Flexopack S.A.

Annual Report (ESEF) • Apr 12, 2023

FLEXOPACK SA - 213800SD9V875QXDRR32 - 2023 213800SD9V875QXDRR32 2022-01-01 2022-12-31 213800SD9V875QXDRR32 2022-12-31 213800SD9V875QXDRR32 2021-12-31 213800SD9V875QXDRR32 2021-01-01 2021-12-31 213800SD9V875QXDRR32 2020-12-31 213800SD9V875QXDRR32 2020-12-31 ifrs-full:IssuedCapitalMember 213800SD9V875QXDRR32 2020-12-31 ifrs-full:SharePremiumMember 213800SD9V875QXDRR32 2020-12-31 ifrs-full:OtherReservesMember 213800SD9V875QXDRR32 2020-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800SD9V875QXDRR32 2020-12-31 ifrs-full:RetainedEarningsMember 213800SD9V875QXDRR32 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:OtherReservesMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 213800SD9V875QXDRR32 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:IssuedCapitalMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:SharePremiumMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:OtherReservesMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800SD9V875QXDRR32 2021-12-31 ifrs-full:RetainedEarningsMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:IssuedCapitalMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:SharePremiumMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:OtherReservesMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:RetainedEarningsMember 213800SD9V875QXDRR32 2022-01-01 2022-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:IssuedCapitalMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:SharePremiumMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:OtherReservesMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:RetainedEarningsMember 213800SD9V875QXDRR32 2022-12-31 ifrs-full:EquityAttributableToOwnersOfParentMemberiso4217:EUR FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 1 TZIMA LOCATION – 194 00 KOROPI ATTICA, GREECE General Commercial Registry No. 582101000 Annual Financial Report for financial year 2022 (January 1st 2022 - December 31st 2022) According to article 4 of L. 3556/2007 And the relevant authorized and executive decisions issued by the Board of Directors of the Hellenic Capital Market Commission FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 2 CONTENTS CHAPTER 1: Statements by Representatives of the Board of Directors ....................................................... 5 CHAPTER 2: Annual Report by the Board of Directors (including the Corporate Governance Statement), for financial year 2022 .................................................................................................................................. 6 CHAPTER 3: Independent Auditor’s Report ..................................................................................... 91 CHAPTER 4: Annual Financial Statements ............................................................................................... 98 Statement of Financial Position ........................................................................................................... 99 Statement of Comprehensive Income ................................................................................................ 101 Consolidated Statement of Changes in Equity .................................................................................... 102 Statement of Cash Flows .................................................................................................................. 104 1. General Information on the Company and Group ........................................................................... 105 2. Basis for the preparation of the financial statements ...................................................................... 105 2.1 Adoption of New and Revised International Standards .................................................................. 106 2.2 Significant accounting judgments, estimations and assumptions ................................................... 108 3. Basic accounting principles ........................................................................................................... 110 3.1 Consolidation ............................................................................................................................. 110 3.1.1 Structure and consolidation method of companies ..................................................................... 111 3.2 Operation and presentation currency and foreign currency translation ........................................... 113 3.3 Tangible fixed assets .................................................................................................................. 113 3.4 Goodwill .................................................................................................................................... 113 3.5 Intangible assets ........................................................................................................................ 114 3.6 Impairment of Assets ................................................................................................................. 114 3.7 Trade receivables and other receivables ...................................................................................... 115 3.8 Inventories ................................................................................................................................ 115 3.9 Cash & cash equivalents ............................................................................................................. 115 3.10 Suppliers and related liabilities .................................................................................................. 115 3.11 Financial Assets and Financial Liabilities ..................................................................................... 115 3.12 Financial Derivatives ................................................................................................................ 117 3.13 Share capital ............................................................................................................................ 118 3.14 Loans ...................................................................................................................................... 118 3.15 Income tax (Current and deferred) ............................................................................................ 118 3.16 Employee benefits .................................................................................................................... 119 3.17 Government Grants .................................................................................................................. 119 3.18 Provisions for contingent claims-liabilities .................................................................................. 119 3.19 Recognition of income .............................................................................................................. 119 3.20 Leases ..................................................................................................................................... 120 3.21 Dividend distribution ................................................................................................................ 121 3.22 Earnings per Share ................................................................................................................... 121 4. Segment reporting ....................................................................................................................... 121 5. Risk Management ........................................................................................................................ 122 6. Notes on the Financial Statements ................................................................................................ 131 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 3 6.1 Tangible fixed assets .................................................................................................................. 131 6.2 Goodwill .................................................................................................................................... 133 6.3 Intangible assets ........................................................................................................................ 134 6.4 Participations in Subsidiaries ....................................................................................................... 135 6.5 Participations in associate companies .......................................................................................... 136 Participations of the Company in associate (related) companies are analyzed as follows . ..................... 136 6.6 Other long-term receivables ........................................................................................................ 136 6.7 Inventories ................................................................................................................................ 137 6.8 Trade receivables ....................................................................................................................... 137 6.9 Other receivables ....................................................................................................................... 139 6.10 Cash & cash equivalents ........................................................................................................... 139 6.11 Equity ...................................................................................................................................... 139 6.11.1 Share Capital and Share Premium .......................................................................................... 139 6.11.2 Reserves ............................................................................................................................... 140 6.11.3 Retained earnings ................................................................................................................. 144 6.12 Deferred tax assets and liabilities .............................................................................................. 144 6.13 Provision for staff indemnities due to retirement ....................................................................... 146 6.14 Right of Use Assets ................................................................................................................. 148 6.15 Long-term and short-term loans ................................................................................................ 149 6.16 Other provisions ....................................................................................................................... 152 6.17 Suppliers and other liabilities .................................................................................................... 153 6.18 Liabilities from income tax ........................................................................................................ 153 6.19 Turnover ................................................................................................................................. 154 6.20 Analysis of Expenses per category ............................................................................................. 154 6.21 Employee Benefits .................................................................................................................... 155 6.22 Other Operating Income and Expenses ...................................................................................... 156 6.23 Financial Income and Expenses ................................................................................................. 156 6.24 Other Financial Results ............................................................................................................. 157 6.25 Income Tax ............................................................................................................................. 158 6.26 Contingent Receivables - Liabilities ............................................................................................ 159 6.26.1 Information regarding assumed liabilities ................................................................................ 159 6.26.2 Tax un-audited financial years ................................................................................................ 159 6.26.3 Information regarding contingent receivables .......................................................................... 160 6.27 Current liens ............................................................................................................................ 160 6.28 Auditors’ fees .......................................................................................................................... 161 6.29 Transactions with related parties ............................................................................................... 161 6.30 Earnings per share ................................................................................................................... 164 6.31 Dividends ................................................................................................................................ 165 6.32 Fair value measurement ........................................................................................................... 165 6.33 Reconciliation of cash flows from financing activities .................................................................. 166 6.34 Stock Option Plan and subsequent share capital increase of the company .................................. 167 6.35 Events after the reporting date of the financial statements ......................................................... 168 CHAPTER 5 : Online availability of financial information ......................................................................... 170 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 4 APPENDIX: Report of the Audit Committee for the year 2022 ............................................................. 171 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 5 CHAPTER 1: Statements by Representatives of the Board of Directors (According to article 4 par. 2 of L. 3556/2007, as is in effect) 1. Georgios Ginosatis of Spyridonos, resident of Koropi Attica, 6 Karaiskaki Str., Chairman of the Board of Directors. 2. Stamatios Ginosatis of Spyridonos, resident of Koropi Attica, 204 Vas. Konstantinou Str., Deputy Chief Executive Officer. 3. Asimina Ginosati of Dimitrios, resident of Koropi Attica, 204 Vas. Konstantinou Str., Executive Member of the Board of Directors. **** We, the following signatories, under our capacity as mentioned above, according to the stipulations by law (article 4 par. 2, case c, of Law 3556/2007) and specifically pursuant to the relevant special decision by the Board of Directors of the Société Anonyme Company with the name “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY” and with the distinctive title “FLEXOPACK S.A.”, (hereinafter the “Company” or “FLEXOPACK” ), hereby state and confirm that to our knowledge: (a) The annual Financial statements of the Company for financial year 2022 (1.1.2022 - 31.12.2022), individual and consolidated, which were prepared in accordance with the current accounting standards in effect, accurately present the assets and liabilities, the equity and results for the period of the Company, as well as of the companies included in the consolidation and considered aggregately as a whole, and (b) the annual Report of the Board of Directors of the Company depicts in true manner the most significant events occurring during the financial year 2022 (01.01.2022-31.12.2022), their effect on the annual Financial Statements, including the description of the major risks and uncertainties which the Company faces, the important changes taking place between the Company and its related parties (as they are defined by IAS 24), as well as the development of the activities, the performance and position of the Company and the companies included in the consolidation regarded as a whole. Koropi, 11 April 2023 The parties of the statement Georgios Ginosatis ID NO. ΑΕ 153990 Stamatios Ginosatis ID NO. S 500301 Asimina Ginosati ID NO. ΑΒ 243605 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 6 CHAPTER 2: Annual Report by the Board of Directors (including the Corporate Governance Statement), for financial year 2022 The current Annual Management Report by the Board of Directors (hereinafter for the sake of brevity the “Report” or “Annual Report”), refers to the financial year 2022 (01.01.2022 – 31.12.2022) was prepared and is in line with the relevant provisions of 4548/2018 "Reform of the Law of Societe Anonymes" (Government Gazette Α΄ 104 / 13.06.2018) as it is in force today, and also with the provisions of Law 3556/2007 (Gove rnment Gazette 91Α/30.04.2007) and especially the article 4, and with the relevant, as stated by law, executive decisions issued by the Hellenic Capital Market Commission and specifically Decisions No. 1/434/2007 and 8/754/14.04.2016,as the latter is in force after its amendment by the decision with number 12A / 889 / 31.08.2020 of the Board of Directors of the Hellenic Capital Market Commission. The present Report includes in synopsis and in understandable, essential and comprehensive manner all sub- sections required, according to the above regulatory framework, and depicts in clear and true manner all the relevant by law information, so as to create an essential and in depth sum of information for the activities during the period under consideration of the Societe Anonyme under the name “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY” (which in the current Report will be called for the sake of brevity as “Company” or “FLEXOPACK”) as well as of FLEXOPACK Group. Given the fact that the Company prepares consolidated and non-consolidated (separate) Financial Statements, the present Report is exclusive, with however as its basic and primary reference the Company’s consolidated financial data and those of its related companies. References to non-consolidated financial data in the following analysis, are made in specific points deemed reasonable or necessary by the Company’s Board of Directors, for the better understanding of the Report’s contents and also for the more effective provision of information towards the investment community. The subsidiaries and related companies, which are included in the consolidated Financial Statements and the percentages of the Company's participation in these entities, are mentioned in note 3.1.1 of the annual Financial Statements. The present Report is included in total with the annual Financial Statements (separate and consolidated) of the year 2022 and the other required by law information and statements in the Annual Financial Report which concerns the financial year 2022. The sub-sections of the Report and the content of such are as follows: SECTION A’ Significant events of financial year 2022 The significant events that occurred during the closing financial year 2022 as well as their impact on the annual Financial Statements have as follows: 1. Annual Ordinary General Shareholders’ Meeting of the Company On Friday 10 June 2022, at 15:00, the Annual Ordinary General Meeting of the Company's shareholders was FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 7 held at the Company's headquarters (Koropi, Attica, Tzima location, Hephaestus Street), which was attended in person or by a representative, by shareholders representing 9,860,378 common registered shares and equal number of voting rights, i.e. 84.29% of the total 11,698,574 shares and equal number of voting rights of the Company. It is noted that for 96,450 common, registered shares the representation and voting rights had been suspended, according to the provisions of article 50 paragraph 1 sec. A of Law 4548/2018, as own (treasury) shares of the Company and the said shares were not calculated for the formation of a quorum. The Annual General Meeting of the Company’s shareholders proceeded with the following decisions on the subjects of the daily agenda. With regard to the 1st issue , the General Meeting unanimously approved the Annual Financial Statements (separate and consolidated) relating to the financial year 2021 (01.01.2021 - 31.12.2021) and, in overall, the annual Financial Report for that year, which was prepared in accordance with the provisions of the current regulatory framework and the requirements of the European Single Electronic Format and was published by the Company on the latter’s legally registered webpage in GEMI (General Electronic Commercial Registry) ( http://www.flexopack.com ), and via dispatch to the website of the Organized Market where the Company’s shares are traded ( http://www.athexgroup.gr ), as well as to the Hellenic Capital Market Commission. With regard to the 2nd issue , it unanimously approved the annual Management Report of the Board of Directors, which is entirely included in the Minutes of the Company’s Board of Directors of 19 th April 2022, as well as the Audit Report as of 20 th April 2022, of the Chartered Auditor-Accountant of the Company, Mr. Manolis Michalios (SOEL Registration Number 25131), regarding the annual financial statements relating to the financial year 2021 (01.01.2021-31.12.2021). With regard to the 3rd issue , for which no resolution was required, the Company submitted and presented to the Shareholders’ Meeting, in accordance with the provisions of article 44 par. 1, section h of Law 4449/2017, as it is valid after its amendment by the article 74, par. 4 of Law 4706/2020, the Annual Report of the Audit Committee for the financial year 2021 (01.01.2021-31.12.2021), in order to fully, adequately and thoroughly inform the shareholders regarding the work of the Committee during the closing fiscal year. With regard to the 4th issue , the Meeting unanimously approved the allocation and distribution of the results of the fiscal year ended 31.12.2021 and in particular approved on the one hand the formation of the Company's ordinary and special reserves and on the other hand the distribution (payment) to the shareholders of the Company of a total amount of 1,591,006.06 Euros (gross amount), i.e. amount of 0.136 Euros per share (gross amount) from the earnings of the closing year 2021 (01.01.2021-31.12.2021). From the above amount, meaning the dividend paid, the proportional tax of 5% will be withheld and therefore the total amount of the dividend settled at 0.1292 Euro per share. It is pointed out that the 96,450 treasury shares held by the Company were excluded from the payment of dividends and consequently the amount of the dividend corresponding to the treasury shares increased the above dividend of all other shares in accordance with the article 50 of Law 4548/2018. Beneficiaries of the above dividend were appointed the shareholders of the Company registered in the files of the Dematerialized Securities System (DSS) on Tuesday, July 5, 2022 (record date). FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 8 Dividend cut-off date was set for Monday, July 4, 2022, in accordance with article 5.2 of the Athens Stock Exchange Regulations. The payment of the dividend started on Monday, July 11, 2022 and was carried out based on the procedure provided by the Regulation of the Athens Stock Exchange by the paying Bank "NATIONAL BANK OF GREECE SA". Simultaneously with the same unanimous decision, the General Meeting of Shareholders authorized the Board of Directors of the Company to handle any relevant issue for the proper and timely implementation of the above-mentioned decision on the distribution (payment) of dividend. With regard to the 5th issue , the Meeting unanimously approved, following a voting from the shareholders based on name, the general administration performed by the members of the Board of Directors during the year ended on 31.12.2021 and the discharge of the Auditors of the Company from any liability stemming from their actions and the overall management of the closing financial year of 2021 (01.01.2021-31.12.2021), and the annual financial statements of that year. With regard to the 6th issue , the Meeting approved unanimously and following the relevant proposal of the Audit Committee, the election of the Auditing Firm Grant Thornton Certified Auditors and Consultants Societe Anonyme”, registered in the Public Registry of article 14, Law 4449/2017, for the ordinary audit of the annual and semi-annual financial statements (separate and consolidated) of the Company for the current fiscal year 2022 (01.01.2022 - 31.12.2022). It is noted that the above Auditing Firm will also undertake the process of issuing the annual tax certificate and the tax compliance report of the Company for the year 2022, in accordance with the provisions of article 65A of Law 4174/2013. Finally, by the same unanimous decision, the Meeting authorized the Board of Directors to make a final agreement with the above Audit Company regarding the amount of its remuneration concerning the audit to be performed and the issuance of the tax certificate, as well as to send the written notice-mandate to the elected Audit Company within five (5) days from the date of its election. With regard to the 7th issue , the General Meeting unanimously approved the remuneration, compensation and overall benefits paid and / or granted to the members (executive and non-executive ones) of the Board of Directors for the services provided to the Company and for their participation in the latter’s management during the closing fiscal year 2021 (01.01.2021-31.12.2021) in accordance with the approved and effective Remuneration Policy. With regard to the 8th issue , the General Meeting unanimously approved the Remuneration Policy Report of the financial year 2021 (01.01.2021- 31.12.2021), which was prepared in accordance with the provisions of article 112 of Law 4548/2018 and contains a comprehensive overview of the total remuneration of the members of the Board of Directors (executive and non-executive), including the Chief Executive and also provides explanation on the manner with which the Company implemented the respective Remuneration Policy for the immediately preceding financial year. With regard to the 9th issue , the Meeting unanimously approved the remuneration, salaries, compensations and other benefits in general, which would be paid to the members of the Board of Directors during the current fiscal year 2022 (01.01.2022-31.12.2022), which are in harmonization and compliance FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 9 with the approved and current Remuneration Policy of the Company, while with the same unanimous decision it provided the relevant permission for advance payment of such fees to the above persons for the period until the next Ordinary General Meeting, in accordance with the provisions of article 109 of Law 4548/2018, as in force. With regard to the 10th issue , the General Meeting unanimously approved the Company's share buyback plan, in accordance with the provisions of article 49 of Law 4548/2018, as in force. In particular the Meeting approved the purchase within a period of twenty-four (24) months from the date of this decision, i.e. until 10.06.2024, at a maximum rate of 10% of the total outstanding shares of the Company (including and already accumulating the treasury shares that the Company already owns in the context of a previous share buyback plan into the above percentage limit), with a purchase price range between three Euros (€3.00) per share (minimum limit) and eight Euros (€8.00) per share (maximum limit). Simultaneously with this unanimous decision, the General Meeting of shareholders granted the Company's Board of Directors the relevant authorization for the proper implementation of the share buyback plan in accordance with the provisions of the current regulatory framework. With regard to the 11th issue , the Meeting unanimously approved the provision of authorization, in accordance with article 98 paragraph 1 of L. 4548/2018, to the members of the Board of Directors and the Managers of the Company to participate in the Board of Directors or the Management of Group Companies (existing and / or future), which pursue the same, related or similar purposes and to perform actions related to the business objectives of the Company. With regard to the 12th issue , in relation to which no decision was made, the Independent Non-Executive BoD Members' Report dated 18.05.2022 was submitted to the body of shareholders for the fiscal year of 2021 (01.01.2021-31.12.2021), in accordance with the provisions of article 9, par. 5 of Law 4706/2020, and was read accordingly. 2. Exercise of Stock Option Plan and subsequent increase of the Company's share capital According to the terms of the Stock Option Plan, which was established by virtue of the decision of the Board of Directors dated 19.12.2019, in execution of the decision of the Annual Ordinary General Meeting of the Company's shareholders dated 29.06.2018, the Company's executives, as determined by virtue of the relevant decision of the Board of Directors dated 09.01.2020, were invited to submit by 28.12.2021 a statement of intention to exercise the stock options which in total corresponded to 75,000 new common, registered shares carrying voting rights of the Company. After exercising 75,000 stock options (i.e. the entire number of stock options) with an exercise price of 3.00 Euro, the beneficiaries (members of the Board of Directors, Directors and personnel of the Company) paid a total amount of 225,000, 00 Euros via a bank account held in the name of the Company (Note 6.34) and consequently the share capital of the Company was increased by 40,500.00 Euros (whereas the remaining amount of 184,500 Euros was transferred to the share premium account emerging from the issuance of shares above par value) via the issuance of 75,000 new common registered shares of the Company carrying voting rights, and with nominal value of 0.54 Euros per share. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 10 More specifically: Stock Option Plan Number of options to be exercised 75,000 Exercise price 3.00 € Option exercise declaration period 29.03.2022 - 20.04.2022 Payment deadline 29.03.2022 - 20.04.2022 The price of the share on 20.04.2022 amounted to 6.25 Euros. The balance of the stock option reserve amounting to 244 thousand euros was transferred to the results carried forward. The Corporate Transactions Committee of the Athens Exchange, Greece, during its meeting on May 18 th , 2022, approved the admission to trading on the organized market of the Athens Exchange of the above 75,000 new common registered shares of the Company carrying voting rights. On May 25 th , 2022, the trading of the aforementioned 75,000 new shares commenced on the Athens Exchange. The above share capital increase of the Company was certified by its Board of Directors on 06.05.2022 and was registered in the General Commercial Registry (G.E.MI.) on 10.05.2022, through the Companies Division (Department of Listed Companies) of Ministry of Development and Investments being the competent Supervisory Authority. It is noted that, following the above increase, the Company's share capital now amounts to 6,369,312.96 Euros, divided into 11,795,024 common registered shares, with a nominal value of 0.54 Euros per share (Note 6.11.1). The evolution of exercise of the Stock Option Plan in accordance with the Company's current Share Allocation Programs is depicted in the following Table. 3. Share capital increase of the subsidiary "FLEXOPACK INTERNATIONAL LIMITED" The Management of the Company proceeded to the share capital increase by an amount of 800 thousand Euros, of the fully owned, 100%, subsidiary company "FLEXOPACK INTERNATIONAL LIMITED" based in Larnaca, Cyprus. This share capital increase was implemented with the aim of: a) the further financing and share capital increase by an amount of 250 thousand Euros of the Group’s subsidiary based in Lyon, France under the name "FLEXOPACK FRANCE" (in which the above Cypriot subsidiary holds a percentage of 100% of the voting rights) as the latter (FLEXOPACK FRANCE) is in a phase of significant growth in turnover and is in urgent need of financial support. Stock Option Plan Initial balance Plan Period of the plan Granting date Maturity date Exercise period Exercise price Options at beginning of year Options granted Options matured Options subject to performance Options granted but not matured Options subject to retention Plan 1 19.12.2019- 20.04.2022 09.01.2020 29.3.2022 29.3.2022- 20.4.2022 3 Euro 75,000 - 75,000 - - - Plan 2 17.05.2021- 20.04.2023 24.05.2021 29.3.2023 29.3.2023- 20.04.2023 3 Euro 75,200 - - - 75,200 - Total 150,200 - 75,000 - 75,200 - During the period Ending balance FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 11 b) the further capital support, via the amount of 750 thousand Australian dollars (AUD), of the Brisbane- based Australian subsidiary of the Group under the name "Flexopack Properties Pty Ltd". The capital was provided in order for the latter to cover various expenses in relation to studies and issuance of respective permits in view of the imminent construction of a new building on a privately owned land. 4. Increase of share capital of the subsidiary company "FLEXOPACK Polska" The Extraordinary General Meeting of shareholders of the subsidiary company under the name "FLEXOPACK POLSKA Sp. Zoo", in which the Company participates with a percentage of 100%, which took place on 25.04.2022, decided to increase its share capital by a total amount of PLN 30,000,000 (approximately 6,297,000 Euros), via the subsequent issuance of 60,000 new shares, with a nominal value of PLN 500 each and with an offering price equal to their nominal value (without any share premium). After the completion of the above capital increase, the share capital of the above subsidiary amounted to PLN 57,000,000, divided into 114,000 common shares carrying voting rights, with a nominal value of PLN 500 per share. It is noted that the Company covered the entire number of new shares resulting from the share capital increase, and fully covered the total amount of the approved share capital increase. Through the above share capital increase, the Company contributes capital in order to finance the subsidiary’s investment plan with the aim of significantly increasing the production capacity of the latter and with the objective of facilitating in a more effective manner the subsidiary’s penetration into the particular geographic market. 5. Issuance of a Common Bond Loan with a total nominal value of 9,000,000 Euros On June 9, 2022, a Contractual Agreement for the Coverage of a Common Bond Loan was signed through a private placement, in accordance with the provisions of Law 4548/2018 and of Law 3156/2003, as in force, of an amount of nine million Euros (9,000,000). The Bond Loan was fully covered by "ALPHA BANK S.A." and has a 7-year duration, with a right towards early repayment. "ALPHA BANK S.A." was appointed Payment Administrator and Representative of the Bondholders. The Company used the proceeds of the above Bond Loan as follows: (a) an amount of three million two hundred and fourteen thousand Euros (€3,214,000) for repayment / refinancing of the Company's existing loan to "ALPHA BANK S.A." and (b) an amount of five million seven hundred and eighty six thousand Euros (€5,786,000) for working capital needs. 6. Participation in exhibitions In the context of the Management’s effort to further strengthen the Group's export activity and make its products known in the international markets, the Company participated in: (a) IFFA 2022 Exhibition, held in Frankfurt, Germany during the period 14-19/5/2022 and (b) PACK EXPO exhibition held in Chicago, U.S.A. during the period 23-26/10/2022. In general, through participation in relevant international exhibitions, the aim is to increase the recognition of the Group's products, to strengthen the Company's international network, to achieve new partnerships and to expand the Group's presence both on a product and geographical level. 7. Issuance of tax certificate for the year 2021 The Company on October 17, 2022 pursuant to the provisions of paragraph 4.1.3.1, sect. 12 of the Athens Exchange Regulation and article 17 of Regulation No. 596/2014 of the European Parliament and of the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 12 Council as of April 16, 2014, notified the investors’ community that, after completion of the special tax audit for the fiscal year 2021 (tax year 2021) carried out by the statutory auditors of the Company, in accordance with the provisions of article 65A of Law 4174/2013 as in force today, a tax certificate was issued for the Company with a conclusion “without reservation”. Corresponding tax certificates with conclusion “without reservation” for the fiscal year 2021 (tax year 2021) were also issued for the associate companies "INOVA SA" and "VLACHOU BROS SA". 8. Issuance of a Common Bond Loan with a total nominal value of 12,913,202 Euros On November 24, 2022, the Company signed a Contract for the Coverage of a Common Bond Loan, in accordance with the provisions of Law 4548/2018 and Law 3156/2003, as applicable, with a total nominal value of twelve million nine hundred and thirteen thousand and two hundred and two Euros (€ 12,913,202). The above loan was covered in its entirety on November 29, 2022 as follows: (a) on the one hand, with funds from the Recovery and Resilience Fund, by the amount of eight million seventy thousand seven hundred and fifty one Euros (€ 8,070,751), and (b) on the other hand, via "Eurobank Societe Anonyme" by the amount of four million eight hundred forty two thousand and four hundred fifty one Euros (€ 4,842,451). "Eurobank Societe Anonyme" was appointed Paying Agent and Representative of the Bondholders. The proceeds from the above Common Bond Loan were used by the Company to cover its needs along an envisaged investment plan. The Company was the implementing body of an eligible Investment Plan amounting to sixteen million one hundred forty one thousand and five hundred and three euros (€16,141,503), which falls under the Eligible Action "Extroversion" and aims at the capacity increase of the existing production unit of flexible plastic materials (films), located in Koropi (Tzima location), County of Attiki, Greece. 9. Sustainable Development Report. The company's Sustainable Development Report of the year 2021, for the 3rd consecutive year, presents in detail the Group’s strategy and performance. The structure of the Report is based on the guidelines of the Global Reporting Initiative in accordance with the GRI Standards, of the Athens Stock Exchange (ATHEX) and of those defined in Sustainable Development Targets of the United Nations. In continuation of the above and in accordance with the outcome of the regular semi-annual review of the composition of ATHEX Stock Market Indices announced by the Athens Stock Exchange for the period May 2022 – October 2022, FLEXOPACK was included in the ATHEX ESG index. SECTION Β΄ Major risks and uncertainties Given its exporting activities and particularly its high extrovert strategy, the Group operates within an intense competitive international environment. The Group’s general activities create several financial and other risks, including exchange rate risk, interest rate risk, credit and liquidity risk. The basic risk management policies that the Group applies during the performance of its business activity are determined by its Management. The overall risk management plan of the Group focuses on the fluctuations of the financial markets and aims to mitigate and also minimize the potential adverse effects of these fluctuations on the financial performance and results of the Group as a whole. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 13 The Group’s financial assets and financial liabilities mainly consist of cash & cash equivalents, trade receivables, loans and other receivables, bank loans, lease liabilities as well as liabilities towards suppliers and related liabilities. The Board of Directors is responsible for the effective monitoring of the exposure to business risks and in this context it acts with the aim of ensuring stability while at the same time facilitating the uninterrupted continuation of operations and the development of the Company. The Management is responsible for the implementation of the Business Risk Management System in the daily life of the Company and the Group in broader terms. In particular, the Management is responsible for the systematic identification and evaluation of risks that affect business activities and in addition, oversees the formulation and timely implementation of risk management plans. It regularly evaluates the effectiveness and the need to adjust risk management plans to achieve optimal management. I. Financial risks The most common financial risks which the Group is exposed to are the following: Α. Exchange Rate Risk The Group operates on a global level and realizes transactions in foreign currency, mainly: a) in U.S. dollar (U.S.D.), b) in Polish zloty (PLN), c) in Australian dollar (AUD) and in British Pound (GBP). The Group’s exposure to foreign exchange risk mainly emerges from existing or expected cash flows in foreign currency (exports-imports), as well as from investments in foreign countries under a different currency (other than Euro) whose equity is exposed to exchange rate risk during the translation of their financial statements for consolidation purposes. The foreign exchange risk that emanates from transactions in foreign currency according to the above is hedged with the use of placements in foreign currency and foreign exchange futures, depending on the needs each time. The Group monitors on constant and systematic basis the movements of the above exchange rates and the particular risk, as consequence of the broader uncertainty prevailing in the global environment, exists and may significantly affect the results of the Group during the current year 2023. A relevant analysis is presented in the note 5A of the annual Financial Statements, with regard to the above effect. Β. Credit risk Credit risk is the possibility that a counterparty will cause financial loss to the Group and the Company due to the breach of its contractual obligations. 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 financial assets. The Group does not face significant credit risk until today. Trade receivables stem from a wide client base, both from Greece and mainly from abroad. The Group’s turnover mainly consists of transactions with reliable FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 14 and creditworthy firms and companies in general, with most of which it sustains a long-term collaboration and relation of mutual trust in the majority of cases. It should be noted that the Group has established and systematically applies credit control procedures that aim at minimizing bad debt. The Credit Control Department defines credit limits per customer and specific sales and cash collection terms are applied, while possible security is requested when deemed necessary. To the greatest possible extent, the Group continuously and systematically monitors the performance and financial position of its customers, in order to be pro-active and to evaluate the need to take specific measures per customer, also according to the market characteristics and difficulties where each customer operates in. No doubtful debtors exist that have not been covered by provisions for doubtful receivables. It is also noted that the particular risk, although existent mainly due to the war conflict in Ukraine, is considered for the time being as relatively limited and controllable according to the historic data possessed by the Group and in the context of the precautionary measures that have been taken and as well as the procedures that have been established. It is underlined that a potential credit risk exists in cash and cash equivalents as well. The particular risk may arise from a possible inability of the collaborating financial institution to meet its obligations towards the Group. The Group applies procedures that limit its exposure to credit risk in relation to each financial institution which the Group collaborates with. A relevant analysis is presented in the note 5C of the annual Financial Statements. C. Liquidity risk In general, the monitoring of liquidity risk is focused on systematic monitoring and effectively managing cash inflows and outflows on a constant basis, in order for the Group to be able to smoothly and consistently meet its cash liabilities. Liquidity risk is maintained at low levels by holding and ensuring adequate cash balances, while it should also be noted that there are adequate unused credit lines with financial institutions in order to face any possible shortage in cash. Such case however, despite the clearly negative circumstances and conditions particularly seen in the domestic economy over the past years (such as debt crisis, health crisis and energy crisis among others), has not yet appeared. However, given the concerns about the course of the global economy mainly due to the effects of the Ukraine-Russia war, it cannot be ruled out that this risk may affect, to a controlled and manageable degree, the liquidity of the Group. A relevant analysis is presented in the note 5D of the annual Financial Statements. D. Cash flow risk due to changes in interest rates The Group's bank debt is denominated mainly in Euros and is linked to Euribor rate plus spread. Euribor rates starting from the second half of the financial year 2022 have been moving upwards and therefore the Group's operating income and cash flows are negatively affected by this trend in interest rates. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 15 A relevant analysis is presented in the note 5B of the annual Financial Statements. ΙΙ. Other risks to which the Group is exposed Α. Risk arising from competition of foreign and domestic firms The competition in the international market where the Group and the Company activate is becoming constantly stronger. The Group based on the fully staffed and equipped Research and Development Department it owns, and on the long-term presence in the sector it possesses, manages to differentiate its products from the current competition and to present innovative diversified solutions. The quality of the Group’s produced products, the strong recognition, and especially the brand name of the Group and the Company further contribute towards this direction. Despite the above, the particular risk due to the stronger competition seen on international level is real and exists, and therefore it may affect the performance and results of the Group during the fiscal year 2023. Β. Risk of reduced demand due to consumption slowdown The Group is active in an intensive and competitive global environment. Its specialized know-how in conjunction with the research, development and creation of new products and strong infrastructure in production equipment, assist the Group to remain competitive as well as expand or achieve its penetration in new markets. The products of the Group are used mainly in food packaging which, since food is of first need, are usually affected the least from consumption slowdown, however they may be affected subsequently by external factors that may prevail in the markets in which the Group is active. External factors that may harm demand for the Group’s products include the probability of illnesses in meat, the change in food and nutrition patterns, climate changes, a slowdown of the global economy etc. Given that at the present time there is a significant increase in inflation and interest rates both in the Eurozone and globally, the particular risk is assessed as significant and therefore it might affect the Group's financial performance and financial results during the financial year of 2023. C. Risk related to the cost of production (a) risk of increasing raw material prices The Group is exposed to price volatility of raw materials that it acquires internationally. This volatility may result from abrupt changes in oil production prices, other chemical products or other reasons. It should be noted that during the financial year 2022 the various disruptions in transport and supply chains that were observed by the beginning of the previous financial year 2021 continued, with the following main characteristics: - Shortages in some key categories of raw materials worldwide. -Increases in the prices of raw materials in the international market. -Significant increase in transport costs. In this context, the Group takes all necessary measures to ensure the adequacy of raw materials. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 16 In order to reduce this risk, the Group’s inventory and commercial policy is adjusted accordingly in order to diversify and transfer part of this risk, to the extent that this is possible and according to the current conditions present each time as regards to competition. Following the above, this risk in case of inability to substantially transfer the increase in the cost of raw material prices to the price of the final product, is assessed as particularly significant and may adversely affect the Group's results during the year 2023. b) risk of rising electricity prices. Electricity consumption is an important cost factor in relation to the Group's production activity. During the current fiscal year 2022, there was a significant increase in energy costs and consequently a burden on production costs, mainly due to the war in Ukraine, as the international prices of oil and natural gas marked a significant appreciation, rising to unprecedented levels. To address this particular risk and mitigate its negative consequences, the Group invests in equipment with low electricity consumption. It is noted that in August 2022 the Company was certified with the ISO 50001:2018 energy management system. Its development aims at the adoption and implementation of the required procedures that will lead to optimal energy performance. At the present time and based on the prevailing instability and volatility, the particular risk is being assessed by the Company's Management as particularly important as it might significantly affect the financial results and performance of the Group in general during the fiscal year 2023. D. Risks related to work safety Work safety for the Group’s employees is a top priority and necessary condition when operating its production facilities. A plan that focuses on establishing a safety culture throughout all the Group’s activities and operations, as well as on targeting the constant training and education of the Company’s personnel is applied on a continuous and constant basis. Moreover, broad educational programs are applied to systematically and fully train and educate employees on workplace safety and hygiene issues. The application of such programs is continuously reviewed by the Company’s relevant Department with the assistance of specialized professionals - Security Technicians with whom the Company collaborates. E. Environmental risks Protection of the environment and sustainable development are fundamental principles for the Group. For this reason, the Group takes strict measures in the areas where it operates, which in several cases extend further than those imposed by law. The Group invests in best available techniques for protecting the environment, it closely monitors planned changes in environmental law and it ensures to take the necessary measures in advance so as to avoid any risk of not complying with the current legislative and regulatory framework. F. Risks related to climate change Climate change is a global environmental issue with implications that significantly affect human health, working conditions and safety at work. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 17 The optimal response to the risk of climate change comprises a fundamental commitment of the Group, which in addition to its legal obligation also considers this issue as a moral obligation to contribute actively and substantially to the efforts of both the international community and our country to combat climate change-related risks. The Group recognizes both the risks associated with the phenomenon of climate change, and its obligations in relation to the need for continuous improvement of its environmental performance. The mitigation of the effects of climate change affects inevitably and determines significantly the business strategy of the Group through the adoption and implementation of measures to reduce its environmental footprint and the systematic effort to use environmentally friendly sources of energy. The Group monitors and records on a systematic basis the environmental impact of its business activities and takes measures to reduce its environmental footprint. FLEXOPACK aims at the continuous reduction of carbon emissions which are mainly due to the consumption of electricity which is the main source of energy of the Company. The Group's vision is to continue to be one of the most important Greek companies with a strong international presence and with a parallel contribution to sustainable development. The desire of the Group is to enhance its long-term value through the production of technologically advanced products that meet the most demanding international standards along with quality, safety and sustainable development standards. In this context, the Group promotes and implements a policy, which focuses on the following areas: - Demonstration of preparedness for emergencies, -application of emergency prevention, detection and management procedures, -design and construction of facilities aiming at the greatest possible energy savings, -frequent maintenance and constant renewal and upgrade of the used mechanical equipment, in order to leave a low energy footprint, -continuous information, training and awareness raising of personnel on climate change issues, -integration into the system of recycling and alternative packaging management, in order to prevent the generation of packaging waste and the reuse, recycling and effective utilization of all materials, -selection of recyclable, if possible, raw materials with the lowest possible energy footprint, -application of technologies for reduction of direct and indirect emissions of greenhouse gases from energy consumption, -monitoring of the policy followed by the Group suppliers regarding the implementation of procedures for dealing with climate change and the use of renewable energy sources along with the provision of relevant recommendations and suggestions, where necessary, -building relationships of trust with the local communities in which the Group develops its business activities; continuous care to minimize the inconveniences caused. G. Risks due to the spread of COVID-19 pandemic The new coronavirus SARS-CoV-2, which causes the COVID-19 pandemic and was first detected in December 2019 in a region of China and has since spread around the world, has had extremely adverse effects on both global and domestic economic growth. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 18 It is noted that from the first moment of the outbreak of pandemic, the Group adopted strict protocols and procedures for health safety in accordance with the applicable regulatory framework and the relevant guidelines of the competent authorities and thanks to the consistent observance and implementation of these procedures managed to ensure the uninterrupted operation of all its production units as well as their sub-departments and directorates, thus contributing to the broader national effort to deal with the pandemic crisis. The Management of the Group, prioritizing the protection and safety of its employees, closely monitors the developments related to the COVID-19 pandemic and takes timely and effective measures to manage the effects of the pandemic, to ensure its business continuity and smooth operation as well as to reduce the negative consequences to the least extent possible. After almost three years dealing with the coronavirus pandemic, the degree of uncertainty regarding the course and further spread of the Covid-19 pandemic is now significantly lower, since the new variants of virus are more contagious but have milder symptoms compared to the previous ones, especially for people who are fully vaccinated and are not vulnerable from a health perspective. At the same time, the above conditions have led to a relaxation if not to a complete removal of the restrictive measures. This further strengthens the assessment of the competent health authorities towards the transition from a pandemic to an endemic situation. However constant vigilance is still required, even at a global level, as the possibility of new dangerous epidemics cannot be ruled out. Therefore, the articulation of any conclusions regarding the risks, the impact and the possible effects of pandemic on the commercial activity and the financial results of the Company and the Group remains uncertain. However it should be also noted that despite the extremely unpredictable circumstances that arose and the very strict restrictive measures that were taken by the authorities, the Company managed to ensure its uninterrupted business continuity and to achieve satisfactory level of results. H. Risk related to the war in Ukraine. On February 24, 2022, the Russian military invasion of Ukraine took place, which then escalated into a war, creating geopolitical instability and unsustainable repercussions on the global economy. The latter was due to the large increases in energy prices, raw materials, industrial metals and other consumer goods. The Group has no significant business exposure to the countries involved in the war conflict and therefore no material impact (direct or indirect) exists on its business activities. The Group's sales to Russia and Ukraine in year 2022 cumulatively accounted for 0.88% of the consolidated turnover, while in the previous year 2021 they had represented 2.05% of the consolidated turnover. At this time, any prediction regarding the impact of the war on turnover, financial results and financial position of both the Group and the Company is uncertain, as it is directly related to the duration and intensity of the war activity, the length of time during which the economic measures against Russia remain in force, as well as the way by which the crisis may be resolved. SECTION C Significant transactions with related parties This section includes transactions that took place during the period 1/1/2022 – 31/12/2022 between the Company and its related parties, as defined in the International Accounting Standard (IAS) 24. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 19 In particular, the amounts of sales and purchases, the balances of receivables and liabilities as well as explanatory notes are included. The most significant transactions are presented in the following table. Notes: It is also noted: 1. No other transactions related to the Company parties exist according to the provisions of the International Accounting Standard 24 apart from the above mentioned. 2. No loans or any other credit facilitations have been granted to the Board members or other senior executives of the Company and their families. 3. With regard to the Company’s natural persons, apart from the above fees, no other transactions exist between the Company and the particular directors or the members of the Board of Directors. 4. There were no changes in the transactions between the Company and its related parties that could have a material impact on the Company's financial position and performance for the period 1/1/2022-31/12/2022. 1/1/-31/12/2022 COMPANY Sales of goods and services Purchases of goods and services Receivables Liabilities Subsidiaries FLEXOPACK POLSKA Sp. Zo.o 6,469 10,516 3,564 1,929 FLEXOSYSTEMS Ltd -Belgrade 596 0 151 0 FLEXOPACK PTY LTD- AUSTRALIA 20,606 9 15,141 9 FLEXOPACK TRADE AND SERVICES UK LIMITED 9,803 0 3,710 0 FLEXOPACK IRELAND 649 0 299 0 FLEXOPACK DENMARK 0 0 11 0 FLEXOPACK FRANCE 1,094 0 177 0 FLEXOPACK USA 17,149 0 8,164 0 56,366 10,526 31,216 1,938 Related/Associate Companies ΙΝΟ VA SA 392 1 108 0 VLAHOU BROS SA 3,127 335 1,146 159 OTHER RELATED PARTIES 0 136 0 0 3,519 472 1,254 159 Grand Total 59,885 10,998 32,469 2,098 Benefits towards management and executives 1/1/- 31/12/2022 1/1/- 31/12/2021 Transactions and fees of senior executives and members of the management 2,993 2,541 Receivables from senior executives and management 0 0 Liabilities towards senior executives and management 129 124 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 20 5. The Company has granted the following guarantees and loans in favour of its subsidiary “FLEXOPACK POLSKA Sp. Zo.o”: (a) A guarantee towards a banking institution based in Poland for an amount of 831,360 Euros, as insurance against the repayment of a long-term bank loan, of 2.682 million Euros. The balance of the above loan as of 31.12.2022 had settled at 1.665 million Euros. (b) A guarantee for a maximum amount of 1.050 million PLN (225,000 Euros approximately) as insurance against the repayment of a short-term credit line towards the above subsidiary. 6. The Company has also provided a guarantee towards a banking institution in favour of its subsidiary "FLEXOPACK PTY LTD" based in Australia, with a maximum guarantee amount of approximately 74,000 Euros. 7. The transactions described above have been carried out under normal market conditions and do not contain any exceptional, favourable or special features, which would make necessary additional analysis per related party. 8. There is no separate transaction that is assessed as significant, within the meaning of Circular number 45/2011 of the Hellenic Capital Market Commission. 9. The Company's transactions and outstanding balances with subsidiaries have been eliminated from the consolidated financial statements. The most significant transactions that took place during the previous fiscal year 2021 (01.01.2021- 31.12.2021) are shown in note 6.29 of the annual Financial Statements. SECTION D Development, performance and financial position This section includes a brief review of the development, performance, activity and position of the Group and the Company. Α. Statement of Financial Position Items (in thousand Euro) of the Statement of Financial Position for the year 2022 are presented below along with the most important changes that occurred versus the corresponding year of 2021. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 21 The most important changes in the consolidated statement of financial position as of 12/31/2022 compared to the corresponding period of 12/31/2021 are as follows: a) Increase of "Inventories" account by 19.297 million Euros (Note 6.7), mainly due to the inventory policy followed by the Group to ensure the sufficiency of raw materials. That was deemed necessary since during the year 2022, as a result of the various disruptions in the supply chain, there was a shortage of inventory and at the same time a significant increase in raw material prices. b) Increase in total bank debt by 16.180 million Euros due to collection of common bond loans by the Group to finance its investment plan. (Note 6.15). The total liabilities of the Group on 31/12/2022 amounted to 69.509 million Euros, the equity settled at 106.509 million Euros and the cash and cash equivalents amounted to 23.772 million Euros. Β. Items of statement of income Items of the statement of income for the year 2022 are presented below, along with the most significant changes from the items of the statement of income for the year 2021. STATEMENT OF FINANCIAL POSITION EUR THOUS. GROUP COMPANY ASSETS 31/12/2022 31/12/2021 Μετ . % Μετ . 31/12/2022 31/12/2021 Μετ . % Μετ . Non-current assets 68,970 60,772 8,198 13.5% 69,172 59,284 9,888 16.7% Cash and cash equivalents 23,772 19,138 4,634 24.2% 16,694 15,700 994 6.3% Other current assets 83,277 63,262 20,015 31.6% 74,158 56,919 17,239 30.3% Total Assets 176,019 143,172 32,846 22.9% 160,024 131,902 28,121 21.3% EQUITY Total Equity 106,509 93,717 12,792 13.6% 100,632 92,655 7,977 8.6% LIABILITIES Total bank debt 33,073 16,068 17,006 105.8% 29,412 13,232 16,180 122.3% Other long-term liabilities 1,917 2,808 -891 -31.7% 1,365 1,976 -611 -30.9% Suppliers and other short-term liabilities 27,821 27,503 318 1.2% 24,003 21,442 2,561 11.9% Liabilities due to income tax 6,698 3,077 3,621 117.7% 4,611 2,597 2,014 77.6% Total Liabilities 69,509 49,455 20,054 40.5% 59,391 39,247 20,144 51.3% Total Equity & Liabilities 176,019 143,172 32,846 22.9% 160,024 131,902 28,121 21.3% FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 22 The following are noted with regard to the above items of the consolidated statement of income concerning the period 1/1/-31/12/2022 versus the previous financial year. The consolidated sales amounted to 151.012 million Euros posting a 32.3% increase. The gross profit amounted to 44.075 million Euros posting an increase of 55.3%. The operating profit accounted for 21.081 million Euros rising by 68.1%. Earnings before taxes, financial, investment results, depreciation and amortization (EBITDA) amounted to 27.089 million Euros advancing by 46.0%. Earnings before taxes amounted to 18.899 million Euros, recording an increase of 47.4%. Earnings after taxes amounted to 14.102 million Euros, rising by 35.5%. C. Items of the Statement of Cash Flows The following table depicts the items of the cash flow statement for the year 2022 compared to the corresponding cash flow statement for the year 2021. STATEMENT OF INCOME EUR THOUS. GROUP COMPANY 1/1- 31/12/2022 1/1- 31/12/2021 Change % Ch. 1/1- 31/12/2022 1/1- 31/12/2021 Change % Ch. Turnover 151,012 114,181 36,831 32.3% 120,395 93,166 27,230 29.2% Gross Profit 44,075 28,388 15,687 55.3% 28,535 19,680 8,854 45.0% Administrative Expenses (6,067) (4,862) (1,205) 24.8% (4,344) (3,709) (635) 17.1% Research & Development Expenses (1,694) (1,569) (125) 8.0% (1,560) (1,447) (113) 7.8% Distribution Expenses (15,022) (9,673) (5,349) 55.3% (8,357) (5,256) (3,101) 59.0% Other Operating Income-Expenses (212) 258 (470) -182.1% (61) 228 (289) -126.9% Operating Profit 21,081 12,543 8,538 68.1% 14,212 9,496 4,716 49.7% Financial (expenses) - income (551) (377) (174) 46.1% (411) (282) (130) 46.0% Other Financial Results (2,239) (64) (2,175) 3397.1% (2,056) (115) (1,941) 1683.6% Proportional result of related companies 608 717 (109) -15.2% - - - - Earnings before taxes 18,899 12,818 6,081 47.4% 11,745 9,099 2,646 29.1% Income tax (4,798) (2,411) (2,386) 99.0% (2,570) (1,813) (757) 41.8% Earnings after taxes 14,102 10,407 3,695 35.5% 9,175 7,286 1,888 25.9% Depreciation / Amortization 6,008 6,006 3 0.0% 4,400 4,416 (17) -0.4% EBITDA 27,089 18,548 8,541 46.0% 18,612 13,912 4,699 33.8% FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 23 D. Financial Ratios The major financial ratios are presented below. Ε. Alternative Performance Measures (APM) The Alternative Performance Measure (APM) constitutes a financial ratio or an indicator measuring the historic or future financial performance with regard to the financial position or the cash flows. The APM is not stipulated or required by the existing framework of Financial information (IFRS). The general principle of the Group is to present the particular alternative performance measures in a clear and transparent manner so that these indicators are appropriate and useful for decision making purposes by the readers of the financial statements. The APM should be taken into consideration always in conjunction with the financial results that have been prepared in accordance with the IFRS and in no case should function as alternative ones. STATEMENT OF CASH FLOWS EUR THOUS. GROUP COMPANY 1/1-31/12/2022 1/1-31/12/2021 1/1-31/12/2022 1/1-31/12/2021 Net cash flows from operating activities 2,902 5,908 970 5,040 Net cash flows from investment activities (12,685) (3,874) (14,010) (3,458) Net Cash flows from financing activities 14,425 (1,031) 14,034 (555) Net (decrease)/ increase in cash and cash equivalents 4,642 1,003 994 1,026 Cash and cash equivalents at the beginning of the period 19,138 18,021 15,700 14,673 Effect from foreign exchange differences (7) 114 0 0 Cash and cash equivalents at the end of the period 23,772 19,138 16,694 15,700 Financial Ratios GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Explanation Capital Structure 60.5% 65.5% 62.9% 70.2% Total Equity / Total Assets Liquidity Ratio 2.7 2.4 2.8 2.8 Total Current Assets / Total Short-term Liabilities Profit Margin 12.5% 11.2% 9.8% 9.8% Earnings before Taxes / Total Turnover Return on Equity 17.7% 13.7% 11.7% 9.8% Earnings before Taxes / Total Equity FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 24 The Management monitors the following alternative performance measures: a) Capital Management The goals of the Group with regard to the capital management refer to the uninterrupted course of its business activities, the assurance of the financing of investment plans and the optimal allocation of capital targeting the reduction of cost of capital. For the purposes of capital management, the Group systematically monitors the ratio: “Net debt to Total employed capital”. The net debt is calculated as the total short-term and long-term interest bearing liabilities minus the total cash and cash equivalents. The total capital employed is calculated through the sum of the net bank debt and the total equity. For the fiscal years ended on 31 st December 2022 and 2021 respectively, the particular ratio settled as follows: The Group may affect its capital structure via the repayment or the collection of additional bank debt, through share capital increase or return of capital to shareholders, and via the distribution or not of dividends and through other distributions. b) Earnings before interest, taxes, depreciation and amortization (EBITDA) For the fiscal years ended on 31 st December 2022 and 2021 respectively, the particular figure settled as follows: (amounts are expressed in thousand Euros) EUR THOUS. 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Long-term debt obligations 27,674 12,540 25,552 10,875 Short-term bebt obligations 5,400 3,528 3,861 2,357 Total bank debt 33,073 16,068 29,412 13,232 Liabilities for Leases 648 926 289 388 Total Bank Debt 33,721 16,994 29,701 13,620 Minus : Cash and cash equivalents 23,772 19,138 16,694 15,700 Net Bank Debt (1) 9,949 (2,145) 13,007 (2,079) Total Equity (2) 106,509 93,717 100,632 92,655 Total Employed Capital (1)+(2) 116,458 91,573 113,639 90,576 Net Bank Debt / Total Employed Capital 8.5% -2.3% 11.4% -2.3% Group Company FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 25 SECTION E Analytic information, according to article 4 par. 7 l. 3556/2007, as currently in effect, and respective explanatory Report According to article 4 par. 7 of Law 3556/2007 the Company is obliged to disclose analytic information in the present Report, as regards to a number of issues. Therefore, in compliance with the relevant legal provision, the following are disclosed: 1) By virtue of the decision of the Board of Directors of the Company from 06/05/2022 and in the context of the annual implementation of the Stock Option Plan approved by the Annual Ordinary General Meeting of shareholders on 29 June 2018 that concerned the granting of stock options to selected executives of the Company as well as its affiliated companies, the Company's share capital increased by the amount of forty thousand five hundred Euros (€40,500.00) via the issuance of seventy five thousand (75,000) new ordinary, registered shares carrying voting rights, with a nominal value of fifty four cents (0.54 €) per share and an offering price of three Euros (3.00 €) per share. The difference between the offering price of the above new shares and the nominal value, i.e. 184,500.00 € was recorded to the “share premium reserve account”. Following the above, the Company's share capital as of today amounts to six million three hundred sixty nine thousand and three hundred twelve Euros and ninety six cents (6,369,312.96 €) and is divided into eleven million seven hundred ninety five thousand and twenty four (11,795,024) common, registered shares, with a nominal value of fifty four cents (0.54 €) per share. It is also noted that the relevant amendment of article 5 of the Company's Articles of Association as a result of the above decision of the Board of Directors was registered in the General Commercial Registry (GEMI) on 10.05.2022 with Registration Code Number 2857777. The above was accompanied with a protocol number 47831 /10.05.2022 announcement of the Ministry of Development and Investments (General Secretariat of Trade - General Directorate of Market & Consumer Protection - Directorate of Companies - Department of Listed Societe Anonyme Companies). All Company's shares (dematerialized common registered shares) are listed and traded on the regulated market of the Athens Stock Exchange, Greece. EUR THOUS. GROUP COMPANY 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 # Note Operating Profit 21,081 12,543 14,212 9,496 Statement of Income Depreciation of tangible fixed assets 5,036 5,044 3,714 3,741 Cash Flow Statement Amortization of intangible assets 416 377 416 377 Cash Flow Statement Amortization of right-of-use assets 556 590 270 303 Cash Flow Statement Amortization of investment grants 0 (6) 0 (6) Cash Flow Statement Earnings before interest, taxes, depreciation and amortization (EBITDA) 27,089 18,548 18,612 13,912 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 26 Each share includes all the rights and obligations defined by law and the Company’s Articles of Association. Ownership of a share automatically implies the complete and unreserved acceptance of the Company’s Articles of Association and of the decisions made in accordance with law and the Company’s Articles of Association, by the pertinent bodies of the Company. Each share provides one (1) voting right. 2) There are no limitations as regards to the transfer of Company shares, stipulated by either the company’s Articles of Association or specific agreements, or other regulatory provisions etc., except for limitations emanating from four (4) existing Agreements of Subordinated Bond Loans issued by the Company. More specifically and according to two of the Bond Loan Agreements, the Ginosati family aggregately should own a percentage of at least 34% of the Company’s paid up share capital in order to maintain the capacity of a “Controlling Majority”. With regard to the other two Bond Loan Agreements, it is required that the shareholder structure of the Company in terms of the controlling majority must not be changed, directly or indirectly. 3) The Company’s main participations (direct and indirect) are as follows: (a) FLEEXOPACK POLSKA Sp.z.o.o: foreign Company domiciled in Poland. The Company now holds 100.00% of shares and voting rights, (b) “FLEXOSYSTEMS Ltd Belgrade”, foreign company, based in Serbia. The Company holds 100% of shares and voting rights, (c) «FLEXOPACK INTERNATIONAL LIMITED»: Foreign company domiciled in Larnaca, Cyprus, fully owned by the Company (100% of the total shares and voting rights), (d) «FLEXOPACK PTY LTD»: Foreign company domiciled in Brisbane, Australia, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (e) «FLEXOPACΚ PROPERTIES PTY LTD»: Foreign company domiciled in Brisbane, Australia, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (f) « FLEXOPACK ΝΖ LIMITED »: Foreign company domiciled in Auckland, New Zealand, fully owned (100%) by the subsidiary « FLEXOPACK PTY LTD » (indirect participation of the Company). (g) «FLEXOPACΚ TRADE AND SERVICES UK LIMITED»: Foreign company domiciled in Norwich, UK, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (h) “FLEXOPACK FRANCE”: a foreign company based in Lyon, France, which is also 100% owned by the subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation of the Company) (i) FLEXOPACKUSA INC.: foreign company domiciled in the state of Delaware, USA, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (j) FLEXOPACK IRELAND LIMITED: foreign company domiciled in Dublin, Ireland, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (k) FLEXOPACK DENMARK APS: foreign company domiciled in Copenhagen, Denmark, fully owned (100%) by the subsidiary «FLEXOPACK INTERNATIONAL LIMITED» (indirect participation of the Company), (l) INOVA PLASTICS SA: Domestic company in which the Company holds 50% of shares and voting rights, (m) VLACHOU BROS SA: Domestic company in which the Company holds 47.71% of shares and voting rights, Furthermore, regarding the direct or indirect significant holdings in the voting rights of the Company, within the meaning of articles 9 to 11 of law 3556/2007, and on the basis of the relevant notifications received by law (and the MAR) in the Company on behalf of the shareholders, these have as follows: (I) Stamatios Ginosatis: 30.76% (direct participation) FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 27 It is noted that on 12.19.2013, Mr. Stamatios Ginosatis transferred under the cause of selling, the bare ownership of 1,609,933 common, registered Company shares to Mr. Dimitrios Ginosatis, while at the same date, he transferred, also under the cause of selling, the bare ownership of 1,609,933 common, registered shares to Mr. Spyridon Ginosatis. Mr. Stamatios Ginosatis retained the lifetime usufruct of all of the transferred shares, i.e. of 3,219,866 shares, which includes the voting rights and the right to receive the corresponding dividends. (II) George Ginosatis: 17.40% (direct participation) It is noted that on 12.19.2013, Mr. George Ginosatis transferred, under the cause of selling, the bare ownership of 881,787 common, registered shares to Ms. Stamatina Ginosati, while at the same date, he transferred, also under the cause of selling, the bare ownership of 881,787 common, registered shares to Ms. Catherine Ginosati. Mr. George Ginosatis retained the lifetime usufruct of all the transferred shares, i.e. of 1,763,574 shares, which includes the voting rights and the right to receive the corresponding dividends. (III) Nikolaos Ginosatis: 16.19% (direct participation) It is noted that on12.19.2013,Mr.Nikolaos Ginosatis transferred, under the cause of selling, the bare ownership of 600,000common, registered shares to Ms. Stamatina Ginosati, maintaining the lifetime usufruct of all the transferred shares, which includes the voting rights and the right to receive the corresponding dividends. 4) There are no shares, which provide special control rights. 5) To the Company’s knowledge, no restrictions on voting rights exist for the Company’s shareholders. However, the notes presented in 3) (I) (II) and (III) with regard to the beneficial interest of the major shareholders are highlighted. 6) To the Company’s knowledge, there are no agreements between shareholders that imply limitation on the transfer of shares or limitations on the exercise of voting rights. 7) As regards to the appointment and replacement of the Company’s Board members and concerning the amendment of the Company’s Articles of Association, there are no rules that differ than those stipulated in L. 4548/2018, as such is in effect today. 8) There is no permanent special authorization of the Board of Directors or certain members to issue new shares or purchase own shares, according to article 49 of law 4548/2018. The relevant competence and authority is provided to the Board of Directors of the Company by decision of the General Meeting of its shareholders. The Annual Ordinary General Meeting of the Company's shareholders on June 10, 2022 decided, among other things, in accordance with the provisions of article 49 of Law 4548/2018, as in force, the purchase by the Company within a period of twenty-four (24) months from the date of the above decision, i.e. until 10.06.2024, of a maximum percentage of 10% of the Company's existing shares (with the above limit including the entire number of treasury shares that the Company already held in the context of a previous share repurchase program). The respective range of purchase price was set between three Euros (3.00 €) per share (minimum limit) and eight Euros (8.00 €) per share (maximum limit). At the same time, the Meeting provided to the Board of Directors of the Company the authorization for the proper implementation of the above share repurchase plan. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 28 At the time of preparation of the current Report, the Company owned 96,450 treasury shares acquired on 22.07.2020 through an over-the-counter transaction (OTC) with an average purchase price of four Euros (4.00 €) per share, within the framework of the share repurchase plan that had been approved by the Annual Ordinary General Meeting of shareholders of June 26, 2020. The Company’s treasury shares correspond to a percentage of 0.82% of the total share capital. 9) There is no significant agreement contracted by the Company, which becomes in effect, is amended or terminated in case of change in the Company’s control following a tender offer, with the exception of: (a) the signed agreement dated 24/11/2022 for the coverage of the Common Bond Loan between the Company and “EUROBANK SOCIETE ANONYME”, which provides for the right of Bondholder to denounce the loan “if the majority that currently controls the Issuer ceases to have control over the legal entity of the Issuer or the Group to which it belongs”, (b) the signed agreement dated 9/6/2022 for the coverage of the Common Bond Loan between the Company and “ALPHA BANK SOCIETE ANONYME” (Trustee or Agent of the payments), which provides for the right of the Bondholder to denounce the loan “if the Issuer’s current shareholding structure is altered, directly or indirectly, as regards to the “controlling majority”, (c) the signed bond agreement dated 17/11/2021 between the Company and the National Bank of Greece SA; (a representative of the Bondholders and the attorney-at-law of payments), which also provides for the right of the Bondholder to terminate "if the percentage of participation in the paid-up share capital of the Issuer belonging to the Ginosatis family is less than 34% of that with the voting rights"; and (d) The signed, on 24.12.2018, agreement for the coverage of the common Bond Loan between the Company and “EUROBANK ERGASIAS S.A.” (representative of the Bondholders and Trustee of the payments), agreement which provides for the right of the Bondholder to denounce the loan “if the Issuer’s current shareholding structure is altered as regards to the controlling majority and specifically if the Ginosatis family in total ceases to own a percentage at least equal to 34% of the paid in share capital of the issuer”. The aforementioned terms (terms of change in control) are absolutely common practices and are included in all Common Bond Loans which are covered or subscribed by the banking institutions (in fact the controlling majority is usually defined as over 50%). 10) There is no agreement between the Company and the Board members or employees, which provides for indemnity in case of resignation or termination of employment without reason or termination of employment term or their employment emanating from any public tender offer. Explanatory report regarding the information, prepared according to the article 4 par. 8 L. 3556/2007 The numbering in the present explanatory Report (which is prepared according to article 4 par. 8 of L. 3556/2007) follows the respective relevant numbering of information of article 4 par. 7 of L. 3556/2007, as such information is presented above: 1. The structure and form of the Company’s share capital is presented in detail in article 5 of the Company’s Articles of Association. The Company’s shares were listed on the Athens Exchange on April 2 nd 1996 and since then are traded without interruption. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 29 2. No such limitation is imposed either by law, either by the company’s Memorandum of Association, or by any other agreement, apart from the common Bond Loan Agreements, reference to which is made also in Section E.9. 3. Data regarding the number of shares and voting rights owned by individuals with significant participations, have been presented according to the relevant disclosures notified according to law (and the MAR – Market Abuse Regulation) to the Company, on behalf of shareholders. 4. There are no other categories of shareholders, namely there are only common registered shares with voting rights. 5. No such limitations have been notified to the Company. 6. Likewise no such agreements have been notified to the Company. 7. In the particular matters, the Company's Articles of Association do not deviate from the provisions of Law 4548/2018 as it is currently in force. 8. The Annual Ordinary General Meeting of the Company's shareholders on June 10, 2022 granted authorization to the Board of Directors, in accordance with the provisions and limitations of article 49 of Law 4548/2018, as in force, with regard to the purchase by the Company, within a period of twenty-four (24) months from the date of the above decision, of a maximum percentage of 10% of the Company's existing shares (with the above limit including the entire number of treasury shares that the Company already held in the context of a previous share repurchase program). The respective range of purchase price was set between three Euros (3.00 €) per share (minimum limit) and eight Euros (8.00 €) per share (maximum limit). At the time of preparation and approval of the current Report, the Company owned 96,450 treasury shares. 9. In the lack of such agreements, apart from those mentioned, no clarification is deemed necessary. 10. Likewise, in the lack of such agreements no clarification is deemed necessary. SECTION F Non-financial information Group Profile The Company was founded in 1979 with its original production facilities in Koropi, Attica, where they are located and have expanded until today (Koropi Industrial Plant). The Company and the Group are active in the field of production of flexible plastic packaging items intended mainly for the food industry, but also for other sophisticated special applications, offering a wide variety of products, with a particular emphasis on the production of co-extrusion films with oxygen permeability properties. FLEXOPACK's main market is the food industry, with a focus on meat, poultry, cheese and fish. Other markets include the printing/converting industry and personal care product packaging. The Company has 5 production factories (3 in Greece, 1 in Poland and 1 in Australia), 7 distribution centers around the world, while it has developed a global sales and distribution network, offering high quality products and services to its partners. FLEXOPACK participates by 100% in eleven (11) subsidiaries located in Australia (2 subsidiaries), New Zealand, USA, United Kingdom, Poland, Serbia, France, Ireland, Cyprus and Denmark (direct and indirect participations). FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 30 The Group has a wide customer base and has developed strong export activity in about 40 countries, such as USA, Australia, United Kingdom, Poland, Germany, Belgium, Israel, Spain, Italy, Turkey, Norway, France, Switzerland, etc. The Group's sales outside Greece represented on 31.12.2022 89% of its consolidated turnover. On 31.12.2022, the Group employed 496 people and the Company 342 people, with dependent employment. It should be noted that the Group's relations with its employees are excellent and there are no labor problems, as one of the main priorities is to maintain and strengthen the climate of labor peace and the continuous improvement and upgrading of working conditions, in order to achieve maximum possible utilization at the production level of the human resource. The Group continuously promotes a system that recognizes and rewards high performance, empowering its employees and providing the framework and incentives for attracting, engaging and retaining valuable human resources and for their hierarchical development and upgrading. It seeks and cultivates a culture of health and safety for its employees in all activities and especially in those related to the organization and operation of its production facilities. In the context of the requirements and changes brought about by the health crisis, throughout the pandemic, the Group strictly implemented and still continues to this day all the necessary measures to protect the health and safety of its employees, third parties and partners, while ensuring the orderly and uninterrupted operation of production. The Group is constantly in the process of trying to reduce its environmental footprint, aiming to save energy and natural resources and setting high goals for the coming years. In the context of constant communication with customers, suppliers and all its stakeholders, but also in the continuous effort for innovative solutions, it redesigns many of its products in order to increase their recyclability as much as possible, seeks to use higher percentages of recycled raw material, while at the same time, through the quality of its packaging, it contributes to the reduction of food waste. The achievements of the Group until today constitute the most essential legacy for the future, which presents a large series of challenges that are constantly increasing, but to which it must respond. Today it is more obvious than ever that Sustainable Development as a cornerstone of business strategy is a one- way direction. The Group promotes and implements a policy that focuses on the following axes: − demonstration of preparedness to deal with emergency situations, − implementation of emergency prevention, detection and management procedures, − design, construction and operation of facilities aimed at the greatest possible energy savings, − frequent maintenance and continuous renewal and upgrading of the mechanical equipment used, so as to leave a low energy footprint, − continuous updating, training and strengthening of staff awareness on climate change issues, − joining the recycling and alternative packaging management system, with the aim of preventing the creation of packaging waste and the reuse, recycling and substantial utilization thereof, − selection of recyclable, if possible, raw materials with the smallest possible energy footprint, − application of technologies in order to reduce direct and indirect greenhouse gas emissions from energy consumption, − monitoring the policy followed by the Group's suppliers regarding the implementation of procedures to deal with climate change and the use of renewable energy sources and providing relevant recommendations and suggestions, where this is deemed necessary, − building relationships of trust with the local communities in which the Group develops its activities and continuous concern in order to minimize the inconvenience caused. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 31 Business model FLEXOPACK's business model creates sustainable value for stakeholders, the natural environment and the wider society, by converting the available resources used by the Company, through the sectors of its business activity, into products and services that it produces, disposes and manages with positive or negative effects, with the aim of fulfilling its strategic objectives and of creating economies of scale. The Group's vision is: - the effective coverage of the wider and more demanding needs of the flexible packaging market, by offering products of high specifications and excellent quality, with the aim of protecting the health and safety of consumers, - emerging and gaining a strong position into a dynamic global market that requires exceptional flexibility, - anticipating and addressing the ongoing challenges for new and innovative packaging solutions, - profitable growth using modern technology and the implementation of a dynamic strategic plan, - the creation of a working environment in which the Group's staff are integrated, trained and developed with respect for the values and corporate culture and confidence in their capabilities, The Group's strategy is summarized in the following: - improvement and continuous upgrading of the produced products, with an emphasis on their qualitative differentiation in relation to the competition, - creation of new, innovative products capable of meeting the broadest and most demanding needs of the market and responding to the wishes and demands of customers, - perfecting existing modern production methods, with the aim of reducing energy consumption and carbon footprint and making a substantial contribution to sustainable development, - further access into foreign markets through the maintenance of the partnerships that the Company has already developed and their further expansion with the aim of exploiting the Group's know-how, - further effective strengthening of the infrastructure and the production bases and facilities of both the Company and the Group's subsidiaries, with the aim of serving the customer base of the geographical areas in which they are established more quickly and efficiently, so as to be a catalyst for development in the relevant markets and finally - continuous improvement of organizational and operational structures with the aim of further increase of efficiency and cost reduction. Supply chain The management of the supply chain aims at the timely recognition and treatment of situations that could potentially negatively affect business relations with its partners. The Company systematically assesses the risks that threaten its business model and aims to continuously improve the processes related to its suppliers. The main categories of suppliers with which the Company cooperates are: - Suppliers of raw materials - Suppliers of other categories - Energy providers - Service providers The Company ensures effective cooperation with suppliers by clearly communicating the terms of cooperation and evaluates them based on approved criteria (qualitative and quantitative), in order to ensure that the selected partners/suppliers possess the necessary know-how, as well as the ability to execute and provide the assigned tasks and services. 90% of the suppliers are based in Europe (Greece and Western Europe: Spain, Belgium, Germany, France) and the remaining 10% outside Europe. The Company takes into account basic criteria regarding the activity of suppliers when entering into cooperation with them, such as for example annual reports (Sustainable Development Reports) published FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 32 by suppliers and other criteria related to the sustainability of raw materials. In addition, the Company is considering incorporating specific environmental, social and governance criteria for the evaluation of suppliers in order to have a holistic view of performance before and during the partnership. It is noted that in recent years there have been no significant changes in the main suppliers of FLEXOPACK. Finally, it is noted that FLEXOPACK is a member of the Non-Profit Organization SEDEX, which is related to the management of social and environmental risks in supply chains. The platform is used by more than 40,000 members in over 150 countries. Partnerships - participations • The Company cooperates with the internationally recognized Cyclos HTP certification laboratory regarding product certifications. • The Company is a member of CEFLEX, a European consortium of companies representing the entire value chain of flexible packaging. • The Company is also a member of the AGMPM (Association of the Greek Manufacturers of Packaging & Materials) and participates in the sustainability committee. • FLEXOPACK PTY (Australia) is a member of the Australian Packaging Covenant (APCO) and RedCycle initiative. • FLEXOPACK Trade & Services UK is a member of the On-Package Recycling Label (OPRL) System. • The Company participated in international packaging exhibitions in 2022, such as IFFA 2022 in Germany and PackExpo Chicago 2022 in the USA. In this context, compliance with the packaging plastics’ composition is strengthened, so that they are friendlier for recycling, always following the directions from the above bodies. At the same time, in order to inform the staff of the Company and the Group about the technologies related to recycling, actions are organized such as: • Training of the Company's executives. • Continuous interaction with suppliers. • Participation in industry exhibitions. • Participation in various consortia in Europe and Australia for the monitoring of developments in recycling issues. In addition, FLEXOPACK in 2022 received, for the tenth consecutive year, the award "TRUE LEADER 2021" at the ICAP Awards. Cooperation with stakeholders FLEXOPACK recognizes that the full integration of Sustainable Development into its business strategy presupposes relationships of trust with stakeholders and is based on consultation with them. The Company considers as stakeholders the natural and legal persons who influence and are being influenced or are likely to be influenced by its business decisions and activities. FLEXOPACK invests in continuous and two-way communication with each group of stakeholders, understanding the importance of this communication for obtaining the necessary information to improve its actions. The role and views of FLEXOPACK's stakeholders are key elements that fuel its effort to improve its products, as well as for its sustainable operation and growth. In the context of the materiality analysis that took place in 2022, regarding the potential and existing effects of the Company on the environment, people, including human rights, and the economy, it proceeded to the recognition, evaluation and prioritization of its interested parties, with the main criterion the extent to which they are affected or may be affected by the Company's activities. The key stakeholder groups are then presented. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 33 • Shareholders, Investors, Capital Providers • Board of directors • Suppliers, business partners and service providers • Customers • Employees • State and Governmental Organizations (e.g. Ministries, Organizations, Regulatory Authorities) • Business community (e.g. Business Associations, industry companies) • Society – local community groups (e.g. Media, Social organizations, Local Authorities) • Non-Governmental Organizations (NGOs). Materiality analysis The Company, adopting the new methodology of the international GRI Standards (GRI Standards 2021), proceeded to the recognition, evaluation, prioritization and validation of its positive and negative, existing and potential effects on the environment, people, including human rights, and the economy. Through the prioritization of the recognized impacts, the essential Sustainable Development issues for the Company were determined. The results of the materiality analysis, specifically the effects on the environment, economy and society, are presented below. Environment Positive effects (Existing and Potential) • Improving air quality • Soil protection • Maintaining physical stocks of raw materials Adverse Effects (Existing and Potential) • Exhaustion of natural reserves of raw materials • Operation’s impacts on climate change Society Positive effects (Existing and Potential) • Contribution to employment • Contribution to the development of knowledge, art and technology • Contribution to the creation of opportunities that promote training and development • Creating economic value (direct and indirect) • Ensuring regulatory compliance and business ethics. Environmental management The respect for the environment is the basis of all FLEXOPACK activities. Recognizing the importance of its environmental responsibility, the Company's activity is based on the design and development of innovative products with the least possible impact on the environment. FLEXOPACK takes seriously into account the environmental impact stemming from its products during their life cycle. Through research and technology, but also through the Environmental Policy applied by the Company, products are developed with a reduced environmental burden and the use of recyclable materials FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 34 without compromising the quality of the product. Specifically, in the context of environmental management, the Company focuses on the following pillars: Soil: environmental protection from proper waste management. 1. Natural reserves of raw materials: limiting the use of virgin raw materials. 2. Atmosphere and climate: reducing the carbon footprint in the production process. 3. Natural reserves of raw materials Soil protection Soil protection and waste management constitute key priorities for the Company. FLEXOPACK has established an Environmental Policy, in the context of which a Waste Management System is implemented, which focuses on reduction, reuse and recycling, reducing the environmental impact of the solid waste produced. More specifically, FLEXOPACK carries out the following waste management and monitoring procedures: • It records annually information related to waste management. • It is registered in the National Register of Producers (NRP). • It records the management of defective materials resulting from the production process. • Recycles and wherever possible reuses production waste that can be used for the production of new products. • It cooperates with specialized and licensed external partners, who undertake the collection, transport and proper management of each category of waste from its facilities. • The main objective of the Company is the further promotion of products with increased rates of recyclability. This effort is directly linked to the achievement of the national goals as defined by the National Waste Management Plan (NSMP), which, specifically for plastic packaging, aim to increase recycling to 50% by 2025 and 55% by 2030. The Company hopes that in the future recycling will replace all other waste management processes. Natural reserves of raw materials Actions towards the limitation of virgin raw materials’ utilization contribute significantly to the Company's competitiveness and environmental sustainability goals. The use of recycled materials constitutes a priority, in order to reduce the corresponding utilization of primary raw materials. The main pillars of the Company in terms of Sustainable Development regarding the use of raw materials are: • Ensuring the quality of packaging throughout its life cycle and as a result contributing to the reduction of food waste • The use of appropriate technology and quality of raw materials in order to limit the volume/weight of plastic in the final produced product (lightening of packaging) • Recycling-friendly plastic packaging that is produced so that the majority of it can be recycled • The attempt to use recycled raw material, apart from the primary raw material that is already used. • The search and use of plastic raw materials that come from alternative biological sources (FEED- STOCK-BIO), the production of which is not at the expense of the production of food for consumption. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 35 In order to support its main pillars in terms of Sustainable Development, the Company took a series of actions, such as: - Reduction of flexible packaging’s thickness without affecting the quality of its products. Limiting the use of materials in packaging has a double benefit, as it leads to a reduction in the weight of waste produced, but also to the limitation of the use of raw materials. - Increasing the recyclability of the packaging produced, in the context of the sustainability of its activity but also for the coverage of the modern consumer’s needs. The Company has included in its plans the greatest possible increase in the rate of recyclability of the products, which always depends on the available recycling units and technologies in the areas where it operates. The Company monitors targeted indicators regarding the percentage of products’ recyclability, compared to the corresponding percentages of past years. - Adoption of plastic raw materials’ utilization that come from alternative sources (FEED-STOCK-BIO), in the context of reducing the consumption of mineral resources and the impact of plastics on the environment. The Company has established measures according to its needs, which are in line with the global goals of Sustainable Development, ensuring the production and distribution of products that constitute sustainable alternative solutions with zero impact on the production of food for consumption. Atmosphere and climate Improving air quality Annual measurements are carried out in the production units in order to ensure the improvement of air quality, so as to keep the products safe, to avoid any possible contamination of them, but also to protect the health and safety of the workers. In the context of improving the air quality from the pollutants produced by the Company's activities, a system of internal post-combustion of the gases released during production is used, while at the same time multilayer packaging films are used, increasing the shelf life of the products and reducing food waste. During the post-combustion process, measurements follow the requirements of the Environmental Conditions Approval Decision (AEPO) with the aim of maintaining low pollutant levels within limits. More specifically, measurements are carried out every four months of the VOC, CO and NOx content of the gaseous waste emitted, in all the chimneys of the unit, as well as the diffuse emissions (volatile organic compounds, VOCs), taking at least three measurement values during each series of measurements in order to document the compliance of the facility with the gas emission limit values and diffuse emission values imposed by the environmental conditions. Mitigation of climate change impacts Mitigation of the effects caused by FLEXOPACK's activities on climate change constitutes a key pillar and goal of the Company, in the context of sustainable production and its general business operation. FLEXOPACK, through a series of energy upgrading actions of its building facilities, aims to reduce energy consumption and therefore direct and indirect greenhouse gas emissions. In this direction, the following actions were carried out: • Energy upgrade of the Company's equipment to a more efficient energy class. • Establishing the use of heat pumps for cooling and heating buildings. • Replacement of conventional lamps with LED lamps in all production units. • Replacement of air conditioning units with more efficient machines. • Installation of a logic controller (PLC) system to monitor the refrigeration units in order to achieve lower consumption. • Improvement of the insulation of the buildings, in order to achieve the maximum possible limitation of energy consumption. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 36 Additionally, in the context of reducing its carbon footprint, FLEXOPACK is in the process of investigating an investment plan regarding the following actions: • Installation of photovoltaic panels for the production of electricity, zeroing out the use of non- renewable sources, in order to cover the energy needs of the production units. • Continuous energy upgrading of older building facilities, within the framework of the Company's strategy to improve the efficiency of buildings. • Calculation of greenhouse gas emissions (Scope 1, 2, 3), in order to establish targets for their reduction. • Increase the percentage of environmentally friendly electric/hybrid company vehicles. It is noted that in August 2022 the Company was certified with the ISO 50001:2018 energy management system. Its development aims at the adoption and implementation of the required procedures that will lead to optimal energy performance. Contribution to the development of knowledge, art and technology Research and Development (R&D) plays an important role in FLEXOPACK's business model as it contributes the most to the continuous improvement and innovation of its products. Research and development Achieving the goals for innovation requires the direct and close cooperation of the Quality Assurance Directorate with the Research and Development Directorate (R&D), which consists of scientific personnel with significant professional experience and specialized know-how. The Research and Development Department, through the continuous study and monitoring of the market, it aims at the further development of innovative solutions and products of high added value. Its purpose is the more complete coverage of the ever-changing needs of the market and the demands of customers for the production of thinner, more transparent and more sophisticated films. In collaboration with suppliers and customers, new innovative products are designed and developed that adopt new technological packaging standards. In addition, the Company focuses on the high quality of its products and the organization of their production methodology, with the continuous and absolute observance of all the necessary safety rules, quality control and other procedures. The Research and Development Center, which is located in the central facilities in Koropi, Attica, collaborates on various research institutions, such as the "Demokritos" EKEFE, universities and other educational institutions. It forms the core of our product development and testing program with the aim of achieving the optimal packaging solution for any use and application. Product optimization is a very important field of study for FLEXOPACK and therefore it invests in efficient partnerships for the development of innovative solutions. In this light, the Company provides its employees with the opportunity to participate in innovative projects and programs, as a result of which both their personal development and their contribution to the further growth of the Company are achieved. Axes of Research and Development All of the Company's products are subject to strict checking and testing procedures, in order to ensure full compliance with international standards. The Research and Development Department is equipped with modern machines for the analysis and evaluation of plastic films. Its operation and the general policy of the Company in terms of its organization and effectiveness, is contained and summarized in the following triptych: • Upgrade of existing products. • Development of new products. • Exploitation of all new technological possibilities and practices. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 37 The Company has filed about 50 proprietary patents in many countries and in particularly demanding markets, including the USA, Australia, New Zealand, as well as in the European Patent office. Relying on its well-manned and equipped Research and Development Department that it has, as well as its many years of specialized presence in the sector, it can differentiate itself from the existing competition both in terms of products and through the creation of strong infrastructure in production equipment and present innovative differentiated solutions to its customers. The main axes of the Company's Research and Development are the following: • The protection of product quality and safety, so as the FLEXOPACK's packaging to ensure the quality of the packaged product throughout its life cycle. • The increase in the life time of the packaged product, especially in sensitive goods. • The development of technologies with the aim of limiting the volume/weight of plastic in the final produced product (packaging lightening). • The development of recycling-friendly plastic packaging, in order to further increase their degree of recyclability. • The increase in the use of recycled raw materials, compared to primary plastic raw material. Specifically for the production of secondary packaging, where FLEXOPACK constitutes the main supplier of the Greek market in the multipacks of bottles and aluminum cans of soft drinks, beer and water, until 2019 exclusively virgin raw material was used. In 2020, 20% of primary material was replaced by recycled material, and by 2022 it was achieved the replacement of up to 50% of raw material by recycled raw material in certain products. • The search and use of plastic raw materials, which stem from alternative biological sources (non fossil fuel feedstock), the production of which is not at the expense of the production of food for consumption. • The use of raw materials deriving from chemical recycling, which are suitable for food packaging applications. • The development of plastic films that allow to paper packaging to gain functional characteristics that until now were only possible with purely plastic packaging. Contribution to employment The Company, by implementing adequate human resource management practices, the provision of attractive salaries and benefits as well as development incentives, aims at attracting human resources that will dynamically join the Company, creating strong ties with its people and enjoying a meritocratic and privileged work environment. In addition, the Company, by implementing a training scheme and performance evaluation practices for all employees, aims at the long-term preservation of its human resources. The aim is to ensure a safe and fair working environment with respect for human rights and diversity, as well as the promotion of trust, equal opportunities, team spirit and the best possible working conditions. Employee benefits and social policy programs are described below: • Provision of medical care to all employees as of 2022. • Planning, organization and implementation of prevention and health promotion programs: Covid- 19 PCR test. Support for employees in case of illness or accident. Support for both patients and their family environment. Care for their smooth reintegration into the workplace. • Financial support due to illness or accident. • Counseling services to deal with personal, family issues and interpersonal relationship problems in the workplace. • Design and implementation of a First Aid training program. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 38 • Monitoring of health certificates, planning and implementation of the required for the issuance and renewal of medical examinations at the financial expense of the Company. • Informing and raising awareness of employees on various social issues. • Planning, organization and implementation of voluntary actions. Education The Company continuously provides opportunities for employees to broaden their educational background simultaneously with their practical experience. For FLEXOPACK, the importance of its human resources’ training lies in the fact that an effective training program contributes to the cultivation of its people critical thinking, increase of the employees’ productivity, offering of better quality services, strengthening their self-esteem, understanding of problems and their efficient resolution. The Company's positive contribution to the creation of opportunities that promote education is highlighted through the educational program that is formed on an annual basis and is included in its annual budget. Training needs are defined through: - the framework of the strategy and annual objectives for the provision of educational programs. - based on the needs arising, mainly at group level, from the annual staff evaluation process, through evaluation forms. In this way, an environment of continuous education is created with training seminars and educational programs. In the training programs and depending on the employee's position or specialty, priority is given to new technological developments in the Company's sector of activity, to health and safety, mainly for those who work in production, as well as to everything else deemed necessary for the efficient and safe operation of the Company. Protection of physical and mental health Ensuring the health and safety (H&S) of employees as well as the prevention of occupational risk constitute for the Group a moral obligation and a business necessity that goes beyond the limits of a simple legal obligation. FLEXOPACK recognizes the importance of the mental health of its employees and aims for actions that would enhance their social well-being. The primary concern is the assumption of measures and the implementation of projects as well as special programs for the achievement of the objectives for H&S in the workplace. In this direction, FLEXOPACK implements the following: • Continuous control and quality upgrade of the equipment, in order to achieve the improvement of the conditions for the safe execution of the work with the minimum possibility of a serious accident. • Effective protection of people (staff, contractors, partners and visitors), as well as facilities, from possible risks that may arise. • Continuous staff training and information on H&S issues, with the aim of preventing accidents and occupational diseases. • Active participation of all employees and Management in finding the acceptable and effective solutions for protection and safety. • Identifying and evaluating risks in the workplace and creating safety regulations. • Preparation of Occupational risk report. • Open communication between employees and Management regarding H&S issues as well as with the Occupational Physician. The Security Technician, who is responsible for the systematic monitoring of incidents (relevant recommendations, investigation, highlighting) conducts H&S inspections as defined by applicable FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 39 legislation. In addition, employees have the opportunity to report potential risks or safety issues, either directly to the head of the department or during inspections to the Safety Technician. By implementing the above initiatives, the Company has succeeded in minimizing incidents and near- accidents. This is achieved to a large extent due to prevention and timely and systematic recording, which are mentioned in the risk study. Quality assurance FLEXOPACK's position for the provision of particularly high quality products has been established at an international level. Its continuous and focused efforts are supported by the Quality Assurance Division. FLEXOPACK's packaging products provide the necessary protection so that the foods they pack are preserved throughout their life up to the final consumer at all stages of the supply chain, without the loss of nutrients and packaged safely, providing competitive and durable products to its customers. The Company achieves its quality goals by implementing, among others, the following fundamental principles: - Faithful and uninterrupted compliance with strict policies, procedures and standards. - Providing high quality products that exceed customer expectations. - Effort to reduce defective products with the aim of reducing waste. - Creating together with customers and suppliers a team that embraces the same values and the same corporate culture. - Efficiency having as a priority safety. - Assurance of its viability and business continuity. Certifications Certified quality assurance standards are applied at FLEXOPACK. The international certifications constitute proof of the Company's commitment to the quality and safety of products and processes. Specifically, the Company has received the following certifications: • BRCGS Global Standard for Packaging Materials. • ISO 9001:2015 Quality Management Standard. • ISCC Plus: Τhe International Sustainability and Carbon Certification. • ISO 50001:2018 Energy Management Systems The Company is certified and evaluated with the ISO 9001 international Quality Management System, by the certification body Bureau Veritas, for the design, development, production, distribution and technical support of its products. In addition, since April 2003 it has been accredited with the international standard for Packaging Materials of the leading product and consumer protection organization "Brand Reputation Compliance Global Standards (BRCGS)", which has European recognition and introduces high standards in hygiene, safety and the quality of the product. Also, FLEXOPACK is certified according to the ISCC Plus standard through which it ensures the use of sustainable raw materials for the production of packaging materials. Finally, the Company was certified with the ISO 50001:2018 energy management system. Its development aims at the adoption and implementation of the required procedures that will lead to optimal energy performance. Economic value The direct economic value created for shareholders and stakeholders through FLEXOPACK's business activities, contributes to the economy, employment and society in general through targeted actions. At the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 40 national level, it contributes directly by creating new jobs, providing wages, generating tax revenue to the state, payments to suppliers, but also by collaborating with stakeholders from the entire value chain. As part of ensuring the Group's Sustainable Development, business risks that would affect its performance are systematically monitored. There is a process for managing and evaluating financial and non-financial risks, through which the Company minimizes the negative effects, ensuring its performance at a stable level. Social contribution Through communication with the stakeholders, the Company receives requests to support various actions and programs, which it evaluates, plans and implements on a case-by-case basis. Requests for contributions include donations, sponsorships or social programs and are addressed either at the level of local communities or the wider society. In addition to its contribution to the economic development of local communities and employment, the Company supports actions for the strengthening of the following areas: • Education • Health • Culture • Sports • Entrepreneurship In this context, donations were made to local agencies, non-governmental organizations, as well as to child protection structures. Corporate governance The Company adopts and implements, the most suitable for it, corporate governance structures, reference lines as well as policies and procedures, which support all of its activities with the aim of protecting and creating long-term value for its shareholders and other stakeholders. It implements high standards of professional and ethical conduct and includes appropriate mechanisms in its operation, so that it acts in compliance with the current institutional framework. The Company's Regulation of Operation presents its organizational structure, taking into account its size and objective as well as the corporate Policies and Procedures it applies. The Regulation is fully harmonized with the provisions of article 14 of Law 4706/2020, on corporate governance, while during its preparation there were taken into account the Company's Articles of Association, the provisions of the legal, normative and regulatory framework governing its operation and the Greek Corporate Governance Code adopted by the Company. All applicable FLEXOPACK’s Policies and Procedures for the reporting year are listed below: • Risk Management Policy and Procedure. • Hiring and Performance Evaluation Process of Senior Managers. • Procedure for Disclosure of Transactions by persons exercising managerial duties. • Dependency Disclosure Process. • Policy and Procedure for Transactions with Related Parties. • Conflict of Interest Prevention and Treatment Policy and Procedure. • Regulatory Compliance Process. • Privileged Information Management Procedure and Proper Public Information. • Policy and Procedure for periodic evaluation of the Internal Control System. • Training Policy for Board Members and Executives. • Sustainable Development Policy. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 41 • Eligibility policy for Board Members. • Policy to prevent and combat Violence and Harassment at Work. • Policy and Procedure for Evaluation of Board Members. • Policy and Procedure for Succession of Board Members and CEO. Business ethics Code of Ethics and Ethical Conduct FLEXOPACK conducts all its activities with integrity and in accordance with the Code of Ethics and Ethical Conduct that it has adopted and governs all interactions between employees, external partners and the wider environment of the Company, while at the same time it contributes to the achievement of its objectives. The Code constitutes a guidance tool for presentation of good professional behavior, ethical conduct and integrity. It is noted that the Code is implemented by the Company's Management and staff, while the Regulatory Compliance Officer regularly assesses the adequacy of this Code and guides the Company's Management and staff for its effective implementation. The Code includes, among others, the following thematic sections: Bribery and corruption As stated in the Code in the Section on the Company's obligations towards third parties, the Company maintains high standards of ethics and integrity and complies with the requirements of national and international legislation for the combat of bribery and corruption. Every employee of the Company has an explicit obligation not to use his/her power and position for personal gain. The Company shows zero tolerance for any situation or behavior of active or passive bribery or unfair utilization of influence. Competition Law The Company, in the context of establishing trusting relationships with its customers and network, always complies with all the rules of the applicable competition law and it does not seek to gain an advantage through unfair business practices or illegal actions. Personal data protection and confidentiality • The Company implements a Personal Data Protection Policy in accordance with existing legislation and the General Data Protection Regulation (GDPR 1 ) in the countries in which it operates for all natural persons. The Policy refers to the personal information that the Company processes as an employer, prospective employer, supplier of products and services, for promotional purposes, as well as during its operation and normal activity as a manufacturer of flexible packaging products. The Policy states, among other things: • The type of data. • The special categories of data. • The collection sources. • The purpose for which the data is processed. In 2022, there were no substantiated complaints and denunciations about violations of customer privacy and data loss. There have also been no incidents of detected leaks, theft or loss of customer data. More information on the Personal Data Protection Policy is available on the Company's website. Implementation of the Code and monitoring of implementation 1 General Data Protection Regulation (GDPR) FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 42 The Code, to which all employees have access via the Intranet platform, is implemented by the Company's Management and staff, and the Company itself ensures that key business partners and associates (suppliers, customers, etc.) follow the same minimum standards of ethics and professional conduct. As part of the proper use of the Code, the following communication channels are available for reporting incidents of fraud, bribery, corruption, conflict of interest, harassment at work and for other cases of non- compliance with the Code of Ethics and Ethical Conduct: Anonymous or not employee complaint forms. More information on the Code of Ethics and Ethical Conduct is available on the Company's website. The Company's commitment to high standards of ethics and integrity The Company aims to continuously comply with the ever-changing regulatory and legal framework as well as to continue operating by ensuring an environment of integrity, ethics and compliance of all its parties with the Company's regulations. In addition, the Company has implemented a plan to improve the disclosure of its non-financial data as well as the systematic monitoring of its effects on the economy, environment and society. At the same time, it examines the integration of social, environmental and business ethics criteria in the evaluation of suppliers as mentioned in the supply chain Section. During the reporting period, there were no reports/complaints regarding: • Confirmed incident of corruption. • A confirmed incident of corruption, which resulted in the removal or disciplinary action of employees. • Confirmed incident of corruption, which resulted in the termination or non-renewal of the contract with suppliers/partners. • Court case related to corruption against FLEXOPACK or its employees. • Cases for which fines were imposed. • Cases for which non-monetary sanctions were imposed. • Confirmed incidents of non-compliance with laws and regulations. In addition, during the reporting period there were no monetary losses caused as a result of violations of business ethics and there were no incidents of legal actions or financial penalties for anti-competitive conduct, antitrust or monopolistic practices, issues of corruption, bribery, cartel or price-fixing activities. Sustainable Development Report The Company's 2021 Sustainable Development Report for the 3 rd consecutive year presents in detail its strategy and performance. The structure of the Report is based on the guidelines of the Global Reporting Initiative in accordance with the GRI Standards, of the Athens Stock Exchange (ATHEX) and those defined in the Sustainable Development Goals of the United Nations. In continuation of the above and in accordance with the results of the regular six-month review of the composition of the ATHEX Stock Market Indices for the period May 2022 – October 2022 announced by the Athens Stock Exchange, FLEXOPACK was included in the ATHEX ESG index. SECTION G Other information, Treasury shares, Events after the end of the year 2022 1. None of the Group's companies have branches, except for the parent Company, whose old building located opposite the new industrial plant is considered as a branch. No transfer of the head office of any FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 43 of the Group's businesses took place during the 2022 financial year, nor was a relevant decision taken regarding the opening or operation of any branch. 2. None of the companies participating in the consolidation has shares of par. 1e of article 26 of Law 4308/2014, except for the parent Company, which currently owns 96,450 own shares with a nominal value of 0,54 euro per share, acquired in accordance with the more specific regulations and provisions of Treasury share purchase program, which was approved by the Annual Ordinary General Meeting of shareholders on June 26, 2020. 3. There are no other significant events that took place after the end of the 2022 fiscal year and up to the date of preparing of this Report and which are worthy of special mention and reference in this report. SECTION H’ CORPOTATE GOVERNANCE STATEMENT CONTENTS INTRODUCTION 1. CORPORATE GOVERNANCE 1.1 Concept 1.2 Regulatory framework for corporate governance 2. GREEK CORPORATE GOVERNANCE CODE 2.1 Notification of voluntary compliance of the Company with the Corporate Governance Code 2.2 Deviations from the Corporate Governance Code and their justification. Special provisions of the Code that the Company does not apply and an explanation of the reasons for non- implementation 2.3 Corporate governance practices applied by the Company in addition to the provisions of the law PART A – BOARD OF DIRECTORS Ι. Role and responsibilities of the Board of Directors ΙΙ. Size and composition of the Board of Directors ΙΙΙ. Operation of the Board of Directors ΙV. Information regarding the current Board of Directors PART B – COMMITTEES Ι. Audit Committee ΙΙ. Remuneration and Nomination Committee PART C- GENERAL MEETING PART D – INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM Ι. Internal Control ΙΙ. Risk M anagement PART E ADDITIONAL INFORMATION PART F – SPECIAL STATEMENTS FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 44 PART G – SUSTAINABLE DEVELOPMENT POLICY INTRODUCTION 1. CORPORATE GOVERNANCE 1.1 Concept According to the Corporate Governance Principles of the Organization for Economic Cooperation and Development (OECD), corporate governance means the system of relationships established between the Company's Management, shareholders, employees and any other interested party, and aims at the creation, development and viability of strong, healthy and competitive businesses. As a set of principles, corporate governance is in fact a matter of self-regulation, namely it is not limited to the application of mandatory, by laws, clauses and regulations, but is based on the voluntary acceptance and application of rules understood as specific practices. Based on these rules, the management is exercised, monitored, organized and controlled, the corporate operations are performed, the relations with the shareholders and the external agents (shareholders, suppliers, customers, public administration, etc.) that are interconnected with the Company are formed, the achievement of objectives that have been set, identified and managed real or potential risks. The promotion of corporate governance principles aims to increase the credibility of the Greek capital market towards international and domestic investors, to enhance transparency, improve the competitiveness of Greek companies and strengthen their internal operating structures. In addition, a framework of good and adequate corporate governance can, through the consolidation of trust in the business environment, bring together, in an effective and beneficial way, the interests of business, citizens and society. 1.2 Regulatory framework for corporate governance In our country, the corporate governance framework for societe anonyme companies, whose securities are listed on a regulated market, consists on the one hand in the adoption of mandatory law, on the other hand in the application of corporate governance principles, as well as in the adoption of best practices and recommendations through self-regulation. Specifically, this framework includes: (a) Law 4706/2020 (Government Gazette A 136/17.07.2020), with the provisions of which the legislative framework for corporate governance is substantially reformed and updated, taking into account the changes in the legislative and regulatory framework governing the action of listed companies at EU level, during the intervening period since the introduction of Law 3016/2002 (original legislation on corporate governance) until today, as well as current trends in corporate governance. In particular, the new regulations seek to substantially upgrade the required organizational structures and corporate governance procedures of societe anonyme companies, so that they, on the one hand, meet the increased demands of the modern capital market, and on the other hand, not to affect the functional and decisive autonomy of the business entity. The aim of the new legislation is to consolidate good and effective governance practices and consequently to strengthen the confidence of shareholders or their prospective shareholders. (b) the decisions, circulars and recommendations of the Hellenic Capital Market Commission issued under the authority of the above law; (c) certain provisions of Law 4548/2018 as currently in effect and (d) the principles, best practices and recommendations of self-regulation, incorporated in the new Greek Code of Corporate Governance (GCCG), which was drafted by the Hellenic Corporate Governance Council (ESED) in June 2021 and replaced the Code in force since October 2013. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 45 2. GREEK CORPORATE GOVERNANCE CODE 2.1 Notification of voluntary compliance of the Company with the Corporate Governance Code The Company, in full compliance and alignment with the provisions of article 17 par. 1 of law 4706/2020, proceeded under the relevant decision of its Board of Directors dated 16.07.2021 to the adoption and implementation of the new Greek Corporate Governance Code (available at https://www.esed.org.gr ), into which (Code) states that it is subject to the following detailed deviations and exceptions. 2.2 Deviations from the Corporate Governance Code and their justification. Special provisions of the Code that the Company does not apply and an explanation of the reasons for non- implementation The central goal of the current Greek Corporate Governance Code (hereinafter for abbreviation purposes referred to as "Code" or "CGC") is the creation of an accessible and comprehensible reference guide, which sets in a codified way in a single text, high (higher than mandatory) requirements and specifications of corporate governance. In particular, the Code does not address issues that constitute mandatory legal provisions (laws and regulative decisions); on the contrary, it establishes principles beyond the mandatory framework of corporate governance legislation and addresses issues that either: (a) are not regulated by law, or b) are regulated, but the current framework allows selection or derogation, or (c) are regulated to their minimum content. In these cases, the Code either complements the mandatory provisions, or introduces stricter principles, drawing on experience from European and international best practices, always guided by the characteristics of Greek business and the Greek stock market. The Code is implemented based on the "Comply or explain" principle . This principle requires companies that apply the Code to either comply with all of its provisions, or to justify the reasons for their non-compliance with its specific special practices. The explanation 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, substantive and convincing manner. The Company first confirms with this Statement that it faithfully and strictly applies the current provisions of Greek legislation regarding corporate governance, as in force today (Law 4706/2020, Law 4548/2018 and Law 4449/2017). However, in relation to the specific practices and principles established by the Code, there are currently some deviations (including the case of non-application), for which deviations an analysis follows and explanation of the reasons justifying them. In particular, the existing deviations in relation to the specific practices and principles established by the Code are the following:  The Board of Directors has not adopted Rules of Operation, which at least describes the way it meets and makes decisions and the procedures it follows. This deviation is explained by the fact that the provisions of the Articles of Association and the Internal Operating Regulation of the Company in combination with the existing legal framework (Laws 4548/2018 and 4706/2020) are considered sufficient, reasonable and satisfactory for the general organization and operation of the Board of Directors, ensure the full, correct, efficient and timely fulfilment of its duties and the adequate consideration of all issues on which it is called to take decisions and form a flexible and effective framework of meetings and decision-making. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 46  At the beginning of each calendar year, the Board of Directors does not adopt a meeting calendar and an annual action plan, which is revised according to the developments and needs of the Company. This deviation is reasonably understood by the fact that all the members of the Board of Directors of the Company are residents of the Attica prefecture and therefore it is easy to convene and meet the Board of Directors, whenever the needs of the Company or the law impose, without the existence of a predetermined strict action plan. Furthermore, in the current Articles of Association of the Company there is now an explicit provision for the possibility of a meeting of the Board of Directors via teleconference, with respect to some and/or all its members, and therefore it becomes possible to convene it immediately, whenever it is necessary and appropriate, in order to properly address and resolve the issues that arise and take appropriate decisions.  The Chairman is not elected by the independent non-executive members. Although the Chairman is elected by the non-executive members, it is not appointed one of the independent non-executive members either as Vice-Chairman or as a Senior Independent Director. This deviation is justified by the desire of the Company's Management not to further burden the independent non-executive members of the Board of Directors with additional duties and responsibilities, due to the important role they are called to play in the special Committees in which they participate (Audit Committee and Remuneration and Nomination Committee). After all, the appointment of an independent non-executive member as Vice-Chairman would make it necessary for him/her to provide daily and substantial assistance to the Chairman of the Board, especially during the process of organization and operation of the Board, which may be a deterrent factor regarding the need and obligation of the independent non-executive member to devote sufficient and necessary time in the performance of his/her other duties.  The maturity of the options is defined in a period of less than three (3) years from the date of their granting to the executive members of the Board of Directors. This deviation is due to the preparation and approval by the Board of Directors, in the context of the provided by the General Meeting of the shareholders relative authorization, of the existing share distribution programs to the members of the Board of Directors, the Directors and the employees of the Company, in the form of option to acquire shares, according to the provisions of article 113 of law 4548/2018, at a time prior to the entry into force of the existing Corporate Governance Code. In any case, this deviation is limited and insignificant as the period of maturity of the options is not much shorter than that provided by the Code.  The contracts of the Board of Directors’ executive members do not provide that the Board of Directors may demand the return of all or part of the bonus awarded, due to breach of contract terms or inaccurate financial statements of previous years or generally based on incorrect financial data used for calculation of this bonus. This deviation is justified by the fact of non-payment of variable remuneration (bonus) to the executive members of the Board of Directors, namely remuneration which is related to the achievement of performance goals of both the executive members and the Company. In any case, the Financial Management of the Company takes all the necessary measures, in order for any rights to receive extraordinary remuneration (bonus) to mature and be paid only after the audit and final approval of the annual financial statements and to avoid the phenomenon of bonus payment based on incorrect or inaccurate financial statements. However, in order to comply with the above requirement of the CGC, the Company's Management is considering the inclusion in the existing contracts of the Board of Directors’ members of a relevant additional provision regarding the right of the Board of Directors to demand the return of all or part of the bonus that has been awarded due to breach of contract terms or inaccurate financial statements or incorrect financial information. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 47 2.3 Corporate governance practices applied by the Company in addition to the provisions of the law The Company faithfully applies the provisions of the current legal framework regarding corporate governance, while at the present time there are no applicable practices in addition to the provisions of the law, since the main purpose and priority of the Company's Management at the present time is the complete and substantial adoption and implementation of the provisions introduced with the newly established regulatory framework (Law 4706/2020 and related decisions of the Hellenic Capital Market Commission). PART A – BOARD OF DIRECTORS Ι. Role and responsibilities of the Board of Directors, obligations of its members 1.1 The Company is governed by the Board of Directors, which is responsible for deciding on any action concerning the management of the Company, the management of its assets, its judicial and extrajudicial representation and in the general pursuit of its objective. 1.2 The Board of Directors is responsible for: • the administration, representation, as well as management of corporate assets, • decision-taking on all in general issues concerning the Company within the framework of the corporate objective, without any restrictions, with the exception of those which according to the law or the Articles of Association of the Company fall under the exclusive competence of the General Meeting, • the representation of the Company in Greece and abroad, in front of Public, Municipal and other Authorities or International Organizations of any nature or natural or legal persons, all in general the Courts in Greece of all degree and jurisdiction, • taking any decision regarding the promotion of the Company's interests, • the definition and supervision of the corporate governance system of provisions 1 to 24 of Law 4706/2020, and the periodic monitoring and evaluation, at least every three (3) financial years, of its implementation and effectiveness, taking the appropriate actions for the addressing of deficiencies, • the assignment of the Internal Audit of the Company to one or more persons, non-members, • ensuring the adequate and efficient operation of the internal control system (which includes the functions of Internal Control, Regulatory Compliance and Risk Management), • the management of corporate affairs in order to promote the corporate interest and to supervise the execution of the Board of Directors and General Meeting’s decisions while informing the other members about corporate issues, • the definition of the values and the strategic orientation of the Company, as well as the continuous monitoring of their observance, ensuring their alignment with the corporate culture, • the diffusion of values and corporate objective in all policies, procedures and behaviors within the Company, setting for example the appropriate standards of conduct, • the planning and monitoring of the implementation of the Company's strategy and the approval and monitoring of its business plan, • determining the extent of the Company's exposure to risks, which it intends to undertake in the context of achieving its objective and in particular its long-term strategic goals, • the definition or/and delimitation of the responsibilities of the Chief Executive Officer as well as the Deputy Chief Executive Officer, if any, • the establishment of a Policy for the identification, avoidance and treatment of conflicts of interest between the interests of the Company and those of the members of the Board of Directors or persons to whom the Board of Directors has assigned some of its responsibilities, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 48 • the determination of the appropriate structures, reference lines and responsibilities to achieve the Company's objectives, • ensuring the smooth succession of its members and senior executives of the Company, • its effective operation, its systematic evaluation, as well as of its Committees and its members and their continuous improvement, • the care for the composition and operation of the Board of Directors and its Committees in accordance with the current legislation, as well as for the compliance with any obligation, as it derives from the current legislation, as well as from the corporate documents, policies and procedures governing it as well • the other responsibilities as they are provided in the Articles of Association of the Company, its Operating Regulation and the current legislation. 1.3 The Board of Directors has the ability in general to assign its powers of management and representation of the Company, except those that require collective action, to one or more persons, members or not, determining at the same time the extent of this assignment. In any case, the responsibilities of the Board of Directors are subject to articles 19 and 99-100 of Law 4548/2018, as in force. 1.4 Obligations of the Board of Directors’ members 1.4.1 General The members of the Board of Directors must, in the exercise of their duties and responsibilities, observe the law, the Articles of Association and the legal decisions of the General Meeting. They have to make every effort to carry out their duties, to manage corporate affairs in order to promote corporate interest, to supervise the execution of the decisions of the Board of Directors and of the General Assembly and to inform the other members about corporate issues. The custody is judged on the basis of the status of each member and the duties assigned to him/her by law, the Articles of Association or by decision of the competent corporate bodies. 1.4.2 Obligation of faith - Conflicts of interest The members of the Board of Directors have an obligation of faith to the Company. In particular they must: (a) Do not pursue their own interests that contradict the interests of the Company. (b) To disclose in a timely and adequate manner to the other members of the Board of Directors their own interests, which may arise from the Company's transactions, which fall within their duties, as well as any conflict of their interests with those of the Company or related companies to it according to the meaning of article 32 of law 4308/2014, which arises during the exercise of their duties. They must also reveal any conflict between the interests of the Company and the interests of the persons of paragraph 2 of article 99 of Law 4548/2018, if they are related to these persons. A sufficient disclosure is one that includes a description of both the transaction and own interests. (c) To keep strict confidentiality about the corporate affairs and the confidential of the Company which became known to them due to their status as consultants. (d) The member of the Board of Directors is not entitled to vote on issues in which there is a conflict of interest with his/her Company or persons with whom he/she is associated in a relationship subject to paragraph 2 of article 99 of Law 4548/2018. In these cases the decisions are taken by the other members of the Board of Directors, and in case the impossibility of voting concerns so many members, so that the rest do not form a quorum, the other members of the Board of Directors, regardless of their number, must proceed to convening a General Meeting for the sole purpose of taking this decision 1.4.3 Prohibition of competition It is prohibited for the members of the Board of Directors who participate in any way in the management of the Company, as well as to its directors, to act, without the permission of the General Meeting or the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 49 relevant provision of the Articles of Association, on their own account or on behalf of third parties, acts subject to the purposes of the Company, as well as to participate as general partners or as sole shareholders or partners in companies that pursue such purposes. In case of culpable violation of the previous paragraph prohibition, the Company is entitled to claim compensation. However, instead of compensation, it may require that, for transactions performed on behalf of the consultant or the director, these transactions were performed on behalf of the Company, and that for transactions performed on behalf of a third party, to be granted to the Company the fee for the mediation or to be assigned to it the relevant receivables. These receivables expire after one (1) year from the time when the above transactions were announced at a meeting of the Board of Directors or were notified to the Company. The limitation period, however, occurs five (5) years after the entry into force of the prohibited act. ΙΙ. Size and Composition of the Board of Directors 2.1 Composition of the Board of Directors 2.1.1 According to article 9 of the Company’s current Articles of Association, the Board of Directors consists of five (5) to fifteen (15) members, who are elected by the General Meeting of Shareholders with an absolute majority of votes represented in the General Meeting. 2.1.2 The members of the Board of Directors can be shareholders of the Company or not. A member of the Board of Directors can also be a legal entity. In this case, the legal entity is obliged to appoint a natural person to exercise the powers of the legal entity as a member of the Board of Directors. The natural person is fully co-responsible with the legal entity for corporate management. 2.1.3 The members of the Board of Directors are always re-elected and freely revoked by the General Meeting, regardless of the expiration date of their term. 2.1.4 The General Meeting may also elect alternate members, equal number to the regular members. Alternate members may be used only to replace members of the Board of Directors who have resigned, passed away or lost their status in any other way. 2.2 Term of the Board of Directors The term of the Board of Directors’ members is five years, extended until the expiration of the term within which the next Ordinary General Meeting must convene and until the relevant decision is taken, but in no case may it exceed six years. 2.3 Participation in the meeting of the Board of Directors 2.3.1 Each consultant must attend the meetings of the Board of Directors uninterruptedly and devote the time required for the satisfactory and effective fulfillment of his/her duties. 2.3.2 The unjustified absence or non-representation of a consultant during the meetings of the Board of Directors for a period longer than six (6) months is equivalent to his/her resignation. The resignation becomes final from the day that the Board of Directors will decide on it, and its decision is recorded in the minutes and is notified to the consultant to whom it concerns. In the event of an unexcused absence of an independent member in at least two (2) consecutive meetings of the Board of Directors, this member should be considered as having resigned. In such a case, the resignation will be established by a decision of the Board of Directors, which will then replace the member, in accordance with the procedure of par. 4, article 9 of Law 4706/2020. 2.4 Replacement of the Board of Directors’ members 2.4.1 Subject to the provisions of Law 4706/2020 on corporate governance, in case of resignation, death or any other way of losing the status of member or members of the Board of Directors, the latter may elect members to replace the missing members. This election is allowed if the replacement is not FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 50 possible by alternate members, who may have been elected by the General Meeting. The election by the Board of Directors is made by decision of the remaining members, provided that there are at least three and is valid for the remainder of the term of the replaced member. The decision of the election is submitted to the publicity of article 13 of law 4548/2018 and is announced by the Board of Directors at the next General Meeting, which can replace the elected members, even if there is no relevant item on the agenda. 2.4.2 In case of resignation, death or in any other way loss of member or members’ status of the Board of Directors, the remaining members may continue the management and representation of the Company without replacing the missing members in accordance with the previous paragraph, provided that their number exceeds half of the members, as they had been before the occurrence of the above events. In any case, these members may not be less than three (3). 2.4.3 In any case, the remaining members of the Board of Directors, regardless of their number, may convene a General Meeting with the sole purpose of electing a new Board of Directors. 2.5 Distinction between executive and non-executive members of the Board of Directors 2.5.1 The executive members of the Board of Directors are in charge of the management issues related to the daily operation of the Company as well as for the implementation of the strategy determined by the Board of Directors. The executive members regularly consult with the non-executive members of the Board of Directors on the appropriateness of the strategy implemented. In cases of crises or risks, as well as when the circumstances require the assumption of measures that are reasonably expected to significantly affect the Company, such as when decisions are to be made regarding the development of the business activity and the risks assumed which are expected to affect the financial position of the Company, the executive members inform the Board of Directors in writing without delay, either jointly or separately, submitting a relevant report with their estimates and proposals. 2.5.2 The non-executive members of the Board of Directors, including the independent non-executive members, are responsible for the promotion of the corporate goals and issues and the safeguarding of the interests of the Company and have, in particular, the following obligations: (a) monitor and examine the Company's strategy and its implementation, as well as the achievement of its objectives, (b) ensure effective oversight of executive members, including monitoring and controlling their performance, (c) consider and express opinions on proposals submitted by executive members, based on existing information, (d) contribute, through constructive criticism, in the development of strategy proposals for all the Company's issues. 2.5.3 The Board of Directors of the Company, in terms of its independent non-executive members, takes all necessary measures to ensure compliance with the independence criteria set by the applicable regulatory framework. With the assistance and support of the Remuneration and Nomination Committee, the Board of Directors reviews the fulfilment by independent non-executive members of the independence criteria at least on an annual basis per financial year and before the publication of the annual Financial Report, which includes relevant finding. Within this framework, each independent non-executive member completes and submits annually to the Board of Directors a relevant questionnaire and a responsible statement regarding his/her fulfilment of the independence criteria. Following the above, the Board of Directors of the Company after a thorough examination of the fulfilment by the independent non-executive members of the defined by the provisions of article 9 par. 1 and 2 conditions of independence, declares, ascertains and confirms that both during the 2022 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 51 (01.01.2022-31.12.2022), as well as at the date of approval of this Report, all its independent non- executive members, and in particular Mr. Ioannis Tsoukaridis, Ioannis Papamichalis and Aliki Benroubi, continue to meet in their entirety the conditions of independence set by the current regulatory framework. 2.6 Succession of members of the Board of Directors and CEO 2.6.1 The Board of Directors of the Company during its meeting on 30.12.2022 approved the Policy and Procedure for the Succession of the Board Members and CEO, which was drawn up with the cooperation of the Remuneration and Nomination Committee. The Policy aims to ensure on the one hand the orderly and smooth functioning of the Board of Directors, and on the other hand, the smooth continuity of the corporate entity and the effective implementation of the business plan and its strategy. 2.6.2 The above Policy applies: (a) to all the members of the Company's Board of Directors (executive, non-executive, independent non-executive), (b) to the CEO of the Company, as well as to his/her Deputies (one and/or more) and (c) to the members of the various Committees of the Board of Directors. 2.6.3 The Succession Policy and Procedure for the members of the Board of Directors and the CEO includes the following stages:  recognition of the need to fill the vacancy,  determination and approval of the profile of the position to be filled,  examination of the possibility of filling the position internally from the list of candidates maintained and updated by the Remuneration and Nomination Committee,  activation of the possibility of selecting an external candidate, in case there is no suitable internal candidate, either upon recommendation or through assignment to an external consultant,  evaluation of the main characteristics and qualifications of the candidates to fill the position according to the procedure and criteria described in the Succession Policy,  completion of the evaluation process and communication of the results to the interested parties. 2.6.4 The Company's Remuneration and Nomination Committee evaluates the adequacy and effectiveness of the Policy, monitors its adoption and implementation, while recording any identified weakness as well as deficiency and makes the necessary and appropriate proposals-recommendations for improvement. 2.6.5 The Policy is examined on an annual basis and its content as well as implementation is amended and reviewed whenever this is deemed appropriate or necessary, following a relevant recommendation by the Remuneration and Nomination Committee. 2.7 Evaluation of the Board of Directors 2.7.1 The evaluation of the members of Board of Directors is carried out on an annual basis and includes the assessment of all members (executive, non-executive, independent non-executive), as well as third parties (non-members of the above body) who are members of the more specific BoD Committees. 2.7.2 The members of the Board of Directors are evaluated: (a) on a collective basis, which takes into account the overall operation and effectiveness of the subject corporate body and (b) on an individual basis which entails the assessment of contribution of each member towards the successful operation of the Board of Directors. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 52 2.7.3 The evaluation of both the collective and individual suitability is carried out on the basis of questionnaires which are completed by each member of the Board of Directors separately, while additionally within the framework of individual assessment, private meetings between the Remuneration and Nomination Committee and the members may be held, if deemed appropriate or necessary. The members of Board of Directors must answer honestly to all the questions included in the questionnaires. 2.7.4 The criteria based on which the suitability of the members of Board of Directors is evaluated are defined by Law 4706/2020, the decisions issued by the Hellenic Capital Market Commission under its authority, as well as by the Company's applicable Suitability Policy. 2.7.5 The evaluation of the overall performance of the Board of Directors concerns the following: the size and composition, the existence of diversity among its members, the adequate representation by gender and the non-application of outdated criteria (e.g. gender, race, color, ethnic or social origin, religion, age, sexual orientation, etc.) during the recruitment process. In any case, the evaluation of the collective suitability of Board of Directors aims to ensure the existence of a body that consists of the most competent and suitable (fit and proper) individuals, operates in accordance with the Articles of Association, the Greek Code of Corporate Governance, the Internal Regulation, the Company's more specific Policies and Procedures, as well as the applicable legislative and regulatory framework in general. The evaluation also ensures that the Board of Directors is able to take, through effective cooperation and fruitful exchange of views, the appropriate decisions taking into account the business model, the risk acceptance level, the business strategy and the conditions of the market in which the Company activates, while monitoring the actual implementation of the decisions of top management and exercising constructive criticism in the context of promoting the broader corporate interests. 2.7.6 The evaluation of the individual suitability of each member of the Board of Directors concerns the level of performance on an individual basis and the assessment of contribution to the effective operation and overall performance of the collective body, i.e. BoD. When evaluating individual suitability, the member's status (executive, non-executive, independent), his/her participation in special committees, the assumption of specific responsibilities, along with the theoretical knowledge and professional experience are all taken into account for the benefit of the company's interests and activities. Additional areas that are being assessed include the time each member spends in fulfilling the respective duties, the overall personal behavior, the absence of any kind of compromise, as well as the absence of objective and proven factors that indicate a lack of honesty, integrity and good reputation. 2.7.7 The Company's Remuneration and Nomination Committee is the competent body for the initiation of the evaluation process of the Board of Directors as well as for the more specific structure of this process (internally or via the assistance of an independent external consultant). 2.7.8 In the event that a low level of performance is detected, the Chairman of the Board of Directors (non-executive member) is being informed. By this manner, an individual meeting with the member of the Board of Directors can be considered on the one hand for personal briefing and on the other hand for purposes of discussion about the individual weaknesses or deficiencies that have been identified and also for taking further actions or implementing procedures, the adoption of which is deemed appropriate as well as necessary (e.g. further training of the member, removal of specific responsibilities, etc.). ΙΙΙ. Operation of the Board of Directors 3.1 Formation of the Board of Directors as a body FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 53 The Board of Directors immediately after its election by the General Meeting convenes and is formed in a body, electing among its members by secret voting and by an absolute majority the Chairman and Vice-Chairman as well as the Chief Executive Officer. The Chairman, when he/she is absent or disabled, is replaced by the Vice Chairman and him/her, the Consultant appointed by the Board of Directors. The Chief Executive Officer, when absent or disabled, is replaced by the Consultant appointed by the Board of Directors. The award of the position of Chairman or Vice-Chairman and the Chief Executive Officer is not considered incompatible for the same person. 3.2 Board of Directors meetings 3.2.1 The Board of Directors meets whenever required by law, the Articles of Association or the needs of the Company, at its headquarters or in the region of another Municipality within the prefecture of the headquarters. The Board of Directors meets validly outside its headquarters in another place, either at resident country or abroad, provided that all its members are present or represented at the meeting and no one objects to the holding of the meeting and the decision-making. 3.2.2 The Board of Directors may meet by teleconference with respect to some or all of its members. In this case, the invitation to the members of the Board of Directors includes the necessary information and technical instructions for their participation in the teleconference. 3.2.3 During the closing year 2022 (01.01.2022-31.12.2022) thirty-six (36) meetings of the Board of Directors took place. All of its members participated in all the above meetings (fully-attended meetings). 3.3 Convening of the Board of Directors 3.3.1 The Board of Directors is convened by its Chairman or his/her deputy with an invitation notified to its members, in which the items of the agenda must be clearly stated, otherwise decisions are allowed only if all the members of the Board of Directors are present or represented and no one objects to decision making. 3.3.2 The convening of the Board of Directors can be requested by at least two (2) of its members with their request to its Chairman or his/her deputy, in accordance with the provisions of article 91 par. 3 of law 4548/2018. 3.4 Quorum - Decision making of the Board of Directors 3.4.1 The Board of Directors is in quorum and meets validly, when is present or represented to it half (1/2) plus one consultant, but the number of present or represented consultants can never be less than three (3). In order to find the quorum number, any resulting fraction is omitted. 3.4.2 The decisions of the Board of Directors are validly taken by an absolute majority of the members present or represented. In case of a tie, the vote of the Chairman of the Board of Directors shall not prevail. Each Consultant has one (1) vote. Each consultant can validly represent only one consultant. Representation may not be assigned to persons who are not members of the Board of Directors. The voting in the Board of Directors is open, unless with its own decision it is decided that on the specific issue a secret voting will be held, in which case the voting is conducted with a ballot paper. 3.5 Board of Directors’ minutes 3.5.1 The discussions and decisions of the Board of Directors are recorded briefly in a special book, which can also be kept electronically. At the request of a member of the Board of Directors, the Chairman is obliged to record in the minutes a summary of his/her opinion. The Chairman has the right to refuse to record an opinion, which refers to issues obviously off the agenda or its content is clearly contrary to good morals or the law. In this book it is also recorded a list of members present or represented at the meeting of the Board of Directors. The minutes of the Board of Directors are signed by the present members. In case of refusal of signing by a member, a relevant mention is made in the minutes. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 54 3.5.2 Copies and extracts of the minutes of the Board of Directors are certified by the Chairman or his/her deputy, in case of impediment, by the General Manager of the Company or by the person appointed by a decision of the Board of Directors of the Company. 3.5.3 Copies of minutes of Board of Directors meetings for which there is an obligation to register them in the G.E.M.I., according to article 12 of law 4548/2018 or other provisions, there are submitted to the competent service of G.E.M.I. within twenty (20) days from the meeting of the Board of Directors. 3.5.4 The preparation and signing of minutes by all members of the Board of Directors or their representatives is equivalent to a decision of the Board of Directors, even if no previous meeting has taken place. This arrangement also applies if all consultants or their representatives agree to have their majority decision recorded in a minutes without a meeting. The relevant minutes are signed by all Consultants. Signatures of consultants or their representatives can be replaced by exchanging messages by e-mail or other electronic means. ΙV. Information for the current Board of Directors and the Committees of the Company 4.1 In the context of the full, substantial and effective compliance and harmonization of the Company with the requirements and regulations of the new law 4706/2020 (Government Gazette A 136/17.07.2020) on corporate governance, the Annual Ordinary General Meeting of shareholders of June 25, 2021 elected a new nine-member (9-member) Board of Directors with a five-year term, namely until 25.06.2026, extended until the expiration of the deadline within which the next Ordinary General Meeting must convene and until a relevant decision is made, consisting of the following members: 1) Georgios Ginosatis of Spyridonas, 2) Stamatina Ginosati of Georgios, 3) Stamatios Ginosatis of Spyridonas, 4) Asimina Ginosati of Dimitrios, 5) Dimitrios Ginosatis of Stamatis, 6) Spyridonas Ginosatis of Stamatis, 7) Ioannis Tsoukaridis of Petros, 8) Ioannis Papamichalis of Eustratios and 9) Aliki Benroubi of Sam Samouil. 4.2 At the same time with this decision of the above Annual Ordinary General Meeting of the shareholders has defined as independent members of the Company’s Board of Directors Messrs.: 1) Ioannis Papamichalis of Eustratios, 2) Ioannis Tsoukaridis of Petros and 3) Aliki Benroubi of Sam Samouil, who meet the who fully meet the conditions and criteria of independence set by the current legislative and regulatory framework (article 9 par. 1 and 2 of l. 4706/2020), namely: (a) do not hold directly or indirectly percentage of voting rights greater than 0.5% of the Company’s share capital and (b) are free from any dependent relationship with the Company or persons related to it and maintain no financial, business, family or other relationship, which may affect their decisions and their independent, objective and impartial judgment. 4.3 The above elected Board of Directors was formed into body as follows: 1) Georgios Ginosatis of Spyridonas, Chairman of the Board of Directors (Non-Executive Member). 2) Stamatina Ginosati of Georgios, Vice-Chairman of the Board of Directors (Executive Member). 3) Stamatios Ginosatis of Spyridonas, Chief Executive Office (Executive Member). 4) Asimina Ginosati of Dimitrios, Member of the Board of Directors (Executive Member). 5) Dimitrios Ginosatis of Stamatis, A’ Deputy Chief Executive Officer (Executive Member). 6) Spyridon Ginosatis of Stamatios, B’ Deputy Chief Executive Officer (Executive Member). FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 55 7) Ioannis Tsoukaridis of Petros, Member of the Board of Directors (Independent Non-executive Member). 8) Ioannis Papamichalis of Efstratios, Member of the board of Directors (Independent Non-Executive Member). 9) Aliki Benroubi of Sam Samouil, Member of the Board of Directors (Independent Non-Executive Member). The composition of the new Board of Directors of the Company fully covers the appropriate and effective exercise of its duties and responsibilities, reflects the size, organization and mode of operation of the Company that requires speed and flexibility, due to the strong export orientation and the very high percentage of extroversion, achieves adequate staffing of both existing and new Committees set up to strengthen the supervisory role of the Board of Directors, and it is distinguished for the diversity of knowledge, skills, qualifications and experience, elements that can contribute decisively to the promotion and achievement of the corporate objectives and plans of the Company. Particularly and according to the above, the Company’s Board of Directors is consisted of: • 4/9 (44.4%) non-executive members • 3/9 (33.3%) independent non-executive members • 3/9 (33.3%) women 4.4 The minutes of 25.06.2021 of the Annual Ordinary General Meeting of the Company's shareholders regarding the election of a new Board of Directors as well as the minutes of 25.06.2021 of the Board of Directors on its formation into body and the granting of commitment and representation rights of the Company were registered in the General Commercial Registry (G.E.MI) on 08.07.2021 with Registration Code Numbers (RCN) 2578692 and 2578693 respectively, issued in relation to it with protocol number 2400213/08.07.2021 of the relevant announcement of the Ministry of Development and Investment (General Secretariat of Commerce & Consumer Protection, General Directorate of Market, Directorate of Companies, Department of Supervision of Listed SAs & Sports SA) 4.5 As of December 31, 2022 as well as on the date of publication of this Report, the composition of the Board of Directors is as follows: FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 56 4.6 Regarding the proper operation of the Board of Directors and the day-to-day management and control of the Company's activities, there is a clear separation of responsibilities at the management level. The duties of the Chairman of the Board of Directors and those of the Chief Executive Officer are exercised by different persons, while in full compliance with the provision of par. 1 of article 8 of Law 4706/2020 the Chairman of the Board of Directors is a non-executive member. In particular and in accordance with the provisions of the current Operating Regulations of the Company: 4.6.1 Chairman of the Board of directors The Chairman of the Board of Directors, who is a non-executive member, chairs the meetings of this corporate body and is responsible for organizing and coordinating its work in order to achieve its efficient and effective operation. The responsibilities of the Chairman of the Board of Directors include the following: • ensuring the good organization and efficiency of the Board of Directors’ work and its Committees, • setting the items on the daily agenda, ensuring that the Board of Directors takes decisions on all matters within its remit and devotes the required time to issues that concern it, • convening and chairing the meetings of the Board of Directors and ensuring their effective conduct through the encouragement of constructive dialogue and the effective contribution of the views of the Board of Directors’ members, • ensuring the timely and correct information of the Board of Directors’ members for the preparation of its meetings, • ensuring constructive relations between executive and non-executive members and creating an open-minded culture, • ensuring the effective communication of the Board of Directors with the shareholders, so that their positions on important issues are understood, • cooperation with the Chief Executive Officer and the Corporate Secretary for the preparation of the Board of Directors and the full information of its members, Full Name Capacity Date of Election End of Term & Re-election Chairman of BoD 25.06.2021 25.06.2026 Non-Executive Member Stamatina Ginosati Vice Chairman of BoD 25.06.2021 25.06.2026 Executive Member Stamatios Ginosatis Chief Executive Officer (CEO) 25.06.2021 25.06.2026 Executive Member Asimina Ginosati Executive Member 25.06.2021 25.06.2026 Dimitrtios Ginosatis First Deputy CEO 25.06.2021 25.06.2026 Executive Member Spyridon Ginosatis Second Deputy CEO 25.06.2021 25.06.2026 Executive Member Ioannis Tsoukaridis Independent Non- Executive Member 25.06.2021 25.06.2026 Ioannis Papamichalis Independent Non- Executive Member 25.06.2021 25.06.2026 Aliki Benroubi Independent Non- Executive Member 25.06.2021 25.06.2026 Georgios Ginosatis FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 57 • overseeing the evaluation process of the Board of Directors for the effective fulfillment of its duties, • all other responsibilities that, as the case may be, are mentioned in the Company's Articles of Association and / or in the current legislation. 4.6.2 Chief Executive Officer The Chief Executive Officer is the Executive Member of the Board of Directors to whom are assigned the responsibilities for the management of the Company and its representation, acting within the limits of the powers and responsibilities set by the current legislation, the Articles of Association, the specific decisions of the Board of Directors, the Regulations and Policies that govern the organization and operation of the Company. In particular, the CEO has the following responsibilities: • conducts every act of administration, management and representation of the Company within the framework of the powers and responsibilities assigned to him/her by the Board of Directors, • decides on all general issues concerning the Company within the framework of the corporate objective, • executes the decisions of the Board of Directors, • is responsible for the implementation of the corporate strategy as defined by the Board of Directors, • further delegates the exercise of the powers and responsibilities assigned to him/her to third parties, employees or not of the Company, members or not of the Board of Directors, in general or for only certain acts, within the scope of the powers assigned to him/her, determining at the same time the scope of this assignment, • ensures the immediate availability to the members of the Board of Directors of any information that becomes necessary for the performance of their duties, • cooperates with the Chairman of the Board of Directors and the Corporate Secretary for the preparation of the Board of Directors and the full information of its Members, • consults at regular intervals with the non-executive members of the Board of Directors on the appropriateness of the corporate strategy in its implementation, • informs the Board of Directors in writing without undue delay, either alone or together with the other executive members of the Board of Directors, submitting a relevant report with the assessments and proposals, when there are situations of crisis or risk, as well as when the circumstances require them to be taken measures, which are reasonably expected to significantly affect the Company, such as when decisions are to be made regarding the development of the business activity and the risks taken, which are expected to affect its financial position. 4.6.3 Vice-Chairman of the Board of Directors The Vice Chairman of the Board of Directors replaces the Chairman in his/her duties, in cases where the Chairman is prevented from exercising them and in general where provided by the Company's Articles of Association and the law. The Vice Chairman of the Board of Directors, in addition to his/her responsibilities related to the operation of the Board of Directors, and to the extent that he/she retains executive capacity, will exercise the executive responsibilities provided to him/her by the relevant powers of the Board of Directors, in order to participate in all decisions which substantially affect the course of the Company. 4.6.4 Deputy Chief Executive Officer The Deputy Chief Executive Officer is an Executive Member of the Board of Directors of the Company and replaces the Chief Executive Officer, when he/she is absent or prevented from performing any of his/her duties. More than one executive member of the Board of Directors may be appointed as Deputy Chief Executive Officers, while the extent of responsibilities assigned to them is delimited by the Board of Directors by special decision. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 58 4.6.7 Corporate Secretary It is a support body of the Board of Directors according to the Greek Code of Corporate Governance. Appointed and revoked by the Board of Directors, is not a member of it and attends its meetings. The main responsibilities of the Corporate Secretary are the following: • providing practical support to the Board of Directors of the Company in terms of its compliance with the internal Policies and Procedures of the Company, the relevant laws and regulations and the effective operation of the Board of Directors, • ensuring, in consultation with the Chairman, the immediate, clear and complete information of the Board of Directors, the inclusion of new members, the organization of General Meetings, the facilitation of communication of the shareholders with the Board of Directors and the facilitation of communication of the Board of Directors with senior executives. 4.7 Curriculum vitae of members of the Board of Directors and senior executives 4.7.1 The brief CVs of the Members of the Board of Directors are as follows: Georgios Ginosatis, Chairman of the Board of Directors (Non-Executive Member) He is one of the founders of FLEXOPACK with industrial and administrative experience for over forty years. He has been educated on polymer technology and processing. For a number of years he was an elected Consultant at the Athens Chamber of Commerce and Industry. He was the Chairman of the Board of Directors and Chief Executive Officer of FLEXOPACK from January 1989 until June 2021, when he assumed the capacity of the Chairman of the Board of Directors. Stamatios Ginosatis, Chief Executive Officer (Executive Member) He has industrial administrative and laboratory experience of more than forty years. He is one of FLEXOPACK’s founders. His vision, business thinking and international experience have contributed to the significant growth of the Group, making the Group one of the leaders in Europe in the field of flexible plastic packaging of the food industry. He served as Vice-Chairman of the Board of Directors and Deputy Chief Executive Officer of FLEXOPACK from January 1989 until June 2021, when he assumed the capacity of Chief Executive Officer. He studied Chemistry at the Aristotle University of Thessaloniki and holds a M.Sc. from the City University of London in polymer technology. Ginosati Stamatina, Vice-Chairman of the Board of Directors (Executive Member) She is the head of the Human Resources Management (HR) Department of the Group. She holds a degree in Economics and Business Administration (Maitrise Economie et Gestion de l'entreprise) from the University of Aix - Marseille II in France as well as long-term work experience in the Company and later in the Group, as she has been actively employed since 2002 until today, while she was elected as a member of the Board of Directors in June 2017. Ginosati Asimina, Member of the Board of Directors (Executive Member) She has significant administrative experience and knowledge of the Company's objective, employed in a dependent employment relationship since 1986 continuously until today, participating in the close management team with the Company's founders and having assumed responsibility for both the Company's Credit Control Department and broadly of the Group, as well as the supervision of organizational and administrative operations. She was elected as an executive member of FLEXOPACK’s Board of Directors on January 1989. Ginosatis Dimitrios, First Deputy Chief Executive Officer (Executive Member) FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 59 He is the Business Development Manager of Flexopack Group and he has held various positions of responsibility in the organization during his 15-year term. He has extensive experience in the production, research and development of flexible packaging products and holds patents on plastic packaging. He was born in 1980 in Athens and holds a B.A. in Computer Science from Brown University in the USA and M.Sc. in Polymer Science from Michigan State University. He is member of FLEXOPACK BoD as of June 2017. Ginosatis Spyridonas, Second Deputy Chief Operating Officer (Executive Member) He is the Head of Operations of FLEXOPACK Group with experience of more than 10 years in the polymer processing industry. He has been an executive in financial and business sector before joining the team of Flexopack. He was born on 1983 in Athens and holds a B.Sc. on applied Mathematics from the University of Brown USA. He is member of FLEXOPACK BoD as of June 2017. Tsoukaridis Ioannis, Member of the Board of Directors (Independent Non-Executive Member) He is a graduate of the Athens University of Economics and Business. He started his career in 1973 with a small printing house and managed to achieve a continuous growth of his customer base. In 1979 it made a turn by expanding the activity of the printing house, entering the boxing industry and turning PAPERPACK into the Leader of the boxing industry in Greece. From 1996 to the end of 2020 he was the Chairman and CEO of the listed company on the Athens Stock Exchange PAPERPACK SA, of which he was the main shareholder. He is member of FLEXOPACK BoD as of June 2021. Papamichalis Ioannis, Member of the Board of Directors (Independent Non-Executive Member) He is a graduate of the University of Thessaloniki and holds a Master in Business Administration (M.B.A in Finance) from Georgia State University. He worked from 1980 to 1987 in TITAN CEMENTS SA in the Department of Studies and Internal Audit. From 1987 to 1993 he was the Head of Studies, Planning and Internal Audit at VARNIMA CORPORATION INTERNATIONAL and from 1993 to 2017 he held the position of Chief Financial Officer at AVIN INTERNATIONAL S.A. He is member of FLEXOPACK’s Board of Directors as of June 2021. Benroubi Aliki, Member of the Board of Directors (Independent Non-Executive Member) Chairman and CEO of Benroubi SA. She studied Economics at the H.E.C. of Lausanne and the Deree College of Athens. From the beginning of her career she worked in the Benroubi family business, a dominant company in the field of import and distribution of renowned international companies’ electrical appliances. Since 2002, she is the creator of the small electrical appliances brand IZZY, which currently holds a leading position in the Greek market. She is member of FLEXOPACK’s Board of Directors as of June 2018. 4.7.2 The brief CVs of the Company’s senior management are as follows: Pelonis Panagiotis– Factory Director He holds a degree in Electrical Engineer from Western Michigan University in the USA. He is employed in the Company as of December 1999, where he holds the position of Factory Director. Rousos Georgios–R&D Director FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 60 He is in charge of the Research and Development Department of the Group. He has a bachelor's degree in Chemical Engineering from M.P.U. He has long-term work experience in the Company and later in the Group, as he has been actively employed since May 1997 until today. Mantzoros Dimitrios – Group Commercial Director He has a bachelor's degree in Electrical Engineering from M.T.U. and after a long working experience in the Company and later in the Group he holds the position of Commercial Director of the Group. Vasilis Kyrou – Sales Director It is Dr. Chemical Engineer, graduate of the Polytechnic School of AUTh, 1983, with MSc and PhD in Chemical Engineering, from Syracuse University, NY, USA. Has long-term professional experience in sales topics in the International Market. From 1991 to 1998 he worked in various industrial companies, initially as R&D Manager and Technical Director and then as Commercial Director (El. Hatzopoulos SA, N. Vamvalis SA). As of October 1998 he started working as Export Director of Flexopack, where he continues to this day as Sales Director. Koumoutsos Antonis -Group Supply Chain Director He is in charge of the Supply Chain Department of the Group. He has a bachelor's degree in Chemical Engineering from M.P.U. and a postgraduate degree from Cranfield University U.K. as well as M.B.A. from E.U.A., as well as long-term work experience in the Company and later in the Group, as it has been actively employed since the year 2001 until today. Anastasios Lymperopoulos –Finance Director He is a graduate of the Department of Economics of the National Kapodistrian University of Athens and has long-term professional experience in the field of Finance. From February 1982 to December 1994 he worked in various commercial and industrial companies holding the position of Accounting Director, among them in the companies "ORGANON HELLAS SA" and "ORGANON TECHNICS HELLAS SA” of the “AKZO” group. From April 1995 to December 1996 he was the Finance Director of the company AGROTIKOS OIKOS SPYROU SA. At FLEXOPACK he started working as of January 1997, where from then until today he holds the position of Finance Director of the Group. 4.8 Professional commitments of members of the Board of Directors According to the statements of the members of the Board of Directors, the following other professional commitments have been notified to the Company, including significant non-executive commitments to companies and non-profit organizations: FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 61 Member of BoD Professional Commitment - Other Companies of the Group Georgios Ginosatis - Stamatina Ginosati DISPI S.A. (BoD Member) TECHNOPLASTIKI S.A. (Chairman of BoD & shareholder) EGGEIA Ι . Κ . Ε . (Administrator & shareholder) ANELIXIS I.K.E. (shareholder) Stamatios Ginosatis - Asimina Ginosati - Dimitrtios Ginosatis DISPI S.A. (Chairman of BoD & shareholder) APIRON RECYCLING S.A. (BoD Member) TECHNOPLASTIKI S.A. (Vice-Chairman of BoD & shareholder) Spyridon Ginosatis DISPI S.A. (Vice-Chairman of BoD & shareholder) TECHNOPLASTIKI S.A. (BoD Member & shareholder) APIRON RECYCLING S.A. (Chairman of BoD) ANELIXIS I.K.E. (Administrator) Ioannis Tsoukaridis FIVE J&B S.A. (Shareholder) PAPERPACK S.A. (Non-Executive Member of BoD) Ioannis Papamichalis - Aliki Benroubi NEA BENROUBI S.A. (Chairman of BoD - CEO & shareholder) BENROUBI REAL ESTATE (Chairman of BoD - CEO & shareholder) FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 62 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. 4.9 Suitability Policy of the Board of Directors 4.9.1 As the Board of Directors is the highest governing body of the Company, which is responsible for formulating the strategy, orientation and business plan of the Company, defending the general corporate interest and strengthening its long-term economic value, it is absolutely necessary that its composition should reflect the knowledge, skills and experience required to exercise its responsibilities, in accordance with the business model and strategy of the Company, its size, structure, activities and operating environment, the complexity of its functions and its special institutional role and character. 4.9.2 The Annual Ordinary General Meeting of Shareholders of June 25, 2021 approved the Suitability Policy prepared on behalf of the Management, which aims to ensure quality and proper staffing, smooth operation and effective fulfillment of the role of the Board of Directors, as a collective body, for the purpose of promoting the corporate purpose and defending the corporate interest. The Suitability Policy has been designed by a clearly and defined way and includes both the principles governing the selection, replacement and / or renewal of the Board of Directors members’ term, and the criteria for assessing their suitability, including the criteria which satisfactorily ensure the diversity of the composition of the Board of Directors, in accordance with applicable law, and are harmonized with the operational organization of the Company and in particular the strongly extroverted nature of it and the Group more broadly, taking into account that its activities extend , except European, and in Member of BoD Professional Commitment - Other Companies of the Group Georgios Ginosatis - Stamatina Ginosati - Stamatios Ginosatis - Asimina Ginosati - Dimitrtios Ginosatis FLEXOPACK PTY LTD (Director) FLEXOPACK PROPERTIES PTY LTD (Director) FLEXOPACK ΝΖ LIMITED (Director) FLEXOPAC Κ TRADE AND SERVICES UK LIMITED (Director) FLEXOPACK FRANCE (Director) FLEXOPACK USA INC. (President of BoD & Secretary) FLEXOPACK IRELAND LIMITED (Director and Secretary) FLEXOPACK DENMARK ApS (Director) Spyridon Ginosatis FLEXOPACK POLSKA Sp z.o.o (BoD Member) FLEXOPACK INTERNATIONAL LIMITED (Director) FLEXOPACK PTY LTD (Director) FLEXOPACK PROPERTIES PTY LTD (Director) FLEXOPACK ΝΖ LIMITED (Director) FLEXOPAC Κ TRADE AND SERVICES UK LIMITED (Director) FLEXOPACK FRANCE (Director) FLEXOPACK USA INC. (Vice President of BoD andTreasurer) FLEXOPACK IRELAND LIMITED (Director) FLEXOPACK DENMARK ApS (Director) Ioannis Tsoukaridis - Ioannis Papamichalis - Aliki Benroubi - FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 63 international markets in which the Group has achieved a significant degree of presence and creation of a competitive position. 4.9.3 In accordance with the approved and current Suitability Policy, both in the election of new Board of Directors’ members, and in case of replacement or replenishing or renewal of the term of existing members, the Remuneration and Nomination Committee takes into account the criteria related to individual and collective suitability always in the light of the corporate values, the strategy and the general business model that has been adopted and applied by the Company. Ι. Individual suitability Especially the individual suitability is being assessed based on the following criteria: (a) Adequacy of knowledge and skills The capacity of the Board of Directors member is directly related to the performance of administrative duties, which dictate: (a) appropriate and adequate background of academic education and training and (b) previous related professional experience. Particularly there are taken into account: • the description of the specific responsibilities and duties related to the position of the member of the Board of Directors, • acquired knowledge and skills at academic and general theoretical level, • the required skills in relation to the tasks to be performed (hard and soft skills), • the relevant practical and professional experience, which especially for the executive members of the Board of Directors is interwoven either with the holding of a position of responsibility, or with the exercise of business activity for a sufficient period of time, • the sufficient knowledge and understanding of the activities and the complexity of the business model of the Company but also of the Group in general and especially in the light of the international character of the corporate activities, • adequate knowledge and understanding of the legal framework and the Code of Corporate Governance implemented by the Company. (b) Guarantees of morality and reputation The members of the Board of Directors must have proven credibility, good reputation and ethics, which is determined mainly by their honesty and integrity. In particular it is taken into account • the non-existence of objective and proven reasons who indicate a lack of honesty and good reputation such as, as an example, final administrative and judicial decisions, in particular for offenses related to membership of the Board of Directors, non-compliance with the legislation of the Hellenic Capital Market Commission or in general financial offenses • the relevance of any offenses to the role of the member, their degree of seriousness, the general conditions of conduction including any mitigating factors and the role of the person involved, the sentence imposed and any remedial measures; • the existence of a decision by any competent authority to exclude the member from the exercise of duties as a member of the Board of Directors, • the time elapsed since the commission of the offense, • the general behavior of the person after the commission of the offense. (c) Conflict of interests According to the Policy and Procedure for the Prevention & Management of Conflict of Interest Situations adopted by the Company, a conflict of interest is defined as any real or potential situation (professional, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 64 personal or other situation or relationship), in which the private interests of the liable person may are contrary to the interests of the Company or may affect the ability of the liable person to assess a situation or his/her judgment to make a decision independently, impartially and based on the interest of the company and which has the possible effect that the interests of the Company are at risk. The members of the Board of Directors must strictly follow and apply the framework of policies, mechanisms and procedures for the purpose of prevention, recognition and effective treatment and management of conflict of interest situations, in accordance with the specific provisions of both the above policy and the company’s Operating Regulation. (d) Independence of judgement The members of the Board of Directors must act with an independent judgment, which is not only ensured by the absence of conflict of interest and the fulfillment of the conditions of independence in accordance with current legislation, but requires active participation of members in the meetings of the Board of Directors and expression of independent and objective judgments. In particular, the following must be ensured: • the absence of any kind of compromise in the exercise of their duties as members of the Board of Directors, • the exemption from conditions that prevent the member of the Board of Directors from exercising his/her duties in an independent and impartial manner, • the assistance of behavioral skills for the purpose of substantively evaluating the proposals and views of the other members of the Board of Directors in a way that promotes constructive decision-making, • the ability to formulate and support a personal opinion and to avoid indiscriminate or mass adoption of positions that may be expressed by the other members of the Board of Directors (group thinking). (e) Allocation of sufficient time The members of the Board of Directors must have the necessary time for the orderly and effective exercise of the duties related to their position. In particular, the following shall be taken into account in determining the adequacy of the time available: • the status and the specific responsibilities and duties of the member of the Board of Directors, • his/her participation in the Committees of the Board of Directors, • the possible holding of positions and responsibilities on the Boards of Directors of other companies and / or legal entities, • other professional obligations, personal commitments, age and special personal circumstances of each member of the Board of Directors. The executive members, in particular, of the Board of Directors, whose duties are directly related to the promotion of the corporate activities and the best possible promotion of the corporate purpose, must have sufficient time to fulfil all the related obligations. For this purpose, the Company provides information to each candidate member about the expected time, which is required for the proper fulfilment of his/her duties both at the meetings of the Board of Directors, and at the meetings of the individual Committees, of which he/she may be a member. ΙΙ. Collective suitability The Board of Directors in the context of its operation as a collective body must be able to: (a) make appropriate decisions taking into account the business strategy, business development model, the range of risks taken, as well as the specific conditions prevailing in each market (domestic, European and international) in which the corporate activities take place, and (b) to effectively monitor the decisions of senior management and to exercise constructive criticism in the context of promoting the corporate interest. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 65 In the context of the above dual mission, the Board of Directors must have a sufficient number of members, who have the appropriate knowledge and experience in each area related to collective responsibility, so that the management body of the Company can exercise effective management, supervision and oversight of corporate affairs. The main areas of collective responsibility include: • business planning and organization in general, • the key risks associated with the exercised business activity, the ability to identify and properly manage them, • in the applicable financial information and reporting framework, • adequate knowledge and understanding of issues related to corporate governance, • compliance with the legislative, regulatory in general framework. ΙΙΙ. Diversity criteria The Suitability Policy, which has been adopted and implemented by the Company in the context of promoting an effective corporate governance model, promotes the diversity criteria during the selection process of the members of the Board of Directors, and the management and supervisory bodies of the Company, so that they are constituted of a multi-collective team based on sufficient degree of differentiation. The adoption of diversity criteria and the evaluation of the specific qualifications and experiences of each member are related in particular to: (a) the avoidance of outdated and anachronistic social stereotypes in assessing the suitability of members, (b) promoting different views within the institution in order to make it more effective in decision- making, and (c) the pursuit of integrating innovative approaches and ideas into the decision-making process. More specifically, the basic criteria of the intended diversity of the Board of Directors’ and the management and supervisory bodies of the Company composition are as follows: • the minimum percentage (25% of the total members) representation by gender, • the prohibition of exclusion of a candidate or active member of the Board of Directors due to different gender, race, color, ethnic or social origin, religion or belief, property, birth, disability, age or sexual orientation. The members of the current Board of Directors and of any other corporate body cover a wide age range (between 40 and 80 years), combine dynamics and experience, are distinguished for their ethics, reputation, reliability and integrity of character, have worked in high positions and have been senior executives of important companies, as a result of which they have rich experience in the business field and are able to actively and substantially contribute to the development prospects of the Group in the geographical areas of its activity. 4.9.4 The full text of the Suitability Policy of the members of Board of Directors is available on the Company's website https://flexopack.com/investor relations/corporate governance/policies . 4.10 Remuneration of Board of Directors’ members 4.10.1 An essential and fundamental condition for the long-term growth and the ensuring of the Company’s stable presence in the market, in which it operates is the harmonization and alignment of the Board of Directors members’ remuneration with the profitability, capital adequacy, competitiveness and sustainable development of the Company. In this context, the Company has established, maintains and applies basic principles and rules regarding the remuneration of the Members of the Board of Directors (hereinafter "Remuneration Policy") that contribute at maintaining the Company's competitiveness, maximizing its long-term financial value and avoiding taking over excessive risks, due to the payment of exorbitant salaries, which are not in line with the prevailing economic conditions and the wider financial environment. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 66 4.10.2 In particular, the Remuneration Policy: • provides incentives for attracting young people as well as retains capable executives with high theoretical training, long-term professional experience and efficiency in the performance of their duties, in order to strengthen and maximize the financial value of the Company, • ensures the provision of a competitive remuneration package, adapted to the market conditions in which the Company operates, • promotes the business strategy, goals, values and interests of the Company, • enhances internal transparency and • aligns the goals of the Company with the goals of shareholders and stakeholders. 4.10.3 The current Remuneration Policy of the Company was approved, in accordance with the provisions of article 110 of law 4548/2018, by the Annual Ordinary General Meeting of shareholders of June 28, 2019, was registered in the General Commercial Register on 18/07/2019 and the validity period stands at four (4) years, unless the General Meeting within this period decides to amend it. The full text of the Remuneration Policy is available on the Company's website https://flexopack.com/investor relations/corporate governance/policies. The Remuneration Policy applies to all members of the Board of Directors (executive and non-executive, with the necessary differences) including the Chief Executive Officer (one and / or more, if any), the Executive Directors and any Deputy, while it is not applicable to senior or senior executives of the Company. Finally, it also applies to non-members of the Board of Directors who participate in the Company's Committees. 4.10.4 Remuneration of Executive Members According to the specific provisions of the current Remuneration Policy of the Company, the Executive Members of the Company’s Board of Directors are paid: (a) fixed remuneration and (b) variable remuneration. 4.10.4.1 At the fixed remuneration of the executive members of the Board of Directors are included: (a) the remuneration paid to the members of the Board of Directors due to a contract of employment (defined or indefinite time) or a service contract or a paid contract (annual fixed salary), (b) the compensation for participation in the meetings of the Board of Directors and decision-making, (c) the benefits in kind paid by the Company's freedom (indicatively use of a company vehicle / mobile phone / laptop / corporate credit or debit card / fuel card, provision of private health and / or life insurance, use of a fixed number of air tickets, expenses for presence or travelling, accommodation and meals in connection with the fulfillment of these duties as members of the Board of Directors. The amount of the annual cost of benefits in kind may not exceed a maximum of 20% of the annual fixed salary of each executive member of the Board of Directors. The fixed remuneration is been paid by the Human Resource Department (Payroll Department) of the Company. The Company has not yet established and as a result do not apply on the executive members of the Board of Directors: (a) pension schemes, other than the coverage of statutory social security contributions, (b) early retirement or supplementary pension schemes, (c) other incentive programs. 4.10.4.2 As Variable are considered the remuneration that are linked to the achievement of goals both of the Executive Members of the Board of Directors as well as of the Company and are a key component of its performance-oriented policy. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 67 Subject to the achievement of specific corporate profitability targets, the Board of Directors may propose the payment of variable remuneration as an incentive for higher performance. The stated objectives may be determined and revised annually in relation to the Company's annual budget and business plan. The payment of variable remuneration is not binding for the Company. The payment of variable salaries is made in cash and may be consisted of participation in the Company's profits. Variable remuneration is recorded as a percentage of annual fixed remuneration. However, in no case may the amount of the variable percentages exceed 100% of the annual fixed salaries of each of the executive members of the Board of Directors. The Company's performance goals are set at the beginning of each corporate year in collaboration between the Management and the Financial Services Department. At the end of the financial year, the non-Executive Members of the Board of Directors evaluate the performance of its Executive Members and examine the achievement of the set goals, always taking into account the financial environment and market conditions. The payment of the variable remuneration and its amount is decided by the Board of Directors of the Company in a special meeting, based on the above evaluation. The Company may not request a refund of variable remuneration paid. 4.10.5 Remuneration of Non-Executive Members The remuneration of the Non-Executive Members of the Board of Directors is approved by a special decision of the Ordinary General Meeting of the Company's shareholders. The remuneration of the Non-Executive Members of the Board of Directors is paid in cash and is subject to the deductions provided by the applicable tax and insurance legislation. The Non-Executive Members of the Board of Directors receive compensation for their participation in the meetings of the Board of Directors, while they may also be granted additional fees (bonus), participation rights in the Company's profits, stock options or compensations related to the achievement of goals of the Company, within the same framework of the quantitative restrictions that apply to the Executive Members. For the payment of remuneration to Non-Executive Members, there are taken into account the complexity-breadth of their work, the degree of experience and any special knowledge they have, their working time, any participation in special Committees of the Board of Directors (e.g. Audit Committee), the number of meetings in which they participate, etc. The Independent Non-Executive Members do not participate in a scheme of pensions, allowances or long-term incentives, unless there is a special decision of the competent corporate body. Any expenses for performance, transportation, accommodation and meals in relation to the fulfillment of the duties of the Independent Non-Executive Members of the Board of Directors are approved by the Chairman of the Board of Directors. Especially the Independent Non-Executive Members of the Board of Directors for the proper collection of their remuneration and compensations are obliged to submit to the Company any supporting documents requested to prove the fulfillment by these criteria set in the law for their designation as independent. 4.10.6 During the financial year 2022 (01.01.2022 - 31.12.2022), the members of the Company's Board of Directors received the remuneration listed in the Table below, which (remuneration) is in agreement and harmonization with the provisions and regulations of the applicable Remuneration Policy established and applied by the Company. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 68 Note 1: the Annual Ordinary General Meeting of shareholders of June 10, 2022 approved for the financial year 2022 (01.01.2022-31.12.2022), for the personal work and services of the members of the Board of Directors of the Company, which (work) is provided on equal number of contracts approved by the competent corporate bodies (work/project/provision of services/salaried assignment), as well as for their participation in the meetings of the Board of Directors and its specific Committees, the following amounts and in particular: The above-mentioned amounts, on the one hand, are in line with the principles and rules of the approved and current Remuneration Policy, and on the other hand, are related to the increased employment and the upgraded role the members of the Board of Directors are called to play under the provisions of the new law 4706/2020 regarding corporate governance. Note 2 : regarding with: a) Mr. Dimitrio Panagota, third party, non-member of BoD, Chairman of the Audit Committee an annual gross fee was approved of 12,000 euro maximum, b) Mr. Nikolao Vlacho, third party non-member of BoD, member of the Audit Committee an annual gross fee was approved of 10,000 euro maximum. Full Name – Capacity in the BoD Total Remuneration Year 2022 Annual Remuneration Fees for participation in Committees Benefits Stock Options Other Fees EUR Georgios Ginosatis Chairman of BoD 341,089 0 38,490 26,560 0 406,139 Stamatios Ginosatis Chief Executive Officer 341,089 0 47,579 26,560 0 415,228 Stamatina Ginosati Vice Chairman 325,601 0 9,570 26,560 0 361,731 Asimina Ginosati Executive Member 241,694 0 8,791 26,560 0 277,045 Dimitrios Ginosatis Executive Member 325,601 0 36,282 26,560 0 388,443 Spyridon Ginosatis Executive Member 325,601 0 23,966 26,560 0 376,127 Ioannis Tsoukaridis Independent Non Executive Member 12,803 0 0 0 0 12,803 Ioannis Papamichalis Independent Non Executive Member 19,687 0 0 0 0 19,687 Aliki Benroubi Independent Non Executive Member 13,331 0 0 0 0 13,331 Fixed Remuneration Variable Remuneration 1. Georgios Ginosatis Up to the amount of EUR 361,000 annually 2. Stamatios Ginosatis Up to the amount of EUR 361,000 annually 3. Asimina Ginosati Up to the amount of EUR 258,000 annually 4. Stamatina Ginosati Up to the amount of EUR 350,000 annually 5. Dimitrios Ginosatis Up to the amount of EUR 350,000 annually 6. Spyridon Ginosatis Up to the amount of EUR 350,000 annually 7. Ioannis Papamichalis Up to the amount of EUR 20,000 annually 8. Ioannis Tsoukaridis Up to the amount of EUR 14,000 annually 9. Aliki Benroubi Up to the amount of EUR 15,000 annually FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 69 Note 3: the above Annual Ordinary Meeting approved for the corporate year 2022 (01.01.2022- 31.12.2022) both for executive and non-executive members of the BoD benefits in kind, the level of which cannot exceed the upper limit of 20% percentage of the annual fixed remuneration of each member, according to the provisions of the current Remuneration Policy of the Company. Note 4: the Remuneration Report of the members of Board of Directors for the closing financial year 2022 (01.01.2022-31.12.2022) is to be posted on the Company's website (https://www.flexopack com), immediately after its submission for discussion to the Annual Ordinary General Meeting of shareholders. 4.11 Number of shares of the Board of Directors’ members and senior management on 31.12.2022 PART Β – COMMITTEES & OTHER CORPORATE BODIES Ι. Audit Committee 1.1 Election and term of the Audit Committee The Annual Ordinary General Meeting of shareholders of June 25, 2021 decided the election of a new Audit Committee, in accordance with the provisions of article 44 of law 4449/2017, as in force after its amendment by article 74 of law 4706/2021, the which constitutes an Independent Joint Committee, consists of three (3) members, of which one (1) Independent Non-Executive Member of the Board of Directors of the Company and two (2) third persons - non-Members of the Board of Directors and its term is five years, expiring on June 25, 2026, extended until the expiration of the deadline within which the next Ordinary General Meeting must convene, in no case, however, may it exceed six years. 1.2 Members of the Audit Committee 1.2.1 Especially as members of the Audit Committee were elected the following persons: 1) Dimitrios Panagotas of Ioannis, Certified Auditor-Accountant (R.N. SOEL 34971), non-Member of the Board of Directors – third party. Full Name Capacity in the BoD Number of Voting Rights 31/12/2022 Georgios Ginosatis Chairman of BoD 2,051,874 Stamatios Ginosatis Chief Executive Officer 3,628,166 Stamatina Ginosati Vice Chairman 325,648 Asimina Ginosati Executive Member 8,800 Dimitrios Ginosatis Executive Member 269,350 Spyridon Ginosatis Executive Member 258,572 Ioannis Tsoukaridis Independent Non Executive Member 0 Ioannis Papamichalis Independent Non Executive Member 0 Aliki Benroubi Independent Non Executive Member 0 Georgios Roussos Director of Research & Development 1,400 Panagiotis Pelonis Factory Manager 600 Dimitrios Mantzoros Commercial Policy Manager 0 Antonios Koumoutsos Supply Chain Manager 2,400 Vasilis Kyrou Sales Manager 5,090 Anastasios Lyberopoulos Chief Financial Officer 3,000 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 70 2) Nikolaos Vlachos of Matthews, non-Member of the Board of Directors – third party. 3) Aliki Benroubi of Sam Samouil, Independent Non-Executive member of the Board of Directors. Then the Audit Committee during its meeting on 28 th June 2021 elected, among other members, as Chairman of it Mr. Dimitrios Panagota of Ioannis. 1.2.2 For the purpose of complete, adequate and appropriate information of the shareholders and the investing public in general, below are the brief biographies of the Members of the Audit Committee who are third parties - non-Members of the Board of Directors. Dimitrios Panagotas He is a Certified Public Accountant, with a wide knowledge base and rich professional experience. He studied Accounting and Finance at the University of Macedonia and is a graduate of the two-year postgraduate program of the Institute of Certified Public Accountants for obtaining the professional license of Certified Public Accountant. He started his professional career in 1999 taking various positions in the financial sector. From January 2003 to March 2016 he worked as a Certified Public Accountant and Tax Auditor in the company Associate Certified Public Accountants SA. Since January 2019 he has been cooperating with the auditing company NEXIA EUROSTATUS S.A. In addition, he has experience as a member of Audit Committees in other companies listed on the Athens Stock Exchange. He is also a member of the Body of Certified Public Accountants and the Hellenic Institute of Internal Auditors. Nikolaos Vlachos He studied Chemistry specializing in polymers. BSc: Polymer Science, School of Molecular Science University of Sussex, UK. He is a holder of a postgraduate degree M. Philosophy by the same University with a scholarship from the company Tate + Lyle UK. He worked for 12 years as a senior executive in the flexible packaging plastics industry. From 1997 until today he holds the position of Chairman and Chief Executive Officer in the company "VLACHOU BROS SA". He had been a member of the Board of Directors of FLEXOPACK from 2009 until 2021. 1.2.3 The members of the Audit Committee meet all the criteria and conditions set by the provisions of the current legislative and regulatory framework, namely: (a) are in their entirety independent of the audited entity in accordance with the provisions of par. 1 and 2 of article 9 of law 4706/2020 and in particular: (i) do not hold directly or indirectly a percentage of voting rights greater than 0.5% of the Company's share capital; and (ii) are free from any dependency relationship, as it (dependency relationship) is specified in par. 2 of article 9 of law 4706/2020, with the Company or persons related to it and they do not have any financial, business, family or other relationship which may influence their decisions and their independent, objective and impartial judgment, (b) have a thorough knowledge of the sector in which the entity operates; and (c) at least one member of the Committee who is independent of the audited entity, has sufficient knowledge and experience in auditing or accounting, and is required to attend the meetings of the Committee on the approval of financial statements. 1.3 Operation of the Audit Committee 1.3.1 The Audit Committee has Operating Regulation, which was approved by the Board of Directors of the Company at its meeting of November 22, 2018, while its amendments were approved at the meetings of the Board of Directors of September 28, 2020 and June 15, 2021. The Regulation records, among other things, the responsibilities, duties and obligations of the members of the Committee and is posted on the Company's website (http://www.flexopack.com), according to the explicit legislative requirement of article 10 par. 4 of law 4706/2020. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 71 1.3.2 In accordance with the current Operating Regulation of the Audit Committee and taking into account the size, business model and scope of activities of the Company, the Audit Committee meets at regular intervals and extraordinarily when required. In any case, the Audit Committee meets four (4) times a year, while at least two (2) times a year it holds a meeting with the statutory Auditor of the Company, without the presence of the members of Management. The Audit Committee may also meet by teleconference. 1.3.3 All its members participate in the meetings of the Audit Committee in person. The Audit Committee has the discretion to invite, whenever deemed appropriate, key executives involved in the management of the Company, including the CEO, Chief Financial Officer (CFO) and the Head of the Audit Department, to attend specific meetings or specific items on the agenda and provide any necessary information, clarifications or explanations. 1.3.4 The Audit Committee is convened by its Chairman by invitation which is communicated in any appropriate way to the other members at least two (2) days before the meeting. The invitation must include at least the date, time and items on the agenda clearly, otherwise decisions may be taken as long as none of the members of the Committee object to the meeting and the decision being taken. 1.3.5 The decisions of the Audit Committee are taken by an absolute majority of its members. In case of a tie, the casting vote of the Chairman shall prevail. 1.3.6 The discussions and the decisions of the Audit Committee are recorded in minutes which are signed by the members present in accordance with article 93 of law 4548/2018. The minutes are available to all members of the Audit Committee and, at the discretion of its Chairman, to the Board of Directors. 1.3.7 The Audit Committee may elect a secretary to observe the minutes of its meetings and to support its work in general. 1.4 Responsibilities of the Audit Committee According to the provisions of article 44 of law 4449/2017, the responsibilities of the Audit Committee include the following: (a) informs the Company's Board of Directors of the outcome of the statutory audit and explain how the statutory audit contributed to the integrity of the financial information and what was the role of the Audit Committee in that process; (b) monitors the financial information process at all stages and make recommendations or proposals to ensure its integrity; (c) monitors the effectiveness of the internal control, quality assurance and risk management systems of the enterprise and, where appropriate, its Internal Audit Department, regarding the financial information of the audited entity, without prejudice to the independence of that entity; (d) monitors the statutory audit of the annual and consolidated financial statements and in particular its performance; (e) supervises and monitors on an ongoing basis the independence of chartered accountants or audit firms and in particular the adequacy of the provision of non-audit services to the audited entity; (f) is responsible for the selection process of certified public accountants or audit firms and proposes the statutory auditors or audit firms to be appointed; (g) submits an annual report of the proceedings to the Annual Ordinary General Meeting of the Company's shareholders. 1.5 Number of Audit Committee’s meetings FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 72 1.5.1 During the closing year 2022 (01.01.2022-31.12.2022) the Audit Committee met fourteen (14) times and all its decisions were taken unanimously. During each meeting, the examination of all the items on the agenda was completed, after the required information notes and the relevant suggestions had been distributed, and the competent executives, the Certified Auditors and other persons were invited to participate, as the case may be in order to provide any necessary clarifications and / or explanations. 1.5.2 It is clarified that the Certified Auditor-Accountant of the Company, who performs the audit of the annual and semi-annual financial statements, provided with the approval of the Audit Committee authorized non-audit services to the Company amounting to 16,001 euros and is not related to any other relationship with the Company in order to comply with the provisions of Law 4449/2017 and thus ensure its objectivity, impartiality, integrity and independence, with the exception of ensuring services related to the performance of the special tax audit required in accordance with the provisions of article 65A of law 4174/2013, as a result of which (audit) the "Annual Tax Certificate" is issued. 1.6 Proceedings of the Audit Committee The issues that occupied the Audit Committee during the year 2022 (01.01.2022-31.12.2022) were the following: 1.6.1 Financial reporting process - External audit In the field of external audit and financial information processing, the Committee has taken the following steps: (a) was informed by the Chief Financial Officer of the financial statements of the Company and the Group for the year ended 31 December 2021 and of the principal matters of concern to the Financial Management in the preparation of the financial statements; (b) was informed of the accounting principles and policies applicable to the preparation of the financial statements, as well as of the consolidation basis and measurement methods used for the assets and liabilities contained in the financial statements; (c) reviewed the financial statements of the Company and the Group for the year 2021 (01.01.2021- 31.12.2021) before their approval by the Board of Directors and evaluated them in terms of their accuracy and completeness; (d) ascertained the agreement of the financial statements with the legally binding content and framework of their preparation and recommended their approval; (e) briefed the Board of Directors on the issues arising from the statutory audit, the contribution of the statutory audit to the quality and integrity of financial information and the role of the Audit Committee in this process; (f) verified compliance with the rules on the disclosure of financial statements, as well as the possibility of immediate, permanent and without any charge for access to them; (g) was informed by the Certified Auditor-Accountant about the most important issues of the audit for the year 2021, the risks that were assessed as the most important and how to deal with them and was informed about the final draft of the Audit Report for the year ended 31 December 2021, (h) took note of the supplementary report of the Chartered Auditors - Accountants provided by Article 11 of the Regulation of the European Union (EU) 537/2014 on the financial statements of the Company and the Group, (i) submitted a proposal to the Annual Ordinary General Meeting of the Company's shareholders for the election of the Audit Company under the name "Grant Thornton Societe Anonyme SA" for the performance of the statutory audits of the annual and semi-annual financial statements for the year 2022, (j) was informed by the Certified Auditor - Accountant regarding the procedure and methodology that will be followed during the audit of the semi-annual and annual financial statements for the year 2022, with the planning and the schedule of its audit, as well as for the audit procedures to be followed, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 73 (k) confirmed the impartiality, objectivity, independence and integrity of the external auditors in accordance with the Code of Professional Ethics of the International Federation of Accountants, Regulation (EU) 537/2014 and Law 4449/2017, as well as the non-provision of any external , directive, suggestion or recommendation by the Management of the Company, (l) was informed by the Certified Auditor-Accountant about the audit approach of the review of the interim financial statements of the first half of the year 20212 and became aware of the important issues of the audit, (m) supervised the correct and timely disclosure to the investing public of corporate announcements concerning financial information; (n) Approved the provision of authorized non-audit services by the auditing company "Grant Thornton Corporation of Certified Auditors and Business Consultants". 1.6.2 Internal control system In the context of monitoring the effective operation of the Company's internal control system and the proper operation of the Internal Control department, the Audit Committee: (a) examined and evaluated the effectiveness and adequacy of the Internal Control Unit's procedures regarding the Company's financial information, without affecting in any way its independence; (b) monitored the effectiveness of internal control systems through the work of the Internal Control Unit and the work of the Chartered Accountant; (c) reviewed the management of the Company's main risks, evaluating the methods used by the Company to identify and monitor the risks, as well as the treatment of the main ones and their proper disclosure; (d) was informed of the annual control program of the Internal Control Unit before its implementation and approved it; (e) was informed and evaluated of the work of the Internal Control Unit and was informed of the reports of the Head of the Internal Control Unit; (f) inspected the proper functioning of the Internal Control Unit in accordance with professional standards and the applicable legal and regulatory framework in general; (g) had meetings with the Internal Auditor on issues that may have arisen during the audit process, in order to ensure the smooth operation of all individual Departments and Divisions of the Company; (h) confirmed that the Internal Control Unit has constant and unhindered access to all the data and records of the Company, which are necessary for the performance of its duties, as well as to all the Departments of the Company, (i) examined the Operating Regulations of the Internal Control Unit of the Company and its compliance with the requirements of the applicable regulatory framework. (j) recommended the selection of the firm Grant Thornton S.A. for the evaluation of the Internal Control System of the Company and its most important subsidiaries, in the context of harmonization with and implementation of Law 4706/2020 and the relevant decisions of the Hellenic Capital Market Commission. 1.6.3 Other (a) in cooperation with the Management and in response to the Hellenic Capital Market Commission's letter with protocol number 2707/09.11.2022 the Company assisted, to the extent and degree that was appropriate and required, in the preparation of an announcement for the purpose of informing the investor community regarding the following: the evolution of the Company’s fundamental performance, the business activities as well as the Company’s prospects for the third quarter (Q3) of the financial year 2022, as well as the potential impact of the energy crisis and the ongoing war conflict between Russia and Ukraine on the financial results, the overall performance and the broader course of both the Company and the Group. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 74 (b) approved the content of the information provided to the shareholders of the Company at the Annual Ordinary General Meeting of June 10, 2022 regarding its activities for the year 2021 (01.01.2021- 31.12.2021); ΙΙ. Remuneration and Nomination Committee 2.1 Establishment, term and members of the Remuneration and Nomination Committee 2.1.1 The Board of Directors of the Company in the context of immediate, substantial, full and effective compliance with the requirements and general regulations of articles 10-12 of law 4706/2020 (Government Gazette A 136/17.07.20201), as well as the adoption of corporate governance best practices, at its meeting of 14 July 2021 set up a single three-member Remuneration and Nomination Committee, in order to provide the necessary assistance and support to the Board of Directors on the one hand in the process of identifying and promoting appropriate persons for the staffing of Board of Directors, based on the existing Suitability Policy, and on the other hand during the process of preparation, evaluation and revision of the Remuneration Policy, with the aim of attracting and retaining competent executives. As members of the Remuneration and Nomination Committee were defined the following persons: 1) Aliki Benroubi of Sam Samouil, Independent, Non-Executive Member of the Board of Directors. 2) Ioannis Papamichalis of Efstratios, Independent, Non-Executive Member of the Board of Directors. 3) Georgios Ginosatis of Spyridonas, Non-Executive Member of the Board of Directors. The Remuneration and Nomination Committee during its meeting on 15 th July 2021 elected, among its members, as Chairman of it Mrs Aliki Benroubi of Sam Samouil. 2.1.2 The term of the Remuneration and Nomination Committee is five years, ending on June 25, 2026, extended until the expiration of the deadline within which the next Ordinary General Meeting must convene, but in no case may it exceed six years. 2.2 Operation of Remuneration and Nomination Committee 2.2.1 The Remuneration and Nomination Committee (RNC) has an Operating Regulation, which was approved by the Board of Directors of the Company at its meeting of July 14, 2021. This Regulation records the organization and operation of the Remuneration and Nomination Committee, regulates its duties, responsibilities and obligations and of its members and is posted on the Company's website (http://www.flexopack.com), according to the explicit legislative provision of article 10 par. 4 of law 4706/2020. 2.2.2 In accordance with its Operating Regulation, the Remuneration and Nomination Committee meets regularly at least two (2) times a year and extraordinarily, when required by its members. 2.2.3 All its members participate in the meetings of the Committee in person. The Committee has the discretion to invite, whenever appropriate, key executives involved in the management of the Company, including the CEO, to attend specific meetings or specific items on the agenda and to provide any necessary arrangements or clarifications on them. 2.2.4 The meeting is convened at the invitation of the Chairman of the Committee and is being notified in any appropriate way to the other members at least two (2) days before the meeting. The invitation shall include at least the date, time and items on the agenda. The Remuneration and Nomination Committee may also meet by teleconference. 2.2.5 Decisions of the Committee shall be taken by an absolute majority of its members. In case of a tie, the vote of its Chairman shall prevail. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 75 2.2.6 The discussions and decisions of the Committee are recorded in the minutes with the care of the Corporate Secretary, are signed by the members present and are at the disposal of the members of the Committee and the Board of Directors. 2.2.7 It is noted that the Committee may use any resources it deems appropriate, for the fulfillment of its purposes, including services by external consultants. In case of hiring an external consultant, the Committee is responsible for monitoring its work. 2.3 Responsibilities of Remuneration and Nomination Committee 2.3.1 In the context of compliance with the provisions of article 11 of law 4706/2020, the Committee on Remuneration and Nomination Committee: (a) periodically reviews and formulates proposals to the Board of Directors regarding the Remuneration Policy submitted for approval to the General Meeting, in accordance with paragraph 2 of article 110 of Law 4548/2018, (b) makes proposals to the Board of Directors regarding the remuneration of persons falling within the scope of the approved Remuneration Policy of the Company; (c) reviews the information contained in the final draft of the Annual Remuneration Report, and provide its opinion to the Board of Directors, prior the submission of the Report to the General Meeting; (d) examines and submits proposals to the Board of Directors regarding the plans for granting options or granting shares to the members of the Board of Directors and the staff of the Company, as well as to the companies affiliated to it; (e) submits proposed performance targets for any variable remuneration of the members of the Board of Directors or goals associated with options for the granting of options or shares; (f) ensures and monitors the process of assessing the extent to which the performance criteria of persons falling within the scope of the approved Remuneration Policy are met; (g) makes proposals regarding the remuneration of the Company's executives and in particular of the head of the internal control unit; (h) submits proposals to the Board of Directors for any remuneration related business policy. 2.3.2 In the context of compliance with the provisions of article 12 of law 4706/2020, the duties of the Remuneration and Nomination Committee include the following: (a) the care, with the support of the Corporate Secretary, for posting on the Company's website and maintaining an up-to-date CV of each member of the Board of Directors throughout his/her term of office; (b) ensuring that the work of the Committee is reported, as well as the number of meetings in the Company's annual Corporate Governance Statement; (c) the annual assessment of the size, composition, independence criteria, balance of knowledge and skills of the existing Board of Directors, in accordance with the Company's Suitability Policy; (d) the submission of proposals on the content of the Suitability Policy, the training policy of the members of the Board of Directors and the Recruitment and Evaluation Procedures of senior executives of the Company; (e) the care for the communication of the respective position of a member of the Board of Directors to cover, planning, implementation and monitoring of the process of nomination of members of the Board of Directors; (f) taking care of the evaluation of the candidates based on the Suitability Policy and the recommendation to the Board of Directors of the candidate members of the Board of Directors; (g) the coordination of the periodic self-evaluation of the members of the Board of Directors and of its Committees (collective), of the Chairman and the Chief Executive Officer (individual); (h) timely information and submission of proposals to the Board of Directors regarding the succession plan for the members of the Board of Directors; FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 76 (i) the assignment and monitoring of the work of external consultants which it may designate for the fulfillment of its purpose; (j) the care for the formation of the training program of the members of the Board of Directors, at the beginning and during their term of office, in accordance with the Training Policy followed by the Company. 2.4 Number of meetings of Remuneration and Nomination Committee During the closing financial year 2022 (01.01.2022 - 31.12.2022), the Remuneration and Nomination Committee met four (4) times with all members being present, and all decisions were taken unanimously. 2.5 Proceedings of the Remuneration and Nomination Committee (a) examined and evaluated in terms of adequacy, proportionality and suitability, the level of remuneration of all members of the Board of Directors which were approved by the Annual Ordinary General Meeting of shareholders of June 10, 2022 on the one hand for the year 2021 (01.01.2021 - 31.12.2021) and for the fiscal year 2022 (01.01.2022-31.12.2022), in order to determine whether the remuneration paid is commensurate with the duties, the degree of employment, the range of powers, the responsibilities and the performance of such persons as well as to whether they are in line with the prevailing financial conditions and the wider financial environment in which the Company develops its operation and activity, in order to avoid phenomena of payment of exorbitant fees and the consequent Exposure of the Company to excessive risks, (b) provided the necessary assistance for the preparation of the Remuneration Report of the members of the Board of Directors and other persons falling within the scope of the Remuneration Policy for the closing year 2021, in order for its content to fully comply with both the provisions of Article 112 of Law 4548/2018 as well as with the 01.03.2019 Guidelines of the European Commission regarding the standard presentation of the Remuneration Report in accordance with Directive 2007/36/EC, as amended by Directive (EU) 2017/828 for shareholders' rights. (c) provided the Company's Management with the required assistance in drawing up the Succession Policy and Procedure concerning the Members of the Board of Directors and the CEO, with the aim of ensuring, on the one hand, the orderly, efficient and smooth operation of the Board of Directors as well as the high level of quality and the appropriate recruitment of members, and on the other hand, the smooth continuity of the corporate entity along with the implementation of its business plan and strategy. III. Corporate Announcements and Shareholder Services Unit The Company, being listed on a regulated stock market, according to the requirements of articles 19 and 20 of Law 4706/2020 possesses and operates Corporate Announcements and Shareholder Services Unit, which: (a) makes the necessary and required announcements in relation to regulated information in accordance with the provisions of Law 3556/2007 as applicable, as well as in relation to corporate events in accordance with the provisions of Law 4548/2018. The Company proceeds as per above in order to inform accordingly the shareholders or beneficiaries of other securities of the Company. (b) is responsible for the Company's compliance with the obligations provided in article 17 of Regulation (EU) 596/2014, regarding the disclosure of privileged information, and in other applicable provisions, (c) has the responsibility of maintaining and updating the Company's share registry and is charged with the provision of immediate, accurate and equal information towards the shareholders and especially with the provision of support to shareholders regarding the exercise of their rights, in accordance with the applicable legislation and the Company's Articles of Association. The publication of the relevant information is always performed in a way that ensures the speedy and equal access of the shareholders and the investment community in general to all available information, both financial and non-financial. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 77 PART C – GENERAL MEETING Ι. The General Meeting 1.1 Introduction The General Meeting of Shareholders is the supreme body of the Company and is entitled to decide on each corporate case. Its decisions also bind the absent or dissenting shareholders. 1.2 Exclusive competence of the General Meeting 1.2.1 According to article 30 par. 1 of the current Articles of Association, the General Meeting is exclusively competent to decide on: (a) amendments to the Articles of Association (amendments are also considered the increases regular or extraordinary, as well as reductions in share capital); (b) the election of members of the Board of Directors and Auditors; (c) the approval of the overall management according to article 108 of law 4548/2018 and the discharge of the Auditors; (d) the approval of the annual and consolidated financial statements; (e) the distribution of annual profits; (f) the approval of remuneration or advance payment of remuneration according to article 109 of law 4548/2018, (g) the approval of the remuneration policy of article 110 and the remuneration report of article 112 of law 4548/2018, (h) the merger, division, conversion, revival, extension or termination of the Company; and (i) the appointment of liquidators. 1.2.2 They do not fall under the provisions of the previous paragraph: (a) capital increases or capital adjustment acts expressly assigned by law to the Board of Directors, as well as increases imposed by provisions of other laws; (b) the amendment or adaptation of provisions of the Articles of Association by the Board of Directors in the cases expressly provided by law; (c) the appointment by the Articles of Association of the first Board of Directors, (d) the election in accordance with the Articles of Association of directors to replace those who have resigned, died or lost their status in any other way; (e) the absorption under Articles 35 and 36 of Law 4601/2019 of a societe anonyme company by another societe anonyme company that holds one hundred percent (100%) or ninety percent (90%) or more of its shares, (f) the possibility of distributing temporary dividends according to paragraphs 1 and 2 of article 162 of law 4548/2018 and (g) the possibility of distribution according to paragraph 3 of article 162 of law 4548/2018 profits or optional reserves in the current corporate year by decision of the Board of Directors, subject to publication. 1.3 Convening a General Meeting 1.3.1 The General Meeting of Shareholders is convened by the Board of Directors and meets at the headquarters of the Company or in the region of another Municipality within the region of headquarters, at least once every corporate year no later than the tenth (10th) calendar day of the ninth month after the end of corporate use. The General Meeting may also convene in the region of the Municipality where the headquarters of the Athens Stock Exchange are located. 1.3.2 The General Meeting meets extraordinarily whenever the Board of Directors deems it necessary or if requested by shareholders representing the percentage required by law and the Company's Articles of Association. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 78 1.3.3 The procedures and rules of convening, participation and decision-making by the General Meeting are regulated in detail by the provisions of Law 4548/2018 and the Articles of Association of the Company. 1.3.4 From the procedures, forecasts and general arrangements mentioned below, it is clear that the Company's corporate governance system includes adequate and effective mechanisms for communicating with shareholders, in order to facilitate the exercise of their rights and the active dialogue with them (shareholder engagement). 1.3.5 The Board of Directors ensures that the preparation and conduct of the General Meeting facilitates the effective exercise of the rights of the shareholders, who are informed about all issues related to their participation in the General Meeting, including the items on the agenda and their rights during the General Meeting. In particular, in accordance with the provisions of Law 4548/2018, the Company posts on its website at least twenty (20) days before the General Meeting, in both Greek and English: • the invitation to convene the General Meeting, • the total number of shares and voting rights that the shares incorporate at the date of the invitation, the forms to be used for voting by proxy or representative or, where applicable, for electronic voting, • the documents to be submitted to the General Meeting, • a draft decision on each item on the proposed agenda or, if no decision has been proposed for approval, a comment from the Board of Directors, and • the draft decisions proposed by the shareholders, in accordance with paragraph 3 of article 141 of law 4548/2018, immediately after their receipt by the Company. 1.4 Participation in the General Meeting 1.4.1 In the General Meeting is entitled to participate and vote the natural or legal person who has the shareholder status at the beginning of the fifth (5th) day before the date of the General Meeting ("registration date"). Each share provides the right to one (1) vote. 1.4.2 For the Company is considered as a shareholder who is entitled to participate in the General Meeting and to exercise the right to vote the one that is registered at the date of registration in the Dematerialized Securities System (DSS) of the Societe Anonyme with the name "Greek Central Securities Depository SA" (GCSD) or the one identified as such based on the relevant date through the registered mediators or other intermediaries in accordance with the provisions of the legislation (law 4569/2018, law 4569/2018, law 4706/2020 and Regulation (EU) 2018/1212) as well as the Operating Regulation of the Greek Central Securities Depository SA (Government Gazette B 1007/16.03.2021). 1.4.3 The proof of shareholder status is made by any legal means and in any case based on information received by the Company until before the start of the General Meeting by GCSD or through the participating and registered intermediaries in the Central Securities Depository in any other case. 1.4.4 The exercise of the participation and voting rights does not presuppose the commitment of the beneficiary's shares or the observance of another similar procedure, which limits the possibility of selling and transferring them during the period between the registration date and the date of the General Meeting. 1.4.5 The recording date is also valid in case of postponement or repeated meeting, provided that the postponed or repeated meeting is not set at more than thirty (30) days from the recording date. If this does not happen or if in the case of the repeated General Meeting a new invitation is published, in accordance with the provisions of article 130 of Law 4548/2018), at the General Meeting participates FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 79 the person who has the shareholder status at the beginning of the third (3rd) the day before the day of the postponement or the repeated General Meeting. 1.4.6 In article 25 par. 1 of the Company's Articles of Association has been provided the possibility of participation of the shareholders in the General Meeting from a distance in real time by audiovisual or other electronic means, without the physical presence of the shareholders at the venue. The shareholders who participate in the General Meeting through real-time teleconference, are taken into account for the formation of the quorum and the majority and can effectively exercise their rights during the General Meeting. Thus the shareholders have the possibility: (a) to monitor by electronic or audiovisual means the conduct of the General Meeting; (b) to speak and address to the General Meeting orally during the General Meeting; (c) to vote in real time during the General Meeting on the items on the agenda; and (d) receive information on the registration of their vote. 1.5 Representation in the General Meeting 1.5.1 The shareholder participates in the General Meeting and votes either in person or through representatives. Each shareholder can appoint up to three (3) representatives. Legal entities participate in the General Assembly by appointing as their representatives up to three (3) natural persons. However, if the shareholder holds shares of the Company, which appear in more than one securities account, this restriction does not prevent that shareholder from appointing different representatives for the shares appearing in each securities account in relation to the General Meeting. A representative acting for more than one shareholder may vote differently for each shareholder. 1.5.2 The shareholder representative is obliged to notify the Company, before the beginning of the General Meeting, of any specific event that may be useful to the shareholders in assessing the risk that the agent will serve interests other than the interests of the represented shareholder. For the purposes of this paragraph, a conflict of interest may arise in particular when the agent: (a) is a shareholder who exercises control of the Company or is another legal person or entity controlled by that shareholder; (b) is a member of the Board of Directors or in general of the management of the Company or a shareholder who exercises control of the Company, or of another legal entity or entity controlled by a shareholder who exercises control of the Company; (c) is an employee or auditor of the Company or shareholder exercising control of the Company, or of another legal person or entity controlled by a shareholder exercising control of the Company; (d) is a spouse or first-degree relative of one of the natural persons referred to in (a) to (c) above. 1.5.3 The appointment and revocation or replacement of the shareholder's proxy or representative is made in writing or electronically and is submitted to the Company at least forty eight (48) hours before the scheduled date of the General Meeting. 1.6 Quorum and majority of the General Meeting 1.6.1 According to the law and the Articles of Association of the Company, the General Meeting is in quorum and meets validly on the issues of the agenda, when shareholders are present or representing to it shareholders representing at least one fifth (1/5) of the paid-up capital. 1.6.2 If this quorum is not reached, the General Meeting convenes again within twenty (20) days from the date of the canceled meeting, following an invitation at least ten (10) days in full. At this repeating meeting the General Meeting is in quorum and meets validly on the issues of the initial agenda, whatever the part of the paid-up capital represented in it. A newer invitation is not required if the original invitation had already specified the place and time of the repeating meeting, provided that there is at least five (5) days between the canceled meeting and the repeating meeting. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 80 1.6.3 The decisions of the General Meeting are taken by an absolute majority of the votes represented in it. 1.6.4 Exceptionally for decisions concerning: (a) the change of the Company's nationality; (b) the change in the objective of this Company; (c) the increase of shareholders' liabilities; (d) the regular increase of capital, unless required by law or by capitalization of reserves; (e) the reduction of the capital, unless it is done, in accordance with paragraph 5 of article 21 or paragraph 6 of article 49 of law 4548/2018, as in force, (f) changing the way profits are distributed; (g) the merger, division, conversion, revival of the Company; (h) the extension of the duration or dissolution of the Company, (i) the provision or renewal of authority to the Board of Directors to increase the capital, in accordance with paragraph 1 of article 24 of law 4548/2018, as in force, as well as (j) any other case provided by law that the General Meeting decides by an increased quorum and majority; The General Meeting is in quorum and meets validly on the issues of the agenda when shareholders present or represented to it half (1/2) of the paid-up capital. 1.6.5 If the above quorum is not reached, the General Meeting convenes again within twenty (20) days from the date of the canceled meeting, after an invitation of at least ten (10) full days. At this repeating meeting, the General Meeting is in quorum and meets validly on the issues of the initial agenda, when shareholders present or representing at least one fifth (1/5) of the paid-up capital. A newer invitation is not required if the original invitation had already specified the place and time of the repeating meeting provided that there are at least five (5) days between the canceled meeting and the repeating meeting. 1.6.6 The decisions of the General meeting, in the cases of the previous paragraph are taken by a majority of two thirds (2/3) of the votes represented in the Meeting. 1.7 Minority shareholders’ rights The shareholders of the Company have, among other things, the rights that are provided in paragraphs 1, 2, 3, 5, 6 and 7 of article 141 of law 4548/2018: In particular: (a) At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, the Board of Directors is obliged to convene an Extraordinary General Meeting of shareholders, setting a day of its meeting, which should not be more than forty five (45) days from the date of service of the application to the Chairman of the Board. The application contains the subject of the agenda. If a General Meeting is not convened by the Board of Directors within twenty (20) days from the submission of the relevant application, the convening is carried out by the requesting shareholders at the expense of the Company, by court decision, issued during the interlocutory proceedings. This decision defines the place and time of the meeting, as well as the agenda. The decision is not challenged by legal means. (b) At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, the Board of Directors is obliged to include in the agenda of the General Meeting, which has already been convened, additional issues, if the relevant application reaches the Board of Directors fifteen (15) at least days before the General Meeting. The additional issues must be published or announced, under the responsibility of the Board of Directors, according to article 122 of law 4548/2018, at least seven (7) days before the General Meeting. The request for inclusion of additional items on the agenda is accompanied by a justification or a draft decision for approval at the General Meeting and the revised agenda is made public in the same way as the previous agenda, thirteen (13) days before the date of the General Meeting and at the same time is made available to the shareholders on the Company's FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 81 website, together with the justification or the draft decision submitted by the shareholders according to the provisions of paragraph 4 of article 123 of law 4548/2018. (c) Shareholders representing one twentieth (1/20) of the paid-up capital have the right to submit draft decisions on issues included in the initial or any revised agenda of the General Meeting. The relevant application must be submitted to the Board of Directors at least seven (7) days before the date of the General Meeting, and the draft decisions are made available to the shareholders as defined in paragraph 3 of article 123 of law 4548/2018, six ( 6) at least days before the date of the General Meeting. The Board of Directors is not obliged to register items on the agenda or to publish or disclose them along with justification and draft decisions submitted by shareholders, in accordance with paragraphs 2 and 3 of article 141 of law 4548/2018, if their content is obviously contrary to law or good morals. (d) At the request of a shareholder or shareholders representing one twentieth (1/20) of the paid-up capital, the Chairman of the General Meeting is obliged to postpone once only the decision of the General Meeting, Ordinary or Extraordinary, on all or certain issues, setting a day of continuation of the meeting, the one defined in the request of the shareholders, which, however, may not be more than twenty (20) days from the date of postponement. The postponed General Meeting is a continuation of the previous one and there is no need to repeat the formalities of publishing the shareholders' invitation. New shareholders can also participate in this General Meeting, observing the relevant participation formalities and the provisions of paragraph 6 of article 124 of law 4548/2018 apply. (e) At the request of any shareholder, submitted to the Company at least five (5) full days before the General Meeting, the Board of Directors is obliged to provide the General Meeting with the requested specific information about the Company's affairs, insofar as these are related to the items on the agenda. There is no obligation to provide information when the relevant information is already available on the Company's website, in particular in the form of questions 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 announce to the General Meeting, if it is Ordinary, the amounts paid, during the last two years, to each member of the Board of Directors or the directors of the Company, as well as any provision in benefits to these persons for any reason or contract of the Company with them. In all the above cases, the Board of Directors may refuse to provide the information for a substantial reason, 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 uniformly to shareholders' requests with the same content. (f) At the request of shareholders, representing one tenth (1/10) of the paid-up capital which is submitted to the Company at least five (5) full days before the General Meeting, the Board of Directors is obliged to provide the General Meeting with information on the course of corporate affairs and the assets of the Company. The Board of Directors may refuse to provide the information for a substantial reason, 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, provided that the respective members of the Board of Directors have received the relevant information in a sufficient manner. (g) At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, voting on an item or items on the agenda shall be by open ballot. 1.8 Other rights of shareholders In addition to the right to participate and vote in the General Meeting, the Company's shareholders have the following rights, in accordance with the current Articles of Association and the provisions of Law 4548/218: (a) dividend right The minimum dividend is set at a rate of thirty-five percent (35%) of the net profit, after deducting the ordinary reserve and the other credit accounts of the income statement, which do not derive from the realized profit. By decision of the General Meeting taken with an increased quorum and majority, the above percentage can be reduced, but not be set below ten percent (10%). Non-distribution of the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 82 minimum dividend is permitted only by decision of the General Meeting of shareholders, taken with the increased quorum of paragraphs 3 and 4 of article 130 of Law 4548/2018 and via a majority of eighty percent (80%) of the share capital represented at the General Meeting. The amount to be distributed is paid to the shareholders within two (2) months from the decision of the Ordinary General Meeting of shareholders that approved the annual financial statements and the dividend distribution. The date and method of dividend payment is stated through relevant announcements on the Company's website and on the respective platform of the Athens Exchange. According to Greek legislation, dividends that are not being collected by their beneficiaries for a period of five (5) years from the date on which they became claimable are time-elapsed and the relevant amounts are transferred on definite basis to the Greek State. (b) right to information Ten (10) days before the Ordinary General Meeting, the Company is obliged to post on its website the annual Financial Statements, as well as the relevant Reports of the Board of Directors and the Auditors. (c) pre-emptive right In the event of a share capital increase that is not being made by a contribution in kind or through the issuance of bonds convertible into shares, a pre-emptive right is granted for the entire new capital or bond loan towards the existing shareholders at the time of issuance, on a basis that is proportional with their participation in the existing share capital of the company. (d) right to participate in the liquidation proceeds PART D – INTERNAL COTROL AND RISK MANAGEMENT SYSTEM Ι. Internal Control 1.1 As Internal Control System (ICS) is defined all the internal control mechanisms and procedures, including risk management, internal control and regulatory compliance, which continuously covers every activity of the Company and its significant subsidiaries and contributes to its safe and efficient operation. 1.2 The Internal Control System aims at: • the consistent implementation of the Group's business strategy through the effective utilization of all available resources, • the recognition and management of the essential risks related to the business activity and operation of the Group, • the efficient operation of the Internal Control Department, • to ensure the completeness and reliability of the data and information required for the accurate and timely determination of the financial position of the Company and the preparation of reliable financial statements, • in compliance with the current legislative and regulatory framework in general, as well as the internal regulations governing the operation of the Group. 1.3 Responsible for the systematic monitoring, control and periodic evaluation of the Internal Control System (ICS), in particular as to the adequacy and correctness of the financial and non-financial information provided, the risk management, the regulatory compliance and the Corporate Governance Code adopted by the Company is the Internal Audit Unit, which is an independent organizational unit within the Company. Additionally, periodic evaluation of the Internal Control System is carried out every three (3) years by an independent and objective evaluator, according to the more specific provisions of the decision of the Board of Directors of the Hellenic Capital Market Commission with number 1/891/ 30.09.2020, as it is in effect following its amendment by the decision of its Board of Directors numbered 2/917/17.06.2021 (Government Gazette B΄ 3040/2021) . The latter determines the time, procedure, frequency and any other specific issues required for the evaluation of the Internal Control System as well as the characteristics of persons that should be involved in this process. 1.4 The head of the Internal Control Unit: (a) is appointed by the Board of Directors of the Company, following a proposal of the Audit Committee, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 83 (b) is a full-time and exclusive-employment employee, personally and functionally independent and objective in the performance of his duties; (c) possesses the appropriate knowledge and relevant professional experience. (d) reports administratively to the Chief Executive Officer and operationally to the Audit Committee. (e) may not be appointed as head of the Internal Control Unit, member of the Board of Directors or member with voting rights in Committees of a permanent nature of the Company and has close ties with anyone who holds one of the above properties in the Company or in a company of the Group. Furthermore, the number of internal auditors of the Internal Control Unit must be proportional to the size of the Company, the nature, scale, scope and complexity of the Company's activities, the number of its employees, its geographical points of activity, number of its operating and executive units as well as audited entities in general. Mr. Stavros Meggoulis performs the duties of head of the Company's Internal Control Unit. 1.5 The head of the Internal Control Unit: (a) attends the General Meetings of shareholders; (b) provides in writing any information requested by the Hellenic Capital Market Commission, cooperate with it and facilitate in every possible way the task of monitoring, control and supervision by the competent Supervisory Authority; (c) submits to the Audit Committee an annual audit program and the requirements of the necessary resources, as well as the effects of the resource constraint or the audit work of the Unit in general. The annual audit program is prepared based on the risk assessment of the Company, after taking into account the opinion of the Audit Committee. (d) has free and unhindered access to any organizational unit of the Company and is aware of any data, file and information required for the effective and efficient performance of duties. 1.6 The Internal Control Unit has an Operating Regulation, which was prepared in accordance with the provisions of articles 15 and 16 of Law 4706/2020 (Government Gazette A 136/17.07.2020), as in force, was approved and entered into force by 15.07. 2021 decision of the Board of Directors of the Company following a proposal of the Audit Committee and defines the principles and the basic operating framework of the Unit, determines the fundamental principles and rules that the Internal Auditors must follow in the performance of their duties, describes the responsibilities, the duties and obligations of the Unit. 1.7 The executives of the Internal Control Unit must comply with: (a) the International Professional Practices Framework; (b) the International Standards for the Professional Application of Internal Audit (IIA Standards); (c) the Code of Ethics (IIA Code of Ethics); (d) the applicable legislative and regulatory framework in general; (e) the Internal Operating Regulation of the Company. 1.8 The executives of the Internal Control Unit in the performance of their duties must apply the following principles: (a) integrity (demonstration of honesty, diligence, consistency and responsibility in the performance of their duties, compliance with the legal and regulatory framework and internal procedures of the Company), (b) objectivity (demonstration of the greatest possible impartiality in the collection, evaluation and communication of information related to the audits carried out, non-acceptance of gifts that may affect their professional judgment, immediate disclosure of any event that could be considered contrary to their independence), (c) Confidentiality (respect and management of the information obtained in the performance of their duties with due diligence, avoidance of the use of such information for personal gain or in a manner harmful to the Company, taking appropriate measures to protect this information), FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 84 (d) Adequacy of skills (possession of knowledge, skills and experience required to provide internal control services, continuous improvement of the adequacy, efficiency and effectiveness of their services, exercise of appropriate professional judgment). Results of the evaluation process of the Internal Control System (ICS) of FLEXOPACK SA for the period 17-07-2021 to 31-12-2022, in accordance with article 14, par. 3, point j and paragraph 4 of Law 4706/ 2020 and the relevant Decisions of the Board of Directors of the Capital Market Commission. The Company, by decision of its Board of Directors, assigned to Grant Thornton SA the project "Provision of Internal Control System Assessment Services", with the aim of evaluating the adequacy and effectiveness of the Internal Control System ("ICS") of the Flexopack Company S.A. and its major subsidiaries, Flexopack Polska Sp. Z.o.o. and Flexopack Pty Ltd with a reference date of 31/12/2022, in accordance with the provisions of point i of par. 3 and par. 4 of article 14 of Law 4706/2020 and Decision 1/891/30.09.2020 of the Board of Directors of the Capital Market Commission, as applicable (the "Regulatory Framework"). The said evaluation of the Internal Control System was successfully completed in March 2023 and covered the following subjects: the Control Environment, Risk Management, Control Mechanisms and Security Valves, the Information and Communication System as well as the Monitoring of the Company's Internal Control System and its significant subsidiaries. The Conclusion of the Independent Evaluator, namely Ms. Athena Moustakis, Certified Public Accountant with AM 28871 and Partner of Grant Thornton, which is included in the final evaluation report of the adequacy and effectiveness of the ICS dated 24/03/2023, concludes that from the conducted work and the evidence obtained regarding the assessment of the adequacy and effectiveness of the Company's ICS and its significant subsidiaries, no weaknesses were identified that could be considered material weaknesses in the Company's ICS according to the Regulatory Framework. This result is another confirmation that the Company is in constant compliance with the legislative and regulatory framework that governs the Internal Control System and adopts best practices for the legal and orderly operation of the Group's ICS. ΙΙ. Risk Management 1.1 The Company has established and implements a Risk Management Policy and Procedure, which aims at the timely and effective treatment of risks that may have a negative impact on the achievement of its objectives. Risk Management is a systematic process that aims at the timely and effective identification, analysis, control, management and monitoring of any type of risk involved in the operation of the Company. The steps to follow in the annual Risk Management process are as follows: • Preparation of Risk Profile Revision Proposals • Submission of Risk Profile Revision Proposals • Conducting Risk Management Group Meetings • Approval of Risk Profiles and Action Plan • Monitoring of Action Plan - Reports. The Board of Directors of the Company has the overall responsibility of the risk management framework related to the operations and the achievement of the objectives of the Company. The Audit Committee takes the decisions related to the risk assessment and coordinates through the Risk Management Unit the structuring and implementation of the appropriate safeguards for the respective risk management process based on the level of risk acceptance. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 85 1.2 The risk management system implemented by the Company is based on four axes: • risk identification, • risk assessment, • risk management and • risk monitoring and reporting 1.2.1 Risk identification The risk identification is conducted on an annual basis and is completed before the end of each year. Initiates and takes into account the definition of the strategy and the individual business objectives of the Company. The key factors that can threaten the achievement of these goals are then identified. In this context, the Board of Directors of the Company determines the risk appetite and risk tolerance. The results of the risk identification process are recorded in the Company Risk Register, which is a comprehensive mapping of significant risks. 1.2.2 Risk assessment Each risk is initially assessed in terms of its inherent degree (inherent risk). The Risk Profile also includes the response to each risk, ie the existing actions of the Company in order to manage the respective risk. For each action (policy, procedure and safety valve) the Risk Owner is defined, while for each risk there is the possibility of defining more than one action. The Risk Owners, taking into account the overall actions in the Risk Response, assess the level of residual risk that may remain after the risk management actions. 1.2.3 Risk management In cases where the residual risk is greater than the risk tolerance available by the Company, additional required actions are determined in order to effectively manage the risks. These actions constitute the Action Plan for the desired response to the risk through the improvement of the safety valves and in general of the Internal Control System of the Company. The Risk Profile as well as the Action Plan are approved by the CEO and submitted to the Board of Directors. 1.2.4 Risk monitoring and reporting Risk Owners have the primary responsibility to oversee the effective operation of the individual defined actions and to inform the response actions to each risk with any possible changes. The Head of Risk Management supports the organization and the effective performance of the process and is also responsible for coordinating the work required for the Risk Identification and Assessment Process. 1.3 During the process of drawing up the Company's financial statements, specific safeguards exist and are also being applied, with regard to the use of commonly accepted, based on international practices, tools and methodologies. The main safeguards related to the preparation of the Company's financial statements and reports are the following:  appropriate staffing of the financial services unit with people who have adequate theoretical training and experience to carry out the responsibilities assigned to them,  assignment of responsibilities and authorizations to both the top and middle level managers of the Company, while preserving the required segregation of responsibilities,  adoption of consistent policies and methods in monitoring the Accounting departments of all Group companies, which contain definitions, accounting principles and instructions for the preparation of financial statements and other reports,  conducting audits and verifications between the various information systems,  existence of transaction approval limits, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 86  existence of approval levels for carrying out specific transactions or actions (e.g. payments, collections, legal transactions, etc.),  carrying out accounting and other entries based on the necessary documents,  carrying out inventory measurement processes in relation to raw materials, semi-finished and finished products and goods on a systematic basis, according to explicit and clearly written instructions,  carrying out reconciliations of customer, supplier, loan and bank account balances to ensure the correct representation of the Company's assets and liabilities,  performing comparisons between actual, historical and budgeted income and expenditure accounts with sufficient detailed explanation of any significant discrepancies,  development, upgrading and maintenance of advanced IT infrastructure that ensures the correct and accurate depiction of financial figures and data,  securing the Company's information systems through the existence of procedures for keeping backup files, protection mechanism against viruses, external interventions and malicious actions,  ensuring access to email accounts. Through all the above procedures and mechanisms, an attempt is being made to limit and minimize the risks associated with the preparation of reliable and accurate financial statements. PART E’ – ADDITIONAL INFORMATION 1.1 Introduction The Article 10 par.1 of the EU Directive 2004/25/EC dated April 21 st 2004, relating to takeover bids, states the following as regards to companies whose total shares are listed on an regulated according to the terminology of Law 4548/2018 market: “1. Country members ensure that the companies mentioned in article 1 paragraph 1 disclose detailed information as regards to the following: a) their capital structure, including securities that are not listed on an organized market of a country- member and, according to the case, indication of different categories of shares with the rights and obligations linked to each share category and the percentage of the total share capital such represent; b) all the limitations on transfer of securities, such as limitations on the ownership of securities or the obligation to receive approval by the Company or other shareholders, with the reservation of article 46 of Directive 2001/34/EC; c) the significant direct or indirect holdings (including indirect holdings through pyramid structures or cross- holdings) according to the definition of article 85 of directive 2001/34/EC; d) the owners of any kind of securities that provide special control rights and the description of such rights. (e) the system of control of any employee share scheme where the control rights are not exercised directly by the employees; (f) any restrictions on voting rights, such as limitations of the voting rights of holders of a given percentage or number of votes, deadlines for exercising voting rights, or systems whereby, with the company's cooperation, the financial rights attaching to securities are separated from the holding of securities; (g) any agreements between shareholders which are known to the company and may result in restrictions on the transfer of securities and/or voting rights within the meaning of Directive 2001/34/EC; (h) the rules governing the appointment and replacement of board members and the amendment of the Articles of Association; (i) the powers of board members, and in particular the power to issue or buy back shares; (j) any significant agreements to which the company is a party and which take effect, alter or terminate upon a change of control of the company following a takeover bid, and the effects thereof, except where their nature is such that their disclosure would be seriously prejudicial to the company; this exception shall FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 87 not apply where the company is specifically obliged to disclose such information on the basis of other legal requirements; (k) any agreements between the company and its board members or employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of a takeover bid.” 1.2 The above information is included in detail in Chapter 6 of the present Report. 1.3 As regards to items c, d, f, h and i of par. 1 of article 10, the Company states the following: • as regards to item c’: the important direct or indirect participations of the Company are the following: (a) FLEXOPACK POLSKA Sp.z.o.o, (subsidiary) in which the Company participates with a stake of 100.00% of shares and voting rights. (b) FLEXOSYSTEMS Ltd Belgrade, (subsidiary) in which the Company participates with a stake of 100% of shares and voting rights. (c) FLEXOPACK INTERNATIONAL LIMITED, (subsidiary) in which the Company participates with a stake of 100% of shares and voting rights. (d) FLEXOPACK PTY LTD, (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (e) FLEXOPACK PROPERTIES PTY LTD: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (f) FLEXOPACK NZ LIMITED: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACKPTYLTD" (indirect participation), (g) FLEXOPACK TRADEANDSERVICESUKLIMITED: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (h) FLEXOPACKFRANCE: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (i) FLEXOPACK USA INC.: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (j) FLEXOPACK IRELAND LIMITED: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (k) FLEXOPACK DENMARK APS: (subsidiary), in which the Company participates with 100% through its subsidiary "FLEXOPACK INTERNATIONAL LIMITED" (indirect participation), (l) INOVA PLASTICS AEBE: (affiliate), in which the Company participates with 50% of the shares and voting rights and (m) VLACHOU BROS SA: (affiliate), in which the Company participates with a percentage of 47.71% of the shares and voting rights. Moreover, the significant direct or indirect holdings in the voting rights of the Company, according to the definition of provisions of articles 9 through 11 of l. 3556/2007, are the following: (a) Stamatis Ginosatis, percentage of 30.76% (direct participation) (b) Georgios Ginosatis, percentage of 17.40% (direct participation) (c) Nikolaos Ginosatis, percentage of 16.19% (direct participation) • as regards to item d’: there are no kind of securities (including shares), that provide special control rights. • as r egards to item f΄: there are no known limitations on voting rights (such as limitation of voting rights on owners of a specific percentage or number of shares, deadlines to exercise voting rights, or systems through which with the cooperation of the Company financial rights emanating from shares are distinguished by the ownership of the shares). As regards to exercising voting rights during the General Meeting, extensive reference is made in Part C of the present Corporate Governance Statement. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 88 • as regards to item h΄: regarding the appointment and replacement of Board members and regarding the amendment of the Company’s Memorandum of Association, there are no rules that differ from those stated by Law 4548/2018, as currently in effect. Such rules are described in detail in Part A of the present Corporate Governance Code. • as regards to item i ΄: there are no special authorities of the members of the Board of Directors as regards to the issuance or buyback of shares. It is noted that pursuant to a relevant decision of the Annual Ordinary General Meeting of Shareholders of 10 June 2022, the Board of Directors of the Company was granted the authority to purchase a maximum of 10% of the Company’s existing shares (by including the entire number of treasury shares held by the Company following a previous share repurchase plan to the above upper limit) , within a period of twenty-four (24) months from the date of the above decision, i.e. up until 10/06/2024, and in accordance with the terms and restrictions set by article 49 of Law 4548/2018, with a purchase price range between three Euros (3.00 €) per share (threshold) and eight Euros (8.00 €) per share (ceiling). At the date of preparation and approval of this Report, the Company held 96,450 treasury shares. • points e’, g’, i’ and ia; do not apply. PART F – SPECIAL STATEMENTS 1.1 During the closed corporate year 2022 (01.01.2022-31.12.2022), the Board of Directors carried out an annual review of the corporate strategy, the main business risks faced by the Company in the sector in which it operates, as well as the systems of internal control applied by the Company and found the following:  The corporate strategy is implemented appropriately and in accordance with the planning of the competent Directorates, in order for the Company to continue to stand out for the promotion of innovative products and services, the establishment of long-term relationships of trust and the creation of a sense of intimacy with its business partners, thus developing further its business model,  The main areas of business and financial risk of the Company as well as the issues that may have a significant impact on its financial statements, according to the size and complexity of its activities are included and are in detail analysed as well their addressing in the relevant Section of the Management Report of Board of Directors and finally  the internal control is carried out in accordance with the current legislative and regulatory framework and the principles of the Code of Ethics, and covers the main activities of the company, in order to determine the adequacy of the management and organization systems of the audited entity to diagnose any irregularities, errors, weaknesses and possible fraud that may result in mismanagement and/or loss of assets and to verify the reliability of the measurement and presentation of the financial figures that constitute the image of the entity. 1.2 The Board of Directors of the Company declares and confirms hereby that the Audit Company, which is in charge of carrying out the mandatory audit of the annual and semi-annual Financial Statements (corporate and consolidated), as well as the issuance of the annual tax certificate and tax compliance report, provided with the approval of the Audit Committee authorized non-audit services to the Company amounting to 16,001 euros and therefore no direct or indirect impact exists on the objectivity, integrity, reliability and effectiveness of the statutory audit. This Corporate Governance Statement is an integral and special part of the Annual Report (Management) of the Board of Directors of the Company. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 89 SECTION I Group’s course and outlook for the financial year 2023 In view of the strong export orientation of the Group, it should be noted that its prospects, results and course for the fiscal year 2023 are directly related to the conditions prevailing on the one hand in the global, and on the other hand in the domestic economy and marketplace. At the present time there are reasonable and well-founded concerns regarding the course of the global economy, which are mainly due to the following factors: - the ongoing war between Russia and Ukraine and its effects on stability and security, on the European, Greek and global economy. - the significant increase in energy costs, - the worsening of the wave of inflationary pressures, especially in the sectors of energy, raw materials, food and other consumer goods, - the current and looming increases in interest rates internationally and especially in the Eurozone, which may exert upward pressure on the cost of debt in the public and private sectors and lead the economies to a slowdown and/or a recession, Following the above, the degree of uncertainty and insecurity still remains high thus limiting any ability to extract reliable, safe and objective forecasts for the future. Therefore the Management maintains a cautious attitude regarding any impact on the prospects of the Group and the Company whereas it cannot rule out the possibility of a negative effect on the overall performance, financial position and the course of both the Company and the Group during the financial year of 2023. The Management of the Group with a high sense of responsibility towards the employees, the customers, the suppliers, the partners and the investors, closely monitors and systematically evaluates all possible risk factors, which may affect the financial position, activities and results of the Group and has been taking all appropriate measures to ensure the smooth operation and business continuity of the Group. In any case and despite the prevailing conditions of uncertainty, the Group, both at the reporting date of the annual Financial Statements and at the date of their approval, maintains satisfactory capital adequacy and liquidity and continues to be fully consistent with its liabilities to suppliers, government agencies, insurance companies and other creditors. At the same time, the Group takes all the necessary steps to absorb the shocks of financial turmoil and to maintain the respective employment positions. Following the above, the Group's strategy, which is oriented towards flexibility and continuous adaptation to the current conditions, is summarized as follows: - Improvement and continuous upgrade of the spectrum of produced products, with an emphasis on high-quality product diversification compared to competition, - creating new innovative products capable of meeting wider and more demanding market needs, as well as to satisfy the customer requirements and needs, - Further enhancement of the current modern production methods in order to meet the targets of reduction of energy consumption, of a lower carbon footprint and facilitate the essential contribution to sustainable development, - Further penetration of the international markets via the maintenance or expansion of the Company’s partnerships aiming at the utilization of the Group’s knowhow, - Further and efficient strengthening of the infrastructure and the production facilities of both the Company and the subsidiaries of Group, with the objective to even faster and more effectively serve the customer base in the geographical areas where the companies are located, in order to boost the growth potential in the relevant markets, and finally, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 90 - Continuous development of the organizational and operating structures aiming at the further increase of efficiency, and the greater reduction of costs. Koropi, 11 April 2023 THE BOARD OF DIRECTORS FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 91 CHAPTER 3: Independent Auditor’s Report Independent Auditor's Report To the Shareholders of “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY” Report on the Audit of the Separate and Consolidated Financial Statements Opinion We have audited the accompanying separate and consolidated financial statements of “FLEXOPACK S.A.” (the Company), which comprise the separate and consolidated statement of financial position as at 31 December 2022, the separate and consolidated income statements and statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the financial position of FLEXOPACK S.A. and its subsidiaries (the Group) as at 31 December 2022, their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as incorporated into the Greek Legislation. 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 are independent of the Company and its consolidated subsidiaries throughout our entire appointment in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), as incorporated into the Greek Legislation and the ethical requirements that are relevant to the audit of the separate and consolidated financial statements in Greece, and we have fulfilled our other ethical responsibilities in accordance with the requirements of the current legislation and the above-mentioned IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 audited period. These matters and the related risks of material misstatement 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. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 92 Key audit matters How our audit addressed the key audit matter Inventories At 31.12.2022 the Group holds inventories of value amounting to € 51.75 mil. (Company: € 28.01 mil). Inventory items are measured at a lower of cost and net realizable value as referred to in the Group’s accounting policies. Net realizable value is the e stimated selling price less any related selling expenses. Based on the above, the Management makes appropriate estimates, based on the movement of the inventory items recorded within the year and plans for the following season. We considered the area of the production cost - inventories at year - end to be one of the key audit matters, primarily, since inventories constitute a significant asset, and secondly, because of the size of the consumables and estimates required for both - measurement of the val ue of inventories and calculation of the production cost. Information concerning the Company’s accounting policies for inventories is referred to in Note 3.8 and 6.7 to the financial statements. Our audit approach included, among others, the following procedures: • Recording and examining procedures and internal control for inventory management designed by the Company’s Management with regard to inventories. • Monitoring the inventory counting process and performing physical inventory at the warehouses. • Examined Management’s estimates of the inventories net realizable value, which arises from sales after the end of the reporting period. • Carrying out analytical procedures with regard to the movement of inventories and identification of inventories of low marketability (or movement). • Sample confirmation of correct determination of acquisition cost and production cost of inventories. • We also assessed the adequacy and appropriateness of the disclosures recorded in Note 6.7 to the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 93 Assessment of non-current assets impairment As at December 31, 2022, the Group has recognized goodwill of € 252 thous. (Company: € 0), intangible assets of € 1.92 mil. (Company: € 1.92 mil.) and tangible assets of € 59.84 mil. (Company: € 43.25 mil.). In addition, as at December 31, 2022 the Company holds investments in subsidiaries of € 21.41 mil. and investments in associates of € 2.20 mil. (Group: € 6.21 mil.). In accordance with IFRS requirements, Goodwill is tested for impairment at least annually, while intangible assets with definite useful life, tangible assets and investments in subsidiaries and associates are tested for impairment whenever there are related indications. Taking into consideration the significant amounts of the non-current assets mentioned above and the use of the Management's assumptions and estimates for the determination of the relative recoverable amounts, we consider that assessment of impairment of the aforementioned constitutes a key audit matter. Impairment testing requires the determination of recoverable amounts based on the value in use of the assets. Calculation of value in use is derived from the discounted cash flow method, based on the business plans, which incorporate key Management’s assumptions and estimates. This requires Management judgement on the future cash flows of the above CGUs, and the discount rates applicable to the projections of future cash flows. Furthermore, the volatility of the macroeconomic environment and competition could adversely affect the operating performance of the Group's CGUs. The Group and the Company’s disclosures regarding the accounting policy, judgments and estimates used for the analysis of the above non- current assets are included in Notes 2.2, 3.1, 3.3, 3.4, 3.5, 3.6, 6.1, 6.2, 6.3, 6.4 and 6.5 to the financial statements. Our audit approach included, among others, the following procedures: • We assessed the Management’s procedures for the identification of impairment indications relating to non-current assets. • We assessed the Management’s procedure relating to the preparation of reliable business plans. • We assessed the reasonableness of the Management’s assumptions and estimates. • We assessed the mathematical accuracy of discounted cash flow models. • For the above procedures, where this was deemed appropriate, we used our firm’s specialist. • We assessed the adequacy of the related disclosures included in Notes notes 2.2, 3.1, 3.3, 3.4, 3.5, 3.6, 6.1, 6.2, 6.3, 6.4 and 6.5 to the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 94 Other Information Management is responsible for the other information. The other information is included in the Statements of the Members of the Board of Directors, as referred to the “Report on other Legal and Regulatory Requirements” section, but does not include the financial statements and our auditor’s report thereon. Our opinion on the separate and consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion 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. If, based on the procedures performed, we conclude that there is a material misstatement therein; we are required to communicate that matter. We have nothing to report in this respect. Responsibilities of Management and Those Charged with Governance for the Separate and Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with IFRSs, as adopted by the European Union, and for such internal control as management 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, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do so. The Audit Committee (art. 44 L. 4449/2017) of the Company is responsible for overseeing the Company’s and the Group’s financial reporting process. 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 an aggregate, 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, incorporated into the Greek Legislation, 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 affect 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, incorporated into the Greek Legislation, we exercise professional judgment and maintain professional skepticism 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 that 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 the Group’s internal control. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 95 • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. • Conclude on the appropriateness of management’s 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 the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our 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 the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the 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 financial information of entities or business activities within the Group for the purpose of expressing an opinion on the separate and consociated financial statements to be able to draw reasonable conclusions on which to base the auditor’s opinion. Our responsibility is to design, supervise and perform the audit of the Company and its subsidiaries. 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. 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 current period and are therefore the key audit matters. Report on Other Legal and Regulatory Requirements 1.Board of Directors Report Taking into consideration the fact that under the provisions of Par. 5, Article 2 (part B), Law 4336/2015, management has the responsibility for the preparation of the Board of Directors’ Report as well as the Corporate Governance Statement included in this report, the following is to be noted: i. The Board of Directors’ Report includes the Corporate Governance Statement that provides the data and information defined under Article 152, Law 4548/2018. ii. In our opinion, the Board of Directors’ Report has been prepared in compliance with the effective legal requirements of Articles 150 and 153 and Paragraph 1 (cases c’ and d’), Article 152, Law 4548/2018 and its content corresponds to the accompanying financial statements for the year ended as at 31/12/2022. iii. Based on the knowledge we acquired during our audit, we have not identified any material misstatements in the Board of Directors’ Report in relation to the Company “FLEXOPACK S.A.” and its environment. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 96 2.Additional Report to the Audit Committee Our opinion on the accompanying separate and consolidated financial statements is consistent with our Additional Report to the Company Audit Committee, prepared in compliance with Article 11, Regulation (EU) No 537/2014. 3.Provision of Non-Audit Services We have not rendered to the Company and its subsidiary non-prohibited non-audit services, prohibited under Article 5, Regulation (EU) No 537/2014. The allowed non-audit services provided by us to the Company and its subsidiaries during the financial year that ended 31st December 2022, are disclosed in note 6.28 of the accompanying separate and consolidated financial statements. 4.Auditor’s Appointment We were first appointed the Company’s Chartered Accountants following as of 26/06/2020 Decision of the Annual Regular General Meeting of the Shareholders. Our appointment has been, since then, uninterrupted renewed by the Annual General Assembly of shareholders of the Company for 2 consecutive years. 5.Operating Regulations The Company has in place operating regulations in accordance with the content provided by the provisions of article 14, Law 4706/2020. 6.Assurance Report on financial statements in European Single Electronic Format (ESEF) We examined the digital records of FLEXOPACK S.A. (hereinafter the Company), prepared in accordance with the European Single Electronic Format (ESEF) requirements defined in the Delegated Regulation of the European Commission (EU) 2019/815, as amended following the Regulation (EU) 2020/1989 (hereinafter ESEF Regulation) which include separate and consolidated financial statements for the year ended as of 31 December 2022, in XHTML format (213800SD9V875QXDRR32-2022-12-31-en), as well as the projected XBR file (213800SD9V875QXDRR32-2022-12-31-en.zip) with the appropriate mark-up, on the aformenetioned consolidated financial statements. Regulatory Framework The digital records of the European Single Electronic Format (ESEF) are prepared in accordance with the ESEF regulation and the Commission Interpretative Communication 2020/C379/01 as of November 10th, 2020, in compliance with the provisions of 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, inter alia, the following requirements: - All the annual financial statements shall be prepared in a valid XHTML format. - For all consolidated financial statements that are drawn up in accordance with IFRS, the financial reporting included in the Statement of Comprehensive Income, in the Statement of Financial Position, in the Statement of Changes in Equity and in the Statement of Cash Flows shall be marked- up with XBRL ‘tags’, according to the effective ESEF Taxonomy. The technical specifications for ESEF, including the relevant classification, are set out in the ESEF Regulatory Technical Standards. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) 97 The requirements set out in the current ESEF regulatory framework constitute the appropriate criteria for reaching a conclusion with reasonable assurance. Responsibilities of Management and Those Charged with Governance Management is responsible for the preparation and submission of the separate and consolidated financial statements of the Company for the year ended as at December 31st, 2022 in accordance with the requirements defined in the ESEF Regulatory Framework and for such internal control as management determines is necessary to enable the preparation of digital records that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibilities Our responsibility is to design and conduct this assurance engagement 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 on the auditors’ involvement and assurance report in European Single Electronic Format (ESEF) on of issuers with a regulated market listed securities" as issued by the Institute of Certified Public Accountants of Greece on 14/02/2022 (hereinafter "ESEF Guidelines"), in order to obtain reasonable assurance that the separate and the consolidated financial statements of the Company, prepared by the management in accordance with ESEF, are in compliance, in all material respects, with the effective ESEF Regulatory Framework. We conducted our audit in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) as transposed in Greek legislation and we have fulfilled our ethical obligations for independence, in accordance with Law 4449/2017 and EU Regulation 537/2014. The assurance engagement we conducted restrictively covers the items included in the ESEF Guidelines and was carried out in accordance with the International Standard on Assurance Engagements (ISAE) 3000, “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information”. Reasonable assurance is a high level of assurance, but is not a guarantee that our audit will always detect a material misstatement regarding non-compliance with the requirements of the ESEF Regulation. Conclusion Based on the procedures we performed and the evidence we obtained, we conclude that the separate and consolidated financial statements of the Company for the year ended as of December 31, 2022, in XHTML format (213800SD9V875QXDRR32-2022-12-31-en) as well as the projected XBRL file (213800SD9V875QXDRR32-2022-12-31-en.zip) with the appropriate mark-up, on the above consolidated financial statements have been prepared, in all material respects, in accordance with the requirements of the ESEF Regulatory Framework. Athens, 12 April 2023 Certified Accountant (C.A.) Eleftherios Koutsopoulos I.C.P.A. Reg. No.: 44651 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 98 CHAPTER 4: Annual Financial Statements Annual Separate and Consolidated Financial Statements As of 31 st December 2022 (January 1st 2022 – December 31st 2022) According to the International Financial Reporting Standards (IFRS) FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 99 Statement of Financial Position GROUP COMPANY ASSETS Note 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Non-current assets Tangible Assets 6.1 59.842 51.912 43.248 40.301 Right-of-use Assets 6.14 640 925 288 389 Goodwill 6.2 252 252 0 0 Intangible Assets 6.3 1.918 1.980 1.918 1.980 Investments in subsidiary companies 6.4 0 0 21.414 14.317 Investments in associate companies 6.5 6.208 5.600 2.199 2.199 Other Long-term Receivables 6.6 109 102 105 97 Total non-current assets 68.970 60.772 69.172 59.284 Current assets Inventories 6.7 51.745 32.447 28.014 17.083 Trade Receivables 6.8 18.945 19.700 39.372 33.078 Other Receivables 6.9 12.588 11.115 6.772 6.758 Cash and cash equivalents 6.10 23.772 19.138 16.694 15.700 Total current assets 107.049 82.401 90.852 72.619 Total Assets 176.019 143.172 160.024 131.902 EQUITY & LIABILITIES Share capital 6.11.1 6.369 6.329 6.369 6.329 Share premium 6.11.1 3.500 3.316 3.500 3.316 Capital Reserves 6.11.2 23.183 22.848 23.573 23.126 Retained Earnings 6.11.3 73.457 61.225 67.190 59.885 Total Shareholders' Equity 106.509 93.717 100.632 92.655 LIABILITIES Long-term liabilities Deferred tax liabilities 6.12 491 1.291 400 1.127 Provision for employee benefits 6.13 560 527 560 527 Long-term bank liabilities 6.15 27.674 12.540 25.552 10.875 Liabilities from Leases 6.14 290 358 167 84 Other provisions 6.16 576 633 238 238 Total Long-term Liabilities 29.591 15.348 26.916 12.851 Short-term liabilities Suppliers and related liabilities 6.17 27.464 26.935 23.882 21.138 Liabilities from Leases 6.14 357 568 122 304 Liabilities from income tax 6.18 6.698 3.077 4.611 2.597 Short-term bank liabilities 6.15 5.400 3.528 3.861 2.357 Total Short-term Liabilities 39.919 34.108 32.475 26.396 Total Liabilities 69.509 49.455 59.391 39.247 Total Equity & Liabilities 176.019 143.172 160.024 131.902 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 100 I ncome Statement GROUP COMPANY Continuing Operations Note 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Turnover 6.19 151.012 114.181 120.395 93.166 Cost of Sales 6.20 (106.936) (85.793) (91.861) (73.486) Gross Profit 44.075 28.388 28.535 19.680 Other operating income 6.22 160 536 155 291 Administrative expenses 6.20 (6.067) (4.862) (4.344) (3.709) Research & Development Expenses 6.20 (1.694) (1.569) (1.560) (1.447) Distribution expenses 6.20 (15.022) (9.673) (8.357) (5.256) Other operating expenses 6.22 (372) (278) (217) (64) Operating Results 21.081 12.543 14.212 9.496 Financial income 6.23 101 115 101 108 Financial expenses 6.23 (652) (492) (512) (390) Other Financial Results 6.24 (2.239) (64) (2.056) (115) Proportion of associate companies' Result 6.5 608 717 0 0 Earnings before taxes 18.899 12.818 11.745 9.099 Income tax 6.25 (4.798) (2.411) (2.570) (1.813) Earnings after taxes 14.102 10.407 9.175 7.286 Allocated to Shareholders of the parent 14.102 10.407 9.175 7.286 Basic Earnings per share (Euro per share) 6.30 1,2085 0,8953 0,7863 0,6269 Adjusted (Diluted) Earnings per share (Euro per share) 6.30 1,2043 0,8881 0,7836 0,6218 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 101 Statement of Comprehensive Income GROUP COMPANY Continuing Operations Note 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Earnings after taxes 14.102 10.407 9.175 7.286 Other comprehensive income Amounts which may be transferred into the results in subsequent periods Foreign exchange differences from consolidation of foreign subsidiaries (112) 62 0 0 Amounts which will not be transferred into the results in subsequent periods Actuarial profit-(losses) in personnel benefit plan 6.13 14 17 14 17 Corresponding income tax (3) (4) (3) (4) Other comprehensive income after taxes (101) 76 11 13 Total comprehensive income after taxes 14.001 10.483 9.186 7.300 Allocated to : -Shareholders of the parent 14.001 10.483 9.186 7.300 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 102 Consolidated Statement of Changes in Equity Allocated to the shareholders of the parent company GROUP Note Share capital Share premium Reserves FX differences from consolidation Retained earnings Total Balance as at 1/1/2021 6.329 3.316 18.573 (453) 56.188 83.952 Earnings after taxes 0 0 0 0 10.407 10.407 Other comprehensive income after taxes 0 0 0 62 13 76 Distributed dividends 0 0 0 0 (1.011) (1.011) Formation of ordinary reserves 0 0 469 0 (469) 0 Tax free reserves Law 3908/2011 0 0 62 0 (62) 0 Tax free reserves Law 4172/2013 0 0 50 0 (50) 0 Taxed reserve Law 4399/2016 0 0 3.786 0 (3.786) 0 Transfer of amortization of grants 0 0 6 0 (6) 0 Stock options 0 0 294 0 0 294 Balance as at 31/12/2021 6.329 3.316 23.239 (391) 61.225 93.717 Balance as at 1/1/2022 6.329 3.316 23.239 (391) 61.225 93.717 Earnings after taxes 0 0 0 0 14.102 14.102 Other comprehensive income after taxes 0 0 0 (112) 11 (101) Distributed dividends 6.31 0 0 0 0 (1.591) (1.591) Formation of ordinary reserves 0 0 364 0 (364) 0 Tax free reserves Law 3908/2011 6.11.2 0 0 62 0 (62) 0 Tax free reserves Law 4172/2013 6.11.2 0 0 108 0 (108) 0 Share capital increase 6.11.1 41 185 0 0 0 225 Exercise of stock options 6.34 0 0 (244) 0 244 0 Stock options 0 0 157 0 0 157 Balance as at 31/12/2022 6.369 3.500 23.686 (502) 73.457 106.509 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 103 Statement of Changes in Parent Company’s Equity COMPANY Note Share capital Share premium Reserves Retained earnings Total Balance as at 1/1/2021 6.329 3.316 18.460 57.968 86.073 Earnings after taxes 0 0 0 7.286 7.286 Other comprehensive income after taxes 0 0 0 13 13 Distributed dividends 0 0 0 (1.011) (1.011) Formation of ordinary reserves 0 0 469 (469) 0 Tax free reserves Law 3908/2011 0 0 62 (62) 0 Tax free reserves Law 4172/2013 0 0 50 (50) 0 Taxed reserve Law 4399/2016 0 0 3.786 (3.786) 0 Transfer of amortization of grants 0 0 6 (6) 0 Stock options 0 0 294 0 294 Balance as at 31/12/2021 6.329 3.316 23.126 59.885 92.655 Balance as at 1/1/2022 6.329 3.316 23.126 59.885 92.655 Earnings after taxes 0 0 0 9.175 9.175 Other comprehensive income after taxes 0 0 0 11 11 Distributed dividends 6.31 0 0 0 (1.591) (1.591) Formation of ordinary reserves 0 0 364 (364) 0 Tax free reserves Law 3908/2011 6.11.2 0 0 62 (62) 0 Tax free reserves Law 4172/2013 6.11.2 0 0 108 (108) 0 Share capital increase 6.11.1 41 185 0 0 225 Exercise of stock options 6.34 0 0 (244) 244 0 Stock options 0 0 157 0 157 Balance as at 31/12/2022 6.369 3.500 23.573 67.190 100.632 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 104 Statement of Cash Flows GROUP COMPANY Indirect method Note 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 Earnings before taxes 18.899 12.818 11.745 9.099 Adjustments on Earnings for: Depreciation of tangible assets 6.1 5.036 5.044 3.714 3.741 Amortization of intangible assets 6.3 416 377 416 377 Amortization of right-of-use assets 6.14 556 590 270 303 Provisions 163 468 204 359 Impairment 6.7- 6.8 191 44 112 0 Foreign exchange differences 6.24 2.239 64 2.056 115 Profit/(Loss) from the sale of tangible assets (1) 86 (1) (2) Amortization of investment grants 0 (6) 0 (6) Interest income 6.23 (101) (115) (101) (108) Interest expenses 6.23 652 492 512 390 Share of results in associate companies 6.5 (608) (717) 0 0 Total adjustments on Earnings for Cash Flows 8.543 6.328 7.182 5.171 27.443 19.147 18.927 14.270 Working capital changes (Increase) / decrease of inventories (19.324) (10.588) (11.030) (4.694) (Increase) / decrease of receivables (1.501) (11.665) (6.522) (11.311) Increase / (decrease) of liabilities (903) 12.049 1.716 9.444 (21.729) (10.205) (15.837) (6.561) Cash flows from operating activities 5.714 8.942 3.090 7.709 minus: Income tax paid (2.812) (3.034) (2.120) (2.669) Net cash flows from operating activities 2.902 5.908 970 5.040 Cash flows from investment activities Share capital increase of subsidiary 6.4 0 0 (7.097) (300) Purchases of tangible fixed assets (12.435) (3.409) (6.661) (2.686) Purchases of intangible assets (355) (582) (355) (582) Receipts from sale of tangible and intangible assets 3 2 1 2 Interest received 6.23 101 8 101 1 Dividend receivables 6.23 0 108 0 108 Net cash flows from investment activities (12.685) (3.874) (14.010) (3.458) Cash flows from financing activities Proceeds from share capital increase 6.11.1 210 0 225 0 Receipts from issued/collected loans 6.15- 6.33 23.169 7.284 21.913 7.000 Payment of loans 6.33 (6.164) (6.215) (5.733) (5.845) Interest paid 6.23 (602) (436) (495) (363) Dividends payable 6.31 (1.591) (1.011) (1.591) (1.011) Payments for Lease Liabilities (598) (651) (285) (336) Net Cash flows from financing activities 14.425 (1.031) 14.034 (555) Net increase / (decrease) in cash and cash equivalents 4.642 1.003 994 1.026 Cash and cash equivalents at the beginning of the period 19.138 18.021 15.700 14.673 Effect from foreign exchange differences (7) 114 0 0 Cash and cash equivalents at the end of the period 23.772 19.138 16.694 15.700 The accompanying notes constitute an inseparable part of the financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 105 1 . General Information on the Company and Group The Group operates in the sector of producing flexible plastic packaging items mainly for the food industry but also for other advanced special applications. The Company “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY” (hereafter mentioned as “the Company” or “FLEXOPACK”) is specifically active in the production of flexible plastic packaging materials that broadly appeal to many sectors, the most important of which is the food packaging sector. The Company has developed advanced know-how in the production of multiple layer packing films, holding the leading position in the Greek market as the competition comes from a limited number of companies that are active abroad. The Company was initially established as a General Partnership in 1979 in Koropi Attica. In 1998 it is converted from a General Partnership to a Société Anonyme, its current form, under the corporate name “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY”, according to L. 1297/1972 and C.L. 2190/1920 (Gov. Gazette 11/5.1.1989, S.A. and L.T.D. issue). The company’s base (constitutive and administrative) is located at the Municipality of Koropi Attica, at the location Tzima (Postal Code 194 00, tel.: + 30 210 6680000) and is registered in the General Commercial Registry with GEMI number 582101000. The duration of the Company is indefinite. The Company’s building facilities are located at the Tzima position in Koropi Attica, in two self-owned plots with a total area of 29,432 sq. m. The total useful area of the building facilities amounts to 25,700 sq.m.. The Company within the year 2020 proceeded to the purchase of three land plots which are adjacent to its existing facilities in Tzima Location of the Municipality of Kropia, with a total area of 14,160 sq.m., in order to proceed in the future with the construction of an industrial building to expand its production facilities. After the above purchases, the total area of land plots of the company amount to 43,592 sq.m.. From September 1995, the Company operates and is a holder of the ISO 9001 quality assurance certificate for research, development, production, distribution and technical support of its products. The aforementioned certificate has been granted to the Company from the company Βureau Veritas. In April 2003 the Company was certified with the new hygiene standard, the British Retail Consortium (BRC). This standard – with pan European recognition – introduces very high hygiene, products security and quality demands. In August 2022, the Company was certified with the ISO 50001:2018 energy management system. By this manner, the Company aims at the adoption and implementation of the required procedures that will lead to optimal energy utilization and performance. The Company’s shares are listed and traded on the Athens Exchange from April 1996 (OASIS Code: ΦΛΕΞΟ). Annual Financial Report that concerns the financial year 2022 (January 1st 2022 – December 31st 2022), has been approved by the Board of Directors on the 11th of April 2023 and will be finally approval from the upcoming General Shareholders Meeting of “FLEXOPACK PLASTICS S.A.” 2. Basis for the preparation of the financial statements The consolidated and separate financial statements of FLEXOPACK PLASTICS SA of December 31 st 2022 covering the period from January 1st up to December 31 st 2022 have been prepared in accordance with the International Financial Reporting Standards (IFRS), as such have been adopted by the European Union. Also, the financial statements have been prepared based on a) the historic cost principle apart from the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 106 Provision for personnel indemnities, derivative financial instruments and stock options where the valuation was made at fair and b) the going concern principle. The consolidated Financial statements of the Company include the Financial statements of the parent Company FLEXOPACK PLASTICS SA, as well as those of its subsidiaries mentioned in the following section 3.1.1 Group Structure and methods of companies’ consolidation. The Financial statements are expressed in thousand euro. It is noted that any differences in summations of the accompanying financial statements and analysis are due to rounding. Wherever it was deemed appropriate, the comparative financial accounts and items have been reclassified in order to be aligned with any changes made in the presentation of the items of the current year. The accounting principles, based on which the accompanying financial statements have been prepared and which the Group applies systematically, are consistent with those applied in the previous financial year. 2.1 Adoption of New and Revised International Standards 1. New Standards, Interpretations, Revisions and Amendments to existing Standards that are effective and have been adopted by the European Union The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01/01/2022. • Amendments to IFRS 3 “Business Combinations”, IAS 16 “Property, Plant and Equipment”, IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and “Annual Improvements 2018-2020” (effective for annual periods starting on or after 01/01/2022) In May 2020, the IASB issued a package of amendments which includes narrow-scope amendments to three Standards as well as the Board’s Annual Improvements, which are changes that clarify the wording or correct minor consequences, oversights or conflicts between requirements in the Standards. More specifically: - Amendments to IFRS 3 Business Combinations update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. - Amendments to IAS 16 Property, Plant and Equipment prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in profit or loss. - Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets specify which costs a company includes when assessing whether a contract will be loss-making. - Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases. The amendments do not affect the consolidated Financial Statements. 2. New Standards, Interpretations, Revisions and Amendments to existing Standards that have not been applied yet or have not been adopted by the European Union FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 107 The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), but their application has not started yet or they have not been adopted by the European Union. • IFRS 17 “Insurance Contracts” (effective for annual periods starting on or after 01/01/2023) In May 2017, the IASB issued a new Standard, IFRS 17, which replaces an interim Standard, IFRS 4. The aim of the project was to provide a single principle-based standard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. A single principle-based standard would enhance comparability of financial reporting among entities, jurisdictions and capital markets. IFRS 17 sets out the requirements that an entity should apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. Furthermore, in June 2020, the IASB issued amendments, which do not affect the fundamental principles introduced when IFRS 17 has first been issued. The amendments are designed to reduce costs by simplifying some requirements in the Standard, make financial performance easier to explain, as well as ease transition by deferring the effective date of the Standard to 2023 and by providing additional relief to reduce the effort required when applying the Standard for the first time. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any . The above have been adopted by the European Union with effective date of 01/01/2023. • Amendments to IAS 1 “Presentation of Financial Statements” (effective for annual periods starting on or after 01/01/2023) In February 2021, the IASB issued narrow-scope amendments that pertain to accounting policy disclosures. The objective of these amendments is to improve accounting policy disclosures so that they provide more useful information to investors and other primary users of the financial statements. More specifically, companies are required to disclose their material accounting policy information rather than their significant accounting policies. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2023. • Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates” (effective for annual periods starting on or after 01/01/2023) In February 2021, the IASB issued narrow-scope amendments that they clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. That distinction is important because changes in accounting estimates are applied prospectively only to future transactions and other future events, but changes in accounting policies are generally also applied retrospectively to past transactions and other past events. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2023. • Amendments to IAS 12 “Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction” (effective for annual periods starting on or after 01/01/2023) In May 2021, the IASB issued targeted amendments to IAS 12 to specify how companies should account for deferred tax on transactions such as leases and decommissioning obligations – transactions for which companies recognise both an asset and a liability. In specified circumstances, companies are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. The amendments clarify that the exemption does not apply and that companies are required to recognise deferred tax on such transactions. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2023. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 108 • Amendments to IFRS 17 “Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information” (effective for annual periods starting on or after 01/01/2023) In December 2021, the IASB issued a narrow-scope amendment to the transition requirements in IFRS 17 to address an important issue related to temporary accounting mismatches between insurance contract liabilities and financial assets in the comparative information presented when applying IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments” for the first time. The amendment aims to improve the usefulness of comparative information for the users of the financial statements. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any . The above have been adopted by the European Union with effective date of 01/01/2023. • Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” (effective for annual periods starting on or after 01/01/2024) In January 2020, the IASB issued amendments to IAS 1 that affect requirements for the presentation of liabilities. Specifically, they clarify one of the criteria for classifying a liability as non-current, the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments include: (a) specifying that an entity’s right to defer settlement must exist at the end of the reporting period; (b) clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement; (c) clarifying how lending conditions affect classification; and (d) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. Furthermore, in July 2020, the IASB issued an amendment to defer by one year the effective date of the initially issued amendment to IAS 1, in response to the Covid-19 pandemic. However, in October 2022, the IASB issued an additional amendment that aim to improve the information companies provide about long-term debt with covenants. IAS 1 requires a company to classify debt as non-current only if the company can avoid settling the debt in the 12 months after the reporting date. However, a company’s ability to do so is often subject to complying with covenants. The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with early adoption permitted. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. • Amendments to IFRS 16 “Leases: Lease Liability in a Sale and Leaseback” (effective for annual periods starting on or after 01/01/2024) In September 2022, the IASB issued narrow-scope amendments to IFRS 16 “Leases” which add to requirements explaining how a company accounts for a sale and leaseback after the date of the transaction. A sale and leaseback is a transaction for which a company sells an asset and leases that same asset back for a period of time from the new owner. IFRS 16 includes requirements on how to account for a sale and leaseback at the date the transaction takes place. However, IFRS 16 had not specified how to measure the transaction when reporting after that date. The issued amendments add to the sale and leaseback requirements in IFRS 16, thereby supporting the consistent application of the Accounting Standard. These amendments will not change the accounting for leases other than those arising in a sale and leaseback transaction. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. 2.2 Significant accounting judgments, estimations and assumptions FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 109 The preparation of financial statements according to IFRS requires management to make decisions, perform estimations and use assumptions that affect the amounts presented in the financial statements, the assets, liabilities, as well as the disclosure of contingent assets and liabilities during the preparation date of the financial statements and the published income and expenses amounts for the reporting period. The actual results may differ from such estimations. Estimations and judgments by the Management are continuously evaluated and are based on empirical data and other factors, such as expectations for future events considered probable under specific conditions. Specific amounts which are included or affect the financial statements, and the relevant disclosures, must be estimated. During the estimations, assumptions must be created as regards to the values or conditions that cannot be known with certainty during the preparation period of the financial statements. An important accounting estimation is considered as one that is important for the depiction of the company’s financial position and results and demands the most difficult, subjective or complicated judgments by management, often as a result of the need to create estimations regarding the effect of assumptions which are uncertain. The Group evaluates such estimations on a constant basis, based on the results of the past and based on experience, meetings with specialists, trends and other methods that are considered appropriate under the specific circumstances. The significant accounting judgments, estimations and assumptions that refer to data, the evolution of which could affect the financial statements’ accounts, are the following. Estimated impairment of the value of investments in subsidiaries and associates The Group, with the exception of goodwill which is being tested for impairment on annual basis, performs the relevant impairment audit of its investments’ value when events or conditions increase the probability of such impairment. The recovered amounts of the cash flow generating units have been estimated according to the calculations of the value in use. For the calculation of the value in use, the estimated future cash flows are discounted into present value with the use of a discount factor. The determination of the future flows is performed after in-depth analysis and estimates by the management with regard to the level of future profitability as well as the assessment of the existing conditions in the market. The basic assumptions which are being utilized are related to the following factors: Discount rate, levels of sales in the next 5-year period, gross profit margin and growth rate after the 5- year period. The above calculations require the use of estimates. Useful life of tangible fixed assets Fixed assets are being depreciated along their estimated economic life. The Management makes certain estimations regarding the useful life of depreciated fixed assets. Provisions for impairment of trade receivables The Group makes provisions for doubtful receivables in relation to certain customers when there is evidence or when there are certain elements which indicate that the cash collection with regard to a particular claim is not likely to occur. The Management of the Group proceeds with a periodical reassessment of the adequacy of the provision regarding the doubtful receivables in relation to its credit policy and according to the data of the Group’s Legal Department. These data derive from the processing of historical information and from recent developments concerning cases under examination. Estimates of expected credit losses on trade receivables The provision is based on a table that calculates the expected credit losses throughout the lifetime of the Group's receivables. This table is based on past evidence but it is adjusted to reflect expectations for th e FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 110 future financial conditions of customers as well as of the economic environment. At each balance sheet date, the historical rates are updated and estimates of future financial conditions are reviewed and analyzed. The correlation between historical data, future financial conditions and expected credit losses involves the performance of significant estimates. The amount of expected credit losses depends to a large extent on changes in conditions and forecasts of the future economic environment. In addition, past evidence as well as forecasts made for the future economic conditions may not lead to conclusions indicative of the actual amount of customer defaults in the future. Income taxes of tax un-audited financial years The provision for income tax requires judgment and is calculated by estimating the taxes that will be paid to the tax authorities. There are many transactions and calculations which render the final determination of the tax uncertain. The Company recognizes liabilities from expected tax audits, based on estimates of whether or not additional taxes will be imposed. If the final outcome of the audit is different from the initially recognized, then the difference will affect the income tax of the period. Recovery of deferred tax receivables A deferred tax receivable is recognized for unutilized tax losses to the extent that there will be sufficient taxable earnings in future in order to be offset with these tax losses. For the determination of the amount of the deferred tax receivable which may be recognized there is the requirement of judgments and estimations that must be made by the Group’s Management. These are based on the future taxable earnings in combination with the tax policies that will be followed in the future. Obsolescence of inventories Appropriate provisions are being performed for obsolete and useless inventories whenever it is deemed appropriate and necessary. The reductions of the inventory value at the net liquidation value and the other losses from the inventories are recorded in the statement of results during the period when they appear. 3. Basic accounting principles The accounting principles on the basis of which the attached Financial Statements have been prepared and which are systematically applied by the Group are listed below. 3.1 Consolidation Subsidiaries All companies that are managed or controlled, directly or indirectly, by another company (parent) either through the holding of majority voting rights in the undertaking or, in the case where there is no majority shareholding, through agreement of the Company with the other shareholders in the undertaking. That is to say that subsidiaries are companies in which control is exercised by the parent. Subsidiaries are consolidated completely (full consolidation) with the purchase method from the date that control over them is acquired and cease to be consolidated from the date that this control no longer exists. The acquisition cost of a subsidiary is the fair value of the assets given as consideration, the shares issued and the liabilities undertaken on the date of the acquisition plus any costs directly associated with the transaction. The acquisition cost over and above the fair value of the individual assets acquired is booked as goodwill. If the total cost of the acquisition is lower than the fair value of the individual assets acquired, the FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 111 difference is immediately booked directly in the results. Inter-company transactions, balances and unrealized profits from transactions between Group companies are written-off. Unrealized losses are also eliminated except if the transaction provides indication of impairment of the transferred asset. The participations in subsidiaries, are measured at acquisition cost minus any impairment losses in the Company’s financial statements. The accounting principles of subsidiaries have been adjusted when deemed necessary in order to ensure consistency with the accounting principles adopted by the Group. The preparation date of the financial statements of subsidiaries coincides with that of the parent Company. Non-controlling interests represents the percentage of profit or loss and equity that don’t correspond to the Group and are presented separately in the consolidated income statements as well as in a separate line in equity in the consolidated statement of Financial Position. Associate companies Associates are companies on which the Group can exercise significant influence but not control. The assumptions used by the group imply that a holding of between 20% and 50% of a company’s voting rights suggests significant influence on the company. In the Financial statements of the Company, investments in associates are measured at acquisition cost minus impairment losses, while in the consolidated financial statements associates are consolidated with the equity method. The Group’s share in the profit or losses of associate companies after the acquisition is recognized in the results, while the share of changes in reserves after the acquisition is recognized in reserves. When the Group’s share in the losses of an associate is equal or larger than its participation in the associate, including any other doubtful debts, the Group does not recognize any further losses, except if it has covered liabilities or made payments on behalf of the associate company. Unrealized profits from transactions between the Group and its associates are eliminated according to the percentage of the Group’s holding in the associates. The accounting principles of the associates have been amended so as to conform to those adopted by the Group. 3.1.1 Structure and consolidation method of companies The Group’s companies with the respective addresses, and percentages by which the Group participates in their share capital, as well as the respective consolidation method in the consolidated financial statements, are presented below. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 112 Name Domicile Activity % Participation 31/12/2022 % Participation 31/12/2021 Type of Participation Relationship that dictated the consolidation Year of Acquisition - Establishm ent Subsidiary Companies via Full Consolidation Method FLEXOPACK AEBE Koropi - Attica Production - Flexible plastic packaging Parent Parent FLEXOPACK POLSKA Sp. Zo.o Malbork Poland Production - Flexible plastic packaging 100 100 Direct The participation percentage 2007 FLEXOSYSTEMS LTD Belgrade Serbia Trading - Flexible plastic packaging 100 100 Direct The participation percentage 2010 FLEXOPACK INTERNATIONAL LIMITED Larnaca Cyprus Holding company 100 100 Direct The participation percentage 2014 FLEXOPACK PTY LTD Brisbane Australia Trading - Manufacturing Flexible plastic packaging 100 100 Indirect The participation percentage 2014 FLEXOPACK ΝΖ LIMITED Auckland New Zealand Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2016 FLEXOPACK TRADE AND SERVICES UK LIMITED Norwich England Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2014 FLEXOPACK PROPERTIES PTY LTD Brisbane Australia Property portfolio 100 100 Indirect The participation percentage 2017 FLEXOPACK FRANCE LIMITED Lyon France Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2018 FLEXOPACK USA, Inc Delaware-USA Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2020 FLEXOPACK IRELAND LIMITED Dublin-Ireland Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2021 FLEXOPACK DENMARK ApS Copenhagen- Denmark Trading - Flexible plastic packaging 100 100 Indirect The participation percentage 2021 The subsidiary company «FLEXOPACK ΝΖ LIMITED», is fully controlled by «FLEXOPACK PTY LTD». FLEXOPACK IRELAND and FLEXOPACK DENMARK were inactive during 2022. Associate Companies via Equity Consolidation Method VLACHOU BROS SA Koropi - Attica Production - Flexible plastic packaging 47.71 47.71 Direct 2001 ΙΝΟ VA PLASTICS SA Thiva Production - Rigid plastic packaging 50.00 50.00 Direct 2001 Subsidiaries "FLEXOPACK PTY LTD", "FLEXOPACK PROPERTIES PTY LTD", "FLEXOPACK TRADE AND SERVICES UK LIMITED", "FLEXOPACK FRANCE", "FLEXOPACK USA Inc", "FLEXOPACK IRELAND LIMITED" and "FLEXOPAC DENMARK ApS" are fully controlled from the Cypriot subsidiary «FLEXOPACK INTERNATIONAL LIMITED» which is fully owned (100%) by the parent company "FLEXOPACK PLASTICS SA". FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 113 3.2 Operation and presentation currency and foreign currency translation Euro is the Group’s and Company’s presentation and operation currency. Foreign exchange transactions are translated to euro based on the exchange rates in effect at the transaction dates. At the date when the financial statements are prepared, receivables and liabilities in foreign currency are translated in order to reflect the foreign exchange rates at the balance sheet date. Profit and losses deriving from transactions in foreign currencies as well as from the valuation of foreign currency units at the end of the year are included in the income statement, with the exclusion of transactions that fulfill the conditions of cash flow hedging, which are depicted in the statement of comprehensive income. The operating currency of the foreign subsidiaries is also the official currency of the country which each company operates in. For foreign subsidiaries which do not operate in the euro area, the conversion of their financial statements will be as follows. Assets and liabilities are translated with the exchange rates in effect during the date of the statement of Financial Position. Equity is translated with the exchange rates in effect during the dates when such resulted. Income and expenses are translated with the average exchange rate during the period. The resulting foreign exchange differences from the above translation are registered in the statement of comprehensive income until the sale, write-off of a subsidiary, when such are transferred to the results for the year. 3.3 Tangible fixed assets Tangible fixed assets are reported in the financial statements at acquisition cost, less accumulated depreciations and any accumulated impairment losses. The acquisition cost includes all the directly attributable expenses for the acquisition of the assets. Subsequent expenditure is added to the carrying value of the assets or is booked as a separate asset only if it is probable that future economic benefits will flow to the Group and their cost can be accurately measured. The cost of repairs and maintenance is booked in the results when such are realized. Tangible assets under construction include fixed assets under construction and are presented at cost. Tangible assets under construction are not depreciated until the asset is completed and ready for its intended productive operation. Land is not depreciated. Depreciation of other tangible fixed assets is calculated using the straight line method over their useful lives, as follows: • Buildings: 25 years • Mechanical equipment: 8-15 years • Vehicles: 5-10 years • Other equipment: 3-10 years Upon sale of tangible fixed assets, any difference between the proceeds and the carrying value are booked as profit or loss in the results. 3.4 Goodwill Goodwill is the difference between acquisition cost and the net assets that were acquired during the acquisition date of the subsidiary company. The resulting acquisition expenses are accounted for in expenses. The Company during the acquisition date recognizes the goodwill that resulted from the acquisition, presenting such as an asset at cost. Following initial recognition, goodwill is valued at acquisition cost less the cumulative losses due to impairment. Goodwill is not amortized however it is reviewed annually for any impairment, or even more frequently if there are events that indicate loss. Impairment losses related to goodwill cannot be reversed in subsequent periods. In the case where the fair value of equity during the acquisition date of a company is larger than the price FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 114 paid for its acquisition then a negative goodwill (income) is recorded directly as income in the income statement. 3.5 Intangible assets Intangible assets are presented in the financial statements at acquisition cost minus accumulated amortization and any accumulated impairment losses. Amortization is calculated with the straight line method through the duration of their useful economic life. Intangible assets comprise know-how rights, patents, cost for the development of new products and software licenses. a) Know-how rights concern the purchase of a patent right and of all the applications of the patent of the patent right group based on the “multiple layer heat-shrinkable packing film”, with all the rights and obligations stemming thereof. The initial recognition of the intangible asset has been done at cost (contractual consideration for purchase) which is reduced on an annual basis through amortization. The useful life of the intangible asset has been estimated by the Management at 20 years. It is noted that this right may become the object of a trade in the future. b) Cost for the development of patents related to various products such as multiple-layer packing film, which are exported to various countries and amortized based on their useful life as this is estimated by Management at 20 years. The initial recognition is made at acquisition cost which is reduced annually through amortization. c) Expenses related directly to research, which includes the cost of raw materials used. The cost of in-house research of products is recognized as an intangible asset. Until the completion of the research, assets are subject to impairment reviews. Amortization begins with the completion of the asset and is calculated based on the straight line method. The useful life of the above intangibles is estimated by Management at 10 years. The expenses related to research activities are recognized as expenses during the period. Expenses realized during the research phase of a new product are recognized as intangible assets if the following are met: • the technical viability of the under development product for internal use or sale may be proven. • the intangible asset will create potential future benefits from the internal use or sale. • there are adequate and available technical, economic and other resources for the completion of its development and • the value of intangible asset may be reliably estimated. d) Software: Software licenses are valued at acquisition cost less amortization. Amortization is effected using the straight line method throughout the useful life of these assets which ranges from 1 to 10 years. 3.6 Impairment of Assets The Group examines at each date of the annual financial statements whether and to what extent there are indications that the value of an asset may be impaired. Apart from goodwill and intangible assets with an indefinite economic life, which are reviewed for impairment annually, the carrying values of other assets are subject to an impairment review when events or changing conditions imply that their carrying value may not be recoverable. The impairment loss of an asset is recorded as an expense in the income statement when the net book value of the asset is higher than its recoverable value. The recoverable value is defined as the highest between the fair value less the cost of sale and the value in use of the asset. Fair value less the cost of sale is the amount that can be received from the sale of an asset in the context of a bilateral agreement where both parties have full knowledge and proceed on their own will, after the deduction of any additional direct cost for the sale of the asset. Value in use is the present value of the estimated future cash flows expected to be generated as result of the asset’s constant use and sale at the end of its useful life. For the purposes of determining the impairment, assets are grouped at the lowest possible level for which separate cash flows can be determined. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 115 3.7 Trade receivables and other receivables The trade and other receivables are initially recognized at fair value and in a later stage are valued at their net cost, after the deduction of any impairment losses. The impairment losses are recognized whenever there is objective evidence that the Group is not in position to collect the entire amounts which are due according to the contractual terms. The amount of impairment is the difference between the book value of the receivables and the present value of the estimated future cash flows. Regarding the provision for expected credit losses, the Group applies the simplified approach of IFRS 9 by measuring the loss provision at an amount equal to the expected lifetime credit losses for all trade receivables and other receivables from customer contracts. The amount of the provision is recorded as an expense in the statement of results. 3.8 Inventories Inventories include raw and auxiliary materials, packaging items, consumables, spare parts, finished and semi-finished products and merchandise. The cost of inventories includes all the purchasing and manufacturing expenses as well as the expenses that were realized in order to render the inventory at its current position and condition. The cost of inventories does not include financial expenses. At the balance sheet date, inventories are valued at the lower of acquisition cost and net realizable value. Net realizable value is the estimated sales price during the normal course of business of the company less any relevant sales expenses. The cost of inventories is defined by the weighted average method. With regard to obsolete and scrap inventory, relevant provisions are formed and the corresponding losses are recorded in the statement of income during the period they arise. 3.9 Cash & cash equivalents Cash and cash equivalents include cash in the bank and in hand as well as short term time deposits. Cash & cash equivalents have negligible market risk. 3.10 Suppliers and related liabilities The trade liabilities are initially recognized at fair value and in later stage are being valued according to the net cost method via the utilization of the effective interest rate. 3.11 Financial Assets and Financial Liabilities Initial recognition and subsequent measurement of financial assets As of 1 January 2019, in accordance with IFRS 9, the following two items are used as the basis for the classification of financial assets. (a) the concept of an entity's business model for the management of financial assets as determined by key management personnel (in accordance with the definitions in IAS 24); and (b) the characteristics of the contractual cash flows of the financial asset. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 116 Each financial asset is classified into one of three categories: (a) at amortized cost, when it is withheld for the purpose of collecting conventional cash flows on specific dates consisting of the repayment of capital and interest. (b) at fair value through other comprehensive income, when it is withheld for the purpose of collecting conventional cash flows or for the purpose of selling it. (c) at fair value through profit or loss, provided that it does not fall into any of the above two categories. Financial assets recognized at amortized cost are subsequently measured using the effective interest method and are tested for impairment. Profits and losses are recognized in profit or loss when the asset ceases to be recognized, modified or impaired. Financial assets of the Group and the Company that are valued at amortized cost include customer receivables and other receivables. The Group and the Company as at 31/12/2021 did not hold financial assets measured at fair value through other comprehensive income measured at fair value through profit or loss. Impairment of financial assets The Group and the Company assess, at each reporting date, whether the value of a financial asset or a group of financial assets has been impaired as follows: A provision for impairment against expected credit losses for all financial assets that are not measured at fair value through profit or loss is recognized. Expected credit losses are based on the difference between all contractual cash flows payable under the contract and all cash flows that the Group or the Company expects to receive, discounted at the approximate original effective interest rate. For corporate receivables and other receivables, the Group and the Company apply the simplified approach for calculating the expected credit losses, i.e. at each reporting date, measure the provision for a financial instrument for an amount equal to the expected credit loss, throughout their life without monitoring the changes in credit risk. Derecognition of financial assets A financial asset (or part of a financial asset or part of a group of similar financial assets) is derecognized when: - the rights to the inflow of cash resources have expired -The Group or the Company retains the right to receive cash flows from that asset but has also undertaken to pay them to third parties in full without undue delay in the form of a transfer agreement; -The Group or the Company has transferred the right to receive cash flows from that asset while either (a) it has transferred substantially all the risks and rewards thereof or (b) has not transferred substantially all the risks and rewards , but has passed the control of that item. Initial recognition and subsequent measurement of financial liabilities Financial liabilities may be classified into two categories: (a) Financial liabilities measured at fair value through profit or loss, and (b) Financial liabilities measured at amortized cost. They are initially measured at their fair value less the cost of trade, in the case of loans and payables. Financial liabilities of the Group and the Company consist of bank loans, liabilities to suppliers and related liabilities and subsequently from initial recognition are measured at amortized cost using the effective interest method. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 117 Derecognition of financial liabilities A financial liability is derecognized when the commitment resulting from the obligation is canceled or expires. When an existing Financial Liability is replaced by another by the same Lender but under substantially different terms or the terms of an existing liability are substantially amended, such exchange or amendment is treated as a derecognition of the original liability and recognition of a new liability. The difference in the respective book values is recognized in the income statement. Offsetting of financial receivables 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 the Company legally holds that right and intends to offset them on a net basis with each other or to claim the asset and settle the obligation at the same time. The statutory right should not depend on future events and should be capable of being executed in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty. 3.12 Financial Derivatives The financial derivatives are initially recorded at fair value during the transaction date and subsequently are valued at fair value. Changes in fair value are recorded in the results unless hedge accounting is applied. The fair value of financial derivatives is defined by the price of such in an active market, or by using valuation techniques in cases where there is no active market for such instruments. Derivatives are classified as financial assets when their fair value is positive and as financial liabilities when their fair value is negative. The gains or losses resulting from changes in the fair value of derivatives are accounted for directly in the statement of results, except for the effective part of the cash flow hedging, which is recognized in the statement of other comprehensive income and then it is transferred to the results of the year when the prospective transaction is finally recognized in the statement of results. For the purposes of hedge accounting, the hedging actions are classified as follows: • Hedging of fair value, when the risk is adjusted to changes in the fair value of an asset or liability or an unrecognized corporate commitment. • Cash flow hedging when the risk of cash flow variability is adjusted in relation to a recognized asset or liability, or in relation to an extremely probable transaction. • Hedging for net investment in foreign subsidiaries. During the initial recognition of the transaction, the Group shall record in detail the relationship between the hedging and the hedged item, as well as the purpose and the risk management strategy that is served through the agreement of the hedging. The documentation includes the determination of the hedging and the hedged item or transaction, the nature of the risk that is being hedged and the way in which the company will evaluate the effectiveness of the changes at fair value of the hedging instrument for the offset of the risk due to changes in the fair value of the hedged item, meaning the cash flows relating to the hedged risk. These compensations are expected to be extremely effective in achieving offsetting changes in fair value or cash flows and are constantly being assessed to determine their effectiveness throughout the years for which they have been set. The fair value of a derivative as a hedging instrument is recorded either as a non- current asset or as a long-term liability, when the remainder of the period until maturity is greater than 12 months, or as an asset or short-term liability if the remainder of the period until maturity is less than 12 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 118 months. 3.13 Share capital The share capital depicts the nominal value of the common shares issued and outstanding. The price paid above nominal value per share is recorded in the account “Share Premium” in Equity. Direct expenses paid for the issuance of new shares or rights are recorded in equity as a deduction from the amounts of the issue. 3.14 Loans Loans are initially recognized at cost, namely at the fair value of the amount received, less any possible direct costs for the realization of the transaction. Subsequently, loans are valued at net book cost based on the effective interest rate method. The borrowing cost is recognized in the results of the period when such is realized. Borrowing cost that is directly linked to the purchase or construction of an asset, which requires a significant period in order to render such ready for use, is capitalized as part of the asset’s acquisition cost. From the beginning of the fixed asset’s production operation and after, the loan’s interest are charged in the results. Loan liabilities are classified as short-term except for the cases where the Group has the right to postpone the payment of the liability for at least 12 months after the date of the annual financial statements. 3.15 Income tax (Current and deferred) The period’s charge for income tax consists of the current tax and the deferred taxes, i.e. the tax charges or tax credits that are associated with economic benefits accruing in the period but which have been or will be assessed by the tax authorities in different periods. The income expense stands for the sum of the currently payable tax and the deferred tax, plus any additional tax from previous years’ tax audit. The tax burden of the current year is based on the year’s taxable profit. The taxable profit differs from the net accounting profit appearing in the results since it excludes income or expenses which are taxed or which are tax deductible in other years and since also it excludes items which are never being taxed or being tax deductible. The tax is calculated according to the effective tax rates or those which have been enforced at the date of the Statement of the Financial Position. Deferred income tax is determined according to the liability method which results from the temporary differences between the book value and the tax base of assets and liabilities. Deferred tax assets and liabilities are valued based on the tax rates that are expected to be in effect during the period in which the asset or liability will be settled, taking into consideration the tax rates (and tax laws) that have been put into effect or are essentially in effect up during the date of the annual financial statements. Deferred tax assets are recognized to the extent that there will be a future tax profit to be set against the temporary difference that creates the deferred tax asset. The Group proceeds with offsetting entries between tax receivables and tax liabilities whenever there is a legally applicable right for such action as well as whenever the deferred tax receivables and tax liabilities concern taxable income imposed by the same tax authority. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 119 3.16 Employee benefits Short-term benefits Short-term employee benefits (except post-employment benefits) monetary and in kind are recognized as an expense when they accrue. Any unpaid amount is booked as a liability, while in the case where the amount paid exceeds the amount of services rendered, the company recognizes the excess amount as an asset (prepaid expense) only to the extent that the prepayment will lead to a reduction of future payments or to reimbursement. Post-employment Benefits According to Law 2112/20, the Company pays to employees a compensation as a lump sum due to retirement or dismissal. The level of the paid indemnity depends on the years of service, the level of remuneration and whether it is due to retirement or dismissal. In Greece, the indemnity payable in the case of retirement equals with 40% of the indemnity that would be payable in case of dismissal. The relevant liability for employee indemnities recorded in the annual financial statements is the present value of the commitment for the defined benefit less the changes deriving from the non-recognized actuarial profit and loss and the service cost. The commitment for the defined benefit is calculated by an independent actuarial officer with the use of the projected unit credit method. The liability is defined by taking into consideration several parameters such as age, service years, salary and specific obligations for paid benefits. The provisions corresponding to the current financial year are recorded in the statement of comprehensive income. 3.17 Government Grants The Group recognizes the government grants that cumulatively satisfy the following criteria: (a) There is reasonable certainty that the company has complied or will comply with the conditions of the grant and (b) it is certain that the amount of the grant will be received. They are booked at fair value and are systematically recognized as revenue according to the principle of matching the grants with the corresponding costs that they are subsidizing. Grants that relate to assets are included in long-term liabilities as deferred income and are recognized systematically and rationally as revenue over the useful life of the fixed asset. Amortization of grants is presented in “Other operating income” in the Income Statement. 3.18 Provisions for contingent claims-liabilities Provisions constitute liabilities of uncertain time frame or amount. Provisions are recognized when the Group has present obligations (legal or constructive) as a result of past events, their settlement through an outflow of resources is probable and the exact amount of the obligation can be reliably estimated. Provisions are reviewed at the end of each reporting period so that they may reflect the present value of the outflow that is expected to be required for the settlement of the obligation. The provisions may differ from the possible liabilities which unlike the forecasts are not certain to be verified in the future nor can their amount be reliably measured. Contingent liabilities are not recognized in the financial statements but are disclosed, except if the probability that there will be an outflow of resources is very small. 3.19 Recognition of income Income includes the fair value of goods and services sold, net of Value Added Tax, discounts and returns. Inter-company income within the Group is eliminated completely. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 120 The new IFRS 15 establishes a five-step model to measure revenue arising from contracts with customers as follows: 1. Determination of the contract (s) with the customer. 2. Determination of implementation obligations. 3. Determination of the transaction price. 4. Allocation of the transaction price to the performance obligations of the contract. 5. Recognition of income when the Company fulfills an obligation to execute. In accordance with IFRS 15, revenue is recognized when the customer acquires control of the goods or services by specifying the time that the control is transferred either at a given point in time or over time (usually in the provision of services). The Group will recognize revenue in a way that reflects the transfer of the goods or services to customers to the amount it expects to be entitled to in exchange for those goods or services. Revenue from the service is recognized at the level of the completion of the services provided at the date of the balance sheet of the total number of the services rendered and the demand is reliably secured. Interest income is recognized on a time proportion basis using the effective interest rate. 3.20 Leases The Group recognizes right-of-use assets and lease liabilities for operating leases relating to the lease of means of transport, mainly passenger cars and buildings at the beginning of the lease. The assets with the right of use are registered separately in the statement of Financial Position on the line "Right-of-use fixed assets". The right of use is initially valued at the cost, which includes the amount of the initial recognition of the lease liability, any lease payments made at the beginning or before the start of the lease minus any lease incentives received, any initial direct costs and the estimation of the liability for any costs of restoring the right to use an asset. After the initial recognition, the right of use is valued at the cost of acquisition reduced by any cumulative depreciation and impairment losses and adjusted in the event of a reassessment of the lease liability. The right of use is amortized by the method of straight line amortization method until the end of the lease period, unless the contract provides for the transfer of ownership of the underlying asset to the Company at the end of the lease period. In this case, the right of use is amortized during the economic life of the underlying asset. In addition, the right of use is checked for impairment damages, if any, and is adjusted in cases where there is an adjustment of the lease liability. The lease liability at initial recognition consists of the present value of future residual rent payments. The Company uses the implied lease rate to discount future leases and, where this cannot be determined, uses the lender's differential lending rate. The differential lending interest rate of the lessee is the interest rate at which the lessee would be charged if he borrowed the necessary funds to purchase an asset of similar value to the asset with the right to use, for a similar period of time, with similar financial security and in a similar economic environment. Lease payments incorporated in the valuation of lease liability include the following: - fixed payments, - variable payments depending on an indicator or an interest rate, - amounts expected to be paid on the basis of residual value guarantees, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 121 - the price of the exercise of the purchase right that the Company considers that it will also exercise as well as penalties for termination of the lease, if the determination of the duration of the lease has taken into account the exercise of the right of termination or denouncement by the Company. After the start date of the lease period, the lease liability decreases with the payment of the lease, increases with the financial and economic expense and is measured constantly for any reassessments or modifications of the lease. A revaluation is made when there is a change in future lease payments that may result from a change in an index or if there is a change in the Company's estimate of the amount expected to be paid for a residual value guarantee, a change in the lease and a change in the estimate of the right to purchase the underlying asset, if any. When the lease liability is adjusted, a corresponding adjustment is made to the book value of the right-of-use or is recorded in the results when the book value of the right-of-use is reduced to zero. According to the accounting policy selected by the Group, the right to use is recognized in a distinct line in the Balance Sheet entitled "Right-of-use fixed assets" and the liability to lease is recognized in the "Lease liabilities" in the categories of Long-Term and Short-Term Liabilities respectively. The Group has selected to use the exception provided by IFRS 16 and not to recognize the right to use and the lease liability for leases not exceeding 12 months or for leases in which the underlying asset is of low value (less than 5,000 Euros when it is new). 3.21 Dividend distribution The distribution of dividends to shareholders of the parent Company is recognized as a liability in the financial statements at the date on which the distribution is authorized by the Annual General Shareholders Meeting. 3.22 Earnings per Share Basic earnings per share are calculated by dividing the year’s net earnings corresponding to the common shareholders with the weighted average number of shares outstanding during the same year. Adjusted (diluted) earnings per share are calculated by adjusting the weighted average number of common shares outstanding, with the effects of all potential securities convertible into ordinary shares. Stock options (Note 6.35) are the only category of potential securities convertible into common shares of the Company. For the purposes of calculating diluted earnings per share, the exercise of stock options is taken for granted. The existing weighted number of shares outstanding is added to the difference between the number of common shares deemed to have been issued in the exercise of the stock options and the number of common shares that would have been issued at fair value. The number of common shares that would have been issued at fair value is calculated by dividing the hypothetical receipts from the stock options by the average market price of the common shares during the reporting period. 4. Segment reporting The Group is active in the production of flexible plastic (films) packaging materials mainly aimed at the food industry. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 122 Given that the conditions for application of I.F.R.S. 8 “Operating Segments” are not met, and specifically the condition (b) and (c) of paragraph 5 of the Standard are not met, the Group’s activities are presented as one segment. The above conditions define that an operating segment constitutes part of the company: a) for which operating results are reviewed regularly by the “Chief Operating Decision Maker”, which corresponds to the parent company’s Board of Directors for the Group, in order to make decisions regarding the allocation of resources and to assess its effectiveness and b) for which separate Financial information is available. The geographical allocation of the Group’s sales and assets is presented in the following table. 5. Risk Management Given its exporting activities and particularly its high extrovert strategy, the Group operates within an intense competitive international environment. The Group’s general activities create several financial and other risks, including exchange rate risk, interest rate risk, credit and liquidity risk. The basic risk management policies that the Group applies during the performance of its business activity are determined by its Management. The overall risk management plan of the Group focuses on the fluctuations of the financial markets and aims to mitigate and also minimize the potential adverse effects of these fluctuations on the financial performance and results of the Group as a whole. The Group’s financial assets and financial liabilities mainly consist of cash & cash equivalents, trade receivables, loans and other receivables, bank loans, lease liabilities as well as liabilities towards suppliers and related liabilities. The Board of Directors is responsible for the effective monitoring of the exposure to business risks and in this context it acts with the aim of maintaining stability while at the same time facilitating continuation of operations and the development of the Company. The Management is responsible for the implementation of the Business Risk Management System in the daily life of the Company and the Group in general. GROUP 1/1-31/12/2022 GREECE EUROPE OTHER COUNTRIES Intra-Group Write-offs TOTAL Income from external customers 16,284 62,110 72,618 0 151,012 Total Assets 160,024 47,413 36,287 (67,705) 176,019 Purchases of Fixed Assets 7,015 5,467 1,007 0 13,489 1/1-31/12/2021 GREECE EUROPE OTHER COUNTRIES Intra-Group Write-offs TOTAL Income from external customers 14,927 43,252 56,002 0 114,181 Total Assets 131,902 34,587 22,356 (45,673) 143,172 Purchases of Fixed Assets 2,980 98 108 0 3,187 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 123 In particular, the Management is responsible for the systematic identification and evaluation of risks that affect business activities and in addition, oversees the formulation and timely implementation of risk management plans. It regularly evaluates the effectiveness and the need to adjust risk management plans to achieve optimal management. Ι. The usual finan cial risks to which the Group is exposed are as follows: Α. Exchange rate risk The Group operates on a global level and realizes transactions in foreign currency, mainly: a) in U.S. dollar (U.S.D.), b) in Polish zloty (PLN), c) in Australian dollar (AUD) and in British Pound (GBP). The Group’s exposure to foreign exchange risk mainly emerges from existing or expected cash flows in foreign currency (exports-imports), as well as from investments in foreign countries under a different currency (other than Euro) whose equity is exposed to exchange rate risk during the translation of their financial statements for consolidation purposes. The Group's foreign currency sales invoiced during the fiscal year 2022 represented 49.91% of total sales, of which 17.83% concerned sales in US Dollar (USD), 4.03% sales in Polish Zloty (PLN), 18.85% sales in Australian Dollar (AUD), 8.25% sales in British Pound (GBP) and the remaining 0.95% concerned sales in other foreign currencies. The Group's foreign currency sales invoiced during the fiscal year 2021 represented 47.74% of total sales, of which 13.80% concerned sales in US Dollar (USD), 5.82% sales in Polish Zloty (PLN), 19.32% sales in Australian Dollar (AUD), 7.57% sales in British Pound (GBP) and the remaining 1.23% concerned sales in other foreign currencies. The foreign exchange risk that emanates from transactions in foreign currency according to the above is hedged with the use of placements in foreign currency and foreign exchange futures, depending on the needs each time. The Group monitors on constant basis the movements of the above exchange rates and the particular risk, as consequence of the broader uncertainty that exists in the global environment, exists and may significantly affect the results of the Group during the current year 2023. The following table presents the exposure of the Group to exchange rate risk on 31/12/2022 and more specifically the effect on the earnings before taxes and the equity of the Group in case of a 5% change in the exchange rates compared to the exchange rate of 31/12/2022, keeping all other variables constant. More specifically, the presented changes concern the exchange rates EUR/USD, EUR/PLN, EUR/AUD and EUR/GBP. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 124 Β . Cash flow risk due to changes in interest rates The Group's bank debt is denominated mainly in Euros and is linked to Euribor rate plus spread. Euribor rates starting from the second half of the financial year 2022 have been moving upwards and therefore the Group's operating income and cash flows are negatively affected by this trend in interest rates. The table below shows the effect on the Group's pre-tax profits and equity on potential interest rate changes in relation to the weighted average interest rate for the year 2022, based on the Group's total borrowings at 31/12/2022. Sensitivity Analysis of Group’s Loans against changes in interest rates C. Credit risk Sensitivity Analysis for Foreign Exchange Changes GROUP Foreign Currency Increase / (decrease) of foreign currency against € Effect on earnings before taxes Effect on equity Amounts for 2022 USD 5.00% 395 445 -5.00% -395 -445 PLN 5.00% 216 1063 -5.00% -216 -1063 AUD 5.00% 763 863 -5.00% -763 -863 GBP 5.00% 237 249 -5.00% -237 -249 Amounts for 2021 USD 5.00% 350 322 -5.00% -350 -322 PLN 5.00% 433 717 -5.00% -433 -717 AUD 5.00% 580 639 -5.00% -580 -639 GBP 5.00% 145 158 -5.00% -145 -158 Interest and expenses on received bank loans GROUP Interest rate change Effect on earnings before taxes Effect on equity Amounts for 2022 1% -331 -258 -1% 331 258 Amounts for 2021 1% -161 -125 -1% 161 125 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 125 Credit risk is the possibility that a counterparty will cause financial loss to the Group and the Company due to the breach of its contractual obligations. 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 financial assets. The Group does not face significant credit risk until today. Trade receivables stem from a wide client base, both from Greece and mainly from abroad. The Group’s turnover mainly consists of transactions with reliable and creditworthy firms and companies in general, with most of which it sustains a long-term collaboration and relation of mutual trust in the majority of cases. It should be noted that the Group has established and systematically applies credit control procedures that aim at minimizing bad debt. The Credit Control Department defines credit limits per customer and specific sales and cash collection terms are applied, while possible security is requested when deemed necessary. To the greatest possible extent, the Group continuously and systematically monitors the performance and financial position of its customers, in order to be pro-active and to evaluate the need to take specific measures per customer, also according to the market characteristics and difficulties where each customer operates in. No doubtful debtors exist that have not been covered by provisions for doubtful receivables. It is also noted that the particular risk, although existent mainly due to the war conflict in Ukraine, is considered for the time being as relatively limited and controllable according to the historic data possessed by the Group and in the context of the precautionary measures that have been taken and as well as the procedures that have been established. It is underlined that a potential credit risk exists in cash and cash equivalents as well. The particular risk may arise from a possible inability of the collaborating financial institution to meet its obligations towards the Group. The Group applies procedures that limit its exposure to credit risk in relation to each financial institution which the Group collaborates with. On December 31 st 2022, the maturity of trade receivables was as follows: From the overdue and non-impaired receivables of the Company amounting to 21,447 thousand Euros of the above table, the amount of 20,415 thousand Euros concerned receivables of the parent company from subsidiaries. Trade receivables 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Up to 3 months 17,877 18,751 22,959 21,176 Between 3 and 6 months 1,037 881 10,813 7,781 Between 6 months and 1 year 24 43 5,595 3,842 Over 1 year 7 24 4 279 18,945 19,700 39,372 33,078 Non overdue and non-impaired 15,544 17,088 17,925 17,242 Overdue and non-impaired 3,401 2,612 21,447 15,836 Total 18,945 19,700 39,372 33,078 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 126 D. Liquidity risk In general, the monitoring of liquidity risk is focused on systematic monitoring and effectively managing cash inflows and outflows on a constant basis, in order for the Group to be able to smoothly and consistently meet its cash liabilities. Liquidity risk is maintained at low levels by holding and ensuring adequate cash balances, while it should also be noted that there are adequate unused credit lines with financial institutions in order to face any possible shortage in cash. Such case however, despite the clearly negative circumstances and conditions particularly seen in the domestic economy over the past years, has not yet appeared. However, given the concerns about the course of the global economy due to the effects of the war conflict in Ukraine, it cannot be ruled out that this risk may affect, to a controlled degree, the liquidity of the Group. The table below summarizes the maturity dates of the financial liabilities on 31 December 2022, based on the payments arising from the relevant contracts, at discounted prices. Financial Liabilities ΙΙ. Other risks to which the Group is exposed Α. Risk arising from competition of foreign and domestic firms The competition in the international market where the Group and the Company activate is becoming constantly stronger. The Group based on the fully staffed and equipped Research and Development Department it owns, and on the long-term presence in the sector it possesses, manages to differentiate its products from the current competition and to present innovative diversified solutions. The quality of the Group’s produced products, the strong recognition, and especially the brand name of the Group and the Company further contribute towards this direction. Despite the above, the particular risk due to the stronger competition seen on international level is real and exists, and therefore it may affect the performance and results of the Group during the fiscal year 2023. GROUP 31/12/2022 up to 6 months 6 to 12 months 2 to 5 years > 5 years Total Bank Debt 3,110 2,291 19,283 8,390 33,073 Lease liabilities 198 197 253 0 648 Suppliers and related liabilities 27,464 0 0 0 27,464 Liabilities from income taxes 1,512 5,186 0 0 6,698 Total 32,283 7,674 19,536 8,390 67,882 GROUP 31/12/2021 up to 6 months 6 to 12 months 2 to 5 years > 5 years Total Bank Debt 2,158 1,364 10,385 2,161 16,067 Lease liabilities 284 284 358 0 926 Suppliers and related liabilities 26,420 515 0 0 26,935 Liabilities from income taxes 1,216 1,396 465 0 3,077 Total 30,078 3,558 11,208 2,161 47,005 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 127 Β. Risk of reduced demand due to consumption slowdown The Group is active in an intensive and competitive global environment. Its specialized know-how in conjunction with the research, development and creation of new products and strong infrastructure in production equipment, assist the Group to remain competitive as well as expand or achieve its penetration in new markets. The products of the Group are used mainly in food packaging which, since food is of first need, are usually affected the least from consumption slowdown, however they may be affected subsequently by external factors that may prevail in the markets in which the Group is active. External factors that may harm demand for the Group’s products include the probability of illnesses in meat, the change in food and nutrition patterns, climate changes, a slowdown of the global economy etc. Given that at the present time there is a significant increase in inflation and interest rates both in the Eurozone and globally, the particular risk is assessed as significant and therefore it might affect the Group's financial performance and financial results during the financial year of 2023. C. Risk related to the cost of production (a) risk of increasing raw material prices The Group is exposed to price volatility of raw materials that it acquires internationally. This volatility may result from abrupt changes in oil production prices, other chemical products or other reasons. It should be noted that during the financial year 2022 the various disruptions in transport and supply chains that were observed by the beginning of the previous financial year 2021 continued, with the following main characteristics: - Shortages in some key categories of raw materials worldwide. -Increases in the prices of raw materials in the international market. -Significant increase in transport costs. In this context, the Group takes all necessary measures to ensure the adequacy of raw materials. In order to reduce this risk, the Group’s inventory and commercial policy is adjusted accordingly in order to diversify and transfer part of this risk, to the extent that this is possible and according to the current conditions present each time as regards to competition. Following the above, this risk in case of inability to substantially transfer the increase in the cost of raw material prices to the price of the final product, is assessed as particularly significant and may adversely affect the Group's results during the current year 2023. b) risk of rising electricity prices. Electricity consumption is an important cost factor in relation to the Group's production activity. During the current fiscal year 2022, there was a significant increase in energy costs and consequently a burden on FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 128 production costs, mainly due to the war in Ukraine, as the international prices of oil and natural gas marked a significant appreciation, rising to unprecedented levels. To address this particular risk and mitigate its negative consequences, the Group invests in equipment with low electricity consumption. It is noted that in August 2022 the Company was certified with the ISO 50001:2018 energy management system. Its development aims at the adoption and implementation of the required procedures that will lead to optimal energy performance. At the present time and based on the prevailing instability and volatility, the particular risk is being assessed by the Company's Management as particularly important as it might significantly affect the financial results and performance of the Group in general during the fiscal year 2023. D. Risks related to work safety Work safety for the Group’s employees is a top priority and necessary condition when operating its production facilities. A plan that focuses on establishing a safety culture throughout all the Group’s activities and operations, as well as on targeting the constant training and education of the Company’s personnel is applied on a continuous and constant basis. Moreover, broad educational programs are applied to systematically and fully train and educate employees on workplace safety and hygiene issues. The application of such programs is continuously reviewed by the Company’s relevant Department with the assistance of specialized professionals - Security Technicians with whom the Company collaborates. E. Environmental risks Protection of the environment and sustainable development are fundamental principles for the Group. For this reason, the Group takes strict measures in the areas where it operates, which in several cases extend further than those imposed by law. The Group invests in best available techniques for protecting the environment, it closely monitors planned changes in environmental law and it ensures to take the necessary measures in advance so as to avoid any risk of not complying with the current legislative and regulatory framework. F. Risks related to climate change Climate change is a global environmental issue with implications that significantly affect human health, working conditions and safety at work. The optimal response to the risk of climate change comprises a fundamental commitment of the Group, which in addition to its legal obligation also considers this issue as a moral obligation to contribute actively and substantially to the efforts of both the international community and our country to combat climate change-related risks. The Group recognizes both the risks associated with the phenomenon of climate change, and its obligations in relation to the need for continuous improvement of its environmental performance. The mitigation of the effects of climate change affects inevitably and determines significantly the business strategy of the Group through the adoption and implementation of measures to reduce its environmental footprint and the systematic effort to use environmentally friendly sources of energy. The Group monitors and records on a systematic basis the environmental impact of its business activities and takes measures to reduce its environmental footprint. FLEXOPACK aims at the continuous reduction of FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 129 carbon emissions which are mainly due to the consumption of electricity which is the main source of energy of the Company. The Group's vision is to continue to be one of the most important Greek companies with a strong international presence and with a parallel contribution to sustainable development. The desire of the Group is to enhance its long-term value through the production of technologically advanced products that meet the most demanding international standards along with quality, safety and sustainable development standards. In this context, the Group promotes and implements a policy, which focuses on the following areas: - Demonstration of preparedness for emergencies, -application of emergency prevention, detection and management procedures, -design and construction of facilities aiming at the greatest possible energy savings, -frequent maintenance and constant renewal and upgrade of the used mechanical equipment, in order to leave a low energy footprint, -continuous information, training and awareness raising of personnel on climate change issues, -integration into the system of recycling and alternative packaging management, in order to prevent the generation of packaging waste and the reuse, recycling and effective utilization of all materials, -selection of recyclable, if possible, raw materials with the lowest possible energy footprint, -application of technologies for reduction of direct and indirect emissions of greenhouse gases from energy consumption, -monitoring of the policy followed by the Group suppliers regarding the implementation of procedures for dealing with climate change and the use of renewable energy sources along with the provision of relevant recommendations and suggestions, where necessary, -building relationships of trust with the local communities in which the Group develops its business activities; continuous care to minimize the inconveniences caused. G. Risks due to the spread of COVID-19 pandemic The new coronavirus SARS-CoV-2, which causes the COVID-19 pandemic and was first detected in December 2019 in a region of China and has since spread around the world, has had extremely adverse effects on both global and domestic economic growth. It is noted that from the first moment of the outbreak of pandemic, the Group adopted strict protocols and procedures for health safety in accordance with the applicable regulatory framework and the relevant guidelines of the competent authorities and thanks to the consistent observance and implementation of these procedures managed to ensure the uninterrupted operation of all its production units as well as their sub-departments and directorates, thus contributing to the broader national effort to deal with the pandemic crisis. The Management of the Group, prioritizing the protection and safety of its employees, closely monitors the developments related to the COVID-19 pandemic and takes timely and effective measures to manage the effects of the pandemic, to ensure its business continuity and smooth operation as well as to reduce the negative consequences to the least extent possible. After almost three years dealing with the coronavirus pandemic, the degree of uncertainty regarding the course and further spread of the Covid-19 pandemic is now significantly lower, since the new variants of FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 130 virus are more contagious but have milder symptoms compared to the previous ones, especially for people who are fully vaccinated and are not vulnerable from a health perspective. At the same time, the above conditions have led to a relaxation if not to a complete removal of the restrictive measures This further strengthens the assessment of the competent health authorities towards the transition from a pandemic to an endemic situation. However constant vigilance is still required, even at a global level, as the possibility of new dangerous epidemics cannot be ruled out. Therefore, the articulation of any conclusions regarding the risks, the impact and the possible effects of pandemic on the commercial activity and the financial results of the Company and the Group remains uncertain. However it should be also noted that despite the extremely unpredictable circumstances that arose and the very strict restrictive measures that were taken by the authorities, the Company managed to ensure its uninterrupted business continuity and to achieve satisfactory level of results. H. Risk related to the war in Ukraine. On February 24, 2022, the Russian military invasion of Ukraine took place, which then escalated into a war, creating geopolitical instability and unsustainable repercussions on the global economy. The latter was due to the large increases in energy prices, raw materials, industrial metals and other consumer goods. The Group has no significant business exposure to the countries involved in the war conflict and therefore no material impact (direct or indirect) exists on its business activities. The Group's sales to Russia and Ukraine in year 2022 cumulatively accounted for 0.88% of the consolidated turnover, while in the previous year 2021 they had represented 2.05% of the consolidated turnover. At this time, any prediction regarding the impact of the war on turnover, financial results and financial position of both the Group and the Company is uncertain, as it is directly related to the duration and intensity of the war activity, the length of time during which the economic measures against Russia remain in force, as well as the way by which the crisis may be resolved. At this time, any prediction regarding the impact of the war on turnover, financial results and financial position of both the Group and the Company is uncertain, as it is directly related to the duration and intensity of the war activity, the length of time during which the economic measures against Russia remain in force, as well as the way by which the crisis may be resolved. I. Capital Management The Group’s objectives in relation to capital management are the smooth operation of its business activities, ensuring financing for its investment plans and the optimal allocation of capital in order to decrease the cost of capital. For the purpose of capital management, the Group monitors the following ratio: “Net debt to Total Employed Capital” Net debt is calculated as total short-term and long-term interest-bearing debt minus total cash & cash equivalents. Total employed capital is calculated as total net debt plus total equity. For financial years ended on December 31 st 2022 and 2021 respectively, the above financial ratio evolved as follows. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 131 The Group may affect its capital structure via the repayment of existing debt or the collection of new debt, via the share capital increase or capital return towards the shareholders, and also via the distribution or the non-distribution of dividends or through other money distributions. 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Long-term debt obligations 27,674 12,540 25,552 10,875 Short-term bebt obligations 5,400 3,528 3,861 2,357 Total bank debt 33,073 16,068 29,412 13,232 Liabilities for Leases 648 926 289 388 Total Bank Debt 33,721 16,994 29,701 13,620 Minus : Cash and cash equivalents 23,772 19,138 16,694 15,700 Net Bank Debt (1) 9,949 (2,145) 13,007 (2,079) Total Equity (2) 106,509 93,717 100,632 92,655 Total Employed Capital (1)+(2) 116,458 91,573 113,639 90,576 Net Bank Debt / Total Employed Capital 8.5% -2.3% 11.4% -2.3% Group Company FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 132 6. Notes on the Financial Statements 6.1 Tangible fixed assets The Group’s tangible fixed assets are analyzed as follows. The Company’s tangible fixed assets are analyzed as follows. GROUP Tangible fixed assets Plots Buildings Mechanical equipment Vehicles, furniture and Other equipment Assets under constructio n Total Acquisition Cost as at January 1st 2021 9,768 22,638 68,904 4,188 1,603 107,101 Accumulated Depreciations 0 (6,457) (43,329) (2,886) 0 (52,672) Book value as at January 1st 2021 9,768 16,180 25,575 1,303 1,603 54,429 Additions 54 154 2,173 369 (147) 2,604 FX differences 22 (28) 20 5 1 19 Transfers 0 7 438 6 (452) 0 Sales - Reductions 0 0 (162) (30) 0 (192) Depreciations of the current period 0 (835) (3,898) (310) 0 (5,043) FX differences of depreciations 0 7 (13) (4) 0 (10) Depreciations of sold, written-off goods 0 0 75 30 0 106 Acquisition Cost as at December 31st 2021 9,843 22,772 71,374 4,538 1,005 109,533 minus: Accumulated Depreciations 0 (7,287) (47,165) (3,170) 0 (57,621) Book value as at December 31st 2021 9,843 15,485 24,209 1,368 1,005 51,912 Additions 0 313 2,096 403 10,340 13,153 FX differences (8) (67) (150) (8) (12) (244) Transfers 0 40 63 9 (130) (17) Sales - Reductions 0 0 0 (38) 0 (38) Depreciations of the current period 0 (934) (3,784) (317) 0 (5,036) FX differences of depreciations 0 23 50 5 0 78 Depreciations of sold, written-off goods 0 0 0 36 0 36 Acquisition Cost as at December 31st 2022 9,836 23,058 73,383 4,905 11,204 122,385 minus: Accumulated Depreciations 0 (8,198) (50,899) (3,446) 0 (62,544) Book value as at December 31st 2022 9,836 14,859 22,484 1,458 11,204 59,842 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 133 6.2 Goodwill The amount of goodwill refers to the acquisition of the Polish company FLEXOPACK POLSKA Sp. z.o.o. Impairment Review of Goodwill COMPANY Tangible fixed assets Plots Buildings Mechanical equipment Vehicles, furniture and Other equipment Assets under constructio n Total Acquisition Cost as at January 1st 2021 8,445 18,766 57,291 3,496 1,468 89,466 Accumulated Depreciations 0 (5,308) (40,111) (2,402) 0 (47,821) Book value as at January 1st 2021 8,445 13,458 17,180 1,094 1,468 41,645 Additions 54 145 2,127 272 (200) 2,398 Transfers 0 7 351 2 (360) 0 Sales - Reductions 0 0 (14) (30) 0 (44) Depreciations of the current period 0 (647) (2,849) (245) 0 (3,741) Depreciations of sold, written-off goods 0 0 14 30 0 44 Acquisition Cost as at December 31st 2021 8,499 18,918 59,754 3,739 909 91,819 minus: Accumulated Depreciations 0 (5,955) (42,946) (2,617) 0 (51,518) Book value as at December 31st 2021 8,499 12,963 16,808 1,122 909 40,301 Additions 0 248 1,445 335 4,650 6,678 Transfers 0 40 24 9 (90) (17) Sales - Reductions 0 0 0 (25) 0 (25) Depreciations of the current period 0 (750) (2,716) (248) 0 (3,714) Depreciations of sold, written-off goods 0 0 0 25 0 25 Acquisition Cost as at December 31st 2022 8,499 19,206 61,223 4,059 5,468 98,456 minus: Accumulated Depreciations 0 (6,705) (45,662) (2,841) 0 (55,207) Book value as at December 31st 2022 8,499 12,502 15,561 1,218 5,468 43,248 Gross book value at December 31st 2020 252 Cumulative impairment loss 0 Net book value at December 31st 2020 252 Gross book value at December 31st 2021 252 Cumulative impairment loss 0 Net book value at December 31st 2021 252 Gross book value at December 31st 2022 252 Cumulative impairment loss 0 Net book value at December 31st 2022 252 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 134 For purposes of reviewing goodwill for possible impairment on 31/12/2022, the aforementioned subsidiary constitutes an individual cash flow generating unit. As regards to goodwill recognized from the acquisition of FLEXOPACK POLAND Sp. z.o.o., the recoverable amount of such was calculated based on the “value in use”, discounting its future cash flows. The definition of the subsidiary’s future cash flows took place by well-founded estimations of management for the level of the subsidiary’s future profitability and by evaluating current market conditions. The basic assumptions regarding the estimation of the subsidiary’s value, are as follows: Discount rate (WACC) 8.23% Average growth of turnover in the next five years 5.47% Growth rate after five-years 1.00% According to the impairment review on 31/12/2022 no impairment losses emerged from the above goodwill. Furthermore, no losses emerge in the following cases: a) if the above discount rate (WACC) increases by 10%, with the other variables being constant. b) if the above average rate of turnover increase for the next five years is reduced by 30%, with the other variables being constant. 6.3 Intangible assets The Group’s and Company’s intangible assets are analyzed as follows: Other intangible assets include know-how use rights, costs incurred for the development of trading names and mainly costs for the establishment of patents on different applications of multiple layer packing films Intangible Assets GROUP COMPANY Software Other intangibles Total Software Other intangibles Total Acquisition Cost as at January 1st 2021 1,679 2,909 4,588 1,678 2,909 4,587 minus: Accumulated Amortization (1,213) (1,599) (2,813) (1,212) (1,599) (2,812) Book value as at January 1st 2021 466 1,309 1,775 466 1,309 1,775 Additions 224 328 552 224 328 552 Transfers 30 0 30 30 0 30 Amortization during the period (197) (180) (377) (197) (180) (377) Acquisition Cost as at December 31st 2021 1,933 3,237 5,170 1,932 3,237 5,169 minus: Accumulated Amortization (1,410) (1,780) (3,190) (1,409) (1,780) (3,189) Book value as at December 31st 2021 523 1,457 1,980 523 1,457 1,980 Additions 87 251 337 87 251 337 Transfers 17 0 17 17 0 17 Amortization during the period (216) (200) (416) (216) (200) (416) Acquisition Cost as at December 31st 2022 2,037 3,487 5,525 2,036 3,487 5,524 minus: Accumulated Amortization (1,627) (1,980) (3,606) (1,626) (1,980) (3,605) Book value as at December 31st 2022 411 1,508 1,918 411 1,508 1,918 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 135 abroad. They also include cost for the development of new products with a book value of 5 thousand euro as of 31/12/2022. 6.4 Participations in Subsidiaries In the parent financial statements, investments in subsidiaries are valued at acquisition cost. The movement of investments is analyzed as follows. Condensed financial information on subsidiary companies The above subsidiary companies are fully controlled by the Cypriot subsidiary company FLEXOPACK INTERNATIONAL LIMITED which is fully owned (100%) by the parent company FLEXOPACK PLASTICS AEBE. No event or evidence has arisen to suggest that the book value of subsidiaries may no longer be recoverable and accordingly no impairment test was performed. 31/12/2022 31/12/2021 Opening balance 14,317 14,017 Share capital increase in FLEXOPACK INTERNATIONAL LIMITED 800 300 Share capital increase in FLEXOPACK POLSKA 6,297 0 Closing balance 21,414 14,317 COMPANY 31/12/2022 31/12/2021 Country Direct participation FLEXOPACK POLSKA Sp. Zo.o Poland 13,144 6,847 FLEXOSYSTEMS LTD BELGRADE Serbia 70 70 FLEXOPACK INTERNATIONAL LIMITED Cyprus 8,200 7,400 21,414 14,317 Indirect participation FLEXOPACK PTY LTD Australia 4,638 4,638 FLEXOPACK TRADE AND SERVICES UK LIMITED England 200 200 FLEXOPACK ΝΖ LIMITED New Zealand 0 0 FLEXOPACK PROPERTIES PTY LTD Australia 1,978 1,501 FLEXOPACK FRANCE France 900 650 FLEXOPACK USA, INC. USA 153 153 FLEXOPACK IRELAND LTD Ireland 100 100 FLEXOPACK DENMARK APS Denmark 5 5 COMPANY Acquisition Cost FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 136 6.5 Participations in associate companies Participations of the Company in associate (related) companies are analyzed as follows. The movement of investments in associate companies is as follows: Condensed financial information on associate companies: 6.6 Other long-term receivables The Group’s and Company’s other long-term receivables are analyzed as follows: GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 INOVA SA 2,685 2,237 1,199 1,199 VLACHOS BROS S.A. 3,524 3,363 1,000 1,000 6,208 5,600 2,199 2,199 GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Opening balance 5,600 4,884 2,199 2,199 Proportion in profit/loss (after taxes) 708 705 0 0 Other 0 117 0 0 Dividends (100) (105) 0 0 Closing balance 6,209 5,600 2,199 2,199 Domicile Acquisition Cost Assets Liabilities Income Earnings (losses) before taxes Earnings (losses) after taxes YEAR 2022 INOVA SA Greece 1,199 11,373 6,004 9,998 1,454 1,096 VLACHOS BROS S.A. Greece 1,000 29,607 22,264 25,418 401 336 YEAR 2021 INOVA SA Greece 1,199 8,743 4,269 7,359 502 380 VLACHOS BROS S.A. Greece 1,000 29,329 22,463 23,702 1,363 1,078 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 137 6.7 Inventories The inventories of the Group and the Company are analyzed as follows: Increase of "Inventories" account by 19.297 million Euros mainly due to the inventory policy followed by the Group to ensure the sufficiency of raw materials. That was deemed necessary since during the year 2022, as a result of the various disruptions in the supply chain, there was a shortage of inventory and at the same time a significant increase in raw material prices. 6.8 Trade receivables The Group’s and Company’s customers and other trade receivables are analyzed as follows: As of 31 December 2022, the maturity of trade receivables was as follows: Other Long-term Receivables 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Other given Guarantees 55 47 55 47 Participation in the company CIRCULATE AB 50 50 50 50 Other Long-term Receivables 4 4 0 0 Total 109 102 105 97 GROUP COMPANY Inventories 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Raw Materials 26,883 18,336 21,797 11,831 Consumables 229 250 172 200 Spare parts & packaging items 1,407 1,044 918 848 Products & other inventory 23,589 13,003 5,412 4,390 Total 52,109 32,633 28,300 17,269 Provisions for impairment (364) (186) (286) (186) Total 51,745 32,447 28,014 17,083 GROUP COMPANY Trade receivables 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Customers (open account) 17,240 17,767 6,137 8,461 Receivables from associates 1,254 1,402 32,469 23,765 Checks Receivable 839 910 836 910 Impairment provisions (243) (248) 0 0 Provision for credit risk (144) (131) (70) (58) Total 18,945 19,700 39,372 33,078 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 138 From the overdue and non-impaired receivables of the Company amounting to 21,447 thousand Euros of the above table, the amount of 20,415 thousand Euros concerned receivables of the parent company from subsidiaries. The expected credit losses were calculated based on the table below and the provision on 31/12/2022 amounted to 70 thousand Euros for the Company and to 144 thousand Euros for the Group. The Company does not calculate any expected credit loss on receivables from its subsidiaries as long as the accounts receivable do not exceed 365 days. On 31/12/2022 there were no receivables from subsidiary companies that had exceeded 365 days. Trade receivables 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Up to 3 months 17,877 18,751 22,959 21,176 Between 3 and 6 months 1,037 881 10,813 7,781 Between 6 months and 1 year 24 43 5,595 3,842 Over 1 year 7 24 4 279 Total 18,945 19,700 39,372 33,078 Non overdue and non-impaired 15,544 17,088 17,925 17,242 Overdue and non-impaired 3,401 2,612 21,447 15,836 Total 18,945 19,700 39,372 33,078 GROUP COMPANY GROUP Days of delay with regard to trade receivables 31-Dec-22 Non overdue <30 days 31-60 days 61-90 days 90-365 days >365 days Total Total amount of trade receivables 12.932 3.671 472 50 108 7 17.240 Expected credit loss 41 69 17 2 9 7 144 31-Dec-21 Total amount of trade receivables 14.167 3.210 230 85 52 24 17.767 Expected credit loss 24 67 7 4 5 24 131 COMPANY Days of delay with regard to trade receivables 31-Dec-22 Non overdue <30 days 31-60 days 61-90 days 90-365 days >365 days Total Total amount of trade receivables 4.804 1.085 240 1 4 5 6.137 Expected credit loss 24 31 10 0 1 5 70 31-Dec-21 Total amount of trade receivables 7.044 1.319 64 2 15 16 8.461 Expected credit loss 0 38 2 0 2 16 58 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 139 6.9 Other receivables The Group’s and Company’s other receivables are analyzed as follows: 6.10 Cash & cash equivalents Cash and cash equivalents refer to the Group’s and Company’s cash in hand and to short-term bank deposits and term deposits held at call with banks. The Group’s and Company’s cash and cash equivalents are as follows: 6.11 Equity 6.11.1 Share Capital and Share Premium Other receivables 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Advance payment for income tax 2,739 1,860 2,694 1,860 Receivables from the Greek State for V.A.T. 1,802 335 1,281 335 Receivables for other taxes 0 27 0 7 Receivables for insurance indemnities 0 218 0 0 Purchases of inventory under receipt 6,286 6,916 1,488 3,316 Discounts on purchases under settlement 982 1,192 856 887 Deferred expenses 606 489 362 316 Prepayments and loans to employees 24 17 19 9 Sundry Debtors 149 60 73 27 Total 12,588 11,115 6,772 6,758 GROUP COMPANY Cash and cash equivalents 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Cash in hand and at banks 23,772 19,138 16,694 15,700 Total 23,772 19,138 16,694 15,700 GROUP COMPANY Share Capital Share premium Total Number of shares Treasury shares 31/12/2022 6,369 3,500 9,869 11,795.024 96.450 31/12/2021 6,329 3,316 9,644 11,720.024 96.450 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 140 According to the terms of the Stock Option Plan, which was established by virtue of the decision of the Board of Directors dated 19.12.2019, in execution of the decision of the Annual Ordinary General Meeting of the Company's shareholders dated 29.06.2018, the Company's executives, as determined by virtue of the relevant decision of the Board of Directors dated 09.01.2020, were invited to submit by 28.12.2021 a statement of intention to exercise the stock options which in total corresponded to 75,000 new common, registered shares carrying voting rights of the Company. After exercising 75,000 stock options (i.e. the entire number of stock options) with an exercise price of 3.00 Euro, the beneficiaries (members of the Board of Directors, Directors and personnel of the Company) paid a total amount of 225,000, 00 Euros via a bank account held in the name of the Company (Note 6.34) and consequently the share capital of the Company was increased by 40,500.00 Euros (whereas the remaining amount of 184,500 Euros was transferred to the share premium account emerging from the issuance of shares above par value) via the issuance of 75,000 new common registered shares of the Company carrying voting rights, and with nominal value of 0.54 Euros per share. The Corporate Transactions Committee of the Athens Exchange, Greece, during its meeting on May 18 th , 2022, approved the admission to trading on the organized market of the Athens Exchange of the above 75,000 new common registered shares of the Company carrying voting rights. On May 25 th , 2022, the trading of the aforementioned 75,000 new shares commenced on the Athens Exchange. The above share capital increase of the Company was certified by its Board of Directors on 06.05.2022 and was registered in the General Commercial Registry (G.E.MI.) on 10.05.2022, through the Companies Division (Department of Listed Companies) of Ministry of Development and Investments being the competent Supervisory Authority. It is noted that, following the above increase, the Company's share capital now amounts to 6,369,312.96 Euros, divided into 11,795,024 common registered shares, with a nominal value of 0.54 Euros per share. Of the above shares, 11,698,574 shares have voting rights, since the remaining 96,450 are treasury shares, the voting rights of which are suspended in accordance with the provisions of article 50 paragraph 1 of Law 4548/2018, as in force. 6.11.2 Reserves The Group’s and Company’s reserves are analyzed as follows: FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 141 Statutory reserve: According to Greek corporate law, companies are obliged to create 5% of the period’s earnings as an statutory reserve until such reaches one third of the paid up share capital. During the Company’s life the statutory reserve cannot be distributed. Special taxed reserves: Special taxed reserves of the Parent Company were created to cover its own participation in the context of implementing investment plans, according to the provisions of several development laws. Tax-free reserves of development law grants: They arose from the transfer of the grants received by the Company from the profit carried forward to the capital reserves. The Group’s Management does not intend to capitalize or distribute the above reserves and thus has not recognized a relevant deferred tax liability. Other reserves Other reserves include tax-exempt reserves and reserves taxed under special provision and are analyzed as follows. -Tax-exempt reserves according to L. 1828/89, L. 3220/2004 and L. 3908/2011 Such reserves have been created according to the provisions of tax law and are capitalized, with the payment of income tax. -Tax-exempt reserves or reserves taxed according to special laws Such reserves concern interest income that was either not taxed or on which tax has been withheld at the source. According to Greek tax law, these reserves are exempt from income tax, with the condition that they will not be distributed to shareholders. Reserves 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Statutory reserve 4,584 4,220 4,584 4,220 Specially taxed reserves 12,196 12,196 12,196 12,196 Tax-free reserves of development law related grants 5,137 5,137 5,137 5,137 Other reserves analyzed as follows: Tax-exempt reserves of L. 1828/89 876 876 876 876 Tax-exempt reserves of L. 3220/2004 321 321 321 321 Tax-exempt reserves of L. 3908/2011 247 185 247 185 Tax-exempt reserves of L. 4172/2013 158 50 158 50 Reserves from specially taxed income 33 33 33 33 Other reserves 156 156 43 43 Total other reserves 1,791 1,622 1,678 1,509 Stock options 363 449 363 449 Treasury shares (386) (386) (386) (386) Reserve from FX differences (502) (391) 0 0 Grand total 23,183 22,848 23,573 23,126 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 142 The Company does not intend to distribute the above reserves and thus it has not recognized a deferred tax liability for the income tax that will be rendered payable in case of distribution. -Special reserve article 48, Law 4172/2013 It concerns a special reserve formed from dividends received from related companies that is exempt from income taxation based on the provisions of article 48 of Law 4172/2013. Stock options. Share distribution program in the form of stock option plan, in accordance with the provisions of article 113 of law 4548/2018. (Note 6.34) Treasury shares The Management of the Company pursuant to the decisions of the Annual Ordinary General Meeting of Shareholders of June 26, 2020 and the Board of Directors of July 13, 2020, announced on July 14, 2020, the start of implementation of the Stock Repurchase Plan, which provides for the acquisition by the Company, in accordance with the provisions of article 49 of Law 4548/2018, as in force, of a maximum of 586,001 own (treasury) shares, which correspond to 5% of the total existing shares of the Company, with a purchase price range between three Euros (3.00 €) per share (minimum) and eight Euros (8.00 €) per share (maximum) and with the expiration date of the above Plan set on June 26, 2022. The Company in the framework of the above Stock Repurchase Plan, proceeded on 22.07.2020, via an over-the-counter (OTC) transaction, with the purchase of 96,450 treasury shares with an average purchase price of 4.00 Euros per share, and a total transaction value of 385,800 Euros. After the aforementioned purchase, the Company holds as of today 96,450 treasury shares, which correspond to a percentage of 0.82% of the total shares of the Company. Reserve for foreign exchange differences: This reserve is used to register foreign exchange differences from the translation of financial statements of foreign subsidiaries. The movement of the Group’s and Company’s reserves is as follows: FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 143 GROUP Statutory reserve Treasury shares Specially taxed reserves Other reserves Stock options FX differences from consolidation Total Balance as at December 31st 2020 3,752 (386) 13,542 1,510 155 (453) 18,120 Formation of statutory reserves 469 0 0 0 0 0 469 Formation of tax free reserve Law 3908/2011 0 0 0 62 0 0 62 Formation of tax free reserve Law 4172/2013 0 0 0 50 0 0 50 Formation of taxable reserve Law 4399/2016 0 0 3,786 0 0 0 3,786 Transfer of amortization of grants of L. 3299/04 from balance carried forward 0 0 6 0 0 0 6 Stock options 0 0 0 0 294 0 294 FX differences due to consolidation of subsidiaries abroad 0 0 0 0 0 62 62 Balance as at December 31st 2021 4,220 (386) 17,334 1,622 449 (391) 22,848 Formation of statutory reserves 364 0 0 0 0 0 364 Formation of tax free reserve Law 3908/2011 0 0 0 62 0 0 62 Formation of tax free reserve Law 4172/2013 0 0 0 108 0 0 108 Exercise of stock options 0 0 0 0 (244) 0 (244) Stock options 0 0 0 0 157 0 157 FX differences due to consolidation of subsidiaries abroad 0 0 0 0 0 (112) (112) Balance as at December 31st 2022 4,584 (386) 17,334 1,791 363 (502) 23,183 COMPANY Statutory reserve Treasury shares Specially taxed reserves Other reserves Stock options Total Balance as at December 31st 2020 3,752 (386) 13,542 1,397 155 18,460 Formation of statutory reserves 469 0 0 0 0 469 Formation of tax free reserve Law 3908/2011 0 0 0 62 0 62 Formation of tax free reserve Law 4172/2013 0 0 0 50 0 50 Formation of taxable reserve Law 4399/2016 0 0 3,786 0 0 3,786 Transfer of amortization of grants of L. 3299/04 from balance carried forward 0 0 6 0 0 6 Stock options 0 0 0 0 294 294 Balance as at December 31st 2021 4,220 (386) 17,334 1,509 449 23,126 Formation of statutory reserves 364 0 0 0 0 364 Formation of tax free reserve Law 3908/2011 0 0 0 62 0 62 Formation of tax free reserve Law 4172/2013 0 0 0 108 0 108 Formation of taxable reserve Law 4399/2016 0 0 0 0 0 0 Exercise of stock options 0 0 0 0 (244) (244) Stock options 0 0 0 0 157 157 Balance as at December 31st 2022 4,584 (386) 17,334 1,678 363 23,573 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 144 6.11.3 Retained earnings 6.12 Deferred tax assets and liabilities The calculation of deferred tax assets and liabilities is conducted at the individual Group company level and to the extent where receivables and liabilities arise, such are offset between each other (at the level of each individual company). The deferred tax assets and liabilities are offset when there is an applicable legal right to offset current tax assets against current tax liabilities and when the deferred income taxes refer to the same tax authority. The Group’s and the Company’s deferred tax assets and liabilities result from the following items: Retained earnings 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Balance as at January 1st 61,225 56,188 59,885 57,968 Net Results for the period 14,102 10,407 9,175 7,286 Revaluation of earnings-(losses) from defined benefit plans 11 13 11 13 Distributed dividends (1,591) (1,011) (1,591) (1,011) Transfers to reserves (534) (4,366) (534) (4,366) Exercise of stock options 244 0 244 0 Transfer of amortization of grants of L. 3299/04 to reserves 0 (6) 0 (6) Balance as at December 31st 73,457 61,225 67,190 59,885 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 145 GROUP 31/12/2022 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Deferred tax assets Provision for staff indemnities 123 116 7 1 Other short-term liabilities 289 0 289 0 Provisions 206 78 129 (4) Tax loss of subsidiaries 0 0 0 (11) Expected credit loss (IFRS 9) 21 18 3 (1) Foreign exchange differences 295 0 295 0 Valuation of derivatives 53 95 (42) 57 Stock options 80 99 (19) 62 Other 2 20 (17) 3 1,069 425 645 106 Deferred tax liabilities Intangible assets (120) (136) 16 34 Tangible assets (1,440) (1,519) 79 257 Foreign exchange differences 0 (60) 60 (9) (1,560) (1,715) 155 282 Net deferred tax liabilities (491) (1,291) Net charge of deferred tax on the results 800 387 Deferred tax recognized in the results 803 391 Deferred tax recognized in the other comprehensive income (3) (4) Total 800 387 Deferred tax liabilities/assets Deferred tax Statement of Financial Position Income statement FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 146 6.13 Provision for staff indemnities due to retirement The Group and Company recognize the liability for staff retirement indemnities as the present value of the legal commitment for the payment of staff retirement lump sum. The actuarial valuation of the liabilities has been carried out on the basis of the current legislation, as it derives from L.2112 / 1920 and L.3026 / 1954 and as they were amended by L.4093 / 2012, L.4336 / 2015 and L.4194 / 2013. The Company has not activated any special benefits program for employees other than those arising from the above legislation, which is committed to benefits in cases of retirement for all employees. The valuation of the liabilities is being performed in order to capture the following: a) The obligation of the company, when an employee has provided a service in exchange for benefits to be paid in the future and b) The expense of the financial period, when the company consumes the financial benefits arising from the service provided by an employee in exchange for the payment of benefits. COMPANY 31/12/2022 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Deferred tax assets Provision for staff indemnities 123 116 7 1 Other short-term liabilities 289 0 289 0 Provisions 70 48 22 (4) Tax loss of subsidiaries 0 0 0 0 Expected credit loss (IFRS 9) 15 13 3 (1) Foreign exchange differences 295 0 295 0 Valuation of derivatives 53 95 (42) 57 Stock options 80 99 (19) 62 Other 0 0 (0) (1) 925 370 555 113 Deferred tax liabilities Intangible assets (120) (136) 16 34 Tangible assets (1,205) (1,301) 96 292 Foreign exchange differences 0 (60) 60 (9) (1,325) (1,497) 172 317 Net deferred tax liabilities (400) (1,127) Net charge of deferred tax on the results 727 430 Deferred tax recognized in the results 730 433 Deferred tax recognized in the other comprehensive income (3) (4) Total 727 430 Statement of Financial Position Income statement Deferred tax liabilities/assets Deferred tax FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 147 Based on the current legislation (L.2112 / 1920, L.4093 / 2012, L.4336 / 2015 and L.3026 / 1954, L.4194 / 2013) the benefit received by the employees concerns exclusively and only the amount of one-time compensation and is given in case of normal retirement. The amount of the benefit depends on the years of service and the amount of the salary. In the event of exit due to retirement, the amount of compensation to be paid is equal to 40% of the pensionable salary and varies depending on the years of service of each employee. The relevant liability was calculated after an actuarial study on 31/12/2022 and was analyzed as follows: Employee benefits due to retirement from service 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Balance at beginning 527 478 527 478 Debits - (credits) in the results 47 65 47 65 Debits - (credits) in the statement of total comprehensive income (14) (17) (14) (17) Balance at end 560 527 560 527 The main actuarial assumptions used are the following: 31/12/2022 31/12/2021 Discount rate 2.80% 0.60% Future salary increases 2.50% 2.00% Inflation 2.80% 1.80% GROUP COMPANY 31/12/2022 31/12/2021 Changes in the balance sheet liability Net Liability to be recorded in the balance sheet at the beginning of the year 527 478 Contributions payable by Employer - - Expenditure to be entered in the income statement 78 87 Benefits paid within the current year by the Employer (32) (22) Amount entered in the OCI (14) (17) Personnel transportation costs - - Net Liability to be recorded in the balance sheet at the end of the year 560 527 Changes in the present value of the liability Present value of the liability at the beginning of the year 527 478 Interest expense 3 3 Current service cost 59 48 Employee contributions - - Prior service cost - 20 Cost (result) of Settlements / Curtailments / Special Cases (e.g. Consolidations, Splits, Terminations) 16 16 Benefits paid within the current year (32) (22) Expenses - - Actuarial (profit) loss on liability (14) (17) Present value of the liability at the end of the year 560 527 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 148 Sensitivity Analysis The use of a discount rate higher by 0.5% would result in the actuarial liability being lower by 2% while the exact reverse assumption, i.e. the use of a discount rate lower by 0.5% would result in the actuarial liability being higher by 2%. The corresponding sensitivity tests for the expected salary increase, i.e. the use of an expected salary increase higher by 0.5% would result in the actuarial liability being higher by 2% while the exact reverse assumption, i.e. the use of an expected salary increase lower by 0.5% would result in the actuarial liability being lower by 2%. 6.14 Right of Use Assets The right of use assets of the Group and the Company are analyzed as follows: Amounts recorded in the Balance Sheet and Income Statement and related analysis Balance sheet for the year Present value of the obligation at the end of the year 560 527 Actual value of the plan's assets at the end of the year - - Net Liability to be recorded in the balance sheet at the end of the year 560 527 Income Statement at the end of the year Current service cost 59 48 Interest expense 3 3 Expected return on the plan's assets - - Prior service cost - 20 Cost (result) of Settlements / Curtailments / Special Cases (e.g. Consolidations, Splits, Terminations) 16 16 Expenditure to be entered in the income statement 78 87 Other Comprehensive Income (OCI) Amount entered in the OCI (14) (17) Actuarial (profit) loss on liability due to financial assumptions (44) 1 Actuarial (profit) loss on liability due to demographic assumptions - - Actuarial (profit) loss on liability due to evidence 30 (18) Cumulative amount entered in the OCI 72 86 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 149 The liabilities from leases at the Group and the Company level are analyzed as follows: 6.15 Long-term and short-term loans The Group’s long-term bank loans are in Euro. The Group's long-term bank loans are based on variable 3-month and 6-month Euribor rates and on fixed spreads. Right-of-Use Assets GROUP COMPANY Buildings Transport Means Total Buildings Transport Means Total Balance as at 1 January 2021 434 676 1,110 218 453 671 Additions 351 46 398 0 21 21 Forex differences 4 5 9 0 0 0 Depreciation for the year (279) (310) (590) (105) (198) (303) Forex differences of depreciation (1) (1) (2) 0 0 0 Book value as at 31 December 2021 509 416 925 113 275 389 Balance as at 1 January 2022 509 416 925 113 275 389 Additions 0 267 267 0 169 169 Forex differences (2) (3) (5) 0 0 0 Depreciation for the year (286) (270) (556) (105) (165) (270) Forex differences of depreciation 6 2 8 0 0 0 Book value as at 31 December 2022 227 412 640 9 279 288 Lease Liabilities GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Short-term Leasing Liabilities 357 568 122 304 Long-term Leasing Liabilities 290 358 167 84 Total Lease Liabilities 648 926 289 388 Leasing liabilities are payable as follows: Within the year 395 572 134 275 Within the second year 175 326 88 91 From 3 up to 5 years 136 109 91 44 After 5 years 1 0 0 0 Less: Discounting (59) (81) (25) (21) Total Lease Liabilities 648 926 289 388 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 150 The Group's short-term borrowing of 819 thousand Euros (based on the exchange rate as of 31/12/2022) is denominated in the following currencies: Polish zloty (PLN) (value in Euro of 740 thousand) and in Australian dollar (AUD) (value in Euro of 79 thousand). The amounts of the long-term loans which are payable within a year starting from the balance sheet date are recorded as short-term liabilities, whereas the amounts payable at a later stage, are recorded as long-term ones. The Group does not possess any loans value at fair. The book values of the Group’s loans are estimated to approach their fair value and therefore the discount which would be used for the determination of the fair value is almost equivalent to the interest rates charged to the Group. Long-term and short-term liabilities from the Group’s and Company’s loans are analyzed as follows: GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Long-term debt Common bond loans 29,412 13,232 29,412 13,232 Long-term Bank Debt 2,841 2,035 0 0 32,254 15,267 29,412 13,232 Minus part of bond loans payable in the next period 3,861 2,357 3,861 2,357 Minus part of long-term bank debt payable in the next period 720 370 0 0 Total long-term debt 27,674 12,540 25,552 10,875 Short-term debt Bank debt 753 747 0 0 Factoring 66 53 0 0 Short-term portion of bond loans 3,861 2,357 3,861 2,357 Short-term portion of long-term bank debt 720 370 0 0 Total short-term debt 5,400 3,528 3,861 2,357 Total debt 33,073 16,067 29,412 13,232 Maturities of long-term debt Up to 1 year 4,580 2,727 3,861 2,357 2 - 5 years 19,283 10,379 17,161 8,714 Over 5 years 8,391 2,161 8,391 2,161 Total 32,254 15,267 29,412 13,232 Weighted average interest rate charged on the results 2.67% 2.47% 2.63% 2.73% FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 151 The ordinary bond loans of the Company are the following: Α) On the 24th of December 2018, the Company signed a Common, Paper, Bond Loan Coverage Agreement through Private Placement, in accordance with the provisions of Law 3156/2003 and Cod. Law 2190/1920, with a total nominal value of Euro 5,000,000 and covered by the Banking Company under the name "EUROBANK ERGASIAS SA". Attorney-at-law for payments and Representative of the Bondholders was designated "EUROBANK ERGASIAS SA". The proceeds of this non-secured Common Bond Loan was used by the Company, on one hand, by the amount of 3,250,000 Euros, for the refinancing of existing bank loans and, in particular, for the repayment of a Bond Issuance of the Company with a balance of 2,250,000 Euros, as well as for a short-term loan amounting to Euro 1,000,000 and, on the other hand, by the amount of 1,750,000 Euros, in order to cover its working capital needs. B) The Company signed on November 17, 2021, a Contract for the Coverage of a Common Bond Loan through a private placement, in accordance with the provisions of Law 4548/2018 and of Law 3156/2003, as currently in effect, amounting to 7,000,000 Euros via coverage by "National Bank of Greece SA". "National Bank of Greece SA" was appointed Power of Attorney and Representative of the Bondholders. The Company utilized the above loan as follows: (a) an amount of 3,646,000 Euros was channeled into the refinancing of an existing common bond loan and (b) an amount of 3,354,000 Euros was used by the Company in order to meet working capital needs of a long-term nature and to further facilitate its business objectives. C) On June 9, 2022, the Company signed a Contract for the Coverage of a Common Bond Loan via a private placement, in accordance with the provisions of Law 4548/2018 and Law 3156/2003, as applicable, with a total nominal value of 9,000,000 Euros and a duration of seven ( 7) years. The loan was covered by the Limited Liability Banking Company under the name "ALPHA BANK SOCIETE ANONYME". "ALPHA BANK SOCIETE ANONYME" was appointed as Payment Agent and Representative of the Bondholders. The proceeds from the above Common Bond Loan were used by the Company as follows: (a) an amount of 3,214,000 Euros for the repayment/refinancing of the Company's existing loan to Alpha Bank SA and (b) an amount of 5,786,000 Euros for the financing of working capital. D) On November 24, 2022, the Company signed a Contract for the Coverage of a Common Bond Loan, in accordance with the provisions of Law 4548/2018 and Law 3156/2003, as applicable, with a total nominal value of twelve million nine hundred and thirteen thousand and two hundred and two Euros (€ 12,913,202). The above loan was covered in its entirety on November 29, 2022 as follows: (a) on the one hand, with funds from the Recovery and Resilience Fund, by the amount of eight million seventy thousand seven hundred and fifty one Euros (€ 8,070,751), and (b) on the other hand, via "Eurobank Societe Anonyme" by the amount of four million eight hundred forty two thousand and four hundred fifty one Euros (€ 4,842,451). "Eurobank Societe Anonyme" was appointed Paying Agent and Representative of the Bondholders. The proceeds from the above Common Bond Loan were used by the Company to cover its needs along an envisaged investment plan. The Company was the implementing body of an eligible Investment Plan amounting to sixteen million one hundred forty one thousand and five hundred and three euros (€16,141,503), which falls under the Eligible Action "Extroversion" and aims at the capacity increase of the existing production unit of flexible plastic materials (films), located in Koropi (Tzima location), County of Attiki, Greece. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 152 The aforementioned common bond loans have been granted from the banks without any guarantee and the Company has the right to proceed with an early repayment of the above loans without penalty or other cost. The terms of the above bond loans include the obligation to preserve specific financial ratios of (a) total debt to equity, and (b) earnings before interest, taxes, depreciation and amortization (EBITDA) to debit interest and (c) total net debt to EBITDA, (d) bank debt to EBITDA, (e) earnings before interest, taxes, depreciation and amortization (EBITDA) to net interest plus principal of loans. The subsidiary company "FLEXOPACK POLSKA Sp. Zo.o", has since 2020 entered into a long-term loan agreement for an amount of 2.682 million Euros with a banking institution based in Poland, with the aim of repaying the existing long-term loan to another bank and repaying the short-term loan towards the Company that the subsidiary had received for the implementation of its investment plan. Also the subsidiary company "FLEXOPACK POLSKA Sp. Zo.o", in November 2022, entered into an agreement concerning a long-term loan of 5.070 million Euros with a banking institution based in Poland. The above loan was utilized by the subsidiary company in order to finance its investment plan with the aim of increasing its production capacity. 6.16 Other provisions GROUP COMPANY January 1st 2021 520 238 Additional provisions for the year 112 0 Non utlized provisions that have been reversed 0 0 Utilized provisions for the year 0 0 December 31st 2021 633 238 Πρόσθετες προβλέψεις χρήσεως 10 0 Non utlized provisions that have been reversed -66 0 Utilized provisions for the year 0 0 December 31st 2022 576 238 Analysis of provisions Provision for other taxes 235 235 Other provisions 342 4 Total 576 238 Analysis of additional provisions for the year Other provisions 10 0 Total 10 0 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 153 6.17 Suppliers and other liabilities The Group’s and Company’s balances for the suppliers’ and other related liabilities accounts are analyzed as follows: * Concerns liability to an energy supplier due to the difference between the current ADMIE price and the energy supplier's charges which were made according to the weighted average price of the last 6 months. 6.18 Liabilities from income tax For fiscal year 2022, the tax is paid in a maximum of eight (8) equal monthly instalments, the first of which is paid until the last working day of the month following the deadline for submission of the tax declaration. The remaining seven (7) instalments must also be paid by the last working day of the seven (7) following months. Suppliers and other liabilities 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Suppliers 18,952 21,575 17,233 17,216 Energyh provider * 1,314 0 1,314 0 Liabilities to associates 1,938 1,240 1,938 1,240 Checks payable 15 8 15 8 Customer prepayments 430 178 430 178 Sundry creditors 49 51 18 40 Derivative financial instruments 242 430 242 430 Payable employee remuneration 672 603 524 459 Accrued expenses 1,323 1,016 1,065 716 Deferred income 91 0 91 0 Purchases under settlement 36 51 36 30 Social Security Funds 631 515 480 434 Other taxes, other than income tax 1,772 1,267 498 388 Total 27,464 26,935 23,882 21,138 GROUP COMPANY 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Income Tax 5,601 2,804 3,300 2,246 Difference of income tax prepayment 625 (463) 839 (385) Balance of income tax for previous year 472 736 472 736 6,698 3,077 4,611 2,597 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 154 6.19 Turnover The Group’s and Company’s turnover is analyzed as follows: 6.20 Analysis of Expenses per category The analysis of the Group’s expenses per category is as follows: The analysis of the Company’s expenses per category is as follows: 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Income from sale of merchandise 48,103 30,295 16,994 13,469 Income from sale of products 97,559 79,909 97,246 75,111 Income from sale of other inventories 1,377 588 758 902 Income from provision of services 3,973 3,388 5,398 3,684 151,012 114,181 120,395 93,166 GROUP COMPANY GROUP 1/1-31/12/2022 1/1-31/12/2021 Expense per Category Cost of Goods Sold Distri- bution Expenses R&D Expenses Admin- istrative Expenses Total Cost of Goods Sold Distri- bution Expenses R&D Expenses Admin- istrative Expenses Total Remuneration & other employee benefits 11,787 2,627 299 3,780 18,493 10,468 2,056 278 3,385 16,187 Third party fees & expenses 629 746 8 1,086 2,468 580 548 7 588 1,723 Third party benefits (energy, insurance, maintenance etc.) 12,692 1,035 16 348 14,091 7,149 599 26 273 8,047 Taxes - Duties 52 8 1 205 266 52 8 1 174 234 Various expenses (transport, export expenses, etc.) 1,767 10,168 381 390 12,707 1,720 6,136 240 148 8,244 Depreciations of fixed assets 4,732 188 51 65 5,036 4,851 82 47 64 5,044 Amortization of intangible assets 129 58 177 51 416 121 47 163 46 377 Amortization of rights-of-use 256 187 12 101 556 264 191 12 123 590 Provision for staff indemnity 0 5 0 42 47 0 7 0 59 65 Cost of inventories recognized as an expense 74,922 0 748 0 75,670 60,629 0 795 0 61,424 Total 106,968 15,022 1,694 6,067 129,751 85,833 9,673 1,569 4,862 101,937 Own-production of assets (31) 0 0 0 (31) (40) 0 0 0 (40) Total 106,936 15,022 1,694 6,067 129,719 85,793 9,673 1,569 4,862 101,897 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 155 6.21 Employee Benefits The Group’s and Company’s employee benefits are analyzed as follows: Employed staff as at 31/12/22. Group 496 individuals. Company 342 individuals. Employed staff as at 31/12/21. Group 457 individuals. Company 322 individuals. COMPANY 1/1-31/12/2022 1/1-31/12/2021 Expense per Category Cost of Goods Sold Distri- bution Expenses R&D Expenses Admin- istrative Expenses Total Cost of Goods Sold Distri- bution Expenses R&D Expenses Admin- istrative Expenses Total Remuneration & other employee benefits 8,014 897 299 2,968 12,178 7,365 723 278 2,745 11,110 Third party fees & expenses 353 347 8 435 1,142 358 199 7 265 830 Third party benefits (energy, insurance, maintenance etc.) 9,982 310 16 269 10,577 5,618 189 26 210 6,042 Taxes - Duties 52 7 1 43 103 52 6 1 44 103 Various expenses (transport, export expenses, etc.) 924 6,435 381 391 8,131 985 3,884 240 170 5,279 Depreciations of fixed assets 3,424 178 51 61 3,714 3,559 74 47 60 3,741 Amortization of intangible assets 129 58 177 51 416 121 47 163 46 377 Amortization of rights-of-use 52 121 12 85 270 57 127 12 108 303 Provision for staff indemnity 0 5 0 42 47 0 7 0 59 65 Cost of inventories recognized as an expense 68,957 0 615 0 69,571 55,411 0 674 0 56,085 Total 91,886 8,357 1,560 4,344 106,147 73,525 5,256 1,447 3,708 83,937 Own-production of assets (25) 0 0 0 (25) (40) 0 0 0 (40) Total 91,861 8,357 1,560 4,344 106,122 73,486 5,256 1,447 3,708 83,897 Employee benefits 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Wages and daily wages and benefits 13,180 11,354 7,899 7,099 Social security expenses 2,260 1,994 1,722 1,564 End of service indemnities 35 28 35 28 Other employee benefits 927 964 444 573 Stock options 205 0 205 0 Total 16,608 14,340 10,305 9,263 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 156 6.22 Other Operating Income and Expenses The Group’s and Company’s other operating income and expenses are analyzed as follows: 6.23 Financial Income and Expenses The Group’s and Company’s financial income and expenses are analyzed as follows: Benefits towards Management 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Remuneration of Board of Directors 1,950 1,851 1,946 1,847 Other benefits 165 143 165 143 Stock options 159 0 159 0 Total 2,274 1,994 2,271 1,991 Fees and benefits of executive BoD members 1,822 1,947 1,819 1,944 Fees and benefits of non-executive BoD members 452 47 452 47 Total 2,274 1,994 2,271 1,991 COMPANY GROUP 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Other income Amortization of received grants 0 6 0 6 Income from provision of services to affiliated companies 0 0 136 135 Various indemnities 87 433 8 116 Profit from sale of fixed assets 1 2 1 2 Other income from previous years 0 2 0 2 Other income 72 94 10 32 Total 160 536 155 291 Other expenses Provisions for expected credit losses 12 44 12 0 Provision for obsolete inventory 143 0 100 0 Losses from sale and/or write-off of assets 0 87 0 0 Expenses from previous years 101 49 81 41 Other expenses 116 97 23 23 Total 372 278 217 64 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 157 6.24 Other Financial Results The Group’s and Company’s financial results are analyzed as follows: The basic foreign exchange rates as of 31/12/2022 are the following: 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Financial income Dividends receivable 100 108 100 108 Other financial income 1 8 1 1 101 115 101 108 Financial expenses Interest and expenses of bank loans 517 369 439 313 Interest expenses from Leases (IFRS 16 49 53 17 27 Other financial expenses 86 70 56 49 652 492 512 390 GROUP COMPANY Other Financial Results 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Foreign exchange differences and profit/(losses) of foreign exchange future contracts (2,257) 24 (2,257) (69) Foreign exchange differences from valuation of receivables and liabilities in foreign currency profit / (losses) 259 342 442 385 Profit / (Losses) from valuation of foreign exchange future contracts (Note 6.32) (242) (430) (242) (430) Total (2,239) (64) (2,056) (115) GROUP COMPANY Exchange rates versus Euro (currency units per 1 Euro) 31/12/2022 31/12/2021 US dollar (USD) 1.0666 1.1326 Polish zloty (PLN) 4.6808 4.5969 Australian dollar (AUD) 1.5693 1.5615 Pound sterling (GBP) 0.88693 0.84028 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 158 6.25 Income Tax The income tax of the Group and the Company is analyzed as follows: The income tax for the year 2022 has been calculated according to a tax rate of 22%. The corresponding rate for the year 2021 amounted to the same level, i.e. 22%. It is noted that the effective final tax rate differs from the nominal. There are several factors influencing the effective tax rate, the most important of which is the non-tax deduction of certain expenses, the differences in depreciation rates between the useful lives of the fixed assets and the rates set in the income tax and the possibility of tax-free rebates and tax- reserves. The Company in fiscal year 2022 used a tax exemption of Law 3908/2011 amounting to € 62 thousand. More specifically, on 28/12/2018, was published the Decision No. 141471 / YPE / 6/0003 / C / Ν.3908 / 2011 decision of completion of the Minister of Economy and Development concerning the investment of the company that had been subject in 2011 to the provisions of the Law .3908 / 2011 in the General Business Income Tax 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Income Tax 5,601 2,802 3,300 2,246 Deferred tax (Note 6.12) (803) (391) (730) (433) Total income tax 4,798 2,411 2,570 1,813 Following, an analysis and reconciliation of the nominal and effective tax rate is presented. 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Earnings before taxes (IFRS) 18,899 12,818 11,745 9,099 Tax Rate 22% 22% 22% 22% Income tax based on effective tax rate 4,158 2,820 2,584 2,002 Tax corresponding to: Tax free income (27) (42) (27) (42) Subsidiaries' loss for which no deferred tax was recognized (330) (722) 0 0 Proportion of Results by associate companies (134) (158) 0 0 Non deductible expenses 179 11 75 44 Adjustment of deferred due to the change in tax rate 0 (130) 0 (130) Results of subsidiaries taxed with a different tax rate 204 266 0 0 Elimination of intra-company profit 808 427 0 0 Tax exemption Law 3908/2011 (62) (62) (62) (62) Tax expense in the income statement 4,798 2,411 2,570 1,813 Weighted tax rate 25.38% 18.81% 21.88% 19.92% GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 159 category. The total benefit for the company amounts to € 308,195.72 and is granted in the form of the tax exemption, which will be distributed equally over 5 years. 6.26 Contingent Receivables - Liabilities Contingent liabilities are not recognized in the financial statements but are disclosed, unless the probability of outflow of resources that incorporate financial benefits is minimal. 6.26.1 Information regarding assumed liabilities There are no litigious claims or differences under dispute of the Company or its subsidiaries as well as decisions by courts or arbitration bodies that could have a significant impact on the Company’s and Group’s financial position or operation. 6.26.2 Tax un-audited financial years 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Letters of bank guarantees to third parties for the account of subsidiaries 1,131 3,370 1,131 3,370 Letters of bank guarantees as insurance for liabilities 0 515 0 515 1,131 3,884 1,131 3,884 GROUP COMPANY FLEXOPACK SA 2017-2022 FLEXOPACK POLSKA Sp. Zo.o 2017-2022 FLEXOSYSTEMS Ltd Belgrade 2017-2022 FLEXOPACK INTERNATIONAL LIMITED-CYPRUS 2017-2022 FLEXOPACK PTY LTD 2017-2022 FLEXOPACK PROPERTIES PTY LTD 2017-2022 FLEXOPACK ΝΖ LIMITED 2017-2022 FLEXOPACK TRADE AND SERVICES UK LIMITED 2017-2022 FLEXOPACK FRANCE 2018-2022 FLEXOPACK USA, INC. 2020-2022 INOVA SA 2017-2022 VLACHOS BROS S.A. 2017-2022 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 160 In application of the relevant tax provisions : a) paragraph 1 of article 84 of Law 2238/1994 (unaudited cases concerning income tax), b) paragraph 1 of article 57 of Law 2859/2000 (unaudited cases related to VAT) and c) paragraph 5 of article 9 of Law 2523/1997 (penalties imposed for income tax cases), the right of the Greek State to impose any tax with regard to the fiscal years up to 2016 including, has been waived until 31/12/2022, with the exception of special or extraordinary provisions which may provide for a longer waiving period and under the respective conditions which these provisions stipulate. Tax compliance report With the article 82 §5 of Law 2238/94, beginning from year 2014, and in a later stage with the article 65A of Law 4174/2013, the Certified Auditors and the auditing firms performing mandatory audits in societe anonyme companies are obliged to issue a Tax Compliance Report with regard to the application of tax provisions in tax objects. The particular report is submitted to the audited company and via electronic means to the Ministry of Finance. For the years 2011 – 2021, the Company as well as the associate companies INOVA S.A. PLASTICS AND IRON and VLACHOU BROS S.A. received a relevant Report, without any reservation with regard to the tax objects which were audited. With the article 56 of Law 4410/3.8.2016 for the years from 1.1.2016, the issuance of a Tax Compliance Report is no longer mandatory (only optional). The Company's tax obligations for the tax years beginning from 2017 and up to 2022 have not become final and irrevocable, since no tax audit has been carried out. For the fiscal year 2022, the Company and its associate companies have been placed under the above mentioned tax audit of the Certified Auditors Accountants and from the relevant Tax Compliance Report which is expected to be granted, it is anticipated that no additional as well as material tax burdens will emerge. According to the Ministerial Decision (POL) 1006/05.01.2016, the companies for which a tax certificate “without reservation” has been issued, are not being excluded from the obligation concerning an ordinary tax audit from the pertinent tax authorities. As a result, the tax authorities may proceed with their own tax audit and impose any penalties and additional taxes. 6.26.3 Information regarding contingent receivables There are no contingent receivables that are of significance to report in the Company’s and Group’s financial statements. 6.27 Current liens No collateral or liens are written on the fixed assets of the parent Company. With regard to the fixed assets of the Group, there is a lien written for a banking institution in Poland, amounting to 3.0 million Euros, on the production facilities of the Polish subsidiary «FLEXOPACK POLSKA Sp. Zo.o». The purpose of the lien is to be used as insurance against the repayment of a long-term bank loan, of 2.682 million Euros, granted to the subsidiary. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 161 6.28 Auditors’ fees The total fees of the legal auditors of the Company and the Group are the following: The permitted non-audit services provided to the Company and its subsidiaries during the period under consideration amounted to 16 thousand Euro. 6.29 Transactions with related parties The company’s transactions with related parties, according to IAS 24, are as follows. 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Audit Fees 143 95 46 45 143 95 46 45 GROUP COMPANY 1/1/-31/12/2022 COMPANY Sales of goods and services Purchases of goods and services Receivables Liabilities Subsidiaries FLEXOPACK POLSKA Sp. Zo.o 6,469 10,516 3,564 1,929 FLEXOSYSTEMS Ltd -Belgrade 596 0 151 0 FLEXOPACK PTY LTD- AUSTRALIA 20,606 9 15,141 9 FLEXOPACK TRADE AND SERVICES UK LIMITED 9,803 0 3,710 0 FLEXOPACK IRELAND 649 0 299 0 FLEXOPACK DENMARK 0 0 11 0 FLEXOPACK FRANCE 1,094 0 177 0 FLEXOPACK USA 17,149 0 8,164 0 56,366 10,526 31,216 1,938 Related/Associate Companies ΙΝΟ VA SA 392 1 108 0 VLAHOU BROS SA 3,127 335 1,146 159 OTHER RELATED PARTIES 0 136 0 0 3,519 472 1,254 159 Grand Total 59,885 10,998 32,469 2,098 Benefits towards management and executives 1/1/- 31/12/2022 1/1/- 31/12/2021 Transactions and fees of senior executives and members of the management 2,993 2,541 Receivables from senior executives and management 0 0 Liabilities towards senior executives and management 129 124 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 162 Notes: It is also noted: 1. No other transactions related to the Company parties exist according to the provisions of the International Accounting Standard 24 apart from the above mentioned. 2. No loans or any other credit facilitations have been granted to the Board members or other senior executives of the Company and their families. 3. With regard to the Company’s natural persons, apart from the above fees, no other transactions exist between the Company and the particular directors or the members of the Board of Directors. 4. There were no changes in the transactions between the Company and its related parties that could have a material impact on the Company's financial position and performance for the period 1/1/2022-31/12/2022. 5. The Company has granted the following guarantees and loans in favor of its subsidiary “FLEXOPACK POLSKA Sp. Zo.o”: (a) A guarantee towards a banking institution based in Poland for an amount of 831,360 Euros, as insurance against the repayment of a long-term bank loan, of 2.682 million Euros. The balance of the above loan as of 31.12.2022 had settled at 1.665 million Euros. (b) A guarantee for a maximum amount of 1.050 million PLN (225,000 Euros approximately) as insurance against the repayment of a short-term credit line towards the above subsidiary. 6. The Company has also provided a guarantee towards a banking institution in favor of its subsidiary "FLEXOPACK PTY LTD" based in Australia, with a maximum guarantee amount of approximately 74,000 Euros. 7. The transactions described above have been carried out under normal market conditions and do not contain any exceptional, favorable or special features, which would make necessary additional analysis per related party. 8. There is no separate transaction that is assessed as significant, within the meaning of Circular number 45/2011 of the Hellenic Capital Market Commission. 9. The Company's transactions and outstanding balances with subsidiaries have been eliminated from the consolidated financial statements. The company's transactions with related parties within the framework of IAS 24 in the previous year 2021 are as follows. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 163 1/1/-31/12/2021 COMPANY Sales of goods and services Purchases of goods and services Receivables Liabilities Subsidiaries FLEXOPACK POLSKA Sp. Zo.o 5,080 8,139 5,421 1,239 FLEXOSYSTEMS Ltd -Belgrade 700 0 125 0 FLEXOPACK PTY LTD- AUSTRALIA 15,398 6 9,743 0 FLEXOPACK TRADE AND SERVICES UK LIMITED 7,269 0 2,973 0 FLEXOPACK IRELAND 0 0 0 0 FLEXOPACK DENMARK 0 0 0 0 FLEXOPACK FRANCE 906 0 218 0 FLEXOPACK USA 10,800 0 3,882 0 FLEXOPACK ΝΖ LIMITED 4 0 0 0 40,157 8,145 22,363 1,240 Related/Associate Companies ΙΝΟ VA SA 318 2 91 1 VLAHOU BROS SA 3,043 314 1,311 176 OTHER RELATED PARTIES 0 143 0 0 3,361 460 1,402 177 Grand Total 43,518 8,604 23,765 1,417 Benefits towards management and executives 1/1/- 31/12/2021 1/1/- 31/12/2020 Transactions and fees of senior executives and members of the management 2,541 2,195 Receivables from senior executives and management 0 0 Liabilities towards senior executives and management 124 62 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 164 6.30 Earnings per share Earnings per share are analyzed as follows: The share capital of the Company consists of 11,795,024 common fully paid shares. The Company on 31.12.2022 held 96,450 treasury shares, which correspond to 0.82% of the total shares of the Company. (Note 6.11.2) Company's transactions with related parties GROUP COMPANY 1/1/- 31/12/2022 1/1/- 31/12/2021 1/1/- 31/12/2022 1/1/- 31/12/2021 Sales of goods and services To subsidiaries 0 0 56,366 40,157 To associates 3,419 3,253 3,419 3,253 3,419 3,253 59,785 43,410 Purchases of goods and services From subsidiaries 0 0 10,526 8,145 From associates 336 317 336 317 From other related parties 136 143 136 143 472 460 10,998 8,604 Receivables From subsidiaries 0 0 31,216 22,363 From associates 1,254 1,402 1,254 1,402 1,254 1,402 32,469 23,765 Liabilities To subsidiaries 0 0 1,938 1,240 To associates 159 177 159 177 To other related parties 0 0 0 0 159 177 2,098 1,417 Income from dividends From subsidiaries 0 0 0 0 From associates 100 108 100 108 100 108 100 108 Earnings per share 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Earnings after taxes corresponding to shareholders of the parent (1) 14,102 10,407 9,175 7,286 Weighted number of shares outstanding (2) 11,668.904 11,623.574 11,668.904 11,623.574 Basic earnings per share (Euro per share) (1)/(2) 1.2085 0.8953 0.7863 0.6269 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 165 Adjusted (diluted) earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding, with the effects of all potential securities convertible into ordinary shares. The stock option plan (Note 6.34) is the only category of potential securities convertible into common shares that the Company currently possesses. For the purposes of calculating diluted earnings per share, the exercise of options is taken for granted. To the existing weighted number of shares outstanding, the difference between the number of ordinary shares deemed to have been issued in the exercise of the rights and the number of ordinary shares that would have been issued at fair value is added. The number of ordinary shares that would have been issued at fair value is calculated by dividing the hypothetical cash proceeds from the stock options by the average market price of the ordinary shares during the reporting period. 6.31 Dividends The Annual Ordinary General Meeting of the Company's shareholders, on June 10, 2022, approved the distribution of a dividend of a total amount of 1,591,006.06 Euros (gross amount), from the profits of the financial year 2021, that is an amount of 0.136 Euros per share (gross amount), from which the dividend tax of 5% was withheld and therefore the net amount of the dividend paid amounted to 0.1292 Euros per share. The Company’s Board of Directors taking into account the results of the year 2022, the broader capital needs of the Company, as well as the wider financial environment which the Company operates in, intends to propose to the Annual General Meeting of Shareholders the distribution of a dividend amounting to 1,766,066.10 Euros (gross amount) or 0.15 Euros per Company share. As the distribution of the dividend requires the approval of the general meeting of shareholders, no relevant obligation has been recognized in the financial statements for the year 2022. 6.32 Fair value measurement Adjusted (diluted) earnings per share 1/1- 31/12/2022 1/1- 31/12/2021 1/1- 31/12/2022 1/1- 31/12/2021 Earnings after taxes corresponding to shareholders of the parent (1) 14,102 10,407 9,175 7,286 Weighted average number of shares outstanding 11,668.904 11,623.574 11,668.904 11,623.574 Number of stock options 40.546 94.294 40.546 94.294 Weighted average number of shares for the calculation of adjusted earnings per share (2) 11,709.449 11,717.868 11,709.449 11,717.868 Adjusted (diluted) earnings per share (Euro per share) (1)/(2) 1.2043 0.8881 0.7836 0.6218 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 166 The Group and the Company use the following hierarchy to identify and disclose fair values of financial assets using the following valuation method: Level 1: fair values are determined by reference to published active money market transactions. Level 2: fair values are determined using measurement techniques for which all parameters that have a material impact on the fair value of the asset are supported by observable market prices (directly or indirectly). Level 3: fair values are determined using measurement techniques for which the parameters that have a significant impact on the fair value recorded are not supported by observable market prices. The table below shows the hierarchy of the fair value of the assets and liabilities of the Group and the Company. On 31/12/2022 the Group had futures exchange contracts with expiration dates until 29/12/2023, to hedge risks related to the exchange rate EUR / GBP, EUR / AUD and EUR / USD. The fair value of the contracts (liability) was valued on 31/12/2022 at a loss of 242 thousand Euros and was recorded in the income statement in the account "Other Financial Results". The fair value of the granted stock options was assessed according to the Black Scholes model and on 31/12/2022 amounted to 363 thousand Euros. The fair values of the Group's financial assets and liabilities, which consist of cash, receivables from customers, loans and other receivables, liabilities to suppliers and related liabilities and lease liabilities, do not differ significantly from their book values, mainly due to of their short-term nature. The Group's bank loans have a floating interest rate and therefore their fair values do not differ significantly from their book values. 6.33 Reconciliation of cash flows from financing activities Based on the amended IAS 7, the reconciliation of debt liabilities between the statement of Financial Position and the financing activities of the statement of cash flows is presented below: 31/12/2022 31/12/2021 31/12/2022 31/12/2021 Fair Value Hierarchy Short-term liabilities Derivative financial instruments 242 430 242 430 Level 2 Capital reserves Stock options 363 449 363 449 Level 3 GROUP COMPANY FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 167 6.34 Stock Option Plan and subsequent share capital increase of the company According to the terms of the Stock Option Plan, which was established by virtue of the decision of the Board of Directors dated 19.12.2019, in execution of the decision of the Annual Ordinary General Meeting of the Company's shareholders dated 29.06.2018, the Company's executives, as determined by virtue of the relevant decision of the Board of Directors dated 09.01.2020, were invited to submit by 28.12.2021 a statement of intention to exercise the stock options which in total corresponded to 75,000 new common, registered shares carrying voting rights of the Company. After exercising 75,000 stock options (i.e. the entire number of stock options) with an exercise price of 3.00 Euro, the beneficiaries (members of the Board of Directors, Directors and personnel of the Company) paid a total amount of 225,000, 00 Euros via a bank account held in the name of the Company (Note 6.34) and THE GROUP 31.12.2021 1/1/-31/12/2022 31.12.2022 Statement of financial position Collections Cash flow statement Payments Cash flow statement Transfers Statement of financial position Long-term debt liabilities 12,540 23,090 -6,103 -1,853 27,674 Short-term liabilities 3,528 79 -61 1,853 5,400 16,068 23,169 -6,164 0 33,073 THE COMPANY 31.12.2021 1/1/-31/12/2022 31.12.2022 Statement of financial position Collections Cash flow statement Payments Cash flow statement Transfers Statement of financial position Long-term debt liabilities 10,875 21,913 -5,733 -1,504 25,552 Short-term liabilities 2,357 0 0 1,504 3,861 13,232 21,913 -5,733 0 29,412 THE GROUP 31.12.2020 1/1/-31/12/2021 31.12.2021 Statement of financial position Collections Cash flow statement Payments Cash flow statement Transfers Statement of financial position Long-term debt liabilities 11,699 7,000 -6,015 -144 12,540 Short-term liabilities 3,300 284 -200 144 3,528 14,999 7,284 -6,215 0 16,067 THE COMPANY 31.12.2020 1/1/-31/12/2021 31.12.2021 Statement of financial position Collections Cash flow statement Payments Cash flow statement Transfers Statement of financial position Long-term debt liabilities 9,664 7,000 -5,645 -144 10,875 Short-term liabilities 2,413 0 -200 144 2,357 12,077 7,000 -5,845 0 13,232 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 168 consequently the share capital of the Company was increased by 40,500.00 Euros (whereas the remaining amount of 184,500 Euros was transferred to the share premium account emerging from the issuance of shares above par value) via the issuance of 75,000 new common registered shares of the Company carrying voting rights, and with nominal value of 0.54 Euros per share. More specifically: Stock Option Plan Number of options to be exercised 75,000 Exercise price 3.00 € Option exercise declaration period 29.03.2022 - 20.04.2022 Payment deadline 29.03.2022 - 20.04.2022 The price of the share on 20.04.2022 amounted to 6.25 Euros. The balance of the stock option reserve amounting to 244 thousand euros was transferred to the results carried forward. The Corporate Transactions Committee of the Athens Exchange, Greece, during its meeting on May 18 th , 2022, approved the admission to trading on the organized market of the Athens Exchange of the above 75,000 new common registered shares of the Company carrying voting rights. On May 25 th , 2022, the trading of the aforementioned 75,000 new shares commenced on the Athens Exchange. The above share capital increase of the Company was certified by its Board of Directors on 06.05.2022 and was registered in the General Commercial Registry (G.E.MI.) on 10.05.2022, through the Companies Division (Department of Listed Companies) of Ministry of Development and Investments being the competent Supervisory Authority. It is noted that, following the above increase, the Company's share capital now amounts to 6,369,312.96 Euros, divided into 11,795,024 common registered shares, with a nominal value of 0.54 Euros per share (Note 6.11.1). The evolution of exercise of the Stock Option Plan in accordance with the Company's current Share Allocation Programs is depicted in the following Table. 6.35 Events after the reporting date of the financial statements Other than the above, there are no significant events after the reporting date of the financial statements, which concern either the Group or the Company, and whose disclosure is required by the International Financial Reporting Standards (IFRS). Stock Option Plan Initial balance Plan Period of the plan Granting date Maturity date Exercise period Exercise price Options at beginning of year Options granted Options matured Options subject to performance Options granted but not matured Options subject to retention Plan 1 19.12.2019- 20.04.2022 09.01.2020 29.3.2022 29.3.2022- 20.4.2022 3 Euro 75,000 - 75,000 - - - Plan 2 17.05.2021- 20.04.2023 24.05.2021 29.3.2023 29.3.2023- 20.04.2023 3 Euro 75,200 - - - 75,200 - Total 150,200 - 75,000 - 75,200 - During the period Ending balance FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 169 Koropi, 11/4/2023 THE CHAIRMAN THE CHIEF EXECUTIVE THE CHIEF FINANCIAL THE HEAD OF THE BOARD OFFICER OFFICER ACCOUNTANT GEORGIOS S. STAMATIOS S. ANASTASIOS A. ZOIS P. GINOSATIS GINOSATIS LYBEROPOULOS ZAVERDINOS ID NO./ΑΕ 153990 ID NO./Σ.500301 ID NO./Χ.094106 ID NO./AZ 032773 REG. NO. 3544/99 REG. NO. 0078997 FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 170 CHAPTER 5 : Online availability of financial information In accordance with the provisions of Decision 12A/889/31.08.2020 of the Board of Directors of the Hellenic Capital Market Commission, it is hereby notified that the Annual Financial Statements of the Group and the Company, the Audit Report of the Statutory Auditor and the Management Report of the Board of Directors of the Company as well as the annual financial statements and the audit certificates of the Statutory Auditor of the companies included in the consolidated financial statements have been uploaded on the internet at www.flexopack.com . FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 171 APPENDIX: Report of the Audit Committee for the year 2022 Report of the Activities of the Audit Committee of the Societe Anonyme “FLEXOPACK PLASTICS SA” for the year 2022 To the Ordinary General Meeting of Shareholders of the Company of the year 2023 Koropi, 11/04/2023 Introduction Dear Shareholders, In our capacity as members of the Audit Committee of the Company under the name “FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY” (hereinafter the "Company"), we submit the report of the activities of the Audit Committee for the year 2022 (1.1.2022 – 31.12.2022). The report was prepared in accordance with the provisions of article 44 of Law 4449/2017, as amended by article 74 of Law 4706/2020. The Audit Committee was elected by the Ordinary General Meeting of Shareholders of 25.06.2021, constitutes an independent joint committee and consists of three (3) members, of which one (1) member comes from the independent non-executive members of the Board of Directors and two ( 2) members are third parties, non-members of the Board of Directors. The Audit Committee consists of the following: (a) Mr. Dimitris Panagotas, non-member of the Board of Directors (third party), Chairman of the Audit Committee. (b) Ms. Aliki Benroubi, independent non-executive Member of the Board of Directors, Member of the Audit Committee. (c) Mr. Nikolaos Vlachos, non-member of the Board of Directors (third party), Member of the Audit Committee. During the fiscal year 2022, the Committee convened fourteen (14) times and discussed all issues related to its responsibilities, in the presence of all of its members and decisions were taken unanimously. Key executives and the external Certified Auditor of the Company participated in those meetings wherever it was deemed appropriate. The Committee operated in full compliance with the applicable legislative and regulatory framework as well as with its operating regulations approved by the Board of Directors. Purpose and responsibilities The primary purpose of the Audit Committee is to support the Board of Directors in its tasks related to the integrity of financial information, the internal control system and the supervision of the mandatory regular audit of the Company's financial statements. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 172 Within its remit, the Audit Committee: (a) Informs the Board of Directors of the audited entity about the outcome of the statutory audit and explains how the statutory audit contributed to the integrity of the financial information and what the role of the Audit Committee was in that process; (b) Monitors the financial information process at all stages and make recommendations or proposals to ensure its integrity; (c) Monitors the statutory audit of the annual and consolidated financial statements and in particular its performance; (d) Monitors and reviews on an ongoing basis the independence of certified public accountants or auditing firms and in particular the appropriateness of the provision of non-audit services to the audited entity; (e) Is responsible for the selection process of certified public accountants or audit firms and proposes the statutory auditors or audit firms to be appointed; (f) Monitors the effectiveness of the internal control, quality assurance and risk management systems of the company and, where appropriate, of its Internal Control Department, regarding the financial information of the audited entity. Activities of the Audit Committee The issues the Committee dealt with during the year 2022 by area of field of interest were the following: A. Mandatory external audit - Financial information procedure In the field of external control and financial information procedure, the Committee has taken the following steps: (a) Was informed by the Chief Financial Officer of the financial statements of the Company and the Group for the year ended 31 December 2021 and of the principal matters concerning the Financial Management in the preparation of the financial statements; (b) Was informed of the accounting principles and policies applicable to the preparation of the financial statements, as well as of the consolidation basis and measurement methods used for the assets and liabilities contained in the financial statements; (c) Reviewed the financial statements of the Company and the Group for the year 2021 (01.01.2021- 31.12.2021) before their approval by the Board of Directors and evaluated these financial statements in terms of their accuracy and completeness; (d) Ascertained the reconciliation of the financial statements with the legally binding content and framework of their preparation and proposed their approval; (e) Briefed the Board of Directors on the issues arising from the statutory audit, the contribution of the statutory audit to the quality and integrity of financial information and the role of the Audit Committee in this procedure; (f) Verified the compliance with the rules of disclosure of the financial statements, as well as the possibility of an immediate, permanent and free-of-charge access to this information; (g) Was briefed by the Certified Public Accountant on the most important issues of the audit for the year 2021, the risks that were assessed as the most important ones and on the available options to deal with those risks, and was informed about the final draft of the Audit Report for the year ended 31 December 2021, (h) Received knowledge about the supplementary report of the Certified Public Accountants provided for in Article 11 of European Union (EU) Regulation 537/2014 on the financial statements of the Company and the Group; (i) Submitted a proposal to the Annual Ordinary General Meeting of the Company's Shareholders for the re-election of the Audit Company under the name "Grant Thornton Societe Anonyme SA" for the performance of the statutory audits of the annual and semi-annual financial statements for the year 2022, FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 173 (j) Was informed by the Certified Public Accountant regarding the procedure and methodology to be followed during the audit of the semi-annual and annual financial statements for the year 2022, with the planning and schedule of the audit, as well as for the particular procedures to be followed, (k) Confirmed the impartiality, objectivity, independence and integrity of the external auditors in accordance with the Code of Professional Ethics of the International Federation of Accountants, Regulation (EU) 537/2014 and Law 4449/2017, as well as the non-provision of any external directive, guidance or recommendation by the Management of the Company, (l) Was informed by the Certified Public Accountant about the audit approach of the review of the interim financial statements of the first half of the year 2022 and acquired knowledge with regard to the important issues of the audit review, (m) Supervised the correct and timely disclosure to the investors’ community of the relevant corporate announcements relating to financial information; (n) Approved the provision of authorized non-audit services by the auditing company "Grant Thornton Societe Anonyme of Certified Auditors and Business Consultants". B. Internal control system procedures In the context of monitoring the effective operation of the Company's internal control system and the proper operation of the Internal Control Unit, the Committee: (a) Examined and evaluated the effectiveness and adequacy of the Internal Control Unit's procedures regarding the Company's financial information, without affecting by any manner its independence; (b) Monitored the effectiveness of internal control systems through the work of the Internal Control Unit and the work of the Certified Public Accountant; (c) Reviewed the management of the Company's main risks by evaluating the methods used by the Company to identify and monitor the risks, as well as the treatment of the main ones and their proper disclosure; (d) Was informed of the annual audit plan of the Internal Control Unit before its implementation and approved it accordingly; (e) Was informed of and evaluated the work of the Internal Control Unit and was informed of the reports of the Head of the Internal Control Unit; (f) Inspected the proper functioning of the Internal Control Unit in accordance with professional standards and the applicable legal and regulatory framework in general; (g) Held meetings with the Internal Controller on issues that may have arisen during the audit process, in order to ensure the smooth operation of all individual Departments and Divisions of the Company; (h) Confirmed that the Internal Control Unit had a constant and unhindered access to all the data and records of the Company, which are necessary for the performance of its duties, as well as to all the Departments of the Company, (i) Examined the Rules of Operation of the Internal Control Unit of the Company and its compliance with the requirements of the applicable regulatory framework. (j) recommended the selection of the company Grant Thornton SA for the evaluation of the Internal Control System of the Company and its important subsidiaries, in the context of harmonization and implementation of Law 4706/2020 and the relevant decisions of the Hellenic Capital Market Commission. (k) recommended the appointment of an independent evaluator of the internal control system, in accordance with Law 4706/2020. (l) was informed by the regulatory compliance officer about the findings, proposals and recommendations in the framework of the conducted regulatory compliance audit and approved the annual work plan for 2023. FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 174 (m) evaluated, selected and appointed the risk management officer in accordance with the provisions of Law 4706/2020. (n) was informed about the 2022 risk management report and approved the annual action plan of the risk management unit for 2023. C. Other (a) approved the content of the information provided to the Company's shareholders during the Annual Ordinary General Meeting of June 10, 2022 regarding its business activities for the fiscal year 2021 (01.01.2021-31.12.2021), (b) in cooperation with the Management and in response to the Hellenic Capital Market Commission's letter with protocol number 2707/09.11.2022 the Company assisted, to the extent and degree that was appropriate and required, in the preparation of an announcement for the purpose of informing the investor community regarding the following: the evolution of the Company’s fundamental performance, the business activities as well as the Company’s prospects for the third quarter (Q3) of the financial year 2022, as well as the potential impact of the energy crisis and the ongoing war conflict between Russia and Ukraine on the financial results, the overall performance and the broader course of both the Company and the Group. Sustainable development policy applied by the Company In accordance with the provisions of article 44, paragraph 1 of Law 4449/2017, as replaced by the provisions of article 74, paragraph 4, section 9 of Law 4706/2020, the Audit Committee is obliged to include in the annual activity report, that is being presented to the ordinary general meeting of shareholders, a description of the sustainable development policy followed by the Company. The sustainable development framework that governs the Company is based on the following pillars: Corporate Governance The Company adopts the most appropriate corporate governance structures, reporting lines as well as policies and procedures that support all of its business activities with the aim of protecting and creating long-term value for its shareholders and other stakeholders. It follows high standards of professional and ethical conduct and integrates appropriate mechanisms in its operation in order to be able to act in compliance with the institutional framework. Market The Company ensures the full satisfaction of the ever-changing market needs as well as the expectations of its customers by investing in the development of new products and the upgrading of existing ones. In principle, the Company serves a policy that calls for the prevention of waste and the extension of the shelf life of packaged foods. These are fundamental principles along the continuous improvement and development of its products. In addition, the Company deals fairly and ethically with both its customers and suppliers. Human Resources The Company respects the rights of its people, strictly applies the applicable labor law and provides equal opportunities to all employees recognizing the right of diversity. It also takes care of the proper functioning of the work environment according to the principles of transparency, integrity and respect and provides the necessary training and development opportunities to all its human resources. It also constantly ensures the health and safety of the workplace, taking appropriate measures to prevent accidents and injuries. Environment FLEXOPACK SOCIÉTÉ ANONYME COMMERCIAL AND INDUSTRIAL PLASTICS COMPANY Annual Financial Report of financial year 2022 (January 1st – December 31st 2022) Amounts in thousands euro 175 The Company, by focusing on the protection of environment and the mitigation of any impact deriving from climate change, formulates appropriately its business strategy, takes strict measures which, as far as possible, extend beyond the typical provisions of the current legislation and sets specific measurable goals. To achieve the above, the Company continuously invests in the following:  the best available techniques and actions aimed at substantially reducing its environmental footprint,  in research with regard to recycling technologies and the use of recycled transport packaging with the aim of reducing packaging waste while promoting the recycling and effective utilization of such materials,  in effective technologies and production procedures with the aim of reducing the energy consumed during production. The Company also aims at the consumption of energy that is being derived from renewable energy sources. Local Community The Company throughout the spectrum of its activities pursues to build relationships of trust with the local communities in which it operates and minimize any cases of inconvenience and disturbance. It focuses on improving the welfare of citizens and people in general in key areas such as health and education. The Company also makes donations to organizations and charities. The business decisions taken by the Management are always based on the principles of protection and safety of the members of the local community. The Company also contributes to the economic development of local communities in the countries where it operates production plants, being at the same time one of the largest employers in these regions. In conclusion, the members of the Audit Committee consider that they have fulfilled their duties and obligations, as set out in the updated Rules of Procedure of the Audit Committee. Yours sincerely, The members of the Audit Committee The Audit Committee Dimitrios Panagotas Aliki Benroubi Nikolaos Vlachos Chairman Member Member