Annual Report (ESEF) • Mar 15, 2023
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Annual Financial Report 2021 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 1 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 2 Table of Contents I. Representation of the Members of the Board of Directors ......................................................................... 5 II. Board of Directors’ Report for the period 1.1.2022 -31.12.2022 ................................................................ 6 1. Financial progress and performances of year 2022 ......................................................................7 2. Significant events during the year 2022 and their effect on the Financial Statements .......................9 3. Main risks and uncertainties ................................................................................................... 14 4. Company’s strategy and Group’s future prospects ..................................................................... 19 5. Related Parties significant transactions .................................................................................... 24 6. Corporate Governance Statement ........................................................................................... 26 7. Dividend policy – Distribution to the shareholders ..................................................................... 81 8. Number and par value of shares .............................................................................................. 81 9. EU Taxonomy regulation ........................................................................................................ 81 10. Other ................................................................................................................................. 84 11. Subsequent events ............................................................................................................... 85 12. Alternative Performance Indicators (API) ................................................................................ 86 ANNEX ........................................................................................................................................................... 88 III. Annual Financial Statements .................................................................................................................... 92 Independent auditor’s report ....................................................................................................................... 93 1. Statement of Financial Position .............................................................................................................. 101 2. Income Statement ................................................................................................................................... 102 3. Statement of Comprehensive Income .................................................................................................... 103 4. Statement of Changes in Equity .............................................................................................................. 104 4.1. Consolidated Statement of Changes in Equity ....................................................................... 104 4.2. Separate Statement of Changes in Equity ............................................................................. 105 5. Cash Flow Statement ............................................................................................................................... 106 Notes on the Financial Statements ............................................................................................................. 107 1. Information about the Company and the Group .................................................................................... 107 1.1. General information .......................................................................................................... 107 1.2. Nature of operations ......................................................................................................... 107 2. Basis of preparation ................................................................................................................................ 112 2.1. New Standards, amendments to standards and interpretations .............................................. 113 2.2. Important accounting estimates and judgements.................................................................. 116 3. Summary of accounting policies ............................................................................................................. 119 3.1. Basis of consolidation and investments in associates ............................................................. 119 3.2. Foreign currency translation ............................................................................................... 121 3.3. Operating segments .......................................................................................................... 121 3.4. Revenue recognition, accounting for Payout to the winners and revenue from non-gaming activities ................................................................................................................................ 122 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 3 3.5. OPAP S.A. License Extension 2020-2030 ............................................................................... 124 3.6. Interest income ................................................................................................................ 125 3.7. Dividend income ............................................................................................................... 125 3.8. Expenses .......................................................................................................................... 125 3.9. Property, plant and equipment ........................................................................................... 125 3.10. Intangible assets ............................................................................................................. 126 3.11. Goodwill ........................................................................................................................ 128 3.12. Impairment of non-financial assets .................................................................................... 128 3.13. Leases ............................................................................................................................ 129 3.14. Financial assets ............................................................................................................... 130 3.15. Inventories ..................................................................................................................... 132 3.16. Cash and cash equivalents ................................................................................................ 132 3.17. Equity ............................................................................................................................ 132 3.18. Current and deferred income tax ...................................................................................... 133 3.19. Provisions, contingent liabilities and contingent assets ........................................................ 134 3.20. Financial liabilities ........................................................................................................... 135 3.21. Retirement benefits costs ................................................................................................ 136 3.22. Investment property ........................................................................................................ 137 3.23. Dividends payable ........................................................................................................... 137 4. Structure of the Group ............................................................................................................................ 138 5. Operating segments ................................................................................................................................ 139 6. Intangible assets ...................................................................................................................................... 143 7. Property, plant and equipment ............................................................................................................... 147 8. Right-of-Use assets and Lease liabilities.................................................................................................. 149 9. Investment properties ............................................................................................................................. 151 10. Goodwill ................................................................................................................................................ 152 11. Investments in subsidiaries ................................................................................................................... 153 12. Investments in associates ...................................................................................................................... 154 13. Other non-current assets ...................................................................................................................... 156 14. Deferred taxes ....................................................................................................................................... 157 15. Inventories............................................................................................................................................. 160 16. Trade receivables .................................................................................................................................. 161 17. Other current assets .............................................................................................................................. 162 18. Cash and cash equivalents .................................................................................................................... 163 19. Share capital and Share Premium ......................................................................................................... 164 20. Reserves ................................................................................................................................................ 165 21. Treasury shares ..................................................................................................................................... 166 22. Non-controlling interests ...................................................................................................................... 167 23. Borrowings ............................................................................................................................................ 168 24. Employee benefit plans ......................................................................................................................... 170 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 4 25. Provisions .............................................................................................................................................. 172 26. Other non-current liabilities .................................................................................................................. 173 27. Trade payables ...................................................................................................................................... 174 28. Other current liabilities ......................................................................................................................... 175 29. Current income tax liabilities ................................................................................................................ 176 30. Dividends and Share Capital Return ...................................................................................................... 176 31. GGR contribution and other levies and duties ...................................................................................... 177 32. Agents’ commission .............................................................................................................................. 177 33. Other direct costs .................................................................................................................................. 177 34. Revenue from non-gaming activities .................................................................................................... 178 35. Income related to the extension of the concession of the exclusive right 2020-2030 ......................... 179 36. Cost of sales related to non-gaming activities ...................................................................................... 179 37. Payroll expenses .................................................................................................................................... 180 38. Marketing expenses .............................................................................................................................. 180 39. Other operating expenses ..................................................................................................................... 181 40. Finance income / (costs) ....................................................................................................................... 182 41. Dividend income .................................................................................................................................... 182 42. Income tax expense............................................................................................................................... 183 43. Earnings per share ................................................................................................................................. 184 44. Related party disclosures ...................................................................................................................... 185 45. Other disclosures ................................................................................................................................... 188 46. Financial instruments and financial risk factors .................................................................................... 190 47. Audit and other fees .............................................................................................................................. 199 48. Reclassifications .................................................................................................................................... 199 49. Subsequent events ................................................................................................................................ 200 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 5 I. Representation of the Members of the Board of Directors (according to article 4, par. 2 of L. 3556/2007) The members of the Board of Directors of ORGANIZATION OF FOOTBALL PROGNOSTICS S.A., of parent company (the “Company”): 1. Kamil Ziegler, Chairman, 2. Jan Karas, Board Member and Chief Executive Officer, 3. Pavel Mucha, Board Member and Chief Financial Officer notify and certify that as far as we know: a) the attached Financial Statements (consolidated and separate) of the Group of OPAP S.A. (the “Group”) for the period 01.01.2022 to 31.12.2022, which have been prepared in accordance with the applicable International Financial Reporting Standards, provide a true and fair view of the assets and liabilities, the equity and the results of the Group and the Company, as defined on paragraphs 3 to 6 of article 4 of the L. 3556/30.4.2007 and from authorization decisions by the Board of Directors of the Hellenic Capital Market Commission. b) the Board of Directors’ report provides a true and fair view of the financial position and the performance of the Group and the Company, including a description of the main risks and uncertainties, as defined in paragraph 3 to 6 of article 4 of the L. 3556/30.4.2007 and from authorization decisions by the Board of Directors of the Hellenic Capital Market Commission. Athens, 14 March 2023 Chairman Board Member and Chief Executive Officer Board Member and Chief Financial Officer Kamil Ziegler Jan Karas Pavel Mucha OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 6 II. Board of Directors’ Report for the period 1.1.2022 - 31.12.2022 (according to article 4 of L. 3556/2007) The report of the Board of Directors of the Company concerns the year 2022 and was prepared in accordance with the articles 150-154 of L.4548/2018. According to the article 4 of Law 3556/2007 and the Hellenic Capital Market Commission Decision 8/754/14.04.2016 article 2 and the Company’s Articles of Association, we submit for the period 01.01.2022 to 31.12.2022, the annual Board of Directors report, which includes the audited Consolidated and Separate Financial Statements, the notes to the Financial Statements and the audit report by the certified auditor. The report describes the financial results of the Group for the period 01.01.2022 to 31.12.2022, as well as the significant events which took place in 2022 and the most significant events after the year end. The report also contains, a description of the main risks and uncertainties and the expected course and development of the Group, the corporate governance, the dividend policy, the number and the nominal value of shares and finally, the material transactions with the Company’s and the Group’s related parties are also mentioned. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 7 1. Financial progress and performance for the year 2022 Financial Performance The Group’s key financial figures are presented below: (Amounts in thousands of euro) 01.01- 31.12.2022 01.01- 31.12.2021 Δ % Revenue (GGR) 1,938,985 1,538,843 26.0% GGR contribution and other levies and duties (605,597) (494,986) 22.3% Net gaming revenue (NGR) 1,333,388 1,043,857 27.7% Profit before interest, tax, depreciation and amortization (EBITDA) 735,985 550,296 33.7% Profit before income tax 723,251 357,265 102.4% Profit for the year 596,036 260,872 128.5% Net increase/(decrease) in cash and cash equivalents Net cash inflow from operating activities 659,800 493,381 33.7% Net cash outflow from investing activities (53,235) (39,096) 36.2% Net cash outflow from financing activities (742,493) (100,797) 636.6% The Company’s key financial figures are presented below: (Amounts in thousands of euro) 01.01- 31.12.2022 01.01- 31.12.2021 Δ % Revenue (GGR) 1,333,210 985,327 35.3% GGR contribution and other levies and duties (405,277) (298,148) 35.9% Net gaming revenue (NGR) 927,933 687,179 35.0% Profit before interest, tax, depreciation and amortization (EBITDA) 598,354 479,959 24.7% Profit before income tax 466,112 335,288 39.0% Profit for the year 363,644 264,961 37.2% Net increase/(decrease) in cash and cash equivalents Net cash inflow from operating activities 520,281 415,379 25.3% Net cash outflow from investing activities (164,415) (153) 107,167.8% Net cash outflow from financing activities (717,158) (85,629) 737.5% The highly improved performance observed in 2022 both at Group and Company level, in terms of Revenue (GGR), Net gaming revenue (NGR) and Profit before interest, tax, depreciation and amortization (EBITDA) is attributed to the lifting of the restrictive measures against the coronavirus (COVID-19), the general increased demand for gaming both in Greece and Cyprus, as well as the broadened online customer base. Profit of the year has been further improved by € 181,298 th. due to the sale of the Betano Business. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 8 As far as cash flow is concerned: • cash flows from operating activities reflect the return to the strong operating profitability, • cash flows from investing activities incorporate an outflow related to the earn-out of STOIXIMAN LTD of € 106,444 th. and an inflow related to the sale of the Betano Business of € 74,243 th. and finally, • the increase of outflows of financing activities is attributed to € 458,998 th. of dividend and capital return distribution along with € 262.293 th. of bank loans repayments. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 9 2. Significant events during the year 2022 and their effect on the Financial Statements Online betting – OPAP SPORTS LTD On 01.01.2021, OPAP SPORTS LTD was granted a Class “B” license from the National Betting Authority of Cyprus in order to provide electronic (online) betting services. The provision of such services was temporarily suspended for the period from 18.02.2021 until 08.08.2022. From that date onwards, OPAP SPORTS LTD provides electronic (online) betting services. Distribution to the shareholders Dividend for the year 2021 The Company's Board of Directors decided during its meeting on 22.03.2022 to distribute € 0.60 per share as final dividend for the fiscal year 2021 of which € 0.10 per share was already paid as interim dividend in November 2021. The Company's Annual General Meeting (“AGM”) of the Shareholders of the Company of 09.06.2022 decided to distribute a gross amount of € 175,513 th. or € 0.50 per share as the remaining final dividend for the fiscal year 2021, offering a scrip dividend optionality. The amount of € 69,215 th. was distributed on 08.08.2022 to the shareholders in cash while the remaining net amount of € 102,372 th. was reinvested through the dividend reinvestment plan. More specifically, the share capital of the Company was increased by € 2,227 th. through the issuance of 7,423,668 new ordinary, registered, voting shares of nominal value of € 0.30 each. As a result thereof, the share capital of the Company increased to € 108,084 th., divided to 360,279,955 shares, of nominal value of € 0.30 each. The difference between the issue price of the Company’s new shares of € 13.79 and their par value multiplied by the number of the new shares issued, amounting to € 100,145 th., was transferred to the account “Share premium”. Capital return In addition the Company’s AGM dated 09.06.2022 decided the increase of the share capital of the Company by the amount of € 317,571 th., through capitalization of an equal amount from the share premium reserve and the increase of the nominal value of each share of the Company by € 0.90, i.e. from € 0.30 to € 1.20 to be followed by a share capital return of an equivalent amount (€ 317,571 th.) through a reduction of the nominal value of each share of the Company by € 0.90, i.e. from €1.20 to € 0.30, that was executed in cash on 04.08.2022. Interim dividend for the year 2022 The Company's Board of Directors decided during its meeting on 06.09.2022 to distribute a gross amount of € 107,535 th. or € 0.30 per share as interim dividend for the fiscal year 2022, offering a scrip dividend OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 10 optionality. The amount of € 67,901 th. was distributed on 09.11.2022 to the shareholders in cash while the remaining net amount of € 37,213 th. was reinvested through the dividend reinvestment plan. More specifically, the share capital of the Company was increased by € 919 th. through the issuance of 3,061,904 new ordinary, registered, voting shares of nominal value of € 0.30 each. As a result thereof, the share capital of the Company increased to € 109,003 th., divided to 363,341,859 shares, of nominal value of € 0.30 each. The difference between the issue price of the Company’s new shares of € 12.17 and their par value multiplied by the number of the new shares issued, amounting to € 36,345 th., was transferred to the account “Share premium”. Financing Bond loan prepayments/repayments On 05.01.2022, the Company proceeded with a partial repayment of € 100,000 th. of a bond loan with a total nominal amount € 300,000 th. without incurring any repayment penalties. On 23.02.2022, HELLENIC LOTTERIES S.A. proceeded with a partial repayment of € 10,000 th. of a bond loan with a total nominal amount € 50,000 th. without incurring any repayment penalties. On 23.03.2022, the Company repaid earlier and without extra cost a bond loan of € 100,000 th.. The relevant bond loan had been hedged via an interest rate swap which also was early terminated on 23.03.2022 instead of its maturity date of 27.11.2023. On 03.10.2022, the Company, following a respective loan agreement with Piraeus Bank, proceeded with a repayment of a bond loan of total nominal amount € 50,000 th. without incurring any repayment penalties. Issuance of a bond loan by TORA DIRECT SINGLE MEMBER S.A. TORA DIRECT SINGLE MEMBER S.A., according to the meeting of its Board of Directors dated 14.02.2022, resolved on the issuance of a common bond loan of € 7,000 th., divided to 7,000 bonds of € 1,000 each. OPAP S.A. subscribed for the whole amount of € 7,000 th.. The bond loan was fully repaid on 06.09.2022. Issuance of a bond loan by TORA WALLET SINGLE MEMBER S.A. TORA WALLET SINGLE MEMBER S.A., according to the meeting of its Board of Directors dated 31.10.2022, resolved on the issuance of a common bond loan of € 4,900 th., divided to 4,900 bonds of € 1,000 each. OPAP S.A. subscribed for the whole amount of € 4,900 th.. The bond loan matures on 19.12.2027. Shareholders’ Loan to KAIZEN GAMING LTD (“Betano Business”) On 21.12.2022, KAIZEN GAMING LTD (“Betano Business”) requested from its shareholders a loan € 25,000 th., pro rata to their shareholding rights and interests in KAIZEN GAMING LTD (“Betano Business”). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 11 OPAP INVESTMENT LTD, according to the meeting of its Board of Directors dated 22.12.2022, agreed to provide KAIZEN GAMING LTD with a loan of € 9,187 th., based on its 36.75% shareholding with maturity date 23.04.2023. The loan was granted on 23.12.2022 and on 27.12.2022, KAIZEN GAMING LTD (“Betano Business”) fully repaid it. Share capital increase/decrease OPAP INVESTMENT LTD The sole shareholder of OPAP INVESTMENT LTD, OPAP S.A., approved the increase of the company’s share capital by € 150,000 th. through the issuance of 150,000 new ordinary shares of € 1 nominal price and € 999 share premium each as per the Board of Directors decision dated 31.03.2022. The respective amount was paid partially, € 100,000 th. on 11.05.2022 and € 50,000 th. on 19.07.2022. HELLENIC LOTTERIES S.A On 12.12.2022, the extraordinary General Meeting of HELLENIC LOTTERIES S.A approved a share capital increase by € 55,862 th. through capitalization of an equal amount of the share premium with a corresponding increase in the nominal value of each share by € 18.02, i.e. from € 10.00 to € 28.02. Furthermore, on the same date, the Extraordinary General Meeting decided to decrease the nominal value of the share capital by € 86,738 th. through a reduction of the nominal value of the common registered shares by € 27.98, i.e. from € 28.02 to € 0.04 each, by setting off accumulated losses of the company of € 86,738 th. As a result, the HELLENIC LOTTERIES S.A share capital on 31.12.2022 amounts to € 124 th. divided into 3,100,000 ordinary shares with a nominal value of € 0.04 each. Sale of OPAP INVESTMENT LTD’s minority interest in the Betano Business On 19.04.2022 OPAP INVESTMENT LTD, a 100% subsidiary of the Company has executed a share purchase agreement with Allwyn Investments Cyprus Limited (formerly Rubidium Holding 2 Ltd), a fully owned indirect subsidiary of Allwyn International a.s., the parent company of the Group, for the sale of its 36.75% minority interest in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”). The purchase price comprises an upfront cash consideration of € 50,000 th. and an adjusted net cash payment and performance based earnout payments. The Board of Directors of OPAP INVESTMENT LTD approved the transfer of the OPAP INVESTMENT LTD 36.75% minority interest in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) to Allwyn Investments Cyprus Limited in accordance with the aforementioned share purchase agreement on 29.11.2022. On 27.12.2022, OPAP INVESTMENT LTD received the upfront cash consideration and the adjusted net cash payment amounting to € 74,243 th., whilst as at 31.12.2022, which was agreed to be the disposal date for the equity method accounting, the amount of € 130,000 th. has been recognized for the performance based OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 12 earnout payments (Note 17 of the Financial Statements). The Group realized a gain on the disposal of this investment in an associate of € 181,298 th. (Note 12 of the Financial Statements). Following this transaction, the OPAP Group retains its 84.49 % combined stake and sole control over STOIXIMAN LTD and its online gaming business in Greece and Cyprus. Eurojackpot License On 03.11.2022, the Greek State granted to OPAP S.A. the license to conduct offline the numerical lottery game “Eurojackpot” in the Greek territory through its land-based network (OPAP Stores), pursuant to the provisions of Article 185 of Law 4972/2022 (A’ 181) and the Ministerial Decision no. 161178 ΕΞ 2022 (B’ 5645). The license was granted for a period of 10 years starting from the date of the conduct of the first draw of Eurojackpot in Greece which is expected in March 2024, with the option to be renewed for an equal or shorter time period. The consideration was agreed at € 1,000 th. and the supervision of the conduct of the Eurojackpot will be exercised by the Hellenic Gaming Commission. The participation of the Greek State in the revenues from the conduct of Eurojackpot has been set at 30% on the Company’s GGR and shall be attributed in accordance with the relevant provisions of the Law 4002/2011. Any undistributed winnings from the conduct of Eurojackpot shall be attributed to the Greek State according to the rules of the above game, notwithstanding the provisions set out in Article 50 paragraph 5 of Law 4002/2011. Ukraine - Russia war effect The ongoing war in Ukraine following the invasion of Russia in early 2022 and the severe economic sanctions imposed on Russia are significantly affecting the energy market and consequently the global economy and its outlook. However, the Greek economy during this period has demonstrated considerable resilience, resulting to a strong 2022 growth, supported by solid tourism contribution and fiscal measures tackling inflationary headwinds. There is no direct exposure of the Group to either Russia or Ukraine, and therefore no direct effect on its financial performance from these latest developments. Any effect is only indirect, related to the high energy cost and inflationary pressures caused by this geopolitical crisis, that have triggered a subsequent negative effect on our customers’ disposable income. Regulatory framework for the games of chance which are exclusively offered by OPAP S.A. though the Internet Pursuant to the provision of article 184 para. 2 of Law 4972/2022 (A’ 181) OPAP’s licensing was confirmed (with retroactive effect from the entry into force of Law 4002/2011) as regards the conduct, management, organization and operation of the games of chance of article 27 of Law 2843/2000 through the Internet as well. Thereupon, on 31.10.2022, the Regulation on the Organisation and Conduct of OPAP’s Games of Chance through the Internet was published in the Government Gazette ( B' 5571). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 13 New draft law for licensing of games of chance in Cyprus - Process and schedule for the conclusion of the Concession Agreement of OPAP CYPRUS LTD OPAP CYPRUS LTD currently operates in Cyprus on the basis of the 2003 Bilateral Agreement (“BA”) between the Republic of Cyprus and the Hellenic Republic. However, according to a new law 52(Ι) 2018, the 2003 BA will be terminated upon the entry into force of a new Concession Agreement to be signed with OPAP CYPRUS LTD. The Law 52(Ι) 2018 entitled “The Law on Specific Games of Chance of 2018” was published in the Government Gazette on 13.06.2018. According to said Law, the Coordinating Committee carried out due diligence and recommended OPAP CYPRUS LTD as the suitable operator. On 06.11.2019 the Council of Ministers validated OPAP CYPRUS LTD as the suitable operator to be granted with an exclusive license to operate and offer specific games of chance, in particular games falling into one of the following categories: (a) numeric lotteries, which refer to correctly predicting random numbers which are chosen by a draw using a gaming system; and (b) games based on correctly predicting a combination of the results of sports events with variable odds. The Codes of Practice of OPAP CYPRUS LTD have been approved by the National Betting Authority and the Minister of Finance. Following the approval of all Codes of Practice, the Coordinating Committee, by virtue of its letter dated on 20.07.2021, sent to OPAP CYPRUS LTD, according to the provision of art. 5(c) Law 52(I), a draft contract (Concession Agreement) to be concluded by the parties. In March 2022, following intensive and constructive negotiations between the Coordinating Committee and OPAP CYPRUS LTD, the Coordinating Committee sent to OPAP CYPRUS LTD the final draft of the Concession Agreement and invited OPAP CYPRUS LTD to confirm the acceptance of its terms. On 21.03.2022 OPAP CYPRUS LTD approved the proposed Concession Agreement. The draft Concession Agreement has been notified to the European Commission in order to assess its conformity with the EU state aid rules. It is noted that following the signing and entry into force of the Concession Agreement, the 2003 BA shall be terminated. OPAP CYPRUS LTD does not expect any substantial change in its operations under the new Concession Agreement. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 14 3. Main risks and uncertainties We present the main risks and uncertainties to which Group may be exposed. Risk related to political and economic conditions, as well as market conditions and developments in Greece The Greek economy expanded faster than expected in 2022, despite rising inflationary pressures and the impact of the Russia-Ukraine war, mainly benefitted from the strong tourism sector performance, the pent- up domestic demand and accumulated savings related to the Coronavirus (COVID-19) pandemic. These adverse macro developments led central banks to increase interest rates and governments to intervene with fiscal measures to alleviate inflationary effects and assure price stability. In this challenging environment, the Greek economy is expected to grow further in 2023, albeit at a slower pace, on the back of lower exposure of the Greek economy to the energy crisis compared with the EU average, a sizeable support from European funds and fiscal support measures to limit losses on households’ real disposable income. The Group’s activity is significantly affected by disposable income and private consumption, which in turn are affected by the current economic conditions in Greece, such as the GDP, unemployment, inflation, and taxation levels. As such, a potential deterioration of the aforementioned indicators together with a decline in economic sentiment and/or consumer confidence, could result in a decrease of the gaming related frequency and spending of our customers. Change in regulatory requirements The gaming sector in Greece is intensively regulated by the Hellenic Gaming Commission. The Greek authorities may unilaterally alter the legislative and regulatory framework that governs the provision of the games offered by the Group, whilst respecting obligations coming from valid concession agreements. Modifications of the Greek regulatory framework, drive evolving challenges for the Group and may have a substantial impact, due to the restrictions of betting activities or the increase of compliance costs. OPAP consistently complies with regulatory standards, while understands and addresses changing regulatory requirements in an efficient and effective manner. Additionally, a potential inability on the Group’s part to comply with the regulatory and legal framework, as in force from time to time, could have a negative impact on the Group’s business activities. Additionally, potential restrictions on advertising can reduce the ability to reach new customers, thus impacting the implementation of the strategic objectives to focus on sustainable value increase of the Group’s business activities. OPAP participates in the public consultations of laws and regulations proposals and drafts, related to the business activities of the Group which are submitted by the competent authorities (Hellenic Gaming Commission, Ministry of Finance etc.). Furthermore, OPAP continually adapts to the changing OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 15 regulatory/legal framework, while through appropriate policies, processes and controls a rational and balanced gaming regulation has been achieved. Tax change risk The Group’s business activities and the sector in which it operates are subject to various taxes and charges, such as the special contribution regarding the games which is calculated based on the Gross Gaming Revenue (GGR), the tax on players’ winnings and the income tax of legal entities. The Company is exposed to the risk of changes to the existing gaming taxation status or the gaming tax rates, creating unexpected increased costs for the business and impacting the implementation of Group’s strategic objectives for sustainable revenues and additional investments. The Company is seeking to promptly respond to any potential tax changes, by maintaining the required tax planning resources and developing contingency plans so as to implement the required mitigating actions and to minimize the overall impact. Market risk Market risk arises from the possibility that changes in market prices such as exchange rates and interest rates affect the results of the Group and the Company or the value of financial instruments held. The management of market risk consists in the effort of the Group and the Company to control their exposure to acceptable limits. Currency risk Currency risk is the risk that the fair values of the cash flows of a financial instrument fluctuate due to changes in foreign currency rates. The Group operates in Greece and Cyprus, and the vast majority of its established agreements with suppliers is serviced in euro. All revenues from games are in euro, transactions and costs are denominated or based in euro. Consequently, there is no substantial foreign exchange currency risk. Interest rate risk The Group’s main interest rate risk arises from long term borrowings with variable rates. The existing debt facilities, as of 31.12.2022, stand at € 788,386 th. and € 778,099 th. for the Group and the Company, respectively. On 31.12.2022, the floating-rate loans of the Group which are exposed to interest rate risk are € 140,133 th. of debt or 18% of total debt. The remaining € 648,254 th. (82% of total debt) are fixed rate borrowings. The Group follows all market developments and acts in a timely manner when needed. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 16 Capital Management The primary objective of the Group and the Company, relating to capital management is to ensure and maintain strong credit ability and healthy capital ratios to support the business plans and maximize value for the benefit of shareholders. The Group maintains a solid capital structure as depicted in the Net Debt/EBITDA ratio of 0.1x as of 31.12.2022. In addition, it retains an efficient cash conversion cycle thus optimizing the operating cash required in order to secure its daily operations, while diversifying its cash reserves so as to achieve flexible working capital management. The Group manages the capital structure and makes the necessary adjustments to conform to changes in business and economic environment in which they operate. The Group and the Company in order to optimize the capital structure, may adjust the dividend paid to shareholders, return capital to shareholders or issue new shares. Credit risk The Group’s exposure to credit risk arises mainly from its operating activities and more specifically, it is linked to the collection process from its sales network. The aforementioned process leaves the Group exposed to the risk of financial loss if one of its counterparties/agents fails to meet its financial obligations. In order to mitigate the aforementioned risk, OPAP established and implements a credit risk management policy. The main characteristics of the policy are: • The establishment of a Credit Committee responsible to approve and/or to make recommendations to the BoD for credit risk related matters. • The classification of agents based on a credit risk scoring model which is continuously updated. • The establishment of credit limits per agent based on their individual credit ratings. • The immediate suspension of operation in case of overdue amounts. The carrying value of financial assets at each reporting date is the maximum credit risk to which the Group is exposed. Impairment of financial assets The Group and the Company have the following types of financial assets that are subject to the expected credit loss model: • Trade receivables • Loans granted • Short-term & long-term investments • Guarantee deposits • Other financial assets While cash and cash equivalents are also subject to the impairment under IFRS 9, the identified impairment loss was not significant due to the fact that the cash and cash equivalents of the Group and the Company are held at reputable European financial institutions. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 17 The Group applies the IFRS 9 simplified approach to measure expected credit losses using a lifetime expected loss allowance for all trade receivables. It is mentioned that the expected credit losses are based on the difference between the cash inflows, which are receivable, and the actual cash inflows that the Group expects to receive. All cash inflows in delay are discounted. The remaining financial assets are considered to have low credit risk, therefore the Group applies the IFRS 9 general approach and the loss allowance was limited to 12 months expected losses. Liquidity risk The liquidity risk consists of the Group's potential inability to meet its financial obligations. The Group manages liquidity risk by performing a detailed forecasting analysis of the inflows and outflows of the Group on a yearly basis. The aforementioned exercise takes into account: • Revenues forecast based on expected payout ratios of the games • Tax obligations and other financial commitment towards the government • Financial obligations arising from the Group’s loan portfolio • Operating Expenses • Capital Expenditure • Extraordinary inflows and outflows The Group liquidity position is monitored on a daily basis from the Treasury Department and if needed makes recommendations to the CFO and the Board of Directors to assure no cash shortfalls. Security risk Reliability and transparency in relation to the operation of the Group games are ensured through the adoption and implementation of effective technical and organizational security controls, which are designed to ensure the integrity, availability and confidentiality of information systems and data. The above, ensures smooth operation and protection against any security breaches, such as data leakage and theft, as well as data corruption. The applied and enforced security controls protect data processing systems, software applications, data integrity and availability as well as the operation of online services. All operationally critical applications related to the conduct and disposal of games are hosted in infrastructure which ensures high availability and smooth operational transition to Secondary Infrastructure and Services. Furthermore, system criticality is continuously evaluated whether they are directly related to the availability of the games or not, in order to be included in the existing disaster recovery plan (Disaster Recovery Plan) if necessary. Finally, applications are part of a backup program following policies and procedures according to their criticality. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 18 Climate risk There is no direct exposure to climate risk for both, the Group and the Company. However, we are conscious of global climate change and environmental issues. With the aim to contribute to the mitigation of such issues, we systematically work towards minimizing our potential negative impact throughout our operations, by complying with current environmental legislation and relevant provisions, as well as conducting all necessary environmental impact assessments. Through our Environmental and Energy Policy, we are committed to conducting business in an environmentally responsible way, acknowledging that the protection of the environment, energy saving and the conservation of natural resources are integral parts of responsible and sustainable business development. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 19 4. Company’s strategy and Group’s prospects With customer centric mindset we continue to be committed to our vision to deliver the best-in-class entertainment in a safe and responsible way, generate sustainable value to all stakeholders and give back to society. Our Fast Forward Strategy moves us ahead in 2023 and sets clear direction for ensuring OPAP’s long-term success with focus in the following six areas: Put Customer at the center We put the customer at the center of our focus, applying customer centric mindset in everything we do. Changes are driven by the customers, so we need to affirm that we understand them well before anything else, since better customer understanding will lead to better gaming entertainment across all our channels. Customer’s orientation includes the collection of the right data of online, VLTs and retail activities, so as to get closer to our customer and achieve to understand well who they are and what they want. The customer OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 20 approach is being completed with the implementation of these deep customer insights and their reflection in our actions, along with the measurement of the impact on performance and customer satisfaction. This experience will be reflected through delivering the following attributes which are tightly connected with our Brand: more of social interaction through sharing experiences with others, more fun, content and entertainment by offering an experience that goes beyond bet placement, more of personalized experience by making the experience personal and by growing loyalty, more of digitalization through the enhancement of digital customer journeys both in retail and online, more of safety and responsibility by ensuring safe environment and promoting responsible gaming. Furthermore, we keep in mind the key new customer trends we need to embrace, as well as search for more when designing and executing the plans for all our customer segments: smartphones as part of ourselves, play across retail and online channels with digital setting new standards for experience, fun and entertainment in an affordable way, which means in a way that has real value for the customers, with more sociability and interaction, more rewarding and recognition on the “here and now”, more gaming experiences that induce them emotions of excitement and a sense of win, simplicity that renders in today’s complex set up the necessary clarity for brand adoption. Enhance and strengthen our BRAND OPAP and the individual game brands, which constantly evolve, are our strong asset. We want to keep leading in every aspect and be more relevant in people’s life by offering the entertainment they really want. Our goal is to further strengthen the emotional bond with the brand and focus on building entertainment, along with expanding our brand identity in the digital world across all touchpoints that the customer interacts: TV, online, shop, communication, public relations, social networks, even friends. The key attributes we intend to keep developing are the following: a. Fun and social: we target to establish and strengthen the positioning of our stores and our online as the entertainment destination, as well as redefine and deliver our new digital brand identity. b. Engaging: we focus on Digital and Social Media to deliver personalized content and communication to engage with a multigenerational consumer base. c. Rewarding: we enhance loyalty to reward every interaction with us and further strengthen a positive emotional connection between customer and the company. d. Responsibility: we expect to be a responsible corporate citizen, help our customers enjoy the fun of gaming safely and always in compliance with the regulations. We continue focusing on existing customers, employees and partners, as well as further embrace younger audiences and women as an opportunity for growth. 360 CSR campaigns, communication activities fully reflecting our commitment to Responsible Gaming, as well as more emphasis in promoting our successful sponsoring activities consist our priorities. In this context, we envision our brand tone of voice to be conversational, a great story-teller, contextual, personalized and fun! OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 21 Become the customers’ #1 choice in online gaming in Greece Online is our key growth driver with clear aspiration to become the customers’ #1 choice in online gaming in Greece. With the hard work of our high performing team our online priorities and key levers of growth are represented through the following areas: • Product proposition: Enhance our exclusive lottery offering with many OPAP games, while improving our competitiveness of Betting & Casino offering • Brand and communication: Keep building strong awareness of OPAP’s online and its values through any means possible • Operational excellence: Constantly strive for the best possible customer experience across all customer touchpoints all times • Customer insights and CRM: Efficient CRM that will allow us to deliver the right offer at the right time leveraging Artificial Intelligence, while keeping relentless focus on activity and development of players • High-performing frontends: Superior high-performance packaging with key focus on mobile. • Entertainment: Explore opportunities beyond existing games portfolio like social networking, community, virtual reality, casual games, infotainment or personalization. Key enablers for all the above will be i) technology, choosing the right vendors and technology setup (in house/outsource) for agile delivery and operational excellence, and ii) regulatory, cooperating with relevant authorities on regulatory matters, ensuring equal market conditions and enabling implementation of our “tomorrow”. More specifically, our key commercial priorities for 2023 in Online will be: • New sportsbook: a new competitive proposition with a wide array of new features & enhancements which comes with a brand-new platform with unique and innovative UX/UI and simple and fast navigation. • New iLottery: our clear ambition is to evolve opaponline.gr into a digital entertainment hub for everyone and for everyday. Through it, exclusive lotteries will be offering fun ways to play, including Free2Play games, with several features to promote the social connections, as well as quick play widgets with inspiration and engagement features. Maintain our strong position in the Retail World Our aim is to maintain our strong position in retail and explore opportunities for growth through further upgrade of gaming entertainment experiences and enhancement of digital customer journeys. We will further evolve the local affordable entertainment destination experience with paperless and cashless customer journeys, more social experiences with a new digital layer on top of this. Our focus will be on the following three Unique Selling Propositions towards a step change in digital: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 22 • A new digital and rewarding Customer Journey: establish OPAP Store App throughout the customer journey and evolve rewarding • The Best Games in town: continuous focus on our product proposition by rejuvenating games A unique entertaining & social experience: embed the affordable component into the entertainment mentality and evolve instore experience In specific, our key commercial priorities for 2023 will be as follows: • Lotto completely transforms to annuity in order to attract more young people and women • OPAP rewards moving to new level with instant rewards based on customers’ behaviour introducing also real time rewards • Free2Play game with 100k win on a daily basis so as to increase walk ins • Develop Scratch as gifting proposition building on the Christmas initiation • Elevate PAME STOIXIMA proposition with new socializing and community elements offering also advanced cash out Explore technology Technology is supporting our mission comprising an essential enabler pillar of our strategy to deliver better customer solutions and improve our productivity and efficiency. Technology will further evolve with focus on three pillars: • Customers: new gaming platforms, enhanced user engagement, digital world evolution are coming for our customers making us proud of our internal skillsets. • Network: enhanced connectivity and streaming for better audiovisual experience (digital signage evolution, new Apollo terminal printers, Telco systems upgrade, OPAPNET enrichment) • People: we remain devoted in upskilling our people deploying new technologies and improving processes which lead to a more productive workspace. Digital engagement, collaboration, work – life balance and well-being, enablement of our people consist our top priorities. Engage our People We move forward further enhancing clarity, fairness, quality leadership and career advancement potentials within our company to drive agility and engagement with new banding, new leadership model, new compensation and benefits policy, 360 evaluation feedback. For 2023 we keep moving forward by building on what we believe is essential for an agile, engaged and effective organization by: • creating career opportunities across our company and enhancing our market position as an employer of choice OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 23 • utilizing and strengthening the capabilities and know-how that each one of the people bring to OPAP • developing a more attractive environment to work and live, with a culture based on teamwork, respect and accountability • recognizing and rewarding the contribution of each one towards the achievement of Group’s goals • offering substantial benefits for people and their families, such as the health & life insurance or the new pension scheme Along with the six key areas of our strategy, we continue to strengthen and leverage our #1 Position in Corporate Responsibility showcasing that giving back to society is essential to OPAP as much as our commercial aspirations. Pediatric hospitals, sports academies, OPAP Forward with addition of new companies and emphasis on women entrepreneurship consist the key highlights of our actions, along with our support to local communities and sensitive groups with the engagement of all our people and agents. Our commitment to sustainable growth and ESG (Environmental – Social – Governance) principles also underline the following aspirations: • Environment: environmental compliance and consciousness, minimization of our potential impact • Social: creation of a working environment that stands out with features such as corporate culture, fair treatment, development that delivers a unique working experience, Responsible Gaming which expands our leading positions, creating strong and sustainable customer relations • Governance: structured corporate governance framework which has made OPAP a benchmark for corporate citizenship in Greece OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 24 5. Related Parties significant transactions The amounts of expenses and income undertaken in 2022, and the balances of payables and receivables as at 31.12.2022 for the Group and the Company which arose from transactions with related parties are presented in the following tables: Company’s transactions with related parties (eliminated for consolidation purposes) Company Expenses Income Assets’ Purchase Payables Receivables (Amounts in thousands euro) OPAP SPORTS LTD - 2,000 - - - OPAP CYPRUS LTD 828 32,591 - 41,713 12,638 HELLENIC LOTTERIES S.A. - 4,677 - 25 5,395 HORSE RACES SINGLE MEMBER S.A. 9 264 - 12 352 TORA DIRECT SINGLE MEMBER S.A. 298 281 - 115 2,901 TORA WALLET SINGLE MEMBER S.A. 720 239 - 235 5,283 NEUROSOFT S.A. 9,070 - 258 2,704 1,103 Total 10,923 40,053 258 44,802 27,672 It is noted that the “Payables” include two loans of € 20,000 th. and € 10,000 th. nominal value to OPAP CYPRUS LTD, whereas the “Receivables” include a loan of € 4,900 th. nominal value from TORA WALLET SINGLE MEMBER S.A. and a loan of € 3,500 th. nominal value from TORA DIRECT SINGLE MEMBER S.A. (Note 44). Additionally, the Company has granted total corporate guarantees of € 108,550 th. in favor of HELLENIC LOTTERIES S.A. out of which the € 41,750 th. is a corporate guarantee for the loan of HELLENIC LOTTERIES S.A. from Alpha bank, the € 62,625 th. is a guarantee to HRADF and the € 4,175 th. relates to its overdraft bank account. Additionally, the Company has granted corporate guarantees of € 4,132 th. in favor of HORSE RACES SINGLE MEMBER S.A. to HRADF and up to € 3,000 th. for its overdraft bank account. Finally, the Company has granted corporate guarantees of € 1,100 th. in favor of OPAP SPORTS LTD and € 1,000 th. in favor of NEUROSOFT S.A.. The Company intends to provide financial support to any of its subsidiaries, if it is deemed necessary. It is mentioned that for the preparation of the consolidated financial statements, the transactions and balances with the subsidiaries have been eliminated. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 25 Group’s companies transactions with related companies Expenses Income Payables Receivables (Amounts in thousands euro) Related parties not eliminated for consolidation purposes 34,114 205,063 2,573 133,498 Total 34,114 205,063 2,573 133,498 It is noted that an amount of € 204,243 th. included in “Income” from related parties relates to the consideration following the sale of the 36.75% minority interest in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) to Allwyn Investments Cyprus Limited (formerly Rubidium Holding 2 Ltd) while the respective remaining consideration that has not been yet received of € 130,000 th. is included in the “Receivables”. By virtue of a credit agreement signed on 14.07.2022, OPAP INVESTMENT LTD agreed to provide a related party, that is a party under common control, with a credit facility with a maximum credit limit of € 100,000 th. and maturity date 31.12.2022. A number of drawdowns took place during the year under this facility, all of which have been fully repaid by 27.09.2022. Finally, an amount of € 169 th. included in “Income” represents the finance income regarding the loans granted to related parties. Transaction and balances with Board of Directors members and management personnel (Amounts in thousands euro) GROUP COMPANY Category Description 01.01- 31.12.2022 01.01- 31.12.2022 MANAGEMENT PERSONNEL Salaries 8,339 8,291 Other compensations 27 27 Social security costs 250 250 Total 8,616 8,568 (Amounts in thousands euro) GROUP COMPANY Category Description 01.01- 31.12.2022 01.01- 31.12.2022 BOARD OF DIRECTORS Salaries 841 434 Social security costs 102 72 Total 944 507 (Amounts in thousands euro) GROUP COMPANY Liabilities from BoD’s compensation & remuneration 31.12.2022 31.12.2022 BoD and key management personnel 146 145 Total 146 145 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 26 6. Corporate Governance Statement Chairman’s Statement on Corporate Governance The Company has adopted and applies the Hellenic Corporate Governance Code (HCGC) issued by the Hellenic Council of Corporate Governance (ESED) in June 2021 (hereinafter “HCGC” or the “Code”) which replaced the initial version of the Code issued in 2013 and was adopted by the Company in 2014. The Board takes seriously its responsibility for effective corporate governance and delivery of long-term shareholder and interested parties reward and its decisions are taken in light of these considerations. I am pleased to report to you directly on OPAP’s governance activities. OPAP and Governance The Board strongly believes that implementing and maintaining high governance standards underpin our business objectives and our drive to create and maximize shareholder value whilst managing the business effectively, responsibly and with integrity, so that we demonstrate accountability and maintain the trust of all our stakeholders. We are constantly seeking to develop our practices and governance framework to ensure that compliance, transparency and good governance permeate through the Group at all levels. Following the implementation of the Law 4706/2020 the Company constantly aims at improving the governance system, at demonstrating continuous compliance with the legal and regulatory framework which applies to listed companies, at implementing best and effective corporate governance practices and at strengthening shareholders’ trust to the Company. The purpose of the Company is to continuously comply with the legal and regulatory framework which applies to listed companies, to implement best and effective corporate governance practices and to strengthen shareholders’ trust to the Company. In addition to compliance with the applicable legal and regulatory framework, the Board wishes to ensure that high ethical standards are reflected in business behavior and culture through OPAP Group’s Code of Conduct, which was approved by the BoD in 2015 and is periodically reviewed and amended, ensuring alignment with strategic Company targets and standards. The Code of Conduct establishes a structured framework applicable to OPAP S.A. and its subsidiaries and proves that OPAP is a transparent organization acting in accordance with the principles and rules of the Code of Conduct, as well as its legal and regulatory obligations. Τhe revised Internal Rules and Regulations of the Company, approved by the Board of Directors in February 2021, aim at regulating the organization and functioning of the Company to secure: a) business integrity; b) transparency of business activity; c) control over management and how management decisions are made; d) compliance with the legal and regulatory framework and the obligations deriving from the Concession Agreement. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 27 The Internal Rules and Regulations are publicly available at the Company’s website https://investors.opap.gr/en/governance/internal-rules-and-regulations Further, the Company regularly updates its Articles of Association and the Company's Policies and Processes to constantly comply with the applicable legal framework. The Company has established a structured framework of policies, processes, principles and roles to ensure that OPAP S.A. and its subsidiaries comply with the applicable legal, regulatory and contractual framework and take preventive measures to limit possible risks before they materialize. In this respect, OPAP S.A. issued its Fit and Proper Policy which was approved by the Annual General Meeting of the Shareholders on 17/06/2021. The Fit and Proper policy sets out: (i) the core principles of the process for the selection, appointment, re-appointment and succession planning of members of the BoD; (ii) the applicable internal procedure for the assessment of the suitability of BoD directors, including the internal function responsible for providing support for the assessment; (iii) the criteria to be used in the suitability assessment of the BoD and the BoD members (suitability criteria) and how such an assessment should be documented; (iv) the diversity policy for members of the BoD and the target for the underrepresented gender in the BoD; and (iv) the guidelines for the induction and ongoing development of members of the BoD. The Fit and Proper Policy addresses the issues of individual and collective suitability as required by the Corporate Governance Law 4706/2020 and Circular no 60 of the Hellenic Capital Market Commission. The Fit and Proper Policy is available on the Company’s website (https://investors.opap.gr/en/governance/codes-and-policies/fit_and_proper_policy). OPAP S.A. has also in place a Whistleblowing Complaints Policy, which is under the responsibility of the OPAP Group Chief Legal, Regulatory and Compliance Officer. This Policy applies in case of violation of the Code of Conduct or in case of other serious violations of the applicable framework and provides for the channels by which employees can and should report to the Company valid allegations of known or suspected alleged improper activities. The Whistleblowing Complaints’ Policy is currently under review to ensure full compliance with the new framework established by Directive (EU) 2019/1937 of the European Parliament and of the Council (hereinafter the “Whistleblowing Directive”) and Law 4990/2022 (by virtue of which the Whistleblowing Directive has been transposed into Greek Law). Furthermore, the Company’s Audit Committee, established as a BoD Committee by virtue of a resolution of the Company’s General Meeting of the Shareholders, among other things, monitors the effectiveness and adequacy of, the policies and systems of Internal Controls of the Company and the Group. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 28 In line with our FAST FORWARD strategy we set clear directions for ensuring OPAP’s long term success with focus on our Customers, our Brand, the Online and Retail gaming, exploration of Technology potentials and our People. In the interest of continuous monitoring of the implementation of strategy, the Company CEO regularly updates the Board about the progress of the Fast Forward Strategy and provides annually an overall assessment. The 2022 Fast Forward Strategy key achievements, as well as the opportunities for improvement in 2023 have been presented to the Board of Directors and were effectively communicated to all employees. Composition of the Board I and the rest of the Board continue to pay close attention to the composition of the Board. We remain mindful of the new legal provisions and it is our aim to comply with them without compromising the culture that drives the success of our business. In this context we have strengthened gender diversity and the number of independent members of the Board of Directors. The above initiatives have complemented our previous choices regarding the distinction of the role of the Chairman from that of the Chief Executive Officer and the appointment of a non-executive Vice-Chairman. Risk Assessment and Management The Board is responsible to ensure and monitor the effective implementation of the Company’s risk management framework and, remaining committed to building on and improving our understanding of the key risks faced by the Company and its business operations, has also adopted a relevant communication and escalation framework. Board Evaluation In accordance with new Internal Rules and Regulations, the Board of Directors performs its evaluation internally on a yearly basis. Details in respect to the annual evaluation for 2022 is available in section B.3. Diversity OPAP S.A. is an equal opportunities employer who promotes an inclusive and diverse culture and is committed to the promotion of equality through our workforce, players, retailers and society. The Board reiterates its view that facilitating and promoting diversity in its broadest sense has helped propel the Company’s success to date. OPAP S.A. established policies and processes in order to ensure that the Company’s senior management roles, in particular, are open to fresh thinking and must include personnel from different global backgrounds who bring new ideas to the table. It is OPAP’s policy to make decisions regarding recruitment and selection, remuneration, career development and training, transfers, promotion and succession planning based solely on merit – being the skills, experience, qualifications and potential of OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 29 the individual connected to the job – without regard to gender, age, sexuality, family circumstances, marital status, disability, religion, political preference, trade unionism or any other classification protected by applicable law. Reference to the above policy is also made in the Code of Conduct of OPAP Group which is accessible in the Company site https://investors.opap.gr/en/governance/codes-and-policies/code-of- conduct Further, the updated Diversity Policy forms part of the Fit and Proper Policy adopted by the Company. OPAP S.A. Diversity Policy provides the framework by which the Company and its subsidiaries actively manage and encourage inclusion and diversity. It aims at creating a safe, respectful and inclusive place to work which shall provide an essential foundation for OPAP people to successfully contribute to meeting the Company’s objectives, enhance the Company’s global reputation and achieve sustainable business results. The Diversity Policy is accessible in the Company site (https://investors.opap.gr/en/governance/codes-and- policies/fit_and_proper_policy). As at 31 December 2022: • The Company complies with the quantitative target for the representation of the underrepresented gender in the BoD set by Corporate Governance Law (i.e. 25% of the total members of the BoD, fraction is rounded down to the previous integer) and its Diversity Policy. • More specifically, the Board of Directors consists of eight men and three women, while Greek BOD members represent 18,18% and non-Greeks represent 81,82%. • During 2022 our % of women in managerial positions (Team Leader level +) was 31,5% (same as 2021). Certain conditions did not allow our women % to increase in managerial positions, as new hires took place mainly in Technology & Digital Team where, according to market trends, the number of men candidates is significantly higher than women. For 2023 we will target for a slight increase to 31,8%, should the circumstances allow it. • Regarding our Top Executives (Chairman, CEO, Chiefs) the percentage of women reached the percentage of 16,67% in 2022 (same as 2021). Greek Top Executives represent 66,67% and non- Greeks are 33,33%. The Company’s Board of Directors has not only achieved gender and nationality diversity but also educational, professional and age diversity to ensure variety of views and experiences, to facilitate independent opinions and sound decision making with the BoD. The Board has instructed me to confirm that, notwithstanding the explanations / disclosures in the respective chapter of Corporate Governance Statement, each Director’s independence of thought and actions is assured and all decisions were taken to promote OPAP’s success as a whole. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 30 Statement of Compliance with the Code The Corporate Governance Statement on the following pages contains a summary of the Company’s governance arrangements and the regulatory assurances required under the current legal and regulatory framework. Except as explained in the respective chapter, the Company states that it complies with the current legal requirements and additional Special Practices of the Code throughout the year ended 31 December 2022. Athens, 14 March 2023 Kamil Ziegler, Chairman of the BoD OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 31 Corporate Governance Statement The Company prepares this Corporate Governance Statement (herein the “Statement”) since its shares are traded in the main market of Athens Exchange. This Statement, which is prepared in accordance with Law 4548/2018 "Reform of the Law of Sociétés Anonymes", as in force (hereinafter the "Law"), article 18 of Law 4706/2020 and in line with the requirements and the guidance provided in the Hellenic Corporate Governance Code, sets out how the Company has applied the main principles of the Code throughout the year ended 31 December 2022 and at the date of this Statement. A: Leadership A.1: THE ROLE OF THE BOARD The Board of Directors is the supreme administrative body of the Company that mainly formulates the Company’s strategy and growth policy, while supervising and controlling its management and administration of corporate affairs and the pursue of its corporate purpose. The Board of Directors is competent to decide on every issue concerning the Company’s assets management, administration, representation and its operations in general, taking all appropriate measures and decisions that assist the Company in achieving its objectives. Those issues which, according to the provisions of the law or the Articles of Association, fall within the exclusive competence of the General Meeting shall be outside the competence of the Board of Directors. The Board of Directors ensures the integrity of financial statements, of financial reporting and the effectiveness of the systems of internal controls, risk management and of compliance processes of the Company. Further, the BoD shall specifically have the authority to decide on the issuance of any kind of bonds, with the exception of those that by law fall under the exclusive competence of the General Meeting of Shareholders. The Board of Directors can also decide on the issuance of bonds convertible into shares following decision of the General Meeting of the Shareholders and the provision of authorization to the Board of Directors in accordance with the provisions of applicable law. The BoD operates in accordance with the Company’s Articles of Association as well as with its Charter, which has been approved by the same. The main matters for the Board’s decision in 2022 included the following: • Significant business projects • Participations and capital expenditure projects • Approval, as appropriate of annual budgets, business plans, organizational structure advertising and sponsorships program • Approval of Financial Statements and shareholders communication • Resolutions regarding the financial position, bank lending, etc. • Regulatory compliance issues and related policies OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 32 • Significant transactions with related parties • Review and approval, as appropriate, of recommendations from the Committees of the Board • Protection of legal interests of the Company Meetings Board meetings are structured to allow open discussion. The Board meets regularly, in principle once per month (with physical presence, by telephone, teleconference or videoconference, or combination thereof) and calls additional meetings or takes written resolutions without holding a meeting, to consider matters in its competence whenever deemed necessary. In 2022, there were thirteen Board meetings (plus eight additional resolutions via rotation). There were nine Audit Committee meetings (plus seven additional per rotation resolutions) and five Remuneration and Nomination Committee meetings (plus four additional resolutions via rotation). The table below sets out the attendance by individual Directors at scheduled Board and Committee meetings during 2022 and provides information on the number of shares held by each Board member. BoD member name Position BoD 1 Presence BoD Representation Audit Committee Presence Remuneration & Nomination Committee - Presence Number of Company shares Kamil Ziegler Executive Chairman 13 - - - 31,718 Jan Karas Member – Executive, Chief Executive Officer 13 - - - 79,540 Pavel Saroch 2 Vice-Chairman – Non-Executive 13 - - 3 8 1,116,300 Pavel Mucha Member – Executive, CFO 13 - - - Ø Katarina Kohlmayer Member – Non-Executive 13 - - - 9,146 Robert Chvátal Member – Non-Executive 12 1 - 4 Ø Igor Rusek 3 Member – Non-Executive 7 - 2 2 7 Ν/Α Nicole Conrad Forker Member – Independent Non- Executive 10 3 9 2 Ø Cherrie Mae Chiomento-Ferreria 3 Member – Independent Non- Executive 7 - 4 5 - Ø Theodore Panagos 3 Member – Independent Non- Executive 7 - - 2 7 Ø Georgios Mantakas 3 Member – Independent Non- Executive 7 - 4 5 - Ø Spyridon Fokas 4 A’ Vice-Chairman –Non-Executive 6 - - - Ν/Α Christos Kopelouzos 4 Member – Non-Executive 4 2 - - Ν/Α Stylianos Kostopoulos 4 Member – Non-Executive 6 - - - Ν/Α Rudolf Jurcik 4 Member – Independent Non-Executive 6 - 5 6 - Ν/Α Nikolaos Iatrou 4 Member – Independent Non-Executive 6 - - 3 8 Ν/Α Vasiliki Karagianni 4 Member – Independent Non- Executive 5 1 5 6 - Ν/Α OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 33 Notes: 1. In the year 2022, eight (8) BoD decisions were taken unanimously via rotation. 2. Mr. Pavel Saroch was B’ Vice-Chairman until 09.06.2022 and has since been appointed Vice-Chairman. 3. Messrs. Igor Rusek, Theodore Panagos, Georgios Mantakas and Mrs. Cherrie Mae Chiomento-Ferreria were elected members of the Board of Directors on 09.06.2022. 4. Messrs. Spyridon Fokas, Christos Kopelouzos, Stylianos Kostopoulos, Rudolf Jurcik, Nikolaos Iatrou & Mrs. Vasiliki Karagianni were BoD Members until 09.06.2022. 5. Mrs. Cherrie Mae Chiomento-Ferreria and Mr. Georgios Mantakas were elected members of the Audit Committee on 09.06.2022 and Mrs. Cherrie Mae Chiomento-Ferreria was appointed the Committee’s Chairperson by the AC members, position held until then by Mrs. Nicole Conrad Forker. 6. Mrs. Vasiliki Karagianni and Mr. Rudolf Jurcik were members of the Audit Committee until 09.06.2022. 7. Messrs. Igor Rusek and Theodore Panagos were elected members of the Remuneration and Nomination Committee on 09.06.2022. 8. Messrs. Pavel Saroch and Nikolaos Iatrou were members of the Remuneration and Nomination Committee until 09.06.2022. Directors’ Insurance and Indemnities The Directors receive remuneration as per the relevant provision in the Company’s Articles of Association and the approved Remuneration Policy. Each individual, who is an executive of the Company and/or of any company within OPAP at any time on or after October 2013, benefits from a deed poll of indemnity in respect of the costs of defending claims against him or her and third-party liabilities. Additionally, Directors’ and Officers’ liability insurance cover was maintained throughout the year at the Company’s expense. A.2: THE CHAIRMAN ROLE There is a clear separation of responsibilities between the Executive Chairman and the CEO in the Company’s Articles of Association and the Internal Rules and Regulations. The Chairman presides over meetings of the Board of Directors, organizes and directs its work, and reports on it to the Annual Shareholders Meeting. The Chairman’s competences are indicatively outlined below: • Chairing and ensuring that Board meetings constitute a forum where open debate and effective contribution from individual Directors are encouraged, with sufficient time allocated to key issues • Encouraging dialogue between the Company and its Shareholders and other stakeholders, and facilitating the Board’s understanding of Shareholders’ and other stakeholders’ concerns • Overseeing the induction, information and support provided to directors; and • Leading the annual performance evaluation of the Board • Determining the items of and structure of the agenda, scheduling meetings in a way that ensures that the majority of BoD members are present, and sending members the necessary material to assist debate and decision-making in due time • Ensuring that the BoD complies with its obligations towards Shareholders, the Company, the supervisory authorities, the law and the Articles of Association of the Company • Where a pertinent resolution of the BoD is issued, he may also represent and bind the Company. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 34 The Non-Executive Vice-Chairmen stand in for the Chairman of the Board of Directors in his non-executive duties, when the latter is absent or unable to attend. The CEO stands in for the Chairman in his executive duties. A.3: THE CEO ROLE The CEO is vested with all powers necessary to act in all circumstances on behalf of the Company. He exercises these powers within the limits of the corporate purpose, in accordance with the rules set forth by the law and the Articles of Association of the Company, and subject to the relevant resolutions of the General Shareholders’ Meetings and the Board of Directors. The CEO, per his role, is also in charge administratively and operationally of all Company departments (with the exception of the Internal Audit Team which is supervised only administratively by the CEO, and the Corporate Secretariat Team which is administratively and operationally supervised by the Chairman of the Board), directs their work, makes the necessary decisions within the context of the current legal and regulatory framework governing the Company’s operations, the Articles of Association, the Internal Rules and Regulations, the approved projects and budgets, Board decisions as well as the Business and Strategic Plan. The CEO’s competences indicatively include: • Supervising Company business and financial policy • Monitoring and assuming responsibility for the Company’s financial results and profitability • Monitoring internal organization and taking appropriate measures to promote and make good use of the staff; proposing that the BoD approves the drafting of new regulations, organizational charts • Approving staff recruitment, as appropriate • Defining, in cooperation with the BoD and the Senior Management, the strategic targets of the Company • Setting the targets and the Key Performance Indicators, and monitoring the performance of the Company’s Management • Having the power to delegate the day-to-day management of the business of the Company, either to Deputy Chief Executive Officer or to each of the Officers of the Senior Management, acting individually, jointly or as sub-committee • Having the power to acquire and dispose of businesses and to approve unbudgeted capital expenditure projects, subject, in each case, to a limit per transaction defined by the BoD; • Having the power to represent and bind the Company against third parties for the signing of payment orders, bank checks, payment of salaries, insurance contributions, payment of taxes and fees of any nature to the State; and • Having the power to represent the Company judicially and extrajudicially, and to sign every document from or addressed to the Company, to instruct advisers and to instigate legal OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 35 proceedings on behalf of the Company in respect of matters for which no further collective Board authority is required by the law or the Articles of Association • In general, the CEO checks the day-to-day operations of the Company and supervises how each Team performs its tasks The Chairman of the Board of Directors or the Deputy Managing Director (Deputy CEO), stand in for the Managing Director (CEO) when the latter is absent or unable to attend. A.4: COMPOSITION OF THE BOARD During the reporting financial year, the Board of Directors consisted of eight non-executive members of which four were independent, and three executive members. Specifically, since 01.01.2022 until the date of this Statement, three executive members participate in the Board of Directors, namely Mr. Kamil Ziegler, Executive Chairman, Jan Karas, CEO and Pavel Mucha, Chief Financial Officer (CFO). A.5: EXECUTIVE DIRECTORS The executive members of the Board, among others, are responsible for the implementation of the strategy determined by the Board and consult with non-executive members of the Board at regular intervals regarding the appropriateness of the strategy implemented. In addition, in situations of crisis or risk, as well as when it is required by the circumstances to take measures that are reasonably expected to significantly affect the Company, indicatively when decisions are to be made regarding the development of the business or the risks assumed, which are expected to affect the financial situation of the Company, the executive members immediately inform the Board in writing, either jointly or separately, reporting on their assessments and proposals. A.6: NON-EXECUTIVE DIRECTORS Non-executive members of the BoD, including the independent non-executive members who are elected by the General Meeting of the Shareholders, monitor and examine the Company's strategy and its implementation, as well as the achievement of its objectives and ensure the effective supervision of the executive members. Non-executive members do not perform executive or managerial duties, but contribute by helping the BoD as follows: • Constructively challenging and helping in developing strategy proposals, expressing views on the proposals submitted by the executive members, based on existing information • When appointed by the BoD, participating in BoD Committees or any other working group or ad hoc committees formed from time to time, and performing the duties assigned to them in such committees OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 36 • Providing international and operational experience, and knowledge and understanding of global financial issues, the sectors in which OPAP operates and challenges it faces. A7: INDEPENDENT NON-EXECUTIVE DIRECTORS The independent non-executive members are elected by the General Meeting of the Shareholders or appointed by the Board in case of replacement of a resigned independent member. They are not less than 1/3 of the total number of Board members and, in any case, they are not less than 2, while fractions round to the closest integer. For a non-executive member to be considered as independent, the criteria set out in the applicable legislation and depicted in the Internal Rules and Regulations of the Company, must be met at the election and throughout one’s term of office. The independent non-executive members, either individually or jointly, submit, if necessary, reports to the General Shareholders’ Meetings, irrespective of the reports submitted by the BoD. During the reference year and until the date of this Statement, the BoD of the Company comprises 4 independent non-executive members, all satisfying the independence criteria set forth in article 9 of Law 4706/2020, as confirmed based on the members’ resumes, their other commitments (professional and personal), the additional documents submitted by each Independent BoD member, the absence of any incompatibilities, the fact that they do not own, directly or indirectly, voting rights constituting a percentage higher than 0.5% of the share capital of the Company and are discharged from financial, business, family or any other type of dependence relationship (as set out in article 9 of L. 4706/2020), which might affect their decisions and their independent and objective judgement. The CVs of the members of the Board of Directors and the Corporate Secretary who serve on the date of this Statement are available in section B.5. B: Effectiveness B.1: COMMITMENT All Non-Executive Directors confirm that they are able to allocate sufficient time to meet the expectations of the role and the requirement to disclose any actual or potential conflicts of interest. Αll Board members satisfy the non-overboarding criteria (HCGC clause 2.2.18). Other professional commitments of the members of the Board of Directors who serve on the date of this Statement are available in section B.5. B.2: INFORMATION AND SUPPORT All members of the Board receive timely reports on items arising at meetings of the Board to enable due consideration of the items in advance of meetings. Directors unable to attend a particular meeting during the year had the opportunity to review and raise any issues on the relevant briefing papers. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 37 Each Director has access to the advice and services of the Corporate Secretary and a procedure exists for Directors to take independent professional advice at the Company’s expense in respect of their duties. Company Secretary The Corporate Secretary ensures that the correct Board procedures are followed and proper records are maintained. Furthermore, the Corporate Secretary assists and advises, as the case may be, the members of the Board of Directors on matters concerning their said capacity. B.3: EVALUATION Performance Evaluation The Board maintains an ongoing review of its procedures and its effectiveness and those of its Committees throughout the year. The Board of Directors is performing on a yearly basis a self-assessment of the effective fulfilment of its tasks, in line with the legislative requirements and the provisions of the Fit & Proper Policy. The performance of each committee is assessed by the committee itself and the results are shared with the Board of Directors. The Company has established a process with both qualitative and quantitative criteria for the assessment of the performance of the Board of Directors and its committees. The process is chaired by the Chairman of the Board of Directors in cooperation with the Remuneration and Nomination Committee, with the exception of the evaluation of the Chairman’s performance which is chaired by the Remuneration and Nomination Committee. The evaluation process includes: • evaluation of collective suitability of the performance of the Board of Directors in accordance with the Fit and Proper Policy and the criteria set therein • individual evaluations of each member, including the Chief Executive Officer and the Chairman • succession plan of the members of the Board of Directors The evaluation process is carried out in the form of questionnaires. The results of the evaluation of the Board of Directors are assessed by the Remuneration and Nomination Committee and communicated and discussed by the Board of Directors. Τhe annual self-evaluation of the Board of Directors and its Committees for 2022 was concluded and the results were discussed by the Board of Directors at its meeting of 23.02.2023. All ratings calculated for each self-assessment exercise [BoD, Audit Committee and Remuneration & Nomination Committee (ReNoCo)] are close to excellent and confirm the Board’s and Committees’ collective suitability. As greatest strengths the Board members identified the very high skills and knowhow in different areas of expertise, the diversity in multiple levels (skills, cultures, business ideas, and business experience), the team spirit and the constructive cooperation among the members, the efficiency in exercising its duties through agenda-driven meetings diligently planned, encouraging thoughtfully organized discussion on insightful and probing questions, through disciplined approach towards all relevant topics, maintaining very good balance between business focus and regulatory, legal, governance, risk management, and compliance aspects. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 38 The Board also acknowledged that the succession planning for key Board members can be further elaborated and the orientation for new Board members could be enriched to introduce the members more deeply to the culture of the Company and the group with more regular induction sessions. ReNoCo examines thoroughly the main areas for improvement, in accordance with the Company’s Fit & Proper policy and shall require expert advice should this be deemed necessary. B.4: DIRECTORS’ RE-ELECTION In accordance with Articles of Association of the Company, all the Directors are subject to election by shareholders at intervals of four years. Such term of office shall be extended ipso jure until the election of new directors from the next ordinary General Meeting of the Shareholders in accordance with the more specific provisions of the Articles of Association. The members of the Board of Directors are unconditionally re-eligible and may be freely removed. Members of the Board of Directors are removed by the General Meeting of the Shareholders. The General Meeting may replace any of the members of the Board of Directors even before their term of office expires. The current Board of Directors was elected for four (4) years, and its term of office expires on 09.06.2026. According to article 11 of the Company’s Articles of Association (AoA) such term of office is extended ipso jure until the election of new directors from the next Annual Shareholders’ General Meeting, in accordance with the specific provisions of paragraphs 1, 2 and 3 of the same article. B.5: CURRICULA VITAE OF THE BOARD OF DIRECTORS MEMBERS Kamil Ziegler Executive Chairman Mr. Kamil Ziegler is the Executive Chairman of OPAP S.A. Born in Ceska Lipa in the Czech Republic. In 1984 Mr. Ziegler graduated from the University of Economics, Faculty of Trade, in Prague. In 1996 he graduated from the Southern Graduate School of Banking at the Southern Methodist University in Dallas, Texas. He began his professional career at the State Bank of Czechoslovakia where he served in different managerial positions: he worked as an Executive Director for Finance at Komercni banka, Prague, and then as a deputy CEO and Board member at Czech Savings Bank. Thereafter, he was appointed Chairman of the Board and CEO in the Czech state-owned Consolidation Bank. After that he served as Chairman of the Board and CEO in Raiffeisenbank Czech Republic. He also held the position of Executive Director for Finance and Board Member in the PPF Group. His last executive appointment was as the CEO and proxy holder in SAZKA A.S., the largest Czech lottery organisation, where he is currently serving as a Board member. Mr. Ziegler has been also a member of the Board of Directors and member of Supervisory Boards of many companies in the Czech Republic, Netherlands, Cyprus and Austria. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 39 Other professional commitments Opap Cyprus Ltd Chairman Opap Investment Ltd Chairman Hellenic Lotteries SA Non-Executive Board Member Horse Races Single Member SA Chairman Neurosoft SA Non-Executive Board Member SAZKA a.s. Member of the Board of Directors SAZKA FTS a.s. Member of the Board of Directors PPF Group N.V. Chairman of the Supervisory Board Chairman of the Audit Committee PPF Financial Holdings a.s. Chairman of the Audit Committee (until 31/12/2022) Casinos Austria Akiengesellschaft Member of the Supervisory Board Jan Karas Chief Executive Officer, Executive Member Jan Karas was appointed OPAP’s Chief Executive Officer (CEO) and executive member of the Board Directors in December 2020, after successfully serving the company for nearly seven years, from various senior roles. He joined OPAP in January 2014 and during his tenure with the company, he has led the operations, development and modernization of the company’s retail and indirect sales networks, overseeing activities related to sales, retail marketing, customer and partner support. Moreover, he has also been in charge of the operation and management of OPAP’s gaming and non-gaming commercial activities, across all retail and online channels, and contributed significantly to OPAP’s initiatives and response to the coronavirus (COVID-19) pandemic. Overall, Jan has a proven track record in delivering strong business results, as well as broad professional experience in developing solid commercial strategies and implementing successful retail and sales development programs. Before joining OPAP, he held several high-ranking positions in Marketing, Sales and Product Development in the Telecommunications sector, in the Czech Republic and Germany. Throughout his career, Jan has been focused on pursuing and following a customer-centric mindset, promoting positive change and developing high-performing and cross-functional teams. Other professional commitments Hellenic Lotteries SA Chairman and CEO Opap Cyprus Ltd Member of the Board of Directors Opap Investment Ltd Member of the Board of Directors Tora Direct Single Member SA Executive Board Member OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 40 Pavel Šaroch Vice Chairman, Non-Executive Member Mr. Šaroch graduated from the University of Economics, Prague. Having specialized in investment banking and economic management of corporations since 1995, he has served in management positions with securities trading firms such as Ballmaier & Schultz CZ and Prague Securities. From 1999 to 2001, he was Member of the Board of Directors at I.F.B., which focuses on organizational and economic consultancy, management of private investment projects. In 2001, he was appointed Deputy Chairman of the Supervisory Board of ATLANTIK finanční trhy and subsequently became a member of the company‘s Board of Directors. Mr. Šaroch is a member of the Boards of Directors of the parent company of KKCG investment group KKCG AG and of individual holding companies that belong to the Group. In KKCG a.s. he represents the position of the Chief Investment Officer. Moreover, he is a member of the board of directors of Allwyn International a.s. (former SAZKA Group a.s.) and its subsidiaries. Other professional commitments Kaizen Gaming Ltd Member of the Board of Directors Stoiximan Ltd Member of the Board of Directors Sazka a.s. Member of the Board of Directors Allwyn International a.s. (former Sazka Group a.s.) Member of the Board of Directors Sazka Austrian Gaming Holding a.s. Chairman of the Board of Directors Italian Gaming Holding a.s. Chairman of the Board of Directors Allwyn Asia Holding a.s. (former Sazka Asia a.s.) Chairman of the Board of Directors Lottoitalia S.r.l. Member of the Board of Directors Sazka Group Financing a.s. (SK) Chairman of the Board of Directors Allwyn Czech Republic Holding a.s. (former Sazka Czech a.s.) Chairman of the Board of Directors Sazka FTS a.s. Member of the Supervisory Board Allwyn Services UK Ltd (former Sazka Group UK Ltd) Member of the Board of Directors KKCG AG Vice-Chairman of the Board of Directors Sazkamobil 5G a.s., v likvidaci (former Italian GNTN Holding a.s.) Member of the Board of Directors Allwyn Financing Czech Republic a.s. (former Sazka Group Financing (Czech Republic) a.s. and Sazka Group Holding a.s.) Chairman of the Board of Directors Casinos Austria Aktiengesellschaft Member of the Supervisory Board Allwyn AG (former Sazka Entertainment AG) Member of the Board of Directors OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 41 Allwyn Financing Czech Republic 2 a.s. (former SAZKA Group Financing (Czech Republic) 2, a.s.) Chairman of the Board of Directors Kaizen Gaming International Ltd Director Österreichische Lotterien GmbH Member of the Supervisory Board Allwyn Entertainment Ltd Director Pavel Mucha CFO, Executive Member Mr. Pavel Mucha has officially assumed his role as Chief Financial Officer at OPAP, on 1 October 2019. Prior to OPAP he had 26 years of professional experience. Having graduated from University of Economics and Business in Prague in 1992, he started his career as tax consultant (Price Waterhouse), and later he held various finance and CFO positions in pharmaceutical (Wyeth Whitehall in Czech and Slovakia) and FMCG companies (Rothmans/BAT in the UK, Cyprus and Czech and in Stock Spirits Group in Czech and Slovakia). Before joining OPAP he held the position of Chief Financial Officer at Sazka, the national lottery operator of the Czech Republic, which is a member of Allwyn (former SAZKA) Group. Other professional commitments Opap Sports Ltd Chairman of the Board of Directors Opap International Ltd Chairman of the Board of Directors Opap Investment Ltd Member of the Board of Directors Hellenic Lotteries SA Executive Member of the Board of Directors Kaizen Digital Services Single Member SA Member of the Board of Directors Katarina Kohlmayer Non-Executive Member Mrs. Kohlmayer had been a senior investment banker with experience in corporate finance, reporting & accounting, international M&A, equity & debt capital markets and bank financing transactions. Her previous professional roles include managing director’s positions in London & Moscow, at Morgan Stanley and VTB Capital. As of 2014, she serves as Board Director and CFO at KKCG, one of the largest Czech-led private investment group, active in 4 main investment areas: lotteries & gaming, oil & gas & chemicals, technology and real estate. During her professional career, she has specialized in M&A transactions and capital markets in Central and Eastern European countries, Russia and CIS. Mrs. Kohlmayer has masters’ degree from University of Economics in Bratislava and MBA from Harvard University. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 42 Other professional commitments Allwyn International a.s. (former Sazka Group a.s.) Member of the Board of Directors Allwyn Financing Czech Republic a.s. (former Sazka Group Financing (Czech Republic) a.s. and Sazka Group Holding a.s.) Member of the Board of Directors KKCG a.s. Member of the Board of Directors Allwyn Services Czech Republic a.s. (former Sazka Group CZ a.s.) Member of the Board of Directors MND Group AG Member of the Board of Directors Metanol d.o.o. Director Rezervoarji d.o.o. Director US Methanol LLC Director KKCG US Advisory LLC Director US Methanol Midco LLC Director KKCG Methanol Holdings LLC Director Liberty One Methanol LLC Director Allwyn Financing Czech Republic 2 a.s. (former SAZKA Group Financing (Czech Republic) 2 a.s.) Member of the Board of Directors Allwyn UK Holding Ltd (former Sazka Group UK Holding Limited) Director Allwyn Entertainment Ltd Director Allwyn Services UK Ltd (former Sazka Group UK Ltd) Director Allwyn Entertainment Financing (UK) PLC Director Allwyn UK Holding B Ltd (former Allwyn Financing (UK) Ltd) Director Allwyn UK Holding C Ltd (former Allwyn Financing (UK) Ltd) Director Allwyn Entertainment AG Member of the Board of Directors Allwyn Sub AG Member of the Board of Directors Allwyn Services US LLC Manager Casinos Austria Aktiengesellschaft Member of the Supervisory Board Österreichische Lotterien GmbH Member of the Supervisory Board Robert Chvátal Non-Executive Member Born in 1968, Mr. Chvátal graduated from Prague School of Economics studying Business Administration. He began his professional career in 1991 with Procter & Gamble and Benckiser before spending 15 years in OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 43 mobile telecommunications as Chief Marketing Officer for T-Mobile Czech, and later as CEO of T-Mobile Slovakia and T-Mobile Austria. Since 2013, he joined lottery sector by being appointed the CEO and a member of the BoD of Sazka a.s., which, following a turnaround, has become one of the fastest growing lottery companies globally. In 2017 Mr. Chvátal was appointed as CEO of Allwyn (former SAZKA) Group, while since the same year he serves as an OPAP Board Director. Mr. Chvátal has also been elected since 2015 as the 1st Vice-President of the European Lotteries and Executive Committee member of Eurojackpot – pan European jackpot scheme. Other professional commitments Allwyn AG Group CEO, Authorised signatory Allwyn Czech Republic Holding a.s. (formerly SAZKA Czech a.s) Member of the Board of Directors SAZKA A.S. Chairman of the Board of Directors, CEO Allwyn International a.s. (formerly SAZKA Group a.s.) Member of the Board of Directors, CEO SAZKA Austrian Gaming Holding a.s. (formerly Austrian Gaming Holding a.s.) Member of the Board of Directors SAZKAmobil 5G a.s. (formerly Italian GNTN Holding a.s.) Chairman of the Board of Directors Italian Gaming Holding a.s. Member of the Board of Directors Allwyn Asia Holding a.s. (formerly SAZKA Asia a.s.) Member of the Board of Directors SAZKA Group Financing a.s. Member of the Board of Directors OSTERREICHISCHE LOTTERIEN GESELLSCHAFT M.B.H. President of the Supervisory Board CASINOS AUSTRIA AKTIENGESELLSCHAFT Vice-President of the Supervisory Board Allwyn US Holding Inc Director Allwyn Services Czech Republic a.s. (formerly SAZKA Group CZ a.s.) Chairman of the Board of Directors Hellenic Football Prognostic Organization S.A. (OPAP S.A.) Member of the Board of Directors (Non- executive Member) ALLWYN UK HOLDING LTD (formerly SAZKA GROUP UK HOLDING LTD) Director ALLWYN ENTERTAINMENT LTD Director Allwyn Entertainment AG (in liquidation) Member of the Board of Directors, liquidator Allwyn Sub AG (in liquidation) Member of the Board of Directors, liquidator Allwyn Services US LLC Manager OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 44 Dr Igor Rusek Non-Executive Member Dr Igor Rusek graduated from the Faculty of Law at the University of Basel, Switzerland, where he undertook post-graduate studies in international private law. He has served for many years as a member of Boards of Directors of various international groups of companies and has managed for two decades in this capacity the organisation of internal audits, accounting standards and corporate governance under applicable international standards. From 1994 to 2001, he was Associate Attorney at ATAG Ernst & Young, auditing and consulting firm in Basel. In 2001 he was appointed Partner and Member of Executive Committee at ATAG Private & Corporate Services Ltd (ATAG PCS). Meanwhile Dr Rusek is the Chairman of the Board of Directors of ATAG Group Ltd as well as the Chairman of the Board of Directors and partner of ATAG Attorneys Ltd, a law firm which roots reach back to 1917 founded ATAG, a leading Swiss advisory company, whereas his key area of work comprises amongst others organisation and execution of complex legal and tax planning as well as strategic management of negotiations. Other professional commitments ATAG Swiss Trustees AG Board Member Amdipharm GmbH in Liq.* Board Member and Liquidator Esports Innovation Group AG Board Member Fisherman Foundation Foundation Board Member Shigeo & Megumi Takayama Foundation Foundation Board Member Socom Sanity AG Board Member Vorgezem SA Board Member Valea Foundation Protectorship ATAG Family Office Ltd Board Member ATAG Private & Corporate Services Ltd Board Member ATAG Attorneys Ltd Board Member * Voluntary liquidation: The reason for the voluntary liquidation is a restructure with the purpose to reduce strategic economic costs and keeping structures clearer. Prof. Dr Nicole Conrad-Forker Independent Non-Executive Member Prof. Conrad-Forker is an Attorney at Law. She has experience in audit and corporate governance related issues as a professor, advisor and project leader. She holds a Doctorate from the Faculty of Economics of the University of Kassel, Germany. She has strong business acumen and deep understanding of financial / accounting related issues, while her legal perspective is an added value resulting to a “holistic” approach of corporate governance aspects. Her professional experience includes being Board Member and Partner at OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 45 ATAG Attorneys Ltd., Basel; Foreign Trade Advisor to the Kassel/Marburg Chamber of Commerce and Industry; Professor at Economic Faculty at Mainz University and ZHAW School of Management and Law in Zurich and Representative of the City of Zurich as majority shareholder on the Board of Directors of a Swiss energy supply company. Other professional commitments ATAG Attorneys Ltd., Basel, Switzerland ATAG Family Office Ltd., Basel, Switzerland C.D.-Stiftung, Essen, Germany KHAN Familienstiftung, Vaduz, Principality of Liechtenstein Cherrie Mae Chiomento-Ferreria Independent Non-Executive Member Ms. Chiomento has a dynamic leadership career combining astute strategic, corporate governance, financial, operational, and people skills with approximately three decades of international exposure in Asia, the Americas, and Europe. A rich mix of experience in public accounting/audit, consulting, corporate governance, risk management, process and control systems, information systems security, and finance for businesses in global and national environments. Her broad and extensive experience includes being a Partner at EY (Ernst & Young, one of the Big Four accounting organizations and a multinational professional services network of firms,) and a Corporate Finance Leader at Roche (a Swiss multinational healthcare company) and at SITA (a multinational information technology company). She graduated from the University of the Philippines Diliman with a B.S. in Business Administration and Accountancy and qualified as a certified public accountant. Also qualified as a certified information systems auditor in New York, USA. She completed the EY Executive Partnership Program at the Institute for Management Development (IMD) in Lausanne, Switzerland and the Advanced Management Program (AMP) at Harvard Business School Boston, USA. Other professional commitments None. Theodore Panagos Independent Non-Executive Member Born in Athens. Completed his high school studies in 1974. Graduated from the Law School of National and Kapodistrian University of Athens. Master’s in information law and the Technique of Legislation from the Law School of University of Salento (Italy). PhD in Public Law from the Law School of Demokrition University of Thrace. Certificate of Attendance in Commercial law from International Academy of Law in Hague. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 46 As an Attorney at Law, member of Athens Bar Association since 1981, practicing energy law, environmental law, corporate law and public procurement law. Managing Partner at Panagos-Spiliopoulou Law Firm (www. Thvlaw.com) Associate Professor at International Hellenic University in energy and hydrocarbons law, energy policy and regulation, cross-border energy trade. Visiting Professor in Hydrocarbons law (2016-19) at Exeter University (School of Law). Former Vice Chairman at Regulatory Authority for Energy (2005-10). Member of the Board at National Energy Council (2006-09). Member of the Board at Industrial Property Organization (2005-06). Member of the Committee of the Open-Door Invitation for granting and using authorizations for the exploration and exploitation of hydrocarbons (2012-13). Lecturer in many conferences in Greece and abroad on energy issues. Author of many monographies and publications on energy, regulation, energy policy and public procurement. Other professional commitments Panagos Spiliopoulou Law Firm Managing Partner DEPA Infrastructures SA Member of the Board of Directors International Hellenic University Asc Professor Georgios Mantakas Independent Non-Executive Member George Mantakas was born in 1959 in Athens. He graduated (summa cum laude) from the Athens University of Economics in 1981 and continued with his Master’s degree and his PhD in Economics (1987) at the University of Rochester, New York. Early in his professional career he has worked as an economist at the Antitrust Division of the U.S. Department of Justice. After a period of teaching and research experience in the University of Macedonia, he joined Ionian Bank and reached the position of assistant Director in the section of special projects, international business planning, and new product design. In year 1998, he joined Piraeus Bank and headed the business planning section of the Bank, while in 2000 he assumed the position of the Director of the International Banking Division responsible for the Int’l network of the Bank and Correspondent Banking. In 2011 assumed the position of the Chief Risk Officer of Piraeus Bank Group until the end of 2017. During the years after 2017, George Mantakas has worked as an independent senior business and banking advisor, participating in various projects in banking, and other industries, while the last two years executes various management projects and cooperates with Ballian Techniki SA. During his career he has served as a member of Boards of Directors of Subsidiaries of Piraeus Bank, the BoD of “Greek Yellow Pages SA”, and various Management Committees in the banks he has worked. He is married with 2 children. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 47 Other professional commitments Ballian Techniki SA Consultant Marie Emmanouil, LL.M Corporate Secretary Marie Emmanouil is an experienced lawyer specialized in Corporate and Company Law and Corporate Governance. Prior to joining Opap she worked as Lawyer in Tsibanoulis & Partners Law Firm and the Legal Department of Lavipharm SA. She was Director of Legal and Corporate Affairs, Investment and International Banking at Piraeus Bank as well as Legal Counsel, Compliance & AML Officer and Corporate Secretary at Trastor REIC. She holds a Bachelor’s Degree from University of Athens Law School and LL.M. (master’s degree) with distinction from the University of Kent, UK. C: Accountability C.1: FINANCIAL AND BUSINESS REPORTING The Board is responsible for the integrity of OPAP’s consolidated and separate Financial Statements and recognizes its responsibility to present a fair, balanced and understandable assessment of OPAP’s position and prospects. The Board is satisfied that the Financial Statements and reports to regulators present a fair, balanced and understandable assessment of OPAP’s position and prospects. To assist with financial reporting and the preparation of separate and consolidated Financial Statements, the Finance Team has in place a series of accounting and treasury policies, practices and controls which are designed to ensure the identification and communication of changes in accounting standards, and reconciliation of core financial systems. The function consists of consolidation and financial accounting teams, and technical support which comprises of Senior Managers of Finance Team that review external technical developments and accounting policy issues. Throughout the year OPAP has had in place an ongoing process for evaluating the financial reporting process and the preparation of consolidated accounts. The basis for the preparation of consolidated accounts is as set out on page 119 under Accounting Policies. Following the Audit Committee recommendation, the Board agrees an engagement letter with the Auditors in respect of the full year audit and half-year review and the Auditors’ statement on their work and reporting responsibilities. Information on OPAP’s business model and strategy for generating and preserving longer-term growth and delivering on the Company’s stated objectives is set out in the Business Strategy section of the Annual Report on page 19. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 48 An extra step involving an additional review of the Annual Report was added to the approval process of financial statements so that the full Board, acting together, could confirm that the Annual Report was fair, balanced and understandable. Furthermore, an analysis of the remuneration paid by OPAP Group to auditors for the offering of audit and other services is included on page 199 of the Annual Report. All information provided for in article 10 (1) (c), (d), (f), (h) and (i) of Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, is included in the Annual Report and the Company's Articles of Association, to which we refer. C.2: SYSTEM OF INTERNAL CONTROLS The Board of Directors has the responsibility for establishing and maintaining an effective System of Internal Controls, that is a set of processes with the objective of controlling the operations of OPAP and its significant subsidiaries, in a manner which provides reasonable assurance that published information is accurate, reliable and timely, that the organization’s policies, standards, plans and all applicable laws and regulations are respected, and that the organization’s plans, programs, goals, and objectives are achieved. To this respect, the Board has established a System of Internal Controls based on best international practices, designed to provide reasonable assurance with regard to achieving business and operations, financial and management reporting, and compliance objectives. Furthermore, the Board has developed a systematic enterprise risk management approach, based on which key risks that may affect the achievement of strategic objectives are identified, measured and prioritized, on an ongoing basis. Further the Board has established a risk management function and approved a risk management framework. In this context, the Company’s Management has been assigned with the duty to conduct the controlling, which is an integral part of the overall process of managing operations. Therefore, it is the responsibility of managers at all levels of the organization to identify and evaluate risks, to establish policies, operating standards, processes to mitigate the risks, develop practical controls and ensure established controlling processes are effectively implemented. The Board has the overall responsibility for the establishment and effectiveness of the Company’s Internal Control System, as reflected in the P167 Policy titled “Policy and Process of Assessment of System of Internal Controls”. The first evaluation of the Company’s ICS was performed with reference date 31.12.2022 (for a detailed analysis, please see below). In accordance with this Policy, the control environment consists of all the organization structures, policies and processes that provide the basis for the development of an effective and adequate System of Internal Controls. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 49 Further, OPAP’s control environment is supported by the principles of Business Conduct which are included in the OPAP Group Code of Conduct and a range of ISO policies and procedures on corporate, social and environmental responsibility and information security. Other key elements within the internal control structure are summarized as follows: The Board and Management – The Board approves the strategy and performs an advisory and supervisory role, with the day-to-day management of the Company being undertaken by the CEO supported by the Deputy CEO and the Senior Management. The CEO and other Executives have clearly communicated OPAP’s vision, strategy, operating model, values and business objectives across the Group and constantly monitor their progress. Organizational Structure – The structure of the Senior Management, as reflected in the current organizational chart, is structured in a way to best serve the FAST FORWARD strategy. Throughout the organization, the achievement of business objectives and the establishment of appropriate risk management and internal control systems and processes are embedded in the responsibilities of managers of business teams. Budgeting – There is an annual planning process whereby operating budgets (OPEX and CAPEX) for the following financial year are prepared and reviewed by the Board. Long-term business plans are also prepared and reviewed by the Board on an annual basis. Management Reporting – there is a comprehensive system of management reporting. The financial performance of operating units and OPAP as a whole are monitored against budget on a monthly basis and are updated by periodic forecasts. Internal Audit - The Internal Audit Team is an independent unit within the Company. The mission of the Internal Audit Team is to enhance and protect organizational value by providing risk-based and objective assurance, advice and insight. The Internal Audit Team helps OPAP Group accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. The Internal Audit Director is appointed by OPAP Board of Directors, following a proposal by the Audit Committee, is a full-time employee, personally and operationally independent and objective in performing his duties, and has sufficient qualifications and experience. He reports functionally to the Audit Committee and administratively to the CEO. He may not be a member of the Board or of another permanent committee within the Company or closely associated with any person having the above capacities in OPAP or a company of OPAP Group above up to the second degree by blood or by marriage. The Internal Audit Team operates and organizes its work and responsibilities based on a risk-based audit plan that is annually approved by the Audit Committee. The subsidiaries HELLENIC LOTTERIES S.A., NEUROSOFT S.A., STOIXIMAN S.A. and TORA WALLET SINGLE MEMBER S.A. have respectively established an Internal Audit Unit. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 50 Risk Management – as part of the ongoing risk and control management, the BoD has established a Risk Management Function, appointed a Risk Officer and approved a risk management framework which describes the fundamental principles applied in risk management, defines the required roles and respective responsibilities regarding risk oversight and ownership, and establishes the appropriate methodologies and processes for the assessment and management of identified risks, while determining the acceptable level of risk assumed by the Company in the pursuit of its corporate objectives. Furthermore, the Audit Committee and the relevant responsible stakeholders are informed of those significant risks which might impact on the achievement of corporate objectives and of the agreed actions to monitor, mitigate, and control risks. A summary of the most significant risks faced by OPAP is included in the Business Strategy section on page 19 and details of OPAP’s uncertainties and principal risks are set out on pages 14 to 18. Business Units’ Controls – each business unit maintains a system of controls and risk management which is appropriate to its own business environment. Such controls must be in accordance with Group policies and include management authorization processes, to ensure that all commitments on behalf of OPAP are entered into only after appropriate approval. Compliance Controls – ΟPAP has established a series of codes, policies and procedures, in the framework of its corporate governance, in compliance with the regulatory framework in which OPAP operates and in the context of its Integrated Management System. The following are among the policies applied: • Hellenic Code of Corporate Governance (adopted by the Company) • OPAP Group Code of Conduct • OPAP Agents’ Code of Conduct • Internal Rules and Regulations • Fit and Proper Policy • Anti-Money Laundering and Counter Terrorist Financing Policy • Policy on Responsible Gaming • Procurement Policy • Environmental and Energy Policy • Quality Policy • Compliance Policy • Health and Safety Policy • Social Accountability Policy • Determination and Evaluation of Environmental Aspects • Health and Safety Risk Identification and Evaluation • Policy on CSR Strategy OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 51 • Policy on CSR Report Development • Sustainability Policy • Investor Relations Policy • Framework and Policy on Information Assets Security OPAP maintains a compliance program that aims to demonstrate that the Company has the organizational structure, adequate people, resources, policies, processes in place and technology to contribute to risk management and compliance enforcement. The Company is responsible for the monitoring of compliance of the Company and the OPAP Network with the applicable legal and regulatory framework and takes appropriate corrective measures, if necessary. In this respect OPAP established a Compliance Policy which set the overarching principles and commitment to action so as to achieve compliance and a set of processes regarding compliance framework monitoring, compliance risk assessments, and annual Compliance BoD Report. OPAP has successfully completed in 2022 the audit of ISO 37301 Compliance Management System, with zero non-conformities raised, becoming one of the first companies in Greece certified with this new standard. The Company monitors compliance with the principles of responsible gaming, with the Games Regulations and with the international security standards of Games (WLA/EL-SCS/ISO 27001), takes action to combat illegal gambling, conducts annual reviews specifically for the subsidiary company HELLENIC LOTTERIES S.A. and for the certification of compliance with other ISO systems. The Code of Conduct of OPAP Group establishes a policy for whistleblowing complaints, through which any violation of the Code of Conduct can be reported to the Chief Legal, Regulatory and Compliance Officer by formal written or verbal complaint or anonymously. Chief Legal, Regulatory and Compliance Officer provides the Board of Directors with updates on the compliance controls of the Group and recommendations for continuous improvement. OPAP is committed to pursuing operational effectiveness, customer satisfaction and continuous improvement, as well as maintaining our environmental and social responsibility. This is achieved through the effective implementation of an Integrated Management System for Quality, Environmental and Energy and Health and Safety management, certified according to: • ISO 9001 Quality Management System, certified by LRQA. • ISO37301 Compliance Management System, certified by LRQA. • ISO 50001 Energy Management System, certified by Bureau Veritas • ISO 45001 Occupational Health and Safety System, certified by Bureau Veritas • ISO 14001 Environmental Management System, certified by Bureau Veritas Monitoring – the effectiveness of the system of internal control and risk management is monitored regularly through a combination of management review, self-assessment, independent review through quality assurance, environment, health & safety and regulatory audits, as well as independent internal and OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 52 [Business/Internal Use] external audits. The results of internal and external audit reviews are reported to and considered by the Audit Committee, and actions are taken to address any significant control matters identified. The Audit Committee also approves annual internal and external audit plans and is responsible for performing the ongoing review of the system of internal control and risk management on behalf of the Board. Conflicts of Interests - In accordance with the Internal Rules and Regulations, a revised conflict / potential conflict of interest process applies. Conflict of interests is a situation in which a Board Member or one of his or her family members has or may have a personal or financial interest that compromises or could compromise the Board Member’s independence of judgment in exercising his or her responsibilities to OPAP. The process identifies, avoids and deals with conflicts of interest between the interests of the Company and those of its Board of Directors. The Board reviews the business strategy, the appropriateness and effectiveness of the system of internal controls and risk management throughout the financial year and up to the date of approval of the Annual Report and confirms that the financial statements have been satisfactorily completed. Periodic Evaluation of the Internal Controls System (ICS) - The Company, in accordance with the provisions of article 14(4) of Law 4706/2020, Decision 1/891/30.09.2020 of the Hellenic Capital Market Commission (HCMC), as amended and in force, and the Company’s Policy P167 “Policy and Process of Assessment of System of Internal Controls”, engaged PricewaterhouseCoopers SA (PwC), by virtue of a decision of its Board of Directors, to evaluate the Company’s Internal Control System (ICS) as of December 31, 2022. The Independent Assessor was Mr. Dimitrios Sourbis, a Certified Public Accountant with SOEL reg. number 16891. PwC confirmed their independence per the International Ethics Standards Board for Accountants’ Code of Ethics as incorporated into the Greek Legislation, the ethical requirements of the Regulation (EU) No 537/2014 and the provisions of Law 4449/2017. PwC conducted the engagement in accordance with the International Standard on Assurance Engagements 3000 and the provisions of case i, paragraph 3 and paragraph 4 of Article 14 of Law 4706/2020 and Decision Nr. 1/891/30.09.2020 of the Board of Directors of the HCMC, as effective (the "Regulatory Framework"), in order to assess adequacy and effectiveness of the ICS of the Company and the significant subsidiaries (i.e., Stoiximan Ltd and Hellenic Lotteries S.A), as of 31 December 2022. They believe that the evidence they obtained is sufficient and appropriate to support the conclusion expressed in their Assessment Report dated 08 March 2023, as follows: " Conclusion: Based on the procedures performed as described in the “Scope of Engagement” paragraph above, and the evidence obtained, about the Company’s and its significant subsidiaries ICS adequacy and effectiveness, as at December 31, 2022 reporting date, nothing has come to our attention that causes us to believe that something could be identified as a material weakness in terms of the Company's and its significant subsidiaries ICS in compliance with the Regulatory Framework. " The foregoing results constitute a further confirmation that the Company is in compliance with the applicable legislative and regulatory framework governing its Internal Control and Corporate Governance System and that it has adopted and implements international best practices to ensure the lawful and orderly operation towards achieving the sustainable development strategy of the Company and the Group. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 53 Report of the Audit Committee C.3: AUDIT COMMITTEE AND AUDITORS The Audit Committee of OPAP S.A. Group (hereinafter the “AC” or the “Committee”) presents the Committee’s Activity Report for the year 2022. The Committee is governed by its Charter which was approved by the AC and the Board of Directors of OPAP S.A. on 14/10/2020 and is currently publicly available on the Company’s site, as per the provisions of Law 4449/2017 (art. 44 par. 1, indent h), as amended by art. 74 par. 4 of Law 4706/2020 on Corporate Governance of Sociétés Anonymes. The Charter is reviewed annually in order to incorporate the requirements set forth in laws and regulations. The Charter guides the Committee in terms of its objective and its responsibilities assigned by the Board of Directors. The key activities of the Committee during 2022 are set out below. AC Composition The Audit Committee is comprised of three independent, non-executive Board Members, according to the following table: Name Position at the AC Type Cherrie Chiomento Chair since 09.06.2022 Independent Non-Executive Board Member Prof. Dr Nicole Conrad-Forker Member since 09.06.2022 (Chair until 09.06.2022) Independent Non-Executive Board Member Georgios Mantakas Member since 09.06.2022 Independent Non-Executive Board Member Vasiliki Karagianni Member until 09.06.2022 Independent Non-Executive Board Member Rudolf Jurcik Member until 09.06.2022 Independent Non-Executive Board Member By virtue of resolution of the Annual General Meeting of the Shareholders dated 09/06/2022, following recommendation by the Board of Directors, the current Audit Committee is a Board of Directors Committee, comprising three (3) Independent Non-executive Board members. The tenure of the Audit Committee was resolved to be equal to the tenure of the Board of Directors, i.e., until 09.06.2026 and, if the case be, shall be extended ipso jure until the election of new directors from the subsequent Annual General Shareholders’ Meeting in accordance with the provisions of article 11 of the Company’s Articles of Association. All members are qualified and possess the required expertise for such positions, meeting the requirements of Law 4449/2017, as amended by article 74 of Law 4706/2020 and currently in force. All members have business acumen and financial / accounting experience. The AC Chair, Ms. Cherrie Chiomento is experienced in auditing (external and internal) & controllership, corporate governance & risk management, internal control over financial reporting (including US Sarbanes-Oxley SOX 302/404), and finance for businesses in global environments. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 54 Audit Committee Meetings The Committee met nine (9) times in 2022, while seven (7) additional per rotation resolutions were unanimously approved by exchange of emails, as per the provisions of par. 9.6 of the Audit Committee Charter. Before every AC meeting an agenda is prepared including all items for discussion. The agenda is communicated to each member at least two working days before the meeting. The Minutes of the AC meetings are kept by a lawyer, member of Corporate Secretariat team. The following persons are regularly invited to attend the AC meetings: • Internal Audit Director and IA Team members; • Chief Financial Officer; • Operational Finance Director and Financial Reporting Manager; • External auditors; • Top Management executives and Managers/Directors of Company’s teams. The areas covered and the main items discussed during the AC meetings held within 2022 are summarized below: Financial Statements/Financial Reporting 1. Reviewed the annual separate and Consolidated Financial Statements for the year ended December 31st, 2021 and further recommended their approval by the Board of Directors; 2. Reviewed the six-month separate and Consolidated Financial Statements for the period 01/01/2022 to 30/06/2022 and further recommended their approval by the Board of Directors; 3. Reviewed the quarterly unaudited financial information/Interim Management Statements as of 31.03.2022 and 30.09.2022 and further recommended their approval by the Board of Directors; 4. Reviewed any new accounting, governance, tax and reporting developments. External Audit 1. Approved OPAP audit fees for the period 1/1-31/12/2021; 2. Reviewed and confirmed the independence of PwC and the provision of any non-audit services (NAS) and monitored that the provision of such services does not compromise the independence of the statutory auditors in accordance with Law 4449/2017 and Regulation (EU) 537/2014; 3. Proposed for the election of Auditing Company for the statutory audit of the Company’s separate and Consolidated Financial Statements for the FY 2022; 4. Reviewed and discussed PwC’s audit planning/strategy for the year ended December 31, 2022, including PwC’s independence and quality control procedures and their readiness to respond to regulatory framework changes; 5. Met with PwC during audit planning, during the year of audit, and on report submissions; OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 55 6. Met with PwC without management being present to discuss any matters related to the performance and results of the audit including PwC’s review of internal control as part of their audit procedures and any significant findings and recommendations, together with management's responses; 7. Reported, as necessary, PwC discussion results to the BoD. Internal Audit 1. Reviewed the IA activity quarterly reports for 2022 and the IA 2021 KPI's and Annual Report, issued by the Company’s Internal Audit Team and briefed the Board of Directors on the arising risks, the agreed mitigating actions and suggestions for improvement, if any, or on the risk acceptance; 2. Reviewed the list of long outstanding findings identified by the Internal Audit Team, informed the Board of Directors accordingly and recommended corrective actions; 3. Reported to the Board of Directors all important matters pertaining to the Company’s System of Internal Controls; 4. Conducted the evaluation of OPAP Group Internal Audit Team for 2021 and the individual evaluation of the performance of the Internal Audit Team Director; 5. Monitored the replacement process of the resigned Internal Audit Director and recommended to the Board of Directors the appointment of the new Internal Audit Director of the Company; 6. Approved the FY 2022 Internal Audit Risk Based Plan and its revision related to SOX consulting services; 7. Held meetings with the Company’s Directors and Top Management executives; 8. Recommended to the Board of Directors the appointment of the third-party assessor of the internal controls system (ICS), according to L. 4706/2020 – Reviewed external auditors’ Independence statement and respective non-audit fees and sought internal and external legal advice. SOX Compliance 1. Reviewed the adequacy of the control environment, but also the quality and maturity of the underlying business processes and internal controls as prepared and reported by company and its external advisors; 2. Reviewed the work of Internal Audit function in relation to the SOX testing for the attestation of management’s own assessment of internal controls and procedures in accordance with standards established by the Public Company Accounting Oversight Board; 3. Reviewed the company’s readiness to meet the quarterly and annual reporting requirements of the Section 302 executive certification and Section 404 internal control reporting requirements of Sarbanes- Oxley Act by reviewing the work of finance management and auditors. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 56 Audit Committee matters 1. Approved the Audit Committee Activity Report for the year ended 31.12.2021 and conducted the Audit Committee’s self-assessment; 2. Drafted and adopted the Audit Committee Plan for 2022. Under the provision of the Audit Committee Charter (par. 9.5 & 9.11) the Committee reports at least annually to the Board of Directors the Committee's composition, responsibilities and how the Committee has fully discharged all of its responsibilities for the period being reported. The present annual report covers the period 01.01.2022 to 31.12.2022. Corporate Sustainable Development Policy The Audit Committee is informed about the impact of the Company's activities on the environment and the wider community based on non-financial factors related to the environment, social responsibility and governance (Environmental, Social, Governance "ESG"), which are economically significant for the Company and the collective interests of key stakeholders, such as employees, customers, suppliers, local communities and other important stakeholders. In accordance with the provisions of the Code, the Company adopts and implements a policy on sustainable development and the most material issues identified in early 2023 are listed in section H: Non-financial report – Sustainable development of the present Statement. The AC has been informed accordingly and acknowledges the significance of all issues for OPAP’s sustainable development. Conclusion The Audit Committee has fulfilled its duties and responsibilities as specified in the Audit Committee Charter. On behalf of the Audit Committee, Cherrie Chiomento Audit Committee Chair C.4. Related Parties Transactions (RPT) Policy In accordance with Law 4548/2018, the Company has adopted a Related Party Transactions Policy (hereinafter the “RPT Policy") as part of the Internal Rules & Regulations. Under the RPT Policy, all transactions with related parties are submitted to a three-member internal committee, i.e. the Assessment/Exemption Committee (ExCom), with the task to evaluate whether a transaction in question falls under the exemptions of par.3 of article 99 of Law 4548/2018 and provide to this end a relevant report. In cases where ExCom considers that a transaction does not fall under any of the exemptions of par. 3 of article 99 of Law 4548/2018, the Company engages an independent auditor/audit firm to evaluate the commercial terms of the transaction and analyze whether it is at “arm’s length”; on the basis of this OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 57 evaluation, the independent auditor/audit firm, provides a fairness opinion on whether the transaction in question is fair and reasonable for the Company, for the non-related parties and the minority shareholders. All related party transactions are periodically submitted to the Audit Committee, which ascertains that applicable legal and regulatory provisions, as well as the RPT Policy, are complied with. D: Remuneration D.1: THE LEVEL AND COMPONENTS OF REMUNERATION The Company’s compensation plan is performance-driven and designed to promote OPAP’s innovative and entrepreneurial culture. Since OPAP privatization, the Board set out to create a truly multinational Company and, as a result of this approach, people of various nationalities, skills and professional backgrounds cooperate in every sector in which OPAP operates. The level and components of remuneration across OPAP are designed to facilitate global mobility and diversity. Salary ranges are based on domestic and sectorial benchmarking and OPAP’s annual cash bonus structure, whereas long-term incentives and other benefits are offered. Employees In December 2022, the Company adopted a new Compensation & Benefits Policy, applying to all employees of OPAP S.A., HELLENIC LOTTERIES S.A., TORA WALLET SINGLE MEMBER S.A. and TORA DIRECT SINGLE MEMBER S.A, from entry level and up to the level of director. The Policy defines the principles, tools and processes to be implemented for the determination of the level of the compensation components of all employees. In particular, the Policy provides for a fixed part and a variable part of compensation (bonus), the latter directly associated with a structured performance assessment procedure, which takes into account both Company performance and individual performance. The Policy also sets out the benefits’ policy implemented by the Company. By means of the new Compensation & Benefits Policy the Company aims at rewarding the contribution of all employees to the business results, as well as to forge the desired company culture. Board of Directors With respect to the Board of Directors’ compensation arrangements, details on the Company’s Remuneration Policy are set out below: The Remuneration and Nomination Committee, is responsible for deciding on the benefits that encourage good customer service, are fair to all our employees and are aligned with the interests of all of our shareholders. Our management team is multinational and adaptable and thus the main principles of our philosophy regarding remuneration are the following: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 58 • Transparency • Alignment of interests between shareholders and management • Alignment of interests between employees and management • Attraction and retention of the right people • Performance-based remuneration Remuneration regime • Bonus schemes were adopted that build incentives via specific KPIs. Established criteria include quantitative benchmarking based on the overall Company performance, taking into account key profitability metrics • Qualitative criteria also apply, focusing on managerial skills, training & development of the working teams, project deliveries, external communication etc. It is worth mentioning that bonuses and other variable remuneration arrangements is common practice for companies listed in the FTSE100 index. Research shows that 99% of executives working in index FTSE100 companies at the Senior Management level and above has a ratio of variable to fixed remuneration in excess of 1:1, whereas that is not the case in our Company, where such levels is possible for very limited number of positions (currently only Chairman and CEO). The Remuneration Policy of the Company applies to the remuneration of all members of the Board of Directors. It is designed to reflect fairness in the context of pay conditions to all employees and align Board remuneration with the interests of our shareholders. The objective of the Remuneration Policy is therefore to meet market practice, to serve the Company’s strategic vision, its shareholders, clients and wider stakeholders. The revised Remuneration Policy was approved by the shareholders of the Company at the 2021 Annual General Shareholders’ Meeting. Long-term incentive scheme The Board of Directors, following a recommendation of the Company’s Remuneration and Nomination Committee, decided on the 09.06.2020 the enactment of a new long term incentive scheme for the years 2020 to 2022 with distribution of part of the Company’s net profits to Executive Members of the Board of Directors and other Key Management Personnel of the Company. The program’s duration is 3 years, for the period 2020-2022. The targets relate to a. the profitability (adjusted Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) for the 3-year period mentioned above and b. the total shareholders return measured by increase of Company’s share price in the Athens Exchange. Finally, the scheme defines that the maximum amount to be distributed to up to 35 beneficiaries is up to 0.6% of achieved EBITDA target based on cumulative yearly plans for period 2020 – 2022. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 59 This remuneration framework has sought to create long-term corporate value by confirming that the incentive structure strikes a balance between the long-term and short-term performance of Board members as well as promoting meritocracy, so that the Company attracts talents which will effectively manage it. The long-term incentive scheme for years 2020-2022 will be submitted to the Company’s Remuneration & Nomination Committee for the evaluation of the targets’ achievement, in accordance with the scheme’s terms as set out in the Company’s approved Remuneration Policy, as well as to the forthcoming Annual General Shareholders’ Meeting for approval. BOARD MEMBERS’ REMUNERATION REPORT The Company, in compliance with its legal obligations, will submit the Remuneration Report of 2022 for discussion at the Annual General Shareholders’ Meeting of 2023, ensuring that the Report is prepared and published in accordance with the requirements of the applicable law. In particular, the Remuneration and Nomination Committee prepares a clear and comprehensible remuneration report, which contains a comprehensive overview of remuneration for the last financial year, with the minimum content specified by Law 4548/2018. The remuneration report for the last financial year is submitted to the Annual General Shareholders’ Meeting for discussion as a separate item on the agenda. The shareholders' vote on the remuneration report is advisory. The Board of Directors should explain in the next remuneration report how the above result of the vote at the Annual General Shareholders’ Meeting was taken into account. D.2: REMUNERATION & NOMINATION COMMITTEE The Remuneration and Nomination Committee is governed by its Charter which was approved by the Board of Directors on 16/07/2021. The Charter guides the Committee in terms of its objective and its responsibilities assigned by the Board of Directors. The Remuneration and Nomination Committee comprises three non-executive Board Members, in majority Independent as in the following table: Name Position at the AC Type Prof. Dr Nicole Conrad-Forker Chair since 17.06.2021 and reappointed on 09.06.2022 Independent Non-Executive Board Member Dr Igor Rusek Member since 09.06.2022 Non-Executive Board Member Theodore Panagos Member since 09.06.2022 Independent Non-Executive Board Member Pavel Saroch Member until 09.06.2022 Non-Executive Board Member Nikolaos Iatrou Member until 09.06.2022 Independent Non-Executive Board Member until 09.06.2022 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 60 Within the reference period (01.01.-31.12.2022) none of the Committee members’ term of office exceeded nine (9) years in total. During 2022, the Remuneration and Nomination Committee addressed issues and submitted recommendations to the Board for approval in respect of both areas of remit of the combined committee. The main issues addressed are summarized below: • Review of the OPAP Compensation and Benefits Policy • Assessment of collective and individual suitability of Board • Review of the information included in the final draft of the annual remuneration report and submission of recommendation to the Board of Directors prior to the submission of the report to the General Meeting for advisory vote • Review of succession plan for Board members and chief officers to maintain an appropriate balance of skills, experience, expertise and diversity in the management of the Company, evaluation of candidate Board Members and submission of recommendation to the Board in relation to the nomination of Board members for election by the Annual General Shareholders’ Meeting held. E: Relations with Shareholders E.1: RELATIONS WITH SHAREHOLDERS The Board is committed so that the Company effectively communicates with its Shareholders. The Executive Directors and executives from the Investor Relations team meet regularly with shareholders, institutional investors and financial analysts to discuss matters relating to the Company’s business strategy and current performance. The Chairman, the CEO and the CFO receive by the Investor Relations Team monthly and annual updates on share price developments, major buyers and sellers of shares, peer group analysis, investors’ views and analysts’ reports on the industry and on the Company specifically. Feedback on presentations and roadshow meetings with institutional investors is presented to the Executive Members of the BoD and any other specifically interested Non-Executive members. The investor relations program includes: • Formal presentations of full year and half year results and quarterly interim management statements • Regular meetings between institutional investors and senior management to ensure that the investor community receives a balanced and complete view of OPAP’s performance, the issues faced by OPAP and any issues of concern to the investors • Response to enquiries from institutional and from retail Shareholders through the Company’s investor relations team and • A section dedicated to Shareholders on the Company’s website OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 61 In 2022 Investor Relations Team introduced a new and innovative for the capital markets concept of quarterly earnings’ video presentation, widely welcomed by the investment community and publicly available in the Company’s website prior to the regular conference call, maximizing the quality of the conference call’s question & answer section. Additionally, the Investor Relations Policy which was published in 2021 continues to constitute an integral part of the updated Internal Rules and Regulations of the Company. Overall, the Investor Relations Team’s main responsibilities are to: • Develop strategies & implement Investor Relation initiatives to target & attract investors and increase shareholders value • Enable effective two-way communication between OPAP and financial community; OPAP’s Investor Relations Team promotes dialogue with its shareholders and investors as an essential aspect of corporate value. The objective is to help various stakeholders of the capital markets to be able to form timely a true and fair picture of the Company’s financial position and to support fair valuation of the Company • Communicate Market Feedback to Management • Perform its duties to the highest investor relations standards, so as to enhance investors’ and analysts’ understanding and stimulate interest in the Company aiming to build investor loyalty. In 2022, following the ease of covid- related restrictions, investors’ meetings were conducted both virtually and in-person, with the Company participating in nine international investor events and roadshows related to either Gaming, Emerging Markets and/or Greece - South Eastern Europe. The frequency, duration and location of roadshow activity as well as the level of participation is determined at the beginning of the year. The Investor Relation Team is fully dedicated to communicate with the investors community, while the senior management including Chairman, CEO, CFO and key directors, are available to discuss governance and strategy with major Shareholders and Institutional Investors should such a dialogue is needed. E.2: THE ANNUAL GENERAL MEETING The AGM provides all Shareholders with an opportunity to vote on the resolutions put to them. The AGM is used as the main opportunity for the members of the Board of Directors to meet directly with private investors. It is attended by the members of the Board of Directors and all Shareholders present are given the opportunity to ask questions to the Chairman, the Chairs of Board Committees and the Board. The Company makes available to the public all information related to the AGM in a way as to ensure easy and equal access for all. More specifically, the Company posts timely on its website the invitation of the General Shareholders’ Meeting as well as the information and documentation required by the legal framework and finally, informs about the minority rights of the shareholders. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 62 The Company's Articles of Association explicitly define the competences of the General Meeting and the way it is convened, as well as the issues of standard and exceptional quorum and majority. On voting, each share has one vote. The results of the poll are released to the Athens Exchange and published on the Company’s website immediately after the AGM. During the last years, a quorum of more than 70% was achieved. F. Senior Management Odysseas Christoforou Deputy CEO Odysseas Christoforou holds a Degree in Political Science from the Panteion University and a MSc in Public Relations & Communication from the Ulster University, Belfast. He began his career at accounting firm Arthur Andersen and later became Marketing General Manager at Ernst & Young and worked as Communication General Manager at Emporiki Bank and the Bank of Cyprus. From 2008 to 2014 he served as General Manager at the Bank of Greece where he was primarily in charge of the supervision and coordination of administrative units for providing liquidity to Greek banks via the Eurosystem as well as communication with relevant institutions abroad. He has been at OPAP since 2014, initially holding the position of Chief Corporate Communications Officer. Since 1 July 2019, Odysseas Christoforou is OPAP Deputy CEO. As part of his duties, he covers the areas of Corporate & Commercial Communication, Compliance and Regulatory Affairs, Corporate Affairs, Media Relations, Sponsorships and Corporate Social Responsibility. Nancy Verra Chief Legal, Regulatory and Compliance Officer Anastasia (Nancy) Verra is the Chief Legal, Regulatory and Compliance Officer of OPAP Group, which she joined in 2015. She holds a BA from the Law School of the National and Kapodistrian University of Athens, an LL.M. in International Economic Law from the University of Warwick, as well as a PhD in Law from the University of London, having been granted a doctoral scholarship. She has been a member of the Athens Bar Association since 2000 and is qualified to practice before the Supreme Court and the Council of State. Nancy boasts more than 20 years of professional experience in senior positions requiring increased level of responsibility, with companies listed in the ATHEX (OTE-COSMOTE-PIRAEUS BANK), having successfully handled top litigation, legal and regulatory cases. She is chairwoman of Neurosoft S.A. Board of Directors and member of the Board of Directors of Horse Races Single Member S.A. She has also served as a BoD member in ERGOSE S.A. and the National Regulatory Authority for Railways, as well as a Legal Counsel for the ‘Green Fund’ and the Minister of Communications of Bulgaria. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 63 James Curwen Chief Online Officer James joined the OPAP Team in April 2021 to assume the position of Chief Online Officer. Before joining, throughout his 30 years in the industry both in online and land-based, he held a number of executive positions in prestigious companies in the UK and Overseas including William Hill, Superbet, Ladbrokes and The Ritz Casino. Being widely recognized as an industry influencer, awarded by EGR and Gaming Intelligence, he brings a wealth of online experience into the company. Argiris Diamantis Chief Technology Officer Argiris joined OPAP family in June 2020 and he was appointed as Chief Technology Officer on the 1st of July 2020. Prior to this role, Argyris was the CTO of Intracom Holdings, responsible for driving Technology Strategy and the representation of the company in Technology and Innovation Forums. Argiris has worked for many years in Technology, with leading positions in Gaming and Telecommunications. He previously was the Group CTO of Intralot, and the CIO of Vodafone and Hellas On Line. He started his professional career as a Software Developer working for Ericsson development centers in Germany, Spain and Ireland. He holds a Master of Science Degree (MSc.) in Electrical Engineering and a Bachelor of Science Degree (BSc.) in Electrical and Computer Engineering from Northeastern University in Boston, USA, as well as an Executive MBA Degree from Athens University of Economics and Business. Mary Nikolaidou Acting Chief People Officer Mary Nikolaidou carries over 40 years of valuable experience in Human Resources under her role as strategic HR professional with extensive knowledge in multiple business sectors. Characterized by her strong leadership and management skills aligning HR vision and strategy to support business goals. Recognized as team builder in diverse work forces and developer of trusted partnerships with key executives and management leaders to drive HR initiatives and achieve business results. Proven strong negotiation skills with Unions and working committees and ability to achieve organization transformation in diverse working environments. It is characteristic that she undertook the successful management of human resources in large organizations during their transformation from public to private sector. Prior to joining OPAP SA in 2013, Mary had assumed relevant roles in: • EMPORIKI BANK – CREDIT AGRICOLE GROUP 2009 – 2013 Emporiki Bank S.A. Group Human Resources Head – 4,850 employees OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 64 • GROUPAMA PHOENIX – 2007 – 2009 Human Resources Head – 655 employees / Member of the Executive Committee • PHOENIX – METROLIFE EMPORIKI S.A. 2004 -2007 Human Resources Head Greece – 655 employees / Member of the Company’s Board • AMERICAN EXPRESS BANK Ltd 1995-2003 Human Resources Head Greece – 360 employees / AMEX European Employee Forum • ATHENS LABORATORY OF BUSINESS ADMINISTRATION (ALBA) - 1994 Project Manager • CONTROL DATA GREECE INC (Computer Hardware / Software & IT Education) 1983-1991 Human Resources & Administration Manager Greece – 485 employees • SCHLUMBERGER TECHNICAL SERVICES IN (Oil Field) 1977 - 1982 Personnel Manager for Law 89 Offices – 275 employees • TITAN CEMENT S.A. – 1972 - 1976 Personnel Assistant Matthaios Matthaiou Chief Operations Officer Matthaios Matthaiou joined OPAP in 2015, as Network Development Director. Since then, he has held various leadership roles in the company’s sales operations. In 2021, he was appointed Chief Operations Officer. He has worked in Greece and abroad, holding senior roles, locally and internationally, in Shell, the Boston Consulting Group and Hellenic Petroleum. His professional background covers sales, operations and strategy. During his career, he has led cross-functional teams, delivering impactful transformational projects. He is a graduate of the Athens University of Economics & Business and holds an MBA from the Warwick Business School (UK). Fotis Zisimopoulos Chief Product Officer Fotis Zisimopoulos has been with OPAP since June 2014 and currently serves as Chief Product Officer. He is also a member of the Board of Directors of Hellenic Lotteries and OPAP CYPRUS LTD. He began his career in 2001 and has held senior management positions in the fields of consumer and product marketing, in Greek and multinational companies, such as Sara Lee and Forthnet. Over the years, he has led the development and management of new products and services, as well as new markets, guided by consumer trends. He is a graduate of Marketing and Business Research from the Athens University of Economics and Business and holds an MBA from the same university. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 65 Yiannis Rokkas Chief Marketing Officer Yannis Rokkas is the Chief Marketing Officer of OPAP Group. He joined OPAP in 2019, as Marketing, Media and Sponsorships Director with a view to developing the commercial communication strategy, as well as to strengthening OPAP brand name and products. He boasts more than 20 years of professional experience in Greece and abroad in senior positions requiring increased level of responsibility. Before joining OPAP, he was the Deputy General Manager of Marketing, Customer Experience and Loyalty of Piraeus Bank Group, assuming overall responsibility for marketing programs, communication, and customer experience. He also served as Director of Deposits and Investments Division, as Director of Consumer Loans Division for Piraeus Bank Group and as Board Member of the Center of Sustainable Entrepreneurship “Excelixi S.A.’’. He started his professional career at Young and Rubicam in New York and he served, inter alia, as a General Manager in Solid Communications. Yannis Rokkas holds a B.Sc. in International Business and Marketing from Marquette University (USA) and a M.A in Global Marketing Communication and Advertising from Emerson College, Boston. Ilias Katsaros Chief Retail Officer (as of 01/03/2022) Ilias Katsaros became a member of OPAP family in 2022, undertaking the development and operation of OPAP and PLAY Stores, as well as the partners’ network of HELLENIC LOTTERIES S.A.. Ilias is a leader, with a great empathy and focus on people. He has a professional experience of more than 20 years, in various sectors, in the USA, in Greece, and in Germany, and he has been employed in companies of international scope, such as Adidas, Diageo, Korres, and has been in charge of demanding projects of strategic and digital transformation, generating significant commercial results. He focuses on the promotion of changes, emphasizing on a better customer experience, on the achievement of results, and the maximization of revenues in retail networks, as well as on the development of highly performing groups. He graduated the National Technical University of Athens and acquired an MBA by the California State University of Los Angeles. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 66 In accordance with article 18, par. 3 of L. 4706/2020, there follows a table with the number of shares held also by the Senior Management members of the Company. Senior Management Role Number of Shares Odysseas Christoforou Deputy CEO 6,000 Nancy Verra Chief Legal, Regulatory and Compliance Officer Ø James Curwen Chief Online Officer Ø Argiris Diamantis Chief Technology Officer Ø Mary Nikolaidou Acting Chief People Officer Ø Matthaios Matthaiou Chief Operations Officer 2,804 Fotis Zisimopoulos Chief Product Officer Ø Yiannis Rokkas Chief Marketing Officer 550 Ilias Katsaros Chief Retail Officer 4,000 G: Explanation on Deviations from Special Practices of the Code The Board recognizes that the objective of the Code is to facilitate management’s delivery of business success in a transparent and responsible manner. The Code does not impose a rigid set of rules and with its ‘Comply or Explain’ approach provides the possibility for the Company to carefully assess its specific circumstances and select the suitable rules with transparency and with the aim of effective and high-quality good governance. The Board provides an explanation for the following areas of the Codes Special Practices (‘Comply or Explain’ principle): • The Remuneration and Nomination Committee, which is responsible for the individual evaluation of the executive board members, consists of non-executive members in majority independent. When the evaluation results of the performance of the executive members are discussed at Board level, the non-executive members of the Board of Directors convene together with the executive members, however, at these meetings, the executive members abstain from discussion and voting. This deviation is assessed as low risk, taking into account that any risk is mitigated by the fact that the evaluation process of the performance and the suitability of the BoD members is specific and transparent and is primarily performed by the Remuneration and Nomination Committee. (Clause 1.13. of the Corporate Governance Code). • According to clause 8.2 of Law 4706/2020, in case the Board of Directors appoints an executive Chairman, it obligatorily appoints a Vice-Chairman from the non-executive members. Although an executive Chairman is appointed, the Company fully complies with the Law as the Board of OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 67 Directors has appointed a non-executive Vice-Chairman. Despite the fact that the Company has not appointed one of the independent non-executive members as Vice-Chairman, nor a Senior Independent Director, the Board composition is deemed satisfactory, commensurate to the Company business and needs. The non-executive Vice-Chairman has been appointed based on his individual professional and personal qualities, his profound experience and knowledge of the market in which the Company operates, he is able to constructively challenge the executive members propositions and provide strong safeguards of independence of mind and judgement. (Clause 2.2.21 of the Corporate Governance Code) • Executive members’ of the Board of Directors contracts do not include provisions that the Board may require a refund of all, or part of the bonus awarded, on the basis of breach of contractual terms or incorrect financial statements of previous years or incorrect financial data used for the calculation of this bonus. Instead, the Company has established and applies targeted control mechanisms to ensure integrity of financial information. Financial Statements (consolidated and separate) of the OPAP Group are being prepared in accordance with the applicable International Financial Reporting Standards and provide a true and fair view of the assets and liabilities, the equity and the results of the Group and the Company, as per provisions of applicable framework, the Company’s Articles of Association and decisions of the Hellenic Capital Market Commission. The financial statements process controls, implemented by the Company, are regularly audited by the Internal Audit team and external auditors. Bonuses are calculated based on audited financial statements and final award and payment are subject to the approval of General Shareholders’s Meeting upon recommendation by the Remuneration and Nomination Committee. (Clause 2.4.14 of the Corporate Governance Code) H: Non-financial report – Sustainable development Sustainability is deeply embedded in everything that we do at OPAP Group. While staying laser-focused on our business priorities, we acknowledge that sustainability is interwoven in our operation and the way we do business. Considering our scale, size and reach we are aware of the measurable and positive impact which we are capable of making in the community. Our Sustainability (formerly Corporate Responsibility) Agenda is driven by the CEO, while at organizational level the Deputy CEO is responsible for identifying the strategic risks, setting standards and targets and reviewing the Company’s sustainability performance. At operational level, the Corporate Responsibility team promotes the dialogue around sustainability themes and respective policies and - in collaboration with different teams across the organization - designs and supports the implementation of specific initiatives. Specifically, the Corporate Responsibility team collaborates closely with the Quality Management Systems Team, in order to ensure that policies for OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 68 Quality, Compliance, Environment and Energy, and Health and Safety are aligned with International Management System standards (ISO37301, ISO19600, ISO14001, ISO50001 and ISO45001). Our key objective is to seek an exponentially greater impact in the community, engaging all our employees and partnering with various stakeholders, fostering collective action. Starting by setting the tone with our employees, we then work towards empowering all entities of our value chain in our sustainability efforts. In this context, we conduct a systematic and regular dialogue with stakeholders, who we define as anyone who influences or is influenced by our operations, throughout our value chain and across our operations. Through our engagement with our stakeholders, we utilize a range of interaction methods to understand their main issues of interest and to respond to their needs and expectations, in an effort to improve ourselves, both in the short and long term. To learn more about our Sustainability management, system of internal controls and stakeholder engagement please visit our 2022 Annual Integrated Report which will become available later this year. Furthermore, our corporate governance practices have been developed in line with the Hellenic Corporate Governance Code issued in June 2021 by the Hellenic Council of Corporate Governance (ESED). More information is provided in the Corporate Governance Statement. Our Business Our games portfolio is divided into fixed odds betting games and mutual betting games: • in fixed odds betting games, the final amount of winnings is fixed and communicated at the time of betting. • in mutual betting games, all bets of a particular type are collected and then the yield is calculated by distributing the concentrated bets to the winners. To deliver our products and services, we utilize a series of resources from our suppliers (materials, equipment, services, and know-how) aligned with our Procurement Policy which reinforce our own operations. Our suppliers enable us to effectively carry out the following activities and continue to grow our business. All our products and services are available throughout our retail network, which includes OPAP Stores (where we provide the necessary equipment, IT systems and services, such as sharing of company information, training, etc.), PLAY Gaming Halls (for VLTs), street vendors and other various retailers (for selling SCRATCH tickets and passive lotteries), , as well as the horseracing venue in Markopoulo. For information regarding the Taxonomy eligibility of our products and services please visit the “EU Taxonomy regulation” section of the Annual Financial Report. Players can also place their bets through our online platforms for sports betting games, Virtuals, online and casino games, and www.tzoker.gr for TZOKER, our numeric betting game. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 69 Our Business Model Our business model is the blueprint of what we do. It sets the foundation for our actions, our decisions and our operations. It also outlines how we create value for our stakeholders, achieve our business goals, foster employee engagement, maintain strong working relationships with our retail network and fulfil our corporate responsibility mandate centered on sustainable growth for the Company. Our vision is to deliver the best‐in‐class entertainment in safe and responsible way, generate sustainable value to all stakeholders and give back to society. Our Fast Forward Strategy drives us forward and sets a clear direction for ensuring OPAP’s long‐term success side by side with our Sustainability Strategy which has established a set of four focus areas that will help us generate, capture and sustain value for the company and our stakeholders, both in the short and in the long term. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 70 Our Sustainability Strategy We have built our Sustainability Strategy around the four focus areas outlined below, with the aim to operate in a responsible manner by embedding responsibility into our business while always improving our competitiveness and creating value for all our stakeholders. • Protecting our Players Our objective We understand that the responsible management of our business is imperative, due to the possible risks and consequences that might arise from excessive participation in games of chance. Therefore, we seek to establish an environment, in which a fair, reliable and safe gaming experience is provided to those who choose to use the products and services offered by our Company, for their own entertainment. Our approach Through our Code of Conduct and the Commercial Communication Policy included in the Group’s Responsible Gaming Policy, we ensure that all our advertisements and commercial communication announcements a) are legal, fair and truthful, b) comply with the relevant regulatory framework and c) respect the principles of Responsible Gaming. All commercial communication activities are OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 71 approved by the competent regulatory body (Hellenic Gaming Commission and the three-member Committee of art. 28, para. 3A of L. 4002/2011), are fair to participants, do not cause disrepute, respect participants’ personal data and conform to all current regulatory framework and the corporate policies in force. Moreover, in order to ensure that our communications are responsible, we fully comply with the Hellenic Ministry of Finance Decision no. 79292 ΕΞ 2020 “Establishment of Gaming Regulation on Commercial Gaming Communication” (GG B/5.8.2020), as currently in force. The decision defines the principles for gaming operators’ with respect to promotion, marketing and advertising activities as well as the various aspects of commercial communications. We have established an internal and external mechanism for advice on ethical and responsible player behavior, as well as the reporting of illegal gaming sites, which endanger the industry’s reputation and players’ wellbeing. Our Responsible Gaming Framework which reflects the one adopted by the World Lottery Association, consists of activities that aim to ensure responsible and sustainable growth, protect the general public and especially vulnerable social groups from excessive gaming, as well as prevent minors from any participation in games of chance. Recognizing our Responsible Gaming principles, two international associations have rewarded us with the highest distinctions globally for our commitment to protecting and ensuring a safe environment for our players. In particular, for the second time consecutively, OPAP has been awarded the “Level 4” Responsible Gaming Certificate from the World Lottery Association (WLA), for the consistent application of responsible gaming principles throughout its activities. This certification is the highest distinction of its kind globally. In addition, the European State Lotteries and Toto Association / European Lotteries (EL) OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 72 awarded us with the Statement of Alignment with the EL Responsible Gaming Standards for our true dedication to consistently instilling Responsible Gaming principles within our strategy and operation. OPAP was awarded with these two top-level certifications, which are valid until 2024, after a thorough evaluation process by a team of independent experts. These distinctions highlight OPAP's practical commitment to the principles of Responsible Gaming, recognizing our integrated strategy in this area, which focuses on creating a safe environment for our customers, protecting minors, implementing best practices and education of the public, amongst others. In 2022, Hellenic Lotteries SA was also awarded with the “Level 4” Responsible Gaming Certificate from the World Lottery Association (WLA) which is valid until 2025. To ensure that we continue to uphold the highest standards, we inform, educate and engage with our employees about Responsible Gaming, and monitor their compliance with the respective principles and rules defined by our policies and practices. The credibility of our draw processes is the cornerstone of our reliability and the single most important driver of trust in our relationship with our players. We therefore place a proportionate importance on these processes in order to ensure that our draw processes are perceived as being indisputably credible and objective by all our customers. OPAP is in line with the Draw Regulation (Joint Ministerial Decision no. 7905/27.02.2009 GG B’ 430/10.03.2009), which describes in detail the procedures that must be followed for the draws, as well as all the necessary corrective actions to apply in case of malfunction. The issue of personal data privacy is particularly important for serving the users of our products and services. For this reason, we have in place a Data Protection Office and a Data Protection Officer, to ensure compliance with the applicable framework. We have adopted several new policies and procedures and revised all our privacy notices to ensure full transparency of our processing activities. We have implemented the appropriate technical and organizational measures. In addition, we conduct risk assessments and audits, on a regular basis, to identify and prioritize information security vulnerabilities and define appropriate risk treatment plans. Finally, as part of our actions to improve our customer service, we continuously monitor our customer related performance through appropriate surveys. • Enhancing our Network Our objective Recognizing that we operate in a highly challenging economic environment, we dedicate our efforts to the further development and digitalization of our retail network. Our customers are top priority for us. Therefore, we aim to provide our partners the necessary resources to constantly improve network operations at all levels, in order to help them unlock the full potential of their stores and provide the best experience to customers. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 73 Our approach Our distribution network, through which we offer our games and services, is the largest exclusive commercial network in Greece. In total, 3,401 OPAP Stores, 363 PLAY Stores, 12,037 independent Points of Sale and street vendors that distribute SCRATCH tickets and Passive Lotteries comprise OPAP’s network in Greece. In Cyprus, 202 OPAP Stores in total offer our games. As part of our commitment to continuously invest in and develop our network, we monitor each partner’s performance on a daily basis, while suggesting actions and initiatives to enhance our offerings. In the meantime, we provide incentives for the achievement of our common goals through reward and recognition programs. Additionally, our dedicated team of Area Managers is responsible for keeping close proximity to and guiding our partners, aiming to provide comprehensive support and to help maximize our network performance. Following our efforts to establish a direct line of communication, we have created and are constantly evolving the “opapnet”, “opapnet|play” and “opapnet|laheia” B2B portals for our partners in OPAP Stores, PLAY Stores and the Hellenic Lotteries Indirect Points of Sale, respectively. Aiming to inform our network in a timely manner, we support their operations through a wide range of tools, such as the “opapnet” mobile application (app) which offers direct and remote access (via smartphone or tablet) to the most recent news and updates of our network. Our partners are obliged to comply with the applicable legal and regulatory framework, including the responsible gaming framework, ensuring that all games of chance are offered in a responsible manner. We closely monitor the responsible operation of our partners (in OPAP and PLAY Stores as well as in the Hellenic Lotteries Points of Sale) and make sure that they comply with the law as well as OPAP’s policies and rules. Non-compliance with the principles and rules of responsible operation constitutes a reason to impose sanctions (ranging from warning letter to termination of agency agreements depending on the severity of the violation). Furthermore, we provide our partners with various training sessions created and coordinated by our Retail Training Team via the classroom, live (on the job), and our e-learning platform “OPAP Retail Academy”. If deemed necessary, our stores and points of sale employees are invited to participate in training programs with respect to gaming rules, responsible gaming, and standard operational procedures and policies. This training ensures that our network partners have the resources to properly manage, provide information to customers, and identify problematic behavior of players, taking the necessary steps to refer the appropriate treatment providers. In this respect we have also established the role of the “Responsible Gaming Ambassador”. Through in- person meetings, the RG Ambassador educates the OPAP agents and their employees on RG issues, especially player protection and how they recognize a player experiencing gambling related harm. The RG Ambassador role aims to inform partners on signs of problem gaming so they can intervene promptly, without replacing the role of an expert. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 74 In 2022, we were able to reach a number of significant milestones including the development of a responsible gaming tool based on an AI Algorithm and an RG email detection robot, the launch of a 360 Responsible Gaming awareness campaign, and the utilization of affiliate marketing to promote Responsible Gaming principles, aiming to enhance the awareness and education on responsible gaming and protection of consumers from excessive playing behavior. Furthermore, based on the relevant urban planning and regulatory provisions, our property and engineering team, responsible for supervising the design and construction of the network's stores, ensured that all new stores from January 2022 will be designed to provide accessibility for people with mobility difficulties. Last but not least, one of the most significant initiatives of OPAP, is the communication of the dedicated Helpline 1114 by KETHEA-ALFA, established in cooperation with OPAP in 2011 for players who consider themselves addicted or at risk of becoming addicted to gaming (as well as their family members or friends). OPAP CYPRUS LTD, in association with the Ministry of Health, has also established a national phone line (1444) to support people dealing with addiction to gaming. • Developing our People Our objective Our People are at the heart of everything we do, bringing value and contributing to the success of our long-term strategic objectives, which lead us towards our Vision. We are committed to create a unique experience for all OPAP People; one that reflects our high performing culture and our values. We focus on being a great place to work by placing our People at the center of our strategy. Our approach Aiming to foster OPAP Group's rapid development, business efficiency and customer service excellence, the Group welcomes talents and recruits outstanding professionals who will become part of our team. We appreciate our People’s dedication to OPAP and we systematically work to ensure that all employees are able to achieve a healthy work-life balance. As part of our commitment, we have launched the supportive OPAP Employee Assistance Program for our People and family members in collaboration with a specialized and experienced provider. At the same time, by investing in the training and development of all employees through constant training courses, we safeguard the further developing and strengthening of talent to guarantee the achievement of our strategic objectives. Since its establishment in 2015, Opapacademy has acted as the hub through which we design and distribute OPAP’s training programs and employee development activities. Health and safety of our People is of the outmost importance, as it is a non-negotiable prerequisite for the successful operation of our business. In this context, we have developed an Occupational Health and Safety Policy demonstrating our commitment in shaping a preventive culture regarding health and safety OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 75 at work. The Policy has been communicated to all employees and outlines our activities to continuously improve our workplace. Additionally, we implement a Health and Safety Management System certified according to ISO45001 standard for Occupational Health and Safety. We have integrated fairness within our core values, as we believe it represents a fundamental requirement in establishing a positive work environment which facilitates a performance driven culture. Consequently, in our Code of Conduct we articulate our policy against discrimination based on race, gender, marital status, political beliefs, religion, origin, sexual orientation, age and disabilities, regarding work issues, such as recruitment and selection, salaries, promotions and career development. Further we established a new Diversity Policy which is annexed to the Fit and Proper Policy. We strictly follow the internationally recognized human rights, as described within the UN Universal Declaration of Human Rights and the ten Principles of the UN Global Compact, while at the same time all our employees are covered by the Greek National Collective Bargaining Agreement. It should be noted that our Code of Conduct also addresses any issues related to fraud, bribery and corruption which in conjunction with our Compliance Management System (ISO19600) ensure the successful mitigation of such risks in our company. Our Corporate Governance Statement provides more information regarding the policies and procedures associated with these matters as well as a description of our Internal Control System. In the beginning of 2022, a new collective labor agreement (CLA) was signed for one year for the period from 01.01.2022 to 31.12.2022. The new CLA covers all employees of OPAP SA (excluding lawyers, directors, freelance workers paid via invoice, trainees, etc.). The main provisions of the agreement include basic salary, allowances, annual leave, etc. Respectively, the additional cost for 2022 amounted to € 251,000. Furthermore, we believe that compensation and benefits are the core tools for retaining and developing our people. As such, during 2022, we offered two new benefit packages in alignment with market and social trends. • Provided employees a significant monthly meals allowance, based on their monthly salary (lower salary-higher allowance). • Offered a limited one-time use fuel card to support our people with the rise of global energy/fuel prices. We have also updated our Compensation & Benefits Policy, adding new important elements such as a bonus scheme for everyone, depending on level and performance. At the same time we are redesigning our core benefits policies (cars, mobiles, parking etc.) in alignment with our new banding policy and current trends (e.g. electric cars). Last but not least, for 2023, we have already announced our intention to offer a pension plan to all our Executives (Manager level+). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 76 • Supporting Society and Protecting the Environment Our objective We believe that our role in society transcends our business activities and we have the responsibility to support social growth and prosperity. Thus, we are committed to support and benefit different stakeholders and underprivileged social groups, facilitate our supply chain’s growth and responsible operation, as well as safeguard the environment and reduce our potential impact on climate change and resource use. Our approach Within the context of OPAP’s integrated societal support strategy, we focus on large-scale initiatives in three main areas, namely Health, Sports and Employment. At the same time, we do not neglect to support sensitive social groups and communities, responding to ad hoc needs of our society as well as responding to emergency situations (e.g., wildfires, earthquakes etc.). In the area of Health, we work towards upgrading the medical infrastructure for children. In 2022, we completed the renovation work in the two largest public hospitals for children in Greece, “Aghia Sophia” and “Panagioti and Aglaias Kyriakou”. The project represents a significant investment in public health, in which 30 renovation works were carried out across an area of 14,960 sq. meters in total, including 23 nursing units of international standards with a capacity of 564 beds. Driven by our objective to address the key social issue of unemployment and enhance our overall positive impact on the Greek economy, we designed and implemented the “OPAP Forward” program. This program offers a unique opportunity to fast growing Small Medium Businesses by offering them specialized services (e.g., strategic guidance, training, access to investors etc.) to help them unleash their full potential, generate new jobs and contribute to their further development. OPAP collaborates with the global non-profit organization Endeavor, to ensure the program’s effective implementation. Endeavor supports the most promising companies worldwide helping them capitalize on their potential through a unique network of seasoned business leaders. With Endeavor’s support, the selected companies will be able to grow faster, create jobs and contribute to the growth of the economy. Since the launch of the program, 69 companies have participated. The “OPAP Forward” curriculum has helped the participating companies create 2,260 new direct working positions and support 20,249 new indirect job positions through the establishment of new collaborations, while at the same time increase their total turnover by € 242 million. Having set as a priority to build solid foundations and create value for future generations, we continued the “Sports Academies” program for the fourth year, to instil the values of fair play and teamwork in children. Overall, 178 amateur football and basketball academies participate in the initiative. We fully acknowledge that our suppliers’ activities and actions can influence our own responsible operation and therefore we strive to build a sustainable supply chain. We interact with our suppliers in a transparent and objective manner and offer equal opportunities to all. We utilize our outreach and OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 77 size to support the local economy in the areas we operate, by collaborating with local suppliers and purchasing locally produced products and supplies. We are conscious of global environmental issues and work systematically towards minimizing our potential negative impact throughout our operations, by complying with current environmental legislation and relevant provisions, as well as conducting all necessary environmental impact assessments. As part of our certified Environmental Management System according to ISO14001:2015, we apply appropriate practices to manage our operations in a way that prevents environmental pollution, regarding both our own operations, as well as our main suppliers’ operations, through specific provisions in RFPs, awards and contracts. Furthermore, as of November 2018, we implement an Energy Management System certified according to ISO50001, that enables us to effectively monitor our climate change impact (energy consumption from electricity, heating and fuel oil), complying with the legal obligations on energy management set out by law no. 4342/2015. Furthermore, the company has expanded its loan policy to finance the upgrade of our stores energy infrastructure. The funding includes several energy saving initiatives such as the replacement of old lamps and lighting with new high efficiency LED technology, grouping of lighting circuits, and installation of motion sensors, replacement of air conditioners with new inverter technology and installation of photovoltaic panels up to 3.0 kWp. These improvements aims to reduce the electricity consumption, electricity costs and energy and environmental footprint of our network. Materiality Analysis: Identifying the Most Material Issues for our Sustainable Operation OPAP is continuously informed about the global economic, environmental and social issues that are surrounding the business community and strives to ensure that these global issues are taken into consideration during the development of our Sustainability Strategy. As the largest gaming Company in Greece, we acknowledge the sheer size of our business operations and the subsequent impacts it can incur on the economy, the environment and society. Therefore, we identify the material issues that are most material for our sustainable development and our stakeholders. In early 2021, we identified and prioritized these issues through a four-phase methodology, as follows: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 78 Phase 1: Sustainability Context Potential material issues were identified by evaluating OPAP’s operation and strategy, the guidelines of international and domestic sustainability frameworks, future trends and current global industrial practices. Through this process, we identified the following 19 material issues: 1. Societal Support 2. Responsible Gaming 3. Network Support 4. Customer Satisfaction 5. Human Rights and Diversity 6. Employee Engagement and Development 7. Employee Health, Safety and Wellbeing 8. Technology Innovation 9. Cyber and Data Security 10. Draw Credibility 11. Responsible Procurement 12. Energy Management and Carbon Emissions 13. Waste and Water Management 14. Corporate Governance 15. Business Ethics and Compliance 16. Risk Management and Business Continuity 17. Anti-Money Laundering 18. Illegal Gambling 19. Financial Performance Phase 2: Materiality Analysis by OPAP Management OPAP’s Senior Management prioritized the issues by taking into consideration their impact on OPAP’s operations, as well as the impact that OPAP’s actions on these issues have in the overall economy, society and environment. Phase 3: Stakeholder Engagement To assess stakeholders’ expectations and interests, we created an online questionnaire and invited all stakeholder groups to participate. Phase 4: Prioritization By analyzing the outcomes of each phase, we identified the issues that are prioritized as most significant for both OPAP’s Senior Management and our stakeholders. It should be noted that we acknowledge all 19 issues as important for our sustainable development. In early 2023, we began the process of conducting an updated materiality analysis taking into consideration the double materiality concept. More information on our new methodology and the most relevant material issues for OPAP’s business and operations will be presented in this year’s Annual Integrated Report which will be published in Spring of 2023. More details on the risks associated with OPAP's operations are presented in the “Main risks and uncertainties" section of the Annual Financial Report. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 79 Our Data Collection Process The process of corporate reporting is an integral part of the Internal Control System (ICS) of the Group which is described in detail in the Corporate Governance Statement. More specifically, the data collection process for the reporting of non-financial information follows the basic principles of the corporate reporting process featuring standard controls (good practices) such as the identification of roles/responsibilities, information systems, management review and approvals, etc. Furthermore, in the context of increasing the reliability of its non-financial reporting, OPAP subjects selected data within the NFR to external independent assurance. Our data collection process serves to provide management and all of our stakeholders with the non- financial information (both qualitative and qualitative), including any significant impacts we may have on the society (and environment) which may be pertinent to our business and governance effectiveness. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 80 Our results in 2022 A representative sample of key results for 2022 is displayed below, which are part of the overall Sustainability results presented within the Integrated Report (financial and non-financial data), to be issued by OPAP in 2023. Indicator GROUP COMPANY Court convictions for corruption or bribery against OPAP 0 0 Monetary value of fines or penalties (i.e. even if appealed) for noncompliance with laws and regulations regarding incidents of corruption and bribery (€) 0 0 Protecting our Players Employees informed about Responsible Gaming (%) 98% 1 100% Enhancing our Network OPAP Stores (number) 3,603 3,401 PLAY Stores (number) 363 363 Additional POS (points of sale) and street vendors for Hellenic Lotteries products (number) 12,037 0 Developing our People Employees (number) 1,677 1,185 Full-time employees (%) 98% 99.9% Indefinite time contract employees (%) 98% 98% Women in overall workforce (%) 38% 43% Fatalities (number) 0 0 Grievances regarding human rights (including child, forced and compulsory labor), which were filed through formal grievance mechanisms (number) 0 0 Supporting Society and Protecting the Environment Societal support activities (number) 723 433 Societal support spending (million €) 29.6 15.73 Significant suppliers 2 with contractual clauses on sustainability issues (e.g. labor practices, environmental issues, impacts on society, human rights such as child, forced and compulsory labor) (%) 22% 100% Electricity consumption (MWh) 5,534.5 2,830 3 Water consumption (m 3 ) 64,669 5,286 34 Paper consumption (tn) 11.5 6.48 4 1 Data refer to employees from all the companies with gaming activities, i.e. OPAP SA, HELLENIC LOTTERIES S.A., OPAP CYPRUS LTD, OPAP SPORTS LTD, HORSE RACES SINGLE MEMBER S.A. and STOIXIMAN LTD. 2% of employees not yet informed about RG will be briefed in the upcoming round of onboarding training. 2 Significant suppliers refer to suppliers whose annual contract fees exceed € 50,000 3 Data refer to the companies OPAP SA, HELLENIC LOTTERIES S.A., OPAP Services SA, TORA DIRECT SINGLE MEMBER S.A. and TORA WALLET SINGLE MEMBER S.A. 4 Data refer to the companies OPAP SA, HELLENIC LOTTERIES S.A. and TORA DIRECT SINGLE MEMBER S.A. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 81 7. Dividend policy – Distribution to the shareholders In relation to dividend distribution for the fiscal year 2022, the Company’s Management, after taking into consideration the Company’s performance, its prospects and its investment plans, proposes the distribution of dividend of € 1.00 per share before withholding taxes (according to the applicable tax legislation) versus € 0.60 per share for the year 2021. It should be noted that the meeting of the Company’s Board of Directors, held on 06.09.2022, approved the distribution of € 0.30 per share as interim dividend for the fiscal year 2022. Based on the aforementioned information, total dividend for the 2 comparable periods before applicable withholding taxes, will be as follows: 2022 2021 Interim dividend 0.3000 0.1000 Final dividend 0.7000 0.5000 Total dividend 1.0000 0.6000 In addition to the dividend distribution, capital return to Shareholders of € 0.90 per share was distributed to the shareholders based on the Company’s AGM dated 09.06.2022 and additional € 0.45 per share will be proposed to the forthcoming Company’s AGM. 8. Number and par value of shares All the shares issued by the Company are common shares. The Board of Directors, as its meeting dated 09.06.2022 decided to issue 7,423,668 new common, registered, voting shares of nominal value of € 0.30 each. Additionally, the Board of Directors, as its meeting dated 06.09.2022 decided to issue 3,061,904 new common, registered, voting shares of nominal value of € 0.30 each. Consequently, the total authorized number of common shares was 363,341,859 on 31.12.2022 (352,856,287 on 31.12.2021) with a par value of € 0.30 per share (€ 0.30 in 2021). All issued shares are fully paid. 9. EU Taxonomy regulation The Taxonomy regulation (EU Taxonomy Regulation, (EU) 2020/852) is a key component of the European Commission's “Action Plan: Financing Sustainable Growth” of March 2018. It represents an important step in the EU’s pursuit of the goals of the Paris Agreement, according to which climate neutrality is to be achieved by 2050. One of the objectives of the Finance Action Plan is to redirect capital flows towards a more sustainable economy. Such a shift of capital flows has to be underpinned by a shared understanding of what “sustainable” means. Therefore, the EU Taxonomy provides for a unified classification system of activities that can be considered “sustainable”. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 82 The scope of the Taxonomy Regulation includes inter alia undertakings which are subject to the obligation to publish non-financial statements pursuant Art.19a or 29a of the Accounting Directive 2013/34/EU. These undertakings are to provide investors with a basis for their investment decision by disclosing information on how and to what extent the undertaking’s activities are associated with environmentally sustainable economic activities (Art.8 of the Taxonomy Regulation). The aim is to increase transparency in order to help prevent greenwashing and enlarge the space for green finance. Taxonomy-eligible economic activity means an economic activity that is described in the delegated acts supplementing the Taxonomy Regulation (that is, the Climate Delegated Act as of now), irrespective of whether that economic activity meets any or all of the technical screening criteria laid down in those delegated acts. An economic activity is Taxonomy-aligned where it complies with the technical screening criteria as defined in the Climate Delegated Act and it is carried out in compliance with the minimum safeguards regarding human and consumer rights, anti-corruption and bribery, taxation, and fair competition. To meet the technical screening criteria, an economic activity contributes substantially to one or more environmental objectives while not doing significant harm to any of the other environmental objectives. Taxonomy-non-eligible economic activity means any economic activity that is not described in the delegated acts supplementing the Taxonomy Regulation. have examined all Taxonomy-eligible economic activities listed in the Delegated Act based on our activities as a Group that mainly provides gaming entertainment services. The Climate Delegated Act focuses on those economic activities and sectors that have the greatest potential to achieve the objective of climate change mitigation, i.e. the need to avoid producing greenhouse gas emissions, to reduce such emissions or to increase greenhouse gas. After a thorough review involving all relevant divisions and functions, we concluded that our core economic activities are not covered by the Climate Delegated Act and consequently are Taxonomy-non-eligible and Taxonomy-non-aligned. The European Commission identifies three Key Performance Indicators (KPIs) to be disclosed regarding the proportion of the Taxonomy Eligible activities of the Group to its total activities: • Turnover KPI (Gross Gaming Revenue (GGR)) • Operating Expenses KPI and • Capital Expenditure KPI Our economic activities as a Group that mainly provides gaming entertainment services are not covered by the Climate Delegated Act. We have assessed both CAPEX and OPEX related to the purchase of outputs from Taxonomy-eligible economic activities and individual measures enabling certain target activities (our non-eligible activities) to become low-carbon or to lead to greenhouse gas reductions. As a result of this assessment, the share of the Taxonomy-eligible economic activities according to the Art. 8 of the Regulation for Taxonomy and the Art. 10 (2) of the Art. 8 of the Delegated Act in our total turnover is 0% and - consequently - the related capital and operating expenditure are also 0%. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 83 Information relating to the calculation of the KPIs: Turnover (Gross Gaming Revenue (GGR)): the percentage of the Taxonomy-eligible economic activities on the total annual Gross Gaming Revenue (GGR) has been calculated as part of the Gross Gaming Revenue (GGR) associated with the Taxonomy-eligible economic activities (numerator), to the total consolidated Gross Gaming Revenue (GGR) (denominator). The total annual Gross Gaming Revenue (GGR) can be reconciled with the consolidated and separate Financial Statements of the Company in the Consolidated Income Statement in page 102. Operating Expenses: the quotient of the operating expenses related to the Taxonomy-eligible and Taxonomy-aligned economic activities (numerator) to the total operating expenses (denominator) on a consolidated basis. The total operating expenses of the Group include the payroll, the marketing and the other operating expenses as presented in the Consolidated Income Statement. Capital Expenditure: the capital expenditure defined as Taxonomy-eligible and Taxonomy-aligned economic activities (numerator) to the total capital expenditure (denominator). The total capital expenditure consists of the additions to intangible assets, property, plant and equipment, right-of-use assets and investment property during the financial year, before depreciation and amortization, impairment and any measurements, including any resulting remeasurement and impairment. The total capital expenditure is the sum of the "Additions" line in Notes 6, 7, 8 and 9 of the financial statements. More information relating to the accounting policies applied are included in Note 3 of the financial statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 84 10. Other Branches The Group owns a total of six branches that operate as OPAP agencies offering customers all the products and services of OPAP S.A., HELLENIC LOTTERIES S.A., HORSE RACES SINGLE MEMBER S.A., TORA DIRECT SINGLE MEMBER S.A. and TORA WALLET SINGLE MEMBER S.A.. Five of the branches are owned by the Company and are located in: 1. 108 Athens Avenue, Athens, which operates as a model store, 2. 46-48 Kifisou Avenue, Peristeri, Athens, 3. Fokon 11 and Kappadokias 0, Nea Filadelfia, Athens, 4. 5 St. George Patriarchiko of Pylea, Thessaloniki, 5. 25A Koleti I. and Kavalas 0, Thessaloniki. and the sixth is a branch of HORSE RACES SINGLE MEMBER S.A. and is located in Markopoulo, Attica. Research and development Three companies of the Group, OPAP S.A., NEUROSOFT S.A. and TORA WALLET SINGLE MEMBER S.A. spend on research and development in order to produce software and other technology products, either for own use or for sale to third parties. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 85 [Business/Internal Use] 11. Subsequent events Bond loans repayment On 06.02.2023, the Company proceeded with an early repayment of € 100,000 th. of its bond loan with Alpha Bank of total nominal amount € 200,000 th.. Final dividend for the fiscal year 2022 The Company's Board of Directors decided during its meeting on 14.03.2023 to distribute € 1.00 per share as a final dividend for the fiscal year 2022 with € 0.30 per share having already paid as interim dividend in November 2022. In addition to the dividend distribution, capital return to Shareholders of € 0.45 per share will be proposed to AGM. Consequently, the total shareholders distribution including the dividend will amount to € 1.45 per share. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 86 12. Alternative Performance Indicators (API) The Group presents certain Alternative Performance Indicators besides IFRSs arising from its financial statements, particularly the indicator "Net Debt/Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA)”. The indicators which are defined and calculated in detail below, are widely used in order to present the Group’s profits in relation to its debt and how viable servicing its debt is. The Alternative Performance Indicators should not be considered as a substitute for other figures and have been calculated in accordance with the provisions of IFRS. (Amounts in thousands of euro) 01.01- 31.12.2022 01.01- 31.12.2021 Δ % Profit before interest, tax, depreciation, amortization and impairment (EBITDA) / Revenue (GGR) 38.0% 35.8% 6.1% Profit attributable to owners of the Company / Revenue (GGR) 30.5% 16.9% 81.2% Profit before interest, tax, depreciation, amortization and impairment (EBITDA) / Net gaming revenue (NGR) 55.2% 52.7% 4.7% Profit attributable to owners of the Company / Net gaming revenue (NGR) 44.4% 24.9% 78.7% Net debt 107,439 233,651 (54.0%) Total debt / Total equity 77.7% 115.6% (32.8%) Net debt / Profit before interest, tax, depreciation, amortization and impairment (EBITDA) last twelve months 0.1 0.4 (65.6%) Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) as a % of GGR Calculated as the ratio of earnings before tax, depreciation, amortization and impairment (EBITDA) over GGR in the year. Profit attributable to owners of the Company as a % of GGR Calculated as the ratio of net profit for the year over GGR for the year. Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) as a % of NGR Calculated as the ratio of Earnings before tax, depreciation, amortization and impairment (EBITDA) over NGR in the period. Profit attributable to owners of the Company as a % of NGR Calculated as the ratio of net profit for the year over NGR for the year. Net Debt Calculated as the sum of short-term and long-term borrowings plus short-term and long-term lease liabilities at the end of the year/period minus the "Cash and cash equivalents", “Long-term investments” and “Short-term investment” balances at the end of the year. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 87 Total Debt / Equity Calculated as the ratio of the sum of short-term and long-term borrowings plus short-term and long-term lease liabilities at the end of the year over equity at the end of the year. Net Debt / Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) Calculated as the ratio of Net Debt (see above) over earnings before interest, tax, amortization and impairment in the last twelve months. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 88 ANNEX EXPLANATORY REPORT TO THE ORDINARY GENERAL MEETING OF OPAP S.A. SHAREHOLDERS PURSUANT TO ARTICLE 4 PAR. 7-8 OF LAW 3556/2007 The present explanatory report of the Company’s Board of Directors to the Ordinary General Meeting of OPAP S.A. Shareholders consists of detailed information pursuant to the provisions of art. 4, par. 7 and 8 of L. 3556/2007. 1. Company’s Share Capital Structure The Company’s Share Capital amounts up to € 109,003 th., divided into 363,341,859 nominal common and outstanding voting shares, with nominal value of € 0.30 each. Within the fiscal year 2022: • The Company’s Share Capital, following the resolution of the Board of Directors of the Company dated 09.06.2022, was increased by € 2,227 th., upon issuance of 7,423,668 new common, registered, voting shares, of nominal value € 0.30 each, as a result of the reinvestment program of the remaining dividend of the fiscal year 2021. • The Company’s Share Capital, following the resolution of the AGM of the Company dated 09.06.2022, was increased by € 317,571 th., through capitalization of an equal amount from the share premium reserve and the increase of the nominal value of each share of the Company by € 0.90, i.e. from € 0.30 to € 1.20 to be followed by a share capital return of an equivalent amount (€ 317,571 th.) through a reduction of the nominal value of each share of the Company by € 0.90, i.e. from €1.20 to € 0.30, that was executed in cash on 04.08.2022. • The Company’s Share Capital, following the resolution of the Board of Directors of the Company dated 06.09.2022, was increased by € 919 th., upon issuance of 3,061,904 new common, registered, voting shares, of nominal value of € 0.30 each, as a result of the reinvestment program of the interim dividend of the financial year 2022. All shares are admitted to trading at the Athens Stock Exchange Market. The rights of the Shareholders of OPAP S.A. which stem from the Company’s share are equivalent to the percentage of their equity investment in the paid-up share capital. Each share provides all rights and obligations required by the Law and the Statutes and more specifically: • Participation and voting right to the General Meeting of OPAP S.A. • The right of being entitled to receive dividend out of annual profits or out of Company liquidation, as well as the right on the Company’s assets in the event of liquidation. Every shareholder listed in the Company’s share register at the ex-dividend date is entitled to a dividend. The date and the way of the collection of the dividend’s distribution are announced by the Company through the OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 89 Media, pursuant to L. 3556/2007 and the relevant decisions of the Exchange Commission. Within five (5) years starting from the year when distribution is approved by the General Meeting, the right of the collection of the dividend is lapsed and the amount not collected is prescribed to the Hellenic Public Sector. • The right of pre-emption to any share capital increase of the Company holding cash and the assumption of new shares. • The General Meeting of the Company’s Shareholders retains all the functions and authorities during the Company’s liquidation (pursuant to article 46 of its Statutes). The liability of the Company's shareholders is limited to the nominal value of shares held. • The right to receive copies of Financial Statements and reports of the auditors and the Board of Directors. 2. Restrictions on the transfer of shares of the Company According to the Law, the Company transfers its shares and this transfer is not subject to restrictions by the Statute. 3. Significant direct and indirect holdings according the provisions of Law 3556/2007 The shareholders (natural persons or legal entities) that according to their notification made up until 31.12.2022 hold directly or indirectly a percentage of shares of more of 5% of its total shares with the respective voting rights, are listed below: Name Percentage Allwyn Greece & Cyprus Holding LTD 33.59% Allwyn International a.s. 16.25% Free Float 50.16% 4. Shareholders of any shares with special auditing rights There are no shares offering to the shareholders special auditing rights in the Company. 5. Restrictions of voting rights According to the provisions of the Company’s Statutes, there are no restrictions on shareholders voting rights. 6. Agreements of shareholders, acknowledged by the Company, involving restrictions on transfer of shares or exercising of voting rights The Company does not acknowledge the existence of agreements among its shareholders which conclude to restrictions on transfer of shares or exercising of voting rights. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 90 7. Regulations concerning appointment or replacement of members of the Board of Directors and amendment of the Statutes The regulations of the Company’s statutes regarding the appointment and replacement of BoD members and the modification of provisions of Statutes do not differentiate from the ones provided in L. 4548/2018. 8. Competence of the Board of Directors or some of its members regarding issue of new shares or purchase of own shares According to the Article 8 of the Company’s Statutes, upon decision of the General Assembly, which is subject to publicity of Article 13 of L. 4548/2018, the Board of Directors can be given the right, upon the Board’s decision taken by, at least, a majority of two third (2/3) of its members, to increase the share capital partially or totally by issuing new shares, up to the amount of the paid-up capital the date that the Board of Directors was granted the authority in question. The Board of Directors’ authority can be renewed by the General Assembly for a period of time that will not exceed the six-year period for each renewal. No such decision has been made by the General Assembly of the Shareholders. According to the same article of the Statutes, upon decision of the General Assembly, a program of shares disposal can be established for the members of the Board of Directors and the Company’s personnel, as well as for the associated companies, in the form of optional right of shares acquisition, with the terms and conditions of Article 26 of L. 4548/2018. No such decision has been made by the General Assembly of the Shareholders. According to the provisions of Articles 48-52 of L. 4548/2018, the companies listed on the Athens Exchange may acquire own shares, upon decision of the General Assembly of their shareholders, which provides the terms and the conditions of provided acquisitions and, in particular, the maximum number of shares that can be acquired and the duration of this approval. Their acquisition takes place under the Board of Directors responsibility, under the conditions mentioned in the law. No controversy provision exists in the Company’s Statutes. Τhe Annual Ordinary General Assembly of the Company’s Shareholders that was held on 17.06.2021 decided and set the details for the acquisition by the Company of treasury shares, through the Athens Exchange, up to a percentage of 5% of the total paid up share capital of the Company, namely up to 17,071,319 shares. The acquisition of treasury shares shall be made provided that on a case by case basis are considered to be at the Company's own benefit, preferential to other available investment options and as long as the Company's cash flow allows for such acquisitions and for the scopes and uses allowed by the law, in accordance with the specific stipulations of articles 49 and 50 of Law 4548/2018, as in force today, and in connection to the provisions of Regulation (EU) No 596/2014 of the European Parliament and of the Council, on market abuse and of its supplementing Commission Delegated Regulation (EU) 2016/1052, with regard to regulatory technical standards for the conditions applicable to buy-back programs and stabilization measures. The proposed program for the acquisition of treasury shares shall be completed OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 91 within twenty four months as from the date of the decision of the General Assembly, namely the latest by 16.06.2023, and will be implemented at a maximum acquisition price of € 17.00 per share and a minimum acquisition price equal to the nominal value price of each share, i.e. € 0.30 per share. The Company holds as of 31.12.2022 1,829,624 treasury shares that were acquired during 2015, 2016, 2017 and 2018. 9. Important agreements signed by the Company, that are put into force, modified or expire in case of change of Company control following a public offering and the results of these agreements There are no agreements that are put into force, modified or expire in case of change of Company control following a public offering. 10. Each agreement signed among the Company and the members of the Board of Directors or its personnel, which provides for compensation in the event of resignation or dismissals without just cause or termination of service or employment due to public offering The Company has not entered into any agreements with the members of the Board of Directors or its personnel to compensate these persons, in case they are forced to resign or dismissed unfairly or their services or employment are terminated due to public offer for the acquisition of its shares. Athens, 14 March 2023 Kamil Ziegler Jan Karas Chairman Board Member and Chief Executive Officer OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 92 III. Annual Financial Statements The attached Financial Statements as at 31.12.2022 of the Group and the Company were approved by the Board of Directors of OPAP S.A. (“BoD”) on 14.03.2023, following the Audit Committee (“AC”) review and pursuant to the AC recommendation to the BoD dated 13.03.2023 and are posted at the Company’s website www.opap.gr as well as in the website of Athens Stock Exchange. The attached Financial Statements will remain at the disposal of investors at least five years from the date of their announcement. It is noted that the published attached financial information arise from the Financial Statements, which aim to provide the reader with a general information about the financial status and results of the Group and the Company but they do not present a comprehensive view of the financial position and results of financial performance and cash flows of the Company and the Group, in accordance with the International Financial Reporting Standards (IFRS). The auditors of the consolidated and separate Financial Statements of OPAP S.A. for the years ended on 31.12.2022 and 31.12.2021 is the auditing firm PricewaterhouseCoopers S.A.. 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 93 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 94 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 95 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 96 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 97 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 98 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 99 2 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 100 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 101 1. Statement of Financial Position Amounts in thousands of euro GROUP COMPANY Notes 31.12.2022 31.12.2021 31.12.2022 31.12.2021 ASSETS Non - current assets Intangible assets 6 1,021,349 1,133,295 736,190 801,942 Property, plant and equipment 7 56,752 70,383 54,581 68,101 Right-of-use assets 8 32,135 35,222 18,342 21,002 Investment properties 9 3,007 1,521 3,007 1,521 Goodwill 10 342,688 342,688 - - Investments in subsidiaries 11 - - 575,412 425,412 Investments in associates 12 - 8,156 - - Trade receivables 16 748 2,078 748 2,078 Other non - current assets 13 60,917 71,093 66,016 72,822 Deferred tax assets 14 35,651 30,544 - - Total non - current assets 1,553,246 1,694,980 1,454,296 1,392,877 Current assets Inventories 15 5,552 4,682 2,879 2,689 Trade receivables 16 102,123 90,881 57,924 49,216 Current income tax assets 17 5 - - Other current assets 17 182,284 47,955 35,757 31,049 Short - term investments 18 3,634 3,633 - - Cash and cash equivalents 18 724,433 860,361 247,796 609,088 Total current assets 1,018,043 1,007,517 344,356 692,042 Total Assets 2,571,289 2,702,497 1,798,652 2,084,919 EQUITY & LIABILITIES Equity Share capital 19 109,003 105,857 109,003 105,857 Share premium 19 165,148 346,228 165,148 346,228 Reserves 20 36,334 35,450 36,334 34,174 Treasury shares 21 (12,851) (14,497) (12,851) (14,497) Retained earnings 745,146 437,822 420,891 343,260 Equity attributable to owners of the Company 1,042,780 910,860 718,525 815,022 Non-controlling interests 22 32,653 38,513 - - Total equity 1,075,433 949,372 718,525 815,022 Non-current liabilities Borrowings 23 506,679 991,673 466,565 941,517 Lease liabilities 8 39,328 43,507 13,959 16,989 Deferred tax liability 14 124,483 127,176 41,916 40,317 Employee benefit plans 24 2,802 4,058 2,670 3,955 Other non-current liabilities 26 3,141 5,724 - 1,453 Total non-current liabilities 676,433 1,172,137 525,112 1,004,230 Current liabilities Borrowings 23 281,707 54,965 311,533 82,677 Lease liabilities 8 7,792 7,500 5,604 5,365 Trade payables 27 181,684 168,186 84,329 62,560 Employee benefit plans 24 3,464 - 3,464 - Provisions 25 10,823 9,520 10,820 9,517 Current income tax liabilities 29 117,173 60,658 77,648 49,079 Other current liabilities 28 216,781 280,160 61,617 56,470 Total current liabilities 819,424 580,988 555,015 265,668 Total liabilities 1,495,856 1,753,125 1,080,127 1,269,897 Total Equity & Liabilities 2,571,289 2,702,497 1,798,652 2,084,919 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 102 2. Income Statement Amounts in thousands of euro GROUP COMPANY Notes 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Revenue (GGR) 1,938,985 1,538,843 1,333,210 985,327 GGR contribution and other levies and duties 31 (605,597) (494,986) (405,277) (298,148) Net gaming revenue (NGR) 1,333,388 1,043,857 927,933 687,179 Agents' commissions 32 (382,993) (277,862) (322,236) (228,891) Other direct costs 33 (151,605) (160,157) (73,522) (69,137) Revenue from non-gaming activities 34 129,017 123,735 48,113 50,610 Income related to the extension of the concession of the exclusive right 2020- 2030 35 230,153 217,373 230,153 217,373 Cost of sales related to non-gaming activities 36 (71,654) (74,415) (183) (1,016) Share of profit/(loss) of associates 12 14,788 (443) - - Payroll expenses 37 (84,503) (76,263) (67,930) (62,263) Marketing expenses 38 (111,700) (90,636) (50,133) (46,691) Other operating expenses 39 (167,543) (154,392) (92,850) (76,347) Net impairment losses on financial assets 46 (1,364) (501) (991) 9,143 Profit before interest, tax, depreciation and amortization (EBITDA) 735,985 550,296 598,354 479,959 Profit from disposal of associate 12 181,298 - - - Depreciation and amortization 6,7,8,9 (133,716) (144,804) (103,317) (110,961) Impairment of intagible assets 6 (20,219) (4,663) - - Results from operating activities 763,348 400,829 495,037 368,998 Finance income 40 890 2,288 474 1,629 Finance costs 40 (40,986) (45,852) (36,399) (39,339) Dividend income 41 - - 7,000 4,000 Profit before income tax 723,251 357,265 466,112 335,288 Income tax expense 42 (127,215) (96,393) (102,468) (70,327) Profit for the year 596,036 260,872 363,644 264,961 Profit is attributable to: Owners of the Company 592,334 259,427 363,644 264,961 Non-controlling interests 22 3,702 1,445 - - Profit after tax 596,036 260,872 363,644 264,961 Basic and diluted earnings per share in € 43 1.6711 0.7544 1.0259 0.7705 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 103 3. Statement of Comprehensive Income Amounts in thousands of euro GROUP COMPANY Notes 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Profit for the year 596,036 260,872 363,644 264,961 Other comprehensive income - items that will not be reclassified to the Income Statement Actuarial gains/(losses) 24 18 24 11 (29) Related tax 14,42 (4) (5) (2) 6 Total items that will not be reclassified to the Income Statement 14 18 8 (22) Other comprehensive income - items that are or may be reclassified subsequently to the Income Statement Gain from valuation of hedging derivatives 1,453 1,296 1,453 1,296 Related tax 14,42 (341) (340) (341) (340) Exchange differences on translation of foreign operations 3 1 - - Total items that may be reclassified to the Income Statement 1,115 956 1,112 956 Other comprehensive loss for the year, net of tax 1,130 975 1,120 933 Total comprehensive income for the year 597,166 261,846 364,764 265,894 Total comprehensive income is attributable to: Owners of the Company 593,462 260,393 364,764 265,894 Non-controlling interests 22 3,704 1,453 - - Total comprehensive income, net of tax 597,166 261,846 364,764 265,894 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 104 4. Statement of Changes in Equity 4.1. Consolidated Statement of Changes in Equity Amounts in thousands of euro Attributable to owners of the Company Share capital Share premium Reserves Treasury shares Retained earnings Total Non-controlling interests Total equity Balance at 1 January 2021 102,428 218,826 33,329 (14,497) 401,498 741,584 41,126 782,710 Profit for the year - - - - 259,427 259,427 1,445 260,872 Other comprehensive income - - 956 - 10 966 8 975 Total comprehensive income for the year - - 956 - 259,437 260,393 1,453 261,846 Transactions with owners of the Company Share capital increase (Note 19) 3,429 127,402 - - - 130,831 - 130,831 Share capital increase expenses - - - - (238) (238) - (238) Statutory reserve (Note 20) - - 1,165 - (1,165) - - - Dividends (Notes 22 & 30) - - - - (221,711) (221,711) (4,067) (225,778) Total transactions with owners of the Company 3,429 127,402 1,165 - (223,114) (91,117) (4,067) (95,184) Balance at 31 December 2021 105,857 346,228 35,450 (14,497) 437,822 910,860 38,513 949,372 Balance at 1 January 2022 105,857 346,228 35,450 (14,497) 437,822 910,860 38,513 949,372 Profit for the year - - - - 592,334 592,334 3,702 596,036 Other comprehensive income - - 1,114 - 14 1,128 2 1,130 Total comprehensive income for the year - - 1,114 - 592,347 593,462 3,704 597,166 Transactions with owners of the Company Share capital increase (Note 19) 3,146 136,490 - - - 139,636 - 139,636 Share capital increase expenses - - - - (2,204) (2,204) (55) (2,259) Statutory reserve (Note 20) - - 1,049 - (1,049) - - - Reserves of subsidiaries - - (1,278) - 1,278 - - - Capitalization of share premium (Note 19) 317,571 (317,571) - - - - - - Share capital return to the shareholders (Notes 19 & 21) (317,571) - - 1,647 - (315,924) - (315,924) Dividends (Notes 22 & 30) - - - - (283,048) (283,048) (9,508) (292,557) Total transactions with owners of the Company 3,146 (181,080) (230) 1,647 (285,023) (461,541) (9,564) (471,104) Balance at 31 December 2022 109,003 165,148 36,334 (12,851) 745,146 1,042,780 32,653 1,075,433 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 105 4.2. Separate Statement of Changes in Equity Amounts in thousands of euro Share capital Share premium Reserves Treasury shares Retained earnings Total equity Balance at 1 January 2021 102,428 218,826 32,075 (14,497) 301,214 640,045 Profit for the year - - - - 264,961 264,961 Other comprehensive income/(loss) - - 956 - (22) 933 Total comprehensive income for the year - - 956 - 264,938 265,894 Share capital increase (Note 19) 3,429 127,402 - - - 130,831 Share capital increase expenses - - - - (38) (38) Statutory reserve (Note 20) - - 1,143 - (1,143) - Dividends (Note 30) - - - - (221,711) (221,711) Balance at 31 December 2021 105,857 346,228 34,174 (14,497) 343,260 815,022 Balance at 1 January 2022 105,857 346,228 34,174 (14,497) 343,260 815,022 Profit for the year - - - - 363,644 363,644 Other comprehensive income - - 1,112 - 8 1,120 Total comprehensive income for the year - - 1,112 - 363,652 364,764 Share capital increase (Note 19) 3,146 136,490 - - - 139,636 Share capital increase expenses - - - - (1,924) (1,924) Statutory reserve (Note 20) - - 1,049 - (1,049) - Capitalization of share premium (Note 19) 317,571 (317,571) - - - - Share capital return to the shareholders (Notes 19 & 21) (317,571) - - 1,647 - (315,924) Dividends (Note 30) - - - - (283,048) (283,048) Balance at 31 December 2022 109,003 165,148 36,334 (12,851) 420,891 718,525 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 106 5. Cash Flow Statement GROUP COMPANY Amounts in thousands of euro Notes 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 OPERATING ACTIVITIES Profit before income tax 723,251 357,265 466,112 335,288 Adjustments for: Depreciation & amortization 6,7,8,9 133,716 144,804 103,317 110,961 Net finance costs 40 40,096 43,564 35,925 37,711 Employee benefit plans 2,322 2,173 2,286 2,130 Loss allowance for trade receivables 16 1,199 (1,262) (16,418) (906) Write-off of trade receivables 46 165 1,764 17,409 1,764 Other provisions 28 1,303 (616) 1,303 (616) Provision for obsolete inventories - 195 - 195 Impairment losses on PPE, intangible assets, Right-of-use assets & goodwill 6,7,8,10 20,219 4,663 - - Dividend income 41 - - (7,000) (4,000) Gain from disposal of subsidiary/associate 12 (181,373) (395) - - Reversal of loss allowance of other current & non-current assets - - - (10,000) Share of (profit) / loss of associates 12 (14,788) 443 - - (Profit) / loss from the sale of PPE and intangible assets 63 (16) 45 (18) Rent concessions 8 (1) (3,690) (10) (2,761) Total 726,173 548,891 602,968 469,746 Changes in Working capital (Increase) / decrease in inventories (870) 1,292 (190) 1,128 (Increase) / decrease in receivables (14,995) (53,132) (11,577) (35,211) Increase in payables (except banks) 56,607 72,955 26,390 27,942 Total 766,915 570,006 617,591 463,605 Interest paid (26,764) (30,542) (24,670) (28,441) Income taxes paid (80,351) (46,084) (72,640) (19,785) Net cash inflow from operating activities 659,800 493,381 520,281 415,379 INVESTING ACTIVITIES Proceeds from sale of tangible & intangible assets 38 18 38 18 Payment for acquisition of subsidiary 28 (106,444) (19,007) - - Repayment of loans by related & other third parties 95,461 3,426 1,433 2,436 Repayment of loans by subsidiaries - - 7,700 31,250 Proceeds from sale of subsidiary/associate 12 74,243 802 - - Share capital increase of subsidiaries - - (150,000) - Loans granted to related & other third parties (93,904) (1,553) (717) (1,553) Loans granted to subsidiaries - - (11,900) (16,000) Purchase of intangible assets 6 (18,179) (20,377) (16,384) (14,720) Purchase of property, plant and equipment & investment property 7,9 (4,620) (3,839) (3,785) (3,368) Dividends received - - 9,000 1,000 Interest received 171 439 199 784 Net change in short-term & long-term investments (1) 997 - - Net cash outflow from investing activities (53,235) (39,096) (164,415) (153) FINANCING ACTIVITIES Proceeds from borrowings 23 - 452,101 - 410,000 Repayment of borrowings 23 (262,293) (450,273) (250,001) (400,002) Transaction costs related to borrowings - (1,350) - (1,200) Share capital increase expenses (1,980) (238) (1,924) (38) Payment of lease liabilities 8 (9,714) (5,935) (6,236) (3,354) Share capital return to the shareholders 19 (317,571) - (317,571) - Dividends paid to Company's shareholders (141,427) (91,035) (141,427) (91,035) Dividends paid to non-controlling interests 22 (9,508) (4,067) - - Net cash outflow from financing activities (742,493) (100,797) (717,158) (85,629) Net increase/(decrease) in cash and cash equivalents (135,928) 353,488 (361,292) 329,597 Cash and cash equivalents at the beginning of the period 18 860,361 506,873 609,088 279,491 Cash and cash equivalents at the end of the period 18 724,433 860,361 247,796 609,088 The attached notes on pages 107 to 200 form an integral part of Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 107 Notes on the Financial Statements 1. Information about the Company and the Group 1.1. General information OPAP S.A. (the “Company” or “OPAP”) was established as a private legal entity in 1958. It was reorganized as a société anonyme in 1999 domiciled in Greece and its accounting as such began in 2000. OPAP’s registered office and principal place of business is 112 Athinon Avenue, 104 42 Athens, Greece. OPAP’s shares are listed in the Athens Stock Exchange. The ultimate controlling party of OPAP S.A. is the VALEA FOUNDATION, while since October 2016 the OPAP Group is fully consolidated by Allwyn International a.s. (previously under the name of SAZKA Group a.s.), as at 31.12.2022 holds 49.84% (31.12.2021: 47.20%) interest in OPAP which is deemed to be a controlling interest since the remaining shares are traded “free float” on the Athens Stock Exchange. The Group, beyond the parent Company, includes the companies which OPAP S.A. controls directly or indirectly (refer to Note 4). The Financial Statements for the year that ended on 31.12.2022 were approved by the Board of Directors on 14.03.2023 and are subject to approval by the Shareholders’ General Assembly Meeting. 1.2. Nature of operations On 13.10.2000, the Company acquired from the Hellenic Republic the 20-year exclusive right to conduct, manage, organise and operate by any appropriate means or measures provided by modern technology certain numerical lottery and sports betting games (and any variations of these games) and for which the Company paid € 322,817 th.. The Company also acquired the exclusive right to operate and manage any new sports betting games in Greece as well as a right of first refusal to operate any new games permitted by Law. The number of games was progressively increased over time and includes at present 13 games. The Company's exclusive right was subsequently extended by a period of 10 years, i.e., until 12.10.2030. Therefore, the Company currently holds the exclusive right to conduct, manage, organise and operate by any appropriate means seven numerical lottery games (JOKER, LOTTO, PROTO, EXTRA 5, SUPER 3, KINO & POWERSPIN), three sports and other betting games (PROPO, PROPOGOAL and STΟIΧIMA [which includes MONITOR GAMES and GO LUCKY]), two new lottery games (BINGO and SUPER 4) and “Prognostika Agonon Basket”, “Prognostika Agonon Omadikon Athlimaton” (these last four games have not been launched yet). The above numerical lotteries and sports betting games are also operated in Cyprus through the Company’s subsidiaries, OPAP CYPRUS LTD and OPAP SPORTS LTD, respectively. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 108 OPAP CYPRUS LTD OPAP CYPRUS LTD is governed by Law 34 (III)/2003 that ratifies the agreement between the Greek Republic and the Government of the Republic of Cyprus, for the terms of organization, operation, conduct and management of games conducted by OPAP S.A. as well as the "Taxation of profits from games of OPAP S.A. and by the State Lottery Act of 2012". However, according to a new law 52(Ι) 2018, the 2003 BA will be terminated upon the entry into force of a new Concession Agreement to be signed with OPAP CYPRUS LTD. In March 2022, following intensive and constructive negotiations between the Coordinating Committee and OPAP CYPRUS LTD, the Coordinating Committee sent to OPAP CYPRUS LTD the final draft of the Concession Agreement and invited OPAP CYPRUS LTD to confirm the acceptance of its terms. On 21.03.2022 OPAP CYPRUS LTD approved the proposed Concession Agreement. The draft Concession Agreement has been notified to the European Commission in order to assess its conformity with the EU state aid rules. It is noted that following the signing and entry into force of the Concession Agreement, the 2003 BA shall be terminated. OPAP CYPRUS LTD does not expect any substantial change in its operations under the new Concession Agreement. OPAP SPORTS LTD OPAP SPORTS LTD is a holder of a Class “A” and Class “B” licenses from the National Betting Authority of Cyprus and its principal activity is to operate in the field of fixed odds betting through its authorised representatives of Class A recipients and through electronic (online) activities. VLTs License In November 2011, according to the Ar. 39 of Law 4002/2011, OPAP S.A was granted permission to install and operate 35,000 Video Lottery Terminals (“VLT machines”) within the Greek territory. The duration of the license was set at 10 years and the total price paid by OPAP S.A. amounted to € 560,000 th.. In November 2017, according to an amendment of the above law published in Government Gazette issue number 176, the number of VLT machines was limited to 25,000 while the duration of the license was extended from 10 to 18 years starting from the commencement of the commercial operation of the first VLT machine. HELLENIC LOTTERIES S.A. HELLENIC LOTTERIES S.A., in July 2013, acquired the 12-year exclusive right to produce, operate, circulate and manage the state lotteries games (National, Popular, New Year’s Eve, European) and the Instant lottery game (Scratch) in Greece for a consideration of € 190,000 th.. According to the Concession Agreement HELLENIC LOTTERIES S.A. should pay to the State a contribution of 30% on the Gross Gaming Revenue (GGR) on an annual basis generated from the Greek State Lotteries (with the exception of the New Year’s Lottery); OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 109 however such amount is not to be less than € 30,000 th. in the first year of operation and € 50,000 th. on per year for each of the following 11 years (for a total of € 580,000 th. for the duration of the Lottery Concession). HORSE RACES SINGLE MEMBER S.A. HORSE RACES SINGLE MEMBER S.A was established on 22.12.2014. Its purpose of business is the exercise of the 20-year exclusive right to organize and conduct terrestrial and online mutual horseracing betting in Greece, according to the terms and conditions of the 24.04.2015 Concession Agreement with the Hellenic Republic Asset Development Fund (“HRDF”), the general legislative and regulatory framework, as well as the general regulatory framework. The total cost of the aforementioned exclusive right amounted to € 40,501 th.. STOIXIMAN LTD On 18.12.2018, OPAP INVESTMENT LTD, a wholly owned subsidiary of the Company, completed the acquisition of a 36.75% stake in the parent company of STOIXIMAN LTD, KAIZEN GAMING LIMITED. Additionally, on 13.07.2020, OPAP INVESTMENT LTD acquired from KAIZEN GAMING LIMITED a 51% direct stake in STOIXIMAN LTD. Finally, on 18.11.2020, OPAP INVESTMENT LTD acquired an additional 15.49% indirect stake in STOIXIMAN LTD. Following the above acquisition of the additional 15.49%, OPAP INVESTMENT LTD effectively holds a 84.49% combined stake (direct & indirect) in STOIXIMAN LTD. STOIXIMAN LTD provides online betting and online casino games and poker services. Online betting and Online Casino Games & Poker During May 2021, both OPAP S.A. and STOIXIMAN LTD were granted a Type 1 License regarding Online Betting and a Type 2 License regarding Other Online Games and Poker which both went live during August 2021.The acquisition cost of the Type 1 License amounted to € 3.000 th. and of the Type 2 License amounted to € 2.000, while the duration of each license determined to seven (7) years with a renewal option. Additionally, STOIXIMAN LTD on 31.01.2021 was granted a Class “B” license from the National Betting Authority of Cyprus to provide electronic (online) betting services. Other Group Operations TORA DIRECT SINGLE MEMBER S.A. On 19.11.2014, OPAP INVESTMENT LTD, a wholly owned subsidiary of OPAP S.A., acquired 90% of the share capital of TORA DIRECT SINGLE MEMBER S.A (ex PAYZONE HELLAS S.A.) and on 24.08.2015 proceeded to the acquisition of the remaining non-controlling 10% for a total consideration of € 9,135 th.. TORA DIRECT OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 110 SINGLE MEMBER S.A. provides transaction services via electronic means, intangible talk time selling services as well as bill payments services. TORA WALLET SINGLE MEMBER S.A. TORA WALLET SINGLE MEMBER S.A. was established on 01.09.2016 by a wholly owned subsidiary of OPAP S.A. and its principal activity is the provision of electronic money services and payment services. The licencing procedure was completed on 12.02.2018 and this development marks the official commencement of its activities. NEUROSOFT S.A. NEUROSOFT S.A. is a software company specializing in the design, production, adaptation and maintenance of integrated information systems and is listed on the over-the-counter (“OTC”) market at the Milan Stock Exchange. Since 02.08.2017, OPAP Group holds the 67.72% of NEUROSOFT S.A. share capital. Distribution Network OPAP Group activities are offered through a wide online and land-based sales’ network. Within Greece, there are 15,801 points of sales, out of which 363 relate to PLAY Gaming Halls, for the distribution of OPAP S.A., HELLENIC LOTTERIES S.A. and HORSE RACES SINGLE MEMBER S.A. products. Scratch tickets and passive lotteries (products of HELLENIC LOTTERIES S.A.), apart from agents, are also distributed through street vendors, mini-markets and wholesalers. In Cyprus, there are 202 shops, consisting of OPAP CYPRUS LTD and OPAP SPORTS LTD shops. Three-Member Supervisory Committee of OPAP S.A. (art. 28 par.3Α, L.4002/2011) The Three member Supervisory Committee of OPAP S.A., which is provided for by Article 28 par.3A of Law 4002/2011, is established by decision of the Hellenic Gaming Committee (‘HGC’), for a 3-year term. One of its members is among HGC’s appointed members and the other two members are selected in accordance with the conditions, requirements and procedures provided for in the Regulation on the Conduct and Control of Games. Pursuant to the Law, the Three-member Supervisory Committee has the right to attend OPAP’s board meetings, supervises and ensures OPAP’s and its agents’ compliance with the applicable legislation and with OPAP’s contractual obligations towards the Greek State. The Three member Supervisory Committee specifically monitors the Company to ensure: compliance with the terms of the legislative framework that regulates the exclusive rights of OPAP S.A. in the gaming market, the General Gaming Regulation of the Organization, Operation and Conduct of Games of Chance of OPAP S.A. and HGC’s relevant regulative decisions as well as with the terms of the Concession Agreement dated 15.12.2000 for the exclusive right to conduct, manage, organise and operate the games specified therein, as in force, and OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 111 of the Agreement dated 04.11.2011 for the installation and operation of VLT gaming machines, as in force, consumers’ protection against addiction and crime related to games of chance, the protection of minors and other vulnerable groups, the reliability of the games and the payment to players of their winnings, the protection of personal data and the payment of the taxes and contributions due to the Greek State. OPAP’s Board of Directors and any persons duly authorized, prior to the adoption of any decision, make available to the Three member Supervisory Committee, upon relevant request, any draft recommendations, decisions or other documents relevant to the Committee’s responsibilities. OPAP S.A. is obliged to refrain from adopting any decision for which the Three member Supervisory Committee has raised a reasoned objection. The Three member Supervisory Committee informs without delay HGC of any breach of OPAP’s contractual obligations towards the Greek State or of applicable laws. The HGC is competent to decide over any dispute between OPAP S.A. and the Three Member Supervisory Committee. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 112 2. Basis of preparation The separate and consolidated Financial Statements of the Company for the year ended on 31 December 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and interpretations issued by the IFRS Interpretations Committee (IFRS IC) and are effective as of 1 January 2022. The separate and consolidated Financial Statements have been prepared on a going concern basis, using the historical cost basis except for derivative financial instruments measured at fair value. The use of the going concern basis takes into consideration the Group’s current and forecasted financing position. The preparation of the Financial Statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 2.2 “Important accounting decisions, estimations and assumptions. All amounts presented in the Financial Statements are in thousands of euro unless otherwise stated. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 113 2.1. New Standards, amendments to standards and interpretations Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after 01.01.2022. The Group’s evaluation of the effect of these new standards, amendments to standards and interpretations is as follows: Standards and Interpretations effective for the current financial year IFRS 16 (Amendment) “Covid-19-Related Rent Concessions” The amendment extends the application period of the practical expedient in relation to rent concessions by one year to cover rental concessions that reduce leases due only on or before 30 June 2022. IAS 16 (Amendment) “Property, Plant and Equipment – Proceeds before Intended Use” The amendment prohibits an entity from deducting from the cost of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also requires entities to separately disclose the amounts of proceeds and costs relating to such items produced that are not an output of the entity’s ordinary activities. IAS 37 (Amendment) “Onerous Contracts – Cost of Fulfilling a Contract” The amendment clarifies that ‘costs to fulfil a contract’ comprise the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The amendment also clarifies that, before a separate provision for an onerous contract is established, an entity recognises any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract. IFRS 3 (Amendment) “Reference to the Conceptual Framework” The amendment updated the standard to refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a liability in a business combination. In addition, an exception was added for some types of liabilities and contingent liabilities acquired in a business combination. Finally, it is clarified that the acquirer should not recognise contingent assets, as defined in IAS 37, at the acquisition date. The amendments listed above did not have any impact on the separate or consolidated financial statements of the Company. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 114 Annual Improvements to IFRS Standards 2018–2020 (effective for annual periods beginning on or after 1 January 2022) The amendments set out below include changes to IFRSs. IFRS 9 “Financial instruments” The amendment addresses which fees should be included in the 10% test for derecognition of financial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be included in the 10% test. IFRS 16 “Leases” The amendment removed the illustration of payments from the lessor relating to leasehold improvements in Illustrative Example 13 of the standard in order to remove any potential confusion about the treatment of lease incentives. IAS 41 “Agriculture” The amendment has removed the requirement for entities to exclude cash flows for taxation when measuring fair value under IAS 41. The adoption of the annual improvements is not expected to have an impact on the Group's and Company's Financial Statements. New Standards and Interpretations effective for subsequent periods that have not yet been adopted The following standards and amendments to standards and interpretations have been issued by IASB but have not been applied in preparing these consolidated and separate Financial Statements for the year ended 31.12.2022 as they are either not yet effective and/or have not yet been adopted by the European Union. IFRS 17 “Insurance contracts and Amendments to IFRS 17” (effective for annual periods beginning on or after 1 January 2023) IFRS 17 has been issued in May 2017 and, along with the Amendments to IFRS 17 issued in June 2020, supersedes IFRS 4. IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard and its objective is to ensure that an entity provides relevant information that faithfully represents those contracts. The new standard solves the comparison problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current values instead of historical cost. The adoption of the amendment is not expected to have any impact on the separate or consolidated Financial Statements. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 115 IAS 1 (Amendments) “Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Disclosure of Accounting policies” (effective for annual periods beginning on or after 1 January 2023) The amendments require companies to disclose their material accounting policy information and provide guidance on how to apply the concept of materiality to accounting policy disclosures. The adoption of the amendment is not expected to have any impact on the separate or consolidated Financial Statements. IAS 8 (Amendments) “Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates” (effective for annual periods beginning on or after 1 January 2023) The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. The adoption of the amendment is not expected to have any impact on the separate or consolidated Financial Statements. IΑS 12 (Amendments) “Deferred tax related to Assets and Liabilities arising from a Single Transaction” (effective for annual periods beginning on or after 1 January 2023) The amendments require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. This will typically apply to transactions such as leases for the lessee and decommissioning obligations. The Group and the Company are currently assessing the potential impact of adoption of this amendment on the Financial Statements, but do not expect this to be significant. IFRS 17 (Amendment) “Initial Application of IFRS 17 and IFRS 9 – Comparative Information” (effective for annual periods beginning on or after 1 January 2023) The amendment is a transition option relating to comparative information about financial assets presented on initial application of IFRS 17. The amendment is aimed at helping entities to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and therefore improve the usefulness of comparative information for users of financial statements. The adoption of the amendment is not expected to have an impact on the separate or consolidated Financial Statements. IAS 1 “Presentation of Financial Statements (Amendments)” (effective for annual periods beginning on or after 1 January 2024) 2020 Amendment ‘Classification of liabilities as current or non-current’ The amendment clarifies that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 116 entity or events after the reporting date. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendment has not yet been endorsed by the EU. 2022 Amendments ‘Non-current liabilities with covenants’ The new amendments clarify that if the right to defer settlement is subject to the entity complying with specified conditions (covenants), this amendment will only apply to conditions that exist when compliance is measured on or before the reporting date. Additionally, the amendments aim to improve the information an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within twelve months after the reporting period. The 2022 amendments changed the effective date of the 2020 amendments. As a result, the 2020 and 2022 amendments are effective for annual reporting periods beginning on or after 1 January 2024 and should be applied retrospectively in accordance with IAS 8. As a result of aligning the effective dates, the 2022 amendments override the 2020 amendments when they both become effective in 2024. The amendments have not yet been endorsed by the EU. The Group and the Company are currently assessing the potential impact of adoption of this amendment on the Financial Statements. IFRS 16 (Amendment) “Lease Liability in a Sale and Leaseback” (effective for annual periods beginning on or after 1 January 2024) The amendment clarifies how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted. An entity applies the requirements retrospectively back to sale and leaseback transactions that were entered into after the date when the entity initially applied IFRS 16. The amendment has not yet been endorsed by the EU. The adoption of the amendment is not expected to have an impact on the separate or consolidated Financial Statements. 2.2. Important accounting estimates and judgements The preparation of the Financial Statements requires the use of accounting estimates and judgements. Although these estimates and judgements are based on Management's best knowledge of current events and actions, as well as historical experience, actual events may ultimately differ from those estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The effect of a change in an accounting estimate or judgement shall be recognized prospectively. Certain amounts included in or affecting the Financial Statements and related disclosure must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the Financial Statements are prepared. A ‘‘critical accounting estimate’’ is one OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 117 which is both important to the portrayal of the Group’s financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Group evaluates such estimates and assumptions on an ongoing basis, based upon historical results and experience, consultation with experts, trends and other methods considered reasonable in the particular circumstances, as well as forecasts as to how these might change in the future. In the process of applying the Group’s accounting policies, judgments and estimates made by the Management that have the most significant effect on the amounts recognized in the Financial Statements are presented below: Recoverability of trade receivables The Group applies the IFRS 9 simplified approach to measuring expected credit losses which use a lifetime expected loss allowance for all trade receivables. Management examines at each period of Financial Statements preparation the recoverability of the amounts included in trade receivables using historical trends, statistical information, future expectations, in combination with external information such as creditability databases, lawyers consultation etc.. The credit control department also interacts with Management in order to provide a more precise estimation since the latter has the past experience and the daily interaction with the debtors. More detailed information on trade receivables treatment is available at Note 3.14. Impairment testing relating to goodwill and other intangible assets The impairment test is a complex process requiring significant management judgment and is based on key assumptions about future profitability and cash flows and selecting the appropriate discount and long-term growth rates. The subjectivity involved in the key assumptions used by Management in the impairment review and the inherent uncertainty of those assumptions is high. The accounting treatment of goodwill and intangible assets is described in more detail in Notes 3.10 and 3.11. Income taxes Income tax expense consists of current and deferred tax. Current tax includes tax estimates calculated from the taxable income or loss for the current period using tax rates applicable as at the balance sheet date, as well as any adjustments to the current tax relating to prior years. Estimates on deferred tax arise in the process of recognition of deferred tax assets which is performed to the extent that is probable that future taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized. In addition, the tax rates used for both deferred tax assets and liabilities are the ones that are estimated to be OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 118 enacted in the following years where the differences are expected to reverse. Additional information is provided in Note 3.18. Provisions Provisions require a reliable estimation from Management since they are reported in the Statement of Financial Position if the Company has a current legal or non-contractual obligation arising from an event that occurred in the past and if the performance of such an obligation is likely to require sacrifice of economic benefits and the relevant amount can be reliably estimated. In addition, provisions are reported as current liabilities at the current value of the expected amount. Note 3.19 provides more detailed accounting treatment of provisions. Contingencies The Management assesses at each reporting date any contingencies arising from legal disputes and estimates its outcome. Another factor of potential future negative impact is the open tax years and the possible additional taxes or fines. Furthermore, new laws and regulations are examined and their potential impact in the performance of the Group is assessed. All of the aforementioned actions require a great input of judgement and estimate by Management. The recognised contingencies as at 31.12.2022 are analysed at Note 45 and the accounting policy at Note 3.19. Useful life of depreciated assets The Group estimates the useful life of depreciated assets including, Property Plant and Equipment, Intangible assets, Right-of Use assets and assets arising as a result of business combinations. At least annually, Management reassesses these estimates by taking into account updated conditions. Further details are provided in Notes 3.9, 3.10, 3.11 and 3.12. Impairment of investments in subsidiaries The Company performs impairment tests in order to estimate the investments’ recoverable amount. The impairment test is a complex process requiring significant management judgment and is based on key assumptions about future profitability and cash flows, taking into account the environment in which the Company’s investments operate which is effected from the regulatory framework, selecting appropriate discount and long-term growth rates. The subjectivity involved in the key assumptions used by management in the impairment review and the inherent uncertainty of those assumptions is high. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 119 3. Summary of accounting policies The significant accounting policies that have been used in the preparation of these consolidated Financial Statements are summarised below. 3.1. Basis of consolidation and investments in associates The consolidated Financial Statements comprise the Financial Statements of the Company and its subsidiaries. Subsidiaries Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group uses the full acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any non- controlling interest in the acquire is recognized at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. The Group elects to recognize any non-controlling interest in the acquire at the non-controlling interest’s proportionate share of the acquiree’s net assets. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the Income Statement. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a liability is recognised in the Income Statement. Contingent consideration that is classified as equity is not re- measured, and its subsequent settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interest and the fair value of any other participation previously held in the subsidiary acquired over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the amount recognized for non-controlling interest and the fair value of any other participation previously held in the 3.1. Basis of consolidation and investments in associates The consolidated Financial Statements comprise the Financial Statements of the Company and its subsidiaries. Subsidiaries Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group uses the full acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any non- controlling interest in the acquire is recognized at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. The Group elects to recognize any non-controlling interest in the acquire at the non-controlling interest’s proportionate share of the acquiree’s net assets. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the Income Statement. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a liability is recognised in the Income Statement. Contingent consideration that is classified as equity is not re- measured, and its subsequent settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interest and the fair value of any other participation previously held in the subsidiary acquired over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the amount recognized for non-controlling interest and the fair value of any other participation previously held in the OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 120 subsidiary acquired the gain is recognised in the Income Statement. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Non-controlling interest reflects the portion of profit or loss and net assets attributable to equity interests that are not owned by the Group. The Group handles transactions with non-controlling interests in the same way that it handles transactions with the shareholders of the Group. Regarding purchases made by non-controlling interests, the difference between the consideration transferred and the carrying amount of the acquired share of the subsidiary's equity is recognized in equity. Profits or losses arising from sales to non-controlling interests are also recognized in equity. If the loss of a subsidiary, that concerns non- controlling interests, exceeds the non-controlling interests in the equity of the subsidiary, the excess sum is shared out in the shareholders of parent company apart from the sum for which the non-controlling has an obligation and it is capable of making up for the loss. In the Company’s separate Financial Statements, investments in subsidiaries are accounted for at cost less impairments, if any. When the Group loses control, the remaining interest is re-measured at its fair value, and any differences that arise are recognized in the Income Statement. Then, this asset is recognized as an associate, joint venture or financial asset at that fair value. In addition, respective amounts that were previously included in other comprehensive income, are accounted for in the same way as they would be following the event of sale of such assets and liabilities, which is the transfer to the Income Statement. All subsidiaries of the Group have as balance date the 31 st December. Intra-group transactions, balances and unrealised gains/losses on transactions between group companies are eliminated in the consolidated financial statements. Associates Associates are those entities in which the Group has significant influence upon, but not control over their financial and operating strategy, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates in which the Group has significant influence are accounted for using the equity method of accounting. Under this method the investment is initially recognized at cost, and is adjusted to recognize the investor’s share of the profit or loss after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition. The Group’s share of post-acquisition profit or loss is recognized in the Income Statement and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. The accumulated variations after the acquisition affect the carrying amount of investments in associates (reduced by any impairment losses). Unrealized gains from transactions between the Group and associates are eliminated using the percentage of the Group's participation in associates. Unrealised losses incurred are eliminated unless the transaction provides evidence of impairment of the transferred asset. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 121 Dividends received from associates are identified by decreasing the carrying value of the investment. When the Group’s share of losses exceeds the carrying amount of the investment, the carrying value of the investment is reduced to nil and recognition of further losses is discontinued, except to the extent the Group has created obligations or has made payments on behalf of the associate. The accounting policies of associates have been amended in order to comply with the ones adopted by the Group. The Company recognizes investments in associates at its separate Financial Statements at acquisition cost minus impairment. Transactions between companies under common control Transactions between companies under common control are excluded from the scope of IFRS 3. Therefore, the Group implementing the guidance of IAS 8 Accounting policies, changes in accounting estimates and errors for similar cases accounts for such transactions using the predecessor approach without restatement of the previous period financial statements. Under this approach, the acquired assets and liabilities are recorded at their existing carrying values without revaluation at their fair values, no goodwill is recognized and the difference between the acquirer’s cost of investment and the acquiree’s net assets is recognized directly in equity in retained earnings or in a separate reserve. The Group elects to recognize the difference in retained earnings. 3.2. Foreign currency translation OPAP’s consolidated Financial Statements are presented in euro (€), which is also the functional currency of the parent company and the currency of presentation for the Company and all its subsidiaries. Foreign currency transactions are translated into euro using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses arising from the settlement of such transactions during the period and from the conversion of monetary items that are denominated in foreign currency at the exchange rates prevailing at the balance sheet date, are recognized in the Income Statement, either as financial income or as financial expenses, unless recognized in equity, designated as cash flow hedge or net investment hedge. 3.3. Operating segments Segment information is presented in Note 5 based on the internal management reports and information provided to the chief operating decision makers, as required by IFRS 8. An operating segment represents a separate category of games or other services offered by the Group entities. Information for operating segments that do not constitute reportable segments is combined and disclosed in the “Other” category. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 122 3.4. Revenue recognition Revenue is presented net of value-added tax, returns and players’ incentives. Gaming Revenue Gaming revenue is reported net after the deduction of the payout, and net of incentives to the players and is presented as Gross Gaming Revenue (GGR) in the Income statement. Amounts wagered do not represent the Group’s and the Company’s statutory revenue measure. They comprise the amounts received from the players or that are receivable by the end of the year in respect of all games apart from VLTs and CASINO-type games. Amounts wagered that refer to events (games or draws) of future accounting periods are considered as deferred revenue classified under “Trade payables” in the Statement of Financial Position, measured at fair value. Payout to the winners is recognized on the date that the draw or the event occurred. Payout (winning) claims at the end of each reporting period are classified as “Trade payables” in the Statement of Financial Position while the unclaimed winnings are attributed to the State when the relevant legal claim period expires. • Lottery games: This category refers to draw based games and there are two types, with fixed prizes and Pari mutuel (Jackpot games). For Fixed prizes, the payout is a fixed amount while, for Pari mutuel a payout pool is created. In case of no winner in the current draw (Jackpot), the prize is rolled into the next draw and at the end of each reporting period the Group recognises a relevant payout provision which is included in “Trade payables”. In this category LOTTO, PROTO, TZOKER, KINO, SUPER 3, EXTRA 5 and POWERSPIN are included. Revenue is recognized in the period when the draws take place, net of the obligations to pay the player winnings on future draws and are assessed at fair value. • Betting games: This category refers to bets from players mainly on sports events, real or virtual. When players bet on the outcome of an event (fixed odds games), the payout is fixed but when they play against other players (Pari mutuel) a payout pool is created. The betting games offered by the Group are STOIXIMAN sportsbook, PAME STOIHIMA (including virtual games and horse races betting), PROPO, PROPOGOAL and CASINO-type games. For betting games other than CASINO-type games, revenue is recognized in the period when the bet event occurs, net of the obligation to pay the player winnings on future events and are assessed at fair value. For CASINO-type games revenue is recognized as the net result of players’ session. • Instant lotteries: this category refers to SCRATCH cards which are operated by HELLENIC LOTTERIES S.A.. Revenue represents the amounts wagered less the winners’ payout. The winners’ payout is adjusted to the level stated in the Concession Agreement and the specifications of each SCRATCH card type with a corresponding payout provision recognized in “Trade payables” in the Statement of Financial Position. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 123 • Passive lotteries: There are two types of passives lotteries, the NATIONAL (without Jackpot) and the POPULAR (with Jackpot), both operated by HELLENIC LOTTERIES S.A. In case of no winner in the current draw (Jackpot) of the POPULAR lottery, the prize is rolled into the next draw. At the end of each reporting period the Group recognises a relevant payout provision which is included in “Trade payables” in the Statement of Financial Position. Revenue is recognized in the period when the draws take place, net of the obligation to pay the player winnings on future draws and are assessed at fair value. • VLTs: Revenue is defined as the sum of all players’ sessions within a period. A player’s session begins when the player inserts the card in the machine and ends when the card is taken out. Revenue is recognized at the net amount (receipts less winnings) of each player’s session. Revenue from non-gaming activities Revenue from non-gaming activities mainly includes: • New Year’s Eve Lottery commission (or Special State Social Solidarity Lottery): New Year’s Eve Lottery is issued once a year and the draw is held on New Year’s Eve. Net revenues from this Lottery are attributed to the Greek State. HELLENIC LOTTERIES S.A. according to the Concession Agreement produces, operates, distributes, promotes, manages it and receives a 17% management fee on amounts wagered. • Income from TORA DIRECT SINGLE MEMBER S.A. relating to prepaid cards, mobile top-ups and bill payments: (a) Principal for the sale of electronic codes to end users: In this category of contracts TORA DIRECT SINGLE MEMBER S.A. acquires the ownership of the electronic codes and assumes the risk of inventory. The income is recognized when the business partners sell the specific codes to end users. (b) Agent for the sale of electronic codes to end users: In this category of contracts TORA DIRECT SINGLE MEMBER S.A. does not acquire the ownership of the electronic codes and is considered to be acting as a representative of the suppliers. The revenue recognized in this category is the commissions received by the suppliers. (c) Bill payments TORA DIRECT SINGLE MEMBER S.A. acts as an intermediary for the service of bill payments through its network of business partners for which it receives a commission by the end users. The Company recognizes the revenue of the commission upon payment of the bill. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 124 • Income from TORA WALLET SINGLE MEMBER S.A. relating to payment services: Revenue is recognized during the period in which the services are provided, based on the stage of its completion. Besides the payment services provided to consumers, TORA WALLET SINGLE MEMBER S.A. also provides B2B payment methods to OPAP Group companies. The revenue from these services relates to commissions received regarding the completion of each transaction/service offered either to third parties or to Group. • Revenue from IT and other services: Revenue is recognized when the performance obligation is satisfied by transferring goods or services to the customer. 3.5. OPAP S.A. License Extension 2020-2030 On 15.12.2000, OPAP S.A. signed an agreement with Hellenic Republic Asset Development Fund (HRADF) which provided to OPAP S.A. the exclusive right to conduct, manage, organize and operate by any means various numerical lottery and sports betting games. This agreement had an expiration date of 13.10.2020. On 12.12.2011, OPAP S.A. signed an Addendum with HRADF extending the expiration date of the agreement from 13.10.2020 to 13.10.2030. The 12.12.2011 Addendum with HRADF set also the GGR Contribution to be at 30%. Additionally, based on the agreement, the 80% of the consideration paid of the amount of € 1,831,200 (calculated in future value) is considered a prepayment of the OPAP S.A. contribution for the GGR that will be generated during the Addendum’s period i.e. 2020-2030. The aforementioned 30% GGR contribution in the Income Statement, is classified under ‘GGR contribution and other levies and duties’ category and consists of: • A ‘‘Variable consideration’’ of 5% which is payable to the State on a monthly basis • An ‘‘Additional consideration’’ calculated on an accrual basis which, depending on the performance of the Company, may be either expense or income and will be settled a few months following the termination of the Addendum, i.e. in April 2031 • The portion of the ‘‘Prepaid contribution’’ of € 1,831,200 adjusted for any corporate tax impact. From 13.10.2020 the Group accounts for the effects of the agreement in the following way: • “Intangible asset” of € 375,000 which is amortized over the 10-year period • “Income related to the extension of the concession of the exclusive right 2020-2030” of € 1,831,200 adjusted for any corporate tax impact is recognized on an accrual basis over 10-year period • “Other non-current assets” or “Other non-current liabilities” representing the present value of the “additional consideration” while the effect of the discounting is incorporated in “Finance income/(cost)” OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 125 3.6. Interest income Interest income is recognized using the effective interest method that is the rate that discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When a receivable is impaired, the Group reduces the carrying amount to the amount expected to be recovered, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. 3.7. Dividend income Dividend income is recognized in the Income Statement at the date of distribution approval by the Annual General Meeting of shareholders of the dividend paying entity. 3.8. Expenses Expenses are recognized in the Income Statement on an accrual basis. Interest expenses are also recognized on an accrual basis. 3.9. Property, plant and equipment Items of Property, Plant and Equipment are measured at historical cost less accumulated depreciation and any impairments. The historical cost includes all the directly attributable expenses for the acquisition of the assets. Subsequent expenditure is added to the carrying value of property, plant and equipment or is booked as a separate fixed asset only if it is probable that future economic benefits will flow to the Group and their cost can be accurately and reliably measured. Upon sale of property, plant and equipment, any difference between the proceeds and the book value is presented as profit or loss in the Income Statement. Expenditure on repairs and maintenance is presented as an expense in the period they occur. Depreciation of property, plant and equipment (other than Land which is not depreciated) is calculated using the straight line method over their useful life, as follows: Land - Buildings 10-20 years Plant & Machinery 3-9 years Vehicles 6.5 years Furniture and other equipment 3-10 years OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 126 The residual values and useful economic life of property, plant and equipment are subject to reassessment at each reporting date. When there are objective indications that the book value of property, plant and equipment exceeds their recoverable amount, the difference (impairment) is immediately presented as an expense in the Income Statement. Assets up to a value of € 1.5 are amortized during the year. 3.10. Intangible assets Intangible assets include concession rights (“Right of games”), brand and customer relationships, software and development costs and intangible assets not yet available for use. Concession rights (“Right of games”) The exclusive rights granted by the Hellenic Republic to Group companies are initially recognized at cost and subsequently at amortized cost decreased with any impairment (Refer to Νote 3.12, for the impairment test procedures). The exclusive right to operate by any suitable means provided by current technology, numerical games, video lotteries, lotteries, sports and horse racing betting games provided to Group companies by the Greek State is accounted for at cost and is amortized within the period to which it relates. Extensions to existing exclusive rights and new licenses of new video lotteries on an exclusive basis, are treated as separate assets and are amortized over the period of each license extension on a straight line basis. The useful life of the exclusive right to operate numerical and sports betting games according to the respective concession agreement is defined to 20 years and its extension to 10, video lotteries to 18 years, lotteries to 12 years and horse racing betting games to 20 years. Brand and Customer relationships Brand and customer relationships acquired in a business combination are recognized at fair value based on expert’s appraisal prepared at the time of the acquisition and both are determined to be intangible assets. After initial recognition, the assets are carried at their cost less any accumulated amortization and any accumulated impairment losses. Brands’ useful life is indefinite on the basis of their market strength and generation of future stable cash inflows. The brand is well established in the market and has substantial market share. The Group continues to invest in brand awareness and brand recognition and expects to use the brands for the foreseeable future. Therefore, the useful life of “Brand and trademarks” is expected to be indefinite and is annually tested for impairment. The assessment of indefinite life is reviewed annually to determine whether the indefinite life assumption continues to be appropriate (Note 3.12). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 127 Customer relationships’ useful life is finite and is amortized on a straight line basis over a period determined by the management (7-20 years). An impairment testing is performed on customer relationships at least on an annual basis in line with its relevant policy (Note 3.12). Software Software licenses are recognized at historical cost and subsequently they are carried at cost less accumulated amortization. Depreciation is calculated using the straight line method during the assets’ useful life that range from 1 to 4 years. Development costs Development projects differ from other intangible assets in terms of scientific and technical uncertainty. Expenditure on research activities, which are incurred in order to gain knowledge that can lead to future economic benefits are recognized as expenses in the period in which they are incurred and no intangible asset arising from research (or the research phase of an internal project) shall be recognized. An intangible asset that arises as a result of development (or the development phase of an internal project) is recognized as an asset only when all of the following are met: • Technical feasibility of completing an intangible asset is such that it can be used or sold; • Intention to complete and use or sell the intangible asset; • Ability to use or sell the intangible asset; • Ability to demonstrate how the intangible asset will generate future economic benefits; • Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; • Ability to measure expenses related to an intangible asset during its development reliably. The amount of the initial recognition of an internally generated intangible asset includes the total expenditure incurred since the intangible asset first met the recognition criteria above. If no internally generated intangible asset can be recognized, development expenditure is recognized in the Income Statement in the period in which it is incurred. Intangible assets not yet available for use Intangible assets not yet available for use are assets that are in the process of development and are carried at cost. Cost mainly includes cost of payroll and they are not depreciated, as they are not yet available for use. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 128 3.11. Goodwill Goodwill is measured in accordance with Note 3.1. Goodwill is not depreciated but is subject to impairment testing on an annual basis or more frequently if events or changes in circumstances indicate possible impairment. After initial recognition, goodwill is measured at acquisition cost less any cumulative impairment losses. If part of a cash-generating unit in which goodwill is allocated is sold, then the goodwill attributable to the portion sold is included in the carrying amount of that portion in order to determine profit or loss. The value of goodwill attributable to the portion sold is determined based on the relative values of the portion sold and the portion of the cash-generating unit that remains unsold. Each unit or group of units to which the goodwill is allocated shall: (a) Represent the lowest level within the entity at which the goodwill is monitored for internal management purposes; and (b) Not be larger than an operating segment as defined by paragraph 5 of IFRS 8 “Operating Segments” before aggregation. 3.12. Impairment of non-financial assets The Group’s goodwill, assets with an indefinite useful life and intangible assets that have not yet come in force are not depreciated and are tested for impairment annually. Assets that are depreciated are subject to an impairment review when there is evidence that their value will not be recoverable. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. An impairment loss is recognized when the carrying amount of these assets (cash generating unit - CGU) is greater than its recoverable amount. Fair value less costs of disposal is the amount received from the sale of an asset at an arm’s length transaction in which participating parties have full knowledge and participate voluntarily, after deducting any additional direct cost for the sale of the asset, while value in use is the present value of estimated future cash flows that are expected to flow into the company from the use of the asset and from its disposal at the end of its estimated useful life. For the purposes of assessing impairment, intangible assets and assets are grouped at the lowest level for which there are separately identifiable cash flows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash generating unit level. For impairment testing at business combinations, the goodwill that has been recognized is allocated, from the acquisition date, to the cash generating units of the Group which are expected to benefit from the merger, regardless of whether the other assets or liabilities of the acquired company are allocated to the specific cash generating units. An impairment loss is recognised in the Income Statement for the amount by which the asset’s or cash- generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value in use, based on an internal discounted cash flow evaluation. For goodwill, the impairment loss is defined by valuating the recoverable amount of OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 129 cash generating units which are related to goodwill. If the book value of a cash generating unit, including goodwill, exceeds its recoverable amount, then impairment loss is recognized. The impairment loss is initially charged to goodwill and then pro rata to the other assets of the cash generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist and therefore the recognized impairment is reversed. 3.13. Leases The Group as the lessee Under IFRS 16, a contract is, or contains a lease if it conveys the right to control the use of an identified asset for a period of the time in exchange for consideration. For such contracts, the new model requires a lessee to recognize a right of use asset and a lease liability. The right of use of asset is depreciated and the liability accrues interest. The only exception the Group uses in application of IFRS 16 is leases with a lease term of 12 months or less and containing no purchase options. At commencement of a lease the Group measures a lease liability at the present value of the lease payments which are not paid as at that date. Lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate of the component entered into the lease agreement. Generally, the Group uses its incremental borrowing rate as the discount rate. This is the rate that the lessee would have to pay on the commencement date of the lease for a loan of a similar term, and with similar security, to obtain an asset of similar value to the right-of-use asset in a similar economic environment. The following payments are included in the measurement of the lease liability: • fixed payments (including in-substance fixed payments), less any lease incentives receivable • variable lease payment that are based on an index or a rate • amounts expected to be payable by the lessee under residual value guarantees • the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The above payments are discounted for the lease term. The lease term is the non-cancellable period of the lease. Any periods covered by extension options held by the Group are included in the lease liability only if it is reasonable certain that the options will be exercised. In addition, periods covered by an option to terminate the lease held by the Group are included only if the Group is reasonably certain that these options will not be exercised. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 130 The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured if there is a modification that is not accounted for as a separate lease; when there is a change in future lease payments arising from a change in an index or rate; a change in the estimate of the amount expected to be payable under a residual value guarantee; and changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. Right-of-use (“RoU”) assets are initially measured at cost being the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. ROU assets are measured at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. They are depreciated using the straight-line method over the shorter of the underlying asset’s useful life and the lease term. If the cost of the right-of-use assets reflects that the Group will exercise a purchase option then they are depreciated over the useful life of the underlying asset. The Group as the lessor The leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Initially, the lease payment income less the cost of services is charged to the income on a straight-line basis over the period of the lease. 3.14. Financial assets Financial assets include cash and other financial instruments. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Initial recognition and subsequent measurement of financial assets The financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (FVOCI), and fair value through profit or loss (FVPL). The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the business model within which the financial asset is held. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are “solely payments of principal and interest (SPPI)” on the principal amount outstanding. This assessment is referred to as the SPPI criterion and is performed at an instrument level. For the purpose of subsequent measurement, financial assets are classified in three categories: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 131 • Financial assets at amortised cost (debt instruments) • Financial assets at fair value through other comprehensive income • Financial assets at fair value through profit or loss Assets held for the purpose of collecting contractual cash flows and create cash flows on specific dates that are exclusively consisted of repayment of capital and interest on the outstanding balance of the capital, are measured at amortised cost. Interest income is calculated using the effective interest method and is recognized in “Finance income”. The gain or loss that results from the recognition of the asset is recognized directly in the Income Statement along with any foreign exchange gains / losses. Impairment losses are recognized in line “Net impairment losses on financial assets”. Impairment of financial assets The Group and the Company assess at each reporting date, whether a financial asset or group of financial assets is impaired as follows: The Group and the Company recognise an allowance for Expected Credit Losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). Derecognition of financial assets A financial asset (or, a part of a financial asset or part of a group of similar financial assets) is derecognized when: • the rights to receive cash flows from the asset have expired; • the Group or the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through” arrangement; or • the Group or the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the assets, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group or the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 132 rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. 3.15. Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the yearly weighted average cost formula. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. When there is any subsequent increase of the net realizable value of inventories that have been previously written-down, the amount of the write-down is reversed. 3.16. Cash and cash equivalents Cash and cash equivalents include cash at bank accounts and in hand as well as short term highly liquid investments such as money market instruments and bank deposits with an original maturity of three months or less. Cash and cash equivalents also include amounts from electronic payment processors, as Management concluded that the process completed at the time of purchase includes adequate checks to provide evidence that the amount is readily convertible to known amount of cash and that there is an insignificant risk of changes in value. 3.17. Equity Share capital is determined using the nominal value of shares that have been issued. Ordinary shares are classified as equity. Any excess of the fair value of the consideration received over the par value of the shares issued is recognized as share premium in shareholders’ equity. Share capital issuance costs, net of related tax, are reflected as a deduction from share premium. Treasury shares consist of Company’s own equity shares, which are reacquired and not cancelled. Treasury shares do not reduce the number of shares issued but reduce the number of shares in circulation. Treasury shares are recognized at cost as a deduction from equity. No gain or loss is recognized in the Income Statement on the purchase, sale, issue or cancellation of the Company’s own share capital. Expenses related to the issuance of shares for the purchase of companies are included in the acquisition cost of the company acquired. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 133 3.18. Current and deferred income tax Income tax for the year comprises current and deferred tax. Tax is recognized in the Income Statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. Current income tax is measured on the taxable income for the year using enacted or substantively enacted tax rates at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided on all temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax liabilities are recognized for all taxable temporary differences. However, in accordance with the rules set out in IAS 12, no deferred taxes are recognised in conjunction with goodwill. No deferred tax is recognised from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither the accounting profit nor taxable profit or loss. No deferred taxes are recognised to temporary differences associated with shares in subsidiaries and joint ventures if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. Most changes in deferred tax assets or liabilities are recognised as a part of tax expense in the Income Statement. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or liabilities that are charged directly to equity are charged or credited directly to equity. Deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. The Group recognises previously unrecognised deferred tax assets are reassessed at each balance sheet date to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. The Company may offset deferred tax assets and deferred tax tax liabilities if and only if: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 134 (a) The enterprise has a legally enforceable right to offset current tax claims against current tax liabilities, and (b) Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. The Company may offset current tax assets and current tax liabilities if and only if, the enterprise: (a) Has a legal right to set off the amounts recorded, and (b) Intends to either repay/ settle the net balance or to recover the claim and pay the obligation at the same time. 3.19. Provisions, contingent liabilities and contingent assets Provisions are recognized when the Group or the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. No provisions are recognized for future operating losses. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. The discount pre-tax rate reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as borrowing cost in the Income Statement and specifically in the line “Finance costs”. All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, or the amount to be provided for cannot be measured reliably, no liability is recognised unless assumed in the course of a business combination. Contingent liabilities are not recognized in the Financial Statements but are disclosed, except if the probability that there will be an outflow of resources that embody economic benefits is remote. Contingent assets are not recognized in the Financial Statements but are disclosed provided that the inflow of economic benefits is probable. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 135 3.20. Financial liabilities The Group’s financial liabilities include bank loans and overdrafts, trade and other payables and finance lease liabilities. Initial recognition and subsequent measurement of financial liabilities All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The measurement of financial liabilities depends on their classification. Derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Income Statement. The loans are divided into long term (mature in more than one year) and short term (mature in one year or less). Offsetting of financial assets and liabilities Financial assets and liabilities are offset and the net amount is presented in the statement of financial position only when the Group or the Company has a legally enforceable right to set off the recognized amounts and intends either to settle such asset and liability on a net basis or to realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty. Cash flow hedge The Group uses derivative financial instruments to hedge its exposure to interest rate risks. Changes in the fair value of the derivative hedging instrument or designated non-derivative financial liability designated as a cash flow hedge are recognized directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in the Income Statement. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in equity remains there until the forecast transaction occurs. When the hedged item is a non- financial asset, the amount recognized in equity is transferred to the carrying amount of the asset when it OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 136 is recognized. In other cases, the amount recognized in equity is transferred to the Income Statement in the same period that the hedged item affects income or loss. 3.21. Retirement benefits costs The parent company, its subsidiaries HELLENIC LOTTERIES S.A., TORA DIRECT SINGLE MEMBER S.A., HORSE RACES SINGLE MEMBER S.A., TORA WALLET SINGLE MEMBER S.A. and NEUROSOFT S.A. in Greece, pay contributions to employee retirement benefit plans in accordance with the applicable laws and the practices of the Group. These programs are classified as defined benefit plans and defined contribution plans. Defined benefit plans A defined benefit plan is a benefit plan in which specific benefits become payable to the employee upon retirement, which are determined by certain parameters such as age, years of service or salary. For a defined benefit plan, the value of the liability is equal to the present value of the defined benefit payable at the balance sheet date less the fair value of plan assets and of past services cost. The defined benefit liability and the related expense is estimated annually by independent actuaries using the projected credit unit method. The present value of the liability is determined by discounting the estimated future cash flows to the interest rate of high quality corporate bonds or government bonds in the same currency as the liability with proportional liability duration, or interest rate that takes into account the risk and duration of the liability, where the market depth for such bonds is weak. The costs of liability are recognized in income during the rendering of insured services. The expenses for defined benefit plans, as estimated, are recognized in the Income Statement and are included in staff costs. Additionally, based on the requirements of IAS 19 (Amendment) the actuarial profits/(losses) are recognised in the statement of comprehensive income. Following a decision issued by the International Finance Reporting Interpretations (IFRIC) issued in May 2021, it was determined that the period over which the provision for retirement benefits is accrued under Article 8 of Law 3198/1955, shall be the period of 16 years prior to the date at which the employee is due to retire based on the retirement scales provided by Law 4093/2012. This resulted in a change in accounting policy, since up to that date, the Company was accruing the retirement benefit provision from the date of recruitment up to the date of retirement. Defined contribution plans A defined contribution plan is where the entity pays fixed contributions into a separate entity and no legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all employees the benefits relating to employee service in current or prior years. The contributions are OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 137 recognized as employee benefit expense on an accrual basis. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. Long-term incentive scheme The 20th Ordinary General Meeting of the Company, following a recommendation of the Remuneration and Nomination Committee and in accordance with article 109 of Law 4548/2018, as in force and the Company Remuneration Policy, on 22.05.2019, approved a Long term incentive scheme with distribution of part of the Company’s net profits to Executive Members of the BoD and other Key Management Personnel of the Company. The program’s duration is 3 years, for the period 2020-2022 and the targets relate to a. the EBITDA of the Company for the 3 year period b. the total shareholders’ return (TSR). The scheme has been accounted for under IAS 19 Employee Benefits. 3.22. Investment property In this category the Group classifies property held for long-term rental yields which is not occupied by the Group companies. These investments are initially recognized at their cost, increased by the expenses related to the acquisition transaction. After the initial recognition they are valued at their cost less the accumulated depreciation and the possible accumulated losses from the reduction of their value. Expenses for the maintenance and repairing of the invested upon property, plant and equipment, are recognized in the Income Statement. For the calculation of depreciation, their useful life has been defined equal to that of owned occupied property. 3.23. Dividends payable Dividends declared to the shareholders are recognized as a liability in the period they are approved by the General Assembly of shareholders. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 138 4. Structure of the Group The structure of OPAP Group as of 31.12.2022 is the following: Company’s Name % of investment Country of Incorporation Consolidation Method Principal Activities OPAP S.A. Parent company Greece Numerical lottery games and sports betting HELLENIC LOTTERIES S.A. 83.50% Greece Full consolidation Lotteries OPAP CYPRUS LTD 100% Cyprus Full consolidation Numerical lottery games OPAP SPORTS LTD 100% Cyprus Full consolidation Sports betting company OPAP INTERNATIONAL LTD 100% Cyprus Full consolidation Holding company OPAP INVESTMENT LTD 100% Cyprus Full consolidation Holding company TORA DIRECT SINGLE MEMBER S.A. 100% Greece Full consolidation Services for electronic transactions - Mobile Top-ups - Utility and Bill Payments HORSE RACES SINGLE MEMBER S.A. 100% Greece Full consolidation Mutual Betting on Horse Races TORA WALLET SINGLE MEMBER S.A. 100% Greece Full consolidation eMoney Institution NEUROSOFT S.A. 67.72% Greece Full consolidation Software STOIXIMAN LTD 84.49% Malta Full consolidation Betting company The country of incorporation indicated above is also the principal place of business of the respective company (with the exception of STOIXIMAN LTD which operates in Greece and Cyprus), and the proportion of ownership interest is the same as the proportion of voting rights held (with the exception of STOIXIMAN LTD in which the Group holds a 84.49% economic interest and controls the 85.18% of voting rights). On 29.11.2022, the Board of Directors of OPAP INVESTMENT LTD, a 100% subsidiary of the Company, approved the transfer of the 36.75% minority interest held by OPAP INVESTMENT LTD in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) to Allwyn Investments Cyprus Limited, a fully owned indirect subsidiary of Allwyn International a.s.. The disposal date for the equity method investment in KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) was agreed with Allwyn Investments Cyprus Limited (formerly Rubidium Holding 2 Ltd) to be 31.12.2022, whilst the transaction was actually completed on 27.12.2022. Following the aforementioned transaction, the OPAP Group retains its 84.49 % combined stake and sole control over STOIXIMAN LTD and its online gaming business in Greece and Cyprus. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 139 The annual financial statements of companies included in the consolidation are prepared at the same reporting date as the annual financial statements of the Company. 5. Operating segments The Group identifies the following operating segments that the Management has decided to monitor separately for decision making purposes, which are also reportable segments: • Lotteries • Betting (land based) • Online betting • Other online games • Instant & Passives • VLTs • Telecommunication & eMoney services The Group uses “Profit before interest, tax, depreciation and amortization (EBITDA)” to evaluate the performance of its operating segments. EBITDA is a non-IFRS measure and it is a subtotal or derived directly from the lines presented in the Income Statement. The first 6 business segments (Lotteries, Betting (land based), Online betting, Other online games, Instant & Passives and VLTs) relate to the gaming activity of the Company and the other Group entities which operate in the gaming sector. Further relevant details are given in Note 3.3. The “Telecommunication & eMoney services” segment includes the business activities of TORA WALLET SINGLE MEMBER S.A. and TORA DIRECT SINGLE MEMBER S.A. (refer to Note 3.3). The “Other” category, includes the non-gaming activities of OPAP S.A., the business activities of NEUROSOFT S.A. and the holding companies of the Group. Specifically, the non-gaming activities of OPAP S.A. refers to the sales of PLAY Gaming Halls to third parties, the configuration of the network for the VLTs installation and the provision of other supporting services to the network. Finally, the business activity of NEUROSOFT S.A. refers to the provision of IT services and other technological products. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 140 The Group’s operating segments for the current period are presented below: 01.01-31.12.2022 (Amounts in thousands of euro) Lotteries Betting (land based) Online Betting Other online games Instant & Passives VLTs Telecommunication & eMoney services Other Total Revenue (GGR) 709,457 370,784 232,966 199,510 107,902 318,365 - - 1,938,985 GGR contribution and other levies and duties (203,308) (109,210) (79,203) (67,947) (50,000) (95,929) - - (605,597) Net gaming revenue (NGR) 506,149 261,575 153,763 131,563 57,902 222,436 - - 1,333,388 Agents' commission (177,778) (98,134) - - (30,581) (76,500) - - (382,993) Other direct costs (6,875) (13,677) (27,503) (49,945) (7,591) (46,014) - - (151,605) Revenue from non-gaming activities - 631 - - 1,996 - 81,802 44,589 129,017 Income related to the extension of the concession of the exclusive right 2020-2030 147,316 82,837 - - - - - - 230,153 Cost of sales related to non-gaming activities - - - - - - (66,030) (5,623) (71,654) Share of profit of associates - - 7,237 7,552 - - - - 14,788 Profit before interest, tax, depreciation and amortization (EBITDA) 363,852 175,169 78,459 43,467 7,936 53,217 1,628 12,258 735,985 Profit from disposal of associate - - 88,719 92,580 - - - - 181,298 Depreciation and amortization (38,166) (23,539) (7,392) (6,187) (13,249) (40,127) (890) (4,167) (133,716) Impairment of intagible assets - - - - (20,219) - - - (20,219) Results from operating activities 325,685 151,630 159,786 129,860 (25,532) 13,090 739 8,091 763,348 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 141 The Group’s operating segments for the comparative period are presented below: 01.01-31.12.2021 (Amounts in thousands of euro) Lotteries Betting (land based) Online Betting Other online games Instant & Passives VLTs Telecommunication & eMoney services Other Total Revenue (GGR) 549,171 283,002 238,369 184,827 88,833 194,641 - - 1,538,843 GGR contribution and other levies and duties (155,157) (83,411) (83,479) (64,547) (50,000) (58,392) - - (494,986) Net gaming revenue (NGR) 394,014 199,591 154,890 120,280 38,833 136,249 - - 1,043,857 Agents' commission (134,572) (72,717) - - (24,069) (45,528) - (977) (277,862) Other direct costs (11,371) (12,151) (47,458) (51,658) (5,996) (31,523) - - (160,157) Revenue from non-gaming activities 4,571 4,130 90 75 2,209 84,357 28,302 123,735 Income related to the extension of the concession of the exclusive right 2020-2030 138,988 78,385 - - - - - - 217,373 Cost of sales related to non-gaming activities - - - - - - (72,048) (2,367) (74,415) Share of profit of associates - - (265) (178) - - - - (443) Profit before interest, tax, depreciation and amortization (EBITDA) 296,323 143,845 52,333 26,494 (652) 27,234 676 4,043 550,296 Depreciation and amortization (41,420) (25,444) (7,699) (6,017) (16,722) (41,432) (939) (5,131) (144,804) Impairment of intagible assets - - - - (4,315) - (235) (113) (4,663) Results from operating activities 254,902 118,401 44,634 20,477 (21,689) (14,198) (498) (1,201) 400,829 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 142 Geographical Segments The Group operates in two geographical locations, Greece and Cyprus. Greece and Cyprus are the countries of incorporation of the Company and of its subsidiaries with the exception of STOIXIMAN LTD, which is incorporated in Malta. GROUP For the year ended on 31 December 2022 Greece Cyprus Total Revenue (GGR) 1,804,230 134,755 1,938,985 GGR contribution and other levies and duties (577,770) (27,826) (605,597) Net gaming revenue (NGR) 1,226,459 106,929 1,333,388 Revenue from non-gaming activities 92,939 36,078 129,017 GROUP For the year ended on 31 December 2021 Greece Cyprus Total Revenue (GGR) 1,440,210 98,633 1,538,843 GGR contribution and other levies and duties (475,888) (19,098) (494,986) Net gaming revenue (NGR) 964,322 79,535 1,043,857 Revenue from non-gaming activities 119,707 4,028 123,735 GROUP Greece Cyprus Total Segment Assets As at 31 December 2022 2,162,875 408,415 2,571,289 As at 31 December 2021 2,616,861 85,636 2,702,497 Segment Liabilities As at 31 December 2022 1,444,396 51,461 1,495,856 As at 31 December 2021 1,610,067 143,058 1,753,125 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 143 6. Intangible assets Intangible assets comprise of software, rights of games, development costs, brand customer relationships and intangible assets not yet available for use and are analyzed as follows: GROUP Software Rights of games Development costs Brand Customer relationships Intagible assets not yet available for use Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 40,650 931,035 2,440 175,390 86,493 45 1,236,054 Additions 10,156 10,000 222 - - - 20,377 Disposals - - (811) - - - (811) Transfers (27) - 27 - - - - Amortization charge (16,754) (88,250) (915) - (12,183) - (118,102) Disposals amortization - - 327 - - - 327 Impairment (139) (4,315) (96) - - - (4,550) Net book amount (31 December 2021) 33,887 848,470 1,193 175,390 74,310 45 1,133,295 Year ended 31 December 2022 Opening net book amount (1 January 2022) 33,887 848,470 1,193 175,390 74,310 45 1,133,295 Additions 15,810 1,000 206 - - 1,163 18,179 Disposals (18) - - - - - (18) Transfers (502) - - - - 502 - Amortization charge (11,440) (85,640) (624) - (12,183) - (109,887) Impairment - (20,219) - - - - (20,219) Net book amount (31 December 2022) 37,737 743,611 774 175,390 62,126 1,710 1,021,349 GROUP Software Rights of games Development costs Brand Customer relationships Intagible assets not yet available for use Total 31.12.2021 Acquisition cost 209,237 1,537,202 6,539 175,390 90,200 45 2,018,614 Accumulated amortization (175,350) (688,732) (5,346) - (15,890) - (885,319) Net book value 31.12.2021 33,887 848,470 1,193 175,390 74,310 45 1,133,295 31.12.2022 Acquisition cost 224,527 1,517,983 6,745 175,390 90,200 1,710 2,016,555 Accumulated amortization (186,790) (774,372) (5,971) - (28,074) - (995,206) Net book value 31.12.2022 37,737 743,611 774 175,390 62,126 1,710 1,021,349 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 144 COMPANY Software Rights of games Intagible assets not yet available for use Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 36,228 838,036 45 874,308 Additions 9,720 5,000 - 14,720 Amortization charge (15,537) (71,549) - (87,086) Net book amount (31 December 2021) 30,410 771,487 45 801,942 Year ended 31 December 2022 Opening net book amount (1 January 2022) 30,410 771,487 45 801,942 Additions 14,221 1,000 1,163 16,384 Reclassification 10 - (10) - Amortization charge (10,152) (71,984) - (82,137) Net book amount (31 December 2022) 34,489 700,503 1,198 736,190 COMPANY Software Rights of games Intagible assets not yet available for use Total 31.12.2021 Acquisition cost 199,809 1,387,783 45 1,587,637 Accumulated amortization (169,399) (616,295) - (785,694) Net book value 31.12.2021 30,410 771,487 45 801,942 31.12.2022 Acquisition cost 214,040 1,388,783 1,198 1,604,021 Accumulated amortization (179,551) (688,280) - (867,831) Net book value 31.12.2022 34,489 700,503 1,198 736,190 The Group’s “Software” additions within the current year mainly include: • Software, licenses and upgrading of several applications, websites, platforms, virtualization software, digital signage equipment, etc. of € 7,518, • Software upgrading relating to betting platform of € 3,315, • Software regarding Eurojackpot of € 2,198 • Software relating to VLTs of € 1,577, • SAP software licenses and development of € 115, OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 145 The Group’s “Rights of Games” include the licences below: Licence's Description Company’s Name Net book value 31.12.2022 Net book value 31.12.2021 Remaining amortization period (in years) as at 31.12.2022 Conduct, manage, organise and operate numerical and sports betting games. OPAP S.A. 290,616 328,125 7.75 Installation licence and operation of the VLTs. OPAP S.A. 404,924 438,667 12.00 Online Betting, Casino Games & Poker. OPAP S.A. 3,963 4,695 5.42 Conduct offline the numerical lottery game “Eurojackpot” in the Greek territory through the OPAP Stores. OPAP S.A. 1,000 - 10.42 Produce, operate, distribute, promote and manage all the State Lotteries games and the Instant Lottry game (SCRATCH). HELLENIC LOTTERIES S.A. 31,728 64,296 3.33 Organize and conduct mutual horseracing betting. HORSE RACES SINGLE MEMBER S.A. 7,411 7,984 13.02 Online Betting, Casino Games & Poker. STOIXIMAN LTD 3,969 4,703 5.42 Total 743,611 848,470 The Group’s “Right of Games” additions within the current period refer to the license granted to the Company to conduct offline the numerical lottery game “Eurojackpot” in the Greek territory through its land-based network (OPAP Stores). The license’s provision of services has not started yet and it has been granted for a period of 10 years starting from the date of the conduct of the first draw of Eurojackpot in Greece, with the option to be renewed for an equal or shorter time period. The Group’s “Intagible assets not yet available for use” additions within the current period refer to the capitalization of payroll costs of € 1,163 of the Company for the development and production of software for own use. An impairment of “Rights of games” of € 20,219 was recognized in the year ended 31.12.2022 relating to the 12‐year license to produce, operate, distribute, promote and manage all State Lotteries of HELLENIC LOTTERIES S.A.. Following operational challenges, there were indications that the HELLENIC LOTTERIES S.A. license carrying value exceeds its recoverable amount. Consequently, the impairment test performed as of 30.06.2022 indicated an impairment of € 18,840 while the impairment test performed for 31.12.2022 purposes indicated an additional impairment of € 1,379. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 146 GROUP 31.12.2022 30.6.2022 31.12.2021 Carrying Amount 33,107 56,940 68,611 Recoverable Amount 31,729 38,100 64,296 Impairment (1,379) (18,840) (4,315) The recoverable amount is determined based on the value in use method, consistent with the method used during the previous periods, which required the use of assumptions and estimates. The value in use is calculated based on the projected cash flows covering the concession agreement period (until April 2026). Subjective estimates and judgements by management about the future results of HELLENIC LOTTERIES S.A. (CGU) were included in the above calculation. These estimates and judgements include assumptions surrounding revenue growth rates, EBITDA margins (on NGR) and discount rates. The key assumptions used for the calculation of the Value in Use were the following: GROUP 31.12.2022 31.12.2021 Compounded annual revenue growth rate (CAGR) on NGR 5.4% 2.5% EBITDΑ margin (on NGR) 10.9%-20.6% 20.2%-25.3% Discount rate (WACC) 11.14% 10.37% If the discount rate used in the value-in-use calculation had been 0.25% lower than management’s estimates as at 31.12.2022, the Group would have to recognize an impairment of € 1,248 (instead of € 1,379). If the discount rate used in the value-in-use calculation had been 0.25% higher than management’s estimates as at 31.12.2022, the Group would have to recognize and impairment of € 1,509 (instead of € 1,379). During the preparation of the annual financial report for the period 01.01.2022 to 31.12.2022, management has identified impairment indicators for the license to conduct HORSE RACES SINGLE MEMBER S.A. and the right-of-use asset of the race-track premises at Markopoulo and proceeded to perform the respective impairment test. In making its assessment, management has assessed that the lease of the Markopoulo race-track is not commercially viable for the Group. Accordingly, the Group’s management and the Board of Directors of HORSE RACES SINGLE MEMBER S.A. are currently committed to exploring all options available to disengage from this lease, including, among others, exercising rights to terminate the lease under the license concession agreement. In this respect, management is discussing such options with all relevant stakeholders and has set as a final deadline for its decisions the 31.12.2023, a date until which it may continue to operate horse races in the Markopoulo premises. On the basis of the latest approved business plan reflecting the most probable scenarios, the impairment test performed concluded that no impairment was necessary on the aforementioned carrying values of these assets on our Statement of Financial Position as at 31.12.2022. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 147 Finally, the Group performed impairment testing procedures on all other “Right of Games” , which didn’t result in an impairment. The intangible assets of the Group and the Company have not been pledged. 7. Property, plant and equipment The Property, plant and equipment is analyzed as follows: GROUP Land Buildings Machinery Vehicles Equipment Construction in progress Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 8,496 11,746 37,403 207 27,772 - 85,623 Additions - 225 1 - 3,603 - 3,828 Disposals - - (36) (124) (297) - (456) Depreciation charge - (1,598) (7,093) (42) (10,334) - (19,067) Disposals depreciation - - 34 124 297 - 455 Net book amount (31 December 2021) 8,496 10,373 30,309 165 21,041 - 70,383 Year ended 31 December 2022 Opening net book amount (1 January 2022) 8,496 10,373 30,309 165 21,041 - 70,383 Additions - 496 305 26 3,654 111 4,591 Disposals (57) (758) - (19) (173) - (1,007) Transfer to investment property (1,488) (1,637) - - - - (3,125) Depreciation charge - (1,667) (7,024) (41) (7,850) - (16,583) Disposals depreciation - 732 - 19 173 - 923 Transfer depreciation - 1,569 - - - - 1,569 Net book amount (31 December 2022) 6,951 9,107 23,589 150 16,844 111 56,752 GROUP Land Buildings Machinery Vehicles Equipment Construction in progress Total 31.12.2021 Acquisition cost 8,496 34,417 120,790 2,342 123,100 - 289,146 Accumulated depreciation - (24,044) (90,482) (2,177) (102,060) - (218,762) Net book value 31.12.2021 8,496 10,373 30,309 165 21,041 - 70,383 31.12.2022 Acquisition cost 6,951 32,518 121,095 2,348 124,802 111 287,825 Accumulated depreciation - (23,411) (97,506) (2,198) (107,958) - (231,073) Net book value 31.12.2022 6,951 9,107 23,589 150 16,844 111 56,752 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 148 COMPANY Land Buildings Machinery Vehicles Equipment Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 8,496 10,760 36,985 139 26,434 82,813 Additions - 225 - - 3,132 3,357 Disposals - - - (124) (153) (277) Depreciation charge - (1,462) (6,915) (25) (9,668) (18,069) Disposals depreciation - - - 124 153 277 Net book amount (31 December 2021) 8,496 9,523 30,070 114 19,898 68,101 Year ended 31 December 2022 Opening net book amount (1 January 2022) 8,496 9,523 30,070 114 19,898 68,101 Additions - 494 170 - 3,092 3,756 Transfer to investment property (1,488) (1,637) - - - (3,125) Disposals (57) (758) - - (173) (987) Depreciation charge - (1,532) (6,870) (24) (7,210) (15,636) Disposals depreciation - 732 - - 173 904 Transfer depreciation - 1,569 - - - 1,569 Net book amount (31 December 2022) 6,951 8,390 23,370 90 15,781 54,581 COMPANY Land Buildings Machinery Vehicles Equipment Total 31.12.2021 Acquisition cost 8,496 32,813 119,576 2,217 109,727 272,829 Accumulated depreciation - (23,290) (89,506) (2,103) (89,829) (204,728) Net book value 31.12.2021 8,496 9,524 30,070 114 19,898 68,101 31.12.2022 Acquisition cost 6,951 30,912 119,746 2,217 112,646 272,472 Accumulated depreciation - (22,521) (96,377) (2,127) (96,865) (217,891) Net book value 31.12.2022 6,951 8,391 23,370 90 15,780 54,581 The Group “Equipment” additions within the current year include, among others: • Hardware (laptop & desktop) of € 1,802, • Equipment for OPAP Stores in Greece of € 1,193, • Equipment for OPAP Stores in Cyprus of € 194, • Equipment for VLTs and PLAY Gaming Halls as well as furniture of € 50. The “Transfer to investment property” refers to an OPAP store located in Thessaloniki which during October 2022 has been leased in a 3 rd party. Property, plant & equipment of the Group and the Company have not been pledged. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 149 8. Right-of-Use assets and Lease liabilities The Right-of-use assets are analyzed as follows: GROUP Buildings Vehicles Equipment Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 38,885 2,391 588 41,864 Additions 1,310 712 - 2,023 Termination of leases (969) (109) - (1,078) Other movements (19) (20) (10) (48) Depreciation charge (6,133) (1,077) (328) (7,539) Net book amount (31 December 2021) 33,075 1,897 250 35,222 Year ended 31 December 2022 Opening net book amount (1 January 2022) 33,075 1,897 250 35,222 Additions 1,341 610 2,462 4,413 Termination of leases (757) (76) - (834) Other movements 479 3 - 482 Depreciation charge (5,883) (970) (296) (7,149) Net book amount (31 December 2022) 28,254 1,464 2,416 32,135 GROUP Buildings Vehicles Equipment Total 31.12.2021 Acquisition cost 53,406 5,233 974 59,613 Accumulated depreciation (20,331) (3,336) (724) (24,391) Net book value 31.12.2021 33,075 1,897 250 35,222 31.12.2022 Acquisition cost 54,468 5,770 3,436 63,674 Accumulated depreciation (26,214) (4,306) (1,021) (31,540) Net book value 31.12.2022 28,254 1,464 2,416 32,135 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 150 COMPANY Buildings Vehicles Equipment Total Year ended 31 December 2021 Opening net book amount (1 January 2021) 24,318 1,838 - 26,155 Additions 1,050 533 - 1,583 Termination of leases (949) (17) - (966) Other movements (41) (21) - (62) Depreciation charge (4,872) (837) - (5,709) Net book amount (31 December 2021) 19,507 1,496 - 21,002 Year ended 31 December 2022 Opening net book amount (1 January 2022) 19,507 1,496 - 21,002 Additions 330 347 2,462 3,139 Termination of leases (757) (41) - (798) Other movements 442 3 - 445 Depreciation charge (4,580) (764) (103) (5,447) Net book amount (31 December 2022) 14,941 1,041 2,359 18,342 COMPANY Buildings Vehicles Total 31.12.2021 Acquisition cost 34,454 4,009 - 38,464 Accumulated depreciation (14,947) (2,514) - (17,461) Net book value 31.12.2021 19,507 1,496 - 21,002 31.12.2022 Acquisition cost 34,469 4,319 2,462 41,250 Accumulated depreciation (19,528) (3,278) (103) (22,908) Net book value 31.12.2022 14,941 1,041 2,359 18,342 The Group right-of-use of “Buildings” mainly refers to Markopoulo Park, with a Net Book Value (“NBV”) of € 11,993 as at 31.12.2022 (31.12.2021: € 12,914) and PLAY Gaming Halls with a total NBV of € 14,312 as at 31.12.2022 (31.12.2021: € 18,673). The “Termination of leases” included in the category “Buildings” mainly relates to the early termination of contracts for PLAY Gaming Halls. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 151 The consolidated and separate Statement of Financial Position includes the following amounts related to lease liabilities: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Non-current lease liabilities 39,328 43,507 13,959 16,989 Current lease liabilities 7,792 7,500 5,604 5,365 Total 47,120 51,007 19,563 22,354 Total capital and interest payments of lease liabilities in the year ended 31.12.2022, amounts to € 9,714 (31.12.2021: € 5,935) for the Group and € 6,236 (31.12.2021: € 3,354) for the Company. Income from subleases which refers to the sublease of PLAY Gaming Halls is included in “Revenue from non-gaming activities” of Separate and Consolidated Income Statement (refer to Note 34) and amounts to € 4,132 (2021: € 2,186) for both the Group and the Company. 9. Investment properties The Group’s and Company’s investment properties in accordance with IAS 40, Investment property is shown below: GROUP COMPANY 2022 2021 2022 2021 Opening net book amount (1 January 2022) 1,521 1,606 1,521 1,606 Transfer cost from tangible assets 3,125 - 3,125 - Depreciation transfer from tangible assets (1,569) - (1,569) - Depreciation for the year (98) (97) (98) (97) Additions 29 11 29 11 Net book amount (31 December 2022) 3,007 1,521 3,007 1,521 Acquisition cost 8,490 5,336 8,490 5,336 Accumulated depreciation (5,483) (3,816) (5,483) (3,816) Net book value 31.12.2022 3,007 1,521 3,007 1,521 The income received from leasing these investment properties amounts to € 306 for the year ended 31.12.2022 (2021: € 281). The “Transfer cost from tangible assets” refers to an OPAP store located in Thessaloniki which during October 2022 has been leased to a 3 rd party. The useful life of the buildings is estimated at 20 years and the straight-line method of depreciation is used. According to the Company’s estimates, the fair value of the properties are not significantly different from their carrying value. Investment property of the Group and the Company has not been pledged. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 152 10. Goodwill The goodwill acquired through business combinations is analyzed as follows: GROUP 31.12.2022 31.12.2021 OPAP SPORTS LTD 8,435 8,435 TORA DIRECT SINGLE MEMBER S.A. 4,249 4,249 NEUROSOFT S.A. 5,092 5,092 STOIXIMAN LTD 324,913 324,913 Total 342,688 342,688 The goodwill and the intangible assets with indefinite useful life are subject to impairment testing from Management at each reporting date either internally or externally by independent valuators. The recoverable amount of the Group’s companies OPAP SPORTS LTD, TORA DIRECT SINGLE MEMBER S.A., NEUROSOFT S.A. and STOIXIMAN LTD, was determined using the value in use method which requires the use of assumptions. The value in use method was determined based on the projected cash flows derived from the five year business plan approved by the Management. Cash flows beyond the five year period are extrapolated using the estimated perpetuity growth rates stated below. The key assumptions used in determining the value in use were as follows: OPAP SPORTS LTD 31.12.2022 31.12.2021 WACC 11.85% 9.88% Compounded Annual Growth Rate (CAGR) on NGR for the next 5 years 3.90% 4.50% Perpetuity growth rate 2.00% 2.00% TORA DIRECT SINGLE MEMBER S.A. 31.12.2022 31.12.2021 WACC 12.57% 9.21% Compounded Annual Growth Rate (CAGR) on revenues for the next 5 years -3.90% -0.20% Perpetuity growth rate 2.00% 2.00% OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 153 NEUROSOFT S.A. 31.12.2022 31.12.2021 WACC 11.67% 9.18% Compounded Annual Growth Rate (CAGR) on revenues for the next 5 years 13.00% 8.50% Perpetuity growth rate 2.00% 2.00% STOIXIMAN LTD 31.12.2022 31.12.2021 WACC 13.34% 9.75% Compounded Annual Growth Rate (CAGR) on NGR for the next 5 years 5.80% 6.40% Perpetuity growth rate 2.00% 2.00% The sensitivity analysis on the above assumptions, notably to a change of 0.25% in the discount rate (WACC) or the perpetuity growth rate, did not show deviations that would point the need to change the carrying value of the goodwill of these entities. 11. Investments in subsidiaries Investment in subsidiaries of the Company are analysed as follows: Consolidated subsidiary % of investment Country of incorporation 31.12.2022 31.12.2021 OPAP CYPRUS LTD 100% Cyprus 1,704 1,704 OPAP INTERNATIONAL LTD 100% Cyprus 4,673 4,673 OPAP SPORTS LTD 100% Cyprus 9,650 9,650 OPAP INVESTMENT LTD 100% Cyprus 559,385 409,385 Total 575,412 425,412 Investments in subsidiaries on the Separate Statement of Financial Position are accounted for at cost less impairment loss. The increase in the investment in OPAP INVESTMENT LTD refers to the increase of the OPAP INVESTMENT LTD share capital by € 150,000 by OPAP S.A. through the issuance of 150,000 new ordinary shares of € 1 nominal price and € 999 share premium each as per the Board of Directors decision dated 31.03.2022. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 154 12. Investments in associates Investments in associates are analyzed as follows: 31.12.2022 31.12.2021 KAIZEN GAMING LIMITED - 8,156 Total - 8,156 The report date of the Financial Statements of the investment in associate does not differ from the reporting date of the parent company. KAIZEN GAMING LIMITED is the parent company of KAIZEN Group, which principal activity is to carry on the business of online gaming and betting activities in various countries, mainly in Romania, Portugal, Brazil, Germany and others. On 29.11.2022, the Board of Directors of OPAP INVESTMENT LTD approved the transfer of 36.75% minority interest held by OPAP INVESTMENT LTD in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) to Allwyn Investments Cyprus Limited, a fully owned indirect subsidiary of Allwyn International a.s.. The purchase price was determined to be € 204,243 out of which the upfront cash consideration of € 50,000 and the adjusted net cash payment of € 24,243 were both received on 27.12.2022, whilst the remaining amount of € 130,000 representing the performance based earnout payments, as at 31.12.2022 is still pending receivable. The disposal date was agreed to be the 31.12.2022 and the gain arising from the transaction in the consolidated financial statements of the Group amounting to € 181,298 is presented separately in the Income Statement. The tables below provide summarised financial information of KAIZEN GAMING LIMITED as at 31.12.2022. The information disclosed reflects the amounts presented in the financial statements of the KAIZEN GAMING LIMITED and not OPAP’s share of those amounts. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 155 KAIZEN GAMING LIMITED Summarized statement of financial position 31.12.2022 31.12.2021 Current assets Cash and cash equivalents 126,151 48,949 Other current assets 123,399 31,575 Total current assets 249,551 80,523 Total non - current assets 54,820 34,465 Current liabilities Financial liabilities (excluding trade payables) 1,120 745 Other current liabilities 227,319 76,606 Total current liabilities 228,439 77,351 Non-current liabilities Financial liabilities (excluding trade payables) 1,168 1,630 Other non-current liabilities 811 809 Total non-current liabilities 1,978 2,440 Equity 73,954 35,197 Summarized Income statement and other comprehensive income 01.01- 31.12.2022 01.01- 31.12.2021 Revenue (GGR) 728,902 183,808 Profit after tax 40,449 (1,208) Other comprehensive income, net of tax (209) 4 Total comprehensive income 40,240 (1,204) Based on the above, the value of investment in associate in KAIZEN GAMING LIMITED results as follows following the disposal: 31.12.2022 31.12.2021 Opening balance 8,156 8,599 Share of operating profits 14,788 (443) Disposal of associate (22,945) - Closing balance - 8,156 The gain on the disposal is calculated as follows: 31.12.2022 Consideration 204,243 Net book value (22,945) Gain from the disposal of associate 181,298 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 156 13. Other non-current assets The Other non-current assets are analysed as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Guarantee deposits 2,930 2,614 962 934 Prepayments of retirement benefits & housing loans to personnel 325 338 325 338 Loans receivable 1,745 2,137 9,187 5,621 Prepayments to suppliers 26,426 16,143 26,426 16,143 GGR contribution receivable 29,116 49,785 29,116 49,785 Other receivables 375 76 - - Total 60,917 71,093 66,016 72,822 The Group’s “Loans receivable” balance refers to loans that the Company and its subsidiary, OPAP INVESTMENT LTD, have granted of € 1,737 and € 8 as at 31.12.2022 (31.12.2021: € 2,121 and € 16), respectively. The maturity of these loans is until May 2026. At Company level, the “Loans receivable” balance also include loans of € 2,550 granted to TORA DIRECT SINGLE MEMBER S.A. as at 31.12.2022 (31.12.2021: € 3,500) and € 4,900 granted to TORA WALLET SINGLE MEMBER S.A. as at 31.12.2022 (31.12.2021: € 0). These loans to subsidiaries bear an interest rate of 2.50%. The “Prepayments to suppliers” balance of € 26,426 as at 31.12.2022 (31.12.2021: € 16,143) relate to an advance paid to VLT vendors under respective contracts, which is expected to settle in more than one year. The “GGR contribution receivable” balance constitutes the discounted additional consideration relating to the 10-year extension of the Company’s license which refers to the exclusive right to conduct certain numerical lottery and sports betting games. The nominal receivable with maturity date the end of the extension period of the licence (2030) amounts to € 42,219 as at 31.12.2022 (31.12.2021: € 55,854), and has been discounted for 100 months (31.12.2021: 112 months) using the spot interest rate as at 31.12.2022 of a bond of the Greek Government ending in 2030. The additional consideration will be calculated based on the agreement on an annual basis up to the expiration of the extension, which may result in a net receipt or payment to the Greek State. The additional payment or refund will be settled as a lump sum in 2030. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 157 14. Deferred taxes The deferred taxes are calculated in full on temporary differences under the balance sheet method using the principal tax rates that apply to the countries in which the companies of the Group operate. GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Deferred tax asset 35,651 30,544 - - Deferred tax liability (124,483) (127,176) (41,916) (40,317) Net deferred tax asset/(liability) (88,832) (96,632) (41,916) (40,317) The movement in the deferred taxes is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Opening balance, net deferred tax asset/(liability) (96,632) (81,362) (40,317) (25,394) Charge recognised in the Income Statement (Note 29) 8,145 (15,060) (1,257) (14,589) Charge recognised in other comprehensive income (Note 29) (345) (345) (343) (334) Impact from disposal of subsidiary - 135 - - Closing balance, net deferred tax liability (88,832) (96,632) (41,916) (40,317) The deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxing authority. The corporate income tax rate in Greece is 22%, in Cyprus is 12.5% and in Malta is 35%. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 158 The movement in the deferred tax assets and liabilities per category (prior to offsetting balances within the same tax jurisdiction) is as follows: GROUP Balance at 1 January 2022 Recognised in the Income Statement (Note 42) Recognised in Other Comprehensive Income (Note 42) Balance at 31 December 2022 Analysis of deferred tax assets (before set - offs) Property, plant and equipment 270 (10) - 260 Intangible assets 5,551 3,327 - 8,878 Leases 3,481 (158) - 3,323 Other non-current & current assets 62 - - 62 Trade receivables 112 (76) - 36 Employee benefits 209 30 (4) 235 Provisions 1,999 286 - 2,285 Derivative (interest rate swap) 320 21 (341) - Other non-current & current liabilities 22,736 580 - 23,316 Tax losses 324 1,117 - 1,440 35,063 5,116 (345) 39,835 Analysis of deferred tax liabilities (before set - offs) Property, plant and equipment (1,029) (795) - (1,824) Intangible assets (118,599) (1,310) - (119,909) Other non-current & current assets (11,143) 4,407 - (6,736) Trade receivables - (105) - (105) Borrowings (923) 831 - (93) (131,695) 3,028 - (128,666) Net deferred tax asset/(liability) (96,632) 8,145 (345) (88,832) OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 159 COMPANY Balance at 1 January 2022 Recognised in the Income Statement (Note 42) Recognised in Other Comprehensive Income (Note 42) Balance at 31 December 2022 Analysis of deferred tax assets (before set - offs) Leases 306 (31) - 275 Trade receivables 76 (76) - Employee benefits 187 22 (2) 206 Provisions 1,998 287 - 2,284 Derivative (interest rate swap) 320 21 (341) - Other non-current & current liabilities 1,459 (224) - 1,235 4,346 (2) (343) 4,001 Analysis of deferred tax liabilities (before set - offs) Property, plant and equipment (1,029) (795) - (1,824) Intangible assets (31,571) (5,593) - (37,164) Other non-current & current assets (11,140) 4,407 - (6,732) Trade receivables - (105) - (105) Borrowings (923) 831 - (93) (44,662) (1,255) - (45,917) Net deferred tax liability (40,317) (1,257) (343) (41,916) The movement in the deferred tax assets and liabilities per category during the prior year is as follows: GROUP Balance at 1 January 2021 Recognised in the Income Statement (Note 42) Recognised in Other Comprehensive Income (Note 42) Impact from disposal of subsidiary Balance at 31 December 2021 Analysis of deferred tax assets (before set - offs) Property, plant and equipment 305 (35) - - 270 Intangible assets 5,387 164 - - 5,551 Leases 3,908 (427) - - 3,481 Other non-current & current assets 1,223 (1,161) - - 62 Trade receivables 458 (346) - - 112 Employee benefits 200 29 (5) (15) 209 Provisions 2,347 (348) - - 1,999 Derivative (interest rate swap) 660 - (340) - 320 Other non-current & current liabilities 20,925 1,810 - - 22,736 Tax losses 6,868 (6,544) - - 324 42,282 (6,858) (345) (15) 35,063 Analysis of deferred tax liabilities (before set - offs) Property, plant and equipment (297) (731) - - (1,029) Intangible assets (121,398) 2,648 - 151 (118,599) Other non-current & current assets (4) (11,139) - - (11,143) Borrowings (1,945) 1,022 - - (923) (123,644) (8,201) - 151 (131,695) Net deferred tax asset/(liability) (81,362) (15,060) (345) 135 (96,632) OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 160 COMPANY Balance at 1 January 2021 Recognised in the Income Statement (Note 42) Recognised in Other Comprehensive Income (Note 42) Balance at 31 December 2021 Analysis of deferred tax assets (before set - offs) Leases 318 (12) - 306 Other non-current & current assets 1,151 (1,151) - - Trade receivables 273 (197) - 76 Employee benefits 169 12 6 187 Provisions 2,346 (348) - 1,998 Derivative (interest rate swap) 660 - (340) 320 Other non-current & current liabilities 1,739 (280) - 1,459 6,656 (1,976) (334) 4,346 Analysis of deferred tax liabilities (before set - offs) Property, plant and equipment (297) (731) - (1,029) Intangible assets (29,808) (1,763) - (31,571) Other non-current & current assets - (11,140) - (11,140) Borrowings (1,945) 1,022 - (923) (32,050) (12,613) - (44,662) Net deferred tax liability (25,394) (14,589) (334) (40,317) On 31.12.2022, certain Group entities had accumulated tax losses of € 95,438 (31.12.2021: € 90,396). TORA WALLET SINGLE MEMBER S.A. recognised deferred tax assets as at 31.12.2022 amounting to € 1,440 (31.12.2021: € 0) attributable to losses amounting to € 6,546 as these deferred tax assets will be recoverable using the estimated future taxable income based on approved business plans. For the remaining € 88,892 carried forward tax losses as at 31.12.2022, no deferred tax asset has been recognized due to the extent that it is not probable that sufficient taxable profits will be available to utilise the assets. If the Group’s entities were able to recognize all unrecognized deferred tax assets, these would amount to € 20,996 (31.12.2021: € 19,887). Under Greek tax regulations, an income tax advance is paid to the tax authorities each year calculated at the 80% of the current year income tax liability. Such advance is then netted off with the following year’s income tax liability. 15. Inventories The analysis of inventories is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Gaming Halls construction cost 1,645 1,627 1,645 1,627 Consumable materials 3,907 3,055 1,234 1,062 Total 5,552 4,682 2,879 2,689 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 161 Consolidated inventories include: • OPAP S.A. inventories of € 1,645 as at 31.12.2022 related to PLAY Gaming Halls stores under construction that will be sold after their completion (31.12.2021: € 1,627). • TORA DIRECT SINGLE MEMBER S.A. inventories of € 1,805 as at 31.12.2022 (31.12.2021: € 1,536) relating mainly to phone cards and Internet cards. • NEUROSOFT S.A. inventories of € 796 as at 31.12.2022 (31.12.2021: € 383) relating to production consumables. • HORSE RACES SINGLE MEMBER S.A. inventories of € 71 as at 31.12.2022 (31.12.2021: € 74) relating to veterinary clinic consumables. • OPAP S.A. lottery and athletic events prognoses games tickets, coupons for PAME STOIXIMA game etc. of € 1,234 as at 31.12.2022 (31.12.2021: € 1,062). The Group and the Company have not pledged their inventories as collateral. 16. Trade receivables The analysis of trade receivables is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Receivables from agents 87,381 81,777 45,436 38,162 Receivables from agents under arrangement 343 300 - - Doubtful receivables from agents 25,276 41,331 20,865 37,466 Other receivables 17,339 11,733 13,859 12,242 Sub total short term trade receivables 130,338 135,141 80,161 87,870 Less loss allowance on short term trade receivables (28,215) (44,260) (22,237) (38,655) Total short term trade receivables 102,123 90,881 57,924 49,216 Discounted long term receivables from agents 748 2,078 748 2,078 Total long term trade receivables 748 2,078 748 2,078 Total trade receivables 102,871 92,959 58,671 51,294 The Group has exposure to credit risk in relation to receivables from agents. According to IFRS 9 requirements, an assessment of the credit risk under ECL model was conducted per agent and the calculated amount as at 31.12.2022 was higher than the carrying amount of the loss allowance before the aforementioned assessment. Consequently, on 31.12.2022 the loss allowance of the Group and the Company was increased by € 1,199 and € 826, respectively. Moreover, following the finalization of all legal procedures required, the Company as at 31.12.2022 proceeded with a write-off of € 17,244 regarding the OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 162 “Doubtful receivables from agents” with no effect in the financial statements since the respective loss allowances had been recognised during the past years. “Other receivables” refer to the trade receivables of the non-gaming entities (i.e. TORA DIRECT SINGLE MEMBER S.A., TORA WALLET SINGLE MEMBER S.A. and NEUROSOFT S.A.). The “Discounted long term receivables from agents” include arrangements with agents that will be settled in April 2025. Additional information about the impairment of trade receivables and the Group’s exposure to credit risk are included in Note 46. The Group and the Company have not pledged their receivables as collateral. 17. Other current assets The analysis of other current assets is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Housing loans to personnel 10 13 10 13 Accrued income 15,423 18,939 14,948 9,602 Prepaid expenses 22,088 20,123 17,228 16,935 Deferred consideration from the disposal of KAIZEN GAMING LIMITED (Betano Business) 130,000 - - - Receivables from taxes (other than corporate income tax) 12,821 5,884 1,465 2,271 Loans receivable 1,942 2,996 2,105 2,227 Total 182,284 47,955 35,757 31,049 At the Company level, the “Accrued income” as at 31.12.2022 includes the dividend receivable from OPAP CYPRUS LTD of € 5,000 (31.12.2021: € 7,000). The “Prepaid expenses” of the Group as at 31.12.2022 mainly includes the current portion of a prepayment to VLT vendors of € 4,275 (31.12.2021: € 3,439) (refer to Note 13), prepaid services for use and maintenance of software of € 4,791 (31.12.2021: € 4,837), prepaid sponsorships of € 5,164 (31.12.2021: € 4,360), prepaid promotional activities of € 2,607 (31.12.2021: € 2,505) and third party fees of € 2,399 (31.12.2021: € 1,522). There is also an amount of € 760 (31.12.2021: € 760) which represents prepaid loan expenses for an undrawn credit facility of the Company (refer to Note 23). The ”Receivables from taxes (other than corporate income tax)” of the Group as at 31.12.2022 mainly include a tax refund from the Malta tax authorities of € 11,351 (31.12.2021: € 3,582). The “Loans receivable” of the Group refer mainly to loans granted to the agents while at the Company level they include the short term part of the loan that the Company granted to its subsidiary TORA DIRECT SINGLE MEMBER S.A. of amount € 250 as at 31.12.2022 (31.12.2021: €0). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 163 18. Cash and cash equivalents The analysis of cash and cash equivalents is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Cash on hand 1,102 1,000 609 795 Short term bank deposits 723,331 859,361 247,186 608,293 Total 724,433 860,361 247,796 609,088 The “Short term bank deposits” comprise current accounts and short-term time deposits with a maturity of three months or less from the date of the acquisition. The effective interest rates are based on floating rates and are negotiated on a case by case basis. The “Short term bank deposits” balance of the Group and the Company also include amounts from electronic payment processors, of € 31,125 and € 1,215 respectively as at 31.12.2022 (31.12.2021: € 50,568 and € 632 respectively), which, at the time of purchase are readily convertible to known amounts of cash and that there is an insignificant risk of changes in value. The fixed deposits with maturity between 3 and 12 months from the date of acquisition of € 3,634 as at 31.12.2022 (31.12.2021: € 3,633) are included in “Short‐term investments” in the Consolidated Statement of Financial Position. According to IFRS 9 requirements, an assessment of the credit risk under the ECL model as at 31.12.2022 was conducted. Since the Group retains its deposits at institutions that have high credit ratings, credit risk was insignificant and no impairment provision was raised. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 164 19. Share capital and Share Premium The total number of the authorized ordinary shares is: GROUP & COMPANY 31.12.2022 31.12.2021 Ordinary shares of € 0.30 each 363,341,859 352,856,287 363,341,859 352,856,287 The share capital and share premium movement is as follows: Number of shares Share capital Share premium Balance at 31 December 2020 341,426,387 102,428 218,826 New shares issued as per the 17.06.2021 AGM decision (2020 Dividend reinvestment plan) 9,729,566 2,919 105,468 New shares issued as per the 07.09.2021 BoD decision (2021 Interim Dividend reinvestment plan) 1,700,334 510 21,934 Balance at 31 December 2021 352,856,287 105,857 346,228 New shares issued as per the 09.06.2022 BoD decision (2021 Dividend reinvestment plan) 7,423,668 2,227 100,145 New shares issued as per the 06.09.2022 BoD decision (2022 Interim Dividend reinvestment plan) 3,061,904 919 36,345 Capitalization of share premium as per the 09.06.2022 AGM decision - 317,571 (317,571) Share capital return to the shareholders as per the 09.06.2022 AGM decision - (317,571) - Balance at 31 December 2022 363,341,859 109,003 165,148 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 165 20. Reserves Reserves are analyzed as follows: GROUP Statutory reserves Cash flow hedge reserve Foreign currency translation reserve Total Balance as at 31.12.2020 35,399 (2,067) (3) 33,329 Statutory reserve 1,165 - - 1,165 Gain from valuation of hedging derivatives - 1,296 - 1,296 Deferred tax - (340) - (340) Balance as at 31.12.2021 36,564 (1,112) (3) 35,450 Statutory reserve (230) - - (230) Gain from valuation of hedging derivatives - 1,453 - 1,453 Deferred tax - (341) - (341) Exchange differences - - 3 3 Balance as at 31.12.2022 36,334 - - 36,334 COMPANY Statutory reserves Cash flow hedge reserve Total Balance as at 31.12.2020 34,143 (2,067) 32,075 Statutory reserve 1,143 - 1,143 Gain from valuation of hedging derivatives - 1,296 1,296 Deferred tax - (340) (340) Balance as at 31.12.2021 35,286 (1,112) 34,174 Statutory reserve 1,049 - 1,049 Gain from valuation of hedging derivatives - 1,453 1,453 Deferred tax - (341) (341) Balance as at 31.12.2022 36,334 - 36,334 The statutory reserve is not available for distribution and the additional amount added each year is equal to or at least, 5% of the annual net profit. The requirement to increase the statutory reserve ends when the reserve reaches a minimum of 1/3 of the Company’s share capital. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 166 21. Treasury shares The Annual Ordinary General Assemblies of the Company’s Shareholders held on 20.04.2015, 27.04.2017 and 22.05.2019 decided and set the details for the acquisition of treasury shares by the Company through the Athens Exchange, up to a percentage of 5% of the total paid up share capital of the Company. The acquisition of treasury shares shall be made provided that on a case by case basis are considered to be at the Company's own benefit, preferential to other available investment options and as long as the Company's cash flow allows for such acquisitions and for the scopes and uses allowed by the law. The current program for the acquisition of treasury shares shall be completed within twenty four months as from the date of the decision of the 17.06.2021 General Assembly, namely the latest by 16.06.2023, and will be implemented at a maximum acquisition price of € 17.00 per share (in absolute amount) and a minimum acquisition price equal to the nominal value price of each share, i.e. € 0.30 per share (in absolute amount). Furthermore, the Company's Board of Directors was authorized to determine the specific terms and details for the implementation of the program for the acquisition of treasury shares. During the current reporting period, the Company did not proceed to the acquisition of new treasury shares, however the value of the already held treasury shares decreased by € 1,647 due to the share capital return of € 0.90 per share (in absolute amount) to the shareholders, based on the 09.06.2022 AGM decision: Treasury shares No of shares Value of shares % of treasury shares on total shares Balance at 31 December 2020 1,829,624 14,497 0.5% Balance at 31 December 2021 1,829,624 14,497 0.5% Change in value due to the share capital return to the shareholders - (1,647) - Balance at 31 December 2022 1,829,624 12,851 0.5% OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 167 22. Non-controlling interests The Group’s non-controlling interests amount to € 32,653 as at 31.12.2022 (31.12.2021: € 38,513), arising from HELLENIC LOTTERIES S.A., NEUROSOFT S.A. and STOIXIMAN LTD. The summarized financial information and basic financial data of these companies are presented below. The amounts disclosed for each subsidiary are before any intercompany eliminations. Summarized statement of financial position as at December 31, 2022 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Total NCI percentage 16.50% 32.28% 15.51% Non-current assets 60,953 6,187 239,152 Current assets 131,785 12,130 131,988 Non-current liabilities (41,267) (1,749) (83,130) Current liabilities (154,804) (7,746) (92,249) Net assets (3,332) 8,823 195,761 Net assets attributable to NCI (550) 2,848 30,355 32,653 Summarized income statement and other comprehensive income for the year ended December 31, 2022 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Total Revenue (GGR) 107,902 - 384,242 Revenue from non-gaming activities 1,996 23,359 - Profit/(loss) after tax (27,920) 1,117 51,260 Other comprehensive income, net of tax 1 6 - Total comprehensive income (27,919) 1,123 51,260 Profit/(loss) after tax attributable to NCI (4,607) 361 7,948 3,702 Other comprehensive income, net of tax attributable to NCI - 2 - 2 Dividends paid to NCI - - 9,508 9,508 Summarized cash flow information for the year ended December 31, 2022 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Cash flows from operating activities 23,193 3,417 88,481 Cash flows from investing activities (106) (682) (84) Cash flows from financing activities (10,073) (604) (61,562) Net increase/(decrease) in cash and cash equivalents 13,014 2,131 26,834 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 168 Summarized statement of financial position as at December 31, 2021 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Total NCI percentage 16.50% 32.28% 15.51% Non-current assets 90,062 6,742 250,660 Current assets 121,378 7,442 104,556 Non-current liabilities (50,817) (2,230) (88,105) Current liabilities (135,700) (4,254) (61,290) Net assets 24,922 7,700 205,821 Net assets attributable to NCI 4,112 2,486 31,915 38,513 Summarized income statement and other comprehensive income for the year ended December 31, 2021 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Total Revenue (GGR) 88,833 - 374,809 Revenue from non-gaming activities 1,644 16,601 1 Profit/(loss) after tax (29,798) 672 39,626 Other comprehensive income, net of tax - 25 - Total comprehensive income (29,798) 698 39,626 Profit/(loss) after tax attributable to NCI (4,917) 217 6,145 1,445 Other comprehensive income, net of tax attributable to NCI - 8 - 8 Dividends paid to NCI - - 4,067 4,067 Summarized cash flow information for the year ended December 31, 2021 HELLENIC LOTTERIES S.A. NEUROSOFT S.A. STOIXIMAN LTD Cash flows from operating activities 34,003 791 46,493 Cash flows from investing activities (81) 533 (4,974) Cash flows from financing activities (177) (659) (26,266) Net decrease in cash and cash equivalents 33,745 665 15,253 23. Borrowings The summary of the Group and the Company outstanding debt is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Total non-current loans 506,679 991,673 466,565 941,517 Current loans Current portion of non-current loans 281,707 52,764 311,533 82,676 Current loans (overdraft accounts) - 2,202 - 1 Total current loans 281,707 54,965 311,533 82,677 Total borrowings 788,386 1,046,638 778,099 1,024,193 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 169 The movement in the Group’s and the Company’s borrowings is as follows: GROUP Year of maturity 31.12.2021 31.12.2022 Book value Repayments Payments of interest of previous year Provision of Interest Amortization of expenses Outstanding nominal value Book value Loan, amount € 916 2025 393 (92) (4) 4 - 298 302 Bond Loan € 250,000 2023 248,556 - (289) 289 1,437 250,000 249,992 Bond Loan € 200,000 2027 197,561 - (758) 758 517 200,000 198,079 Bond Loan € 300,000 2027 300,349 (100,000) (931) 627 138 200,000 200,182 Bond Loan € 50,000 2024 50,025 (10,000) (167) 243 49 40,000 40,150 Bond Loan € 100,000 97,820 (100,000) (241) - 2,422 - - Bond Loan € 50,000 2022 50,266 (50,000) (308) - 43 - - Corporate Bond Loan € 200,000 2024 99,467 - (17) 34 196 100,000 99,681 Overdraft € 2,000 100 (100) - - - - - Overdraft € 8,000 2,101 (2,101) - - - - - Overdraft € 15,000 1 (1) - - - - - Total 1,046,638 (262,293) (2,715) 1,955 4,802 790,298 788,386 COMPANY Year of maturity 31.12.2021 31.12.2022 Book value Repayments Payments of interest of previous year Provision of Interest Amortization of expenses Outstanding nominal value Book value Bond Loan, € 250,000 2023 248,556 - (289) 289 1,437 250,000 249,992 Bond Loan, € 200,000 2027 197,561 - (758) 758 517 200,000 198,079 Bond Loan, € 300,000 2027 300,349 (100,000) (931) 627 138 200,000 200,182 Bond Loan, € 100,000 97,820 (100,000) (241) - 2,422 - - Bond Loan, € 50,000 2022 50,266 (50,000) (308) - 43 - - Corporate Bond Loan € 200,000 2024 99,467 - (17) 34 196 100,000 99,681 Loan, € 20,000 2023 20,116 - (116) 109 - 20,000 20,109 Loan, € 10,000 2023 10,058 - (58) 55 - 10,000 10,055 Overdraft, € 15,000 1 (1) - - - - - Total 1,024,193 (250,001) (2,719) 1,872 4,752 780,000 778,099 As at 31.12.2022 and 31.12.2021, the weighted average interest rate of the Group and the Company was 2.2% and 2.5% for both the Group and Company. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 170 During the current period the following transactions took place: • On 05.01.2022, the Company proceeded with a partial repayment of € 100,000 of its € 300,000 bond loan Eurobank without incurring any repayment penalties. • On 23.02.2022, HELLENIC LOTTERIES S.A. proceeded with a partial repayment of € 10,000 of its € 50,000 bond loan with Alpha Bank without incurring any repayment penalties. • On 23.03.2022, the Company repaid earlier and without incurring any repayment penalties a bond loan of € 100,000 with National Bank of Greece. The relevant bond loan had been hedged via an interest rate swap which also was terminated earlier, on 23.03.2022 instead of 27.11.2023. • On 28.04.2022, the Company signed a bond loan agreement of € 250,000 with Eurobank which will be in force from 15.03.2023 with maturity date on 15.03.2026, however up to 31.12.2022 no draw down took place. • On 22.06.2022, the Company signed a bond loan agreement of € 100,000 with Piraeus Bank with maturity date on 04.05.2023, however up to 31.12.2022 no draw down took place. • On 03.10.2022, the Company, following the respective loan agreement with Piraeus Bank, proceeded with a repayment of its € 50,000 bond loan without incurring any repayment penalties. As at 31.12.2022, the Group and the Company have total undrawn borrowing facilities of € 560,000 and € 550,000, respectively, out of which € 100,000, for both the Group and the Company, expire within one year and € 460,000 and € 450,000, respectively, expire beyond one year. Additionally, as at 31.12.2022 the Group and the Company were in compliance with the financial covenants of their borrowing facilities. Finally, all agreements of the Group and the Company are unsecured. 24. Employee benefit plans The analysis of employee benefit plans is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Short term Incentive Scheme 3,464 - 3,464 - Sub total short term employee benefit plans 3,464 - 3,464 - Long term Incentive Scheme 1,732 3,106 1,732 3,106 Defined Benefit Plan 1,070 952 939 849 Sub total long term employee benefit plans 2,802 4,058 2,670 3,955 Total employee benefit plans 6,266 4,058 6,134 3,955 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 171 Long Term Incentive Scheme for the years 2020-2022 The 20th Ordinary General Meeting of the Company, following a recommendation of the Remuneration and Nomination Committee and in accordance with article 109 of Law 4548/2018, as in force and the Company Remuneration Policy, on 22.05.2019, approved a Long term incentive scheme with distribution of part of the Company’s net profits to Executive Members of the BoD and other Key Management Personnel of the Company. The targets relate to (a) the EBITDA of the Company for the 3 year period (2020- 2022) and (b) the total shareholders’ return (TSR). Based on the scheme’s provisions the 2/3 of the liability is expected to be paid up to the end of August 2023 while the 1/3 within January 2024. Defined Benefit Plan Under Greek labor law (L.2112/1920), employees are entitled to a retirement plan in the form of a lump- sum payment with the amount of payment varying in relation to the employee's compensation and length of service. The 31.12.2022 and 31.12.2021 liability arising from the above obligation is calculated by an independent firm of actuaries using actuarial valuation methods, which require the use of estimates (refer also to Note 3.21). The analysis of the defined benefit plan in the Statement of Financial Position is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Opening balance 952 834 849 703 Current service cost 232 220 196 177 Interest cost 6 5 5 4 Settlement cost (result) 1,636 2,535 1,477 2,151 Total amount recognised in Income Statement 1,874 2,760 1,678 2,332 Actuarial loss arising from demographic assumptions 40 - 35 - Actuarial (gain)/loss arising from financial assumptions (73) 25 (62) 23 Actuarial (gain)/loss arising from experience adjustment 15 (48) 16 5 Total amount recognised in other comprehensive income (18) (24) (11) 29 Payments made (1,738) (2,618) (1,578) (2,214) Closing balance 1,070 952 939 849 The principal actuarial assumptions used in the actuarial valuations as at 31.12.2022 and 31.12.2021 are the following: OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 172 31.12.2022 31.12.2021 Discount rate 1.80% 0.60% Expected salary increase percentage 2.20% 1.80% Average service in the company 5,66-15 0-10,55 Inflation rate 2.20% 1.80% The estimated service cost for the next fiscal year amounts to € 225 for the Company and € 271 for the Group. The following table shows the change in actuarial liability of the Group and the Company if the discount rate was 0.5% higher or lower than that which has been used and the corresponding change if the expected rate of salary increase was 0.5% higher or lower than the one used: Sensitivity analysis (Group) Actuarial liability Percentage change Increase in discount rate by 0.5% 1,029 -4% Decrease in discount rate by 0.5% 1,114 4% Increase of the expected wages' increase by 0.5% 1,113 4% Decrease of the expected wages' increase by 0.5% 1,029 -4% Sensitivity analysis (Company) Actuarial liability Percentage change Increase in discount rate by 0.5% 903 -4% Decrease in discount rate by 0.5% 976 4% Increase of the expected wages' increase by 0.5% 976 4% Decrease of the expected wages' increase by 0.5% 903 -4% 25. Provisions The movement in provisions is as follows: GROUP COMPANY Balance as at 31.12.2021 9,520 9,517 Provisions of the period 2,203 2,202 Provision reversal (400) (400) Used provision (500) (500) Balance as at 31.12.2022 10,823 10,820 Provisions for the Company and the Group are recognised primarily when there is probable that an outflow of resources will be required in the future to settle the obligation from lawsuits and claims by third parties, agents and employees against the Company. The current status of outstanding litigation is regularly reviewed and updated by the Company’s Legal Counsel who estimates that the legal claims for which a negative outcome is probable including interest, OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 173 for the Company is € 10,384 and for the Group is € 10,386 as at 31 December 2022. The maximum exposure as at 31 December 2022 of these claims for the Company amounts to € 26,570 and for the Group to € 26,668. The balance of the provision as at 31.12.2022 and 31.12.2021 is analyzed as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Labor disputes 1,358 1,446 1,358 1,446 Lawsuits from individuals or legal entities 9,028 7,637 9,025 7,635 Total provision 10,386 9,084 10,384 9,081 There are no other pending or outstanding court or other administrative authorities’ resolutions related to the Company or the Group that we are aware of that might have a material effect on the Group’s and the Company’s Financial Statements. The respective liability compared to previous reporting periods was reclassified from “Non-current liabilities” to “Current liabilities” as the Group considers that it does not have the unconditional right to defer settlement of the liability for at least twelve months after the reporting period. 26. Other non-current liabilities Other non-current liabilities are analyzed as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Derivative (interest rate swap) - 1,453 - 1,453 Grants 415 520 - - Payout to the winners 1,326 959 - - STOIXIMAN LTD liability to the Hellenic Gaming Commission 1,250 2,500 - - Other liabilities 150 292 - - Total 3,141 5,724 - 1,453 The “Derivative (interest rate swap)” in the comparative period related to an interest rate swap acquired by the Company to hedge the risk of a floating rate borrowing which on 23.03.2022 was repaid and as a result the interest rate swap was terminated as well. The “Payout to the winners” balance relates to long term payout to winners of scratch games of HELLENIC LOTTERIES S.A. of € 1,326 as at 31.12.2022 (31.12.2021: € 959). The “STOIXIMAN LTD liability to the Hellenic Gaming Commission” of € 1,250 as at 31.12.2022 (31.12.2021: € 2,500) refers to the long-term liability of STOIXIMAN LTD to the Hellenic Gaming Commission relating to the acquisition of the online betting and other online games licenses. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 174 27. Trade payables The analysis of trade payables is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Suppliers (services, assets, etc.) 68,761 57,045 43,750 31,162 Payout to the winners 30,425 29,150 23,083 14,596 Unclaimed winnings 20,535 19,936 9,370 7,738 Players' e-wallet 20,444 18,802 3,681 5,765 SCRATCH payout provision 29,199 32,967 - - Other payables (salaries – subsidies) 1,172 908 497 394 Contract liabilities 11,147 9,378 3,948 2,905 Total 181,684 168,186 84,329 62,560 The “Suppliers (services, assets, etc.)” are non-interest bearing and are normally settled within 60 days for both the Group and the Company. In “Suppliers (services, assets, etc.)”, among others, the liability in the online affiliates under Article 196 of L.4635/2019 and the Article 10 of the Online regulation is included which as at 31.12.2022 amounts to € 217 (31.12.2021: € 181) and € 60 (31.12.2021: € 149) for OPAP S.A. and STOIXIMAN LTD respectively. It is also mentioned that during the current year OPAP S.A. cooperated with 36 affiliates and the respective expense amounts to € 2,093 (2021: € 1,561) while STOIXIMAN LTD cooperated with 59 affiliates and the respective expense amounts to € 13,561 (2021: € 11,448). The “Contract liabilities” refer to amounts wagered for games or draws that will be settled in the near future (refer to Note 3.4) of OPAP S.A., HELLENIC LOTTERIES S.A., OPAP CYPRUS LTD and NEUROSOFT S.A.. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 175 28. Other current liabilities The analysis of other current liabilities is as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Donations 921 2,349 921 2,349 Sponsorships 10,664 8,466 774 730 Guarantee deposits from agents 10,464 10,967 7,739 8,408 Wages and salaries 10,930 8,696 9,997 7,958 Dividends payable 2,302 2,245 2,302 2,245 Capital return to the Shareholders 282 - 282 - Accrued expenses 19,763 13,732 8,204 8,382 Insurance contributions payable 3,012 2,729 2,328 2,151 Provision stipulated under the Concession Agreement of HELLENIC LOTTERIES S.A. 70,668 62,780 - - GGR contribution and other levies and duties payable 42,247 31,002 15,304 13,445 Other taxes (withholding, VAT) 25,228 17,441 12,101 8,797 Additional consideration for the acquisition of STOIXIMAN LTD 13,971 114,303 - - Other liabilities 6,328 5,450 1,664 2,004 Total 216,781 280,160 61,617 56,470 The “Guarantee deposits from agents” represent: • the amount placed on deposit to jointly secure agents’ obligations (the guarantee is paid back when the agent returns the license); • the amount paid in order for the credit limit to be raised. The “Accrued expenses” refer to provisions made regarding expenses incurred in the current period however, as of 31.12.2022 the invoice has not been received. The provisions recorded regarding the online affiliates under the Article 196 of L.4635/2019 amount to € 150 as at 31.12.2022 (31.12.2021: € 140) and € 0 as at 31.12.2022 (31.12.2021: € 850) for OPAP S.A. and STOIXIMAN LTD, respectively. The “Provision stipulated in the Concession Agreement of HELLENIC LOTTERIES S.A.” of € 70,668 as at 31.12.2022 (31.12.2021: € 62,780) represents the difference between the actual amounts of contributions paid on the net revenues (GGR) of HELLENIC LOTTERIES S.A. for the fiscal years 2020, 2021 and the 5-month period of 2022 and the minimum amount required by the Concession Agreement of € 50,000. HELLENIC LOTTERIES S.A. has raised a claim against the payment of the minimum amount for the aforementioned periods (Note 31). The “GGR contribution and other levies and duties payable” refer to the amounts resulting from a month’s gaming activity which are payable during the next month. At Group level, the significant variation between OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 176 the comparative period is attributed to HELLENIC LOTTERIES S.A.. Specifically, an amount of €10,135 relates to the part of the minimum amount of € 50,000 required by the Concession Agreement which is payable on April 2023 and is not subject to the arbitration with the Greek State. The variation in “Other taxes (withholding VAT)” is mainly attributed to the players’ winning tax which is payable on a 15-days basis. As far as the “Additional consideration for the acquisition of STOIXIMAN LTD” is concerned, on 29.06.2022 OPAP INVESTMENT LTD paid all outstanding liabilities relevant with the 2020 and 2021 Earnouts of € 106,444, with the exception of the premium amount of € 13,971 which is expected to be paid up to March 2023. Finally, the remaining variance of € 6,112 represents the discounting effect and the effect of the remeasurement of the contingent consideration resulted from the variation between the audited 2021 STOIXIMAN LTD’s EBITDA versus the unaudited one. 29. Current income tax liabilities The variation presented in the Group between the two comparative periods is mainly attributed to the Company of € 28,569 and STOIXIMAN LTD of € 27,516, and resulted from the increased operating activity. 30. Dividends and Share Capital Return By virtue of the resolution of the Annual General Meeting (“AGM”) of the Shareholders of the Company of 09.06.2022 the distribution of the remaining dividend for the financial year 2021 of a total gross amount of € 175,513 was approved, corresponding to € 0.50 per Company’s share (in absolute amount). Additionally, the Company’s AGM decided the increase of the share capital of the Company by the amount of € 317,571, through capitalization of an equal amount from the share premium reserve and the increase of the nominal value of each share of the Company by € 0.90 (in absolute amount), i.e. from € 0.30 (in absolute amount) to € 1.20 (in absolute amount) to be followed by a share capital return of an equivalent amount (€ 317,571) through a reduction of the nominal value of each share of the Company by € 0.90 (in absolute amount), i.e. from €1.20 (in absolute amount) to €0.30 (in absolute amount). Finally, the Company's Board of Directors meeting that took place on 06.09.2022 decided to distribute an amount of € 107,535 or € 0.30 per share (in absolute amount) as interim dividend for the fiscal year 2022. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 177 31. GGR contribution and other levies and duties The respective expense is determined by the Concession Right held by the Group’s companies and a summary of the applicable rates is disclosed as following: Company License Rights of games GGR Contribution and other levies and duties rates OPAP S.A. Lottery & Betting games 10-year extension of the exclusive right until Oct.2030 30% OPAP S.A. Online games 7-year right until 08.2027 35% OPAP S.A. VLTs 18-year exclusive right until Dec.2035 30% STOIXIMAN LTD Online games 7-year right until 08.2027 35% HELLENIC LOTTERIES S.A. Passives & Instants 12-year exclusive right until 04.2026 30% and minimum annual fee € 50,000 HORSE RACES SINGLE MEMBER S.A. Horse racing landbased betting 20-year exclusive right until 2035 30% OPAP CYPRUS LTD Lottery & Betting games Agreement between Greek Republic and Republic of Cyprus 17% OPAP SPORTS LTD Betting games Class 'A' license for the landbased and Class 'B' license for the Online 13% The GGR contribution of HELLENIC LOTTERIES S.A has been calculated at the minimum amount of € 50,000 per annum stipulated in the Concession Agreement. However, it is noted that HELLENIC LOTTERIES S.A. disagrees with the payment of minimum amount for the years 2020 and 2021 and the 5-month period of 2022, and for this reason it has already appealed to the London Court of International Arbitration. 32. Agents’ commission For the Company, the agents’ commission is calculated as a percentage on the Net Gaming Revenue (NGR) depending on the game, the sales channel and the targets achieved. For the rest companies of the Group, the agents’ commission is calculated as a percentage on wagers depending on the game and especially for HELLENIC LOTTERIES S.A, the sales’ channel (wholesalers, mini markets, OPAP S.A. sales’ network etc.). 33. Other direct costs The other direct costs refer to the entities of the Group which operate in the gaming sector only, and its level is directly connected with the level of the gaming activity. More specifically, in the current period in the respective category are included: • fees to system providers of € 100,755 (2021: € 70,877) for the Group and € 68,574 (2021: € 47,978) for the Company, respectively, OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 178 • financial institutions’ fees of € 35,187 (2021: 28,961) for the Group and € 2,855 (2021: € 1,697) for the Company, respectively, representing the finance cost occurred regarding the completion of the online players’ transactions and, • online affiliation fees under the Article 196 of L.4635/2019 and the Article 10 of the Online regulation relating to the promotion of the online games by placing links at their websites of € 2,093 (2021: € 1,561) for OPAP S.A. and € 13,561 for 2022 (2021: € 11,448) for STOIXIMAN LTD. 34. Revenue from non-gaming activities The analysis of the Revenue from non-gaming activities is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Commission on New Year's Eve Lottery 1,955 1,568 - - Revenues from prepaid cards, mobile top-ups and bill payments 81,379 83,862 - - Revenue from IT services 13,789 8,208 - - Management fees - - 32,428 26,462 Income from subsidies 446 13,958 63 12,705 Tax refund from Malta Tax Authorities 14,694 3,582 - - Income from leases 4,718 2,673 4,440 2,488 Income from TV subscriptions 3,017 2,267 3,017 2,267 Income from Gaming Halls Telecommunication 2,015 1,600 2,015 1,600 Other 7,005 6,018 6,149 5,090 Total 129,017 123,735 48,113 50,610 Τhe “Commission on New Year's Eve Lottery” refers to the commission that HELLENIC LOTTERIES S.A. is entitled to receive regarding the operation and conduction of the relevant draw at the last day of each year and equals to 17% on the amounts wagered. The “Revenues from prepaid cards, mobile top-ups and bill payments” refer to revenues from TORA DIRECT SINGLE MEMBER S.A. and TORA WALLET SINGLE MEMBER S.A. and includes the following: • an amount of € 67,982 (2021: € 74,196) related to revenues where the aforementioned subsidiaries act as principals, • an amount of € 5,307 (2021: € 5,356) related to commissions where the subsidiaries act as agents and finally, • an amount of € 8,091 (2021: € 4,311) refers to commission from bill payments services. The ”Revenue from IT services” relates to the NEUROSOFT S.A. revenue for the provision of IT services and consulting and the sale of software and other technological products. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 179 Τhe Company’s “Management fees” mainly include Service Level Agreements (“SLA”) fees from its subsidiaries OPAP CYPRUS LTD, HELLENIC LOTTERIES S.A. and HORSE RACES SINGLE MEMBER S.A. which are eliminated for Group purposes. At Group level, the “Income from subsidies” of the comparative period included primarily a 25% discount on certain tax liabilities amounting to € 9,590 and a 100% leases discount of € 4,000, which both related to the measures introduced by the Greek authorities against to coronavirus (COVID-19) impact. 35. Income related to the extension of the concession of the exclusive right 2020-2030 As per the Supplementary agreement between the Company and the Hellenic Republic Asset Development Fund (HRADF) dated 12.12.2011 and its subsequent amendment on 29.04.2013 relating to the Company’s 10-year extension of the exclusive right up to 12.10.2030, a proportion equal to 80% of the absolute consideration for the extension which amounted to € 375,000 in total represents a GGR contribution prepayment of the Company for the extended period. This 80% proportion of the Absolute consideration equals to € 300,000 the future value of which was defined at the time that the extension was entered into at € 1,831,200 to be allocated to the 10 years of the extension. For 2022 the portion of the prepaid contribution of € 1,831,200, adjusted for any corporate tax impact, amounts to € 230,153 (2021: € 217,373) and has been incorporated as an expense under “GGR contribution and other levies and duties” and simultaneously, as an income under “Income related to the extension of the concession of the exclusive right 2020-2030” in the Income Statement. 36. Cost of sales related to non-gaming activities The "Cost of sales related to non-gaming activities” of the Group in 2022 includes the consumption of TORA DIRECT SINGLE MEMBER S.A. phone cards amounting to € 66,030 (2021: € 72,048), the cost of the sold PLAY Gaming Halls of OPAP S.A. of € 183 (2021: € 1,016) as well as the consumption of NEUROSOFT S.A. goods of € 5,441 (2021: € 1,351) for the production and development of software and IT systems. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 180 37. Payroll expenses The analysis of payroll expenses of the Company and the Group is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Wages and salaries 65,387 58,457 52,401 47,552 Social security costs 12,902 11,580 10,163 9,374 Other staff costs 2,371 1,518 1,621 1,056 Employee benefit plans 2,333 2,173 2,286 2,130 Termination compensations 1,511 2,535 1,459 2,151 Total 84,503 76,263 67,930 62,263 The number of employees of the Company as at 31.12.2022 and 31.12.2021 is 1,185 and 1,127 respectively, while the employees of the Group at the same dates are 1,677 and 1,612 respectively. 38. Marketing expenses The analysis of the marketing expenses is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 CSR and sponsorships 32,688 27,568 11,600 13,322 Advertising 79,012 63,068 38,533 33,369 Total 111,700 90,636 50,133 46,691 The Group’s CSR expense for the year 2022 amounts to € 2,149 (2021: € 5,243) and the sponsorships expense to € 30,539 (2021: 22,324). At Company’s level, the relevant expenses amount to € 1,711 (2021: € 4,632) and € 9,889 (2021: € 8,690). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 181 39. Other operating expenses The analysis of other operating expenses is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 IT related costs 37,353 32,731 31,444 24,894 Utilities & Telecommunication costs 13,489 11,478 12,181 11,452 Rentals 853 548 527 315 Professional fees 65,126 74,110 20,341 18,715 Subscriptions 3,358 2,720 2,633 2,102 Financial support to the agents 1,620 2,570 1,620 2,570 Insurance expenses 1,781 1,772 1,422 1,401 Consumables 2,640 1,980 1,795 1,797 Travelling expenses 3,172 1,581 2,394 1,213 Repair and maintenance 2,486 1,909 1,383 955 Other 30,658 19,423 12,515 7,640 Inventory consumption 5,006 3,569 4,597 3,292 Total 167,543 154,392 92,850 76,347 The Group “IT related costs” in 2022, among others, include fees for technological support of information systems (other than gaming platforms) of € 3,327 (2021: € 3,987), repair and maintenance of € 12,768 (2021: € 10,765) and use of software licenses of € 20,287 (2021: € 17,059) of which the amount of € 13,213 comes from STOIXIMAN LTD. The “Rentals” classified under the other operating expenses refer to short term and variable leases which are excluded from the IFRS 16 accounting treatment. The Group subcategory “Other” in 2022 includes a wide range of expenses, operating or not, such as, legal fees of € 7,411 (2021: € 2,034), Cypriot agents VAT of € 4,349 (2021: € 3,554), litigation provision of € 1,303 (2021: reversal € 616), taxes (other than Income tax) of € 2,350 (2021: € 2,313), extraordinary and prior year expenses of € 1,381 (2021: € 1,636) etc. Finally, it includes an expense of € 4,485 (2021: € 2,175) which relates to the remeasurement of the contingent consideration for the acquisition of STOIXIMAN LTD and resulted from the difference between the final 2021 STOIXIMAN LTD’s EBITDA versus the preliminary one. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 182 40. Finance income / (costs) The analysis of finance income and cost is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Interest expense on lease obligations (1,766) (1,993) (668) (835) Interest and expenses of bond loans (27,279) (33,200) (26,966) (32,446) Other finance costs (4,856) (6,057) (1,725) (1,505) Capital cost of employee benefit plans (6) (5) (5) (4) Remeasurement of the discounting interest of receivables (7,080) (4,597) (7,035) (4,550) Finance cost (40,986) (45,852) (36,399) (39,339) Bank deposits 146 176 68 95 Interest income from loans to third parties 189 108 154 824 Other finance income 175 177 104 141 Reversal of previous period discount interest 240 1,578 147 569 Discounting interest of payables 141 251 - - Finance income 890 2,288 474 1,629 Net finance costs (40,096) (43,564) (35,925) (37,711) The “Remeasurement of the discounting interest on receivables” for both the Group and the Company includes primarily the discounting of the accrued receivable related to the license extension 2020-2030 of € 7,035 (2021: € 4,550). 41. Dividend income The Company recognised dividend income from subsidiaries in 2022 amounting to € 7,000 (2021: € 4,000). Specifically, the dividend from OPAP CYPRUS LTD in 2022 amounted to € 5,000 (2021: € 3,000) and from OPAP SPORTS LTD was € 2,000 (2021: € 1,000). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 183 42. Income tax expense The income tax charged to the Income Statement and Other Comprehensive Income for the years ended 31.12.2022 and 31.12.2021 is analysed as follows: Amounts recognized in the Income statement GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Corporate income tax (135,360) (81,334) (101,212) (55,738) Deferred tax 8,145 (14,336) (1,257) (16,664) Deferred tax – Effect due to change in the income tax rate - (723) - 2,075 Income tax expense (127,215) (96,393) (102,468) (70,327) Effective tax rate 17.6% 27.0% 22.0% 21.0% Amounts recognised in other comprehensive income GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Deferred tax (345) (339) (343) (328) Deferred tax – Effect due to change in the income tax rate - (6) - (6) Total (345) (345) (343) (334) The corporate income tax rate in Greece is 22%, in Cyprus is 12.5% and in Malta is 35%. The accumulated tax losses of certain Group’s entities as of 31.12.2022 amount to € 95,438 (2021: € 90,396). Based on the approved business plans and the management estimations relating to the utilisation of the future taxable income the tax losses for which a deferred tax asset of € 1,440 recognised amounts to € 6,546, while for the remaining tax losses of € 88,892 no deferred tax asset could be recognised. Tax losses can be offset against future taxable earnings over the next 5‐year period. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 184 A reconciliation between the income tax expense and the accounting profit before tax multiplied by tax rates in force in Greece (2022: 22%, 2021: 22%) is as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Profit before tax 723,251 357,265 466,112 335,288 Tax calculated at the Company's statutory tax rate (22%) (159,115) (78,598) (102,545) (73,763) Tax adjustments in respect of: Effect of different tax rates in other countries 16,619 (5,653) - - Tax effect of non-deductible expenses (4,089) (2,804) (2,974) 282 Tax effect of non-taxable income 17,307 2,685 1,678 3,297 Effect of unrecognized deferred tax asset on tax carry forward losses (2,543) (9,224) - - Tax relating to prior periods 576 (2,315) 831 (2,315) Effect from tax rate change - (730) - 2,069 Effect of participating in share of profit of associates 3,253 (97) - - Other taxes 521 374 541 103 Other items for which no deferred tax asset is recognized 255 (29) - - Income tax expense (127,215) (96,393) (102,468) (70,327) 43. Earnings per share The basic and diluted earnings per share are calculated as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Net profit attributable to the shareholders of the Company 592,334 259,427 363,644 264,961 Weighted average number of ordinary shares 354,457,513 343,864,110 354,457,513 343,864,110 Basic and diluted earnings per share (in €) 1.6711 0.7544 1.0259 0.7705 Basic and diluted earnings per share are the same, as the Company has no dilutive potential categories. The weighted average number of shares is calculated as follows: 31.12.2022 31.12.2021 Issued ordinary shares at 1 January 352,856,287 341,426,387 Effect of treasury shares held (1,829,624) (1,829,624) Effect of new shares issuance 3,430,850 4,267,347 Weighted-average number of ordinary shares 354,457,513 343,864,110 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 185 44. Related party disclosures The Group’s Financial Statements for the year 2022 were consolidated by Allwyn International a.s.. The term “related parties” includes not only the Group’s companies, but also companies in which the parent participates in their share capital with a significant percentage, companies that belong to parent’s main shareholders, companies controlled by members of the BoD or key management personnel, as well as close members of their family. The Group’s and the Company’s income and expenses for the years of 2022 and 2021 as well as the balances of receivables and payables for the same period that have arisen from related parties’ transactions, as defined by IAS 24, as well as their relevant figures are analysed as follows: COMPANY Expenses & Assets’ Purchases Income 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 OPAP SPORTS LTD - - 2,000 1,000 OPAP CYPRUS LTD 828 784 32,591 25,529 HELLENIC LOTTERIES S.A. - - 4,677 3,796 HORSE RACES SINGLE MEMBER S.A. 9 - 264 750 TORA DIRECT SINGLE MEMBER S.A. 298 252 281 430 TORA WALLET SINGLE MEMBER S.A. 720 654 239 195 NEUROSOFT S.A. 9,328 7,711 - - Total 11,181 9,402 40,053 31,701 GROUP Expenses & Assets’ Purchases Income 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Related parties not eliminated for consolidation purposes 34,114 48,135 205,063 - Total 34,114 48,135 205,063 - GROUP Receivables Payables 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Related parties not eliminated for consolidation purposes 133,498 3,495 2,573 9,979 Total 133,498 3,495 2,573 9,979 The Company's income from transactions with related parties mainly refers to income from royalties and supporting services, while the respective expenses mainly refer to IT related costs. The Group’s expenses mostly relate to consulting fees. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 186 It is noted that an amount of € 204,243 included in “Income” from related parties relates to the consideration following the sale of the 36.75% minority interest in the business activities of KAIZEN GAMING LIMITED outside Greece and Cyprus (the “Betano Business”) to Allwyn Investments Cyprus Limited (formerly Rubidium Holding 2 Ltd) while the respective remaining consideration that has not been yet received of € 130,000 is included in the “Receivables” (Note 12). By virtue of a credit agreement signed on 14.07.2022, OPAP INVESTMENT LTD agreed to provide a related party, that is a party under common control, with a credit facility with a maximum credit limit of € 100,000 and maturity date 31.12.2022. A number of drawdowns took place during the year under this facility, all of which have been fully repaid by 27.09.2022. Finally, an amount of € 169 included in “Income” represents the finance income regarding the loans granted to related parties. COMPANY Receivables (excl. loans) Payables (excl. loans) 31.12.2022 31.12.2021 31.12.2022 31.12.2021 OPAP CYPRUS LTD 12,638 13,873 11,549 1,300 HELLENIC LOTTERIES S.A. 5,395 4,202 25 13 HORSE RACES SINGLE MEMBER S.A. 352 270 12 10 TORA DIRECT SINGLE MEMBER S.A. 94 155 115 186 TORA WALLET SINGLE MEMBER S.A. 379 620 235 311 NEUROSOFT S.A. 1,103 33 2,704 1,788 Total 19,961 19,153 14,638 3,607 COMPANY Loans to subsidiaries 31.12.2022 31.12.2021 TORA WALLET SINGLE MEMBER S.A. 4,904 - TORA DIRECT SINGLE MEMBER S.A. 2,807 3,511 7,711 3,511 The movement of the “Loans to subsidiaries” is presented below: COMPANY 31.12.2021 31.12.2022 Book value New Loans Repayments Receipts of interest of previous year Provision of Interest Book value TORA WALLET SINGLE MEMBER S.A. - 4,900 - - 4 4,904 TORA DIRECT SINGLE MEMBER S.A. - 7,000 (7,000) - - - TORA DIRECT SINGLE MEMBER S.A. 3,511 - (700) (11) 7 2,807 Σύνολο 3,511 11,900 (7,700) (11) 11 7,711 COMPANY Loans from subsidiary 31.12.2022 31.12.2021 OPAP CYPRUS LTD 30,164 30,175 30,164 30,175 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 187 The movement of the “Loans from subsidiary” is presented below: 31.12.2021 31.12.2022 Book value Payments of interest of previous year Provision of Interest Book value Loan, € 20,000 20,116 (116) 109 20,109 Loan, € 10,000 10,058 (58) 55 10,055 Σύνολο 30,175 (175) 164 30,164 Additionally, the Company has granted total corporate guarantees of € 108,550 (2021: € 104,375) in favor of HELLENIC LOTTERIES S.A. out of which the € 41,750 (2021: € 41,750) is a corporate guarantee for the loan of HELLENIC LOTTERIES S.A. from Alpha bank, the € 62,625 (2021: € 62,625) is a guarantee to HRADF and the € 4,175 (2021: € 4,175) relates to its overdraft bank account. Additionally, the Company has granted corporate guarantees of € 4,132 (2021: € 4,132) in favor of HORSE RACES SINGLE MEMBER S.A. to HRADF and up to € 3,000 (2021: € 3,000) for its overdraft bank account. Finally, the Company has granted corporate guarantees of € 1,100 (2021: € 1,100) in favor of OPAP SPORTS LTD and € 1,000 (2021: € 1,000) in favor of NEUROSOFT S.A.. It is mentioned that the Company intends to provide financial support to any of its subsidiaries, if it is deemed necessary. Senior members of Management have received the following remuneration: MANAGEMENT PERSONNEL GROUP COMPANY 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Salaries 8,339 7,296 8,291 7,260 Other compensations 27 20 27 20 Social security cost 250 195 250 195 Total 8,616 7,510 8,568 7,475 BOARD OF DIRECTORS GROUP COMPANY 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Salaries 841 837 434 364 Social security cost 102 90 72 63 Total 944 927 507 428 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 188 It should be noted that Group key management personnel is comprised only by the Company’s executives. GROUP COMPANY Liabilities from BoD compensation & remuneration 31.12.2022 31.12.2021 31.12.2022 31.12.2021 BoD and key management personnel 146 170 145 169 Total 146 170 145 169 All the above intercompany transactions have been dealt at arm’s length. All the above inter-company transactions and balances have been eliminated in the consolidated Financial Statements of the Group. 45. Other disclosures Contingent liabilities Tax liabilities The companies of the Group subject to tax audit by legal auditors, were tax audited by their Certified Auditors Accountants, according to the terms of article 82, par. 5 of the Law 2238/1994 and the article 65A, par. 1 of L. 4174/2013 that has been accordingly revised by L. 4262/2014, and received Tax Compliance Reports without differences. More specifically, the audited tax years by Certified Auditors are: Company’s Name Fiscal Years OPAP S.A. 2011-2022 HELLENIC LOTTERIES S.A. 2014-2022 TORA DIRECT SINGLE MEMBER S.A. 2011-2022 TORA WALLET SINGLE MEMBER S.A. 2016-2022 NEUROSOFT S.A. 2011-2022 HORSE RACES SINGLE MEMBER S.A. 2016-2022 In any case and according to POL. 1006/05.01.2016, Greek companies subject to the Tax Certificate process are not excluded from a tax audit by tax authorities. Consequently, tax liabilities for these fiscal years are not considered to be final. A possible tax audit may impose further taxes and fines, the amount of which is not expected to be material. The right of the Greek State to audit and impose taxes and fines for the years until 2016 has been elapsed. As far as the work of the Certified Auditors Accountants for the tax compliance report of the current year is concerned, it should be noted that it is currently in progress and it will not have been finalized prior to the publication of the annual Financial Statements. However, no material additional tax liabilities are expected. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 189 Group companies’ outside Greece have not been tax audited for the below years: Company’s Name Fiscal Years OPAP CYPRUS LTD 2013 -2022 OPAP SPORTS LTD 2020 -2022 OPAP INTERNATIONAL LTD 2004 - 2005 & 2013 - 2022 OPAP INVESTMENT LTD 2012 - 2015 & 2021-2022 STOIXIMAN LTD 2022 OPAP S.A. has appealed to the administrative courts, awaiting the hearing, for the imposition in 2014 of additional taxes and surcharges for the fiscal year 2010 of a total amount of € 29,568. This amount has already been paid to the respective authorities. Legal liabilities According to the Legal Counsel third party lawsuits against the Group and the Company have been filed of a total claim of € 336,032 and € 335,082, respectively as at 31.12.2022 (31.12.2021: € 341,883 and € 340,993). However, no provision has been recorded as the outcome expected is positive for the Group and the Company. Off balance sheet assets and liabilities The guarantees that the Group and the Company have received as well as granted in order to secure their assets/liabilities are stated below: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Receivables securing 14,991 15,067 2,519 2,541 Guarantees received 14,991 15,067 2,519 2,541 Guarantees to HRADF 78,500 78,500 - - Other guarantees 54,020 48,437 118,782 109,426 Guarantees granted 132,520 126,937 118,782 109,426 It is noted that out of the total of the above guarantees to HRADF as of 31.12.2022, € 75,000 (31.12.2021: € 75,000) are related to HELLENIC LOTTERIES S.A. and € 3,500 (31.12.2021: € 3,500) to HORSE RACES SINGLE MEMBER S.A. and refer to the obligations arising from the respective concession agreements. The Company has granted total corporate guarantees as 31.12.2022 of € 108,550 (31.12.2021: € 104,375) in favor of HELLENIC LOTTERIES S.A.. From this amount, € 41,750 (31.12.2021: € 41,750) is a corporate guarantee for the loan of HELLENIC LOTTERIES S.A. from Alpha bank, € 62,625 (31.12.2021: € 62,625) is a guarantee to HRADF regarding the minimum amount per annum stipulated in the Concession Agreement and € 4,175 (31.12.2021: € 0) relates to its overdraft bank account. Additionally, the Company has granted OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 190 corporate guarantees of € 4,132 (31.12.2021: € 0) in favor of HORSE RACES SINGLE MEMBER S.A. to HRADF and up to € 3,000 (31.12.2021: € 0) for its overdraft bank account. Finally, the Company has granted corporate guarantees of € 1,100 (31.12.2021: € 1,100) in favor of OPAP SPORTS LTD and € 1,000 (31.12.2021: € 1,000) in favor of NEUROSOFT S.A.. Other than that, the subsidiary HELLENIC LOTTERIES S.A. is committed to pay on an annual basis 30% of the gross gaming revenue generated from the Greek State Lotteries (with the exception of the New Year’s Lottery) to the Greek State; however such amount is not to be less than € 50,000 for the following years of its operation. In addition, the subsidiary HORSE RACES SINGLE MEMBER S.A. is committed to allocate 1.5% of the gross gaming revenue to the Jockey Club for its operational costs with a minimum annual allocation of € 500 up to a limit of € 200,000 of total amounts wagered and 0.5% over this limit for the following years of its operation. 46. Financial instruments and financial risk factors Fair value and fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuing technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. During the year there were no transfers between level 1 and level 2 fair value measurement, and no transfers into and out of level 3 fair value measurement. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 191 The following tables compare the carrying amount of the Group’s and the Company’s financial instruments that are carried at amortized cost to their fair value: GROUP Carrying value Fair value 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Financial assets Loans receivable 3,687 5,133 3,687 5,133 Trade receivables 102,871 92,959 102,871 92,959 Cash and cash equivalents 724,433 860,361 724,433 860,361 Housing loans to personnel and other financial assets 488 206 488 206 Guarantee deposits 2,930 2,614 2,930 2,614 Accrued income 145,423 18,939 145,423 18,939 Investments 3,634 3,633 3,634 3,633 Financial liabilities Long term borrowings 506,679 991,673 505,401 996,814 Short term borrowings 281,707 54,965 282,277 55,027 Trade payables (excluding contracts' liabilities) 170,537 158,808 170,537 158,808 Liabilities arising from derivatives (swap) - 1,453 - 1,453 Lease liabilities 47,120 51,007 47,120 51,007 Other financial liabilities 64,688 158,869 64,688 158,869 COMPANY Carrying value Fair value 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Financial assets Loans receivable 11,293 7,848 11,293 7,848 Trade receivables 58,671 51,294 58,671 51,294 Cash and cash equivalents 247,796 609,088 247,796 609,088 Housing loans to personnel 114 130 114 130 Guarantee deposits 962 934 962 934 Accrued income 14,948 9,602 14,948 9,602 Financial liabilities Long term borrowings 466,565 941,517 464,150 947,197 Short term borrowings 311,533 82,677 312,132 82,733 Trade payables (excluding contracts' liabilities) 80,381 59,655 80,381 59,655 Liabilities arising from derivatives (swap) - 1,453 - 1,453 Lease liabilities 19,563 22,354 19,563 22,354 Other financial liabilities 19,303 21,873 19,303 21,873 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 192 The fair value of long-term and short-term borrowings is based on either quoted (unadjusted) prices or on future cash flows discounted. The fair value of other financial assets and financial liabilities approximates their carrying amounts. Risk related to political and economic conditions, as well as market conditions and developments in Greece The ongoing war in Ukraine following the invasion of Russia in early 2022 and the severe economic sanctions imposed on Russia are significantly affecting the energy market and consequently the global economy and its outlook. There is no direct exposure of the Group to either Russia or Ukraine, and therefore no direct effect on its financial performance from these latest developments. Any effect is only indirect, related to the high energy cost and inflationary pressures caused by this geopolitical crisis, that have triggered a subsequent negative affect on our customers’ disposable income. The Group is following developments and monitoring customer behavior for any signs of a long-term decline in their gaming activity or spending, which would act as an impairment indicator for the respective licenses. The Group has considered the impact of the current macroeconomic environment on the measurement of non-financial and financial assets and the related disclosures. In measurement of non- financial assets, the Group used adjusted cash flows projections based on the revised financial budgets to calculate the Value in Use (VIU), i.e. the recoverable amount of the cash generating units. Revised budgets reflect the impact of the high inflation on GDP and private consumption along with emerging trends in gaming activity. Management reassessed also the recoverability of trade and other receivables, included intergroup receivables. Management assessed the impact of the economic environment has on the expected credit losses (ECL) calculation and the effect of credit risk on the amount, timing and uncertainty of future cash flows. Within this challenging environment, the Group managed to record positive results as of 31.12.2022 maintaining strong financial position. The total debt of the Group and the Company mainly bears fixed interest rates thus the Group and the Company are not sensitive to potential changes in interest rates on loans. Management continually assesses the possible impact of any changes in the macroeconomic and financial environment in Greece taking into consideration global economic developments, so as to ensure that all necessary measures are taken in order to minimize any impact on the Group’s Greek operations. Climate risk There is no direct exposure to climate risk for both, the Group and the Company. However, we are conscious of global climate change and environmental issues. With the aim to contribute to the mitigation of such issues, we systematically work towards minimizing our potential negative impact throughout our OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 193 operations, by complying with current environmental legislation and relevant provisions, as well as conducting all necessary environmental impact assessments. Through our Environmental and Energy Policy, we are committed to conducting business in an environmentally responsible way, acknowledging that the protection of the environment, energy saving and the conservation of natural resources are integral parts of responsible and sustainable business development. Financial risk management Management continually assesses the possible impact of any changes in the macroeconomic and financial environment in Greece and Cyprus so as to ensure that all necessary actions and measures are taken in order to minimize any impact on the Group’s operations. Based on its current assessment, it has concluded that no additional impairment is required with respect to the Group’s financial and non-financial assets as of 31.12.2022. Next, we present the main risks and uncertainties which the Group is exposed. Market risk Market risk arises from the possibility that changes in market prices such as exchange rates and interest rates affect the results of the Group and the Company or the value of financial instruments held. The management of market risk consists in the effort of the Group and the Company to control their exposure to acceptable limits. The individual risks that comprise market risk, namely interest rate and currency risk, and the Group’s and the Company’s policies for managing them are described below. Interest rate risk The Group’s main interest rate risk arises from long term borrowings with variable rates. The Group follows all market developments concerning the interest rate environment and acts accordingly. The existing debt facilities, as of 31.12.2022, stand at € 788,386 and € 778,099 for the Group and the Company respectively, which are analysed as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Fixed rate borrowings 648,254 646,484 678,418 676,558 Floating rate borrowings 140,133 400,154 99,681 347,635 Total 788,386 1,046,638 778,099 1,024,193 As at 31.12.2022 the floating-rate borrowings do not include loan agreements which have been hedged whilst as at 31.12.2021 approx. 24% of the total floating-rate borrowings had been hedged through interest rate swap. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 194 The Group follows all market developments and acts in a timely manner when needed. The effect of interest rate swap on the financial statements of the Group and the Company is as follows: Interest rate swap GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Carrying amount (non-current liability) - 1,453 - 1,453 Notional amount 100,000 100,000 100,000 100,000 Maturity date - 2023 - 2023 Hedge ratio 1:1 1:1 1:1 1:1 Change in fair value of outstanding hedging instruments since 1 January 1,453 1,296 1,453 1,296 The following table demonstrates the sensitivity to a change in interest rates on borrowings to the income statement. If interest rates were to increase by 1.0%, the impact on profits after tax would be: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Impact on profit after tax (688) (1,510) (468) (1,480) If interest rates were to decrease by 1.0%, the impact on profits after tax would be: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Impact on profit after tax 277 396 204 396 Currency risk Currency risk is the risk that the fair values of the cash flows of a financial instrument fluctuate due to changes in foreign currency rates. The Group operates in Greece and Cyprus, and the vast majority of its established agreements with suppliers is serviced in euro. All revenues from games are in euro, transactions and costs are denominated or based in euro. Consequently, there is no substantial foreign exchange currency risk. Capital Management The primary objective of the Group and the Company, relating to capital management is to ensure and maintain strong credit ability and healthy capital ratios to support the business plans and maximize value for the benefit of shareholders. The Group maintains a solid capital structure as depicted in the Net Debt/EBITDA ratio of 0.1x as of 31.12.2022. In addition, it retains an efficient cash conversion cycle thus optimizing the operating cash required in order to secure its daily operations, while diversifying its cash reserves so as to achieve flexible working capital management. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 195 The Group manages the capital structure and makes the necessary adjustments to conform to changes in business and economic environment in which they operate. The Group and the Company in order to optimize the capital structure, may adjust the dividend paid to shareholders, return capital to shareholders or issue new shares. The capital structure for the years 2022 and 2021 is as follows: GROUP COMPANY Period that ended on December 31 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Long-term borrowings 506,679 991,673 466,565 941,517 Short-term borrowings 281,707 54,965 311,533 82,677 Long-term lease liabilities 39,328 43,507 13,959 16,989 Short-term lease liabilities 7,792 7,500 5,604 5,365 Total debt 835,506 1,097,645 797,662 1,046,548 Minus : Cash and cash equivalents (724,433) (860,361) (247,796) (609,088) Minus : Short & long-term investments (3,634) (3,633) - - Net debt 107,439 233,651 549,866 437,459 Total Equity 1,075,433 949,372 718,525 815,022 Profit before interest, tax, depreciation and amortization (EBITDA) last twelve months 735,985 550,296 598,354 479,959 Total debt / Total Equity 77.7% 115.6% 111.0% 128.4% Net debt / Profit before interest, tax, depreciation, amortization and impairment (EBITDA) 0.1 0.4 0.9 0.9 Credit risk The Group’s exposure to credit risk arises mainly from its operating activities and more specifically, it is linked to the collection process from its sales network. The aforementioned process leaves the Group exposed to the risk of financial loss if one of its counterparties/agents fails to meet its financial obligations. In order to mitigate the aforementioned risk, OPAP established and implements a credit risk management policy. The main characteristics of the policy are: • The establishment of a Credit Committee responsible to approve and/or to make recommendations to the BoD for credit risk related matters. • The classification of agents based on a credit risk scoring model which is continuously updated. • The establishment of credit limits per agent based on their individual credit ratings. • The immediate suspension of operation in case of overdue amounts. The carrying value of financial assets at each reporting date is the maximum credit risk to which the Group is exposed. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 196 Impairment of financial assets The Group and the Company have the following types of financial assets that are subject to the expected credit loss model: • Trade receivables • Loans granted • Short-term & long-term investments • Guarantee deposits • Other financial assets. While cash and cash equivalents are also subject to the impairment under IFRS 9, the identified impairment loss was not significant due to the fact that the cash and cash equivalents of the Group and the Company are held at reputable European financial institutions. The Group applies the IFRS 9 simplified approach to measure expected credit losses using a lifetime expected loss allowance for all trade receivables. It is mentioned that the expected credit losses are based on the difference between the cash inflows, which are receivable, and the actual cash inflows that the Group expects to receive. All cash inflows in delay are discounted. The remaining financial assets are considered to have low credit risk, therefore the Group applies the IFRS 9 general approach and the loss allowance was limited to 12 months expected losses. Assets subject to credit risk as at the date of the Statement of Financial Position are analyzed as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Financial Assets Categories Loans receivable 3,687 5,133 11,293 7,848 Trade receivables 102,871 92,959 58,671 51,294 Cash and cash equivalents 724,433 860,361 247,796 609,088 Housing loans to personnel and other financial assets 488 206 114 130 Guarantee deposits 2,930 2,614 962 934 Accrued income 145,423 18,939 14,948 9,602 Investments 3,634 3,633 - - Total 983,466 983,845 333,784 678,896 All financial assets in the above table are not yet due except for doubtful trade receivables. The latter, along with receivables by agents are also impaired. Both these categories are included in Trade Receivables (see Note 16) and are covered through loss allowance. OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 197 The loss allowances for trade receivables assets as at 31 December reconcile to the opening loss allowances as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Opening balance 44,260 46,104 38,655 40,142 Additions 1,199 92 826 - Unused amounts - (1,354) - (906) Write offs (17,244) (581) (17,244) (581) Closing balance 28,215 44,260 22,237 38,655 The loss allowances for other current assets as at 31 December reconcile to the opening loss allowances as follows: GROUP COMPANY 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Opening balance 16,406 20,111 397 12,353 Unused amounts - - - (8,250) Write offs - (3,705) - (3,705) Closing loss allowance 16,406 16,406 397 397 During the year, the following losses were recognised in income statement in relation to impaired financial assets: Net impairment losses on financial assets GROUP COMPANY 01.01- 31.12.2022 01.01- 31.12.2021 01.01- 31.12.2022 01.01- 31.12.2021 Impairment losses on short term trade receivables (1,199) (92) (826) - Reversal of previous impairment losses - 1,354 - 10,906 Write-off of short term trade receivables (165) (1,764) (165) (1,764) Total (1,364) (501) (991) 9,143 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk by performing a detailed forecasting analysis of the inflows and outflows of the Group on a yearly basis. The aforementioned exercise takes into account: • Revenues forecast based on expected payout ratios of the games • Tax obligations and other financial commitment towards the government • Financial obligations arising from the Group’s loan portfolio • Operating Expenses • Capital Expenditure • Extraordinary inflows and outflows OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 198 The Group liquidity position is monitored on a daily basis from the Treasury Department and if needed makes recommendations to the CFO and the Board of Directors to assure no cash shortfalls. The analysis of the undiscounted contractual payments of the financial liabilities of the Group and the Company is as follows: GROUP Short Term Long Term Total contractual cash flows 31.12.2022 Less than 6 months 6 to 12 months 1 to 2 years 2 to 5 years Over 5 years Long term borrowings - - 170,092 340,115 - 510,206 Short term borrowings 280,000 92 - - - 280,092 Trade payables (excluding contracts' liabilities) 141,338 29,199 - - - 170,537 Lease liabilities 4,790 4,679 7,828 17,161 21,222 55,680 Other financial liabilities 35,745 20,131 1,550 621 733 58,780 Total 461,873 54,101 179,470 357,896 21,955 1,075,295 GROUP Short Term Long Term Total contractual cash flows 31.12.2021 Within 6 months 6 till 12 months 1 to 2 years 2 to 5 years Over 5 years Long term borrowings - - 380,092 270,206 350,000 1,000,298 Short term borrowings - 52,293 - - - 52,293 Trade payables (excluding contracts' liabilities) 125,841 32,967 - - - 158,808 Liabilities arising from derivatives (swap) - - 1,453 - - 1,453 Lease liabilities 4,583 4,543 8,374 18,449 24,952 60,901 Other financial liabilities 119,011 32,376 1,601 1,749 438 155,175 Total 249,435 122,180 391,520 290,404 375,390 1,428,928 COMPANY Short Term Long Term Total contractual cash flows 31.12.2022 Within 6 months 6 till 12 months 1 to 2 years 2 to 5 years Over 5 years Long term borrowings - - 130,000 340,000 - 470,000 Short term borrowings 280,000 30,000 - - - 310,000 Trade payables (excluding contracts' liabilities) 80,381 - - - - 80,381 Lease liabilities 3,127 3,012 4,807 9,144 736 20,826 Other financial liabilities 9,900 7,739 - - - 17,639 Total 373,408 40,751 134,807 349,144 736 898,846 OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 199 COMPANY Short Term Long Term Total contractual cash flows 31.12.2021 Within 6 months 6 till 12 months 1 to 2 years 2 to 5 years Over 5 years Long term borrowings - - 380,000 220,000 350,000 950,000 Short term borrowings - 80,001 - - - 80,001 Trade payables (excluding contracts' liabilities) 59,655 - - - - 59,655 Liabilities arising from derivatives (swap) - - 1,453 - - 1,453 Lease liabilities 3,003 2,996 5,475 10,669 1,919 24,062 Other financial liabilities 11,461 8,408 - - - 19,869 Total 74,119 91,404 386,928 230,669 351,919 1,135,038 47. Audit and other fees The auditors of the Company as well as its subsidiaries in Greece, for the years 2022 and 2021 was the audit firm PRICEWATERHOUSECOOPERS S.A.. The audit and other fees of the Company and the Group concerning the PricewaterhouseCoopers network are analyzed as follows: GROUP COMPANY Period that ended on December 31, 2022 2021 2022 2021 Audit fees 1,182 809 828 579 Fees for the Tax Certificate 153 144 80 75 Other non-audit fees 86 49 79 41 Total 1,421 1,001 987 695 48. Reclassifications At the Group’s and the Company’s Statement of Financial Position, the “Provisions” were reclassified from “Non-current liabilities” to “Current liabilities” (Note 25). OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 200 49. Subsequent events Bond loans repayment On 06.02.2023, the Company proceeded with an early repayment of € 100,000 of its bond loan with Alpha Bank of total nominal amount € 200,000. Final dividend for the fiscal year 2022 The Company's Board of Directors decided during its meeting on 14.03.2023 to distribute € 1.00 per share (in absolute amount) as a final dividend for the fiscal year 2022 with € 0.30 per share (in absolute amount) having already paid as interim dividend in November 2022. In addition to the dividend distribution, capital return to Shareholders of € 0.45 per share (in absolute amount) will be proposed to AGM. Consequently, the total shareholders distribution including the dividend will amount to € 1.45 per share (in absolute amount). Chairman Board Member and Chief Executive Officer Board Member and Chief Financial Officer Operational Finance Director Kamil Ziegler Jan Karas Pavel Mucha Petros Xarchakos OPAP S.A. Annual Financial Report 2022 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 201 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
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