Thrace Plastics Holding and Commercial S.A.

Annual Report (ESEF) • Apr 25, 2023

Untitled 22 ANNUAL FINANCIAL REPORT 01/0131/12/2022 THRACE PLASTICS CO S.A. General Commerce Reg. No. 12512246000 Domicile: Magiko, Municipality of Avdira Xanthi Greece Offices: 20 Marinou Antypa Str. 174 55 Alimos, Attica Greece www.thracegroup.com Page 2 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise TECHNICAL FABRICS SECTOR PACKAGING SECTOR AGRICULTURE SECTOR WITH GEOTHERMAL HYDROPONIC GREENHOUSES THE GROUP AT A GLACE Annual Financial Report as of 31.12.2022 Page 3 of 268 Amounts in thousand Euro, unless stated otherwise TECHNICAL FABRICS SECTOR GREECE SCOTLAND IRLAND NORWAY AND SWEDEN USA The technical fabrics segment concerns the production and trading of synthetic fabrics for industrial and technical uses, has an international orientation and operates through 7 companies of the Group. (Thrace Nonwovens & Geosynthetics SA, Thrace Eurobent SA, Don & Low Ltd, Thrace Synthetic Packaging Ltd, Lumite Inc, Thrace Polybulk AB, Thrace Polybulk AS). PRODUCT CATEGORIES: • Geosynthetic products (woven, non- woven) with application in large road construction, drainage, erosion control projects, etc. • Membranes, nets with application in constructions • Fabrics, nets, films, ropes with ap- plication in agriculture / horticulture / aquaculture • Products with application in land- scape / gardening • Fabrics with application in sports / leisure products • Hygiene / medical products • Filter fabrics • Fabrics with application in furniture / bedding • Fabrics with application in the auto- motive industry • Fabrics for industrial packaging • Advanced fabrics • Fabrics for floor covering • Industrial fabrics • Straps / ropes • Yarns / fibers for industrial use Page 4 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise PACKAGING SECTOR The packaging segment concerns the production and trading of packaging for food and industrial products, it is mainly European oriented and operates through 8 companies of the Group (Thrace Polyfilms SA, Thrace Pack SA, Thrace Synthetic Packaging Ltd, Thrace Ipoma SA, Thrace Greiner Packaging SRL, Thrace Polybulk AB, Thrace Polybulk AS, Thrace Plastics Packaging DOO). PRODUCT CATEGORIES: • FIBC/ filling solutions • Bags/ FFS Films (Form, Fill, Seal) • Packaging film / Pallet covering • Container liners / Cargo protection • Packaging fabrics • Buckets / pails / containers • cups/ thermoforming glasses • Plastic crates • Bag in box • Garbage bags • Ropes / twines BULGARIA GREECE AND SERBIA GREECE IRLAND ROUMANIA NORWAY AND SWEDEN Annual Financial Report as of 31.12.2022 Page 5 of 268 Amounts in thousand Euro, unless stated otherwise AGRICULTURE SECTOR WITH GEOTHERMAL HYDROPONIC GREENHOUSES Operating since 2013, with respect towards the environment and the end customer, growing pure and delicious hydroponic vegetables on 185 acres in Xanthi, using geo- thermal energy and photovoltaics, with controlled up to zero applications of plant pro- tection products. The total arable area of Thermokipia Thrace S.A. it now amounts to 196 acres plot of land, including the Attica Greenhouses. Thrace Greenhouses’ vision is “the systematic and organized business activity in the primary agricultural sector with a tar- get of an optimum production with the minimum environmental footprint”. PRODUCT CATEGORIES: • Tomato beef • Cluster tomato • Mini tomatoes • Cucumber • Cucumber of Knossos • Eggplant Page 6 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise The Group Activity in Technical fabrics Packaging solutions Hydroponic agriculture sectors Operating in countries with production, commercial and distribution companies Processing of PP/PE per year replacement of virgin raw material with post consuming recycled by 2025 8,500 MT Pledge to the EU Employs personnel including joint ventures Sales network in countries around the world 28 dierent technologies Capacity for in production Covering 25 market segments with products and solutions products Producing 14 companies The Group consists of worldwide (that have an active trading or production activity) material originate from both the production process residues and from external sources 13,407 MT recycled Use of Supports the principles of the circular economy with 120 product groups more than 110 ΜΤ 100% recyclable 3 9 2 , 069 80 € Group Net sales of 394,4 ml. Annual Financial Report as of 31.12.2022 Page 7 of 268 Amounts in thousand Euro, unless stated otherwise Mission Vision Το be the most valuable partner for our customers and suppliers and to consistently increase shareholders’ value while ensuring a prosperous future for all the people working in THRACE GROUP. Flexibility Our Values Responsiveness Integrity Innovation Collaboration Leadership Effectiveness • Adhering closely to our Group core values: integrity, focus on results, in- novation, flexibility, responsiveness, cooperation, leadership. • Investing in our people, by encourag- ing lifelong learning, individuality, personal initiatives and self-achieve- ment. • Creating new business standards through innovation and smart think- ing, aiding our customers’ leadership in their markets. • Providing not just products but com- plete & innovative solutions, tailor- made upon our customers’ specific requirements and needs. • Acting local – being global, serving thousands of companies worldwide through strategic geographic disper- sion. • Pursuing profitability through organic growth and strategic acquisitions. • Achieving competitive prices through economies of scale, vertical integra- tion and internal synergies. • Combining diverse high-end technol- ogies with a long know-how and an extensive experience in the markets we operate. • Respecting our global environment and the societies where we work and live. • Adapting to the ever-changing market environment and promptly adjusting our practices to successfully meet the global trends that will shape the future of business, economy and society. Values Page 8 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise History 2002 Acquisition of Thrace Greiner Packaging SRL (50% JV, Romania) and operation of production line for rigid packag- ing through injection technology 2004 Acquisition of Thrace Ipoma (Bulgaria) and operation of production line for rigid pack- aging through injection technol- ogy. 2005 Establishment of Thrace Plastics Packaging DΟΟ (Serbia) as a packaging solutions trading company. 2006 Acquisition of Lumite Inc (50% JV, USA) and operation of production line for woven techni- cal fabrics. 2007 Acquisition of Thrace Linq Inc (USA). 2008 Operation of production lines for spunbond and needle- punched non-woven fabrics in Xanthi. 2009 Operation of production line for needle-punched non- woven fabrics in USA. 2010 Establishment of Thrace Nonwovens & Geosynthetics SA (Xanthi, Greece) undertak- ing the activities of the company Thrace Plastics SA, and establish- ment of Thrace Polyfilms SA 1977 Mr. Stavros Chalioris estab- lishes Thrace Plastics Co S.A. in Xanthi, Greece. 1980 Operation of production lines for woven bags, ropes & twines in Xanthi. 1986 Operation of production line for technical fabrics in Xanthi. 1992 Operation of production line for industrial and carpet Yarns in Xanthi. 1995 Listing in the Athens Stock Exchange. 1997 Establishment of Thrace Pack SA (Ioannina, Greece) and operation of production lines for rigid packaging through injection technology and thermoforming, as well as establishment of currently operating as Thrace Polyfilms SA (Xanthi, Greece) and operation of a flexible packaging production line. 1999 Acquisition of Don & Low Ltd (Scotland) and operation of production line for woven and non- woven technical fabrics. 2000 Acquisition of Thrace Syn- thetic Packaging Ltd (Ireland). 2001 Acquisition of Thrace Poly- bulk AB & AS (Norway and Swe- den) and operation of production line for of flexible FIBC. Annual Financial Report as of 31.12.2022 Page 9 of 268 Amounts in thousand Euro, unless stated otherwise 2018 Operation of new produc- tion line for Needle-punched Nonwoven fabrics in USA, while the expansion in Thrace Green- houses is completed by 45 acres in Xanthi, reaching in total the 185 acres. 2019 Internal restructuring of the Group’s activities placing emphasis on the development of new innovative and sustainable products and limiting activities in low-profit margin markets and products. 2020 Operation of new produc- tion lines for Needle-punched Non-woven fabrics, meltblown fabrics and surgical masks in Greece, Scotland and Ireland and cessation of Thrace Linq Inc operation (USA). 2021 Operation of net metering photovoltaic systems. 2022 Operation of new recy- cling line and operation of a new fiber production line to meet the needs of needle-punched nonwo- ven lines. (Xanthi, Greece) and operation of production line for flexible pack- aging. 2013 Establishment of the compa- ny Thrace Greenhouse SA (50% JV, Xanthi, Greece) with operating activity of hydroponic cultivation with the utilization of geothermal energy. 2014 Establishment of Thrace Eurobent SA (50% JV, Xanthi, Greece) and operation of produc- tion line for sealing products with the utilization of geosynthetic clay liner. 2016 Operation of two new production lines for spunbond and needle-punched non-woven fab- rics in Xanthi and a new produc- tion line thermoforming technol- ogy in Bulgaria. 2017 Internal restructuring of the Group, with the company Thrace Plastics SA to operate as Thrace Plastics Holdings SA and opera- tion of new production lines for woven technical fabrics and rigid packaging through injection tech- nology (Ireland). Page 10 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Domestic and international presence The Group consists of the following companies that have an active trading or produc- tion activity: Companies Headquarters Thrace Plastics Company SA Xanthi, Greece Thrace Nonwovens & Geosynthetics SA Xanthi, Greece Thrace Polyfilms SA Xanthi, Greece Thrace Eurobent SA Xanthi, Greece Thrace Pack SA Ioannina/Xanthi, Greece Thrace Greenhouses SA Xanthi, Greece Don & Low Ltd Forfar, Scotland Thrace Synthetic Packaging Ltd Clara, Ireland Thrace Ipoma SA Sofia, Bulgaria Thrace Greiner Packaging SRL Sibiu, Romania Lumite Inc Georgia, USA Thrace Polybulk AB Köping, Sweden Thrace Polybulk AS Brevik, Norway Thrace Plastics Packaging DOO Nova Pazova, Serbia The companies Thrace Eurobent SA, Thra- ce Greenhouses SA, Thrace Greiner Pack- aging SRL and Lumite Inc constitute Joint Ventures of the Group. However their ag- gregate data regarding the non-financial key performance indicators are included, as the same principles and values of Sus- tainable Development as in the Group are applied. Annual Financial Report as of 31.12.2022 Page 11 of 268 Amounts in thousand Euro, unless stated otherwise 22 www.thracegroup.com ANNUAL FINANCIAL REPORT 1 st January - 31 st December 2022 THRACE PLASTICS CO S.A. Page 14 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Information regarding the preparation of the Annual Financial Report for the period from January 1 st to December 31 st 2022 The present Report was approved unanimously by the Board of Directors of “THRACE PLASTICS CO The present Financial Report, which refers to the period from 1.1.2021 to 31.12.2021, was prepared in accordance with the provisions of article 4 of L.3556/2007 (Gov. Gaz. 91Α’/30-04-2017), of Law 4548/2018 and the relevant decisions issued by the Board of Directors of the Hellenic Capital Market Commission under Reg. No. 8/754/14-4- 2016 and 1/434/03-07-2007 as well as with the protocol no. 62784/06-06-2017 Circular of the Division of Enterprises and GEMI of the Ministry of Finance, Development and Tour- ism. The present Report was approved unanimously by the Board of Directors of “THRA- CE PLASTICS CO S.A.” (“Company”) on April 24 th , 2023, has been posted on the Company’s website www.thracegroup.gr where such will remain available to investors for a period of at least (10) ten years from the publication date and includes: CONTENTS Ι. Statements by Representatives of the Board of Directors 15 ΙΙ. Report by the Board of Directors 16 ΙΙΙ. Audit Report by Independent Certified Auditor 163 267 IV. Annual Financial Statements for the Period 1.1.2022 – 31.12.2022 V. O nline availability on the Internet 171 Annual Financial Report as of 31.12.2022 Page 15 of 268 Amounts in thousand Euro, unless stated otherwise THE UNDERSIGNED: I. STATEMENTS BY REPRESENTATIVES OF THE BOARD OF DIRECTORS (according to article 4 par. 2 of L 3556/2007) The Chairman of the Board of Directors The Chief Executive Officer & Executive Member of the Board of Directors The Non-Executive Member of the Board of Directors Konstantinos St. Chalioris Dimitris P. Malamos Vasileios S. Zairopoulos We, the representatives of the Board of Directors, hereby state and confirm that to our knowledge: (a) The Annual Financial Statements (Parent and Consolidated) of the Company, which concern the period from January 1 st 2022 to December 31 st 2022, were prepared in ac- cordance with the accounting standards in effect, accurately present the Assets and Li- abilities, Equity and Financial Results of the Company, as well as those of the companies included in the consolidation and considered aggregately as a whole, and (b) The Annual Report by the Company’s Board of Directors accurately presents the sig- nificant events of the year 2022 and their effect on the annual financial statements, the significant transactions between the Company and its related parties, the developments, performance and position of the Company, as well as of the companies included in the consolidation and considered aggregately as a whole, including the description of basic risks and uncertainties they are facing. Xanthi, 24 April 2023 Page 16 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise II. ANNUAL REPORT BY THE BOARD OF DIRECTORS OF THRACE PLASTICS CO S.A. ON THE FINANCIAL STATEMENTS OF THE YEAR FROM 1-1-2022 TO 31-12-2022 INTRODUCTION The present Annual Report by the Board of Directors (hereinafter called as “Re- port”) refers to the fiscal year 2022 (01.01.2022 – 31.12.2022). The Report was prepared in accordance with the rel- evant provisions of Law 4548/2018 (GOV. GAZ. 104Α΄/13.06.2018) as it is currently in force and of Law 3556/2007 as it is in ef- fect following its amendment from Law 4374/2016 and the relevant executive de- cisions issued by the Board of Directors of the Hellenic Capital Market Commission, and especially the decisions with num- ber 1/434/3.7.2007 and 8/754/14.4.2016, as the latter is valid after its amendment by the decision with number 12A / 889 / 31.08.2020 of the Board of Directors of Hel- lenic Capital Market Commission. The Report includes the total required by law information (financial and non-finan- cial information) with a concise as well as comprehensive, objective and adequate manner and with the principle of provid- ing the complete and substantial informa- tion with regards to the issues included in such. Given the fact that the Company pre- pares consolidated and non-consolidated (stand-alone) financial statements, the present Report constitutes a single report referring mainly to the consolidated fi- nancial data of the Company and its sub- sidiaries or affiliates. Any reference to non- consolidated financial data takes place in certain areas which have been deemed as necessary by the Board of Directors of the Company for the better understanding of the contents of the report and towards providing investors with the most com- plete information. It is noted that the present Report includes, along with the 2022 financial statements, the required by law data and statements in the Annual Financial Report, which con- cern the financial year ended on 31 De- cember 2022. The sections of the present Report and the contents of such are in particularly as fol- lows: Annual Financial Report as of 31.12.2022 Page 17 of 268 Amounts in thousand Euro, unless stated otherwise SECTION 1: Significant events that took place during the financial year 2022 Below, the most significant events that took place during the fiscal year 2022 are pre- sented: Macroeconomic environment, COVID-19 impact and Russia-Ukraine war 2022 has been the first year in the post- pandemic era, which however was affect- ed by a series of macroeconomic and geo- political factors. The year at its beginning was marked by the war between Ukraine and Russia, a crucial event which in addi- tion to the huge humanitarian issue it cre- ated, it was a determining factor for the course of the broader European economy within the year. Furthermore, the post- pandemic era has been characterized by strong inflationary pressures, which have significantly affected the purchasing pow- er of households. The above factors formed new conditions in the market, clearly more difficult ones than initially expected, such as the fol- lowing: (a) lower demand for goods and services, especially in the second half of the year, (b) high uncertainty, both for the level of demand and for energy sufficien- cy, (c) continuation of the already strong inflationary pressures, (d) interest rate hikes and consequent increase in financ- ing costs for businesses and households. The above shaped an extremely difficult economic environment along with condi- tions of uncertainty regarding the course of economies and purchasing power inter- nationally. I. Group’s Performance in the Financial Year 2022 In this highly difficult environment as de- scribed above and despite the unfavorable conditions that emerged, the Group man- aged to enter the post-pandemic era by posting enhanced profitability which was almost double the pre-pandemic levels. In particular, in terms of demand, the first half of the year evolved at satisfactory lev- els and the Group managed to successfully handle the increased costs and maintain profitability at quite high levels. Neverthe- less, the fourth quarter of 2022 proved to be particularly difficult, perhaps one of the most difficult ones that the industrial sector has encountered in recent years, as the combination of the parameters ana- lyzed above brought a large slowdown in demand over the last months of the year. Therefore, the following were observed in the fourth quarter of 2022: • Reduced demand for products in the construction sector. • Low demand for products related to the infrastructure sector and to the large-scale construction projects. • Decreased demand for most of the products of the agricultural sector. • Steady demand for products related to the packaging sector. • Almost zero demand for products re- lated to COVID-19. • Reduction in the cost of raw materials. • Strong pressures for decreases on sales prices, in all product categories. Page 18 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise • Reduction of customer inventories due to the drop in raw materials prices and in view of the great uncertainty over the course of the European econ- omy. • Significantly increased energy costs in all countries of operation with signifi- cant fluctuations on a monthly basis. • Steadily rising transport costs, with only some de-escalation on specific routes. • Significantly increased cost of raw ma- terials and packaging materials. • Gradually increase of interest rates From a financial perspective, the Group, in terms of volumes and as a result of the reduced demand in the fourth quarter of the year, posted a relatively small drop by 5.5% compared to 2021. The turnover from continuing operations, as it was expected following the significantly lower demand for products related to COVID-19 pandem- ic but also due to the declining sale prices as a result of lower raw material prices in the second half of the year, posted a lim- ited decrease of 7.9% compared to 2021. In more specific terms, and despite the especially negative conditions and their impact on the level of demand across the globe, sales amounted to €394.4 million compared to €428.4 million in the previous year. Earnings before Taxes (EBT) from con- tinuing operations amounted to €32.1 mil- lion (compared to €83.9 in 2021), of which €22.2 million related to the traditional product portfolio (compared to € 32.1 in 2021), €5.3 million derived from sales of personal protection products (compared to earnings of €51.8 million in 2021), while there was a non-recurring financial in- come of €4.6 million (see note 3.9). Earnings before Taxes from the traditional product portfolio, as expected, dropped by 30.8%, compared to the corresponding level of the previous year. However, given the special conditions that prevailed in 2021 due to the outbreak of the pandemic, but also due to the also special conditions prevailing in 2022, due to the ongoing war conflict and the escalating inflationary pressures, it is extremely difficult to make a direct comparison between the two pe- riods. On the other hand, compared to the pre- pandemic levels, i.e. the year 2019, which is more appropriate for direct comparison, the Earnings before Taxes from the tradi- tional product portfolio in 2022 posted an increase of 166% (€22.2 million compared to €8.3 million in 2019). The above devel- opment demonstrates the significantly in- creased profitability of the Group, despite the especially unfavorable conditions that prevailed in the global market during 2022 and the substantially higher costs of raw materials, energy and transportation. Therefore, it is now clear that despite the particularly difficult conditions prevail- ing in the global economy, the Group is in strong position to achieve stable, sustainable and significantly higher recurring profitability compared to pre-pandemic levels. Furthermore, this achievement was realized in very different and especially negative conditions com- pared to the previous years, demonstrat- ing the Group’s ability to adapt to the new conditions emerging each time, by dem- onstrating both flexibility and resilience. In this context, the Group through the in- vestment and restructuring plan that took place over the previous years, has man- aged to set new performance standards in terms of financial results, even in a con- stantly difficult economic environment, creating new prospects for the future. Annual Financial Report as of 31.12.2022 Page 19 of 268 Amounts in thousand Euro, unless stated otherwise These prospects can be further enhanced by the time the energy and inflationary cri- sis de-escalates. Regarding the liquidity levels of the Group and the trading cycle of the subsidiaries, there was no negative effect due to the difficult conditions observed during the period under consideration. At the same time, the implementation of the Group’s planned as well as extraordinary invest- ments progressed smoothly. Investments reached €40 million in 2022 approximately, on a cash basis, consisting of investments mainly in the Group’s facilities in Greece, but also in the other countries of opera- tion, and being financed to a significant extent with own funds. It is noted that the FY2022 investments have been part of the Group’s extensive investment plan spanning the 3-year period 2022-2022 and amounting to ap- proximately €100 million. The plan aims to achieve volume increases, cost reduc- tion and stronger competitiveness, while improving the product mix, enhancing the recycling process and ensuring sus- tainable development. On the other hand, during the last months of the year, as ex- pected, there was an improvement at the level of working capital. As a result of the above, the Group’s Net Debt at the end of 2022 amounted to €21.5 million, posting a drop by approximately €4.2 million, as compared to the Net Debt of the 9months 2022 period. II. Measures taken to reduce the impact of the pandemic The Group’s Management continues to closely monitor the developments related to the pandemic crisis, despite the signifi- cantly improving conditions, and to adjust its plans based on the revised health pro- tocols as required by the various pertinent authorities in each country. III. Prospects of the Group Regarding the prospects for the year 2023, the Management closely monitors the macroeconomic developments, on a glob- al level, which are still characterized by inflationary trends thus affecting all cost items that constitute the industrial sector’s cost base. On the other hand, there is also evidence of some de-escalation in the pric- es of primary and secondary materials and of transportation costs. At the same time, demand remains at relatively low levels, having however recovered from the levels experienced in the last months of 2022. For the first quarter of 2023, the Group’s Management monitors and adapts to the changes taking place at the macroeco- nomic level, making an effort to achieve the best possible financial performance, while simultaneously managing the inher- ent business risks. However, the economic environment remains difficult due to the low demand, persistent inflation levels, high energy costs and also high financing costs. However, for the first quarter of the year 2023, the Group’s Management antici- pates that a significant profitability will be achieved, which demonstrates the Group’s ability, despite the intense and difficult market environment, to remain focused on its ultimate goals. Therefore, profitability in terms of EBITDA (Earnings before Inter- est, Taxes, Depreciation and Amortization) of the Group from the traditional product portfolio for the first quarter of 2023 will be at the same levels approximately with the EBITDA profitability of the first quar- ter of 2022. This development is indeed satisfactory in view of the current market Page 20 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise conditions (It is noted that according to the relevant corporate announcement, the Earnings before Taxes (EBT) in the first quarter of 2022 from personal protection products related to COVID-19 had amount- ed to €4.3 million, while it is estimated that also at an EBITDA level in the first quarter of 2022, the favourable effect was approxi- mately the same). Regarding the prospects for the next year, the Group’s Management is constantly contemplating ways to mitigate, as far as possible, the negative consequences of the ongoing economic crisis experienced in Europe, but also at an international lev- el. Despite the unfavorable market condi- tions and the overall uncertainty, which makes any attempt to estimate the course of next year rather difficult, there are very positive prospects for the Group. Thrace Group is now, more than ever, capable of capitalizing on the significant recurring profitability of the year 2022, but also on the extended investment plan that took place in the past years, with a target to maintain and further enhance the Group’s profitability. Given that the current conditions in the global market place create a lot of uncer- tainty, making any forecast concerning the production / commercial activity and the financial results of the Company and the Group precarious, the Management of the Group on the other hand strongly be- lieves that neither the Group nor any of its business activities face a possible threat of interruption whatsoever (“going concern” principle). IV. Climate issues The Group recognizes the risks and im- pacts that may arise in its business activ- ity due to the climate crisis and the energy transition, which may affect its production process and activities, while at the same time has identified great opportunities that are emerging through the adoption of the principles of circular economy, the use of recycled raw material and the in- vestment in renewable energy sources. In order to mitigate the risks arising from climate change, but also to take advantage of the opportunities that arise in order to achieve positive financial results for itself and the environment in which it operates, the Group is constantly adjusting its busi- ness model, in order to constantly reduce its environmental footprint. It achieves this through recording direct and indirect greenhouse gas emissions, reducing ener- gy consumption in production processes, self-production and use of energy from renewable sources (solar, geothermal and hydroelectric), reducing the use of natural resources through the use of recycled raw material and proper waste management. In addition, it focuses on the development of innovative and sustainable products and services, applying the principles of the circular economy. Therefore, it has established and commu- nicated relevant principles and policies, while it has formulated a detailed strategic plan of specific actions, which are imple- mented with measurable positive results. More details are set out in the Report of Non-Financial Information (Section 12), as well as in the link below: https://www.thracegroup.com/gr/en/sus- tainability/ Annual Financial Report as of 31.12.2022 Page 21 of 268 Amounts in thousand Euro, unless stated otherwise V. Expected Credit Losses There are no expected credit losses as a result of the current conditions and cir- cumstances. In any case, according to the established policy, a big part of the com- panies’ sales remain insured, while addi- tional measures have been taken to ensure the Group carries out transactions with reliable customers (credit risk assessment, credit scoring, advances, etc.). More infor- mation on credit risk can be found in note 3.3.1.1. of financial statements. Direct Impact of the War Conflict on the Financial Results of the Group The war outbreak after the Russian military invasion of Ukraine creates geopolitical instability with adverse macroeconomic consequences. These consequences have been evident for all companies across the various economies on a day-to-day basis and are mainly related to the energy cost and the price increase in a series of raw materials and products. The above condi- tions created within the year 2022 an en- vironment of great uncertainty affecting the level of demand especially in Europe. The Group does not have significant direct business activities in Ukraine and in Rus- sia, i.e. in the areas directly affected by the war. Furthermore, the overall exposure to Ukraine and Russia is minimal. Based on the financial results of 2022, sales in these two countries stood at 0.2% of the Group’s total turnover (for 2021, corresponding sales had stood at 0.6% of total Group sales). Therefore, no direct material impact is expected on the financial performance of the Group, given the non-existence of business activity in the specific areas as far as customers sales are concerned. How- ever, the effects on the Group’s activities from the negative developments, follow- ing the war conflict, in the energy sector, from the wider macroeconomic uncertain- ty and from the high inflation pressures with a focus on the abruptly rising energy costs, comprise factors which negatively affect the financial performance of the Group and specifically its cost structure. The Group’s Management closely moni- tors all the above developments and has taken actions accordingly and in order to effectively deal with issues concerning the trading cycle and its cost base, to the ex- tent possible. Appointment of the Head of Regulatory Compliance and Risk Management Department The Board of Directors of the Company, during its meeting of 21/02/2022, ap- pointed Mr. Michael Psarros of George as Head of the Department (Unit) of Regula- tory Compliance and Risk Management. Mr. Psarros has been working in the Group since 2010. He is a graduate of the Univer- sity of Patras and the University of Leices- ter and has worked for 21 years as an inter- nal auditor, gaining extensive experience in the areas of regulatory compliance and risk management. Mr. Michael Psarros will assume his duties as Head of the Regula- tory Compliance and Risk Management Department (Unit) from 24.02.2022. Page 22 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Annual Ordinary General Meeting of the Company’s shareholders The Annual Ordinary General Meeting of the Company’s shareholders, which took place on May 25, 2022 remotely in real time via videoconference, approved the following among others: A) the General Meeting unanimously ap- proved the allocation of results for the fi- nancial year 2021 (01.01.2021-31.12.2021) and specifically it approved the distribution of a total dividend of Euro 11,750,000.00 (gross amount) from the earnings of the particular financial year. Given that the Company, by virtue of the relevant decision of the Board of Direc- tors dated 24.09.2021, had already distrib- uted to its shareholders for the fiscal year 2021 an interim dividend of total amount of 4,750,000.00 Euros (gross amount), i.e. 0.109858877 Euros per share (gross amount, along with the increase that corresponds to the treasury shares the Company held on the cut-off date of the interim dividend), the General Meeting unanimously approved the distribution of the remaining amount of the dividend, and in particular of 7,000,000.00 Euros (gross amount), i.e. an amount of 0.1600312674 Euros per share (gross amount). The latter amount per share after the increase corre- sponding to 659,853 treasury shares held by the Company and which are excluded from the payment of dividend, settled at 0.1624823628 Euros per share (gross amount). The Company’s shareholders registered in the records of the Dematerialized Securi- ties System (SAT) as of Tuesday, 31 May 2022 (record date), were those entitled to receive the above dividend. Monday 30 May 2022 was set as the ex-div- idend date according to the relevant arti- cle 5.2 of the Athens Exchange Regulation. The payment of dividend commenced on Friday, 3 June 2022, and was implemented through the Societe Anonyme under the name “PIRAEUS BANK S.A.”, according to the procedure stipulated by the Regula- tion of the Athens Exchange in effect. B) the General Meeting approved by ma- jority the Remuneration Report of the clos- ing year 2021 (01.01.2021-31.12.2021), which was prepared in accordance with the pro- visions of article 112 of Law 4548/2018. The Report contains a comprehensive overview of the total remuneration of the members of the Board of Directors (execu- tive and non-executive) and explains how the Remuneration Policy was implement- ed by the Company for the immediately preceding financial year. The decisions of the General Meeting of Shareholders are posted on the Compa- ny’s website at the link https://www.thra- cegroup.com/gr/en/general-meetings/ Annual Financial Report as of 31.12.2022 Page 23 of 268 Amounts in thousand Euro, unless stated otherwise Issuance of Tax Certificate for the Fiscal Year 2021 in accordance with article 65 A of Law 4174/2013 Following the special tax audit carried out for the financial year 2021 by the statu- tory external auditors in accordance with article 65A of Law 4174/2013, both on the Company and its subsidiaries “Thrace Non- wovens & Geosynthetics S.A.”, “Thrace- Polyfilms S.A.”, “Thrace Plastics Pack S.A.”, “Thrace Eurobent S.A.” and “Thrace Green- houses S.A.”, the relevant tax certificates were issued with an unqualified opinion. Liquidation and permanent Elimination of Subsidiary With the decision dated 09/09/2022, the Hong Kong business registry approved the permanent elimination of the Group’s subsidiary, Thrace Asia Ltd. Thrace Asia operated as a sales office of Thrace Nonwovens & Geosynthetics Single Person SA in the market of China, with ex- tremely limited activity in recent years, as most of the sales in the Asian market are made directly by Thrace Nonwovens & Ge- osynthetics Single Person SA. Therefore, the Group’s Management decided to close the above sales office. The elimination did not affect the results of the Group and it only had an impact on the results of sub- sidiary SAEPE LTD. The Board of Directors of the Company during the meeting of November 22, 2022 approved the distribution of an in- terim dividend for the financial year 2022 based on the interim financial statements for the period 01.01.2022-30.06.2022. The Interim dividend amounted in total to 3,000 thousand Euros (gross amount), i.e. 0.0685848289 Euros per share of the Company. The above amount through the increase corresponding to the 751,396 treasury shares held by the Company and which are not entitled to an interim divi- dend, settled at 0.0697835797 Euros per share and was subject to a withholding tax of 5%, in accordance with the provi- sions of Law 4646/2019 (Government Ga- zette A’ 201/12.12.2019). Therefore, the final amount paid as Interim dividend for the year 2022 amounted to 0.0662944007 Eu- ros per share. Τhe Board of Directors of the Company, during its meeting of December 7 th , 2022 set the following dates: Monday, January 30, 2023 as the cut-off date for the interim dividend, Tuesday, January 31, 2023 as the date of determination of the benefi- ciaries to the above dividend (record date), and Friday, February 3, 2023 as the pay- ment commencement date. The payment of the interim dividend was made through the paying Bank “PIRAEUS BANK SA”. Interim Dividend for the Year 2022 Page 24 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise SECTION 2: Main Risks and Uncertainties Financial Risk Management The financial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable accounts, payable accounts and loans. The Group’s activities, in general, create several financial risks. Such risks include market risk (foreign exchange risk and risk from changes of raw materials prices), credit risk, liquidity risk and interest rate risk. Risk from fluctuation of prices of raw materials The Group is exposed to fluctuations in the price of polypropylene (represents 49% approximately of the cost of sales), which are mainly faced by a similar change in the selling price of the final product. The possibility that the increase in the price of polypropylene cannot be fully passed on to the selling price, causes unavoidably the compression of margins. For this rea- son, the Company accordingly adjusts, to the extent it is feasible, its inventory policy as well as its commercial policy in general. Hence, in any case, the particular risk is deemed as relatively controlled. Credit Risk The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause financial loss to the Group and the Company as a result of the breach of its contractual liabilities. The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the financial statements is the book value of their fi- nancial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required. In order to monitor credit risk, customers are grouped according to the category they belong to, their credit risk character- istics, the maturity of their receivables and any previous receivables that they have caused, taking into account future factors as well as the economic environment. Impairment The Group and the Company, in the finan- cial assets that are subject to the model of expected credit losses, include receivables from customers and other financial assets. The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all finan- cial assets. The expected credit losses are based on the difference between the contractual cash flows and the entire cash flows which the Group (or the Company) anticipates to receive. The difference is discounted by using an estimate concern- ing the initial effective interest rate of the financial asset. For the trade receivables, the Group and the Company applied the simplified approach of the accounting standard and calculated the expected credit losses based on the expected credit losses for the entire lifetime of these items. Regarding the remaining financial assets, Annual Financial Report as of 31.12.2022 Page 25 of 268 Amounts in thousand Euro, unless stated otherwise the expected credit losses are being calcu- lated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the antici- pated credit losses for the entire life of the financial assets, which emanates from the probability of a default in the payment of the contractual obligations within the next 12-month period starting from the report- ing date. In case of a significant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. At the date of the preparation of the finan- cial statements, impairment of receivables from customers and other financial assets was made on the basis of the above. The following table presents an analysis of the maturity of Trade Receivables’ bal- ances at 31.12.2022. Maturity of Trade Receivables’ balances at 31.12.2022 Group 01 – 30 days 19,708 31 – 90 days 37,429 91 – 180 days 8,196 180 days and over 7,126 Subtotal 72,459 Provisions for doubtful receivables (7,69 0) Total 64,769 The above amounts are expressed in terms of due days in the table below: Analysis of not past due/overdue Group Trade receivables at 31.12.2022 Group Receivables current 52,008 Overdue receivables 1 – 30 days 9,838 Overdue receivables 31 – 90 days 3,015 Overdue receivables above 91 days 7,598 Subtotal 72,459 Provisions for doubtful re- ceivables (7,69 0) Total 64,769 With regard to uninsured receivables over- due more than 90 days, which the Group has classified as doubtful, relevant provi- sions have been made which are deemed as sufficient. Correspondingly, the amounts of maturity and past due for the financial year 2021 are presented in the following tables: Maturity of Trade Receivables’ balances at 31.12.2021 Group 01 – 30 days 23,443 31 – 90 days 37,175 91 – 180 days 4,980 180 days and over 6,670 Subtotal 72,268 Provisions for doubtful re- ceivables (7,721) Total 64,547 Page 26 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Analysis of not past due/overdue Group Trade receivables at 31.12.2021 Group Receivables current 53,323 Overdue receivables 1 – 30 days 9,492 Overdue receivables 31 – 90 days 2,639 Overdue receivables above 91 days 6,814 Subtotal 72,268 Provisions for doubtful re- ceivables (7,721) Total 64,547 Liquidity Risk Liquidity risk monitoring focuses on the management of cash inflows and outflows on a permanent basis, so that the Group has the ability to meet its cash liabilities and retain the cash reserves required for its operations. Liquidity is managed by maintaining cash and approved bank credit lines. At the date of preparation of the financial statements, unused approved bank credits were available to the Group, which are considered sufficient to handle any possible shortage of cash in the future. Short-term bank liabilities are renewed at maturity, as they are part of the approved bank credit lines. The following table presents the liabilities – disbursements according to their matu- rity dates. Group 31.12.2022 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 21,357 19,051 222 - - 40,630 Other short-term liabilities 11, 324 10,367 1,279 - - 22,970 Short-term debt 3,658 8,735 14,596 - - 26,989 Liabilities from leasing (short-term portion) 86 383 498 - - 967 Long-term debt - - - 30,993 648 31,641 Liabilities from leasing (long-term portion) - - - 1,446 24 1,470 Other long-term liabilities - - - 174 - 174 Total 31.12.2022 36,425 38,536 16,595 32,613 672 124,841 Annual Financial Report as of 31.12.2022 Page 27 of 268 Amounts in thousand Euro, unless stated otherwise Group 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 29,665 25,484 292 - - 55,441 Other short-term liabilities 12,723 15,891 381 - - 28,995 Short-term debt 2,601 9,118 5,674 - - 17,393 Liabilities from leasing (short-term portion) 75 330 509 - - 914 Long-term debt - - - 33,610 - 33,610 Liabilities from leasing (long-term portion) - - - 1,941 120 2,061 Other long-term liabilities - - - 237 - 237 Total 31.12.2021 45,064 50,823 6,856 35,788 120 138,651 Foreign Exchange Risk The Group is exposed to foreign exchange risks arising from existing or expected cash flows in foreign currency and investments that have been made in countries outside Greece. The management uses hedge in- struments, mainly foreign currency for- ward contracts, to hedge the risks arising from changes in foreign exchange rates. Sensitivity analysis of the effect of ex- change rate changes is given in the table below. Foreign Currency 2022 2021 Change of foreign currency against Euro * Profit before tax USD GBP Other USD GBP Other +5% (333) 65 (18) (74) (32) 5 -5% 368 (72) 21 81 35 (6) Equity +5% (56) (881) (302) (218) (1.358) (222) -5% 62 974 334 241 1.500 246 Note • Profits before Taxes are converted at the average exchange rates. • Equity is converted at the exchange rate at the closing date of each fiscal year. Page 28 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Interest Rate Risk The long-term loans of the Group have been granted by Greek and foreign banks and are mainly in Euro. Their repayment time varies, depending on the loan agree- ment and they are usually linked to Euribor plus margin. The Group’s short-term loans have been granted by various banks, with Euribor interest rate plus margin as well as Libor interest rate plus margin. The Group Management monitors the evo- lution of the interest rates level and initiate actions, to the extent possible, to retain or decrease the spreads. At the same time, ef- fort is being placed on liquidity manage- ment, with a target to maintain a rational debt balance, compared with Group’s sales volume, profitability level and its in- vestment plans. It is estimated that a change in the average annual interest rate by 1% will result in a (charge) / improvement of Earnings before Tax as follows: The Group controls capital adequacy using the Net Debt to Equity ratio and the Net Debt to EBITDA ratio. The Group’s objec- tive in relation to capital management is to ensure the ability for its smooth opera- tion in the future, while providing rational returns to shareholders and benefits to other parties, as well as to maintain an adequate capital structure so as to ensure a low cost of capital. For this purpose, it systematically monitors working capital in order to maintain the normal level of ex- ternal financing. Possible interest rate change Effect on Earnings before Tax Group 2021 2022 2021 Interest rate increase 1% (610) (540) Interest rate decrease 1% 610 540 Capital Adequacy Risk Capital Adequacy Risk Group 2022 2021 Long-term debt 31,641 33,610 Long-term debt from leases 1,470 2,061 Short-term debt 26,989 17,393 Short-term debt from leases 967 914 Total debt 61,067 53,978 Minus cash & cash equivalents 39,610 63,240 Net debt 21,457 (9,262) EBITDA 48,243 110,275 NET DEBT / EBITDA 0.44 (0.08) EQUITY 267,861 252,250 NET DEBT / EQUITY 0.08 (0.04) * Concerns Total Operations Annual Financial Report as of 31.12.2022 Page 29 of 268 Amounts in thousand Euro, unless stated otherwise Income Don & Low LTD 1,460 Thrace Nonwovens & Geosynthetics Single Person SA 1,584 Thrace Polyfilms Single Person SA 371 Thrace Plastics Pack SA 906 Thrace Ipoma A.D. 286 Synthetic Holdings LTD 261 Thrace Synthetic Packaging LTD 214 Thrace Polybulk AB 267 Thrace Polybulk AS 213 Thrace Linq Inc 200 Total 5,762 SECTION 3: Significant Transactions with Related Parties The most significant transactions between the Company and its related parties, as de- fined by International Accounting Stand- ard 24, are described below. It should be noted that the reference to the particular transactions includes the fol- lowing data: a) The amount of the most significant transactions for the year 2022 b) Their unpaid balance at the end of the year (31.12.2022) c) The nature of relation between the re- lated party and the Company, as well as d) Any information concerning the trans- actions, which is necessary for the un- derstanding of the Company’s financial position, only to the extent that these transactions are material. Company’s Revenues from Related Parties The following table includes the Com- pany’s most important revenues from Re- lated parties, i.e. from company’s subsidi- aries: It should be noted that the Company does not have any bank debt liabilities, while the balance of the debt liabilities reported in its Balance Sheet refers to an intragroup loan. Page 30 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Short-term Liabilities of the Company to Related Parties The following table includes the Company’s short-term liabilities to Related parties, which essentially consist of an intra-group loan. Suppliers - Liabilities 31.12.2022 Thrace Synthetic Packaging LTD 1,023 The remuneration to the members of the Board of Directors The remuneration granted to the mem- bers of the Company’s Board of Direc- tors amounted to € 1,664 in 2022 against € 1,812 in 2021. The remuneration of the members of the Board of Directors for the Group amounted to € 4,797 in 2022 versus € 4,970 in 2021 and relate to the Boards of Directors of 20 companies and to 31 peo- ple that participate in these BoDs, and also include salaries of the executive members of the Boards, other remuneration and benefits of both the executive and the non-executive members. Bank guarantees and grants in favor of its subsidiaries Bank guarantees issued by banks on be- half of the Company against third parties (State owned companies, Suppliers, Cus- tomers) amount to € 834. The Company has granted guarantees to banks against long-term loans of its sub- sidiaries. On 31 st December 2022, the out- standing amount for which the Company had provided guarantee settled at € 43,616 and is analyzed as follows: Guarantees for Subsidiaries 2022 Thrace Nonwovens & Geosynthetics Single Person S.A. 21,443 Thrace Plastics Pack S.A. 17, 676 Thrace Polyfilms Single Person SA 4,497 Total 43,616 Statutory external auditors fees During the financial year 2022, the total fees paid to the Company’s statutory ex- ternal auditors, for audit and non-audit services, amounted to € 691 for the Group and to € 126 for the Company. There were no changes in transactions be- tween the Company and its related parties that could have had material effect on the financial position and performance of the Company during the financial year 2022. All transactions described above have tak- en place under normal market terms and contain no special or extraordinary fea- tures which in opposite case would have made compulsory the further analysis of the above per related party. Annual Financial Report as of 31.12.2022 Page 31 of 268 Amounts in thousand Euro, unless stated otherwise SECTION 4: Analytical Information according to Article 4 par. 7 and 8 of Law 3556/2007, as currently in effect The Company, according to article 4 par. 7 and 8 of L. 3556/2007 is obliged to include in the present Report, analytical informa- tion regarding a series of issues, as follows: 1. Structure of Company’s share capital The Company’s share capital on 31.12.2022 amounted to twenty eight million eight hundred sixty nine thousand, three hun- dred fifty eight Euros and thirty two cents (€28,869,358.32) and was divided into forty three million seven hundred forty one thou- sand, four hundred fifty two (43,741,452) common registered shares, with a nomi- nal value of sixty six cents (€ 0.66) each. All Company shares are common, registered, with voting rights (with the exception of any treasury shares held by the Company), and are listed on the organized Market of the Athens Stock Exchange and specifically in the Main Market under the Chemicals – Specialized Chemicals sector. The structure and the formation of the Company’s share capital are presented in detail in article 5 of the Company’s Articles of Association. The Company’s shares were listed on the Athens Exchange on 26 June 1995 and are being traded on this market up until today, without any interruption. From each share, all rights and obligations stipulated by the law and the Company’s Articles of Associa- tion emanate. The possession of each share results automatically into the full and with no reservations acceptance of the Com- pany’s Articles of Association and the deci- sions that have been made by the pertinent bodies of the Company in accordance with the law and the Articles of Association. Each share provides for one (1) voting right. 2. Limitations to the transfer of Company shares The transfer of Company shares takes place as stipulated by the Law and there are no limitations regarding such transfers in relation to its Articles of Association or other special agreements or other regula- tory provisions. 3. Significant direct or indirect shareholdings according to the definition of Law 3556/2007 With regards to significant shareholdings in the share capital and voting rights of the Company, according to the definition of provisions of articles 9 to 11 of L. 3556/2007, Mr. Konstantinos Chalioris holds, on 31/12/2022, a percentage of 43.292% of the Company’s share capital and voting rights and Mrs. Eufimia Chalioris holds, on 31/12/2022, a percentage of 20.851% of the Company’s share capital and voting rights. No other physical or legal entity owned a percentage over 5% of the share capital. The data regarding the number of shares and voting rights held by individuals with a significant shareholdings have been de- rived from the Shareholder Registry kept by the Company and from disclosures by the shareholders provided to the Compa- ny according to Law (and MAR). 4. Shares incorporating special control rights There are no Company shares that provide special control rights to owners. Page 32 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 5. Limitations on voting rights According to the Company’s Articles of As- sociation, there are no limitations on vot- ing rights. 6. Agreements of Company shareholders To the knowledge of the Company there are no shareholder agreements, which re- sult in limitations on the transfer of shares or limitations on the exercise of voting rights that emanate from its shares. 7. Rules for appointment and replacement of Board members and the amendment of the Articles of Association, which deviate from the provisions of C.L. 4548/2018 The rules stated by the Company’s Articles of Association regarding the appointment and replacement of its Board of Directors’ members and the amendment of the pro- visions of its Articles of Association, do not differ from those stipulated by C.L. 4548/2018 as it is in effect. 8. Responsibility of the Board of Directors or specific Board members for the issuance of new shares or the purchase of treasury shares. There is no special and permanent compe- tence of the Board of Directors or some of its members for the issuance of new shares or the purchase of treasury shares accord- ing to article 49 of law 4548/2018.The rel- evant power and responsibility is given to the Company’s Board of Directors by virtue of a relevant decision of the General Meet- ing of its shareholders. 9. Significant agreements made by the Company and put into effect, amended or terminated in case of a change in the Company’s control following a tender offer. There are no such agreements, which are put into effect, amended or terminated, in case of a change in the Company’s control following a tender offer. 10. Significant agreements made by the Company with Board members or the Company’s personnel There are no agreements of the Company with the members of its Board of Directors or its personnel, which provide for the pay- ment of indemnity specifically in case of resignation or termination of employment without reasonable cause, or of the termi- nation of their term or employment, due to a public offering. Annual Financial Report as of 31.12.2022 Page 33 of 268 Amounts in thousand Euro, unless stated otherwise The Extraordinary General Meeting of the Company’s shareholders on February 2, 2017 decided, inter alia, to approve the purchase of own shares through the Ath- ens Stock Exchange under the provisions of the pre-existing article 16 of Codified Law 2190/1920, which expired on 02-02- 2019. Under the aforementioned plan, and until its expiration, the Company acquired 4,324 own shares. The Extraordinary General Meeting of the Company’s shareholders on March 19, 2019 decided, inter alia, to approve the acquisi- tion of own shares through the Athens Stock Exchange in accordance with the provisions of article 49 of law 4548/2018 as currently in force, which expired on 19.03.2021. Under the above plan and un- til its completion, the Company acquired 318,364 treasury shares, with an average purchase price of 2.4373 Euros per share, which correspond to a percentage of 0.728% of the share capital. The Annual General Meeting of the Com- pany’s shareholders of May 21, 2021 decid- ed to approve a share buyback program which provided for the purchase within a period of twenty-four (24) months, i.e. no later than 21.05.2023, of a maximum of 4,341,876 common registered shares, with- in a price range from fifty cents of Euro (0.50 €) per share (minimum) to ten Euros (10.00 €) per share (maximum). During the execution of the above share buyback program and in execution-im- plementation of the above decision of the General Meeting of Shareholders, the Company proceeded, in accordance with the provisions of Regulation (EU) 596/2014 of the European Parliament and of the Council as of 16 April 2014 and of the Commission’s Delegated Regulation (EU) 2016/1052 as of 8 March 2016, with the pur- chase of a total of 428,708 common regis- tered shares carrying voting rights, based on an average price of EUR 5.89 per share, corresponding to 0.98% of the equity. The Company held on 31.12.2022 a total of 751,396 treasury shares which correspond to a percentage of 1.72% of the share capital. SECTION 5: Treasury Shares Page 34 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 1. Group Financial Results Continuing Operations The following table depicts the Group’s financial results (from continuing operations) for the year 2022 compared to the year 2021: Financial Results of Year 2022 (CONTINUING OPERATIONS) (amounts in thousand Euro) Year 2022 Year 2021 Change % Turnover 394,382 428,429 -7.9% Gross Profit 84,263 140,149 -39.9% Gross Profit Margin 21.4% 32.7% ΕΒΙΤ 27,407 83,913 -67.3% EBIT Margin 6.9% 19.6% EBITDA 48,259 103,791 -53.5% EBITDA Margin 12.2% 24.2% Adjusted EBITDA 48,850 105,799 -53.8% Adjusted EBITDA Margin 12.4% 24.7% Earnings before Taxes (EBT) 32,068 83,920 -61.8% EBT Margin 8.1% 19.6% Earnings after Taxes (EAT) 26,270 65,866 -60.1% EAT Margin 6.7% 15.4% Total EATAM 25,777 65,436 -60.6% EATAM Margin 6.5% 15.3% Earnings per Share (in euro) 0.5985 1.5093 -60.3% * Note: The alternative performance measures are presented and described analytically in the section 7 of the present Report. SECTION 6: Review of material financial figures of 2022 Annual Financial Report as of 31.12.2022 Page 35 of 268 Amounts in thousand Euro, unless stated otherwise Below, an analysis of the changes ob- served in key financial figures of the finan- cial results compared to the previous year is included. However, it should be noted that the financial figures between the two years are not directly comparable (or versus 2020), due to the special con- ditions prevailing both in the current year as well as in the previous year (Due to sales related to Covid-19 products) and therefore the pre-pandemia finan- cial figures (i.e. fiscal year 2019) are also supplementary included in total for better interpretation purposes. Turnover € 394,382 (-7.9%) Decrease in consolidated turnover by 7.9%, demonstrating a relatively controlled but also expected decrease compared to the previous year. Decrease in the volume of consolidated sales by 5.5%. In particular and in terms of sales volume, the Packag- ing sector posted a decrease by 2.2% and the Technical Fabrics sector recorded a de- crease of 5.7%, compared to the year 2021. Gross Profit €84,263 (-39.9%) Gross profit amounted to €84,263, posting a drop by 39.9% compared to the previ- ous year. However, the gross profits of the two years are not directly comparable due to the shift of product mix towards the traditional portfolio (as compared to the generation of significant sales of products related to COVID-19 in 2021), and also due to the abrupt increase of major cost items following the macroeconomic and geopo- litical developments of the past months. The gross profit margin settled at 21.4% compared to 32.7% in 2021. The decrease in margin is due to lower sales of person- al protective equipment from COVID-19 which had an increased profit margin. EBIT € 27,407 (-67. 3%) Earnings before financial and investing activities and taxes amounted to €27,407, posting a decrease of 67.3% compared to the previous year, however, the compari- son between the two years becomes ex- tremely difficult due to the shift of product mix towards the traditional portfolio (as compared to the generation of significant sales of products related to COVID-19 in 2021). It is noted that in 2019, EBIT amount- ed to € 12,102. Accordingly, the EBIT margin stood at 6.9% compared to 19.6% in 2021, while for the respective period of 2019, the EBIT margin stood at 3.7%. EBITDA € 48,259 (-53.5%) Earnings before financial and investing ac- tivities, depreciation, amortization, impair- ments and taxes amounted to €48,259, re- cording a drop by 53.5% compared to the previous year, however, the comparison between the two years becomes extreme- ly difficult due to the shift of product mix towards the traditional portfolio (as com- pared to the generation of significant sales of products related to COVID-19 in 2021). It is noted that in 2019, EBITDA amounted to € 28,745. Accordingly, the EBITDA mar- gin settled at 12.2% compared to 24.2% during the previous year, while for the re- spective period of 2019, the EBITDA margin stood at 8.8%. Page 36 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Adjusted EBITDA € 48,850 (-53.8%%) The Adjusted EBITDA margin reached 12.4% compared to 24.7% in 2021. Adjusted EBITDA does not include extraor- dinary personnel indemnities amounting to €591. During the year 2021, in the context of the restructuring of the Group’s participa- tions, expenses of € 1,973 had emerged as result of the operational reorganization of the subsidiary Don & Low LTD along with a profit of €763 from fixed asset sales (see note 3.5). This subsidiary reduced its presence in woven technical fabrics, while increasing its production capacity in non- woven technical fabrics. In addition, there was an expense of € 798 from extraordi- nary allowance to the personnel. Earnings before Taxes 32,068 (-61.8%) Earnings before taxes amounted to € 32,068 (in 2021 amounted to €83,920), of which according to the Management’s es- timates, € 5.3 million were related to the sales of personal protection and health products allocated as follows: €3.0 million was generated from the «Technical Fab- rics» Sector, while €2.3 million was gener- ated by the «Packaging» Sector. Accord- ingly, EBT margin stood at 8.1% compared to 19.6% in the previous year. Earnings before Taxes posted an in- crease of 166% compared to the pre- pandemic levels, i.e. versus 2019, where the comparison becomes more reason- able (the comparison refers to the EBT from the traditional product portfolio), demonstrating a significantly increased profitability, despite the extremely un- favorable conditions prevailing in the global market place during the 2022, and the significant increase in the cost of raw materials, energy and transpor- tation. Earnings after Taxes €26,270 (-60.1%) Earnings after taxes amounted to €26,270, posting a reduction of 60.1% compared to the previous year, noted that the total earnings after taxes, the comparable year of 2019 amounted to €4,017. Respectively, the profit margin after taxes settled at 6.7% compared to 15.4% in the previous year. Earnings after Taxes and Non Con- trolling Interests € 25,777 (-60.6%) Earnings after Taxes and Non-Controlling Interests amounted to € 25,777, posting a decrease of 60.6% compared to the previ- ous year. Respectively, the profit margin after taxes and non-controlling interests stood 6.5% in 2022 compared to 15.3% in 2021. Total Operations Due to the decision to permanently dis- continue the production of Thrace Linq INC, which was decided in order for the Group to focus on more profitable activi- ties, this particular activity is reported in the income statement and other compre- hensive income as discontinued opera- tions. For the completeness of information pro- vided, the following table presents the Group’s financial results in total (from Con- tinuing and Discontinued Operations) in 2022, in comparison with the year of 2021: Annual Financial Report as of 31.12.2022 Page 37 of 268 Amounts in thousand Euro, unless stated otherwise Financial Results of Year 2022 (CONTINUING & DISCONTINUED OPERATIONS) (amounts in thousand Euro) Year 2022 Year 2021 Change % Turnover 394,382 428,429 -7.9% Gross Profit 84,263 140,149 -39.9% Gross Profit Margin 21.4% 32.7% ΕΒΙΤ 27, 391 90,397 -69.7% EBIT Margin 6.9% 21.1% EBITDA 48,243 110,275 -56.3% EBITDA Margin 12.2% 25.7% Adjusted EBITDA 48,850 105,799 -53.8% Adjusted EBITDA Margin 12.4% 24.7% Earnings before Taxes (EBT) 32,052 90,517 -64.6% EBT Margin 8.1% 21.1% Earnings after Taxes (EAT) 26,235 72,457 -63.8% EAT Margin 6.7% 16.9% Total EATAM 25,742 72,027 -64.3% EATAM Margin 6.5% 16.8% Earnings per Share (in euro) 0.5977 1.6613 -64.0% Note: The alternative performance measures are presented and described analytically in the section 7 of the present Report. 2. Parent Company’s Financial Results The Company’s business purpose, apart from being a holding company, relates also to the provision of support services to its subsidiaries. Specifically the Company’s in- come is generated from the provision of ad- ministrative, operating and organizational support services, financial and tax services, IT and consulting services in the areas of marketing and sales, the preparation of fi- nancial feasibility studies, and the general provision of consulting services which en- sure the proper operation of subsidiaries at all levels. Specifically for the year 2022, the Turnover of the Company concerning the provision of the above services amounted to € 5,658 against € 5,668 in 2021, remaining therefore at the same levels. The Losses before Taxes, Financial and Investment Results amounted to € 648 in 2022 compared to a loss of € 839 Page 38 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise in 2021. Earnings before taxes for the year 2022 amounted to 12,775 compared to € € 14,130 in 2021, posting a decrease of 9.6%. Finally, Earnings after taxes in 2022 amount- ed to € 11,171 compared to € 14,114 in 2021, recording a decrease of 20.9%. 3. Financial Results of the Group per Business Segment The operating segments are based on the different product category, the structure of the Group’s management and the inter- nal reporting system. Using the criteria, as defined in the accounting standards and based on the different activities of the Group, the business activity of the Group is divided into two business segments, namely “Technical Fabrics” and “Packag- ing”. The information about the sectors of activity which are not reported as separate ones has been collected and presented in the category “Other”, which includes the agricultural sector as well as the activities of the Parent Company. The description and financial results of the Group’s operating segments are presented as follows: Technical Fabrics Production and trade of technical fabrics for industrial and technical use. Packaging Production and trade of packaging prod- ucts, plastic bags, plastic boxes for packag- ing of food and paints and other packag- ing materials, for agricultural use. Other It includes the Agricultural sector and the business activity of the Parent company which apart from the investing activities, also provides Administrative – Financial – IT services to its subsidiaries. During the year 2020, which was charac- terized by the spread of the coronavirus Covid 19 pandemic, the Group faced sig- nificantly increased demand for specific products in its existing product portfolio and particularly in the area of technical fabrics used in personal protection and health applications (Personal Protective Equipment). The Group, taking advantage of the technological capabilities of its modern production lines and the know-how it has developed in technical fabrics, man- aged to meet the significantly increased demand, using the existing production lines and channeling a large part of the al- ready produced volumes towards applica- tions in this sector. At the same time the Group proceeded with targeted invest- ments, such as the surgical mask produc- tion lines and the Meltblown non-woven fabric production line (as it has been al- ready announced to the investor commu- nity via the corporate announcements of 04/05/2020 and 01/10/2020). The Group also proceeded with the purchase of ma- chinery for the production of high protec- tion masks (FFP2). At the same time, there was a very high profitability at the Group level during the year 2021, where the pandemic was in full swing with repeated waves and muta- tions. The Group supported the market’s needs, either through the network of the various retail chains (e.g. super markets) or through delivery of products according to contracts signed with the local health systems. On the other hand during the year 2022, Annual Financial Report as of 31.12.2022 Page 39 of 268 Amounts in thousand Euro, unless stated otherwise a sharp reduction in demand for products related to the COVID-19 pandemic was ob- served, resulting into significantly lower sales and profitability for the Group com- pared to the previous year. The first quar- ter of 2022 was an exception to the above, as due to the spread of “Omicron” variant but mainly due to the execution of the last part of a contractual agreement signed with a local health system, the Group post- ed strong profitability which was however much lower than the level of the corre- sponding period of 2021. More specifically, Earnings before Taxes from Continuing Operations at the Group level for 2022 amounted to €32.1 million, of which, according to Management’s estimates, €5.3 million were related to COVID-19 products (compared to €51.8 million in the year 2021). More specifically, €3.0 million were allocated in the Sector of “Technical Fabrics” (versus €49.9 million in 2021), and €2.3 million were allocated in the Sector of “Packaging” (versus €1.9 mil- lion in 2021). From the year 2023 onwards, having en- tered into the post-pandemic era, personal protection and health products will not be presented separately, following the same pre-pandemic disclosure practice. Instead, they will comprise another product cat- egory within the context of the Group’s normal business activity. It should be noted that part of the specific investments that were implemented (such as the Meltblown non-woven technical fabrics production line), can be used to produce products serving other sectors and applications. The following table summarizes the course of financial results from continuing opera- tions of the individual sectors in which the Group activated during the year 2022: Page 40 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise GROUP 394,382 84,263 48,259 Turnover 12M 2022 EBITDA GROSS PROFIT EBITDA 274,488 56,478 29,688 12M 2022 GROSS PROFIT 132,672 12M 2022 EBITDA 27,239 18,892 GROSS PROFIT 5,658 12M 2022 EBITDA -339 282 GROSS PROFIT PACKAGING OTHER TECHNICAL TEXTILES Turnover Turnover Turnover FINANCIAL RESULTS PER SEGMENT (Continuing Operations) Sector Technical Fabrics Packaging Other Intra-Seg- ment Elimi- nations Group 12M 2022 12M 2021 % Ch. 12M 2022 12M 2021 % Ch. 12M 2022 12M 2021 12M 2022 12M 2021 12M 2022 12M 2021 Turnover 274,488 318,878 -13.9% 132,672 120,007 10.6% 5,658 5,668 -18,436 -16,124 394,382 428,429 Gross Profit 56,478 113, 245 -50.1% 27,239 26,512 2.7% 282 24 264 368 84,263 140,149 Gross Profit Margin 20.6% 35.5% 20.5% 22.1% 5.0% 0.4% - - 21.4% 32.7% Total EBITDA 29,688 86,148 -65.5% 18,892 18,265 3.4% -339 -512 19 -110 48,259 103,791 EBITDA Margin 10.8% 27.0% 14.2% 15.2% -6.0% -9.0% - - 12.2% 24.2% Annual Financial Report as of 31.12.2022 Page 41 of 268 Amounts in thousand Euro, unless stated otherwise 4. Group Consolidated Statement of Financial Position The following table summarizes the basic financial figures of the Group’s financial posi- tion as of 31.12.2022: (amounts in thousand Euro) 31/12/2022 31/12/2021 Change % Tangible Assets 169,218 153,848 10.0% Rights-of-use assets 2,521 3,051 -17.4% Investment Property 113 113 0.0% Intangible Assets 10,357 10,539 -1.7% Investments in Joint Ventures 19,921 18,012 10.6% Net benefit from funded defined benefit plans 7,169 - Other Long-term Receivables 132 5,001 -97.4% Deferred Tax Assets 357 380 - 6.1% Total Fixed Assets 209,788 190,944 9.9% Inventories 76,415 71,835 6.4% Income Tax Prepaid 1,984 274 624.1% Trade Receivables 64,769 64,547 0.3% Other Receivables 11,945 14,359 -16.8% Fixed Assets Held for Sale 284 - Cash & Cash Equivalents 39,610 63,240 -37.4% Total Current Assets 195,007 214,255 -9.0% TOTAL ASSETS 404,795 405,199 -0.1% TOTAL EQUITY 267,861 252,250 6.2% Long-term Debt 31,641 33,610 -5.9% Liabilities from Leases 1,470 2,061 -28.7% Provisions for Employee Benefits 1,385 3,499 -60.4% Other Long-term Liabilities 9,834 6,979 40.9% Total Long-term Liabilities 44,330 46,149 -3.9% Short-term Debt 26,989 17,393 55.2% Liabilities from Leases 967 914 5.8% Suppliers 40,630 55,441 -26.7% Other Short-term Liabilities 24,018 33,052 -27.3% Total Short-term Liabilities 92,604 106,800 -13.3% Total Liabilities 136,934 152,949 -10.5% TOTAL EQUITY & LIABILITIES 404,795 405,199 -0.1% Page 42 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Fixed Assets € 209,788 (+9.9%) The increase is mainly a result of the imple- mentation of new investments (asset ad- ditions) during the year, which are greater compared to depreciation for the year. Current Assets € 195,007 (-9.0%) The decrease in current assets by 9.0% is mainly due to the relative decrease in cash reserves, despite the increase in invento- ries, compared to the previous year. . The reduction in cash balances is mainly the result of cash outflows for the implemen- tation of the year’s extensive investment plan (outflows of approximately €38 mil- lion), which was largely financed with own funds. > Inventory: € 76,415 (+6.4%) The increase in Inventory is mainly due to the relatively higher purchase prices of pri- mary raw materials. The Average Inventory Turnover Days however stood at 87 days compared to 81 days in 2021. The Average Trade Receivables Turnover Days stood at 60 days compared to 52 days in 2021. Equity € 267,861 (+6.2%) Equity amounted to € 267,861, posting an increase of 6.2% compared to 31.12.2021. Provisions for Employee Benefits (Net Assets) € 5,784 This asset is mainly due to the valuations of the assets using the updated discount rates. The largest share in the actuarial sur- plus of the Group comes from Don & Low LTD and the details of its plan are analyzed below: 31.12.2022 31.12.2021 Present Value of Liabilities (101,252) (159,705) Present Value of Fixed Assets 108,355 157,682 Net Asset Recognized in Balance Sheet 7,103 (2,023) The asset allocation of the plan is as fol- lows: Asset allocation 31.12.2022 31.12.2021 Mutual Funds (Stock Market) 13,418 15,471 Mutual Funds (Bond Market) 63,480 79,020 Mutual Funds (Diversified Growth Funds) 22,438 52,838 Other 9,020 10,353 Total 108,355 157,682 The assets of the plan are measured at fair value and consist of Mutual Funds of Baillie Gifford, Legal & General Investment Management as well as Ninety One plc. Annual Financial Report as of 31.12.2022 Page 43 of 268 Amounts in thousand Euro, unless stated otherwise Net Debt € 21,457 Net debt settled at €21,457, while on 31.12.2021 the Company had net cash of €(9,262). The Net Debt / Equity ratio stood at 0.08x on 31.12.2022 versus (0.04x) on 31.12.2021. The Group’s Net Debt / EBIT- DA ratio for the period under considera- tion settled at 0.44x. It is noted that on 31.12.2021 the above ratio stood at (0.08x). Short-term Liabilities €92,604 (-13.3%) Short-term liabilities amounted to €92,604, compared to €106,800 on 31.12.2021, post- ing a decrease of 13.3%. > Suppliers: € 40,630 (-26.7%) The decrease in Suppliers was mainly due to the gradually lower purchase prices of primary and secondary raw materials. The average Suppliers Turnover Ratio set- tled at 57 days versus 54 days in 2021. Capital Structure Ratios 2022 2021 Explanation Total Liabilities / Equity 0.5 0.6 Relation between Liabilities and Equity Net Debt / Equity 0.08 -0.04 Relation between Debt and Equity Net Debt/EBITDA 0.44 -0.08 Relation between Debt and Earnings before Interest, Taxes, Depreciation and Amortization Fixed Assets / Total Assets 0.5 0.5 Asset Allocation between Current and Non-current Assets Current Assets / Total Assets 0.5 0.5 Equity / Net Fixed Assets 1,6 1,6 The level of nancing of the Tangible Assets from the Equity Leverage Ratios 2022 2021 Explanation Equity / Total Assets 0.7 0.6 Relation between Equity and Total Assets Interest Coverage 14.4 49,4 Interest Income –Interest Expense Coverage from Operating Earnings (ΕΒΙΤ) Liquidity Ratios 2022 2021 Explanation Current Ratio 2.1 2.0 Total Current Assets / Total Short-term Liabilities Acid Test Ratio 1.3 1.3 (Total Current Assets - Inventories) / Total Short-term Liabilities 5. Financial Ratios Following the above analysis, some basic Financial Ratios of the Group based on the Total Operations are presented: Page 44 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Prot Margins (%) 2022 2021 Explanation Gross Prot 21,4% 32.7% Gross Prot/Total Turnover EBITDA 12,2% 25.7% EBITDA / Total Turnover Adjusted EBITDA 12,4% 24.7% Adjusted EBITDA / Total Turnover Earnings before Taxes 8,1% 21.1% Earnings before Taxes/ Total Turnover Earnings after Taxes and Minorities 6,5% 16.8% Earnings after Taxes and Minorities / Total Turnover Receivables and Payables (in days) total 2022 2021 Explanation Average Receivable Days 60 52 [(Receivables 2022 + Receivables 2021)/2] / Turnover 2021365 days Average Inventory Days 87 81 [(Inventories 2022+ Inventories 2021)/2] / Cost of Sales 2021365 days Average Suppliers Days 57 54 [(Suppliers 2022 + Suppliers 2021)/2] / Cost of Sales 2021365 days Consolidated Cash Flows In terms of consolidated cash flows, the Group recorded cash and cash equivalents of €39,610 on 31/12/2022 compared to €63,240 on 31/12/2021. CASH FLOWS 31/12/2022 31/12/2021 EBITDA 48,243 110,275 Non cash and non-operating movements -2,083 -3,104 Change in working capital -26,379 -429 Cash Flows from Operating Activities 19,781 106,742 Interest & income taxes & other financial expenses paid -6,758 -19,663 Total inflows/outflows from operating activities 13,023 87,079 Investing activities -36,502 -24,999 Financing activities 1,003 -41,195 Net increase/(decrease) in cash and cash equivalents -22,476 20,885 Cash and cash equivalents at beginning of period 63,240 40,824 Effect from changes in foreign exchange rates on cash reserves -1,154 1,531 Cash and cash equivalents at end of period 39,610 63,240 Annual Financial Report as of 31.12.2022 Page 45 of 268 Amounts in thousand Euro, unless stated otherwise In the context of its decision making con- cerning the financial, operating and stra- tegic planning as well as the evaluation of its performance, the Group utilizes Al- ternative Performance Measures (APM). These indicators mainly serve the better understanding of the financial and operat- ing results of the Group, its financial posi- tion as well as its cash flow statement. The Alternative Performance Measures (APM) should be always taken into account in line with the financial statements which have been prepared according to the Interna- tional Financial Reporting Standards and in no case the APM replace the above. Alternative Performance Measures In the analysis of the developments and the performance of the Group, ratios such as the EBIT and the EBITDA are utilized. ΕΒΙΤ (The indicator of earnings before financial and investing activities as well as taxes) The EBIT serves the better analysis of the Group’s operating results and is calculated as follows: Turnover minus Cost of Sales plus other operating income minus the to- tal operating expenses, before the finan- cial and investing activities and taxes. The EBIT margin (%) is calculated by dividing the EBIT by the total turnover EBITDA (The indicator of operating earn- ings before financial and investing activ- ities as well as depreciation, amortiza- tion, impairment and taxes) The EBITDA serves the better analysis of the Group’s operating results and is cal- culated as follows: Turnover minus Cost of Sales plus other operating income minus the total operating expenses before the depreciation of tangible assets, the amor- tization of grants and the impairments, as well as before the financial and investing activities and taxes. The EBITDA margin (%) is calculated by dividing the EBITDA by the turnover. Adjusted EBITDA (The adjusted indicator of operating earnings before financial and investing activities as well as depre- ciation, amortization, impairment and taxes). The Adjusted EBITDA is the EBITDA less any restructuring, acquisition, merger, and other non-recurring expenses that may be realized within the period / year, as well as any non-recurring gains (e.g. gain from the sale of property, plant and equipment). Net Debt It is calculated as the sum of long-term loans plus long-term lease liabilities plus short-term loans plus short-term lease li- abilities minus the balance of cash & cash equivalents. Total Debt / Equity It is calculated as the ratio of Net Debt (see above) to Total Equity. Net Debt / EBITDA It is calculated as the ratio of Net Debt (see above) to EBITDA. SECTION 7: Definition and Reconciliation of Alternative Performance Measures (APM) Page 46 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise SECTION 8: Sustainable Development SECTION 9: Prospects and Outlook of the Group for the Financial Year 2023 It is mentioned to Section 1: «Significant events that took place during the financial year 2022» of this Annual Report by the Bord of Directors, subparagraph III. «Prospects of the Group». SECTION 10: Events after the Financial Position Date The following paragraphs present the significant events that took place after the end of the financial year 2022 and up to the date of preparation of this Report: Announcement of Regulated Information in accordance with Law 3556/2007 The Group’s objective via sustainable development is to create value for both the society and the environment. In this framework the Group’s priorities comprise the generation of sustainable products in the context of the circular economy, the increase in the utilization of recycled raw materials, the investment in renewable energy sources and the materialization of actions that will contribute to the further reduction of the environmental footprint. The Group implements a specific policy and strategy regarding sustainable devel- opment and is committed to demonstrate respect for the human factor, society and the environment, in order to remain a reli- able social partner. The approach towards sustainable development is based on the following six pillars: (i) Support circular economy, (ii) Deal with climate change, (iii) Empower human capital, (iv) Contribute to society, (v) Operating with integrity, (vi) Ensure business continuity. The main risks along with the risk management policy, as well as the performance and commit- ments under the UN Sustainable Develop- ment Objectives are presented in detail in the corresponding annual reports of the Sustainable Development and the Non- Financial Information. The Company following the relevant noti- fication to the Company from March 10 th , 2023, announced the following amend- ments / developments on March 9, 2023: 1. Mr. Konstantinos Chalioris, shareholder and Chairman of the Board of Directors of the Company, transferred from his indi- vidual share, to two “Joint Investor Shares” (KEM), the first one jointly created with his son Alexandros Chalioris and the sec- ond one jointly created with his son Stav- ros Chalioris (himself being the first ben- eficiary in both “Joint Investor Shares”), a total of 18,000,983 common registered shares with voting rights, i.e. a percentage of 41.153% of a total of 43,741,452 common registered shares with voting rights of the Company. Annual Financial Report as of 31.12.2022 Page 47 of 268 Amounts in thousand Euro, unless stated otherwise However, following the above, there was absolutely no change in the number and percentage of shares and voting rights controlled by Mr. Konstantinos Chalioris, who holds a total of 18,936,558 common registered shares with voting rights of the Company (and the same number of vot- ing rights) a percentage of 43.292%. More specifically, he holds 18,000,983 common registered shares through the aforemen- tioned “Joint Investor Share” and 935,575 common registered shares with voting rights (percentage 2.139%) through his Personal Investment Account. 2. Mr. Stavros Chalioris, son of Konstan- tinos, due to his participation in the aforementioned “Joint Investor Share” (which he holds jointly with Konstantinos Chalioris) holds 9,000,491 common regis- tered shares of the Company (percentage 20.577%), while he already holds 212,071 common registered shares with voting rights (percentage 0.484%) in his Personal Investment Account and, 3. Mr. Alexandros Chalioris, son of Kon- stantinos, due to his participation in the aforementioned “Joint Investor Share” (which he holds jointly with Konstantinos Chalioris) holds 9,000,492 common regis- tered shares of the Company (percentage 20.577%), while he already holds 212,071 common registered shares with voting rights (percentage of 0.484%) in his Per- sonal Investment Account. Proposed Dividend for the Year 2022 The Board of Directors of the Company, with its meeting of 24.4.2023, unani- mously decided to propose to the An- nual Ordinary General Meeting of share- holders the approval of the distribution (payment) of the profits of the fiscal year that ended on 31.12.2022 and in par- ticular to propose the distribution (pay- ment) to the shareholders of a dividend of a total amount of 11,300,000.00 Euros (gross amount), i.e. 0.2583361887 Euros per share (gross amount) from the prof- its of the fiscal year 2022 (01.01.2022- 31.12.2022), but also from profits of pre- vious years. Given that the Company, pursuant to the relevant decision of the Board of Directors dated 22.11.2022, has already distributed to the shareholders the in- terim dividend for the fiscal year 2022 of a total amount of 3,000,000.00 Euros (gross amount), i.e. 0.0697835797 Euros per share (gross amount), the Board of Directors will subsequently propose to the Annual Ordinary General Meeting of shareholders the distribution of the remaining amount of the dividend, and in particular the amount of 8,300,000.00 Euros (gross amount), i.e. 0.1897513599 Euros per share (gross amount), which gross amount per share will be increased by the amount corresponding to the treasury shares that the Company will hold on the dividend cut-off date (and which treasury shares are not entitled to the payment of the dividend, by the pro- visions of article 50 of Law 4548/2018, as applicable.) The Annual Ordinary General Meeting of shareholders will take the final decision concerning the approval of the above proposal. Page 48 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise SECTION 11: Corporate Governance Statement The current Corporate Governance State- ment is compiled according to the provi- sions of a. 152 of L. 4548/2018, and a.18 of L.4706/2020 Hellenic Corporate Govern- ance Code, which was adopted and ap- plied by the Company, and the decisions of the Hellenic Capital Market Commission issued by authorization of law 4706/2020, constitutes special and separate section of the Annual Management Report of the Board of Directors and contains the entire information required by the law. Specifically, the structure of the present Corporate Governance Statement (here- inafter called as “Statement” or “CGS”) is as follows: I. Compliance Statement with the Cor- porate Governance Code II. Deviations from the Corporate Gov- ernance Code and explanation of such III. Corporate Governance Practices ap- plied by the Company apart from those stated by regulatory frame- work. IV. Description of the internal control and risk management system as regards to the process for preparing financial statements V. Information regarding the Company’s audit process (information stipu- lated by items (c), (d), (f), (h) and (i) of paragraph 1 of article 10 of Directive 2004/25/EC) VI. Board of Directors and Committees VII. General Meeting and Shareholders’ Rights VIII. Sustainable Development Report I. Compliance Statement with Hellenic Corporate Governance Code The Company applies the principles of corporate governance, as they are defined in the current legislative and regulatory framework in general. In full compliance with the provisions of article 17 of law 4706/2020 and article 4 of Decision No. 2/905/03.03.2021 of the Board of Directors of the Hellenic Capital Market Commis- sion, the Company proceeded based on the relevant decision of the Board of Direc- tors dated 16.07.2021 to the adoption and implementation of the Hellenic Corpo- rate Governance Code (hereinafter called as the “Code”), which was drafted by the Hellenic Corporate Governance Council in June 2021 and is available at: http://www. esed.org.gr/code-listed, to which (Code) the Company states that it complies with- out any deviations. The Company, by tak- ing and applying the appropriate, neces- sary and proper decisions and measures, proceeded to its full, effective, substantial and timely compliance and harmonization with the provisions of Law 4706/2020 (Gov- ernment Gazette A136/17.07.2020), which laws substantially reformed and updated the regulatory framework for corporate governance, by upgrading the required organizational structures and corporate governance processes, increasing the There are no other events after the Balance Sheet date that have a significant impact on the financial statements of the Group. Annual Financial Report as of 31.12.2022 Page 49 of 268 Amounts in thousand Euro, unless stated otherwise principle of transparency and strengthen- ing the confidence of shareholders and the investors community in general, in or- der for societe anonyms whose shares are listed on the regulated market to meet the increased demands of the modern capital markets. ΙΙ. Deviations from the Corporate Governance Code The Company, as mentioned above, taking into account in each case the particulari- ties of its organizational structure and op- eration, decided to adopt and implement the Hellenic Code of Corporate Govern- ance. As the Code is applied on the basis of the principle “Comply or explain”, which requires companies that comply with the Code to either comply with all of its provi- sions, or to explain, with explanation, the reasons for their non-compliance with its specific special practices, while the expla- nation of the reasons for non-compliance should not be limited to a simple reference to the practice with which the Company does not comply, but should be justified in a specific, definite, comprehensible, sub- stantial and convincing manner. The com- pany fully complies with the provisions, special practices and principles defined by the Hellenic Code of Corporate Govern- ance without any deviations. ΙΙΙ. Corporate Governance Practices applied by the Company, apart from those stated by regulatory framewo rk. As regards to corporate governance is- sues, the Company applies faithfully and without any deviations the provisions of laws 4548/2018, 4706/2020 and 4449/2017 as currently in force, as well as the Hel- lenic Corporate Governance Code, the provisions and regulations of which it has as much as possible, incorporated in its Articles of Association, its Internal Opera- tion Rulebook, in the Rules of Procedure of the Committees, in the Manual of Internal Control and in all the individual proce- dures and policies it has established and implements. At the present time there are no applica- ble practices in addition to the provisions of the law. Moreover, the Company applies the above provisions and the Hellenic Cor- porate Governance Code to the rules of procedure of its committees, in other reg- ulations, codes, procedures and policies. Finally, it is noted that the Company is fully harmonized with the provisions of the law 4706/2020 on corporate governance. IV. Description of the internal control and risk management system of the Company and the Group as regards to the procedure of preparing financial statements and assessment results The Internal Control System consists of the functions established by the Group, i.e. both the parent Company and all other companies included in the consolidation, in order to ensure the protection of its assets, to identify and address the most important risks it faces or may face in the future, to ensure that the financial data on the basis of which the financial statements are prepared (separate and consolidated) are correct, true and accurate, and also to ensure that the laws and the applicable regulatory framework are applied, as well as the principles the procedures and the policies adopted by the Management. For the development of this System, the Management of the Group, has reviewed and implemented various Policies, Proce- Page 50 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise dures and Rules, which have been includ- ed in its Internal Operation Rulebook. Its implementation covers the Manage- ment of Potential Risks in relation to the process of drafting Financial Statements (separate and consolidated) in the follow- ing three (3) areas: 1) Entity level controls applied by the Company and each of the other companies included in the consoli- dation at a parent level, 2) Financial reporting process controls implemented by both the Company and all other companies included in the consolidation during the process of drafting financial state- ments, separate and consolidated, 3) IT controls embedded into the in- formation systems applied by the Company as well as all other com- panies included in the IT systems framework. Specifically: 1) Entity level controls Role and Responsibilities of the Board of Di- rectors: The Board of Directors decides on any action that concerns management of the Company, management of its assets and in general on anything that relates to the achievement of its objective and the promotion of its business activities. Additionally, the Board of Directors: • Determines the main responsibilities and the objective of each Division, so that the CEO can then assign to each Director the responsibility of allocat- ing the above to his/her subordinates. • Proposes to the General Meeting of Shareholders to appoint the Compa- ny’s External Auditors, in line with the proposition of the Audit Committee, and to define their remuneration. • Is responsible to prepare a report with detailed transactions of the Company with its related parties, which is dis- closed to the regulatory authorities. • Is responsible for the preparation of the Remuneration Report according with article 112 of Law 4548/2018. Preparation of Budget and Monitoring its Im- plementation at the Board of Directors level: The Annual Budget, which is also a guide for the Group’s financial development, is prepared on an annual basis (consolidated and also per segment/subsidiary) and is presented to the Company’s Board of Di- rectors for approval. The reports with the actual financial results are issued periodi- cally, accompanied by the condensed re- ports including the explanations of devia- tions and are discussed at the Board level. Internal Operation Rules: The Company’s In- ternal Operation Rulebook is also the man- ual for its Internal Control System, which amongst others includes the following: • Description and guidance on manag- ing the different operations • Control points in stand-alone proce- dures • Delegation of responsibilities • Authorizations and limits of expense approvals • Ιnstructions for Controls on the main sections of the Internal Control Sys- tem. The adequacy of the Internal Control Sys- tem is monitored on a systematic basis by the Audit Committee through regular meetings that take place with the Inter- nal Audit and the Risk and Compliance Management Department in the context of monitoring the Annual Audit Program for the Company and the Group, which Annual Financial Report as of 31.12.2022 Page 51 of 268 Amounts in thousand Euro, unless stated otherwise is prepared based on the relevant risk as- sessment. 2) Financial reporting process controls In order to ensure that the financial data, based on which the financial statements of both the Company and the Group, are correct, true and accurate, the Company applies specific controls that include the following: • The postings from the Company’s ac- counting department are performed based on a specific process that re- quires all receipts/invoices to be origi- nal and carry the respective original signed approvals. • The Company maintains a Fixed Asset Register in the Fixed Assets sub-sys- tem and applies depreciation rules ac- cording to the International Financial Reporting Standards and Tax Rules in effect. • The Accounting Department carries out periodic reconciliation of balances of payroll, customers, suppliers’ ac- counts, VAT, etc. • The Group prepares the consolidated budget on an annual basis. Each sub- sidiary prepares the corporate budget in alignment with the objectives of the Group. These budgets shall be sub- mitted to the Board of Directors of the Company for approval. • Each month a detailed financial re- sults presentation is prepared per segment/subsidiary and on a consoli- dated Group level. This presentation is submitted to the Company’s Manage- ment. • Companies that constitute the Group follow common accounting standards and procedures in line with the Inter- national Financial Reporting Stand- ards (IFRS). • At the end of each period, the ac- counting standards of the parent and subsidiary companies prepare their financial statements according to the International Financial Reporting Standards (IFRS). • The Statutory departments of the Group collect all the necessary data from subsidiaries and plants, consoli- dation entries are applied, and the financial statements are prepared ac- cording to the International Financial Reporting Standards (IFRS). • There are specific financial statements closing processes, which include deadlines for submission, responsibili- ties allocation and update on the re- quired actions before submission. • The financial statements are audited by external Certified Auditors whose work is monitored by the Audit Com- mittee, which then proposes their approval to the Company’s Board of Directors. • The departments of Internal Audit and Risk & Compliance periodically per- form audits to confirm the accuracy, completeness, and correctness of fi- nancial statements. 3) IT controls The Group IT Department is responsible for supporting the Group’s and the Com- pany’s IT applications. This Department has established robust IT controls frame- work, which ensures the support of the short-term and also the long-term objec- tives of the Company and the Group. All applicable procedures are described Page 52 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise in detail by the Company’s Internal Op- eration Rulebook. It is noted that all the companies of the Group follow the Group Policies Manual and fully comply with its basic principles, rules, and procedures, in order to ensure the reliable and adequate implementation of the control of informa- tion systems of all companies within the Group. The most important of these pro- cedures are listed below: • Βack Up Process (in Hardware): Ac- cording to the Operation Rulebook, the IT Service develops the appropri- ate infrastructure and ensures that such is compatible and backed by an alternative application/system to have a back-up in cases of damage in the Company’s and the Group’s central IT system. • Safekeeping (Confidential) of the Company’s and the Group’s Electronic Files: The IT Department applies the appropriate systems that ensure the “non” leakage of the Company’s and the Group’s IT data. • Files – Software of the Central System: Particular emphasis is given to the ac- cess of the room where the Central System is hosted, in order to allow such access only by IT authorized em- ployees. The access is controlled ad- equately and at regular basis. • Files –Software of the Peripheral Sys- tems: Access to files and system soft- ware is granted to specific individuals with the use of personal passwords. • Processes for Security of the Central and Peripheral Systems: In the context of protecting the Group’s IT system, and taking advantage of the latest technology available, the IT Depart- ment applies advanced security prac- tices, such as antivirus security soft- ware, e-mail security, firewalls etc. The Audit Committee of the Company monitors the adequacy of the Company’s Internal Control System on a continuous basis, given that: • It has approved the Company’s Inter- nal Operation Rulebook which has incorporated the appropriate Policies, Processes and Rules that comprise the Internal Control System applied by the Company, including Group’s Policies Manual, which concerns the common policies and procedures applied by the subsidiaries. • The members of the Company’s Audit Committee as well as the Members of the Board of Directors are recipients of the reports prepared by the Compa- ny’s Internal Audit Unit and the Regu- latory Compliance & Risk Management Department of the Company. In these reports, the Company and the Group’s operations are assessed as well as the adequacy of Internal Control Systems applied. Assessment of the Internal Control System According to article 14 par. 3 case j of Law 4706/2020 and nr. 1/891/ 30.9.2020 deci- sion of the Board of Directors of the Hellen- ic Capital Market Commission, as amend- ed by nr. 2/917/17.6.2021 decision of the Board of Directors of the Hellenic Capital Market Commission as in force, a periodic assessment of the Internal Control System of the Company took place, in particular as to the adequacy and effectiveness of the financial information, on an individual and consolidated basis, in terms of risk man- agement and regulatory compliance, in accordance with recognized compliance and internal control standards, as well as Annual Financial Report as of 31.12.2022 Page 53 of 268 Amounts in thousand Euro, unless stated otherwise the implementation of the provisions on corporate governance of Law 4706/2020. This assessment was carried out by an in- dependent auditor who meets the pro- visions of Law 4706/2020 and the above- mentioned decision of the Hellenic Capital Market Commission’s Board of Directors, in accordance with the relevant policy / pro- cedure, for the periodic assessment of the Company’s Internal Control System. In spe- cific, the registered in Public Registry of ar- ticle 14 of Law 4449/2017 auditing compa- ny PRICEWATERHOUSECOOPERS Auditing Company SA (AM SOEL 113) was appointed pursuant to the decision of the Board of Di- rectors of the Company of 11.03.2022, fol- lowing the relevant proposal of the Audit Committee of the Company of 08.03.2022, together with the Board of Directors’ deci- sion dated 16.07.2021, which determined the significant subsidiaries included in the scope of the assessment (namely, Thrace Nonwovens & Geosynthetics S.A, Thrace Plastics Pack S.A. and Don & Low Ltd). The scope of the assessment , which was decided by the Board of Directors of the Company, included all the require- ments set in chapter ii.b of the decision 1/891/30.09.2020 of the Hellenic Capital Market Commission’s Board of Directors. More specifically, the scope of the assess- ment included the Control Environment, the Risk Management framework, the Con- trol Activities, the Information and Com- munication framework and the Internal Controls System Monitoring. The Company’s Internal Control System was assessed by the Certified Auditor-Ac- countant Mr. Evangelos Venizelos (SOEL Reg.Nr.39891), partner of PRICEWATER- HOUSECOOPERS Auditing Company SA, with a reference date of December 31, 2022. According to the “Internal Control System Adequacy and Effectiveness Assessment Report” dated 20.03.2023 of the aforemen- tioned Auditing Company, which was sub- mitted to the Company after the comple- tion of the assessment of the Company’s Internal Control System, based on the work carried out, as well as the evidence ob- tained, with a reference date of December 31, 2022, nothing that could be considered a material weakness of the Company’s In- ternal Control System and its significant subsidiaries has come to the auditing company attention, in accordance with the Regulatory Framework (article 14 par. 3 par. j’ and par. 4 of Law 4706/2020, Deci- sion of the Board of Directors of the Capital Market Commission nr. 1/891/30.9.2020, as amended by the decision of the Board of Directors of the Capital Market Commis- sion nr. 2/917/17.6.2021 as in force). Therefore, due to the absence of any mate- rial findings, the provisions ii.c of the De- cision of the Capital Market Commission’s Board of Directors nr. 1/891/30.9.2020, as amended by the decision nr. 2/917/17.6.2021 as in force, and of par. Α of the letter of the LISTED COMPANIES DIVISION, Listed Com- panies Supervision Department of the Capital Market Commission with protocol number 425/21.02.2022 with title: “High- lights, clarifications and recommendations regarding the actions of listed companies in view of the publication of the Annual Financial Reports and the implementation of Law 4706/2020 “Corporate governance of joint-stock companies, modern capital market, incorporation into Greek legisla- tion of Directive (EU) 2017/828 of European Parliament and of the Council, measures to implement Regulation (EU) 2017/1131 and other provisions” do not apply. Those regulations and guidelines require that the Corporate Governance Statement must in- clude a response by the Company’s Man- agement for the significant deficiencies, Page 54 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise including a brief reference to the action plans and the relevant timetable in place to resolve them, as well as a brief reference to the actions taken by the Company dur- ing the reporting year to resolve the defi- ciencies in question, based on the afore- mentioned action plan. Further to the above, and following the Group’s annual strategy review/revision performed, the assessment of the main business risks faced by the Company with- in the industry as well as the adequacy of the internal control systems in place which were performed by the Board of Di- rectors of the Company at the end of the fiscal year 2022 (01.01.2022-31.12.2022), the Board of Directors concludes on the following: • the Company’s strategy and the busi- ness plan are implemented properly and according to the planning of the individual Divisions, in order for the Company to continue to stand out for the promotion of innovative products that meet the constantly evolving and most demanding needs of its custom- ers, creating value for its people, con- tributing to the local community and building relationships of trust, • The main business and financial risk areas of the Company as well as the issues that may have a significant im- pact on the financial statements of the Company and Group, have been reported in detail in the relevant Sec- tion of the Board of Directors Report, • The internal audit is carried out in accordance with the current legisla- tive and regulatory framework and the principles of the Code of Ethics and covers the main activities of the Company, in order to assess in time any deficiencies, errors, weaknesses and possible fraud that may result in a misappropriation and/or loss of as- sets and verify the credibility of the entity’s financial figures. The Auditing Company, which is in charge of carrying out the mandatory audit of the annual and semi-annual financial state- ments (stand-alone and consolidated), as well as the issuance of the tax certificate, provided to the Company the following non-audit services during the closing year 2022 (01.01.2022-31.12.2022): (a) Review of the procedures and inter- nal controls to assess the compliance of the company against the art.14 of L.4706/2020 and the HCMC decision 1/891/30.9.2020. (b) Evaluation of the Internal Control Sys- tem in compliance with the provisions set out in L.4706/2020 and the Hellenic Market Capital Commission decision 1/891/30.9.2020 as per COSO compo- nent. (c) Report on agreed upon procedures re- garding “Certificate of Conformity” of “Thrace NonWovens & Geosynthetics S.A.” to “EUROBANK SA” and “ALPHA BANK” on 31.12.2021. (d) Report on agreed upon procedures regarding the “Certificate of Conform- ity of “Thrace Plastics Pack SA” to “EU- ROBANK”, “PIRAEUS BANK”, “NATIONAL BANK OF GREECE” and “ALPHA BANK” on 31.12.2020. (e) Report on agreed upon procedures re- garding the “Certificate of Conformity of “Thrace Polyfilms SA” to “NATIONAL BANK OF GREECE” on 31.12.2021. (f) Execution of agreed upon procedures regarding the Procedure for Inclusion of Beneficiaries in Categories of Reduced Charges of Special Fee for Reduction Annual Financial Report as of 31.12.2022 Page 55 of 268 Amounts in thousand Euro, unless stated otherwise of Gas Pollutant Emissions (ΕΤΜΕΑΡ), in the context of the decision of the Dep- uty Minister of Environment and Energy “Government Gazette with Number B’ 3152-30.07.2020” for the period from 01- 01 to 31-12-2019. (g) Technical support on local tax and ac- counting areas of Thrace Polybulk A.S. However, the fact that the Auditing Com- pany provided the above (non-audit) ser- vices had no effect, direct or indirect, on the independence, objectivity, integrity, reliability and effectiveness of the statu- tory audit, as the provision of the specific services took place from a different team of the said Auditing Company and from other persons, who have no involvement and participation in the process of con- ducting the statutory audit of the finan- cial statements (annual and semi-annual, stand-alone and consolidated) where ap- propriate, or were performed under ad- equate safeguards and rules and by nature these services cannot jeopardize their independence, which is additionally en- sured by the strict internal procedures and protocols applied by the Auditing Com- pany itself. V. Information regarding the Company’s control framework (Information of items (c), (d), (f), (h) and (i) of paragraph 1 of article 10 of Directive 2004/25/EC of the European Parliament and the Council, of 21 st April 2004.) Significant direct or indirect sharehold- ings (including indirect shareholdings through pyramid structures or cross- participation) according to the defini- tion of article 85 of Directive 2001/34/ ΕC As regards to significant shareholdings in the share capital and voting rights of the Company, according to the definition of article 85 of Directive 2001/34/EC and the provisions of articles 9 up to 11 of Law 3556/2007, Mr. Konstantinos Chalioris on 31-12-2022 owned 43.29% of the Com- pany’s share capital and voting rights and Mrs. Efimia Chaliori owned 20.85% of the Company’s share capital and voting rights on 31-12-2022. No other individual or legal entity has a shareholding of more than 5.00% of the Company’s share capital and voting rights. Data regarding the number of shares and voting rights of individu- als owning significant shareholdings, has been derived by the Shareholders’ registry kept by the Company and the notifications made to the Company by the shareholders according to Law (and MAR). Owners of any type of titles that pro- vide special control rights and descrip- tion of such rights There are no securities, including the Com- pany’s shares that provide owners with special control rights. Any kind of limitations on voting rights, such as limitations on voting rights of owners that hold a specific percent- age or number of votes, the exercise deadlines for voting rights, or systems through which, with the cooperation of the company, financial entitlements that derive from the titles are distin- guished from the ownership of the ti- tles The Company’s Articles of Association pro- vides no limitations to voting rights deriv- ing from its shares. Rules governing the appointment and replacement of the Board members as well as the amendments of the Articles of Association Page 56 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise The rules included in the Company’s Ar- ticles of Association, both as regards to the appointment and the replacement of Board Members and as regards to its amendments, do not differ from those stated by the L. 4548/2018 as it is in effect. The authorities of Board members, spe- cifically as regards to the ability to issue or buyback shares There is no special and permanent power of the Board of Directors or some of its members for the issuance of new shares or the purchase of treasury shares according to article 49 of law 4548/2018. The relevant power and responsibility are given to the Company’s Board of Directors by virtue of a relevant decision of the Shareholders General Meeting. In accordance with this framework, the Annual Ordinary General Meeting of the shareholders of 21 May 2021 decided by majority the approval of Company’s shares buy-back program in accordance with the provisions of article 49 of L. 4548/2018, as in force, and in particular approved the purchase within a period of twenty-four (24) months from the date of adoption of this resolution, namely no later than 21.05.2023, of a maximum of 4.341.876 common, registered shares, with a pur- chase price range from fifty eurocents (€ 0,50) per share (minimum price) to ten Euro (€ 10,00) per share (maximum price). V. Board of Directors and Committees 1) Composition of the Board of Directors According to article 7, paragraph 1 of its Articles of Association, as in force after its amendment by the Extraordinary General Meeting of Shareholders of 19 March 2019, for the purpose of harmonization with provisions of Law 4548/2018, the Company is managed by a Board of Directors (here- after called as “the Board of Directors”) which consists of seven to fifteen (7-15) members. The members of the Board of Directors are elected by the General Meet- ing of shareholders, may be shareholders or not and have a five-year term, which is extended until the expiration of the term within which the next Ordinary General Meeting must convene and until a relevant decision is taken, but in any case, should not exceed a six-year term. • In case of resignation, death or in any other way loss of the capacity of a Board member, the remaining mem- bers may either elect members of such in replacement of the above or may continue the management and repre- sentation of the Company without any replacement, with the condition that the number of the remaining mem- bers is not less than half of the num- ber of members during the time such events occurred. The Board members are not allowed to be less than three (3). • Without prejudice to the provisions of Corporate Governance law 4706/2020 in case of electing a replacement, the decision for the election is subject to the disclosure requirements of article 13 of L. 4548/2018, as currently in ef- fect, and is announced by the Board of Directors at the next General Meeting, which can even replace those elected, even if the relevant issue had not been included in the General Meeting agen- da. • The actions of the elected temporary replacement are valid even if the Gen- eral Meeting does not validate his/her election or even if it has elected or not Annual Financial Report as of 31.12.2022 Page 57 of 268 Amounts in thousand Euro, unless stated otherwise another permanent member of the Board. • The term of the new Board member is terminated when and whenever the term of the replaced member would have been terminated. The Extraordinary General Meeting of Shareholders of 11 February 2021 elected a new 11-member Board of Directors for a 5-year term, i.e. until 11/02/2026, extended until the date of the next Ordinary Gen- eral Meeting and until a relevant decision is being made, consisting of the following members: 1. Konstantinos Chalioris of Stavros, 2. Theodoros Kitsos of Konstantinos, 3. Dimitrios Malamos of Petros, 4. Vassilios Zairopoulos of Stylianos, 5. Christos Shiatis of Panagiotis, 6. Christos-Alexis Komninos of Konstan- tinos, 7. Petros Fronistas of Christos, 8. Georgios Samothrakis of Panagiotis, 9. Myrto Papathanou of Christos, 10. Spyridoula Maltezou of Andreas and 11. Nikitas Glykas of Ioannis. Furthermore, during the Annual Ordinary General Meeting, the election of Mr. Atha- nasios Dimiou of Georgios, as the new non-executive member of the Board of Di- rectors in the position -and for the remain- ing of the term (i.e. until 11.02.2026)- of the resigned non-executive member Mr. Pet- ros Fronistas of Christos was announced, in accordance with the provisions of article 82 par. 1 of law 4548/2018, as in force. The abovementioned election took place during the meeting of the Board of Direc- tors of the Company on July 28, 2021 and following the relevant nomination of the Remuneration and Nominations Commit- tee of the Company, which took place in accordance with the applicable Suitability Policy and the procedures applied by the Company. Following the above, the Board of Directors of the Company was reconsti- tuted into a body for the remainder of its term, namely until February 11, 2026. The minutes of the Board of Directors meet- ing held on 28.07.2021with subject the re- placement of the resigned non-executive member Mr. Petros Fronistas of Christos, was registered in the General Commercial Register (G.E.M.I.) on 03.08.2021 with Reg- istration Code 2596045, issued with proto- col number 2415279/03.08.2021 following the relevant announcement of the Minis- try of Development and Investment (Gen- eral Secretariat of Commerce & Consumer Protection, General Directorate of Market, Directorate of Companies, Department of Supervision of Listed SAs & Sports SA). It should be underlined that that there are not any changes regarding the independ- ent non-executive members of the Compa- ny’s Board of Directors, who were appoint- ed in the Extraordinary General Meeting of Shareholders on February 11, 2021. The non-executive members of the Board of Directors are: 1) Theodoros Kitsos of Kon- stantinos, 2) Georgios Samothrakis of Pa- nagiotis, 3) Myrto Papathanou of Christos, 4) Spyridoula Maltezou of Andreas and 5) Nikitas Glykas of Ioannis, who all meet in their entirety the criteria of independence set by the existing legal provisions (article 9, par.1 and 2 of Law 4706/2020), namely: (a) They do not hold directly or indirectly a percentage of voting rights greater than 0.5% of the Company’s share capi- tal; and (b) They are free from any dependent rela- Page 58 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise tionship with the Company or persons affiliated with it and do not maintain any financial, business, family, or other relationship, which may affect their de- cisions and their independent, objec- tive and fair judgment. The Company has adopted and imple- ments the Procedure for Ensuring Inde- pendence and Disclosure of Dependent Relationships of the Independent Non- Executive Members of the Board of Direc- tors in accordance with the current legal framework. The purpose of this Procedure is to ensure that the Independent Non-Ex- ecutive Members of the Board of Directors meet throughout their term the criteria of independence and any dependent re- lationships of themselves or persons who have close relations with these persons are on time notified to the Company. The Board of Directors take all the neces- sary measures to ensure compliance with the above Independence Criteria. The Board of Directors with the support of the Remuneration and Nominations Commit- tee and the Department of Compliance & Risk Management reviews the fulfilment of the Independence Criteria of the Inde- pendent Non-Executive Members at least annually per financial year and before the publication of the annual Financial Report, which includes the relevant verification. In the event that during the audit of the ful- filment of the independence criteria or in case at any time it is ascertained that the independence criteria have ceased to ex- ist in the person of any Independent Non- Executive Member or this Member makes a relevant statement to the Company, the Board of Directors takes the appropriate steps to replace him/her without delay, following a nomination by the Remunera- tion and Nominations Committee. Each Independent Non-Executive Board of Directors Member submits to the Remu- neration and Nominations Committee an- nually, an affirmation statement regarding the fulfilment of the criteria of independ- ence by him/her, without however the Company being satisfied exclusively with the submission of the declaration accord- ing to the above. The Board of Directors of the Company, after a thorough examination with the as- sistance of the Remuneration and Nomi- nations Committee for the fulfilment by the independent non-executive members of the independence conditions defined by article 9 par. 1 and 2, declares and con- firms that both during the fiscal year 2022 (01.01.2022-31.12.2022) and on the approv- al date of the present, the independent non-executive members, and in particular Messrs. Theodoros Kitsos, Georgios Samo- thrakis, Myrto Papathanou, Spyridoula Maltezou and Nikitas Glykas, fully meet the criteria of independence set by the current legislative and regulatory frame- work in general. The following table presents the mem- bers of the eleven-member (11-mem- ber) Board of Directors in effect: Annual Financial Report as of 31.12.2022 Page 59 of 268 Amounts in thousand Euro, unless stated otherwise Member Position in the Board Date of election/ appointment Expiry of tenure Konstantinos Chalioris Chairman, Executive Member 11.02.2021 11.02.2026 Theodoros Kitsos Vice Chairman, Independent non-executive member 11.02.2021 11.02.2026 Dimitrios Malamos Chief Executive Officer, Executive member 11.02.2021 11.02.2026 Vassilios Zairopoulos Non-executive member 11.02.2021 11.02.2026 Christos Shiatis Non-executive member 11.02.2021 11.02.2026 Christos-Alexis Komninos Non-executive member 11.02.2021 11.02.2026 Athanasios Dimiou Non-executive member 28.07.2021 11.02.2026 Georgios Samothrakis Independent non-executive member 11.02.2021 11.02.2026 Myrto Papathanou Independent non-executive member 11.02.2021 11.02.2026 Spyridoula Maltezou Independent non-executive member 11.02.2021 11.02.2026 Nikitas Glykas Independent non-executive member 11.02.2021 11.02.2026 From the above members, all individuals have Greek nationality besides Mr. Christos Shiatis and Mr. Christos-Alexis Komninos who have Cypriot nationality. Particularly and in accordance with the above, the Board of Directors of the Company consists of: • 2/11 (18.18%) executive members • 4/11 (36.36%) non-executive members • 5/11 (45.45%) independent, non-executive members • 2/11 (18.18%) women (fulfilling however the requirements of Article 3, of L.4706/2020, for adequate representation per gender in the Board of Directors). Page 60 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise It is pointed out that the composition of the new Board of Directors is fully harmo- nized with the requirements, criteria and regulations of the new law 4706/2020 on corporate governance. Furthermore, the composition of the new Board of Directors of the Company fully covers the proper and effective exercise of its duties and responsibilities, reflects the size, organization and type of operation of the Company, achieves adequate staff- ing of both existing and new Committees instituted to strengthen the supervisory role of the Board of Directors, and is dis- tinguished for the diversity of knowledge, skills, qualifications and experience, ele- ments which can contribute decisively to the promotion and achievement of busi- ness goals, plans and the implementation of the Company’s business strategy. Description of the suitability and diver- sity policy with regard to the adminis- trative bodies of the Company Given the fact that the Board of Directors is the highest administrative body of the Company, which is responsible for the safeguarding of the broader corporate in- terests, the policy making and the growth strategy of the Company as well as for the strengthening of the long-term economic value of the Company, it is very essential for the particular body to possess, with re- gard to its composition, a diversity of skills, views and abilities which at the same time respond to the need to effectively attain corporate goals. The Company has a Suitability Policy for the members of the Board of Directors, which is approved by its Board of Direc- tors and includes at least the provision of diversity criteria for the selection of the members of the Board of Directors and the Senior Executives. The Suitability Policy, which was approved by the Annual Ordinary General Meeting of Shareholders on May 25, 2022, is posted on the Company’s website www.thracegroup. com, while its scope includes the members of the Board of Directors (executive, non- executive, independent non-executive) as well as the members of the Board Commit- tees. The Suitability Policy aims to support the Company’s interests, ensuring quality staffing, efficient operation, and fulfillment of the role of the BoD, as a collective body. I. Individual Suitability Specifically, individual suitability is as- sessed based on the following criteria: Annual Financial Report as of 31.12.2022 Page 61 of 268 Amounts in thousand Euro, unless stated otherwise Guarantees of Ethics and Reputation — Good Reputation (Reliability and Integrity, Consistency, Personal Weight) Conflicts of Interest — Financial interests / incentives — Personal or professional relationships with members of the Company — Personal or professional relationships with related external stakeholders (e.g. liaison with important suppliers, consultants, etc.) Availability of sufficient time — Systematic participation in BoDs and Committees — Limitation on the number of positions held as members of the Board of listed com- panies, including Thrace Group companies, with a limit of four (4) outside the Group — Flexibility and adaptability to attending special meetings — Preparation and in-depth analysis of BoD meeting’s topics — Preparation of propositions and writing presentations on BoD topics Furthermore, the individual eligibility criteria include the following: Knowledge and competencies / skills — Teamwork and Collaboration: The ability to collaborate harmoniously, complemen- tary, actively communicating in order to contribute to the Group's goals achievement — Entrepreneurial thinking: Perception of business risks and growth opportunities that could create a competitive advantage for the Group — Strategic thinking: Active participation in the formulation of the Group's strategy and monitoring of its implementation as well as the possibility of evaluation and active participation in the approval of strategic plans — S pecialized know-how in specific areas (e.g. Auditing or Accounting for the Audit Co- mittee members, environmental issues, venture capital, and generally pre-selected areas that need to be reviewed on a regular basis) — Contribution to the sustainability improvement — Adoption of the corporate culture and Company’s values — Understanding the legal framework and corporate governance issues — Ability to recognize and focus on the important factors that lead to the Company’s sustainability and prosperity — Innovation: The ability to think and see things from a new and innovative perspec- tive, identify and inform about new technologies and market trends oriented to the Group’s benefit — Flexibility and adaptability: The ability to adapt and work effectively in a changing environment Impartiality of judgment — Objectivity, Courage, belief and vigor, Individual judgement (avoiding “groupthink”). Page 62 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise II. Collective Suitability Regarding the collective suitability the composition of the BoD, must ensure the effective management and balanced de- cision-making, with members who have complementary abilities and skills and re- main in full compliance with the Compa- ny’s strategies. There are specific prerequi- sites, which are diversity, multi-collectivity (representation from different fields of ac- tivity and accumulation of a wide range of knowledge and skills), adequate represen- tation by gender as stipulated by respec- tive legislation, representation without ex- clusion due to any kind of discrimination (e.g. gender, race, religion or belief, etc.). At the same time, all necessary actions are taken in order BoD members to be able to actively participate in strategic planning, identify and manage risks and understand Corporate Governance issues and related legislation, financial reports and technol- ogy activities. From the time of the Company’s establish- ment and until today, the entire members of the Board of Directors fulfill all neces- sary conditions and have set the foun- dations in order to be granted with the capacity of the member of the Board of Directors. At the same time, they are dis- tinguished for their high professional skills, educational level, knowledge, capabilities, experiences, and their organizational and administrative abilities, and at the same time they possess high standards of ethics and integrity of character. The members of the board of Directors cover a broad range in terms of age ef- fectively combining their dynamics and experience (indicatively between 43 and 79 years old). The members, in their ma- jority, are holders of graduate and post- graduate degrees of domestic as well as of international universities, have worked in high ranked positions of major companies domestically and abroad, meaning com- panies activating in a variety of business sectors. They have also Senior Executives large organizations and as a result they possess significant international experi- ence in the corporate as well as the broader social fields and are in position to actively contribute to the growth prospects of the Group in the geographical areas in which it activates. They finally fulfill the require- ments of suitability as well as the criteria with regard to the Group’s effective staff- ing and operation. The current composition of the Board of Directors aims undoubtedly at the best possible facilitation of corporate goals, as it increases the pool of skills, experience, and vision that the Company has for its highest-ranking personnel, and conse- quently its competitiveness, productivity and innovation. The current 11-member Board of Directors of the Company consists of 9 men and 2 women and was elected in the framework of the decision of the Company’s Manage- ment for immediate, substantial and effec- tive compliance and harmonization with the provisions of the new law 4706/2020 on corporate governance and in particu- lar its provisions which define suitability, diversity and, above all, adequate repre- sentation by gender on the Board of Direc- tors. The presence of two women among the members of the Board of Directors covers the statutory percentage (25%) of adequate representation by gender (with rounding to the previous whole number, in case of a fraction, as defined in Article 3, of Law 4706/20). Annual Financial Report as of 31.12.2022 Page 63 of 268 Amounts in thousand Euro, unless stated otherwise The Board of Directors Members Gender / Age Education Nationality Independence 11 Members 9 Men 2 Women Specialization 9 Greek 2 Other nationality 45.45% Independent non-executive members 43 - 79 years old The Company, in the context of the adop- tion of the corporate governance best practices provided by the new CCG, en- sures the application of the diversity crite- ria included in the current and approved by the annual Ordinary General Meeting of shareholders on May 22 nd , 2022, Suitability Policy not only among the members of its Board of Directors, but also to its senior executives. In particular, the Human Resources De- partment, which aims to attract and retain the appropriate human resources and con- tinuously increase its efficiency and effec- tiveness through the implementation of modern procedures, policies and practices of evaluation, recruitment, training and re- muneration, ensures faithful and strict ap- plication of the diversity criteria to senior management, in order to ensure: (a) the avoidance of outdated and anachro- nistic social stereotypes in the process of assessing the specific qualifications and suitability of senior management in general; and (b) the integration of innovative approach- es and ideas into the selection process of such executives. The fundamental criteria of the intended diversity regarding the selection and eval- uation of senior executives are as follows: • adequate gender representation of at least 25%, to the extent and timing that this criterion is applicable; and • the prohibition of exclusion of a can- didate for senior management, due to different gender, race, color, ethnic or social origin, religion or belief, prop- erty, birth, disability, age or sexual orientation. The main criteria for selecting the top ex- ecutives employed in the Company are the adequacy of knowledge and skills, namely the satisfactory background of theoretical education and training, the appropriate professional experience, the guarantees of ethics and reputation, the integrity and objectivity, and the general skills of the candidate as well as the knowledge of the business model, the culture and the more specific principles of the Company, in order to form a diverse team of senior executives with a sufficient degree of differentiation, which will be able to take full advantage of market opportunities and effectively man- age the risks the Company the Company must cope with, or may cope with during the development of its activities. The condensed CVs of the Company’s Board members are as follows: Page 64 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Konstantinos Chalioris, Chairman of the Board of Directors, Executive Member He possesses a professional experience of 40 years and has gained very good knowl- edge of the industry and the international market. Since 2009, he holds the position of the Chairman of the Board of Directors. Following the decision of the Board of Di- rectors as of October 14, 2020, Mr. Chalioris remained Chairman of the Board of Direc- tors and also assumed the position of Chief Entrepreneur. The specific position, which was added to the organizational chart of the Group aims to ensure the continuation of the profitable growth of the Group in areas that fall both in the existing activities of the Group and in new beneficial activi- ties in the future. The creation of this po- sition and its assumption by Mr. Chalioris, who has a significant career and valuable experience in “entrepreneurship”, will en- sure the future development of the Group. Theodoros Kitsos, Vice-Chairman of Board of Directors, Independent Non-Executive Board Member He holds a BSc degree from the Economics Department of the National and Kapodis- trian University of Athens and an MBA de- gree in finance from the Wagner College of USA. He started his career in Unilever Hellas and also in other companies of the Group located abroad where he worked in United Arab Emirates, Saudi Arabia and Holland. He returned to Greece in 2005 where he worked as General Manager of Human Re- sources and Organization at PPC (DEI) SA. In a later stage he held the position of Dep- uty General Manager of Human Resources at Eurobank Group. By the end of the year 2007, he returned to Unilever Group based in London undertaking the duties with regard to the global organizational plan- ning of the Company, whereas in year 2010 he moved to Unilever Russia, Ukraine and Belarus based in Moscow where he held the position of Vice President responsible for issues of human resources and organi- zation, implementing successfully at the same time the acquisitions and mergers of three companies active in the production and trading of consumer products. Since the summer of 2015, he worked at the headquarters of Unilever in London hav- ing assumed a plethora of duties in the ar- eas of Finance, Law, Technology and Sup- port Services on global level, up until 2020, when he completed his collaboration. Dimitrios Malamos, Chief Executive Officer, Executive Member He graduated from the Athens College in 1993. He studied in Great Britain from 1993 to 1998. He holds a BA (Hons) in Business and Financial Economics from Stafford- shire University a postgraduate ΜΒΑ de- gree from University of Kent in Canterbury. From 2000 to 2007 he worked in Pricewa- terhouseCoopers in the area of Manage- ment Consulting servicing companies of the private and public sector where he gained significant experience in the fields of budgeting and reporting, financial anal- ysis and internal restructuring. During the period 2007-2009 he worked in National Bank of Greece in the Accounting & Fi- nance division, and he returned to Price- waterhouseCoopers in the area of Man- agement Consulting. From June 2010 to March 2020, he worked at Thrace Group as a Group CFO. From March 2020, Mr. Mala- mos took over the duties of Deputy Group CEO, while from October of the same year he holds the position of CEO of the Com- pany and the Group (Group CEO). Annual Financial Report as of 31.12.2022 Page 65 of 268 Amounts in thousand Euro, unless stated otherwise Vasileios Zairopoulos, Non-Executive Member He began his career in 1983 in the apparel and footwear sector. He assumed the po- sition of Director of Design and Collection for a leading company in the kids apparel market. In a later stage he also became responsible for the planning and coordi- nation of production. He then moved to the business development department of a large retail store chain where he also undertook the broader supervision of the retail business activity, including the store design, the order and supply process, the management of the sales team, the mar- keting and promotion, as well as the budg- eting. He was also engaged in the areas of strategic consulting, negotiations, mar- keting management and financial plan- ning, before moving to establish its own consulting firm. During the past 10 years, Mr. Zairopoulos activates as consultant, through his firm, in the areas of strategic consulting, startups, business planning, in- vestment evaluation, international negoti- ations, pricing and communication. Apart from his professional activities in Greece, Mr. Zairopoulos has also collaborated with two American multinational corporations, namely Columbia Sportswear and New Balance. He received IB Diploma from UWC Atlantic College in 1979 and BSc in Man- agement from Bath University in 1983. Christos Shiatis, Non-Executive Member An Associate Member of the Fellows of Chartered Accountants of England and Wales. He is a Certified Public Account- ant by the Cyprus Institute of Chartered Accountants and Member of the Hel- lenic Association of Certified Accountants (SOEL). He began his career in 1981 at the auditing firm Kostouris – Michailidis (Grant Thornton) in Athens. In 1993 he became Managing Partner of the Greek company and in 1997 he assumed the position of Territory Senior Partner at the company that resulted from the merger of Kostouris- Michailidis and Coopers & Lybrand. In 1998 he was elected Chairman and Chief Execu- tive Officer of the company Pricewater- houseCoopers in Greece. At the same time he was exercising his Management re- sponsibilities at the above auditing firms, Mr. Shiatis provided advisory services also to senior management of large firms. Athanasios Dimiou, Non-Executive Member He graduated from the School of Chemi- cal Engineering of the Aristotle University of Thessaloniki in 1986. From 1989 to 1996 he worked for the companies PLASTIKA MAKEDONIAS SA and AG.PETZETAKIS ini- tially in the field of Quality Control and the development of new products and then his duties were expanded where he was trans- ferred to the position of Technical Director and Technical Services Director. From 1996 to 1998 he assumed the position of Plant Manager in the shoe manufacturer trad- ing company MOURIADIS SA, a company listed on the Athens Exchange, Greece, and since 1998 he worked as Plant Man- ager of THRAPLAST SA which mainly pro- duces flexible packaging products made of polyethylene (current Thrace Polyfilms). In 2000 he started in PLASTIKA THRAKIS SA as a Production Manager at the group’s facilities in Xanthi and in 2004 he took over the duties of Plant Manager in the facilities of Magiko complex in Xanthi, a position he held until 2010. Since then, he has been the Managing Director THRACE NONOWO- VENS & GEOSYNTHETICS SA. At the same time, he remains an active member of the Technical Chamber of Greece (TCG), and in Page 66 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise the past he was a member of the Hellenic Company of Business Administration and the Institute of Production Management. Christos-Alexis Komninos, Non-Executive Member He was born in Constantinople. In 1971 he graduated from the Polytechnic University of Constantinople (I.T.U.) with a degree in Chemical Engineering (MSc). In 1972 he moved to Greece and was recruited to Coca-Cola TRIA EPSILON, where until 1987 he held several positions. From 1987 to 1990 he served as Chief Executive Officer of Coca-Cola Bottlers Ireland (a subsidiary of TRIA EPSILON). In 1990 he returned to Greece and in 1995 he was appointed Chief Executive Officer, a position he held until 2000. From 2000 to 2004 he was Chairman and Managing Director of PAPASTRATOS SA. After the acquisition of Papastratos by PHILIPMORRIS S.A. he participated vol- untarily at the ATHENS 2004 Organizing Committee of the Olympic Games as the Head of the Organization of the Opening and Closing Ceremonies of the 28th Olym- piad. From 2005 to February 2010, he held the position of Executive Vice President of SHELMAN S.A. and ELMAR S.A. From December 2011 until February 2014 Mr. Komninos held the position of Chairman of the Board of Directors of Hellenic Petro- leum SA (ELPE). Mr. Komninos also in the past served as Vice President of the Board of Directors and member of the Executive Committee of the Association of Enter- prises and Industries (SEV), member of the Board of Directors of FINANSBANK (Turkey) and of ANADOLU EFES (Turkey), and he is also member of the Board of Directors of Elval Chalkor SA of the VIOHALCO Group. He speaks English, French, Italian and Turkish Georgios Samothrakis, Independent Non-Executive Board Member He is a graduate of the Athens University of Economics and Business (ASOEE) and for- mer Certified Public Accountant, special- izes in tax issues and tax strategy of Greek and multinational companies, while has been extensively involved in regular and extraordinary audits of commercial and industrial enterprises. He began his career in 1965 at the National Bank of Greece and in 1972 moved to Coopers & Lybrand (now PwC) to set up the Tax Services depart- ment where he remained head until 2006. For a number of years, he was also Chair- man of the Board of PwC. He is a member of the Supervisory Board of the Body of Certified Public Accountants (SOEL) where he is actively involved in the formation of the audit - accounting institutional frame- work in Greece. He has been President of the Fédération des Experts Comptables Méditerranéens, President of the Hellenic Institute of Economic Management (IOD), Member of Committees of the Ministry of Economy and Finance for the implementa- tion of IFRS in Greece, the simplification of the Greek Code of Accounting Books and Records as well as the integration of the new 8 th Directive, and also Member of the Chamber of Commerce, while during the last years he has also been the Chairman of the Audit Committee of the Company. Myrto Papathanou, Independent Non-Executive Member She studied Economics at the City Univer- sity of London and holds a Master’s De- gree in Economics from the Imperial Col- lege Management School in London and an MBA from the INSEAD Business School. She began her financial career in London, Annual Financial Report as of 31.12.2022 Page 67 of 268 Amounts in thousand Euro, unless stated otherwise where she worked as a Fixed Income Strat- egist for Bank of America / Merrill Lynch and as a credit risk analyst for Dresdner Kleinwort Wasserstein. She was a member of the Board of Direc- tors of Think Silicon SA, while today she is member of the Board of Directors of Ferry- hopper SA, Advantis Medical Imaging BV, Better Origin Ltd and Gommyr Power Net- works Ltd, which are active in the fields of transport, sports technology, health tech- nologies and renewable energy sources. Since 2007 she has been working as a busi- ness development manager at CPI and since 2011 she has been developing her own business activity in technology and as a consultant and investor in other com- panies. She is the founder of Metavallon VC, while she has been the Chief Financial Officer and Head of Corporate Develop- ment at the EFA Group, which is active in Aerospace & Defense and other high-tech sectors. She is the first investor from Greece to emerge as Kauffman Fellow (Silicon Valley), a network that selects the best investors in the world. She is on Fortune Greece’s list of the 40 entrepreneurs who innovated and excelled for 2020. She received the Leader of the Year award from Linkage Greece in 2016 in recognition of its outstanding leadership ability and contribution to busi- ness and society development. She has also worked in the non-profit space, co-founding Ethelon and seeking funding for the microcredit organization Action Finance Initiative, while as board member of the organization Women-on- top she has developed Microfinance pro- grams in Kenya and Nicaragua for wom- en’s empowerment. Spyridoula Maltezou, Independent Non-Executive Member She holds a degree in Chemical Engineer- ing from the Aristotle University of Thes- saloniki and a PhD in Environmental Eco- nomics from the University of the Aegean. Her doctoral dissertation was entitled “Re- cycling - Environmental Value”. She started her professional career in 1999 in the Region of Achaia as head of the de- partment and special advisor on environ- mental issues. Then, in 2003, she worked at the Ministry of Environment as a Special Environmental Engineer, while she was a founding member of the “Unit for Alterna- tive Management of Packaging Waste and Other Products”, acquiring a specialty in Environmental Economics. During this pe- riod, she was the representative of Greece in EU Legislative Committees on waste management and recycling and member of European and International Committees on the environment and sustainable de- velopment. From 2010 to 2013 she worked as an Environmental Inspector at the Min- istry of Infrastructure, Transport and Net- works, where she supervised major public road projects throughout Greece in terms of implementing the environmental legal framework. She has been a consultant on environmental issues and on the creation of management systems in many compa- nies in Greece, while since 2016 she has been working as Senior Chief Inspector of the International Organization for the Cer- tification of Registrars and Industrial Ser- vices of Lloyd’s. She has extensive experience in the con- trol and compliance inspection of ISO standards and compliance with existing legislation (Senior Auditor) and in-depth knowledge of environmental policies and regulations as well as legislation and Page 68 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise regulations related to environmental pro- tection. Since February 2019, she has been working as Head of Audit of the Regulation for monitoring, reporting and verification of carbon dioxide emissions (MRV Regula- tion) and IMO DCS Technical Code in the international organization Lloyd’s, and was member of the Professional Accredi- tation Program of the International Water Resources Management Alliance (AWP) of Scotland. Her professional dedication and adapt- ability have provided a continuous path in the design, management, inspection and improvement of Environmental and Waste Management systems. She also deals with the Inspection of Quality, Environment and Health & Safety at work, according to the ISO certification procedures as it has been trained as a Head of Control according to the standards of the International Water Resources Management Alliance (AWP). Nikitas Glykas, Independent Non-Executive Member He holds a BSc degree in Physics from the University of Athens and postgraduate degrees from the Lancaster University in 1990 and Harvard University in 2006. Un- til the year 2005 he held the position of Peripheral Manager of Eastern Europe for MAILLIS SA. Since 2006 and until 2009, as Member of the Board of Directors and member of the senior management of SHELMAN SA, being responsible for both the Company and its affiliates, he promot- ed the restructuring and the broader rede- sign of the Group’s operating procedure achieving especially positive results amid recession conditions in the timber sector. Since the year 2009 he has held various positions in HTC Group, whereas from Oc- tober 2015, and assuming higher duties, he holds the position of the Head for the region of Middle East and Africa based in Dubai with direct reporting to the Group’s headquarters in Taiwan. He is considered a senior executive with international expe- rience, deep knowledge of the European markets as well as of the markets of Middle East and Africa, who manages effectively different cultures and holds records in the achievement of sales and the penetration of new and existing geographic markets. Since 2019, he has been serving a Vice Chairman of XR SPACE Co LTD based in Taiwan. The condensed CVs of the top executives of the Company are as follows: Dimitris Fragkou, Group Chief Financial Officer (CFO) & Secretary of the Board of Directors of the Company He studied Business Administration at the Athens University of Economics and Busi- ness (AUEB), from which he graduated in 2002. From 2006 to 2008, he studied Ac- counting and Finance (specializing in Fi- nance), obtaining a Master’s Degree from the Athens University of Economics and Business (AUEB). He is also a Certified Pub- lic Accountant, as he became a member in 2012 of the Association of Chartered Cer- tified Accountants - ACCA. He started his professional career, for a short period of time from shipping banking, while at the end of 2003 he joined PwC. At PwC, he worked in the Consulting Division, gain- ing significant experience in the areas of budgeting, financial information, financial analysis, process optimization, transition to new integrated information systems, and treasury operations. In 2014 he joined the Department of Business Process Out- sourcing, gaining experience in account- ing procedures, tax compliance and finan- cial reporting to the Authorities (statutory Annual Financial Report as of 31.12.2022 Page 69 of 268 Amounts in thousand Euro, unless stated otherwise reporting). He has worked for a number of listed and private companies in the con- struction, energy, shipping and industrial sectors. From March 2020, he joined Thra- ce Group as Chief Financial Officer. Christina Diamanti, Group Chief People Officer Christina joined Thrace Group in Septem- ber 2022 as Group Chief People Officer, with a background in the FMCG sector and the food industry. In the past 22 years, Christina held various human resources roles in supply chain, manufacturing and selling organizations. She has held assign- ments in Greece, in the Middle East and the regional headquarters in Switzerland where she got a rounded experience of different business areas and managed many organizations effectiveness, leader- ship development, change and restruc- turing projects across multiple European markets. In her last role, she led Human Resources for the Distributor Markets or- ganization across the Nordics, Central and Eastern Europe and Iberia. She has studied Business Administration and holds a Mas- ter’s Degree from the Athens University of Economics and Business (AUEB). Ioannis Sideris, Chief Sustainability Officer He is a graduate of the Athens University of Economics and Business with a spe- cialization in Business Administration and holds a Master’s Degree in Information Systems Development from the London School of Economics. He has significant experience in the fields of sustainable development, environmental protection, and integrated solid waste management in the context of the circular economy, as he was the CEO of the Hellenic Recycling Organization (EOAN) and for many years responsible for environmental issues (lo- cal Deputy Mayor of Environment in the Municipality of Agia Paraskevi). In the past, he has served as consultant specializing in Information Systems Management at PricewaterhouseCoopers. Lambros Apostolopoulos, Head of Internal Audit Unit He is graduate of Varvakeio High School, graduate of the Department of Business Administration and Management of the Athens University of Economics and Busi- ness (BSc) and holds a Master’s Degree in Finance & Business Economics from the University of Portsmouth (MSc). He has worked for many years in large corporate groups in Greece and abroad. He has 15 years of active experience in internal au- dit and is a certified Internal Auditor (CIA) since 2013. Michail Psarros, Risk and Compliance Manager He is a graduate of the Department of Mathematics of the University of Patras, holds a Master’s Degree in Finance from the University of Leicester. He also holds a professional certification as Compli- ance Officer from TUV Austria. He started his professional career, for a short period of time as an Internal Auditor in a com- pany in the financial sector, while from May 2000 he worked in the Internal Audit Department of the Group of Companies of K. Filippou. Then in November 2005 he moved to the group Lafarge Cement / AGET IRAKLIS, where he worked in the Internal Audit Department until Decem- ber 2010, when he joined Thrace Plastics Group as Internal Controller. During the 21 years of his employment in the Internal Page 70 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Audit Departments in the above industrial groups, he has gained extensive experi- ence in the fields of Internal Audit, internal control systems, risk & compliance man- agement. From February 2022, Mr. Psarros took over the duties as Risk and Compli- ance Manager. The following table shows the number of shares held by each member of the Board of Directors and seniors execu- tives of the Company on 31/112/2022: BoD members Number of shares held directly Percentage of shareholding Konstantinos Chalioris 18,936,558 43.3% Theodoros Kitsos - 0% Christos-Alexis Komninos 25,000 0.1% Dimitris Malamos 520 0.0% Nikitas Glikas - 0% Athanasios Dimiou - 0% Vasileios Zairopoulos 160,023 0.4% Spyridoula Maltezou - 0% Myrto Papathanou - 0% Georgios Samothrakis 27,000 0.1% Christos Shiatis 60,000 0.1% Senior Management & Members of Audit Committee Number of shares held directly Percentage of participation Dimitris Fragou - 0% Christina Diamanti - 0% Ioannis Sideris 40,000 0.1% Lambros Apostolopoulos - 0% Michail Psarros - 0% Konstantinos Kotsililnis, Member of the Audit Committee - 0% Konstantinos Gianniris, Member of the Audit Committee 15,000 0.0% In the following table, the professional commitments of the Board members are presented: Annual Financial Report as of 31.12.2022 Page 71 of 268 Amounts in thousand Euro, unless stated otherwise BoD Member Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Konstantinos Chalioris Civil non-Profit Company Stavros Chalioris 50% Vice-Chairman of BoD Xanthi Photovoltaic Park S.A. 50% Chairman & Chief Executive Officer EYTERPI S.A. - Chairman & Chief Executive Officer ERATO S.A. 50% Chairman & Chief Executive Officer THALEIA S.A. 50% Chairman & Chief Executive Officer KLEIO S.A. - Chairman & Chief Executive Officer EVNIKI MCPY 99% Legal Representative AVDIRA MCPY 99% Chairman of BoD THRACE YAGHTING SMPC 66% Partner & Administrator THRACE LABEA SMPC 50% Partner THRACE NONWOVENS & GEOSYNTHETICS SA Chairman of BoD DON & LOW LTD Member of BoD ARNO LTD Chairman of BoD THRACE PLASTICS PACK SA 4.71% Chairman of BoD SYNTHETIC HOLDINGS LTD Chairman of BoD THRACE SYNTHETIC PACK - AGING LTD Member of BoD THRACE GREENHOUSES SA Chairman of BoD & Managing Director TRIERINA TRADING LTD Director THRACE IPOMA AD Chairman of BoD THRACE POLYBULK AB Chairman of BoD THRACE POLYBULK AS Chairman of BoD LUMITE INC Chairman of BoD THRACE SYNTHETIC TEX - TILES LTD Director THRACE POLYFILMS SA Chairman of BoD Theodoros Kitsos AMALTHEA SMPC 35% Partner COLLEGE LINK PRIVATE COMPANY 1% Christos Alexis Komninos T.K.K. CONSULTANTS LTD 100% Director ELVAL - CHALCOR Member of BoD Page 72 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise BoD Member Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Dimitrios Malamos DYNAMIC CONSTRUCTIONS  V. ZARIFOPOULOS S.A. - Chairman of BoD IOANNIS FILIPPAIOS S.A. - Member of BoD ΖΙΤΑ MCPY 1% Vice Chairman of BoD THRACE GREENHOUSES SA Member of BoD THRACE POLYBULK AS Member of BoD THRACE SYNTHETIC PACKAGING LTD Member of BoD THRACE IPOMA AD Member of BoD THRACE NONWOVENS & GEOSYNTHETICS SA Vice-Chairman of BoD DON & LOW LTD Member of BoD THRACE PLASTICS PACK SA Vice-Chairman of BOD LUMITE INC Member of BoD THRACE POLYBULK AB Member of BoD THRACE LINQ INC Chairman of BoD THRACE POLYFILMS SA Vice-Chairman of BoD THRACE EUROBENT SA Member of BoD SAEPE LTD Director ADFIRMATE LTD Director PAREEN LTD Director Nikitas Glykas XRSPACE Co LTD - Vice Chairman of BoD LUXURY HOUSES IN ATHENS MARIETTA SMPC 50% Partner Athanasios Dimiou AVDIRA MCPY - Vice-Chairman of BoD THRACE POLYFILMS SA Member of BoD THRACE NONWOVENS & GEOSYNTHETICS SA Managing Director & Member of BoD THRACE EUROBENT Vice-Chairman of BoD Vasileios Zairopoulos V. ZAIROPOULOS& SIA GENERAL PARTNERSHIP 90% Partner & Administrator ΖΙΤΑ MCPY 99% Chairman of BoD DON & LOW LTD Chairman of BoD SYNTHETIC HOLDINGS LTD Director SYNTHETIC TEXTILES LTD Director THRACE EUROBENT SA Member of BoD Annual Financial Report as of 31.12.2022 Page 73 of 268 Amounts in thousand Euro, unless stated otherwise BoD Member Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Spyridoula Maltezou SPYRIDOULA MALTEZOU SOLE PROPRIETORSHIP (Business and Administration Consulting Services) 100% Myrto Papathanou GOMMYR POWER NETWORKS LTD 30% Member of BoD GOMMYR POWER SMPC 30% Partner BANSARA TRADING LTD 30% - METAFOUNDER UNIT HOLDER SMPC 25% Partner KARYON AGRICULTURE SMPC 20% Partner ENTOMICS BIOSYSTEMS LTD - Member of BoD FERRYHOPPER SA - Member of BoD ADVANTIS HOLDING BV - Member of BoD METAVALLON PARTNERS AEDAKES 25% Member of BoD LANGWARE INC Member of BoD Georgios Samothrakis FRIGOGLASS SA - Member of Audit Committee Christos Shiatis AVAX INTERNATIONAL LTD - Director C.E.T. RIVERS CYPRUS LTD - Director J&P AVAX SA - Member of BoD C.P.S. FINANCIAL SOLUTIONS LTD 99% Director TROLID HOLDINGS LTD DIRECTOR EOTATI REAL ESTATES LTD DIRECTOR TRIERINA TRADING LTD Director It is noted that none of the members of the Board of Directors of the Company participates in the Boards of Directors of more than five (5) listed companies. Page 74 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Framework for the Management of the Company’s Transactions with Related Parties The Company has adopted and imple- ments a Framework for the Management of its Transactions with Related Parties, which includes the general policy that governs and the procedure that regulates its Transactions with Related Parties and which has been adopted by a decision of the Board of Directors in compliance with its obligations arising from the applicable legislative and regulatory framework. In addition to the Framework for the Man- agement of its Related Party Transactions, the Company has also adopted a Conflict- of-Interest Management Framework, which is additionally implemented. The policies that ensure that the Board of Directors has sufficient information to base its decisions regarding transactions between related parties including the transactions of its subsidiaries with related parties are: 1. To define the responsibilities of the Company and the roles of its Divisions in the Management of Transactions with Related Parties In order to ensure the transparency and proper management of the Company’s Transactions with its related parties, the Framework for the Management of the transactions with Related Parties describes the responsibilities of the Company and provides for a clear allocation of roles be- tween its divisions. Specifically, the Company has undertaken a series of actions related to the manage- ment of transactions with Related Parties, as follows: • submits the Framework for the Man- agement of its Transactions with Re- lated Parties for approval by the Board of Directors, • ensures the revision of the content of the Framework for the Management of its transactions with Related Party, where required, • ensures in cooperation with the legal advisors the legality of the individual procedures • applies the criteria mentioned in the Framework for the Management of its transactions with Related Parties and evaluates the affiliation of the transac- tions with Related Parties for approval by the Board, taking into account the respective legal framework governing these Transactions, • takes into account the exceptions mentioned as well as those defined by the respective legislative framework, • presents the information related to the transactions with Related Parties, pointing out the Company’s interest for the financial advantage and the correct application of the conditions for the completion of the transaction, taking into account the respective le- gal and regulatory framework. 2. Define the Related Parties As “Related Parties” are defined the related parties listed in IAS 24, as well as the legal entities controlled by those persons in ac- cordance with IAS 27. 3. Locate the Related Parties For the correct fulfillment of the legal and regulatory obligations of the Company and the effective implementation of the Framework for the Management of its Annual Financial Report as of 31.12.2022 Page 75 of 268 Amounts in thousand Euro, unless stated otherwise Transactions with Related Parties, the trac- ing and identification of the Related Par- ties with the Company is carried out in the following ways: • taking into account the organizational chart of the Company and the corpo- rate hierarchy of the Group as well as the list of investments in other entities, as they apply each time, • receiving information from the Corpo- rate Secretary of the Board of Direc- tors regarding changes of members of the Board and / or its Committees, • requesting from the Company’s ex- ecutives, when assigning and per- forming their duties, to complete and sign a declaration form listing their immediate family members and third parties not affiliated with the Com- pany, in which they hold or in which they exercise control or joint control, as defined in IAS 24. In this context, it is noted that it is the responsibility of each manager to immediately no- tify the Investor Relations & Corporate Announcements Department in the event of changes to the details of its original statement. The Investor Rela- tions & Corporate Announcements Department updates the declaration forms at a regular basis. 4. To define the Transactions with Related Parties As “Transaction with Related Parties” is de- fined as any transfer of resources, services or liabilities between Related Parties, in which the Company is the one party and its Related Party is the other, regardless of the possible price agreed, and includes any financial transaction, settlement or contract. Indicatively, and not restrictively, such Transactions may include: • the transfer of human resources, in- cluding their detachment, • the signing of service contracts, • signing receivables / debt manage- ment contracts, • the provision of guarantees or insur- ances. 2) Responsibilities of the Board of Directors The Board of Directors is the administra- tive body that decides on any action that concerns the company’s management, the management of its assets and in gen- eral anything that refers to promoting and achieving its objective. According to the Company’s Articles of As- sociation: - The Board of Directors is responsible for the representation, administration and unlimited management of corporate af- fairs. It decides on any issue that concerns the Company’s management, the achieve- ment of the company objective and the management of company assets, includ- ing the issue of ordinary and convertible bonds. Only decisions, which according to the provisions of Law or the Articles of As- sociation as they are in effect following its amendment by the Extraordinary General Meeting of 19 th March 2019, are subject ex- plicitly to the responsibility of the General Meeting of shareholders, are excluded. - The Board of Directors may appoint, for any time period and under any conditions it deems necessary each time, to exercise its representation and duties in general, fully or partially to one or more of its mem- bers or Managers or Executives or other Page 76 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise employees of the Company or third par- ties or committees, defining however each time their authority and the signatories that bind the Company. Specifically, the main responsibilities of the Board of Directors (in the sense that the relevant decision making requires the prior approval of the Board of Directors or, if necessary, ex post ratification by the Board of Directors), should include: • The representation, administration and unlimited management of corpo- rate affairs. • The decision making for each decision relating to the Company’s manage- ment • The achievement of the corporate objective and management of corpo- rate assets including the issuance of ordinary and convertible bonds. The decisions, which according to the pro- visions of the Law or the Articles of Association or any other valid, bind- ing and firm agreement, are explicitly subject to the exclusive responsibility of the General Meeting of Sharehold- ers, are excluded • The approval of the long-term strat- egy and the operational objectives of the Company and the Group • The approval of the annual budget and business plan and the decision making on major capital expenditures, acquisitions and divestments • The selection and, when necessary, the replacement of the executive management of the Company, as well as the supervision of the plan of the succession • The performance testing of the Senior Management and the harmonization of the remuneration of the executives with the long-term interests of the Company and its shareholders • Ensuring the reliability of the financial statements and data of the Company, the financial information systems and the data and information disclosed to public, as well as ensuring the suffi- cient and effective operation of inter- nal control system of the Company • The vigilance regarding existing and potential conflicts of interest of the Company, on one side, and the Man- agement, the members of the Board of Directors or the major shareholders, on the other side, and the appropriate treatment of such conflicts. For this purpose, the Board of Directors has adopted a transactions monitoring process. • Ensuring the existence of an effective process of regulatory compliance of the Company. • The responsibility for decision making and monitoring of the effectiveness of the Company’s Corporate Govern- ance system, including the decision- making processes and the delegation of authorities and duties to other em- ployees, and • The formulation, dissemination and application of the basic values and principles governing the Company’s relations with all parties, whose inter- ests are linked to those of the Com- pany • The observance of the law, the statute and the legal decisions of the general assembly. They have to manage the corporate affairs in order to promote the corporate interest, to supervise the execution of the decisions of the Board of Directors and the general as- sembly and to inform the other mem- Annual Financial Report as of 31.12.2022 Page 77 of 268 Amounts in thousand Euro, unless stated otherwise bers of the Board of Directors about the corporate affairs. • The definition and supervision of the implementation of the corporate gov- ernance system of provisions 1 to 24 of Law 4706/2020, the monitoring and evaluation periodically every three (3) financial years for its implementation and effectiveness, taking the appro- priate actions for addressing deficien- cies. 3) Operation of the Board of Directors As regards to the operation of the Board, the Company’s Articles of Association and the Internal Operation Rulebook state the following: Formation of the Board of Directors as a body • The Board of Directors, as soon as it is elected and specifically during its first meeting, elects from its members and for the entire period of its term, a Vice- Chairman and a Chairman, whereas if the Chairman is absent or unable the Vice-Chairman substitutes such, and if the latter is absent or unable then the Director that is appointed by means of a decision by the Board of Directors substitutes such. • The Chairman of the Board of Direc- tors presides over the Board meetings, manages its activities and informs the Board of Directors on the Company’s operation. • The Board of Directors may elect one of its members as Chief Executive Of- ficer or Executive Director, it may ap- point responsibilities of the CEO to the Chairman or Vice-Chairman of the Board and it may elect the deputy CEO or Executive Director from its mem- bers. • The responsibilities of the CEO are de- fined by means of a decision by the Board. Decision Making • The Board of Directors is considered to be in quorum and meets validly given that half (1/2) plus one (1) member are present or represented at the meet- ing. However, the number of members participating in person or represented cannot be less than three (3) in any case. To calculate quorum, possible fractions are omitted. • The decisions of the Board of Directors are made with absolute majority or the members present and represent- ed at the meeting. Representation of Board of Directors A Board member that is absent may be rep- resented by another member. Each Board member may represent only one absent member, with a written authorization. Minutes of the Board of Directors • Copies or excerpts of the Board of Di- rectors’ Minutes are certified by the Chairman or his/her legal representa- tive or by a member of the Board that has specifically been authorized for such by a decision from the Board. • The preparation and signing of min- utes by all Board members or their representative constitutes a deci- sion by the Board of Directors, even if a meeting has not previously taken Page 78 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise place. This arrangement applies if all the members or their representatives agree to make a majority decision in minutes without a meeting. The rel- evant minutes are signed by all the members. • The signatures of the members or their representatives can be exchanged by e-mail or through electronic means. Remuneration of Board of Directors • The members of the Board of Directors may receive remuneration for each participation at Board meetings in per- son or through teleconference, only if such is approved with a special deci- sion by the Ordinary General Meeting. • The members of the Board of Direc- tors receive the fixed and variable re- muneration as well as the other ben- efits, fees and indemnities specified in the Company’s current Remuneration Policy. The fees of the members of the Board of Directors may also consist of a share in the profits of the year, in ac- cordance with the provisions of Law 4548/2018. • A fee or benefit granted to a member of the Board of Directors that is not regulated by law or the Statute in ef- fect, shall be borne by the Company only if approved by a special decision of the General Meeting. Remuneration Report The Company has established and imple- ments a Remuneration Policy, the purpose of which is to ensure that the members of the Board of Directors and its Committees are remunerated based on its short-term and long-term business plan, in order to achieve profitable organic growth through capacity increase, geographic expansion and value capture as per the Company’s strategic plan. The current Remuneration Policy of the Company was approved by the Annual Or- dinary General Meeting of shareholders of May 25, 2022, and its validity period is four (4) years and is available on the Company’s website www.thracegroup.com. The Remuneration Report has been pre- pared in accordance with the provisions of Law 4548/2018, Article 112, in line with the Guidelines of March 1, 2019, of the Eu- ropean Commission regarding the presen- tation of the Remuneration Report in ac- cordance with Directive 2007/36/EC, as has been amended by Directive (EU) 2017/828 on Shareholders’ rights. It provides an overview of the remuneration model of THRACE PLASTICS CO SA, as it reflects the total remuneration of the members of the Board of Directors, explaining the way in which the Remuneration Policy of the Company was implemented for the finan- cial year 2021. The total remuneration paid to the mem- bers of the Board and Committees during fiscal year 2022 (01.01.2022-31.12.2022) is included in the Remuneration Report, which is available on the Company’s www. thracegroup.com/gr/el/corporate-govern- ance just before the Annual Ordinary Gen- eral Meeting of shareholders of May, 2023. 4) Board of Directors’ Meetings • The Board of Directors meets at the Company’s headquarters whenever the Law or the Company’s Articles of Association or its needs require so, convened by the Chairman or his / her deputy with an invitation to be com- municated to members at least two Annual Financial Report as of 31.12.2022 Page 79 of 268 Amounts in thousand Euro, unless stated otherwise (2) working days prior to the meeting. The Board of Directors may also meet outside the Company’s registered of- fice, but in the particular case such notice must be communicated to its members at least five (5) working days prior to the meeting. • The Board of Directors may convene through teleconference for certain of its members or for all of them. In this case, the invitation towards Board members includes all information necessary, including technical infor- mation, for their participation in the meeting. • The Board meetings are presided by the Chairman or upon absence or any other hindrance by his/her substitute according to the Articles of Associa- tion. During the closing financial year 2022 (01.01.2022-31.12.2022), 27 Board meetings took place. The frequency of participation of the members of the Board of Directors at its meetings in 2022 is as follows: MEMBER NAME MEMBER TYPE FINANCIAL YEAR PARTICIPATION IN THE BOD MEETINGS PARTICIPATION PERCENTAGE From To Konstantinos Chalioris Chairman, Executive Member 01/01/2022 31/12/2022 27/27 100% Theodoros Kitsos Vice Chairman, Independent non-executive member 01/01/2022 31/12/2022 27/27 100% Dimitrios Malamos Chief Executive Officer, Executive member 01/01/2022 31/12/2022 27/27 100% Vassilios Zairopoulos Non-executive member 01/01/2022 31/12/2022 26/27 96% Christos Shiatis Non-executive member 01/01/2022 31/12/2022 27/27 100% Christos-Alexis Komninos Non-executive member 01/01/2022 31/12/2022 27/27 100% Athanasios Dimiou Non-executive member 01/01/2022 31/12/2022 27/27 100% Georgios Samothrakis Independent non-executive member 01/01/2022 31/12/2022 27/27 100% Myrto Papathanou Independent non-executive member 01/01/2022 31/12/2022 27/27 100% Spyridoula Maltezou Independent non-executive member 01/01/2022 31/12/2022 27/27 100% Nikitas Glykas Independent non-executive member 01/01/2022 31/12/2022 27/27 100% The topics mainly discussed during the year included: • Update by the Chief Executive Offic- er on issues related to COVID-19, the external environment of the operating segments, as well as on other impor- tant issues related to the Group’s ac- tivity (such as price increases and price Page 80 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise management, impact of energy costs, volume of recycled raw material, etc.) • Presentation of period Financial Re- sults for the Group and its subsidiaries • Health and safety issues and strength- ening of relevant measures and policies • Update on current developments in subsidiaries • Briefing of Board of Directors Commit- tees, Audit Committee and relevant propositions to the BoD • Evaluations of Board of Directors / Committees • Next steps in risk management and corporate governance projects, aiming at the full compliance of the Company • Other issues 5) Audit Committee Fully in compliance with the provisions and stipulations of the effective legislation and in particular with the article 44, effec- tive at the time, of L. 4449/2017, during the Extraordinary General Meeting of share- holders that took place on 11.02.2021, the Company elected a new Audit Committee with the objective to support the Board in performing its duties as regards to the procedure of financial information, super- vise the operation of the Internal Audit and Risk and Compliance Units, the procedures of internal control systems, the supervision of the mandatory audit of the annual and consolidated financial statements, as well as to inform the Board of Directors with re- gard to the review of the financial reports prior to their approval. Under the regime of article 44 of law 4449/2017, as in force after its amend- ment by article 74 of law 4706/2020), and on the other hand in line with the notifi- cations, clarifications and recommenda- tions of the circular with protocol number 1508/17.07.2020 and 427/21.02.2022 docu- ments of the Listed Companies Directorate of the Hellenic Capital Market Commission, the Company is obliged, as a public interest entity, to have an Audit Committee which consists of at least three (3) members and which may comprise: (a) A Board of Directors Committee consisting of its non-executive members, or (b) An Independent Committee, con- sisting of: I. either by non-executive members of the Board of Directors and third parties, or II. only by third parties. Third party means any person who is not a member of the Board of Directors. The members of the Audit Committee are appointed by the Board of Directors, when it is a Committee of the Board or by the General Meeting of Shareholders, when it is an Independent Committee and must be in their majority independent of the audited entity. This means that in a three- member Audit Committee, at least two of its members (and in any case its Chairman) must either be independent non-exec- utive members of the Board of Directors or, in the case they are third parties, they should meet the requirements of article 9, par. 1 and 2 conditions of independence. The minimum required number of the pre- sent members in order to render a meet- ing of the Audit Committee as a valid one must be three (3), meaning that in case of a three-member Audit Committee then it is required the presence of all members at each meeting. Annual Financial Report as of 31.12.2022 Page 81 of 268 Amounts in thousand Euro, unless stated otherwise However even if the Audit Committee consists of more than three (3) mem- bers it is required, according to the clari- fications granted pursuant to the no. 1302/28.04.2017 document of the Listed Companies Division of the Hellenic Capital Market Commission, the participation of the entire number of its members, in per- son, in the Committee’s meetings. At least one (1) member of the Audit Com- mittee must possess sufficient knowl- edge and experience in auditing and accounting. In any case, it is to the discretion of the Audit Committee to invite whenever it is deemed necessary key directors of the Company who are involved in the latter’s corporate governance (for example Man- aging Director, Finance Director, head of the Internal Audit and Risk & Compliance Manager) to attend certain meetings or certain subjects of the daily agenda in or- der to provide any necessary clarifications. The Audit Committee, which now operates in accordance with the provisions of Law 4449/2017, as in force after its amendment by Law 4706/2020 has the following duties while the Board of Directors maintains full responsibility and particularly: i) External Audit (sect. a’ of par. 3) article 44 of Law 4449/2017 (Government Gazette A’ 7/24.01.2017) The Audit Committee monitors the proce- dure and performance of the mandatory audit on the separate and consolidated financial statements of the Company and the Group. In this context the Committee informs the Board of Directors by submit- ting a relevant report for issues deriving from the mandatory audit and by explain- ing analytically the following: a) the contribution of the mandatory audit to the quality and integrity of the financial information, meaning in the accuracy, completeness and cor- rectness of the publicized financial information including the relevant disclosures which are approved by the Board of Directors b) the role of the Audit Committee in the under (a) above mentioned pro- cedure, meaning the recording of the actions taken by the Audit Committee during the performance of the manda- tory audit. In the context of the above information that is being granted to the Board of Di- rectors, the Audit Committee takes into consideration the contents of the supple- mentary report which the Certified Ex- ternal Auditor prepares and submits, and which contains the results of the manda- tory audit that was performed fulfilling at least the requirements of article 11 of the Regulation (EU) no. 537/2014 of the Euro- pean Parliament and the Council of April 16 th , 2014. The Committee: • Is responsible for the process of se- lection and recall of External Audi- tors or audit companies and proposes through the Board towards the Gen- eral Assembly (Meeting) of the share- holders the External Auditors or the auditing companies to be appointed, the terms of collaboration, as well as their remuneration (according to arti- cle 16 of Regulation (EU) No 537/2014, unless par. 8 of article 16 of Regulation (EU) No 537/2014 is being applied). • Regarding the selection of the Au- diting Company, it is examined and analyzed: o the scope of work o the audit standard on the basis of Page 82 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise which this work will be performed o the form of the deliverable o the responsibilities of the manage- ment and the auditor respectively • It is responsible for monitoring any non-audit service to be performed by the company’s external auditor. • Taking into account articles 21, 22, 23, 26 and 27, as well as Article 6 of Regula- tion (EU) No 537/2014) and in particular the adequacy of the provision of non- audit services to the Company (ac- cording to article 5 of Regulation (EU) no. 537/2014) will approve or not the non-audit service. • Monitors the process and the perfor- mance of the mandatory audit of the separate and consolidated financial statements of the Company and es- pecially the performance of the audit, taking into account any findings and conclusions of the competent author- ity (according to paragraph 6 of article 26 of Regulation (EU) no. 537/2014). In this context, it informs the Board by submitting a relevant report on the issues that arose from the mandatory audit explaining in detail: (a) the contribution of the statutory au- dit to the quality and integrity of the financial information, i.e. to the accu- racy, completeness and correctness of the financial information, including the relevant disclosures which are ap- proved by the Board of Directors and made public, (b) the role of the Committee in the (a) procedure above, i.e. reporting the ac- tions taken by the Committee during the statutory audit process. • It is also being informed by the Exter- nal Auditor on the annual statutory audit plan before its implementation, evaluates the specific plan and en- sures that the annual statutory audit will cover the most important areas of audit, taking into account the main business and financial risk areas of the Company. • Furthermore, the Committee sub- mits proposals on other important is- sues, when it deems it appropriate or imposed. ii) Procedure of financial information (sect. b’ of par. 3) article 44 of Law 4449/2017 (Government Gazette A’ 7/24.01.2017) Within this context the Committee: • Is informed about the process and schedule of preparation of financial information by the Management and monitors, examines and evaluates the process of preparation of financial in- formation, i.e. the mechanisms and production systems, the flow and dis- semination of financial information produced by the involved units of the company. • The above actions include other dis- closed information in any way (e.g. stock market announcements, press releases, etc.) in relation to financial information. • Informs the Board for its findings on essential issues in its areas of respon- sibility, submits proposals to improve the process, if deemed appropriate, and monitors the response of the Company’s Management to these findings. • Takes into account and examines the most important issues and risks that may have an impact on the Company’s Annual Financial Report as of 31.12.2022 Page 83 of 268 Amounts in thousand Euro, unless stated otherwise financial statements as well as the sig- nificant judgments and estimates of Management during their preparation. • Below are indicative issues that are ex- amined and evaluated in detail by the Audit Committee to the extent that they are important for the Company, mentioning specific actions on them during its reporting and briefing to the Board: • Evaluate the use of the assumption of ongoing activity. • Significant judgments, assumptions and estimates in the preparation of the financial statements. • Valuation of assets at fair value. • Assessment of asset recoverable value. • Accounting for acquisitions. • Adequacy of disclosures for the signifi- cant risks faced by the Company. • Significant transactions with related parties. • Significant extraordinary transactions. The Committee’s communication with the external auditor in view of the preparation of the audit report and the latter’s supple- mentary report to the Committee must be substantial. In addition, the Committee reviews the fi- nancial reports (Annual and Semi-Annual) before their approval by the Board of Di- rectors, in order to assess their complete- ness and consistency in relation to the in- formation taken into account as well as the accounting principles implemented by the Company and informs the Board of Direc- tors accordingly. iii) Procedures of internal control and risk management systems and audit control unit (sect. c’ of par. 3) article 44 of Law 4449/2017 (Government Gazette A’ 7/24.01.2017) The Committee: • Monitors, examines and assesses the adequacy and effectiveness of the en- tire policies, procedures and controls of the Company with regard to the internal control system as well as the quality assurance and the estimation and management of risks in relation to the financial information. • Monitors the effectiveness of internal control systems mainly through the work of the internal audit and Risk & Compliance Department and the work of the External Auditor. • Examines the conflicts of interest during the Company’s transactions with related parties and submits to the Board of Directors the relevant reports. • Examines the existence and content of those procedures, according to which the Company’s personnel will be able, in confidentiality, to express their con- cerns about possible illegalities and irregularities in matters of financial information or other issues related to the operation of the company. The Commission must ensure that proce- dures are in place to effectively and independently investigate such issues, as well as to address them properly. Regarding the operation of internal audit unit, the Committee: • Evaluates the staffing and organiza- tional structure of the internal audit unit and identifies any weaknesses. It also monitors and inspects the proper Page 84 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise operation of the internal audit unit in accordance with professional stand- ards as well as the current legal and regulatory framework and evaluates the results, its adequacy and effective- ness, without however affecting its independence. If deemed appropri- ate, the Committee submits propos- als to the Board, so that the internal audit unit has the necessary means, is adequately staffed with personnel with sufficient knowledge, experience and training, there are no restrictions on its work and has the envisaged in- dependence. Therefore, the appoint- ment and dismissal of the head of the internal audit unit is a proposal of the Audit Committee to the Board of Directors. In the same context, the Committee determines and examines the operating regulations of the Com- pany’s internal audit unit. • It is being informed on the annual or periodic audit plan of the internal au- dit unit before its implementation and evaluates it, accordingly, taking into consideration the main areas of busi- ness and financial risks as well as the results of previous audits. The Com- mittee may decide to configure the annual or periodic internal audit plan, as well as to carry out extraordinary audits by the internal audit unit. • As part of this briefing, the Committee reviews if the annual or periodic audit plan (in conjunction with any corre- sponding medium-term plans) covers the most important areas of control and financial information systems. • Holds regular meetings with the Inter- nal Auditors to discuss issues of their responsibility, as well as problems aris- ing from the performance of internal audits. • Takes knowledge of the work of the in- ternal audit unit and its reports (regu- lar and extraordinary) and monitors the briefing of the Board about their content, in relation to the financial in- formation of the Company. • Reviews the disclosed information re- garding the internal control and the main risks and uncertainties of the Company, in relation to the financial information. iv) Regulatory Compliance and Risk Management Unit (articles 13 & 14 of Law 4706/2020 - Government Gazette A’ 136/17.07.2020) The Committee: • Supervises the management of the main risks and uncertainties of the Company and their periodic revision. In this context, it evaluates the meth- ods used by the Company for the iden- tification and monitoring of risks, the treatment of the main ones through the internal control system and the in- ternal audit unit as well as their proper disclosure in the published financial information. • Monitor the effectiveness of the regu- latory compliance system, including adopting and implementing appro- priate and up-to-date procedures, to ensure that the Company fully and constantly complies with the legal and regulatory framework in force in a timely manner and that there is, at all times, a complete picture available of the degree to which this objective is attained. • Supervise compliance with specific governance practices such as personal data protection, cybersecurity and in- formation security. Annual Financial Report as of 31.12.2022 Page 85 of 268 Amounts in thousand Euro, unless stated otherwise • Review the findings of the audits car- ried out by the supervisory authori- ties, the external and internal auditors as well as by the risk and compliance unit and monitor the degree to which the Company complies with the appli- cable requirements. • Follow up on cases of non-compliance and review the corrective action taken by the Management. • Obtain information from the Man- agement and work together with the Company’s legal consultants on com- pliance issues. • Investigate for any existing conflicts of interest in the Company’s transactions with related parties and report to the Board of Directors accordingly. • Look into the existence and content of the procedures followed to allow Company staff to express their con- cerns confidentially about any poten- tial illegal and irregular practices with regard to financial reporting or other issues which are associated with the Company’s operation. The Committee must ensure that the procedures are in place for investigating such issues ef- fectively and independently, as well as addressing them adequately. • Evaluate regulatory compliance and risk management reports at company and group level, informs the Board of Directors of its findings and submits proposals where required. The oversight of the main risks and un- certainties and the monitoring of the ef- fectiveness of the regulatory compliance system is done through the supervision of the risk and compliance unit, where the Committee: • Evaluates the staffing and organiza- tional structure of the Unit and detect any weaknesses therein. Moreover, monitors and inspects the proper functioning of the Risk and Compli- ance Unit according to the profession- al standards and the legal and regula- tory framework in force and assesses its work, adequacy and effectiveness. Where appropriate, makes proposals to the Board of Directors for the Unit to have the necessary means and be adequately staffed with employees who have sufficient knowledge, expe- rience and training etc. • Evaluates the annual work plan of the Unit before it is implemented taking into account the key areas of business and financial risk, proposes any adit- tions or changes and finally approves it. • Receives and evaluates the result of the unit’s annual work plan, the An- nual Compliance Report and noti- fies the non compliance cases to the Company’s Board of Directors and its Committees, if any, and makes recom- mendations to the Management on the corrective action to be taken. • Holds regular meetings with the Risk & Compliance Manager to discuss issues of his/her responsibility. For the results of all the above actions, the Committee informs the Board of Directors about its findings and submits proposals for the implementation of corrective ac- tions, if deemed appropriate. The Committee shall have unhindered and full access to the information, records and data required in the exercise of its powers and shall have the necessary resources to carry out its work in a proper and effective Page 86 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise manner, including the use of external consultants. The Audit Committee archives all the nec- essary information, including the minutes of its meetings, in which its actions and their results are recorded, regarding the implementation of its work. The Audit Committee submits reports to the Board of Directors on its areas of re- sponsibility and also in the areas which, af- ter the completion of its work, it considers that there are essential issues in relation to the financial information provided; at the same time it monitors the response of the Management on the above issues. The Chairman of the Committee provides information to the shareholders dur- ing the annual General Meeting about the Committee’s activities on the basis of the above-mentioned responsibili- ties, through the submission of a relevant Report. For the implementation of all the above, the Audit Committee is expected to hold meetings with the Management and the competent executives during the prepara- tion of the financial reports, as well as with the External Auditor during the planning phase of the audit, during the execution and also during the phase of preparation of audit reports. The existing Audit Committee, which was elected by the Extraordinary General Meeting of Shareholders on 11 February 2021, is an Independent Committee and is consisted of the following one (1) Inde- pendent Non-Executive Member of the Company’s Board of Directors and two (2) non-members-third parties, namely: Georgios Samothrakis Independent Non- Executive Board Member Konstantinos Kotsilinis Non-Board Member – third party Konstantinos Gianniris Non-Board Member – third party Following the election of the above three- member Audit Committee by the Extraor- dinary General Meeting of shareholders of 11 February 2021 and the appointment of the persons assuming the positions of its members, the Audit Committee at its meeting of 16 February 2021 was formed into body with the expiration of its term on 11 February 2026 as follows: Georgios Samothrakis Chairman of Audit Committee Konstantinos Kotsilinis Member of Audit Committee Konstantinos Gianniris Member of Audit Committee For reasons of completeness, the CVs of the members of the Audit Committee are presented as follows: • Georgios Samothrakis -The CV of Mr. Georgios Samothrakis, Member of the Board of Directors, is pre- sented in detail in Section VI.1 “Composi- tion of the Board of Directors” of the cur- rent Report. • Konstantinos Kotsilinis -Mr. Konstantinos Kotsilinis was born in New Zealand, studied at Victoria Univer- sity of Wellington and earned a Bachelor of Commerce and Administration degree. He began his professional career in 1968 at the Coopers & Lybrand Company in Wellington, moved to the London office Annual Financial Report as of 31.12.2022 Page 87 of 268 Amounts in thousand Euro, unless stated otherwise in 1972 and later that year to the Greek of- fice. From 1978 to 2003 he was head of the audit department of Coopers & Lybrand / PwC Greece. In his last years of service in the Company, he has been the Chairman of the Board of Directors of the Company. He has served on various Committees includ- ing the Supervisory Board of the European Financial Reporting Advisory Group (2002- 2004) and the Accounting Harmonization Committee of UNICE (2002-2005). From 2009 to 2014, he was Vice Chairman of the Accounting Standardization and Auditing Committee of Greece (ELTE) and Chairman of the Quality Control Council (SPE). Dur- ing this period he represented Greece in the relevant committees in the European Union and during the Greek Presidency he was the Chairman of the committee responsible for audit issues. He is a Mem- ber of the Board of Chartered Auditors of Greece as well as a former Member of the Institute of Chartered Auditors of New Zealand. He is the Chairman (since 2006) of the Board of Directors and a member of the Audit Committee of the insurance com- pany Interasco. From 2006 until today he is an External Advisor of the Audit Committee of the Na- tional Bank of Greece, while since 2017 un- til 2021 was a Member of the Audit Com- mittee of Mytilineos SA and since 2021 is an external advisor of it. Since 2004 he is a Member of the Board of Directors of “Child’s Smile” and today Vice President of the Organization. From 1991 to 2020 he was the Honorary Consul General of New Zealand in Greece, while he has been appointed Member (MNZM) and Officer (ONZM) of the Order of Merit of New Zealand by the Queen of England. • Konstantinos Gianniris Mr. Konstantinos Gianniris has studied Economics, Organization and Business Ad- ministration at the University of Piraeus, is a graduate of the Law School of the Uni- versity of Athens and has extensive profes- sional training. He has been the General Manager of IASO Group, Managing Direc- tor of the Euroclinic Athens Group, Gen- eral Manager of SOULIS SA, Member of the Executing Committee, General Manager or High-Ranking Executive (CFO, Market- ing / Sales Manager, Logistics, IT Manager, Organization and Internal Audit Manager) in large companies. He is a member of the Board and the Audit Committee, of ELASTRON S.A. He was also a member of the Board (and in most cases the Chair- man of Audit Committee) of the follow- ing companies: Thrace Plastics CO SA, Eu- rodrip SA, Logicdis SA, Dodoni Ice Cream SA, Euroclinic of Athens SA, Euroclinic of Children SA and European Technical SA. He has founded the Business Consulting Company P.M.S. Consultants (specializing in Business Administration, Internal Audit, Corporate Governance and Business Or- ganization). He has founded the Hellenic Institute of Internal Auditors (for a number of years he was its President) and has rep- resented the body at International Confer- ences. He has founded the Association of Clinics of Greece (SEK), in which the large groups of Private Clinics participate, and where he served for a number of years as President. Mr. Gianniris has prepared dis- sertations on Applied Organization and Business Administration, which have been adopted in a number of Businesses, such as: Internal Regulation of Management, Organization, Operation and Internal Con- trol System, Manual of Organization and Operation of Internal Control Unit, Budget & Audit Systems, Costing Systems etc. Page 88 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise From the above it is inferred that the mem- bers of the Audit Committee have proven in their entirety that they possess suffi- cient knowledge in the field in which the Company operates, given that: (a) Mr. George Samothrakis was already a member of the Audit Committee of the Company, elected by the Extraor- dinary General Meeting of Sharehold- ers as of March 19, 2019, (b) Mr. Konstantinos Gianniris partici- pated in the management of the Company for a period of more than ten (10) years. It is therefore evident that from his participation he has ob- tained a complete and clear picture of the organization, management and operation of the Company, about the products it produces and markets as well as the services it provides, and for the business model and the strat- egy it follows in general. (c) Mr. Konstantinos Kotsilinis, who has never participated in the Board of Di- rectors of the Company, knows very well -and due to his wider profes- sional activity- the environment and the conditions in which the Company develops its business activities. The criterion of sufficient knowledge and experience in auditing or accounting is proven to be met in the capacities of both Mr. Georgios Samothrakis and Mr. Kon- stantinos Kotsilinis, who are both Certified Public Accountants with extensive knowl- edge and rich professional experience. This is turn will contribute decisively and substantially in further strengthening the efficiency of the Audit Committee and in the implementation of its responsibili- ties in the best possible way, in order to strengthen the dynamics and the value of the Company. Furthermore, Mr Gianniris is considered very capable in this field, hav- ing served for a large number of years as Director of Internal Audit and Chief Finan- cial Officer for numerous companies from various industries. Finally, those conditions and criteria of in- dependence which are covered by the cur- rent regulatory framework and in particu- lar by article 9 par. 1 and 2 of law 4706/2020, are met in the persons of Messrs. Georgios Samothrakis and Konstantinos Kotsilinis, i.e. the majority of the members of the Audit Committee, given that the following persons: (a) do not hold shares greater than 0.5% of the Company’s share capital; and (b) do not have any dependency rela- tionship with the Company or per- sons related to the Company, ac- cording to the manner by which this dependency relationship is speci- fied in particular in the provisions of the above legislation. Frequency of Meetings and Main Topics of Meetings’ Agenda The Committee convenes at least four (4) times a year. The Chairman of the Com- mittee decides on the frequency and time schedule of the meetings. The external au- ditors are entitled to request a meeting by the Committee if they deem appropriate. During 2022 the Committee convened twelve (12) times and all members were presented during the meetings, whereas all issues mentioned in the Internal Opera- tion Rulebook as well as in the Operations Rulebook of the Audit Committee were discussed and handled, the major of which are as follows: • Supervision and approval of the Annual Financial Report as of 31.12.2022 Page 89 of 268 Amounts in thousand Euro, unless stated otherwise Internal Audit and Risk & Compliance Unit’s activities and briefing of the Board of Directors about the issues arising from both Units activities. • Monitoring of the process and the performance of the mandatory audit on the separate and consolidated fi- nancial statements of the Company and briefing of the Board of Directors about the issues related to the man- datory audit along with an analytical explanation. • Monitoring of the process and the performance of the mandatory audit on the internal control system of the company’s and it’s significant subsidi- aries and briefing of the Board of Di- rectors about the issues arising from this audit. • Monitoring of the process and the performance of the Enterprise Risk As- sessment Project of the mother com- pany and it’s subsidiaries. • Informing the Board of Directors on issues arising from the Enterprise Risk Assessment Project. • Opinion on the selection of the Audit- ing Company for the performance of the mandatory audit on the separate and consolidated financial statements of the Company. • Ensuring the independence of the Certified External Auditors • Monitoring the process of preparation of the published financial statements of the Group and the Company and the preparation of a relevant propos- al to the Board of Directors for their approval. • Implementation of an RFI process for the selection of a new audit company, as requested by the article 42 of Law 4449/2017 due to the mandatory rota- tion of the current External Auditors in 2024. 6) Remuneration and Nominations Committee of Board Members and Committees The Board of Directors of the Company for the purpose of substantial, effective and appropriate compliance and harmoniza- tion of the Company with the regulations of articles 11 and 12 of Law 4706/2020 (Government Gazette A136/17.07.20201) and with the parallel adoption of the cor- porate governance best practices, during its meeting of 22.03.2021 decided the abo- lition of the existing Committee for Bene- fits and Promotion of Nominations (CBPN) and its replacement by the Remuneration and Nominations Committee. The Committee consists of three (3) Non- Executive Board Members, while the ma- jority of its members are Independent, in order to ensure the objectivity, inde- pendence and integrity of their judgment. The Board is responsible for the appoint- ment and replacement of all members of the Committee. The Committee elects its Chairman, who is an Independent Non- Executive Member and is supported by the Secretary of the Committee. The term of office of the members of the Commit- tee is directly related to that of the Board of Directors. In addition, the Committee submits an annual progress report regard- ing the actions took place to the Board of Directors. The Committee consists of the following Non-Executive Members of the Board, namely: Page 90 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Theodoros Kitsos Independent Non- Executive Member of the BoD, Chairman of the Committee Nikitas Glykas Independent Non- Executive Member of the BoD, Member of the Committee Vasileios Zairopoulos Non-Executive Member of the BoD, Member of the Committee The term of the above Committee expires on February 11th, 2026. The purpose of this Committee includes at a minimum the development and for- mation of all types of remuneration of executives falling within the scope of ap- plication of the Remuneration Policy pro- vided by Article 110 of Law 4548/2018, the identification and retain of the necessary executives within the headcount of the Company, who will support the long-term successful performance of the Company, the nomination process and succession planning of the Board of Directors and its Committees, within the boundaries of business objectives, competitive practices, Company’s applicable rules and regula- tions and current legislation, as well as in the formulation-submission of relevant proposals and suggestions on the above issues to the Board of Directors. The operation of this Committee ensures that both the remuneration of the Execu- tive and Non-Executive members of the Board of Directors and the members of its Committees as well as the nominations for Board of Directors members will be in line with the corporate objectives and market practices and, in any case, will be in full compliance with the current legal and reg- ulatory framework. In terms of setting remuneration policy, the Committee’s responsibilities include: • On an annual basis, the Committee ex- amines, pre-approves and formulates proposals to the Board of Directors regarding labor issues included in the employment contracts of Executive Board of Directors members and the compliance with the internal Rule of Procedure. • The Committee is responsible to de- termine the renumeration scheme of the Board of Directors, it’s Committee members and Top Management Exec- utives and makes recommendations on the subject to the Board of Direc- tors which decides or makes a sug- gestion to the General Meeting, when required. • The Committee reviews, pre-approves and proposes annually (or whenever deemed necessary) to the Board of Directors, the base salary, the variable remuneration and benefits provided (where available) for the Board of Di- rectors Executive and Non-Executive members, the Board of Directors Com- mittees members, and the Top Man- agement Executives, including the Head of Internal Audit and the Head of Risk & Compliance, taking into con- sideration the macroeconomic condi- tions and the remuneration level of respective companies. • Specifically for the Executive Board of Directors members and based on the approved by the Board of Direc- tors Strategic Plan, the Committee ensures the appropriate formulation of approved annual significant targets (maximum 3). At the end of the rele- vant period, the Committee examines, pre-approves and proposes to the Annual Financial Report as of 31.12.2022 Page 91 of 268 Amounts in thousand Euro, unless stated otherwise Board of Directors the level of variable remuneration based on the achieve- ment level of the set targets. • Whenever deemed necessary, the Committee reviews the Remuneration Policy and makes recommendations for improvements or diversifications. • The Committee reviews the final draft of the annual Remuneration Report providing its opinion to the Board of Directors, before submitting the Re- port to the General Meeting. • The Committee shall inform Manage- ment and demand the reimburse- ment of the whole or part of the vari- able remuneration, due to revision in past years financial statements or due to findings of incorrect, inaccurate, or incomplete financial data, taken into consideration for the calculation of variable remuneration. • The Committee conducts or author- izes third parties to conduct research or studies on matters falling within its remit. In the responsibilities of the Committee regarding the promotion of the nominees for the Board of Directors and Committees members, include: • The Committee defines and proposes to the Board of Directors the criteria for the election of members (Board of Directors and Board of Directors Com- mittees), in accordance with the re- quirements of the law and the respec- tive strategy / Suitability Policy of the Company. • The Committee is responsible for the preparation of the Nomination pro- cess for members of the Board of Di- rectors / Committees, based on prede- fined criteria and in accordance with the eligibility and corporate govern- ance policies. • The Commission evaluates candidates of the Board of Directors and Board of Directors Committees through inter- views and references. • The Committee proposes the selected candidates for approval to the Board of Directors and General Meeting as required. • The Committee determines the evalu- ation criteria of Board of Directors and its Committees on matters such as size, composition, qualifications, gender, knowledge, experience, skills, and effectiveness. The Committee is also responsible for the annual perfor- mance evaluation based on the crite- ria of Suitability Policy. Based on evalu- ation results, the Committee prepares the annual Adequacy Report which is submitting in the General Meeting. • The Committee determine the param- eters of the succession planning of the Board of Directors and its Committees and supervise it. • The Committee determines the evalu- ation criteria, supervises the annual individual evaluations of the Executive Board of Directors members, and sug- gests to the Board of Directors propos- als for their personal and professional development, to ensure that the Com- pany remains competent and compet- itive in the long term. • The Committee advises the CEO in the process of nominating the Compa- ny’s Executives, and their succession planning. The final decision to fill the above positions belongs exclusively to the CEO. • The Committee conducts or author- Page 92 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise izes third parties to conduct investi- gations or studies on matters falling within its area of responsibility. The Remuneration and Nominations Com- mittee of Board of Directors Members and Committees convened 11 times during the year 2022 (01.01.2022-31.12.2022) in the presence of all its members. The topics that were mainly discussed were: • The evaluation of the management’s proposal for the 2022 remuneration of the Top Executives and the approval for 2021 bonus, • To review the term of Board of Direc- tors Members and Committees • To confirm that for the Members of the Board of Directors there are not issued any a final court decision for loss-mak- ing transactions (article 3, paragraph 4) of Law 4706/2020. • To confirm that the Independent Non- Executive Members of the Board of Directors are fulfilling the conditions and criteria of independence as they are defined by the current regulatory framework. • Defining the most specific perfor- mance criteria for the 2022 short-term incentive program for the Board’s Ex- ecutives and the Top Management Ex- ecutives. • The review of the participation of the members of the Board of Directors to other Boards/Committees outside the Group. • The definition of a succession plan for the members of the Board of Directors and Committees • The issuance of the Competence Re- port for the Board of Directors. • The revision of the Remuneration and the Suitability Policy of the members of the Board of Directors and Commit- tees • The Committee prepared the annual Remuneration Report. • The finalization of the evaluation of the Board of Directors Members and Committees suitability, the remunera- tion review of the of the Board of Di- rectors Members and Committees, after its issuance by a reputable con- sulting firm. • The finalization of its Operation Rule- book 7) Other Committees Furthermore, the Board of Directors of the Company at its meeting of March 22, 2021, in order to optimally organize and operate the most efficient framework of corporate governance, decided the establishment of new Committees as follows: • Strategy and Investment Committee, • Environmental, Social and Corporate Governance [ESG] Committee, and • Human Resources Committee. Following its decision of 22.3.2021, the Company’s Board of Directors meeting that took place on 24.03.2022 decided: • To transfer of the responsibilities of regulatory compliance from the Envi- ronmental, Social and Corporate Gov- ernance (ESG) Committee to the Audit Committee and rename the ESG Com- mittee to Sustainability Committee. • To change the organizational posi- tion of the Human Resources Com- mittee and put it to report directly to the Group CEO, in order to ensure the most effective support and assistance to him. Annual Financial Report as of 31.12.2022 Page 93 of 268 Amounts in thousand Euro, unless stated otherwise Consequently, the new format of the Board of Directors committees is the following: Strategy and Investment Committee The purpose of this consists in providing assistance to the Board of Directors with regard to the development of the opera- tional strategy, the formulation of the in- vestment plan of the Company and of the Group in general, as well as supervising and providing guidance to the Board of Directors of the respective business strat- egy, as well as the provision of support in the formulation of revised / updated plans and in the monitoring and control of the implementation and performance of the strategic investments of the Company and the Group. The responsibilities of the Committee in- clude: • Develops and proposes to the Board of Directors the long-term strategy of the Group and suggests the necessary adjustments in the short and medium term • Studies and pre-approves the strate- gic plans of the companies, ensures that they are in line with the Group’s strategy and makes recommendations to the Board. • Reviews and suggests to the Board of Directors for the investment plans and the individual investments of the com- panies • Reviews possible acquisitions, merg- ers, divestments and Joint Ventures and makes proposals to the Board re- spectively • Reviews the progress and results of all actions related to the implementation of the strategy and the progress of in- vestment plans and informs the Board accordingly. • Monitors closely international trends, best practices, and market data, in or- der to adapt the strategy of the Group and the Companies and informs the respectively the Board of Directors • Recognizes timely risks and opportu- nities and prepares proposals to the Board of Directors for the necessary actions, including the framework that ensures their funding. • Discusses the communication of the Management to third parties and the investors community, in terms of the strategy and the investment plan of the Group. The Strategy and Investment Committee consists of three (3) members of the Board of Directors, as follows: Konstantinos Chalioris Executive Member of the BoD, Chairman of the Committee Dimitrios Malamos Executive Member of the BoD, Member of the Committee Vasileios Zairopoulos Non-Executive Member of the BoD, Member of the Committee The Committee convened 6 times during the fiscal year 2022 in the presence of all its members. The topics that were mainly discussed con- cern the strategies of the subsidiaries and strategies for new investments. Sustainability Committee The purpose of this Committee is to con- sider, promote and report periodically to Page 94 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise the Board of Directors on environmental and social sustainability issues. The responsibilities of the Committee include: • Review the formulation of the sustain- ability related policies, strategies and objectives to ensure that they are in line with the needs of the Company in line with the vision and values, fully complying with applicable legal and regulatory requirements. • Monitors the development and imple- mentation of the Sustainable Develop- ment goals that have been set, based on the materiality analysis, which in- cludes the important, relevant and critical areas that the Company high- lights as priorities and proposes im- provements to the Management and then to the Board, where necessary. • Review the progress and results of any of the Company’s sustainability work and report to the Board regularly. • Monitors international trends and best practices in order to regularly update the Board. • Recognizes timely risks and opportu- nities and prepares proposals to the Board for the necessary actions, in- cluding the framework that ensures the financing of the Company. • Studies and pre-approves the annual non-financial statements and Sustain- ability reports, as well as other disclo- sures, submitting relevant suggestions to the Board for approval. • Acts on behalf of the Board and coop- erates with the Management of the Company ensuring the prestige and reputation of the Company in relation to all issues of Sustainable Develop- ment and its Public Image. Operational Framework Environment: The impact of the Com- pany’s footprint to land, air, water, climate through the use of raw materials, end products design, technology, manufactur- ing units etc Society: the impact of the Company’s policies and strategy in relation to: (1) Em- ployee’s learning & development, (2) Well- being including Health & Safety, (3) Living wage standards (4) Diversity & Inclusion philosophy and commitments, (5) Human rights, (6) Work environment, (6) Policy of child/forced/compulsory labour, (7) Com- munity support (8) Products’ safety during their production and use, etc. The Sustainability Committee consists of four (4) members of the Board of Directors, as follows: Theodoros Kitsos Independent, Non-Executive Member of the BoD, Chairman of the Committee Konstantinos Chalioris Executive Member of the BoD, Member of the Committee Dimitrios Malamos Executive Member of the BoD, Member of the Committee Spyridoula Maltezou Independent, Non-Executive Member of the BoD, Member of the Committee The Committee convened 6 times during the fiscal year 2022 in the presence of all its members, during the major meetings. The topics that were mainly discussed concern: Annual Financial Report as of 31.12.2022 Page 95 of 268 Amounts in thousand Euro, unless stated otherwise • Monitoring the Group’s plan regard- ing the reduction of energy consump- tion and the use of Renewable Energy Resources, • Approval of the Strategic Plan for Sus- tainable Development, • Discussion on the changes that Law 4819/2021 will bring to plastics follow up, • Approval of revision of the Commis- sion’s Terms of Reference (TOR), • Follow up of direct and indirect green- house gas emissions monitoring, • Discussion on the Board of Directors members and Executives’ training program, • Discussion on Group’s Sustainability PURPOSE and VISION/MISSION, • Discussion on Group’s and external environment current status related with sustainability, • Monitor the CDP report and data verification, • Discussion and approval of the 2021 Sustainable Development Report, • Discussion and approval on the Sus- tainable Development Report of Thra- ce Greenhouses, • Discussion on supplier evaluation policy, • Discussion on the project to support sustainable development issues It is pointed out that all the above Commit- tees of the Board of Directors have drafted – composed their Rulebooks. 8) Evaluation of Board of Directors and Committees The Company implements an Evaluation Policy of the Board of Directors and Com- mittees. The scope of the Policy includes the executive, non-executive, independ- ent non-executive members of the Board of Directors of the Company, as well as the non-members of the Board of Direc- tors (third parties) who are members of its Committees. The criteria of suitability and reliability of the Board members are defined in law 4706/2020, the decisions issued under its authority, as well as the Suitability Policy of the Company, which has been approved and implemented by the Company. The Company Suitability Policy is posted on the company’s website www.thracegroup. com. Procedure for Periodic Evaluation of Board Members Individuals falling within the scope of the Suitability Policy are evaluated on an on- going basis for their ability to perform their duties adequately and effectively and to safeguard the interests of the Company and other stakeholders in order to achieve sound and prudent management of the Company by fit and proper persons. The members of the Board and its Com- mittees are evaluated: • On a collective basis, which takes into account the overall operation of the Board and its Committees and • On an individual basis regarding the assessment of each member contribu- tion to the successful operation of the Board. The periodic evaluation of the Board of Page 96 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Directors members and its Committees is held on an annual basis within the first quarter of each year, unless otherwise de- cided by the Remuneration & Nomination Committee and concerns the period of 12 months of the previous year. Self-evaluation of the overall performance of the Board of Directors and its Committees The self-evaluation of the overall perfor- mance of the Board of Directors and its Committees is carried out taking into ac- count the purposes, responsibilities, their operation based on the Articles of Asso- ciation, the Regulations and the legislative and regulatory framework. Also, during the overall evaluation, the composition, the diversity, and the effective coopera- tion of the members of the Board of Di- rectors for the fulfillment of their duties are taken into account. It is conducted on the basis of questionnaires which are ap- proved by the Remuneration & Nomina- tion Committee and are completed by the members of the Board of Directors and the Committees. Members should answer all the questions on the questionnaires. The Remuneration & Nomination Commit- tee decides on the initiation of the self- evaluation process and decides whether it is deemed appropriate for the annual eval- uation to be carried out internally or with the assistance of an independent external consultant. Individual Evaluation of Board of Directors Members and its Committees The individual evaluation of the members of the Board concerns the performance of each member on an individual basis and the assessment of his/her contribution to the effective operation and overall perfor- mance of the Board. Each member of the Board is evaluated by the Chairman or the Vice-Chairman and all the other members of the Board of Direc- tors, regarding the fulfillment of the role and the more specific tasks assigned to him/her, as defined in the Rulebook of the Board of Directors and its Committees, in the Internal Regulations of the Company, in the Corporate Governance Code as well as in law 4706/2020. During the individual evaluation, the sta- tus of the member is taken into account (executive, non-executive, independent non-executive), the participation in spe- cial Committees, the assumption of special responsibilities / projects, the time dedi- cated during the fulfillment of his / her du- ties, the behavior as well as the utilization of theoretical knowledge and professional experience possessed. The evaluation is carried out on the basis of questionnaires that are completed for each member, while in addition, in the context of the individual evaluation, the Chairman or Vice-Chairman may meet individually with the members, if this is deemed appropriate or necessary. In case a low score is identified or there are suggestions for improvement for specific members, the Chairman and/or the Vice Chairman of the Board are informed so as to consider the possibility of an individual meeting of the Chairman and / or the Vice- Chairman with the member of the Board for their update, the discussion of the in- dividual points that have been recorded and the definition of the actions that are deemed appropriate to follow. Regard- ing the evaluation of the Chairman, a cor- responding update is made, if necessary, to the Chairman of the Remuneration & Annual Financial Report as of 31.12.2022 Page 97 of 268 Amounts in thousand Euro, unless stated otherwise Nomination Committee. During the rele- vant briefing of the Chairman of the Board, the anonymity of the members who made the evaluation is ensured and in no case are their details disclosed to the Chairman of the Board or to the Remuneration & Nomination Committee. Based on the evaluation of the Board of Directors members and its Committees, as described above, with reference period the closing fiscal year 2022 (01.01.2022- 31.12.2022), no significant weaknesses were identified. Therefore, the Board of Directors decided not to prescribe any cor- rective actions. VI. General Meeting and Shareholders’ Rights 1. Authorities of General Meeting • The General Meeting of the Compa- ny’s shareholders is the highest corpo- rate body and is entitled to decide on any issue that concerns the Company, while its decisions also bind share- holders that are not present or who disagree. • Issues regarding invitation, convening and conducting General Meetings of shareholders, that are not particularly defined by the Company’s current Ar- ticles of Association are governed by the relevant provisions of articles 116- 140 of Law 4548/2018, as currently in effect. 2. Convening the General Meeting • The General Meeting convenes at the company’s registered offices or in a district of another municipality within the prefecture of its domicile or anoth- er municipality near the domicile. The General Meeting may also convene in the district of the municipality where the domicile of the relevant organized market is located. • Participation in voting remotely, mean- ing via either audiovisual/ electronic or other means, like mail vote, during the General Meeting of shareholders is permitted given the prior disclosure to shareholders of the meeting agen- da issues and relevant voting ballots or the mail vote forms, accompanying such issues at least five (5) days prior to the General Meeting. The issues and voting ballots may be provided and submitted online through the internet. Shareholders that vote in this manner are calculated to define quorum and majority, given that the relevant ballots or the mail vote forms have been received by the company at least one (1) full day prior to the day of the General Meeting. In this case, the Company shall take ade- quate measures to: (a) be able to ensure the identity of the participant, the participation of per- sons who are entitled to participate in or attend the General Meeting and the security of the electronic connection, (b) enable the participant to monitor the proceedings of the Meeting by elec- tronic or audiovisual means and to ad- dress the Meeting, verbally or in writ- ing during the meeting, and to vote on the items on the agenda; and (c) ensure the ability to record accurately the participant’s remote voting. • The members of the Board of Direc- tors as well as the Auditors of the Company are entitled to attend the General Meeting. The head of the Page 98 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Internal Audit Unit must attend the General Meetings of shareholders. The Chairman of the General Meet- ing may, under his/her responsibility, allow the presence of other persons who do not have shareholder status or are not shareholders’ representatives in the Meeting insofar as this is not contrary to the Company’s interest. These persons are not considered to be members of the General Meeting solely because they have spoken on behalf of a present shareholder or at the invitation of the Chairman. 3. Representation of shareholders at the General Meeting Shareholders that have the right to par- ticipate in the General Meeting may be represented in such by legally authorized proxies. 4. Chairman of the General Meeting • The Chairman of the Board of Direc- tors temporarily serves as chairman of the General Meeting, or if he is unable his substitute, as defined by the article 9 of the Articles of Association or if the latter is unable also, then the oldest in age from the present Members. Those appointed by the Chairman serve as temporary Secretary of the General Meeting. • Following the reading of the final list of shareholders that have voting rights, the Meeting proceeds with electing a Chairman and a Secretary who also serves as a vote teller. 5. Minutes Copies or extracts from the minutes of the General Meeting shall be ratified by the Chairman or by his / her legal substitute or by his / her replacement or by any person appointed by the Board of Directors. 6. Shareholders’ Rights before the General Meeting • From the date of publication of the invitation for the convening of the General Meeting or Assembly up to that day, the Company shall post on its website the following information: (a) the invitation to convene the Gen- eral Meeting, (b) the total number of shares and vot- ing rights that the shares incorporate at the date of the invitation, indicating also separate totals per share class, (c) the forms to be used for voting by a representative or delegate, and, where provided for, by ballot paper or mail vote and by electronic means, and (d) the documents to be submitted to the General Meeting, (e) a draft decision on each item of the proposed agenda and the draft reso- lutions proposed by the shareholders pursuant to paragraph 3 of article 141 of Law 4548/2018. • The Company publishes the results of voting on its website, under the re- sponsibility of the Board of Directors, within five (5) days from the date of the General Meeting, specifying for each decision at least the number of shares for which valid votes, the pro- portion of the capital represented by these votes, the total number of valid votes, and the number of votes for and against each decision and the number of abstentions. Annual Financial Report as of 31.12.2022 Page 99 of 268 Amounts in thousand Euro, unless stated otherwise Right of Participation and Voting Each share is entitled to one (1) vote. The General Meeting is entitled to participate as shareholder in the records of the De- materialized Securities System (DSS) man- aged by Societe Anonyme with the name “Greek Central Securities Depository SA” (GCSD) or the one identified as such based on the relevant date through the regis- tered mediators or other intermediaries in accordance with the provisions of the legislation (law 4569/2018, law 4706/2020 and Regulation (EU) 2018/1212) as well as the Regulation of Operation of the Greek Central Securities Depository SA (Govern- ment Gazette B 1007/16.03.2021). Proof of shareholder status can be per- formed by any legal means, and, in any case, based on information received by the Company from the CSD, under the condition it provides registry services or through the participants and registered in- termediaries in the CSD in any other case. For the Repeated General Meeting the sta- tus of shareholder must exist at the begin- ning of the fifth (5 th ) day prior to the day of the General Meeting in accordance with the provisions of article 124 par. 6 of law 4548/2018, as in force today, provided that the adjourned or repeated meeting is not more than thirty (30) days from the record date. If this is not the case or if a new invita- tion is published in the case of the repeat- ed General Meeting, the General Meeting is attended by the person who has the shareholder status at the beginning of the third (3 rd ) day before the postponed or the repeated General Meeting. Only those that have the shareholder ca- pacity during the respective record date is considered by the Company to have the right of participation and voting at the General Meeting (first and / or repeat meeting). It is noted that the exercise of the above rights (participation and voting) does not require the blockage of the beneficiary’s shares or any other relevant process, which limits the ability to sell or transfer shares during the time period between the record date and the date of the General Meeting. Minority Rights of Shareholders Pursuant to article 141 of Law 4548/2018, the shareholders have, inter alia, the fol- lowing rights: (a) At the request of shareholders, rep- resenting one twentieth (1/20) of the paid-up share capital, the Board of Directors is obliged to convene an Ex- traordinary General Meeting of Share- holders, appointing a meeting date, which shall not be more than forty five (45) days from the date of submission of the application to the Chairman of the Board of Directors. The application contains the subject of the agenda. If no General Meeting is convened by the Board of Directors within twenty (20) days from service of the relevant application, the convo- cation shall be carried out by the ap- plicant shareholders at the expense of the Company, by a court order issued in the interim proceedings. This deci- sion defines the place and time of the meeting as well as the agenda. The decision is not challenged by legal means. (b) With the request of shareholders that represent one twentieth (1/20) of the paid up share capital, the Board of Di- rectors of the Company is obliged to list additional issues on the General Meeting’s agenda, if the relevant re- quest is received by the Board at least fifteen (15) days prior to the General Page 100 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Meeting. The request for the listing of additional issues on the daily agenda is accompanied by a justification or by a draft resolution for approval by the General Meeting and the revised agenda is published in the same man- ner as the previous agenda, at least thirteen (13) days prior to the General Meeting date and at the same time is disclosed to shareholders on the Company’s website together with the justification or draft resolution sub- mitted by the shareholders according to those stipulated by article 123, para- graph 4 of Law 4548/2018. If these issues are not published, the requesting shareholders are entitled to request the postponement of the General Meeting and to make the publication themselves. (c) Shareholders representing one twen- tieth (1/20) of the paid-up share capi- tal shall have the right to submit draft decisions on issues included in the original or any revised agenda. The relevant application must reach the Board of Directors seven (7) days prior to the date of the General Meeting, the draft decisions being made avail- able to the shareholders according to the provisions of article 123 par. 3 of law 4548/2018 six (6) at least days prior to the date of the General Meeting. The Board of Directors is not obliged to enroll issues on the agenda or to publish or disclose them together with justifications and draft decisions sub- mitted by the shareholders according to the above paragraphs b and c re- spectively if their content comes obvi- ously contrary to law or ethics. (d) At the request of a shareholder or shareholders representing one twenti- eth (1/20) of the paid-up share capital, the Chairman of the Meeting shall be obliged to postpone the decision of the General Assembly, either ordinary or extraordinary, for all or certain mat- ters, setting a day for the continua- tion of the meeting to conclude with these matters, the one specified in the shareholders’ application, but this cannot be more than twenty (20) days from the date of the postponement. The postponement of the General Meeting is a continuation of the previ- ous one and no repetition of the pub- lication formalities of the sharehold- ers’ invitation is required, and new shareholders cannot participate in it, subject to the relevant participation formalities. (e) Following a request of any sharehold- er that is submitted to the Company at least five (5) full days prior to the Gen- eral Meeting, the Board of Directors is obliged to provide to the General Meeting the specifically required in- formation on the Company’s affairs, to the extent that such are useful for the real assessment of the agenda issues. No obligation to provide information exists when the relevant information is already available on the Company’s website especially in the form of ques- tions and answers. Also, at the request of shareholders representing one twentieth (1/20) of the paid up capital, the Board of Directors is obliged to an- nounce to the General Meeting, if or- dinary, the sums paid over the last two years to each member of the Board of Directors or the directors of the Com- pany, as well as any benefit to such persons from any cause or contract between the Company and the mem- bers. In all the above cases, the Board of Directors may refuse to provide the information for substantive reason, Annual Financial Report as of 31.12.2022 Page 101 of 268 Amounts in thousand Euro, unless stated otherwise which is recorded in the minutes. Such a reason may be, in the circumstances, the representation of the requesting shareholders in the Board of Directors in accordance with Articles 79 or 80 of Law 4548/2018. In the cases of this paragraph, the Board of Directors may respond in unison to shareholder re- quests with the same content. (f) Following a request by shareholders that represent one tenth (1/10) of the paid up share capital, which is submit- ted to the Company at least five (5) full days prior to the General Meeting, the Board of Directors is obliged to pro- vide to the General Meeting informa- tion on the development of corporate affairs and the financial position of the Company. The Board of Directors may decline the provision of such in- formation for reasonable cause, which is stated in the minutes. Such a reason may be, according to the circumstanc- es, the representation of the request- ing shareholders in the Board of Direc- tors in accordance with Articles 79 or 80 of Law 4548/2018 or if the relevant members of the Board of Directors have received the relevant informa- tion in a sufficient manner. (g) At the request of shareholders rep- resenting one twentieth (1/20) of the paid-up share capital, the voting on a subject or issues on the agenda shall be made by open vote. In all the cases of Article 141 of Law 4548/2018, the requesting sharehold- ers are required to prove their share- holder status and, except in the cases of the first subparagraph of paragraph 6 and paragraph 10, the number of shares they hold in exercising their rights. Demonstration of sharehold- er status can be done by any legal means, however, based on informa- tion received by the Company from the CSD, under the condition it pro- vides registry services or through the participants and registered intermedi- aries in the CSD in any other case. (h) Shareholders of the Company, repre- senting at least one twentieth (1/20) of the paid-up share capital, are enti- tled to request extraordinary audit of the Company by court which has juris- diction in the procedure of voluntary jurisdiction. Control shall be ordered if acts that violate provisions of the Company’s law or the Articles of As- sociation or decisions of the General Meeting are suspected. (i) Shareholders of the Company repre- senting one fifth (1/5) of the paid-up share capital are entitled to request the court to audit the Company, since from the course of the company and on the basis of certain indications it is believed that the management of corporate affairs is not exercised as required by sound and prudent man- agement. The court may consider that the representation of the requesting shareholders in the Board of Direc- tors in accordance with Articles 79 or 80 does not justify the shareholders’ request. (j) Shareholders representing one twen- tieth (1/20) of the paid-up share capi- tal have the right to submit in writing to the Board of Directors an applica- tion for the exercise of the Company’s claim pursuant to article 103 of Law 4548/2018. (k) Shareholder holding shares repre- senting 2 percent (2/100) of the share capital may request the annulment of a decision of the General Meeting that took place in a manner not consistent Page 102 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise with the law or the Articles of Associa- tion, if he/she did not attend the Gen- eral Meeting or opposed the decision. (l) At the request of a shareholder or shareholders representing at least one third (1/3) of the paid-up capital, the Company may be dissolved by a court order if there is an important reason for doing so, which in a clear and per- manent manner, proves that its con- tinuance is impossible. Process for exercising voting rights through a proxy The shareholder participates in the Ex- traordinary General Meeting and votes either in person or through a proxy. Each shareholder may appoint up to three (3) proxies. Legal entities participate in the General Meeting by appointing up to three (3) persons as representatives. However, if a shareholder owns Company shares, which appear in more than one security accounts, this limitation does not obstruct the said shareholder from appointing dif- ferent proxies for the shares that appear in each security account in relation to the General Meeting. A proxy that acts on be- half of more than one shareholder, can vote separately for each shareholder. Specifically for shareholder participation by proxy at the Annual Ordinary Gen- eral Meeting or any Repeated Meeting, remotely in real-time by teleconference, the shareholder or the Participant of the Securities Account in the DSS or another intermediary acting as custodian of the shareholder and holding his/her shares may appoint up to one (1) proxy. A shareholder proxy must disclose to the Company, prior to the beginning of the Ex- traordinary General Meeting, any specific event that may be useful to shareholders in assessing the risk of the proxy serving other interests than those of the represent- ed shareholder. There might be conflict of interests specifically when the proxy: (a) is a shareholder that exercises control on the Company or is another legal en- tity controlled by the shareholder, (b) is a member of the Board of Directors or generally the management of the Company or of a shareholder that exer- cising control on the Company, or an- other legal entity that is controlled by a shareholder who exercising control of the Company, (c) is an employee or Certified Public Ac- countant of the Company or sharehold- er that exercising control of the Compa- ny, or another legal entity controlled by the shareholder who exercising control of the Company, (d) is a spouse or first degree relative with one of the persons mentioned above in cases (a) through (c). The appointment and revocation or re- placement of the representative or proxy is applied in written or electronically and submitted to the Company in the same form, at least forty eight (48) hours prior to the defined date of the General Meeting. The Company makes available the form it uses to appoint proxies on its website. This form is filled in and submitted signed by the shareholder to the Company’s Inves- tor Relations Department or is sent by fax to the latter at least forty eight (48) hours prior to the date of the General Meeting. The beneficiary shareholder is requested to confirm the successful dispatch and re- ceipt of the proxy form by the Company by contacting the Company during working days and hours. Procedure for remotely participating in the vote by Mail vote. Annual Financial Report as of 31.12.2022 Page 103 of 268 Amounts in thousand Euro, unless stated otherwise In addition, shareholders have the option to participate remotely, in person or by proxy, at the vote on the item of the Annu- al Ordinary General Meeting that will take place before the General Meeting, under the terms of article 126 of law 4548/2018 and under what it is mentioned below. Specifically, shareholders that wish to par- ticipate and vote remotely on the item of the Annual General Meeting that will take place before the General Meeting, can complete, and submit the “Mail vote form” which has been uploaded at the site of the Company, signed with a dully verified sig- nature form or be sent digitally signed by using a recognized digital signature (quali- fied certificate) by the proxy or sharehold- er through email. Shareholders’ Rights Shareholders’ Rights & their exercise The Company has issued common reg- istered shares listed on the Athens Ex- change, and registered in immaterial form in the records of the Dematerialized Secu- rities System. There are no special rights in favor of specific shareholders. The acquisition of Company shares implies the full and without any reservation ac- ceptance of its Articles of Association and of the legal decisions made by its relevant bodies. Each share provides rights correspond- ing to the respective percentage of share capital such represents. The responsibil- ity of shareholders is limited respectively to the nominal value of shares owned. In case of co-ownership of a share, the rights of the co-beneficiaries are exercised only by a joint representative of such. The co- beneficiaries are responsible with solidar- ity and entirely for fulfilling the obligations that emanate from the common share. Each Company share incorporates all the rights and obligations defined by Law 4548/2018 as in effect and its Articles of Association, and specifically: • The right to participate and vote in the General Meeting. • The right to receive dividend from the Company’s earnings. • The right on the product of liquida- tion, or respectively the capital depre- ciation that corresponds to the share, given that such is decided by the Gen- eral Meeting. The General Meeting of the Company’s shareholders main- tains all its rights during liquidation. • The pre-emptive right in any increase of the Company’s share capital that takes place by cash and through the issue of new shares, as well as the pre- emptive right in any issue of convert- ible bonds, given that the General Meeting that approves the increase does not decide differently. • The right to receive a copy of the annu- al financial statements and reports by the Certified Public Accountants and Board of Directors of the Company. • The rights of minority shareholders described below. VII. Sustainable Development Policy At the core of the Sustainable Develop- ment Policy, the Company has a vision to be the most valuable partner for its cus- tomers and suppliers and at the same time to increase its share value, always taking care of the well-being of all its people. In this context, the Company seeks the implementation of practices to promote Sustainable Development and is commit- ted through its policies to show respect for the human factor, society and the environ- Page 104 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise ment, in order to remain a reliable social partner. Our approach to Sustainable De- velopment is based on six pillars: (1) We operate with respect for the envi- ronment, (2) We contribute to the Circular Economy and the Economy of New Plastics, (3) We create value for our people, (4) We contribute in the local community, (5) We operate with transparency and in- tegrity, (6) We ensure business continuity and opti- mal financial performance. The main risks and their management, the Company’s performance and its commit- ments under the 17 Sustainable Develop- ment Goals are described in detail in the annual Sustainable Development Reports and the Non-Financial Information Re- ports. The recording and communication of all the above issues to the interested parties is in line with international and na- tional standards and indicators, aiming at reliable and transparent information. Implementation and Monitoring This policy is in line with the requirements of the existing legislative and regulatory framework. • In addition, the Company in the con- text of preparation and implementa- tion of this policy, has taken into ac- count and has voluntarily adopted international standards and principles, with emphasis on: • the “Agenda 2030” of the United Na- tions (UN) with the 17 Sustainable Development Goals adopted in Sep- tember 2015 by the 193 UN Member States, • the ESG 2019 Information Disclosure Guide of the Athens Stock Exchange, • the United Kingdom Modern Slavery Act 2015. The monitoring of the implementation of the Sustainable Development Policy is the responsibility of the Sustainability Committee at the Board of Directors level, while at the administrative level, of the Sustainable Development Team. In this context, the Internal Audit Service can as- sist through periodic audits. The Sustain- able Development Policy was approved by the 16.07.2021 of the Board of Directors, is reviewed on an annual basis and is avail- able on the corporate website. The Board of Directors and / or the Inter- nal Audit Service may suggest the revision of the Sustainable Development Policy and any amendment thereto shall be ad- equately documented and accompanied by the approval of the Board of Directors. The rules, commitments and principles contained in the Corporate Governance Code, the Code of Ethics and Conduct, the Internal Rules of Operation, the Safety, Health, Environment Policy, Social Contri- bution Policy and Product Quality Policy in each relevant policy or code adopted and implemented by the Company, remain in force, and are applied in parallel with this policy. Everything mentioned in this policy is applied and monitored in the same way for the Company and for all its subsidiaries. This Sustainable Development Policy: • Binds the Company and all its subsidi- aries and covers all the activities of the Company in Greece and abroad, in- cluding all operations carried out by the Company or its subsidiaries. • Applies to all members of the Board of Directors, senior executives, em- ployees of the Company and its sub- Annual Financial Report as of 31.12.2022 Page 105 of 268 Amounts in thousand Euro, unless stated otherwise sidiaries, and in general all persons employed in the Company or its sub- sidiaries either through an employ- ment contract or through another contractual relationship. • Is disclosed to third parties provid- ing services to the Company (supply chain) or acting on its behalf or in co- operation with it (value chain), includ- ing partners and suppliers and any other persons with whom the Com- pany cooperates under outsourcing contracts or other agreements. Stakeholders Stakeholders are the “environment” (di- rect and indirect), which interacts with the Company and is interested in its activities. Interested parties are defined as those en- tities that either have a direct or indirect impact on the Company and its activities or respectively are recipients of the direct or indirect impact arising from the Com- pany and its activity. The Company maps the groups of stakeholders that influence with their decisions its ability to imple- ment its strategy and achieve its goals. On an annual basis, it validates the stake- holder groups, improves the methods of communication and consultation with them and records their basic needs and ex- pectations as they arise from its operation. For the Company, the establishment of the dialogue with the interested parties is very important, as it contributes to its effective operation through the understanding of the market conditions and the mitigation of potential risks. Corporate Governance Through the established corporate gov- ernance system, the Company adminis- ters the management and control issues, monitors the compliance with the cur- rent legislation and the legal framework and controls the management methods related to shareholder issues. This system is framed by the Corporate Governance Code applied by the Company. Regarding corporate governance, the Company has set up a Sustainability Committee, where members of the Board of Directors are part of. The Committee is accountable to the Board of Directors for the supervision and the proper process of implementation of the Company’s sustainable development strategy, which concerns policies, goals, actions and results in environmental, so- cial and ethical issues related, both inter- nally and with the external environment of the Company. At the administrative level, a Sustainable Development Team has been appointed, which includes executives from various departments of the Company as well as representatives of the Subsidi- aries and which supports the Company’s Management in the implementation of its strategy for sustainable development. The Team is coordinated by the Chief Sustain- ability Officer. Fight against Corruption and Bribery The Company is committed to zero tol- erance in matters of corruption, bribery and extortion and aims to prevent such phenomena in all aspects of its activity, conducting its business with integrity, in accordance with the highest standards of ethics and applying applicable laws. The Company has established the Code of Ethics and Conduct, which defines the standards of conduct required of all em- ployees and includes basic principles, the observance of which aims to prevent and/ or eliminate corruption. The Code of Eth- ics and Conduct is available to all employ- ees through the corporate website. In ad- dition, the internal audit department, in the context of its various audits, includes targeted audits in this regard to avoid any Page 106 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise incidents of corruption. Respect for Human Rights The Company and all those who repre- sent, cooperate and/or are employed in it must comply with the Code of Ethics and Conduct applied by the Company and all provisions and regulations of it regarding the respect of human rights. The Company is committed to zero tolerance, in terms of harassment in the workplace, in any form of discrimination based on race, religion, gender, nationality, age, disability, sexual orientation, etc., in cases of forced and child labor in both the Company itself, as well as to its subsidiaries. Suppliers’ Ethics and Conduct The Company recognizes the necessity of applying the principles of ethics and con- duct, to which it is committed, in its supply chain. In this context, there is a continuous effort to evaluate its suppliers and part- ners in accordance with their social and environmental commitments and perfor- mance, thus ensuring the risk of devia- tion from good social and environmental standards, which include issues of work practices and human rights, as well as the fight against corruption. At the same time, the Company has fully implemented the Modern Slavery Act of the United King- dom of 2015 and has zero tolerance in rela- tion to its violation. Social Responsibility The Company seeks, through its business activities, to achieve high performance, to produce and distribute directly or indirect- ly economic value to the society in which it operates, with particular emphasis: • On strengthen the economies of the countries in which it operates, through the cash flows it creates to stakehold- ers and in particular tax payments, payments to suppliers, payroll pay- ments to employees, dividends to shareholders and investments in local communities. • On the needs of the citizens and the societies that frame the Company and are influenced by its activities. • On the employment, through the direct and indirect creation and / or maintenance of jobs throughout the value chain of the Company. Quality, Safety and Customer Service The Company prioritizes the quality of its products and the safety of its custom- ers and has established a Product Quality Policy. The Company complies with the respective national laws and adopts inter- national norms, safety rules, best practices and standards, regarding the design and production of products in all its facilities, monitoring and eliminating any unfortu- nate effects on the health and safety of customers and end users. The products are controlled in all phases of the produc- tion process and the Company has adopt- ed management systems and quality as- surance procedures in accordance with international standards. Labor Issues The Company recognizes the value creat- ed by human capital and considers it cru- cial for the good quality of its products, the high productivity and the achievement of its competitive advantage. Investing in its people is a priority, by encouraging life- long learning, collaboration, initiative and personal achievement. Annual Financial Report as of 31.12.2022 Page 107 of 268 Amounts in thousand Euro, unless stated otherwise In order to ensure a responsible working environment of well-being, the Company has established the Code of Ethics and Conduct, various company directives, in- ternal regulations and policies related to human and labor rights, health, safety and well-being of human resources, evolution and development of its potential and zero tolerance of harassment, all forms of dis- crimination, forced and child labor. The Company also respects the privacy of its employees by keeping all their personal information confidential and the Top Man- agement promotes in various ways the as- surance and enhancement of employee benefits, providing a working environment of equal opportunities for all. The priority is to minimize the possibility of causing an accident at work or illness and that is why the implementation of the Safety, Health, Environment Policy has been systemati- cally developed and monitored. Social contribution The Company has established a unified Social Contribution Policy, through which all subsidiaries recognize their responsi- bility to the society. The Sustainable De- velopment Team is in constant collabora- tion with executives of the subsidiaries, in order to plan, coordinate and implement, jointly, social actions and initiatives for public benefit purposes. In order to make a practical contribution to the local com- munity, the “Stavros Halioris Social Center” has been established, which constitutes a prominent example for the Company, with actions and activities of educational, cul- tural, recreational and social content. Environmental Liability The Company has an Safety, Health, Envi- ronmental Policy always guided by the im- provement of the environmental impacts resulting from its operation, with commit- ment to the application of the principles of circular economy, responsible waste management, reduction of energy con- sumption and reduction of greenhouse gas emissions. Circular Economy The plastics industry faces a variety of chal- lenges and opportunities. For this reason, the Company has adopted the principles of the circular economy from the supply of raw materials and product design, incor- porating practices based on the principles of reduction, reuse and recycling, up to the entire life cycle of its products. The adop- tion of a new, innovative, circular economy model is a very important initiative by the Company, recognizing its contribution to the efficient use of resources, as an impor- tant link in the global plastic value chain. In this context, the Company is commit- ted, in terms of responsible supply of raw materials and saving of natural resources, to replace 8,500 tons of raw material with recycled plastic by 2025. At the same time, the Company monitors with relevant measurement indicators and improves where possible its environmental perfor- mance. Furthermore, it fully complies with the legal requirements for waste manage- ment, storage, transport, recycling and dis- posal, ensuring their proper management through partnerships with certified bodies and organizations, while, at the same time, it participates in global alliances. Climate Change The Company recognizes the risks and impacts that may arise in its business ac- tivity due to climate change, such as the occurrence of extreme weather events or Page 108 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise rising temperatures, which may affect the production process and bring about sig- nificant changes in its activities and abrupt changes in its income and expenses in the short, medium and long term. To mitigate the risks arising from climate change, but also to achieve positive financial results for itself and its operating environment, the Company adapts its business model to re- duce its carbon footprint (direct emissions, energy consumption, use of recycled ma- terial, waste management) and focus on the development of innovative products and services, applying the principles of the circular economy. Essential non-financial issues The Group proceeded at the end of 2022 to the identification of important issues related to the creation of economic, social and environmental benefit throughout the value chain and proceeded to the pri- oritization of them in relation to its busi- ness model based on the methodology of the internationally valid GRI reporting standards. The topics that emerged from the pri- oritization as material after consultation with the interested parties (Shareholders & Investment Community, Board of Direc- tors, Management, Employees, Custom- ers, Suppliers, State, Non-Governmental Organizations & Civil Society, Business As- sociations) were endorsed by the Sustain- ability Committee and the Audit Commit- tee. These issues will be analyzed in detail in the 2022 Sustainability Report regarding the Group’s approach and performance. Material topics • Virgin & recycled raw materials • Economic value generated & distrib- uted • Customer health, safety & satisfaction • Business ethics & anti-corruption • Employee health, safety & well-being • Product quality, safety & information • Energy efficiency & renewable energy • Regulatory compliance & policies • Product innovation & life cycle • Direct & indirect GHG emissions Standards for the publication of non- financial information The Report (Statement) of non-financial in- formation, which is analyzed in CHAPTER 12, has been compiled according to GRI standards (core selection). For reasons of consistency and completeness of the infor- mation provided, as well as comparability of the data, the corresponding data of the two previous years are also displayed. At the same time, other valid standards, tools and recommendations from internation- ally recognized initiatives have been taken into account in order to ensure compliance with a complete as possible framework of disclosure indicators, such as the SASB standards for the chemicals sector, the rec- ommendations for the disclosure of finan- cial information related to climate of the international initiative TCFD, the CDP and EcoVadis assessments on environmental impacts and business practices, the ESG Nasdaq Reporting Guide, the ten prin- ciples of the United Nations Global Com- pact (UNGC), the twenty criteria of the Greek Sustainability Code (GSC), the ESG Information Disclosure Guide of the Ath- ens Stock Exchange, where the Company participates in the ATHEX ESG index, as well as the impact on the UN Sustainable Development Goals (SDG). Annual Financial Report as of 31.12.2022 Page 109 of 268 Amounts in thousand Euro, unless stated otherwise SECTION 12: Non-Financial Report INTRODUCTION Content The current Non-Financial Report (State- ment) constitutes part of the Annual Fi- nancial Report of Thrace Plastics Group (hereinafter «Group»), it concerns the fiscal year January 1, 2022 to December 31, 2022 and it was prepared in accordance with the Group’s Non-Financial Information De- velopment Process, as it was approved on 16/07/2021 by the Board of Directors. The Group’s business model is described in de- tail at the beginning of the Annual Finan- cial Report. This section includes informa- tion on the following: 12.1 Approach to Sustainable Development In addition, it contains a detailed descrip- tion of the Group’s actions for the follow- ing thematic areas, as defined in section 7 «Report (Statement) of Non-Financial Information» of circular 62784/2017 in accordance with the provisions of Law 4403/2016: 12.2 Anti-corruption and issues related to bribery 12.3 Respect for human rights 12.4 Supply chain issues 12.5 Social and labor issues 12.6 Environmental issues and climate change Each of the above areas is analyzed in three axes: (1) Main risks and their manage- ment, (2) Due diligence policies and other policies, (3) Results of said policies and non-financial key performance indicators. In addition to the above, the following the- matic sections are also included: 12.7 Impact of the COVID-19 pandemic on non-financial issues 12.8 Taxonomy Report, in accord- ance with Taxonomy Regulation 2020/852/EU Frame of reference This Report (Statement) of non-financial information was prepared by the Group’s Sustainable Development Department. The responsibility for the accuracy and completeness of the quantitative and qualitative information included in the Report (Statement) belongs exclusively to the Group. It has been compiled according to GRI standards. For reasons of consist- ency and completeness of the informa- tion provided, as well as comparability of the data, the corresponding data of the two previous years are also displayed. At the same time, other valid standards, tools and recommendations from internation- ally recognized initiatives have been taken into account in order to ensure compli- ance with a complete as possible frame- work of disclosure indicators, such as the SASB standards for the chemicals sector, the recommendations for the disclosure of financial information related to climate of the international initiative TCFD, the CDP and EcoVadis assessments on envi- ronmental impacts and business practices, the ESG Nasdaq Reporting Guide, the ten principles of the United Nations Global Compact (UNGC), the twenty criteria of the Greek Sustainability Code (GSC), the ESG Information Disclosure Guide of the Athens Stock Exchange, where the Group participates in the ATHEX ESG index, as Page 110 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise well as the impact on the UN Sustainable Development Goals (SDG). For clarification on the terminologies included in this re- port, an Index of Abbreviations is listed at the end of the section. Disclaimer Any deviation at last-digit-level of the quan- titative information in this Report (State- ment) is due to rounding of the amounts. Prices listed are subject to change. The val- ues mentioned may be subject to change in relation to the final quantitative infor- mation after their verification by a certified body and detailed data to fully cover the indicators that will be published in the 5 th Sustainable Development Report for the year 2022. Insignificant differences that may have arisen in previous years are due to the detailed recalculation of the data and the conversion rates. 12.1 Approach to Sustainable Development OBJECTIVE The Group’s objective through the principles, policy and strategy for sustainable devel- opment is to create value and develop with respect for society and the environment, so as to remain a reliable social partner. THRACE GROUP IS ALIGNED WITH THE MOST SIGNIFICANT GLOBAL SUSTAINABLE DEVELOPMENT INITIATIVES Assessment of the environmental performance of products in all three sectors of activity 2020 Assessment of business practices and commitment to sustainable development 2021 Participation in the international organization CDP to evaluate environmental performance 2021 2018-2019 Disclosure of approach and annual performance based on GRI standards Certication of recycled content by assessing its traceability 2022 Inclusion in the ATHEX ESG index of the Athens Stock Exchange 2021 2023 Validation of CO2 reduction targets to address climate change 2022 Measurement, disclosure and continuous reduction of CO2 emissions (scope 1, 2, 3) PRINCIPLES ENVIRONMENT Support circular economy Deal with climate change SOCIAL Empower human capital Contribute to society GOVERNANCE Operate with integrity Ensure business connuity Annual Financial Report as of 31.12.2022 Page 111 of 268 Amounts in thousand Euro, unless stated otherwise ACTIONS AND PERFORMANCES 2022 DISTINCTIONS AND EVALUATIONS • The Group participates in the interna- tional organization CDP, which evalu- ates organizations regarding their en- vironmental impact, environmental risk management and demonstration of best practices. In 2022 it moved up 2 levels in the ranking receiving a ‘B’ score for its performance related to cli - mate change, with external certification based on AA1000 verification standard, confirming that it is on par with its in - dustry average, while exceeding the global average • The Group participates in the interna- tional initiative SBTi (Science Based Targets Initiative), which validates the targets for reducing emissions accord - ing to the most valid scientific data on climate change. In 2022, it committed to the establishment of scientific targets for reducing the carbon footprint and their validation and has already started this process. • The Group participates in the European organization EcoVadis, which evaluates organizations regarding their business practices and commitment to sustain - able development. In 2022 it received 5 silver awards through the companies Pack, Nonwovens & Geosynthetics, Pol - yfilms, Greiner and Ipoma. Page 112 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise PARTICIPATION IN INITIATIVES • In EDANA which consists of a global association of non-woven and related industries. • In the organization Polyolefin Circular Economy Platform (PCEP) which aims to redesign and recycle packaging products and materials. • In Circular Plastics Alliance (CPA) ini- tiative which aims to use 10 million tonnes of recycled plastic by 2025 within the EU. • In Synthetic Turf Council (STC) which is a non-profit trade association for the promotion, development and support of the synthetic turf industry. • In the European Man-made Fibers As- sociation (CIRFS) which is active in the European technical fiber industry. • In the European Association of Geo- synthetics Manufacturers (EAGM) which aims to promote the knowl- edge and use of European synthetic products. • In the Association of Hellenic Plastic Industries (AHPI) which is active in the field of plastic applications. • In the Association of the Greek Manu- facturers of Packaging & Materials (AGMPM) which is active in the pack- aging material production industry. • In the Association of Businesses and Industries (SEV) which aims to repre- sent Greek businesses and industries and defend their interests. Certifications ISO 14001:2015 Environmental management ISO 45001:2018 Health and Safety Management ΙSO 50001:2018 Energy management ISO 9001:2015 Quality management ISO 13485:2016 Quality management of medical technol- ogy products ISO 22000:2018 Food safety BRC, IFS, FDA, HALAL Food safety and quality Global GAP Implementation of good agricultural practices EuCertPlass Recycling of secondary raw material Recyclass Content in recycled raw material OK Recycled Calculation of recycled content CoVid Shield Health and safety Oeko-Tex® Standard 100 Content of harmful substances POLICY [ATHEX ESG: C-G4] Through Sustainable Development Policy, the Group seeks to implement practices for promoting Sustainable Development and is committed to respecting the hu- man factor, society and the environment, in order to remain a reliable social partner. Monitoring the implementation of the Sustainable Development Policy is the re- sponsibility of the Sustainability Commit- tee (Environment-Society) and the Audit Annual Financial Report as of 31.12.2022 Page 113 of 268 Amounts in thousand Euro, unless stated otherwise Committee (Corporate Governance) at the Board of Directors level and the Sus- tainable Development Directorate at the administrative level. The Sustainable De- velopment Policy was approved in 2021 by a decision of the Board of Directors, is revised annually and is available on the Group’s Website. SUPERVISION [ATHEX ESG: C-G2] Sustainability Committee It is consisted of executive and non-exec- utive members of the Board of Directors and its primary objective is, according to its Regulation, the study, pre-approval and recommendation to the Board of Direc- tors of the strategy, the way of managing and monitoring the performance of en- vironmental and social sustainability is- sues. Sustainable Development issues are discussed in the Sustainability Committee in accordance with the information it re- ceives from the Director of Sustainable De- velopment who acts as Secretary, so that the priorities, the respective goals, the rel- evant schedules, as well as the monitoring of the course of their implementation are determined. The Sustainability Commit- tee is responsible for informing the other members of the Board of Directors. Audit Committee It is responsible for the management and monitoring of corporate governance is- sues in addition to supporting the Board of Directors in its duties regarding the financial information process, internal control and risk management system pro- cedures and regulatory compliance. It is also responsible for the supervision of the internal audit department and the manda- tory audit of the annual and consolidated financial statements. Directorate of Sustainable Development Its objective is the implementation of ac- tions and initiatives that promote sustain- able development and create value for stakeholders, society and the environ- ment, in accordance with the policy and strategic plan of Sustainable Development established by the Group. Its main respon- sibilities are described in the Internal Reg- ulation of Operation. Strategy [SASB: RT-CH-110a.2, ATHEX ESG: SS-E1] The Sustainable Development Directorate has developed a Strategic Plan which has been approved by the Sustainability Com- mittee. The Strategic Plan is based on the following strategic axes, in accordance with the relevant Policy, each of which is broken down into specific actions and goals. 1. Reduction of greenhouse gas emissions in all processes The actions include continuously increas- ing the use of recycled raw material, reduc- ing residues from production processes, reducing energy consumption, investing in renewable energy sources and reducing waste. 2. Improving the environmental impact of products The actions include designing sustainable products, reducing average weight and developing new reusable solutions. Page 114 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3. Implementation of circular economy projects The actions include strengthening coop- eration with existing and new partners on the basis of circular economy initiatives and reducing the environmental impact of the supply chain. 4. Improving social aspects affecting stakeholders The actions include establishing a cooper- ation framework with suppliers based on environmental and social criteria, creating a sustainable development manual and continuously developing and training em- ployees, ensuring employees health and safety, and supporting local communities. 5. Ensuring responsible corporate governance The actions include informing about sus- tainable development issues, informing about the directives of the corporate gov- ernance legislation, ensuring their correct implementation and incorporating best practices. 6. Awareness and certification The actions include strengthening the sustainability communication strategy, life cycle analysis and environmental footprint studies for each product group, obtaining appropriate certificates and participating in international assessment initiatives. ESTABLISH DIALOGUE WITH INTERESTED PARTIES [GRI: 2-29, ATHEX ESG: C-S1] The Group, mainly through the materiality analysis, identifies the stakeholder groups that are affected by its activities, but also influence the strategy and mitigation of potential risks and thus contribute to its more efficient operation. In this context, the Group maps the groups of interested parties and annually validates them. The Group has established a Corporate Com- munication Policy in order to define a single framework for the management of corporate communication through the ob- servance of common principles and rules harmonized with its strategy. At the same time, it has established an internal and external communication process, which also covers communication with external stakeholders. MATERIALITY ANALYSIS [GRI: 3, ATHEX ESG: C-G3] The Group proceeded at the end of 2022 to the reevaluation of important issues re- lated to the creation of economic, social and environmental benefit throughout the value chain and proceeded to the pri- oritization of them in relation to its busi- ness model based on the methodology of the internationally valid GRI reporting standards. Stage 1: Understanding and updating the Group’s business model Responsible for implementation: Directorate of Sustainable Development Basis of the Group’s sustainable develop- ment strategy and approach, the Group’s policies and regulations, the UN Sustaina- ble Development Goals, industry informa- tion, international authoritative reporting standards, the Group’s risk analysis. Stage 2: Recording of important issues Responsible for implementation: Directorate of Sustainable Development Identification of actual and potential posi- tive and negative impacts of the Group on Annual Financial Report as of 31.12.2022 Page 115 of 268 Amounts in thousand Euro, unless stated otherwise the economy, the environment and soci- ety and recording of important issues that represent and group the most significant impacts. Stage 3: Validation of important issues Responsible for implementation: Sustainabil- ity Committee and Audit Committee Validation by the Sustainability Committee and the Audit Committee of the impor- tant issues that represent and group the Group’s most significant impacts on the economy, the environment and society. The important issues for the Group in rela- tion to the values and the Sustainable De- velopment Goals are the following: Support circular economy Deal with climate change 1. Product innovation & life-cycle 5. Direct & indirect GHG emissions 2. Virgin & recycled raw materials 6. Climate risks & opportunities 3. Waste & scrap management 7. Energy efficiency & renewable energy 4. Water & effluents management 8. Biodiversity & conservation Empower human capital Contribute to society 9. Employee health, safety & well-being 13. Product quality, safety & information 10. Human rights, diversity & inclusion 14. Customer health, safety & satisfaction 11. Employment creation & safeguarding 15. Responsible supply chain & local suppliers 12. Employee training & talent retention 16. Social contribution & engagement Operate with integrity Ensure business continuity 17. Business ethics & anti-corruption 21. Emergency preparedness & response 18. Governance structure & mechanisms 22. Economic value generated & distributed 19. Regulatory compliance & policies 23. Investment in infrastructure & processes 20. Privacy protection & information security 24. Risks & potential impact analysis Stage 4: Prioritization & validation of essential issues Responsible for implementation: Sustainable Development Directorate, Sustainability Com- mittee and Audit Committee Consultation with stakeholders for the prioritization of important issues. The consul- tation was carried out with representation by Group executives of the following main groups of interested parties, with whom they maintain relationship and communication. Page 116 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise • Shareholders & Investment Community • Board of directors • Management • Employees • Customers • Suppliers • State • Non-Governmental Organizations & Civil Society • Business Associations The issues that emerged from the prior- itization as material were validated by the Sustainability Committee and the Audit Committee are the following: > Virgin & recycled raw materials > Energy efficiency & renewable energy > Product innovation & life cycle > Direct & indirect GHG emissions > Customer health, safety & satisfaction > Employee health, safety & well- being > Product quality, safety & information > Economic value generated & distributed > Business ethics & anti-corruption > Regulatory compliance & policies The Group, through the material topics, fo- cuses on 7 of the 17 Sustainable Develop- ment Goals in which monitors its progress: RISK MANAGEMENT [ATHEX ESG: SS-G3] The Group has adopted a Risk Manage- ment Framework, which aims at effective management of risks and integrates the Risk Management Policy and Procedures. This framework helps Management to identify new opportunities and challeng- es, provides consistency and maturity in risk management and aligns risk-taking with willingness to undertake, enforces a culture of integrity, transparency, account- ability and continuous development, improves the decision-making process and supports the responsible autonomy, strengthens the Group’s control environ- ment in order to be able to respond quick- ly to changing environments, reduces per- formance variability, improves resource development and strengthens the Group’s resilience. Annual Financial Report as of 31.12.2022 Page 117 of 268 Amounts in thousand Euro, unless stated otherwise 12.2 Anti-corruption and bribery-related issues 12.2.1 Main risks and their management The Group recognizes the occurrence risks of corruption, extortion and bribery inci- dents throughout its value chain. Potential risks are examined both within its internal operations and in relation to its activities and transactions with its key stakehold- ers, such as customers and suppliers. The Group is committed to zero tolerance in matters of corruption and bribery, con- ducting its business activity with integrity, in accordance with ethical standards and applicable laws. In this context, it has es- tablished and communicated relevant principles and policies, creating at the same time control mechanisms. 12.2.2 Due Diligence and Other Policies The Group has adopted and follows an integrated framework of principles and policies that ensure its transparency and responsible operation. In order to ensure the avoidance of corruption and bribery incidents, it operates proactively, conduct- ing relevant updates and audits on an an- nual basis through the Internal Control Department. To discourage participation in such an incident, disciplinary measures have been established. In the context of supporting the internal procedures, the Audit Committee has been set up, tasked with the selection process, as well as the supervision of the external auditors and informing the Board of Directors of the re- sult of the mandatory audit, the monitor- ing of the financial information process, the internal control and risk management systems and the supervision of the inter- nal control and regulatory compliance and risk management units. Code of Ethics and Conduct [GRI: 2-23, ATHEX ESG: C-G5] The Group’s firm commitment is to con- duct its business with integrity, in accord- ance with the highest ethical standards and by applying current laws. The Code of Ethics and Conduct defines the standards of behavior required by employees and apply in every country where the Group operates. The basic Principles of the Code are as fol- low: • Business ethics • Respect for human rights • Diversity and equal representation • Compliance with laws and social norms • Product quality • Promotion of fair and free competition • Avoiding conflict of interest • Accuracy and completeness of finan- cial information • Protection of corporate assets • Cooperation with public authorities legally and transparently • Conducting all transactions with in- tegrity and combating corruption • Protection and confidentiality of infor- mation • Good working relations • Safety, health and environmental pro- tection • Circular economy and climate change • Social contribution Page 118 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Corporate Governance Code The Group, following the relevant approv- al of the Board of Directors and in compli- ance with article 17 of Law 4706/20, imple- ments and adopts the Hellenic Corporate Governance Code (HCGC, June 2021) of the Hellenic Corporate Governance Coun- cil (HCGC). Internal Rules of Operation The Internal Rules of Operation is har- monized with the requirements of law 4706/2020 and it was approved by the rel- evant decision of the Board of Directors. A summary of the Regulation is listed on the Group’s Website in the Corporate Govern- ance section. Manual of Group Policies The Manual of Group Policies is comple- mentary to the other policies of the Group but in any case precedes them, as it forms the basis of the policies and procedures of the Group. Its purpose is to establish a uni- form approach through a common frame- work, specifying the control functions that should be followed as a minimum. Platform for reports’ submission “EthicsPoint” [ATHEX ESG: SS-G1] The Group uses an anonymous or named whistleblowing platform, which gives the possibility to report wrongful behavior and situations, which are then investigated by the Group. 12.2.3 Outcomes of the aforementioned policies and non-financial performance indices [GRI: 205-3, ATHEX ESG: Α-G2] There was no confirmed incident of cor- ruption or bribery during 2022 and ac- cordingly no monetary loss occurred as a result. Likewise, the Group did not come to the knowledge of any relevant intention or behavior of corruption or bribery. 12.3 Respect for human rights 12.3.1 Main risks and their management The Group recognizes the risks associated with human rights violations, both within the working environment and in the sup- ply chain, such as the possible discrimina- tion of employees due to race, religion, gender, nationality, beliefs, age, disability, etc., the violation of privacy, forced and child labor. It advocates the elimination of all forms of forced and compulsory labor, the effective abolition of child labor and the elimination of discrimination in terms of employment and work. The Group is committed to zero tolerance in matters related to human rights and it has estab- lished and it has communicated relevant principles and policies. 12.3.2 Due Diligence and Other Policies The Group, through the Code of Ethical Behavior and Ethics, has established prin- ciples for the respect of human rights, where it is committed to zero tolerance for harassment in the workplace, any form of discrimination and forced and child la- bor throughout its value chain. It is also Annual Financial Report as of 31.12.2022 Page 119 of 268 Amounts in thousand Euro, unless stated otherwise 12.4 Supply chain issues 12.4.1 Main risks and their management In the Group, apart from the financial risks, there are also recognized non-financial risks that are related to the supply chain and mainly concerns the safeguarding of human rights and the fight against cor- ruption. The Group is committed to zero tolerance in these matters and it has es- tablished and communicated relevant principles and policies. 12.4.2 Due Diligence and Other Policies The Group recognizes that the evaluation and selection of suppliers constitutes a necessary business function in order to achieve a responsible supply chain and it applies practices so as to determine whether a supplier meets the require- ments and conditions set in the coopera- tion among them. Monitor of suppliers’ performance [GRI: 308-1, 414-1, ATHEX ESG: C-S8] Major categories of suppliers include committed to resolving complaints and treatment of employees in a fair and im- partial manner and it has established guidelines and internal regulations that refer to human rights and informs employ- ees through the Internal Labor Regulation. At the same time, the Group, through the Code of Ethical Behavior and Ethics, has es- tablished principles for the Protection and Confidentiality of Information. Evaluation criteria for entering into cooperation The Group, through the Code of Ethical Behavior and Ethics, applies selection and evaluation criteria so as to avoid entering into cooperation with partners that run a high risk of violating human rights and it is committed to the continuous improve- ment of actions and controls regarding hu- man rights, in its interactions with its sup- pliers or partners. Personal data protection [ATHEX ESG: C-G6, SS-S2] The Group respects the privacy of its stakeholders and keeps their personal in- formation confidential in compliance with the relevant legislation. It strictly applies the General Data Protection Regulation (GDPR) EU 2016/679, as well as the na- tional legislation l. 4624/2019 concerning the protection of natural persons against the processing of personal data. Measures are implemented in order to comply with the requirements of the Regulation, im- plementation controls and periodic staff training. At Group level, a Data Protec- tion Officer has been appointed and an insurance contract has been activated, in order to ensure any loss of personal data. The Personal Data Protection Statement is available on the Group’s Website. 12.3.3 Outcomes of the aforementioned policies and non-financial performance indices [GRI: 406-1] There were no complaints or confirmed incidents of discrimination based on race, religion, gender, nationality, beliefs, age, disability, etc., including incidents of har- assment or violation of human rights, nor confirmed incidents of violation of person- al data during 2022 in the Group. Page 120 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise suppliers of raw materials, trading goods, electricity, equipment, packaging, spare parts, logistics partners, transport industry services, consulting services, telecommu- nications and IT services. The evaluation of suppliers’ selection con- stitutes a distinct and documented pro- cess taking into account objective and fixed criteria of cost, reliability, quality of provided materials/services, terms of pay- ment, speed of delivery, possible synergies with other companies of the Group or with the quality control departments (if feasi- ble) and is based on written evaluations (supplier evaluation questionnaire, evalu- ation table with criteria, etc.). The supplier evaluation questionnaire is applied by all the production companies of the Group, where each supplier is asked to describe: • its compliance with the current regu- latory framework of the countries in which it operates, where it should also have the necessary insurance cover- age for cases of defective product. • the quality of its activities through certification and quality assurance systems and in matters related to envi- ronmental protection and health and safety at work, where required. • dealing with issues of corruption and bribery, conducting business with in- tegrity. • the observance of moral and ethical principles regarding human rights, phenomena of harassment in the workplace, any form of discrimination due to race, religion, gender, national- ity, beliefs, age, disability, etc., or with phenomena of forced and child labor. • ensuring a safe working environment and in accordance with applicable safety standards. • the adoption of practices for the pro- tection of the environment, where it is encouraged to contribute to the re- duction of greenhouse gas emissions and to promote environmental pro- tection actions. Fighting corruption in the supply chain The Group takes into account the risk of a partner or supplier to be involved in cor- ruption incidents and it undertakes the necessary actions, through due diligence procedures, in order to ensure maximum transparency during or at the start of each collaboration. More specifically, the Group mainly cooperates with multinational companies, which place particular em- phasis on issues of transparency and the fight against corruption through rules and policies. Human rights in the supply chain [ATHEX ESG: C-S6] The Group has adopted principles in order to avoid entering into cooperation with suppliers at high risk of human rights vio- lations and it is committed to promote the continuous improvement of international human rights standards. The fact that the majority of the Group’s suppliers operate in countries in the European Union and America, where labor laws are respected and there is awareness of human rights issues, as well as the high percentage of local suppliers, ensure to a significant ex- tent that the risk of infringement of human rights is minimized, even though it is not possible to take action to identify cases of abuse throughout the supply chain. Group employees have the right and obligation to use the anonymous or named report- ing platform and report any violations, Annual Financial Report as of 31.12.2022 Page 121 of 268 Amounts in thousand Euro, unless stated otherwise which include cases that may lead to an increased risk of modern incidents or prac- tices of slavery in the supply chain. UK Modern Slavery Act 2015 The Group has zero tolerance in relation to the violation of the UK Modern Slavery Act 2015. This statement is made in accord- ance with article 54 (1) of the Law and sets out the steps to prevent incidents of mod- ern slavery and human trafficking in the supply chain. The Group recognizes the importance of combating these incidents and applies a zero-tolerance approach to all forms of modern slavery in its wider supply chain to the extent that it can be identified and it is committed to act with integrity and transparency. 12.4.3 Outcomes of the aforementioned policies and non-financial performance indices During 2022, no incident of violation of the UK Modern Labor Act 2015 was reported to the Group or the Group Companies where they operate. The following tables include information on the Group’s supply chain, as well as on its companies’ spending on local suppliers, based on the supplier’s country of origin. Total number of suppliers 2022 2021 2020 Thrace Plastics Co. S.A. 225 175 131 Thrace Nonwovens & Geosynthetics SA 1152 999 874 Thrace Polyfilms SA 577 525 518 Thrace Eurobent SA 123 120 136 Thrace Pack SA 1007 992 913 Thrace Greenhouse SA 288 294 322 Don & Low LTD 517 534 526 Thrace Synthetic Packaging Ltd 473 319 272 Thrace Ipoma SA 557 549 586 Thrace Greiner Packaging SRL 382 380 409 Lumite Inc 452 436 413 Thrace Polybulk AB & AS 20 20 20 Thrace Plastics Packaging DOO 110 105 95 * Companies of the Group have as suppliers companies of the Group respectively and they have been in- cluded in the above figures. Page 122 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Spending on local suppliers [GRI: 204-1] The following table displays the estimated monetary value of total payments to suppliers (€ million) and the percentage of spending on local suppliers. 2022 2021 2020 2022 2021 2020 Thrace Plastics Co. S.A. 4.2 3.9 2.9 89% 94% 93% Thrace Nonwovens & Geosynthetics SA 142.3 113. 5 86.0 76% 78% 77% Thrace Polyfilms SA 35.1 30.4 26.0 66% 66% 67% Thrace Eurobent SA 7.3 6.8 5.0 54% 49% 59% Thrace Pack SA 71.2 63.5 51.5 79% 81% 79% Thrace Greenhouse SA 4.9 4.9 5.1 95% 99% 98% Don & Low LTD 59.3 61.9 58.0 66% 64% 77% Thrace Synthetic Packaging Ltd 14.5 14.2 13.3 8% 12% 13% Thrace Ipoma SA 22.3 24.8 16.5 59% 55% 58% Thrace Greiner Packaging SRL 19.0 17. 3 12.8 33% 25% 26% Lumite Inc 22.8 24.8 15.8 69% 65% 66% Thrace Polybulk AB & AS 20.9 19.0 21.4 3% 3% 1% Thrace Plastics Packaging DOO 4.1 4.7 4.2 23% 23% 22% 12.5 Social and labor issues 12.5.1 Main risks and their management The Group recognizes the risks related to labor issues in general and places great emphasis on them. It recognizes health and safety issues as one of the strategic risks it faces and implements measures to mitigate the risk of workplace accidents. It is committed to zero tolerance in health and safety matters and it has established and communicated relevant principles and policies. In relation to its products, it recognizes and seeks to eliminate the risk of harm to human life and health, taking measures to eliminate components or de- fects during their manufacture, disposal and use. Also, the Group recognizes the special situations and difficulties that exist in the local communities in which it oper- ates, which may affect its social capital, while it recognizes its influence and places emphasis on the opportunities created for local communities by its activities. Annual Financial Report as of 31.12.2022 Page 123 of 268 Amounts in thousand Euro, unless stated otherwise 12.5.2 Due Diligence and Other Policies The Group places great emphasis on labor issues, such as workers’ rights, ensuring health and safety in the workplace, train- ing and education of employees. It also recognizes its influence and the opportu- nities created for local communities by its activities. The Group, through the Code of Ethical Behavior and Ethics, recognizes that its human resources have a decisive role in its development and the achieve- ment of its strategic goals. In this context, it encourages lifelong learning, profes- sional training, cooperation, initiative and well-being of its employees and provides a working environment of equal opportuni- ties for all. Hiring process For the selection of new employees, the Group relies on objective criteria, exclud- ing any possibility of discrimination due to race, religion, gender, nationality, beliefs, age, disability, etc. To fill new job positions, Group’s employees are first given the op- portunity to express their interest through the internal mobility process before it is communicated to the general public. The Group follows two different recruit- ment procedures concerning production workers (blue collar workers) and workers in administrative positions (white collar workers). A candidate evaluation commit- tee participates in these procedures in order to ensure transparency. Part of the recruitment strategy is to support local communities, through the recruitment of people from the local communities where the Group operates, as well as gradu- ates of local educational institutions and universities. Fair pay and equal opportunities policy [GRI: 2-19, ATHEX ESG: A-G4] The Group has an Eligibility Policy and a Remuneration Policy for the members of the Board of Directors and the Com- mittees, as well as the top management, which define, on the one hand, the exist- ing rights of the members of the Board of Directors and the Group’s obligations towards them, and on the other hand, the conditions under which remuneration will be provided. These policies are published on the Group’s Website. At the same time, the Group has a Payroll and Personnel Management Policy for employees. The level of fixed remuneration is determined in accordance with the principle of pay- ing the most suitable and fair remunera- tion to the most suitable person, taking into account the level of competence, knowledge and experience required for the role, while there is no variable remu- neration. At the same time, it is ensured that the long-term goals of the Group are served and it is sought the connection of professional development and remunera- tion with personal performance and goals’ achievement. Training and development of employees [ATHEX ESG: C-S5] The Group has established procedures for the evaluation and training of personnel. It offers extensive professional training and education, aiming at the development of its employees, as the production methods used as well as the ever-changing techno- logical environment require continuous training. Therefore, it actually contributes to the creation of value for human capital for its own benefit, but also for the benefit of society at large. The training of employ- ees is carried out either internally or with Page 124 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise the contribution of external consultants with high technical knowledge. In the con- text of the continuous development of employees and in matters of sustainable development, a special manual of sustain- able development was created, which is adapted to each company of the Group with specific examples and is available to all employees through an internal online platform. In addition, in the context of strengthening the capability of the mem- bers of the Board of Directors in terms of managing Sustainable Development is- sues related to the corporate strategy, a two-day training seminar was organized. Human resource platform “HR Hub” The platform is an online employee inter- action system through which processes are automated and digitized, access to im- portant workplace information is created, process waiting and processing time is re- duced, and the possibility of error or omis- sion is minimized. Freedom to join labor unions and the right to collective negotiation [GRI: 2-30, 407-1, ATHEX ESG: C-S7] The Group respects the right of employees to participate in labor associations and un- ions. It consistently follows the Labor Reg- ulation, which have been drawn up in col- laboration with employee representatives and it has been submitted to the Labor In- spection office. The Regulation strength- ens the smooth communication between the Management and the representatives of the employees, at regular intervals, with the aim of presenting the requests of the employees that are officially recorded, but also the more general discussion of issues related to the workplace and the health and safety of the employees. Health, safety and environment protection [GRI:403-1] The safety and health of employees are pointed out as important issues for the Group, as the priority remains to ensure an environment that respects the daily strug- gle of all employees to remain creative and productive while also being healthy and safe. The basic practice of the Group is to ensure the health and safety of its em- ployees, setting as a key strategic goal the minimization of the possibility of occupa- tional accidents, as well as the occurrence of work-related illnesses. Also, the Group proceeded to the formation of a life and health safety program for employees. The Group recognizes its responsibility to take all necessary measures to protect the health and safety of its employees, the en- vironment and the natural resources of the countries in which it operates. Protecting the health and safety of employees, con- sumers, customers and communities in all the areas in which it operates is a top prior- ity for the Group. Under the policy of the Group, the functioning of facilities and the conduct of operations should comply with the legislation in force in each country in which they are based, as well as with the regulations and authorizations on safety and health and the environment, includ- ing those relating to the control, transpor- tation, storage and disposal of controlled or non-controlled materials. Health, safety, environment Policy The aim of Thrace Group’s Safety ‐ Health ‐ Environment (SHE) Policy includes the following: • Provision of guidance and estab- lishment of a unified way for the Annual Financial Report as of 31.12.2022 Page 125 of 268 Amounts in thousand Euro, unless stated otherwise administration of the Group’s Safe- ty‐Health‐Environment issues with reference to the general principles and the basic rules set by the Group’s management. • Assurance of safety and health in the working places for all Group person- nel, collaborators and visitors. • Avoidance of any possible dam- age in Thrace Group’s property and personnel. • Increase of the Group’s personnel awareness in environmental aspects, environmentally friendly produc- tion processes and environmental protection. • Improvement of the Group’s culture with reference to Safety‐Health‐Envi- ronment topics Health, safety, environment procedures [GRI:403-2, 403-5] Within the Group, the risks at work have been identified and assessed and the rele- vant corrective or preventive actions have been defined with the aim of eliminating them and minimizing the chances of caus- ing an accident. The following actions and practices are indicative: • Training and awareness of workers in the facilities on matters of health and safety at work, with a special emphasis on induction training, which includes the guidelines for safe work. • Elaboration of risk studies in all facilities. • Implementation of a security project, within the framework of which work groups have been set up per facility, which on a monthly basis list the risks they have identified and have faced, are updated on issues related to secu- rity and take relevant actions. • Raising employee awareness on health and safety issues, by placing messages and safety rules in central points of the facilities, providing clothing with the corresponding messages, etc. • Recording and investigating cases in- volving accidents or incidents, where employees are encouraged to confi- dentially report any unsafe practices or hazards they encounter at work. • Determination of responsibilities for health and safety tasks by the Director of each facility in collaboration with the Safety Technician and Occupa- tional Physician. • Systematic monitoring of production processes, machinery and equipment to ensure they are safe and in good condition. • First aid boxes and fire extinguish- ers are readily available, escape ex- its are clearly marked and clear of obstructions. • Maintain and cleaning of work area in order to ensure clean and comfort- able conditions, including appropriate temperature, ventilation and lighting. • Use of quality, environmental, health and safety management software to record incidents of non-compliance with these matters. Appropriate use of safety equipment The Group ensures that all employees are provided with the equipment required for the safe performance of their duties, as well as that they receive the necessary in- formation on the proper use of the equip- ment and the risks associated with their Page 126 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise work. The Group’s primary concern is to provide all the prescribed Personal Protec- tive Equipment (PPE) to its employees. Facility safety The Group implements facility safety measures by conducting regular risk as- sessments, which are submitted when requested to labor inspectors and certifi- cation bodies in order to confirm that the measures applied are proportionate to the security risk and in accordance with cur- rent legislation. The Group complies with legal requirements for noise, odor, light and vibration levels, as well as for emer- gency and evacuation plans, providing ap- propriate training to employees. These is- sues are monitored on a regular basis and preventive or even corrective measures are taken. Prevention and avoidance of any kind of injury The Group continuously monitors and re- cords every incident related to safety in the facilities. Internal networking and information In the Group’s facilities there are screens showing presentations covering issues related to the environment, health and safety and sustainable development, while at the same time internal networking and information platforms are utilized “Teams, SharePoint and Yammer”. Ensuring product quality, customer health and safety [GRI: 416-1, ATHEX ESG: SS-S1] The Group’s main priority is to offer innova- tive products and integrated solutions that adapt to the needs and requirements of customers and reflect its vision in relation to quality and customer safety. The Group complies with relevant national legislation and adopts international guidelines, safety rules, best practices and industry stand- ards regarding the production and design of its products. In addition, it follows best practices such as spreading a culture of quality, consolidating partnerships with suppliers and customers to optimize the added value of the supply chain, and es- tablishing quality management processes. Special attention is paid to the produc- tion of packaging that comes into direct contact with food. The Group has adopted Quality Management Systems based on in- ternational food safety standards, such as ISO 22000, ISO 9001, IFS, BRC, FDA, HALAL and applies relevant procedures including: • Sets goals and indicators (KPIs) that it monitors and reviews at regular intervals. • Selects suppliers with specific criteria and evaluates them. • Trains staff on Good Manufacturing Practices (GMP) through internal and external trainings. • Implements a preventive maintenance program for mechanical equipment. • Calibrates and maintains laboratory equipment. • Cooperates with external laboratories, which have relevant accreditation / certification. • Performs quality controls, through which the safety of packaging materi- als is ensured, such as total and specif- ic migration control, microbiological control of finished products, micro- biological control of water, microbio- logical control of air in production and storage areas. Annual Financial Report as of 31.12.2022 Page 127 of 268 Amounts in thousand Euro, unless stated otherwise • It has prepared a HACCP study and a Risk Assessment at all stages of the production process. • It has drawn up a quality control plan for raw materials, semi-finished and finished products. • It has drawn up technical specifica- tions for all manufactured products. • Internal inspections are carried out, monthly hygiene inspections, regu- lar inspections by Certification Bod- ies and by customers, extraordinary inspections by Public Bodies, such as EFET, State General Chemistry. • Implements PEST CONTROL in col- laboration with a licensed external workshop. • Implements cleaning programs for all areas of the facilities. • Procedures for Product Implementa- tion (Flow Chart), Customer Complaint Management, Product Recall and Supplier Complaint Management are drawn up. • Cooperates with transporters, who have specific standards for their vehi- cles, in order to ensure the integrity of the products they transport. Accordingly, during the production of masks, the Group focuses particularly on ensuring the health and safety of end us- ers and applies procedures including: • Certification with quality manage- ment system for medical technology product ISO 13485:2016 • Registration in the EOF register and li- censing of capability to produce medi- cal technology products • CE marking in compliance with regula- tions (EU) 2016/425 and 2017/745 • Certification with STANDARD 100, OE- KO-TEX®, Class I for textile products • CoVid-Shield certification Quality management procedures [ATHEX ESG: SS-S8] • Control of raw materials: Evaluation of raw materials with trial production of a product and comparison in the labora- tory with corresponding products. • Product control: Control of products in all phases of production, such as di- mensional control, control of mechan- ical properties based on international standards, product harmonization with its specifications and customer requirements. • Control of transport packaging: Us- ing packaging based on the technical specifications of the products to en- sure smooth and safe transport and carrying out during loading visual quality checks for suitability and im- plementing scanning systems that en- sure that only approved products are loaded. • Customer satisfaction control: Regular telephone or live communication with customers, with the aim of optimizing the services provided. Promote transparency of product details and information of customers [GRI: 417-1, ATHEX ESG: SS-S7] Product quality and customer safety are top priorities for the Group. In this con- text, the Group conforms to the national laws in force from time to time and adopts standards, safety rules and best practices regarding the design and manufacture of products in all its facilities and uses regular Page 128 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise quality controls to verify that all specifica- tions are complied with, including those relating to the health and safety of cus- tomers and end users. The products are subject to control across all stages of the production process, and the Group has adopted management systems and pro- cedures according to various international standards (BRC, ISO 22000 and 9001, FDA and IFS, etc.) to ensure quality and custom- er service. Supporting local communities [GRI: 413-1, SASB: RT-CH-210a.1] The Group seeks, through its business ac- tivities, to achieve high performance, so as to produce and distribute directly or indirectly economic value to the society in which it operates, placing special empha- sis on: • To strengthen the economies of the countries in which it operates, through the cash flows it generates towards its stakeholders, namely tax payments, payments to suppliers, payment of employer contributions, payroll pay- ments to employees, dividends to shareholders and investments in local communities. • To the needs of citizens and societies that surround the Group and are af- fected by its activities. • In employment, through the direct and indirect creation and maintenance of jobs throughout the value chain. Social contribution/donations The Group supports social solidarity pro- grams, assists the work of organizations with recognized action for addressing social problems and makes a series of in- dividual donations to cover their specific needs, and strengthens sensitive social groups and individuals. The Group’s goal is to emerge as a valuable business entity for the communities where it operates. At the same time, the Group supports ActionAid for the 5 th consecutive year by supporting 16 children in need through the Adoption Program. In addition, the Thrace Greenhouses com- pany is constantly developing initiatives to reduce food waste. Through the Stavros Chalioris Social Center, he contributes to the wider local community where he op- erates, supplying on a regular basis free products to non-profit organizations, to the workers in the greenhouses, and also to the employees of the Group in Xanthi. Also, through the non-profit organization “Boroume”, it participates in the “Food Res- cue and Offer” network and with the cen- tral message “No portion of food wasted” practically supports non-profit organiza- tions throughout Greece in terms of food. According to official figures of “Boroume”, the total food offered by the company in 2022 corresponds to 1,995 portions of food. Stavros Chalioris Social Center The Social Center STAVROS CHALIORIS is an Urban Non-Profit Company located in the Local Community of Magico Municipality of Abdera, Xanthi Regional Unit and it has been operating since 2010. It is named af- ter the late Stavros Chalioris, founder and President of Thrace Group who envisioned its creation. The aim of the Social Center operation is its practical contribution to society with Annual Financial Report as of 31.12.2022 Page 129 of 268 Amounts in thousand Euro, unless stated otherwise educational, cultural, recreational and so- cial activities, which are addressed at both children and adults with a regular training program which accommodates approxi- mately 250 people per training period each year. At the same time the Social Center organizes events, celebrations and excur- sions for its members with educational and entertainment content, children’s cin- ema screenings, conferences on medical issues, social and educational workshops in collaboration with local agencies and scientific collaborators. In the actions of the Social Center are included the sup- port of actions of the Group’s Employees Union of Thrace Plastics, granting of schol- arships and financial aid to children in the area who wish to study and are unable to afford their studies as well as financial support and coverage of treatment / hos- pitalization expenses for needy patients in the area. In addition, in the area of the Social Center there is a doctor’s office for the provision of primary health care to the residents of the wider area and the meet- ings of KAPI Magiko take place. Recognizing the necessity of taking effec- tive actions to support the health system, but also vulnerable social groups, the So- cial Center and in direct cooperation with institutions and organizations, including the General Hospital of Chios, the Xanthi Hospital and the non-profit association DESMOS, carried out donations of per- sonal protective equipment and medical equipment. In addition, the contemporary influences of climate change at the global level impose the choice of actions that concern the awareness of local communi- ties and children in matters of ecology, re- newable energy sources and biodiversity conservation. The Social Center organized an action within the framework of its participation in the European waste reduction week under the common slogan “Sustainable Textile Products”. The action, which took place with the participation of 60 chil- dren from the wider region of Xanthi, was implemented with the assistance of the Region Office of Eastern Macedonia and Thrace and is part of the actions of Hel- lenic Recycling Organization. The aim was to acquaint the children with the wider is- sue of environmental protection and the adoption of waste reduction, reuse and re- cycling through a theoretical and practical experiential approach (presentation, thea- tre, workshop of making useful objects). Page 130 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 12.5.3 Outcomes of the aforementioned policies and non-financial performance indices PERCENTAGE OF EMPLOYEES COVERED BY COLLECTIVE AGREEMENTS Thrace Plastics Co S.A. 100% Thrace Nonwovens & Geosynthetics SA Thrace Polyfilms SA Thrace Eurobent SA Thrace Pack SA Thrace Greenhouse S.A. Thrace Greiner Packaging SRL 99% Don & Low Ltd 80% Thrace Synthetic Packaging Ltd 10% Thrace Ipoma SA 0% Lumite Inc Thrace Polybulk AB Thrace Polybulk AS Thrace Plastics Packaging DOO TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT 2022 2021 2020 Men Women Total Men Women Total Men Women Total Permanent term 1,479 366 1,845 1,468 341 1,809 1,394 394 1,788 Temporary term 132 67 199 224 168 392 272 142 414 Total 1,611 433 2,044 1,692 509 2,201 1,666 536 2,202 Annual Financial Report as of 31.12.2022 Page 131 of 268 Amounts in thousand Euro, unless stated otherwise 2022 2021 2020 Men Women Total Men Women Total Men Women Total Full-time employment 1,606 420 2,026 1,688 496 2,184 1,661 509 2,170 Part-time employment 5 13 18 4 13 17 5 27 32 Total 1,611 433 2,044 1,692 509 2,201 1,666 536 2,202 STAFF MOBILITY [ATHEX ESG: C-S4] The indicators refer to the percentage of redundancies from the Group 2022 2021 2020 Voluntary mobility index 11% 11% 11% Non-voluntary mobility index 8% 10% 10% FEMALE EMPLOYEES [GRI: 405-1, ATHEX ESG: C-S2, C-S3] 2022 2021 2020 Percentage of women 24% 24% 25% Female employees in managerial positions 16% 18% 20% Percentage of women in the Board of Directors 18% 18% 0% * Meeting the criteria for adequate representation as defined in Article 3 of L.4706/2020 TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT Page 132 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise INJURIES AT WORK [GRI: 403-9, SASB: RT-CH-320a.1, ATHEX ESG: SS-S6] Employees Partners 2022 2021 2020 2022 2021 2020 Number of deaths as result of injury 0 0 0 0 0 0 Level of deaths as result of injury * 0 0 0 0 0 0 Number of serious injures 12 0 0 0 0 0 Level of serious injures * 0.63 0 0 0 0 0 Number of confirmed injuries 27 35 33 2 4 0 Level of confirmed injuries * 2.45 1.89 1.77 6.32 11. 26 0 * Equal to the corresponding number/hours 200.000 ILLNESS AT WORK [GRI: 403-10, SASB: RT-CH-320a.1, ATHEX ESG: SS-S6] Employees Partners 2022 2021 2020 2022 2021 2020 Number of deaths due to illness 0 0 0 0 0 0 Number of confirmed illnesses 0 0 0 0 0 0 PRODUCT SAFETY AND HEALTH AND SAFETY OF CONSUMERS AND END USERS [GRI: 416-2, ATHEX ESG: SS-S1] During 2022, there were no cases of non-compliance with existing legislation and appli- cable regulations, regarding the effects of products on the health and safety of consum- ers. Accordingly, there was no product recall due to malfunctions or inconsistency in any of the Group’s companies and, as a result, there was no need to pay relevant monetary compensation. SOCIAL SUPPORT 2022 2021 2020 Total expenditure of Stavros Chalioris Social Center €412,621 €380,017 €328,623 Annual Financial Report as of 31.12.2022 Page 133 of 268 Amounts in thousand Euro, unless stated otherwise 12.6. Environmental issues and climate change 12.6.1 Main risks and their management [GRI: 201-2, ATHEX ESG: A-E2] For the identification of the opportunities, as well as of the natural and transitional risks associated with climate change, the Group is aligned with the recommenda- tions of the Financial Stability Board’s Task Force on Climate-Related Financial Disclo- sures (TCFD). The climate crisis and the en- ergy transition affect the Group’s activities while simultaneously creating great op- portunities through the principles of the circular economy, the use of recycled raw materials and investment in renewable en- ergy sources. At the same time, the Group recognizes the risks and impacts that may arise in its business activity due to climate change, such as the occurrence of extreme weather events or an increase in tempera- ture, which may affect the production pro- cess in the short, medium and long term. In order to mitigate risks and avoid nega- tive socio-economic and environmental impacts, the Group constantly updates and adapts its business model, is commit- ted to zero tolerance in matters related to the protection of the environment and it has established and communicated rel- evant principles and policies. The Group has recognized the follow- ing categories of risks related to climate change, but also the transition opportu- nities to a low-carbon emissions’ busi- ness model with an emphasis on innova- tion based on the recommendations for climate-related financial disclosure of the international initiative “Task Force on Cli- mate-Related Financial Disclosures (TCFD)’. Risks and opportunities have been taken into account when formulating the sus- tainable development strategy and defin- ing objectives and actions: Type: Risks associated with: The Group: Institutional framework the changes in the European and national regulatory framework that create future requirements. monitors the national and international regula- tory framework concerning the environment and in particular packaging management and recycling, with the aim of leading new markets of innovative, ecologically designed products. Technology the fact that the transi- tion to a low-carbon emissions’ economy presents adaptation needs for the produc- tion process. monitors potential risks in its internal pro- cesses, such as requirements in the production of sustainable products or in new investments in equipment, but also technological devel- opments that can enhance innovation and optimize processes. Market changes in industry structure in a carbon sensitive economy. assesses environmental risk in terms of carbon emissions, monitors and records direct and indirect emissions from all its operations Reputation the variations in con- sumer preferences recognizes the transitional risks associated with changes in consumer preferences by providing solutions for sustainable products with a posi- tive environmental footprint. Page 134 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Type: Opportunities arising: The Group: Energy sources from the increase in the use of renewable sources and the effort to gradually reduce energy consumption. invests in photovoltaic systems and geother- mal energy so as to reduce greenhouse gas emissions through the use of RES, and continu- ously takes measurable actions to save energy. Markets from the conversion of existing markets to new sustainable products and processes, where the use of recycled or re-use will add value to the customer. has developed specialized upgrading recycling systems that also enable the recording and cer- tification of the percentage of recycled raw ma- terial or reuse systems that enable the record- ing and certification of the number of uses. Prod- ucts and services from the development of products and solu- tions based on the cir- cular economy that add value to the customer. applies the circular economy model in practice, through specific actions, such as the organiza- tion of closed recycling systems for the pro- duction of new products or the design and production of reusable products. Elasticity from the execution of projects aimed at improving efficiency during the production process. carries out targeted projects such as zero pellet loss, energy efficiency in the production pro- cess, waste minimization, re-use of production process waste. Resource efficiency from increasing the use of recycled raw material. has set as a priority the replacement of primary raw material with recycled, the synergies with suppliers/customers in the context of creating a sustainable supply chain, the reduction of product packaging where possible, or actions of zero pellet loss. 12.6.2 Due Diligence and Other Policies The Group has a Safety-Health-Environ- ment Policy with the aim of a consistent approach, raising awareness and improv- ing the culture in relation to the general principles and basic rules included in the Code of Ethical Behavior and Ethics and concerning safety and health, the protec- tion of environment, circular economy and climate change. The priority is to improve the environmental impacts resulting from the operation of the Group, with particular attention to the application of circular economy principles, responsible waste management, increasing the use of recy- cled raw materials, reducing energy con- sumption, investing in renewable energy sources and limiting greenhouse gas emis- sions related to its activities. Actions according to the principles of the circular economy The European Green Deal lays the Annual Financial Report as of 31.12.2022 Page 135 of 268 Amounts in thousand Euro, unless stated otherwise foundations for a new plastics economy, in which the design and production of plas- tic products are done with full respect for the environment through the use of fewer natural resources and increased recycling. The Group fully responds to this strategy, turning today’s challenges into growth opportunities with the aim of strengthen- ing a sustainable competitive advantage. In this context, it has adopted the princi- ples of the circular economy throughout the life cycle of its products, incorporating practices based on the principles of reduc- tion, reuse and recycling Raw materials [ΑΤΗΕΧ ESG: SS-E7] • Ensuring efficient use of natural resources and evaluation of raw materials based on the required technical specifications • Deliberate non-use during the production process of the 27 critical raw materials for which there is a high risk of supply problems as recognized by the European Commission Design • Reducing the average weight of the products while maintaining the same technical characteristics • Designing new innovative and sustainable products with a low environmental footprint Production • Investment in more energy efficient production machines and continuous monitoring and reduction of energy consumption • Use of recycled raw material in a very high percentage depending on the application Distribution / Transportation • Synergies between Group companies for the optimization of routes and procurement of raw materials from industries located in the same geographical area on a priority basis • Collaboration with customers aiming to reduce the use of secondary packaging Reuse • Saving of raw materials through the reuse of internal waste • Production of reusable products with the aim of extending their life cycle as much as possible Collection • Storage of production residues in appropriate temporary storage stations with the aim of their optimal utilization • Collection of recyclable materials through closed systems with the aim of upgrading recycling Recycling • Voluntary commitment to replace 8,500 tons of primary raw material with recycled one by 2025 • Reliable information on traceability and content of recycled raw material Page 136 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise through RecyClass, EuCertPlus and TUV OK Recycled certifications Waste • Recycling of non-reusable raw materials through licensed partners • Continued reduction of non- hazardous waste disposal in landfills through source separation actions Research and innovation for the development of sustainable products [SASB: RT-CH-410a.1, ΑΤΗΕΧ ESG: SS-E5] The Group constantly invests in research and innovation mainly during the design phase with the aim of developing sustain- able products fully in line with the Eu- ropean strategy for plastics in a circular economy, with a positive environmental impact and contribution to mitigating cli- mate change. Priority in the design is the low environmental footprint, the lowest possible weight while achieving the same strength, the possibility of reuse, 100% re- cyclability, production from a single mate- rial, the addition of natural materials in a percentage of up to 30%, the use of recy- cled material in percentage up to 100%. Many of the Group’s products replace the raw material with recycled, while at the same time maintaining their proper- ties and being certified by RecyClass, an international initiative that promotes the recyclability of plastic packaging and en- sures the traceability and transparency of recycled plastic. The Group has carried out EPD® (Environmental Product Declaration) environmental assessments for specific, representative types of products in all three segments of its activity. Both the as- sessments, and the corresponding Life Cy- cle Assessments (LCA for short) carried out within the above context, were prepared based on an internationally established and accepted methodology for the prod- uct categories in question (ISO 14025 and ISO 14040), certified by independent au- diting body for their validity and are avail- able in the prescribed database (The Inter- national EPD System) of the organization EPD International AB (based in Sweden). TARGET 2025 30% INCREASE IN THE USE OF RECYCLED RAW MATERIAL Circular economy platform “In the Loop” [GRI: 306-2, ΑΤΗΕΧ ESG: SS-E5] The environmentally targeted platform of the Thrace Plastics Group is based on the 3 axes of the circular economy REDUCE | REUSE | RECYCLE and networks compa- nies, brands, public bodies and consumers with the aim of reducing the environmen- tal footprint throughout the whole value chain. It reflects the Group’s approach regarding the environmental impact of packaging materials and the avoidance of their disposal in the environment. The platform contributes to the creation of lighter products with the aim of reduc- ing the use of plastic while maintaining the same technical characteristics, multi- use products that replace their single-use counterparts and products from recycled raw material. It also designs specialized reuse systems that enable recording and certification of the number of uses and specialized closed/controlled cycle recy- cling systems. In addition, it informs about the circular economy in plastic products and the upgrading recycling. The benefits of using the platform are as follows: Annual Financial Report as of 31.12.2022 Page 137 of 268 Amounts in thousand Euro, unless stated otherwise • The transition from the linear to the circular economy is taking place • The environmental footprint of the products is reduced • Natural resources are preserved • Plastic waste is reduced • Reuse is made possible • More products are produced from re- cycled raw material ANNUAL PERFORMANCE 130 ASSOCIATE MEMBERS IN 2022 Protection and preservation of biodiversity [GRI: 304-2, ΑΤΗΕΧ ESG: A-E5] The Group continuously seeks to increase the use of recycled raw material, drastically reduce waste and reduce greenhouse gas emissions through production processes, thereby reducing pressures on biodiver- sity. The circular economy-oriented strat- egy that it applies, aims to keep materials as much as possible in the economy cycle through reuse or recycling and certainly away from the environment, landfills and oceans, thus mitigating negative impacts on biodiversity throughout the value chain. The Biodiversity Strategy also works alongside the new European Strategy from “the farm to the plate” for the support and transition to fully sustainable agriculture. The Group, through Thrace Greenhouse fully supports this strategy for healthier, fresher and more sustainable food. Hy- droponics allows the minimization of the use of plant protection products with the ultimate goal of their zero application and great water savings, while geothermal en- ergy contributes to energy savings and al- most zero greenhouse gas emissions. Water consumption management [ΑΤΗΕΧ ESG: SS-E3, SS-E4] Measures applied for saving and rational use of water, as well as limit leakages: • Water consumption monitoring • Integrated preventive maintenance system to deal with any leaks that may occur (cooling/heating) • Water collection and recycling systems • Automatic switches at the points of use of drinking water • Special marking for rational use of drinking water • Personnel awareness to reduce consumption Liquid waste management [SASB: RT-CH-140a.3, ΑΤΗΕΧ ESG: A-E4] The Group fully complies with the legal re- quirements for liquid waste management. In this context, an environmental impact study has been prepared, which mainly concerns the optimal way of managing them, as well as dealing with potential risks. Page 138 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Solid waste management [GRI: 306-2, ΑΤΗΕΧ ESG: A-E3] The Group fully complies with the legal re- quirements for waste management. In this context, an environmental impact study has been prepared which mainly concerns the optimal way of managing them, while meeting contractual obligations, such as registration in the Electronic Waste Reg- ister (EWR) and registration of the waste producer’s annual report, and registration in the National Register of Waste Produc- ers (NRWP) and payment of the relevant packaging recycling fee. The Group im- plements internal procedures, such as the preparation of reports on the types and quantities of waste produced, while an ef- fort is made to reduce this in the factories by the method of separation at the source. It is also ensured that the companies to which the waste ends up for final treat- ment or disposal have valid legal operat- ing documents, while the relevant recy- cling certificates are obtained. Use and management of chemicals [SASB: RT-CH-410b.2, ATHEX ESG: SS-E8] Due to its field of activity, the Group uses a range of chemical substances and consti- tutes a very important priority the effec- tive management of the potential risks that may arise for the environment. The Group fully complies with legal requirements for the temporary storage and use of chemi- cals, informs and trains employees about their safe use and does not use chemicals or other hazardous substances subject to national or international bans. In addition, all the chemicals used are placed on metal bases, while any leaks of small quantities end up in special collectors. All chemicals are stored in appropriate areas with special markings, while access is only allowed to persons with special permission and ex- tensive knowledge of safety regulations. Improving resource efficiency during the production process Resource and process efficiency is incor- porated in the Group’s corporate culture. There are active relevant projects in all fa- cilities that, with the input of employees, are successfully implemented, while their progress is recorded and evaluated on a systematic basis: • zero pellet loss • zero waste Improving energy efficiency during the production process [GRI: 302-3] The Group constantly monitors the energy consumption in the production processes with the aim of the best possible efficiency through taking energy saving measures and raising awareness and informing the employees. At the same time, it makes mechanical modernization investments aimed at saving energy, such as the re- placement of energy-consuming equip- ment with equipment with lower energy requirements. TARGET 2025 -15% REDUCTION OF ENERGY CONSUMPTION IN PRODUCTION PROCESSES IN TERMS OF PRODUCTION VOLUME Annual Financial Report as of 31.12.2022 Page 139 of 268 Amounts in thousand Euro, unless stated otherwise Investment in renewable energy sources The utilization of renewable energy sourc- es and the improvement of energy effi- ciency constitute key pillars for the fulfil- ment of the climate objectives and the long-term strategy of the European Union. After all, the European Green Deal also focuses on the transition to clean energy, the promotion of energy efficiency and the development of an energy produc- tion sector that will be largely based on re- newable energy sources. Actions that will contribute to the reduction of greenhouse gas emissions and to the upgrading of the quality of life. In this context, the Group constantly invests in the use of energy from renewable sources. During 2021, the operation of photovoltaic net metering systems began. ANNUAL PERFORMANCE 6.7 ΜW OPERATION OF PHOTOVOLTAIC SYSTEMS WITH CLEAR EXPANSION PLAN Actions to limit the effects of climate change [ATHEX ESG: SS-E1] The Group has integrated into its strategic plan the improvement of the data collec- tion process for the accurate calculation and measurement of emissions and it has committed to the establishment of scien- tific targets for their reduction and vali- dation through the international Science Based Targets Initiative (SBTi). At the same time, it implements actions to save energy, optimize waste management and increase the use of recycled raw materials. These actions formed the basis for defining specific objectives. In order to maximize the use of business opportunities and miti- gate the risks arising from climate change, the Group bases its business model on a comprehensive risk assessment process, having examined strong and weak points, as well as opportunities and threats from the operating environment through SWOT analysis. At the same time, the Group par- ticipates in the international organization CDP, in order to evaluate the way it man- ages the effects of its activities on the en- vironment and climate change. In order to respond immediately to the risks and op- portunities from climate change, all Group companies follow a common Environ- mental Policy, while environmental man- agement officers have been appointed to monitor the companies’ performance through an Environmental Management System. Platform for calculating greenhouse gas emissions “Carbon Tracker” [GRI: 305-1, 305-2, 305-3, SASB: RT-CH-110a.1, ATHEX ESG: C-E1, C-E2, A-E1] The Group recognizes the importance of recording and reducing direct and indirect greenhouse gas emissions. For this reason, it uses a specialized platform for calculat- ing greenhouse gas emissions, which is aligned with the internationally estab- lished GHG Protocol methodology and ISO 14064-3. In 2021, the Group proceeded to the recording of direct and indirect emis- sions (Scope 1 and 2) for the previous year and determined the carbon footprint of the three most important subsidiaries. In 2022 the Group proceeded with the complete recording of direct and indirect emissions (Scope 1, 2 and 3) for the previous year and determined the carbon footprint of all sub- sidiaries. Reducing energy consumption Page 140 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise during the production process, increasing the use of renewable energy sources, rais- ing the percentage of recycled material and reducing waste are key pillars of ac- tion in order to reduce emissions. Scoring with “B” by the international organization CDP Group participates in the international non-profit organization CDP which sup- ports organizations to publicize their en- vironmental impacts and evaluates them based on completeness of disclosures, management of environmental risks, tar- geting and demonstration of best prac- tices. In just its second year of participa- tion, the Group moved up 2 levels in the rankings by receiving the score of “B- Management” for its performance in rela- tion to climate change, confirming that it is on the same scale as the industry aver- age, while exceeding global average. At the same time, the Group committed to the establishment of scientific targets for the reduction of carbon footprint and their validation through the international Sci- ence Based Targets Initiative (SBTi) while it has started the process of defining these targets. 12.6.3 Outcomes of the aforementioned policies and non-financial performance indices Raw materials The purpose of the monitoring framework is to measure the progress made towards the circular economy in terms of the sup- ply of raw materials in relation to recy- clable raw materials. In 2022 the Group achieved a significant increase in the use of recycled raw material compared to 2021. ANNUAL PERFORMANCE 17% INCREASE IN RECYCLED RAW MATERIAL USE IN 2022 COMPARED TO 2021 Total weight of materials (in t) [GRI: 301-1] 2022 2021 2020 Polypropylene 85,610 90,366 88,450 Polyethylene 10,646 10,856 12,906 PET 384 0 0 Masterbatch 2,908 2,040 3,154 Packaging materials 7,855 7,059 6,692 Total 107,403 110,321 111,202 Annual Financial Report as of 31.12.2022 Page 141 of 268 Amounts in thousand Euro, unless stated otherwise Total weight of recycled raw materials (in t) [GRI: 301-2] 2022 2021 2020 Recycled raw material * 13,407 11,443 7,018 Percentage of recycled raw material 12.5% 10.4% 6.3% * The recycled raw materials included into the pro- duction process stem from residues of the produc- tion processes and from external sources. Solid waste [GRI: 306-3, 306-4, 306-5, SASB: RT-CH-150a.1, ATHEX ESG: A-E3] Regarding the management of solid waste, the following table includes data for the quantities of waste generated in the Group, by treatment method. It must be noted that that the quantities of plas- tic production residues generated within the production units are recycled in full through in the production process. Waste treatment method Total weight of hazardous waste (t) Percentage 2022 2021 2020 2022 2021 2020 Recycling 210.6 196.6 209.9 94% 90% 94% Incineration 13.4 21.1 13.8 6% 10% 6% Total 224.0 217.7 223.7 100% 100% 100% Waste treatment method Total weight of non-hazardous waste (t) Percentage 2022 2021 2020 2022 2021 2020 Recycling 3,570.5 2,201.8 3,205.4 63% 51% 52% Energy recovery 314.6 362.4 326.9 5% 8% 5% Disposal in landfills 1,802.0 1,794.9 2,595.9 32% 41% 43% Total 5,687.1 4,359.1 6,128.2 100% 100% 100% Energy consumption by type and source (MJ) [GRI: 302-1, SASB: RT-CH-130a.1, ATHEX ESG: C-E3] 2022 2021 2020 Non-renewable resources Electric energy 562,705,599 586,734,821 547,416,814 District heating 1,545,613 1,627,056 1,674,000 Fuel 103,985,964 146,173,320 95,244,785 Gasoline 870,124 904,150 731,011 Natural gas 90,791,932 134,301,900 81,338,215 Methane 0 241,200 57,600 Liquefied Petroleum Gas (LPG) 7,058,892 7,381,517 7,717,144 Diesel 1,397,626 1,524,156 1,606,128 Heating pellets 3,867,390 1,820,397 3,794,687 Page 142 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Renewable sources Solar energy (Photovoltaic) 20,515,636 4,494,035 1,134,518 Geothermal energy 22,963,889 22,385,650 23,748,305 Hydropower 932,976 994,104 836,784 Total (MJ) 712,649,677 762,408,986 670,055,205 Total (MWh) 197,958 211,780 186,126 * To calculate electricity, district heating and fuel consumption, unit conversion factors from the DEFRA (Department for Environment, Food & Rural Affairs) methodology guide were used. Data has been updated. Energy consumption within the Group per type and source of energy (%) 2022 2021 2020 Electric energy (%) 78.96% 76.96% 81.70% Thermal energy (%) 0.22% 0.21% 0.25% Fuel (%) 14.59% 19.17% 14.21% Renewable energy sources (%) 6.23% 3.66% 3.84% Total 100% 100% 100% ANNUAL PERFORMANCE 6.23% USE OF ENERGY FROM RENEWABLE SOURCES IN 2022 Direct and indirect emissions [GRI: 305-1, 305-2, 305-3, SASB: RT-CH-110a.1, ATHEX ESG: C-E1, C-E2, A-E1] Below there are displayed the data collected according to ISO 14064-3 for the year 2021 in full analysis (scope 1, 2, 3) and external verification based on the AA1000 assurance standard, while in the Sustainable Development Report there will be detailed report for the year 2022. Categories (tCO2e) Direct emissions (Scope 1): 5,676 Indirect emissions (Scope 2): 100,169 (Location based), 65,963 (Market based) Indirect emissions related to the value chain (Scope 3): 242,576 Annual Financial Report as of 31.12.2022 Page 143 of 268 Amounts in thousand Euro, unless stated otherwise 12.7 Impact of the COVID-19 pandemic on non-financial issues The impact of the pandemic on the operation of the Group and business continuity In 2022, the Group managed to achieve stable, sustainable, but also significantly higher recurring profitability compared to pre-pandemic levels, despite the par- ticularly difficult conditions that prevailed in the global economy. The foundations were laid for long-term improvement and development, within conditions of intense uncertainty and inflationary pressures, while the implementation of both the planned and the extraordinary investment plan progressed consistently. The dynamic growth path of the Group continues, aim- ing at the further increase of production volume, the continuous improvement of the product mix and profitability, as well as the strengthening of the dynamics at the level of recycling within the framework of holistic sustainable development. More details are included in section 3.33. Measures taken for the minimization of the impact of the pandemic The Group closely and responsibly moni- tors all the developments related to the pandemic crisis, having as priority the as- surance of the health and safety of its em- ployees and its uninterrupted operation, so that it does not suffer any consequence that would negatively affect its business continuity. In particular, in accordance with the guidelines and recommendations of the World Health Organization and the local Public Health and Civil Protection Or- ganizations, the following measures were implemented from the very beginning and, if required, will be activated: • Formation of crisis management teams, with the participation of the Group’s management and companies, Human Resources departments, Occu- pational Physicians and Safety Techni- cians in weekly meetings with the aim of maintaining and enriching protec- tion measures and monitoring cases. • Information regarding the way of its transmission and prevention meas- ures and provision of recommenda- tions and instructions of personal hy- giene, according to the guidelines of the competent authorities. • Provision of personal protective equipment. • Implementation of diagnostic testing. • Realization of disinfections on a regu- lar basis. • Application of remote working for of- fice workers, to the extent possible. • Provision of protection for employees who belong to vulnerable groups with immediate removal from the facilities without affecting their remuneration. • Establishment of particular proce- dures and protocols for all visitors. • Realization of meetings, conducting Board meetings and General Assem- blies’ convening by teleconference, in accordance with the provisions of the law • Compliance with mandatory medical protocols in case of employee illness or contact with a case Page 144 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 12.8. EU TAXONOMY REPORT [ATHEX ESG: A-S1] 12.8.1 Environment EU Commission aims to provide the eco- nomic and financial system in the EU with a structure that is more sustainable. For this reason, EU adopted the recommen- dations of the high-level expert group on sustainable finance that formed the basis of the “Action Plan on sustainable finance”. Moreover, climate neutrality by 2050 is at the heart of the European Green Deal. By this term, the volume of CO2 emissions emitted should be equal to the volume avoided or removed. EU Taxonomy Regu- lation is the basic tool in the aforementioned Action Plan. It is a system that classifies en- vironmentally sustainable eco- nomic activities. The following environmental objectives are examined: 1. Climate Change Mitigation 2. Climate Change adaptation 3. Sustainable use and protection of wa- ter and marine resources 4. Transition to a circular economy 5. Pollution prevention and control 6. Protection and restoration of biodiver- sity and ecosystems EU Taxonomy Regulation classifies eco- nomic activities as “environmentally sus- tainable” under the following conditions: • Make a substantial contribution to at least one environmental objective. • Do no significant harm (DNSH) to achievement of the five other EU envi- ronmental objectives. • Comply with minimum social safeguards. Technical Screening Criteria (TSC) are used for the assessment of an economic activity to the extent of the substantial contribution to one of the objectives and does no significant harm to the five other objectives. Figure 1 presents the necessary steps for the alignment of an economic activity. Figure 1: A 4-step process to determine a taxonomy aligned activity (Source: BNEF) Climate change Mitigation (1) and Cli- mate Change Adaptation (2) are the cur- rently active EU environmental objectives for which technical screening criteria have been issued. The evaluation for fiscal year 2022 can take place only for these criteria. • “Taxonomy eligible economic activ- ity” is described in the delegated acts supplementing Taxonomy Regulation, irrespective of whether the economic activity meets any or all the TSC laid down in those delegated acts. • “Taxonomy aligned economic activ- ity” complies with the TSC as defined in the Climate Delegated Act and it Annual Financial Report as of 31.12.2022 Page 145 of 268 Amounts in thousand Euro, unless stated otherwise is carried out in compliance with the minimum safeguards, re: human and consumer rights, anti-corruption and bribery, taxation and fair competition. Turnover KPI, Capital Expenditure (CapEx) KPI and Operating Expenditure (OpEx) KPI will be reported for Thrace Group’s eco- nomic activities in fiscal year 2022. There is a significant number of economic activities that are not eligible under the taxonomy requirements. For Thrace Group, the economic activity 3.6 “Manufacture of other low carbon technologies” is con- sidered eligible. For the Climate Change Adaptation objective, description of 3.6 includes the manufacture of technologies aimed at substantial GHG emission reduc- tion in other sectors of the economy (not covered in Sections 3.1 to 3.5 of Annex II, Climate Delegated Act). Taxonomy Eligibility – Taxonomy Alignment The identification of technologies, activi- ties, and products in Thrace Group’s port- folio that can demonstrate low CO2 emis- sions in their application was performed, which resulted in their inclusion in the 3.6 economic activity. The EU Taxonomy Regulation does not stipulate a minimum value for the KPI lev- els. Building on technological advances rather than on efficiency enhancements within the existing system could be the purpose and objective of the “EU Action Plan on Financing Sustainable Growth”. Thrace Group aims in manufacturing 1 as referred to in Article 10(2) of Regulation (EU) 2020/852) 2 as referred to in Article 10(1), point (i), of https://eur-lex.europa.eu/legal-content/EN/ TXT/?uri=celex:32020R0852) 3 A pan-European classification system that groups organizations according to their business activities. 4 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021R2139&qid=1677158195514 sustainable products, aligned with Circular Economy standards, to further reduce the environmental footprint. Considering how they contribute to or support the environmental objectives, economic activities are categorized as: • Primary Activities, which directly con- tribute substantially to one of the six environmental objectives. • Transitional activities, which support the transition to a climate-neutral economy 1 . • Enabling activities, which facilitate the primary activities indirectly 2 . Economic activities Thrace Group consists of 14 companies, operates in 9 countries, with production, trading and distribution companies and develops activity in 3 sectors: Technical fabrics, Packaging solutions and Geother- mal Hydroponic Greenhouses. Moreover, it develops sales network in 80 countries, applies 28 technologies in production pro- cedure and covers 25 market segments with products and solutions. The EU taxonomy regulation classifies Eco- nomic activities and proposes their asso- ciation with possible NACE 3 codes . NACE codes can be associated with more than one economic activity 4 . A reference to NACE codes for the major economic activities of the Group is listed below: Page 146 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Nace Code Description Busi- ness Unit A1 Crop and animal production, hunting and related service activities C A1.13 Growing of vegetables and melons, roots and tubers C C13 Manufacture of textiles A C13.20 Weaving of textiles A C13.95 Manufacture of non-wovens and articles made from non- wovens, except apparel A C17 Manufacture of paper and paper products B C17. 2 Manufacture of articles of paper and paperboard B C20 Manufacture of chemicals and chemical products A C20.16 Manufacture of plastics in primary forms A C22 Manufacture of rubber and plastic products A, B C22.22 Manufacture of plastic packing goods B C22.29 Manufacture of other plastic products A All economic activities carried out by the Group have been examined to identify which are eligible and aligned in accord- ance with Annexes I and II to the Climate Delegated Act. Technical Screening Crite- ria were considered for this evaluation. The table below indicates the environ- mental objective for which the activities qualify as eligible. Table 1: Taxonomy eligible economic activity Economic Activity Description NACE- code 3.6 Manufac- ture of other low carbon technologies Manufacture (and sale) of technical fabrics (textiles, woven, non-woven) that aim at enabling a substan- tial reduction of GHG emis- sions in other sectors of the economy 13.20 13.95 The aforementioned activity primarily contributes to climate change adaptation. Eligibility criteria for Thrace Group Thrace Group products are categorized in the following Business Sectors, according to their prevail uses: I. Technical Fabrics II. Packaging Solutions III. Geothermal Hydroponic Greenhouses According to the Delegated Regulation EU 2021/ 2139, the economic activity: 3.6. Manufacture of other low carbon technologies can be associated with Thrace Group’s NACE codes. The main NACE code for the production of Technical Fabrics is 13.95. The activity is classified as eligible, even though the respective NACE code is not mentioned in Annex I to the Climate Dele- gated Act, since the economic activities in the category 3.6 could be associated with several NACE codes and on the other hand the products substantially contribute to Climate Change Adaptation. Thrace Group products are classified to this economic activity since Environmen- tal Product Declarations (EPDs) have been issued which demonstrate the reduction of greenhouse gas emissions over the life cycle, allowing comparison between prod- ucts to ensure the most sustainable choice. Packaging Solution products from Busi- ness Unit B are not eligible for the envi- ronmental objectives Climate Change Mitigation and Climate Change Adapta- tion for which Technical Criteria have been set. The production of Business Unit B products does not meet TSC of economic activity 3.17 “Manufacture of plastics in primary form”. Geothermal Hydroponic Greenhouses products, Business Unit C, are not examined because they are pro- duced from a joint venture. In accordance Annual Financial Report as of 31.12.2022 Page 147 of 268 Amounts in thousand Euro, unless stated otherwise with section 1.2.3. of Annex 1 of the del- egated act, KPIs of Joint Ventures will not be published. The activity 3.6 is classified as Enabling Activity, which facilitates the primary ac- tivities indirectly by providing adaptation solutions that contribute substantially to preventing or reducing the risk of the ad- verse impact of the current climate and the expected future climate on people, nature or assets, without increasing the risk of an adverse impact on other people, nature or assets. Thrace Group products contribute sub- stantially to: Climate Change Adaptation Technical Fabrics, Business Unit A, have been designed and used mainly to prevent soil erosion and improve the energy effi- ciency of buildings. The economic activity is tested only for Climate Change Adaptation and not for Climate Change Mitigation based on the conditions set out in Articles 10 and 11 of the Taxonomy Regulation. In order to identify the climate change risks, the Group has started its alignment with the TCFD’s recommendations. The TCFD Report (Recommendations of the Task Force on Climate-related Financial Disclosures) divides climate-related risks into two major categories: • risks related to the physical impacts of climate change and (Climate Change Physical Risk). • risks related to the transition to a low- er-carbon economy (Climate Change Transition Risk). The classification of climate-related risks comprises four major hazard groups, with hazards related to water, temperature, wind, and solid mass according to Appen- dix A of the Climate Delegated Act. Within this framework, the Group has carried out a risk assessment including both acute (Bi- ological risks, Health epidemics/ Pandem- ics, Inability to develop a business continu- ity/recovery plan, International sanctions imposed due to the Russo-Ukrainian War, Political instability) and chronic risks (Scar- city of water / contaminated water, Inabil- ity to manage environmental or climate changes, Natural Disasters/ Impact of natural disasters on global operations and markets). Physical risks which were found to be relevant, as adaptation must account for both rapid as well as gradual changes to take the appropriate adaptation meas- ures, a further analysis is being conducted at this stage for each of the Group’s sites. The eligible activity is also taxonomy- aligned, since it meets all the following three criteria, as detailed below: • Substantially contribute to Climate Change Adaptation in line with the Technical Screening Criteria (TSC). • Do-not-significant-harm (DNSH) in relation to the other environmental objectives. • Comply with Minimum social safe- guards (MSS) as described in the Tax- onomy Regulation. Page 148 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Table 2 presents Thrace Group products for Business Unit A and their eligibility approach to the Environmental objectives of EU Taxonomy. Category Product family1 name Product family2 name Economic Activity (Del. Reg. 2021/ 2139) Description / Protection of the Environment A.Technical Fabrics GeoSynthetics Nonwoven Geotextiles 3.6 Manufacture of other low carbon technologies A needle punched, and heat-treated nonwoven geotextile produced from 100% polypropylene staple fibers, that is used in road, railway, and drainage applications. It acts as separator to prevent the intermixing of the different soil layer types and extends the life cycle of the infrastructure. A.Technical Fabrics Woven Geotextiles A stabilized, high strength, black woven geo- textile produced from 100% polypropylene tapes that is used in Road, railway, and geobag applications. It acts as separator to prevent the intermixing of the different soil layer types and extends the life cycle of the infrastructure. A.Technical Fabrics Geogrids & Geocompos- ites Βiaxial geogrids are manufactured from poly- propylene (PP) sheets using the extrusion method of punching a pattern of holes, fol- lowed by stretching in both directions under controlled temperature, in order to reach the material's tensile characteristics. They are used in roads, landfill and erosion control. A.Technical Fabrics Geosynthetic Clay Liners (GCL) A bentonite layer sandwiched between a non- woven geotextile as a cover layer and a woven geotextile as a carrier and reinforcement bot- tom layer, both connected through the process of needle punching. It is used in landfills, canals & storage reservoirs, tank storage sites, tunnel & building seals, run-off basins, and roads for water insulation in environmentally sensitive areas. A.Technical Fabrics Drainage Geonets & Geocompos- ites Thrace drainage nets (TDN) are composed of a high-density polyethylene (HDPE) geonet drainage core. They are used in landfills, foun- dation walls, methane roads, pavements and for erosion control. A.Technical Fabrics Erosion Con- trol Mats A UV stabilized, woven mat produced from 100% polypropylene monofilament yarns used for erosion control. A.Technical Fabrics Construction Flooring Protection The use of flooring protection contributes to improved energy efficiency of buildings A.Technical Fabrics Roofing Membranes The use of correctly specified and properly installed high performance membranes can reduce the risk of condensation within the building fabric and can contribute to improved energy efficiency. Annual Financial Report as of 31.12.2022 Page 149 of 268 Amounts in thousand Euro, unless stated otherwise Category Product family1 name Product family2 name Economic Activity (Del. Reg. 2021/ 2139) Description / Protection of the Environment A.Technical Fabrics Construction Housewrap 3.6 Manufacture of other low carbon technologies Breather membranes can be installed on the outside of the frame and sheathing in timber and steel framed walls. In framed construction, breather membranes protect the frame and any sheathing from water that may penetrate the external cladding and reduce infiltration of air into the wall, extending the life cycle of the construction. A.Technical Fabrics Concrete Fibres Polypropylene multifilament fibers are high performance and high chemical resistance fi- bres developed for crack control of concrete i.e. to reduce the incidence of plastic shrinkage cracking, in order to extend the life cycle of the construction. A.Technical Fabrics Vapour Con- trol Layers Nonwoven extrusion coated spunbond fabric, made from polypropylene spunbond and poly- olefin coating. They reduce water vapour trans- fer through a building element and minimise convective heat losses. A.Technical Fabrics Agri/ Horticul- ture/ Aquaculture Groundcover Groundcover fabrics offer exceptional weed control, eliminating the need for herbicidal or insecticidal sprays. They can be used in greenhouses, gardens, nurseries and land- scaped areas. A.Technical Fabrics Root Barrier Root Barrier is designed to prevent wall crack- ing and to extend life of the concrete paths around trees as well as to protect buildings, walls and sidewalks from potential damage caused by root development redirecting roots downwards. A.Technical Fabrics Nets Their use improves the efficiency of fertilizer use. A.Technical Fabrics Mulching Widely used in nurseries, greenhouses and garden centers, Thrace Group Mulching Fab- rics prevent the growth of weeds without the need for spraying, while helping to maintain a clean, hygienic growing environment for opti- mized productivity. A.Technical Fabrics Cropcover Cropcover fabrics help to extend the growing season resulting in higher yield crops. They are particularly essential in climatic conditions that do not favor successful continuous crop devel- opment. Their use reduces the need for insec- ticides and chemical treatment A.Technical Fabrics Joined Cropcover Used for limiting the growth of weeds and re- duces the need for insecticides and chemical treatment Page 150 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Category Product family1 name Product family2 name Economic Activity (Del. Reg. 2021/ 2139) Description / Protection of the Environment A.Technical Fabrics Landscape - Gardening Gardening - DIY Mini Rolls 3.6 Manufacture of other low carbon technologies A family of products for building and landscape applications, addressing the DIY market. It can be used in gardens, floriculture, small green- houses, landscaping, tree planting, erosion control. A.Technical Fabrics Filtration Air Filtration Nonwovens for air filtration are spunbond, continuous filament, thermally bonded fabrics made from 100% polypropylene. They are used in vacuum cleaner prefilters, pleated filters, respirator coverstocks, cartridge filters, liquid filters, air filters A.Technical Fabrics Liquid Filtration Woven materials produced from monofilament or multifilament polypropylene yarns and non- woven made of polypropylene staple fibres, used to separate liquids from solids. Used in chemical processing, mining, sugar refining, water filtration, wastewater treatment giving the potential for liquids reuse. A.Technical Fabrics Industrial fabrics Absorbents Nonwoven and woven fabrics are produced for a large variety of product end uses including automotive, building materials, absorbency, furniture, bedding, and flooring. Pollutants re- moval is one of these uses. A.Technical Fabrics Lamination / Reinforcing Substrates The use of Lamination / Reinforcing Substrate offers stability, strength and reinforcement to products in a variety of applications and contributes to improved energy efficiency of buildings A.Technical Fabrics Woven Industrial Can be used in landfills, run-off basins and roads in environmental sensitive areas for soil protection. A.Technical Fabrics Non Woven Industrial Can be used in landfills, run-off basins and roads in environmental sensitive areas for soil protection A.Technical Fabrics Industrial Yarns/ Fibers PP Multifila- ment Yarn Used in manufacturing of air filters A.Technical Fabrics PP Staple Fibers Used in manufacturing of air filters Annual Financial Report as of 31.12.2022 Page 151 of 268 Amounts in thousand Euro, unless stated otherwise Evaluation of “Do no significant harm” (DNSH) criteria “Do no Significant harm” evaluation takes place for the Economic Activity: 3.6 Manufacture of other low carbon technologies In this economic activity, as described in previous sections, products from Technical Fabrics business unit substantially contrib- ute to Climate Change Adaptation. Compliance with DNSH criteria to the ap- plicable environmental objectives is being evaluated in the following paragraphs. Climate Change Adaptation DNSH technical criteria for Climate Change mitigation do not apply for an economic activity that substantially con- tributes to Climate Change Adaptation. The criteria for the EU environmental ob- jective for the use and protection of Water and Marine resources are associated with environmental degradation risks related to preserving water quality and avoiding wa- ter stress are identified and addressed with the aim of achieving good water status and good ecological potential, in accordance with Directive 2000/60/EC. Thrace Group has adopted several proce- dures to this direction and various meas- ures are in place, such as i) water consump- tion monitoring, ii) integrated proactive maintenance system to deal with possible leaks, iii) water collection and recycling systems, iv) automatic switches at drinking water points, etc. DNSH criteria for Circular Economy ex- amine the assessment of the activity and, where feasible, the adaptation of tech- niques that support: i) Reuse and use of secondary raw mate- rial. ii) Design for high durability and recycla- bility. iii) Waste management that prioritizes re- cycling over disposal in the manufac- turing process. iv) Information on the content and trace- ability of it throughout the life cycle of the products. Production of Technical Fabrics aims both to the maximum reuse and constant in- crease of secondary raw material in prod- ucts manufactured, but also to the maxi- mum recycling rate of the produced waste. For compliance to the criteria for the Pro- tection and restoration of biodiversity and ecosystems Thrace Group facilities, have all the required environmental per- mits for their operation in place. The locations of the European facilities of Thrace Group are not in or near biodiver- sity-sensitive areas (including the Natura 2000 network as well as other protected areas), as presented in Figure 2. DNSH criteria for the Pollution preven- tion include the avoidance of manufac- ture and placing on the market of several hazardous substances. Thrace Group does not use chemicals or other hazardous sub- stances that are subject to national or in- ternational constraints. Page 152 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Figure 2: Thrace Group facilities in Europe Definition of Turnover KPI, CapEx KPI and OpEx KPI Turnover as referred to in the EU Tax- onomy Regulation is defined as net rev- enues pursuant to IFRS as stated in the consolidated income statement and only referring to fully consolidated subsidiaries. The proportion of Taxonomy-aligned eco- nomic activities in our total turnover has been calculated as the part of net turnover derived from products and services asso- ciated with Taxonomy-aligned economic activities (numerator) divided by the net turnover (denominator) for the financial year from 1 January to 31 December 2022. The denominator of the turnover KPI is based on the consolidated net turnover in accordance with paragraph 82(a) of IAS 1. For further details on the accounting poli- cies regarding the consolidated net turno- ver, refer to section 2.14 of the Annual Fi- nancial Report 2022. The numerator of the turnover KPI is de- fined as the net turnover derived from products and services associated with Tax- Annual Financial Report as of 31.12.2022 Page 153 of 268 Amounts in thousand Euro, unless stated otherwise onomy-aligned economic activities, that is: • Activity 3.6 “Manufacture of other low carbon technologies” generates net turnover from the sale of technical fib- ers. CapEx as referred to in the EU Taxon- omy Regulation is calculated on a gross basis, i.e. without accounting for remeas- urements, depreciation and amortization, or impairment losses. CapEx comprises in- vestments in non-current intangible assets and in property, plant and equipment as presented in the consolidated statement of financial position. The CapEx KPI is defined as Taxonomy- aligned CapEx (numerator) divided by the total CapEx (denominator). Total CapEx consists of additions to tangi- ble and intangible fixed assets during the financial year, before depreciation, amor- tization, and any remeasurements, includ- ing those resulting from revaluations and impairments, as well as excluding changes in fair value. It includes acquisitions of tan- gible fixed assets (IAS 16), intangible fixed assets (IAS 38), right-of-use assets (IFRS 16) and investment properties (IAS 40). Addi- tions resulting from business combina- tions are also included. Goodwill is not in- cluded in CapEx, because it is not defined as an intangible asset in accordance with IAS 38. For further details on the accounting poli- cies regarding CapEx, refer to section 2.5 of the Annual Financial Report 2022. The numerator consists of the following categories of Taxonomy-eligible CapEx: a) CapEx related to assets or processes that are associated with Taxonomy- aligned economic activities (“category a”): • CapEx invested into the following areas is considered in the numerator of the CapEx KPI: Buildings, Equip- ment, Machinery, intangible assets. b) CapEx that is part of a plan to upgrade a Taxonomy-eligible economic activ- ity to become Taxonomy-aligned or to expand a Taxonomy-aligned econom- ic activity (“category b”): • Thrace Group does not have CapEx for FY 2022, under this category. c) CapEx related to the purchase of out- put from Taxonomy-aligned econom- ic activities and individual measures enabling certain target activities to become low-carbon or to lead to GHG reductions (“category c”): • Thrace Group does not have CapEx for FY 2022, under this category. Thrace Group’s CapEx can be reconciled to our consolidated financial statements, re- fer to sections 3.12, 3.13, 3.14 of the Annual Financial Report 2022 (“table on changes in intangible assets, in right-of-use assets, in PP&E, and in investment properties”). They are the total of the movement types (acquisition and production costs): • additions • additions from business combinations for intangible assets, right-of-use assets, property, plant and equipment, and in- vestment properties. For both CapEx and OpEx KPI calculations associated with Taxonomy-aligned eco- nomic activities, double counting is elimi- nated. OpEx as referred to in the EU Taxonomy Regulation includes expenses not eligible for capitalization that are presented in the consolidated income statement, such as expenses for research and development, building refurbishment measures, short Page 154 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise term leases, maintenance and repairs, and all other direct expenses resulting from the maintenance of property, plant and equip- ment in order to safeguard the operating capability of taxonomy-eligible assets. The OpEx KPI is defined as Taxonomy- aligned OpEx (numerator) divided by our total OpEx (denominator). Total OpEx consists of direct non-capital- ised costs that relate to research and de- velopment, building renovation measures, short-term leases as well as all forms of maintenance and repair. This includes: • Research and development expendi- ture recognised as an expense during the reporting period in our income statement (refer to section 3.6 of the Annual Financial Report 2022). • The volume of non-capitalised leases was determined in accordance with IFRS 16 and includes expenses for short-term leases and low-value leases (refer to section 3.13 of the Annual Fi- nancial Report 2022). Maintenance and repair expenditures were determined based on the maintenance and repair costs allocated to our inter- nal cost centers. The related costs can be found in various line items in our income statement, including production costs (maintenance in operations), sales and dis- tribution costs (maintenance logistics) and administration costs (such as maintenance of IT systems). This also includes building renovation measures. Key Performance Index 5 2022 Turnover CapEx OpEx Total (in mil. €) 394.38 37.97 9.44 taxonomy - aligned (in mil. €) 154.20 21.72 3.89 % 39.1 57.2 41.1 taxonomy - eligible (in mil. €) 154.20 21.72 3.89 % 39.1 57.2 41.1 not taxonomy - eligible (in mil. €) 240.18 16.25 5.56 % 60.9 42.8 58.9 Contextual Information Turnover KPI - Quantitative breakdown of the numerator In the Table 3 below, a quantitative breakdown of the numerator for the turnover KPI is presented. Table 3: Quantitative breakdown of turnover numerator Turnover (in mil. €) Customer contracts 154.20 other revenue 0 Total 154.20 5 Values for the Taxonomy aligned activity (3.6 Manufacture of other low carbon Technologies) that substantially contributes to Climate Change Adaptation Annual Financial Report as of 31.12.2022 Page 155 of 268 Amounts in thousand Euro, unless stated otherwise CapEx KPI – Quantitative breakdown at the economic activity aggregated level In FY 2022, the Taxonomy-aligned CapEx is associated with activity 3.6. In the Table 4 below, a breakdown of the amounts included in the numerator is included. Table 4: Quantitative breakdown of the CapEx numerator Activity 3.6 (in mil. €) Total (in mil. €) Additions to property, plant, and equipment 21.55 21.55 Internally generated or purchased intangibles 0.11 0.11 Right - of use assets 0.06 0.06 Sum 21.72 21.72 Upgrade and expansion plan Thrace Group’s facilities are constantly upgraded so that they remain safe and functional, while also meeting the Group’s needs due to the ongoing investments in mechanical equipment and photovoltaic panels. OpEx KPI – Quantitative breakdown of the numerator Table 5 shows the breakdown of the OpEx numerator into its components based on the definition of OpEx in the Disclosures Delegated Act: Table 5: Quantitative breakdown of OpEx numerator OpEx (in mil. €) R&D costs 0.99 Maintenance and repair 2.75 Short-term lease 0.15 Total 3.89 12.8.2 Minimum Safeguards The Group focuses strongly on labour topics, such as workers’ rights, health and safety in the workplace, training, and edu- cation of employees. It also acknowledges the influence and opportunities created by the Group activities in local communi- ties. The taxonomy-alignment evaluates the compliance with the Minimum Safe- guards (MS). The economic activities of Thrace Group are carried out in alignment with: • the OECD Guidelines for Multinational Enterprises (OECD MNE Guidelines) • the UN Guiding Principles on Business and Human Rights (UNGPs), includ- ing the principles and rights set out in the eight fundamental conventions identified in the Declaration of the In- ternational Labour Organization on Fundamental Principles and Rights at Work • the International Bill of Human Rights. The scope of the MS covers the following four topics: • human rights (including labour and consumer rights) • corruption and bribery • taxation • fair competition Thrace Group’s approach, to assess com- pliance with MS, consists of two (2) stag- es. The implementation of adequate Page 156 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise processes for the prevention of negative impacts is the 1 st stage and the monitoring of the outcomes is the 2 nd one. Human Rights (Including labour and consumer rights) Various risks can be linked to human rights, not only in the workspace but also in the supply chain. Thrace Group has recognized such possible discrimination against employees due to race, religion, gender, nationality, beliefs, age, disability etc., violation of the privacy of employees, and forced child labour. There is zero tol- erance by Thrace Group for acts of harass- ment in the workplace, forced child labor and any other type of discrimination. A whistleblowing mechanism platform is also being used. Through this platform, anonymous or signed reports can be re- corded. Employees can report offending behaviors and situations, which are then investigated by the Group. Taxation Thrace Group aims in producing and dis- tributing, through its business activities and high-performance levels both directly and indirectly, economic value to the com- munities in which it operates, placing spe- cial emphasis on: • Strengthening the economies of the countries it operates in, through the cash flows it generates to stakehold- ers, namely tax payments, payments to suppliers, salary payments to em- ployees, dividends to shareholders and investments in local communities. • Meeting the needs of societies that surround the Group facilities and are affected by its activities. • Creating employment opportunities through the direct and indirect crea- tion and maintenance of job positions through the value chain. Corruption and bribery Thrace Group has identified the risk of in- cidents of corruption and bribery through- out its value chain. Both the Group’s in- ternal activities and possible transactions with its main stakeholders, such as cus- tomers and suppliers, can assess the pos- sible risks. The commitment to zero toler- ance by Thrace Group towards matters of corruption and bribery is achieved by con- ducting its business activity with integrity in accordance with the highest standards of ethics and the laws in effect. Within this framework, it has enacted and communi- cated related principles and policies, while setting up control mechanisms. Thrace Group is taking preventive action by monitoring related updates and con- trols on an annual basis through the Inter- nal Audit Department, for the avoidance of corruption and bribery. Disciplinary meas- ures are in force for the discouragement of cases of participation in incidents of this sort. In support of these internal pro- cedures, the Audit Committee has been established which is responsible for the management and monitoring of corporate governance issues in addition to support- ing the Board of Directors in its duties re- garding the financial information process, internal control and risk management system procedures and regulatory compli- ance. It is also responsible for the supervi- sion of the internal audit department and the mandatory audit of the annual and consolidated financial statements. Annual Financial Report as of 31.12.2022 Page 157 of 268 Amounts in thousand Euro, unless stated otherwise Fair Competition Thrace Group is firmly committed to con- ducting its business activity with integrity, always taking into account the highest standards of ethics and the laws in effect. The Code of Ethics and Conduct specifies the standards of behavior required by the employees of the companies of the Group in every country where the Group is oper- ating. The basic principles of the Code are listed: • Business ethics • Respect of human rights • Diversity and equal representation • Compliance with the laws and social norms • Product quality • Promotion of fair and free competition • Avoidance of conflict of interest • Accuracy and completeness of financial information • Protection of corporate tangible assets • Transparent and legitimate collaboration with the public authorities • Realization of all transactions with integrity and protection against corruption • Data protection and confidentiality • Good labour relations • Safety, health and environmental protection • Circular economy and climate change • Social contribution Page 158 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 12.8.3 Annexes Proportion of turnover from products or services associated with Taxonomy-aligned economic activi- ties - disclosure covering year 2022 Substantial contribution citeria DNSH criteria Economic activities (1) Code(s) (2) Absolut turnover (3) Proportion of turnover (4) Climate change mitigation (5) Climate change adaptation (6) Water and Marine resources (7) Circular Economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and Marine resources (13) Circular Economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of turnover, year 2022 (18) Taxonomy-aligned proportion of turnover, year 2021 (19) Category (enabling activity) (20) Category (transition activity) (21) € % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Percent Ε T Α. TAXONOMY ELIGIBLE ACTIVITIES Α.1 Environmentally sustainable activities (Taxonomy-aligned) Manufacture of other low carbon technologies 3.6 154,205,076 39.1 N/A 39.1 N/A N/A N/A N/A N/A N/A Y Y Y Y Y 39.1 Ε Turnover of environ- mentally sustainable activities (Taxono- my-aligned) (A.1) 154,205,076 39.1 N/A 39.1 N/A N/A N/A N/A N/A N/A Y Y Y Y Y 39.1 E Α.2 Taxonomy-Eligi- ble but not environ- mentally sustain- able activities (not Taxonomy-aligned activities) Activity 1 % Activity 3 Turnover of Tax- onomy- eligible but not environmentally sustainable Total (Α.1 + Α.2) 154,205,076 39.1 39.1 Ε B. TAXONOMY NON-ELIGIBLE ACTIVITIES Turnover of Taxon- omy-non-eligible activities (B) 240,176,924 60.9 Activity 1 is Taxonomy-eligible in its entity. However, only a proportion of it is Taxonomy-aligned. Therefore, Activity 1 may be reported under both A1 and A2. However, only the proportion re- ported under A1 may be counted as Taxonomy-aligned in the turnover KPI of the non-financial undertaking. Column 21 should be filled in for transitional activities contributing to the Climate Change Mitigation. For activities listed under A2, columns 5 to 17 may be filled in on a voluntary basis by non-finan- cial undertakings. Total (Α + Β) 394,382,000 100 Annual Financial Report as of 31.12.2022 Page 159 of 268 Amounts in thousand Euro, unless stated otherwise Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022 Substantial contribution citeria DNSH criteria Economic activities (1) Code(s) (2) Absolut CapEx (3) Proportion of CapEx (4) ("Does Not Significantly Harm") Climate change adaptation (6) Water and Marine resources (7) Circular Economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and Marine resources (13) Circular Economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of CapEx, year 2022 (18) Taxonomy-aligned proportion of CapEx, year 2021 (19) Category (enabling activity) (20) Category (transition activity) (21) € % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Per- cent Ε T Α. TAXONOMY ELIGIBLE ACTIVITIES Α.1 Environmetally sustainable activities (Taxonomy-aligned) Manufacture of other low carbon technologies 3.6 21,722,693 57.2 N/A 57.2 N/A N/A N/A N/A N/A Α/Α Ν Ν Ν Ν Ν 57,2 Ε CapEx of environ- mentally sustainable activities (Taxonomy- aligned) (A.1) 21,722,693 57.2 N/A 57.2 N/A N/A N/A N/A N/A Α/Α Ν Ν Ν Ν Ν 57, 2 Ε Α.2 Taxonomy-Eligible but not environmen- tally sustainable ac- tivities (not Taxonomy- aligned activities) Activity 1 % CapEx of Taxonomy- eligible but not environmentally sus- tainable activities (not Taxonomy- aligned activities) (A.2) Total (Α.1 + Α.2) 21,722,693 57.2 57.2 Ε B. TAXONOMY NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy- non-eligibleactivities (B) 16,248,307 42.8 Activity 1 is Taxonomy-eligible in its entity. However, only a proportion of it is Taxonomy- aligned. Therefore, Activity 1 may be reported under both A1 and A2. However, only the pro- portion reported under A1 may be counted as Taxonomy-aligned in the CapEx KPI of the non- financial undertaking. For activities listed under A2, columns 5 to 17 may be filled in on a voluntary basis by non- financial undertakings. Total (Α + Β) 37,971,000 100 Page 160 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022 Substantial contribution citeria DNSH criteria Economic activities (1) Code(s) (2) Absolut CapEx (3) Proportion of CapEx (4) ("Does Not Significantly Harm") Climate change adaptation (6) Water and Marine resources (7) Circular Economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and Marine resources (13) Circular Economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of CapEx, year 2022 (18) Taxonomy-aligned proportion of CapEx, year 2021 (19) Category (enabling activity) (20) Category (transition activity) (21) € % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Per- cent Ε T Α. TAXONOMY ELIGIBLE ACTIVITIES Α.1 Environmetally sustainable activities (Taxonomy-aligned) Manufacture of other low carbon technologies 3.6 3,886,470 41.1 N/A 41.1 N/A N/A N/A N/A N/A Α/Α Ν Ν Ν Ν Ν 45.2 Ε ΟpEx of environ- mentally sustainable activities (Taxonomy- aligned) (A.1) 3,886,470 41.1 N/A 41.1 N/A N/A N/A N/A N/A N/A Y Y Y Y Y 41.1 Ε Α.2 Taxonomy-Eligible but not environmen- tally sustainable ac- tivities (not Taxonomy- aligned activities) Activity 1 OpEx of Taxonomy-el- igible but not environ- mentally sustainable activities (not Taxonomy- aligned activities) (A.2) % Total (Α.1 + Α.2) 3,886,470 41.1 41.1 E B. TAXONOMY NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non- eligibleactivities (B) 5,559,007 58.9 Activity 1 is Taxonomy-eligible in its entity. However, only a proportion of it is Taxonomy- aligned. Therefore, Activity 1 may be reported under both A1 and A2. However, only the pro- portion reported under A1 may be counted as Taxonomy-aligned in the OpEx KPI of the non- financial undertaking. For activities listed under A2, columns 5 to 17 may be filled in on a voluntary basis by non – fi- nancial undertakings. Total (Α + Β) 9,445,477 100 Annual Financial Report as of 31.12.2022 Page 161 of 268 Amounts in thousand Euro, unless stated otherwise Abbreviation list ATHEX ESG ESG reporting guide by the Athens Stock Exchange BRC (Brand Reputation Compliance) International standard for food safety CDP International non-profitable organization that helps com- panies publish their environmental impact EcoVadis Organization for the evaluation of companies in relation to matters of non-financial updates and responsible business activity EPD (Environmental Product Declaration) Environmental Product Declaration ESG (Environmen- tal, Social and Governance) The environment, society and corporate governance EuCertPlus Certification focusing on the traceability of plastic materials and the quality of the recycled content of the end product FDA (Food and Drug Administration) International organization responsible for the protection and promotion of public health GRI (Global Reporting Initiative) International reporting standard for sustainable develop- ment. In this report, the core option is followed. IFS (International Food Standard) International standard for the certification of food safety and quality In the Loop Platform for the upcycling of plastic waste ISO (International Standardization Organization) International Standardization Organization LCA (Life Cycle Assessment) Method for the analysis of life cycle Nasdaq ESG Global environmental, social and governance (ESG) report- ing guide for public and private companies RecyClass Certification for the traceability of recycled content in plas- tic products SASB (Sustainability Accounting Standards Board) International reporting standards of sustainable development SBTi (Science Based Targets initiative) International initiative that provides companies with a clear methodology for the reduction of emissions according to the goals set in the Paris Agreement SDGs (Sustainable De- velopment Goals) Sustainable Development Goals set by the UN TCFD (Task Force on Climate-Related Finan- cial Disclosures) International initiative that develops recommendations for more effective disclosures related to the climate change tCO2 Greenhouse gas emissions in tons of CO2 equivalent Page 162 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise TÜV OK Recycled Certification scheme that specifies the requirements to calculate the recycled content of plastic products UNGC (UN Global Compact) The ten principles of the UN Global Compact Xanthi, 24 April 2023 The Chairman of the Board of Directors The Chief Executive Officer & Executive Member of the Board of Directors The Non-Executive Member of the Board of Directors Konstantinos St. Chalioris Dimitris P. Malamos Vasileios S. Zairopoulos Annual Financial Report as of 31.12.2022 Page 163 of 268 Amounts in thousand Euro, unless stated otherwise III. ΕΚΘΕΣΗ ΑΝΕΞΑΡΤΗΤΟΥ ΟΡΚΩΤΟΥ ΕΛΕΓΚΤΗ ΛΟΓΙΣΤΗ PricewaterhouseCoopers SA, T: +30 210 6874400, www.pwc.gr Athens: 260 Kifissias Avenue & 270 Kifissias Avenue, 15232 Halandri | T:+30 210 6874400 Thessaloniki: 16 Agias Anastasias & Laertou, 55535 Pylaia | T: +30 2310 488880 Ioannina: 2 Plateia Pargis (or 23 Pyrsinella), 1st floor, 45332 | T: +30 2651 313376 Patra: 2A 28is Oktovriou & Othonos Amalias, 26223 | T: +30 2616 009208 Independent auditor’s report To the Shareholders of “ Thrace Plastics Holding Company S.A.” Report on the audit of the separate and consolidated financial statements Our opinion We have audited the accompanying separate and consolidated financial statements of “Thrace Plastics Holding Company S.A.” (Company and/or Group) which comprise the separate and consolidated statement of financial position as of December 31, 2022, the separate and consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flow statements for the year then ended, and notes to the separate and consolidated financial statements, including a summary of significant accounting policies. In our opinion, the consolidated financial statements present fairly, in all material respects the separate and consolidated financial position of the Company and the Group as at 31 December 2022, their separate and consolidated financial performance and their separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the statutory requirements of Law 4548/2018. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs), as they have been transposed into Greek Law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the separate and consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence During our audit we remained independent of the Company and the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) that has been transposed into Greek Law, and the ethical requirements of Law 4449/2017 and of Regulation (EU) No 537/2014, that are relevant to the audit of the separate and consolidated financial statements in Greece. We have fulfilled our other ethical responsibilities in accordance with Law 4449/2017, Regulation (EU) No 537/2014 and the requirements of the IESBA Code. We declare that the non-audit services that we have provided to the Company and its subsidiaries are in accordance with the aforementioned provisions of the applicable law and regulation and that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have provided to the Company and its subsidiaries, during the year ended as at December 31, 2022, are disclosed in note 3.31 to the separate and consolidated financial statements. Page 164 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 2 Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the year under audit. These matters were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Provisions for Employee benefits (Consolidated Financial Statements) In the consolidated statement of financial position is included an amount of €7,2 million related to net benefit from funded defined benefit plans of foreign components as at 31 December 2022. The future benefits are discounted at present value after deducting the fair value of the assets of the funded programs. The present value of post-employment benefit obligations is contingent on certain factors determined on the basis of an actuarial valuation prepared by an independent actuary through the use of significant assumptions. The assumptions used to determine the net cost of post-employment benefits include, among others, the discount rate, inflation, and the average annual salary increase. Any changes in the assumptions may have a significant impact on the accounting for post-employment benefit accounting, making this item volatile, since it is significantly influenced by the change in the fair value of the assets of the funded programs. We focused on this item due to its significant value in the consolidated financial statements and due to the estimates and assumptions used by the management. Detailed information is provided in Notes 2.18 “Employee benefits” and 3.22 "Pension Liabilities” of the consolidated financial statements of the Group. • We evaluated the Group Accounting policy for defined benefit plans. • We investigated the matter by requesting from the Group's management detailed information in order to evaluate the assumptions adopted and the data used for the calculation of the provision. • We performed a detailed examination and evaluation of the actuarial valuation prepared for the calculation of the provision, in order to assess that it is in line with IFRS, with an emphasis on the reasonability of the assumptions used. • We critically assessed the method used and the assumptions used, as well as the hypotheses and sources of data defined by the management and used by the actuary, their cohesion and consistency compared to the previous year and we compared these assumptions with relative observable market information. • We agreed on the provision for staff benefits and the relative costs included in the financial statements with the actuarial valuation. • We found that the assumptions used were within a reasonable range and confirmed the appropriateness of the disclosures in the consolidated financial statements. • We confirmed that the relevant disclosures in the consolidated financial statements are adequate. Based on our work, no exceptions identified regarding the reasonableness of the assumptions. Annual Financial Report as of 31.12.2022 Page 165 of 268 Amounts in thousand Euro, unless stated otherwise 3 Impairment assessment of Goodwill (Consolidated Financial Statements) In the consolidated statement of financial position as at 31 December 2022, the Group has goodwill of € 9,7 million as stated in note 3.14 "Intangible Assets" of the financial statements. Following initial recognition, the Group measures goodwill at cost less accumulated impairment losses. Goodwill is allocated on cash-generating units and an impairment test is carried out annually or more frequently if there is evidence of a possible impairment in the book value of the goodwill in relation to its recoverable value in accordance with IAS 36. Impairment is recognized directly as an expense in consolidated profit or loss and other comprehensive income and is not subsequently reversed. Management determines recoverable value of the cash generating units as the largest amount between the value in use and its fair value, minus any related costs of disposal. The calculation of the value in use of each cash- generating unit is performed by an independent valuer and requires management's estimation of the assumptions about the future results of the above cash-generating units, such as the growth rate in perpetuity, forecasts of expected sales quantities and prices, gross margin and discount rates. These assumptions vary due to the different market conditions in the countries in which the Group operates. We focused on this area due to the significant value of this item in the consolidated financial statements as well as the estimates and assumptions used by management in the context of performing the impairment assessment of goodwill. Detailed information on the impairment assessment of goodwill is provided in notes 2.3.1.3 "Estimation on impairment of goodwill”, 2.6.1 “Goodwill”, and 3.14 "Intangible assets" of the consolidated financial statements of the Group. Based on the impairment test performed by management, there was no need to recognize impairment loss on goodwill for the year ended 31 December 2022. We evaluated the overall impairment test performed by the management, including the process of reviewing and approving value in use models. We performed audit procedures to confirm that the impairment test for goodwill is generally based on accepted policies and on reasonable assumptions. In cooperation with our colleagues with valuation expertise, we performed the following audit procedures: • We examined the key assumptions of the Group, such as the growth rate of the cash generating units in perpetuity, projected sales volumes and prices, and gross profit margins used in the projected cash flow, comparing them with the trends of local markets and the assumptions used in previous years. • We evaluated the reliability of the forecasts used in the projected cash flows of the management, by comparing the actual performance against previous forecasts. • We found that the discount rate was determined within an acceptable range, assessing the cost of capital and borrowing costs per cash-generating unit and comparing the discount rates with industry and market data. • We examined the mathematical accuracy of the cash flow models and we agreed these with the relative investment plans. We assessed the impact on the value in use of the cash- generating units of a possible change in the key assumptions, such as growth rates, discount rates, sales volume and prices, and gross profit margins, and we found that the margin between book value and recoverable value was adequate. Based on the procedures performed, no exceptions were identified regarding the impairment test and we found that management's assumptions and estimates were within a reasonable range. In addition, we confirmed the appropriateness of the relevant disclosures in the consolidated financial statements. 4 Other Information The members of the Board of Directors are responsible for the Other Information. The Other Information, which is included in the Annual Report in accordance with Law 3556/2007, is the Statements of Board of Directors members and the Board of Directors Report (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report. Our opinion on the separate and consolidated financial statements does not cover the Other Information and except to the extent otherwise explicitly stated in this section of our Report, we do not express an audit opinion or other form of assurance thereon. In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We considered whether the Board of Directors Report includes the disclosures required by Law 4548/2018 and the Corporate Governance Statement required by article 152 of Law 4548/2018 has been prepared. Based on the work undertaken in the course of our audit, in our opinion: ● The information given in the the Board of Directors’ Report for the year ended at December 31, 2022 is consistent with the separate and consolidated financial statements, ● The Board of Directors’ Report has been prepared in accordance with the legal requirements of articles 150,151,153 and 154 of Law 4548/2018, ● The Corporate Governance Statement provides the information referred to items c and d of paragraph 1 of article 152 of Law 4548/2018. In addition, in light of the knowledge and understanding of the Company and Group and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Board of Directors’ Report and Other Information that we obtained prior to the date of this auditor’s report. We have nothing to report in this respect. Responsibilities of Board of Directors and those charged with governance for the separate and consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the requirements of Law 4548/2018, and for such internal control as the Board of Directors determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate and consolidated financial statements, the Board of Directors is responsible for assessing the Company’s and 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 Board of Directors either intends to liquidate the Company and Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s and Group’s financial reporting process. 5 Auditor’s responsibilities for the audit of the separate and consolidated financial statements Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 separate and consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ● Identify and assess the risks of material misstatement of the separate and 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 Company’s and 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 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 Company’s and 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 auditor’s report to the related disclosures in the separate and 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 auditor’s report. However, future events or conditions may cause the Company and Group to cease to continue as a going concern. ● Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company and 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, related safeguards. 6 From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the year under audit and are therefore the key audit matters. We describe these matters in our auditor’s report. Report on other legal and regulatory requirements 1. Additional Report to the Audit Committee Our opinion on the accompanying separate and consolidated financial statements is consistent with our, as per article 11 of Regulation (EU) 537/2014 required, Additional Report to the Audit Committee of the Company. 2. Appointment We were first appointed as auditors of the Company by the decision of the annual general meeting of shareholders on 12 May 2010. Our appointment has been renewed annually by the decision of the annual general meeting of shareholders for a total uninterrupted period of appointment of 13 years. 3. Operating Regulation "The Company has an Operating Regulation in accordance with the content provided by the provisions of article 14 of Law 4706/2020". 4. Assurance Report on the European Single Electronic Format We have examined the digital files of “Thrace Plastics Holding Company S.A.” (hereinafter referred to as the “Company and/or Group”), which were compiled in accordance with the European Single Electronic Format (ESEF) defined by the Commission Delegated Regulation (EU) 2019/815, as amended by Regulation (EU) 2020/1989 (hereinafter “ESEF Regulation”), and which include the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2022, in XHTML format (213800J1QD8BIB2ICW19-2022-12-31-el.xhtml), as well as the provided XBRL file (213800J1QD8BIB2ICW19-2022-12-31-el.zip) with the appropriate marking up, on the aforementioned consolidated financial statements, including the other explanatory information (Notes to the financial statements). Regulatory framework The digital files of the European Single Electronic Format are compiled in accordance with ESEF Regulation and 2020 / C 379/01 Interpretative Communication of the European Commission of 10 November 2020, as provided by Law 3556/2007 and the relevant announcements of the Hellenic Capital Market Commission and the Athens Stock Exchange (hereinafter “ESEF Regulatory Framework”). In summary, this Framework includes the following requirements: • All annual financial reports should be prepared in XHTML format. • For consolidated financial statements in accordance with International Financial Reporting Standards, the financial information stated in the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the Statement of Cash Flows, as well as the financial information included in the other explanatory information, should be marked-up with XBRL 'tags' and ‘block tag’, according to the ESEF Taxonomy, as in force. The technical specifications for ESEF, including the relevant classification, are set out in the ESEF Regulatory Technical Standards. 7 The requirements set out in the current ESEF Regulatory Framework are suitable criteria for formulating a reasonable assurance conclusion. Responsibilities of the management and those charged with governance The management is responsible for the preparation and submission of the separate and consolidated financial statements of the Company and the Group, for the year ended December 31, 2022, in accordance with the requirements set by the ESEF Regulatory Framework, as well as for those internal controls that management determines as necessary, to enable the compilation of digital files free of material error due to either fraud or error. Auditor’s responsibilities Our responsibility is to plan and carry out this assurance work, in accordance with no. 214/4 / 11.02.2022 Decision of the Board of Directors of the Hellenic Accounting and Auditing Standards Oversight Board (HAASOB) and the "Guidelines in relation to the work and the assurance report of the Certified Public Accountants on the European Single Electronic Format (ESEF) of issuers with securities listed on a regulated market in Greece" as issued by the Board of Certified Auditors on 14/02/2022 (hereinafter "ESEF Guidelines"), providing reasonable assurance that the separate and consolidated financial statements of the Company and the Group prepared by the management in accordance with ESEF comply in all material respects with the current ESEF Regulatory Framework. Our work was carried out in accordance with the Code of Ethics for Professional Accountants of the International Ethics Standard Board for Accountants (IESBA Code), which has been transposed into Greek Law and in addition we have fulfilled the ethical responsibilities of independence, according to Law 4449/2017 and the Regulation (EU) 537/2014. The assurance work we conducted is limited to the procedures provided by the ESEF Guidelines and was carried out in accordance with International Standard on Assurance Engagements 3000, “Assurance Engagements other than Audits or Reviews of Historical Financial Information''. Reasonable assurance is a high level of assurance, but it is not a guarantee that this work will always detect a material misstatement regarding non-compliance with the requirements of the ESEF Regulation. Conclusion Based on the procedures performed and the evidence obtained, we conclude that the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2022, in XHTML file format (213800J1QD8BIB2ICW19-2022-12-31-el.xhtml), as well as the provided XBRL file (213800J1QD8BIB2ICW19-2022-12-31-el.zip) with the appropriate marking up, on the aforementioned consolidated financial statements, including the other explanatory information, have been prepared, in all material respects, in accordance with the requirements of the ESEF Regulatory Framework. 25 April 2023 The Certified Auditor PricewaterhouseCoopers SA 268 Kifissias Avenue 152 32, Halandri Socrates Leptos - Bourgi SOEL Reg.No 113 SOEL Reg. No. 41541 22 www.thracegroup.com ANNUAL FINANCIAL STATEMENTS FOR THE PERIOD 01.01.2022 – 31.12.2022 THRACE PLASTICS CO S.A. Page 172 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise IV. ANNUAL FINANCIAL STATEMENTS (SEPARATE AND CONSOLIDATED) Contents of notes 1. Information about the Group 180 2. Basis for the Preparation of the Financial Statements and Main Accounting Principles 182 2.1 Basis of Preparation 182 2.2 New standards, amendments to standards and interpretations 183 2.3 Significant Accounting Estimations and Judgments of the Group’s Management 185 2.4 Basis of Consolidation 187 2. 5 Tangible Assets 189 2.6 Intangible A ssets 190 2.7 Non-Current Assets Held for Sale 191 2.8 Impairments of Non-Financial Assets 191 2.9 Inventories 192 2.10 Cash & cash equivalents 192 2.11 Foreign Exchange Translations 192 2.12 Acquisition of Treasury Shares 193 2.13 Dividends 193 2.14 Income 193 2.15 Exp enses 194 2.16 Leases 194 2.17 Income Ta x 196 2.18 Employee Bene fits 196 2.19 Provisions 198 2. 20 Financial A ssets 198 2. 21 Financial Liabilities 200 2.22 Suppliers and Other Creditors 200 2. 23 Equit y 20 0 STATEMENTS STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME 174 STATEMENT OF FINANCIAL POSITION 176 STATEMENT OF CHANGES IN EQUITY Group 177 STATEMENT OF CHANGES IN EQUITY Company 178 STATEMENT OF CASH FLOWS 179 Annual Financial Report as of 31.12.2022 Page 173 of 268 Amounts in thousand Euro, unless stated otherwise 3. Notes on the Financial Statements 201 3.1 Evolution and Performance of the Group 201 3.2 Discontinued Activities 203 3.3 Segment Repor ting 204 3.4 Other Operating Income 208 3.5 Other Gains / Losses 208 3.6 Analysis of Expenses (Production-Administrative-Sales & Distribution-Research & Development) 209 3.7 Payroll Expenses 210 3.8 Other Operating Expenses 211 3.9 Financial income/(e xpenses) 212 3.10 Earnings per Share (Consolidated) 212 3.11 Income Tax 213 3.12 Property, Plant & Equipment (PP&E) 216 3.13 Leases 220 3.14 Intangible Assets 224 3.15 Other Long-Term Receivables 228 3.16 Inventories 229 3.17 Trade and other receivables 229 3.18 Cash & cash equivalents 231 3.19 Share Capital and Share Premium Reserve 232 3.20 Reserves 232 3.21 Bank Debt 233 3.22 Pension Liabilities 234 3.23 Deferred Taxes 240 3.24 Suppliers and Other Short-Term Liabilities 243 3.25 Financial Derivative Products 244 3.26 Dividend 24 4 3.27 Transactions with Related Parties 245 3.28 Remuneration of Board of Directors 248 3.29 Investments 248 3.30 Commitments and Contingent Liabilities 251 3.31 Fees of auditing firms 252 3.32 Financial risk s 252 3.33 Signif icant Events 259 3.34 Significant events after the Balance Sheet Date 265 Page 174 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 149 from 238 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements Note 1/1 - 31/12/2022 1/1 - 31/12/2021 1/1 - 31/12/2022 1/1 - 31/12/2021 Turnover 394,382 428,429 5,658 5,668 Cost of Sales (310,119) (288,280) (5,376) (5,644) Gross profit/(loss) - continuing operations 84,263 140,149 282 24 Other Operating Income 3.4 1,613 Selling and Distribution Expenses 3.6 (39,693) (35,891) - - Administrative Expenses 3.6 (16,966) (16,742) (1,160) (930) Res ea rch a nd Devel opment Expenses 3.6 (2,295) (1,822) - - Other Operating Expenses 3.8 (1,577) (4,594) (6) (99) Other gain / (losses) 3.5 909 1,200 (2) (2) Financial Income 3.9 Financial Expenses 3.9 (4,417) (3,728) (55) (37) Income from Dividends - - 13,478 15,006 Profit / (loss) from companies consol idated with the Equity Method 3.29 2,525 2,770 - - Profit/(loss) before Tax - continuing operations 32,068 83,920 12,775 14,130 Income Tax 3.11 Profit/(loss) after tax (Α) - continuing operations 26,270 65,866 11,171 14,114 Profit/(loss) after tax (Α) - discontinued operations 3.2 (35) 6,591 - - Profit/(loss) after tax (Α) 26,235 72,457 11,171 14,114 Other Comprehensive Income (Loss) Items that may be classified in the future in the statement of income FX differences from SOFP balances translation (4,791) 4,348 - - Items that will not be classified in the future in the statement of income Actuarial profit/(loss) 6,745 7,887 11 6 Other comprehensive income after taxes (B) - continuing operations 1,954 12,235 11 6 Items that may be classified in the future in the statement of income FX differences from SOFP balances translation 311 95 - - Items that will not be classified in the future in the statement of income Actuarial profit/(loss) - - - - Other comprehensive income after taxes (B) - discontinued operations 311 95 - - Items that may be classified in the future in the statement of income FX differences from SOFP balances translation (4,480) 4,443 - - Items that will not be classified in the future in the statement of income Actuarial profit/(loss) 6,745 7,887 11 6 Other comprehensive income after taxes (B) 2,265 12,330 11 6 Total comprehensive income / (loss) after taxes (A) + (B) - continuing operations 28,224 78,101 11,182 14,120 Total comprehensive income / (loss) after taxes (A) + (B) - discontinued operations 276 6,686 - - Total comprehensive income / (loss) after taxes (A) + (B) 28,500 84,787 11,182 14,120 Group 168 (648) (839) Operating Profit /(loss) before interest and tax - continuing operations (16) - 238 27,407 6,553 965 (5,798) (18,054) - (1,604) Company 83,913 2,766 The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Annual Financial Report as of 31.12.2022 Page 175 of 268 Amounts in thousand Euro, unless stated otherwise STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (continues from previous page) Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 150 from 238 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (continues from previous page) The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements Continuing operations 1/1 - 31/12/2022 1/1 - 31/12/2021 1/1 - 31/12/2022 1/1 - 31/12/2021 Profit / (loss) after tax Attributed to: Equity holders of the parent Non controlling interest 493 430 - - Total comprehensive income / (loss) after taxes Attributed to: Equity holders of the parent 27,720 77,678 - - Non controlling interest 504 423 - - Discontinued operations Profit / (loss) after tax Attributed to: Equity holders of the parent (35) 6,591 - - Non controlling interest - - - - Total comprehensive income / (loss) after taxes Attributed to: Equity holders of the parent 276 6,686 - - Non controlling interest - - - - Total Operations Profit / (loss) after tax Attributed to: Equity holders of the parent 25,742 72,027 - - Non controlling interest 493 430 - - Total comprehensive income / (loss) after taxes Attributed to: Equity holders of the parent 27,996 84,364 - - Non controlling interest 504 423 - - Profit/(loss) allocated to shareholders per share - continuing operations Number of shares 43,067 43,356 Earnings/(loss) per share 3.10 0.5985 1.5093 Profit/(loss) allocated to shareholders per share - discontinued operations Number of shares 43,067 43,356 Earnings/(loss) per share 3.10 (0.0008) 0.1520 Profit/(loss) allocated to shareholders per share Number of shares 43,067 43,356 Earnings/(loss) per share 3.10 0.5977 1.6613 25,777 65,436 - - Group Company The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Page 176 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 151 from 238 STATEMENT OF FINANCIAL POSITION The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements Note 31/12/2022 31/12/2021 31/12/2022 31/12/2021 ASSETS Non-Current Assets Property Plant and Equipment 3.12 169,218 153,848 302 327 Rights-of-use assets 3.13 2,521 3,051 222 344 Investment property 113 113 - - Intangible Assets 3.14 10,357 10,539 148 262 Investments in subsidiaries 3.29 - - 73,858 73,858 Investments in joint ventures 3.29 19,921 18,012 3,819 3,819 Net benefit from funded defined benefit plans 3.22 7,169 - - - Other l ong term recei va bl es 3.15 132 5,001 39 1,156 Deferred tax as s ets 3.23 357 380 119 113 Total non-Current Assets 209,788 190,944 78,507 79,879 Current Assets Inventori es 3.16 76,415 71,835 - - Income tax prepaid 1,984 274 25 25 Tra de recei vables 3.2 64,769 64,547 55 309 Other debtors 3.17 11,945 14,359 4,105 7,003 Financial derivative products 3.25 284 - - - Cash and Cash Equivalents 3.18 39,610 63,240 1,427 137 Total Current Assets 195,007 214,255 5,612 7,474 TOTAL ASSETS 404,795 405,199 84,119 87,353 EQUITY AND LIABILITIES Equity Share Capital 3.19 28,869 28,869 28,869 28,869 Sha re premium 3.20 21,524 21,524 21,644 21,644 Other res erves 3.20 20,992 23,496 12,291 12,605 Retained earnings 192,355 174,631 18,024 19,297 Total Shareholders' equity 263,740 248,520 80,828 82,415 Non controlling interest 4,121 3,730 - - Total Equity 267,861 252,250 80,828 82,415 Long Term Liabilities Long Term Debt 3.21 31,641 33,610 - - Liabilities from leases 3.13 1,470 2,061 76 208 Provi s i ons for Empl oyee Benefits 3.22 1,385 3,499 79 79 Other provisions - - 283 284 Deferred Tax Liabilities 3.23 9,660 6,742 - - Other Long Term Liabilities 174 237 1 1 Total Long Term Liabilities 44,330 46,149 439 572 Short Term Liabilities Short Term Debt 3.21 26,989 17,393 1,022 1,519 Liabilities from leases 3.13 967 914 147 139 Income Ta x 1,048 4,057 56 56 Suppliers 3.24 40,630 55,441 295 1,046 Other short-term liabilities 3.24 22,970 28,995 1,332 1,606 Total Short Term Liabilities 92,604 106,800 2,852 4,366 TOTAL LIABILITIES TOTAL EQUITY & LIABILITIES Company Group 136,934 152,949 3,291 4,938 404,795 405,199 84,119 87,353 STATEMENT OF FINANCIAL POSITION The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Annual Financial Report as of 31.12.2022 Page 177 of 268 Amounts in thousand Euro, unless stated otherwise STATEMENT OF CHANGES IN EQUITY Group Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 152 from 238 STATEMENT OF CHANGES IN EQUITY The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements 28,869 21,524 33,891 (786) (11,947) 101,074 172,625 3,484 176,109 - - - - - 72,027 72,027 430 72,457 - - - - 4,448 7,889 12,337 (7) 12,330 - - 1,601 - - (1,601) - - - - - - - - (6,947) (6,947) (176) (7,123) Transfers - (2,206) - - 2,206 - - - - - - - (17) (17) (1) (18) - - - (1,505) - - (1,505) - (1,505) - - (605) (1,505) 4,448 73,557 75,895 246 76,141 28,869 21,524 33,286 (2,291) (7,499) 174,631 248,520 3,730 252,250 28,869 21,524 33,286 (2,291) (7,499) 174,631 248,520 3,730 252,250 - - - - - 25,742 25,742 493 26,235 - - - - (4,480) 6,737 2,257 8 2,265 - - 1,834 - - (1,834) - - - - - - - - (11,750) (11,750) (113) (11,863) - - 1,162 - - (1,162) - - - - - - - - (9) (9) 3 (6) - - - (1,020) - - (1,020) - (1,020) - - 2,996 (1,020) (4,480) 17,724 15,220 391 15,611 28,869 21,524 36,282 (3,311) (11,979) 192,355 263,740 4,121 267,861 Balance as at 31/12/2022 Balance as at 31/12/2021 Other changes Retained earnings Balance as at 01/01/2021 Share Capital FX translation reserves Changes during the period Share Premium Non controlling interest Other Reserves Treasury shares reserves Profit / (losses) for the period Purchase of treasury shares Dividends Other changes Other comprehensive income Total Total Equity Formati on of statutory reserve Attributed to the shareholders of the Parent Company Changes during the period Formati on of statutory reserve Other comprehensive income Balance as at 01/01/2022 Profit / (losses) for the period Transfers Dividends Purchase of treasury shares The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Page 178 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise STATEMENT OF CHANGES IN EQUITY (continues from previous page) Company Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 153 from 238 STATEMENT OF CHANGES IN EQUITY (continues from previous page) The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements Company 28,869 21,644 14,320 (786) 16 12,684 76,747 - - - - - 14,114 14,114 - - - - - 6 6 - - 560 - - (560) - - - - - - (6,947) (6,947) - - - - - - - - - - (1,505) - - (1,505) - - 560 (1,505) - 6,613 5,668 28,869 21,644 14,880 (2,291) 16 19,297 82,415 28,869 21,644 14,880 (2,291) 16 19,297 82,415 - - - - - 11,171 11,171 - - - - - 11 11 - - 706 - - (706) - - - - - - (11,750) (11,750) - - - - - 1 1 - - - (1,020) - - (1,020) - - 706 (1,020) - (1,273) (1,587) 28,869 21,644 15,586 (3,311) 16 18,024 80,828 Other changes Other comprehensive income Dividends Profit / (losses) for the period Purchase of treasury shares Changes during the period Profit / (losses) for the period Balance as at 31/12/2022 Dividends Balance as at 31/12/2021 Formati on of statutory reserve Balance as at 01/01/2022 Purchase of treasury shares Other changes Changes during the period Formati on of statutory reserve Other comprehensive income Total Equity Treasury shares reserves FX translation reserves Retained earnings Balance as at 01/01/2021 Share Capital Share Premium Other Reserves The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Annual Financial Report as of 31.12.2022 Page 179 of 268 Amounts in thousand Euro, unless stated otherwise Amounts in Euro thousand, unless stated otherwise Annual Financial Report as of 31.12.2022 Page 154 from 238 STATEMENT OF CASH FLOWS The accompanying notes that are presented in pages 152-237 form an integral part of the present Financial Statements 1/1 - 31/12/2022 1/1 - 31/12/2021 1/1 - 31/12/2022 1/1 - 31/12/2021 Cash flows from Operating Activities Profit before Taxes and Non controlling interest - continuing operations 32,068 83,920 12,775 14,130 Profit before Taxes and Non controlling interest - discontinued operations (16) 6,597 - - Plus / (minus) adjustments for: - Deprecia ti on 327 Provisions (1,262) 2,208 (111) 93 Grants (71) (148) - - FX di fferences (709) (195) 10 2 (Gain)/loss from sale of property, plant and equipment (41) (7,426) (8) - Income from dividends - - (13,478) (15,006) Impai rment of fi xed ass ets - 2,457 - - Interes t & s imi l a r (i ncome) / expens es (2,136) 2,651 55 37 (Profit) / loss from companies consolidated with the Equity method (2,525) (2,770) - - Operating Profit before adjustments in working capital 46,161 107,172 (448) (417) (Increase)/decrease i n recei vables (1,431) (9,547) 241 (1,329) (Increase)/decrease i n inventori es (5,590) (15,653) - - Increas e/(decreas e) i n l i abi li ti es (a pa rt from banks-taxes ) (19,359) 24,770 (920) 322 Cash generated from Operating activities 19,781 106,742 (1,127) (1,424) Interes t Pai d (1,790) (1,781) (41) - Other financial income/(expenses) 4,250 (424) (11) (6) Taxes paid (9,218) (17,458) (1) (1) Cash flows from operating activities (a) 13,023 87,079 (1,180) (1,431) Investing Activities Proceeds from sales of property, plant and equipment and intangible assets 110 1,429 10 - Cash collection from the sale of Thrace Linq property - 3,004 - - Interes t recei ved 17 66 - - Divi dends received 1,152 660 11,141 14,007 Purchase of property, plant and equipment and intangible ass ets (37,852) (30,306) (51) (22) Investment grants 71 148 - - Cash flow from investing activities (b) (36,502) (24,999) 11,100 13,985 Financing activities Proceeds from loans 47,691 21,074 1,000 1,500 Purchase of treasury shares (1,020) (1,505) (1,020) (1,505) Repayment of loans (37,619) (44,926) (1,500) (960) Payments for l eases (949) (4,206) (124) (158) Dividends paid (7,100) (11,632) (6,986) (11,457) Cash flow from financing activities (c) 1,003 (41,195) (8,630) (12,580) Net increase /(decrease) in Cash and Cash Equivalents (22,476) 20,885 1,290 (26) Cash and Cash Equivalents at beginning of period 3.18 63,240 40,824 137 163 Effect from changes in foreign exchange rates on cash reserves (1,154) 1,531 - - 3.18 Group Company 63,240 1,427 39,610 Cash and Cash Equivalents at end of period 137 20,853 19,878 309 STATEMENT OF CASH FLOWS The accompanying notes that are presented in pages 182-270 form an integral part of the present Financial Statements Contents > Page 180 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise The company THRACE PLASTICS CO S.A. as it was renamed following the approval and the alteration of its name on GEMI (here- inafter the “Company”) was founded in 1977. It is based in Magiko of municipality of Avdira in Xanthi, Northern Greece, and is registered in the Public Companies (S.A.) Register under Reg. No. 11188/06/Β/86/31 and in the General Commercial Register under GEMI Reg. No. 12512246000. The purpose of the Company and its main objective is to participate in the share capital of companies and to finance com- panies of any legal form, kind and objec- tive, either listed or non-listed on organ- ized market, as well as the provision of Administrative - Financial - IT Services to its Subsidiaries. The Company is the parent of a Group of companies (hereinafter the “Group”), which operate mainly in two sectors, the technical fabrics sector and the packaging sector. The Company’s shares are listed on the Athens Stock Exchange since June 26, 1995. The company’s shareholders, with equity stakes above 5%, as of 31.12.2022 were the following: Chalioris Konstantinos 43.29% Chaliori Eyfimia 20.85% The Group maintains production and trade facilities in Greece, United Kingdom, Ireland, Sweden, Norway, Serbia, Bulgaria, U.S.A. and Romania. The Group, including its joint ventures, employed a total of 2,069 employees as of December 31, 2022, of which 1,246 were employed in Greece. The structure of the Group as of 31 st De- cember 2022 was as follows: 1. Information about the Group Contents > Annual Financial Report as of 31.12.2022 Page 181 of 268 Amounts in thousand Euro, unless stated otherwise Company Registered Offices Ownership Percentage of Parent Company Ownership Percentage of Group Consolidation Method Thrace Plastics CO S.A. GREECE-Xanthi Parent - Full Don & Low LTD SCOTLAND-Forfar 100.00% 100.00% Full Don & Low Australia Pty LTD AUSTRALIA - 100.00% Full Thrace Nonwovens & Geosynthetics Single Person S.A. GREECE-Xanthi 100.00% 100.00% Full Saepe LTD CYPRUS-Nicosia - 100.00% Full Thrace Protect S.M.P.C. GREECE-Xanthi - 100.00% Full Thrace Plastics Pack S.A. GREECE-Ioannina 92.94% 92.94% Full Thrace Greiner Packaging SRL ROMANIA - Sibiou - 46.47% Equity Thrace Plastics Packaging D.O.O. SERBIA-Nova Pazova - 92.94% Full Trierina Trading LTD CYPRUS-Nicosia - 92.94% Full Thrace Ipoma A.D. BULGARIA-Sofia - 92.83% Full Synthetic Holdings LTD N. IRELAND-Belfast 100.00% 100.00% Full Thrace Synthetic Packaging LTD IRELAND - Clara - 100.00% Full Arno LTD IRELAND -Dublin - 100.00% Full Synthetic Textiles LTD N. IRELAND-Belfast - 100.00% Full Thrace Polybulk A.B. SWEDEN -Köping - 100.00% Full Thrace Polybulk A.S. NORWAY-Brevik - 100.00% Full Lumite INC. U.S.A. - Georgia - 50.00% Equity Adfirmate LTD CYPRUS-Nicosia - 100.00% Full Pareen LTD CYPRUS-Nicosia - 100.00% Full Thrace Linq INC. U.S.A. - South Carolina - 100.00% Full Thrace Polyfilms Single Person S.A. GREECE - Xanthi 100.00% 100.00% Full Thrace Greenhouses S.A. GREECE - Xanthi 50.91% 50.91% Equity Thrace Eurobent S.A. GREECE - Xanthi 51.00% 51.00% Equity Contents > Page 182 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 2.1 Basis of Preparation The present financial statements have been prepared according to the Inter- national Financial Reporting Standards (I.F.R.S.), including the International Ac- counting Standards (I.A.S.) and interpreta- tions that have been issued by the Interna- tional Financial Reporting Interpretations Committee (I.F.R.I.C.), as such have been adopted by the European Union until 31 December 2022. The basic accounting principles that were applied for the prepa- ration of the financial statements for the year ended on 31 December 2022 are the same as those applied for the preparation of the financial statements for the year ended on 31 December 2021 and are de- scribed in such. When deemed necessary, the compara- tive data have been reclassified in order to conform to possible changes in the pres- entation of the data of the present year. Differences that possibly appear between accounts in the financial statements and the respective accounts in the notes, are due to rounding. The financial statements have been prepared according to the historic cost principle, as such is disclosed in the Com- pany’s accounting principles presented below. Moreover, the Group’s and Company’s fi- nancial statements have been prepared according to the “going concern” principle taking into account the significant profit- ability of the Group and the Company and all macroeconomic and microeconomic factors as well as their impact on the smooth operation of the Group and the Company. The financial statements were approved by the Board of Directors of the Company on April 24, 2023 and are subject to ap- proval by the next Ordinary General Meet- ing which will convene within the year 2023. The financial statements of the Group THRACE PLASTICS Co. S.A. as well as of the parent company are posted on the inter- net, on the website www.thracegroup.gr. 2. Basis for the Preparation of the Financial Statements and Main Accounting Principles Contents > Annual Financial Report as of 31.12.2022 Page 183 of 268 Amounts in thousand Euro, unless stated otherwise Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods be- ginning on or after 1 January 2022. STANDARDS AND INTERPRETATIONS EFFECTIVE FOR THE CURRENT FINANCIAL YEAR IFRS 16 (Amendment) ‘Covid-19- Related Rent Concessions – Extension of Practical Expedient’ The amendment extends the application period of the practical expedient in rela- tion to rent concessions by one year to cover rental concessions that reduce leases due only on or before 30 June 2022. IAS 16 (Amendment) ‘Property, Plant and Equipment – Proceeds before Intended Use The amendment prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also requires entities to separately disclose the amounts of proceeds and costs relating to such items produced that are not an output of the entity’s ordinary activities. IAS 37 (Amendment) ‘Onerous Contracts – Cost of Fulfilling a Contract’ The amendment clarifies that ‘costs to fulfil a contract’ comprise the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfill- ing contracts. The amendment also clari- fies that, before a separate provision for an onerous contract is established, an entity recognizes any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract. IFRS 3 (Amendment) ‘Reference to the Conceptual Framework’ The amendment updated the standard to refer to the 2018 Conceptual Framework for Financial Reporting, in order to deter- mine what constitutes an asset or a liability in a business combination. In addition, an exception was added for some types of li- abilities and contingent liabilities acquired in a business combination. Finally, it is clari- fied that the acquirer should not recognize contingent assets, as defined in IAS 37, at the acquisition date. The amended standards did not have a sig- nificant effect on the financial statements of the Group and the Company. Annual Improvements to IFRS Standards 2018–2020 (effective for annual periods beginning on or after 1 January 2023) IFRS 9 ‘Financial instruments’ The amendment addresses which fees should be included in the 10% test for derecognition of financial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be in- cluded in the 10% test. IFRS 16 ‘Leases’ The amendment removed the illustra- tion of payments from the lessor relating to leasehold improvements in Illustrative 2.2 New standards, amendments to standards and interpretations Contents > Page 184 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Example 13 of the standard in order to re- move any potential confusion about the treatment of lease incentives. IAS 41 ‘Agriculture’ The amendment has removed the require- ment for entities to exclude cash flows for taxation when measuring fair value under IAS 41. STANDARDS AND INTERPRETATIONS MANDATORY FOR SUBSEQUENT PERIODS IAS 1 (Amendments) ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Disclosure of Accounting policies’ (effective for annual periods begin- ning on or after 1 January 2023) The amendments require companies to disclose their material accounting policy information and provide guidance on how to apply the concept of materiality to ac- counting policy disclosures. IAS 8 (Amendments) ‘Accounting poli- cies, Changes in Accounting Estimates and Errors: Definition of Accounting Es- timates’ (effective for annual periods begin- ning on or after 1 January 2023) The amendments clarify how companies should distinguish changes in account- ing policies from changes in accounting estimates. IΑS 12 (Amendments) ‘Deferred tax re- lated to Assets and Liabilities arising from a Single Transaction’ (effective for annual periods beginning on or after 1 Janu- ary 2023) The amendments require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. This will typically apply to transactions such as leases for the lessee and decommissioning liabilities. IAS 1 ‘Presentation of Financial State- ments’ (effective for annual periods begin- ning on or after 1 January 2024) • 2020 Amendment ‘Classification of liabilities as current or non-current’ The amendment clarifies that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendment has not yet been endorsed by the EU. • 2022 Amendments ‘Non-current li- abilities with covenants’ The new amendments clarify that if the right to defer settlement is subject to the entity complying with specified conditions (covenants), this amendment will only ap- ply to conditions that exist when compli- ance is measured on or before the report- ing date. Additionally, the amendments aim to improve the information an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within twelve months after the reporting period. The 2022 amendments changed the ef- fective date of the 2020 amendments. As a result, the 2020 and 2022 amendments are effective for annual reporting periods beginning on or after 1 January 2024 and should be applied retrospectively in ac- cordance with IAS 8. As a result of aligning Contents > Annual Financial Report as of 31.12.2022 Page 185 of 268 Amounts in thousand Euro, unless stated otherwise the effective dates, the 2022 amendments override the 2020 amendments when they both become effective in 2024. The amendments have not yet been endorsed by the EU. IFRS 16 (Amendment) ‘Lease Liability in a Sale and Leaseback’ (effective for an- nual periods beginning on or after 1 January 2024) The amendment clarifies how an entity ac- counts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted. An entity applies the requirements retrospectively back to sale and leaseback transactions that were en- tered into after the date when the entity initially applied IFRS 16. The amendment has not yet been endorsed by the EU. 2.3 Significant Accounting Estimations and Judgments of the Group’s Management The estimations and judgments of the Management of the Group are constantly assessed. They are based on historical data and expectations for future events, which are deemed as fair according to the rele- vant provisions in effect. 2.3.1 Significant Accounting Estimates and Assumptions The preparation of the Financial State- ments in accordance with International Fi- nancial Reporting Standards (IFRS) requires the management to make estimates and assumptions that may affect the account- ing balances of assets and liabilities, the required disclosure of contingent assets and liabilities at the date of preparation of the Financial Statements, as well as the amounts of income and expenses recog- nized during the financial year. The use of the available information, which is based in historical data and assumptions and the implementation of subjective evaluation are necessary in order to conduct esti- mates. The actual future results may differ from the above estimates and these differ- ences may affect the Financial Statements. Estimates and relative assumptions are re- vised constantly. The revisions in account- ing estimations are recognized in the pe- riod they occur if the revision affects only the specific period or in the revised period and the future periods if the revisions af- fect the current and the future periods. The key estimates and judgments that re- fer to elements and data whose develop- ment could affect the items of the Finan- cial Statements during the next twelve months are as follows: 2.3.1.1 Provisions for expected credit losses from customers and other receivables The Group and the Company recognize impairment losses for expected credit losses for all financial assets. Expected credit losses are based on the difference between the contractual cash flows and all cash flows that the Group (or the Com- pany) expects to receive. The difference is Contents > Page 186 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise discounted using an estimate of the initial effective interest rate of the financial asset. For customer receivables, the Group and the Company applied the simplified ap- proach to the standard and calculated the expected credit losses on the basis of the expected credit losses over the lifetime of those items. For other financial assets, the expected credit losses are calculated on the basis of the losses for the next 12 months. Expected credit losses over the next 12 months are part of the expected credit losses over the life of the financial assets resulting from the probability of default of an item within 12 months of the report- ing date. If there is a significant increase in credit risk from the initial recognition, the provision for impairment will be based on the expected credit losses over the life of the asset (see note 3.17.3 and 3.32.2).. 2.3.1.2 Impairment of Investment in Subsidiaries Management examines on an annual ba- sis whether there are indicators of impair- ment of investment in subsidiaries. If an investment has to be impaired, the Com- pany calculates the amount of the impair- ment as the difference between the recov- erable amount of the investment and its book value. Management determines re- coverable value as the greater of the value in use and the fair value less costs to sell in accordance with the provisions of IAS 36. Value in use is determined by an inde- pendent valuer based on management’s estimates and assumptions such as future cash flows, returns of each subsidiary com- pany, and discounted rates applied to the projected cash flows. Moreover, these as- sumptions vary due to the different con- ditions prevailing in the markets of the countries in which the Group operates (see note3.29). 2.3.1.3 Estimate on Impairment of Goodwill The Group assesses whether there is im- pairment of goodwill at least on an annual basis. Management identifies the recover- able amount as the greater of its value in use and its fair value less costs to sell. The calculation of the acquisition (book) value of each cash-generating unit requires an estimate by management of the assump- tions about the future results of the above cash-generating units, such as growth rate in perpetuity, forecasts for projected quantities and sales prices, gross profit margin and discount rates. These assump- tions vary due to different market condi- tions in the countries in which the Group operates (see note 3.14). 2.3.1.4 Provision for income tax The provision for income tax according to I.A.S. 12 is calculated by estimating taxes that will be paid to the tax authorities and includes the current income tax for each fi- nancial year and a provision for additional taxes that may arise in future tax audits. Group companies are subject to different income tax laws and therefore significant management assessment is required to determine the Group’s income tax income. Income tax expense may differ from these estimates as a result of future changes in tax legislation both in the countries in which the Group operates and in Greece or unforeseen consequences from the final determination of the tax liability of each use by the tax authorities. These changes may have a significant impact on the Group’s and Company’s financial posi- tion in the event that the final settlement of income taxes deviates from the initial amounts that have been recorded in the Group and Company Financial Statements. These differences will affect income tax and deferred tax provisions for the year in Contents > Annual Financial Report as of 31.12.2022 Page 187 of 268 Amounts in thousand Euro, unless stated otherwise which the final determination is made. For more information, see note 3.11 2.3.1.5 Provisions for employee benefits The present value of the liabilities for post- employment benefits depends on a num- ber of factors defined on actuarial basis via the use of a significant number of assump- tions. The assumptions used for the deter- mination of the net cost (income) for post- employment benefits include discount rates, rates of wage increases, mortality and disability rates, retirement ages and other factors. Any changes to these under- lying assumptions may have a significant effect on the liability and the relative costs of each period. The Group defines the appropriate dis- count rate in each reporting period. It is the interest rate applicable for the calculation of the present value of the estimated fu- ture payments required for the settlement of the benefit liabilities. For the estimation of the appropriate discount rate the Group takes into consideration the interest rates prevailing in high credit rating corporate bonds denominated in the currency of the benefit payments and with maturity dates similar to the ones of the respective liabili- ties. Due to the long-term nature of these defined benefit plans, these cases are sub- ject to a significant degree of uncertainty. Further information is provided in note 3.22 2.3.1.6 Depreciation/amortization of tangible and intangible assets The Group and the Company calculate de- preciation/amortization on tangible and intangible assets based on estimation of the useful life of such. The residual value and useful life of such assets are reviewed and defined at the end of each reporting period, if deemed necessary. 2.3.2 Significant Accounting Judgments in the Application of Accounting Principles There are no significant estimates to be ap- plied in accounting policies. Subsidiaries are all companies (includ- ing those companies of special purpose) which are controlled by the Group. The Group controls a company when the Group is exposed to or has rights in vari- able returns from its participation in the company and has the ability to affect these returns through the power it pos- sesses in the company. The subsidiaries are consolidated with the full consolidation method from the date at which the control is acquired by the Group and are excluded from consolidation from the date at which such control does not exist. The mergers of companies are accounted for, from the Group based on the purchase method. The price of the acquisition is cal- culated as the fair value of the transferred assets, the liabilities undertaken against the former shareholders and the shares issued by the Group. The price of the ac- quisition includes the fair value of any as- set or liability which may derive from any potential agreement about the price. The assets acquired and the liabilities along with the contingent liabilities assumed during a corporate merger are measured initially at fair value at the date of the 2.4 Basis of Consolidation 2.4.1 Subsidiaries Contents > Page 188 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise acquisition. Depending on the acquisition case, the Group recognizes any non-con- trolled interest in the subsidiary either at fair value or at the value of the stake of the non-controlled interest in the equity of the subsidiary. The acquisition cost less the fair value of the individual items acquired is re- corded as goodwill. If the total cost of the acquisition is less than the fair value of the individual items acquired, the difference is immediately recognized in the results. The expenses related to the acquisition are recorded in the financial results. If the corporate merger is gradually achieved then the fair value of the partici- pation held by the Group in the acquired company is revalued at fair value at the acquisition date. The profit or loss which emerges from the revaluation is recog- nized in the financial results. Any potential price that is transferred from the Group is recognized at fair value at the acquisition date. Any subsequent chang- es in the fair value of the potential price, which is considered as an asset or a liabil- ity, are recognized according to IAS 39 in the financial results. If the potential price is recorded as item of the equity, then it is not revalued until its final settlement through the equity. Intra-company transactions, balances and non-realized earnings from transactions among the companies of the Group are excluded. The non-realized losses are also excluded. The accounting principles that are applied by the subsidiaries have been adjusted wherever it was deemed neces- sary so that they are aligned with the ones adopted by the Group. The Company records the investments in subsidiaries in the separate financial statements at acquisition cost minus any impairment. Furthermore, the acquisition cost is adjusted so that it reflects the changes in the payable price deriving from any amendments in the potential price. 2.4.2 Transactions with owners of non-controlled interests The Group treats the transactions with the owners of non-controlled interests, which do not result into loss of control, in the same manner with the transactions with the major shareholders of the Group. The difference between the price paid and the book value of the acquired interest of the subsidiary’s equity is recorded in the share- holders’ funds. Earnings of losses deriving from the sale to owners of non-controlled interests are also recorded in shareholders’ funds 2.4.3 Sale of Subsidiary When the Group ceases to possess control, the remaining percentage is measured at fair value, whereas any potential differ- ences that derive in comparison with the current value are recorded in the financial results. Following, this asset is recognized as associate company, joint venture or fi- nancial asset at the above fair value. Addi- tionally, any relevant amounts which were previously recorded in the other compre- hensive income are accounted for, with the same manner that would be followed in the case of sale of these assets and liabil- ities, meaning that they can be transferred in the financial results. 2.4.4 Joint Arrangements Based on IFRS 11, investments in joint ar- rangements are classified either as joint activities or as joint ventures and the clas- sification depends on the contractual Contents > Annual Financial Report as of 31.12.2022 Page 189 of 268 Amounts in thousand Euro, unless stated otherwise rights and the liabilities of each investor. The Group evaluated the nature of its in- vestments in joint arrangements and de- cided that these constitute joint ventures. Joint ventures are consolidated according to the equity method. According to the equity method, invest- ments in joint ventures are initially recog- nized at the acquisition cost, which in a later stage increases or decreases via the recognition of the Group’s share in the earnings or losses of the joint ventures and the changes in the other compre- hensive income after the acquisition. In case the share of the Group in the losses of the joint ventures exceeds the amount of the investment (which also includes any long-term investment that essentially con- stitutes part of the net investment of the Group in the joint ventures), no additional losses should be recognized, unless there have been payments or there are commit- ments undertaken for the account of the joint ventures. Non-realized profit from transactions be- tween the Group and the joint ventures is excluded according to the percentage of the Group’s participation in the joint ventures. The non-realized losses are also excluded, unless the transaction of- fers indications of a potential impairment of the transferred asset. The accounting principles of the joint ventures have been amended wherever it was deemed ap- propriate so that they are aligned with the ones adopted by the Group. 2.5 Tangible Assets Tangible assets are recorded at book value, net of any grants received, less accumu- lated depreciation and any impairment in value. Expenses for replacement of part of tangible assets are included in the value of the asset if they can be estimated ac- curately and increase the future benefits of the Group from such. The repairs and maintenance of tangible assets charge the financial results, in the period when such are realized. The acquisition cost and the related accumulated depreciation of as- sets retired or sold, are removed from the accounts at the time of sale or retirement, and any gain or loss is included in the fi- nancial Results. Depreciation is charged in the financial Results based on the straight-line method over the estimated useful life of tangible assets, however, in extraordinary cases of investments in machinery where the financial benefits are not estimated to be evenly distributed throughout the useful life of the asset, the diminishing balance method is used. The estimated useful life of each category of asset is presented below: Category Depreciation rate Economic Life Buildings and technical works 2.5% - 5% 20 - 40 years Machinery and technical installations 7% - 10% 10 - 14 years Specialized mechanical equipment 12% - 15% 7 - 8 years Vehicles 10% - 20% 5 - 10 years Furniture and fixture 10% - 30% 3 - 10 years Contents > Page 190 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Goodwill is measured at cost less any ac- cumulated impairment losses. For the pur- poses of the impairment test, the goodwill recognized has been allocated, from the date of acquisition, to the Group’s cash- generating units, which are expected to benefit from the combination. Each unit in which goodwill has been allocated repre- sents the lowest level within the company in which goodwill is monitored for internal management purposes. Goodwill is allocated on cash-generating units and an impairment test is carried out at least annually or more frequently if there is evidence of a possible impairment in the book value of the goodwill in rela- tion to its recoverable value in accordance with IAS 36. Impairment is recognized di- rectly as an expense in consolidated profit or loss and other comprehensive income and is not subsequently reversed. The Management determines recoverable value as the largest amount between the value in use and its fair value, minus any related costs of disposal. The calculation of the value in use of each cash-gener- ating unit is performed by an independ- ent valuer and requires management’s estimation of the assumptions about the future financial results of the above cash- generating units, such as the growth rate in perpetuity, forecasts of expected sales quantities and prices, gross margin and discount rates. These assumptions vary due to the different market conditions in the countries in which the Group operates. For more information see note 3.14. 2.6.2 Other Intangible Assets Other intangible assets mainly concern software and industrial ownership rights which refer to the utilization right of the trademark TERRAHOME that has been purchased from a third party. Their values are stated at acquisition cost, less the accu- mulated depreciation and any impairment losses. Amortization of intangible assets is recorded in the financial results, based on the straight-line method over the esti- mated useful life of assets. The following table depicts the estimated useful life of intangible assets: 2.6 Intangible Assets 2.6.1 Goodwill Land and plots are not depreciated, how- ever they are reviewed for impairment. Residual values and economic life of tan- gible assets might be adjusted if necessary at the time the Financial Statements are prepared. Tangible assets, that have been impaired, are adjusted to reflect their re- coverable value (Note 3.12). The remaining value, if not negligible, is re-estimated on an annual basis. Tangible assets are derecognized when sold, or when no future economic benefits are expected from their use. The gains and losses arising from the sale of property, plant and equipment are determined by the difference between the sale proceeds and the net book value as shown in the books and included in the operating result. Contents > Annual Financial Report as of 31.12.2022 Page 191 of 268 Amounts in thousand Euro, unless stated otherwise Category Amortization Rate Useful Life Industrial own- ership rights 20% 5 years Software 10 - 20% 5 - 10 years Subsequent expenses on the capitalized intangible assets are capitalized only when they increase the future benefits that are attributed to the specific asset. In a differ- ent case, all other expenses are recorded when they incur. Research costs are expensed as incurred. Development costs that do not meet the recognition criteria as an asset are ex- pensed as incurred. 2.7 Non-Current Assets Held for Sale The Group classifies a non-current asset (or a group of assets and liabilities) as held for sale, if its value is expected to be recov- ered primarily through the sale of the item and not through its continued use and the sale is considered very likely. Immediately before the initial classification of the non- current asset (or group of assets and liabili- ties) as held for sale, the asset (or all assets and liabilities included in the group) shall be assessed on the basis of the applicable IFRS. Non-current assets (or asset and lia- bility groups) classified as held for sale are valued at the lowest value between their book value and their fair value reduced by direct sales costs, and any resulting impair- ment losses and then they are recorded in the financial results. Any possible increase in the fair value in a later valuation is re- corded in the statement of comprehensive income, but not for an amount greater than the previously recorded impairment loss. From the day on which a non-current asset (or non-current asset included in a group of assets and liabilities) is classified as held for sale, no depreciation or impair- ment is recorded. 2.8 Impairments of Non-Financial Assets With the exception of goodwill which is reviewed for impairment at least on an an- nual basis, the book values of other non-fi- nancial assets are reviewed for impairment when events or changes in conditions in- dicate that the book value may not be recoverable. When the book value of an asset exceeds its recoverable amount, the respective impairment loss is registered in the financial results. The recoverable amount is defined as the largest value be- tween the net sales price and the value in use. Net sale price is the amount that can be received from the sale of an asset, in the context of an arm’s length transaction in which the parties have full knowledge and voluntarily proceed, after the deduc- tion of any additional direct cost for sale of the asset. Value in use is the present value of estimated future cash flows expected to be realized from the continuous use of an asset and from the revenue expected to result from its sale and the end of its esti- mated useful life. For purposes of defining impairment, the non-financial assets are grouped at the lowest level for which cash flows can be recognized separately. Contents > Page 192 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise For purposes of preparing the Statement of Cash Flows, the category of cash & cash equivalents include cash in hand, cash equivalents, such as site deposits and short-term time deposits, namely those with a maturity up to three months. 2.9 Inventories Inventories are stated at the lower of cost (acquisition or production) and net real- izable value. Cost of final and semi-final products includes all cost of purchase, cost of materials, direct labor cost, other di- rect expenses and proportionate general production expenses. The cost of inven- tories is calculated using the weighted average method. Net realizable value rep- resents the estimated selling price in the ordinary course of business, less any sell- ing cost. 2.10 Cash & cash equivalents 2.11 Foreign Exchange Translations 2.11.1 Operating currency and presentation currency The data in the Financial Statements of the Group’s companies are registered in the currency of the primary economic environ- ment, in which each Company operates (“operating currency”). The consolidated Financial Statements are presented in Euro, which is the operating valuation currency and presentation cur- rency of the parent Company. 2.11.2 Transactions and balances in foreign currencies Transactions in foreign currencies are con- verted into the operating currency based on exchange rates effective at the date of transaction or at the date of revaluation if such case is required. Profits and losses from foreign exchange differences, aris- ing during the settlement of such transac- tions and from the conversion of foreign currency denominated assets and liabili- ties based on the current exchange rates at the reporting date, are recorded in the fi- nancial results. Profits and losses from for- eign exchange differences related to cash reserves and bank liabilities are recorded in the statement of comprehensive income, under the account “Financial income / (ex- penses) - Net”. All other profits or losses from foreign exchange differences are re- corded in the statement of comprehensive income, under the account “Other profits / (losses) - Net”. 2.11.3 Group’s Companies in foreign currency The conversion of the Financial State- ments of the Group’s companies (none of which operates with a currency belong- ing to a hyperinflation economy), which are recorded in a currency that is different from the one of the Group, is conducted as follows: Contents > Annual Financial Report as of 31.12.2022 Page 193 of 268 Amounts in thousand Euro, unless stated otherwise 2.13 Dividends 2.12 Acquisition of Treasury Shares Payable dividends are presented as a liability during the time when such are approved by the Annual General Meeting of Shareholders. The paid price to acquire Treasury Shares, including the relevant expenses for their purchase, is presented as a deduction of Equity. Any profit or loss from the sale of Treasury Shares, net of direct transaction costs and taxes, is recognized directly in Equity, in the account “Treasury Share Reserve.” 2.14 Income 2.14.1 Income from contracts with customers The Parent Company provides Administra- tive, Financial, Accounting, IT Services to the Subsidiaries of the Group. Income from the provision of services is recognized over time in the accounting period during which the services were provided. The Group recognizes income from the sale of goods when the control of the goods is transferred to the customer, usual- ly upon delivery, and there is no unfulfilled liability that could affect the acceptance of the goods by the customer. The main product categories are technical fabrics (Geosynthetics and textiles for construc- tion, garden projects, hospital and sani- tary products, filter industry, automotive industry, industrial use, sports and leisure, carpet weaving, yarn and straps) and pack- aging products (Big bags, packaging film, packaging fabrics, containers, bins, cups, glasses, containers and trays, plastic boxes, bottles, bags, garbage bags, ropes and strings). The Group accepts returns only in case of defective products or products which do not generally meet the required specifications. The asset (receivable) is recognized when there is an unconditional right for the en- tity to receive the price for the performed liabilities of the contract to the customer. The contractual asset is recognized when the Group has fulfilled its liabilities to the customer, before the customer pays or before payment becomes due. Payment becomes due after 30 to 90 days. The • The assets and liabilities for each state- ment of financial position are convert- ed based on the effective exchange rates at each reporting date, • Revenues and expenses are converted based on the average exchange rates of each period (unless the average exchange rate does not logically ap- proach the cumulative effect of the exchange rates that were effective at the time of the transactions. In such case, revenues and expenses are con- verted based on the exchange rates effective at the time of the relevant transactions), and • The extracted foreign exchange differ- ences are recorded in other compre- hensive income. Contents > Page 194 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise contractual liability is recognized when the Group receives a payment from the customer (advance payment) or when it acquires an unconditional right to a cash amount (deferred income) before the per- formance of the liabilities of the contract and the transfer of the goods or services. The contractual liability is recognized when the liabilities of the contract are ful- filled and the income is recorded in the in- come statement. 2.14.2 Government Grants - Subsidies Government grants on tangible and intan- gible assets, are deducted from the book value of the asset for which they were re- ceived. The relevant income is recognized with the form of reduced depreciation amounts during the useful life of the rel- evant asset. Government grants that con- cern payroll expenses are recognized as in- come during the period that such relate to the respective expenses and are presented in the Income Statement in the account “Other Operating Income”. 2.14.3 Income from Dividends – Interim Dividends Income from dividends is recognized in the Income Statement as income, during the date when such are approved by the Annual General Meeting of Sharehold- ers. Interim dividends are recognized on the date of their approval by the General Meeting of Shareholders, unless their dis- tribution precedes the date of approval of the General Meeting. In such a case interim dividends will be recognized on the date of distribution, in accordance with local corporate law. 2.14.4 Interest Income Interest income is recognized on an ac- crual basis. 2.15 Expenses Expenses are recognized in the financial results on an accrual basis. 2.16 Leases When a contract enters into force, the Group assesses whether the contract con- stitutes, or involves, a lease. A contract constitutes, or involves, a lease if the con- tract transfers the right to control the use of a recognized asset for a specified period of time in exchange for a consideration. 2.16.1 Leasing Accounting from Lessee The Group applies a unified approach to recognition and measurement for all leases (except for short-term leases and low-value leases). The Group recognizes liabilities from leases for payments and as- sets with a right of use that represent the right to use the underlying assets. 2.16.2 Right-of-use Assets The Group recognizes the assets with the right of use on the date of commencement of the lease term (i.e. the date on which the underlying asset is available for use). As- sets with the right to use are measured at cost, reduced by any cumulative deprecia- tion and impairment losses and are adjust- ed based on any revaluation of the liability Contents > Annual Financial Report as of 31.12.2022 Page 195 of 268 Amounts in thousand Euro, unless stated otherwise from leases. The cost of the assets with the right of use consists of the amount of the liability from recognized leases, the initial direct costs and any leases paid on the date of commencement of the lease pe- riod or earlier, minus any lease incentives received. Assets with the right of use are depreciated based on the fixed method in the shortest period of time between the duration of the lease and their useful life. If the ownership of the leased asset is transferred to the Group at the end of the lease term or if its cost reflects the exercise of a market right, depreciation is calculat- ed in accordance with the estimated use- ful life of the asset. The Group has contracts for the lease of buildings (used as offices, warehouses), means of transport as well as other equip- ment used in its business activities. Lease agreements may contain lease and non- lease information. The Group has chosen not to separate the parts of the contract that are not a lease from the elements of the lease and therefore treats any element of the lease and any related parts that do not constitute a lease as a single lease. As- sets with the right of use are subject to impairment test as described in the ac- counting policy “2.8 Impairments of Non- Financial Assets”. 2.16.3 Liabilities from Leases At the date of commencement of the lease, the Group calculates the liability from leas- es at the present value of the leases to be paid during the lease term. Leases consist of fixed parts (including substantially fixed leases) reduced by any lease incentives, floating parts that depend on an index or interest rate and amounts expected to be paid on the basis of residual value guaran- tees. Leases also include the exercise price of the purchase right if it is rather certain that the Group will exercise that right and the payment clause that would allow to terminate the lease if the term of the lease reflects the exercise of the right to re- nounce. To discount the leases, the Group uses the incremental borrowing rate since the implied interest rate related to the leasing cannot be easily determined. After the start date of the lease, the amount of the lease liability increases based on the interest on the liability and decreases with the payment of the lease. In addition, the book value of the liability from leases is recalculated if there are reassessments or amendments to the lease agreement. Analysis of the Group’s leases is included in Note 3.13. 2.16.4 The Group as Lessor When the assets are leased in the context of leasing agreements, the present value of the leasing payments to be collected is recognized as receivable. The difference between the gross receivable amount and the present value of the claim is recog- nized as non-accrued financial income. When the assets are leased in the context of leasing agreements, they are recorded in the statement of financial position ac- cording to the nature of each asset. The income generated from operating leasing agreements is recorded in the financial re- sults via the straight line method over the leasing period. Contents > Page 196 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 2.17 Income Tax Tax burden for the year relates to current and deferred taxes. Current income taxes are payable taxes on taxed income for the year based on effec- tive tax rates as of the balance sheet date, as well as additional income taxes relating to previous years. Deferred taxes are tax burden/exemptions relating to current year’s profit (or losses) that will be charged by the tax authorities in future years. Deferred income taxes are calculated according to tax rates effective as of the dates they will be paid, on the dif- ference between accounting and tax base of individual assets and liabilities, provided that these differences imply time devia- tions, which will be erased in future. Deferred tax receivables are recognized only to the extent they imply future taxable income, which will be offset by these deferred tax receivables. Deferred tax receivables might be lowered any time when it is not evident that such future tax relaxation will be certain. Current and deferred tax is recorded in the financial results or directly in Equity, if it relates to elements directly recognized in Equity. The Group’s companies offset deferred tax receivables with deferred tax liabilities, only if: a) It has a legal applicable right to offset current tax receivables with current tax liabilities. b) The deferred tax receivables and liabili- ties relate to income taxes imposed by the same tax authority. 2.18.1 Shor t-term liab ilities Liabilities for wages and salaries that are expected to be fully settled within 12 months from the end of the period in which the employees provide the relevant service are recognized for the services of the employees until the end of the re- porting period and are measured at the amounts expected to be paid during the settlement of liabilities. Liabilities are pre- sented in the statement of financial posi- tion in the other liabilities. 2.18.2 Liabilities after the exit from service The Group has an liability in a defined ben- efit plan that determines the amount of retirement benefit that an employee will receive upon retirement, which depends on more than one factor such as age, years of service and compensation. The liability recorded in the statement of financial position for the defined benefit plan is the present value of the defined benefit liability at the reporting date less the fair value of the plan’s assets. The com- mitment of the defined benefit is calcu- lated annually by an independent actuary using the method of the projected credit unit. The present value of the defined benefit liability is calculated by discount- ing the expected future cash outflows us- ing interest rates of high quality corporate bonds denominated in Euro and having a term approaching the maturity of the rel- evant retirement liability. The cost of current employment in the 2.18 Employee Benefits Contents > Annual Financial Report as of 31.12.2022 Page 197 of 268 Amounts in thousand Euro, unless stated otherwise defined benefit plan is recognized in the income statement and reflects the in- crease in the defined benefit liability aris- ing from the employment of employees during the year. Changes in the present value of the de- fined benefit liability arising from modifi- cations or reductions in the plan are recog- nized immediately in the financial results as prior service cost. The financial cost is calculated by applying the discount rate to the balance of the de- fined benefit liability. This cost is included in the income statement on employee benefits. Actuarial gains and losses arising from em- pirical adjustments and from changes in actuarial assumptions are recognized in other comprehensive income in the year in which they arise. They are also included in the financial results carried forward in the statement of changes in equity and in the statement of financial position. All the above calculations are being per- formed via an actuary study, conducted by an independent actuary, whereas for the interim periods certain estimates are being made. The estimates which are be- ing utilized for the determination of the net cost for post-employment benefits in- clude among other the discount rate, the inflation and the average annual salary in- crease. Any alterations in the assumptions affect significantly the book value of the liabilities for post-employment benefits. The discount rate that is used derives from the one of the long-term bonds with AA credit rating and with maturities similar to the liabilities of the plan. Group subsidiaries Don & Low LTD and THRACE POLYBULK A.S have in place de- fined benefit plans for their employees which are financed. The Greek companies of the Group as well as Thrace Ipoma A.D. have defined contri- bution schemes not self-financed. 2.18.3 Benefits following termination of employment Termination benefits become payable when employment ends before the normal retirement date or when the employee ac- cepts voluntary retirement in exchange for these benefits. The Group records these benefits no earlier than the following dates: a) when the Group can no longer withdraw the offer for these benefits and b) when the Group recognizes restructur- ing costs that are part of the application of IAS 37 which includes the payment of termination benefits. In case of an offer for voluntary retirement, the termination ben- efits are calculated according to the num- ber of employees who are expected to ac- cept the offer. Termination benefits which are due 12 months after the reporting date are discounted. Contents > Page 198 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 2.20 Financial Assets 2.20.1 Financial Assets Initial Measurement and Recognition The Group and the Company measure the financial assets initially at their fair value by adding transaction costs. The trade receivables initially are being measured / valued according to the transaction price. The financial assets with embedded deriv- atives are being reviewed in their entirety whenever it is examined if their cash flows are only the payment of capital (principal) and interest. According to the provisions of IFRS 9, the securities are measured at a later stage at fair value via the other com- prehensive income or at fair value via the financial results for the year. The classifica- tion is based on two criteria: a) the busi- ness model concerning the management of financial assets and b) the conventional cash flows of the instrument, meaning if they represent “only payments of capital and interest” (SPPI criterion) against the pending balance. Subsequent Measurement After initial recognition, financial assets are classified into three categories: • at amortized cost • at fair value through other compre- hensive income • at fair value through profit or loss The Group and the Company do not have assets that are valued at fair value through the other comprehensive income as of 31 December 2022. Financial assets classified at amortized cost are subsequently measured using the effective interest method (EIR) and are subject to impairment testing. Profits and losses are recognized in profit or loss when the asset ceases to be recognized, modi- fied or impaired. Termination of financial asset recognition The Group (or Company) ceases to rec- ognize a financial asset when and only when the contractual rights expire on the cash flows of the financial asset or when it transfers the financial asset and the trans- fer meets the conditions for write-off. 2.19 Provisions Provisions are recognized only when there is a liability, due to events that have oc- curred and it is likely (namely more possi- ble than not) that this settlement will cre- ate an outflow, the amount of which can be estimated reliably. The recognition of provisions is based on the present value of cash flows that may be needed for the above liabilities to be settled. Amounts paid in order to arrange the repayment of such liabilities are deducted from the recorded provisions. The amounts are also reviewed at the periods when the finan- cial statements are prepared. Provisions for any future losses should not be recog- nized. Compensation received from third parties and relate to the aggregate amount or part of the estimated cash flow, should be recognized on the asset side only when there is certainty for the final payment of the corresponding amount. Contents > Annual Financial Report as of 31.12.2022 Page 199 of 268 Amounts in thousand Euro, unless stated otherwise Reclassification of financial assets Reclassification of financial assets takes place in rare cases and is due to a decision of the Group (or Company) to modify the business model it applies with regard to the management of these financial assets. Impairment The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all finan- cial assets. The expected credit losses are based on the difference between contrac- tual cash flows and all cash flows that the Group (or Company) expects to receive. The difference is discounted using an es- timate of the initial effective interest rate of the financial asset. With regard to the trade receivables, the Group and the Com- pany applied the simplified approach of the standard and estimated the expected credit losses based on the anticipated loss- es for the entire life of these assets. Regarding the remaining financial assets, the expected credit losses are being cal- culated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the an- ticipated credit losses for the entire life of the financial assets, which emanates from the probability of a default in the payment of the contractual liabilities within the next 12-month period starting from the report- ing date. In case of a significant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. 2.20.2 Financial Derivatives The Group uses financial derivatives, main- ly forward foreign exchange contracts, to hedge risks that emanate from changes in exchange rates. Financial derivatives are measured at fair value, during the balance sheet date. The fair value of forward contracts is calculated based on the market prices of contracts with respective maturities (valuation of 1 st level of IFRS 7). Financial derivatives of the Group do not have the characteristics of hedging instru- ments as defined in IAS 39 and therefore gains and losses resulting from change in their fair values are recorded directly in the income statement. 2.20.3 Accounts Receivable - Provisions for Doubtful Receivables Accounts receivable are initially recorded at their fair value, which is the transaction value, and are subsequently measured at amortized cost using the effective interest rate, less the expected credit losses arising from all possible default events through- out expected life of a financial instrument at each reporting date. At each financial statement date, the recoverability of the receivable accounts is estimated either per customer when there is objective evi- dence that the Group is unable to collect all amounts due under the contractual terms, either on historical trends, statistical data and anticipated future events and the rel- evant provision for impairment is formed. The provision formed is adjusted for im- pairment and is included in ‘Other ex- penses’. Any write-offs of receivables from accounts receivable are made through the provision made. Contents > Page 200 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 2.22 Suppliers and Other Creditors Suppliers and other liabilities are initially recognized at fair value and subsequently measured according to amortized cost, while the effective interest rate method is used. Liabilities are classified as short-term if payment is expected in less than one year. If not, then such are included in long- term liabilities. Initial Recognition and subsequent measurement of financial liabilities All financial liabilities are initially valued at their fair value minus the transaction costs, in the case of loans and liabilities. For later measurement purposes, financial liabilities are classified as financial liabilities at am- ortized costs. Loans are characterized as short-term liabilities except if the Group has the final right to postpone repayment for at least 12 months after the balance sheet date. Bank overdrafts are included in short-term debt in the balance sheet and in investing activities in the statement of cash flows. De-recognition of Financial Liabilities A financial liability is written off when the commitment arising from the liability is canceled or expires. When an existing fi- nancial liability is replaced by another by the same lender but on fundamentally different terms, or the terms of an exist- ing liability are significantly modified, this exchange or amendment is treated as de- recognition of the initial liability and rec- ognition of a new liability. The difference in the respective book values is recognized in the statement of financial results. Offsetting between financial assets and liabilities Financial assets and liabilities are offset and the net amount is reflected in the statement of financial position only when the Group or Company has this legal right and intends to offset them on a net basis or to claim the asset and settle the liabil- ity at the same time. The legal right should not depend on future events and should be enforceable in the normal course of business and in the event of a breach, in- solvency or bankruptcy of the company or counterparty. 2.21 Financial Liabilities 2.23 Equity The share capital includes common shares of the Company. The difference between the nominal value of shares and their issue price is registered in the “Share Premium” account. Direct expenses for the issue of shares, are presented after the deduction of the relevant income tax and reduce the issue proceeds, namely as a deduc- tion from the share premium. During the purchase of treasury shares, the amount paid, including the relevant expenses is recorded as deduction from the share- holders’ equity. No profit or loss is recog- nized in the statement of comprehensive income from the purchase, sale, issuance or cancellation of treasury shares. Expens- es which are realized for the issuance of shares are recorded after the deduction of the relevant income tax, as deduction from the product of the issue. Contents > Annual Financial Report as of 31.12.2022 Page 201 of 268 Amounts in thousand Euro, unless stated otherwise 3. Notes on the Financial Statements 3.1 Evolution and Performance of the Group The following table depicts the Group’s financial results from continuing operations for the year ended 31 st December 2022: Financial Results of Year 2022 (CONTINUING OPERATIONS) (amounts in thousand Euro) Year 2022 Year 2021 Change % Turnover 394,382 428,429 -7.9% Gross Profit 84,263 140,149 -39.9% Gross Profit Margin 21.4% 32.7% ΕΒΙΤ 27,407 83,913 - 67.3% EBIT Margin 6.9% 19.6% EBITDA 48,259 103,791 -53.5% EBITDA Margin 12.2% 24.2% Adjusted EBITDA 48,850 105,799 -53.8% Adjusted EBITDA Margin 12.4% 24.7% Earnings before Taxes (EBT) 32,068 83,920 -61.8% EBT Margin 8.1% 19.6% Earnings after Taxes (EAT) 26,270 65,866 -60.1% EAT Margin 6.7% 15.4% Total EATAM 25,777 65,436 -60.6% EATAM Margin 6.5% 15.3% Earnings per Share (in euro) 0.5985 1.5093 -60.3% * EBITDA is defined as the operating earnings before interest, taxes, depreciation and amortization and before financial and investment activities. ** Adjusted EBITDA does not include extraordinary personnel indemnities amounting to €591. (see note 3.8) Contents > Page 202 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise For completeness purposes, the following table depicts in synopsis the financial re- sults of the Group, both from Continuing and Discontinued Operations, for the pe- riod ended on 31 st December 2022: Financial Results of Year 2022 (CONTINUING & DISCONTINUED OPERATIONS) (amounts in thousand Euro) Year 2022 Year 2021 Change % Turnover 394,382 428,429 -7.9% Gross Profit 84,263 140,149 -39.9% Gross Profit Margin 21.4% 32.7% ΕΒΙΤ 27,391 90,397 -69.7% EBIT Margin 6.9% 21.1% EBITDA 48,243 110,275 -56.3% EBITDA Margin 12.2% 25.7% Adjusted EBITDA 48,850 105,799 -53.8% Adjusted EBITDA Margin 12.4% 24.7% Earnings before Taxes (EBT) 32,052 90,517 -64.6% EBT Margin 8.1% 21.1% Earnings after Taxes (EAT) 26,235 72,457 -63.8% EAT Margin 6.7% 16.9% Total EATAM 25,742 72,027 -64.3% EATAM Margin 6.5% 16.8% Earnings per Share (in euro) 0.5977 1.6613 -64.0% Contents > Annual Financial Report as of 31.12.2022 Page 203 of 268 Amounts in thousand Euro, unless stated otherwise Due to the decision to permanently dis- continue the production activity of Thrace Linq INC, in 2020, which was decided in order for the Group to focus on profitable business activities, this specific activity is recorded in the income statement and other comprehensive income as discontin- ued operations. 3.2 Discontinued Activities Discontinued Operations Statement of Income & Other Comprehensive Income Thrace Linq INC 31.12.2022 31.12.2021 Turnover - - Cost of Sales - - Gross Profit / (Loss) - - Non-Operating Income / (Expenses) (216) 6,294 Earnings / (Losses) before Taxes (216) 6,294 Taxes (19) (6) Earnings / (Losses) after Taxes (235) 6,288 Intra-group Transactions 200 303 Earnings / (Losses) after Taxes (35) 6,591 Discontinued Operations Cash Flows Thrace Linq INC 31.12.2022 Cash Flows from operating activities (287) Cash Flows from investing activities (3,134) Cash Flows from financing activities - Change in cash and cash equivalents (3,421) Cash and cash equivalents as at 31.12.2021 3,464 Foreign exchange differences 258 Cash and cash equivalents as at 31.12.2022 301 * Refers to intra-group transaction. Contents > Page 204 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.3 Segment Reporting The Group applies IFRS 8 to monitor its business activities by sector. The areas of activity of the Group have been defined based on the legal structure and the busi- ness activities of the Group. The Group Management, being responsible for mak- ing financial decisions, monitors the finan- cial information separately as presented by the parent company and by each of its subsidiaries. The operating segments (business units) are structured based on the different prod- uct category, the structure of the Group’s management and the internal reporting system. Using the criteria as defined in the accounting reporting standards and based on the Group’s different activities, the Group’s business activity is divided into two sectors, namely the “Technical Fabrics” and the “Packaging” sector. The information related to the business activities that do not comprise separate segments for reporting purposes, have been aggregated and depicted in the cat- egory “Other”, which includes the agricul- tural sector and the activities of the Parent Company. The operating segments (business units) of the Group are as follows: Technical Fabrics Packaging Other Production and trade of technical fabrics for industrial and technical use. Production and trade of packaging products, plastic bags, plastic boxes for packaging of food and paints and other packaging materials for agricultural use. It includes the Agricul- tural sector and the business activity of the Parent company which apart from the investing activities provides also Administrative – Finan - cial – IT services to its subsidiaries. Contents > Annual Financial Report as of 31.12.2022 Page 205 of 268 Amounts in thousand Euro, unless stated otherwise During the year 2020, which was char- acterized by the spread of the Covid-19 coronavirus pandemic, the Group faced significantly increased demand for specific products of its existing product portfolio and particularly in the area of technical fabrics used in personal protection and health applications (Personal Protective Equipment). The Group, taking advan- tage of the technological capabilities of its modern production lines and the know-how it has developed in technical fabrics, managed to meet the significantly increased demand, using the existing pro- duction lines and channeling a large part of the already produced volumes towards applications in this sector. At the same time the Group proceeded with targeted investments, such as the surgical mask production lines and the Meltblown non- woven fabric production line (as it has been already announced to the investor community via the corporate announce- ments of 04/05/2020 and 01/10/2020). The Group also proceeded with the purchase of machinery for the production of high protection masks (FFP2). At the same time, there was a very high profitability at the Group level during the year 2021, where the pandemic was in full swing with repeated waves and muta- tions. The Group supported the market’s needs, either through the network of the various retail chains (e.g. super markets) or through delivery of products according to contracts signed with the local health systems. On the other hand during the year 2022, a sharp reduction in demand for prod- ucts related to the COVID-19 pandemic was observed, resulting into significantly lower sales and profitability for the Group compared to the previous year. The first quarter of 2022 was an exception to the above, as due to the spread of “Omicron” variant but mainly due to the execution of the last part of a contractual agreement signed with a local health system, the Group posted strong profitability which was however much lower than the level of the corresponding period of 2021. More specifically, Earnings before Taxes from Continuing Operations at the Group level for 2022 amounted to €32.1 million, of which, according to Management’s estimates, €5.3 million were related to COVID-19 products (compared to €51.8 million in the year 2021). More specifically, €3.0 million were allocated in the Sector of “Technical Fabrics” (versus €49.9 million in 2021), and €2.3 million were allocated in the Sector of “Packaging” (versus €1.9 mil- lion in 2021). From the year 2023 onwards, having en- tered into the post-pandemic era, personal protection and health products will not be presented separately, following the same pre-pandemic disclosure practice. Instead, they will comprise another product cat- egory within the context of the Group’s normal business activity. It should be noted that part of the spe- cific investments that were implemented (such as the Meltblown non-woven tech- nical fabrics production line), can be used to produce products serving other sectors and applications. Contents > Page 206 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise BALANCE SHEET OF 31.12.2022 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINATIONS GROUP Total consolidated assets 265,247 126,947 85,238 (72,637) 404,795 INCOME STATEMENT FOR THE PERIOD 01.01 - 31.12.2022 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINATIONS GROUP Turnover 274,488 132,672 5,658 (18,436) 394,382 Cost of sales (218,010) (105,433) (5,376) 18,700 (310,119) Gross profit 56,478 27,239 282 264 84,263 Other operating income 2,575 509 238 (556) 2,766 Selling & Distribution expenses (28,805) (10,409) (1) (478) (39,693) Administrative expenses (12,290) (4,304) (1,160) 788 (16,966) Research and Development Expenses (1,805) (490) - - (2,295) Other operating expenses (829) (743) (6) 1 (1,577) Other Gain / (Losses) 968 (57) (2) - 909 Operating profit / (loss) 16,292 11,745 (649) 19 27,407 Interest & Other related (expenses)/income 2,796 (630) (55) 25 2,136 Income from dividends - - 13,478 (13,478) - Profit / (loss) from companies consolidated with the Equity method 1,007 1,069 449 - 2,525 Earnings / (losses) before tax (Continuing operations) 20,095 12,184 13,223 (13,434) 32,068 Earnings / (losses) before tax (Discontinued operations) (16) - - - (16) Total Earnings / (losses) before tax 20,079 12,184 13,223 (13,434) 32,052 Depreciation from continuing operations 13,396 7,147 310 - 20,853 Depreciation from discontinued operations - - - - - Total Depreciation 13,396 7,147 310 - 20,853 Earnings / (losses) before interest, tax, depreciation & amortization from continuing operations (EBITDA) 29,688 18,892 (339) 19 48,259 Earnings / (losses) before interest, tax, depreciation & amortization from discontinued operations (EBITDA) (16) - - - (16) Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) 29,671 18,892 (339) 19 48,243 Contents > Annual Financial Report as of 31.12.2022 Page 207 of 268 Amounts in thousand Euro, unless stated otherwise BALANCE SHEET AS OF 31.12.2021 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINATIONS GROUP Total consolidated assets 269,145 120,606 88,026 (72,578) 405,199 INCOME STATEMENT FOR THE PERIOD 01.01 - 31.12.2021 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINATIONS GROUP Turnover 318,878 120,007 5,668 (16,124) 428,429 Cost of sales (205,633) (93,495) (5,644) 16,492 (288,280) Gross profit 113,245 26,512 24 368 140,149 Other operating income 1,355 459 166 (367) 1,613 Selling & Distribution expenses (25,855) (9,611) - (425) (35,891) Administrative expenses (12,099) (4,027) (930) 314 (16,742) Research and Development expenses (1,483) (339) - - (1,822) Other operating expenses (3,351) (1,144) (99) - (4,594) Other Gain / (Losses) 1,124 76 - - 1,200 Operating profit / (loss) 72,936 11,926 (839) (110) 83,913 Interest & Other related (expenses)/income (1,811) (959) (38) 45 (2,763) Income from dividends - 15,007 (15,007) - Profit / (loss) from companies consolidated with the Equity method 1, 311 1,125 334 - 2,770 Earnings / (losses) before tax (Continuing operations) 72,436 12,092 14,464 (15,072) 83,920 Earnings / (losses) before tax (Discontinued operations) 6,597 - - - 6,597 Total Earnings / (losses) before tax 79,033 12,092 14,464 (15,072) 90,517 Depreciation from continuing operations 13,212 6,339 327 - 19,878 Depreciation from discontinued operations - - - - - Total Depreciation 13,212 6,339 327 - 19,878 Earnings / (losses) before interest, tax, depreciation & amortization from continuing operations (EBITDA) 86,148 18,265 (512) (110) 103,791 Earnings / (losses) before interest, tax, depreciation & amortization from discontinued operations (EBITDA) 6,484 - - - 6,484 Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) 92,632 18,265 (512) (110) 110,275 Contents > Page 208 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Other Operating Income Group Company 2022 2021 2022 2021 Grants () 1,279 378 - - Income from rents 15 45 - - Income from provision of services 65 131 - - Income from prototype materials 33 37 - - Reverse entry of not utilized provisions 88 32 10 11 Income from energy management programs 352 426 - Other operating income 654 564 228 157 Income from photovoltaics 280 - Total 2,766 1,613 238 168 * The amount of € 1,279 refers to the following grants awarded: investment, research and development, recruitment of junior graduates as well as professional training of the Group’s employees. 3.4 Other Operating Income Other Gains / (Losses) Group Company 2022 2021 2022 2021 Gains / (Losses) from sale of PP&E 28 98 8 (2) Extraordinary profit / (losses) from sale of tangible assets of Don & Low LTD - 763 - - Foreign Exchange Differences 881 339 (10) - Total 909 1,200 (2) (2) 3.5 Other Gains / Losses Contents > Annual Financial Report as of 31.12.2022 Page 209 of 268 Amounts in thousand Euro, unless stated otherwise Analysis of Expenses (Production-Administrative- Sales & Distribution-Research & Development) Group Company 2022 2021 2022 2021 Payroll expenses 57,366 58,544 2,825 3,148 Third party fees – expenses * 6,612 5,707 1,841 1,742 Electric power – Natural gas 25,984 17,046 31 18 Repairs / Maintenance 5,969 6,436 26 18 Rental expenses (note 3.13) 1,183 929 20 29 Insurance expenses 2,934 2,632 75 53 Exhibitions / travelling expenses 1,918 699 182 86 IT and telecom expenses 1,488 1,302 462 631 Promotion and advertising expenses 605 660 185 176 Transportation expenses 21,720 20,003 - - Consumables 6,777 5,783 3 2 Sundry expenses / Other provisions 3,952 4,149 576 344 Depreciation / Amortization 20,673 19,805 310 327 Total 157,181 143,695 6,536 6,574 * Third party fees – expenses include fees paid to auditors, legal and advisory firms, as well as to the Board of Directors. The analysis of expenses per operating category, is as follows: 3.6 Analysis of Expenses (Production-Administrative-Sales & Distribution-Research & Development) Analysis of expenses Group Company 2022 2021 2022 2021 Production 98,227 89,240 5,376 5,644 Administrative 16,966 16,742 1,160 930 Sales & Distribution 39,693 35,891 - - Research and Development 2,295 1,822 - - Total 157,181 143,695 6,536 6,574 The analysis of cost of goods sold is presented below: Contents > Page 210 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Analysis of Cost of Goods Sold Group Company 2022 2021 2022 2021 Production expenses 98,227 89,240 5,376 5,644 Cost of materials and inventory 211,892 199,040 - - Total 310,119 288,280 5,376 5,644 * The production expenses in the Company refer to expenses provided to subsidiaries. 3.7 Payroll Expenses Payroll expenses analysis is as follows: Payroll expenses Group Company 2022 2021 2022 2021 Salaries & Wages 47,260 48,629 2,428 2,767 Employer’s contributions 8,099 7, 859 376 344 Retirement benefits 1,422 1,466 14 8 Total 56,781 57,954 2,818 3,119 Other Expenses 585 590 7 29 Grand Total 57,366 58,544 2,825 3,148 The number of employed staff at the Group and Company level at the end of the financial year (without including the joint ventures), was as follows: Number of employees Group Company 2022 2021 2022 2021 Full time employees – wage based employees 1,682 1,662 26 25 Contents > Annual Financial Report as of 31.12.2022 Page 211 of 268 Amounts in thousand Euro, unless stated otherwise Other Operating Expenses Group Company 2022 2021 2022 2021 Provisions for doubtful receivables 115 442 - - Other taxes and duties non- incorporated in operating cost 172 221 - - Depreciation 180 73 - - Staff indemnities 3 397 - 92 Supplies / other bank expenses 132 166 6 7 Expenses for the purchase of prototype materials (maquettes) 56 84 - - Other operating expenses 328 440 - - Sub-Total 986 1,823 6 99 Extraordinary and non-recurring expenses 591 2,771 - - Total 1,577 4,594 6 99 Analysis of extraordinary and non-recurring expenses Group 2022 2021 Extraordinary personnel indemnities 591 798 Impairment of tangible assets’ value - Don & Low LTD - 1,973 Total 591 2,771 During the year 2021, in the context of the restructuring of the Group’s holdings, ex- penses of € 1,973 had emerged as result of the operational reorganization of the sub- sidiary Don & Low LTD along with a profit of €763 from fixed asset sales (see note 3.5). This subsidiary reduced its presence in woven technical fabrics, while increas- ing its production capacity in non-woven technical fabrics. In addition, there was an expense of € 798 from extraordinary allow- ance to the personnel. In the context of the completion of the restructuring of the Group’s holdings, for the current fiscal year, costs of €591 were incurred from extraordinary personnel indemnities. 3.8 Other Operating Expenses Contents > Page 212 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.9 Financial income/(expenses) 3.9.1 Financial income Financial income Group Company 2022 2021 2022 2021 Interest income and other related income 36 106 - - Reverse of long-term receivable discount in relation to OAED (see note 3.15) 4,563 - - - Foreign exchange differences 1,954 859 - - Total 6,553 965 - - Income from dividends - - 13,478 15,006 3.9.2 Financial expenses Financial expenses Group Company 2022 2021 2022 2021 Interest expense and other related expenses (1,937) (2,049) (55) (37) Foreign exchange differences (2,004) (1,208) - - Financial result from Pension Plans (476) (471) - - Total (4,417) (3,728) (55) (37) Earnings after tax, per share, are calcu- lated by dividing net earnings (after tax) allocated to shareholders, by the weight- ed average number of shares outstanding during the respective financial year, after the deduction of any treasury shares held. 3.10 Earnings per Share (Consolidated) Basic earnings per share (Consolidated, continuing operations) 2022 2021 Earnings allocated to shareholders 25,777 65,436 Number of shares outstanding (weighted) 43,067 43,356 Basic and adjusted earnings per share (Euro in absolute terms) 0.5985 1.5093 Contents > Annual Financial Report as of 31.12.2022 Page 213 of 268 Amounts in thousand Euro, unless stated otherwise Basic earnings per share (Consolidated, discontinued operations) 2022 2021 Earnings allocated to shareholders (35) 6,591 Number of shares outstanding (weighted) 43,067 43,356 Basic and adjusted earnings per share (Euro in absolute terms) (0.0008) 0.1520 Basic earnings per share (Consolidated, total operations) 2022 2021 Earnings allocated to shareholders 25,742 72,027 Number of shares outstanding (weighted) 43,067 43,356 Basic and adjusted earnings per share (Euro in absolute terms) 0.5977 1.6613 As of 31 st December 2022, the Company held 751,396 treasury shares. The analysis of tax charged in the year’s financial results, is as follows: Income Tax Group Company 2022 2021 2022 2021 Income tax (4,619) (15,826) (1,613) - Tax of previous years - (12) - - Deferred tax (expense)/income (1,179) (2,216) 9 (16) Total (5,798) (18,054) (1,604) (16) 3.11 Income Tax The income tax for the period is calculat- ed based on the domestically applicable tax rates. Deferred taxes are calculated on temporary differences using the applicable tax rate in the countries where the Group’s companies operate. The effective tax rate of the Group differs significantly from the nominal tax rate, as there are tax losses in the companies of the Group for which no deferred tax asset is recognized as well as significant non-tax deductible expenses. Contents > Page 214 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise According to Law 4799/2021, the income tax rate of legal entities in Greece was reduced from 24% to 22% from the year 2021 onwards. The income tax (reconciliation of the ac- tual tax rate) is as follows: Income Tax Group Company 2022 2021 2022 2021 Earnings / (losses) before tax 32,068 83,920 12,775 14,130 Income tax rate 22% 22% 22% 22% Corresponding income tax (7,055) (18,462) (2,810) (3,109) Effect due to different tax rates of subsidiaries abroad 258 1,902 (293) - Non-tax-deductible expenses (1,020) (672) (210) (89) Revenues not subject to tax 1,190 512 1,099 3,301 Income tax differences from previous years 307 (27) - - Effect from tax losses for which no deferred tax asset has been recognized (94) (159) - (105) Effect from offsetting tax losses from previous years with taxable earnings for the year 610 - 610 - Effect due to change of tax rate of companies 6 (1,147) - (14) Income Tax (5,798) (18,053) (1,604) (16) From the fiscal year 2011 and onwards, the Group’s Greek companies receive an “An- nual Tax Certificate”. The “Annual Tax Cer- tificate” is issued from the Legal External Certified Auditor who audits the annual financial statements. Following the com- pletion of the tax audit, the Legal External Certified Auditor grants the company with a “Tax Compliance Report” which is later submitted electronically to the Ministry of Finance. The tax audit for the year 2021 for the Group’s Greek companies Thrace Plastics Co. SA, Thrace Nonwovens & Geosynthet- ics Single Person SA, Thrace Plastics Pack SA, Thrace Polyfilms Single Person SA, Thrace Eurobent SA, which was conducted in accordance with the provisions of arti- cle 65a of L. 4172/2013, was completed by the audit firm “PricewaterhouseCoopers SA” and revealed no material tax liabilities apart from those recorded and depicted in the financial statements. Tax certificates were issued, with an unqualified opinion, for each of the above companies. For the financial year 2022, a tax audit for the above companies is already performed by PricewaterhouseCoopers SA in accord- ance with the provisions of article 65 of L. 4172/2013. This audit is underway and the relevant tax certificate is expected to be issued following the release of the 2022 fi- nancial statements. If until the completion of the tax audit additional tax liabilities arise, the Management of the Group assess that such will not have a material effect on the financial statements. The unaudited tax fiscal years, in which Contents > Annual Financial Report as of 31.12.2022 Page 215 of 268 Amounts in thousand Euro, unless stated otherwise the tax liabilities have not been finalized, and therefore the probability of a tax audit from the tax authorities exists, are present- ed in the following table: Company Tax un-audited fiscal years Thrace Plastics Co. Sa 2017-2022 Thrace Nonwovens & Geosynthetics Single Person SA 2017-2022 Thrace Plastics Pack SA 2017-2022 Thrace Polyfilms Single Person SA 2017-2022 Thrace Protect Single Person SMPC 2017-2022 Thrace Eurobent SA 2017-2022 Thrace Greenhouses SA 2017-2022 The following table depicts the unaudited tax fiscal years for which the tax liabilities have not been finalized for the Companies outside Greece. Company Tax un-audited f iscal years Don & Low LTD 2018-2022 Don & Low Australia LTD 2018-2022 Synthetic Holdings LTD 2018-2022 Synthetic Textiles LTD 2016-2022 Thrace Synthetic Packaging LTD 2018-2022 Thrace Polybulk A.B 2016-2022 Thrace Polybulk A.S 2018-2022 Thrace Greiner Packaging SRL. 2016-2022 Trierina Trading LTD 2017-2022 Thrace Ipoma A.D. 2017-2022 Thrace Plastics Packaging D.O.O. 2017-2022 Lumite INC 2016-2022 Thrace Linq INC 2016-2022 Adfirmate LTD 2017-2022 Pareen LTD 2017-2022 Saepe LTD 2017-2022 Contents > Page 216 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise The Group pursues economic growth in alignment with environmental responsibil - ity. All investments are assessed towards the Group’s environmental strategy with a main focus on tackling climate change and serv - ing the principles of the circular economy. At the same time, the Group constantly up - grades its PP&E, thus improving their envi- ronmental footprint, while it evaluates on a regular basis any evidence of impairment, including climate related criteria. As at 31.12.2022, the Group has not identified any relevant indications of possible impairments or negative impact during the review of the useful lives of tangible fixed assets. The changes in the PP&E during the year are analyzed as follows: 3.12 Property, Plant & Equipment (PP&E) Property, Plant & Equipment (PP&E) Group 2022 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2022 4,212 63,380 333,824 1,411 9,983 14,588 427,398 Additions 225 7, 820 16,937 80 488 11,785 37,335 Disposals (99) - (4,024) (105) (37) - (4,265) Transfers 32 3,230 13,071 28 126 (16,527) (40) Foreign exchange differences (37) (1,091) (5,750) (15) (253) (164) (7, 310) Acquisition cost 31.12.2022 4,333 73,339 354,058 1,399 10,307 9,682 453,118 DEPRECIATION Accumulated depreciation 01.01.2022 - (31,588) (232,499) (1,123) (8,340) - (273,550) Depreciation for the period - (1,927) (17,130) (97) (438) (19,592) Disposals - - 4,284 103 36 4,423 Foreign exchange differences - 680 3,871 12 256 4,819 Accumulated depreciation 31.12.2022 - (32,835) (241,474) (1,105) (8,486) (283,900) NET BOOK VALUE 31.12.2021 4,212 31,792 101,325 288 1,643 14,588 153,848 31.12.2022 4,333 40,504 112,584 294 1,821 9,682 169,218 Contents > Annual Financial Report as of 31.12.2022 Page 217 of 268 Amounts in thousand Euro, unless stated otherwise Property, Plant & Equipment (PP&E) Group 2021 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2021 3,510 57,679 301,826 1,446 9,102 4,381 377,944 Additions 655 2,318 5,429 49 506 21,322 30,279 Disposals - - (6,875) (89) (21) - (6,985) Impairments - - (2,456) - - - (2,456) Transfers - 2,110 8,932 5 95 (11,142) - Transfer from right-of- use assets - - 19,351 - - - 19,351 Foreign exchange differences 47 1,273 7,617 - 301 27 9,265 Acquisition cost 31.12.2021 4,212 63,380 333,824 1,411 9,983 14,588 427,398 DEPRECIATION Accumulated depreciation 01.01.2021 - (29,055) (208,617) (1,084) (7,677) - (246,433) Depreciation for the period (1,740) (16,081) (120) (386) - (18,327) Disposals - - 6,143 85 18 - 6,246 Transfer from right-of- use assets - - (9,288) (4) - - (9,292) Foreign exchange differences - (793) (4,656) - (295) - (5,744) Accumulated depreciation 31.12.2021 - (31,588) (232,499) (1,123) (8,340) - (273,550) NET BOOK VALUE 31.12.2020 3,510 28,624 93,209 362 1,425 4,381 131,512 31.12.2021 4,212 31,792 101,325 288 1,643 14,588 153,848 Contents > Page 218 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Property, Plant & Equipment (PP&E) Company 2022 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2022 - 392 11,159 221 1,250 - 13,022 Additions - - - - 31 - 31 Disposals - - - (25) - (25) Acquisition cost 31.12.2022 - 392 11,159 196 1,281 - 13,028 DEPRECIATION Accumulated depreciation 01.01.2022 - (247) (11,124) (216) (1,108) - (12,695) Depreciation for the period - (12) (3) (39) - (54) Disposals - - - 23 - - 23 Accumulated depreciation 31.12.2022 - (259) (11,124) (196) (1,147) (12,726) NET BOOK VALUE 31.12.2021 - 145 35 5 142 - 327 31.12.2022 - 133 35 - 134 - 302 Contents > Annual Financial Report as of 31.12.2022 Page 219 of 268 Amounts in thousand Euro, unless stated otherwise Tangible Assets Company 2021 Fields – land plots Buildings & technical works Machinery & technical facilities Transporta- tion means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2021 - 392 11,159 221 1,228 - 13,000 Additions - - - - 22 - 22 Acquisition cost 31.12.2021 - 392 11,159 221 1,250 - 13,022 DEPRECIATION Accumulated depreciation 01.01.2021 - (234) (11,124) (214) (1,071) - (12,644) Depreciation for the period - (13) - (2) (37) - (51) Accumulated depreciation 31.12.2021 - (247) (11,124) (216) (1,108) - (12,695) NET BOOK VALUE 31.12.2020 - 158 35 7 157 - 357 31.12.2021 - 145 35 5 142 - 327 There are no liens and guarantees on the Company’s PP&E, while the liens on the Group’s PP&E amount to € 6,130. Contents > Page 220 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise The right-of-use assets are analyzed as follows: Right-of-use assets Group 2022 Buildings and technical works Machinery equipment Transporta- tion vehicles Furniture and other equipment Total ACQUISITION COST Acquisition cost 01.01.2022 1,266 486 3,242 62 5,056 Additions 6 - 445 - 451 Deregognition - - (175) - (175) Foreign exchange differences (12) - (31) - (43) Acquisition cost 31.12.2022 1,260 486 3,481 62 5,289 DEPRECIATION Accumulated depreciation 01.01.2022 (496) (44) (1,431) (35) (2,006) Depreciation for the period (254) (34) (627) (13) (928) Deregognition - - 145 - 145 Foreign exchange differences 5 - 19 (3) 21 Accumulated depreciation 31.12.2022 (745) (78) (1,894) (51) (2,768) NET BOOK VALUE 31.12.2021 770 442 1,811 27 3,051 31.12.2022 515 408 1,587 11 2,521 3.13 Leases Contents > Annual Financial Report as of 31.12.2022 Page 221 of 268 Amounts in thousand Euro, unless stated otherwise Right-of-use assets Group 2021 Buildings and technical works Machinery equipment Transporta- tion vehicles Furniture and other equipment Total ACQUISITION COST Acquisition cost 01.01.2021 531 19,837 2,980 62 23,410 Additions 724 - 408 4 1,136 Deregognition - - (181) (4) (185) Transfers to PP&E - (19,351) - - (19,351) Foreign exchange differences 11 - 35 - 46 Acquisition cost 31.12.2021 1,266 486 3,242 62 5,056 DEPRECIATION Accumulated depreciation 01.01.2021 (280) (8,975) (932) (26) (10,213) Depreciation for the period (213) (357) (625) (13) (1,208) Deregognition - - 137 4 141 Transfers to PP&E - 9,288 4 - 9,292 Foreign exchange differences (3) - (15) - (18) Accumulated depreciation 31.12.2021 (496) (44) (1,431) (35) (2,006) NET BOOK VALUE 31.12.2020 251 10,862 2,048 36 13,197 31.12.2021 770 442 1,811 27 3,051 Contents > Page 222 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Right-of-use assets Company 2022 Buildings and techni- cal works Transportation vehicles Total ACQUISITION COST Acquisition cost 01.01.2022 622 117 739 Additions - 20 20 Acquisition cost 31.12.2022 622 137 759 DEPRECIATION Accumulated depreciation 01.01.2022 (346) (49) (395) Depreciation for the period (115) (27) (142) Accumulated depreciation 31.12.2022 (461) (76) (537) NET BOOK VALUE 31.12.2021 276 68 344 31.12.2022 161 61 222 Right-of-use assets Company 2021 Buildings and techni- cal works Transportation vehicles Total ACQUISITION COST Acquisition cost 01.01.2021 254 60 314 Additions 368 57 425 Acquisition cost 31.12.2021 622 117 739 Contents > Annual Financial Report as of 31.12.2022 Page 223 of 268 Amounts in thousand Euro, unless stated otherwise Right-of-use assets Company 2021 Buildings and techni- cal works Transportation vehicles Total DEPRECIATION Accumulated depreciation 01.01.2021 (232) (27) (259) Depreciation for the period (114) (22) (136) Accumulated depreciation 31.12.2020 (346) (49) (395) NET BOOK VALUE 31.12.2020 22 33 55 31.12.2021 276 68 344 The consolidated and stand-alone statements of financial position of year 2022, includes the following amounts related to lease liabilities: Lease Liabilities Group Company Short-term liabilities from leases 967 147 Long-term liabilities from leases 1,470 76 Total liabilities from Leases 2,437 223 The interest expense related to lease li- abilities of the Group and the Company amounts to € 87 (2021: € 108) and € 10 (2021: € 14) respectively. The expenses related to short-term leases of the Group amount to € 1,183 (2021: € 929) and are included in the cost of goods sold and the administrative and sales & distribution expenses. The expenses re- lated to short-term leases of the Company amount to € 20 (2021: € 29) and are includ- ed in the administrative expenses. The maturity of liabilities from leases is analyzed in Note 3.32. Contents > Page 224 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.14 Intangible Assets The changes in the intangible assets during the year are analyzed as follows: Intangible Assets Group Company Concessions & indus- trial property rights Company goodwill Total Concessions & indus- trial property rights Total ACQUISITION COST Acquisition cost 31.12.2021 3,129 9,815 12,944 1,589 1,589 Additions 185 - 185 - - Transfers 40 - 40 - - Impairments (50) - (50) - - Foreign exchange difference (37) (95) (132) - - Acquisition cost 31.12.2022 3,267 9,720 12,987 1,589 1,589 AMORTIZATION Accumulated amortiza- tion 31.12.2021 (2,405) - (2,405) (1,327) (1,327) Amortization for the period (333) - (333) (114) (114) Impairments 50 - 50 - - Foreign exchange differences 57 - 57 - - Accumulated amortiza- tion 31.12.2022 (2,631) - (2,631) (1,441) (1,441) NET BOOK VALUE 31.12.2021 724 9,815 10,539 262 262 31.12.2022 637 9,720 10,357 148 148 Contents > Annual Financial Report as of 31.12.2022 Page 225 of 268 Amounts in thousand Euro, unless stated otherwise Intangible Assets Group Company Concessions & indus- trial property rights Company goodwill Total Concessions & indus- trial property rights Total ACQUISITION COST Acquisition cost 31.12.2020 2,943 9,808 12,751 1,589 1,589 Additions 141 - 141 - - Foreign exchange difference 45 7 52 - - Acquisition cost 31.12.2021 3,129 9,815 12,944 1,589 1,589 AMORTIZATION Accumulated amortiza- tion 31.12.2020 (2,096) - (2,096) (1,188) (1,188) Amortization for the period (342) - (342) (139) (139) Transfers 57 - 57 - - Foreign exchange difference (24) - (24) - - Accumulated amortiza- tion 31.12.2021 (2,405) - (2,405) (1,327) (1,327) NET BOOK VALUE 31.12.2020 847 9,808 10,655 401 401 31.12.2021 724 9,815 10,539 262 262 The Group tests on an annual basis the goodwill for impairment according to the Group’s accounting principle (see note 2.6). The goodwill included in the consolidated Financial Statements, following their ac- quisition, has been allocated in the follow- ing cash flow generating units (CFGU) per subsidiary company. Goodwill per Subsidiary 2022 Don & Low LTD 7,490 Trierina Trading LTD 798 Thrace Polybulk AB 623 Thrace Polybulk AS 727 Thrace Nonwovens & Geosynthetics Single Person S.A. 50 Other 32 Total 9,720 Contents > Page 226 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Major Assumptions The recoverable value of a cash flow gen- erating unit is determined according to the calculation of the value in use. This calculation uses provisions of cash flows before taxes, based on 5-year financial budgets, which have been approved by the Management and then extrapolated into perpetuity. Estimates of projected sales are pro- vided by the local Management and are approved by the Group Management, reflecting their best comprehensive es- timates, following a prudent approach. Factors taken into account for the develop- ment of such estimates are the following: historical sales trends, existing contracts with customers and suppliers, open orders (recorded in the system for the coming months), inflation, competition, increases in production costs combined with the potential sales increases, etc. The basic scenario developed takes into account the current production cost level, as well as the current energy and transportation prices, and the corresponding realistic sce- nario for sales potential process, followed for the full set of projections. Further, the impact of the new investments (already implemented or in progress) area slo tak- en into account, both in sales and cost of sales, while scenarios for the implementa- tion of new investments and their impact are also developed. Finally, actions to be performed for the mitigation of potential operational risks (e.g. supply chain disrup- tions) and the enhancement of Group’s en- vironmental footprint are also taken into account. The value in use for the cash flow gener- ating units is being affected (in terms of sensitivity) from basic factors such as the growth rate to perpetuity which has been set at 0.5%, the projections with regard to the forecasted quantities and sales prices according to the 5-year investment plan of the group, the gross profit margin and the discount rates. The discount rates reflect the current es- timations of the market for the separate risks of each cash flow generating unit. The calculation of the discount rates is based on the certain conditions in which the Group operates along with its oper- ating segments, and is being extracted from the weighted average cost of capi- tal (WACC). The weighted average cost of capital is based on both the debt and the equity. The cost of equity derives from the expected return required by the Group’s investors for their investment. The cost of debt is based on the interest rate of the Group’s loans that are being repaid. The country’s risk premium is incorporated with the application of individual beta sensitivity factors. Beta sensitivity factors (or beta coefficient) are being reviewed annually according to the published mar- ket data. The above assumptions vary depending on the different market conditions prevail- ing in the countries which the Group acti- vates in. The Group uses the services of an independent valuator who utilizes the Dis- counted Cash Flow method and values the companies based on the future cash flows in order to determine the value in use. The basic assumptions used are consist- ent with independent external sources of information, and are analyzed below per cash flow generating unit (CFGU). Contents > Annual Financial Report as of 31.12.2022 Page 227 of 268 Amounts in thousand Euro, unless stated otherwise Assumptions – Don & Low LTD 2022 2021 Discount rate, weighted average 8.9% 6.9% Annual growth rate in revenues 10.6% 5.3% Earnings before interest, taxes, depreciation and amortization (5-year) 15% - 16% 20% Assumptions – Trierina Trading LTD / Thrace Ipoma A.D. Discount rate, weighted average 7.2% 5.7% Annual growth rate in revenues 8.8% 7.5% Earnings before interest, taxes, depreciation and amortization (5-year) 16.6% 13% – 16% Assumptions – Thrace Polybulk AS Discount rate, weighted average 8.4% 8.0% Annual growth rate in revenues 5.9% 9.3% Earnings before interest, taxes, depreciation and amortization (5-year) 10% 9.6% - 14% Assumptions – Thrace Polybulk AB Discount rate, weighted average 7.3% 6.8% Annual growth rate in revenues 4.8% 10.3% Earnings before interest, taxes, depreciation and amortization (5-year) 5.7% - 5.9% 3.2% - 10.6% Based on the results of the impairment test, as of December 31, 2022, no impairment losses emerged in the book value of the goodwill of the above cash flow generating units. On December 31, 2022, the recoverable amount for the specific cash flow generat - ing units compared to the corresponding book values, indicates that there is a signifi - cant margin and any substantial change in the assumptions used would not result in an impairment in the book value of goodwill. The Group analyzed the sensitivity of the re - coverable amounts of each Cash Flow Gen- erating Unit (CFGU) in relation to a rational and probable change in one of the major assumptions (as an indication it is noted the best case scenario which refers to 5% sales growth and 2% increase of gross profit, as well as the worst case scenario which refers Contents > Page 228 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.15 Other Long-Term Receivables Other Long-Term Receivables Group Company 2022 2021 2022 2021 Grants receivable - 4,879 - 1,119 Other accounts receivable 132 122 39 37 Total 132 5,001 39 1,156 to the corresponding opposite and unfa- vorable changes). In addition, sensitivity is calculated according to a 0.5% change in the growth rate in perpetuity and according to a 1% change in the discount rate. As a result of the sensitivity analysis, the recoverable amount for the above cash flow generating units (CFGU) compared to their respective book value, indicates a sufficient margin. Due to delays observed in the collection of grants receivable from the Greek State, the Group had reclassified this item in the pre - vious years from short-term to long-term receivables, while proceeding to a partial impairment, and therefore the current out - standing balance of the receivable at the end of the year 2021 had settled at €4,879. The receivable was formed due to a 12% grant on the payroll cost concerning the personnel employed in Xanthi and is to be collected from OAED (Greek Manpower Em - ployment Organization). On July 17, 2020, the Law 4706/2020 was voted, according to which the outstand - ing receivables of the beneficiaries until 31.12.2015 will be offset against existing and future claims of the State, by the entry into force of the above law. The liabilities of OAED (Greek Manpower Employment Organization) and the Greek State are exhausted according to the provi - sions of article 87, par. 2 of Law 4706/2020. The companies of the Group have imple - mented the procedures provided by Law 4706/2020, in accordance with the issued circulars of OAED, in order to certify the correctness of the claimed amounts by com - paring the already submitted statements. During the financial year 2022, offsetting entries of receivables amounting to € 7,827 have been already carried out, resulting into a corresponding reduction of the receiva - bles recorded and to an increase of financial income. The above applied in cases where the provision was lower than the value of the offsetting entry. The offsetting process is in progress. An amount of €1,202 has been transferred to short-term receivables (see note 3.17). Contents > Annual Financial Report as of 31.12.2022 Page 229 of 268 Amounts in thousand Euro, unless stated otherwise 3.16 Inventories 3.17 Trade and other receivables Inventories Group Company 2022 2021 2022 2021 Merchandise 10,419 8,684 - - Finished and semi-finished products 33,277 29,163 - - Raw & auxiliary materials 32,527 34,687 - - Provision for impairment of inventory * (2,703) (1,852) - - Spare parts – other inventory 2,895 1,153 - - Total 76,415 71,835 - - Provision for Impairment of Inventory Group Company Opening Balance 1.1.2021 1,433 - Additional provisions 356 - Foreign Exchange Differences 63 - Total 31.12.2021 1,852 - Additional provisions 951 - Foreign Exchange Differences (100) - Total 31.12.2022 2,703 - It is noted that, according to the European and national legislation in effect, there are no product categories subject to marketing restrictions due to their impact on the environ- ment. As a result, no requirement for impairment arises. 3.17.1 Trade Receivables Trade Receivables Group Company 2022 2021 2022 2021 Customers 72,459 72,268 2,362 2,626 Provisions for doubtful debts (7,690) (7,721) (2,307) (2,317) Total 64,769 64,547 55 309 The customers’ balance on the Group level included notes and checks overdue of € 7,993 for the year 2022 and of € 8,070 for the year 2021. Contents > Page 230 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Classification of Customer receivables Receivables from customers consist of the amounts due from customers from the sale of products that occur within the nor- mal operation of the Group. In general, credit terms range from 30 to 180 days and therefore trade receivables are classified as short-term. Receivables from customers are initially recognized in the transaction amount if the Group has the unconditional right to receive the transaction price. The Group holds the receivables from customers in or- der to collect the contractual cash flows and therefore measures them at amortized cost using the effective interest rate method. The dispersion of the Group’s sales is deemed as satisfactory. There is no concentration of sales into a limited num- ber of customers and therefore there is no increased risk of income loss or increased credit risk. Fair value of receivables from customers Given their short-term nature, the fair value of receivables approximates book value. Impairment of receivables from customers For the accounting policy on impairment of receivables from customers, see note 2.20. For information on financial risk manage- ment, see note 3.32. 3.17.2 Other receivables Other receivables Group Company 2022 2021 2022 2021 Debtors 2,638 3,438 1,361 1,066 OAED (Greek Manpower Employment Organization) subsidies receivable (note 3.15) 1,202 - 851 - Investment Grant Receivable 2,353 2,353 - - V.A.T and Other Taxes receivables other than Income Tax 2,838 2,045 115 133 Prepaid expenses 2,914 1,773 53 54 Interim dividend - Dividends - 4,750 1,725 5,750 Total 11,945 14,359 4,105 7,003 The above grant concerns a grant receiv- able of Law 3299/2004 of the subsidiary Thrace Plastics Pack SA concerning an im- plemented investment. Prepaid expenses mainly concern the re- ceivable for government grants and other prepaid expenses. Contents > Annual Financial Report as of 31.12.2022 Page 231 of 268 Amounts in thousand Euro, unless stated otherwise 3.17.3 Analysis of Provisions for Doubtful Receivables and other receivables Analysis of Provisions for Doubtful Receivables Group Company Opening balance 1.1.2021 7,307 2,328 Additional Provisions 456 - Reverse Entry of Provision (70) - Provisions utilized (11) (11) Foreign Exchange Differences 39 - Total 31.12.2021 7,721 2,317 Opening balance 1.1.2022 7,721 2,317 Additional Provisions 115 - Reverse Entry of Provision (90) - Provisions utilized (41) (10) Foreign Exchange Differences (15) - Total 31.12.2022 7,690 2,307 3.18 Cash & cash equivalents Cash & cash equivalents Group Company 2022 2021 2022 2021 Cash in hand 21 20 5 5 Current and time deposits 39,589 63,220 1,422 132 Total 39,610 63,240 1,427 137 Credit rating of cash & cash equivalents Approximately 22% of the Group’s cash and cash equivalents are deposited in the Greek systemic banks within the Greek region. The Group’s Management deems that there are no risks associated with the above deposits in the current period. Following, cash & cash equivalents are cat- egorized according to the credit rating of banks (conducted by Fitch) where the rel- evant deposits are placed. Contents > Page 232 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.19 Share Capital and Share Premium Reserve 3.20.1 Statutory Reserves In accordance with the provisions of Greek Law, the creation of a statutory re- serve – by transferring to such a reserve an amount equal to 5% of the annual after tax profits realized – is mandatory until the time though the reserve reaches the 1/3 of the Company’s share capital. The statutory reserve can be distributed only upon the dissolution of the Company. However, it can be used to offset accumulated losses. 3.20.2 Tax-exempt and Other Reserves These reserves were formed by the appli- cation of special provisions of tax laws for special incentive laws. In case of their distri- bution, they will be taxed with the tax rate prevailing at the time of their distribution. 3.20 Reserves Credit rating of cash & cash equivalents Group Company 2022 2021 2022 2021 AA- 1,086 91 - - Α+ 348 3,521 - - Α 25,538 45,315 - - A- 1,254 478 - - Β- - 2,909 - 53 ΒΒ- 4,252 - 53 - BBB+ 1,078 2,540 - - B 2,706 3,306 134 21 B+ 3,327 5,060 1,235 58 Total 39,589 63,220 1,422 132 The Company’s share capital accounted for 28,869,358.32 Euro (absolute number) on 31 December 2022 divided by 43,741,452 common registered shares with nominal value of 0.66 Euro per share. Treasury shares Company holds are pre- sented below: Treasury Shares Quantity Value (In TH. €) Beginning Balance 541,318 2,291 Acquired during the year 210,078 1,020 Ending Balance 751,396 3,311 Contents > Annual Financial Report as of 31.12.2022 Page 233 of 268 Amounts in thousand Euro, unless stated otherwise It should be noted that the Company does not have any bank debt liabilities, while the balance of the debt liabilities reported in its Balance Sheet refers to an intragroup, fixed rate, short term loan. Interest rates are linked to Euribor or Libor on per case basis and range from 1.25% to 3.50%. It is noted that 12% of the Group’s 3.21 Bank Debt 3.20.3 Foreign exchange difference reserves These reserves are formed from the con- version of the Assets, Liabilities and net income of subsidiaries based abroad into EUR, based on the exchange rate accord- ing to the accounting policies mentioned in note 2.11.3. The Group’s long term loans have been granted from Greek and foreign banks. The repayment time varies, according to the loan contract, while most loans are linked to Euribor plus a spread. The Group’s short term loans have been granted from Greek and foreign banks with interest rates of Euribor or Libor plus a margin. The book value of loans ap- proaches their fair value during 31 Decem- ber 2022. Analytically, bank debt at the end of the year was as follows: Debt Group Company 2022 2021 2022 2021 Long-term debt 31,641 33,610 - - Total long-term debt 31,641 33,610 - - Short term portion of long term debt 15,239 8,519 - - Short-term debt 11,750 8,874 1,022 1,519 Total short-term loans 26,989 17,393 1,022 1,519 Grand Total 58,630 51,003 1,022 1,519 Short-term loans include an amount of € 5,676 which relates to a Factoring arrange- ment of Thrace Plastics Pack SA with ABC Factors, which has been received by the aforementioned subsidiary and corre- sponds to non-reinsured customers. The maturity of the loans is as follows: Maturity of Loans Group Company 2022 2021 2022 2021 Up to 1 year 26,989 17, 393 1,022 1,519 From 1 – 3 years 16,587 29,479 - - Over 3 years 15,054 4,131 - - Total loans 58,630 51,003 1,022 1,519 Contents > Page 234 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Employee Benefits Group Company 2022 2021 2022 2021 Defined benefit plans – Unfunded 1,385 1,599 79 79 Defined benefit plans – Funded (7,169) 1,900 - - Total provision at the end of the year (5,784) 3,499 79 79 3.22.1 Defined benefit plans – Unfunded 3.22 Pension Liabilities The liabilities of the Company and the Group towards its employees in provid- ing them with certain future benefits, de- pending on the length of service is calcu- lated by an actuarial study on annual basis. The accounting treatment is made on the basis of the accrued entitlement, as at the Balance Sheet date, that is anticipated to be paid, discounted to its present value by reference to the anticipated time of payment. The liability for the Company and the Group, as presented in the Balance Sheet, is analyzed as follows: The IFRS Interpretations Committee is- sued in May 2021 the final decision on the agenda entitled “Distribution of benefits in periods of service in accordance with International Accounting Standard (IAS) 19”, which includes explanatory material on how to distribute benefits in periods of service on a specific defined benefit plan proportional to that defined in article 8 of L.3198 / 1955 regarding the provision of compensation due to retirement (the “Pro- gram of Fixed Benefits of Labor Law”). Based on the above Decision, there should be an alteration in the way in which the basic principles of IAS 19 were ap- plied in Greece in the past in this regard. Consequently, according to what is de- fined in the “IASB Due Process Handbook (par. 8.6)”, the economic entities that pre- pare their financial statements in accord- ance with IFRS are required to amend their accounting policies in relation to the above. Until the issuance of the decision, for the Greek subsidiaries, the Group applied IAS 19 distributing the benefits defined by the article 8 of L.3198 / 1955, L. 2112/1920, and its amendment by Law 4093/2012 in the period from the recruitment until the date of retirement of the employees. The application of this final Decision to the attached financial statements, has brought loans carry a fixed interest rate ranging from 0.35% to 2.15%. The majority of the Group’s loans are linked to covenants which on December 31, 2022 are fully met. Contents > Annual Financial Report as of 31.12.2022 Page 235 of 268 Amounts in thousand Euro, unless stated otherwise Defined benefit plans – Unfunded Group Company 2022 2021 2022 2021 Amounts recognized in the balance sheet Present value of liabilities 1,385 1,599 79 79 Net liability recognized in the balance sheet 1,385 1,599 79 79 Amounts recognized in the financial results Cost of current employment 231 164 14 12 Net interest on the liability / (asset) 8 6 - - Ordinary expense in the account of financial results 239 170 14 12 Recognition of prior service cost - (22) - - Cost of curtailment / settlements / service termination 575 386 - 88 Other expense / (income) - - - - Total expense in the account of financial results 814 534 14 100 Change in the present value of the liability Present value of liability at the beginning of period 1,599 1,462 79 78 Cost of current employment 231 164 15 12 Interest cost 8 6 - - Benefits paid from the employer (764) (480) - (92) Cost of curtailment / settlements / service termination 575 386 - 88 Other expense / (income) - - - Cost of prior service during the period - 59 - - Actuarial loss / (profit) – financial assumptions (236) (11) (10) 3 Actuarial loss / (profit) – demographic assumptions (53) 18 - - as requirement the distribution of benefits defined in the last sixteen (16) years until the date of retirement of employees fol- lowing the scale of Law 4093/2012. The Greek companies of the Group as well as the subsidiary Thrace Ipoma A.D. domi- ciled in Bulgaria participate in the follow- ing plan. Contents > Page 236 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Defined benefit plans – Unfunded Group Company 2022 2021 2022 2021 Actuarial loss / (profit) – evidence from the period 26 (5) (5) (10) Present value of liability at the end of period 1,385 1,599 79 79 Adjustments Adjustments profit / (loss) in the liabilities due to change of assumptions 289 (88) 10 (3) Empirical adjustments profit / (loss) in liabilities (25) 5 5 10 Other - - - - Total actuarial profit / (loss) in the Net Worth 264 (83) 15 7 Changes in the Net Liability recognized in Balance Sheet Net liability / receivable at the beginning of year 1,599 1,462 79 78 Benefits paid from the employer - Other (764) (480) - (92) Total expense recognized in the account of financial results 814 534 15 100 Total amount recognized in the Net Worth (264) 83 (15) (7) Other - - - - Net liability at the end of year 1,385 1,599 79 79 Cumulative amount in the Net Worth Profit / (Loss) (59) 12 22 7 Money flows Expected benefits from the plan in the following year 45 86 - - The actuarial assumptions are presented in the following table. Contents > Annual Financial Report as of 31.12.2022 Page 237 of 268 Amounts in thousand Euro, unless stated otherwise Actuarial Assumptions Greek Companies Thrace Ipoma AD 2022 2021 2022 2021 Discount rate 3.20% 0.50% 6.00% 0.60% Inflation 2.60% 2.03% 16.9% 7.8 0% Average annual increase of personnel salaries 2.60% 2.03% 2.00% 5.00% Duration of liabilities 5.2 years 6.7 years 7.4 years 10.5 years The subsidiaries Don & Low LTD and Thrace Polybulk AS have formed Pension Plans of defined benefits which operate as stand- alone legal entities in the form of trusts. Therefore the assets of the plans are not re- lated to the assets of the companies. The accounting treatment of the plans ac- cording to the revised IAS 19 is as follows: Defined benefit plans – Funded Group 2022 2021 Amounts recognized in the balance sheet Present value of liabilities 102,648 160,955 Fair value of the plan’s assets (109,817) (159,055) Net liability recognized in the balance sheet (7,169) 1,900 Amounts recognized in the financial results Cost of current employment 118 186 Net interest on the liability / (asset) 1 120 Ordinary expense in the account of financial results 119 306 Cost recognition from previous years - - Cost of curtailment / settlements / service termination - - Other expense / (income) 469 349 Foreign exchange differences - - Total expense in the account of financial results 588 655 It is noted that a change of 0.5% in the dis- count rate would result into a change in the present value of liabilities by 3%, while a change of 0.5% in the average annual increase of personnel salaries would lead to a change in the present value of liabili- ties by 3%. 3.22.2 Defined benefit plans – Funded Contents > Page 238 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Defined benefit plans – Funded Group 2022 2021 Change in the present value of the liability Present value of liability at the beginning of period 160,955 158,697 Cost of current employment 115 166 Interest cost 2,838 2,237 Benefits paid from the plan (5,863) (5,583) Cost of curtailment / settlements / service termination - (121) Other expense / (income) (24) (18) Actuarial loss / (profit) – financial assumptions (60,038) (3,490) Actuarial loss / (profit) – demographic assumptions 2,932 (349) Actuarial loss / (profit) – evidence from the period 8,193 (1,441) Foreign exchange differences (6,460) 10,857 Present value of liability at the end of period 102,648 160,955 Change in the value of assets Present value of the plan’s assets at the beginning of period 159,055 145,968 Income from interest 2,838 2,117 Return on assets (40,718) 4,703 Employer’s contributions 1,224 1,971 Employees’ contributions - - Benefits paid from the plan (5,863) (5,933) Foreign exchange differences (6,719) 10,229 Present value of assets at the end of period 109,817 159,055 Adjustments Adjustments profit / (loss) in the liabilities due to change of assumptions 48,913 5,280 Empirical adjustments profit / (loss) in liabilities - - Empirical adjustments profit / (loss) in assets (40,718) 4,823 Total actuarial profit / (loss) in the Net Worth 8,195 10,103 Cost recognition from previous years Foreign exchange differences Total amount recognized in the Net Worth 8,195 10,103 Contents > Annual Financial Report as of 31.12.2022 Page 239 of 268 Amounts in thousand Euro, unless stated otherwise Defined benefit plans – Funded Group 2022 2021 Asset allocation Mutual Funds (Equities) 13,490 15,640 Mutual Funds (Bonds) 64,547 79,893 Diversified Growth Funds 22,438 52,839 Other 9,342 10,683 Total 109,817 159,055 Changes in the Net Liability recognized in Balance Sheet Net liability / (receivable) at the beginning of year 1,900 12,729 Contributions from the employer / Other (1,720) (2,009) Total expense recognized in the account of financial results 588 655 Total amount recognized in the Net Worth (8,195) (10,103) Foreign exchange differences 258 628 Net liability / (asset) at the end of year (7,169) 1,900 Cumulative amount in the Net Worth Profit / (Loss) 27,087 18,148 Money flows Expected benefits from the plan in the following year (5,637) (4,760) * The assets of the plan are measured at fair values and include mainly mutual funds of Baillie Gifford, of Legal & General Investment Management as well as of Ninety One plc. The category “Other” also includes the plan’s cash reserves. The actuarial assumptions are presented in the following table. Contents > Page 240 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Actuarial Assumptions Don & Low LTD Thrace Polybulk AS 2022 2021 2022 2021 Discount rate 5.02% 1.84% 3.00% 1.70% Inflation 3.14% 3.37% 3.00% 2.00% Average annual increase of personnel salaries 3.14% 3.37% 4.00% 2.00% Duration of liabilities 14 years 18 years 10 years 10 years It is noted that a change of 0.25% in the discount rate would result into a change in the present value of liabilities by 3.5%. 3.23 Deferred Taxes Group The following amounts are recorded in the consolidated Statement of Financial Position, after any offsetting entries wherever it is required: Deferred Taxation 2022 2021 Deferred tax assets 1,322 2,261 Deferred tax liabilities (10,625) (8,623) Total deferred taxation (9,303) (6,362) Α. Change of deferred tax in the financial results 2022 2021 As at 1 January (6,362) (1,824) Change in the financial results (1,179) (2,216) Foreign exchange differences 442 (176) Change in statement of comprehensive income (2,204) (2,146) As at 31 December (9,303) (6,362) Contents > Annual Financial Report as of 31.12.2022 Page 241 of 268 Amounts in thousand Euro, unless stated otherwise Β. Deferred tax (liabilities) Liabilities for employee benefits Amortization Other Total As at 1 January 2021 (5,774) (661) (6,435) Change in the financial results (1,858) (5) (1,863) Foreign exchange differences (292) (33) (325) Change in statement of comprehensive income - - - As at 31 December 2021 - (7,924) (699) (8,623) Change in the financial results (42) (1,418) 390 (1,070) Foreign exchange differences 62 370 (16) 416 Change in other comprehensive income (1,374) 26 - (1,348) As at 31 December 2022 (1,354) (8,946) (325) (10,625) C. Deferred tax assets Liabilities for employee benefits Provisions Other Total As at 1 January 2021 3,129 966 516 4,611 Change in the financial results (249) (86) (18) (353) Change in the other comprehensive income (2,146) - - (2,146) Foreign exchange differences 122 - 27 149 As at 31 December 2021 856 880 525 2,261 Change in the financial results 12 (121) (109) Change in the other comprehensive income (856) - - (856) Foreign exchange differences - 26 26 As at 31 December 2022 - 892 430 1,322 Contents > Page 242 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Α. Change of deferred tax in the financial results 2022 2021 As at 1 January 113 130 Change in the financial results 9 (16) Change in the other comprehensive income (3) (1) As at 31 December 119 113 Β. Deferred tax (liabilities) Depreciation Other Total As at1 January 2021 111 (2) 109 Change in the financial results (14) - (14) Change in other comprehensive income - - - As at 31 December 2021 97 (2) 95 Change in the financial results 5 - 5 Change in other comprehensive income As at 31 December 2022 102 (2) 100 C. Deferred tax assets Liabilities for employee benefits Provisions Other Total As at 1 January 2021 21 - - 21 Change in the financial results (2) - - (2) Change in other comprehensive income (1) - - (1) As at 31 December 2021 18 - - 18 Change in the financial results 3 Change in other comprehensive income (3) As at 31 December 2022 18 18 In the Statement of Financial Position, deferred tax assets and liabilities are offset per Company, while in the specific table deferred tax assets and liabilities are presented in detail. Therefore, any reconciliation is made in the change between assets and liabilities. Company Contents > Annual Financial Report as of 31.12.2022 Page 243 of 268 Amounts in thousand Euro, unless stated otherwise 3.24 Suppliers and Other Short-Term Liabilities Suppliers and Other Short-Term Liabilities are presented analytically in the following tables: 3.24.1 Suppliers Suppliers Group Company 2022 2021 2022 2021 Suppliers 40,630 55,441 295 1,046 Total 40,630 55,441 295 1,046 3.24.2 Other Short-Term Liabilities Other Short-Term Liabilities Group Company 2022 2021 2022 2021 Sundry creditors 5,053 4,531 14 16 Liabilities from taxes and pensions 4,917 4,993 238 426 Dividends payable 143 107 115 102 Customer prepayments * 1,483 7,79 4 - - Personnel salaries payable 1,412 1,216 69 65 Accrued expenses – Other accounts payable 9,962 10,354 896 997 Total short-term liabilities 22,970 28,995 1,332 1,606 The fair value of the liabilities approaches the book value. * Customer prepayments concern contractual liabilities of the Group for the performance of the con- tractual agreements and the transfer of goods and/or services. The Group expects that the total ad- vances will be recognized as revenue in the financial year 2023. Revenues will be recognized in the financial results upon delivery of the order. Revenue corresponding to previous year’s customer advances has been recognized in the current year. Contents > Page 244 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.26.1 Dividend of Year 2021 The annual Ordinary General Meeting of the Company’s shareholders, which took place on May 25, 2022 approved the al- location (distribution) of profits for the financial year 2021 (01.01.2021-31.12.2021) and specifically it approved the distribu- tion (payment) of a total dividend of Euro 11,750,000.00 (gross amount) from the earnings of the particular financial year. Given that the Company, by virtue of the relevant decision of the Board of Direc- tors dated 24.09.2021, had already distrib- uted to its shareholders for the fiscal year 2021 an interim dividend of total amount of 4,750,000.00 Euros (gross amount), i.e. 0.109858877 Euros per share (gross amount, along with the increase that corresponds to the treasury shares the Company held on the cut-off date of the interim dividend), the General Meeting unanimously approved the distribution of the remaining amount of the dividend, and in particular of 7,000,000.00 Euros (gross amount), i.e. an amount of 0.1600312674 Euros per share (gross amount). The latter amount per share after the increase that corresponds to 659,853 treasury shares held by the Company and which are ex- cluded from the payment of dividend set- tled at 0.1624823628 Euros per share (gross amount). The Company’s shareholders registered in the records of the Dematerialized Securi- ties System (SAT) as of Tuesday, 31 May 2022 (record date), were those entitled to receive the above dividend. Monday 30 May 2022 was set as the ex-div- idend date according to the relevant arti- cle 5.2 of the Athens Exchange Regulation. The payment of dividend commenced on Friday, 3 June 2022, and was implemented through the Societe Anonyme under the name “PIRAEUS BANK S.A.”, according to the procedure stipulated by the Regula- tion of the Athens Exchange in effect. 3.25 Financial Derivative Products 3.26 Dividend The Group enters into foreign exchange futures -purchase and sale- contracts, to cover the exchange risk from collection of receivables and payments in foreign cur- rency towards suppliers. These contracts have different expiration dates, depending on the date of each expected collection or payment. The valuation of the Company’s open position as of 31 st December 2022 is as follows: Currency Open Position Pre-purchase / (Pre-sale) Amount (in $) Pre-purchase / (Pre-sale) Value (in €) Current Value in € Gain/(Loss) from Valuation USD Sale 6,500 6,378 6,094 284 Total 6,500 6,378 6,094 284 Contents > Annual Financial Report as of 31.12.2022 Page 245 of 268 Amounts in thousand Euro, unless stated otherwise The Group classifies as related parties the members of the Board of Directors, the di - rectors of the Companies divisions as well as the shareholders who own over 5% of the Company’s share capital (their related par - ties included). The commercial transactions of the Group with these related parties during the period 01.01.2022 – 31.12.2022 have been conduct - ed according to market terms and in the context of the ordinary business activities. The transactions with the Subsidiaries, Joint Ventures and Affiliated companies according to the IFRS 24 during the period 01.01.2022 – 31.12.2022 are presented below. 3.27 Transactions with Related Parties 3.26.2 Interim Dividend for the Year 2022 The Board of Directors of the Company during its meeting on 22 November 2022 approved the distribution of an interim dividend for the financial year 2022 based on the interim financial statements of the period 01.01.2022-30.06.2022. The interim dividend settled at 3,000,000.00 Euros (gross amount), i.e. 0.0685848289 Euros per share of the Company (gross amount), which after the increase that corresponds to the 751,396 treasury shares held by the Company and which are excluded from the payment of interim dividend, accord- ing to the law, amounted to 0.0697835797 Euros per share. The latter amount was also subject to withholding tax based on a rate of 5% in accordance with the provisions of Law 4646/2019 (Government Gazette A΄ 201/12.12.2019). Therefore, the finally paid amount of interim dividend for the year 2022 settled at 0.0662944007 Euros per share. Based on a relevant decision taken on 7 th of December 2022 by the meeting of the Company’s Board of Directors, the fol- lowing dates were determined: Monday 30 January 2023 was set as the ex- dividend date. The Company’s shareholders registered in the records of the Dematerialized Securi- ties System (SAT) as of Tuesday, 31 January 2023 (record date), were those entitled to receive the above interim dividend for the year 2022. The payment of the interim dividend com- menced on Friday, 3 February 2023, and was implemented through the paying Bank “PIRAEUS BANK S.A.” Income Group Company 01.01 – 31.12.2022 01.01 - 31.12.2021 01.01 – 31.12.2022 01.01 - 31.12.2021 Subsidiaries - - 5,785 5,664 Joint Ventures 7,061 5,917 102 119 Affiliated Companies 102 13 - - Total 7,163 5,930 5,887 5,783 * The Group’s revenues from joint ventures mainly refer to sales of goods. Contents > Page 246 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Expenses Group Company 01.01 – 31.12.2022 01.01 - 31.12.2021 01.01 – 31.12.2022 01.01 - 31.12.2021 Subsidiaries - - 163 84 Joint Ventures 572 486 - - Affiliated Companies 1,590 800 561 403 Total 2,162 1,286 724 487 Trade and other receivables Group Company 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Subsidiaries - - 1,775 1,297 Joint Ventures 1,386 1,195 - 7 Affiliated Companies 55 38 26 26 Total 1,441 1,233 1,801 1,330 Suppliers and Other Liabilities Group Company 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Subsidiaries - - 1,241 1,678 Joint Ventures 90 48 1 5 Affiliated Companies 56 92 33 69 Total 146 140 1,275 1,752 Long-term Liabilities Group Company 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Subsidiaries - - 283 284 Joint Ventures - - - - Affiliated Companies - - - - Total - - 283 284 In the context of the adoption of IFRS 16, the Company’s liabilities to Subsidiaries and Af- filiated companies include lease liabilities. The Company’s lease liabilities with related parties are analyzed as follows: Contents > Annual Financial Report as of 31.12.2022 Page 247 of 268 Amounts in thousand Euro, unless stated otherwise Company Liabilities from leases Initial balance 01.01.2022 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2022 Subsidiaries 2 (1) - - 1 Affiliated Companies 277 (120) - 9 166 Total 279 (121) - 9 167 Company Liabilities from leases Initial balance 01.01.2021 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2021 Subsidiaries 3 (1) - - 2 Affiliated Companies 20 (120) 368 9 277 Total 23 (121) 368 9 279 In addition, the depreciation of the Com- pany includes depreciation for assets with the right of use, relating to lease agree- ments with related parties, amounting to € 115 (2021: € 114). Also, the Group’s liabilities to affiliated companies include lease liabilities which are analyzed as follows: ‘Group Liabilities from leases Initial balance 01.01.2022 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2022 Affiliated Companies 559 (246) - 18 331 Total 559 (246) - 18 331 ‘Group Liabilities from leases Initial balance 01.01.2021 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2021 Affiliated Companies 21 (186) 708 16 559 Total 21 (186) 708 16 559 In addition, the depreciation of the Group includes depreciation for assets with the right to use, relating to lease agreements with related parties, amounting to € 227 (2021: € 182). The Group’s “subsidiaries” include all com- panies consolidated under “Thrace Plastics Group” via the full consolidation method. The “Joint Ventures” include those consoli- dated with the equity method. The Company has granted guarantees to banks against long-term debt of its sub- sidiaries. On 31 st December 2022, the out- standing amount for which the Company had provided guarantee settled at € 43,616 and is analyzed as follows. Contents > Page 248 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Guarantees for Subsidiaries 2022 Thrace Nonwovens & Geosynthetics Single Person S.A. 21,443 Thrace Plastics Pack SA 17,676 Thrace Polyfilms Single Person S.A. 4,497 Total 43,616 3.28 Remuneration of Board of Directors 3.29 Investments 3.29.1 Investments in companies consolidated with the full consolidation method BoD Fees Group Company 2022 2021 2022 2021 BoD Fees 4,797 4,970 1,664 1,812 The remuneration concerns the Boards of Directors of 20 companies in which 31 mem- bers participate and include salaries of the executive members of the Boards of Directors, other remuneration and benefits of both the executive and the non-executive directors. The Management reviews at least on an- nual basis whether there are indications for impairment in goodwill. On 31.12.2022, the Management reviewed all equity invest- ments with regard to any evidence of im- pairment. At the same time it followed the procedures described in note 2.6 with re- gard to the review for goodwill impairment and at the same time concluded that there is no indication of a need for impairment of participations in subsidiaries. Based on the evaluation of the Manage- ment, there is no indication of a need for impairment of investments in subsidiaries as of 31.12.2022. The value of the Company’s investments in the subsidiaries, as of 31 st December 2022, is as follows: Contents > Annual Financial Report as of 31.12.2022 Page 249 of 268 Amounts in thousand Euro, unless stated otherwise Companies consolidated with the full consolidation method 2022 2021 Don & Low LTD 37,495 37,495 Thrace Plastics Pack SA 15,507 15,507 Thrace Nonwovens & Geosynthetics Single Person SA 5,710 5,710 Synthetic Holdings LTD 11,728 11,728 Thrace Polyfilms Single Person SA 3,418 3,418 Total 73,858 73,858 3.29.2 Investments in companies consolidated with the equity method The following table presents the compa- nies in which the management is jointly controlled with another shareholder with the right to participate in their net assets. The companies are consolidated accord- ing to the Equity method in line with the provisions of IFRS 11. The parent Company holds direct business interest of 50.91% in Thrace Greenhouses SA with a value of € 3,615 and of 51% in Thrace Eurobent SA with a value of € 204 as at 31/12/2022. The company Thrace Greiner Packaging SRL is 50% owned by Thrace Plastics Pack SA whereas Lumite INC. is 50% owned by Syn- thetic Holdings LTD. Company Country of Activities Business Activity Percentage of Shareholding Thrace Greiner Packaging SRL Romania The company activates in the production of plastic boxes for food products and paints and belongs to the packaging sector. The company’s shares are not listed. 46.47% Lumite INC United States The company activates in the production of agricultural fab- rics and belongs to the technical fabrics sector. The company’s shares are not listed. 50.00% Thrace Greenhouses SA Greece The company activates in the production of agricultural prod- ucts and belongs to the agricultural sector. The company’s shares are not listed. 50.91% Thrace Eu- robent SA Greece The company activates in the manufacturing of waterproof products via the use of Geosynthetic Clay Liner – GCL, and belongs to the technical fabrics sector. 51.00% The company’s shares are not listed. The change of the Group’s Investments in the companies that are consolidated with the equity method is analyzed as follows: Contents > Page 250 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Investment in companies consolidated with the equity method THRACE GREINER PACKAGING SRL THRACE GREENHOUSES SA LUMITE INC THRACE EUROBENT SA Total Balance at beginning 01.01.2021 3,968 3,936 6,866 298 15,068 Gain / (losses) from joint ventures 1,141 333 1,253 43 2,770 Dividends (401) - - - (401) Foreign exchange differences and other reserves (64) 16 617 6 575 Balance at end 31.12.2021 4,644 4,285 8,736 347 18,012 Balance at beginning 01.01.2022 4,644 4,285 8,736 347 18,012 Gain / (losses) from joint ventures 1,069 449 790 217 2,525 Dividends (669) - (441) - (1,110) Foreign exchange differences and other reserves (3) - 497 - 494 Balance at end 31.12.2022 5,041 4,734 9,582 564 19,921 The financial statements of the companies are presented in the following tables: STATEMENT OF FINANCIAL POSITION THRACE GREINER PACKAGING SRL THRACE GREEN- HOUSES SA LUMITE INC THRACE EUROBENT SA 2022 2021 2022 2021 2022 2021 2022 2021 % of Shareholding 46.47% 46.47% 50.91% 50.91% 50% 50% 51% 51% ASSETS Property, Plant & Equipment 6,738 5,791 9,463 9,163 4,441 4,264 922 1,066 Inventories 2,979 4,139 239 181 14,372 12,555 1,107 931 Trade and other receivables 3,390 3,390 1,953 1,386 1,556 2,886 439 169 Other asset items - - 427 374 167 8 117 85 Cash 2,685 2,739 1,360 110 3,057 4,181 605 948 LIABILITIES Bank debt 1,931 2,684 2,811 1,731 2,371 2,345 895 1,035 Other liabilities 3,703 4,026 1,332 1,066 2,110 4,134 1,100 1,436 EQUITY 10,158 9,349 9,299 8,417 19,112 17,415 1,195 728 Contents > Annual Financial Report as of 31.12.2022 Page 251 of 268 Amounts in thousand Euro, unless stated otherwise STATEMENT OF COMPREHENSIVE INCOME THRACE GREINER PACKAGING SRL THRACE GREEN- HOUSES SA LUMITE INC THRACE EUROBENT SA 2022 2021 2022 2021 2022 2021 2022 2021 Turnover 22,815 21,099 9,424 8 ,111 31,750 31,059 6,994 6,218 Cost of sales (18,194) (16,102) (7,169) (6,104) (26,087) (26,296) (5,419) (5,241) Gross profit 4,621 4,997 2,255 2,007 5,663 4,763 1,575 977 Selling & Distribution expenses (890) (778) (872) (748) (2,209) (2,228) (812) (685) Administrative expenses (1,244) (1,185) (538) (506) (1,382) (1,193) (96) (70) Other (expenses) / income 3 (276) 265 93 91 1,491 (43) (42) Operating profit / loss 2,490 2,758 1,110 846 2,163 2,833 624 180 Financial result 22 (53) (97) (147) (119) (90) (33) (40) Profit/(loss) before Taxes 2,512 2,705 1,013 699 2,044 2,743 591 140 Taxes (360) (438) (131) (45) (467) (264) (125) (64) Profit/(loss) after Taxes 2,152 2,267 882 654 1,577 2,479 466 76 3.30 Commitments and Contingent Liabilities On 31 st December 2022 there are no signif- icant legal issues pending that may have a material effect in the financial position of the Companies in the Group. The letters of guarantee issued by the banks for the account of the Company and in favor of third parties (Greek State, sup- pliers and customers) amount to € 834. Contents > Page 252 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise 3.31 Fees of auditing firms During the financial year 2022, the total fees of the Company’s and Group’s external audi- tors, are analyzed as follows: Fees of auditing firms Group Company 2022 2021 2022 2021 Fees for auditing services 498 419 68 63 Fees for tax certificate 114 153 12 11 Fees for non-audit services 79 28 46 - Total 691 600 126 74 3.32 Financial risks The financial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable accounts, payable accounts and loans. The Group’s activities, in general, create several financial risks. Such risks include market risk (foreign exchange risk and risk from changes of raw materials prices), credit risk, liquidity risk and interest rate risk. 3.32.1 Risk of Price Fluctuations of Raw Materials The Group is exposed to fluctuations in the price of polypropylene (represents 49% approximately of the cost of sales), which are mainly faced by a similar change in the selling price of the final product. The possibility that the increase in the price of polypropylene cannot be fully passed on to the selling price, causes unavoidably the compression of margins. For this rea- son, the Company accordingly adjusts, to the extent it is feasible, its inventory policy as well as its commercial policy in general. Hence, in any case, the particular risk is deemed as relatively controlled. 3.32.2 Credit Risks The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause financial loss to the Group and the Company as a result of the breach of its contractual liabilities. The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the financial statements is the book value of their fi- nancial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required. In order to monitor credit risk, customers are grouped according to the category they belong to, their credit risk character- istics, the maturity of their receivables and any previous receivables that they have caused, taking into account future factors as well as the economic environment. Contents > Annual Financial Report as of 31.12.2022 Page 253 of 268 Amounts in thousand Euro, unless stated otherwise • Impairment The Group and the Company, in the finan- cial assets that are subject to the model of expected credit losses, include receivables from customers and other financial assets. The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all finan- cial assets. The expected credit losses are based on the difference between the contractual cash flows and the entire cash flows which the Group (or the Company) anticipates to receive. The difference is discounted by using an estimate concern- ing the initial effective interest rate of the financial asset. For the trade receivables, the Group and the Company applied the simplified approach of the accounting standard and calculated the expected credit losses based on the expected credit losses for the entire lifetime of these items. Regarding the remaining financial assets, the expected credit losses are being calcu- lated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the antici- pated credit losses for the entire life of the financial assets, which emanates from the probability of a default in the payment of the contractual obligations within the next 12-month period starting from the report- ing date. In case of a significant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. At the date of the preparation of the finan- cial statements, impairment of receivables from customers and other financial assets was made on the basis of the above. The following table presents an analysis of the maturity of customers at 31/12/2022. Maturity of Trade Receivables’ Balances 31.12.2022 Group Company 01 – 30 days 19,708 50 31 – 90 days 37,429 - 91 – 180 days 8,196 - 180 days and over 7,126 2,312 Subtotal 72,459 2,362 Provisions for doubtful receivables (7,690) (2,307) Total 64,769 55 The above amounts are expressed in terms of due days in the table below: Contents > Page 254 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Analysis of not past due/overdue trade receivables 31.12.2022 Group Company Receivables current 52,008 50 Overdue receivables 1 – 30 days 9,838 - Overdue receivables 31 – 90 days 3,015 - Overdue receivables above 91 days 7,598 2,312 Subtotal 72,459 2,362 Provisions for doubtful customer receivables (7,69 0) (2,307) Total 64,769 55 Maturity of Trade Receivables’ Balances 31.12.2021 Group Company 01 – 30 days 23,443 304 31 – 90 days 37,175 - 91 – 180 days 4,980 - 180 days and over 6,670 2,322 Subtotal 72,268 2,626 Provisions for doubtful receivables (7,721) (2,317) Total 64,547 309 With regard to uninsured receivables over- due more than 90 days, which the Group has classified as doubtful, relevant provi- sions have been made which are deemed as sufficient. Correspondingly, the amounts of maturity and past due for the financial year 2021 are presented in the following tables: Contents > Annual Financial Report as of 31.12.2022 Page 255 of 268 Amounts in thousand Euro, unless stated otherwise Analysis of not past due/overdue trade receivables 31.12.2021 Group Company Receivables current 53,323 297 Overdue receivables 1 – 30 days 9,492 7 Overdue receivables 31 – 90 days 2,639 - Overdue receivables above 91 days 6,814 2,322 Subtotal 72,268 2,626 Provisions for doubtful customer receivables (7,721) (2,317) Total 64,547 309 3.32.3 Liquidity risk Group 31.12.2022 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 21,357 19,051 222 - - 40,630 Other short-term liabilities 11, 324 10,367 1,279 - - 22,970 Short-term debt 3,658 8,735 14,596 - - 26,989 Liabilities from Leases (short-term portion) 86 383 498 - - 967 Long-term debt - - - 30,993 648 31,641 Liabilities from Leases (long-term portion) - - - 1,446 24 1,470 Other long-term liabilities - - - 174 - 174 Total 31.12.2022 36,425 38,536 16,595 32,613 672 124,841 Liquidity risk monitoring focuses on the management of cash inflows and outflows on a permanent basis, so that the Group has the ability to meet its cash liabilities and retain the cash reserves required for its operations. Liquidity is managed by maintaining cash and approved bank credit lines. At the date of preparation of the financial statements, unused approved bank credits were available to the Group, which are considered sufficient to handle any possible shortage of cash in the future. Short-term bank liabilities are renewed at maturity, as they are part of the approved bank credit lines. The following table presents the liabilities – disbursements according to their matu- rity dates. Contents > Page 256 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Company 31.12.2022 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 248 47 - - - 295 Other short-term liabilities 495 721 116 - - 1,332 Short-term debt 1,022 - - - - 1,022 Liabilities from Leases (short-term portion) 12 61 74 - - 147 Long-term debt - - - - - - Liabilities from Leases (long-term portion) - - - 76 - 76 Other long-term liabilities - - - 1 - 1 Total 31.12.2022 1,777 829 190 77 - 2,873 Group 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 29,665 25,484 292 - - 55,441 Other short-term liabilities 12,723 15,891 381 - - 28,995 Short-term debt 2,601 9,118 5,674 - - 17,393 Liabilities from Leases (short-term portion) 75 330 509 - - 914 Long-term debt - - - 33,610 - 33,610 Liabilities from Leases (long-term portion) - - - 1,941 120 2,061 Other long-term liabilities - - - 237 - 237 Total 31.12.2021 45,064 50,823 6,856 35,788 120 138,651 Contents > Annual Financial Report as of 31.12.2022 Page 257 of 268 Amounts in thousand Euro, unless stated otherwise Company 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 520 526 - - - 1,046 Other short-term liabilities 178 1,331 97 - - 1,606 Short-term debt - 1,519 - - - 1,519 Liabilities from Leases (short-term portion) 11 58 70 - - 139 Long-term debt - - - - - - Liabilities from Leases (long-term portion) - - - 208 - 208 Other long-term liabilities - - - - 1 1 Total 31.12.2021 709 3,434 167 208 1 4,519 Foreign Currency 2022 2021 Change of foreign currency against Euro USD GBP Other USD GBP Other Profit before tax +5% (333) 65 (18) (74) (32) 5 -5% 368 (72) 21 81 35 (6) Equity +5% (56) (881) (302) (218) (1,358) (222) -5% 62 974 334 241 1,500 246 * Note • Profit before Taxes are converted at the average exchange rates. • Equity is converted at the exchange rate at the closing date of each fiscal year. 3.32.5 Interest rate Risk The long-term loans of the Group have been granted by Greek and foreign banks and are mainly in Euro. Their repayment time varies, depending on the loan agree- ment and they are usually linked to Euribor plus margin. The Group’s short-term loans have been granted by various banks, with Euribor interest rate plus margin as well as Libor interest rate plus margin. The Group Management monitors the evolu- tion of the interest rates level and initiate ac- tions, to the extent possible, to retain or de- crease the spreads. At the same time, effort is being placed on liquidity management, with a target to maintain a rational debt balance, 3.32.4 Foreign exchange risk The Group is exposed to foreign exchange risks arising from existing or expected cash flows in foreign currency and investments that have been made in countries outside Greece. The management uses hedge instruments, mainly foreign currency for- ward contracts, to hedge the risks arising from changes in foreign exchange rates. Sensitivity analysis of the effect of exchange rate changes is given in the table below. Contents > Page 258 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise compared with Group’s sales volume, profitability level and its investment plans. It is estimated that a change in the average annual interest rate by 1% will result in a (charge) / improvement of Earnings before Tax as follows: Possible interest rate change Effect on Earnings before Tax Group Company 2022 2021 2022 2021 Interest rate increase 1% (610) (540) (1) (16) Interest rate decrease 1% 610 540 1 16 3.32.6 Capital Adequacy Risk The Group controls capital adequacy us- ing the Net Debt to Equity ratio and the Net Debt to EBITDA ratio. The Group’s ob- jective in relation to capital management is to ensure the ability for its smooth op- eration in the future, while providing ra- tional returns to shareholders and benefits to other parties, as well as to maintain an adequate capital structure so as to ensure a low cost of capital. For this purpose, it systematically monitors working capital in order to maintain the normal level of ex- ternal financing. Capital Adequacy Risk Group Company 2022 2021 2022 2021 Long-term debt 31,641 33,610 - - Long-term liabilities from leases 1,470 2,061 76 208 Short-term debt 26,989 17,393 1,022 1,519 Short-term liabilities from leases 967 914 147 139 Total debt 61,067 53,978 1,245 1,866 Minus cash & cash equivalents 39,610 63,240 1,427 137 Net debt 21,457 (9,262) (182) 1,729 EBITDA* 48,243 110,275 (338) (512) NET DEBT / EBITDA 0.44 (0.08) - - EQUITY 267,861 252,250 80,828 82,415 NET DEBT / EQUITY 0.08 (0.04) 0.00 0.02 * Concerns Total Operations ** Since 2018, the Company has transformed into a Holding Company and therefore the net debt to EBITDA ratio does not reflect the actual relation between the Company’s debt and its earnings. For this reason, going forward the Company does not monitor the particular ratio. It should be noted that the Company does not have any bank debt liabilities, while the balance of the debt liabilities reported in its Balance Sheet refers to an intragroup loan. Contents > Annual Financial Report as of 31.12.2022 Page 259 of 268 Amounts in thousand Euro, unless stated otherwise 2022 has been the first year in the post- pandemic era, which however was affect- ed by a series of macroeconomic and geo- political factors. The year at its beginning was marked by the war between Ukraine and Russia, a crucial event which in addi- tion to the huge humanitarian issue it cre- ated, it was a determining factor for the course of the broader European economy within the year. Furthermore, the post- pandemic era has been characterized by strong inflationary pressures, which have significantly affected the purchasing pow- er of households. The above factors formed new conditions in the market, clearly more difficult ones than initially expected, such as the follow- ing: (a) lower demand for goods and ser- vices, especially in the second half of the year, (b) high uncertainty, both for the level of demand and for energy sufficiency, (c) continuation of the already strong infla- tionary pressures, (d) interest rate hikes and consequent increase in financing costs for businesses and households. The above shaped an extremely difficult economic environment along with condi- tions of uncertainty regarding the course of economies and purchasing power internationally. I. Group’s Performance in the Financial Year 2022 In this highly difficult environment as de- scribed above and despite the unfavorable conditions that emerged, the Group man- aged to enter the post-pandemic era by posting enhanced profitability which was almost double the pre-pandemic levels. In particular, in terms of demand, the first half of the year evolved at satisfactory lev- els and the Group managed to successfully handle the increased costs and maintain profitability at quite high levels. Neverthe- less, the fourth quarter of 2022 proved to be particularly difficult, perhaps one of the most difficult ones that the industrial sector has encountered in recent years, as the combination of the parameters ana- lyzed above brought a large slowdown in demand over the last months of the year. Therefore, the following were observed in the fourth quarter of 2022: • Reduced demand for products in the construction sector. • Low demand for products related to the infrastructure sector and to the large-scale construction projects. • Decreased demand for most of the products of the agricultural sector. • Steady demand for products related to the packaging sector. • Almost zero demand for products re- lated to COVID-19. • Reduction in the cost of raw materials. • Strong pressures for decreases on sales prices, in all product categories. • Reduction of customer inventories due to the drop in raw materials prices and in view of the uncertainty over the course of the European economy. • Significantly increased energy costs in all countries of operation with signifi- cant fluctuations on a monthly basis. 3.33 Significant Events Macroeconomic environment, COVID-19 impact and Russia-Ukraine war Contents > Page 260 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise • Steadily rising transport costs, with only some de-escalation on specific routes. • Significantly increased cost of raw ma- terials and packaging materials. • Gradually increase of interest rates From a financial perspective, the Group, in terms of volumes and as a result of the reduced demand in the fourth quarter of the year, posted a relatively small drop by 5.5% compared to 2021. The turnover from continuing operations, as it was expected following the significantly lower demand for products related to COVID-19 pandem- ic but also due to the declining sale prices as a result of lower raw material prices in the second half of the year, posted a lim- ited decrease of 7.9% compared to 2021. In more specific terms, and despite the especially negative conditions and their impact on the level of demand across the globe, sales amounted to €394.4 million compared to €428.4 million in the previous year. Earnings before Taxes (EBT) from con- tinuing operations amounted to €32.1 mil- lion (compared to €83.9 in 2021), of which €22.2 million related to the traditional product portfolio (compared to € 32.1 in 2021), €5.3 million derived from sales of personal protection products (compared to earnings of €51.8 million in 2021), while there was a non-recurring financial income of €4.6 million (see note 3.9). Earnings before Taxes from the traditional product portfolio, as expected, dropped by 30.8%, compared to the corresponding level of the previous year. However, given the special conditions that prevailed in 2021 due to the outbreak of the pandemic, but also due to the also special conditions prevailing in 2022, due to the ongoing war conflict and the escalating inflationary pressures, it is extremely difficult to make a direct comparison between the two periods. On the other hand, compared to the pre- pandemic levels, i.e. the year 2019, which is more appropriate for direct comparison, the Earnings before Taxes from the tradi- tional product portfolio in 2022 posted an increase of 166% (€22.2 million compared to €8.3 million in 2019). The above devel- opment demonstrates the significantly in- creased profitability of the Group, despite the especially unfavorable conditions that prevailed in the global market during 2022 and the substantially higher costs of raw materials, energy and transportation. Therefore, it is now clear that despite the particularly difficult conditions prevail- ing in the global economy, the Group is in strong position to achieve stable, sustainable and significantly higher recurring profitability compared to pre-pandemic levels. Furthermore, this achievement was realized in very different and especially negative conditions com- pared to the previous years, demonstrat- ing the Group’s ability to adapt to the new conditions emerging each time, by dem- onstrating both flexibility and resilience. In this context, the Group through the in- vestment and restructuring plan that took place over the previous years has man- aged to set new performance standards in terms of financial results, even in a con- stantly difficult economic environment, creating new prospects for the future. These prospects can be further enhanced by the time the energy and inflationary cri- sis de-escalates. Regarding the liquidity levels of the Group and the trading cycle of the subsidiaries, there was no negative effect due to the difficult conditions observed during the period under consideration. At the same Contents > Annual Financial Report as of 31.12.2022 Page 261 of 268 Amounts in thousand Euro, unless stated otherwise time, the implementation of the Group’s planned as well as extraordinary invest- ments progressed smoothly. Investments reached €40 million in 2022 approximately, on a cash basis, consisting of investments mainly in the Group’s facilities in Greece, but also in the other countries of opera- tion, and being financed to a significant extent with own funds. It is noted that the FY2022 investments have been part of the Group’s extensive investment plan spanning the 3-year period 2022-2022 and amounting to ap- proximately €100 million. The plan aims to achieve volume increases, cost reduc- tion and stronger competitiveness, while improving the product mix, enhancing the recycling process and ensuring sus- tainable development. On the other hand, during the last months of the year, as ex- pected, there was an improvement at the level of working capital. As a result of the above, the Group’s Net Debt at the end of 2022 amounted to €21.5 million, posting a drop by approximately €4.2 million, as compared to the Net Debt of the 9months 2022 period. II. Measures taken to reduce the impact of the pandemic The Group’s Management continues to closely monitor the developments related to the pandemic crisis, despite the signifi- cantly improving conditions, and to adjust its plans based on the revised health pro- tocols as required by the various pertinent authorities in each country. III. Prospects of the Group Regarding the prospects for the year 2023, the Management closely monitors the macroeconomic developments, on a glob- al level, which are still characterized by inflationary trends thus affecting all cost items that constitute the industrial sector’s cost base. On the other hand, there is also evidence of some de-escalation in the pric- es of primary and secondary materials and of transportation costs. At the same time, demand remains at relatively low levels, having however recovered from the levels experienced in the last months of 2022. For the first quarter of 2023, the Group’s Management monitors and adapts to the changes taking place at the macroeco- nomic level, making an effort to achieve the best possible financial performance, while simultaneously managing the inher- ent business risks. However, the economic environment remains difficult due to the low demand, persistent inflation levels, high energy costs and also high financing costs. However, for the first quarter of the year 2023, the Group’s Management antici- pates that a significant profitability will be achieved, which demonstrates the Group’s ability, despite the intense and difficult market environment, to remain focused on its ultimate goals. Therefore, profitability in terms of EBITDA (Earnings before Inter- est, Taxes, Depreciation and Amortization) of the Group from the traditional product portfolio for the first quarter of 2023 will be at the same levels approximately with the EBITDA profitability of the first quar- ter of 2022. This development is indeed satisfactory in view of the current market conditions (It is noted that according to the relevant corporate announcement, the Earnings before Taxes (EBT) in the first quarter of 2022 from personal protection products related to COVID-19 had amount- ed to €4.3 million, while it is estimated that also at an EBITDA level in the first quarter of 2022, the favourable effect was approxi- mately the same). Contents > Page 262 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Regarding the prospects for the next year, the Group’s Management is constantly contemplating ways to mitigate, as far as possible, the negative consequences of the ongoing economic crisis experienced in Europe, but also at an international level. Despite the unfavorable market conditions and the overall uncertainty, which makes any attempt to estimate the course of next year rather difficult, there are very positive prospects for the Group. Thrace Group is now, more than ever, capable of capitaliz- ing on the significant recurring profitabili- ty of the year 2022, but also on the extend- ed investment plan that took place in the past years, with a target to maintain and further enhance the Group’s profitability. Given that the current conditions in the global market place create a lot of uncer- tainty, making any forecast concerning the production / commercial activity and the financial results of the Company and the Group precarious, the Management of the Group on the other hand strongly be- lieves that neither the Group nor any of its business activities face a possible threat of interruption whatsoever (“going concern” principle). IV. Climate issues The Group recognizes the risks and im- pacts that may arise in its business activ- ity due to the climate crisis and the energy transition, which may affect its production process and activities, while at the same time has identified great opportunities that are emerging through the adoption of the principles of circular economy, the use of recycled raw material and the invest- ment in renewable energy sources. In order to mitigate the risks arising from climate change, but also to take advantage of the opportunities that arise in order to achieve positive financial results for itself and the environment in which it operates, the Group is constantly adjusting its busi- ness model, in order to constantly reduce its environmental footprint. It achieves this through recording direct and indirect greenhouse gas emissions, reducing ener- gy consumption in production processes, self-production and use of energy from renewable sources (solar, geothermal and hydroelectric), reducing the use of natural resources through the use of recycled raw material and proper waste management. In addition, it focuses on the development of innovative and sustainable products and services, applying the principles of the circular economy. Therefore, it has established and commu- nicated relevant principles and policies, while it has formulated a detailed strategic plan of specific actions, which are imple- mented with measurable positive results. More details are set out in the Report of Non-Financial Information (Section 12), as well as in the link below: https://www.thracegroup.com/gr/en/ sustainability/ V. Expected Credit Losses There are no expected credit losses as a result of the current conditions and cir- cumstances. In any case, according to the established policy, a big part of the com- panies’ sales remain insured, while addi- tional measures have been taken to ensure the Group carries out transactions with reliable customers (credit risk assessment, credit scoring, advances, etc.). More infor- mation on credit risk can be found in note 2.3.1.1 of financial statements. Contents > Annual Financial Report as of 31.12.2022 Page 263 of 268 Amounts in thousand Euro, unless stated otherwise The Board of Directors of the Company, during its meeting of 21/02/2022, ap- pointed Mr. Michael Psarros of George as Head of the Department (Unit) of Regula- tory Compliance and Risk Management. Mr. Psarros has been working in the Group since 2010. He is a graduate of the Universi- ty of Patras and the University of Leicester and has worked for 21 years as an internal auditor, gaining extensive experience in the areas of regulatory compliance and risk management. Mr. Michael Psarros will assume his duties as Head of the Regula- tory Compliance and Risk Management Department (Unit) from 24.02.2022. Appointment of the Head of Regulatory Compliance and Risk Management Department Annual Ordinary General Meeting of the Company’s shareholders Direct Impact of the War Conflict on the Financial Results of the Group The war outbreak after the Russian military invasion of Ukraine creates geopolitical in- stability with adverse macroeconomic con- sequences. These consequences have been evident for all companies across the various economies on a day-to-day basis and are mainly related to the energy cost and the price increase in a series of raw materials and products. The above conditions cre- ated within the year 2022 an environment of great uncertainty affecting the level of demand especially in Europe. The Group does not have significant direct business activities in Ukraine and in Russia, i.e. in the areas directly affected by the war. Further- more, the overall exposure to Ukraine and Russia is minimal. Based on the financial results of 2022, sales in these two countries stood at 0.2% of the Group’s total turnover (for 2021, corresponding sales had stood at 0.6% of total Group sales). Therefore, no direct material impact is expected on the financial performance of the Group, given the non-existence of business activity in the specific areas as far as customers sales are concerned. However, the effects on the Group’s activities from the negative devel- opments, following the war conflict, in the energy sector, from the wider macroeco- nomic uncertainty and from the high infla- tion pressures with a focus on the abruptly rising energy costs, comprise factors which negatively affect the financial performance of the Group and specifically its cost struc- ture. The Group’s Management closely monitors all the above developments and has taken actions accordingly and in order to effectively deal with issues concerning the trading cycle and its cost base, to the extent possible. The Annual Ordinary General Meeting of the Company’s shareholders, which took place on May 25, 2022 remotely in real time via videoconference, approved the follow- ing among others: A) the General Meeting unanimously ap- proved the allocation of results for the financial year 2021 (01.01.2021-31.12.2021) and specifically it approved the distribution of a total dividend of Euro 11,750,000.00 (gross amount) from the earnings of the particular financial year. Given that the Company, by virtue of the relevant decision of the Board of Directors Contents > Page 264 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise dated 24.09.2021, had already distrib- uted to its shareholders for the fiscal year 2021 an interim dividend of total amount of 4,750,000.00 Euros (gross amount), i.e. 0.109858877 Euros per share (gross amount, along with the increase that corresponds to the treasury shares the Company held on the cut-off date of the interim dividend), the General Meeting unanimously ap- proved the distribution of the remaining amount of the dividend, and in particular of 7,000,000.00 Euros (gross amount), i.e. an amount of 0.1600312674 Euros per share (gross amount). The latter amount per share after the increase corresponding to 659,853 treasury shares held by the Company and which are excluded from the payment of dividend, settled at 0.1624823628 Euros per share (gross amount). The Company’s shareholders registered in the records of the Dematerialized Securi- ties System (SAT) as of Tuesday, 31 May 2022 (record date), were those entitled to receive the above dividend. Monday 30 May 2022 was set as the ex-dividend date according to the rel- evant article 5.2 of the Athens Exchange Regulation. The payment of dividend commenced on Friday, 3 June 2022, and was implemented through the Societe Anonyme under the name “PIRAEUS BANK S.A.”, according to the procedure stipulated by the Regulation of the Athens Exchange in effect. B) the General Meeting approved by major- ity the Remuneration Report of the closing year 2021 (01.01.2021-31.12.2021), which was prepared in accordance with the provi- sions of article 112 of Law 4548/2018. The Report contains a comprehensive overview of the total remuneration of the members of the Board of Directors (executive and non-executive) and explains how the Re- muneration Policy was implemented by the Company for the immediately preceding financial year. The decisions of the General Meeting of Shareholders are posted on the Company’s website at the link https://www.thrace- group.com/gr/en/general-meetings/ Issuance of Tax Certificate for the Fiscal Year 2021 in accordance with article 65 A of Law 4174/2013 Following the special tax audit carried out for the financial year 2021 by the statutory external auditors in accordance with article 65A of Law 4174/2013, both on the Compa- ny and its subsidiaries “Thrace Nonwovens & Geosynthetics S.A.”, “Thrace-Polyfilms S.A.”, “Thrace Plastics Pack S.A.”, “Thrace Eurobent S.A.” and “Thrace Greenhouses S.A.”, the relevant tax certificates were is- sued with an unqualified opinion. Liquidation and permanent Elimination of Subsidiary With the decision dated 09/09/2022, the Hong Kong business registry approved the permanent elimination of the Group’s subsidiary, Thrace Asia Ltd. Thrace Asia operated as a sales office of Thrace Nonwovens & Geosynthetics Single Person SA in the market of China, with ex- tremely limited activity in recent years, as most of the sales in the Asian market are made directly by Thrace Nonwovens & Ge- osynthetics Single Person SA. Therefore, the Group’s Management decided to close the above sales office. The elimination did not affect the results of the Group and it only had an impact on the results of sub- sidiary SAEPE LTD. Contents > Annual Financial Report as of 31.12.2022 Page 265 of 268 Amounts in thousand Euro, unless stated otherwise Interim Dividend for the Year 2022 The Board of Directors of the Company during the meeting of November 22, 2022 approved the distribution of an in- terim dividend for the financial year 2022 based on the interim financial statements for the period 01.01.2022-30.06.2022. The Interim dividend amounted in total to 3,000 thousand Euros (gross amount), i.e. 0.0685848289 Euros per share of the Company. The above amount through the increase corresponding to the 751,396 treasury shares held by the Company and which are not entitled to an interim divi- dend, settled at 0.0697835797 Euros per share and was subject to a withholding tax of 5%, in accordance with the provisions of Law 4646/2019 (Government Gazette A’ 201/12.12.2019). Therefore, the final amount paid as Interim dividend for the year 2022 amounted to 0.0662944007 Eu- ros per share. Τhe Board of Directors of the Company, during its meeting of December 7 th , 2022 set the following dates: Monday, January 30, 2023 as the cut-off date for the interim dividend, Tuesday, January 31, 2023 as the date of determination of the benefi- ciaries to the above dividend (record date), and Friday, February 3, 2023 as the pay- ment commencement date. The payment of the interim dividend was made through the paying Bank “PIRAEUS BANK SA”. The Company following the relevant noti- fication to the Company from March 10 th , 2023, announced the following amend- ments / developments on March 9, 2023: 1. Mr. Konstantinos Chalioris, shareholder and Chairman of the Board of Directors of the Company, transferred from his individual share, to two “Joint Investor Shares” (KEM), the first one jointly cre- ated with his son Alexandros Chalioris and the second one jointly created with his son Stavros Chalioris (himself be- ing the first beneficiary in both “Joint Investor Shares”), a total of 18,000,983 common registered shares with vot- ing rights, i.e. a percentage of 41.153% of a total of 43,741,452 common regis- tered shares with voting rights of the Company. However, following the above, there was absolutely no change in the num- ber and percentage of shares and vot- ing rights controlled by Mr. Konstan- tinos Chalioris, who holds a total of 18,936,558 common registered shares with voting rights of the Company (and the same number of voting rights) a percentage of 43.292%. More spe- cifically, he holds 18,000,983 common registered shares through the afore- mentioned “Joint Investor Share” and 935,575 common registered shares with voting rights (percentage 2.139%) through his Personal Investment Account. 2. Mr. Stavros Chalioris, son of Kon- stantinos, due to his participation in the aforementioned “Joint Investor Share” (which he holds jointly with 3.34 Significant events after the Balance Sheet Date Announcement of Regulated Information in accordance with Law 3556/2007 Contents > Page 266 of 268 Annual Financial Report as of 31.12.2022 Amounts in thousand Euro, unless stated otherwise Konstantinos Chalioris) holds 9,000,491 common registered shares of the Com- pany (percentage 20.577%), while he already holds 212,071 common reg- istered shares with voting rights (per- centage 0.484%) in his Personal Invest- ment Account and, 3. Mr. Alexandros Chalioris, son of Kon- stantinos, due to his participation in the aforementioned “Joint Investor Share” (which he holds jointly with Konstantinos Chalioris) holds 9,000,492 common registered shares of the Com- pany (percentage 20.577%), while he already holds 212,071 common reg- istered shares with voting rights (per- centage of 0.484%) in his Personal In- vestment Account. Proposed Dividend for the Year 2022 The Board of Directors of the Company, with its meeting of 24.4.2023, unanimously decided to propose to the Annual Ordi- nary General Meeting of shareholders the approval of the distribution (payment) of the profits of the fiscal year that ended on 31.12.2022 and in particular to propose the distribution (payment) to the share- holders of a dividend of a total amount of 11,300,000.00 Euros (gross amount), i.e. 0.2583361887 Euros per share (gross amount) from the profits of the fiscal year 2022 (01.01.2022-31.12.2022), but also from profits of previous years. Given that the Company, pursuant to the relevant decision of the Board of Directors dated 22.11.2022, has already distributed to the shareholders the interim dividend for the fiscal year 2022 of a total amount of 3,000,000.00 Euros (gross amount), i.e. 0.0697835797 Euros per share (gross amount), the Board of Directors will sub- sequently propose to the Annual Ordinary General Meeting of shareholders the dis- tribution of the remaining amount of the dividend, and in particular the amount of 8,300,000.00 Euros (gross amount), i.e. 0.1897513599 Euros per share (gross amount), which gross amount per share will be increased by the amount corre- sponding to the treasury shares that the Company will hold on the dividend cut- off date (and which treasury shares are not entitled to the payment of the divi- dend, by the provisions of article 50 of Law 4548/2018, as applicable.) The Annual Ordinary General Meeting of shareholders will take the final decision concerning the approval of the above proposal. There are no other events after the Balance Sheet date that have a significant impact on the financial statements of the Group. Contents > Annual Financial Report as of 31.12.2022 Page 267 of 268 Amounts in thousand Euro, unless stated otherwise The Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, were approved by the Board of Directors on 24 April 2023 and are signed by the representatives of such. The Chairman of the BoD The Chief Executive Officer The Chief Financial Officer The Chief Accountant KONSTANTINOS ST. CHALIORIS DIMITRIOS P. MALAMOS DIMITRIOS V. FRAGKOU FOTINI K. KYRLIDOU ID NO. AM 919476 ID NO. ΑΟ 000311 ID NO. ΑΗ 027548 ID NO. ΑΚ 104541 Accountant Lic. Reg. No. 34806 Α’ CLASS V. ONLINE AVAILABILITY OF THE FINANCIAL REPORT The Annual Financial Statements of the Company, the Audit Report of the Chartered Auditor- Accountant and the Management Report of the Board of Directors, as well as the Annual Fi- nancial Statements, the reports of the Chartered Auditor-Accountant and the Reports of the Board of Directors of the companies that are incorporated in the consolidated financial state- ments of “THRACE PLASTICS CO SA” are registered on the internet at www.thracegroup.gr. General Commerce Reg. No. 12512246000 Domicile: Magiko, Municipality of Avdira Xanthi Greece Offices: 20 Marinou Antypa Str. 17455 Alimos, Attica Greece www.thracegroup.com 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