expected to have a posiƟve impact on our overall financials for the 2024 financial year.

In parƟcular, the Company considers that the projected increase in defence and security over the next 5 years will be over 5% per annum. In our own product markets, we conƟnue to see a trend acknowledging the importance of night fighƟng capability and the need for fully equipped troops. We expect the procurement cycle for night vision and thermal imaging to pick up speed in 2024, as we also see increasing demand for advanced interconnected systems.

The Company's Management team conƟnuously assesses the trends in our sector and by evaluaƟng the new condiƟons that are emerging plans measures designed to opƟmise its financials. In 2024, Management will make every effort to enhance the company's profitability, strengthen its presence in foreign markets, while also improving its financial indicators. The Company's high credit raƟng contributes to easy access to financing from banks to partnerships with suppliers offering compeƟƟve terms, ensuring our smooth operaƟon.

DECLARATION BY THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIALS RESPONSIBLE FOR THE DRAFTING OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (In accordance with the provisions of Law 190(I)/2007 on Transparency Requirements)

In accordance with sections (3)(c) and (7) of Article 9 of the Transparency Requirements (Traded Securities in Regulated Markets) Law 190(I)/2007, as amended from time to time (the "Law"), we, the members of the Board of Directors, the Chief Financial Officer and the Chief Executive Officer responsible for the drafting of the separate financial statements of Theon International Plc (the "Company") and the consolidated financial statements of the Company and its subsidiaries (the "Group"), confirm, to the best of our knowledge, that: (a) the financial statements of the Company and the consolidated financial statements of the Group for the year ended 31 December 2023, that are presented on pages 63 to 140: (i) have been prepared in accordance with the International Financial Reporting Standards as (ii) give a true and fair view of the assets, liabilities, financial position and profit or loss of the (b) the Management Report provides a fair review of the developments and performance of the

• • adopted by the European Union, and in accordance with the provisions of section (4) of Article 9, of the Law; and
  • Company and the Group; and
• business and the financial position of the Company and the Group, together with a description of the principal risks and uncertainties that they face.

Members of the Board of Directors:

Name and Position Signature

Kolinda Grabar-Kitarovic - Chairperson of the Board of Directors and Non-Executive Director Christianos Hadjiminas - Vice-Chair of the Board of Directors and CEO Stelios Anastasiou - Executive Director Philippe Jean Mennicken - Business Development Director and Executive Director Efstathios Potamitis- Non-Executive Director, Non-independent

Hans Peter Bartels - Non-Executive Director, Non-independent Maria Athienitou Anastasiou - Non-Executive Director, Independent

Responsible for drafting the financial statements Name and Position Signature

Dimitrios Parthenis (Chief Financial Officer)

Nicosia, 19 April 2024

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

Report on the audit of the consolidated financial statements

Opinion

We have audited the consolidated financial statements of Theon International PLC (the ''Company'') and its subsidiaries (the ''Group''), which are presented on pages 63 to 140 and comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2023, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (''IFRS-EU'') and the requirements of the Cyprus Companies Law, Cap. 113 (the ''Companies Law, Cap.113'').

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (''ISAs''). Our responsibilities under those standards are further described in the ''Auditors' responsibilities for the audit of the consolidated financial statements''' section of our report. We remained independent of the Group throughout the period of our appointment in accordance with the International Code of Ethics (Including International Independence Standards) for Professional Accountants of the International Ethics Standards Board for Accountants (''IESBA Code'') together with the ethical requirements in Cyprus that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

56

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

Key audit matters incorporating the most significant risks of material misstatements, including assessed risk of material misstatements due to fraud

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition
Refer to note 9 of the consolidated financial statements
Key audit matter	How the matter was addressed in our audit
The Group's revenue for the year ended 31 December 2023 amounted to €218.722.904.	Our audit procedures regarding the Revenue recognition included amongst others the following:
Due to the significance of the amounts, the volume of transactions, the inherent risk of revenue recognition at the wrong time and amount and due to the nature of the Group's operations, we have concluded that revenue recognition is considered to be a key audit matter.	- Obtained and examined the Group's accounting policy with respect to revenue recognition and ensured that the policy is in compliance with the provisions of IFRS 15.
	- Assessed the design and implementation of controls related to revenue.
	- A sample of sales transactions which was derived from the general ledger and selected using statistical sampling methods, has been vouched to the related sales contracts or purchase orders submitted by clients, delivery notes, invoices, CMRs (shipping documents). Subsequent settlement of invoices was also examined.
	- For a sample of sales transactions that occurred close to the reporting date, selected using the specific items sampling method, we have examined the related sales documentation (delivery notes, invoices, CMRs and collections against the relevant invoices) to assess whether revenue has been properly recognized in the correct accounting period.
	- A sample of credit notes issued subsequent to 31 December 2023 has been examined in order to assess whether they have been properly recognized in the correct accounting period.
	- Considered adequacy of the disclosures in the financial statements.

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

Reporting on other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the financial statements and the auditors' report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except as required by the Companies Law, Cap.113.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the information obtained prior to the date of the auditors' report, we conclude that there is a material misstatement of this other information, we are required to report that fact.

With regards to the other information, with the exception of the Management Report, we have nothing to report.

With regards to the Management Report, our report in this regard is presented in the ''Report on other regulatory and legal requirements'' section.

Responsibilities of the Board of Directors and those charged with governance for the consolidated financial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS-EU and the requirements of the Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to either liquidate the Company or to cease the Group's operations, or there is no realistic alternative but to do so.

The Board of Directors and those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditors' responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities of the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report.

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

Report on other regulatory and legal requirements

Other regulatory requirements

Pursuant to the requirements of Article 10(2) of European Union (EU) Regulation 537/2014 we provide the following information in our Independent Auditors' Report, which is required in addition to the requirements of ISAs.

Date of appointment and period of engagement

We were appointed auditors on 16 August 2023 by the General Meeting of the Company's members to audit the consolidated financial statements of the Group for the year ended 31 December 2023. Our total uninterrupted period of engagement is 1 year covering the period ended 31 December 2023.

Consistency of auditors' report to the additional report to the Audit Committee

We confirm that our audit opinion on the consolidated financial statements expressed in this report is consistent with the additional report presented to the Audit Committee of the Company, which is dated 18 April 2024.

Provision of Non-audit Services ('NAS')

We have not provided any prohibited NAS referred to in Article 5 of EU Regulation 537/2014 as applied by Section 72 of the Auditors Law of 2017, L.53(I)2017, as amended from time to time (''Law L53(I)/2017'').

Other legal requirements

Pursuant to the additional requirements of law L.53(Ι)/2017, and based on the work undertaken in the course of our audit, we report the following:

• In our opinion, the Management Report, the preparation of which is the responsibility of the Board of Directors, has been prepared in accordance with the requirements of the Companies Law, Cap 113, and the information given is consistent with the consolidated financial statements.
• In the light of the knowledge and understanding of the business and the Group's environment obtained in the course of the audit, we have not identified material misstatements in the Management Report.

European Single Electronic Format

We have examined the digital files of the European Single Electronic Format (ESEF) of Theon International PLC for the year ended 31 December 2023 comprising an XHTML file which includes the consolidated financial statements for the year then ended and XBRL files with the marking up carried out by the entity of the consolidated statement of financial position as at 31 December 2023, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and all disclosures made in the consolidated financial statements or made by cross-reference therein to other parts of the annual financial report for the year ended 31 December 2023 that correspond to the elements in Table 1 of Annex II of the EU Delegated Regulation 2019/815 of 17 December 2018 of the European Commission, as amended from time to time (the "ESEF Regulation") (the "digital files").

TO THE MEMBERS OF

THEON INTERNATIONAL PLC

European Single Electronic Format (continued)

The Board of Directors of Theon International PLC is responsible for preparing and submitting the consolidated financial statements for the year ended 31 December 2023 in accordance with the requirements set out in the EU Delegated Regulation 2019/815 of 17 December 2018 of the European Commission. (the "ESEF Regulation").

Our responsibility is to examine the digital files prepared by the Board of Directors of Theon International PLC. According to the Audit Guidelines issued by the Institute of Certified Public Accountants of Cyprus (the "Audit Guidelines"), we are required to plan and perform our audit procedures in order to examine whether the content of the consolidated financial statements included in the digital files correspond to the consolidated financial statements we have audited, and whether the format and marking up included in the digital files have been prepared in all material respects, in accordance with the requirements of the ESEF Regulation.

In our opinion, the digital files examined correspond to the consolidated financial statements, and the consolidated financial statements included in the digital files, are presented and marked-up, in all material respects, in accordance with the requirements of the ESEF Regulation.

Other matters

Reporting responsibility

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Article 10(1) of the EU Regulation 537/2014 and Section 69 of Law L.53(Ι)/2017 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

Corporate Governance

The Company did not include in its Management Report a corporate governance statement in accordance with Article 151(2)(a) of the Companies Law Cap.113, since the Company was not listed on a regulated market during the year ended 31 December 2023.

Comparative figures

The consolidated financial statements of Theon International PLC for the years ended 31 December 2022 and 31 December 2021 (from which the statement of financial position as at 1 January 2022 has been derived), excluding the adjustments described in Note 37 to the consolidated financial statements, were audited by another auditor who expressed an unmodified opinion on those financial statements on 4 May 2023.

As part of our audit of the consolidated financial statements for the year ended 31 December 2023, we audited the adjustments described in Note 37 that were applied to restate the comparative information presented in the consolidated statement of profit or loss and other comprehensive income and in the consolidated statement of cash flows for the year ended 31 December 2022, and in the consolidated statements of financial position as at 31 December 2022 and as at 1 January 2022. We were not engaged to audit, review, or apply any procedures to the consolidated financial statements for the years ended 31 December 2022 or 31 December 2021 (not presented herein) or to the consolidated statement of financial position as at I January 2022 or to the consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2022 or to the consolidated statement of cash flows for the year ended 31 December 2022, other than with respect to the adjustments described in Note 37 to the consolidated financial statements. Accordingly, we do not express an opinion or any other form of assurance on those respective financial statements taken as a whole. However, in our opinion, the adjustments described in Note 37 are appropriate and have been properly applied.

Consolidated statement of financial position (1/2)

		31 December 2023	31 December 2022	01 January 2022
in euro	Note		Restated*	Restated*
Assets
Property plant and equipment	19.	17.358.467	10.637.023	8.118.726
Intangible assets	20.	1.470.095	824.317	523.458
Right of use assets	33.	908.907	844.653	1.066.691
Investment property	21.	703.802	1.412.354	1.491.327
Investment in associates	22.	1.099.085	45.425	-
Other non-current assets		150.932	105.716	103.922
Long term loans receivable	35.	-	7.526.149	-
Deferred tax assets	15.	48.258	631.769	214.089
Non-current assets		21.739.546	22.027.406	11.518.213
Inventories	16.	63.613.462	34.021.574	14.250.666
Trade accounts receivable	17.	46.087.790	67.996.704	15.843.544
Other receivables	17.	10.977.857	5.092.763	2.709.584
Other financial assets	23.	208.156	462.404	397.378
Prepayments	24.	2.255.011	3.774.246	1.841.177
Cash and cash equivalents	18.	65.639.067	24.035.134	26.096.448
Current assets		188.781.343	135.382.825	61.138.797
Total assets		210.520.889	157.410.231	72.657.010

*The comparative information is restated on account of correction of errors. See Note 37. The notes on pages 68 to 140 are an integral part of the consolidated financial statements.

Consolidated statement of financial posi�on (2/2)

		31 December	31 December	01 January
		2023	2022	2022
in euro	Note		Restated*	Restated*
Equity
Share Capital	25.	600.000	200.000	200.000
Merger Reserve	25.	(27.937.057)	(27.947.398)	(27.945.738)
Reserves	25.	104.694.565	92.011.330	61.023.526
Equity atributable to the owners of the		77.357.508	64.263.932	33.277.788
Company
Liabili�es
Loans and borrowings	27.	25.521.669	3.075.002	7.540.103
Amount owed for share buy-back	35.	6.656.157	-	-
Provision for staff re�rement indemni�es	13.	198.320	162.026	162.035
Lease liabili�es	33.	564.634	586.354	815.417
Government grants	29.	128.257	188.427	378.385
Non-current liabili�es		33.069.037	4.011.809	8.895.940
Trade accounts payable	30.	41.811.689	23.989.883	6.915.629
Lease liabili�es	33.	401.526	295.232	281.351
Loans and borrowings	27.	25.391.700	30.998.667	9.640.434
Amount owed for share buy-back	35.	6.984.086	-	-
Contract liabili�es	28.	5.240.112	26.237.209	5.618.148
Income tax payable		7.974.569	6.067.157	4.296.230
Accrued and other current liabili�es	30.	12.290.662	1.546.342	3.731.490
Current liabili�es		100.094.344	89.134.490	30.483.282
Total liabili�es		133.163.381	93.146.299	39.379.222
Total equity and liabili�es		210.520.889	157.410.231	72.657.010

On 19 April 2024, the Board of Directors of Theon Interna�onal PLC authorized the issuance of these consolidated financial statements.

__________________________

CEO & Vice Chairman of BoD

*The compara�ve informa�on is restated on account of correc�on of errors. See Note 37. The notes on pages 68 to 140 are an integral part of the consolidated financial statements.

Consolidated statement of profit or loss and other comprehensive

income

For the year ended 31 December

		2023	2022
in euro	Note		Restated*
Revenue	9.	218.722.904	142.894.760
Cost of sales	10c.	(148.511.795)	(92.689.099)
Gross profit		70.211.109	50.205.661
Other income	10a.	496.641	1.486.416
Administra�ve expenses	10c.	(9.326.455)	(7.114.798)
Selling and distribu�on expenses	10c.	(2.744.204)	(2.008.391)
Research and development expenses	10c.	(2.807.368)	(1.985.082)
Other expenses	10b.	(92.152)	(351.331)
Opera�ng profit		55.737.571	40.232.475
Finance income		681.119	16.765
Finance costs		(7.137.587)	(2.452.547)
Net finance costs	11.	(6.456.468)	(2.435.782)
Share of profit of equity-accounted investees	22.	585.614	-
Profit before tax		49.866.717	37.796.693
Income tax expense	14.	(13.187.548)	(8.213.755)
Deferred tax	15.	(583.581)	417.680
Profit for the year a�er tax		36.095.588	30.000.618
Other comprehensive income
Items that will not be classified to profit or loss
Staff leaving indemnity	13.	(317)	16.000
Deferred tax	15.	70	(3.520)
Merger reserve		10.341	(1.660)
		10.094	10.820
Items that are or may be reclassified subsequently to profit or
loss
Foreign currency transla�on reserves		2.709.690	974.703
		2.709.690	974.703
Other comprehensive income for the year, net of tax		2.719.784	985.523
Total comprehensive income for the year		38.815.373	30.986.141
Earnings per share
Basic earnings per share	12.	0,6	1,5
Diluted earnings per share	12.	0,6	1,5
Adjusted Earnings before interest, tax, deprecia�on and amor�sa�on (Adj EBITDA)	38.	57.741.171	41.708.362

*The compara�ve informa�on is restated on account of correc�on of errors. See Note 37. The notes on pages 68 to 140 are an integral part of the consolidated financial statements.

Consolidated statement of changes in equity

For the year ended 31 December

in euro	Note	Share	Legal	Other	Treasury	Foreign	Merger	Retained	Total Equity
		Capital	Reserve	Reserves	Share Reserve	Exchange reserve	Reserve	Earnings
Balance at 1 January 2022, as previously reported		200.000	1.781.154	3.603.943	-	4.408.342	(31.304.588)	55.156.361	33.845.212
Impact of correction of errors	37.	-	-	-	-	(3.358.850)	3.358.850	(567.421)	(567.421)
Restated* balance at 1 January 2022		200.000	1.781.154	3.603.943	-	1.049.491	(27.945.738)	54.588.940	33.277.788
Total comprehensive income for the year (restated*)
Profit for the year		-	-	-	-	-	-	30.000.618	30.000.618
Other comprehensive income		-	-	-	-	(381.933)	(1.660)	1.369.116	985.523
Total comprehensive income for the year (restated*)		-	-	-	-	(381.933)	(1.660)	31.369.734	30.986.141
Transfer from retained earnings to legal reserves		-	884.880	-	-	-	-	(884.880)	-
Balance at 31 December 2022		200.000	2.666.034	3.603.943	-	667.559	(27.947.398)	85.073.794	64.263.932
Balance at 1 January 2023, as previously reported		200.000	2.666.034	3.603.943	-	6.052.027	(33.331.866)	86.237.278	65.427.416
Impact of correction of errors	37.	-	-	-	-	(5.384.468)	5.384.468	(1.163.484)	(1.163.484)
Restated* balance at 1 January 2023		200.000	2.666.034	3.603.943	-	667.559	(27.947.398)	85.073.794	64.263.932
Total comprehensive income for the year
Profit for the year		-	-	-	-	-	-	36.095.588	36.095.588
Other comprehensive income		-	-	-	-	1.863.147	10.341	846.296	2.719.784
Total comprehensive income for the year		-	-	-	-	1.863.147	10.341	36.941.884	38.815.373
Transactions with owners of the Company
Share capital increase	25.	400.000	-	-	-	-	-	(400.000)	-
Dividends	25.	-	-	-	-	-	-	(10.000.000)	(10.000.000)
Share buy-back	35.	-	-	-	(17.173.937)	-	-	-	(17.173.937)
Change in the present value of amounts owed for share	35.	-	-	-	1.452.140	-	-	-	1.452.140
buy-back
Reallotment of treasury shares	35.	-	-	-	15.721.797	-	-	(15.721.797)	-
Total transactions with owners of the Company		400.000	-	-	-	-	-	(26.121.797)	(25.721.797)
Transfer from retained earnings to legal reserves		-	1.430.540	-	-	-	-	(1.430.540)	-
Balance at 31 December 2023		600.000	4.096.574	3.603.943	-	2.530.706	(27.937.057)	94.463.342	77.357.508

*The comparative information is restated on account of correction of errors. See Note 37.

The notes on pages 68 to 140 are an integral part of the consolidated financial statements.

Consolidated statement of cash flows

For the year ended 31 December

		2023	2022
in euro	Note		Restated*
Cash flows from opera�ng ac�vi�es
Profit for the year a�er tax		36.095.588	30.000.618
Adjustments for:
Deprecia�on of tangible assets	19.	989.333	996.737
Deprecia�on of right of use assets	33.	353.178	295.897
Amor�sa�on of intangible assets	20.	(72.427)	183.255
(Reversal of) / Impairment of receivables	17.	(59.476)	161.308
(Gains) / losses on disposal of tangible assets		(20.030)	(53.817)
Impairment of inventory	29.	613.331	(263.238)
Amor�za�on of grants Gain from valua�on of forward contracts		(40.256) (48.988)	(189.958) -
Fair value (gains) / losses on financial assets at fair value through profit or loss		(58.633)	(77.048)
Dividend Income		(17.688)	(17.046)
Foreign Exchange (gain)/losses		2.881.444	1.001.124
(Gains) / losses on disposal of financial assets		(69.832)	-
Share of profit of equity-accounted investee, net of tax		(585.614)	-
Finance cost net		3.763.923	1.451.704
Tax expense		13.771.129	7.796.075
		57.494.982	41.285.611
Changes in:
Inventories	16.	(30.205.219)	(19.507.670)
Prepayments		1.519.235	(1.933.069)
Trade and other receivables	17.	16.434.317	(54.699.441)
Trade and other payables	30.	24.598.871	11.387.276
Provision for staff re�rement indemni�es		36.294	(9)
Contract Liabili�es		(20.997.097)	20.619.061
Cash generated (used in)/from opera�on ac�vi�es		48.881.383	(2.848.240)
Income tax paid	14.	(11.278.027)	(3.653.841)
Interest paid		(2.341.760)	(637.674)
Net cash (used in) / from opera�ng ac�vi�es		35.261.596	(7.139.755)
Cash flows from inves�ng ac�vi�es
Payments for tangible and intangible assets		(7.575.571)	(3.825.280)
Payments for acquisi�on of associates		(513.471)	(342.623)
Payments for financial assets at fair value		(147.923)	(45.425)
Proceeds from sale of tangible and intangible assets		20.031	193.598
Proceeds from sale of financial assets		530.636	-
Proceeds from sale of associates		45.425	-
Loans to related par�es		-	(8.700.000)
Repayment of loans receivables		7.526.149	1.211.573
Dividends received		17.689	198.120
Interest received		310.181	(281)
Net cash flows (used in) / from inves�ng ac�vi�es		213.147	(11.310.318)
Cash flows financing ac�vi�es
Repayment of borrowings	27.	(72.948.581)	(26.231.374)
Proceeds from borrowings from financial ins�tu�ons	27.	89.617.241	42.919.990
Proceeds from government grants		35.797	-
Ou�lows of lease liabili�es	33.	(336.783)	(289.311)
Dividends paid	25.	(10.000.000)	-
Net cash flows (used in) / from financing ac�vi�es		6.367.674	16.399.305
Net increase / (decrease) in cash and cash equivalents		41.842.417	(2.050.768)
Cash and cash equivalents at 1 January		24.035.135	26.096.448
Foreign exchange differences		(238.485)	(10.546)
Cash and cash equivalents balance at 31 December:	18.	65.639.067	24.035.134

*The compara�ve informa�on is restated on account of correc�on of errors. See Note 37. The notes on pages 68 to 140 are an integral part of the consolidated financial statements.

1. Repor�ng en�ty

Theon Interna�onal PLC ("The Company) together with its subsidiaries form the Group "Theon Sensors" ("The Group").

Theon Interna�onal PLC was incorporated in Cyprus on 10 August 2021 as a private limited liability Company under the provisions of the Cyprus Companies Law, Cap. 113, is domiciled in the country of its incorpora�on and was converted to a Public Limited Liability Company on 13 September 2021. Its registered office is at 5 Agios Antonios Street, 1st floor, Office 102, 2002 Nicosia, Cyprus.

The Company was incorporated with the purpose to acquire the 100% of the issued share capital of Theon Sensors AG, a Company incorporated in Switzerland. The acquisi�on agreements were concluded on 27 August 2021. Theon Sensors AG is the owner of the following companies:

• Theon Sensors SA, Greece (100%),
• Theon Sensors MEA FZC, United Arab Emirates (99%),
• Theon Deutschland GmbH, Germany (100%),
• Theon Sensors Far East Long Ltd., Singapore (100%) and
• Theon Sensors USA Inc. USA (100%)

The Group is a leading developer and manufacturer of customizable night vision, thermal imaging systems and Electro-Op�cal ISR systems for military and security applica�ons in Europe with a global footprint. The Group was founded in 1997 and has since become one of the most relevant players in the segment with offices in Athens, Cyprus, Kempen, Arlington, Abu Dhabi, Dubai, Zug, Copenhagen, and Singapore, coupled with manufacturing facili�es in Athens, Wetzlar and Plymouth. THEON's commercial presence extends to 68 countries, of which 24 are members of NATO, with almost 150.000 systems manufactured and sold as of 2023.

The Group is involved in the manufacture and trade of a large range of sensors, and in par�cular it manufactures night vision systems, thermal systems (thermal sights) and other innova�ve electro-op�cal equipment and equipment for defence and security applica�ons.

The Group's objects are to manufacture, maintain, repair and trade in high-tech sensors and thermal imaging instruments, vision instruments, distance meters, day�me and night-�me sights, high-tech and microelectronics products, to provide all manner of informa�on and advice about the opera�on of those products, to act as agent for and/or to broker the conclusion of all manner of contracts rela�ng to those products, to brief individuals about the above work, to provide advice and services to foreign and Greek companies.

The Group is today one of the market leaders in night vision systems for military and security applica�ons, with produc�on facili�es and head offices in Athens.

The main product categories are:

• Night vision monoculars and binoculars;
• Full range of night vision sights and thermal imaging instruments;
• Sights for night driving and upgrade kits for armoured vehicles;
• Night vision and thermal imaging systems for vehicles and digital pla�orms;

All products of the Group are compa�ble and fully tested for compliance with military standards, focusing on highly effec�ve and ergonomically advanced systems that increase the safety and performance of soldiers during night opera�ons.

One of the featured advantages is that systems can be adjusted to meet the specific requirements of end users. Following flexible procedures, we can promptly respond to adjustment requests within a short period.

The Group also advises clients about the right system for them for the specific purpose and the mission profile and provides training services at all levels. Professional and full a�er-sales support is yet another key feature of the Group's interna�onal success, as it provides customised support and maintenance solu�ons.

All Group sensor systems are stringently checked following military standard tes�ng procedures and using exac�ng quality assurance and quality control criteria. The Group maintains a Quality Management System, which complies with the requirements of standard EN ISO 9001:2015, an Environmental Management System as per standard EN ISO 14001:2015 and a Security System in the Supply Chain as per standard 28000:2007 with the following scope of cer�fica�on: Planning, Manufacture and Trade of Electro-op�cal Systems and Sensors. Group manufacturing facili�es and staff have NATO security clearance for defence projects.

For the acquisi�on of the share capital of Theon Sensors AG, the Group issued on 13 September 2021, 199.000 ordinary shares of €1,00 each in exchange for 204.082 issued and fully paid shares in Theon Sensors AG.

Un�l 19th September 2023, the Group was listed on the Emerging Companies Market of the Cyprus Stock Exchange. Therea�er, the Group delisted its' shares. It is noted that, on the same date, the Group's shares were also delisted from the Central Securi�es Depository and Central Registry, in accordance with Ar�cle 19 of the Securi�es and Cyprus Stock Exchange (Central Securi�es Department and Central Registry) Law.

On November 14, 2023, the Company's general shareholder mee�ng resolved to affect a share split of 1 to 100 and resolved to increase the share capital from €200.000 to €600.000 using Company retained earnings and at the same �me reduce the nominal value per Share from €1,00 to €0,01, increasing the number of exis�ng shares from 200.000 to 60.000.000.

On November 16, 2023, in connec�on with the planned Private Placement and Admission to Trading, the Company's general shareholder mee�ng resolved to authorize the Board of Directors to affect an increase in the Company's share capital by up to €150.000 for the issuance of up to 15.000.000 Shares, excluding preemp�on rights for Exis�ng Shareholders as of the date of this Prospectus, in connec�on with the Private Placement.

On November 23, 2023, the Company's general shareholder mee�ng resolved to create a second class of restricted Non-Vo�ng Shares with a nominal value of €0.01 each, increasing the issued share capital from €600.000 to €60.000,10.

On February 7, 2024, the Group listed its shares on the regulated market of Euronext Amsterdam, achieving one of the first IPOs in Europe. A total of 15,4 million ordinary shares, consis�ng of 10 million newly issued ordinary shares and 5,4 million exis�ng ordinary shares (including 1,4 million shares of the over-allotment op�on), were placed with ins�tu�onal and private investors as part of the private placement. The total number of offer shares placed in the private placement corresponds to 22% of the share capital of the Group.

The Group debuted with issue price at €10,00 per share. During the first days of trading, the over-allotment op�on has been par�ally exercised, leading to a total number of shares placed in the private placement of 14,3 m, leaving a free-float below 21%. Post-IPO and un�l the moment of this publica�on the share price has had an upward trend and surpassed €13, fueled by the geopoli�cal instability, favorable release of ini�a�on of coverage reports and announcement of new contracts.

Theon Interna�onal PLC does no longer hold a stake in European Sensor Systems SA, Greece, as it was sold during 2023 for an amount of € 30.954.

Opera�ng environment of the Group

The Group assesses the impact of changes on the global economic environment on the markets in which it operates. The global macroeconomic and financial environment shows signs of improvement, however, there is s�ll some uncertainty. The Group's Management assesses con�nuously the possible impact of any changes to the macroeconomic and financial environment in global level, in order to ensure that all the necessary ac�on and measures are taken to minimise any effects on the Group's ac�vi�es. Management considers that the projected increase in defense and security expenditure worldwide will have a posi�ve impact on the Group's financial results in 2024.

The Management team con�nuously assesses the trends in our sector and by evalua�ng the new condi�ons that are emerging plans measures designed to op�mise its financials. The global energy crisis that started in 2021 is characterized by the ongoing energy shortage around the world, but also by the rapid increase in its prices, affec�ng countries in Europe and Asia. Greece was facing a significant increase in prices for all forms of energy. The Group was not significantly affected by the energy crisis in 2022 & 2023.

The Group does not operate in Ukrainian, Gaza, Yemen, nor does it have a large exposure to commodi�es affected by the crisis in Yemen, Ukraine, and Gaza (such as energy or agriculture, so its financials have not been affected. In any case, because this is an ongoing event, management is monitoring developments and is ready to take the necessary measures if necessary. Especially given the risks the Red Sea crisis is throwing Yemen, the Group is not exposed to any Supply risk. It con�nuously assesses the situa�on and its possible impact and promptly takes all the necessary and effec�ve measures and ac�ons to minimize any impact on its business.

2. Basis of accoun�ng

These consolidated financial statements have been prepared in accordance with Interna�onal Financial Repor�ng Standards (IFRS) as adopted by the European Union (EU) and the requirements of the Cyprus Company Law, Cap. 113. They were authorised for issue by the Company's Board of Directors on 19 April 2024.

3. Basis of measurement

The consolidated financial statements have been prepared in accordance with the historical cost or deemed cost principle except provision for staff re�rement indemni�es, lease liabili�es which are measured at present value and other financial assets which are measured at fair value, keeping each year separate, ensuring uniform presenta�on.

Going concern

Management assesses the Group's financial posi�on in rela�on to the risks the Group faces, its capital adequacy and any major uncertain�es rela�ng to the Group's ability to con�nue opera�ng in the foreseeable future, and in par�cular for at least 12 months from the date of the approval of the financial statements.

Management considers that the financial statements can safely be prepared on a going concern basis, since there are no major uncertain�es in rela�on to the Group's ability to con�nue to operate in the foreseeable future.

4. Func�onal and presenta�on currency

These consolidated financial statements are presented in euro, which is the Group's func�onal currency. All amounts have been rounded up to no decimals, unless otherwise indicated.

5. Consolidated Financial Statements

The consolidated financial statements of the Group for the year ended 31 December 2023 consist of the financial statements of the parent Company and its subsidiaries in accordance with interna�onal financial repor�ng standards (IFRS) and the Interpreta�ons issued by the IFRS Interpreta�ons Commitee as adopted by the European Union.

Prepara�on of the financial statements in accordance with the IFRS requires the use of certain important accoun�ng es�mates and the exercise of judgement by Management in applying the accoun�ng policies. The financial statements areas where es�mates are par�cularly important are outlined in Note 6.

The consolidated Statement of Financial Posi�on on 31 December 2023 and the Profit or Loss and Other Comprehensive income for the respec�ve year include the financial statements of Theon Interna�onal PLC and its subsidiaries and were prepared on the assump�on that were a Group since 1 January 2020.

For the purposes of preparing the consolidated financial statements, the method of Business Combina�ons under Common Control was followed, where the book value method ("book-value accoun�ng" or "Predecessor Value method") is applied. The assets and liabili�es of the acquired company were recognised based on their current book values instead of fair values. The Management has adopted this method of business combina�on since the new business structure does not affect the shareholding structure and minority interests. Furthermore, no resources were spent outside the group because of this restructuring.

Therefore, the Consolidated Statement of Financial Posi�on and the Consolidated Statement of Comprehensive Income on 31 December 2023 are presented as the sum of the respec�ve financial statements of the parent and its subsidiaries as if they had been combined during the accoun�ng periods

included in these financial statements. The difference between the acquisi�on price of a company and the book value of the corresponding net assets is presented as "merger reserve" in the reserves.

6. Use of judgements and es�mates

In preparing these consolidated financial statements, Management has exercised judgement and used accoun�ng es�mates that affect the applica�on of accoun�ng policies and the reported amounts of assets and liabili�es, income, and expenses. Actual results may differ from these es�mates.

The significant judgements made by Management in applying the Group's accoun�ng policies and the key sources of es�ma�on uncertainty were the same as those described in the last annual financial statements.

a. Judgment

In preparing these consolidated financial statements, management has made judgements and es�mates that affect the applica�on of accoun�ng policies and the reported amounts of assets and liabili�es, income, and expenses. Actual results may differ from these es�mates.

The significant judgements made by management in applying the Group's accoun�ng policies and the key sources of es�ma�on uncertainty were the same as those described in the last annual financial statements and they are as follows:

Net realisable value of inventories

The Group uses its judgment derived from its experience in the industry in which it operates to make the best es�mate of future selling prices of its inventory. On a consistent basis, the current selling prices prevailing just before and a�er the date of the Consolidated Financial Statements are used as the basis for making es�mates unless there is certainty that the inventories at the date of the Financial Statements will be disposed of at predetermined dates in the future with the result that the es�mated selling prices at those dates are used to make the relevant calcula�ons.

b. Assump�ons and es�ma�on uncertain�es

The prepara�on of financial statements requires the Management to make es�mates and assump�ons, which affect the disclosures in the financial statements.

The es�mates and judgements are based on experience-based data and other factors, including the expecta�ons of future events which are considered reasonable under specific circumstances.

These es�mates and assump�ons form the basis for taking decisions about the book values of assets and liabili�es that are not readily available from other sources. The resul�ng accoun�ng es�mates will, by defini�on, seldom equal the related actual results. The es�mates and assump�ons that entail risk of causing significant changes in the amounts of assets and liabili�es within the next fiscal year are presented below.

Provision for doub�ul debts

The allowance for expected credit losses for trade receivables and contract assets are calculated at individual level when there is an indica�on of impairment. For receivables and contract assets without any indica�on of impairment the expected credit losses are based on historical data combined with forwardlooking macroeconomic factors affec�ng credit risk, such as country risk. Expected loss rates are updated at every repor�ng date. Details of the key assump�ons and inputs used are disclosed in Note 36, Credit risk sec�on.

7. Material accoun�ng policies

a. Consolida�on

Business combina�ons

The acquisi�on method of accoun�ng is used to account for all business combina�ons when all the ac�vi�es and assets acquired meet the defini�on of a business and control is transferred to the Group. To determine whether a par�cular set of ac�vi�es and assets cons�tutes a business, the Group assesses whether the set of assets and ac�vi�es acquired includes at least one input and a substan�ve process and whether the processes applied to those inputs have the ability to contribute to the crea�on of outputs. The Group has the op�on to apply on a transac�on level a "concentra�on control" that allows a simplified assessment of whether an acquired set of ac�vi�es and assets is not a business. This op�onal "concentra�on control" is met if substan�ally all the fair value of the gross assets acquired is aggregated into a single iden�fiable asset or a set of similar iden�fiable assets. Where setlement of any part of cash considera�on is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the interest rate at which the Group could borrow from an independent source under corresponding terms and condi�ons (incremental borrowing rate). The considera�on transferred for the acquisi�on of a subsidiary comprises the fair values of the assets transferred, the liabili�es incurred to the former owners of the acquired business, the equity interests issued by the group, the fair value of any asset or liability resul�ng from a con�ngent considera�on arrangement, and the fair value of any pre-exis�ng equity interest in the subsidiary. The excess of the considera�on transferred, the amount of any non-controlling interest in the acquired en�ty, and the acquisi�on-date fair value of any previous equity interest in the acquired en�ty over the fair value of the net iden�fiable assets acquired is recorded as goodwill. Any goodwill arising is checked annually for impairment. If those amounts are less than the fair value of the net iden�fiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase. Transac�on costs are expensed when incurred, unless related to the issuance of bonds or equity securi�es.

The price does not include amounts related to any pre-exis�ng rela�onship setlement. These amounts are generally recognized in the results. Any price payable by the Group is ini�ally recognized at its fair value at the date of acquisi�on and is categorized either in equity or as a financial liability. Amounts that have been classified as a financial liability are reassessed at fair value and any changes are recognized in profit or loss. There is no subsequent measurement for amounts that have been recorded in equity.

Subsidiaries

Subsidiaries are en��es controlled by the Group. The Group controls an en�ty when it is exposed to or en�tled to variable returns from its involvement with the en�ty and has the ability to influence those returns through its power to direct the ac�vi�es of the en�ty. Subsidiaries are fully consolidated (full consolida�on) from the date on which control is transferred to the group and are deconsolidated from the date that such control ceases. Accoun�ng policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Associates

Associates are all en��es over which the group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method of accoun�ng, a�er ini�ally being recognised at cost.

Elimina�ons

Transac�ons between Group companies, balances and unrealized gains and losses (excluding foreign exchange gains and losses) related to transac�ons between Group companies are eliminated. Also unrealized losses and unrealized gains are eliminated, but only to the extent that there is no indica�on of impairment.

b. Foreign currency

Foreign currency transac�ons and balances

Foreign currency transac�ons are translated into the func�onal currency of the Group companies using the exchange rates prevailing at the dates of the transac�ons. Foreign exchange gains and losses arising from the setlement of such transac�ons during the period and the transla�on of monetary items denominated in foreign currencies at year end exchange rates are recognized in profit or loss. Nonmonetary items denominated in foreign currencies and valued at historical cost are translated at the exchange rates ruling at that date. Non-monetary items denominated in foreign currencies and valued at fair value are translated at the exchange rates ruling at the dates of the fair value when the fair value was determined. In this case, the resul�ng exchange differences from the change in fair value are recognised in profit or loss or directly in other comprehensive income, depending on the item.

Business ac�vi�es abroad

The assets and liabili�es of the companies par�cipa�ng in the consolida�on and which are ini�ally presented in a currency other than the presenta�on currency of the Group have been translated into euro at the closing rate of the balance sheet date. Income and expenses are translated into the Group's presenta�on currency at the average exchange rates during the repor�ng period (unless the average exchange rate is a reasonable approxima�on of the cumula�ve effect of the exchange rates prevailing at the dates of the transac�ons, in which case the income and expenses are translated at the exchange rates prevailing on the dates of the transac�ons). All resul�ng exchange differences are recognised in other comprehensive income and cumula�vely in the foreign currency balance sheet reserve of the net posi�on except for the por�on of those differences allocated to non-controlling interests, when any. When a foreign opera�on is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

c. Property, plant and equipment

Tangible assets are measured at historical cost less accumulated deprecia�on and any impairment loss, apart from the plots/lots category which is measured at historical cost less any impairment losses.

The historical cost of tangible assets includes all expenses directly associated with acquisi�on of the tangible assets. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably.

The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the repor�ng period in which they are incurred.

Subsequent expenditure is depreciated either over the remaining useful life of the asset or the period up to the next planned improvement to the tangible asset, whichever is shorter.

Deprecia�on of all tangible assets is calculated using the straight-line method over the useful life of the assets.

The useful life of each asset category is presented below:

Asset category	Useful life
Buildings	25 years
Machinery and equipment	10 years
Motor vehicles	6,2 to 8,3 years
Fixtures and fittings	5-10 years
Computers	2-5 years

The residual values and useful lives of tangible assets are re-examined and adjusted at the end of each repor�ng period if that is considered necessary.

Where the carrying amount of an asset is greater than its recoverable amount, the value of the asset is writen down to the recoverable amount.

Each tangible asset and each important part thereof ini�ally recognised is derecognised upon sale or when no future economic gain is expected from use or sale thereof.

Gains and losses which arise from the sale of tangible assets are calculated as the difference arising between the proceeds from sale and the carrying amount and included in profit or loss.

Interest from loans taken out specifically or generally to finance the construc�on of tangible assets is capitalised in the year in which it arises, during the tangible asset construc�on period, where the recogni�on criteria are met.

d. Investment property

Investment property is investments that relate to all those proper�es (including land, buildings or parts of buildings or both) that are held by the Group either to earn rentals or for capital apprecia�on or both and are not used in commercial or other ac�vi�es of the Group. Investment property is measured at cost less accumulated deprecia�on and impairment.

Repairs and maintenance are recognised in the period in which they are incurred. Significant subsequent expenditure is capitalised if they result in an increase in the useful life of the property, enhance its produc�ve capacity, or reduce opera�ng costs. Transfers of property from the category of investment property shall be made only when there is a change in use, evidenced by the commencement of the Group's own use or the commencement of the development with the intent to sale. Where the carrying amount of an asset is greater than its recoverable amount, the value of the asset is adjusted to the recoverable amount.

The useful life of the investment property is 25 years.

e. Intangible assets

Intangible assets acquired separately are recorded at historical cost. A�er ini�al recogni�on, intangible assets con�nue to be measured at historical cost, less the accumulated deprecia�on and accumulated impairment losses.

Intangible assets generated in-house are capitalised if the relevant expenditure is associated with an inten�on on Management's part, and a technical capability, to complete the intangible asset (for use or sale), if there is a strong likelihood that there will be future financial gains and that there is a reliable system for measuring such costs.

In all other cases, the relevant cost is recognised as an expense.

The Group's intangible assets have a limited useful life and are amor�sed over their useful life. They are tested for impairment when there are signs that some intangible assets may have suffered impairment. Intangible assets whose usage period is contractually specified are amor�sed over that period. Such assets without a usage period specified in contract are amor�sed based on es�mated useful economic life.

The useful life and amor�sa�on method for intangible assets with a specific useful life are re-examined at least in each year in which financial statements are prepared. Changes to the expected useful life or expected method by which future financial gains accrue for each intangible asset are treated as a change in an accoun�ng es�mate. The amor�za�on cost of intangible assets is recognised in the income statement.

Amor�sa�on of all intangible assets is calculated using the straight-line method over the useful life of the assets. The es�mated useful life of the most important categories of intangible assets coincides with the deprecia�on rates in the tax laws, since in the view of the Group management team, they correctly reflect the es�mated useful economic life of the assets. Useful life is as follows:

Asset category	Useful life
Other intangibles	10 years
Internally generated intangibles	5-10 years
Contractual specified	1 year

f. Impairment of tangible & intangible assets

Tangible assets with an unlimited life (such as land) are not depreciated or tested annually for impairment.

Tangible and intangible assets which can be depreciated, are tested for impairment in case events or changes in the circumstances suggest that the carrying amount may no longer be recoverable. An impairment loss is recognised in profit and loss for the amount by which the asset's carrying amount exceeds its recoverable amount.

For the purposes of impairment tes�ng, assets are grouped together in the lowest category for which there are separately iden�fiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-genera�ng units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each repor�ng period.

The recoverable value of assets is either the fair value of asset less sale costs or the value in use, whichever is higher.

g. Leases

When recognising a contract as a lease, the Group examines all relevant facts and circumstances, and excludes short-term leases (of less than 12 months) and leases where the leased property has low value.

When a contract is or contains a lease, each lease element is recognised separately from the non-lease elements of the contract, unless the Group opts, as appropriate, for the sake of simplifica�on to apply uniform recogni�on as a prac�cal solu�on.

The Group as lessee

At the lease start date, the lessee recognises the asset with a right to use and a lease liability.

Ini�al measurement of the right to use the assets includes the lease liability, any rents paid on the rental period start date or prior to it, less any lease incen�ves collected, any ini�al direct costs incurred by the lessee and an es�mate of the cost of returning the leased property to the state specified in the lease agreement.

The ini�al measurement of the lease liability includes the current value of rents discounted using the presumed lease interest rate. If that interest rate cannot be easily set, the lessee's differen�al borrowing rate is used.

Subsequently, the right to use the asset is reduced by the accumulated deprecia�on and impairment losses and any re-measurements of the lease liability is adjusted.

Subsequently the lease liability increases the interest on the lease liability, and is reduced by the payment of rental costs, and is re-measured when the leased property is revalued, or the lease is amended.

The Group as lessor

The Group classifies the lease either as an opera�ng lease or finance lease. Leases where the Group does not in effect transfer all risks and rewards of ownership are classified as opera�ng leases.

When the assets are leased in the context of opera�ng leases, they are presented in the statement of financial posi�on in accordance with the nature of each asset.

Rental costs under opera�ng leases are recognised in the results using the straight-line method over the dura�on of the lease.

Ini�al direct costs incurred when signing an opera�ng lease are added to the book value of the leased asset and are recognised in expenses over the term of the lease on the same basis of recogni�on as revenues from rental income.

Any rental income is recognised as revenues in the period in which they are generated.

h. Inventories

Inventories are valued at acquisi�on cost or net realisable value, whichever is lower.

Acquisi�on cost is calculated using the average weighted cost method. The cost of finished goods and work in progress consists of the cost of raw materials, direct labour costs, other direct costs and general industrial overheads associated with produc�on (in accordance with normal produc�on capacity). Net realisable value is the es�mated sale price in the normal course of business, less the es�mated selling and transac�on costs.

Any loss resul�ng from measuring stocks/inventories at net realisable value, when it is below acquisi�on cost, is recognised in impairment losses and affects the cost of sales in the income statement. Where there are par�cularly high impairment losses for stocks/inventories, the relevant amounts are shown in the 'Asset impairment' account in the income statement to ensure fair presenta�on.

Appropriate provisions are made for impaired, obsolete, and slow-moving inventories. Write-downs of inventories to net realisable value and other losses from inventories are recognised in the income statement in the period they occur.

i. Trade accounts receivable

Trade receivables are the balances owed by customers from the sale of goods or provision of services in the context of the Group's normal course of business Trade receivables are ini�ally recognised at their fair value and later valued at the carrying amount by using the effec�ve interest rate method, less impairment losses, and subsequently measured at amor�sed cost using the effec�ve interest rate method, less impairment losses. The Group shows any unreserved rights over the considera�on of contracts with customers separately as a trade receivable.

j. Cash and cash equivalents

Cash and cash equivalents include cash, demand deposits, short-term, up to 3 months from the date of acquisi�on, investments and term deposits, highly liquid and zero risk.

Cash equivalents in the cash flow statement include not just cash and sight deposits but also short-term highly liquid investments and bank overdra�s, when applicable.

Bank overdra�s are shown in liabili�es under short-term loan liabili�es. Cash and cash equivalents entail negligible risk of a change in their value

k. Share capital

Ordinary and preference shares without vo�ng rights are shown in the "share capital" account in Equity. The share capital shows the value of Company shares which have been issued and are in circula�on.

l. Loans and borrowings

Loan obliga�ons are ini�ally recognised at fair value, net of transac�on costs incurred (bank charges and bank or third-party commission). In subsequent periods, the loan obliga�ons are measured at amor�sed cost using the effec�ve interest rate method.

Loan obliga�ons are classified as short-term liabili�es apart from cases where the Group has the unreserved right to defer setlement of its liability for at least 12 months a�er the repor�ng date.

m. Income tax

Tax for the period consists of current and deferred tax. Tax is recognised in the Income Statement except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respec�vely.

Income tax is calculated based on the tax laws adopted or substan�vely adopted at the end of the repor�ng period in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates the posi�ons taken in the tax returns when applicable tax laws are subject to interpreta�on and forms provisions, when needed, based on the amounts expected to be paid to the tax authori�es.

n. Deferred tax

Deferred income tax is calculated using the liability method, based on temporary differences between the tax base of assets and liabili�es and the corresponding amounts shown in the financial statements.

Deferred tax assets are recognised to the extent that there will be a future taxable profit for use of the temporary difference generated by the deferred tax assets.

Deferred tax liabili�es are recognised for all taxable temporary adjustments. A deferred tax asset is recognised for deduc�ble temporary differences to the extent that it is expected that the temporary difference will be reversed in the future and there will be an adequate future taxable profit for use of the temporary difference.

o. Employee benefits

Pension and other post-employment obliga�ons

The Group does not par�cipate in pension and other post-employment benefit plans or defined benefit, or defined contribu�on plans apart from the statutory social security schemes which are mandatory by the laws.

Defined Contribu�on Plans

Defined contribu�on plans mean pension plans where the Group pays fixed contribu�ons to a separate en�ty. The Group has no legal or presumed obliga�on to pay addi�onal contribu�ons in the case where the fund's resources would not be adequate to pay employees benefits for their service, rela�ng to the current period and past periods.

For defined contribu�on plans, the Group pays the mandatory contribu�ons required by public social security funds. Once the contribu�ons are paid, the Group is not obliged to pay any addi�onal contribu�ons. Regular contribu�ons are recognised as a cost of employee benefits when they become payable.

Any prepaid contribu�ons are recognised as an asset to the extent that prepayment would lead to a reduc�on in future payments or the return of cash.

Defined Benefit Plans

Defined benefit plan means a pension plan or plan involving other post-employment benefits which is not a defined contribu�on plan. Post-employment benefit obliga�ons at the end of the current period and previous period were calculated in line with an actuarial study using the projected credit unit method.

The obliga�on arising from defined benefit plans is the present value of the commitment to provide a defined benefit on the date the financial statements are prepared, less the fair value of any assets the plan has.

The present value of the commitment to provide a defined benefit is calculated using the discount rate for corporate bonds with a high credit ra�ng in €, whose term approximates the dura�on of the relevant pension obliga�on.

The cost of past service is recognised in the results, broken down into current cost of service and cost of past service, gains and losses from reduc�ons and the cost of setling pay.

The net financial income or expenses are recognised in financial expenses.

Re-assessments, broken down into actuarial gains or losses and the difference between the es�mated and actual performance of the plan's assets, are recognised in the statement of financial posi�on in the "retained earnings" account through the statement of other comprehensive income for the period. The re-assessments are not reclassified in the income statement in subsequent periods.

Employment termina�on benefits

Employment termina�on benefits are payable when an employee's employment is terminated by the Group before the normal re�rement date or when the employee agrees to voluntarily leave in return for these benefits.

The Group records these benefits on whichever of these dates is first: a) when the Group can no longer withdraw the offer of such benefits and b) when the Group recognises an expense from restructuring which is in the context of implemen�ng IAS 37, which includes payment of employment termina�on benefits.

Where an offer to encourage voluntary redundancy is made, employment termina�on benefits are calculated based on the number of employees who are expected to accept the offer. Employment termina�on benefits due 12 months a�er the end of the repor�ng period are discounted at present value.

Employee profit sharing and bonus schemes

The obliga�on to provide benefits to employees in the form of profit sharing or performance bonuses is entered in the "other provisions" account when there is an official scheme and the amounts to be paid have been specified before the date on which the financial statements are published, or if previous Group prac�ces have given rise to a strong expecta�on from employees that they will be paid a performance bonus / profit share-out and the amount can be es�mated before the date on which the financial statements are approved.

p. Government grants

Government grants are recognised at fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all relevant condi�ons.

Government grants rela�ng to expenses are recognised as income in the period in which the subsidised expenses are incurred.

Government grants rela�ng to the purchase of tangible assets are included in the non-current liabili�es as deferred income grants and credited to profit or loss on a straight-line method over the expected useful life of the relevant assets.

Subsequent to ini�al recogni�on, state grants are depreciated by transfer to the Income Statement as expenses, in the same period and in a manner corresponding to the transfer to Income Statement of the book value of the asset subsidised.

Government grants rela�ng to expenses are ini�ally recognised as liabili�es in the period in which they are collected or in the period when approval for them is finalised and it is certain that they will be collected. State grants concerning expenses are transferred to profit and loss as revenue for the period when the subsidised expenses are charged in profit and loss.

q. Provisions

Provisions are liabili�es where the �me or amount is uncertain.

Provisions are recognised when there is a present legal or presumed commitment because of past events; it is likely that an ou�low of resources will be needed to setle the commitment and the amount required can be reliably es�mated. When the Group expects to be compensated for a loss which it has suffered (as in the case of insurance contracts for example) and it is fully certain that the amount will be collected, the specific compensa�on is recognised as a separate receivable. The cost associated with each provision is presented in the income statement, in net of any compensa�on.

Provisions are not recognised for future opera�ng losses. The Group forms a provision for onerous contracts when the financial gain expected to flow from such contracts is less than the unavoidable cost of complying with contractual obliga�ons.

Restructuring provisions include penal�es for early termina�on of leases and payment of employment termina�on benefits and are recorded in the period in which the Group acquires the legal or presumed obliga�on to make payment. Costs associated with the Group's normal business ac�vity are not entered in provisions before binding events occur.

When �me affects the value of money in a significant way, provisions are measured at the present value of the expenditure expected to be required to setle the liability, using a pre-tax interest rate which reflects the current market es�mates of the value of money over �me and risks associated with the liability, as the discoun�ng rate. An increase in the provision due to the passage of �me is recognised as a financial expense.

r. Revenue recogni�on

Revenue from contracts with customers

The Group's revenues derive from A) the sale of night vision systems, thermal systems (thermal sights), other innova�ve electro-op�cal equipment and equipment for applica�on to Defense and Security, and B) the provision of training / maintenance services related to the above sales.

The Group recognizes revenue, excluding interest and dividend income and other related income from financial instruments recognized under IFRS 9, upon the transfer of promised services to customers in amounts that reflect the considera�on to which the Group expects to be en�tled in exchange for those goods based on the following five-step approach:

Step 1: Iden�fy the contract for the sale of the goods.

Step 2: Iden�fy the separate performance obliga�ons arising from the contract with the customer.

Step 3: Determina�on of the transac�on price.

Step 4: Allocate the transac�on price to the obliga�ons under the contract.

Step 5: Recogni�on of revenue as the en�ty sa�sfies its obliga�ons under the contract with the customer.

Revenue is recognized, in accordance with IFRS 15, at the amount that the en�ty expects to be en�tled to as considera�on for the transfer of goods when the customer obtains control of the goods, specifying the �ming of the transfer of control - either at a point in �me or over �me.

Revenue is defined as the considera�on amount in exchange for the services or goods transferred to a customer, excluding amounts received on behalf of third par�es (value added tax, other sales taxes).

The Group recognizes revenue when (or as) it sa�sfies its performance obliga�on to fulfil a contract by transferring the goods or services promised to the customer. The �me of transfer of control is usually when the goods have been shipped to the customer's loca�on, unless otherwise specified in the terms of the contract. The terms governing contracts with customers are consistent with interna�onal commercial terms (Incoterms). Receivable from the customer is recognized when there is an uncondi�onal right for the en�ty to receive the considera�on for the performed obliga�ons of the contract to the customer.

The Group has determined that sales of night vision, thermal and other equipment is a dis�nct performance obliga�on. The Group has concluded that revenue from the sale of products meets the criteria to be recognized at a par�cular point in �me since it does not meet the recogni�on criteria to recognized over �me. Transac�on price is determined in the contract and it does not include variable considera�on.

The Group does not enter contracts where the period between the sale of goods promised to the customer and payment by the customer exceeds one year. Therefore, the Group does not adjust the transac�on price for the �me value of money. Sales Invoices are issued the date that products are shipped to customer loca�ons and they are generally payable between 0 and 120 days.

Revenue from training and maintenance services is a dis�nct performance obliga�on where revenue is recognized over �me since the customer simultaneously receives and consumes the benefits provided by the en�ty's performance as the en�ty performs. The transac�on price is determined in the contract, and it does not include variable considera�on. Progress is determined based on the cost-to-cost method.

The Group does not provide volume discounts to customers.

The Group provides warranty for its products and has assessed that the warranty is not a separate performance obliga�on since it is assurance warranty in order products to comply with agreed upon specifica�ons. As a result, provision for warranty is accounted in accordance with IAS 37.

Contract assets

A contract assets is recognized when a performance obliga�on is sa�sfied, meaning the work is complete and revenue has been recognized, but the payment remains condi�onal on the en�ty's future performance.

Contract liability

A contract liability is recognised if a payment is received or a payment is due – whichever is earlier – from a customer before Group transfers the related goods or services. Contract liabili�es are recognised as revenue when the Group fulfils its performance obliga�on under the contract (i.e., transfers control of the related goods or services to the customer).

s. Dividend distribu�on

Dividends to shareholders are recognised as a liability for the period in which Management's proposal for distribu�on is approved by the annual Ordinary General Mee�ng of Shareholders.

t. Financial assets and financial liabili�es

Classifica�on and ini�al measurement

At ini�al recogni�on financial assets are classed in two categories, one where valua�on is done at the amor�sed cost and one where valua�on is done at fair value. The criteria which must be taken into account in order to decide on how financial assets are to be ini�ally categorised are as follows:

The business model used by the business to manage such assets. There are 3 types of business models:

• The business model where the objec�ve is to hold financial instruments to collect the contractual cash flows (hold to collect);
• the business model where the goal is achieved either by collec�ng the contractual cash flow or by selling the financial assets (hold to collect and sell);
• other business models;

The characteris�cs of the instruments' contractual cash flows.

In order for a financial instrument to be classed as valued at amor�sed cost, all the following criteria must be met:

• the instrument must be under a business model where the objec�ve is to hold financial instruments to collect the contractual cash flows;
• the contractual terms governing the asset must exclusively seek cash flows of principal and interest on the unpaid principal which must be paid on specific dates (known as Solely Payments of Principal and Interest- SPPI);

If an instrument meets such criteria but is held both for sale and to collec�on of contractual cash flows, it must be classed in the 'valued at fair value' category through other results entered directly in equity.

Instruments not falling into any of the two classifica�on categories must be valued at fair value through profit and loss.

Subsequent measurement of financial assets

For measurement purposes the Group divides financial assets into the following categories:

• financial assets valued at amor�sed costs (primarily non-interest-bearing receivables from customers) and
• financial assets valued at fair value through profit and loss (primarily investments in equity instruments for profit)

The following rules apply to these categories:

Financial assets valued at amortised cost (loans and receivables)

This category includes instruments which meet the following requirements:

• They are under a business model where the objec�ve is to hold financial instruments to collect the contractual cash flows;
• The contractual terms governing the asset must refer to the Solely Payments of Principal and Interest- SPPI, which must be paid on specific dates;

This category is valued at amor�sed cost using the effec�ve interest rate model and is periodically examined for signs of expected impairment losses.

It includes current assets unless their effec�ve term is over 12 months from the date on which the financial statements are prepared, and Management's inten�on is to hold them for a longer period un�l they mature.

Financial assets at fair value through profit and loss

This category includes financial assets:

• which there is an inten�on to sell within a short period in order to capitalise on short-term market fluctua�ons (commercial por�olio). The Group places a limited number of shares in this category
• which do not meet the classifica�on criteria for some other category
• which the Group chose at ini�al valua�on to value at fair value by transferring the difference arising to the results. Such an irrevocable choice can be made when in doing so eliminates any accoun�ng asymmetry which arises from valua�on of such financial assets in a different way (such as carrying cost) compared to related financial instruments (such as deriva�ves, which are valued at fair value through profit and loss)

Assets in this category are classed as current assets.

Subsequent measurement of financial liabili�es

To measure financial liabili�es the Group values them at the carrying amount.

Financial liabilities valued at amortized cost

These liabili�es bear interest using the effec�ve interest rate method.

This category includes liabili�es to credit ins�tu�ons and customers.

Impairment of financial assets

When the Consolidated financial statements are prepared, the Group recognises impairment for expected credit risk losses for customer receivables.

At the end of each period for which the Consolidated financial statements are prepared, the Group assesses whether there are signs that a financial asset or a Group of financial assets has been impaired.

Signs of impairment can include the fact that debtors or a Group of debtors face serious financial difficul�es, an inability to pay interest or the principal, the probability that they will become bankrupt or engage in some other form of financial restructuring, and where there are observable data which indicate that there is a measurable reduc�on in the es�mated future cash flows.

If in a subsequent period, the impairment figure is reduced, and the reduc�on can be objec�vely correlated to an event a�er ini�al recogni�on of the impairment (such as an improvement in the debtor's creditworthiness) the reversal of the previously recognised impairment loss is recognised in the income statement.

Impairment is based on expected credit risk losses associated with the probability of default within the next 12 months, unless there is a major increase in credit risk from the �me of ini�al recogni�on, where the expected credit risk losses are recognised over the instrument's en�re life. For impairment measurement purposes, the Group divides financial assets into the following categories based on credit risk:

Stage 1: This includes performing credit facili�es which have no major rise in credit risks compared to the date of ini�al recogni�on. In this stage the expected credit risk losses are recognised based on the probability of default over the next 12 months;

Stage 2: This includes performing credit facili�es where there has been a major increase in the credit risk since ini�al recogni�on. In this stage, expected credit risk losses are recognised over the instrument's en�re life;

Stage 3: includes non-performing/impaired credit facili�es. In this stage, expected credit risk losses are recognised over the instrument's en�re life;

The Group defines significant increase in credit risk for financial assets whose balance of receivables is past due by more than 180 days, there are no guaranteed, there is not commitment of payment close a�er the year end, they are not receivables where final customer are governments and transna�onal organiza�onal or receivables from foreign countries past due 180 days are poli�cal & economical instability. The Group defines default of trade receivables for customers whose balance of receivables is past due by more than 360 days, and there are no guarantees since the en�ty's final customers are mainly government or transna�onal organiza�ons with remote risk of default. A major increase in credit risk arises by comparing the risk of default on the repor�ng date against the risk of default on the ini�al recogni�on date for all performing credit facili�es, including credit facili�es which have no past-due days.

Derecogni�on of financial assets

Financial assets (or a part of a financial asset or part of a Group of financial assets, as appropriate) cease to be recognised when:

• the rights to an inflow of cash resources have expired or;
• the Group retains the right to an inflow of cash resources from a specific asset but has simultaneously undertaken an obliga�on to a third party to fully pay them without major delay, in the form of a transfer agreement or;
• the Group has transferred the right to an inflow of cash from a specific asset and at the same �me has: (a) either materially transferred all risks and rewards of ownership or (b) has not materially transferred all risk and rewards of ownership but has transferred control over the specific asset;
• the Group's write off policy is when it has exhausted its legal ac�ons against the customers.

Where the Group has transferred the rights to an inflow of cash resources from a specific asset but at the same �me has not materially transferred all risks and rewards or control of the specific asset, the asset is recognised to the extent of the Group's con�nuing involvement in the asset. A corresponding liability is also recognised.

Con�nuing involvement in the form of a guarantee over the transferred asset is valued at either the ini�al value of the asset or the maximum amount the Group may be called to pay, whichever is lower. The Group's write off policy is when it has exhausted its legal ac�ons against its customers.

Derecogni�on of financial liabili�es

Financial liabili�es cease to be recognised when the relevant obliga�on is cancelled or has expired. Where a financial liability is replaced by another one from the same lender with materially different terms, or where the terms of an exis�ng obliga�on have materially changed, the swap or change is considered to be derecogni�on of the ini�al obliga�on and recogni�on of a new obliga�on. The difference with current values is recognised in the income statement.

u. Borrowing cost

General and specific borrowing costs that are directly atributable to the acquisi�on, construc�on or produc�on of a qualifying asset are capitalised during the period of �me that is required to complete and prepare the asset for its intended use or sale.

Qualifying assets are assets that necessarily take a substan�al period of �me to get ready for their intended use or sale. The Group considers that a �me of over 4 months is an extensive �me period.

All other borrowing costs are expensed as incurred. Borrowing costs consist of the interest and other costs that an en�ty incurs in connec�on with the borrowing of funds.

v. Trade accounts payable

Trade payables are obliga�ons to pay for goods or services acquired from suppliers in the normal course of the Group's business.

Trade payables are recorded as short-term liabili�es where payment is made within 1 year (and/or more if the �me period is part of the Group's normal opera�ng cycle). If not, they are presented as long-term liabili�es.

Trade payables are ini�ally recognised at fair value and are subsequently measured at the carrying amount using the effec�ve interest rate method.

w. Deriva�ves and hedge accoun�ng

The Group holds deriva�ve financial instruments to hedge cash flows and fair value. Deriva�ves include futures to hedge the financial risk arising from changes in the exchange rate with foreign currencies (mainly USD).

The results from the setled opera�ons of financial risk Management are recognized through profit or loss when they are realized (foreign currency contracts). Deriva�ves are ini�ally and subsequently recognized at their fair value. The method by which profits and losses are recognized depends on whether deriva�ves are designated as a fair value or cash flow hedging instrument. Deriva�ves are recognized when the transac�ons entered into by the Group as hedges for the fair value of receivables, liabili�es or commitments (fair value hedges) or very probable transac�ons (cash flow hedges).

When entering into transac�ons the Group records the propor�on between hedged assets and hedging assets and the relevant financial risk Management strategy. When entering into the contract and therea�er the es�mate is recorded about the high effec�veness of hedging both for fair value hedges and for cash flow hedges. As for future transac�on hedging, the probability to complete the transac�on is substan�ated.

Fair value hedging

Changes in the fair value of deriva�ves which are defined as fair value hedges are posted through profit or loss as are the changes in the fair value of the hedged assets which are atributed to the risk offset.

Cash Flow hedges

The effec�ve propor�on of the change in the fair value of deriva�ves defined as cash flow change hedges is posted to an Equity Reserve. The gain or loss on the non-effec�ve propor�on is posted through profit or loss. The amounts posted as an Equity Reserve are carried forward to the results of the periods where the hedged assets affect profits or losses. In cases of hedging forecast future transac�ons which result in recogni�on of a non-monetary asset (e.g., inventory) or liability, profits or losses which had been posted to equity are carried forward to acquisi�on cost of the non-financial asset generated.

When a hedging instrument matures or is sold or when the hedging propor�on no longer meets the hedge accoun�ng criteria, the profits and losses accrued to Equity remain as a reserve and are carried forward to the results when the hedge affects profits or losses. In the case of a hedge on a forecast future transac�on which is no longer expected to be realized, the profits or losses accrued to Equity are transferred to the statement of profit or loss.

x. Earnings per share

Earnings per share are calculated by dividing the profit atributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. There were no bonds conver�ble into shares or other poten�al securi�es conver�ble into shares that are less profitable during the repor�ng period, and therefore no diluted earnings per share have been calculated.

y. Expenses

Expenses are recognized in the income statement on an accrued basis. Interest expenses recognized on an accrual basis.

z. Share buy back

When shares recognised as equity are repurchased, the amount of the considera�on paid, which includes directly atributable costs, net of any tax effects, is recognised as a deduc�on from equity (Treasury Share Reserve). Repurchased shares are classified as treasury shares and are presented in the Treasury Share Reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in Treasury Share Reserve and the resul�ng surplus or deficit on the transac�on is presented within retained earnings.

8. Adop�on of new Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards by the European Union (EU)

From 1st January 2023 the Group has adopted all amendments in IFRS as these were adopted by the European Union ("EU") which relate to its opera�ons. These Amendments and Interpreta�ons did not have a significant impact on the financial statements of the Group.

The following Standards, amendments and interpreta�ons have been issued from Interna�onal Accoun�ng Standards Board (IASB), have been adopted by the EU and they are effec�ve from annual periods beginning on or a�er 1st January 2023.

a. New Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards adopted by the EU

• IAS 1 Presenta�on of Financial Statements(Amendments): Classifica�on of Liabili�es as Current or Non-current and Non-current Liabili�es with covenants (effec�ve for annual periods beginning on or a�er 1 January 2024)

In 2020, the IASB has amended IAS 1 to promote consistency in applica�on and clarify the requirements on determining if a liability is current or non-current. Under exis�ng IAS 1 requirements, companies classify a liability as current when they do not have an uncondi�onal right to defer setlement of the liability for at least twelve months a�er the end of the repor�ng period. As part of its amendments, the IASB has removed the requirement for a right to be uncondi�onal and instead, now requires that a right to defer setlement must have substance and exist at the end of the repor�ng period. Similar to exis�ng requirements in IAS 1, the classifica�on of liabili�es is unaffected by management's inten�ons or expecta�ons about whether the Group will exercise its right to defer setlement or will choose to setle early.

On 31 October 2022 the IASB issued further amendments to IAS 1 i.e. Non-current liabili�es with covenants. The new amendments aim to improve the informa�on an en�ty provides when its right to defer setlement of a liability is subject to compliance with covenants within twelve months a�er the repor�ng period. The amendments clarify that only covenants with which a Group must comply on or before the repor�ng date affect the classifica�on of a liability as current or non-current. Covenants with which the Group must comply a�er the repor�ng date (i.e. future covenants) do not affect a liability's classifica�on at that date. However, when non-current liabili�es are subject to future covenants, companies will now need to disclose informa�on to help users understand the risk that those liabili�es could become repayable within 12 months a�er the repor�ng date.

The amendments also clarify how a Group classifies a liability that can be setled in its own shares (e.g. conver�ble debt). When a liability includes a counterparty conversion op�on that involves a transfer of the Group's own equity instruments, the conversion op�on is recognised as either equity or a liability

separately from the host liability under IAS 32 Financial Instruments: Presenta�on. The IASB has now clarified that when a Group classifies the host liability as current or non-current, it can ignore only those conversion op�ons that are recognised as equity. Companies may have interpreted the exis�ng IAS 1 requirements differently when classifying conver�ble debt. Therefore, conver�ble debt may become current.

• IFRS 16 Leases (Amendments): Lease Liability in Sale and Leaseback (effec�ve for annual periods beginning on or a�er 1 January 2024)

The IASB has issued amendments to IFRS 16 Leases, which add to requirements explaining how a Group accounts for a sale and leaseback a�er the date of the transac�on. A sale and leaseback is a transac�on for which a Group sells an asset and leases that same asset back for a period of �me from the new owner. IFRS 16 includes requirements on how to account for a sale and leaseback at the date the transac�on takes place. However, IFRS 16 had not specified how to measure the transac�on when repor�ng a�er that date. The amendments issued in September 2022 impact how a seller-lessee accounts for variable lease payments that arise in a sale and leaseback transac�on.

The amendments introduce a new accoun�ng model for variable payments and will require sellerlessees to reassess and poten�ally restate sale and leaseback transac�ons entered into since 2019.

The amendments confirm the following: (1) On initial recognition, the seller-lessee includes variable lease payments when it measures a lease liability arising from a sale and leaseback transaction. (2) After initial recognition, the seller-lessee applies the general requirements for subsequent accounting of the lease liability such that it recognises no gain or loss relating to the right of use it retains.

b. Standards, Interpreta�ons, Revisions and Amendments to exis�ng Standards not endorsed by the EU

The following New Standards, Amendments and Interpreta�ons have been issued by the Interna�onal Accoun�ng Standards Board (IASB) but are not yet effec�ve for annual periods star�ng 1st January 2023.

• IAS 7 Statement of Cash Flows (Amendments) and IFRS 7 Financial Instruments: Disclosures (Amendments) – Supplier Finance Arrangements (effec�ve for annual periods beginning on or a�er 1 January 2024)

The amendments introduce two new disclosure objec�ves – one in IAS 7 and another in IFRS 7 – to enable the users of the financial statements in understanding and assessing the effects of supplier finance arrangements on an en�ty's liabili�es, cash flows and exposure to liquidity risk as well as the impact to the en�ty if supplier finance arrangements were no longer available.

The amendments do not define the supplier finance arrangements. Instead, the amendments describe the characteris�cs of an arrangement for which an en�ty is required to provide the informa�on. Specifically, all the following characteris�cs should apply:

• a finance provider pays amounts that the en�ty owes to its suppliers;
• the en�ty agrees to pay under the terms and condi�ons of the arrangements on the same date or at a later date than its suppliers are paid; and
• the en�ty is provided with extended payment terms or suppliers benefit from early payment terms, compared with the related invoice payment due date.

• IAS 21 The Effects of Changes in Foreign Exchange Rates (Amendments): Lack of Exchangeability (effec�ve for annual periods beginning on or a�er 1 January 2025)

The amendments, as issued in August 2023, aim to clarify when a currency is exchangeable into another currency and how a Group es�mates a spot rate when a currency lacks exchangeability. According to the amendments, a currency is exchangeable into another currency when a Group is able to exchange that currency for the other currency at the measurement date and for a specified purpose. When a currency is not exchangeable at the measurement date, the Group will be required to es�mate a spot rate as the rate that would have been applied to an orderly exchange transac�on between market par�cipants under prevailing economic condi�ons. The amendments contain no specific requirements for es�ma�ng a spot rate, but they set out a framework under which an en�ty can determine the spot rate at the measurement date using an observable exchange rate without adjustment or another es�ma�on technique.

Companies will be required to provide also new disclosures to help users assess the impact of a currency not being exchangeable to the en�ty's financial performance, financial posi�on, and cash flows. To achieve this objec�ve, en��es will disclose informa�on about the nature and financial impacts of a lack of exchangeability, the spot exchange rate(s) used, the es�ma�on process and risks to the Group because the currency is not exchangeable.

• IFRS 10 Consolidated Financial Statements (Amendments) and IAS 28 Investments in Associates and Joint Ventures (Amendments): Sale or Contribu�on of Assets between an Investor and its Associate or Joint Venture (effec�ve date postponed indefinitely; early adop�on con�nues to be permited) The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribu�on of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transac�on involves a business (as defined in IFRS 3). A par�al gain or loss is recognised when a transac�on involves assets that do not cons�tute a business. In December 2015, the IASB postponed the effec�ve date of this amendment indefinitely pending the outcome of its research project on the equity method of accoun�ng.

The Boad of Directors expects that the adop�on of these standards or interpreta�ons in future periods will not have material effect on the consolidated financial statements.

9. Revenue

a. Disaggrega�on of revenue from contracts with customers

In the following table, revenue is disaggregated by primary geographical market, major products and �ming of revenue recogni�on.

For the year ended 31 December

2023	2022
	Restated*
	92.913.957
	22.714.495
	27.126.465
	73.380
	66.463
	142.894.760
	126.527.039
	13.015.333
	688.523
	2.663.865
	142.894.760
	137.505.351
	5.389.409
	142.894.760
218.722.904	142.894.760
	142.894.760
	142.894.760
	178.679.985 22.127.515 17.904.379 - 11.025 218.722.904 202.674.167 12.233.656 1.699.175 2.115.906 218.722.904 218.128.624 594.280 218.722.904 218.722.904 218.722.904

3 European customers (23%, 14% and 12% respec�vely) individually comprise more than 10% of total revenue in 2023 regarding Night vision products (2022: 2 European customers accoun�ng for 18% and 10% respec�vely for Night vision contracts as well).

The Group has two divisions which are night and thermal divisions. Segmenta�on is based on the fact that the above range of products are managed separately, relevant devices have different technologies, characteris�cs, and components (tubes/sensors), specifically, night vision products have image intensifica�on technology and thermal products have thermal imaging technology.

The Group has outstanding customer orders records (backlog) which amount to €192,3 million as of 31.12.20223 (31.12.2022: €253m), which are expected to be executed and recognized in revenue during the years 2024 & 2025.

b. Contract balances

	2023	2022
in euro		Restated*
Receivables which are included in trade accounts receivable	46.087.790	67.996.704
Contract Liabilities	(5.240.112)	(26.237.209)
Total	40.847.678	41.759.495

Analysis and movement of contract liabili�es:

in euro	Client down payments	Deferred income	Total
Balance as at 1 January 2022 as restated	5.618.148	-	5.618.148
Revenue recognised	(5.618.148)	-	(5.618.148)
New contract liabilities outstanding at year end	20.456.989	5.780.220	26.237.209
Balance as at 31 December 2022 as restated	20.456.989	5.780.220	26.237.209
in euro	Client down payments	Deferred income	Total
Balance as at 1 January 2023	20.456.989	5.780.220	26.237.209
Revenue recognised	(16.297.102)	(5.780.220)	(22.077.322)
New contract liabilities outstanding at year end	957.051	123.172	1.080.223

10. Income and expenses

a. Other income

in euro	2023	2022
Subsidies received	370	1.974
Unused provisions	-	130.720
Various revenues from sales	11.026	91.549
Revenue from disposal of property, plant and equipment	20.030	53.517
Income from rent	119.700	135.106
Other income	345.515	1.073.550
Total	496.641	1.486.416

Regarding 2022, €735.000 relates to the reversal of sales commissions.

b. Other expenses

in euro	2023	2022
Taxes and duties	(1.247)	(3.536)
FX differencies	-	8.964
Prior years' expenses	(65.439)	(55.278)
Other expenses	(25.466)	(301.481)
Total	(92.152)	(351.331)

c. Expenses by nature

	2023	2022
in euro		Restated*
Change in inventories	(130.142.070)	(78.215.503)
Employee wages and salaries and other benefits	(10.320.191)	(7.559.137)
Third party remuneration and expenses	(16.243.688)	(10.824.374)
Taxes & duties	(121.177)	(160.654)
Depreciation & amortisation	(1.270.084)	(1.475.887)
Foreign exchange losses / (gains)	107.405	(617.678)
Sundry expenses	(3.138.056)	(3.029.410)
Provisions	(5.356)	(20.339)
Transportation expenses	(1.184.415)	(1.052.867)
Travelling expenses	(1.072.190)	(841.521)
Total cost of sales, administrative, selling and distribution and research and development expenses	(163.389.822)	(103.797.370)

The independent auditors' remunera�on regarding the statutory audits of the annual financial statements amounted to €232.089 (2022: €68.854). Non audit services provided totaled €265.440 (2022: €22.690).

Third-party remunera�on and expenses mainly consist of produc�on subcontrac�ng fees and sales commissions paid to agents.

Sundry expenses mainly comprise u�li�es, repair and maintenance fees, insurance fees, car fleet costs, hospitality and adver�sing expenses.

Staff costs

in euro	2023	2022
Salaries	7.555.270	5.374.332
Employer's contributions	1.673.295	1.229.112
Insurance	111.972	89.805
Staff leaving indemnity	23.322	19.645
Other benefits	1.296.284	1.055.396
DnD Capitalisation	(339.952)	(209.153)
Total	10.320.191	7.559.137

The Group employed 272 employees on average in 2023, while the respec�ve amount was 213 throughout 2022.

11. Net finance costs

For the year ended 31 December

in euro	Note	2023	2022
Bank deposit receipts		297.831	(281)
Dividends received		-	17.046
Gain from sales of financial asset		188.899	-
Foreign exchange gains		182.039	-
Other financial income		12.350	-
Finance income		681.119	16.765
Interest on long-term loans	27.	(217.263)	(165.603)
Interest on short-term loans	27.	(2.264.423)	(644.534)
Foreign exchange losses		(3.063.483)	(1.001.124)
Other finance expenses		(1.557.384)	(608.928)
Interest on lease liabili�es	33.	(35.034)	(32.358)
Finance expenses		(7.137.587)	(2.452.547)
Net finance costs recognised in profit or loss		(6.456.468)	(2.435.782)

12. Earnings per share

a. Profit for the year a�er tax

		Restated*
in euro	2023	2022
Profit for the year after tax	36.095.588	30.000.618

b. Weighted – average number of ordinary shares (basic and diluted)

	2023	2022
Issued ordinary shares 1st January	200.000	200.000
Issued ordinary shares 14th November	400.000	-
	600.000	200.000
Share split from €1 to €0,01 14th November	60.000.000	20.000.000
Weight average number of ordinary shares at 31 December	60.000.000	20.000.000
Earnings per share	0,6	1,5

During 2023, the number of ordinary shares outstanding increased as a result of a share split. Therefore, the calcula�on of basic and diluted earnings per share for all periods presented was adjusted retrospec�vely.

On November 14, 2023, the Group's general shareholder mee�ng resolved to affect a share split of 1 to 100 and resolved to increase the share capital from €200.000,00 to €600.000,00 using Group retained earnings and at the same �me reduce the nominal value per Share from €1,00 to €0,01, increasing the number of exis�ng shares from 200.000 to 60.000.000.

13. Employee benefits

a. Actuarial assump�ons

in euro	2023	2022
Discount rate	3,0%	3,5%
Future salary growth	2,4%	2,4%
Inflation rate	2,1%	2,2%
Longevity	EVK 2000
Incapability	EVK 2000 * 50%
Retirement age	62

The defined benefits liabili�es derive from the requirements of Law 2112/1920 as modified by Law 4093/2012. According to decision adopted in May 2021 by the IFRS Interpreta�ons Commitee differen�ates the way in which the Basic Principles of IAS 19 were applied in Greece.

The applica�on of this final decision to the atached consolidated Financial Statements results in the distribu�on of benefits over the last 16 years un�l the re�rement date of the employees following the scale of Law 4093/2012. Law 4808/2021 equates the compensa�on of salaried employees with salaried employees.

b. Defined benefit liability

The employee benefits analysis of the Group is the following:

in euro	2023	2022
Balance at 1 January	162.026	162.035
Included in Profit or Loss
Current service cost	52.837	29.725
Interest cost	5.316	1.094
	58.153	30.819
Included in Other comprehensive income
Actuarial loss / (gain) arising from:
Financial assumptions	3.676	(13.663)
Experience adjustment	(3.359)	(2.338)
	317	(16.001)
Other
Benefits paid	(22.176)	(14.827)
Balance at 31 December	198.320	162.026

The actuarial es�mate of obliga�ons has been prepared in accordance with the relevant legisla�on contained in Laws 2112/1920 and 3026/1954 and amended by Laws 4093/2012, 4336/2015 and 4194/2013.

They are pension benefits specified in the relevant legisla�on paid once the employee re�res. Greek labour law provides for compensa�on when one re�res from work. The amount is based on length of service at the Group, taking into account the pay on the date of departure.

Compensa�on for re�rement is not funded from special funds.

The Group has not developed a special benefits plan for employees other than those specified in the relevant legisla�on, to be used for the payment of benefits to all employees who leave the Group.

The present value of the defined benefit obliga�on, the normal cost of current employee and, where appropriate, the cost of past service are calculated using the projected unit credit method (IAS 19).

During 2022 and based on a decision of the Interna�onal Financial Repor�ng Standards Interpreta�ons Commitee (IFRIC) on the applica�on of IAS 19 to this actuarial liability, the actuarial liability was allocated in such a way that it is now recognised only in rela�on to the last 16 years of service before re�rement.

c. Sensi�vity analysis

Reasonably possible changes at the repor�ng date to one of the relevant actuarial assump�ons, holding other assump�ons constant, would have affected the defined benefit obliga�on by the amount shown below:

		Increase		Decrease
in euro	2023	2022	2023	2022
Discount rate (0,5% movement)	176.213	148.122	183.091	153.216
Future salary growth (0,5% movement)	183.094	153.232	176.179	148.083

14. Income taxes

The Group's income tax differs from the theore�cal amount that would result using the current tax rate on the Group's results. The difference is as follows:

According to the Swiss Federal Tax Administra�on, Theon AG paid the amount of €1.457.391 as withholding tax on dividends paid to Theon PLC.

Regarding the Greek Subsidiary "Theon Sensors SA": ("Greek Subsidiary")

The tax rate on profits from the business ac�vity of legal persons in Greece for the year 2023 based on Ar�cle 120 of Law No. 4799/2021 amounts to 22% (2022: 22%).

The Group's income tax differs from the theore�cal amount that would result using the current tax rate on the Group's results. The difference is as follows:

	2023	2022
in euro		Restated*
Current tax	(13.244.295)	(8.421.821)
Deferred tax	(583.581)	421.200
Previous year's tax expense	56.747	204.546
Tax Expense	(13.771.129)	(7.796.075)

Reconcilia�on of effec�ve tax rate

		2023		2022
in euro				Restated*
Profit before tax		49.866.717		37.796.693
Tax rate using the Group's domes�c tax rate	40,4%	(20.161.579)	26,7%	(10.093.414)
Deduc�ble temporary diffs (no DT recogni�on)		(192.450)		1.298
Expenses not recognised for tax purposes	(16,1%)	8.050.599	(5,6%)	2.100.453
Prior year income tax	(0,1%)	56.747	(0,5%)	204.546
Reversal of prior year deferred tax	0,1%	(50.781)		-
Other movements		(16.274)		(8.958)
Overseas taxes	2,9%	(1.457.391)	-	-
Tax Expense		(13.771.129)		(7.796.075)
Effec�ve tax rate	27,6%		20,6%

The Greek Subsidiary has obtained tax compliance cer�ficates with unqualified opinion by its cer�fied auditor for each fiscal year from 2011 up to and including 2021 according to Greek tax laws (years 2011- 2013 pursuant to the provisions of Ar�cle 82 of Law No. 2238/1994 and years 2014-2022 pursuant to the

provisions of Ar�cle 65Α of Law No. 4174/2013). Tax compliance cer�ficate for the year ended 31 December 2023 is s�ll in progress and expected to be completed within 2024.

The Greek Subsidiary does not expect addi�onal taxes and surcharges to occur in the context of the audit of the Greek tax authori�es for the years 2016 up to 2022. Accordingly, based on risk analysis criteria and as part of the audits carried out on companies that have received tax compliance cer�ficates with unqualified opinion by a cer�fied auditor, the Greek subsidiary may be selected by the Greek tax authori�es for a tax audit. The Group's Management es�mates that no significant differences will arise from this assurance work.

The Greek subsidiary is audited by the Tax Authori�es based on an audit instruc�on served on it at the end of January 2023. This audit covers the 2018 and 2019 financial years. That audit is s�ll under way and the Greek subsidiary has not received any other audit instruc�on from the tax authori�es for the 2020 to 2022 financial years. Addi�onally, the Management of the Group es�mates that, in case of possible reaudits by the tax authori�es, no addi�onal tax disputes will arise with a significant impact on the consolidated financial statements.

The tax rates on the profits of the rest subsidiaries of the Group, based on their country of tax residence are as follows:

• Theon Interna�onal PLC, Cyprus: 12,5%
• Theon Sensors AG, Switzerland: 11,9%
• Theon Sensors MEA FZC, United Arab Emirates: 0%
• Theon Sensors Far East Ltd, Singapore: 16%
• Τ Industries DK ApS, Denmark: 23,5%
• Τ Industries Inc, USA: 35%

15. Deferred tax

2022 Restated*

		Recognised in				Balance at 31 December
in euro	Net balance at 1 January	PnL	OCI	Net	Deferred tax assets	Deferred tax liabilities
Trade receivables	34.828	281.290	-	316.118	316.118	-
Leases liabilities	241.286	(47.337)	-	193.949	193.949	-
Right of use assets	(234.672)	48.848	-	(185.824)	-	(185.824)
Derivatives	7.740	(16.951)	-	(9.211)	-	(9.211)
Employee benefits	32.091	4.562	(3.520)	33.133	33.133	-
Deferred income	160.042	168.121	-	328.163	328.163	-
Trade payables	(27.209)	(56.420)	-	(83.629)	-	(83.629)
Other items	(17)	39.087	-	39.070	39.070	-
Net tax assets (liabilities)	214.089	421.200	(3.520)	631.769	910.433	(278.664)

2023		Recognised in			Balance at 31 December
in euro	Net balance at 1 January	PnL	OCI	Net	Deferred tax assets	Deferred tax liabili�es
Property, plant and equipment	-	(131.680)	-	(131.680)	-	(131.680)
Trade receivables	316.118	(288.610)	-	27.508	27.508	-
Leases liabili�es	193.949	(12.698)	-	181.251	181.251	-
Right of use assets	(185.824)	16.168	-	(169.656)	-	(169.656)
Deriva�ves	(9.211)	(1.566)	-	(10.777)	-	(10.777)
Inventories	-	125.704	-	125.704	125.704	-
Employee benefits	33.133	6.301	70	39.504	39.504	-
Provision / accruals	-	44.537	-	44.537	44.537	-
Deferred income	328.163	(328.163)	-	-	-	-
Trade payables	(83.629)	40.044	-	(43.585)	-	(43.585)
Other items	39.070	(53.618)	-	(14.548)	-	(14.548)
Net tax assets (liabili�es)	631.769	(583.581)	70	48.258	418.504	(370.247)

16. Inventories

	2023	2022
in euro		Restated*
Finished goods and work in progress	16.578.514	12.284.889
Raw materials and various materials	41.157.191	18.900.712
Raw materials and various materials in transit	5.877.757	2.835.973
Inventories	63.613.462	34.021.574

In 2023, inventories of €130,1m (2022: €78,2m) were recognized as an expense during the year and are included in Cost of Sales.

During the year ended 31 December 2023, the Group wrote down finished goods inventory by €915.637 (2022: €302.305). The write-down was included in cost of sales in the consolidated financial statement of profit or loss.

The increase in inventories is due to increased demand for the Group's products.

17. Trade accounts receivable and other receivables

	2023	2022
in euro		Restated*
Trade accounts receivable	46.606.320	68.574.710
Provision for doubtful debts	(518.530)	(578.006)
Total trade accounts receivable	46.087.790	67.996.704
	2023	2022
in euro		Restated*
V.A.T. and other receivables	1.457.415	2.497.593
Prepaid expenses	1.960.303	879.481
Other short-term receivables	7.562.248	1.715.689
Total other receivables	10.979.966	5.092.763
Total trade and other receivables	57.067.756	73.089.467

The "Other short-term receivables" account includes amounts rela�ng to income tax credit, VAT credit, amounts blocked for imports (cash guarantees) and various balances from miscellaneous debtors in euro. In addi�on, other short-term receivables amoun�ng to €5.982.684 relate to qualifying costs atributable to the issue of share capital that took place a�er the year end.

The overall provision for impairment of trade accounts receivable as at 31 December 2023 stood at €518.530 (2022: €578.006) and relates to addi�onal provisions for customers whose balance of receivables was past due by more than 360 days.

	2023	2022
in euro		Restated*
Balance as at 1 January	(578.006)	(416.697)
Impairment loss recognized	-	(161.309)
Impairment loss reversed	59.476	-
Balance as at 31 December	(518.530)	(578.006)

18. Cash and cash equivalents

in euro	2023	2022
Cash in hand	37.894	9.553
Cash at banks	65.601.173	24.025.581
Total	65.639.067	24.035.134

The Group has further enhanced its already solid cash posi�on, as part of the realisa�on of the increased revenue, coupled with the inflows stemming from bank loans.

Cash equivalents in the cash flow statement include only cash and sight deposits. No short-term highly liquid investments, demand deposits and/or bank overdra�s are included as at 31 December 2023.

in euro	2023	2022
AAA	74.861	76.598
Aa1	2.085	2.156
AA-	6.653.542	14.875.271
A+	380.113	159.910
BB+	8.895.594	1.538.188
BB	54.851	189.175
BB-	48.720.335	7.109.041
n/a	819.792	75.242
Total	65.601.173	24.025.581

The credit score of each bank was obtained by Standard & Poor's (as displayed in each bank's website).

19. Property, plant and equipment

a. Reconcilia�on of carrying amount

in euro	Land	Buildings	Machinery and equipment	Motor vehicles	Fixtures and fittings	Under construction	Total
Cost
Balance at 1 January 2022	1.055.447	5.804.669	5.567.323	301.889	3.553.048	43.000	16.325.376
Additions	-	1.711.454	781.634	339.513	663.336	24.000	3.519.937
Transfers	-	-	(6.450)	-	(111.042)	(24.000)	(141.492)
Disposals	-	-	-	-	(1.139)	-	(1.139)
Balance at 31 December 2022	1.055.447	7.516.123	6.342.507	641.402	4.104.203	43.000	19.702.682
Balance at 1 January 2023	1.055.447	7.516.123	6.342.507	641.402	4.104.203	43.000	19.702.682
Additions	-	2.478.948	1.097.857	105.558	1.071.861	2.247.997	7.002.221
Transfers	-	688.540	-	-	-	-	688.540
Disposals	-	-	(91.401)	-	(441)	-	(91.842)
Balance at 31 December 2023	1.055.447	10.683.611	7.348.963	746.960	5.175.623	2.290.997	27.301.601
Accumulated depreciation and impairment
losses
Balance at 1 January 2022	-	2.422.743	3.181.787	130.898	2.471.222	-	8.206.650
Depreciation	-	209.183	434.614	11.000	278.651	-	933.448
Disposals	-	-	-	(73.304)	(1.135)	-	(74.439)
Balance at 31 December 2022	-	2.631.926	3.616.401	68.594	2.748.738	-	9.065.659
Balance at 1 January 2023	-	2.631.926	3.616.401	68.594	2.748.738	-	9.065.659
Depreciation	-	296.585	355.270	52.299	210.081	-	914.235
Transfers	-	55.083	-	-	-	-	55.083
Disposals	-	-	(91.401)	-	(442)	-	(91.843)
Balance at 31 December 2023	-	2.983.594	3.880.270	120.893	2.958.377	-	9.943.134
Carrying amount 31 December 2023	1.055.447	7.700.017	3.468.693	626.067	2.217.246	2.290.997	17.358.467
Carrying amount 31 December 2022 (restated*)	1.055.447	4.884.197	2.726.106	572.808	1.355.465	43.000	10.637.023

In 2023, the Group evaluated the useful life of its assets and, as a result, the profits for the year to posi�ve effect by the amount of €202.745 and relates to fixtures and fi�ngs, buildings, machinery and equipment.

b. Impairment

Tangible fixed assets are tested for impairment when events and circumstances indicate that their depreciable value may no longer be recoverable. If the depreciated value of the fixed assets exceeds their recoverable amount, the excess amount represents an impairment loss, which is charged directly to the income statement as an expense.

No circumstances or events were iden�fied in 2023 that indicate that the depreciable amount may no longer be recoverable.

In addi�on, current environmental legisla�on does not have a nega�ve impact on the Group's opera�ons or create condi�ons that the depreciable value of assets may no longer be recoverable.

Management has concluded that future cash expenditures to comply with environmental legisla�on are not material to the Group's current year financial statements given that environmental approvals are already in place for the Group's opera�ons.

c. Security

The following security interest has been registered in favour of Piraeus Bank:

A first mortgage prenota�on on the plot situated at 62 Ioannou Metaxa St., Koropi, A�ca and the industrial building thereon for €2.000.000 to secure bank loan whose total outstanding balance was €1.725.000 on 31 December 2023.

d. Property, plant and equipment under construc�on

The most important addi�ons in property, plant, and equipment under construc�on as of 31 December 2023 concern machinery addi�ons.

e. Leased property, plant and equipment

The Group holds both property (Vas. Georgiou building) and equipment (car fleet and machinery) under leased contracts.

The period of the leasing may vary from asset to asset, although the Group mostly engages into 4-5year contracts.

20. Intangible assets

a. Reconcilia�on of carrying amount

in euro	Other Software intangibles		Internally generated	Property rights and	Total
			developed costs	patents
Cost
Balance at 1 January 2022	193.834	1.242.523	2.378.664	6.790	3.821.811
Additions	-	75.542	267.081	-	342.623
Internally developed	-	-	141.491	-	141.491
Balance at 31 December 2022	193.834	1.318.065	2.787.236	6.790	4.305.925
Balance at 1 January 2023	193.834	1.318.065	2.787.236	6.790	4.305.925
Additions	-	118.753	450.697	3.900	573.350
Balance at 31 December 2023	193.834	1.436.818	3.237.933	10.690	4.879.275
Accumulated amortisation and impairment losses
Balance at 1 January 2022	12.394	1.092.847	2.186.322	6.790	3.298.353
Amortisation	1.649	129.553	52.053	-	183.255
Balance at 31 December 2022	14.043	1.222.400	2.238.375	6.790	3.481.608
Balance at 1 January 2023	14.043	1.222.400	2.238.375	6.790	3.481.608
Amortisation	1.313	(112.839)	37.444	1.654	(72.428)
Balance at 31 December 2023	15.356	1.109.561	2.275.819	8.444	3.409.180
Carrying amount 31 December 2023	178.478	327.257	962.114	2.246	1.470.095
Carrying amount 31 December 2022	179.791	95.665	548.861	-	824.317

In connec�on with the foresaid evalua�on of the useful life, the posi�ve effect regarding intangible assets amounted to €241.863.

b. Impairment test

Impairment tests were performed on assets, where no circumstances or events were iden�fied in 2023 that indicate that the depreciable amount may no longer be recoverable.

21. Investment property

It should be noted that investment property is monitored on an "at cost" basis. There were no indica�ons for impairment of investment property during 2023.

On 31 December 2023 based on the valua�on performed, the fair value of land and buildings was €882.857 and €5.236.718 respec�vely.

2022
in euro	Cost	Accumulated depreciation	Carrying amount
Balance at 1 January	1.491.327	(34.085)	1.457.242
Acquisitions	18.401	-	18.401
Depreciation	-	(63.289)	(63.289)
Balance at 31 December	1.509.728	(97.374)	1.412.354

2023

in euro	Cost	Accumulated depreciation	Carrying amount
Balance at 1 January	1.509.728	(97.374)	1.412.354
Reclassification to property, plant and equipment	(688.540)	55.083	(633.457)
Depreciation	-	(75.095)	(75.095)
Balance at 31 December	821.188	(117.386)	703.802

In 2023, the Group reclassified a carrying amount of €633.457 from investment property to property and plant, as the Group now uses much of the property.

2023

Notes to the consolidated financial statements

22. Equity-accounted investees

In 2022 the Group announced a joint Group with Hensoldt, called Hensoldt Theon NightVision GmbH ("HTN") which is based in Wetzlar Germany. The specific Group was set-up in connec�on with the award of an Organisa�on for Joint Armament Co-Opera�on ("OCCAR") contract to a consor�um of Theon and Hensoldt Optronics for 20.000 night vision goggles on behalf of the governments of Belgium and Germany. The Group owns 49,9% of the equity interests of the associate, however the Group has determined that it has significant influence on the associate because it has meaningful representa�on on its board of directors, having 33,33% of the seats in its advisory board.

in euro	2023
Assets
Property plant and equipment	248.307
Non-current assets	248.307
Inventories	2.635.584
Trade accounts receivable	15.442.849
Cash and cash equivalents	1.386.761
Current assets	19.465.194
Total assets	19.713.501
Trade accounts payable	(15.441.554)
Income tax payable	(490.950)
Accrued and other current liabili�es	(1.582.421)
Current liabili�es	(17.514.925)
Net assets (100%)	2.198.576
49,9% of ownership	1.097.089
Goodwill	1.996
Carrying amount of interest in associate	1.099.085

in euro
Revenue	20.723.253
Operating profit	1.729.475
Profit for the period after tax	1.241.242
Prior years' losses	(67.667)
Accumulated profit	1.173.575
49,9% of ownership	585.614

23. Other financial assets

The Group uses the following scale to determine and disclose the fair value of assets and liabili�es for each valua�on technique:

Level 1:Nego�able (non-adjusted) prices on ac�ve markets for similar assets or liabili�es.

Level 2:Other techniques for which all data with a major impact on fair value is visible, either directly or indirectly, and includes valua�on techniques employing nego�able prices on less ac�ve markets for similar or iden�cal assets or liabili�es.

Level 3:Techniques that use data with a major impact on fair value not based on observable market data.

31 December 2023

Financial assets measured at fair value

	Carrying amount			Fair Value Scale
in euro	FVTPL	Level	Level	Level	Total
Derivatives	48.988	-	48.988	-	48.988
Equity securities	159.168	159.168	-	-	159.168
Total	208.156	159.168	48.988	-	208.156

31 December 2022

	Financial assets measured at fair value
	Carrying amount		Fair Value Scale
in euro	FVTPL	Level	Level	Level	Total
Derivatives	1.600	-	1.600	-	1.600
Equity securities	460.804	460.804	-	-	460.804
Total	462.404	460.804	1.600	-	462.404

During the year ended 31 December 2023, there were no transfers from within or outside any level when measuring fair value. Financial assets relate to investments in shares in companies listed on the Athens Exchange. The Group has sold the specific investments with a profit of €69.832 as of the date of this publica�on.

For the deriva�ve, the fair value is determined using quoted forward exchange rates at the repor�ng date.

On 27 September 2023 the Group par�cipated in the share capital increase of Op�ma bank, acquiring 20,406 number of stocks at a total value of €147.923.

Valua�on techniques

Listed investments

The fair values of investments traded on ac�ve liquid markets are determined with reference to quoted market prices. These investments are included within Level 1 of the hierarchy.

Non-listed investments

The fair values of non-listed securi�es are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transac�ons and dealer quotes for similar instruments. The Group classifies the fair value of these investments as Level 3.

Reconcilia�on of fair value measurements

in euro	2023	2022
Level 1
Balance 1 January	460.804	385.355
Gains on disposals/revaluation	11.245	75.449
Purchases	147.923	-
Sales	(460.804)	-
Balance 31 December	159.168	460.804
Level 2
Balance 1 January	1.600	-
Gains on revaluation	47.388	1.600
Balance 31 December	48.988	1.600
Total	208.156	462.404

24. Prepayments

Prepayments amoun�ng to €2.255.011 as at 31 December 2023, relate to advance payments made to suppliers for inventory purchases (2022: €3.774.246).

25. Capital and reserves

Share capital

Authorised capital

On 14 November 2023 the authorised share capital of the Company was increased to €600.000 divided into 600.000 ordinary shares of €1 each. On the same day, the par value of the authorised share capital of the Group was subdivided and the number of shares was increased from 600.000 ordinary shares of €1 each to 60.000.000 ordinary shares of €0,01 each.

On 16 November 2023 the authorised share capital of the Company was increased to €750.000 divided into 75.000.000 ordinary shares of €0,01 each.

On 23 November 2023 the authorised share capital of the Company was increased to €750.000,10 divided into 75.000.000 ordinary shares of €0,01 each and 10 ordinary Class B shares of €0,01 each. Ordinary Class B shares do not carry vo�ng rights.

Issued capital

Between July and September 2023, the Company declared and then undertook a share buyback acquiring 19.631 ordinary shares in exchange for €17.173.937.

Following the approval by the Extraordinary General Mee�ng on 17th July 2023 of the share buy-back, the Company repurchased 19.631 ordinary shares for an amount of €17.173.937 and recognized the net present value of the considera�on as a financial liability. The resul�ng discount of €1.452.140 was recognized as an increase in the Treasury Share Reserve. As at 31 December 2023 the amount of € 13.640.243 was outstanding. The non-current por�on of amount owed for share buy-back of € 6.656.157 is payable by 31 December 2025.

On 2nd October 2023, the Company distributed all treasury shares to exis�ng shareholders i.e Venetus Limited, Chris�anos Hadjiminas and Evangelos Boutlas, and therefore the amount of €15.721.797 was reclassified from the Treasury share reserve to Retained earnings in the Statement of changes in equity.

On 14 November 2023, the Company's general shareholder mee�ng resolved to effect a share split of 1 to 100, and resolved to increase the share capital from €200.000 to €600.000 using Group retained earnings and at the same �me reduce the nominal value per Share from €1,00 to €0,01, this increasing the number of exis�ng shares from 200.000 to 60.000.000.

On 16 November 2023, in connec�on with the planned Private Placement and Admission to Trading, the Copmany's general shareholder mee�ng resolved to authorize the Board of Directors to effect an increase in the Company's share capital by up to €150.000 for the issuance of up to 15.000.000 Shares, excluding preemp�on rights for Exis�ng Shareholders as of the date of this Prospectus, in connec�on with the Private Placement.

On 23 November 2023, the Company's general shareholder mee�ng resolved to create a second class of restricted Non-Vo�ng Shares with a nominal value of €0,01 each, increasing the issued share capital from €600.000 to €600.000,10.

Legal reserve

Pursuant to Greek company law, the companies are obliged to allocate each year at least 5% of its annual net profits to its legal reserve, un�l this reserve equals at least 1/3 of the company's share capital. The distribu�on of the legal reserve is prohibited but it can be used to offset losses.

The balance carried forward in the "Reserves mandated by law or the ar�cles of associa�on (ar�cle 158 of law 4548/20218) account of €5.317.161 as at 31.12.2023. Legal reserve amounts to €4.096.574 increased by € 1.430.540 compared to the prior year following decision of general mee�ng of shareholders dated 5/7/2023.

Other reserve

Other reserves comprise "ac�on 2.5.3." extraordinary tax reserve amoun�ng to €400.000 and "Law 3908/2011" untaxed reserve amoun�ng to €820.587.

Merger reserve

A merger reserve mainly represents the amount recognised in equity, of the difference between the considera�on paid and the capital of the acquiree by Theon Sensors AG and its subsidiary undertakings.

Treasury share reserve

Details regarding the Treasury share transac�ons that took place during the year are disclosed in note 35e of the financial statements.

Dividends

On 16 August 2023 the Group in General Mee�ng approved the distribu�on of dividend amoun�ng to €10.000.000 (2022: €NIL).

Dividend per share for 2023 amounted to €50, while the respec�ve amount for 2022 was nil.

Dividends are subject to a deduc�on of special contribu�on for defense at 17% for individual shareholders that are both Cyprus tax resident and Cyprus domiciled. Dividends are also subject to a 2,65% contribu�on to the General Healthcare System.

Foreign exchange reserve

A foreign exchange reserve relates to the net foreign exchange transac�on differences resulted from the transla�on of its foreign subsidiary's merger reserve to the Group's presenta�on currency (euro).

26. Capital Management

The policy of the Board of Directors consists of the preserva�on of a solid capital base, in order to maintain investor, creditor, and market confidence in the Group and to allow the future expansion of its ac�vi�es.

	2023	2022
in euro		Restated*
Total liabilities	133.163.381	93.146.299
Less: Cash and cash equivalent	(65.639.067)	(24.035.134)
Net liabilities	67.524.314	69.111.165
Total equity	77.357.508	64.263.932
Adjusted equity	77.357.508	64.263.932
Net liabilties to adjusted equity ratio	0,87	1,08

During the reported year, no changes occurred to the Group's approach regarding Capital Management.

27. Loans and borrowings

a. Loan balances

in euro	Note	2023	2022
Non-current liabilities
Secured bank loans		1.505.000	1.725.000
Guaranteed bank loans		416.669	750.002
Bond loans		23.600.000	600.000
Lease liabilities	33.	564.634	586.354
		26.086.303	3.661.356
Current liabilities
Secured bank loans		220.000	220.000
Guaranteed bank loans		21.277.393	29.283.917
Bond loans		1.408.268	561.397
Lease liabilities	33.	401.526	295.231
Non guaranteed bank loans		2.486.039	933.354
		25.793.226	31.293.899

Guaranteed

Personal guarantee from the Group's majority shareholder.

Secured

Amounts secured by a first mortgage-nota�on on the plot situated at 62 Ioannou Metaxa St. Koropi, A�ca and the industrial thereon from €2.000.000 to secure bank loan.

Some loans contain covenants that the Group adheres to.

The maturity for borrowings (excl lease liabili�es) is as follows:

in euro	2023	2022
Up to 1 year	25.391.700	30.998.667
Between 1 and 2 years	21.753.336	753.335
Between 2 and 5 years	3.143.333	1.476.667
Over 5 years	625.000	845.000
Total	50.913.369	34.073.669

The loans contain clauses of change of control that provide the lenders with the right of early termina�on.

The Group did not breach these clauses in 2023 and consequently loans are presented in the financial statements according to their repayment schedule.

b. Reconcilia�on of movements

The movement of loans for the years 2023 and 2022 is as follows:

	Long-term	Short-term	Short-term part of long	Total bank
in euro	loans	loans	term loans	loans
Balance at 01 January 2022	7.540.103	8.922.898	717.536	17.180.537
New Loans	-	42.919.990	-	42.919.990
Repayments	(1.711.768)	(23.837.158)	(682.448)	(26.231.374)
Interest expense	165.603	644.534		810.137
Interest repayments	(165.603)	(384.507)	(55.511)	(605.621)
Transfers between accounts	(2.753.333)	2.000.000	753.333	-
Balance at 31 December 2022	3.075.002	30.265.757	732.910	34.073.669

	Long-term	Short-term	Short-term part of long	Total bank
in euro	loans	loans	term loans	loans
Balance at 01 January 2023	3.075.002	30.265.757	732.910	34.073.669
New Loans	4.000.000	85.617.241	-	89.617.241
Repayments	-	(72.195.249)	(753.332)	(72.948.581)
Interest expense	217.263	2.264.423	-	2.481.686
Interest repayments	(237.227)	(2.073.420)	-	(2.310.647)
Transfers between accounts	18.466.631	(20.000.000)	1.533.369	-
Balance at 31 December 2023	25.521.669	23.878.752	1.512.947	50.913.368

In December, the Group refinanced a €20m short-term loan to a Bond loan of 3 years with favorable terms and signed a new bond loan of €6m (€4m were drawn in 2023) to finance capex investments in new machinery and equipment.

c. Terms and repayment schedule

				2023		2022
in euro	Currency	Nominal interest rate	Year of maturity	Face Value	Carrying amount	Face Value	Carrying amount
Bond loan	EUR	3,50%+Eur6m	2024	1.000.000	607.067	1.000.000	806.870
Guaranteed loan	EUR	3,75%+Eur3m	n/a	1.500.000	754.114	1.500.000	1.088.038
Secured loan	EUR	1,90%+Eur3m	2029	2.000.000	1.748.990	2.000.000	1.961.490
Guaranteed loan	EUR	2,50%+Eur3m /Eur6m +0,6%	2023	4.000.000	3.648.218	2.000.000	4.052.890
Bond loan	EUR	2,25%+Eur3m	2024	6.000.000	4.000.000	-	-
Bond loan	EUR	2.00%+ Eur3m	2025	20.000.000	20.039.764	-	-
Non guaranteed loan	EUR	3,00%+Eur3m	2024	1.000.000	2.486.039	1.500.000	933.354
Guaranteed loan	EUR	3,25%+Eur3m + 0,6%	2024	17.000.000	3.426.222	-	49.569
Guaranteed loan	EUR	3,25%+Eur3m+0,6%	n/a	6.000.000	2.000.000	4.000.000	4.000.000
Guaranteed loan	EUR	1,90%+Eur3m+0,6%	2025	12.000.000	12.202.954	11.000.000	11.078.137
Secured loan	EUR	2%+Eur3m+0,6%	2024	n/a	-	10.000.000	10.103.321
Lease liabilities	EUR	n/a	n/a	n/a	966.161	n/a	881.586
					51.879.529		34.955.255

28. Contract liabili�es

Contract liabili�es amoun�ng to €5.240.112 as at 31 December 2023, mainly relate to downpayments made by customers (2022: €26.237.209). 2022 figures also include the derecogni�on of Revenue which was eroniously booked in 2022 and was ul�mately transferred to 2023 (check Note 37. Correc�on of erros, Error1 – Revenue recogni�on).

29. Government grants

in euro	2023	2022
Government grants	698.067	717.981
Depreciated government grants	(569.810)	(529.554)
Net debt	128.257	188.427

The Group was awarded grants for an EU (Horizon) & a Greek program (Poio�kós Eksynchronismós)

30. Trade accounts payable and Accrued and other current liabili�es

The trade and other payables balance on their current or non-current classifica�on is as follows:

	2023	2022
in euro		Restated*
Trade payables	41.811.689	23.989.743
Post dated cheques payable	-	140
Total trade accounts payable	41.811.689	23.989.883
	2023	2022
in euro		Restated*
Staff payments due	702.680	600.258
Sundry creditors	1.506.640	(413.908)
Sales and other taxes due	226.816	139.992
Dividends due	-	431.507
Accruals	9.854.526	787.789
Other current liabilities	-	704
Total other payables	12.290.662	1.546.342
Total trade and other payables	54.102.351	25.536.225

The increase of balances at year is atributed to increased purchases of inventory in comparison to 2022.

31. Provisions

in euro	Warranties	Total
Balance at 1 January 2023	-	-
Provisions made during the year	202.441	202.441
Balance at 31 December 2023	202.441	202.441
Current	202.441	202.441
Total	202.441	202.441

The provision for warran�es relates mainly to products sold during 2023. The provision has been es�mated based on historical warranty data associated with similar products. The Group expects to setle the majority of the liability over the next year. The amount of €202.441 has been included in "Accrued and other current liabili�es".

32. List of subsidiaries

THEON Interna�onal Plc is the holding Company of the Group, which consists of 10 companies ac�ve in several different jurisdic�ons, mainly Greece, Germany, Denmark, the USA, the UAE and Singapore. The acquisi�on from the shareholders of Theon Sensors AG became fully effec�ve on September 13, 2021, whereby the Company became the parent en�ty of the Group. The Company's primary role is to func�on as the Management and finance holding of the Group. The business is conducted primarily through its subsidiaries.

Theon Sensors AG is domiciled in Switzerland with the purpose of inves�ng in businesses, par�cularly in the area of Night Vision and Thermal Imaging Systems for military and security applica�ons. As men�oned above, this Company served as the holding Company of the Group un�l 2021.

THEON Sensors Single-Member Commercial and Industrial Société Anonyme (THEON Sensors S.A.) is domiciled in Athens, Greece and is involved in the manufacture and trade of a large range of sensors, and in par�cular it manufactures night vision systems, thermal systems (thermal sights) and other innova�ve electro-op�cal equipment and equipment for defence and security applica�ons.

THEON Sensors Far East PTE LTD is incorporated and domiciled in Singapore, while THEON Sensors MEA FZC in Ras Al Khaimah, UAE, THEON Saudi Arabia LLC in Saudi Arabia, THEON Sensors GMBH in Germany and THEON Sensors USA Inc in the US. The principal ac�vity of those Companies is the design of electroop�cal, thermal and night vision equipment including sensors and electronics, as well as marke�ng representa�on and advisory-consul�ng services.

T Industries DK APS and T Industries INC are incorporated and domiciled in Denmark and USA respec�vely and their principal ac�vity is to act as the industrial branches of THEON Interna�onal PLC in those countries.

HTN concerns an associate which was formed along with HENSOLDT Optronics GmbH, giving the Group the ability and advantage to produce the night vision and thermal products of both companies in Wetzlar, Germany.

The chart below shows the current structure of the Group in a simplified form.

33. Leases

Right of use assets

in euro	Land and buildings	Motor vehicles	Total
2022
Balance at 1 January	781.927	284.764	1.066.691
Depreciation charge for the year	(186.513)	(109.384)	(295.897)
Additions to right-of-use assets	-	73.859	73.859
Balance at 31 December	595.414	249.239	844.653

in euro	Land and buildings	Motor vehicles	Total
2023
Balance at 1 January	595.414	249.239	844.653
Depreciation charge for the year	(219.609)	(102.535)	(322.144)
Derecognition of depreciation	-	44.984	44.984
Additions to right-of-use assets	192.728	193.670	386.398
Derecognition of right-of-use assets	-	(44.984)	(44.984)
Balance at 31 December	568.533	340.374	908.907

Lease liabili�es

in euro	Land and buildings	Motor vehicles	Total
2022
Balance at 1 January	804.978	291.789	1.096.767
Interest charge for the year	23.489	8.869	32.358
Interest payments	(23.489)	(8.869)	(32.358)
Repayments	(180.511)	(108.800)	(289.311)
Additions to lease liabilities	-	73.859	73.859
Derecognition of lease liabilities	-	271	271
Balance at 31 December	624.467	257.119	881.586

in euro	Land and buildings	Motor vehicles	Total
2023
Balance at 1 January	624.467	257.119	881.586
Interest charge for the year	22.372	12.663	35.035
Interest payments	(18.450)	(12.663)	(31.113)
Repayments	(204.323)	(132.460)	(336.783)
Additions to lease liabilities	192.729	193.670	386.399
Derecognition of lease liabilities	-	31.036	31.036
Balance at 31 December	616.795	349.366	966.160

The tables below summarise the effect of Leases in Profit or Loss and the Statement of Cash flows:

in euro	Land and buildings	Motor vehicles	Total
2022
Amounts recognised in profit or loss	(163.024)	(100.515)	(263.539)
Depreciation	(186.513)	(109.384)	(295.897)
Interest	23.489	8.869	32.358
Amounts recognised in statement of cash flows	(204.000)	(117.669)	(321.669)
Interest payments	(23.489)	(8.869)	(32.358)
Repayments	(180.511)	(108.800)	(289.311)
in euro	Land and buildings	Motor vehicles	Total
2023
Amounts recognised in profit or loss	(197.237)	(44.888)	(242.125)
Depreciation	(219.609)	(57.551)	(277.160)
Interest	22.372	12.663	35.035
Amounts recognised in statement of cash flows	(222.773)	(145.123)	(367.896)
Interest payments	(18.450)	(12.663)	(31.113)

The tables below summarise the maturity analysis of the Group's Leases:

31 December 2022

		Up to 12	1 to 2	2 to 5	Over 5
in euro	Total	months	years	years	years
Lease liabilities
Interest	74.975	31.113	25.555	18.308	-
Principal	962.068	297.153	301.336	347.578	16.000
Total	1.037.043	328.266	326.891	365.886	16.000
31 December 2023
		Up to 12	1 to 2	2 to 5	Over 5
in euro	Total	months	years	years	years
Lease liabilities
Interest	50.848	30.167	19.127	1.554	-

Principal 969.303 403.225 402.619 163.458 - Total 1.020.150 433.393 421.746 165.012 -

34. Commitments & Con�ngencies

The Board of Directors of the Company has decided to grant permission, in accordance with Ar�cle 100 of Law 4548/2018, for the provision of a guarantee in favor of credit ins�tu�ons, if required, amoun�ng up to €4.050.000 in favor of Company related companies to secure credit limits for the issuance of leters of guarantee to third par�es.

The Group is not involved in any outstanding legal cases.

a. Guarantees

The guaranteed leters which have been issued are displayed below:

in euro	2023	2022
Letters of Guarantee - Customs	16.569.000	12.154.000
Letters of Guarantee - Project Performance	251.069	145.409
Letters of Guarantee - Equipment Substandard Performance	816.239	817.750
Letters of Guarantee - Customers advance payments	9.431.964	16.367.199
Letters of Guarantee - Third Parties	191.744	191.744
Letters of Guarantee - Participation	-	509.200
Total	27.260.016	30.185.302

b. Indirect and con�ngent indebtedness

As part of government defense tenders, the Group occasionally undertakes to invest certain amounts into investment and/or development projects selected by customer (so called "offsets"). As of 31 December of 2023, the Group's con�ngent liabili�es under such offsets amounted to approximately €34 million.

c. Tax liabili�es

The Greek subsidiary is audited by the Large Enterprises Audit Centre based on an audit instruc�on served on it at the end of January 2023. This audit covers the 2017, 2018 and 2019 financial years. That audit is s�ll under way for the years 2018 & 2019 and the Group has not received any other audit instruc�on from the tax authori�es for the 2020 to 2023 financial years.

The Management does not expect any tax liabili�es other than those already recorded and shown in the financial statements.

The existence of con�ngent liabili�es requires Management to constantly apply assump�ons and make value judgements about the likelihood of future events occurring or not occurring and about the impact that those events could have on the Group's ac�vi�es.

35. Related par�es

a. Parent and ul�mate controlling party

The parent of the Group is Venetus Limited. The Ul�mate Controlling Party is Mr. Chris�anos Hadjiminas.

b. Key Management personnel

Chris�anos Chatziminas (Vice-Chairman of the Board of Directors and Chief Execu�ve Officer) Stelios Anastasiou Hans Peter Dr. Bartels Kolinda Grabar-Kitarovic Philippe Jean Mennicken Maria Athienitou Petros Christou (resigned on 19 January 2024)

c. Key Management personnel compensa�on

in euro	2023	2022
Key Management and Board Members compensation	345.133	399.143

Key management personnel refer to execu�ves who are responsible for planning, managing and controlling the ac�vi�es of an economic en�ty, whether directly or indirectly.

No loans have been provided to members of the Board or other Group management execu�ves (or their families) and there are no receivables/liabili�es involving Board members.

There were no changes in transac�ons between the Group and its related par�es which could have material impacts on the Group's financial posi�on and performance for the period ended (01 December 2023 – 31 December 2023).

d. Other related party transac�ons

This sec�on includes the most important transac�ons between the Group and related companies as defined in IAS 24.

All outstanding balances are to be setled in cash within 6 months of the repor�ng date. None of the balances are secured. No expense has been recognized in the current year or prior year for doub�ul debts in respect of amounts owed by related par�es.

The Board of Directors of the Group has decided to grant permission, in accordance with Ar�cle 100 of Law 4548/2018, for the provision of a guarantee in favor of credit ins�tu�ons, if required, amoun�ng up to €4.050.000 in favor of Group related companies to secure credit limits for the issuance of leters of guarantee to third par�es.

In par�cular, the transac�ons between the Group and related companies in the year ended 31 December 2023 and 31 December 2022 accordingly were as follows:

	Balance outstanding as at 31 December
in euro	2023	2022
Balance from UBO	-	3.008.378
Chris�anos Hadjiminas	-	3.008.378
Related par�es	-	3.008.378
Receivables	24.805.408	16.863.436
Venetus Limited	701.555	-
Hensoldt–Theon Gbr	8.557.569	12.222.026
Interad Hellas	404	-
Ucandrone	26.385	19.861
ESS	136.799	102.089
EFA Ventures	(270)	1.689
Aerospace Ventures AG	-	4.517.771
Related par�es	9.422.442	16.863.436
Hensoldt Theon Nightvision Gmbh	15.382.966	-
Associate	15.382.966	-
Payables	(136.097)	11.126
ESS	(148.410)	-
EFA Ventures	12.313	11.126
Related par�es	(136.097)	11.126

Transac�on values for the year ended 31 December

in euro	2023	2022
Sales of Goods	68.456.743	28.297.453
Hensoldt–Theon Gbr	47.149.355	28.297.453
Hensoldt Theon Nightvision Gmbh	21.307.388	-
Income from rebilled expenses	100.537	143.976
Interad Hellas	715	-
Ucandrone	23.200	49.527
ESS	62.159	90.587
EFA Ventures	14.463	3.662
Scytalis	-	200
Total	68.557.280	28.441.429
Purchases of products and services	48.190	586.082
ESS	22.410	200.000
EFA Ventures	1.685	28.549
Defender LLC	24.095	357.533
Total	48.190	586.082

e. Share buy-back

Following the approval by the Extraordinary General Mee�ng on 17th July 2023 of the share buy-back, the Group repurchased 19.631 ordinary shares for an amount of €17.173.937 and recognized the net present value of the considera�on as a financial liability. The resul�ng discount of €1.452.140 was recognized as an increase in the Treasury Share Reserve. As at 31 December 2023 the amount of €13.640.243 was outstanding. The non-current por�on of amount owed for share buy-back of €6.656.157 is payable by 31 December 2025.The amount is owed to ex-shareholders (non-controlling interest) from whom the company purchased the ordinary shares.

On 2nd October 2023, the Group distributed all treasury shares to exis�ng shareholders, and therefore the amount of €15.721.797 was reclassified from the Treasury share reserve to Retained earnings in the Statement of changes in equity.

36. Financial risk Management

The Group is exposed to financial risks primarily due to the nature and geographical spread of its markets and sales.

The Group's financial risk factors are managed by Management to minimise the poten�ally unfavourable impacts of market fluctua�ons on the Group's financial performance.

a. Market risk

Market risk consists of 3 main risks:

• currency risk,
• price risk (such as the price of goods risk); and
• interest rate risk.

The Group's exposure to exchange rate risk derives primarily from exis�ng or expected cash flows in foreign currency (imports / exports) and from foreign investments.

b. Credit risk

The Group provides goods and services solely to recognised, solvent counterpar�es.

It is Group policy that all clients to whom goods and services are provided on credit must undergo credit checks. In addi�on, trade receivables are constantly monitored to minimise the risk from bad debt.

As far as the credit risk from other financial assets of the Group is concerned (cash and cash equivalents), the risk derives from failure to comply with the counterparty's contractual terms, and maximum exposure to risk is equal to the book value of the instruments concerned.

The Group's historical loses are 0,1% of sales which are calculated based on actual losses for the years 2019-2022.

The Credit risk of Group's customers is not significant affected by economic condi�ons since final customers of the en�ty's products are usually governments.

Based on the above, it has been concluded that expected credit losses for buckets 0-360 days are immaterial. More than 1 year from the contractual payment date and those provisions are considered adequate.

Receivables exposed to credit risks

	31 December 2023	31 December 2022
in euro		Restated*
Trade accounts receivable	46.087.790	67.996.704
Long term loans receivable	-	7.526.149
Cash and cash equivalents	65.601.173	24.025.581
Total	111.688.963	99.548.434

Cash and cash equivalents are considered items with low credit risk according to credit exercise that was performed.

Receivables by geographic region

	31 December 2023	31 December 2022
in euro		Restated*
Europe	28.587.570	39.478.582
5 EYES & Japan	7.679.817	12.305.749
Middle East	6.186.135	13.645.963
Asia Pacific	2.229.720	97.625
LATAM	1.382.231	2.151.526
Africa	13.516	13.516
Central Asia	8.801	303.742
Total	46.087.790	67.996.704

Ageing of receivables

	31 December 2023	31 December 2022
in euro		Restated*
Current	22.853.874	43.770.870
0-60	11.496.242	13.091.898
61-120	6.835.056	6.968.618
121-180	2.479.746	3.741.808
181-360	2.314.518	423.510
360+	108.355	-
Total	46.087.790	67.996.704

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a life�me expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris�cs and the days past due.

Expected Credit Loss

2022

in euro	Trade receivables	Impairment loss allowance	Carrying amount	Weighted average loss rate (%)	Credit - impaired
Current	43.770.870	-	43.770.870	0,0%	No
0-60	13.091.898	-	13.091.898	0,0%	No
61-120	6.968.618	-	6.968.618	0,0%	No
121-180	3.741.808	-	3.741.808	0,0%	No
181-360	423.510	-	423.510	0,0%	No
360+	578.006	(578.006)	-	100,0%	Yes
Total	68.574.710	(578.006)	67.996.704

2023

in euro	Trade receivables	Impairment loss allowance	Carrying amount	Weighted average loss rate (%)	Credit - impaired
Current	22.853.874	-	22.853.874	0,0%	No
0-60	11.496.242	-	11.496.242	0,0%	No
61-120	6.835.056	-	6.835.056	0,0%	No
121-180	2.479.746	-	2.479.746	0,0%	No
181-360	2.314.518	-	2.314.518	0,0%	No
360+	626.886	(518.530)	108.356	82,7%	Yes
Total	46.606.321	(518.530)	46.087.791

Expected credit loss is based on historical informa�on of 2-3 years.

The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 0 to 120 days for its customers.

At December 2023, the carrying amount of the receivable from the Group's most significant customer (a European defense manufacturer) was €8.557.569 (2022: €12.222.026).

c. Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in mee�ng the obliga�ons associated with its financial liabili�es that are setled by delivering cash or another financial asset. The Group's objec�ve when managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabili�es when they are due, under both normal and stressed condi�ons, without incurring unacceptable losses or risking damage to the Group's reputa�on.

In addi�on to opera�ng cash flows, the Group holds adequate cash reserves and other liquid assets such as credit facili�es with banks in order to ensure it can discharge its financial obliga�ons.

The table below summarises the maturity dates for financial obliga�ons as at 31 December 2023 and 31 December 2022 based on payments deriving from the relevant contracts at non-discounted prices.

Borrowing includes the balances of loans (unpaid principal) including interest at a fixed and variable rate to maturity.

31 December 2022	Contractual undiscounted cash flows
	Carrying		Up to 12	1 to 2	2 to 5	Over 5
in euro	amounts	Total	months	years	years	years
Loans and borrowings	34.073.669	34.713.426	31.205.839	913.738	1.702.021	891.828
Lease liabilities	881.586	1.037.043	328.266	326.891	365.886	16.000
Trade accounts payable	23.989.883	23.989.883	23.989.883	-	-	-
Contract liabilities	26.237.209	26.237.209	26.237.209	-	-	-
Accrued and other current liabilities	1.546.342	1.546.342	1.546.342	-	-	-
Total liabilities	86.728.689	87.523.903	83.307.538	1.240.629	2.067.907	907.828

31 December 2023				Contractual undiscounted cash flows
	Carrying		Up to 12	1 to 2	2 to 5	Over 5
in euro	amounts	Total	months	years	years	years
Loans and borrowings	50.913.369	53.804.878	26.988.117	22.606.937	3.584.824	625.000
Lease liabilities	966.160	1.020.150	433.393	421.746	165.012	-
Trade accounts payable	41.811.689	41.811.689	41.811.689	-	-	-
Contract liabilities	5.240.112	5.240.112	5.240.112	-	-	-
Accrued and other current liabilities	12.290.662	12.290.662	12.290.662	-	-	-
Total liabilities	111.221.992	114.167.492	86.763.972	23.028.683	3.749.836	625.000

The Group does not face liquidity risks since its working capital is sufficient to meet its needs.

d. Interest rate risk

The Group finances its investments, as well as its working capital needs, through bank lending and bond loans, thus burdening its results with debt interest. Increased interest rate trends will have a nega�ve impact on results, as the Group will be charged with addi�onal borrowing costs.

Since the Group does not have significant interest-bearing assets, its opera�ng income and cash flows are materially independent of changes in interest rates.

The Group is not in default on its loans. If loans are available, the credit banks are nego�ated with over the terms of loan repayment, including interest rates. Both the interest rate and the interest level are nego�able rather than freely changeable.

Interest rate changes sensi�vity analysis

The impacts of varia�ons in interest rates on the Group's opera�ng results and opera�ng cash flows are limited as can be seen from the following sensi�vity analysis:

	Profit or loss
	Increase by 100	Decrease by 100
in euro	base points	base points
Impact in € at 31 December 2023
Financial instruments of variable rate	(380.733)	380.733
Impact in € at 31 December 2022
Financial instruments of variable rate	(88.552)	88.552

The interest-bearing financial liabili�es as at 31 December 2023 and 31 December 2022 respec�vely are shown in the table below:

in euro	2023	2022
Short term loans	25.391.700	30.998.667
Long term loans	25.521.669	3.075.002
Bank loans	50.913.369	34.073.669
Short term loans	401.526	295.232
Long term loans	564.634	586.354
Lease liabilities	966.160	881.586
Total interest bearing liabilities	51.879.529	34.955.255

e. Currency risk

The Group enters into transac�ons in foreign currencies both when selling and buying goods and so is exposed to such risk.

When purchasing from foreign firms, the main transac�onal currency is the USD. Although there are fluctua�ons in the EUR/USD exchange rate, this had no major impact on the results for the period. Moreover, the Group uses FX deriva�ves (op�ons-forwards) to hedge the risk of changes in exchange rates.

Based on its sales and receipts in USD, the Group covers all its purchases in the same currency and therefore any exposure to foreign exchange is limited to the receipts segment. For surplus cash in USD, the Group enters into forward contracts to hedge exchange rate risk.

		Average		Year-end spot
	2023	2022	2023	2022
USD 1	0,925	0,950	0,952	0,938
GBP 1	1,150	1,173	1,151	1,127
CHF 1	1,029	0,995	1,080	1,016

The Groups currency risk is summarised as follows:

					2022
in euro	EUR	USD	GBP	Other	Total
Trade and other receivables	59.061.665	13.979.039	-	48.763	73.089.467
Cash and cash equivalents	22.094.100	1.730.431	60.297	150.306	24.035.134
Total assets	81.155.765	15.709.470	60.297	199.069	97.124.601
Loans and borrowings and lease liabilities	34.955.255	-	-	-	34.955.255
Trade and other payables	19.756.251	5.652.482	12.932	114.559	25.536.225
Contract Liabilities	26.237.209	-	-	-	26.237.209
Total liabilities	80.948.715	5.652.482	12.932	114.559	86.728.689
Net total risk	207.050	10.056.988	47.365	84.510	10.395.912
					2023
in euro	EUR	USD	GBP	Other	Total
Trade and other receivables	47.913.945	7.989.321	1.164.490	-	57.067.756
Cash and cash equivalents	62.403.726	2.771.483	289.129	174.729	65.639.067
Total assets	110.317.671	10.760.804	1.453.619	174.729	122.706.823
Loans and borrowings and lease liabilities	51.879.529	-	-	-	51.879.529
Trade and other payables	46.025.049	7.910.494	10.909	155.899	54.102.351
Contract Liabilities	5.240.112	-	-	-	5.240.112
Total liabilities
	103.144.690	7.910.494	10.909	155.899	111.221.992

Currency risk sensi�vity analysis is summarised as follows:

		Profit or loss
in euro	Strengthening	Weakening
2023
USD (10% movement)	285.031	(285.031)
GBP (10% movement)	144.271	(144.271)
2022
USD (10% movement)	837.889	(837.889)
GBP (10% movement)	4.736	(4.736)

f. Price risk

The Group is exposed to changes in the value of raw materials/merchandise to a limited degree. The risk to the Group from changes in the price of commodi�es is controlled.

The Group checks for any impairment of its stocks/inventories and other assets, and if there are signs and there are grounds for deprecia�on, the Group applies the relevant impairments so that the value in the financial statements always matches the actual value.

As for selling prices, the Group enters into binding sales agreements at fixed prices, and so there is no price risk in rela�on to sales and receivables.

g. Capital risk

The Group's gearing ra�o as at 31 December 2023 and 31 December 2022 was as follows:

in euro	2022	2023	Varriance
Long-term loan obligations	3.661.356	32.742.460	29.081.104
Short-term loan obligations	31.293.899	32.777.312	1.483.413
Total debt	34.955.255	65.519.772	30.564.517
Less: Cash and cash equivalents	(24.035.134)	(65.639.067)	(41.603.933)
Net debt	10.920.121	(119.295)	(11.039.416)
Equity	64.263.932	77.357.508	13.093.576
Non-current liabilities	4.011.809	33.069.037	29.057.228
Total capital employed	68.275.741	110.426.545	42.150.804
Leverage ratio	16,0%	(0,1%)

The Group is not exposed to capital risk since the key liquidity indicators for the last 2 financial years establish its high liquidity and adequate working capital despite the existence of loans.

37. Correc�on of errors

Error 1 - Revenue Recogni�on:

The Group discovered that revenues had been erroneously recognized in its consolidated financial statements since 2021. The error related to premature revenue recogni�on of specific sale invoices which should have been recognized in later periods according to IFRS15 Revenue from contracts with customers. Consequently, the Group's revenues, cost of sales, deferred tax expense, the related contract liabili�es, inventories, and deferred tax assets included errors.

The errors have been corrected in these consolidated financial statements for the year ended 31 December 2023 by resta�ng the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 1 January 2022:

• Increase the value of the Group's inventory by the amount of €561.336 by increasing the value of the Group's retained earnings with the equivalent amount.
• Increase the value of the Group's contract liabili�es with the amount of €1.288.799 by decreasing the value of the Group's retained earnings by the equivalent amount.
• Increase the value of the Group's deferred tax asset with the amount of €160.042 by increasing the value of the Group's retained earnings with the equivalent amount.

Consolidated statement of financial position as at 31 December 2022:

• Increase the value of the Group's inventory by the amount of €4.288.569 by increasing the value of the Group's retained earnings by the equivalent amount.
• Increase the value of contract liabili�es by the amount of €5.780.218 by decreasing the value of the Group's retained earnings by the equivalent amount.
• Increase the amount of deferred tax assets by the amount of €328.163 by increasing the value of the Group's retained earnings by the equivalent amount.

Consolidated Statement of Profit & Loss and Other Comprehensive Income for the year 2022:

• Decrease the value of the Group's revenues by the amount of €4.491.419 by increasing the value of the Group's contract liabili�es by the equivalent amount.

• Decrease the value of the Group's cost of sales by €3.727.233 by increasing the value of the Group's inventory by the equivalent amount.
• Increase the value of the Group's deferred tax income by €168.121 by increasing the value of the Group's deferred tax asset by the equivalent amount.

Error 2 - Reclassifica�ons:

During the period, the Group discovered mul�ple amounts included in certain financial statement cap�ons which had been erroneously classified and presented in its consolidated financial statements.

During the period, the Group discovered mul�ple amounts included in certain financial statement cap�ons which had been erroneously classified and presented in its consolidated financial statements since the year 2021. The classifica�on errors have been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

a. Reclassifica�on of Merger Reserve to foreign exchange reserve

Since 2021, the Group erroneously classified net foreign exchange transac�on differences resulted from the transla�on of its foreign subsidiary's merger reserve to the Group's presenta�on currency (euro) at each repor�ng date in its merger reserve instead of its foreign currency transla�on reserve in OCI. As a result, the classifica�on error has been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 1 January 2022

• Increase the value of the Group's merger reserve by the amount of €3.358.835 by decreasing the value of the Group's foreign exchange reserve by the equivalent amount.

Consolidated statement of financial position as at 31 December 2022:

• Increase the value of the Group's merger reserve by the amount of €5.384.468 by decreasing the value of the Group's foreign exchange reserve by the equivalent amount.

b. Reclassifica�on of Accrued and other current liabili�es to Contract liabili�es.

The Group erroneously classified items that met the defini�on of contract liabili�es to accrued and other current liabili�es in its consolidated financial statements since the year 2021. As a result, the classifica�on error has been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 1 January 2022

• Decrease the value of the Group's accrued and other current liabili�es by the amount of €4.329.347 by increasing the value of the Group's contract liabili�es with the equivalent amount.

Consolidated statement of financial position as at 31 December 2022:

• Decrease the value of the Group's accrued and other current liabili�es with the amount of €20.456.994 by increasing the value of the Group's contract liabili�es with the equivalent amount.

Consolidated statement of financial position as at 31 December 2022:

c. Reclassifica�on of trade accounts receivable to other receivables

The Group erroneously classified other receivables which did not meet the defini�on of trade accounts receivables into trade accounts receivables in its consolidated financial statements for the year ended 31 December 2022. As a result, the classifica�on error has been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 31 December 2022

• Decrease the value of the Group's trade accounts receivable with the amount of €1.393.781 by increasing the value of the Group's other receivables with the equivalent amount.

d. Reclassifica�on of inventories to Prepayments

The Group erroneously classified items related to prepayments for the acquisi�on of inventories to inventories in its consolidated financial statements since the year 2021, even though they did not meet the defini�on of inventories. As a result, the classifica�on errors have been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 1 January 2022

• Decrease the value of the Group's inventories with the amount of €1.841.177 by increasing the value of the Group's prepayments with the equivalent amount.

Consolidated statement of financial position as at 31 December 2022

• Decrease the value of the Group's inventories with the amount of €3.774.245 by increasing the value of the Group's prepayments with the equivalent amount.
• e. Reclassifica�on of Provisions for staff re�rement indemni�es to long term Liabili�es

As at 31 December 2022 and 1 January 2022, the Group has erroneously classified provisions for staff re�rement indemni�es as a separate subtotal from total long term liabili�es, despite the fact that these amounts relate to long term liabili�es. The classifica�on error has been corrected in these consolidated financial statements for the year ended 31 December 2023 by reclassifying the affected compara�ve informa�on as follows:

Consolidated statement of financial position as at 1 January 2022

• Total provisions for staff re�rement indemni�es of €162.026 have been reclassified to total longterm liabili�es.

Consolidated statement of financial position as at 31 December 2022

• Total provisions for staff re�rement indemni�es of €162.035 have been reclassified to total longterm liabili�es.

Restated Consolidated Statement of Financial Posi�on (1/2)

31 December 2022

	Reported		Restated
in euro	31 December	Adjustments	31 December
	2022		2022
Assets
Property plant and equipment	11.481.677	(844.654)	10.637.023
Intangible assets	824.317	-	824.317
Right of use assets	-	844.653	844.653
Investment property	1.412.354	-	1.412.354
Investment in associates	45.425	-	45.425
Other non-current assets	105.716	-	105.716
Long term loans receivable	7.526.149	-	7.526.149
Deferred tax assets	303.606	328.163	631.769
Non-current assets	21.699.244	328.162	22.027.406
Inventories	33.507.250	514.324	34.021.574
Trade accounts receivable	69.390.484	(1.393.781)	67.996.704
Other receivables	3.698.983	1.393.780	5.092.763
Other financial assets	462.404	-	462.404
Prepayments for inventories	-	3.774.246	3.774.246
Cash and cash equivalents	24.035.134	-	24.035.134
Current assets	131.094.255	4.288.569	135.382.825
Total assets	152.793.499	4.616.731	157.410.231
Equity
Share Capital	200.000	-	200.000
Merger Reserve	(33.331.866)	5.384.468	(27.947.398)
Reserves	98.559.283	(6.547.952)	92.011.331
Equity atributable to the owners of the Company	65.427.417	(1.163.484)	64.263.933
Liabili�es
Loans and borrowings	3.075.002	-	3.075.002
Provision for staff re�rement indemni�es	162.026	-	162.026
Lease liabili�es	586.354	-	586.354
Government grants	188.427	-	188.427
Deferred tax liabili�es	54.622	(54.622)	-
Non-current liabili�es	4.066.431	(54.622)	4.011.809
Trade accounts payable	23.989.882	-	23.989.883
Lease liabili�es	295.232	-	295.232
Loans and borrowings	30.998.667	-	30.998.667
Contract liabili�es	-	26.237.209	26.237.209
Income tax payable	6.067.157	-	6.067.157
Accrued and other current liabili�es	21.948.714	(20.402.372)	1.546.342
Current liabili�es	83.299.652	5.834.837	89.134.490
Total liabili�es	87.366.083	5.780.215	93.146.299
Total equity and liabili�es	152.793.499	4.616.731	157.410.231

Restated Consolidated Statement of Financial Posi�on (2/2)

01 January 2022

in euro	Reported 01 January 2022	Adjustments	Restated 01 January 2022
Assets
Property plant and equipment	9.185.417	(1.066.691)	8.118.726
Intangible assets	523.458	-	523.458
Right of use assets	-	1.066.691	1.066.691
Investment property	1.491.327	-	1.491.327
Other non-current assets	103.922	-	103.922
Deferred tax assets	54.047	160.042	214.089
Non-current assets	11.358.171	160.042	11.518.213
Inventories	15.530.507	(1.279.841)	14.250.666
Trade accounts receivable	15.843.544	-	15.843.544
Other receivables	2.709.584	-	2.709.584
Other financial assets	397.378	-	397.378
Prepayments for inventories	-	1.841.177	1.841.177
Cash and cash equivalents	26.096.448	-	26.096.448
Current assets	60.577.461	561.336	61.138.797
Total assets	71.935.632	721.378	72.657.010
	-
Equity
Share Capital	200.000	-	200.000
Merger Reserve	(31.304.573)	3.358.835	(27.945.738)
Reserves	64.949.785	(3.926.259)	61.023.526
Equity atributable to the owners of the Company	33.845.212	(567.424)	33.277.788
Liabili�es
Loans and borrowings	7.540.103	-	7.540.103
Provision for staff re�rement indemni�es	162.035	-	162.035
Lease liabili�es	815.417	-	815.417
Government grants	378.385	-	378.385
Non-current liabili�es	8.895.940	-	8.895.940
Trade accounts payable	6.915.631	-	6.915.631
Lease liabili�es	281.350	-	281.350
Loans and borrowings	9.640.434	-	9.640.434
Contract liabili�es	-	5.618.148	5.618.147
Income tax payable	4.296.230	-	4.296.230
Accrued and other current liabili�es	8.060.835	(4.329.346)	3.731.488
Current liabili�es	29.194.480	1.288.802	30.483.282
Total liabili�es	38.090.420	1.288.802	39.379.222
Total equity and liabili�es	71.935.632	721.378	72.657.010

Restated Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2022

in euro	Reported 2022	Adjustments	Restated 2022
Revenue	147.386.179	(4.491.419)	142.894.760
Cost of sales	(96.416.332)	3.727.233	(92.689.099)
Gross profit	50.969.847	(764.186)	50.205.661
Other income	1.486.416	-	1.486.416
Administra�ve expenses	(7.114.798)	-	(7.114.798)
Selling and distribu�on expenses	(2.008.391)	-	(2.008.391)
Research and development expenses	(1.985.082)	-	(1.985.082)
Other expenses	(351.331)	-	(351.331)
Opera�ng profit	40.996.661	(764.186)	40.232.475
Finance income	16.765	-	16.765
Finance costs	(2.452.547)	-	(2.452.547)
Net finance costs	(2.435.782)	-	(2.435.782)
Profit before tax	38.560.879	(764.186)	37.796.693
Income tax expense	(8.213.755)	-	(8.210.235)
Deferred tax	249.559	168.121	417.680
Profit for the period a�er tax	30.596.683	(596.065)	30.004.138
Other comprehensive income
Items that will not be reclassified to profit or loss
Staff leaving indemnity	16.001	-	16.001
Deferred tax	(3.520)	-	(3.520)
Merger reserve	(1.660)	-	(1.660)
	10.821	-	10.821
Items that are or may be reclassified subsequently to profit or loss
Foreign currency transla�on reserves	974.703	-	974.703
	974.703	-	974.703
Other comprehensive income for the year, net of tax	985.524	-	985.524
Total comprehensive income for the year	31.582.207	(596.065)	30.989.662
Earnings per share
Basic earnings per share	1,53	(0,03)	1,5
Diluted earnings per share	1,53	(0,03)	1,5

Restated Consolidated Statement of Cash Flow

For the year ended 31 December

		2022		2022
in euro	Note	Reported	Adjustments	Restated*
Cash flows from operating activities
Profit for the period after tax		30.596.683	(596.065)	30.000.618
Adjustments for:
Depreciation of tangible assets	19.	1.292.634	(295.897)	996.737
Depreciation of right of use assets	33.		295.897	295.897
Amortisation of intangible assets	20.	183.255	-	183.255
(Reversal of) / Impairment of receivables		103.993	57.315	161.308
(Gains) / losses on disposal of tangible assets		(53.817)	-	(53.817)
Impairment of inventory		(263.238)	-	(263.238)
Amortization of grants	29.	(189.958)	-	(189.958)
Fair value (gains) / losses on financial assets at FV through profit
or loss		(77.048)	-	(77.048)
Dividend Income		(198.120)	181.074	(17.046)
Foreign Exchange (gain)/losses		2.465.336	(1.464.212)	1.001.124
Finance cost net		1.473.474	(21.770)	1.451.704
Tax expense		7.964.196	(168.121)	7.796.075
		43.297.390	(2.011.779)	41.285.611
Changes in:
Inventories	16.	(17.713.726)	(1.793.944)	(19.507.670)
Prepayments			(1.933.069)	(1.933.069)
Trade and other receivables	17.	(55.649.173)	949.732	(54.699.441)
Trade and other payables	30.	27.787.506	(16.400.230)	11.387.276
Provision for staff retirement indemnities		20.740	(20.749)	(9)
Contract Liabilities			20.619.061	20.619.061
Cash generated from operation activities		(2.257.263)	(590.977)	(2.848.240)
Income tax paid	14.	(3.739.735)	85.894	(3.653.841)
Interest paid		(1.274.083)	636.409	(637.674)
Net cash (used in) / from operating activities		(7.271.081)	131.326	(7.139.755)
Cash flows from investing activities
Payments for tangible and intangible assets		(3.791.194)	(34.086)	(3.825.280)
Payments for acquisition of associates		(342.621)	(2)	(342.623)
Payments for financial assets at fair value		(45.425)	-	(45.425)
Proceeds from sale of tangible and intangible assets		193.598	-	193.598
Loans to related parties		(8.700.000)	-	(8.700.000)
Repayment of loans receivables		1.211.573	-	1.211.573
Dividends received		198.120	-	198.120
Interest received		-	(281)	(281)
Net cash flows (used in) / from investing activities		(11.275.949)	(34.369)	(11.310.318)
Cash flows financing activities
Repayment of borrowings		(26.231.375)	1	(26.231.374)
Proceeds from borrowings from financial institutions		42.919.990	-	42.919.990
Outflows of lease liabllities		(215.181)	(74.130)	(289.311)
Net cash flows (used in) / from financing activities		16.473.434	(74.129)	16.399.305
Net decrease in cash and cash equivalents		(2.073.596)	22.828	(2.050.768)
Cash and cash equivalents at 1 January		26.096.448	-	26.096.448
Foreign exchange differences		12.283	(22.829)	(10.546)
Closing Cash and cash equivalents balance:		24.035.135	-	24.035.134

1. Adjusted earnings before interest, tax, deprecia�on and amor�za�on (adjusted EBITDA)

For the year ended 31 December

		2023	2022
in euro	Note		Restated*
Profit after tax		36.095.588	30.000.618
Income tax expense	14.	13.187.548	8.217.275
Deferred tax	15.	583.581	(421.200)
Profit before tax		49.866.717	37.796.693
Adjustments for:
Interest income and related income	11.	(681.119)	(16.765)
Financial expenses	11.	7.137.587	2.452.547
(Revenues) / expenses from holdings and investments		(585.614)	-
EBIT		55.737.571	40.232.475
Non recurring items		733.516	-
Adjusted EBIT		56.471.087	40.232.475
Depreciation of property, plant and equipment	19.	989.333	996.735
Amortisation of intangibles	20.	(72.427)	183.254
Depreciation of right of use assets	33.	353.178	295.898
Adjusted EBITDA		57.741.171	41.708.362

Management has presented the performance measure adjusted EBITDA because it monitors this performance measure at a consolidated level and it believes that this measure is relevant to an understanding of the Group's financial performance. Adjusted EBITDA is calculated by adjus�ng profit for the year a�er tax to exclude the impact from taxa�on, net finance costs, deprecia�on and amor�za�on, impairment of assets, gains from the revalua�on of assets, the share of profit of equity-accounted investees and non-recurring expenses incurred.

Adjusted EBITDA is not a defined performance measure in IFRS Accoun�ng Standards. The Group's defini�on of adjusted EBITDA may not be comparable with similarly �tled performance measures and disclosures by other en��es.

39. Subsequent events

• The Organisa�on for Joint Armament Coopera�on OCCAR signed on 26 January 2024, in Bonn, a second contract amendment of an exis�ng contract for binocular night vision goggles and in-Service Support on behalf of Belgium and Germany with a Consor�um consis�ng of HENSOLDT Optronics GmbH and THEON SENSORS SA. The newly signed second amendment includes 3.500-night vision goggles for Belgium, as well as 16.041 night vision goggles and 8.423 Head Moun�ng Systems for Germany, the later two are pending approval from German parliament, which the consor�um expects to be received at the end of Q1 2024. Moreover, the contract includes an op�on for up to 25.000 addi�onal night vision goggles each for Belgium and Germany. Thus, both Par�cipa�ng States have the opportunity to buy addi�onal quan��es without further nego�a�ons.
• On 16 January 2024, the Group signed 2 more contracts. The first contract concerns the supply of the night vision binocular NYX to a central European Armed Forces at a value of €23m with an op�on for an addi�onal €70m. Deliveries shall start at the end of 2024 with the bulk to be delivered in 2025. The second contract award was received by a European NATO member state and first-�me customer and concerns the supply of Theon's Night Vision monocular ARGUS at a value of €8 m with immediate delivery.
• On 7 February 2024 the ul�mate mother Group lis�ng on Euronext Amsterdam was the first Ini�al Public Offering (IPO) in Europe for 2024. The lis�ng on the Euronext Amsterdam market allows Group to further accelerate growth and its future business development.
• In February, THEON SENSORS SA received the first drawdown of EUR 3,56 million from a total amount of EUR 7,91 million approved for eligible investments through the State Supported Loan Facility of the Recovery and Resilience Fund.

There are no other material events a�er the repor�ng period which have a bearing on the understanding of the consolidated financial statements.

On 19 April 2024 the Board of Directors of Theon Interna�onal PLC approved and authorized these consolidated financial statements.