Annual Report (ESEF) • May 13, 2022
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Download Source FileUntitled 21 www.thracegroup.com ANNUAL FINANCIAL REPORT 01/0131/12/2021 IN ACCORDANCE ARTICLE 4 OF LAW 3556/2007 AND THE RELEVANT EXECUTIVE DECISIONS OF THE BOARD OF DIRECTORS OF THE HELLENIC CAPITAL MARKET COMMISSION THRACE PLASTICS CO S.A. General Commerce Reg. No. 12512246000 Domicile: Magiko, Municipality of Avdira Xanthi Greece Oces: 20 Marinou Antypa Str. 174 55 Alimos, Attica Greece Page 2 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Information regarding the preparation of the Annual Financial Report for the period from January 1 st to December 31 st 2021 The present Financial Report, which refers to the period from 1.1.2021 to 31.12.2021, was prepared in accordance with the provisions of article 4 of L.3556/2007 (Gov. Gaz. 91Α’/30-04-2017), of Law 4548/2018 and the relevant decisions issued by the Board of Directors of the Hellenic Capital Market Commission under Reg. No. 8/754/14-4-2016 and 1/434/03-07-2007 as well as with the protocol no. 62784/06-06-2017 Circular of the Division of Enterprises and GEMI of the Ministry of Finance, Development and Tourism. The present Report was approved unanimously by the Board of Directors of “THRACE PLASTICS CO S.A.” (“Company”) on April 12th, 2022, has been posted on the Company’s website www.thracegroup.gr where such will remain available to investors for a period of at least (10) ten years from the publication date and includes: • Any deviation in the numbers’ last digit is due to rounding. CONTENTS I. STATEMENTS BY REPRESENTATIVES OF THE BOARD OF DIRECTORS 3 II. ANNUAL REPORT BY THE BOARD OF DIRECTORS OF THRACE PLASTICS CO S.A. ON THE FINANCIAL STATEMENTS OF THE YEAR FROM 1-1-2021 TO 31-12-2021 4 III. AUDIT REPORT BY CERTIDIED AUDITOR 142 IV. ANNUAL FINANCIAL STATEMENTS (SEPARATE AND CONSOLIDATED) 150 V. ONLINE AVAILABILITY OF THE INTERIM FINANCIAL REPORT 258 Annual Financial Report as of 31.12.2021 Page 3 of 260 Amounts in thousand Euro, unless stated otherwise THE UNDERSIGNED: I. STATEMENTS BY REPRESENTATIVES OF THE BOARD OF DIRECTORS (according to article 4 par. 2 of L 3556/2007) We, the representatives of the Board of Directors, hereby state and conrm that to our knowledge: (a) The Annual Financial Statements (Parent and Consolidated) of the Company, which concern the period from January 1 st 2021 to December 31 st 2021, were prepared in accordance with the accounting standards in eect, accurately present the Assets and Liabilities, Equity and Financial Results of the Company, as well as those of the companies included in the consolidation and considered aggregately as a whole, and (b) The Annual Report by the Company’s Board of Directors accurately presents the sig- nicant events of the year 2021 and their eect on the annual nancial statements, the signicant transactions between the Company and its related parties, the devel- opments, performance and position of the Company, as well as of the companies included in the consolidation and considered aggregately as a whole, including the description of basic risks and uncertainties they are facing. Xanthi, 12 April 2022 The Chairman of the Board of Directors The Chief Executive Ocer & Executive Member of the Board of Directors The Non-Executive Member of the Board of Directors Konstantinos St. Chalioris Dimitris P. Malamos Vasileios S. Zairopoulos Page 4 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise II. ANNUAL REPORT BY THE BOARD OF DIRECTORS OF THRACE PLASTICS CO S.A. ON THE FINANCIAL STATEMENTS OF THE YEAR FROM 1-1-2021 TO 31-12-2021 The present Annual Report by the Board of Directors (hereinafter called as “Report”) refers to the scal year 2021 (01.01.2021 – 31.12.2021). The Report was prepared in accordance with the relevant pro- visions of Law 4548/2018 (GOV. GAZ. 104Α΄/13.06.2018) as it is currently in force and of Law 3556/2007 as it is in ef- fect following its amendment from Law 4374/2016 and the relevant executive de- cisions issued by the Board of Directors of the Hellenic Capital Market Commission, and especially the decisions with num- ber 1/434/3.7.2007 and 8/754/14.4.2016, as the latter is valid after its amendment by the decision with number 12A / 889 / 31.08.2020 of the Board of Directors of Hel- lenic Capital Market Commission. The Report includes the total required by law information (nancial and non-nan- cial information) with a concise as well as comprehensive, objective and adequate manner and with the principle of provid- ing the complete and substantial informa- tion with regards to the issues included in such. Given the fact that the Company prepares consolidated and non-consolidated (sepa- rate) nancial statements, the present Re- port constitutes a single report referring mainly to the consolidated nancial data of the Company and its subsidiaries or af- liates. Any reference to non-consolidated nancial data takes place in certain areas which have been deemed as necessary by the Board of Directors of the Company for the better understanding of the contents of the report and towards providing inves- tors with the most complete information. It is noted that the present Report in- cludes, along with the 2021 nancial statements, the required by law data and statements in the Annual Financial Report, which concern the nancial year ended on 31 December 2021. The sections of the present Report and the contents of such are in particularly as fol- lows: INTRODUCTION Annual Financial Report as of 31.12.2021 Page 5 of 260 Amounts in thousand Euro, unless stated otherwise SECTION I: Significant events that took place during the financial year 2021 Below, the most signicant events that took place during the scal year 2021 are pre- sented: Macroeconomic Environment and Impact of COVID-19 Global macroeconomic conditions have been aected for another year by the re- curring waves of the COVID-19 pandemic, particularly in Europe, with alterations be- tween gradual easing of restrictive meas- ures and re-adoption of such measures within the year. Therefore, it is obvious that the evolution of the pandemic was an important determinant of the economic and business environment, creating at the same time conditions of uncertainty but also business opportunities. At the same time, in the last months of year there has been the phenomenon of rising ination pressures in most world econo- mies and the constantly increasing prices on the cost base of industrial production, i.e. price increases in raw material prices, in secondary materials and packaging ma- terials, in energy costs and transportation costs, while there is still limited evidence of a potential reversal of the above price pressures. The above on the one hand generate chal- lenges, which the Group already faces and will continue to face in the near future and on the other hand create conditions of uncertainty regarding the course of the economies and their growth patterns. Ι. Impact of the pandemic on the operation of the Group for the nancial year 2021 In this extremely dicult environment as described above and in view of the signi- cant disruptions in global supply and de- mand forces, the business and economic activity as well as operation of the Group has not been adversely aected to date and the Group continues to eectively overcome the existing challenges. Regarding the operation of production, all production units within the Group con- tinued to operate smoothly for the entire year 2021, without facing any operational issues from the spread of the pandemic, regarding the health and safety of the Group’s employees, as a result of the par- ticularly strict protection measures taken by the Group. The scal year 2021 was a year of espe- cially strong nancial performance as the Group achieved a higher protability by successfully osetting the negative impact from the signicant increase seen in raw material costs and the volatility observed in terms of market demand. More speci- cally, the following were observed during the year: • Increase of demand for products in the construction sector. • Signicant demand in the infrastruc- ture and agricultural sector. • Signicant demand for products relat- ed to personal protection and health, especially during the rst months of the year, but with a signicant decline Page 6 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise in the second half. • Gradual increase of raw material pric- es, while their high levels remained throughout the year. In individual cas- es some additional increases were ob- served, depending on the type of raw material and the geographical area. • Constantly increasing energy costs, especially during the last quarter of the year, in all countries which the Group is operating in. • Signicantly higher transportation costs with signicant lack of capac- ity in both available ground transport and containers. • Signicantly increased cost with re- gard to auxiliary materials as well as and packaging materials. In nancial terms, however, the Group managed to increase its turnover from continuing operations, taking advantage of its production capacity, its ever-grow- ing global network of customers and the business opportunities that arose. The above resulted in sales for 2021 of € 428.4 million, an increase of 26.1% compared to 2020, mainly due to increasing selling prices, Earnings before Taxes (EBT) from continuing operations of € 83.9 million, an increase of 61.1% compared to the year 2020. It should be noted that according to estimates of the Management for the year 2021, Earnings before Taxes at the Group level, related to the products of the exist- ing portfolio used in personal protection and health applications, amounted to € 51.8 million. (see note 3.3 of the nancial statements). Regarding the liquidity levels of the Group and the trading cycle of the subsidiaries, there was no negative impact due to the pandemic crisis. On the contrary, during the year 2021, the Group achieved the fur- ther strengthening of its liquidity, record- ing a Net Cash of € 9.3 million, as cash and cash equivalents exceeded its debt liabili- ties. Regarding the investment plan, the imple- mentation of the Group’s already planned investments is progressing smoothly. The investment plan for 2022, exceeds €40mil. on cash basis. The investments will be made mainly at the Group’s facilities in Greece, but also in other countries of ac- tivity. It is worth mentioning that the new invest- ment plan in its entirety, but also the ex- isting investment actions are fully aligned with the implementation of the Group’s sustainability policy, in the context of its stable, long-term, sustainable growth. From the above it is clearly demonstrated that for the year 2021, the Group did not experience any negative, from a nancial point of view, consequence both in its - nancial results and in its trading cycle and therefore, it did not encounter any nan- cial risk, which would adversely aect its business continuity. On the contrary, the Group managed to achieve historically high protability, which will be the basis of its further growth in the coming years. Annual Financial Report as of 31.12.2021 Page 7 of 260 Amounts in thousand Euro, unless stated otherwise ΙΙ. Measures taken to reduce the impact of the pandemic The Management of the Group continues to closely monitor the developments re- lated to the pandemic crisis and continues to maintain in full implementation mode a plan to ensure the health and safety of its personnel as well as the smooth business continuity of the entire Group. In particular, in accordance with the guide- lines and recommendations of the World Health Organization (WHO) and the local Public Health and Civil Protection Organi- zations, the following measures have been implemented: h Establishment of sub-crisis manage- ment teams with the participation of the Management teams of the sub- sidiaries and the Group, the Human Resources Departments, the Occupa- tional Physicians and the Safety Tech- nicians. h Informing employees about the coro- navirus, the mode of transmission, the prevention and protection measures and providing recommendations and instructions for personal hygiene, in accordance with the local instructions of the competent authorities. h Provision of personal protective equipment to the personnel (masks, antiseptics, gloves). h Carrying out disinfections at the Com- pany’s premises on a regular basis. h Conduct Covid-19 tests on the person- nel, preventively and as appropriate. h Remote work for oce employees to the greatest possible extent. h Protection of employees belonging to vulnerable groups, by facilitating their immediate removal from the premises, without curtailing their remuneration. h Development of specic procedures and protocols for all visitors to the Company’s facilities (carriers, contrac- tors, technicians, etc.) h Conducting meetings among the em- ployees of all Companies as well as the Management of the Group and con- ducting Board of Directors’ meetings between the Board of Directors with- out physical presence and by using electronic or audiovisual means (e.g. video conference). h Conducting General Meetings by vid- eo conference, in accordance with the provisions of the relevant legislative framework. h Adherence to the required medical protocols, in case of illness of an em- ployee or simple contact with an in- fected case, in collaboration with the occupational physician. h Continuous monitoring of liquidity and the transaction cycle of the Group companies. h Weekly meetings among the Man- agement of the subsidiaries and the Group, the Human Resources Depart- ment, the Occupational Physicians and the Safety Technicians in order to maintain and enrich the protection measures as well as the monitoring process of vaccinations and infections. It should be noted that the protection measures mentioned above continue to be fully implemented in the most consist- ent manner and to absolute degree at the time of preparation of the current Report. Page 8 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise ΙΙΙ. Assessing the impact of the pandemic in the future and prospects of the Group Regarding the prospects for the year 2022, the Management closely monitors the macroeconomic developments, on a global level, which are characterized by the sig- nicantly stronger inationary trends, throughout the economy but also in all cost items that constitute the industrial sector’s cost base, and by the ongoing war between Russia and Ukraine, which is substantially aggravating the economic en- vironment. As a result of the above devel- opments, there is a lag in demand in vari- ous sectors of the economy, combined with the presence of signicantly higher prices of both raw materials as well as energy and transportation costs. Regarding the rst quarter of 2022, the Management of the Group remains op- timistic for its satisfactory performance, given the dicult conditions prevailing in the current period. It is estimated that a signicantly stronger protability will be achieved, compared to the corresponding period before the pandemic, but it will set- tle lower than the protability of the cor- responding period of the previous year. However, the comparison with the previous year becomes extremely dicult to be sub- stantiated, due to the extraordinary circum- stances of both that period and the current one. Specically concerning the impact of the war, it should be noted that the Group’s sales volume in Russia and Ukraine for 2021 was immaterial (0.6% of sales), but it is not clear how the ongoing war conict will af- fect more broadly the supply and demand conditions in the market. Regarding the course of 2022 as a whole, the very challenging as well as volatile mac- roeconomic environment described above makes especially dicult the development of any nancial estimates, since the visibil- ity for the nancial results and the level of demand in the coming months remains ex- tremely limited. However, the great eort made by the Management of the Group as well as the Management of the subsidiar- ies in all the countries of operation, creates conditions of reserved optimism that the Group will be able to implement its strate- gic plans and to maintain to a signicant extent the protability from the traditional portfolio that was formed in 2021. This will be also demonstrating that the Group has entered a new era, characterized by sig- nicantly higher protability compared to pre-pandemic levels. It should be noted, however, that although the implementa- tion of this plan is the fundamental goal of the Management, the extremely uncertain conditions that arise at the time of prepa- ration of the annual report are likely to re- dene the annual performance estimates made by the Management in the coming months of the year. At the same time, the Group’s Management is working in seamless manner towards the implementation of the new strategy, the extraordinary investment actions that have been decided, as well as the imple- mentation of the new annual investment plan for 2022. As already announced, the Group’s priority is the development of new products as well as the access to new mar- kets, the emphasis on improving prot- ability, the further cost reduction and con- sequently the increase in competitiveness and the targeted increase in production ca- pacity in both key sectors of activity. At the same time the Group implements impor- tant actions regarding recycling and the cir- cular economy, actions that are an integral Annual Financial Report as of 31.12.2021 Page 9 of 260 Amounts in thousand Euro, unless stated otherwise The Company recognizes the risks and the impact that may arise in its business activ- ity from the climate change, such as the occurrence of extreme weather events or rising temperatures, which may aect the production process and lead to signi- cant changes in its activities as well as to abrupt changes in the Group’s income and expenses in the short, medium and long term horizon. In order to mitigate the risks arising from climate change, but also to achieve positive nancial results for both the Group and its broader environment, the Company adapts its business model to reduce its environmental footprint (direct emissions, energy consumption, use of re- cycled material, waste management) and focus on the development of innovative products and services, applying the prin- ciples of the circular economy. Therefore, it has formulated a detailed strategic plan of specic actions, which are already being implemented. More details can be found in the non-nancial information section of this report as well as in the following link: https://www.thracegroup.com/gr/el/sus- tainability/ . IV. Climate related issues part of the Group’s strategy and will form new dynamics for the future. It is worth not- ing that for the period 2020 - 2022, the total investment plan of the Group, on a cash basis, will amount to € 101 million. Regarding the level of liquidity of the Group, which in 2021 settled at signi- cantly higher levels, it is estimated that it will remain at similarly high levels. How- ever, the full implementation of the exten- sive investment plan, the greatest part of which will be disbursed in 2022, is mainly carried out via the utilization of own funds and therefore the Net Cash is likely to re- turn to Net Debt. The utilization of excess liquidity for the implementation of actions that will contribute to the further long-term development and viability of the Group, is estimated to be from any perspective the most appropriate use of this capital, both in terms of sound management and in terms of required return. The Management of the Group is condent that the overall implementation of the re- spective investment plans but also of the broader strategy creates conditions for the Group to gradually enter into a new era of development, improvement of infrastruc- ture, further expansion of activities and im- provement of prot generation, compared to the pre-pandemic levels. At the same time, the strengthening of the Group’s - nancial position is the basis for the imple- mentation of the future investment plans, as they will be unveiled in the coming years, actions that in turn will contribute to the successful implementation of the new strategy, always within the framework of protable sustainable development. Despite the fact that the current conditions in the global market place create signicant volatility, making any assessment regarding the impact of the pandemic on the com- mercial activity and the nancial results of the Company and the Group uncertain, the Group’s Management estimates that neither the Group nor any of its individual activities face any potential threat in terms of cessation of business activity (going con- cern). Page 10 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise V. Expected Credit Losses There are no expected credit losses as a re- sult of the current conditions and circum- stances. In any case, according to the estab- lished policy, most of the companies’ sales remain insured, while additional measures have been taken to ensure the Group car- ries out transactions with reliable custom- ers (credit risk assessment, credit scoring, advances, etc.). More information on credit risk can be found in Chapter 3.32.2. Election of new members of the Board of Directors to replace resigned Directors – Reconstitution of the Board of Directors into a body The Board of Directors of the Company, during the meeting that took place on 18 th January 2021, elected: (a) Ms. Myrto Papathanou of Christos in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Konstantinos Gianniris of Ioannis, and (b) Ms. Spyridoula Maltezou of Andreas in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Ioannis Apostolakos of George. The above replacement and the election of the specic independent non-executive members of the Board of Directors takes place in the context of the Company’s de- cision for its immediate, substantial and eective compliance and adaptation of its organization to the requirements and reg- ulations of the new Law 4706/2020 with regard to corporate governance. More specically, the election of the above new members of the Board of Directors, on the one hand is in line with the current regulatory framework and in particular with the provisions of the above new law, in terms of substantive criteria and condi- tions of independence of new members, whereas on the other hand is harmonized with the provisions of the new law on suit- ability, diversity and, above all, adequate representation by gender in the Board of Directors. The election of the above new independ- ent non-executive members of the Board of Directors was announced, in accordance with the law and the Company’s Articles of Association, at the Extraordinary General Shareholders Meeting of the Company, on 11 February 2021. Following the above, the Board of Direc- tors of the Company was reconstituted into a body for the remaining of its term, i.e. until March 19 th , 2024, as follows: 1. Konstantinos Chalioris of Stavros, Chairman of the Board of Directors (executive member). 2. Christos-Alexis Komninos of Konstan- tinos, Vice Chairman of the Board of Directors (non-executive member). 3. Dimitrios Malamos of Petros, Chief Executive Ocer of the Company (ex- ecutive member). 4. Vassilios Zairopoulos of Stylianos, Member of the Board of Directors (non-executive member). Annual Financial Report as of 31.12.2021 Page 11 of 260 Amounts in thousand Euro, unless stated otherwise 5. Christos Shiatis of Panagiotis, Member of the Board of Directors (non-execu- tive member). 6. Petros Fronistas of Christos, Member of the Board of Directors (independ- ent non-executive member). 7. Myrto Papathanou of Christos, Mem- ber of the Board of Directors (inde- pendent non-executive member). 8. Spyridoula Maltezou of Andreas, Member of the Board of Directors (in- dependent non-executive member). 9. Theodoros Kitsos of Konstantinos, Member of the Board of Directors (in- dependent non-executive member). 10. Nikitas Glykas of Ioannis, Member of the Board of Directors (independent non-executive member). Decisions of the Extraordinary General Meeting of the Company’s shareholders of 11 th February 2021 The Extraordinary General Meeting of the Company’s shareholders on 11 th February 2021 took the following decisions: In the 1 st item of the agenda, the Meet- ing decided by majority, in accordance with the provisions of article 3 of Law 3016/2002, the election of the following persons: (a) Ms. Myrto Papathanou of Christos in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Konstantinos Gianniris of Ioannis, and (b) Ms. Spyridoula Maltezou of Andreas in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Ioannis Apostolakos of George, The election of the above independent non-executive members of the Board of Directors takes place in the framework of the Company’s decision for the immedi- ate, substantial and eective compliance and adaptation of its organization to the requirements and regulations of the new Law 4706/2020 with regard to corporate governance. Both members that were elected accord- ing to the above meet the criteria and con- ditions of independence of both the arti- cle 4, par. 1 of Law 3016/2002 valid until 17.07.2021, as well as of article 9 par. 1 and 2 of Law 4706/2020. In the 2 nd item and in the context of har- monization with the requirements, criteria and regulations of the new Law 4706/2020 with regard to corporate governance and concerning both independence and suit- ability, diversity and mainly the adequate representation by gender in the Board of Directors, and following a relevant propos- al of the Remuneration and Nomination Committee (RNC), the Meeting approved by majority the election of a new eleven- member (11-member) Board of Directors, through the re-election of all its outgoing members, as well as the election of Mr. Georgios Samothrakis of Panagiotis as its new member. Following the above, the Board of Direc- tors of the Company, with a term in ac- cordance with the provisions of article 7, par. 2 of the Articles of Association, which Page 12 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise is extended until the expiration of the deadline within which the next Ordinary General Meeting must convene and until the relevant decision, will consist of the following members: 1. Konstantinos Chalioris of Stavros 2. Christos-Alexis Komninos of Konstan- tinos 3. Dimitrios Malamos of Petros 4. Vassilios Zairopoulos of Stylianos 5. Christos Shiatis of Panagiotis 6. Petros Fronistas of Christos 7. Georgios Samothrakis of Panagiotis 8. Myrto Papathanou of Christos 9. Spyridoula Maltezou of Andreas 10. Theodoros Kitsos of Konstantinos 11. Nikitas Glykas of Ioannis Simultaneously with the same majority de- cision, the Extraordinary General Meeting appointed as independent members of the Board of Directors of the Company, the following: 1) Georgios Samothrakis of Pa- nagiotis, 2) Myrto Papathanou of Christos, 3) Spyridoula Maltezou of Andreas, 4) The- odoros Kitsos of Konstantinos and 5) Niki- tas Glykas of Ioannis as they all meet the required by the current regulatory frame- work (namely article 4, par. 1 of the current until 17.07.2021 Law 3016/2002 and arti- cle 9, par. 1 and 2 of Law 4706/2020) con- ditions and criteria of independence. The new Board of Directors of the Com- pany, elected by the Extraordinary General Meeting of Shareholders, which took place on 11 February 2021, was formed on the same day (11 February 2021) into body. In the 3 rd item, the Meeting approved by majority, in accordance with the provi- sions of article 44 of Law 4449/2017, as in force after its amendment by the arti- cle 74 of Law 4706/2020, the election of a new Audit Committee, which constitutes an Independent Committee and consists of three (3) members, of which one (1) in- dependent non-executive member of the Board of Directors of the Company and two (2) third parties - non-members of the Board of Directors. Within the above framework, the follow- ing persons were elected as members of the Audit Committee: 1. Mr. Georgios Samothrakis of Panagio- tis, Independent non-executive Mem- ber of the Board of Directors, 2. Mr. Konstantinos Kotsilinis of Elefthe- rios, third party and non-Member of the Board of Directors and 3. Mr. Konstantinos Gianniris of Ioannis, third party and non-Member of the Board of Directors. The members of the Audit Committee as a whole have sucient knowledge of the sector in which the Company operates, while the majority of the members of the Audit Committee and in particular Messrs. George Samothrakis of Panagiotis and Konstantinos Kotsilinis of Eleftherios, are independent of the Company, given that: (a) They do not hold shares greater than 0.5% of the Company’s share capital; and (b) They do not have any dependency re- lationship with the Company or persons related to it, as this (dependency relation- ship) is specied in particular in the provi- sions of article 4 par. 1 of Law 3016/2002, which remains in force until 17.07.2021, as well as of article 9 par. 1 and 2 of Law 4706/2020. Furthermore, the criterion of sucient knowledge and experience in auditing or accounting is met in the person of both Annual Financial Report as of 31.12.2021 Page 13 of 260 Amounts in thousand Euro, unless stated otherwise Mr. Georgios Samothrakis and Mr. Kon- stantinos Kotsilinis, and therefore each of the above members will be required to at- tend the meetings of the Audit Committee concerning the approval of the nancial statements. Finally, by the same majority decision, the Meeting specied the term of the Audit Committee as ve years, starting on Feb- ruary 11, 2021 and ending on February 11, 2026. Following the election of a three-member Audit Committee by the Extraordinary General Meeting of Shareholders of 11 February 2021 and the appointment of the persons holding the positions of its mem- bers, the Audit Committee at the meeting of 16 February 2021 decided the election of Mr. Georgios Samothrakis of Panagiotis, Independent Non-Executive Member of the Board of Directors of the Company, as its Chairman, in accordance with the provi- sions of article 44, par. 1, Law 4449/2017, as in force today. Following the above, the Audit Committee was constituted into a body as follows: 1. Georgios Samothrakis of Panagiotis, Independent Non-Executive Member of the Board of Directors, Chairman of the Audit Committee. 2. Konstantinos Kotsilinis of Eleftherios, third party - non-Member of the Board of Directors, Member of the Audit Committee. 3. Konstantinos Gianniris of Ioannis, third party - non-Member of the Board of Directors, Member of the Audit Com- mittee. It is noted that from the above Members of the Audit Committee, Messrs. Georgios Samothrakis of Panagiotis and Konstanti- nos Kotsilinis of Eleftherios, i.e. the majori- ty of the members of the Audit Committee, meet the required by the current regulato- ry framework (article 4, par. 1 of the eec- tive until 17.07.2021 Law 3016/2002 and article 9, par. 1 and 2 of Law 4706/2020) conditions and criteria of independence. According to the decision of 12.03.2021 of its Board of Directors and after a relevant proposal made by the Audit Committee, Mr. Lambros Apostolopoulos was appoint- ed as Head of the Internal Audit Depart- ment (Unit). Mr. Apostolopoulos meets the require- ments of the current legal framework (arti- cle 15 of Law 4706/2020), i.e. he is full-time and exclusively employed, has personal and functional independence, is not a member of the Board of Directors or a member with the right to vote in standing committees of the Company, has no close relations with anyone who holds one of the above capacities in the Company and has the appropriate knowledge and rel- evant professional experience to assume the above position. Mr. Apostolopoulos assumed his duties as Head of the Internal Audit Department on 17/03/2021. Appointment of New Head of the Internal Audit Department Page 14 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise The Annual Ordinary General Meeting of the Company’s shareholders, which took place on May 21, 2021 remotely in real time via videoconference, decided the fol- lowing among others: a) the allocation (distribution) of income for the nancial year 2020 (01.01.2020- 31.12.2020) and specically the Gen- eral Meeting approved the distribution (payment) of a total dividend of Euro 6,947,002.24 (gross amount) to the shareholders of the Company from the earnings of the closing nancial year 2020, or 0.158820 Euros per share (gross amount), which after the increase corre- sponding to the 322,688 treasury shares held by the Company and which are ex- cluded from the payment of dividend, will amount to 0.16 Euros per share (gross amount). The Company’s shareholders registered in the records of the Dematerialized Securities System (SAT) as of Thursday 27 May 2021 (record date), were those entitled to receive the above dividend. Wednesday 26 May 2021 was set as the ex-dividend date according to the rele- vant article 5.2 of the Athens Exchange Regulation. The payment of dividend commenced on Wednesday 2 June 2021, and was implemented through the Societe Anonyme under the name “PIRAEUS BANK S.A.”, according to the procedure stipulated by the Regulation of the Ath- ens Exchange in eect. b) the approval by majority of the Remu- neration Report, which was prepared in accordance with the provisions of arti- Expiration / Completion of the Stock Repurchase Plan On 22 March 2021, the Company an- nounced the expiration / completion of the Stock Repurchase Plan in accordance with the provisions of article 49 of Law 4548/2018, as in force, by the Extraordi- nary General Meeting of Shareholders of March 19 th , 2019. Establishment of Committees of the Board of Directors The Board of Directors of the Company during its meeting on 22 nd March 2021, for the purposes of a substantial, eective and appropriate compliance and harmoniza- tion of the Company with the regulations of articles 11 and 12 of Law 4706/2020 re- garding the Committees of the Board of Directors, and also with the parallel adop- tion of best corporate governance practic- es, decided the following: (a) the abolition of the existing Committee for Benets and Promotion of Nomina- tions (CBPN) and its replacement by the Remuneration and Nomination Com- mittee, (b) the establishment of the Strategy and Investment Committee, (c) the establishment of the Environmen- tal, Social Responsibility and Corporate Governance Committee, and nally (d) the establishment of the Human Re- sources Committee The Board of Directors during the above meeting appointed the members and set the responsibilities of these committees. Annual Ordinary General Meeting of the Company’s shareholders Annual Financial Report as of 31.12.2021 Page 15 of 260 Amounts in thousand Euro, unless stated otherwise Commencement of Share Buy-Back Plan The Management of the Company in ap- plication of the decisions of the Annual Or- dinary General Meeting of the sharehold- ers of May 21st, 2021 and of the Board of Directors of June 4th, 2021, announced on June 7th, 2021 the commencement of the share buy -back plan. New investment program of € 25.5 million with an emphasis on the production facilities of Xanthi The Board of Directors of the Company, following a relevant proposal by the Man- agement, approved a new, extraordinary investment plan. More specically, the Management, taking into consideration the broader market conditions as well as the strong cash position of the Group, pro- posed the immediate implementation of the above extraordinary investment plan, which is an additional investment com- pared to the current investment plan of 2021, or any other additional investment plan potentially approved at a later time. The new investment plan is oriented to- wards the Sustainable & Protable De- velopment of the Group, with a focus on the following strategic pillars: further re- duction of production costs and boost of competitiveness, improvement of prot margins, vertical integration of production processes and with parallel emphasis on the circular economy and nally, further reduction of the environmental footprint. The individual actions of the new invest- ment plan that will be implemented at the Group’s facilities, in Xanthi, Greece, are summarized as follows: h investment in mechanical ber production equipment: ber is a basic raw material for the production of non-woven needle punch fabrics. Needle Punch fabrics aim at a variety of applications in the sectors of infra- structure and construction, agricul- ture, automotive, etc. h investment in mechanical recycling equipment in order to increase the recycling capacity with regard to n- ished products or plastic waste, both from internal production and oper- ating processes as well as from third party sources. This action is in line with the commitment of the Group calling on the one hand for the use of more recycled raw materials and on the other hand for further reducing the environmental footprint of its nal products. h investment concerning the instal- lation and commissioning of pho- tovoltaic systems to cover part of the energy needs of the Group’s pro- duction plant complex in the area of Xanthi, Greece (net metering), with a cle 112 of Law 4548/2018. The Report contains a comprehensive overview of the total remuneration of the members of the Board of Directors (executive and non-executive), and explains how the Remuneration Policy of the Company was implemented for the immediately preceding nancial year. The decisions of the General Meeting of Shareholders are posted on the Compa- ny’s website at the link https://www.thra- cegroup.com/gr/el/general-meetings/ Page 16 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise targeted power capacity of 1.5 MW, demonstrating its commitment to- wards sustainable development, in the context of achieving energy sav- ings and for further reducing the envi- ronmental footprint. h investment in infrastructure (land and buildings), which will create con- ditions that are conducive to ecien- cy gains of the production plants, but will also prepare the ground for future development of the business activity and protability of the Group’s com- panies. Moreover, under the above extraordinary investment plan, the following will take place at Don & Low’s facilities in Forfar, Scotland: h investment in mechanical laminat- ing equipment to increase produc- tion capacity with regard to the fur- ther processing of non-woven Spun bond fabrics, in order to achieve high- er prot margins. h investment in mechanical recycling equipment to increase the recycling capacity with regard to nished prod- ucts or plastic waste, both from inter- nal production and operating process- es as well as from third party sources. h investment in infrastructure (land and buildings), which will create con- ditions that are conducive to eciency gains of the production plant, but will also facilitate the future development of the business activity and protabil- ity of the company. The new investments amount in total to € 25.5 million, of which € 21.4 million con- cern the investments that will be imple- mented in the production facilities of the Group in Xanthi, Greece and € 4.1 million concern the investments in the Group’s subsidiary in Scotland, whereas all are be- ing related to the eld of Technical Fabrics. The nancing of this new investment plan will be carried out mainly with own funds. Election of a new member of the Board of Directors to replace the resigned Director - Reconstitution of the Board of Directors into a body The Board of Directors of the Company, during its meeting as of July 28 th , 2021 and following the relevant proposal made by the Company’s Remuneration & Nomina- tion Committee which took place in ac- cordance with the applicable Policy of Suitability and the procedures applied by the Company, elected: Mr. Athanasios Dimiou of Georgios as non-executive member, in replacement for the remaining term of the resigned non-ex- ecutive member of the Board of Directors Mr. Petros Fronistas of Christos. The above replacement and the election of the specic non-executive member of the Board of Directors will contribute to the further strengthening of the Board of Directors, in particular with the new mem- ber’s many years of experience and spe- cialized knowledge in the eld of plastics and specically in production technolo- gies, while this replacement takes place in the context of the Company’s decision for the substantial and more eective ad- aptation of its organization to the require- ments and regulations of the new Law 4706/2020 (Government Gazette AD 136 / 17.07.2020) on corporate governance and is harmonized with the provisions of the particular law on suitability. Annual Financial Report as of 31.12.2021 Page 17 of 260 Amounts in thousand Euro, unless stated otherwise The election of the above new non-exec- utive member of the Board of Directors is going to be announced, in accordance with the provisions of the law and the Company’s Articles of Association, at the next General Meeting convened by the Company’s shareholders. Following the above, the Board of Direc- tors of the Company was reconstituted into a body for the remainder of its term, i.e. until February 11th, 2026, as follows: 1. Konstantinos Chalioris of Stavros, Chairman of the Board of Directors (executive member). 2. Theodoros Kitsos of Konstantinos, Vice Chairman of the Board of Direc- tors (independent non-executive member). 3. Dimitrios Malamos of Petros, Chief Ex- ecutive Ocer of the Company (ex- ecutive member). 4. Athanasios Dimiou of Georgios, Mem- ber of the Board of Directors (non- executive member). 5. Vassilios Zairopoulos of Stylianos, Member of the Board of Directors (non-executive member). 6. Christos Alexis Komninos of Konstan- tinos, Member of the Board of Direc- tors (non-executive member). 7. Christos Shiatis of Panagiotis, Mem- ber of the Board of Directors (non- executive member). 8. Georgios Samothrakis of Panagiotis, Member of the Board of Directors (independent non-executive mem- ber). 9. Myrto Papathanou of Christos, Mem- ber of the Board of Directors (inde- pendent non-executive member). 10. Spyridoula Maltezou of Andreas, Member of the Board of Directors (independent non-executive mem- ber). 11. Nikitas Glykas, of Ioannis, Member of the Board of Directors (independ- ent non-executive member). Completion of the Process concerning the Sale of the Industrial Property of the fully owned, by 100%, subsidiary Thrace Linq INC. The Management of the Company, fol- lowing the relevant announcements on 24.04.2020, 18.06.2020, 28.08.2020 and 17.06.2021, in relation to the transfer –due to the respective sale by its 100% subsidi- ary company Thrace Linq INC.-- of the pri- vately owned industrial property, which is located in South Carolina, U.S.A., after the nal cessation of the production opera- tion of the above subsidiary, informed the investor community on 18/08/2021 about the following: After the collection of the entire remaining part of USD 3.5 million (plus the interest due and related expens- es), and the consequent abolition of any impediments associated with this particu- lar repayment, the sale transaction with re- gard to the above property was completed and consequently the transfer of the prop- erty became certain and nal. It is reminded that the total consideration with regard to the above sale transaction amounted to USD 14.5 million, the great- est part of which (i.e. USD 11 million) had been collected at the time of the trans- fer agreement of the property (i.e. on 15/06/2020). It is noted that as a result of the comple- tion of the above sale transaction of the property as per above, the Group recorded an extraordinary prot for the year 2021, Page 18 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Donation of surgical masks The Board of Directors of the Company, with a relevant decision, has appointed Mr. Dimitrios Fragkou of Vassilios as the Ocer of the Investors Relation and Corporate An- nouncements Department of the Company in replacement of Mrs. Ioanna Karathanasi daughter of Paraskevas, due to the with- drawal of the latter from the Company. Mr. Dimitrios Fragkou took over his duties as the Ocer of the Investors Relation and Corporate Announcements Department on September 13, 2021. Thrace Plastics Group actively supported the eort of the National Hellenic Wheel- chair Basketball Team to claim the highest possible distinction and awarded 3,000 certied disposable surgical masks, cover- ing the needs for increased protection as part of the organization of the 14 th Euro- pean Men’s Wheelchair Basketball Cham- pionship, which was held at the Peace and Friendship Stadium from 12-18 July 2021. Issuance of Tax Certicate of Tax Certicate for the Fiscal Year in ac- cordance with article 65 A of Law 4174/2013 Replacement of the Ocer of Investor Relations and Corporate An- nouncements Department Following the special tax audit carried out for the nancial year 2020 by the statu- tory external auditors in accordance with article 65A of Law 4174/2013, both on the Company and its subsidiaries “Thrace Nonwovens & Geosynthetics S.A.”, “Thrace- Polylms S.A.”, “Thrace Plastics Pack S.A.”, “Thrace Eurobent S.A.” and “Thrace Green- houses S.A.”, the relevant tax certicates were issued with an unqualied opinion. Interim Dividend for the Year 2021 amounting to USD 7.78 million (i.e. ap- proximately EUR 6.57 million). The nalization of sale of the property of the fully owned by 100% subsidiary Thrace Linq INC. has completed in the most ben- ecial way for the Group its action plan regarding the cessation of the production activities of the specic subsidiary. At the same time, the Group continues to serve uninterruptedly the geotextile market in America from the Group’s facilities in Europe and from Lumite INC., a joint ven- ture of the Group in the U.S.A., gradually strengthening its position in the particular market as well. The Board of Directors of the Company during the meeting of September 24th, 2021 approved the distribution of an in- terim dividend for the nancial year 2021 based on the interim nancial statements for the period 01.01.2021-30.06.2021. The Interim dividend amounted in total to 4,750 thousand Euros (gross amount), i.e. 0.108592646 Euros per share of the Company. The above amount through the increase corresponding to the 504,163 treasury shares held by the Company and Annual Financial Report as of 31.12.2021 Page 19 of 260 Amounts in thousand Euro, unless stated otherwise which are not entitled to an interim divi- dend, settled at 0.109858877 Euros per share and was subject to a withholding tax of 5%, in accordance with the provisions of Law 4646/2019 (Government Gazette A’ 201/12.12.2019). Therefore, the nal amount paid as Interim dividend for the year 2021 amounted to 0.104365933 Euros per share. Following the above and after the approval of the nancial statements for the period 01.01.2021-30.06.2021 and especially the entry, as of 6.10.2021, in the General Electronic Commercial Regis- try (GEMI) of the relevant announcement regarding the publication of the above - nancial statements, the Board of Directors of the Company at its meeting of October 14, 2021, set Wednesday, December 1, 2021 as the cut-o date for the interim div- idend, Thursday, December 2, 2021 as the date of determination of the beneciaries to the above dividend (record date), and Wednesday, December 8, 2021 as the pay- ment commencement date. The payment of the interim dividend was made through the paying Bank “PIRAEUS BANK SA”. Appointment of new Ocer of Investor Relations and Corporate Announcements Department The Board of Directors of the Company, during its meeting as of November 18, 2021, made the appointment of Ms. Evan- gelia (Elina) Sideri of Georgios as the Oc- er of the Investor Relations and Corporate Announcements Department of the Com- pany in replacement of Mr. Dimitrios Frag- kou, who had been acting under the above capacity up until November 23, 2021. Ms. Evangelia Sideri took over her duties on November 24, 2021. SECTION II: Main Risks and Uncertainties The Group’s activities, in general, create several business risks. Such risks include market risk (foreign exchange risk and risk from changes of raw materials prices), credit risk, liquidity risk and interest rate risk. ● Financial Risks The nancial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable accounts, payable accounts and loans. The relevant risks are monitored by the nancial management teams of the subsidiaries and the parent company and a network of actions to limit such risks is accordingly being formed. ● Risk from fluctuation of prices of raw materials The Group is exposed to uctuations in the price of polypropylene (represents 52% approximately of the cost of sales), which are mainly faced by a similar change in the selling price of the nal product. The possibility that the increase in the price of polypropylene cannot be fully passed on to the selling price, causes unavoidably the compression of margins. For this rea- son, the Company accordingly adjusts, to the extent it is feasible, its inventory policy as well as its commercial policy in general. Therefore in any case, the particular risk is deemed as relatively controlled. Page 20 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise ● Credit Risk The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause nancial loss to the Group and the Company as a result of the breach of its contractual obligations. The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the nancial statements is the book value of their - nancial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required. In order to monitor credit risk, customers are grouped according to the category they belong to, their credit risk character- istics, the maturity of their receivables and any previous receivables that they have caused, taking into account future factors as well as the economic environment. ● Impairment The Group and the Company, in the - nancial assets that are subject to the new model of expected credit losses, include receivables from customers and other - nancial assets. The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all nan- cial assets. The expected credit losses are based on the dierence between the con- tractual cash ows and the entire cash ows which the Group (or the Company) anticipates to receive. The dierence is discounted by using an estimate concern- ing the initial eective interest rate of the nancial asset. For the trade receivables, the Group and the Company applied the simplied approach of the accounting standard and calculated the expected credit losses based on the expected credit losses for the entire lifetime of these items. Regarding the remaining nancial assets, the expected credit losses are being calcu- lated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the antici- pated credit losses for the entire life of the nancial assets, which emanates from the probability of a default in the payment of the contractual obligations within the next 12-month period starting from the report- ing date. In case of a signicant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. At the date of the preparation of the nan- cial statements, impairment of receivables from customers and other nancial assets was made on the basis of the above. The following table presents an analysis of the maturity of Trade Receivables’ bal- ances at 31.12.2021. Maturity of Trade Receivables’ balances at 31.12.2021 Group 01 – 30 days 23,443 31 – 90 days 37,175 91 – 180 days 4,980 180 days and over 6,670 Subtotal 72,268 Provisions for doubtful receivables (7,721) Total 64,547 Annual Financial Report as of 31.12.2021 Page 21 of 260 Amounts in thousand Euro, unless stated otherwise The above amounts are expressed in terms of due days in the table below. Analysis of not past due/overdue Trade receivables at 31.12.2021 Group Receivables not past due 53,323 Overdue receivables 1 – 30 days 9,492 Overdue receivables 31 – 90 days 2,639 Overdue receivables above 91 days 6,814 Subtotal 72,268 Provisions for doubtful receivables (7,721) Total 64,547 With regard to uninsured receivables over- due more than 90 days, which the Group has classied as doubtful, relevant provi- sions have been made which are deemed as sucient. Correspondingly, the amounts of maturity and past due for the nancial year 2020 are presented in the following tables. Maturity of Trade Receivables’ balances at 31.12.2020 Group 01 – 30 days 21,197 31 – 90 days 30,357 91 – 180 days 5,927 180 days and over 6,689 Subtotal 64,170 Provisions for doubtful receivables (7,307) Total 56,863 Analysis of not past due/overdue Trade receivables at 31.12.2020 Group Receivables not past due 47,434 Overdue receivables 1 – 30 days 8,017 Overdue receivables 31 – 90 days 1,528 Overdue receivables above 91 days 7,191 Subtotal 64,170 Provisions for doubtful receivables (7,307) Total 56,863 ● Liquidity Risk Liquidity risk monitoring focuses on the management of cash inows and outows on a permanent basis, so that the Group has the ability to meet its cash obliga- tions and retain the cash reserves required for its operations. Liquidity is managed by maintaining cash and approved bank credit lines. At the date of preparation of the nancial statements, unused approved bank credits were available to the Group, which are considered sucient to handle any possible shortage of cash in the future. Short-term bank liabilities are renewed at maturity, as they are part of the approved bank credit lines. The following table presents the liabilities – disbursements according to their matu- rity dates. Page 22 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Group 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 29,665 25,484 292 - - 55,441 Other short-term liabilities 12,723 15,891 381 - - 28,995 Short-term debt 2,601 9,118 5,674 - - 17,393 Liabilities from leasing (short- term part) 75 330 509 - - 914 Long-term debt - - - 33,610 - 33,610 Liabilities from leasing (long- term part) - - - 1,941 120 2,061 Other long-term liabilities - - - 237 - 237 Total 31.12.2021 45,064 50,823 6,856 35,788 120 138,651 Group 31.12.2020 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 10,706 18,819 172 - - 29,697 Other short-term liabilities 7,904 15,738 9,450 - - 33,092 Short-term debt 514 5,395 20,402 - - 26,311 Liabilities from leasing (short- term part) 455 1,394 973 - - 2,822 Long-term debt - - - 46,691 - 46,691 Liabilities from leasing (long- term part) - - - 2,998 212 3,210 Other long-term liabilities - - - 208 34 242 Total 31.12.2020 19,579 41,346 30,997 49,897 246 142,065 ● Foreign Exchange Risk The Group is exposed to foreign exchange risks arising from existing or expected cash ows in foreign currency and investments that have been made in countries outside Greece. The management of the various risks is made by the use of natural hedge instruments. In order to hedge the foreign exchange risk from customers’ receivables in foreign currency, an equal amount of borrowing is agreed in the same currency according to the management’s policy and judgment. Sensitivity analysis of the eect of ex- change rate changes is given in the table below: Annual Financial Report as of 31.12.2021 Page 23 of 260 Amounts in thousand Euro, unless stated otherwise Foreign Currency 2021 2020 Change of foreign currency against Euro * Prot before tax USD GBP Other USD GBP Other +5% (74) (32) 5 (244) (44) (62) -5% 81 35 (6) 270 49 68 Equity +5% (218) (1.358) (222) 136 169 (277) -5% 241 1.500 246 (151) (187) 307 Note • Prot before Taxes are converted at the average exchange rates. • Equity is converted at the exchange rate at the closing date of each scal year. ● Interest Rate Risk The long-term loans of the Group have been granted by Greek and foreign banks and are mainly in Euro. Their repayment time varies, depending on the loan agree- ment and they are usually linked to Euribor plus margin. The Group’s short-term loans have been granted by various banks, with Euribor interest rate plus margin as well as Libor interest rate plus margin. It is estimated that a change in the average annual interest rate by 1 percentage point, will result in a (charge) / improvement of Earnings before Tax as follows: Possible interest rate change Eect on Earnings before Tax Group 2021 2020 Interest rate increase 1% (540) (790) Interest rate decrease 1% 540 790 ● Capital Adequacy Risk The Group controls capital adequacy us- ing the net debt to operating prot ra- tio and the net debt to equity ratio. The Group’s objective in relation to capital management is to ensure the ability for its smooth operation in the future, while pro- viding satisfactory returns to shareholders and benets to other parties, as well as to maintain an ideal capital structure so as to ensure a low cost of capital. For this purpose, it systematically monitors work- ing capital in order to maintain the lowest possible level of external nancing. Page 24 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Capital Adequacy Risk Group 2021 2020 Long-term debt 33,610 46,691 Long-term debt from leases 2,061 3,210 Short-term debt 17,393 26,311 Short-term debt from leases 914 2,822 Total debt 53,978 79,034 Minus cash & cash equivalents 63,240 40,824 Net debt (9,262) 38,210 EBITDA 110,275 69,444 NET DEBT / EBITDA (0.08) 0.55 EQUITY 252,250 176,109 NET DEBT / EQUITY (0.04) 0.22 * Concerns Total Operations. It should be noted that the Company does not have any bank debt obligations, while the balance of the debt obligations reported in its Balance Sheet refers to an intragroup loan. Annual Financial Report as of 31.12.2021 Page 25 of 260 Amounts in thousand Euro, unless stated otherwise SECTION III: Significant Transactions with Related Parties The most signicant transactions between the Company and its related parties, as de- ned by International Accounting Stand- ard 24, are described below. It should be noted that the reference to the particular transactions includes the follow- ing data: a) The amount of the most signicant transactions for the year 2021 b) Their unpaid balance at the end of the year (31.12.2021) c) The nature of relation between the re- lated party and the Company, as well as d) Any information concerning the trans- actions, which is necessary for the un- derstanding of the Company’s nancial position, only to the extent that these transactions are material. Income Don & Low LTD 1,518 Thrace Nonwovens & Geosynthetics Single Person SA 1,510 Thrace Polylms Single Person SA 351 Thrace Plastics Pack SA 921 Thrace Ipoma A.D. 291 Synthetic Holdings LTD 161 Thrace Synthetic Packaging LTD 205 Thrace Polybulk AB 220 Thrace Polybulk AS 160 Thrace Linq Inc 303 Total 5,640 Suppliers - Liabilities 31.12.2021 Don & Low LTD 1,519 The remuneration granted to the mem- bers of Board of Directors with regard to the Parent Company amounted to € 1,812 in 2021 against € 2,115 in 2020. The re- muneration of the members of the Board of Directors for the Group amounted to € 4,970 in 2021 versus € 5,339 in 2020 and relate to Boards of Directors of 21 com- panies and to 33 people that participate in these BoDs, and also include salaries of the executive members of the Boards, other remuneration and benets of both Page 26 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise the executive and the non-executive members. • Bank guarantees issued by banks on behalf of the Company against third parties (State owned companies, Sup- pliers, Customers) amount to € 834. The Company has granted its guarantee in favor of its subsidiaries to banks for secur- ing long-term loans. As of 31.12.2021 the outstanding amount of loans for which the Company has guaranteed amounted to € 34,844 and is analyzed as follows: Guarantees for Subsidiaries 2021 Thrace Nonwovens & Geosynthetics Single Person S.A. 14,697 Thrace Plastics Pack S.A. 15,654 Thrace Polylms Single Person SA 4,493 • During the nancial year 2021, the to- tal fees paid to the Company’s statu- tory external auditors amounted to € 600 for the Group and to € 74 for the Company. • There were no changes in transactions between the Company and its related parties that could have had substan- tial eects on the nancial position and performance of the Company during the nancial year 2021. • All transactions described above have taken place under normal market terms and contain no special or ex- traordinary features which in opposite case would have made compulsory the further analysis of the above per related party. Annual Financial Report as of 31.12.2021 Page 27 of 260 Amounts in thousand Euro, unless stated otherwise The Company, according to article 4 par. 7 and 8 of L. 3556/2007 is obliged to include in the present Report, analytical informa- tion regarding a series of issues, as follows: 1. Structure of Company’s share capital The Company’s share capital on 31.12.2021 amounted to twenty eight million eight hundred sixty nine thousand, three hun- dred fty eight Euros and thirty two cents (€28,869,358.32) and was divided into forty three million seven hundred forty one thou- sand, four hundred fty two (43,741,452) common registered shares, with a nomi- nal value of sixty six cents (€ 0.66) each. All Company shares are common, registered, with voting rights (with the exception of any treasury shares held by the Company), and are listed on the organized Market of the Athens Stock Exchange and specically in the Main Market under the Chemicals – Specialized Chemicals sector. The structure and the formation of the Company’s share capital are presented in detail in article 5 of the Company’s Articles of Association. The Company’s shares were listed on the Athens Exchange on 26 June 1995 and are being traded on this market up until today, without any interruption. From each share, all rights and obligations stipulated by the law and the Company’s Articles of Associa- tion emanate. The possession of each share results automatically into the full and with no reservations acceptance of the Com- pany’s Articles of Association and the deci- sions that have been made by the pertinent bodies of the Company in accordance with the law and the Articles of Association. Each share provides for one (1) voting right. 2. Limitations to the transfer of Company shares The transfer of Company shares takes place as stipulated by the Law and there are no limitations regarding such transfers in relation to its Articles of Association or other special agreements or other regula- tory provisions. 3. Signicant direct or indirect shareholidngs according to the denition of Law 3556/2007 With regards to signicant shareholidngs in the share capital and voting rights of the Company, according to the deni- tion of provisions of articles 9 to 11 of L. 3556/2007, Mr. Konstantinos Chalioris holds, on 31/12/2021, a percentage of 43.292% of the Company’s share capital and voting rights and Mrs. Eumia Chalio- ris holds, on 31/12/2021, a percentage of 20.851% of the Company’s share capital and voting rights. No other physical or le- gal entity owned a percentage over 5% of the share capital. The data regarding the number of shares and voting rights held by individuals with a signicant sharehol- idngs have been derived from the Share- holder Registry kept by the Company and from disclosures provided to the Company according to Law (and MAR) on behalf of its shareholders. 4. Shares incorporating special control rights There are no Company shares that provide special control rights to owners. SECTION IV: Analytical Information according to Article 4 par. 7 and 8 of Law 3556/2007, as currently in effect Page 28 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise 5. Limitations on voting rights According to the Company’s Articles of As- sociation, there are no limitations on vot- ing rights. 6. Agreements of Company shareholders To the knowledge of the Company there are no shareholder agreements, which re- sult in limitations on the transfer of shares or limitations on the exercise of voting rights that emanate from its shares. 7. Rules for appointment and replacement of Board members and the amendment of the Articles of Association, which deviate from the provisions of C.L. 4548/2018 The rules stated by the Company’s Articles of Association regarding the appointment and replacement of its Board of Directors’ members and the amendment of the pro- visions of its Articles of Association, do not dier from those stipulated by C.L. 4548/2018 as it is in eect. 8. Responsibility of the Board of Directors or specic Board members for the issuance of new shares or the purchase of treasury shares. There is no special and permanent compe- tence of the Board of Directors or some of its members for the issuance of new shares or the purchase of treasury shares accord- ing to article 49 of law 4548/2018.The rel- evant power and responsibility is given to the Company’s Board of Directors by virtue of a relevant decision of the General Meet- ing of its shareholders. 9. Signicant agreements made by the Company and put into eect, amended or terminated in case of a change in the Company’s control following a tender oer. There are no such agreements, which are put into eect, amended or terminated, in case of a change in the Company’s control following a tender oer. 10. Signicant agreements made by the Company with Board members or the Company’s personnel There are no agreements of the Company with the members of its Board of Directors or its personnel, which provide for the pay- ment of indemnity specically in case of resignation or termination of employment without reasonable cause or of termina- tion of their term or employment, due to a tender oer. Annual Financial Report as of 31.12.2021 Page 29 of 260 Amounts in thousand Euro, unless stated otherwise The Extraordinary General Meeting of the Company’s shareholders on February 2, 2017 decided, inter alia, to approve the purchase of own shares through the Ath- ens Stock Exchange under the provisions of the pre-existing article 16 of Codied Law 2190/1920, which expired on 02-02- 2019. Under the aforementioned plan, and until its expiration, the Company acquired 4,324 own shares. The Extraordinary General Meeting of the Company’s shareholders on March 19, 2019 decided, inter alia, to approve the acquisition of own shares through the Athens Stock Exchange in accordance with the provisions of article 49 of law 4548/2018 as currently in force, which ex- pired on 19.03.2021. Under the above plan and until its completion, the Company acquired 318,364 treasury shares, with an average purchase price of 2.4373 Euros per share, which correspond to a percentage of 0.728% of the share capital. The Annual General Meeting of the Com- pany’s shareholders of May 21, 2021 decid- ed to approve a share buyback program which provided for the purchase within a period of twenty-four (24) months, i.e. no later than 21.05.2023, of a maximum of 4,341,876 common registered shares, within a price range from fty cents of Euro (0.50 €) per share (minimum) to ten Euros (10.00 €) per share (maximum). During the execution of the above share buyback program and in execution-im- plementation of the above decision of the General Meeting of Shareholders, the Company proceeded, in accordance with the provisions of Regulation (EU) 596/2014 of the European Parliament and of the Council as of 16 April 2014 and of the Commission’s Delegated Regulation (EU) 2016/1052 as of 8 March 2016, with the purchase of a total of 218,630 common registered shares carrying voting rights, based on an average price of EUR 6.88 per share, corresponding to 0.50% of the eq- uity. The Company held on 31.12.2021 a total of 541,318 treasury shares which correspond to a percentage of 1.24% of the share capi- tal. SECTION V: Treasury Shares Page 30 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise 1. Group Financial Results Continuing Operations The following table depicts the Group’s nancial results (from continuing operations) for the year 2021 compared to the year 2020 : Financial Results of Year 2021 (CONTINUING OPERATIONS) (amounts in thousand Euro) Year 2021 Year 2020 Change % Turnover 428,429 339,722 26.1% Gross Prot 140,149 105,959 32.3% Gross Prot Margin 32.7% 31.2% ΕΒΙΤ 83,913 53,857 55.8% EBIT Margin 19.6% 15.9% EBITDA 103,791 72,484 43.2% EBITDA Margin 24.2% 21.3% Adjusted EBITDA 105,799 76,559 38.2% Adjusted EBITDA Margin 24.7% 22.5% EBT 83,920 52,077 61.1% EBT Margin 19.6% 15.3% Total EAT 65,866 41,272 59.6% EAT Margin 15.4% 12.1% Total EATAM 65,436 40,663 60.9% EATAM Margin 15.3% 12.0% Earnings per Share (in euro) 1.5093 0.9314 62.0% * Note: The alternative performance measures are presented and described analytically in the section VII of the present Report Turnover € 428,429 (+26.1 %) ________________ Increase in the volume of consolidated sales by 3.37% and increase in the consolidated turnover by 26.1% compared to the year 2020. In particular and in terms of sales volume, the Packaging sector posted an increase by 8.46% and the Technical Fabrics sector re- corded an increase of 1.38%, compared to the year 2020. SECTION VΙ: Evolution and Performance of the Group Annual Financial Report as of 31.12.2021 Page 31 of 260 Amounts in thousand Euro, unless stated otherwise Gross Prot € 140,149 (+32.3%) ________________ The gross prot margin settled at 32.7% compared to 31.2% in 2020. EBIT € 83,913 (+55.8%) ________________ The EBIT margin stood at 19.6% compared to 15.9% in the nancial year 2020. EBITDA € 103,791 (+43.2%) ________________ The EBITDA margin stood at 24.2% compared to 21.3% in 2020. Adjusted EBITDA € 105,799 (+38.2%) ________________ The Adjusted EBITDA margin reached 24.7% compared to 22.5% in 2020. Adjusted EBITDA does not include gains from the sale of tangible assets accounting for € 763 and impairment losses of tangible assets amounting to € 1,973 which concern the operational restructuring of Don & Low LTD. This subsidiary reduced its presence in the market of woven technical fabrics, while increasing its production capacity in the non- woven technical fabrics. Also the above calculations do not include expenses of € 798 concerning extraordinary allowance to personnel. These expenses are summarized below: a. Gains from the sale of assets of Don & Low LTD (see note 3.5) amounting to € 763 b. Impairment of mechanical equipment of Don & Low LTD (see note 3.8) of € 1,973 c. Extraordinary allowance to personnel (see note 3.8) accounting for € 798 Earnings before Taxes € 83,920 (+61.1%) ________________ The prot margin before taxes stood at 19.6% compared to 15.3% in the nancial year 2020. Earnings after Taxes € 65,866 (+59.6%) ________________ The prot margin after taxes settled at 15.4% compared to 12.1% in 2020. Earnings after Taxes and Non Controlling Interests € 65,436 (+60.9%) ________________ The prot margin after taxes and non controlling interests reached 15.3% in 2021 com- pared to 12% in 2020. Total Operations Due to the decision to permanently discontinue the production of Thrace Linq INC, which was decided in order for the Group to focus on protable activities, this particular activity is reported in the income statement and other comprehensive income as discontinued operations. Page 32 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise For the completeness of information provided, the following table presents the Group’s nancial results in total (from Continuing and Discontinued Operations) in 2021, in com- parison with the year of 2020. Financial Results of Year 2021 (CONTINUING & DISCONTINUED OPERATIONS) (amounts in thousand Euro) Year 2021 Year 2020 Change % Turnover 428,429 344,806 24.3% Gross Prot 140,149 106,217 31.9% Gross Prot Margin 32.7% 30.8% ΕΒΙΤ 90,397 50,472 79.1% EBIT Margin 21.1% 14.6% EBITDA 110,275 69,444 58.8% EBITDA Margin 25.7% 20.1% Adjusted EBITDA 105,799 76,559 38.2% Adjusted EBITDA Margin 24.7% 22.2% EBT 90,517 48,767 85.6% EBT Margin 21.1% 14.1% Total EAT 72,457 37,956 90.9% EAT Margin 16.9% 11.0% Total EATAM 72,027 37,347 92.9% EATAM Margin 16.8% 10.8% Earnings per Share (in euro) 1.6613 0.8555 94.2% 2. Parent Company’s Financial Results The Company’s business objective, apart from being a holding company, relates also to the provision of support services to its subsidiaries. Specically the Company’s in- come is generated from the provision of ad- ministrative, operating and organizational support services, nancial and tax services, IT and consulting services in the areas of marketing and sales, the preparation of - nancial feasibility studies, and the general provision of consulting services which en- sure the proper operation of subsidiaries at all levels. Specically for the year 2021, the Turnover of the Company concerning the provision of the above services amounted to € 5,668 against € 4,852 in 2020, posting an increase of 16.8%. The loss before Taxes, Financial and Investment Results amounted to € 839 in 2021 compared to a loss of € 698 in 2020. Earnings before taxes for the year 2021 amounted to € 14,130 compared to € 11,743 in 2020, posting an increase of 20.3%. Final- ly, Earnings after taxes in 2021 amounted to € 14,114 compared to € 11,190 in 2020, recording an increase of 26.1%. Annual Financial Report as of 31.12.2021 Page 33 of 260 Amounts in thousand Euro, unless stated otherwise 3. Financial Results of the Group per Business Segment The operating segments are based on the dierent product category, the structure of the Group’s management and the inter- nal reporting system. Using the criteria, as dened in the standards and based on the dierent activities of the Group, the busi- ness activity of the Group is divided into two business segments, namely “Technical Fabrics” and “Packaging”. The information about the sectors of activity which are not reported as separate ones has been collect- ed and presented in the category “Other”, which includes the agricultural sector as well as the activities of the Parent Company. The description and nancial results of the Group’s operating segments are presented as follows: Technical Fabrics Sector Production and trade of technical fabrics for industrial and technical use. Packaging Sector Production and trade of packaging materi- als, plastic bags, and plastic boxes for the packaging of food and paints and other packaging materials, mainly for agricultural use. Other It includes the Agricultural sector and the business activity of the Parent company which apart from the investing activities, also provides Administrative – Financial – IT services to its subsidiaries. During the year 2020, which was character- ized by the spread of the coronavirus Covid 19 pandemic, the Group faced signicantly increased demand for specic products in its existing product portfolio and particu- larly in the area of technical fabrics used in personal protection and health applica- tions (Personal Protective Equipment). The Group, taking advantage of the technologi- cal capabilities of its modern production lines and its know-how that is developed in technical fabrics, managed to respond to the signicantly increased demand, us- ing the existing production lines and chan- neling a large part of the already produced quantities towards applications in this particular sector, while proceeding with targeted investments, such as production lines of surgical masks and production line of technical non-woven fabrics Meltblown (as it has been already announced to the investors’ community with the corporate announcements as of 04/05/2020 and 01/10/2020). The Group also purchased re- lated machinery for the production of high protection masks (FFP2). From a commercial point of view, the Group during the previous year developed its cus- tomer base, through the available sales net- works per country, based on the separate needs of the respective markets in each country, through the group subsidiaries and regardless of the reference sector. The Group acted in the above manner either by channeling the products into the retail mar- ket or by entering into agreements with the respective local health systems. Regarding the twelve-month period of 2021, the Group continued to support, in line with the market needs, the particular sector maintaining -especially during the rst half of the year- an alternative product mix which resulted into the sale of products with higher protability. However, during Page 34 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise the third quarter of the year, there was a signicant decline in the demand for these products and an accelerated shift of the product mix towards the traditional portfo- lio, which continued with an even greater pace during the last quarter of the year. Earnings before Taxes from Continuing Operations at the Group level for the year 2021 amounted to € 83.9 million, of which, according to the estimates of the Manage- ment, € 51.8 million were the result of the above market conditions and especially of the respective conversion of product mix. The above gure was allocated by € 49.9 million in the Sector of “Technical Fabrics”, and by € 1.9 million in the Sector of “Pack- aging”. It should be noted that part of the specic investments that were implemented (such as the Meltblown non-woven technical fabrics production line), can be used to pro- duce products serving other sectors and applications. The following table summarizes the course of nancial results from continuing opera- tions of the individual sectors in which the Group activated during the year 2021: FINANCIAL RESULTS PER SEGMENT (Continuing Operations) Sector Technical Fabrics Packaging Other Intra- Segment Eliminations Group 12M 2021 12M 2020 % Ch. 12M 2021 12M 2020 % Ch. 12M 2021 12M 2020 12M 2021 12M 2020 12M 2021 12M 2020 Turnover 318,878 243,103 31.2% 120,007 105,718 13.5% 5,668 4,853 -16,124 -13,952 428,429 339,722 Gross Prot 113,245 74,927 51.1% 26,512 30,733 -13.7% 24 308 368 -9 140,149 105,959 Gross Prot Margin 35.5% 30.8% 22.1% 29.1% 0.4% 6.3% - - 32.7% 31.2% Total EBITDA 86,148 50,494 70.6% 18,265 22,482 -18.8% -512 -412 -110 -80 103,791 72,484 EBITDA Margin 27.0% 20.8% 15.2% 21.3% -9.0% -8.5% - - 24.2% 21.3% Annual Financial Report as of 31.12.2021 Page 35 of 260 Amounts in thousand Euro, unless stated otherwise (amounts in thousand Euro) 31/12/2021 31/12/2020 Change % Tangible Assets 153,848 131,512 17.0% Rights-of-use assets 3,051 13,197 -76.9% Investment Property 113 113 0.0% Intangible Assets 10,539 10,655 -1.1% Investments in Joint Ventures 18,012 15,074 19.5% Other Long-term Receivables 5,001 5,034 -0.7% Deferred Tax Assets 380 287 32.4% Total Non-Current assets 190,944 175,872 8.6% Inventories 71,835 55,338 29.8% Income Tax Prepaid 274 278 -1.4% Trade Receivables 64,547 56,863 13.5% Other Receivables 14,359 7,211 99.1% Fixed Assets Held for Sale 0 5,478 -100.0% Cash & Cash Equivalents 63,240 40,824 54.9% Total Current Assets 214,255 165,992 29.1% TOTAL ASSETS 405,199 341,864 18.5% TOTAL EQUITY 252,250 176,109 43.2% Long-term Loans 33,610 46,691 -28.0% Liabilities from Leases 2,061 3,210 -35.8% Provisions for Employee Benets 3,499 14,191 -75.3% Other Long-term Liabilities 6,979 2,358 196.0% Total Long-term Liabilities 46,149 66,450 -30.6% Short-term Debt 17,393 26,311 -33.9% Liabilities from Leases 914 2,822 -67.6% Suppliers 55,441 29,697 86.7% Other Short-term Liabilities 33,052 40,475 -18.3% Total Short-term Liabilities 106,800 99,305 7.5% TOTAL EQUITY & LIABILITIES 405,199 341,864 18.5% 4. Consolidated Statement of Financial Position of the Group The following table summarizes the basic nancial gures of the Group’s nancial posi- tion as of 31.12.2021: Page 36 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Tangible Assets € 190,944 (+8.6%) ________________ The increase is mainly a result of the implementation of new investments during the year. Current Assets € 214,255 (+29.1%) ________________ The increase in current assets by 29.8% is mainly due to the increase in turnover. Inventories amounted to € 71,835 on 31.12.2021 higher by 29.8% compared to 31.12.2020. The Average Inventory Turnover Days however stood at 81 compared to 88 days in 2020. The Average Trade Receivables Turnover Days stood at 52 compared to 60 days in 2020. Equity € 252,250 (+43.2%) ________________ Equity amounted to € 252,250, posting an increase of 43.2% compared to 31.12.2020. Provisions for Employee Benets € 3,499 (-75.3%) ________________ This decrease is mainly due to the reduction of the discount rate. The largest share in the actuarial decit of the Group comes from Don & Low LTD and for this reason the details of its plan are analyzed below: 31.12.2021 31.12.2020 Present Value of Liabilities 159,705 157,175 Present Value of Tangible Assets 157,682 144,383 Net Liability Recognized in Balance Sheet 2,023 12,792 The asset allocation of the plan is as follows: Asset allocation 31.12.2021 31.12.2020 Mutual Funds (Stock Market) 15,471 17,130 Mutual Funds (Bond Market) 79,020 75,417 Mutual Funds (Diversied Growth Funds) 52,838 48,721 Other 10,353 3,115 Total 157,682 144,383 The assets of the plan are measured at fair value and consist of Mutual Funds of Baillie Giord, Legal & General Investment Management as well as Ninety One plc. Annual Financial Report as of 31.12.2021 Page 37 of 260 Amounts in thousand Euro, unless stated otherwise Net Debt € (9,262) ________________ The Net Debt / Equity ratio stood at (0.04) compared to 0.22 on 31.12.2020, while the Net Debt / EBITDA ratio stood at (0.08), compared to 0.55 on 31.12.2020. Suppliers € 55,441 (86.7%) ________________ The average Suppliers Turnover Ratio settled at 54 days versus 50 days in 2020. 5. Financial Ratios Following the above analysis, some basic Financial Ratios of the Group based on the Total Operations are hereafter presented. Capital Structure Ratios 2021 2020 Explanation Total Liabilities / Equity 0.6 0.9 Relation between Liabilities and Equity Net Debt / Equity (0.04) 0.22 Relation between Debt and Equity Net Debt/EBITDA (0.08) 0.55 Relation between Debt and Earnings before Interest, Taxes, Depreciation and Amortization Non-Current Assets / Total Assets 0.5 0.5 Asset Allocation between Current and Non-current Assets Current Assets / Total Assets 0.5 0.5 Equity / Net Tangible Assets 1.6 1.2 The level of nancing of the Tangible Assets from the Equity Leverage Ratios 2021 2020 Explanation Equity / Total Assets 0.6 0.5 Relation between Equity and Total Assets Interest Coverage 49.4 16.3 Interest Income –Interest Expense Coverage from Operating Earnings (ΕΒΙΤ) Liquidity Ratios 2021 2020 Explanation Current Ratio 2.0 1.7 Total Current Assets / Total Short-term Liabilities Acid Test Ratio 1.3 1.1 (Total Current Assets - Inventories) / Total Short-term Liabilities Page 38 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Prot Margins (%) 2021 2020 Explanation Gross Prot 32.7% 30.8% Gross Prot/Total Turnover EBITDA 25.7% 20.1% EBITDA / Total Turnover Adjusted EBITDA 24.7% 22.2% Adjusted EBITDA / Total Turnover EBT 21.1% 14.1% Earnings before Taxes/ Total Turnover EATAM 16.8% 10.8% Earnings after Taxes and Minorities / Total Turnover Receivables and Turnover (in days) total 2021 2020 Explanation Average Receivable Turnover 52 60 [(Receivables 2021 + Receivables 2020)/2] / Turnover 2020365 days Average Inventory Turnover 81 88 [(Inventories 2021+ Inventories 2020)/2] / Cost of Sales 2020365 days Average Suppliers Turnover 54 50 [(Suppliers 2021 + Suppliers 2020)/2] / Cost of Sales 2020365 days Annual Financial Report as of 31.12.2021 Page 39 of 260 Amounts in thousand Euro, unless stated otherwise In the context of its decision making con- cerning the nancial, operating and stra- tegic planning as well as the evaluation of its performance, the Group utilizes Al- ternative Performance Measures (APM). These indicators mainly serve the better understanding of the nancial and operat- ing results of the Group, its nancial posi- tion as well as its cash ow statement. The Alternative Performance Measures (APM) should be always taken into account in line with the nancial statements which have been prepared according to the In- ternational Financial Reporting Standards and in no case the APM replace the above. Alternative Performance Measures In the analysis of the developments and the performance of the Group, ratios such as the EBIT and the EBITDA are utilized. ΕΒΙΤ (The indicator of earnings before nancial and investing activities as well as taxes) The EBIT serves the better analysis of the Group’s operating results and is calculated as follows: Turnover minus Cost of Sales plus other operating income minus the total op - erating expenses, before the nancial and in- vesting activities and taxes. The EBIT margin (%) is calculated by dividing the EBIT by the total turnover. EBITDA (The indicator of operating earnings before nancial and investing activities as well as depreciation, amortization, impairment and taxes) The EBITDA serves the better analysis of the Group’s operating results and is calculated as follows: Turnover minus Cost of Sales plus other operating income minus the total op - erating expenses before the depreciation of tangible assets, the amortization of grants and the impairments, as well as before the - nancial and investing activities and taxes. The EBITDA margin (%) is calculated by dividing the EBITDA by the turnover. Adjusted EBITDA (The adjusted indicator of operating earnings before nancial and investing activities as well as depreciation, amortization, impairment and taxes). The Adjusted EBITDA is the EBITDA less any restructuring, acquisition, merger, and other non-recurring expenses SECTION VII: Definition and Reconciliation of Alternative Performance Measures (APM) Page 40 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Regarding the prospects for the year 2022, the Management closely monitors the macroeconomic developments, on a glob- al level, which are characterized by the sig- nicantly stronger inationary trends, throughout the economy but also in all cost items that constitute the industrial sector’s cost base, and by the ongoing war between Russia and Ukraine, which is substantially aggravating the economic environment. As a result of the above de- velopments, there is a lag in demand in various sectors of the economy combined with the presence of signicantly higher prices of both raw materials as well as en- ergy and transportation costs. Regarding the rst quarter of 2022, the Management of the Group remains op- timistic for its satisfactory performance, given the dicult conditions prevailing in the current period. It is estimated that a signicantly stronger protability will be achieved, compared to the corresponding period before the pandemic, but it will set- tle lower than the protability of the cor- responding period of the previous year. However, the comparison with the previ- ous year becomes extremely dicult to be substantiated, due to the extraordinary circumstances of both that period and the current one. Specically concerning the impact of the war, it should be noted that the Group’s sales volume in Russia and Ukraine for 2021 was immaterial (0.6% of sales), but it is not clear how the ongo- ing war conict will aect more broadly the supply and demand conditions in the market. Regarding the course of 2022 as a whole, the very challenging as well as volatile macroeconomic environment de- scribed above makes especially dicult the development of any nancial esti- mates, since the visibility for the nancial results and the level of demand in the coming months remains extremely lim- ited. However, the great eort made by the Management of the Group as well as the Management of the subsidiaries in all the countries of operation, creates condi- tions of reserved optimism that the Group will be able to implement its strategic plans and to maintain to a signicant ex- tent the protability from the traditional portfolio that was formed in 2021. This will be also demonstrating that the Group has entered a new era, characterized by sig- nicantly higher protability compared to pre-pandemic levels. It should be noted, however, that although the implementa- tion of this plan is the fundamental goal of the Management, the extremely uncertain conditions that arise at the time of prepa- ration of the annual report are likely to re- dene the annual performance estimates made by the Management in the coming months of the year. At the same time, the Group’s Manage- ment is working in seamless manner to- wards the implementation of the new strategy, the extraordinary investment actions that have been decided, as well as the implementation of the new annu- al investment plan for 2022. As already announced, the Group’s priority is the development of new products as well as the access to new markets, the emphasis on improving protability, the targeted increase in production capacity in both key sectors of activity. At the same time the Group implements important ac- tions regarding recycling and the circular economy, actions that are an integral part SECTION VIIΙ: Prospects and Outlook of the Group for the Financial Year 2022 Annual Financial Report as of 31.12.2021 Page 41 of 260 Amounts in thousand Euro, unless stated otherwise SECTION IX: Events after the Financial Position Date The following paragraphs present the important events that took place after the end of the nancial year 2021 and up to the date of preparation of this Report : Direct Impact of the War Conict on the Financial of the Group The war outbreak after the Russian military invasion of Ukraine creates geopolitical insta- of the Group’s strategy and will form new dynamics for the future. It is worth noting that for the period 2020 - 2022, the total investment plan of the Group, on a cash basis, will amount to € 101 million. Regarding the level of liquidity of the Group, which in 2021 settled at signi- cantly higher levels, it is estimated that it will remain at similarly high levels. How- ever, the full implementation of the exten- sive investment plan, the greatest part of which will be disbursed in 2022, is mainly carried out via the utilization of own funds and therefore the Net Cash is likely to re- turn to Net Debt. This is due to the fact that the utilization of excess liquidity for the implementation of actions that will contribute to the further long-term devel- opment and viability of the Group, is esti- mated to be the most appropriate use of this capital, both in terms of sound man- agement and in terms of required return. The Management of the Group is con- dent that the overall implementation of the respective investment plans but also of the broader strategy creates condi- tions for the Group to gradually enter into a new era of development, improvement of infrastructure, further expansion of ac- tivities and improvement of prot genera- tion, compared to the pre-pandemic lev- els. At the same time, the strengthening of the Group’s nancial position is the basis for the implementation of the future in- vestment plans, as they will be unveiled in the coming years, actions that in turn will contribute to the successful implementa- tion of the new strategy, always within the framework of protable sustainable devel- opment. bility with macroeconomic consequences, the extent of which cannot yet be estimat- ed. The Group does not have signicant business activities in Ukraine and in Rus- sia, i.e. in the areas directly aected by the war. Furthermore, the overall exposure to Ukraine and Russia is minimal. Based on the nancial results of 2021, sales in these two countries stood at 0.6% of the Group’s total turnover. Therefore, no direct materi- al impact is expected on the nancial per- formance of the Group, given the non-ex- istence of business activity in the specic area. However, the eects on the Group’s activities from the negative developments in the energy sector and from the wider macroeconomic uncertainty are closely monitored and in case the crisis is pro- longed and generates stronger ination- ary pressures, the Group will re-evaluate and may modify its estimates accordingly. Page 42 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise SECTION X: Corporate Governance Statement The Board of Directors of the Company, during its meeting of 21/02/2022, appoint- ed Mr. Michael Psarros of George as Head of the Department (Unit) of Regulatory Com- pliance and Risk Management. Mr. Psarros assumed the duties as Risk & Compliance Manager on 24/02/2022. Appointment of Risk & Compliance Manager Proposed Dividend for the Year 2021 The Board of Directors of the Company at the meeting of September 24, 2021 de- cided to distribute an interim dividend for the nancial year 2021 based on the in- terim nancial statements for the period 01.01.2021-30.06.2021. The distribution and payment of the above dividend took place on December 8, 2021. The Board of Directors will propose the distribution of dividend to the Annual General Meeting of Shareholders, however taking into account the conditions that are constantly changing due to Covid-19 pandemic and the Russian invasion of Ukraine, the nal amount to be proposed will be decided at a later stage and in any case prior to the date of the An- nual General Meeting of Shareholders. There are no other events after the Balance Sheet date that have a signicant impact on the nancial statements of the Group. The current Corporate Governance State- ment is compiled according to the provi- sions of a. 152 of L. 4548/2018, and a.18 of L.4706/2020 Hellenic Corporate Gov- ernance Code and the decisions of the Hellenic Capital Market Commission is- sued by authorization of law 4706/2020, constitutes special section of the Annual Management Report of the Board of Direc- tors and contains the entire information required by the law. Specically, the structure of the present Corporate Governance Statement (here- inafter called as “Statement” or “CGS”) is as follows: I. Compliance Statement with the Cor- porate Governance Code II. Deviations from the Corporate Gov- ernance Code and explanation of such III. Corporate Governance Practices ap- plied by the Company apart from those stated by law IV. Description of the internal control and risk management system as regards to the process for preparing nancial statements V. Information regarding the Company’s audit process (information stipulat- ed by items (c), (d), (f), (h) and (i) of paragraph 1 of article 10 of Directive 2004/25/EC) VI. Board of Directors and Committees VII. General Meeting and Shareholders’ Rights VIII. Sustainable Development Report IX. EU Taxonomy Annual Financial Report as of 31.12.2021 Page 43 of 260 Amounts in thousand Euro, unless stated otherwise I. COMPLIANCESTATEMENTWITHHELLENICCORPORATE GOVERNANCECODE The Company applies the principles of corporate governance, as they are dened in the current legislative and regulatory framework in general. In full compliance with the provisions of article 17 of law 4706/2020 and article 4 of Decision No. 2/905/03.03.2021 of the Board of Directors of the Hellenic Capital Market Commis- sion, the Company proceeded based on the relevant decision of the Board of Direc- tors dated 16.07.2021 to the adoption and implementation of the Hellenic Corporate Governance Code (hereinafter called as the “Code”), which was drafted by the Hel- lenic Corporate Governance Council in June 2021 and is available at: http://www. esed.org.gr/code-listed, to which (Code) states that it is subject including the dis- crepancies explicitly mentioned below. The Company, by taking the appropri- ate, necessary and proper decisions and measures, proceeded to its full, eective, substantial and timely compliance and harmonization with the new provisions of Law 4706/2020 (Government Gazette A136/17.07.2020), under substantially reforming and updating the regulatory framework for corporate governance, by upgrading the required organizational structures and corporate governance pro- cesses, increasing the principle of transpar- ency and strengthening the condence of shareholders and the investing public in general, in order for societe anonyms whose shares are listed on a regulated market to meet the increased demands of the modern capital market. ΙΙ.DEVIATIONSFROMTHECORPORATEGOVERNANCECODEAND EXPLANATIONOFNONCOMPLIANCE The Company, as mentioned above, taking into account in each case the particulari- ties of its organizational structure and op- eration, decided to adopt and implement the Hellenic Code of Corporate Govern- ance. However, in relation to the specic practic- es and principles established by the Code, there are currently some very limited dis- crepancies, for which (discrepancies) an analysis and explanation of the reasons justifying them follows, as the Code is ap- plied on the basis of the principle “Comply or explain”, which requires companies that apply the Code to either comply with all of its provisions, or to explain, with explana- tion, the reasons for their non-compliance with its specic special practices , while the explanation of the reasons for non- compliance should not be limited to a sim- ple reference to the practice with which the Company does not comply, but should be justied in a specic, denite, compre- hensible, substantial and convincing man- ner. The company will make the necessary actions in order to comply with the Code in the following years. In particular and on the specic discrep- ancy: Page 44 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Assessment Report of Internal Control System In relation to risk management and the internal control system, the Corporate Governance Statement must include, inter alia, a reference to the results / ndings of the Assessment Report of the Internal Control System, the risks and the consequences of any ndings, the response of the Company’s Management, as well as the implementation of the plans with the relevant schedules. According to the specics of the decision of the Board of Directors of the Hellenic Capital Market Commission with number 1/891/30.09.2020 (GG B 4556/2020), as it is valid after its amendment by the number 2/917/ 17.06.2021 (GG B 3040/2021) Decision of its Board of Directors, which determines the time, the procedure, the periodicity and any more specic issues necessary for the implementation of the Internal Control System evaluation (hereinafter called as «ICS»), as well as the characteristics that concern the persons who carry it out, the rst evaluation of the ICS must be completed by 31 March 2023 with a reference date of 31 December 2022 and a reference period from the entry into force of article 14 of law 4706/2020», namely from 17 July 2021. Following this and consequence of the postponement of the deadline for the completion of the rst evaluation of the Internal Control System from 31.03.2022 to 31.03.2023, a relevant reference and report to the most important ndings of the evaluation, the risks and the consequences arising from them, as well as the response of the Company’s Management to them, including the relevant action plans with clear and realistic timetables, will be carried out in the Corporate Governance Statement, which will be prepared for the next scal year 2022. ΙΙΙ. CORPORATEGOVERNANCEPRACTICESAPPLIEDBYTHE COMPANY,APARTFROMTHOSESTIPULATEDBYLAW As regards to corporate governance issues, the Company applies faithfully and with- out any deviations the provisions of laws 4548/2018, and 4449/2017 as currently in force, as well as the Hellenic Corporate Governance Code, the provisions and reg- ulations of which it has incorporated in its Articles of Association, its Internal Opera- tion Rulebook, in the Rules of Procedure of the Committees, in the Manual of Internal Control and in all the individual proce- dures and policies it has established and implements. At the present time there are no applica- ble practices in addition to the provisions of the law. Moreover, the Company applies the above provisions and the Hellenic Cor- porate Governance Code to the rules of procedure of its committees, in other reg- ulations, codes, procedures and policies. Finally, it is noted that the Company is fully harmonized with the provisions of the law 4706/2020 on corporate governance. Annual Financial Report as of 31.12.2021 Page 45 of 260 Amounts in thousand Euro, unless stated otherwise IV. DESCRIPTIONOFTHEINTERNALCONTROLANDRISK MANAGEMENTSYSTEMOFTHECOMPANYANDTHEGROUP ASREGARDSTOTHEPROCEDUREOFPREPARINGFINANCIAL STATEMENTS The Internal Control System consists of the functions established by the Group, i.e. both the parent Company and all other companies included in the consolidation, in order to ensure the protection of its assets, to identify and address the most important risks it faces or may face in the future, to ensure that the nancial data on the basis of which the nancial statements are prepared (separate and consolidated) are correct, true and accurate, and also to ensure that the laws and the applicable regulatory framework are applied, as well as the principles and policies adopted by the Management. For the development of this System, the Management of the Group, has reviewed and implemented various Policies, Proce- dures and Rules, which have been includ- ed in its Internal Operation Rulebook. Its implementation covers the Manage- ment of Potential Risks in relation to the process of drafting Financial Statements (separate and consolidated) in the follow- ing three (3) areas: 1) Entity level controls applied by the Company and each of the other companies included in the consoli- dation at a parent level, 2) Financial reporting process controls implemented by both the Company and all other companies included in the consolidation during the process of drafting nancial state- ments, separate and consolidated, 3) IT controls into the information sys- tems applied by the Company as well as all other companies included in the IT systems framework. Specically: 1) Entity level controls Role and Responsibilities of the Board of Di- rectors: The Board of Directors decides on any action that concerns management of the Company, management of its assets and in general on anything that relates to the achievement of its objective and the promotion of its business activities. Additionally, the Board of Directors: • Determines the main responsibilities and the objective of each Division, so that the CEO can then assign to each Director the responsibility of allocat- ing the above to his/her subordinates. • Proposes to the General Meeting of Shareholders to appoint the Compa- ny’s External Auditors, in line with the proposition of the Audit Committee, and to dene their remuneration. • Is responsible to prepare a report with detailed transactions of the Company with its related parties, which is dis- closed to the regulatory authorities. • Is responsible for the preparation of the Remuneration Report according with article 112 of Law 4548/2018. Preparation of Budget and Monitoring its Im- plementation at the Board of Directors level: The Annual Budget, which is also a guide for the Group’s nancial development, is prepared on an annual basis (consolidated and also per segment/subsidiary) and is presented to the Company’s Board of Di- rectors for approval. The reports with the Page 46 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise actual nancial results are issued periodi- cally, accompanied by the condensed re- ports including the explanations of devia- tions and are discussed at the Board level. Internal Operation Rules: The Company’s In- ternal Operation Rulebook is also the man- ual for its Internal Control System, which amongst others includes the following: • Description and guidance on managing the dierent operations • Control points in stand-alone proce- dures • Delegation of responsibilities • Authorizations and limits of expense ap- provals • Instructions for Controls on the main sections of the Internal Control System. The adequacy of the Internal Control Sys- tem is monitored on a systematic basis by the Audit Committee through regular meetings that take place with the Inter- nal Audit and the Risk and Compliance Management Department in the context of monitoring the Annual Audit Program for the Company and the Group, which is prepared based on the relevant risk assess- ment. 2) Financial reporting process controls In order to ensure that the nancial data, based on which the nancial statements of both the Company and the Group, are correct, true and accurate, the Company applies specic controls that include the following: • The postings from the Company’s ac- counting department are performed based on a specic process that re- quires all receipts/invoices to be origi- nal, and carry the respective original signed approvals. • The Company maintains a tangible asset register in the tangible assets sub-system and applies depreciation rules according to the International Financial Reporting Standards and Tax Rules in eect. • The Accounting Department carries out periodic reconciliation of balances of payroll, customers, suppliers’ ac- counts, VAT, etc. • The Group prepares the consolidated budget on an annual basis. Each sub- sidiary prepares the corporate budget in alignment with the objectives of the Group. These budgets shall be submit- ted to the Board of Directors of the Company for approval. • Each month a detailed nancial re- sults presentation is prepared per segment/subsidiary and on a consoli- dated Group level. This presentation is submitted to the Company’s Manage- ment. • Companies that constitute the Group follow common accounting standards and procedures in line with the Inter- national Financial Reporting Stand- ards (IFRS). • At the end of each period, the ac- counting standards of the parent and subsidiary companies prepare their nancial statements according to the International Financial Reporting Standards (IFRS). • The Statutory departments of the Group collect all the necessary data from subsidiaries and plants, con- solidation entries are applied and the nancial statements are prepared ac- Annual Financial Report as of 31.12.2021 Page 47 of 260 Amounts in thousand Euro, unless stated otherwise cording to the International Financial Reporting Standards (IFRS). • There are specic nancial statements closing processes, which include dead- lines for submission, responsibilities allocation and update on the required actions before submission. • The nancial statements are audited by external Certied Auditors whose work is monitored by the Audit Com- mittee, which then proposes their ap- proval to the Company’s Board of Di- rectors. • The departments of Internal Audit and Risk & Compliance periodically per- form audits to conrm the accuracy, completeness and correctness of - nancial statements. 3) IT controls The Group IT Department is responsible for supporting the Group’s and the Com- pany’s IT applications. This Department has established robust IT controls frame- work, which ensures the support of the short-term and also the long-term objec- tives of the Company and the Group. All applicable procedures are described in detail by the Company’s Internal Opera- tion Rulebook. It is noted that all the com- panies of the Group follow the Group Poli- cies Manual and fully comply with its basic principles, rules and procedures, in order to ensure the reliable and adequate im- plementation of the control of information systems of all companies within the Group. The most important of these procedures are listed below: • Back Up Process (in Hardware): Ac- cording to the Operation Rulebook, the IT Service develops the appropri- ate infrastructure and ensures that such is compatible and backed by an alternative application/system to have a back-up in cases of damage in the Company’s and the Group’s central IT system. • Safekeeping (Condential) of the Company’s and the Group’s Elec- tronic Files: The IT Department ap- plies the appropriate systems that ensure the “non” leakage of the Com- pany’s and the Group’s IT data. • Files – Software of the Central Sys- tem: Particular emphasis is given to the access of the room where the Cen- tral System is hosted, in order to allow such access only by IT authorized em- ployees. The access is controlled ad- equately and at regular basis. • Files –Software of the Peripheral Systems: Access to les and system software is provided to specic indi- viduals with the use of personal pass- words. • Processes for Security of the Cen- tral and Peripheral Systems: In the context of protecting the Group’s IT system, and taking advantage of the latest technology available, the IT De- partment applies the most advanced security practices, such as antivirus security software, e-mail security, re- walls etc. The Audit Committee of the Company monitors the adequacy of the Com- pany’s Internal Control System on a continuous basis, given that: • It has approved the Company’s Inter- nal Operation Rulebook which has incorporated the appropriate Policies, Processes and Rules that comprise the Internal Control System applied by the Company, including Group’s Policies Manual, which concerns the common Page 48 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise policies and procedures applied by the subsidiaries. • The members of the Company’s Audit Committee as well as the Members of the Board of Directors are recipients of the reports prepared by the Com- pany’s Internal Audit Unit and the Regulatory Compliance & Risk Man- agement Department of the Compa- ny. In these reports, the Company and the Group’s operations are assessed as well as the adequacy of Internal Con- trol Systems applied. Following the above, and after the annual review/revision of the Group strategy per- formed by the Board of Directors of the Company at the end of the closing scal year 2021 (01.01.2021-31.12.2021), the main business risks faced by the Company within the industry as well as the adequa- cy of the internal control systems in place, the Board of Directors concludes on the following: • the corporate strategy and the busi- ness planning are implemented prop- erly and according to the planning of the individual Divisions, in order for the Company to continue to be distin- guished for the promotion of innova- tive products that meet the constantly evolving and most demanding needs of its customers, creating value for its people, contributing to the local com- munity and building relationships of trust, • The main business and nancial risk areas of the Company as well as the issues that may have a signicant im- pact on the nancial statements of the Company and Group, have been reported in detail in the relevant Sec- tion of the Board of Directors Report, • The internal audit is carried out in ac- cordance with the current legislative and regulatory framework and the principles of the Code of Ethics and covers the main activities of the com- pany, in order to diagnose in time any irregularities, errors, weaknesses and possible fraud that may result in mis- appropriation and/or loss of assets and verify the reliability of the entity’s nancial gures. The Auditing Company, which is in charge of carrying out the mandatory audit of the annual and semi-annual nancial state- ments (separate and consolidated), as well as the issuance of the tax compliance re- port, provided to the Company during the closing year 2021 (01.01.2021-31.12.2021) and the following non-audit services: (a) Remuneration Report (art. 112, L.4548/2018) for the parent company (b) Report on agreed upon procedures regarding “Certicate of Conformity” of “Thrace NonWovens & Geosynthet- ics S.A.” to “EUROBANK SA”, “NATIONAL BANK OF GREECE”and “ALPHA BANK” on 31.12.2020. (c) Execution of agreed upon procedures regarding the Procedure for Inclusion of Beneciaries in Categories of Reduced Charges of Special Fee for Reduction of Gas Pollutant Emissions (ΕΤΜΕΑΡ), in the context of the decision of the Dep- uty Minister of Environment and Ener- gy “Government Gazette with Number B’ 3152-30.07.2020” for the period from 01-01-2016 to 31-12-2018. (d) Report on agreed upon procedures re- garding the “Certicate of Conformity of “Thrace Polylms SA” to “EUROBANK”, “PIRAEUS BANK”, “NATIONAL BANK OF GREECE” and “ALPHA BANK” on 31.12.2020. Annual Financial Report as of 31.12.2021 Page 49 of 260 Amounts in thousand Euro, unless stated otherwise However, the fact that the Auditing Com- pany provided the above services (non- audit) had no eect, direct or indirect, on the independence, objectivity, integrity, reliability and eectiveness of the statu- tory audit, as the provision of the specic services took place from a dierent team of the said Auditing Company and from other persons, who have no involvement and participation in the process of con- ducting the statutory audit of the nancial statements (annual and semi-annual, cor- porate and consolidated) where appropri- ate or are implemented under adequate safeguards and rules and by nature these services cannot joepartize their independ- ence, which is additionally ensured by strict internal procedures and protocols applied by this Auditing Company. V.INFORMATIONREGARDINGTHECOMPANY’SCONTROL FRAMEWORK(INFORMATIONOFITEMS(C),(D),(F),(H)AND(I)OF PARAGRAPH1OFARTICLE10OFDIRECTIVE2004/25/ECOFTHE EUROPEANPARLIAMENTANDTHECOUNCIL,OF21STAPRIL2004.) Signicant direct or indirect sharehold- ings (including indirect shareholdings through pyramid structures or cross- participation) according to the deni- tion of article 85 of Directive 2001/34/ ΕC As regards to signicant participations in the share capital and voting rights of the Company, according to the deni- tion of article 85 of Directive 2001/34/EC and the provisions of articles 9 up to 11 of Law 3556/2007, Mr. Konstantinos Chalio- ris on 31-12-2021 owned a percentage of 43.292% of the Company’s share capital and voting rights and Mrs. Emia Chaliori owned a percentage of 20.851% of the Company’s share capital and voting rights on 31-12-2021. No other individual or le- gal entity owns a percentage over 5.00% of the Company’s share capital and vot- ing rights. Data regarding the number of shares and voting rights of individuals owning signicant shareholding, has been derived by the Shareholders’ registry kept by the Company and the disclosures no- tied to the Company according to Law (and MAR) on behalf of its shareholders. Owners of any type of titles that provide special control rights and description of such rights There are no securities, including the Com- pany’s shares that provide owners with special control rights. Any kind of limitations on voting rights, such as limitations on voting rights of owners that hold a specic percent- age or number of votes, the exercise deadlines for voting rights, or systems through which, with the cooperation of the company, nancial entitlements that derive from the titles are distin- guished from the ownership of the titles The Company’s Articles of Association pro- vides no limitations to voting rights deriv- ing from its shares. Rules governing the appointment and replacement of the Board members as well as the amendments of the Articles of Association The rules included in the Company’s Ar- ticles of Association, both as regards to the appointment and the replacement of Board Members and as regards to its Page 50 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise amendments, do not dier from those stated by the L. 4548/2018 as it is in eect. The authorities of Board members, spe- cically as regards to the ability to issue or buyback shares There is no special and permanent compe- tence of the Board of Directors or some of its members for the issuance of new shares or the purchase of treasury shares accord- ing to article 49 of law 4548/2018. The rel- evant power and responsibility is given to the Company’s Board of Directors by virtue of a relevant decision of the General Meet- ing of its shareholders. VI. BOARDOFDIRECTORSANDCOMMITTEES 1) Composition of the Board of Directors According to article 7, paragraph 1 of its Articles of Association, as in force after its amendment by the Extraordinary General Meeting of Shareholders of 19 March 2019, for the purpose of harmonization with pro- visions of Law 4548/2018, the Company is managed by a Board of Director (hereafter called as “the BoD”) which consists of seven to fteen (7-15) members. The members of the Board of Directors are elected by the General Meeting of shareholders, may be shareholders or not and have a ve-year term, which is extended until the expira- tion of the term within which the next Or- dinary General Meeting must convene and until a relevant decision is taken, but in any case should not exceed a six-year term. - In case of resignation, death or in any other way loss of the capacity of a Board member, the remaining mem- bers may either elect members of such in replacement of the above or may continue the management and repre- sentation of the Company without the replacement of past members, with the condition that the number of the remaining members is not less than half of the number of members dur- ing the time such events occurred. The Board members are not allowed to be less than three (3). - In case of electing a replacement, the decision for the election is subject to the disclosure requirements of article 13 of L. 4548/2018, as currently in ef- fect, and is announced by the Board of Directors at the forthcoming Gen- eral Meeting, which can replace those elected, even if the relevant issue had not been included in the General Meeting agenda. - The actions of the elected temporary replacement are valid even if the Gen- eral Meeting does not validate his/her election or even if it has elected or not another permanent member of the Board. - The term of the new Board member is terminated when and whenever the term of the replaced member would have been terminated. The Extraordinary General Meeting of Shareholders of 11 February 2021 elected new eleven (11) members of the Board of Directors of the Company for a 5-year term that is until 11/02/2026, extended until the deadline for the next Ordinary General Meeting to be held and until a relevant de- cision is being made, consisting of the fol- lowing members: Annual Financial Report as of 31.12.2021 Page 51 of 260 Amounts in thousand Euro, unless stated otherwise 1. Konstantinos Chalioris of Stavros, 2. Theodoros Kitsos of Konstantinos, 3. Dimitrios Malamos of Petros, 4. Vassilios Zairopoulos of Stylianos, 5. Christos Shiatis of Panagiotis, 6. Christos-Alexis Komninos of Konstan- tinos, 7. Petros Fronistas of Christos, 8. Georgios Samothrakis of Panagiotis, 9. Myrto Papathanou of Christos, 10. Spyridoula Maltezou of Andreas and 11. Nikitas Glykas of Ioannis. Simultaneously with the above decision, the Extraordinary General Meeting of Shareholders appointed as independent members of the Board of Directors of the Company the following persons: 1) Theo- doros Kitsos of Konstantinos, 2) Georgios Samothrakis of Panagiotis, 3) Myrto Papa- thanou of Christos, 4) Spyridoula Maltezou of Andreas and 5) Nikitas Glykas of Ioan- nis who meet in their entirety the criteria of independence set by the existing legal provisions (article 9, par.1 and 2 of Law 4706/2020): (a) do not hold directly or indirectly a per- centage of voting rights greater than 0.5% of the Company’s share capital; and (b) are free from any dependent relation- ship with the Company or persons af- liated with it and do not maintain any nancial, business, family or other rela- tionship, which may aect their deci- sions and their independent, objective and impartial judgment. The minutes of 11.02.2021 of the Extraor- dinary General Meeting of the Company’s shareholders regarding the election of a new Board of Directors as well as the minutes of 11.02.2021 of the Board of Directors on its formation in a body and granting commitment and representa- tion rights of the Company were regis- tered in the General Commercial Register (G.E.M.I.) on 01.03.2021 with Registration Code Numbers 2491236 and 2491237 respectively, issued in relation to it with protocol number 2336381/01.03.2021 of the relevant announcement of the Minis- try of Development and Investment (Gen- eral Secretariat of Commerce & Consumer Protection, General Directorate of Market, Directorate of Companies, Department of Supervision of Listed SAs & Sports SA). The Company has adopted and imple- ments the Procedure for Ensuring Inde- pendence and Disclosure of Dependent Relationships of the Independent Non- Executive Members of the Board of Direc- tors in accordance with the current legal framework. The purpose of this Procedure is to ensure that the Independent Non-Ex- ecutive Members of the Board of Directors comply with the criteria of independence and any dependent relationships of them- selves or persons who have close ties with these persons are notied to the Company. The BoD take all necessary measures to en- sure compliance with the above Independ- ence Criteria. The BoD with the support of the Remuneration and Nomination Com- mittee and the Department of Compliance & Risk Management reviews the fullment of the Independence Criteria of the Inde- pendent Non-Executive Members at least annually per nancial year and before the publication of the annual Financial Report, in which it includes the relevant verica- tion. In the event that during the audit of the fullment of the independence criteria or in case at any time it is ascertained that the independence criteria have ceased to Page 52 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise exist in the person of any Independent Non-Executive Member or this Member makes a relevant statement to the Compa- ny, the BoD takes the appropriate steps to replace him/her without delay, on the rec- ommendation of the Remuneration and Nomination Committee. Each Independent Non-Executive BoD Member submits to the Remuneration and Nomination Committee annually, an ar- mation statement regarding the fullment of the criteria of independence by him/ her, without however the Company being satised exclusively with the submission of the declaration according to the above. The Board of Directors of the Company, after a thorough examination with the as- sistance of the Remuneration and Nomi- nation Committee for the fullment by the independent non-executive members of the independence conditions dened by article 9 par. 1 and 2, declares and con- rms that both during the scal year 2021 (01.01.2021-31.12.2021) and on the date approval of the present, the independent non-executive members, and in particular Messrs. Theodoros Kitsos, Georgios Samo- thrakis, Myrto Papathanou, Spyridoula Maltezou and Nikitas Glykas, fully meet the criteria of independence set by the current legislative and regulatory frame- work in general. The Board of Directors of the Company, during its meeting of July 28, 2021 and fol- lowing the relevant recommendation of the Remuneration and Nomination Com- mittee of the Company, which took place in accordance with the applicable Suit- ability Policy and the procedures applied by the Company, elected Mr. Athanasios Dimiou of Georgios as a non-executive member, in replacement for the remaining term of the resigned non-executive mem- ber of the Board of Directors Mr. Petros Fronistas of Christos. The election of the above new non-exec- utive member of the Board of Directors will be announced, in accordance with the provisions of the law and the Articles of Association of the Company, at the next General Meeting of the Company’s share- holders. Following the above, the Board of Direc- tors of the Company was reconstituted into a body for the remainder of its term, namely until February 11, 2026. The minutes of 28.07.2021 of the Board of Directors on the election of Mr. Athanasios Dimiou to replace and for the remainder of the term of the resigned member Mr. Pet- ros Fronistas, and on re-composition in a body were registered in the General Com- mercial Register (G.E.M.I.) on 03.08.2021 with Registration Code 2596045, issued in relation to it with protocol number 2415279/03.08.2021 of the relevant an- nouncement of the Ministry of Develop- ment and Investment (General Secretar- iat of Commerce & Consumer Protection, General Directorate of Market, Directorate of Companies, Department of Supervision of Listed SAs & Sports SA). The following table presents the mem- bers of the eleven-member (11-mem- ber) Board of Directors in eect, as long as active BOD members during 2020 - 2021: Annual Financial Report as of 31.12.2021 Page 53 of 260 Amounts in thousand Euro, unless stated otherwise Member Position in the Board Date of election/ appointment Expiry of tenure Konstantinos Chalioris Chairman, Executive Member 11.02.2021 11.02.2026 Theodoros Kitsos Vice Chairman, Independent non-executive member 11.02.2021 11.02.2026 Dimitrios Malamos Chief Executive Ocer, Executive member 11.02.2021 11.02.2026 Vassilios Zairopoulos Non-executive member 11.02.2021 11.02.2026 Christos Shiatis Non-executive member 11.02.2021 11.02.2026 Christos-Alexis Komninos Non-executive member 11.02.2021 11.02.2026 Athanasios Dimiou Non-executive member 28.07.2021 11.02.2026 Georgios Samothrakis Independent non-executive member 11.02.2021 11.02.2026 Myrto Papathanou Independent non-executive member 11.02.2021 11.02.2026 Spyridoula Maltezou Independent non-executive member 11.02.2021 11.02.2026 Nikitas Glykas Independent non-executive member 11.02.2021 11.02.2026 Petros Fronistas Non-Executive member 11.02.2021 09.07.2021 From the above members, all individuals have Greek nationality except for Mr. Chris- tos Shiatis and Mr. Christos-Alexis Komni- nos who have Cypriot nationality. Particularly and in accordance with the above, the Board of Directors of the Com- pany consists of: • 2/11 (18.18%) executive members • 4/11 (36.36%) non-executive members • 5/11 (45.45%) independent, non-exec- utive members • 2/11 (18.18%) women (fullling how- ever the requirements of Article 3, of L.4706/2020, for adequate representa- tion per gender in the Board of Direc- tors). It is pointed out that the composition of the new Board of Directors is fully harmonized with the requirements, criteria and regula- tions of the new law 4706/2020 on corpo- rate governance. Furthermore, the composition of the new Board of Directors of the Company fully covers the proper and eective exercise of its duties and responsibilities, reects the size, organization and mode of operation of the Company, achieves adequate stang of both existing and new Committees insti- tuted to strengthen the supervisory role of the Board of Directors, and is distinguished for the diversity of knowledge, skills, quali- cations and experience, elements which can contribute decisively to the promotion and achievement of business goals and plans of the Company. Description of the diversity policy with regard to the administrative bodies of the Company Given the fact that the Board of Direc- tors is the highest administrative body of the Company, which is responsible for the Page 54 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise safeguarding of the broader corporate in- terests, the policy making and the growth strategy of the Company as well as for the strengthening of the long-term economic value of the Company, it is very essential for the particular body to possess, with re- gard to its composition, a diversity of skills, views and abilities which at the same time respond to the need to eectively attain corporate goals. The Company has a Suitability Policy for the members of the Board of Directors, which is approved by its Board of Directors and includes at least the provision of diversity criteria for the selection of the members of the Board of Directors and the Senior Ex- ecutives. The Suitability Policy, which was approved by the Annual Ordinary General Meeting of Shareholders on May 21, 2021, is posted on the Company’s website www.thracegroup. com, while its scope includes the members of the Board of Directors (executive, non- executive, independent non-executive) as well as the members of the Board Commit- tees. From the time of the Company’s establish- ment and until today, the entire members of the Board of Directors fulll all necessary conditions and have set the foundations in order to be granted with the capacity of the member of the Board of Directors. At the same time they are distinguished for their high professional skills, educational level, knowledge, capabilities, experiences and their organizational and administrative abilities, and at the same time they possess high standards of ethics and integrity of character. The members of the board of Directors cov- er a broad range in terms of age combining eectively their dynamics and experience (indicatively between 42 and 78 years old). The members, in their majority, are hold- ers of graduate and postgraduate degrees of domestic as well as of international uni- versities, have worked in high ranked posi- tions of major companies domestically and abroad, meaning companies activating in a variety of business sectors. They have also Senior Executives large organizations and as a result they possess signicant interna- tional experience in the corporate as well as the broader social elds and are in po- sition to actively contribute to the growth prospects of the Group in the geographical areas in which it activates. They nally fulll the requirements of suitability as well as the criteria with regard to the Group’s eective stang and operation. The current composition of the Board of Directors aims undoubtedly at the best possible facilitation of corporate goals, as it increases the pool of skills, experience and vision that the Company has for its highest ranking personnel, and consequently its competitiveness, productivity and innova- tion. The current 11-member Board of Directors of the Company, consists of 9 men and 2 women and was elected in the framework of the decision of the Company’s Manage- ment for immediate, substantial and eec- tive compliance and harmonization with the provisions of the new law 4706/2020 on suitability, diversity and, above all, ad- equate representation by gender on the Board of Directors. The presence of two women among the members of the Board of Directors covers the statutory percent- age (25%) of adequate representation by gender. Annual Financial Report as of 31.12.2021 Page 55 of 260 Amounts in thousand Euro, unless stated otherwise The Board of Directors Members Gender / Age Education Nationality Independence l ts c I c 11 Members 9 Men 2 Women Specialization 9 Greek 2 Other nationality 45.45% Independent non-executive members 42-78 years old The Company, in the context of the adop- tion of the best corporate governance practices provided by the new CCG, en- sures the application of the diversity crite- ria included in the current and approved by the annual Ordinary General Meeting of shareholders on May 21 st 2021 Suitabil- ity Policy not only among the members of its Board of Directors, but also to its senior executives. In particular, the Human Resources De- partment, which aims to attract and re- tain the appropriate human resources and continuously increase its eciency and eectiveness through the implementation of modern procedures, policies and prac- tices of evaluation, recruitment, training and remuneration, ensures faithful and strict application of the diversity criteria to senior management, in order to ensure: (a) the avoidance of outdated and anachronistic social stereotypes in the process of assessing the specic qualications and suitability of senior management in general; and (b) the integration of innovative ap- proaches and ideas into the selection process of such executives. The fundamental criteria of the intended diversity regarding the selection and eval- uation of senior executives are as follows: adequate gender representation of at least 25%, to the extent and timing that this criterion is applicable; and the prohibition of exclusion of a can- didate for senior management, due to dierent gender, race, color, ethnic or social origin, religion or belief, proper- ty, birth, disability, age or sexual orien- tation. The main criteria for selecting the top ex- ecutives employed in the Company are the adequacy of knowledge and skills, namely the satisfactory background of theoretical education and training, the appropriate professional experience, the guarantees of ethics and reputation, the integrity and objectivity, and the general skills of the candidate as well as the knowledge of the business model and the more spe- cic principles of the Company, in order to form a diverse team of senior executives with a sucient degree of dierentiation, which will be able to take full advantage of market opportunities and eectively man- age the risks. The condensed CVs of the Company’s Board members are as follows: Page 56 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Konstantinos Chalioris, Chairman of the Board of Directors, Executive Member He possesses a professional experience of 40 years and has gained very good knowl- edge of the industry and the international market. Since 2009, he holds the position of the Chairman of the Board of Directors. By the decision of the Board of Directors as of October 14, 2020, Mr. Chalioris re- mained Chairman of the Board of Directors and also assumed the position of Chief En- trepreneur. The specic position, which was added to the organizational chart of the Group aims to ensure the continuation of the protable growth of the Group in ar- eas that fall both in the existing activities of the Group and in new benecial activi- ties in the future. The creation of this po- sition and its assumption by Mr. Chalioris, who has a signicant career and valuable experience in “entrepreneurship”, will en- sure the future development of the Group. Theodoros Kitsos, Vice-Chairman of Board of Directors, Independent Non-Executive Board Member He holds a BSc degree from the Economics Department of the National and Kapodis- trian University of Athens and an MBA de- gree in nance from the Warner College of USA. He started his career in Unilever Hellas and also in other companies of the Group located abroad where he worked in United Arab Emirates, Saudi Arabia and Holland. He returned to Greece in 2005 where he worked as General Manager of Human Re- sources and Organization at PPC (DEI) SA. In a later stage he held the position of Deputy General Manager of Human Resources at Eurobank Group. By the end of the year 2007, he returned to Unilever Group based in London undertaking the duties with re- gard to the global organizational planning of the Company, whereas in year 2010 he moved to Unilever Russia, Ukraine and Be- larus based in Moscow where he held the position of Vice President responsible for is- sues of human resources and organization, implementing successfully at the same time the acquisitions and mergers of three com- panies active in the production and trading of consumer products. Since the summer of 2015, he worked at the headquarters of Unilever in London having assumed a plethora of duties in the areas of Finance, Law, Technology and Support Services on global level, up until 2020, when he com- pleted his collaboration with the Company. Dimitrios Malamos, Chief Executive Ocer, Executive Member He graduated from the Athens College in 1993. He studied in Great Britain from 1993 to 1998. He holds a BA (Hons) in Business and Financial Economics from Staordshire University a postgraduate ΜΒΑ degree from University of Kent in Canterbury. From 2000 to 2007 he worked in PricewaterhouseCoopers in the area of Management Consulting servicing com- panies of the private and public sector where he gained signicant experience in the elds of budgeting and reporting, - nancial analysis and internal restructuring. During the period 2007-2009 he worked in National Bank of Greece in the Account- ing & Finance division and he returned to PricewaterhouseCoopers in the area of Management Consulting. From June 2010 to March 2020 he worked at Thrace Group as a Group CFO. From March 2020, Mr. Malamos took over the duties of Dep- uty Group CEO, while from October of the same year he holds the position of CEO of the Company and the Group (Group CEO). Annual Financial Report as of 31.12.2021 Page 57 of 260 Amounts in thousand Euro, unless stated otherwise Vasileios Zairopoulos, Non-Executive Member He began his career in 1983 in the apparel and footwear sector. He assumed the po- sition of Director of Design and Collection for a leading company in the kids apparel market. In a later stage he also became responsible for the planning and coordi- nation of production. He then moved to the business development department of a large retail store chain where he also undertook the broader supervision of the retail business activity, including the store design, the order and supply process, the management of the sales team, the mar- keting and promotion, as well as the budg- eting. He was also engaged in the areas of strategic consulting, negotiations, mar- keting management and nancial plan- ning, before moving to establish its own consulting rm. During the past 10 years, Mr. Zairopoulos activates as consultant, through his rm, in the areas of strategic consulting, startups, business planning, in- vestment evaluation, international negoti- ations, pricing and communication. Apart from his professional activities in Greece, Mr. Zairopoulos has also collaborated with two American multinational corporations, namely Columbia Sportswear and New Balance. He received IB Diploma from UWC Atlantic College in 1979 and BSc in Man- agement from Bath University in 1983. Christos Shiatis, Non-Executive Member An Associate Member of the Fellows of Chartered Accountants of England and Wales. He is a Certied Public Accountant by the Cyprus Institute of Chartered Ac- countants and Member of the Hellenic As- sociation of Certied Accountants (SOEL). He began his career in 1981 at the auditing rm Kostouris – Michailidis (Grant Thorn- ton) in Athens. In 1993 he became Manag- ing Partner of the Greek company and in 1997 he assumed the position of Territory Senior Partner at the company that result- ed from the merger of Kostouris-Micha- ilidis and Coopers & Lybrand. In 1998 he was elected Chairman and Chief Executive Ocer of the company Pricewaterhouse- Coopers in Greece. At the same time he was exercising his Management respon- sibilities at the above auditing rms, Mr. Shiatis provided advisory services also to senior management of large rms. Athanasios Dimiou, Non-Executive Member He graduated from the School of Chemi- cal Engineering of the Aristotle University of Thessaloniki in 1986. From 1989 to 1996 he worked for the companies PLASTIKA MAKEDONIAS SA and AG.PETZETAKIS ini- tially in the eld of Quality Control and the development of new products and then his duties were expanded where he was trans- ferred to the position of Technical Director and Technical Services Director. From 1996 to 1998 he assumed the position of Plant Manager in the shoe manufacturer trading company MOURIADIS SA, a company listed on the Athens Exchange, Greece, and since 1998 he worked as Plant Manager of THRA- PLAST SA which mainly produces exible packaging products made of polyethylene (current name is Thrace Polylms). In 2000 he started in PLASTIKA THRAKIS SA as a Production Manager at the group’s facili- ties in Xanthi and in 2004 he took over the duties of Plant Manager in the facilities of Magiko complex in Xanthi, a position he held until 2010. Since then he has been the Managing Director THRACE NONOWO- VENS & GEOSYNTHETICS SA. At the same time he remains an active member of the Technical Chamber of Greece (TCG), and in Page 58 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise the past he was a member of the Hellenic Company of Business Administration and the Institute of Production Management. Christos-Alexis Komninos, Non-Executive Member He was born in Constantinople. In 1971 he graduated from the Polytechnic University of Constantinople (I.T.U.) with a degree in Chemical Engineering (MSc). In 1972 he moved to Greece and was recruited to Coca-Cola TRIA EPSILON, where until 1987 he held several positions. From 1987 to 1990 he served as Chief Executive Ocer of Coca-Cola Bottlers Ireland (a subsidiary of TRIA EPSILON). In 1990 he returned to Greece and in 1995 he was appointed Chief Executive Ocer, a position he held until 2000. From 2000 to 2004 he was Chairman and Managing Director of PAPASTRATOS SA. After the acquisition of Papastratos by PHILIPMORRIS S.A. he participated vol- untarily at the ATHENS 2004 Organizing Committee of the Olympic Games as the Head of the Organization of the Opening and Closing Ceremonies of the 28th Olym- piad. From 2005 to February 2010, he held the position of Executive Vice President of SHELMAN S.A. and ELMAR S.A. From December 2011 until February 2014 Mr. Komninos held the position of Chairman of the Board of Directors of Hellenic Petro- leum SA (ELPE). Mr. Komninos also served as Vice President of the Board of Directors and member of the Executive Commit- tee of the Association of Enterprises and Industries (SEV), member of the Board of Directors of Chalkor SA of the VIOHALCO Group, of FINANSBANK (Turkey) and of ANADOLU EFES (Turkey). He speaks Eng- lish, French, Italian and Turkish. Georgios Samothrakis, Independent Non-Executive Board Member He is a graduate of the Athens University of Economics and Business (ASOEE) and for- mer Certied Public Accountant, special- izes in tax issues and tax strategy of Greek and multinational companies, while has been extensively involved in regular and extraordinary audits of commercial and industrial enterprises. He began his career in 1965 at the National Bank of Greece and in 1972 moved to Coopers & Lybrand (now PwC) to set up the Tax Services depart- ment where he remained head until 2006. For a number of years he was also Chair- man of the Board of PwC. He is a member of the Supervisory Board of the Body of Certied Public Accountants (SOEL) where he is actively involved in the formation of the audit - accounting institutional frame- work in Greece. He has been President of the Fédération des Experts Comptables Méditerranéens, President of the Hellenic Institute of Economic Management (IOD), Member of Committees of the Ministry of Economy and Finance for the implementa- tion of IFRS in Greece, the simplication of the Greek Code of Accounting Books and Records as well as the integration of the new 8th Directive, and also Member of the Chamber of Commerce, while during the last years he has also been the Chairman of the Audit Committee of the Company. Myrto Papathanou, Independent Non-Executive Member She studied Economics at the City Univer- sity of London and holds a Master’s De- gree in Economics from the Imperial Col- lege Management School in London and an MBA from the INSEAD Business School. She began her nancial career in London, Annual Financial Report as of 31.12.2021 Page 59 of 260 Amounts in thousand Euro, unless stated otherwise where she worked as a Fixed Income Strat- egist for Bank of America / Merrill Lynch and as a credit risk analyst for Dresdner Kleinwort Wasserstein. She was a member of the Board of Direc- tors of Think Silicon SA, while today she is member of the Board of Directors of Ferry- hopper SA, Advantis Medical Imaging BV, Better Origin Ltd and Gommyr Power Net- works Ltd, which are active in the elds of transport, sports technology, health tech- nologies and renewable energy sources. Since 2007 she has been working as a busi- ness development manager at CPI and since 2011 she has been developing her own business activity in technology and as a consultant and investor in other com- panies. She is the founder of Metavallon VC, while she has been the Chief Financial Ocer and Head of Corporate Develop- ment at the EFA Group, which is active in Aerospace & Defense and other high-tech sectors. She is the rst investor from Greece to emerge as Kauman Fellow (Silicon Val- ley), a network that selects the best in- vestors in the world. She is on Fortune Greece’s list of the 40 entrepreneurs who innovated and excelled for 2020. She re- ceived the Leader of the Year award from Linkage Greece in 2016 in recognition of its outstanding leadership ability and con- tribution to business and society develop- ment. She has also worked in the non-prot space, co-founding Ethelon and seeking funding for the microcredit organization Action Finance Initiative, while as board member of the organization Women-on- top she has developed Micronance pro- grams in Kenya and Nicaragua for wom- en’s empowerment. Spyridoula Maltezou, Independent Non-Executive Member She holds a degree in Chemical Engineer- ing from the Aristotle University of Thes- saloniki and a PhD in Environmental Eco- nomics from the University of the Aegean. Her doctoral dissertation was entitled “Re- cycling - Environmental Value”. She started her professional career in 1999 in the Region of Achaia as head of the de- partment and special advisor on environ- mental issues. Then, in 2003, she worked at the Ministry of Environment as a Special Environmental Engineer, while she was a founding member of the “Unit for Alter- native Management of Packaging Waste and Other Products”, acquiring a special- ty in Environmental Economics. During this period she was the representative of Greece in EU Legislative Committees on waste management and recycling and member of European and International Committees on the environment and sus- tainable development. From 2010 to 2013 she worked as an Environmental Inspec- tor at the Ministry of Infrastructure, Trans- port and Networks, where she supervised major public road projects throughout Greece in terms of implementing the envi- ronmental legal framework. She has been a consultant on environmental issues and on the creation of management systems in many companies in Greece, while since 2016 she has been working as Senior Chief Inspector of the International Organiza- tion for the Certication of Registrars and Industrial Services of Lloyd’s. She has extensive experience in the con- trol and compliance inspection of ISO standards and compliance with existing legislation (Senior Auditor) and in-depth knowledge of environmental policies and regulations as well as legislation and regu- Page 60 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise lations related to environmental protec- tion. Since February 2019, she has been working as Head of Audit of the Regula- tion for monitoring, reporting and veri- cation of carbon dioxide emissions (MRV Regulation) and IMO DCS Technical Code in the international organization Lloyd’s, and was member of the Professional Ac- creditation Program of the International Water Resources Management Alliance (AWP) of Scotland. Her professional dedication and adapt- ability have provided a continuous path in the design, management, inspection and improvement of Environmental and Waste Management systems. She also deals with the Inspection of Quality, Environment and Health & Safety at work, according to the ISO certication procedures as it has been trained as a Head of Control accord- ing to the standards of the International Water Resources Management Alliance (AWP). Nikitas Glykas, Independent Non Executive Member He holds a BSc degree in Physics from the University of Athens and postgraduate de- grees from the Lancaster University in 1990 and Harvard University in 2006. Until the year 2005 he held the position of Peripher- al Manager of Eastern Europe for MAILLIS SA. Since 2006 and until 2009, as Member of the Board of Directors and member of the senior management of SHELMAN SA, being responsible for both the Company and its aliates, he promoted the restruc- turing and the broader redesign of the Group’s operating procedure achieving especially positive results amid recession conditions in the timber sector. Since the year 2009 he has held various positions in HTC Group, whereas from October 2015, and assuming higher duties, he holds the position of the Head for the region of Mid- dle East and Africa based in Dubai with di- rect reporting to the Group’s headquarters in Taiwan. He is considered a senior execu- tive with international experience, deep knowledge of the European markets as well as of the markets of Middle East and Africa, who manages eectively dierent cultures and holds records in the achieve- ment of sales and the penetration of new and existing geographic markets. Since 2019, he has been serving a Vice Chairman of XR SPACE Co LTD based in Taiwan. The condensed CVs of the top executives of the Company are as follows: Dimitris Fragkou, Group Chief Financial Ocer (CFO) & Secretary of the Board of Directors of the Company He studied Business Administration at the Athens University of Economics and Busi- ness (AUEB), from which he graduated in 2002. From 2006 to 2008, he studied Ac- counting and Finance (specializing in Fi- nance), obtaining a Master’s Degree from the Athens University of Economics and Business (AUEB). He is also a Certied Pub- lic Accountant, as he became a member in 2012 of the Association of Chartered Certied Accountants - ACCA. He started his professional career, for a short period of time from shipping banking, while at the end of 2003 he joined PwC. At PwC, he worked in the Consulting Division, gain- ing signicant experience in the areas of budgeting, nancial information, nancial analysis, process optimization, transition to new integrated information systems, and treasury operations. In 2014 he joined the Department of Business Process Out- sourcing, gaining experience in account- Annual Financial Report as of 31.12.2021 Page 61 of 260 Amounts in thousand Euro, unless stated otherwise ing procedures, tax compliance and nan- cial reporting to the Authorities (statutory reporting). He has worked for a number of listed and private companies in the con- struction, energy, shipping and industry sectors. From March 2020, he joined Thra- ce Group as Chief Financial Ocer. Ioannis Sideris, Chief Sustainability Ocer He is a graduate of the Athens University of Economics and Business with a specializa- tion in Business Administration and holds a Master’s degree in Information Systems Development from the London School of Economics. He has signicant experience in the elds of sustainable development, environmental protection and integrated solid waste management in the context of the circular economy, as he was the CEO of the Hellenic Recycling Organization (EOAN) and for many years responsible for environmental issues (local Deputy Mayor of Environment in the Municipality of Agia Paraskevi). In the past, he has served as consultant specializing in Information Sys- tems Management at Pricewaterhouse- Coopers. Lambros Apostolopoulos, Head of Internal Audit Unit He is graduate of Varvakeio High School, graduate of the Department of Business Administration and Management of the Athens University of Economics and Busi- ness (BSc) and holds a Master’s degree in Finance & Business Economics from the University of Portsmouth (MSc). He has worked for many years in large corporate groups in Greece and abroad. He has 15 years of active experience in internal au- dit and is a certied Internal Auditor (CIA) since 2013. Michael Psarros, Risk and Compliance Manager He is a graduate of the Department of Mathematics of the University of Patras and holds a postgraduate degree in MSc Finance from the University of Leicester. He started his professional career, for a short period of time as an Internal Auditor in a company in the nancial sector, while from May 2000 he worked in the Internal Audit Department of the Group of Com- panies of K. Filippou. Then in November 2005 he moved to the group Lafarge Ce- ment / AGET IRAKLIS, where he worked in the Internal Audit Department until December 2010, when he joined Thrace Plastics Group as Internal Controller. Dur- ing the 21 years of his employment in the Internal Audit Departments in the above industrial groups, he has gained extensive experience in the leds of Internal Audit, internal control systems, risk & compliance management. From February 2022, Mr. Psarros took over the duties as Risk and Compliance Man- ager. The following table shows the number of shares held by each member of the Board of Directors and each senior ex- ecutive in the Company: Page 62 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise BoD members Number of shares held directly Percentage of shareholding Konstantinos Chalioris 18,936,558 43.3% Theodoros Kitsos Christos-Alexis Komninos 25,000 0.1% Dimitris Malamos 520 0.0% Nikitas Glikas Athanasios Dimiou Vasileios Zairopoulos 160,023 0.4% Spyridoula Maltezou Myrto Papathanou Georgios Samothrakis 25,000 0.1% Christos Shiatis 60,000 0.1% Senior Management & Members of Audit Committee Number of shares held directly Percentage of participation Dimitris Fragou, Group CFO Ioannis Sideris 40,000 0.1% Lambros Apostolopoulos Michael Psarros Konstantinos Kotsililnis, Member of the Audit Committee Konstantinos Gianniris, Member of the Audit Committee 15,000 0.0% In the following table, there are presented the professional commitments of the Board members: Annual Financial Report as of 31.12.2021 Page 63 of 260 Amounts in thousand Euro, unless stated otherwise BoD Members Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Konstantinos Chalioris Civil non-Prot Company Stavros Chalioris 50% Vice-Chairman of BoD Xanthi Photovoltaic Park S.A. 50% Chairman & Chief Executive Ocer EYTERPI S.A. - Chairman & Chief Executive Ocer ERATO S.A. 50% Chairman & Chief Executive Ocer THALEIA S.A. 50% Chairman & Chief Executive Ocer KLEIO S.A. - Chairman & Chief Executive Ocer EVNIKI MCPY 99% Legal Representative AVDIRA MCPY 99% Chairman of BoD THRACE YAGHTING SMPC 66% Administrator THRACE LABEA SMPC 50% - THRACE NONWOVENS & GEOSYNTHETICS SA Chairman of BoD DON & LOW LTD Member of BoD ARNO LTD Chairman of BoD THRACE PLASTICS PACK SA 4.71% Chairman of BoD SYNTHETIC HOLDINGS LTD Chairman of BoD THRACE SYNTHETIC PACKAGING LTD Member of BoD THRACE GREEN-HOUSES SA Chairman of BoD & Managing Director TRIERINA TRADING LTD Director THRACE IPOMA AD Chairman of BoD THRACE POLYBULK AB Chairman of BoD THRACE POLYBULK AS Chairman of BoD LUMITE INC Chairman of BoD THRACE SYNTHETIC TEXTILES LTD Director THRACE POLYFILMS SA Chairman of BoD Theodoros Kitsos AMALTHEA SMPC Minority shareholder Member of BoD COLLEGE LINK PRIVATE COMPANY 1% Christos Alexis Komninos T.K.K. Consultants LTD 100% Director ELVAL - CHALCOR Member of BoD Page 64 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise BoD Members Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Dimitrios Malamos DYNAMIC CONSTRUCTIONS V. ZARIFOPOULOS S.A. - Chairman of BoD IOANNIS FILIPPAIOS S.A. - Member of BoD ΖΙΤΑ MCPY 1% Vice Chairman of BoD THRACE ASIA LTD Member of BoD THRACE GREEN-HOUSES SA Member of BoD THRACE POLYBULK AS Member of BoD THRACE SYNTHETIC PACKAGING LTD Member of BoD THRACE IPOMA AD Member of BoD THRACE NONWOVENS & GEOSYNTHETICS SA Vice-Chairman of BoD THRACE PLASTICS PACK SA Vice-Chairman of BoD LUMITE INC Member of BoD THRACE POLYBULK AB Member of BoD THRACE LINQ INC Chairman of BoD THRACE POLYFILMS SA Vice-Chairman of BoD THRACE EUROBENT SA Member of BoD SAEPE LTD Director ADFIRMATE LTD Director PAREEN LTD Director Nikitas Glykas XRSPACE Co LTD - Vice Chairman of BoD LUXURY HOUSES IN ATHENS MARIETTA SMPC 50% Athanasios Dimiou AVDIRA MCPY - Vice-Chairman of BoD THRACE POLYFILMS SA Member of BoD THRACE NONWOVENS & GEOSYNTHETICS SA Managing Director & Member of BoD THRACE EUROBENT Vice-Chairman of BoD Vasileios Zairopoulos V. ZAIROPOULOS & SIA GENERAL PARTNERSHIP 90% Administrator ΖΙΤΑ MCPY 99% Chairman of BoD DON & LOW LTD Chairman of BoD SYNTHETIC HOLDINGS LTD Director SYNTHETIC TEXTILES LTD Director THRACE EUROBENT SA Member of BoD Spyridoula Maltezou SPYRIDOULA MALTEZOU SOLE PROPRIETORSHIP (Business and Administration Consulting Services) 100% Annual Financial Report as of 31.12.2021 Page 65 of 260 Amounts in thousand Euro, unless stated otherwise BoD Members Companies in which the BoD members participate Group Companies in which the BoD members participate Equity shareholding Position Myrto Papathanou GOMMYR POWER NETWORKS LTD 30% Member of BoD GOMMYR POWER SMPC 30% - BANSARA TRADING LTD 30% - METAFOUNDER UNIT HOLDER SMPC 25% - KARYON AGRICULTURE SMPC 20% - ENTOMICS BIOSYSTEMS LTD - Member of BoD FERRYHOPPER SA - Member of BoD ADVANTIS HOLDING BV - Member of BoD METAVALLON PARTNERS AEDAKES 25% Member of BoD Georgios Samothrakis FRIGOGLASS SA - Audit Committee Christos Shiatis AVAX International LTD - Director C.E.T. RIVERS CYPRUS LTD - Director J&P AVAX SA - Member of BoD C.P.S. FINANCIAL SOLUTIONS LTD 99% Director TRIERINA TRADING LTD Director It is noted that none of the members of the Board of Directors of the Company partici- pates in the Boards of Directors of more than ve (5) listed companies. Page 66 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Framework for the Management of the Company’s Transactions with Related Parties The Company observes and implements a Framework for the Management of its Transactions with Related Parties, which includes the general policy that governs and the procedure that regulates its Trans- actions with Related Parties and which it has been adopted by a decision of the Board of Directors in compliance with its obligations arising from the applicable legislative and regulatory framework. In addition to the Framework for the Man- agement of its Related Party Transactions, the Company has also adopted a Con- ict of Interest Management Framework, which is additionally implemented. The policies that ensure that the BoD has sucient information to base its decisions regarding transactions between related parties including the transactions of its subsidiaries with related parties are: 1. To dene the responsibilities of the Company and the roles of its Divisions in the Management of Transactions with Related Parties In order to ensure the transparency and proper management of the Company’s Transactions with its related parties, the Framework for the Management of the transactions with Related Parties describes the responsibilities of the Company and provides for a clear allocation of roles be- tween its Divisions. Specically, the Company has undertaken a series of actions related to the manage- ment of transactions with Related Parties, as follows: - submits the Framework for the Man- agement of its Transactions with Re- lated Parties for approval by the BoD, - ensures the revision of the content of the Framework for the Management of its transactions with Related Party, where required, - ensures in cooperation with the legal advisors the legality of the individual procedures - applies the criteria mentioned in the Framework for the Management of its transactions with Related Parties and evaluates the aliation of the transac- tions with Related Parties for approval by the Board, taking into account the respective legal framework governing these Transactions, - takes into account the exceptions mentioned as well as those dened by the respective legislative framework, - presents the information related to the transactions with Related Parties, pointing out the Company’s interest for the nancial advantage and the correct application of the conditions for the completion of the transaction, taking into account the respective le- gal and regulatory framework. 2. Dene the Related Parties As “Related Parties” are dened the related parties listed in IAS 24, as well as the legal entities controlled by those persons in ac- cordance with IAS 27. 3. Locate the Related Parties For the correct fulllment of the legal and regulatory obligations of the Company and the eective implementation of the Framework for the Management of its Transactions with Related Parties, the trac- ing and identication of the Related Par- Annual Financial Report as of 31.12.2021 Page 67 of 260 Amounts in thousand Euro, unless stated otherwise ties with the Company is carried out in the following ways: • taking into account the organizational chart of the Company and the corpo- rate hierarchy of the Group as well as the list of investments in other entities, as they apply each time, • receiving information from the Cor- porate Secretary of the BoD regarding changes of members of the Board and / or its Committees, • requesting from the Company’s ex- ecutives, when assigning and per- forming their duties, to complete and sign a declaration form listing their immediate family members and third parties not aliated with the Com- pany, in which they hold or in which they exercise control or joint control, as dened in IAS 24. In this context, it is noted that it is the responsibility of each manager to immediately no- tify the Investor Relations & Corporate Announcements Department in the event of changes to the details of its original statement. The Investor Rela- tions & Corporate Announcements Department updates the declaration forms at a regular basis. 4. To dene the Transactions with Related Parties As “Transaction with Related Parties” is de- ned as any transfer of resources, services or liabilities between Related Parties, in which the Company is the one party and its Related Party is the other, regardless of the possible price agreed, and includes any nancial transaction, settlement or contract. Indicatively, and not restrictively, such Transactions may include: • the transfer of human resources, in- cluding their detachment, • the signing of service contracts, • signing receivables / debt manage- ment contracts, • the provision of guarantees or insur- ances. 2) Responsibilities of the Board of Directors The Board of Directors is the administra- tive body that decides on any action that concerns the company’s management, the management of its assets and in gen- eral anything that refers to promoting and achieving its objective. According to the Company’s Articles of As- sociation: h The Board of Directors is responsible for the representation, administration and unlimited management of cor- porate aairs. It decides on any issue that concerns the Company’s manage- ment, the achievement of the compa- ny objective and the management of company assets, including the issue of ordinary and convertible bonds. Only decisions, which according to the pro- visions of Law or the Articles of Asso- ciation as they are in eect following its amendment by the Extraordinary General Meeting of 19th March 2019, are subject explicitly to the responsi- bility of the General Meeting of share- holders, are excluded. h The Board of Directors may appoint, for any time period and under any conditions it deems necessary each time, to exercise its representation and duties in general, fully or partially to one or more of its members or Man- Page 68 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise agers or Executives or other employ- ees of the Company or third parties or committees, dening however each time their authority and the signato- ries that bind the Company. Specically, the main responsibilities of the BoD (in the sense that the relevant de- cision making requires the prior approval of the BoD or, if necessary, ex post ratica- tion by the BoD), should include: - The representation, administration and unlimited management of corpo- rate aairs - The decision making for each decision relating to the Company’s manage- ment - The achievement of the corporate objective and management of cor- porate assets including the issuance of ordinary and convertible bonds. The decisions, which according to the provisions of the Law or the Articles of Association or any other valid, binding and rm agreement, are explicitly sub- ject to the exclusive responsibility of the General Meeting of Shareholders, are excluded - The approval of the long-term strat- egy and the operational objectives of the Company and the Group - The approval of the annual budget and business plan and the decision making on major capital expenditures, acquisitions and divestments - The selection and, when necessary, the replacement of the executive management of the Company, as well as the supervision of the plan of the succession - The performance testing of the Senior Management and the harmonization of the remuneration of the executives with the long-term interests of the Company and its shareholders - Ensuring the reliability of the nancial statements and data of the Company, the nancial information systems and the data and information disclosed to public, as well as ensuring the su- cient and eective operation of inter- nal control system of the Company - The vigilance regarding existing and potential conicts of interest of the Company, on one side, and the Man- agement, the members of the BoD or the major shareholders, on the other side, and the appropriate treatment of such conicts. For this purpose, the BoD has adopted a transactions moni- toring process. - Ensuring the existence of an eective process of regulatory compliance of the Company - The responsibility for decision making and monitoring of the eectiveness of the Company’s Corporate Govern- ance system, including the decision- making processes and the delegation of authorities and duties to other em- ployees, and - The formulation, dissemination and application of the basic values and principles governing the Company ‘s relations with all parties, whose in- terests are linked to those of the Com- pany - The observance of the law, the statute and the legal decisions of the general assembly. They have to manage the corporate aairs in order to promote the corporate interest, to supervise the execution of the decisions of the Board of Directors and the general as- sembly and to inform the other mem- bers of the Board of Directors about Annual Financial Report as of 31.12.2021 Page 69 of 260 Amounts in thousand Euro, unless stated otherwise the corporate aairs. - The denition and supervision of the implementation of the corporate gov- ernance system of provisions 1 to 24 of Law 4706/2020, the monitoring and evaluation periodically every three (3) nancial years for its implementation and eectiveness, taking the appropri- ate actions for addressing deciencies. 3) Operation of the Board of Directors As regards to the operation of the Board, the Company’s Articles of Association and the Internal Operation Rulebook state the following: Formation of the Board of Directors as a body > The Board of Directors, as soon as it is elected and specically during its rst meeting, elects from its members and for the entire period of its term, a Vice- Chairman and a Chairman, whereas if the Chairman is absent or unable the Vice-Chairman substitutes such, and if the latter is absent or unable then the Director that is appointed by means of a decision by the Board of Directors substitutes such. > The Chairman of the Board of Direc- tors presides over the Board meetings, manages its activities and informs the Board of Directors on the Company’s operation. > The Board of Directors may elect one of its members as Chief Executive Ocer or Executive Director, it may appoint responsibilities of the CEO to the Chair- man or Vice-Chairman of the Board and it may elect the deputy CEO or Execu- tive Director from its members. - The responsibilities of the CEO are de- ned by means of a decision by the Board. Decision Making > The Board of Directors is considered to be in quorum and meets validly given that half (1/2) plus one (1) member are present or represented at the meet- ing. However the number of members participating in person or represented cannot be less than three (3) in any case. To calculate quorum, possible fractions are omitted. > The decisions of the Board of Directors are made with absolute majority or the members present and represented at the meeting. Representation of Board of Directors A Board member that is absent may be represented by another member. Each Board member may represent only one ab- sent member, with a written authorization. Minutes of Board of Directors > Copies or extracts of the Board of Direc- tors’ Minutes are certied by the Chair- man or his/her legal representative or by a member of the Board that has spe- cically been authorized for such by a decision from the Board. > The preparation and signing of min- utes by all Board members or their rep- resentative constitutes a decision by the Board of Directors, even if a meet- ing has not previously taken place. This arrangement applies if all the members or their representatives agree to make a majority decision in minutes without a meeting. The relevant minutes are signed by all the members. > The signatures of the members or their Page 70 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise representatives can be exchanged by e-mail or through electronic means. Remuneration of Board of Directors > The members of BoD may receive re- muneration for each participation in person at Board meetings, only if such is approved with a special decision by the Ordinary General Meeting. > The members of the Board of Directors receive the xed and variable remuner- ation as well as the other benets, fees and indemnities specied in the Com- pany’s current Remuneration Policy. The fees of the members of the Board of Directors may also consist of a share in the prots of the year, in accordance with the provisions of Law 4548/2018. > A fee or benet granted to a member of the Board of Directors that is not reg- ulated by law or the Statute in eect, shall be borne by the Company only if approved by a special decision of the General Meeting. Remuneration Report The Company has established and imple- ments a Remuneration Policy, the purpose of which is to ensure that the members of the Board of Directors and its Committees are remunerated based on its short-term and long-term business plan, in order to achieve protable organic growth through capacity increase , geographic expansion and value capture as per the Company’s strategic plan. The current Remuneration Policy of the Company was approved by the Annual Or- dinary General Meeting of shareholders of May 21, 2021 and its validity period is four (4) years and is available on the Company’s website www.thracegroup.com. The Remuneration Report has been pre- pared in accordance with the provisions of Law 4548/2018, Article 112, in line with the Guidelines of March 1, 2019 of the Eu- ropean Commission regarding the pres- entation of the Remuneration Report in accordance with Directive 2007/36/EC, as has been amended by Directive (EU) 2017/828 on Shareholders’ rights. Provides an overview of the remuneration model of THRACE PLASTICS CO SA, as it reects the total remuneration of the members of the Board of Directors, explaining the way in which the Remuneration Policy of the Company was implemented for the nan- cial year 2021. The total remuneration paid to the mem- bers of the Board and Committees during scal year 2021 (01.01.2021-31.12.2021) is included in the Remuneration Report, which is available on the Company’s htt- ps://www.thracegroup.com/gr/el/corpo- rate-governance/ 4) Board of Directors’ Meetings The Board of Directors meets at the Com- pany’s headquarters whenever the Law or the Company’s Articles of Association or its needs require so, convened by the Chair- man or his / her deputy with an invitation to be communicated to members at least two (2) working days prior to the meeting. The Board of Directors may also meet out- side the Company’s registered oce, but in the particular case such notice must be communicated to its members at least ve (5) working days prior to the meeting. - The Board of Directors may convene through teleconference for certain of its members or for all of them. In this case, the invitation towards Board members includes all infor- Annual Financial Report as of 31.12.2021 Page 71 of 260 Amounts in thousand Euro, unless stated otherwise mation necessary, including techni- cal information, for their participa- tion in the meeting. - The Board meetings are presided by the Chairman or upon absence or any other hindrance by his/her substitute according to the Articles of Association. During the closing nancial year 2021 (01.01.2021-31.12.2021), 35 Board meet- ings took place which were fully attended by all BoD members (full-quorum meet- ings). The topics that were mainly discussed con- cern: - Update by the Chief Executive Ocer on issues related to COVID-19, the ex- ternal environment of the operating segments, as well as on other impor- tant issues related to the Group’s activ- ity (such as price increases and price management, impact of energy costs, volume of recycled raw material, etc.) - Presentation of period Financial Re- sults for the Group and its subsidiaries - Health and safety issues and strength- ening of relevant measures and poli- cies - Update on current developments in subsidiaries - Brieng of BoD Committees, Audit Committee and relevantpropositions to the GoD - Evaluations of BoD / Committees - Next steps in risk management and corporate governance projects, aim- ing at the full compliance of the Com- pany - Other issues 5) Audit Committee Fully in compliance with the provisions and stipulations of the eective legislation and in particular with the article 44, eec- tive at the time, of L. 4449/2017, during the Extraordinary General Meeting of share- holders that took place on 11.02.2021, the Company elected a new Audit Committee with the objective to support the Board in performing its duties as regards to the procedure of nancial information, the procedures of internal control systems, the supervision of the mandatory audit of the annual and consolidated nancial state- ments, as well as to inform the Board of Directors with regard to the review of the nancial reports prior to their approval. Under the regime of article 44 of law 4449/2017, as in force after its amend- ment by article 74 of law 4706/2020), and on the other hand in line with the noti- cations, clarications and recommenda- tions of the circular with protocol num- ber 1508/17.07.2020 and 427/21.02.2022 documents of the Listed Companies Di- rectorate of the Hellenic Capital Market Commission, the Company is obliged, as a public interest entity, to have an Audit Committee which consists of at least three (3) members and which may comprise: (a) A Board of Directors Committee consisting of its non-executive members, or (b) An Independent Committee, con- sisting of: I. either by non-executive members of the Board of Di- rectors and third parties, or II. only by third parties. Third party means any person who is not a member of the Board of Directors. Page 72 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise The members of the Audit Committee are appointed by the Board of Directors, when it is a Committee of the Board or by the General Meeting of Shareholders, when it is an Independent Committee and must be in their majority independent of the audited entity. This means that in a three- member Audit Committee, at least two of its members (and in any case its Chairman) must either be independent non-exec- utive members of the Board of Directors or, in the case they are third parties, they should meet the requirements of article 4, par. 1 of Law 3016/2002 eective until 17/07/2020and then of article 9, par. 1 and 2 conditions of independence. The minimum required number of the pre- sent members in order to render a meet- ing of the Audit Committee as a valid one must be three (3), meaning that in case of a three-member Audit Committee then it is required the presence of all members at each meeting. However even if the Audit Committee consists of more than three (3) mem- bers it is required, according to the clari- cations granted pursuant to the no. 1302/28.04.2017 document of the Listed Companies Division of the Hellenic Capital Market Commission, the participation of the entire number of its members, in per- son, in the Committee’s meetings. At least one (1) member of the Audit Com- mittee must possess sucient knowledge and experience in auditing and account- ing. In any case, it is to the discretion of the Audit Committee to invite whenever it is deemed necessary key directors of the Company who are involved in the latter’s corporate governance (for example Man- aging Director, Finance Director, head of the Internal Audit and Risk & Compliance Manager) to attend certain meetings or certain subjects of the daily agenda. The Audit Committee, which now operates in accordance with the provisions of Law 4449/2017, as in force after its amendment by Law 4706/2020 has the following duties while the Board of Directors maintains full responsibility and particularly: i) External Audit (sect. a’ of par. 3) The Audit Committee monitors the proce- dure and performance of the mandatory audit on the separate and consolidated nancial statements of the Company and the Group. In this context the Committee informs the Board of Directors by submit- ting a relevant report for issues deriving from the mandatory audit and by explain- ing analytically the following: a) the contribution of the mandatory audit to the quality and integrity of the nancial information, mean- ing in the accuracy, completeness and correctness of the publicized nancial information including the relevant disclosures which are ap- proved by the Board of Directors b) the role of the Audit Committee in the under (a) above mentioned pro- cedure, meaning the recording of the actions taken by the Audit Com- mittee during the performance of the mandatory audit. In the context of the above information that is being granted to the Board of Di- rectors, the Audit Committee takes into consideration the contents of the sup- plementary report which the Certied Ex- ternal Auditor prepares and submits, and which contains the results of the manda- tory audit that was performed fullling at least the requirements of article 11 of the Annual Financial Report as of 31.12.2021 Page 73 of 260 Amounts in thousand Euro, unless stated otherwise Regulation (EU) no. 537/2014 of the Euro- pean Parliament and the Council of April 16 th , 2014. The Committee: • Is responsible for the process of se- lection and recall of External Audi- tors or audit companies and proposes through the Board towards the Gen- eral Assembly (Meeting) of the share- holders the External Auditors or the auditing companies to be appointed, the terms of collaboration, as well as their remuneration (according to arti- cle 16 of Regulation (EU) No 537/2014, unless par. 8 of article 16 of Regulation (EU) No 537/2014 is being applied). • Regarding the selection of the Audit- ing Company, it is examined and ana- lyzed: o the scope of work o the audit standard on the basis of which this work will be per- formed o the form of the deliverable o the responsibilities of the man- agement and the auditor re- spectively • It is responsible for monitoring any non-audit service to be performed by the company’s external auditor. • Taking into account articles 21, 22, 23, 26 and 27, as well as Article 6 of Regu- lation (EU) No 537/2014) and in par- ticular the adequacy of the provision of non-audit services to the Company (according to article 5 of Regulation (EU) no. 537/2014) will approve or not the non-audit service. • Monitors the process and the perfor- mance of the mandatory audit of the separate and consolidated nancial statements of the Company and es- pecially the performance of the audit, taking into account any ndings and conclusions of the competent author- ity (according to paragraph 6 of article 26 of Regulation (EU) no. 537/2014). In this context, it informs the Board by submitting a relevant report on the issues that arose from the mandatory audit explaining in detail: (a) the contribution of the statutory audit to the quality and integrity of the nancial information, i.e. to the ac- curacy, completeness and correctness of the nancial information, including the relevant disclosures which are ap- proved by the BoD and made public, (b) the role of the Committee in the (a) procedure above, i.e. reporting the ac- tions taken by the Committee during the statutory audit process. • It is also being informed by the Exter- nal Auditor on the annual statutory audit plan before its implementation, evaluates the specic plan and en- sures that the annual statutory audit will cover the most important areas of audit, taking into account the main business and nancial risk areas of the Company. • Furthermore, the Committee submits proposals on other important issues, when it deems it appropriate or im- posed. ii) Procedure of nancial information (sect. b’ of par. 3) Within this context the Committee: • Is informed about the process and schedule of preparation of nancial information by the Management and monitors, examines and evaluates the process of preparation of nancial in- Page 74 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise formation, i.e. the mechanisms and production systems, the ow and dis- semination of nancial information produced by the involved units of the company. • The above actions include other dis- closed information in any way (e.g. stock market announcements, press releases, etc.) in relation to nancial information. • Informs the Board for its ndings on essential issues in its areas of respon- sibility, submits proposals to improve the process, if deemed appropriate, and monitors the response of the Company’s Management to these ndings. • Takes into account and examines the most important issues and risks that may have an impact on the Compa- ny’s nancial statements as well as the signicant judgments and estimates of Management during their prepara- tion. Below are indicative issues that are exam- ined and evaluated in detail by the Audit Committee to the extent that they are im- portant for the Company, mentioning spe- cic actions on them during its reporting and brieng to the Board: • Evaluate the use of the assumption of ongoing activity. • Signicant judgments, assumptions and estimates in the preparation of the nancial statements. • Valuation of assets at fair value. • Assessment of asset recoverable value. • Accounting for acquisitions. • Adequacy of disclosures for the signi- cant risks faced by the Company. • Signicant transactions with related parties. • Signicant extraordinary transactions. The Committee’s communication with the external auditor in view of the preparation of the audit report and the latter’s supple- mentary report to the Committee must be substantial. In addition, the Committee reviews the - nancial reports (Annual and Semi-Annual) before their approval by the BoD, in order to assess their completeness and consist- ency in relation to the information taken into account as well as the accounting principles implemented by the Company and informs the BoD accordingly. iii) Procedures of internal control and risk management systems and audit con- trol unit (sect. c’ of par. 3) The Committee: • Monitors, examines and assesses the adequacy and eectiveness of the en- tire policies, procedures and controls of the Company with regard to the internal control system as well as the quality assurance and the estimation and management of risks in relation to the nancial information. • Monitors the eectiveness of internal control systems mainly through the work of the internal audit and Risk & Compliance Department and the work of the External Auditor. • Supervises the management of the main risks and uncertainties of the Company and their periodic revision. In this context, it evaluates the meth- ods used by the Company for the iden- tication and monitoring of risks, the treatment of the main ones through Annual Financial Report as of 31.12.2021 Page 75 of 260 Amounts in thousand Euro, unless stated otherwise the internal control system and the in- ternal audit unit as well as their proper disclosure in the published nancial information. • Examines the conicts of interest dur- ing the Company’s transactions with related parties and submits to the Board of Directors the relevant reports. • Examines the existence and content of those procedures, according to which the Company’s personnel will be able, in condentiality, to express their con- cerns about possible illegalities and irregularities in matters of nancial information or other issues related to the operation of the company. The Commission must ensure that proce- dures are in place to eectively and independently investigate such issues, as well as to address them properly. Regarding the operation of internal audit unit, the Committee: • Evaluates the stang and organiza- tional structure of the internal audit unit and identies any weaknesses. It also monitors and inspects the proper operation of the internal audit unit in accordance with professional stand- ards as well as the current legal and regulatory framework and evaluates the results, its adequacy and eective- ness, without however aecting its independence. If deemed appropri- ate, the Committee submits propos- als to the Board, so that the internal audit unit has the necessary means, is adequately staed with personnel with sucient knowledge, experience and training, there are no restrictions on its work and has the envisaged in- dependence. Therefore, the appoint- ment and dismissal of the head of the internal audit unit is a proposal of the Audit Committee to the Board of Directors. In the same context, the Committee determines and examines the operating regulations of the Com- pany’s internal audit unit. • It is being informed on the annual or periodic audit plan of the internal au- dit unit before its implementation and evaluates it accordingly, taking into consideration the main areas of busi- ness and nancial risks as well as the results of previous audits. The Com- mittee may decide to congure the annual or periodic internal audit plan, as well as to carry out extraordinary audits by the internal audit unit. • As part of this brieng, the Committee reviews if the annual or periodic audit plan (in conjunction with any corre- sponding medium-term plans) covers the most important areas of control and nancial information systems. • Holds regular meetings with the Inter- nal Auditors to discuss issues of their responsibility, as well as problems aris- ing from the performance of internal audits. • Takes knowledge of the work of the in- ternal audit unit and its reports (regu- lar and extraordinary) and monitors the brieng of the Board about their content, in relation to the nancial in- formation of the Company. • Reviews the disclosed information re- garding the internal control and the main risks and uncertainties of the Company, in relation to the nancial information. For the results of all the above actions, the Committee informs the Board of Directors about its ndings and submits proposals for the implementation of corrective ac- Page 76 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise tions, if deemed appropriate. The Committee shall have unhindered and full access to the information, records and data required in the exercise of its powers and shall have the necessary resources to carry out its work in a proper and eective manner, including the use of external con- sultants. The Audit Committee stores all the neces- sary information, including the minutes of its meetings, in which its actions and their results are recorded, regarding the imple- mentation of its work. The Audit Committee submits reports to the Board of Directors on its areas of responsibility and also in the areas con- sidered, after the completion of its work, that there are essential issues in relation to the nancial information provided; at the same time it monitors the response of the Management on the above issues. The Chairman of the Committee provides information to the shareholders dur- ing the annual General Meeting about the Committee’s activities on the basis of the above-mentioned responsibilities, through the submission of a relevant Re- port. For the implementation of all the above, the Audit Committee is expected to hold meetings with the Management and the competent executives during the prepara- tion of the nancial reports, as well as with the External Auditor during the planning phase of the audit, during the execution and also during the phase of preparation of audit reports. The current Audit Committee, which was elected by the Extraordinary General Meeting of Shareholders on 11 February 2021, is an Independent Committee and is consisted of the following one (1) Inde- pendent Non-Executive Member of the Company’s Board of Directors and two (2) non-members-third parties, namely: Georgios Samothrakis Independent Non- Executive Board Member Konstantinos Kotsilinis Non-Board Member – third party Konstantinos Gianniris Non-Board Member – third party Following the election of the above three- member Audit Committee by the Extraor- dinary General Meeting of shareholders of 11 February 2021 and the appointment of the persons assuming the positions of its members, the Audit Committee at its meeting of 16 February 2021 was formed into body with the expiration of its term on 11 February 2026 as follows: Georgios Samothrakis Chairman of Audit Committee Konstantinos Kotsilinis Member of Audit Committee Konstantinos Gianniris Member of Audit Committee For reasons of completeness, the CVs of the members of the Audit Committee are presented as follows. z Georgios Samothrakis The CV of Mr. Georgios Samothrakis, Mem- ber of the Board of Directors, is presented in detail in Section VI.1 “Composition of the Board of Directors” of the current Report. Annual Financial Report as of 31.12.2021 Page 77 of 260 Amounts in thousand Euro, unless stated otherwise z Konstantinos Kotsilinis Mr. Konstantinos Kotsilinis was born in New Zealand, studied at Victoria Univer- sity of Wellington and earned a Bachelor of Commerce and Administration degree. He began his professional career in 1968 at the Coopers & Lybrand Company in Wellington, moved to the London office in 1972 and later that year to the Greek of- fice. From 1978 to 2003 he was head of the audit department of Coopers & Lybrand / PwC Greece. In his last years of service in the Company, he has been the Chairman of the Board of Directors of the Company. He has served on various Committees in- cluding the Supervisory Board of the Euro- pean Financial Reporting Advisory Group (2002-2004) and the Accounting Harmo- nization Committee of UNICE (2002-2005). From 2009 to 2014, he was Vice Chairman of the Accounting Standardization and Auditing Committee of Greece (ELTE) and Chairman of the Quality Control Council (SPE). During this period he represented Greece in the relevant committees in the European Union and during the Greek Presidency he was the Chairman of the committee responsible for audit issues. He is a Member of the Board of Chartered Au- ditors of Greece as well as a former Mem- ber of the Institute of Chartered Auditors of New Zealand. He is the Chairman (since 2006) of the Board of Directors and a member of the Audit Committee of the insurance com- pany Interasco. From 2006 until today he is an External Advisor of the Audit Committee of the Na- tional Bank of Greece, while since 2017 un- til 2021 was a Member of the Audit Com- mittee of Mytilineos SA and since 2021 is an external advisor of it. Since 2004 he is a Member of the Board of Directors of “Child’s Smile” and today Vice President of the Organization. From 1991 to 2020 he was the Honorary Consul General of New Zealand in Greece, while he has been appointed Member (MNZM) and Officer (ONZM) of the Order of Merit of New Zealand by the Queen of England. z Konstantinos Gianniris Mr. Konstantinos Gianniris has studied Economics, Organization and Business Ad- ministration at the University of Piraeus, is a graduate of the Law School of the Uni- versity of Athens and has extensive profes- sional training. He has been the General Manager of IASO Group, Managing Direc- tor of the Euroclinic Athens Group, Gen- eral Manager of SOULIS SA, Member of the Executing Committee, General Manager or High Ranking Executive (CFO, Market- ing / Sales Manager, Logistics, IT Manager, Organization and Internal Audit Manager) in large companies. He is also a member of the Board (and in most cases the Chair- man of Audit Committee) of the follow- ing companies: Thrace Plastics CO SA, Eu- rodrip SA, Logicdis SA, Dodoni Ice Cream SA, Euroclinic of Athens SA, Euroclinic of Children SA and European Technical SA. He has founded the Business Consulting Company P.M.S. Consultants (specializing in Business Administration, Internal Audit, Corporate Governance and Business Or- ganization). He has founded the Hellenic Institute of Internal Auditors (for a number of years he was its President) and has rep- resented the body at International Confer- ences. He has founded the Association of Clinics of Greece (SEK), in which the large groups of Private Clinics participate, and where he served for a number of years as President. Mr. Gianniris has prepared dis- sertations on Applied Organization and Page 78 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Business Administration, which have been adopted in a number of Businesses, such as: Internal Regulation of Management, Organization, Operation and Internal Con- trol System, Manual of Organization and Operation of Internal Control Unit, Budget & Audit Systems, Costing Systems etc. From the above it is inferred that the mem- bers of the Audit Committee have proven in their entirety that they possess suffi- cient knowledge in the field in which the Company operates, given that: (a) Mr. George Samothrakis was already a member of the Audit Committee of the Company, elected by the Extraordinary General Meeting of Shareholders as of March 19, 2019, (b) Mr. Konstantinos Gianniris participated in the management of the Company for a period of more than ten (10) years. It is therefore evident that from his par- ticipation he has obtained a complete and clear picture of the organization, management and operation of the Company, about the products it pro- duces and markets as well as the ser- vices it provides, and for the business model and the strategy it follows in general, while for a number of years he has been member of the Company’s Audit Committee, and he served as a CFO and Internal Audit Head for major companies and finally (c) Mr. Konstantinos Kotsilinis, who has never participated in the Board of Di- rectors of the Company, knows very well -and due to his wider professional activity- the environment and the con- ditions in which the Company develops its business activities. The criterion of sufficient knowledge and experience in auditing or accounting is proven to be met in the capacities of both Mr. Georgios Samothrakis and Mr. Kon- stantinos Kotsilinis, who are both Certified Public Accountants with extensive knowl- edge and rich professional experience. This is turn will contribute decisively and substantially in further strengthening the efficiency of the Audit Committee and in the implementation of its responsibili- ties in the best possible way, in order to strengthen the dynamics and the value of the Company. Also, Mr Gianniris is con- sidered very capable in this field, having served for a large number of years as Di- rector of Internal Audit and Chief Financial Officer for numerous companies from vari- ous industries. Finally, those conditions and criteria of independence which are covered by the current regulatory framework and in particular by article 9 par. 1 and 2 of law 4706/2020, are met in the persons of Messrs. Georgios Samothrakis and Kon- stantinos Kotsilinis, i.e. the majority of the members of the Audit Committee, given that the following persons: (a) do not hold shares greater than 0.5% of the Company’s share capital; and (b) do not have any dependency relation- ship with the Company or persons re- lated to the Company, according to the manner by which this dependency relationship is specified in particular in the provisions of the above legislation. Frequency of Meetings and Main Subjects of Meetings’ Agenda The Committee convenes at least four (4) times a year. The Chairman of the Com- mittee decides on the frequency and time schedule of the meetings. The external au- ditors are entitled to request a meeting by the Committee if they deem appropriate. Annual Financial Report as of 31.12.2021 Page 79 of 260 Amounts in thousand Euro, unless stated otherwise During 2021 the Committee convened nine (9) times and all members were pre- sented during the meetings, whereas all issues mentioned in the Internal Opera- tion Rulebook as well as in the Operations Rulebook of the Audit Committee were discussed and handled, the major of which are as follows: • Supervision and approval of the Inter- nal Audit Unit’s activities • Monitoring of the process and the performance of the mandatory audit on the separate and consolidated - nancial statements of the Company and brieng of the Board of Directors about the issues related to the man- datory audit along with an analytical explanation • Opinion on the selection of the Audit- ing Company • Ensuring the independence of the Certied External Auditors • Monitoring the process of preparation of the published nancial statements of the Group and the Company and the preparation of a relevant proposal to the Board of Directors for their ap- proval. 6) Remuneration and Nomination Committee of Board Members and Committees) The Board of Directors of the Company for the purpose of substantial, eective and appropriate compliance and harmoniza- tion of the Company with the regulations of articles 11 and 12 of Law 4706/2020 (Government Gazette A136/17.07.20201) and with the parallel adoption of the best corporate governance practices, during its meeting of 22.03.2021 decided the aboli- tion of the existing Committee for Benets and Promotion of Nominations (CBPN) and its replacement by the Remuneration and Nomination Committee. The Committee consists of three (3) Non- Executive Board Members, while the ma- jority of its members are Independent, in order to ensure the objectivity, independ- ence and integrity of their judgment. The Board is responsible for the appointment and removal from oce of all members of the Committee. The Committee elects its Chairman, who is an Independent Non- Executive Member and is supported by the Secretary of the Committee. The term of oce of the members of the Committee is directly related to that of the BoD. In ad- dition, the Committee submits an annual report of actions took place to the BoD. The Committee consists of the following Non-Executive Members of the Board, namely: Theodoros Kitsos Independent Non- Executive Member of the BoD, Chairman of the Committee Nikitas Glykas Independent Non- Executive Member of the BoD, Member of the Committee Vasileios Zairopoulos Non-Executive Member of the BoD, Member of the Committee The term of the above Committee expires on February 11 th , 2026. The purpose of this Committee includes at a minimum the development and for- mation of all types of remuneration of executives falling within the scope of ap- plication of the Remuneration Policy pro- vided by Article 110 of Law 4548/2018, the identication and retain of the necessary executives within the headcount of the Page 80 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Company, who will support the long-term successful performance of the Company, as well as in the formulation-submission of relevant proposals and suggestions on the above issues to the Board of Directors. The operation of this Committee ensures that both the remuneration of the Execu- tive and Non-Executive members of the BoD and the members of its Committees as well as the nominations for BoD mem- bers will be in line with the corporate ob- jectives and market practices and, in any case, will be in full compliance with the current legal and regulatory framework. In terms of setting remuneration policy, the Committee’s responsibilities include: • The Committee examines, pre-ap- proves and proposes to the Board an- nually, the labor issues, including the xed salaries and benets of the ex- ecutive members of the Board as well as exit agreements. • Based on the Group’s strategic plan approved by the Board, the Commit- tee ensures the existence of approved annual important objectives and takes care of their correct incorporation on the variable remuneration of the Ex- ecutive members of the Board. At the end of the relevant period, it exam- ines, pre-approves and proposes to the Board the results from the achieve- ment of the objectives. • The Committee reviews, pre-approves and proposes annually (or when a change is needed) to the BoD, the xed salaries and benets for the Ex- ecutive members, the Non-Executive members of the BoD, the members of the BoD Committees, the Senior Ex- ecutives of the Company, the Head of the Internal Audit Unit, as well as the Head of Regulatory Compliance and Risk Management Department, tak- ing into account the macroeconomic conditions and the relative amount of remuneration in similar companies. • The Committee reviews the Remu- neration Policy annually or more fre- quently, including the submission of proposals for improvement or diver- sication, and prepares the annual Remuneration Report in accordance with the provisions of the law. • The Committee, as needed, under- takes and cooperates with the other committees of the Board of Directors, in order to review the non-salary con- tractual obligations for the Executive and Non-Executive members of the Board of Directors / members of com- mittees. • The Committee may claim a refund of all or part of the bonus granted, due to the need for revision for any reason of previous years nancial statements or generally due to the nding of in- correct or inaccurate or incomplete nancial data, used or taken into ac- count in the calculation of its variable remuneration. • The Committee conducts or author- izes third parties to conduct surveys or studies on matters falling within its area of responsibility. In the responsibilities of the Committee regarding the promotion of the nominees for the BoD and Committees members, in- clude: • The Committee proposes to the BoD the criteria for the election of mem- bers (BoD and BoD Committees), in accordance with the requirements of the law and the respective strategy / Suitability Policy of the Company. • The Committee is responsible for the Annual Financial Report as of 31.12.2021 Page 81 of 260 Amounts in thousand Euro, unless stated otherwise preparation of the Nomination pro- cess for members of the Board of Di- rectors / Committees, based on prede- ned criteria and in accordance with the eligibility and corporate govern- ance policies. • The Commission evaluates candidates through interviews and references. • The Committee proposes the selected candidates for approval by the Board. • The Committee organizes an annual evaluation of the size, composition, the existing balance of qualications, gender, knowledge, experience, skills and eectiveness of the Board, on the basis of which it prepares and pro- poses to the Board the annual “Board Adequacy Report”. • The Committee is responsible for en- suring the smooth continuity of the Board through proper succession planning. • Controls, pre-approves and proposes recommendations to the Board re- garding the personal and professional development and succession of the Executive Board members in order to ensure that the Company remains competent and long-term competi- tive. • The Committee advises the CEO in the process of nominating the Company’s Executives, which he/she considers important. The nal decision to ll the above positions belongs exclusively to the CEO. • The Commission conducts or author- izes third parties to conduct investi- gations or studies on matters falling within its area of responsibility. The Remuneration and Nominations Com- mittee of BoD Members and Committees convened 13 times during the year 2021 (01.01.2021-31.12.2021) in the presence of all its members. The topics that were main- ly discussed were: • Dening the most specic perfor- mance criteria for the 2021 short-term incentive program • The examination of its Operation Rule- book • The approval of the remuneration for the year 2021 • The need to modify the Remuneration Policy • The evaluation of the BoD suitability, the preparation of the Adequacy Re- port for the BoD and the submission of a relevant proposal about the com- pany to which the evaluation of the Board of Directors will be assigned • The preparation of the Suitability Poli- cy of the members of the Board of Di- rectors and Committees • Educational needs of Board members and proposal for Board training in Sus- tainability issues • Group CEO and Chief Entrepreneur contracts • Replacement of a BoD member Furthermore, the Board of Directors of the Company at its meeting of March 22, 2021, in order to optimally organize and operate the most ecient framework of corporate governance, decided the establishment of new Committees as follows: 7) Other Committees Strategy and Investment Committee The purpose of this consists in providing assistance to the Board of Directors with regard to the development of the opera- tional strategy, the formulation of the in- vestment plan of the Company and of the Page 82 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Group in general, as well as supervising and providing guidance to the Board of Directors of the respective business strat- egy, as well as the provision of support in the formulation of revised / updated plans and in the monitoring and control of the implementation and performance of the strategic investments of the Company and the Group. The responsibilities of the Committee in- clude: Develops and proposes to the BoD the long-term strategy of the Group and suggests the necessary adjustments in the short and medium term Studies and pre-approves the strate- gic plans of the companies, ensures that they are in line with the Group’s strategy and makes recommendations to the Board. Reviews and suggests to the BoD for the investment plans and the individ- ual investments of the companies Reviews possible acquisitions, merg- ers, divestments and Joint Ventures and makes proposals to the Board re- spectively Reviews the progress and results of all actions related to the implementa- tion of the strategy and the progress of investment plans, and informs the Board. Monitors closely international trends, best practices and market data, in or- der to adapt the strategy of the Group and the Companies and informs the respectively the BoD Recognizes timely risks and opportu- nities and prepares proposals to the BoD for the necessary actions, includ- ing the framework that ensures their funding. Discusses the communication of the Management to third parties and the investors community, in terms of the strategy and the investment plan of the Group. The Strategy and Investment Committee consists of three (3) members of the Board of Directors, as follows: Konstantinos Chalioris Executive Member of the BoD, Chairman of the Committee Dimitrios Malamos Executive Member of the BoD, Member of the Committee Vasileios Zairopoulos Non-Executive Member of the BoD, Member of the Committee The Committee convened 14 times during the scal year 2021 in the presence of all its members. The topics that were mainly discussed con- cern the strategies of the subsidiaries and strategies for new investments. Environmental, Social Responsibility and Corporate Governance [ESG] Committee The purpose of this Committee is the: (a) review, pre-approval and recommen- dation to the Board of Directors on environmental, social and business sus- tainability issues through strategy de- velopment, management of issues and performance monitoring; and (b) formulation of proposals regarding the Corporate Governance and in general the monitoring of the operation of the Board of Directors, the Committees, as well as the Management of the Com- pany. Annual Financial Report as of 31.12.2021 Page 83 of 260 Amounts in thousand Euro, unless stated otherwise The responsibilities of the Committee in- clude: Monitors that the policies, strategies and goals of Sustainability are fully harmonized with the primary pur- pose, vision and values of the Compa- ny, as well as the Laws and the general regulatory framework so as to ensure full compliance, thus ensuring long- term sustainable performance. Monitors closely the development and implementation of the Sustain- able Development goals that have been set, based on the materiality analysis, which includes the impor- tant, relevant and critical areas that the Company highlights as priorities and proposes improvements to the Management and then in BoD, where deemed necessary. Monitors the progress and results of all issues of Sustainable Development with the aim of regularly informing the BoD. Closely monitors international trends and best practices in order to regularly inform the BoD. Recognizes timely risks and opportu- nities and prepares proposals to the BoD for the necessary actions includ- ing the framework that ensures the nancing of the Company. Reviews and pre-approves the annual sustainability statements and reports, including the Non-Financial Reporting as well as other disclosures, submit- ting relevant proposals to the BoD for approval. Highlights Corporate Governance is- sues that need improvement or pro- poses new issues for discussion and takes initiatives for cooperation with other BoD Committees or the Man- agement of the Company, monitoring their resolution. Acts on behalf of the BoD and coop- erates with the Management of the Company ensuring the prestige and the reputation of the Company in rela- tion to all the issues of its Sustainable Development and its public prole. Operational Framework Environment: Impacts of the Company’s footprint on soil, air, water resources and climate change in general from the use of raw materials, nished products, technol- ogy, industrial units, transport, etc. Society: Impact of the Company’s strate- gies in relation to: (1) lifelong learning and development of employees, (2) improve- ment of employee well-being including their Health and Safety, (3) monitoring of living standards of employees, (4) corpo- rate culture, philosophy and related com- mitments on diversity, dierence and in- clusion criteria, (5) wage justice, (6) child / forced labor policy, (7) tax compliance, (8) human rights, (9) support of local commu- nities, (10) workplace environment, (11) product safety during their production and use, etc. Corporate Governance: Implications of the Company’s public commitments and Announcements, governance practices including code of conduct issues, compli- ance with the legal framework, ensuring implementation of the regulation on per- sonal data, information security and cyber security, best practices of operation seg- ment, investors and stakeholders perspec- tive, size and composition of the Board of Directors, regularity of meetings, approval process of commitments, external collabo- Page 84 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise rations, approval of the Board of Directors for transactions between related parties, operation of BoD Committees, annual evaluation of BoD and Committees etc. The Environmental, Social Responsibil- ity and Corporate Governance Committee consists of four (4) members of the Board of Directors, as follows: Theodoros Kitsos Independent, Non-Executive Member of the BoD, Chairman of the Committee Konstantinos Chalioris Executive Member of the BoD, Member of the Committee Dimitrios Malamos Executive Member of the BoD, Member of the Committee Spyridoula Maltezou Independent, Non- Executive Member of the BoD, Member of the Committee The Committee met 8 times during the year 2021. The topics that were mainly dis- cussed concern: • Discussion to promote and enhance the company in the ESG area through eco-label, nancing of sustainable in- vestments, training seminars, devel- opment of a platform for ESG registra- tion of information and data, creation of ESG index • Sustainable Development Policy • Materiality Report • Sustainable Development Report 2020 • Discussion on the CDP Declaration • Discussion on Sustainability vision / mission • Discussion on Sustainable Develop- ment Policy • Information on the project on Corpo- rate Governance • Discussion on the Corporate Govern- ance Code. • Discussion on the training of the Board in the context of Sustainable Develop- ment. • Sustainable Development Strategy It is pointed out that all the above Commit- tees of the Board of Directors have drafted – composed their Rulebooks. The Board of Directors of the Company, at its meeting on March 24, 2022, decided to change the responsibilities and duties of the ESG Committee, as the responsibilities related to regulatory compliance were in- tegrated into the Audit Committee tasks and therefore it was decided to rename the ESG Committee, to Sustainability Com- mittee. Human Resources Committee The particular committee consists of (5) ve BoD members as follows: Dimitrios Malamos Executive member of the BoD, Chairman of the Committee Konstantinos Chalioris Executive member of the BoD, Member of the Committee Thedoros Kitsos Independent, Non- Executive member of the BoD, Member of the Committee Vaisileios Zairopoulos Non-Executive member of the BoD, Member of the Committee Christos Alexis Komninos Non-Executive member of the BoD, Member of the Committee Annual Financial Report as of 31.12.2021 Page 85 of 260 Amounts in thousand Euro, unless stated otherwise The purpose of this Committee is at a minimum to provide the required support mainly to the Chief Executive Ocer in any human resources matters, managing the labor related issues and the implementa- tion of labor laws and existing internal rules, in full compliance and harmoniza- tion with the business model, the strategy and the values of both the Company and the Group. The said Committee was not active during the year as the exercise of its responsibili- ties and duties in general was carried out on the one hand by the Human Resources Department, and on the other hand by the Risk & Compliance Department, which aims at the full and continuous compli- ance of the Company with the current regulatory framework, and therefore of the labor legislation, and the existence of a complete picture for the degree of this goal achievement. Furthermore, the inactivity of the above Committee is due to the fact that it was deemed absolutely meaningful and im- perative to facilitate the exclusive and uninterrupted engagement of its mem- bers with both their duties as members of the Board of Directors of the Company, as well as with their essential responsibilities and obligations arising from any parallel participation in the mandatory Commit- tees according to the current regulatory framework. The role of those committees was in fact upgraded and strengthened as a result of the implementation of Law 4706/2020. However, during the closing year, the Hu- man Resources Committee proceeded with the preparation of the necessary or- ganizational structure and took a series of preparatory actions in order to ensure the eective, substantial and appropriate or- ganization and operation of the HR func- tion in the in the immediate future. Pursuant to its relevant decision of 24.03.2022, the Board of Directors of the Company decided to change the organi- zational role of the above Committee and to place it directly under the Chief Execu- tive Ocer, in order to ensure the most ef- fective support and assistance in the latter’ daily work. The Committee’s new composi- tion will be decided by the CEO at a later time. 8) Evaluation of BoD and Committees The Company implements an Evaluation Policy of the Board of Directors and Com- mittees. The scope of the Policy includes the executive, non-executive, independ- ent non-executive members of the Board of Directors of the Company, as well as the non-members of the Board of Direc- tors (third parties) who are members of its Committees. The criteria of suitability and reliability of the Board members are dened in law 4706/2020, the decisions issued under its authority, as well as the Suitability Policy of the Company, which has been approved and implemented by the Company. The Company Suitability Policy is posted on the company’s website www.thracegroup. com. Procedure for Periodic Evaluation of Board Members Individuals falling within the scope of the Suitability Policy are evaluated on an ongoing basis for their ability to perform their duties adequately and eectively and to safeguard the interests of the Company and other stakeholders in order to achieve sound and prudent management of the Company by t and proper persons. Page 86 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise The members of the Board and its Com- mittees are evaluated: • On a collective basis, which takes into account the overall operation of the Board and its Committees and • On an individual basis regarding the assessment of each member contri- bution to the successful operation of the Board. The periodic evaluation of the BoD mem- bers and its Committees is held on an an- nual basis within the rst quarter of each year, unless otherwise decided by the Re- muneration & Nomination Committee and concerns the period of 12 months of the previous year. Self-evaluation of the overall performance of the BoD and its Committees The self-evaluation of the overall perfor- mance of the BoD and its Committees is carried out taking into account the pur- poses, responsibilities, their operation based on the Articles of Association, the Regulations and the legislative and regu- latory framework. Also, during the overall evaluation, the composition, the diver- sity and the eective cooperation of the members of the Board of Directors for the fulllment of their duties are taken into account. It is conducted on the basis of questionnaires which are approved by the Remuneration & Nomination Committee and are completed by the members of the Board of Directors and the Committees. Members should answer all the questions on the questionnaires. The Remuneration & Nomination Commit- tee decides on the initiation of the self- evaluation process and decides whether it is deemed appropriate for the annual eval- uation to be carried out internally or with the assistance of an independent external consultant. Individual Evaluation of BoD Members and its Committees The individual evaluation of the members of the Board concerns the performance of each member on an individual basis and the assessment of his/her contribution to the eective operation and overall perfor- mance of the Board. Each member of the Board is evaluated by the Chairman or the Vice-Chairman and all the other members of the Board of Direc- tors, regarding the fulllment of the role and the more specic tasks assigned to him/her, as dened in the Rulebook of the Board of Directors and its Committees, in the Internal Regulations of the Company, in the Corporate Governance Code as well as in law 4706/2020. During the individual evaluation, the sta- tus of the member is taken into account (executive, non-executive, independent non executive), the participation in special Committees, the assumption of special responsibilities / projects, the time dedi- cated during the fulllment of his / her du- ties, the behavior as well as the utilization of theoretical knowledge and professional experience possessed. The evaluation is carried out on the basis of questionnaires that are completed for each member, while in addition, in the context of the individual evaluation, the Chairman or Vice-Chairman may meet individually with the members, if this is deemed appropriate or necessary. In case a low score is identied or there are suggestions for improvement for specic members, the Chairman and/or the Vice Chairman of the Board are informed so as Annual Financial Report as of 31.12.2021 Page 87 of 260 Amounts in thousand Euro, unless stated otherwise to consider the possibility of an individual meeting of the Chairman and / or the Vice- Chairman with the member of the Board for their update, the discussion of the in- dividual points that have been recorded and the denition of the actions that are deemed appropriate to follow. Regarding the evaluation of the Chairman, a corre- sponding update is made, if necessary, to the Chairman of the Remuneration & Nomination Committee. During the rele- vant brieng of the Chairman of the Board, the anonymity of the members who made the evaluation is ensured and in no case are their details disclosed to the Chairman of the Board or to the Remuneration & Nomination Committee. 1. Authorities of General Meeting - The General Meeting of the Compa- ny’s shareholders is the highest corpo- rate body and is entitled to decide on any issue that concerns the Company, while its decisions also bind share- holders that are not present or who disagree. - Issues regarding invitation, convening and conducting General Meetings of shareholders, that are not particularly dened by the Company’s current Ar- ticles of Association are governed by the relevant provisions of articles 116- 140 of Law 4548/2018, as currently in eect. 2. Convening the General Meeting - The General Meeting convenes at the company’s registered oces or in a district of another municipality within the prefecture of its domicile or anoth- er municipality near the domicile. The General Meeting may also convene in the district of the municipality where the domicile of the relevant organized market is located. - Participation in voting remotely, meaning via either audiovisual or other electronic means, during the General Meeting of shareholders is permitted given the prior disclosure to shareholders of the meeting agen- da issues and relevant voting ballots accompanying such issues at least ve (5) days prior to the General Meet- ing. The issues and voting ballots may be provided and submitted online through the internet. Shareholders that vote in this manner are calculated to dene quorum and majority, given that the relevant ballots have been re- ceived by the company at least two (2) full days prior to the day of the General Meeting. In this case, the Company shall take ad- equate measures to: (a) be able to ensure the identity of the participant, the participation of per- sons who are entitled to participate in or attend the General Meeting and the security of the electronic connection, (b) enable the participant to monitor the proceedings of the Meeting by elec- tronic or audiovisual means and to ad- dress the Meeting, verbally or in writ- ing during the meeting, and to vote on the items on the agenda; and (c) ensure the ability to record accurately the participant’s remote voting. - The members of the Board of Directors as well as the Auditors of the Compa- ny are entitled to attend the General VII. General Meeting and Shareholders’ Rights Page 88 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Meeting. The Chairman of the General Meeting may, under his/her respon- sibility, allow the presence of other persons who do not have shareholder status or are not shareholders’ repre- sentatives in the Meeting insofar as this is not contrary to the Company’s interest. These persons are not con- sidered to be members of the General Meeting solely because they have spo- ken on behalf of a present shareholder or at the invitation of the Chairman. 3. Representation of shareholders at the General Meeting Shareholders that have the right to par- ticipate in the General Meeting may be represented in such by legally authorized proxies. 4. Chairman of the General Meeting - The Chairman of the Board of Direc- tors temporarily serves as chairman of the General Meeting, or if he is unable his substitute, as dened by the article 9 of the Articles of Association or if the latter is unable also, then the oldest in age from the present Members. Those appointed by the Chairman serve as temporary Secretary of the General Meeting. - Following the reading of the nal list of shareholders that have voting rights, the Meeting proceeds with electing a Chairman and a Secretary who also serves as a vote teller. 5. Minutes Copies or extracts from the minutes of the General Meeting shall be ratied by the Chairman or by his / her legal substitute or by his / her replacement or by any person appointed by the Board of Directors. 6. Shareholders’ Rights before the General Meeting • From the date of publication of the invitation for the convening of the General Meeting or Assembly up to that day, the Company shall post on its website the following information: (a) the invitation to convene the Gen- eral Meeting, (b) the total number of shares and vot- ing rights that the shares incorporate at the date of the invitation, indicating also separate totals per share class, (c) the forms to be used for voting by a representative or delegate, and, where provided for, by ballot paper and by electronic means, and (d) the documents to be submitted to the General Meeting, (e) a draft decision on each item of the proposed agenda and the draft reso- lutions proposed by the shareholders pursuant to paragraph 3 of article 141 of Law 4548/2018. • The members of the Board of Direc- tors and the Auditors of the Company are also entitled to attend the General Meeting. • The Company publishes the results of voting on its website, under the re- sponsibility of the Board of Directors, within ve (5) days from the date of the General Meeting, specifying for each decision at least the number of shares for which valid votes, the pro- portion of the capital represented by these votes, the total number of valid votes, and the number of votes for and against each decision and the number of abstentions. Annual Financial Report as of 31.12.2021 Page 89 of 260 Amounts in thousand Euro, unless stated otherwise Right of Participation and Voting Each share is entitled to one (1) vote. The General Meeting is entitled to participate as shareholder in the records of the De- materialized Securities System (DSS) man- aged by Societe Anonyme with the name “Greek Central Securities Depository SA” (GCSD) or the one identied as such based on the relevant date through the regis- tered mediators or other intermediaries in accordance with the provisions of the legislation (law 4569/2018, law 4706/2020 and Regulation (EU) 2018/1212) as well as the Regulation of Operation of the Greek Central Securities Depository SA (Govern- ment Gazette B 1007/16.03.2021). Proof of shareholder status can be per- formed by any legal means, and, in any case, based on information received by the Company from the CSD, under the condition it provides registry services or through the participants and registered in- termediaries in the CSD in any other case. For the Repeated General Meeting the sta- tus of shareholder must exist at the begin- ning of the fth (5 th ) day prior to the day of the General Meeting in accordance with the provisions of article 124 par. 6 of law 4548/2018, as in force today, provided that the adjourned or repeated meeting is not more than thirty (30) days from the record date. If this is not the case or if a new invita- tion is published in the case of the repeat- ed General Meeting, the General Meeting is attended by the person who has the shareholder status at the beginning of the third (3 rd ) day before the postponed or the repeated General Meeting. Only those that have the shareholder ca- pacity during the respective record date is considered by the Company to have the right of participation and voting at the General Meeting (rst and / or repeat meeting). It is noted that the exercise of the above rights (participation and voting) does not require the blockage of the beneciary’s shares or any other relevant process, which limits the ability to sell or transfer shares during the time period between the record date and the date of the Gen- eral Meeting. Minority Rights of Shareholders Pursuant to article 141 of Law 4548/2018, the shareholders have, inter alia, the fol- lowing rights: (a) At the request of shareholders, rep- resenting one twentieth (1/20) of the paid-up share capital, the Board of Directors is obliged to convene an Ex- traordinary General Meeting of Share- holders, appointing a meeting date, which shall not be more than forty ve (45) days from the date of submission of the application to the Chairman of the Board of Directors. The application contains the subject of the agenda. If no General Meeting is convened by the Board of Directors within twenty (20) days from service of the relevant application, the con- vocation shall be carried out by the applicant shareholders at the expense of the Company, by a court order is- sued in the interim proceedings. This decision denes the place and time of the meeting as well as the agenda. The decision is not challenged by legal means. (b) With the request of shareholders that represent one twentieth (1/20) of the paid up share capital, the Board of Di- rectors of the Company is obliged to list additional issues on the General Meeting’s agenda, if the relevant re- Page 90 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise quest is received by the Board at least fteen (15) days prior to the General Meeting. The request for the listing of additional issues on the daily agenda is accompanied by a justication or by a draft resolution for approval by the General Meeting and the revised agenda is published in the same man- ner as the previous agenda, at least thirteen (13) days prior to the General Meeting date and at the same time is disclosed to shareholders on the Com- pany’s website together with the jus- tication or draft resolution submit- ted by the shareholders according to those stipulated by article 123, para- graph 4 of Law 4548/2018. If these issues are not published, the requesting shareholders are entitled to request the postponement of the General Meeting and to make the publication themselves. (c) Shareholders representing one twen- tieth (1/20) of the paid-up share capi- tal shall have the right to submit draft decisions on issues included in the original or any revised agenda. The relevant application must reach the Board of Directors seven (7) days prior to the date of the General Meeting, the draft decisions being made avail- able to the shareholders according to the provisions of article 123 par. 3 of law 4548/2018 six (6) at least days pri- or to the date of the General Meeting. The Board of Directors is not obliged to enroll issues on the agenda or to publish or disclose them together with justications and draft decisions sub- mitted by the shareholders according to the above paragraphs b and c re- spectively if their content comes obvi- ously contrary to law or ethics. (d) At the request of a shareholder or shareholders representing one twenti- eth (1/20) of the paid-up share capital, the Chairman of the Meeting shall be obliged to postpone the decision of the General Assembly, either ordinary or extraordinary, for all or certain mat- ters, setting a day for the continuation of the meeting to conclude with these matters, the one specied in the share- holders’ application, but this cannot be more than twenty (20) days from the date of the postponement. The post- ponement of the General Meeting is a continuation of the previous one and no repetition of the publication formalities of the shareholders’ invita- tion is required, and new shareholders cannot participate in it, subject to the relevant participation formalities. (e) Following a request of any sharehold- er that is submitted to the Company at least ve (5) full days prior to the Gen- eral Meeting, the Board of Directors is obliged to provide to the General Meeting the specically required in- formation on the Company’s aairs, to the extent that such are useful for the real assessment of the agenda issues. No obligation to provide information exists when the relevant information is already available on the Company’s website especially in the form of ques- tions and answers. Also, at the request of shareholders representing one twentieth (1/20) of the paid up capital, the Board of Directors is obliged to an- nounce to the General Meeting, if or- dinary, the sums paid over the last two years to each member of the Board of Directors or the directors of the Com- pany, as well as any benet to such persons from any cause or contract between the Company and the mem- Annual Financial Report as of 31.12.2021 Page 91 of 260 Amounts in thousand Euro, unless stated otherwise bers. In all the above cases, the Board of Directors may refuse to provide the information for substantive reason, which is recorded in the minutes. Such a reason may be, in the circumstances, the representation of the requesting shareholders in the Board of Directors in accordance with Articles 79 or 80 of Law 4548/2018. In the cases of this paragraph, the Board of Directors may respond in unison to shareholder re- quests with the same content. (f) Following a request by shareholders that represent one tenth (1/10) of the paid up share capital, which is submit- ted to the Company at least ve (5) full days prior to the General Meet- ing, the Board of Directors is obliged to provide to the General Meeting information on the development of corporate aairs and the nancial po- sition of the Company. The Board of Directors may decline the provision of such information for reasonable cause, which is stated in the minutes. Such a reason may be, according to the circumstances, the representation of the requesting shareholders in the Board of Directors in accordance with Articles 79 or 80 of Law 4548/2018 or if the relevant members of the Board of Directors have received the relevant information in a sucient manner. (g) At the request of shareholders repre- senting one twentieth (1/20) of the paid-up share capital, the voting on a subject or issues on the agenda shall be made by open vote. In all the cases of Article 141 of Law 4548/2018, the requesting sharehold- ers are required to prove their share- holder status and, except in the cases of the rst subparagraph of paragraph 6 and paragraph 10, the number of shares they hold in exercising their rights. Demonstration of sharehold- er status can be done by any legal means, however, based on informa- tion received by the Company from the CSD, under the condition it pro- vides registry services or through the participants and registered intermedi- aries in the CSD in any other case. (h) Shareholders of the Company, repre- senting at least one twentieth (1/20) of the paid-up share capital, are enti- tled to request extraordinary audit of the Company by court which has juris- diction in the procedure of voluntary jurisdiction. Control shall be ordered if acts that violate provisions of the Company’s law or the Articles of As- sociation or decisions of the General Meeting are suspected. (i) Shareholders of the Company repre- senting one fth (1/5) of the paid-up share capital are entitled to request the court to audit the Company, since from the course of the company and on the basis of certain indications it is believed that the management of corporate aairs is not exercised as required by sound and prudent man- agement. The court may consider that the representation of the requesting shareholders in the Board of Directors in accordance with Articles 79 or 80 does not justify the shareholders’ re- quest. (j) Shareholders representing one twen- tieth (1/20) of the paid-up share capi- tal have the right to submit in writing to the Board of Directors an applica- tion for the exercise of the Company’s claim pursuant to article 103 of Law 4548/2018. (k) Shareholder holding shares repre- senting 2 percent (2/100) of the share Page 92 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise capital may request the annulment of a decision of the General Meeting that took place in a manner not consistent with the law or the Articles of Associa- tion, if he/she did not attend the Gen- eral Meeting or opposed the decision. (l) At the request of a shareholder or shareholders representing at least one third (1/3) of the paid-up capital, the Company may be dissolved by a court order if there is an important reason for doing so, which in a clear and per- manent manner, proves that its con- tinuance is impossible. Process for exercising voting rights through a proxy The shareholder participates in the Ex- traordinary General Meeting and votes either in person or through a proxy. Each shareholder may appoint up to three (3) proxies. Legal entities participate in the General Meeting by appointing up to three (3) persons as representatives. However, if a shareholder owns Company shares, which appear in more than one security accounts, this limitation does not obstruct the said shareholder from appointing dierent proxies for the shares that ap- pear in each security account in relation to the General Meeting. A proxy that acts on behalf of more than one shareholder, can vote separately for each shareholder. A shareholder proxy must disclose to the Company, prior to the beginning of the Ex- traordinary General Meeting, any specic event that may be useful to shareholders in assessing the risk of the proxy serving other interests than those of the represent- ed shareholder. There might be conict of interests specically when the proxy: (a) is a shareholder that exercises control on the Company or is another legal entity controlled by the shareholder, (b) is a member of the Board of Directors or generally the management of the Company or of a shareholder that ex- ercising control on the Company, or another legal entity that is controlled by a shareholder who exercising con- trol of the Company, (c) is an employee or Certied Public Ac- countant of the Company or share- holder that exercising control of the Company, or another legal entity con- trolled by the shareholder who exer- cising control of the Company, (d) is a spouse or rst degree relative with one of the persons mentioned above in cases (a) through (c). The appointment and revocation or re- placement of the representative or proxy is applied in written or electronically and submitted to the Company in the same form, at least forty eight (48) hours prior to the dened date of the General Meeting. The Company makes available the form it uses to appoint proxies on its website. This form is lled in and submitted signed by the shareholder to the Company’s Inves- tor Relations Department or is sent by fax to the latter at least forty eight (48) hours prior to the date of the General Meeting. The beneciary shareholder is requested to conrm the successful dispatch and re- ceipt of the proxy form by the Company by contacting the Company during working days and hours. Shareholders’ Rights Shareholders’ Rights & their exercise The Company has issued common reg- istered shares listed on the Athens Ex- change, and registered in immaterial form in the records of the Dematerialized Secu- rities System. There are no special rights in favor of specic shareholders. Annual Financial Report as of 31.12.2021 Page 93 of 260 Amounts in thousand Euro, unless stated otherwise The acquisition of Company shares implies the full and without any reservation ac- ceptance of its Articles of Association and of the legal decisions made by its relevant bodies. Each share provides rights corresponding to the respective percentage of share capi- tal such represents. The responsibility of shareholders is limited respectively to the nominal value of shares owned. In case of co-ownership of a share, the rights of the co-beneciaries are exercised only by a joint representative of such. The co-bene- ciaries are responsible with solidarity and entirely for fullling the obligations that emanate from the common share. Each Company share incorporates all the rights and obligations dened by Law 4548/2018 as in eect and its Articles of Association, and specically: • The right to participate and vote in the General Meeting. • The right to receive dividend from the Company’s earnings. • The right on the product of liquida- tion, or respectively the capital depre- ciation that corresponds to the share, given that such is decided by the Gen- eral Meeting. The General Meeting of the Company’s shareholders main- tains all its rights during liquidation. • The pre-emptive right in any increase of the Company’s share capital that takes place by cash and through the issue of new shares, as well as the pre-emptive right in any issue of con- vertible bonds, given that the General Meeting that approves the increase does not decide dierently. • The right to receive a copy of the an- nual nancial statements and reports by the Certied Public Accountants and Board of Directors of the Com- pany. • The rights of minority shareholders described below. VIII. Sustainable Development Policy At the core of the Sustainable Develop- ment Policy, the Company has as a vision to be the most valuable partner for its cus- tomers and suppliers and at the same time to systematically increase its share value, always taking care of the well-being of all its people. In this context, the Company seeks the implementation of practices to promote Sustainable Development and is committed through its policies to the re- spect for the human factor, society and the environment, in order to remain a reliable social partner. The Company’s approach for Sustainable De- velopment approach is based on six pillars: (1) We operate with respect for the en- vironment, (2) We contribute to the Circular Econ- omy and the Economy of New Plas- tics, (3) We create value for our people, (4) We contribute to the local commu- nity, (5) We operate with transparency and integrity, (6) We ensure business continuity and optimal nancial performance. The main risks and their management, the Company’s performance and its commit- ments under the 17 Sustainable Develop- ment Goals are described in detail in the annual Sustainable Development Reports and in the Non-Financial Reports. The re- Page 94 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise cording and communication of all the above issues to the interested parties is in line with international and national stand- ards and indicators, aiming at reliable and transparent information. The monitoring of Sustainable Develop- ment Policy implementation is the respon- sibility of the Sustainability Committee at the level of the Board of Directors, while at the administrative level, is the respon- sibility of the Team and the Director of Sustainable Development. In this context, the Internal Audit Unit can assist through periodic audits. The Sustainable Development Policy is ap- proved by the 16.07.2021 decision of the Board of Directors, is reviewed on an an- nual basis and is available on the corpo- rate Website. The Sustainable Development Policy: - Commits the Company and all its sub- sidiaries and covers all the activities of the Company in Greece and abroad, including all operations carried out by the Company or its subsidiaries. - Applies to all members of the Board of Directors, senior executives, em- ployees of the Company and its sub- sidiaries, and in general all persons employed in the Company or its sub- sidiaries either under an employment contract or through another contrac- tual relationship. - Disclosed to third parties provid- ing services to the Company (supply chain) or acting on its behalf or in co- operation with it (value chain), includ- ing partners and suppliers and any other persons with whom the Com- pany cooperates under outsourcing contracts or other agreements. Corporate Governance Through the established corporate gov- ernance system, the Company manages the administration and control issues, monitors the compliance with the current legislation and the legal framework and monitors the practices of managing share- holders’ related issues. This system is framed by the Corporate Governance Code applied by the Com- pany. Regarding corporate governance, the Company has set up a Sustainability Committee where members of the Board of Directors participate, while the Audit Committee has a critical role in corporate governance. At a managerial level, a Sus- tainable Development Team has been ap- pointed, which includes executives from various departments of the Company as well as representatives of the Subsidiar- ies and which supports the Company’s Management in the implementation of its strategy for sustainable development. The Team is coordinated by the Chief Sustain- ability Ocer. Fight against Corruption and Bribery The Company is committed to zero tol- erance in matters of corruption, bribery and extortion and aims to prevent such phenomena, conducting its business with integrity, in accordance with the highest standards of ethics and applying applica- ble laws. The Company has established the Code of Business Conduct, which denes the standards of conduct required of all employees and includes basic principles, the observance of which aims to prevent and/or eliminate corruption. Annual Financial Report as of 31.12.2021 Page 95 of 260 Amounts in thousand Euro, unless stated otherwise Respect for Human Rights The Company and all those who represent, cooperate and / or are employed in it must comply with the Code of Business Conduct applied by the Company and everything mentioned in it regarding the respect of human rights. The Company is committed to zero tolerance, in terms of harassment in the workplace, in any form of discrimi- nation due to race, religion, gender, na- tionality, age, disability, sexual orientation, etc., in cases of forced and child labor both within the Company, as well as in subsidi- aries. Ethics and deontology of Suppliers The Company recognizes the necessity of applying the principles of ethics and de- ontology, to which it is committed, in its supply chain as well. In this context, there is a continuous eort to evaluate suppli- ers and their partners, in accordance with their social and environmental commit- ments and performance, thus ensuring the risk of deviation from good social and environmental standards, which include issues of labor practices and human rights, as well as the ght against corruption. At the same time, the Company has fully in- tegrated the Law on Modern Slavery of the United Kingdom of 2015 and shows zero tolerance in relation to any violation. Social responsibility The Company seeks, through its business activities, to achieve high performance, so as to produce and distribute directly or indirectly economic value to the society in which it operates, with particular empha- sis on: - To strengthen the economies of the countries in which it operates, through the cash ows it creates to stakeholders and in particular tax pay- ments, payments to suppliers, payroll payments to employees, dividends to shareholders and investments in local communities. - The needs of citizens and societies that frame the Company and are af- fected by its activities. - In employment, through the direct and indirect creation and/or mainte- nance of jobs throughout the value chain of the Company. Quality, Safety and Customer Service The Company prioritizes the quality of its products and the safety of its customers and has established a Product Liability Policy. The Company complies with the respective national laws and adopts inter- national norms, safety rules, best practices and standards, regarding the design and production of products in all its facilities, monitoring and eliminating any unfortu- nate eects on the health and safety of customers and end users. Labor issues The Company recognizes the value cre- ated by human capital and considers it crucial for the good quality of its products, high productivity and the achievement of its competitive advantage. Investing in its people is a priority, encouraging lifelong learning, collaboration, initiative and per- sonal achievement. In order to ensure a responsible working environment of well- being, the Company has established the Code of Business Conduct, various com- pany directives, internal regulations and policies related to human and labor rights, health, safety and well-being of human resources, evolution and development of its potential and zero tolerance of harass- Page 96 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise ment, all forms of discrimination, forced and child labor. The priority is to minimize the possibility of causing an accident at work or illness and that is why the imple- mentation of the Safety, Health and Envi- ronment Policy has been developed and systematically monitored. Social contribution The Company has established a unied Social Action Policy, through which all subsidiaries recognize their responsibil- ity to people and society. The Sustainable Development Team is in constant collabo- ration with executives of the subsidiaries, in order to plan, coordinate and imple- ment, jointly, social actions and initiatives for public benet purposes. In order to make a practical contribution to the local community, the “Stavros Chalioris Social Center” has been established, which is a prominent example for the Company, with actions and activities of educational, cul- tural, recreational and social content. Environmental Responsibility The Company has an Environmental Policy always guided by the improvement of the environmental impacts resulting from its operation, with particular commitment to the application of the circular economy principles, responsible waste manage- ment, reduction of energy consumption and reduction of greenhouse gas emis- sions related to its activities. Circular economy The plastics industry faces a variety of chal- lenges and opportunities. For this reason, the Company has adopted the principles of the circular economy from the supply of raw materials and product design, in- corporating practices based on the prin- ciples of reduction, reuse and recycling, up to the entire life cycle of its products. The adoption of a new, innovative, cyclical economic model constitutes a very impor- tant initiative of the Company, recognizing its contribution to the ecient use of re- sources, as an important link in the global plastic value chain. Climate change The Company recognizes the risks and impacts that may arise in its business ac- tivity due to climate change, such as the occurrence of extreme weather events or rising temperatures, which may aect the production process and bring about sig- nicant changes in its activities and abrupt changes in its revenues and expenses in the short, medium and long term. In order to mitigate the risks arising from climate change, but also to achieve positive nan- cial results for itself and its operating envi- ronment, the Company adapts its business model to reduce its environmental foot- print (direct emissions, energy consump- tion, use of recycled material, waste man- agement) and focus on the development of innovative products and services, apply- ing the principles of the circular economy. Essential non-nancial issues Thrace Group proceeded to the publica- tion of the 3 rd Sustainable Development Report for the nancial year 2020, accord- ing to the GRI Standards and the ESG In- formation Disclosure Guide of the Athens Stock Exchange, in order to communicate the Group’s strategy, programs and results in the eld of Sustainable Development. The Group focuses on issues related to the Annual Financial Report as of 31.12.2021 Page 97 of 260 Amounts in thousand Euro, unless stated otherwise creation of economic, social and environ- mental benets throughout its value chain and to all stakeholders. In this context, it proceeds again, in 2021, to the recogni- tion of the economic, social and environ- mental aspects of its activities and then proceeded to prioritize the essential issues of Sustainable Development related to its business model, based on the methodol- ogy of the internationally valid reference model GRI. The consultation was realized among rep- resentatives of the Group of the follow- ing key stakeholder groups: Sharehold- ers, Board of Directors, Employees, Clients (B2B), Suppliers/Partners, State and local authorities, Non-Prot Organization, Me- dia, Business Associations, Investment Community. The topics that emerged from the materi- ality analysis as material are: • Reduction of greenhouse gas emis- sions • Provision of innovative and sustain- able products within the context of circular economy • Reduction of waste and maximization of the possibilities of new treatment and recycling • Financial value creation / nancial per- formance of the Group • Safeguarding of quality, health and safety of customers • Creation and safeguarding of employ- ment • Safeguarding of employee health, safety and well-being • Defending human rights at work • Responsible corporate governance and safeguarding of business ethics and compliance • Ensuring business continuity and pre- paredness in emergencies Standards for the publication of non- nancial information The Report for the year 2020 is the 3 rd Sustainable Development Report of the Group and includes its approach and per- formance on the essential issues of Sus- tainable Development, with the ultimate goal of informing stakeholders about its economic, social and environmental im- pacts. It has been prepared in accordance with the recognized and internationally valid reference standard GRI (Global Re- porting Initiative): Core Selection, the UN Sustainable Development Goals and the ESG 2019 Information Disclosure Guide of the Athens Stock Exchange, in compliance with selected key, advanced and industry indicators. It is noted that the present Report con- cerns the scal year ended on 31 st Decem- ber 2021. However, due to the consistency and completeness of the information pro- vided and the comparability of the data, the corresponding numerical elements and data of the scal year ending 31 st De- cember 2020 are also presented. Page 98 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise SECTION XI: Non-Financial Report INTRODUCTION The current Non-Financial Report (State- ment) constitutes part of the Statement of the Board of Directors and contains information on all the activities of Thrace Group (hereinafter “the Group”) in the fol- lowing areas, as dened in section 7 “Non- Financial Report (Statement) of the circular 62784/2017 in accordance with the provi- sions of law 4403/2016: • Anti-corruption and bribery issues. • Respect of human rights. • Supply chain issues. • Social and labor issues. • Environmental issues/Climate change. Furthermore, the present report also in- cludes the thematic section “Impact of the COVID-19 pandemic on non-nancial is- sues” as well as the “Classication Report” in accordance with the Classication Reg- ulation 2020/852 / EU. Each of the above aspects is analyzed in three axes: • Main risks and their management • Due diligence and other policies • Outcomes of the above policies and non-nancial performance indicators The content of present Non-nancial Re- port (Statement) has been composed by taking into consideration the GRI Stand- ards, the SASB Standards as well as the re- newed ESG Reporting Guide of the Athens Stock Exchange 2022. The current Report (Statement) refers to the year ending December 31, 2021. For reasons of consistency, completeness of provided data and for comparability pur- poses, respective information for the pre- vious year, ending December 31, 2019 and 2020, is also provided. Annual Financial Report as of 31.12.2021 Page 99 of 260 Amounts in thousand Euro, unless stated otherwise Business Model Sales network in 80 countries around the world * Recycled raw materials originate from both the production process residues and from external sources. 28 dierent production technologies Group headcount: 2,201 employees (Including joint ventures) Replacement of virgin raw material with recycled plastic by 2025: 8,500 MT Use of recycled raw material: 11,443 ΜΤ Activity in 9 countries with production, commercial and distribution companies Activity in 3 sectors (Technical Fabrics, Packaging Solutions, Agricultural sector) Processing more than 110,000 MΤ of PP/PE per year The Group consists of 14 companies worldwide Products in 25 market segments Page 100 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise THRACE PLASTICS S.A. was founded in 1977 in the area of Magiko in the munici- pality of Avdera, Xanthi. Soon after its es- tablishment, it developed into one of the leading producers of Technical Fabrics and Packaging Solutions worldwide. Follow- ing the internal restructuring of the Group in the end of 2017, the parent company Thrace Plastics S.A. has been operating as a holding company under the name Thrace Plastics Co. S.A. Thrace Group is a multinational group of companies, operating in the production and distribution of polypropylene prod- ucts. It possesses production facilities in six countries, namely Greece, Scotland, Ireland, Bulgaria, Romania, and the United States of America. The Group operates dis- tribution and commercial companies in three countries, namely Norway, Sweden and Serbia. Its sales network extends to 80 countries. Thrace Group consists of the following companies: Companies Headquarters Thrace Plastics Co. S.A. Xanthi, Greece Thrace Nonwovens & Geosynthetics S.A. Xanthi, Greece Thrace Polylms S.A. Xanthi, Greece Thrace Eurobent S.A. Xanthi, Greece Thrace Plastics Pack S.A. Ioannina (Xanthi Branch), Greece Thrace Greenhouse S.A. Xanthi, Greece Thrace Synthetic Packaging LTD Clara, Ireland Thrace Ipoma A.D. Soa, Bulgaria Thrace Polybulk AS Brevik, Norway Thrace Polybulk AB Köping, Sweden Thrace Greiner Packaging S.R.L. Sibiu, Romania Lumite Inc. Georgia, USA Don & Low Ltd Forfar, Scotland Thrace Plastics Packaging DOO Nova Pazova, Serbia * The companies Thrace Eurobent S.A., Thrace Greenhouses S.A., Thrace Greiner Packaging S.R.L. and Lumite Inc. are joint ventures of Thrace Group, but are included in present Report in their entirety (100%), since they all apply the same sustainable development principles and values of the Group. It must be also noted that the table above includes only the companies that display an active commercial or production status. Group Prole Annual Financial Report as of 31.12.2021 Page 101 of 260 Amounts in thousand Euro, unless stated otherwise The Technical Fabrics sector specializes in the production and trading of synthet- ic fabrics for industrial and technical use. It operates through 6 subsidiaries of the Group, having an international focus. The Packaging sector focuses on the pro- duction and trading of industrial products, and is addressed to the European market, with an emphasis on Ireland and South- Eastern European countries. In particular it operates through 6 subsidiaries of the Group. Hydroponic Greenhouses using Geothermal energy Operating since 2013, with respect to- wards the environment and the customer, in Thrace Greenhouses S.A. 185 acres of pure and delicious vegetables using geo- thermal (renewable source of energy) and almost zero carbon footprint are cultivat- ed. The company possesses the largest hy- droponic greenhouses in S.E. Europe and the only ones in the world that are heated exclusively by geothermal energy. Awards • Thrace Group was awarded for the 11th consecutive year in the institu- tion of True Leaders organized by the company ICAP. • In the section “Innovation and New Technologies”, in the category “Smart Factory” the company Thrace Pack won a Bronze distinction, at the Manu- facturing Excellence Awards 2021. • Thrace Group was distinguished with an Extroversion Award at the Growth Awards ceremony organized by Eu- robank and Grant Thornton, on Octo- ber 8, 2021. Distinctions As part of the Group’s environmental poli- cy, in 2021, the companies Thrace Plastics Pack and Thrace Greiner Packaging re- ceived a Silver Medal in the evaluation by EcoVadis, while the company Thrace Poly- bulk received Eco-Lighthouse certication for sustainable environmental practices. Certications The companies apply certied Systems, according to international standards. The systems include actions and measures to protect the environment and ensure the proper use of the energy consumed. CERTIFICATIONS ISO 14001:2015 Environmental Management System Global GAP for the implementation of good agricultural practices ΙSO 50001:2018 Energy Management Systems ISO 9001:2015 Quality Management System Recyclass for the recyclability of plastic packaging OK Recycled BY TUV Austria for the recyclability of plastic packaging Business sectors and products Technical Fabrics sector Packaging sector Hydropinics greenhouses Page 102 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise In addition, in 2020 an Environmental Product Declaration (EPD) was issued based on the life cycle analysis for the fol- lowing 4 product of Thrace Greenhouses: • Tomato “beef” • Tomato bunch • Cucumber • Mini cucumber Our approach to Sustainable Development [ATHEX ESG C-S1: Participation of interested parties, C-G3: Substantial issues] In Thrace Group, the establishment of a di- alogue with the stakeholders is of great im- portance, as it helps the Group to operate more eectively, comprehend the market circumstances and mitigate any risks. The Group recognizes stakeholders as anyone signicantly aected by its activities and vice versa. Within this framework, it maps the stakeholder groups, recognizing their needs and expectations, which it prioritiz- es and takes into account in formulating the strategy and setting appropriate goals, which it reviews on an annual basis, while at the same time it monitors and improves the methods of consultation with them. Furthermore, their needs and expectations are communicated by the Sustainability Committee to the Board of Directors and the relative decisions are taken (see Moni- toring of Sustainable Development). More information regarding the type of commu- nication/consultation or/and frequency of communication with the stakeholders is available in the Sustainable Development Report in the website of the Thrace Group. Thrace Group proceeded to the publica- tion of the 3 rd Sustainable Development Report for the nancial year 2020, accord- ing to the GRI Standards and the ESG In- formation Disclosure Guide of the Athens Stock Exchange, in order to communicate the Group’s strategy, programs and results in the eld of Sustainable Development. The Group focuses on issues related to the creation of economic, social and envi- ronmental benets throughout the value chain and to all its stakeholders. In this context, it proceeded, in 2021, to the rec- ognition of the economic, social and envi- ronmental aspects of its activities and the prioritization of the essential Sustainable Development issues related to its business model, based on the methodology of the internationally valid GRI Standards. The consultation was realized among rep- resentatives of the Group of the following key stakeholder groups, with whom they maintain a relationship and communica- tion, in the context of their work: • Shareholders • Board of directors • Employees • Clients (B2B) • Suppliers/Partners • State and local authorities • Non-Prot Organizations • Media • Business Associations • Investment Community The topics that emerged from the materi- ality analysis as “material” are: • Reduction of greenhouse gas emis- sions • Provision of innovative and sustain- able products within the context of circular economy • Reduction of waste and maximization of the possibilities of new treatment and recycling Annual Financial Report as of 31.12.2021 Page 103 of 260 Amounts in thousand Euro, unless stated otherwise • Creation of nancial value and nan- cial performance of the Group • Ensuring the quality, health and safety of customers • Creating and securing employment • Ensuring the health, safety and well- being of employees • Defending human rights at work • Responsible corporate governance and assurance of business ethics and compliance • Ensuring business continuity and pre- paredness in emergencies In the Sustainable Development Report 2020 which is available at the Group’s website (https://www.thracegroup.com/ uploads_file/2021/10/19/p1fibm3bn- b14rd1cin1n2rrfhfmd5.pdf) all the steps of the materiality analysis procedure are outlined. (i.e. identication of recognized issues, changes related to the previous materiality analysis, policies or procedures applied and / or actions taken to manage the material issues, etc.). [ATHEX ESG C-G4 Sustainability Policy] The Group establishes, maintains and im- plements basic principles related to the pillars of society, the environment and the economy and it has developed a Sus- tainable Development Policy regarding the management of social, environmen- tal and corporate governance issues. The Sustainable Development Department aims to implement actions and initiatives that promote sustainable development and create value for the stakeholders, the market and society, in accordance with the Sustainable Development Strategic Plan, established by the Group. The strategic plan is based on the following strategic objectives, in accordance with the relevant Policy, each of which is analyzed in specic actions and activities and is bounded by specic targets. • Reduce greenhouse gas emissions in all processes • Improve product environmental im- pact • Implement circular economy projects • Improve the social aspects aecting all stakeholders • Ensure a responsible corporate gov- ernance. • Build awareness and obtain appropri- ate certicates and disclosures The Group participates in the new ATHEX ESG index of the Athens Stock Exchange, which monitors the stock market perfor- mance of listed companies adopting and promoting their environmental, social and corporate governance (ESG) practices. In addition, in 2021, in the context of strengthening the business culture in ESG issues, the Group developed a com- plete sustainable development manual for employees, designed exclusively for each company (Sustainability Handbook), which is an information guide for sustain- able management of economic, social and environmental issues. The manual intro- duces the reader to the basic concepts of sustainable development, analyzes the current legal framework, refers to recy- cling processes and greenhouse gas emis- sions at the plant, presents the life cycle assessment of some products, refers to the environmentally targeted platform “In the Loop” and presents the certications and evaluations that have been nalized. The manual is tailor-made to each company of the Group and is addressed mainly to the administrative level, to the technical managers of the facilities and to the sales managers, but it is also available to all the employees of the companies through an internal digital platform. Page 104 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Monitoring of Sustainable Development [ATHEX ESG C-G2: Monitoring of sustainable development] The primary purpose of the Sustainability Committee is to consider, promote and report periodically to Thrace Group Board of Directors (Board) on matters relating to the continuous improvement of the Com- pany’s ESG strategy development, man- agement and performance. The Sustainability Committee meets at least four times a year (regular meetings), or more regularly (extraordinary meet- ings) when necessary. The matters of sustainable development are discussed by the Sustainability Committee (which consists of executive and non-executive members of the Board), in accordance with the information received by the Com- mittee from the Sustainable Development Department and in particular through the Director, who acts as a secretary, so that, priorities and plans can be specied and the related goals and timelines can be set, along with the monitoring of their pro- gress towards their implementation. The Sustainability Committee then conveys the issues to the rest of the members of the Board of Directors (all the members of the BoD have opinion on ESG issues). In addition, in the context of strengthen- ing the capability of the members of the Board as to the management of ESG issues that are related to corporate strategy, an ESG Executive Seminar was organized and was attended by all members of the Board. Anti-corruption and bribery issues Main risks and their management The Group acknowledges the risks of cor- ruption or bribery that may occur through- out its value chain. Potential risks are be- ing monitored both in internal activities and in transactions with key stakeholders, such as suppliers and customers. We rec- ognize that corruption issues, including bribery and/or extortion, may have serious implications for the Group. These may af- fect the nancial capital, through possible nes or sanctions, as well as the social and human capital of the Group, by aecting its relations of trust with its stakeholders. It should be noted here that the impact on social and human capital can also have a direct impact on the nancial capital, due to a possible decline in revenue as a result of those eects. The Management of the Group is commit- ted to zero tolerance of corruption, bribery and extortion incidents and aims at pre- venting them throughout its activities by conducting its business with integrity, in ac- cordance with the highest voluntary stand- ards of ethics as well as applicable laws. Re- spective policies and procedures have been established and communicated within this framework, as well as mechanisms for con- trol and compliance with standards and laws. Primary goal is to strengthen and im- prove anti-corruption management proce- dures, comply with legislation and intensify controls. Additionally, relevant policies are included: • In the Code of Ethics and Conduct. Due diligence and other policies Annual Financial Report as of 31.12.2021 Page 105 of 260 Amounts in thousand Euro, unless stated otherwise • In the “General Policies Manual”, which is available electronically or has been distributed to senior and middle man- agement executives, while all other employees have been trained respec- tively. To prevent corruption incidents, the Group operates proactively by conducting rele- vant updates and audits on an annual basis, through the internal audit department. The results of the audits are being communicat- ed to the management teams of the com- pany. To further discourage involvement in an incident of corruption and/or bribery, the Management uses disciplinary meas- ures which ensure safeguard the operation of the Group in accordance with the inter- nal regulations. In case an incident is detected, the Manage- ment of the Group is informed and decides upon further actions to be taken. Within the framework of supporting inter- nal procedures to combat corruption and bribery while aiming at deterring oending practices: • The Audit Committee has been estab- lished and has been entrusted with selecting and supervising the external auditors and notifying the results of the statutory audit to the Company’s BoD, monitoring the nancial report- ing process and the internal audit and risk management systems, as well as supervising the Internal Audit and Risk and Compliance Units. Code of Ethics and Conduct [ATHEX ESG C-G5: Business Ethics Policy] The rm commitment of the Group is to conduct its business activity with integrity, taking into account the precautionary prin- ciple, in accordance with the highest ethical standards and applying the applicable laws. The Code of Ethics and Conduct, denes the standards of conduct required by the employees of the Group companies and is valid in each country where Thrace Group operates. The central theme of the Code of Ethics and Conduct can be summarized as follows: All employees, as representatives of the Group, must act with honesty, respect and integrity in all matters at all times. The basic Principles of the Code are: • Observance of the Laws and the Social Rules • Prevention of Conict of Interests • Accuracy and Completeness of Finan- cial Information • Protection of Company Assets • Realization of all Transactions Respon- sibly • Transparent and Legal Cooperation with Public Authorities • Personal Data Protection • Safety, Health and Environmental Pro- tection • Continuous Evolution of Employees’ ca- pabilities Risk management issues regarding corrup- tion and bribery related to the Group’s sup- ply chain are described later in the docu- ment in the corresponding section. Page 106 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Outcomes of the above policies and non-nancial performance indicators [GRI 205-3: Confirmed incidents of corruption and actions taken] [ATHEX ESG Α-G2: Business ethics violations] There have been no conrmed cases of cor- ruption or bribery during 2021. Similarly, no relevant intent and/or conduct of corrup- tion or bribery, thus no nancial damage as a result of violating the Code of Ethics and Conduct, have come to the attention of the Group. Respect for Human Rights Main risks and their management The Group recognizes the risks related to human rights both in the workplace of the companies and throughout the supply chain, such as potential discrimination of employees due to their race, religion, gen- der, nationality, beliefs, age, etc., violation of employee and other stakeholder per- sonal data, forced and child labor. These risks can aect the nancial, human and social capital of the Group, with nega- tive impacts on its reputation and social license to operate, while also leading to legal sanctions. The management of risks related to human right issues in relation to our supply chain are described in the cor- responding section below. All people working in the Group, as well as its suppliers, must adhere to the due dili- gence policies of the Group regarding hu- man rights. The Group through the Code of Ethics and Conduct is committed to zero tolerance for harassment in the workplace, for all forms of discrimination on grounds of race, religion, gender, nationality, age, disability, sexual orientation, etc. both at the parent company and its subsidiaries, as well as in their supply chain. The Group strives as much as possible to ensure that other cooperating parties are governed by the same principles. The Group is committed to resolving com- plaints and treating its employees in a fair and impartial manner, recognizing the risk of abuse of their rights and the con- sequences that this may have on the well- being of its employees. Protection of employees from incidents of harassment and discrimination in the workplace The Group, although it does not have a separate Human Rights Policy, implements a series of actions to minimize the risk of harassment and incidents of discrimina- tion and general human rights violations. The following are indicative: h Informs for all Policies in eect, the companies Top Management, which then inform the employees respec- tively. h Informs the employees through the Internal Labor Regulations. Due diligence and other policies [ATHEX ESG C-S6: Human rights policy] Annual Financial Report as of 31.12.2021 Page 107 of 260 Amounts in thousand Euro, unless stated otherwise h Has adopted the Code of Ethics and Conduct, various corporate directives and internal regulations related to hu- man rights. h Urges employees to report to their su- pervisor or human resources depart- ment any case that may come to their notice and is contrary to the Code of Ethics and Conduct and other Group Policies. h Investigates all complaints of harass- ment or discrimination in the work- place made through the reference lines to the local Management and then to the Management of the Group and takes the appropriate preventive and / or disciplinary measures, under the supervision of the heads of depart- ments in cooperation with the human resources department of each com- pany. In addition, in 2021 the Group developed a system for submitting anonymous or named reports by em- ployees (whistleblowing mechanism platform) that will be activated in the rst months of 2022, through which employees can report oending be- haviors and situations, which are then investigated by the Group. Safety of facilities and protection of human rights In the Group, safety measures are applied to its facilities so that they adhere to the international principles for human rights and the implementation of the law. For instance, the companies conduct safety risk assessments on a regular basis, which are submitted - upon request - to labor in- spectors and certication bodies, conrm- ing that the measures taken are in line with safety risk and applicable legislation. Commitment against forced and child labor The Group through the Code of Ethics and Conduct is committed to zero tolerance for forced labor and child labor both at the parent company and its subsidiaries, as well as in their supply chain. Safeguarding of personal data [ATHEX ESG C-G6: Data security policy] The Group recognizes that personal data pro- tection is crucial and thus respects the privacy of its stakeholders and treats their personal data as strictly condential, in compliance with the relevant legislation. It strictly follows the General Data Protection Regulation 2016/679 (EU GDPR), as well as the national legislation 4624/2019, concern- ing the protection of individuals against the processing of their personal data. Since 2018, technical and organizational measures are applied in order to comply with the require- ments of the Regulation, audits for its applica- tion by subsidiaries and periodic training of employees. At Group level, a Data Protection Ocer has been appointed. Furthermore, an insurance contract for the case of personal data loss has been estab- lished. The Privacy Policy is available in the Group website at: https://www.thracegroup.com/ gr/el/privacy-policy/ . Page 108 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Outcomes of the above policies and non-nancial performance indicators [GRI 406-1: Incidents of discrimination and corrective actions taken] In 2021, in the Group: • There were no incidents of discrimina- tion based on race, religion, gender, age, disability, nationality, political be- liefs, etc. including incidents of harass- ment and/or total human rights viola- tions, in all the activities and facilities of the Group. • There were no conrmed cases of pri- vacy infringements . In the Group, besides the nancial risks which are related to its supply chain, main- ly depending on the uctuations in raw material prices and especially polypropyl- ene, non-nancial related risks are recog- nized as well, such as cooperating with suppliers and partners that do not comply with international standards of sustain- able development. More particularly, the Group focuses on supply chain risks that are related to hu- man rights protection, labor issues and an- ti-corruption, since their implications may aect the reputation of the Group and the relations of trust with stakeholders. Supply Chain Issues Main risks and their management Due diligence and other policies [ATHEX ESG C-S8: Supplier assessment] The assessment and selection of suppliers is an essential business operation to achieve a responsible supply chain. Having recog- nized this need, the Group has adopted special practices to determine if a supplier meets the requirements and conditions set in their cooperation with each other. The supplier assessment process is realized using a special assessment form, that has been developed by certain companies of the Group and through which the suppliers are required to complete this form in order to be assessed on several areas such as: • Management systems possessed (ISO certications etc.) • Production processes (product avail- ability, environmental compliance etc.) • Quality management (information re- lated to quality controls etc.) • Customer satisfaction (quality stand- ards, product traceability etc.) • Research and development (informa- tion on research and development de- partments, protection of personal data etc.) The categories of the Group’s suppliers vary depending on the company and the main categories include: • Suppliers of raw materials and market- able goods • Suppliers of electric energy Annual Financial Report as of 31.12.2021 Page 109 of 260 Amounts in thousand Euro, unless stated otherwise • Suppliers of equipment, packaging, spare parts • Partners providing logistical support services, transportation, logistics, out- sourcing • Partners providing consulting services, telecommunication services and infor- mation technology. The group is in the phase of dening the process, through which suppliers are re- quired to respect the ocial Code of Ethics and Conduct and to state that they follow similar principles and which are analyzed in the following key issues: • Work • Environmental • Health and safety • Ethics • Human rights. Combating of corruption in the supply chain The Group is aware of the risk that a busi- ness partner or supplier may be involved in corruption incidents, and thus undertakes all necessary actions, through the due dili- gence process, to ensure maximum trans- parency in new business relations. Further- more, the Group is committed to ghting corruption in its transactions with existing suppliers and business partners. More specically, approximately 80% of our collaborations are with large multinational companies, which focus on transparency and combating of corruption and, thus, co- operation is further ensured by their rules and policies of the specic suppliers. Human rights in the supply chain [ATHEX ESG C-S6: Human rights policy] The Group has adopted policies to avoid en- gaging with suppliers/partners with a high risk of violating human rights. The Group is committed and promotes constant im- provement of the standards concerning international human rights in its interac- tions with suppliers or business partners. All Group companies comply with the policy of the Group concerning human rights. No actions have been assumed for the de- tecting of human rights violation in the full spectrum of the supply chain. However, the fact that most suppliers operate in the U.S. and EU countries, where labor legislation is applied and the states are particularly sen- sitivity on human rights issues, ensures at a certain extent the minimization of the risk for potential infringements in the supply chain of the Group. The employees of the companies of the Group have the right and obligation to re- port any violations (through whistleblow- ing mechanism) involving cases that might lead to an increased risk for modern slavery in their supply chain. Modern Slavery Act The Group has zero tolerance for viola- tions of the UK Modern Slavery Act 2015 or the breach of terms in individual agree- ments with specic suppliers. This state- ment is drawn in accordance with article 54 (1) of the UK Modern Slavery Act 2015 and denes the steps that Thrace Group has already taken and continues to take to prevent modern slavery or human track- ing incidents within its business and supply chain. The Group recognizes the impor- tance of combating slavery, forced labor and human tracking (“Modern Slavery”), a set of issues with continually growing interest that aect communities and indi- viduals all over the world. The Group ap- plies a zero tolerance approach to all forms of Modern Slavery within its operations and Page 110 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise supply chain, to the extend in which it can be identied, and recognizes that no sector of its business operations can be excluded. The Group is committed to act with integri- ty and transparency on this sensitive matter and is aware of its responsibility to detect all risks within its business and the wider supply chain. Outcomes of the above policies and non-nancial performance indicators The table below provides information on the Group supply chain, as well as for the spending of Group companies on local suppliers, based on their country of origin. In 2021, no incidents of a UK Modern Slav- ery Act 2015 violation were reported to the Group or to the companies of the Group, where the latter are operating. [GRI 102-9:Supply chain– Total number of suppliers] Total number of Suppliers 2021 2020 2019 Don & Low LTD 534 526 826 Thrace Nonwovens & Geosynthetics S.A. 999 874 882 Thrace Ipoma A.D. 549 586 716 Thrace Greiner Packaging S.R.L. 380 409 409 Thrace Greenhouses S.A. 294 322 321 Thrace Polylms S.A. 525 518 452 Lumite INC 436 413 394 Thrace Synthetic Packaging LTD 319 272 300 Thrace Polybulk AS & AB 20 20 20 Thrace Plastic Pack S.A. 992 913 889 Thrace Eurobent S.A. 120 136 115 Thrace Plastics Co S.A. 175 131 137 Thrace Plastics Packaging DOO 105 95 101 * Companies of the Group have as suppliers companies of the Group respectively and they have been included in the above gures. Annual Financial Report as of 31.12.2021 Page 111 of 260 Amounts in thousand Euro, unless stated otherwise [GRI 204-1: Proportion of spending on local suppliers] 2021 2020 2019 Estimated monetary value of total spending on suppliers (mil.€) Don & Low LTD 61.9 58.0 57.0 Thrace Nonwovens & Geosynthetics S.A. 113.5 86.0 87.0 Thrace Ipoma A.D. 24.8 16.5 21.0 Thrace Greiner Packaging S.R.L. 17.3 12.8 14.9 Thrace Greenhouses S.A. 4.9 5.1 5.3 Thrace Polylms S.A. 30.4 26.0 20.0 Lumite INC 24.8 15.8 16.7 Thrace Synthetic Packaging LTD 14.2 13.3 9.0 Thrace Polybulk AS & AB 19.0 21.4 23.2 Thrace Plastics Pack S.A. 63.5 51.5 45.9 Thrace Eurobent S.A. 6.8 5.0 5.4 Thrace Plastics Co S.A. 3.9 2.9 2.6 Thrace Plastics Packaging DOO 4.7 4.2 3.1 Percentage of spending on local suppliers Don & Low LTD 64% 77% 84% Thrace Nonwovens & Geosynthetics S.A. 78% 77% 78% Thrace Ipoma A.D. 55% 58% 53% Thrace Greiner Packaging S.R.L. 25% 26% 22% Thrace Greenhouses S.A. 99% 98% 99% Thrace Polylms S.A. 66% 67% 61% Lumite INC 65% 66% 73% Thrace Synthetic Packaging LTD Non-signicant percentage spent on local suppliers. The main suppliers of the company are the Group subsidiaries. Thrace Polybulk AS & AB 3% 1% 5% Thrace Plastic Pack S.A. 81% 79% 72% Thrace Eurobent A.B.E.E. 49% 59% 67% Thrace Plastics Co S.A. 94% 93% 87% Thrace Plastics Packaging DOO 23% 22% 24% Page 112 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise The Group and its companies fully comply with local labor legislations, taking into ac- count the international directives related to labor issues. The Group recognizes the risks associated with labor and social issues, namely the right of workers to form and participate in trade unions; human resource manage- ment; health and safety in the workplace; training and education of employees; con- sumer safety; and development of rela- tionships with the local community. Regarding its products, it recognizes and seeks to eliminate the risk of harming hu- man life and health by taking measures to avoid ingredients, defects or side eects that could harm and/or threaten human life and health during construction, use and/or disposal of products. Such a risk may have an impact on the nancial capi- tal of the Group, for instance with possible nes or penalties for aecting consumer health, as well as on the social capital of the Group, for instance by disrupting the relations of trust with customers and other stakeholders. The Group also recognizes the inuence and the opportunities, which could aect local communities through the activities of its companies, which may aect its social capital with potential im- pact on local employment, as well as in the eld of local human rights for the residents of the area or local communities overall. Labor issues Social and Labor Issues Main risks and their management Due diligence and other policies The Group recognizes the value created by human capital and considers it crucial for the high productivity, performance and the assurance of a competitive advantage. In this context, it seeks to deploy – to the best of its ability – of its existing person- nel, its training, further stang of its de- partments with new employees, as well as the safeguarding of its health and safety. Moreover, the management promotes with various ways the strengthening of policy measures against discrimination, as mentioned above. Freedom to participate in trade unions and the right of collective bargaining The Group management respects the right of employees to participate in trade un- ions as well as in primary, secondary and tertiary associations. The Group adheres to the Internal Labor Regulation, which have been established in collaboration with representatives of employees and have been submitted to the labor inspectorate. The Regulation further enhances the regu- lar communication between the Manage- ment and the representatives of employ- ees, which aims at presenting the requests of employees ocially submitted in the unions, as well as discussing any other is- sue related to the workplace and health and safety at work. Recruitment process For the recruitment of new employees the Group is based on objective criteria, thus excluding any possibility of discrimination due to gender, age, marital status, nation- ality, religion, sexual orientation, political beliefs, etc. In order to ll job vacancies, the Group Annual Financial Report as of 31.12.2021 Page 113 of 260 Amounts in thousand Euro, unless stated otherwise rst oers employees the opportunity to express their interest in the new position through the process of internal mobility of employees and if a position is not lled in- ternally, then it proceeds by notifying the general public. More specically, the Group follows two alternative recruitment procedures, de- pending on the category of the employees that it intends to recruit and into which it participates a particular assessment com- mittee of the candidates in order to secure the transparency of the procedure. The categories are: a) production worker (blue collar worker) and b) administration em- ployee (white collar worker). It is worth noting that part of the recruit- ment strategy is the support of local communities, through the recruitment of candidates from the communities where Group companies are operating, as well as graduates of local educational institutions and universities, thus contributing to the retention of young people in peripheral areas. Equal pay policy and equal opportunities [ATHEX ESG A-G4: Variable pay] The Group applies a remuneration policy for the members of the Board of Direc- tors, which denes the existing rights of the Board members, the obligations of the Group towards them and the conditions upon which remuneration will be provid- ed to the members as long as it applies. Within the Group the level of xed remu- neration is determined by the rule of fair and equal payment to the most suitable individual, considering the responsibili- ties, knowledge and experience required for each role. It also ensured that the Group does not make excessively payments, while always ensuring the long-term interests and the sustainable development of the Group, based on the following principles: • Providing a fair and appropriate level of xed remuneration while avoiding variable remuneration and unneces- sary risk-taking, to encourage contin- ued value creation. • Providing incentives to ensure the fo- cus on corporate goals that will create value over time. • Rewarding short-term goal achieve- ment, which leads to value creation for the Company in the long run. The Remuneration Policy that includes information for the variable payments, as well as the methodologies, assumptions and tools utilized in the calculations are available in the website of the Group. The Group has a Payroll and Personnel Management Policy in order to dene a structured management framework of human resources and of all its parameters for the Group companies, through the es- tablishment and observance of common principles and rules harmonized with the general strategy and culture of the Group. More specically, it is sought: • The harmonization of remuneration with the annual budget of the com- pany, as approved by the Top Manage- ment of the Group. • The optimal management and utiliza- tion of the company’s employees and all its parameters, such as the control of recruitments, internal movements, the planning of the annual leave, etc. • The personal development of all that is supported through an eective sys- Page 114 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise tem of professional training and eval- uation of the employees of the Group companies. • The connection of professional devel- opment and the salaries that employ- ees receive with their personal perfor- mance. Health, safety and well-being of employees Basic business practice of the Group is to ensure the health of our employees, by setting as strategic goal the minimization of any probability of a workplace accident as well as the manifestation of occupation- al diseases among its people. As part of good practice in health and safety, in 2021 the company Thrace Plas- tics Pack won an award at the Health & Safety Awards held at the Stavros Niarchos Foundation. Adoption of Health, Safety and Environmental Policy The Group implements a Health, Safety and Environmental Policy, within the con- text of ISO standard 45001:2018 for health and safety in the workplace which covers all the employees of the Group and its sub- sidiaries and has the following aims: • The training of 100% of the person- nel in the facilities throughout the countries where the Group is operat- ing in Health and Safety issues in the workplace, with particular emphasis on introductory sta training, which includes guidelines for safe work. • Assessment and prioritization of occu- pational hazards in the workplace and denition of relevant corrective/pre- ventive actions in order to eliminate the identied hazards and minimize the probability of causing an accident or incident • Operations in compliance with the ap- plicable health and safety legislation and all relevant legislative require- ments and standards. • The application of measures for the prevention of health and safety acci- dents and incidents. • The training and brieng of employ- ees on matters of health and safety in the workplace, as well as their partici- pation in related actions. Health and Safety Practices In order to achieve the goals set by the Group, the following procedures are in- dicative: • Realization of training sessions on health and safety issues, taking place both internally in the Group and in collaboration with external partners. More specically, for 2021, given the restrictions due to the COVID-19 pan- demic, a limited number of employee training sessions were realized. • Engagement of health and safety of- cers in the facilities, per plant or de- partment. • Investment in equipment, machinery and risk assessment studies in the fa- cilities of the Group, in order to ensure a safe environment. It collaborates with specialized partners with long and proved experience on matters of safety, for the detection and handling of risks. • Application of a safety plan, since 2017, according to which, meetings are organized with the project teams in the facilities for the identication and handling of risks. Within this Annual Financial Report as of 31.12.2021 Page 115 of 260 Amounts in thousand Euro, unless stated otherwise framework, project teams have been created per facility, which meet once per month, list the risks identied and handled, get informed on issues relat- ed to safety, discuss and take relative actions. • Communication campaign to further raise awareness among the employ- ees regarding safety issues, by placing safety messages and rules in central spots of the facilities, providing appar- el with the corresponding messages, etc. • Recording and investigation of acci- dents/incidents where the employees are encouraged to report any dan- gerous work practices or safety risks they are being faced with at work. The procedure of receiving and handling health and safety complaints by em- ployees is treated as condential. Oc- cupational hazards have been identi- ed, assessed and prioritized and the relevant corrective / preventive ac- tions have been dened in order to eliminate the identied hazards and minimize the chances of causing an accident or incident. Through special occupational risk assess- ment studies (ORAS), there are identied any possible risks for every working posi- tion. Some of the practices applied are the following: • The health and safety information and procedures are at the disposal of employees in all the languages of the countries where the Group is operat- ing and in a completely understand- able way. • The responsibilities for the health and safety obligations are specied for every company by the Director of the plant, in collaboration with the Safety Technician and the Occupational Phy- sician. • The incidents related to health and safety (accidents/incidents, regardless of their severity) are recorded and in- vestigated accordingly. • Employees are encouraged to report any possible dangerous work practic- es or safety risks they are being faced with at work while the procedure of receiving and handling health and safety complaints by employees is treated as condential. • The production processes, machin- ery and equipment of the Group are systematically monitored, in order to ensure that they are safe and in good condition for use during work. • First aid kits and re extinguishers are readily available and emergency exits are clearly marked and kept clear from obstruction. • The workplace is maintained in a good condition consistently and continu- ously, in order to safeguard clean and comfortable working conditions, in- cluding the proper temperature, ven- tilation and lighting. Proper use of safety equipment The Group ensures that all its employees are provided with the equipment neces- sary to realize their tasks safely and that they are well informed about the proper use of the equipment and the risks in- volved in their work. Primary concern of the Group is to provide to its employees with all the necessary Personal Protective Equipment. Indicative of the Personal Protective Equipment, pro- vided by Thrace Plastics Pack S.A., are the following: Page 116 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise z Safety footwear z Earplugs z Headphones z Dust masks z Fire-proof gloves z Safety helmets z Protective eyewear Continuous employee training and development The Group oers extensive vocational ed- ucation and training, aiming at the devel- opment of its employees, as it utilizes the latest production methods which require continuous training. Therefore, it actively adds value to its personnel in its interest, as well as in the interest of society in gen- eral. The training of employees is realized by deploying both internal resources and external consultants with extensive kno- whow, who are collaborating with each company of the Group separately. Through this training, the employees acquire a lot of experience, which enables them to ad- dress their job requirements. The main priority of the Group is to oer complete and innovative solutions that are adapted to the needs and require- ments of its customers, in the safest and most sustainable way. Product safety and consumer & end user health and safety ATHEX ESG SS-S1:Product quality and safety The products of Thrace Group reect its vision in relation to the quality and safety of the customer. To achieve this, the Group complies with the relevant national laws and adopts international guidelines, safe- ty rules, best practices and industry stand- ards, regarding the production and design of products in all its facilities, taking into account any impacts of its products in the health and safety of customers, consumers and end users. Special attention is paid to the produc- tion of packaging coming into contact with food, due to the increased risk for the health and safety of the consumer. The Group companies that are operating in the production and/or trade of packaging products are the following: • Thrace Plastics Pack S.A., Ioannina / Xanthi, • Thrace Ipoma A.D., Bulgaria • Thrace Greiner Packaging S.R.L., Ro- mania • Thrace Synthetic Packaging Ltd., Ireland • Thrace Plastics Packaging DΟΟ, Serbia Regarding the treatment and manage- ment of this critical issue, for public health, all the companies of the Group apply poli- cies and procedures, which meet the com- mitment of the Group which consists of: • In the non-manufacture and non-sale of products that cannot be used safely. • In the adoption of appropriate work practices and maintenance of facili- ties. Food packaging Social issues Annual Financial Report as of 31.12.2021 Page 117 of 260 Amounts in thousand Euro, unless stated otherwise Masks Similarly, upon the production of masks, in particular by Thrace Polylms, the Group focuses particularly to the safeguard of end users health and safety. To that end, the practices realized are the following: • Accreditation of the Company with a Quality Management System certied by ISO 13485:2016 for medical devices. • Registration of the Company and its products in the Registry of the Nation- al Organization of Medicines (Greece) and, then, licensing for the production of medical devices. • CE marking on the surgical masks, in compliance with Regulation (EU) 2016/425 and Regulation (EU) 2017/745 for medical devices. • Certication of the mask and the tech- nical fabrics by STANDARD 100 of OE- KO-TEX®, Class I. • Certication of the Company with COVID-Shield certication. • Implementation of Quality Policy and COVID-Shield Policy. Product Responsibility Policy Implementation of a series of procedures and best practices, such as: • Dissemination of a culture of quality throughout the Group, which incor- porates all the personnel. • Establishment and maintenance of collaborations with suppliers and cli- ents aiming at an optimized added value for the supply chain. • Establishment and maintenance of a Quality Management System, con- rming to customers that the prod- ucts and services received are char- acterized by their proper use and standard quality (in accordance with ISO standards). • Investment in the latest technologies related with the sector of operations of the Group. • Use of statistics techniques to monitor processes and track trends The Group has adopted management systems based on international standards (BRC, ISO 22000, FDA and IFS) and imple- ments procedures for maintaining a Qual- ity Management System, including: • Annual analysis of the percentage of plastic that migrates to food. • Microbiological analysis. • Water analysis. • Risk analysis. • Contamination of the product. • Carrying out internal inspections. • Product recall procedures. • Internal and external conditions of the facilities. • Implementation of security measures. • Clear denition of the process area and product ow and application of standards and cleaning procedures. • Regular maintenance of equipment. • Controlled movement and distribu- tion of products. • Systematic training of employees. Page 118 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Main stages of the Quality Assurance Process Based on the Quality Management Plan, there are levels of control throughout all the stages of the production process, from receipt to loading: h Supplier and Raw Material Control: 1. Evaluation of suppliers (cost, avail- ability, certications). At this stage criteria are possession of certica- tions for environmental manage- ment system and energy manage- ment system (ISO 14001, ISO 50001) and the supply of raw materials that are recyclable (lm, pallets and oth- ers). A requirement of the Group companies is the submission by the supplier of Safety Data Sheets for all raw materials, in order to receive guarantees for the supply, use and storage. 2. Supply of raw materials only from suppliers approved on the basis of the above criteria. 3. Evaluation of raw materials through trial product production and labora- tory comparison with products pro- duced using dierent raw materials. h Product Control: Control of products at all phases of produc- tion (dimensional inspection, inspection of mechanical attributes based on inter- national standards, compliance of product with the specications and requirements of the client). h Control of Transport Packaging: • Packaging based on the technical specications of the products, with a specic number and arrangement of items as well as a specic type of car- ton box to ensure smooth and safe de- livery to the client. • Realization, upon loading, of visual quality inspection to check the suit- ability of the products to be loaded. • Application of bar code systems, which ensure the loading of approved products only. h Customer Satisfaction Control: Regular phone or face-to-face commu- nication between executives of the sales department and clients in order to listen to their needs and optimize the services provided. Support of local communities The Group seeks to be informed about the needs of citizens and the societies where it operates. Through these channels, it re- ceives relevant requests for support of social programs. It then evaluates them, prioritizes them and proceeds to the de- sign and implementation of programs and actions, with criteria to meet the real and important needs of each local community, but also those that are more in line with the Group’s Sustainable Development strategy, the number of beneciaries , as well as the nature of its activities. Applying a single approach, all of our com- panies recognize their responsibility to- wards people and society as a whole. The goal of the Group companies is to: • Stand out as the most valuable corpo- rate entities for the communities where they are operating and growing, while maintaining the trust they have built over all those years of their co-exist- ence. Annual Financial Report as of 31.12.2021 Page 119 of 260 Amounts in thousand Euro, unless stated otherwise • Remain sensitive to the local needs and enhance the quality of life by funding social programmes and institutions. • Collaborate with important education- al institutions to promote innovation and the development of knowledge. • Bring out and handle signicant social issues related to the business practices of the Group. Stavros Chalioris Social Center The Social Centre “Stavros Chalioris” is a civil non-prot company situated in the local community of Magiko in the municipality of Avdera in the region of Xanthi, which has been operating since 2010. It is named af- ter the late Stavros Chalioris, founder and chairman of Thrace Group, who envisioned its creation. The purpose of the operation of the Social Centre is to actively contribute to the local community through educational, cultural, recreational and social activities, addressed to both children and adults. At the same time, the Social Centre organizes: • Events, celebrations and excursions of educational and recreational character for its members. Movie screenings for children • Cultural, social and educational day- seminars in collaboration with local bodies and scientic partners. The actions of the Social Centre include: • Granting of scholarships and nancial aid to young people living in the wider area, who wish to study but are unable to cover their study expenses. • Financial support or coverage of the cost of treatment/hospitalization for patients in need in the wider area. Moreover, a medical centre is operating in the premises of the Social Centre, oering primary healthcare services to the inhabit- ants of the wider area. At the same time, the Centre hosts the meetings of the Open Care Centre for the Elderly of Magiko. Due to the special circumstances that prevailed due to the pandemic, the Social Centre focused on the support of health units (health centres and the hospital of Xanthi) and social insti- tutions by providing them with equipment and by donating face masks and protective uniforms. Finally, the current impact of cli- mate change globally demands for actions that the Social Centre will launch in 2022, aiming at raising awareness among the lo- cal communities and children regarding ecology and the use of renewable sources of energy. Donations Moreover, our subsidiary Thrace Green- houses, driven by the motto “Nothing goes to waste”, is developing initiatives to reduce food waste. Since 2020, the company has been collaborating with the non-prot or- ganization “Boroume”, thus actively sup- porting food charities throughout Greece. Based on the estimations of the network “Saving & Oering Food”, the foodstus oered in total, up to now, correspond to 15,290 food portions. Moreover, the com- pany supports the employees of the companies of Thrace Group through the distribution of food- stus (www.thracegreenhouses.com/gr/el/ aeiforos-anaptiksi/ ). Page 120 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Outcomes of the above policies and non-nancial performance indices Labor issues [GRI 102-41: Collective bargaining agreements] [ATHEX ESG C-S7: Collective bargaining agreements] Companies Percentage of employees covered by collective agreements Thrace Plastics Co S.A. 100% Thrace Nonwovens & Geosynthetics S.A. 100% Thrace Polylms S.A. 100% Thrace Eurobent S.A. 100% Thrace Plastics Pack S.A. 100% Thrace Greenhouses S.A. 100% Thrace Synthetic Packaging LTD 10% Thrace Ipoma A.D. 0% Thrace Polybulk AS 0% Thrace Polybulk ΑΒ 0% Thrace Greiner Packaging S.R.L. 99% Lumite INC 0% Don & Low Ltd 80% Thrace Plastics Packaging DOO 0% The tables following below include information about the human resources of the Group . [GRI 102-8 – Total number of employees] Total number of employees by type of employment contract 2021 2020 2019 Men Women Total Men Women Total Men Women Total Change (2021 vs 2020) Indenite term 1,450 359 1,809 1,377 411 1,788 1,461 371 1,832 1% Fixed term 224 168 392 272 142 414 150 120 270 -5% Total 1,674 527 2,201 1,649 553 2,202 1,611 491 2,102 0% Annual Financial Report as of 31.12.2021 Page 121 of 260 Amounts in thousand Euro, unless stated otherwise Total number of employees by type of employment 2021 2020 2019 Men Women Total Men Women Total Men Women Total Change (2021 vs 2020) Full-time employment 1,670 514 2,184 1,644 526 2,170 1,607 474 2,081 1% Part-time employment 4 13 17 5 27 32 4 17 21 -47% Total 1,674 527 2,201 1,649 553 2,202 1,611 491 2,102 0% 2021 2020 2019 Total number of employees by geographical area Men Women Total Men Women Total Men Women Total Greece Indefinite term 853 112 965 759 129 888 797 116 913 Fixed term 219 160 379 242 132 374 148 118 266 Total 1,072 272 1,344 1,001 261 1,262 945 234 1,179 USA Indefinite term 108 49 157 105 46 151 113 48 161 Fixed term 2 5 7 5 2 7 2 1 3 Total 110 54 164 110 48 158 115 49 164 Romania Indefinite term 63 33 96 68 35 103 72 31 103 Fixed term 0 0 0 0 0 0 0 0 0 Total 63 33 96 68 35 103 72 31 103 Norway Indefinite term 6 7 13 8 6 14 8 6 14 Fixed term 0 1 1 0 1 1 0 0 0 Total 6 8 14 8 7 15 8 6 14 United Kingdom Indefinite term 294 69 363 298 72 370 339 102 441 Fixed term 2 1 3 25 5 30 0 0 0 Total 296 70 366 323 77 400 339 102 441 Ireland Indefinite term 33 14 47 52 54 106 30 7 37 Fixed term 1 1 2 0 1 1 0 1 1 Total 34 15 49 52 55 107 30 8 38 Serbia Indefinite term 5 3 8 4 3 7 4 4 8 Fixed term 0 0 0 0 0 0 0 0 0 Total 5 3 8 4 3 7 4 4 8 Bulgaria Indefinite term 88 72 160 83 66 149 98 57 155 Fixed term 0 0 0 0 1 1 0 0 0 Total 88 72 160 83 67 150 98 57 155 Total Indefinite term 1,450 359 1,809 1,377 411 1,788 1,461 371 1,832 Fixed term 224 168 392 272 142 414 150 120 270 Total 1,674 527 2,201 1,649 553 2,202 1,611 491 2,102 Page 122 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise [ATHEX ESG C-S4: Employee turnover] C-S4: Employee turnover 2021 2020 2019 Voluntary turnover index 11% 11% 16% Involuntary turnover index 10% 10% 7% * (The indices refer to the rate at which the employees leave the company). Including the companies of the Group in Greece, USA, Romania, Norway, United Kingdom, Ireland, Serbia, and Bulgaria. [ATHEX ESG C-S2: Female employees] [ATHEX ESG C-S3: Female employees in management positions] C-S2: Female employees ** 2021 2020 2019 Percentage of women (in the Group in total) 23.9% 25.1% 22.7% C-S3: Female employees in managerial positions ** 2021 2020 2019 Percentage of women in managerial positions 18% 20% 22% ** Including the companies of the Group in Greece, USA, Romania, Norway, United Kingdom, Ireland, Serbia, Bulgaria. 2021 2020 2019 Percentage of women in the Board of Directors 18% 0% 0% * fullling however the requirements of Article 3, of L.4706/2020, for adequate representation per gender in the Board of Directors Data on the basic wage and salary ratio between women and men will be available in the 2021 Sustainable Development Report, which will be publish within the year. Employee training Detailed data regarding the training of employees (e.g. average training hours per em- ployee) will be issued in the Sustainable Development Report of Thrace Group for 2021. Annual Financial Report as of 31.12.2021 Page 123 of 260 Amounts in thousand Euro, unless stated otherwise Occupational Health and Safety [GRI 403-9: Work-related injuries] Injuries at work Direct Labour Indirect Labour 2021 2020 2019 2021 2020 2019 Number of fatalities due to injury 0 0 0 0 0 0 Degree of fatality due to injury 0 0 0 0 0 0 Number of severe injuries (excluding fatalities) 0 0 1 0 0 0 Degree of severe injuries (excluding fatalities) 0 0 0.05 0 0 0 Number of conrmed injuries 49 33 45 4 0 2 Degree of conrmed injuries 2.67 1.77 2.34 10.5 0 7.8 Number of days lost due to injury 708 398 369 0 0 0 Injury Severity Score 38.6 21.3 19.2 - - - * Data for the years 2019 and 2020 have been updated based on the latest available data for all compa- nies ** Degree of fatalities as a result of Injury = Number of deaths as a result of injury / Working hours * 200,000 *** Degree of severe injuries (excluding deaths) = Number of signicant injuries (excluding deaths) /Work hours200,000 Degree of conrmed injuries = Number of conrmed injuries / Working hours * 200,000 [GRI 403-10 – Work-related ill health] Occupational diseases Direct labour Indirect labour 2021 2020 2019 2021 2020 2019 Number of fatalities due to disease 0 0 0 0 0 0 Number of conrmed diseases 0 0 0 0 0 0 In 2021, there were no illnesses related to employment or fatalities to report for the whole of the Group. The most common types of injuries are: • Upper limb cut by a sharp surface • Limb injury by a moving cylinder • Shoulder injury • Limb fracture Moreover, Thrace Plastics Pack S.A. has been certied by ISO 45001:2018 (certi- cate number: 20152190001675). Product safety and consumer & end user health and safety [GRI 416-2: Incidents of non-compliance concerning the health and safety impacts of products and services] [ATHEX ESG SS-S1: Quality and safety of products] In 2021, there were no incidents of non-compliance with legislation and regulations to report, in relation to the impact of products on the health and safety of consumers. Re- spectively, no product recalls were required by any company of the Group due to mal- functions or defects and, thus, no compensations had to be attributed. Page 124 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Social support Spending on the local community of Xanthi 2021 2020 2019 Total spending of the Stavros Chalioris Social Center €380,017 €328,623 €273,435 Environmental issues/ Climate change Main risks and their management [ATHEX ESG A-E2: Climate change risks and opportunities 1 ] In order to mitigate the risks and avoid the negative socio-economic and envi- ronmental eects, taking into account that the climate-related risks are inher- ently more complex and long-term than most business risks, the Group adapts its business model based on the principles of the circular economy and mitigating the eects of climate change. This practice aims to reduce the carbon footprint and energy consumption of its activities and at the same time, identies the risks that may have a signicant economic impact through an integrated risk assessment process in accordance with the environ- mental management system according to ISO 14001: 2015. The Group has recognized the follow- ing categories of risks related to Climate Change and may cause signicant or ex- treme economic impacts: • The risks related to the climate with possible nancial consequences for the Group, include the stigmatiza- tion of the plastics sector, as well as the continuous and rapid change in consumer preferences. The Group has recognized medium-term transi- tion risks associated with changes in 1 More information on the full coverage of the index will be published in the Sustainable Development Report 2021 consumer preferences and the global trend towards the use of environmen- tally friendlier products due to climate change and invests in research and development moving towards a more circular economy and providing solu- tions to minimize the environmental footprint in the packaging sector. • The risks associated with the changes in the regulatory framework for waste management and recycling mecha- nisms as well as technical restrictions on the management of waste collect- ed for recycling, account for another transition risk. In both the legislative and the operational part, the risks of changing the habits, can turn into an opportunity for the Group to lead in new markets of innovative, alternative reusable, new ecologically designed products. The role of certication bod- ies in the plastics sector will be crucial, as they are called upon to contribute to the updating, control and imple- mentation of the new criteria for inno- vative plastic products, adding value to them. • The transition to a circular economy presents short-term risks of adapting the production process and develop- ing products and solutions. Potential Annual Financial Report as of 31.12.2021 Page 125 of 260 Amounts in thousand Euro, unless stated otherwise risks are monitored both in internal ac- tivities (R&D, production process) and in transactions with key stakeholders, such as suppliers and customers. The Group applies the following practices for a sustainable production process: - Reuse of the scrap resulting from the production process. - Collection of waste and their pro- motion to recycling companies. - Supply of recycled raw material, ei- ther directly from customers (closed loop system) or from certied recy- clers. • Legal requirements for the treatment, storage, transport, recycling and dis- posal of waste generated also present short-term risks. In this context, the Group has assessed the environmen- tal risk regarding the potential waste generated and their management, and respects the contractual obliga- tions, such as the registration in the electronic waste register and the pay- ment of the recycling fee. The Group’s subsidiaries monitor the types and quantities of waste generated, includ- ing their location and method of treat- ment, ensuring that companies where the waste (hazardous or not) ends up for nal treatment or disposal have all the legal documents proving that they have been licensed and certied to proceed with their processing and recycling. The transition to a low-carbon business model creates opportunities for eciency, innovation and growth that extend be- yond high-carbon industries, such as man- ufacturing. The Group has recognized the following opportunities and acts for their implementation: • The Group recognizes the great op- portunity oered in the short term by the principles of the circular economy model. Therefore, through special ac- tions, it aims to strengthen the model in practice. More specically, it uses and develops 28 dierent production technologies, designs reusable prod- ucts with less weight, 100% recycla- ble, as well as products from recycled raw materials. In addition, investing in closed recycling systems for the pro- duction - from waste - of new products is another great opportunity. Thus, the Group has developed a platform that aims to strengthen cooperation between value chain operators and create value through the recycling of plastic waste. • If all processes are optimized eec- tively, the Group can achieve its maxi- mum eciency by minimizing costs and maximizing its capabilities. Rec- ognizing the short-term opportunities that arise through the optimal use of resources to ensure the best possible results, the Group performs various projects such as zero pellet loss, ener- gy eciency and zero waste and reus- es whatever is used or results from its production (pallets, generated waste, etc.). • The use of recycled raw materials is a priority of the Group as evidenced by its voluntary commitment to the Eu- ropean Union to replace 8,500 tons of plastic material with recycled by 2025. • The Group seeks continuous improve- ment of its processes eciency, al- ways guided by the optimal manage- ment of the environmental impacts resulting from its operation, with particular emphasis on reducing en- Page 126 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise ergy consumption and the creation of greenhouse gases associated with its activities. In recent years, this is a great opportunity for a parallel reduction of production costs, as the companies of the Group have taken actions aimed at reducing energy consumption (non-renewable sources) and increas- ing energy eciency, such as: - Lower energy consumption per kilo of product, due to design, monitor- ing, performance and equipment upgrade. - Investments in energy ecient pro- duction machines. - Upgrade of conventional lighting to new LED technology lamps in pro- duction units. - Purchase of electric forklift trucks and withdrawal of old diesel vehi- cles. - Raising awareness on energy e- ciency issues to the employees. Due diligence and other policies [ATHEX ESG SS-E1: Emission strategy] The Group has an Environmental Policy, always guided by the improvement of the environmental impacts resulting from its operation, with particular commitment to the application of the circular economy principles, responsible waste manage- ment, reduction of energy consumption and reduction of greenhouse gas emis- sions related to its activities. The Group develops its business strategy in combination with the recommenda- tions of the international initiative “Task Force on Climate-Related Financial Dis- closures (TCFD)”, while participating in the international initiative CDP (Carbon Dis- closure Project), so as the way that it man- ages the impact that its activities have in the environment and climate change to be evaluated. The companies of the Group follow spe- cic procedures, based on which they cat- egorize their environmental performance while they have appointed responsible personnel for the environmental man- agement in order to monitor their perfor- mance through the Environmental Man- agement System. Moreover, they apply certied Systems, according to the international standards which include actions and measures for the protection of the environment and en- suring the proper use of the energy con- sumed. Circular economy The EU Strategy for plastics in the context of the circular economy lays the founda- tions for a new plastics economy, within which the design and production of plas- Annual Financial Report as of 31.12.2021 Page 127 of 260 Amounts in thousand Euro, unless stated otherwise tic products fully respect the utilization of more sustainable resources and the needs for the prioritization of waste manage- ment (reduction, reuse and recycling). This way, innovation is further promoted, while pollution by plastic waste is limited. The strategy also contributes to the fullment of the goal for a contemporary economy characterized by low carbon emissions and ecient use of resources and energy. Thrace Group, fully meets this strategy by turning the challenges of modern times into opportunities for growth, aspiring to foster a sustainable competitive advan- tage. Within this framework, it has adopt- ed the principles of the circular economy throughout the life cycle of its products. Raw material sourcing [ATHEX ESG SS-E7: Critical materials] • Ensuring quality, safety and sustain- ability in the use of natural resources during the stage of selection and sup- ply of their raw materials. • Evaluation of raw materials based on additional criteria, in addition to costs, so that the Group consolidates and maintains long-term relationships of trust with its suppliers and incorpo- rates in the contracts terms for the management and prevention of risks related to product safety, as well as the required environmental specica- tions. • The Group companies do not inten- tionally use, during their production process, the 27 critical raw materials for which there is a high risk of sup- ply chain problems, as they are recog- nized by the European Committee. [ATHEX ESG SS-E5: Environmental impact of packaging] Design • Reduction of plastic use, through the reduction of the products weight • Eco-friendly reusable solutions • Replacement of raw material with re- cycled raw material. • Production of products from a single material • Life Cycle Assessment (LCA) and de- velopment of Environmental Product Declarations (EPD) according to inter- national standards. • Research and development for reus- able products. Production • Saving raw materials through the re- use of internal waste • In accordance with the European Strategy that requires all plastic pack- aging that will circulate in the Europe- an Union by 2030 to be recyclable, the Group already produces and distrib- utes worldwide, products that meet these conditions • Lower energy consumption per kilo of product produced due to planning, monitoring, eciency and equipment upgrade • Investing in more eective and energy ecient production machines Distribution / Transportation • Carrying out synergies between the Group companies for the optimization of itineraries and the maximum utiliza- tion of the payload for the transports Page 128 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise • Supply of raw materials from indus- tries located in the same geographical area, as a matter of priority, when pos- sible. Reuse Design and production of products with the aim of maximizing their life cycle, so that they can be reused and usable for a long time. Collection Proper separation, collection using suit- able bins and storage of our production residues in appropriate temporary storage stations, with the aim of their optimal uti- lization. Recycling • Actively responding to the European Commission’s call for voluntary com- mitment to increase the use of recy- cled plastic, the Group committed to replace 8,500 tons of raw material with recycled plastic by 2025. • Enhancing the reliability of traceability and evaluation of the recyclability of plastic packaging through the meth- odological approach of Recyclass and TUV OK certication. • Separation and recycling of non-reus- able raw materials, through licensed partners. Rejection Continuous reduction of non-hazardous waste dumping in landlls, through the separation at source. Solid waste and euents The Group complies with the legal require- ments concerning the treatment, storage, transportation, recycling and disposal of waste. In this context, an environmental risk assessment study has been conducted mainly on the potential waste generated and its management, while a decision of approval has been taken for environmen- tal terms while respecting contractual ob- ligations, such as the subscription to the electronic waste registry and the payment of the recycling fee. The Group subsidiaries monitor the types and quantities of waste generated, in- cluding the location and method of their recycling. Within this context the Group implements internal procedures for waste management, such as the evaluation of waste management companies, the prepa- ration of daily, weekly and monthly reports on the types and quantities of waste gen- erated, while eorts are made to reduce them in its facilities (such as the separation at source). The Group ensures that the companies to which the waste ends up (hazardous and not) for nal processing or disposal, have in force the legal operating documents, from which the right to transport and manage the waste they receive is clearly derived. The relevant recycling certicates are also obtained. Use of chemicals Due to the Group’s operation sector a wide range of chemical substances is utilized. The management of any environmental risks that might occur by the use and stor- age of those chemicals is a top priority for the Group. To eectively handle those hazards, the Group complies with the legal require- Annual Financial Report as of 31.12.2021 Page 129 of 260 Amounts in thousand Euro, unless stated otherwise ments for the management, use and stor- age of chemicals and other hazardous substances and we do not produce, trade or use chemicals or other hazardous sub- stances subject to national or international prohibitions. It also informs and trains its employees on the safe handling and use of those substances utilized in production and facility maintenance. All the companies of the Group have en- sured that the chemicals they are using in their activities are placed on metal- lic bases and kept in appropriate storage rooms to avoid the contamination of the environment. Moreover, those metallic bases are equipped with collectors in their lower part, which gather any leaks of small quantities of chemicals. All the chemicals in the facilities of the Group are stored in appropriate areas with special signage, while access to these areas is allowed only to authorized individuals from approved suppliers, who are well aware of the safety regulations. Climate change [ATHEX ESG SS-E1: Emission strategy] Over the past years, the companies of the Group have proceeded with actions that aim at energy eciency, such as: • Replacement of energy-intensive equipment with new one that requires less energy. • Constant monitoring of energy con- sumption and implementation of measures for its reduction. • Raising awareness among employees in relation to energy eciency issues. The Group recognizes the importance of recording the emissions of greenhouse gases and that is why it started recording them in 2020 (initially in the companies with the greatest impact), in order to then take action to reduce them. The moderni- zation of machinery, the use of renewable energy sources, the continuous eort to increase the percentage of recycled mate- rial, and the proper management of waste, constitute key pillars of its approach. Water Water consumption at Group level is not a substantial issue, according to the re- lated materiality analysis (see Thrace Group – Sustainable Development Report 2020). However, in the separate material- ity analysis of Thrace Greenhouses S.A., the issue of “Improvement of water qual- ity” proved to be substantial (see Thrace Greenhouses S.A. – Sustainable Develop- ment Report 2019). In general, the Group assumes measures for the monitoring and reduction of total water consumption. In particular, Thrace Plastics Pack S.A. applies measures for the reduction of water con- sumption through: • Use of water dispensers with automat- ic on/o switches • Water for industrial use (e.g. cooling/ heating) in a pipe network, as part of an integrated system of preventive maintenance for the management of any leakages • Use of water recycling systems • Use of signage for the proper use of water • Monitoring of water consumption Emergency situations and other environmental issues The Group complies with the legal require- ments for the levels of noise, odor, light nuisance and vibrations , as well as for Page 130 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise emergency and evacuation plans, while oering training programs to its employ- ees for the proper handling of these pa- rameters. These issues are monitored on a regular basis and preventive measures or even corrective actions are taken in case it is demonstrated that they are exceeding the permissible limits. In particular, in the premises of the Group, measurements of environmental parameters (noise, oating particles etc.) are realized on regular inter- vals, as these can prove harmful for the en- vironment and health and safety. Outcomes of the above policies and non-nancial performance indicators Materials [GRI 301-1 – Materials used by weight or volume] The purpose of the monitoring framework is to measure the progress being made to- wards the circular economy in terms of the supply of raw materials in relation to recycla- ble raw materials. Total weight of materials (in tons) 2021 2020 2019 Change (2021 vs 2020) Polypropylene 90,365 89,060 89,760 1% Polyethylene 10,830 12,898 10,151 -16% Masterbatch (MB) 2,040 3,154 3,413 -35% Packaging 6,690 6,692 6,864 0% PET Fiber 0 0 643.1 0% Total 109,925 111,804 110,831 -2% * 2020 gures have been updated based on the latest available data [GRI 301-2: Recycled materials utilized] 2021 2020 2019 Change (2021 vs 2020) Recycled raw material ** 11,443 6,783 6,256 69% Percentage of recycled raw material 10% 6% 6% * 2020 gures have been updated based on the latest available data ** Recycled raw materials imported into the production process originate from both the production process residues and from external sources. Annual Financial Report as of 31.12.2021 Page 131 of 260 Amounts in thousand Euro, unless stated otherwise Solid waste Regarding the management of solid waste, the following table includes data for the quantities of waste generated in the Group, by treatment method. It must be noted that the quantities of scrap generated within the production units are recycled in full through the production process. [GRI 306-2: Waste by type and disposal method] [ATHEX ESG A-E3: Waste management] Waste treatment method Total weight of hazardous waste (in tons) Percentage % Total weight of non- hazardous waste (in tons) Percentage % 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 Recycling 177.15 197.98 203.28 83% 88% 93 % 2,201.77 2,817.38 3,350.59 51% 53% 62% Recovery (including energy recovery) 18.92 0.00 0.00 9% 0% 0 % 362.39 8.86 225.08 8% 0% 4% Incineration 16.13 13.77 12.49 8% 6% 6% 0 0 0 0% 0% 0% Disposal in landlls 0.00 12.00 0.00 0% 5% 0% 1,794.97 2,480.29 1,824.22 41% 47% 34% Other methods of treatment 0.56 0.00 2.65 0% 0% 1% 0 0 0 0% 0% 0% Total 212.76 223.75 218.42 100% 100 % 100% 4,359.13 5,306.53 5,399.89 100% 100% 100% * The data for 2020 have been updated based on the latest available data for all companies Data on the quantities of waste by type and method of disposal will be available in the Sustainable Development Report 2021. Page 132 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Platform IN THE LOOP Having incorporated the capabilities of the circular economy in its business strate- gy, the Group has created the IN THE LOOP platform, which aims at upcycling used plastic for the creation of new sustainable products. What it is: • An environmentally-driven platform, which aims at creating value by upcy- cling plastic waste • It connects companies, brands, public bodies, environmental organizations and consumers What it does: • Design specialized closed/controlled loop recycling systems. • Enhances collaboration between val- ue chain stakeholders. • Proves that recycling is feasible, desir- able & protable. • Provides the opportunity to produce new plastic products from plastic waste • Raises awareness about plastic waste upcycling • Promotes and certies the prole of the companies and bodies that par- ticipate The result: • Reduces plastic waste • Reduces carbon footprint. • Preserves natural resources. • Becomes action the transition to circu- lar economy Annual Financial Report as of 31.12.2021 Page 133 of 260 Amounts in thousand Euro, unless stated otherwise Energy [GRI 302-1: Energy Consumption within the organization]] [ATHEX ESG C-E3: Energy consumption and production] 2021 2020 2019 Energy consumption within the Group per type and source of energy (MJ) Non-renewable resources Electric energy Electric energy (total) 553,745,488 550,802,783 571,706,671 Thermal energy District heating (total) 1,627,056 1,674,000 1,548,000 Fuel Gasoline 936 756 27 Natural gas 134,296,621 81,338,215 93,790,669 Methane 242,388 56,221 88,920 Liqueed Petroleum Gas (LPG) 3,995,167 3,696,909 3,680,961 Diesel 736 1,047 1,739 Heating pellets 1,963,026 4,092,002 2,886,332 Total 140,498,874 89,185,150 100,448,648 Renewable sources Geothermal energy (total produced energy) 25,311,968 22,722,870 23,680,000 Total (MJ) 721,183,386 664,384,803 697,383,319 Total(MWh) 200,329 184,551 193,718 Energy consumption within the Group per type and source of energy (%) Total energy consumed within the organization from non-renewable resources (%) 96.5% 96.6% 96.6% Total energy consumed within the organization from renewable energy resources (%) 3.5% 3.4% 3.4% Total 100% 100% 100% Electric energy consumption (%) 76.8% 82.9% 82.0% Thermal energy consumption (%) 0.2% 0.3% 0.2% Fuel consumption (%) 19.5% 13.4% 14.4% Geothermal energy consumption (%) 3.5% 3.4% 3.4% Total 100% 100% 100% Page 134 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Energy intensity of the Group (MJ/kg production) Companies/Country of operation Total operation in Greece (Thrace Nonwovens & Geosynthetics S.A., Thrace Polylms S.A. & Thrace Plastics Pack S.A.) 4.13 4.18 4.36 Don & Low Ltd 6.30 5.98 5.54 Thrace Ipoma A.D. 4.64 5.69 5.40 Thrace Greiner Packaging S.R.L. 4.70 4.90 5.04 * A review was carried out on the method of calculating electricity consumption for the year 2020 Direct and indirect emissions [GRI: 305-1 Direct (Scope 1) emissions, 305-2 Indirect (Scope 2) emissions, 305-3 Other indirect (Scope 3) emissions] [ATHEX ESG: C-E1 Direct emissions (Scope 1), C-E2 Indirect emissions (Scope 2), A-E1 Indirect emissions (Scope 3)] Since 2020, the Group has recorded direct and indirect emissions through interna- tionally recognized initiatives and stand- ards, such as EPD (Environmental Product Declaration), CDP (Carbon Disclosure Pro- ject) and TCFD (Task Force on Climate- Related Financial Disclosures). The Group now participates in the international or- ganization CDP (Carbon Disclosure Pro- ject), in order to evaluate the way it man- ages the impact of its activities on the environment and climate change. Follow- ing this initiative, it proceeded to record the carbon footprint of the three most signicant subsidiaries. In 2021, the same procedure for recording direct and indi- rect emissions was followed. The following are the tables with the data collected and certied according to ISO 14064-3, where tCOe refers to the total greenhouse gas emissions in tons of CO equivalent. Don & Low 2020 2019 Direct emissions (Scope 1) tCO2e Natural gas 914 1,358 LPG production machinery 150 156 LPG vehicles - - Diesel of production machinery - - Diesel of vehicles 16 57 Total 1,080 1,571 Indirect emissions (Scope 2) tCO2e Electric energy 7,813 10,051 Total 7,813 10,051 Indirect emissions (Scope 3) tCO2e Annual Financial Report as of 31.12.2021 Page 135 of 260 Amounts in thousand Euro, unless stated otherwise Don & Low 2020 2019 Waste 37 46 PP material recycled and non- recycled 58,047 66,251 Water 10 28 Total 58,094 66,325 Thrace Nonwovens & Geosynthetics 2020 2019 Direct emissions (Scope 1) tCO2e Natural gas 3,398 3,421 LPG production machinery 116 131 LPG vehicles - - Diesel of production machinery 357 278 Diesel of vehicles 33 26 Total 3,904 3,856 Indirect emission (Scope 2) tCO2e Electric energy 33,106 29,635 Total 33,106 29,635 Indirect emissions (Scope 3) tCO2e Waste 20 14 PP material recycled and non- recycled 133,737 122,683 Water 8 9 Total 133,765 122,706 Thrace Pack * 2020 2019 Direct emissions (Scope 1) tCO2e Natural gas - - LPG production machinery 150 113 LPG vehicles 34 25 Diesel of production machinery - - Diesel of vehicles 1 1 Total 185 139 Indirect emissions (Scope 2) tCO2e Electric energy 16,658 14,735 Total 16,658 14,735 Indirect emissions (Scope 3) tCO2e Page 136 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Thrace Pack * 2020 2019 Waste 11 8 PP material recycled and non- recycled 53,639 47,630 Water 7 9 Total 53,657 47,647 * Both the emissions (direct and indirect) and the intensity of the emissions for 2021 will be published in the Sustainable Development Report 2021 of the Group. The effects of the COVID-19 pandemic on non-financial issues The impact of the pandemic on the op- erations and business continuity of the Group Despite the unprecedented circumstances that prevailed in the global economy due to the pandemic as well as in 2021, the Group has managed to remain unaected by any negative, from nancial perspec- tive, impact in relation to its nancial re- sults and transaction cycle; and therefore it did not face any risk of nancial nature that could negatively aect its business continuity. Measures taken to reduce the impact of the pandemic The Management of the Group continues to closely monitor the developments re- lated to the pandemic crisis and to fully implement a plan to ensure the health and safety of the personnel and the uninter- rupted business continuity of the Group. In particular, in accordance with the guide- lines and recommendations of the World Health Organization (WHO) and the local Public Health and Civil Protection Organi- zations, the following measures were im- plemented: • Establishment of sub-crisis manage- ment teams with the participation of the Management teams of the sub- sidiaries and the Group, the Human Resources Departments, the Occupa- tional Physicians and the Safety Tech- nicians. • Informing employees about the coro- navirus, the mode of transmission, the prevention and protection measures and providing recommendations and instructions for personal hygiene, in accordance with the local instructions of the competent authorities. • Provision of personal protective equipment to the personnel (masks, antiseptics, gloves). • Carrying out disinfections at the Com- pany’s premises on a regular basis. • Conduct Covid-19 tests on the person- nel as appropriate. • Remote work for oce employees to the greatest possible extent. • Protection of employees belonging to vulnerable groups, by facilitating their immediate removal from the premises, without curtailing their remuneration. • Development of specic procedures and protocols for all visitors to the Company’s facilities (carriers, contrac- Annual Financial Report as of 31.12.2021 Page 137 of 260 Amounts in thousand Euro, unless stated otherwise tors, technicians, etc.) • Conducting meetings among the em- ployees of all Companies as well as the Management of the Group and conducting Board of Directors’ meet- ings without physical presence and by using electronic or audiovisual means (e.g. video conference). • Conducting General Meetings by vid- eo conference, in accordance with the provisions of the relevant legislative framework. • Adherence to the required medical protocols, in case of illness of an em- ployee or simple contact with an in- fected case, in collaboration with the occupational physician. • Continuous monitoring of liquidity and the transaction cycle of the Group companies. • Weekly meetings among the Man- agement of the subsidiaries and the Group, the Human Resources Depart- ment, the Occupational Physicians and the Safety Technicians in order to maintain and enrich the protection measures as well as the monitoring process of vaccinations and infections It should be noted that the protection measures mentioned above continue to be fully implemented in the most consist- ent manner and to absolute degree at the time of preparation of the present Report. Charities By recognizing the need to take eective actions for the support of the health sys- tem and the socially vulnerable groups, Thrace Group, through its subsidiaries and the Stavros Chalioris Social Center and in collaboration with other bodies and or- ganizations such as the General Hospital of Chios island and the NGO Desmos, pro- ceeded with donations of personal protec- tive equipment and medical equipment. For more information, check the section “Support of Local Communities”. EU TAXONOMY REGULATION [ATHEX ESG A-S1 Sustainable economic activity] The EU Taxonomy Regulation is one of the tools established under the European Green Deal, which aims at achieving the European Union’s climate neutrality by 2050. The Regulation establishes the crite- ria for determining whether an economic activity is environmentally sustainable, in order to determine the extent to which an investment is indeed environmen- tally sustainable. The Regulation creates a common language, which can be used by investors when investing in projects and economic activities, which have a sig- nicant positive impact on the climate and the environment. Taxonomy Regulation 2020/852 / EU Taxonomy Regulation 2020/852 / EU is supplemented by the delegated Regula- tion 2021/2178 / EU as well as the delegat- ed Regulation 2021/2139 / EU. In order for an economic activity to be characterized as environmentally sustain- able, it must: • contribute substantially to at least one of the following six environmental ob- jectives: 1. Climate change mitigation 2. Climate change adaptation Page 138 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise 3. Sustainable use and protection of wa- ter and marine resources 4. Transition to a circular economy 5. Pollution prevention and control 6. Protection and restoration of biodi- versity and ecosystems • does not signicantly harm any of the other ve environmental objectives, • is exercised in accordance with the minimum safeguards in relation to the OECD Guidelines for Multinational Enterprises and the United Nations Guidelines for Business and Human Rights, including the principles and rights determined in the eight funda- mental conventions set out in Declara- tion of the International Labor Organi- zation on Fundamental Principles and Labor Rights, and the International Charter of Human Rights, • complies with the technical control criteria established by the European Commission. Delegated Regulation 2021/2139 / EU, adopted on 4 June 2021, sets out the technical control criteria for determining the conditions under which an economic activity is considered to contribute sig- nicantly to the rst two environmental objectives: climate change mitigation and climate change adaptation. This Regulation also sets out the conditions for determining whether this economic activ- ity does not signicantly aect any of the other environmental objectives. Compliance with Regulation 2020/852 / EU - Methodology and accounting policy Article 8 (1) of Regulation 2020/852 / EU provides that companies required to pub- lish non-nancial information (according to Directive 2013/34 / EU) should disclose additional information on how and to what extent their activities are linked to environmentally sustainable economic ac- tivities, as dened by this Regulation. More specically, on the basis of the del- egated Regulation 2021/2178 / EU (Article 10, paragraph 2) for the disclosures to be made in the year 2022 and concerning the nancial year 2021 (without the obligation of comparative information for 2020), it arises, for non-nancial corporations, the obligation to disclose the percentage of eligible and ineligible economic activities for classication purposes, in relation to the following key performance indicators (KPI): Turnover, Capital expenditure (“CapEx”), and Operating costs (“OpEx”), on total turnover, capital and operating expenses. For the disclosures that will take place in the year 2023 and will concern the - nancial year 2022, the obligations will be increased, as the companies will have to disclose -among other things- if their eli- gible economic activities are aligned with technical criteria of the Regulation. Towards this direction, in 2022 where 2021 is the reference year, Thrace Plastics Group proceeded to the determination of its eligible economic activities, based on the Classication Regulation, and in particular with regard to the 2 environmental objec- tives, i.e. the objectives of mitigation and adjustment in climate change. As part of this process, the Group publishes in this section the key performance indicators (KPIs) associated with its eligible economic activities for the nancial year 2021. Annual Financial Report as of 31.12.2021 Page 139 of 260 Amounts in thousand Euro, unless stated otherwise Eligible economic activities The eligible economic activities of Thrace Plastics Group for the nancial year 2021 include: • 3.6 Manufacturing of other low carbon technologies. Specically: o Production of technical fabrics of low carbon emissions by the Group. In addition to the above economic activ- ity, which generates income for the Group, capital and operating expenses were in- curred from the acquisitions / additions, from the following economic activity eligi- ble in relation to the classication: • 7.6. Installation, maintenance and re- pair of renewable energy technologies Specically: o Installation and operation of a pho- tovoltaic power plant for cogenera- tion with energy netting (net meter- ing) of installed capacity of 1.5 MW, in order to meet part of the energy needs of the Group’s factory in the area of Xanthi, Greece, in the con- text of achieving the objectives of the Group for energy savings and further reduction of its environmen- tal footprint. Accounting policy for the determination of key performance indicators (KPIs) Thrace Plastics Group prepares its nancial statements in accordance with the Inter- national Financial Reporting Standards (IFRS), including International Accounting Standards (IAS) and interpretations, issued by the Interpretations Committee of Inter- national Financial Reporting Standards. For more information, you can refer to the Annual Financial Report 01/01-31/12/2021 of the Group which is available on its web- site and specically in the section “Frame- work for the preparation of Financial State- ments and Basic Accounting Principles”. Turnover The percentage of turnover is calculated as the part of the net turnover that derived from products in the “technical fabrics” sector and linked to the eligible economic activity “3.6 Manufacturing of other low carbon technologies” via the following cal- culation: the classied economic activity (numerator) is divided by the net turnover (denominator). Turnover covers income as recorded in the nancial statements and which has been prepared in accordance with the International Financial Report- ing Standards (IFRS). Turnover does not include any intra-group transactions. Capital Expenditure (CapEx) The percentage of capital expenditure re- lated to eligible economic activities has been calculated as described below. Numerator The numerator is equal to the capital ex- penditures associated with any of the fol- lowing: • With assets or processes related to the taxonomy-based eligible eco- nomic activity “3.6 Manufacturing of other low carbon technologies” and in particular with the production of low carbon products belonging to the “technical textiles” sector. As capital expenditures are accounted for by op- erating area (factory) and not by prod- uct category, capital expenditures re- lated to the specic economic activity have been calculated based on the sales volume of the specic products, Page 140 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise in relation to the total sales volume of the specic operating areas. • With the acquisitions / additions re- lated to the taxonomy-based eligible economic activity “7.6 Installation, maintenance and repair of renewable energy technologies” that lead to re- ductions in greenhouse gas emissions due to the operation of the Group. Denominator The denominator covers the additions to tangible and intangible assets by operat- ing area, during the nancial year 2021, before depreciation and any revaluations, including those resulting from adjust- ments and impairments and excluding changes in fair value. Operating costs (OpEx) The percentage of operating expenses related to eligible economic activities has been calculated as described below. Numerator The numerator is equal to the portion of the operating costs associated with any of the following: • With assets or processes related to the taxonomy-based eligible eco- nomic activity “3.6 Manufacturing of other low carbon technologies”, and in particular with the production of low carbon products belonging to the “technical fabrics” sector. As operating costs are accounted for by operating area rather than by product category, operating costs related to the product category (low carbon technical fab- rics) are calculated based on the sales volume of the products in relation to the total volume sales of the specic operating areas. • With the acquisitions / additions re- lated to the taxonomy-based eligible economic activity “7.6 Installation, maintenance and repair of renewable energy technologies” that lead to re- ductions in greenhouse gas emissions due to the operation of the Group. Denominator The denominator includes the direct non- capitalized costs related to research and development, as well as other direct costs related to maintenance and repair, which are necessary to ensure the continuous and ecient operation of these assets. The following table summarizes the per- centages of eligible economic activities, in terms of the total performance gures of the Group, as discussed in detail above. KPI KPI KPI Financial activities of Thrace Plastics Group (consolidated results) % Turnover % CapEx % OpEx Eligible economic activities 35.90% 43.94% 47.20% 3.6 Manufacturing of other low carbon technologies 35.90% 42.14% 47.20% 7.6. Installation, maintenance and repair of renewable energy technologies 0.00% 1.80% 0.00% Ineligible economic activities 64.10% 56.06% 52.80% Total 100% 100% 100% Annual Financial Report as of 31.12.2021 Page 141 of 260 Amounts in thousand Euro, unless stated otherwise Xanthi, 12 April 2022 The Chairman of the Board of Directors The Chief Executive Ocer & Executive Member of the Board of Directors The Non-Executive Member of the Board of Directors Konstantinos St. Chalioris Dimitris P. Malamos Vassilios Zairopoulos Page 142 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise AUDIT REPORT BY CERTIDIED AUDITOR [Translation from the original text in Greek] Independent auditor’s report To the Shareholders of “Thrace Plastics Holding Company S.A.” Report on the audit of the separate and consolidated financial statements Our opinion We have audited the accompanying separate and consolidated financial statements of “Thrace Plastics Holding Company S.A.” Listed Company (Company or/and Group) which comprise the separate and consolidated statement of financial position as of 31 December 2021, the separate and consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flow statements for the year then ended, and notes to the separate and consolidated financial statements, including a summary of significant accounting policies. In our opinion, the consolidated financial statements present fairly, in all material respects the separate and consolidated financial position of the Company and the Group as at 31 December 2021, their separate and consolidated financial performance and their separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the statutory requirements of Law 4548/2018. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs), as they have been transposed into Greek Law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the separate and consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3.1 Independence During our audit we remained independent of the Company and the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) that has been transposed into Greek Law, and the ethical requirements of Law 4449/2017 and of Regulation (EU) No 537/2014, that are relevant to the audit of the separate and consolidated financial statements in Greece. We have fulfilled our other ethical responsibilities in accordance with Law 4449/2017, Regulation (EU) No 537/2014 and the requirements of the IESBA Code. We declare that the non-audit services that we have provided to the Company and its subsidiaries are in accordance with the aforementioned provisions of the applicable law and regulation and that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have provided to the Company and its subsidiaries, during the year ended as at 31 December 2021, are disclosed in the note 3.31 of the separate and consolidated financial statements. Annual Financial Report as of 31.12.2021 Page 143 of 260 Amounts in thousand Euro, unless stated otherwise Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the year ended 31 December 2021. These matters were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Provisions for Employee benefits (Consolidated Financial Statements) In the consolidated statement of financial position is included an amount of €3.5 million related to provisions for employee benefits, of which €1.9 million relate to defined benefit plans which are funded and €1.6 million relate to defined benefit plans which are not funded, as at 31 December 2021. The future benefits are discounted at present value after deducting the fair value of the assets of the funded programs. The present value of post-employment benefit obligations is contingent on certain factors determined on the basis of an actuarial valuation prepared by an independent actuary through the use of significant assumptions. The assumptions used to determine the net cost of post-employment benefits include, among others, the discount rate, inflation, and the average annual salary increase. Any changes in the assumptions may have a significant impact on the accounting for post-employment benefit accounting, making this item volatile, since it is significantly influenced by the change in the fair value of the assets of the funded programs. We focused on this item due to its significant value in the consolidated financial statements and due to the estimates and assumptions used by the management. Detailed information is provided in Notes 2.19 and 3.23 "Provisions for employee benefits" of the consolidated financial statements of the Group. • We evaluated the Group Accounting policy for defined benefit plans. • We investigated the matter by requesting from the Group's management detailed information in order to evaluate the assumptions adopted and the data used for the calculation of the provision. • We performed a detailed examination and evaluation of the actuarial valuation prepared for the calculation of the provision, in order to assess that it is in line with IFRS, with an emphasis on the reasonability of the assumptions used. • We critically assessed the method used and the assumptions used, as well as the hypotheses and sources of data defined by the management and used by the actuary, their cohesion and consistency compared to the previous year and we compared these assumptions with relative observable market information. • We agreed on the provision for staff benefits and the relative costs included in the financial statements with the actuarial valuation. We found that the assumptions used were within a reasonable range and confirmed the appropriateness of the disclosures in the consolidated financial statements. We confirmed that the relevant disclosures in the consolidated financial statements are adequate. Based on our work, no exceptions identified regarding the reasonableness of the assumptions. Page 144 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise Impairment assessment of Goodwill (Consolidated Financial Statements) In the consolidated statement of financial position as at 31 December 2021, the Group has goodwill of € 9.8 million as stated in note 3.15 "Intangible Assets" of the financial statements. The Group measures goodwill at cost less accumulated impairment losses. Goodwill is allocated on cash-generating units and an impairment test is carried out annually or more frequently if there is evidence of a possible impairment in the book value of the goodwill in relation to its recoverable value in accordance with IAS 36. Impairment is recognized directly as an expense in consolidated profit or loss and other comprehensive income and is not subsequently reversed. Management determines recoverable value of the cash generating units as the largest amount between the value in use and its fair value, minus any related costs of disposal. The calculation of the value in use of each cash- generating unit is performed by an independent valuer and requires management's estimation of the assumptions about the future results of the above cash-generating units, such as the growth rate in perpetuity, forecasts of expected sales quantities and prices, gross margin and discount rates. These assumptions vary due to the different market conditions in the countries in which the Group operates. We focused on this area due to the significant value of this item in the consolidated financial statements as well as the estimates and assumptions used by management in the context of performing the impairment assessment of goodwill. Detailed information on the impairment assessment of goodwill is provided in notes 2.3.1.3 "Estimation of impairment assessment of goodwill”, 2.6.1 “Goodwill”, 2.6.2 “Impairment assessment of goodwill” and 3.15 "Intangible assets" of the consolidated financial statements of the Group. Based on the impairment test performed by management, there was no need to recognize impairment loss on goodwill for the year ended 31 December 2021. We evaluated the overall impairment test performed by the management, including the process of reviewing and approving value in use models. We performed audit procedures to confirm that the impairment test for goodwill is generally based on accepted policies and on reasonable assumptions. In cooperation with our colleagues with valuation expertise, we performed the following audit procedures: • We examined the key assumptions of the Group, such as the growth rate of the cash generating units in perpetuity, projected sales volumes and prices, and gross profit margins used in the projected cash flow, comparing them with the trends of local markets and the assumptions used in previous years. • We evaluated the reliability of the forecasts used in the projected cash flows of the management, by comparing the actual performance against previous forecasts. • We found that the discount rate was determined within an acceptable range, assessing the cost of capital and borrowing costs per cash-generating unit and comparing the discount rates with industry and market data. • We examined the mathematical accuracy of the cash flow models and we agreed these with the relative investment plans. We assessed the impact on the value in use of the cash-generating units of a possible change in the key assumptions, such as growth rates, discount rates, sales volume and prices, and gross profit margins, and we found that the margin between book value and recoverable value was adequate. Based on the procedures performed, no exceptions were identified regarding the impairment test and we found that management's assumptions and estimates were within a reasonable range. In addition, we confirmed the appropriateness of the relevant disclosures in the consolidated financial statements. Impairment assessment of investment in Subsidiaries (Separate Financial Statements) As at 31 December 2021, the Company held investments in subsidiaries amounting to €73.9 million, which are measured at cost, and We evaluated the management's assessment and resulting conclusions over the existence Annual Financial Report as of 31.12.2021 Page 145 of 260 Amounts in thousand Euro, unless stated otherwise adjusted when the need arises as a result of impairment. Management examines on an annual basis whether there are indicators of impairment of investment in subsidiaries. If an investment has to be impaired, the Company calculates the amount of the impairment as the difference between the recoverable amount of the investment and its book value. Management determines recoverable value as the greater of the value in use and the fair value less costs to sell in accordance with the provisions of IAS 36. Value in use is determined by an independent valuer based on management's estimates and assumptions such as future cash flows, returns of each subsidiary company, and discounted rates applied to the projected cash flows. Moreover, these assumptions vary due to the different conditions prevailing in the markets of the countries in which the Group operates. We focused on this area due to the significant value of investments in subsidiaries as well as the estimates and assumptions used by the management as part of the impairment test conducted for these investments. Based on the impairment test conducted by the management, there was no need to recognize impairment losses on investments for the year ended 31 December 2021. of impairment indicators in investments in subsidiaries. Following the performance of the procedures used for evaluating goodwill impairment in the consolidated financial statements, we evaluated management's analysis according with which the recoverable amounts of the cash-generating units as identified in the impairment test of goodwill, were related with the corresponding investments in subsidiaries. The procedures we performed in determining the recoverable amount of the investments in subsidiaries that had been subject to impairment testing, included those reported in the above-mentioned key audit matter "Impairment assessment of Goodwill”. From the aforementioned audit procedures, we found that management's assumptions and estimates are within a reasonable range. In addition, we have confirmed the appropriateness of the relevant disclosures in Note. 3.29 "Participations". Other Information The members of the Board of Directors are responsible for the Other Information. The Other Information, which is included in the Annual Report in accordance with Law 3556/2007, is the Statements of Board of Directors members and the Board of Directors Report (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report. In addition, the Company prepares on an annual basis the “Thrace Plastics Group Sustainability Report”, which is expected to be made available to us after 14 April 2022. Our opinion on the separate and consolidated financial statements does not cover the Other Information and except to the extent otherwise explicitly stated in this section of our Report, we do not express an audit opinion or other form of assurance thereon. In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We considered whether the Board of Directors Report includes the disclosures required by Law 4548/2018 and the Corporate Governance Statement required by article 152 of Law 4548/2018 has been prepared. Based on the work undertaken in the course of our audit, in our opinion: ● The information given in the Board of Directors’ Report for the year ended at 31 December 2021 is consistent with the separate and consolidated financial statements, ● The Board of Directors’ Report has been prepared in accordance with the legal requirements of articles 150,151,153 and 154 of Law 4548/2018, ● The Corporate Governance Statement provides the information referred to items c and d of paragraph 1 of article 152 of Law 4548/2018. In addition, in light of the knowledge and understanding of the Company and Group and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Board of Directors’ Report and Other Information that we obtained prior to the date of this auditor’s report. We have nothing to report in this respect. Responsibilities of Board of Directors and those charged with governance for the separate and consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the requirements of Law 4548/2018, and for such internal control as the Board of Directors determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate and consolidated financial statements, the Board of Directors is responsible for assessing the Company’s and Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company and Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s and Group’s financial reporting process. Auditor’s responsibilities for the audit of the separate and consolidated financial statements Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ● Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and Group’s internal control. ● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. ● Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and Group to cease to continue as a going concern. ● Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company and Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the year ended 31 December 2021 and are therefore the key audit matters. We describe these matters in our auditor’s report. Report on other legal and regulatory requirements 1. Additional Report to the Audit Committee Our opinion on the accompanying separate and consolidated financial statements is consistent with our, as per article 11 of Regulation (EU) 537/2014 required, Additional Report to the Audit Committee of the Company. 2. Appointment We were first appointed as auditors of the Company by the decision of the annual general meeting of shareholders on 12 May 2010. Our appointment has been renewed annually by the decision of the annual general meeting of shareholders for a total uninterrupted period of appointment of 12 years. 3. Operating Regulation The Company has an Operating Regulation in accordance with the content provided by the provisions of article 14 of Law 4706/2020. 4. Assurance Report on the European Single Electronic Format We have examined the digital files of Thrace Plastics Holding Company S.A.” (hereinafter referred to as the “Company and / or Group”), which were compiled in accordance with the European Single Electronic Format (ESEF) defined by the Commission Delegated Regulation (EU) 2019/815, as amended by Regulation (EU) 2020/1989 (hereinafter “ESEF Regulation”), and which include the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2021, in XHTML format 213800J1QD8BIB2ICW19-2021-12-31-el, as well as the provided XBRL file 213800J1QD8BIB2ICW19-2021-12-31-el with the appropriate marking up, on the aforementioned consolidated financial statements. Regulatory framework The digital files of the European Single Electronic Format are compiled in accordance with ESEF Regulation and 2020 / C 379/01 Interpretative Communication of the European Commission of 10 November 2020, as provided by Law 3556/2007 and the relevant announcements of the Hellenic Capital Market Commission and the Athens Stock Exchange (hereinafter “ESEF Regulatory Framework”). In s ummary, this Framework includes the following requirements: • All annual financial reports should be prepared in XHTML format. • For consolidated financial statements in accordance with International Financial Reporting Standards, the financial information stated in the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the Statement of Cash Flows should be marked-up with XBRL 'tags', according to the ESEF Taxonomy, as in force. The technical specifications for ESEF, including the relevant classification, are set out in the ESEF Regulatory Technical Standards. The requirements set out in the current ESEF Regulatory Framework are suitable criteria for formulating a reasonable assurance conclusion. Responsibilities of the management and those charged with governance The management is responsible for the preparation and submission of the separate and consolidated financial statements of the Company and the Group, for the year ended December 31, 2021, in accordance with the requirements set by the ESEF Regulatory Framework, as well as for those internal controls that management determines as necessary, to enable the compilation of digital files free of material error due to either fraud or error. Auditor’s responsibilities Our responsibility is to plan and carry out this assurance work, in accordance with no. 214/4 / 11.02.2022 Decision of the Board of Directors of the Hellenic Accounting and Auditing Standards Oversight Board (HAASOB) and the "Guidelines in relation to the work and the assurance report of the Certified Public Accountants on the European Single Electronic Format (ESEF) of issuers with securities listed on a regulated market in Greece" as issued by the Board of Certified Auditors on 14/02/2022 (hereinafter "ESEF Guidelines"), providing reasonable assurance that the separate and consolidated financial statements of the Company and the Group prepared by the management in accordance with ESEF comply in all material respects with the current ESEF Regulatory Framework. Our work was carried out in accordance with the Code of Ethics for Professional Accountants of the International Ethics Standard Board for Accountants (IESBA Code), which has been transposed into Greek Law and in addition we have fulfilled the ethical responsibilities of independence, according to Law 4449/2017 and the Regulation (EU) 537/2014. The assurance work we conducted is limited to the procedures provided by the ESEF Guidelines and was carried out in accordance with International Standard on Assurance Engagements 3000, “Assurance Engagements other than Audits or Reviews of Historical Financial Information''. Reasonable assurance is a high level of assurance, but it is not a guarantee that this work will always detect a material misstatement regarding non-compliance with the requirements of the ESEF Regulation. Conclusion Based on the procedures performed and the evidence obtained, we conclude that the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2021, in XHTML file format 213800J1QD8BIB2ICW19-2021-12-31-el, as well as the provided XBRL file 213800J1QD8BIB2ICW19-2021-12-31-el with the appropriate marking up, on the aforementioned consolidated financial statements have been prepared, in all material respects, in accordance with the requirements of the ESEF Regulatory Framework. 14 April 2022 The Certified Auditor PricewaterhouseCoopers SA 268 Kifissias Avenue 152 32, Halandri Konstantinos Michalatos SOEL Reg.No 113 SOEL Reg. No. 17701 ANNUAL FINANCIAL STATEMENTS FOR THE PERIOD 01.01.2021 – 31.12.2021 THRACE PLASTICS CO S.A. 21 Page 150 of 260 Annual Financial Report as of 31.12.2021 Amounts in thousand Euro, unless stated otherwise IV. ANNUAL FINANCIAL STATEMENTS (SEPARATE AND CONSOLIDATED) Contents of Notes 1. Information about the Group 158 2. Basis for the Preparation of the Financial Statements and Main Accounting Principles 160 2.1 Basis of Preparation 160 2.2 New standards, amendments to standards and interpretations 161 2.3 Signicant Accounting Estimations and Judgments of the Management 164 2.4 Basis of Consolidation 166 2.5 Tangible Assets 168 2.6 Intangible Assets 169 2.7 Non-Current Assets Held for Sale 170 2.8 Impairments of Non-Financial Assets 170 2.9 Inventories 171 2.10 Accounts Receivable - Provisions for Doubtful Receivables 171 2.11 Cash & cash equivalents 171 2.12 Foreign Exchange Translations 171 2.13 Acquisition of Treasury Shares 172 2.14 Dividends 172 2.15 Income 172 2.16 Expenses 173 2.17 Leases 174 2.18 Income Tax 175 2.19 Employee Benets 176 2.20 Provisions 177 2.21 Financial Assets 177 2.22 Financial Liabilities 179 2.23 Suppliers and Other Creditors 179 2.24 Equity 179 2.25 Change in Accounting Policy 180 Statements STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME 152 STATEMENT OF FINANCIAL POSITION 154 STATEMENT OF CHANGES IN EQUITY 155 STATEMENT OF CASH FLOWS 157 Annual Financial Report as of 31.12.2021 Page 151 of 260 Amounts in thousand Euro, unless stated otherwise 3.1 Evolution and Performance of the Group 183 3.2 Discontinued Activities 185 3.3 Segment Repor ting 186 3.4 Other Operating Income 190 3.5 Other Gains / Losses 190 3.6 Analysis of Expenses (Production-Administrative-Sales & Distribution-Research & Development) 191 3.7 Payroll Expenses 192 3.8 Other Operating Expenses 193 3.9 Financial income/(expenses) 194 3.10 Earnings per Share (Consolidated) 194 3.11 Income Tax 195 3.12 Tangible Assets 198 3.13 Leases 202 3.14 Fixed assets held for sale 206 3.15 Intangible Assets 207 3.16 Other Long-Term Receivables 210 3.17 Inventories 211 3.18 Trade and other receivables 212 3.19 Cash & cash equivalents 213 3.20 Share Capital and Share Premium Reserve 214 3.21 Reser ves 215 3.22 Bank Debt 215 3.23 Employees Benets 216 3.24 Deferred Taxes 221 3.25 Suppliers and Other Short-Term Liabilities 225 3.26 Dividend 226 3.27 Transactions with Related Parties 227 3.28 Remuneration of Board of Directors 230 3.29 Investments 230 3.30 Commitments and Contingent Liabilities 233 3.31 Fees of auditing rms 234 3.32 Financial risks 234 3.33 Signicant Events 241 3.34 Events after the Financial Position Date 256 Amounts in thousand Euro, unless stated otherwise Contents >> Page 152 of 260 Annual Financial Report as of 31.12.2021 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME Amounts in Euro thousand unless stated otherwise Annual Financial Report of 31.12.2021 Page 136 from 232 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements Note 1/1 - 31/12/2021 1/1 - 31/12/2020 1/1 - 31/12/2021 1/1 - 31/12/2020 Turnover 428,429 339,722 5,668 4,852 Cost of Sales (288,280) (233,763) (5,644) (4,545) Gross Profit/(loss) - continuing operations 140,149 105,959 24 307 Other Operating Income 3.4 1,169 Selling and Distribution Expenses (35,891) (30,725) - - Administrative Expenses (16,742) (15,195) (930) (1,093) Research and Development Expenses (1,822) (1,462) - - Other Operating Expenses 3.8 (4,594) (5,874) (99) (73) Other gain / (losses) 3.5 1,200 (15) (2) 2 Financial Income 3.9 Financial Expenses 3.9 (3,728) (4,223) (37) (316) Income from Dividends - - 15,006 12,757 Profit / (loss) from companies consolidated with the Equity Method 3.29 2,770 1,776 - - Profit/(loss) before Tax - continuing operations 83,920 52,077 14,130 11,743 Income Tax 3.11 Profit/(loss) after tax (Α) - continuing operations 65,866 41,272 14,114 11,190 Profit/(loss) after tax (Α) - discontinued operations 3.2 6,591 (3,316) - - Profit/(loss) after tax (Α) 72,457 37,956 14,114 11,190 FX differences from translation of foreign Balance Sheets 4,348 (3,172) - - Actuarial profit/(loss) 7,887 (1,369) 6 (34) Other comprehensive income after taxes (B) - continuing operations 12,235 (4,541) 6 (34) FX differences from translation of foreign Balance Sheets 95 175 - - Actuarial profit/(loss) - - - - Other comprehensive income after taxes (B) - discontinued operations 95 175 - - FX differences from translation of foreign Balance Sheets 4,443 (2,997) - - Actuarial profit/(loss) 7,887 (1,369) 6 (34) Other comprehensive income after taxes (B) 12,330 (4,366) 6 (34) Total comprehensive income after taxes (A) + (B) - continuing operations 78,101 36,731 14,120 11,156 Total comprehensive income after taxes (A) + (B) - discontinued operations 6,686 (3,141) - - Total comprehensive income after taxes (A) + (B) 84,787 33,590 14,120 11,156 Group 159 (839) (698) Operating Profit /(loss) before interest and tax - continuing operations (553) - 168 83,913 965 667 (18,054) (10,805) - (16) Company 53,857 1,613 The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 153 of 260 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (continues from previous page) Amounts in Euro thousand unless stated otherwise Annual Financial Report of 31.12.2021 Page 137 from 232 STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (continues from previous page) The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements Continuing operations 1/1 - 31/12/2021 1/1 - 31/12/2020 1/1 - 31/12/2021 1/1 - 31/12/2020 Profit / (loss) after tax Attributed to: Owners of the parent Non controlling interest 430 609 - - Total comprehensive income / (loss) after taxes Attributed to: Owners of the parent 77,678 36,138 - - Non controlling interest 423 593 - - Discontinued operations Profit / (loss) after tax Attributed to: Owners of the parent 6,591 (3,316) - - Non controlling interest - - - - Total comprehensive income / (loss) after taxes Attributed to: Owners of the parent 6,686 (3,141) - - Non controlling interest - - - - Total Operations Profit / (loss) after tax Attributed to: Owners of the parent 72,027 37,347 - - Non controlling interest 430 609 - - Total comprehensive income / (loss) after taxes Attributed to: Owners of the parent 84,364 32,997 - - Non controlling interest 423 593 - - Profit/(loss) allocated to shareholders per share - continuing operations Number of shares 43,356 43,656 Earnings/(loss) per share 3.10 1.5093 0.9314 Profit/(loss) allocated to shareholders per share - discontinued operations Number of shares 43,356 43,656 Earnings/(loss) per share 3.10 0.1520 (0.0760) Profit/(loss) allocated to shareholders per share Number of shares 43,356 43,656 Earnings/(loss) per share 3.10 1.6613 0.8555 65,436 40,663 - - Group Company The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Page 154 of 260 Annual Financial Report as of 31.12.2021 STATEMENT OF FINANCIAL POSITION Amounts in Euro thousand unless stated otherwise Annual Financial Report of 31.12.2021 Page 138 from 232 STATEMENT OF FINANCIAL POSITION The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements Note 31/12/2021 31/12/2020 31/12/2021 31/12/2020 ASSETS Non-Current Assets 3.12 153,848 131,512 327 357 3.13 3,051 13,197 344 55 113 113 - - 3.15 10,539 10,655 262 401 3.29 - - 73,858 73,858 3.29 18,012 15,074 3,819 3,819 3.16 5,001 5,034 1,156 1,157 380 287 113 130 190,944 175,872 79,879 79,777 3.17 71,835 55,338 - - 274 278 25 26 3.18 64,547 56,863 309 12 3.18 14,359 7,211 7,003 194 3.14 - 5,478 - - 3.19 63,240 40,824 137 163 214,255 165,992 7,474 395 405,199 341,864 87,353 80,172 Tangible assets Rights-of-use assets Investment property Intangible Assets Investments in subsidiaries Investments in joint ventures Other long term receivables Deferred tax assets Total non-Current Assets Current Assets Inventories Income tax prepaid Trade receivables Other debtors Fixed assets held for sale Cash and Cash Equivalents Total Current Assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share Capital 28,869 28,869 28,869 28,869 Share premium 21,524 21,524 21,644 21,644 Other reserves 23,496 21,158 12,605 13,550 Retained earnings 174,631 101,074 19,297 12,684 Total Shareholders' equity 248,520 172,625 82,415 76,747 Non controlling interest 3,730 3,484 - - Total Equity 252,250 176,109 82,415 76,747 Long Term Liabilities Long Term Debt 3.22 33,610 46,691 - - Liabilities from leases 3.13 2,061 3,210 208 25 Provisions for Employee Benefits 3.23 3,499 14,191 79 78 Other provisions - 5 284 317 Deferred Tax Liabilities 6,742 2,111 - - Other Long Term Liabilities 237 242 1 1 Total Long Term Liabilities 46,149 66,450 572 421 Short Term Liabilities Short Term Debt 3.22 17,393 26,311 1,519 960 Liabilities from leases 3.13 914 2,822 139 31 Income Tax 4,057 7,383 56 56 Suppliers 3.25 55,441 29,697 1,046 531 Other short-term liabilities 3.25 28,995 33,092 1,606 1,426 Total Short Term Liabilities 106,800 99,305 4,366 3,004 TOTAL LIABILITIES TOTAL EQUITY & LIABILITIES Company Group 152,949 165,755 4,938 3,425 405,199 341,864 87,353 80,172 The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 155 of 260 STATEMENT OF CHANGES IN EQUITY Group Amounts in Euro thousand unless stated otherwise Annual Financial Report of 31.12.2021 Page 139 from 232 STATEMENT OF CHANGES IN EQUITY The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements Group 28,869 21,524 33,596 (10) (8,954) 68,353 143,378 2,971 146,349 - - - - - 1,526 1,526 - 1,526 28,869 21,524 33,596 (10) (8,954) 69,879 144,904 2,971 147,875 - - - - - 37,347 37,347 609 37,956 - - - - (2,993) (1,357) (4,350) (16) (4,366) - - 113 - - (113) - - - - - - - - (4,500) (4,500) (80) (4,580) - - 182 - - (182) - - - - - - (776) - - (776) - (776) - - 295 (776) (2,993) 31,195 27,721 513 28,234 28,869 21,524 33,891 (786) (11,947) 101,074 172,625 3,484 176,109 28,869 21,524 33,891 (786) (11,947) 101,074 172,625 3,484 176,109 - - - - - 72,027 72,027 430 72,457 - - - - 4,448 7,889 12,337 (7) 12,330 - - 1,601 - - (1,601) - - - - - - - - (6,947) (6,947) (176) (7,123) - - (2,206) - - 2,206 - - - - - - - - (17) (17) (1) (18) - - - (1,505) - - (1,505) - (1,505) - - (605) (1,505) 4,448 73,557 75,895 246 76,141 28,869 21,524 33,286 (2,291) (7,499) 174,631 248,520 3,730 252,250 Other comprehensive income Total before non controlling interest Total Balance as at 01/01/2020 Retained earnings Share Capital FX translation reserves Profit / (losses) for the period Changes during the period Purchase of treasury shares Other changes Share Premium Non controlling interest Other Reserves Treasury shares reserves Balance as at 31/12/2021 Balance as at 31/12/2020 Profit / (losses) for the period Balance as at 31/12/2020 Change in accounting policy (note 2.25) Balance as at 01/01/2020 Distribution of earnings Distribution of earnings Dividends Transfers Other changes Purchase of treasury shares Changes during the period Other comprehensive income Dividends The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Page 156 of 260 Annual Financial Report as of 31.12.2021 STATEMENT OF CHANGES IN EQUITY (continues from previous page) Company Amounts in Euro thousand unless stated otherwise Annual Financial Report of 31.12.2021 Page 140 from 232 STATEMENT OF CHANGES IN EQUITY (continues from previous page) The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements Company 28,869 21,644 14,208 (10) 16 6,016 70,743 - - - - - 124 124 28,869 21,644 14,208 (10) 16 6,140 70,867 - - - - - 11,190 11,190 - - - - - (34) (34) - - 113 - - (113) - - - - - - (4,500) (4,500) - - (1) - - 1 - - - - (776) - - (776) - - 112 (776) - 6,544 5,880 28,869 21,644 14,320 (786) 16 12,684 76,747 28,869 21,644 14,320 (786) 16 12,684 76,747 - - - - - 14,114 14,114 - - - - - 6 6 - - 560 - - (560) - - - - - - (6,947) (6,947) - - - - - - - - - - (1,505) - - (1,505) - - 560 (1,505) - 6,613 5,668 28,869 21,644 14,880 (2,291) 16 19,297 82,415 Other changes Other comprehensive income Dividends Profit / (losses) for the period Purchase of treasury shares Changes during the period Profit / (losses) for the period Balance as at 31/12/2021 Change in accounting policy (note 2.25) Dividends Balance as at 31/12/2020 Distribution of earnings Balance as at 31/12/2020 Purchase of treasury shares Other changes Changes during the period Distribution of earnings Other comprehensive income Total Treasury shares reserves FX translation reserves Retained earnings Balance as at 01/01/2020 Share Capital Share Premium Balance as at 01/01/2020 Other Reserves The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 157 of 260 Amounts in Euro thousand, unless stated otherwise Annual Financial Report of 31.12.2021 Page 141 from 232 STATEMENT OF CASH FLOWS The accompanying notes that are presented in pages 147-232 form an integral part of the present Financial Statements 1/1 - 31/12/2021 1/1 - 31/12/2020 1/1 - 31/12/2021 1/1 - 31/12/2020 83,920 52,077 14,130 11,743 6,597 (3,310) - - - 285 2,208 2,920 93 55 (148) (57) - - (195) (84) 2 3 (7,426) 518 - (5) - - (15,006) (12,757) 2,457 1,597 - - 2,651 3,481 37 316 (2,770) (1,776) - - 107,172 74,337 (417) (360) (9,547) (673) (1,329) 6,922 (15,653) 1,928 - - 24,770 495 322 276 106,742 76,087 (1,424) 6,838 (1,781) (2,925) - (380) (424) (147) (6) (3) (17,458) (3,637) (1) (1) 87,079 69,378 (1,431) 6,454 1,429 342 - 5 3,004 9,294 - - 66 92 - - 660 544 14,007 12,757 (30,306) (28,190) (22) (10) 148 43 - - (24,999) (17,875) 13,985 12,752 21,074 22,669 1,500 5,960 (1,505) (776) (1,505) (776) (44,926) (45,586) (960) (20,098) (4,206) (4,354) (158) (154) (11,632) (4,480) (11,457) (4,480) (41,195) (32,527) (12,580) (19,548) 20,885 18,976 (26) (342) 40,824 22,051 163 505 1,531 (203) - - Group Company 40,824 137 63,240 Cash flows from Operating Activities Profit before Taxes and Non controlling interest - continuing operations Profit before Taxes and Non controlling interest - discontinued operations Plus / (minus) adjustments for: Depreciation Provisions Grants FX differences (Gain)/loss from sale of fixed assets Dividends received Impairments of fixed assets Interest & similar expenses / (income) (Profit) / loss from companies consolidated with the Equity method Operating Profit before adjustments in working capital (Increase)/decrease in receivables (Increase)/decrease in inventories Increase/(decrease) in liabilities (apart from banks-taxes) Cash generated from Operating activities Interest Paid Other financial income/(expenses) Taxes paid Cash flows from operating activities (a) Investing Activities Proceeds from sales of tangible and intangible assets Partial collection of the consideration paid for the transfer of Thrace Linq property Interest received Dividends received Purchase of tangible and intangible assets Investment grants Cash flow from investing activities (b) Financing activities Proceeds from loans Purchase of treasury shares Repayment of loans Financial leases Dividends paid Cash flow from financing activities (c) Net increase /(decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at beginning of period Effect from changes in foreign exchange rates on cash reserves Cash and Cash Equivalents at end of period 163 19,878 18,971 327 STATEMENT OF CASH FLOWS The accompanying notes that are presented in pages 158-260 form an integral part of the present Financial Statements Amounts in thousand Euro, unless stated otherwise Contents >> Page 158 of 260 Annual Financial Report as of 31.12.2021 The company THRACE PLASTICS CO S.A. as it was renamed following the approval and the alteration of its name on GEMI (here- inafter the “Company”) was founded in 1977. It is based in Magiko of municipality of Avdira in Xanthi, Northern Greece, and is registered in the Public Companies (S.A.) Register under Reg. No. 11188/06/Β/86/31 and in the General Commercial Register under Reg. No. 12512246000. The main objective of the Company was altered as result of the spin-o of the busi- ness segment of production and trade of industrial packaging products of the Com- pany and the subsequent amendment of the relevant article 3 of the Company’s Ar- ticles of Association, according to the pre- cise form that was previously announced by the Company, and in line with the clauses of article 27, paragraph 3, case d’ of P.L. 2190/1920. The aim of the Company and its main objective is to participate in the share capital of companies and to - nance companies of any legal form, kind and objective, either listed or non-listed on organized market, as well as the provi- sion of Administrative - Financial - IT Ser- vices to its Subsidiaries. The Company is the parent of a Group of companies (hereinafter the “Group”), which operate mainly in two sectors, the technical fabrics sector and the packaging sector. The Company’s shares are listed on the Athens Stock Exchange since June 26, 1995. The company’s shareholders, with equity stakes above 5%, as of 31.12.2021 were the following: Chalioris Konstantinos 43.29% Chaliori Eymia 20.85% The Group maintains production and trade facilities in Greece, United Kingdom, Ireland, Sweden, Norway, Serbia, Bulgaria, U.S.A. and Romania. The Group, including its joint ventures, employed a total of 2,068 employees as of December 31, 2021, of which 1,212 were employed in Greece. The structure of the Group as of 31 st De- cember 2021 was as follows: 1. Information about the Group Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 159 of 260 Company Registered Offices Ownership Percentage of Parent Company Ownership Percentage of Group Consolidation Method Thrace Plastics CO S.A. GREECE-Xanthi Parent - Full Don & Low LTD SCOTLAND-Forfar 100.00% 100.00% Full Don & Low Australia Pty LTD AUSTRALIA - 100.00% Full Thrace Nonwovens & Geosynthetics Single Person S.A. GREECE-Xanthi 100.00% 100.00% Full Saepe LTD CYPRUS-Nicosia - 100.00% Full Thrace Asia HONG KONG - 100.00% Full Thrace Protect S.M.P.C. GREECE-Xanthi - 100.00% Full Thrace Plastics Pack S.A. GREECE-Ioannina 92.94% 92.94% Full Thrace Greiner Packaging SRL ROMANIA - Sibiou - 46.47% Equity Thrace Plastics Packaging D.O.O. SERBIA-Nova Pazova - 92.94% Full Trierina Trading LTD CYPRUS-Nicosia - 92.94% Full Thrace Ipoma A.D. BULGARIA-Soa - 92.83% Full Synthetic Holdings LTD N. IRELAND-Belfast 100.00% 100.00% Full Thrace Synthetic Packaging LTD IRELAND - Clara - 100.00% Full Arno LTD IRELAND -Dublin - 100.00% Full Synthetic Textiles LTD N. IRELAND-Belfast - 100.00% Full Thrace Polybulk A.B. SWEDEN -Köping - 100.00% Full Thrace Polybulk A.S. NORWAY-Brevik - 100.00% Full Lumite INC. U.S.A. - Georgia - 50.00% Equity Adrmate LTD CYPRUS-Nicosia - 100.00% Full Pareen LTD CYPRUS-Nicosia - 100.00% Full Thrace Linq INC. U.S.A. - South Carolina - 100.00% Full Thrace Polylms Single Person S.A. GREECE - Xanthi 100.00% 100.00% Full Thrace Greenhouses S.A. GREECE - Xanthi 50.91% 50.91% Equity Thrace Eurobent S.A. GREECE - Xanthi 51.00% 51.00% Equity Amounts in thousand Euro, unless stated otherwise Contents >> Page 160 of 260 Annual Financial Report as of 31.12.2021 2.1 Basis of Preparation The present nancial statements have been prepared according to the Inter- national Financial Reporting Standards (I.F.R.S.), including the International Ac- counting Standards (I.A.S.) and interpreta- tions that have been issued by the Interna- tional Financial Reporting Interpretations Committee (I.F.R.I.C.), as such have been adopted by the European Union until 31 December 2021. The basic accounting principles that were applied for the prepa- ration of the nancial statements for the year ended on 31 December 2021 are the same as those applied for the preparation of the nancial statements for the year ended on 31 December 2020 and are de- scribed in such. When deemed necessary, the compara- tive data have been reclassied in order to conform to possible changes in the pres- entation of the data of the present year. Dierences that possibly appear between accounts in the nancial statements and the respective accounts in the notes, are due to rounding. The nancial statements have been pre- pared according to the historic cost princi- ple, as such is disclosed in the Company’s accounting principles presented below. Moreover, the Group’s and Company’s - nancial statements have been prepared according to the “going concern” principle taking into account the signicant prot- ability of the Group and the Company and all macroeconomic and microeconomic factors as well as their impact on the smooth operation of the Group and the Company. The nancial statements were approved by the Board of Directors of the Company on April 12, 2022 and are subject to ap- proval by the next General Meeting which will convene within the year 2022. The nancial statements of the Group THRACE PLASTICS Co. S.A. as well as of the parent company are posted on the inter- net, on the website www.thracegroup.gr. 2. Basis for the Preparation of the Financial Statements and Main Accounting Principles Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 161 of 260 Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods be- ginning on or after 1 January 2021. STANDARDSAND INTERPRETATIONSEFFECTIVE FORTHECURRENTFINANCIAL YEAR (IFRS 16 (Amendment) ‘Covid-19- Related Rent Concessions’ The amendment provides lessees (but not lessors) with relief in the form of an op- tional exemption from assessing whether a rent concession related to COVID-19 is a lease modication. Lessees can elect to ac- count for rent concessions in the same way as they would for changes which are not considered lease modications. IFRS 4 (Amendment) ‘Extension of the Temporary Exemption from Applying IFRS 9’ The amendment changes the xed expiry date for the temporary exemption in IFRS 4 ‘Insurance Contracts’ from applying IFRS 9 ‘Financial Instruments’, so that entities would be required to apply IFRS 9 for an- nual periods beginning on or after 1 Janu- ary 2023. IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments) ‘Interest rate benchmark reform – Phase 2’ The amendments complement those is- sued in 2019 and focus on the eects on nancial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. More specically, the amendments relate to how a company will account for changes in the contractual cash ows of nancial instruments, how it will account for the change in its hedging relationships and the information it should disclose. IAS 19 “Allocation of Service Periods in accordance with International Accounting Standard (IAS) 19” (Decision of the Interpretations Committee) The IFRS Interpretations Committee is- sued in May 2021 the nal decision on the agenda entitled “Allocation of benets in periods of service in accordance with International Accounting Standard (IAS) 19”, which includes explanatory material on how to distribute benets in periods service on a specic dened benet plan proportional to that dened in article 8 of Law 3198/1955 regarding the provision of compensation due to retirement (the “Plan of Fixed Benets of Labor Law”). Based on the above Decision, the way in which the basic principles of IAS 19 were applied in Greece in the past in this regard is being dierentiated, and consequently, according to what is dened in the “IASB Due Process Handbook (par. 8.6)” entities that prepare their nancial statements in accordance with IFRS are required to amend their accounting policies accord- ingly. The amended standards did not have a sig- nicant impact on the nancial statements of the Group and the Company, while the impact on the nancial statements from the implementation of the Decision of the Interpretations Committee is analyzed in note 3.23.1. 2.2 New standards, amendments to standards and interpretations Amounts in thousand Euro, unless stated otherwise Contents >> Page 162 of 260 Annual Financial Report as of 31.12.2021 STANDARDSAND INTERPRETATIONSEFFECTIVE FORSUBSEQUENTPERIODS IFRS 16 (Amendment) ‘Covid-19-Relat- ed Rent Concessions – Extension in the Application Period’ (eective for annual periods beginning on or after 1 April 2021) The amendment extends the application period of the practical expedient in rela- tion to rent concessions by one year to cover rental concessions that reduce leas- es due only on or before 30 June 2022. The amendment has not yet been endorsed by the EU. IAS 16 (Amendment) ‘Property, Plant and Equipment – Proceeds before In- tended Use’ (eective for annual periods beginning on or after 1 January 2022) The amendment prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also requires entities to separately disclose the amounts of proceeds and costs relating to such items produced that are not an output of the entity’s ordinary activities. IAS 37 (Amendment) ‘Onerous Con- tracts – Cost of Fullling a Contract’ (ef- fective for annual periods beginning on or after 1 January 2022) The amendment claries that ‘costs to full a contract’ comprise the incremental costs of fullling that contract and an allocation of other costs that relate directly to fulll- ing contracts. The amendment also clari- es that, before a separate provision for an onerous contract is established, an entity recognizes any impairment loss that has occurred on assets used in fullling the contract, rather than on assets dedicated to that contract. IFRS 3 (Amendment) ‘Reference to the Conceptual Framework’ (eective for an- nual periods beginning on or after 1 January 2022) The amendment updated the standard to refer to the 2018 Conceptual Framework for Financial Reporting, in order to deter- mine what constitutes an asset or a liabil- ity in a business combination. In addition, an exception was added for some types of liabilities and contingent liabilities ac- quired in a business combination. Finally, it is claried that the acquirer should not recognize contingent assets, as dened in IAS 37, at the acquisition date. IAS 1 (Amendment) ‘Classication of li- abilities as current or non-current’ (ef- fective for annual periods beginning on or after 1 January 2023) The amendment claries that liabilities are classied as either current or non-current depending on the rights that exist at the end of the reporting period. Classication is unaected by the expectations of the entity or events after the reporting date. The amendment also claries what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendment has not yet been endorsed by the EU. IAS 1 (Amendments) ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Disclosure of Accounting policies’ (eective for annual periods begin- ning on or after 1 January 2023) The amendments require companies to disclose their material accounting policy in- formation and provide guidance on how to apply the concept of materiality to account- ing policy disclosures. The amendments have not yet been endorsed by the EU. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 163 of 260 IAS 8 (Amendments) ‘Accounting poli- cies, Changes in Accounting Estimates and Errors: Denition of Accounting Es- timates’ (eective for annual periods begin- ning on or after 1 January 2023) The amendments clarify how companies should distinguish changes in account- ing policies from changes in accounting estimates. The amendments have not yet been endorsed by the EU. IΑS 12 (Amendments) ‘Deferred tax re- lated to Assets and Liabilities arising from a Single Transaction’ (eective for annual periods beginning on or after 1 Janu- ary 2023) The amendments require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary dierences. This will typically apply to transactions such as leases for the lessee and decommissioning obligations. The amendments have not yet been en- dorsed by the EU. IFRS 17 (Amendment) “Initial Applica- tion of IFRS 17 and IFRS 9 - Comparative Information” (eective for annual periods beginning on or after 1 January 2023) The amendment is a transition option re- lated to comparative information on - nancial assets presented in the initial ap- plication of IFRS 17. The amendment is intended to assist entities in avoiding tem- porary accounting discrepancies between nancial assets and insurance contractual liabilities. Therefore it improves the useful- ness of comparative information for users of nancial statements. The amendment has not yet been adopted by the European Union. Annual Improvements to IFRS Stand- ards 2018–2020 (eective for annual peri- ods beginning on or after 1 January 2022) IFRS 9 ‘Financial instruments’ The amendment addresses which fees should be included in the 10% test for derecognition of nancial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be in- cluded in the 10% test. IFRS 16 ‘Leases’ The amendment removed the illustra- tion of payments from the lessor relating to leasehold improvements in Illustrative Example 13 of the standard in order to re- move any potential confusion about the treatment of lease incentives. IAS 41 ‘Agriculture’ The amendment has removed the require- ment for entities to exclude cash ows for taxation when measuring fair value under IAS 41. Amounts in thousand Euro, unless stated otherwise Contents >> Page 164 of 260 Annual Financial Report as of 31.12.2021 2.3 Significant Accounting Estimations and Judgments of the Management The estimations and judgments of the Management of the Group are constantly assessed. They are based on historic data and expectations for future events, which are deemed as fair according to the ones in eect. 2.3.1 Signicant Accounting Estimates and Assumptions The preparation of the Financial Statements in accordance with International Financial Reporting Standards (IFRS) requires the management to make estimates and as - sumptions that may aect the accounting balances of assets and liabilities, the re - quired disclosure of contingent assets and liabilities at the date of preparation of the Fi - nancial Statements, as well as the amounts of income and expenses recognized during the nancial year. The use of the available information, which is based in historical data and assumptions and the implementa - tion of subjective evaluation are necessary in order to conduct estimates. The actual future results may dier from the above es - timates and these dierences may aect the Financial Statements. Estimates and relative assumptions are revised constantly. The revisions in accounting estimations are recognized in the period they occur if the revision aects only the specic period or in the revised period and the future periods if the revisions aect the current and the fu - ture periods. The key estimates and judgments that refer to elements and data whose development could aect the items of the Financial State - ments during the next twelve months are as follows: 2.3.1.1 Provisions for expected credit losses from customers and other receivables The Group and the Company recognize im - pairment losses for expected credit losses for all nancial assets. Expected credit losses are based on the dierence between the contractual cash ows and all cash ows that the Group (or the Company) expects to re - ceive. The dierence is discounted using an estimate of the initial eective interest rate of the nancial asset. For customer receiva - bles, the Group and the Company applied the simplied approach to the standard and calculated the expected credit losses on the basis of the expected credit losses over the lifetime of those items. For other nancial assets, the expected credit losses are calcu - lated on the basis of the losses for the next 12 months. Expected credit losses over the next 12 months are part of the expected credit losses over the life of the nancial as - sets resulting from the probability of default of an item within 12 months of the report - ing date. If there is a signicant increase in credit risk from the initial recognition, the provision for impairment will be based on the expected credit losses over the life of the asset. 2.3.1.2 Impairment of Investment in Subsidiaries Management examines on an annual basis whether there are indicators of impairment of investment in subsidiaries. If an invest - ment has to be impaired, the Company calculates the amount of the impairment as the dierence between the recoverable amount of the investment and its book value. Management determines recover - able value as the greater of the value in use and the fair value less costs to sell in accord - Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 165 of 260 ance with the provisions of IAS 36. Value in use is determined by an independent valuer based on management’s estimates and as - sumptions such as future cash ows, returns of each subsidiary company, and discount - ed rates applied to the projected cash ows. Moreover, these assumptions vary due to the dierent conditions prevailing in the markets of the countries in which the Group operates. 2.3.1.3 Estimate on Impairment of Goodwill The Group assesses whether there is im - pairment of goodwill at least on an annual basis. Management identies the recover - able amount as the greater of its value in use and its fair value less costs to sell. The calculation of the acquisition (book) value of each cash-generating unit requires an estimate by management of the assump - tions about the future results of the above cash-generating units, such as growth rate in perpetuity, forecasts for projected quanti - ties and sales prices, gross prot margin and discount rates. These assumptions vary due to dierent market conditions in the coun - tries in which the Group operates. 2.3.1.4 Provision for income tax The provision for income tax according to I.A.S. 12 is calculated by estimating taxes that will be paid to the tax authorities and includes the current income tax for each - nancial year and a provision for additional taxes that may arise in future tax audits. Group companies are subject to dierent income tax laws and therefore signicant management assessment is required to determine the Group’s income tax income. Income tax expense may dier from these estimates as a result of future changes in tax legislation both in the countries in which the Group operates and in Greece or unfore - seen consequences from the nal determi- nation of the tax liability of each use by the tax authorities. These changes may have a signicant impact on the Group’s and Com - pany’s nancial position in the event that the nal settlement of income taxes devi - ates from the initial amounts that have been recorded in the Group and Company nan - cial statements. These dierences will aect income tax and deferred tax provisions for the year in which the nal determination is made. For more information, see note 3.11. 2.3.1.5 Provisions for employee benets The present value of the liabilities for post- employment benets depends on a num - ber of factors dened on actuarial basis via the use of a signicant number of assump - tions. The assumptions used for the deter- mination of the net cost (income) for post- employment benets include discount rates, rates of wage increases, mortality and disability rates, retirement ages and other factors. Any changes to these underlying assumptions may have a signicant eect on the liability and the relative costs of each period. The Group denes the appropriate discount rate in each reporting period. It is the inter - est rate applicable for the calculation of the present value of the estimated future pay - ments required for the settlement of the benet liabilities. For the estimation of the appropriate discount rate the Group takes into consideration the interest rates prevail - ing in high credit rating corporate bonds denominated in the currency of the benet payments and with maturity dates similar to the ones of the respective liabilities. Due to the long-term nature of these dened ben - et plans, these cases are subject to a signi- cant degree of uncertainty. Further informa- tion is provided in note 3.23 . Amounts in thousand Euro, unless stated otherwise Contents >> Page 166 of 260 Annual Financial Report as of 31.12.2021 Subsidiaries are all companies (includ- ing those companies of special purpose) which are controlled by the Group. The Group controls a company when the Group is exposed to or has rights in vari- able returns from its participation in the company and has the ability to aect these returns through the power it possesses in the company. The subsidiaries are consoli- dated with the full consolidation method from the date at which the control is ac- quired by the Group and are excluded from consolidation from the date at which such control does not exist. The mergers of companies are accounted for, from the Group based on the purchase method. The price of the acquisition is cal- culated as the fair value of the transferred assets, the liabilities undertaken against the former shareholders and the shares issued by the Group. The price of the ac- quisition includes the fair value of any as- set or liability which may derive from any potential agreement about the price. The assets acquired and the liabilities along with the contingent liabilities assumed during a corporate merger are measured initially at fair value at the date of the ac- quisition. Depending on the acquisition case, the Group recognizes any non-con- trolled interest in the subsidiary either at fair value or at the value of the stake of the non-controlled interest in the equity of the subsidiary. Increases of the Group’s participation in subsidiaries are recognized as transactions in equity. The dierence between the ac- quisition cost and the participation in the new equity of the subsidiary acquired, is recognized directly in the Group’s equity. Prot or losses from the sale of a participa- tion percentage that does not lead to loss of control on the subsidiary by the Group, is also recognized in the Group’s equity. The expenses related to the acquisition are recorded in the nancial results. If the corporate merger is gradually achieved then the fair value of the partici- pation held by the Group in the acquired company is revalued at fair value at the acquisition date. The prot or loss which emerges from the revaluation is recog- nized in the nancial results. Any potential price that is transferred from the Group is recognized at fair value at the acquisition date. Any subsequent chang- es in the fair value of the potential price, which is considered as an asset or a liabil- ity, are recognized according to IAS 39 in the nancial results. If the potential price is recorded as item of the equity, then it is not revalued until its nal settlement 2.4 Basis of Consolidation 2.4.1 Subsidiaries 2.3.2 Signicant Accounting Judgments in the Application of Accounting Principles 2.3.2.1 Depreciation/amortization of tangible and intangible assets The Group and the Company calculate depreciation/amortization on tangible and intangible assets based on estima- tion of the useful life of such. The residu- al value and useful life of such assets are reviewed and dened at the end of each reporting period, if deemed necessary. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 167 of 260 through the equity. Intra-company transactions, balances and non-realized earnings from transactions among the companies of the Group are excluded. The non-realized losses are also excluded. The accounting principles that are applied by the subsidiaries have been adjusted wherever it was deemed neces- sary so that they are aligned with the ones adopted by the Group. The Company records the investments in subsidiaries in the separate nancial statements at acquisition cost minus any impairment. Furthermore, the acquisi- tion cost is adjusted so that it reects the changes in the payable price deriving from any amendments in the potential price. 2.4.2 Transactions with owners of non-controlled interests The Group treats the transactions with the owners of non-controlled interests, which do not result into loss of control, in the same manner with the transactions with the major shareholders of the Group. The dierence between the price paid and the book value of the acquired interest of the subsidiary’s equity is recorded in the share- holders’ funds. Earnings of losses deriving from the sale to owners of non-controlled interests are also recorded in shareholders’ funds 2.4.3 Sale of Subsidiary When the Group ceases to possess control, the remaining percentage is measured at fair value, whereas any potential dier- ences that derive in comparison with the current value are recorded in the nancial results. Following, this asset is recognized as associate company, joint venture or - nancial asset at the above fair value. Addi- tionally, any relevant amounts which were previously recorded in the other compre- hensive income are accounted for, with the same manner that would be followed in the case of sale of these assets and liabil- ities, meaning that they can be transferred in the nancial results. 2.4.4 Joint Arrangements Based on IFRS 11, investments in joint ar- rangements are classied either as joint activities or as joint ventures and the classication depends on the contractual rights and the liabilities of each investor. The Group evaluated the nature of its in- vestments in joint arrangements and de- cided that these constitute joint ventures. Joint ventures are consolidated according to the equity method. According to the equity method, invest- ments in joint ventures are initially recog- nized at the acquisition cost, which in a later stage increases or decreases via the recognition of the Group’s share in the earnings or losses of the joint ventures and the changes in the other compre- hensive income after the acquisition. In case the share of the Group in the losses of the joint ventures exceeds the amount of the investment (which also includes any long-term investment that essentially con- stitutes part of the net investment of the Group in the joint ventures), no additional losses should be recognized, unless there have been payments or there are commit- ments undertaken for the account of the joint ventures. Non realized prot from transactions be- tween the Group and the joint ventures is excluded according to the percentage of the Group’s participation in the joint ventures. The non-realized losses are also excluded, unless the transaction of- Amounts in thousand Euro, unless stated otherwise Contents >> Page 168 of 260 Annual Financial Report as of 31.12.2021 2.5 Tangible Assets Tangible assets are recorded at book value, net of any grants received, less accumu- lated depreciation and any impairment in value. Expenses for replacement of part of tangible assets are included in the value of the asset if they can be estimated ac- curately and increase the future benets of the Group from such. The repairs and maintenance of tangible assets charge the nancial results, in the period when such are realized. The acquisition cost and the related accumulated depreciation of as- sets retired or sold, are removed from the accounts at the time of sale or retirement, and any gain or loss is included in the - nancial Results. Depreciation is charged in the nancial Results based on the straight-line method over the estimated useful life of tangi- ble assets, however, in cases of invest- ments where the nancial benets are not estimated to be evenly distributed throughout the useful life of the asset, the diminishing balance method is used. The estimated useful life of each category of asset is presented below: Category Depreciation rate Economic Life Buildings and technical works 2.5% - 5% 20 - 40 years Machinery and technical installations 7% - 10% 10 - 14 years Specialized mechanical equipment 12% - 15% 7 - 8 years Vehicles 10% - 20% 5 - 10 years Furniture and xture 10% - 30% 3 - 10 years Land and plots are not depreciated, how- ever they are reviewed for impairment. Residual values and economic life of tan- gible assets might be adjusted if neces- sary at the time nancial statements are prepared. Tangible assets, that have been impaired, are adjusted to reect their re- coverable value (Note 3.12). The remaining value, if not negligible, is re-estimated on an annual basis. Tangible assets are derecognized when sold, or when no future economic benets are expected from their use. The gains and losses arising from the sale of property, plant and equipment are determined by the dierence between the sale proceeds and the net book value as shown in the books and included in the operating re- sult. fers indications of a potential impairment of the transferred asset. The accounting principles of the joint ventures have been amended wherever it was deemed appro- priate so that they are aligned with the ones adopted by the Group. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 169 of 260 2.6.1 Goodwill The acquisition of a subsidiary by the Group is accounted for based on the acquisition method. The acquisition cost of a sub- sidiary is the fair value of assets acquired, shares issued and liabilities assumed dur- ing the transaction date, plus possible expenses directly linked to the transac- tion. The individual assets, liabilities and contingent liabilities acquired in a busi- ness combination are measured during the acquisition at fair value regardless of the participation percentage. The acquisi- tion cost above fair value of the individual assets acquired, is booked as goodwill. If the total acquisition cost is less than the fair value of the individual assets acquired, the dierence is registered directly in the nancial results. Upon initial recognition, goodwill is meas- ured at cost less any accumulated impair- ment losses. For the purposes of the im- pairment test, the goodwill recognized has been allocated, from the date of acquisi- tion, to the Group’s cash-generating units, which are expected to benet from the combination. Each unit in which goodwill has been allocated represents the lowest level within the company in which good- will is monitored for internal management purposes. Impairment testing is performed on an an- nual basis or more frequently if events or changes in circumstances indicate a pos- sible impairment. The carrying amount (book value) of goodwill is compared to the recoverable amount, which is the high- er between the value-in-use and the fair value less costs to sell. Impairment is rec- ognized directly as an expense and cannot be reversed at a later date. 2.6.2 Impairment of Goodwill Goodwill is allocated on cash-generating units and an impairment test is carried out annually or more frequently if there is evidence of a possible impairment in the book value of the goodwill in relation to its recoverable value in accordance with IAS 36. Impairment is recognized directly as an expense in consolidated prot or loss and other comprehensive income and is not subsequently reversed. Management determines recoverable value as the largest amount between the value in use and its fair value, minus any related costs of disposal. The calculation of the value in use of each cash-gener- ating unit is performed by an independ- ent valuer and requires management’s estimation of the assumptions about the future nancial results of the above cash- generating units, such as the growth rate in perpetuity, forecasts of expected sales quantities and prices, gross margin and discount rates. These assumptions vary due to the dierent market conditions in the countries in which the Group operates. For more information see note 3.15. 2.6.3 Other Intangible Assets Other intangible assets mainly concern software and industrial ownership rights which refer to the utilization right of the trademark TERRAHOME that has been purchased from a third party, and of the Geothermic eld that has been purchased from the Greek State. Their values are stated at acquisition cost, less the accu- mulated depreciation and any impairment losses. Amortization of intangible assets is recorded in the nancial results, based on 2.6 Intangible Assets Amounts in thousand Euro, unless stated otherwise Contents >> Page 170 of 260 Annual Financial Report as of 31.12.2021 the straight-line method over the estimat- ed useful life of assets. The following table depicts the estimated useful life of assets: Category Amortization Rate Useful Life Industrial ownership rights 20% 5 years Software 10 - 20% 5 - 10 years Subsequent expenses on the capitalized intangible assets are capitalized only when they increase the future benets that are at- tributed to the specic asset. In a dierent case, all other expenses are recorded when they incur. Research costs are expensed as incurred. Development costs that do not meet the recognition criteria as an asset are expensed as incurred. 2.7 Non-Current Assets Held for Sale The Group classies a non-current asset (or a group of assets and liabilities) as held for sale, if its value is expected to be recovered primarily through the sale of the item and not through its continued use and the sale is considered very likely. Immediately be- fore the initial classication of the non-cur- rent asset (or group of assets and liabilities) as held for sale, the asset (or all assets and liabilities included in the group) shall be as- sessed on the basis of the applicable IFRS. Non-current assets (or asset and liability groups) classied as held for sale are val- ued at the lowest value between their book value and their fair value reduced by direct sales costs, and any resulting impairment losses and then they are recorded in the - nancial results. Any possible increase in the fair value in a later valuation is recorded in the statement of comprehensive income, but not for an amount greater than the pre- viously recorded impairment loss. From the day on which a non-current asset (or non- current asset included in a group of assets and liabilities) is classied as held for sale, no depreciation or impairment is recorded. 2.8 Impairments of Non-Financial Assets With the exception of goodwill which is reviewed for impairment at least on an an- nual basis, the book values of other non- nancial assets are reviewed for impair- ment when events or changes in conditions indicate that the book value may not be recoverable. When the book value of an as- set exceeds its recoverable amount, the re- spective impairment loss is registered in the nancial results. The recoverable amount is dened as the largest value between the net sales price and the value in use. Net sale price is the amount that can be received from the sale of an asset, in the context of an arm’s length transaction in which the parties have full knowledge and voluntarily proceed, after the deduction of any addi- tional direct cost for sale of the asset. Value in use is the present value of estimated future cash ows expected to be realized from the continuous use of an asset and from the revenue expected to result from its sale and the end of its estimated useful life. For purposes of dening impairment, the non-nancial assets are grouped at the lowest level for which cash ows can be rec- ognized separately. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 171 of 260 Accounts receivable are initially recorded at their fair value, which is the transaction value, and are subsequently measured at amortized cost using the eective interest rate, less the expected credit losses arising from all possible default events through- out expected life of a nancial instrument at each reporting date. At each nancial statement date, the recoverability of the receivable accounts is estimated either per customer when there is objective evi- dence that the Group is unable to collect all amounts due under the contractual terms, either on historical trends, statis- tical data and anticipated future events and the relevant provision for impairment is formed. The provision formed is ad- justed for impairment and is included in ‘Other expenses’. Any write-os of receiva- bles from accounts receivable are made through the provision made 2.9 Inventories Inventories are stated at the lower of cost (acquisition or production) and net real- izable value. Cost of nal and semi-nal products includes all cost of purchase, cost of materials, direct labor cost, other direct expenses and proportionate general pro- duction expenses. The cost of inventories is calculated using the weighted average method. Net realizable value represents the estimated selling price in the ordinary course of business, less any selling cost. 2.10 Accounts Receivable - Provisions for Doubtful Receivables 2.11 Cash & cash equivalents 2.12 Foreign Exchange Translations For purposes of preparing the Statement of Cash Flows, the category of cash & cash equivalents include cash in hand, cash equivalents, such as site deposits and short-term time deposits, namely those with a maturity up to three months. 2.12.1 Operating currency and presentation currency The data in the nancial statements of the Group’s companies are registered in the currency of the primary economic environ- ment, in which each Company operates (“operating currency”). The consolidated nancial statements are presented in Euro, which is the operating valuation currency and presentation cur- rency of the parent Company. 2.12.2 Transactions and balances in foreign currencies Transactions in foreign currencies are con- verted into the operating currency based on exchange rates eective at the date of transaction or at the date of revaluation if such case is required. Prots and losses from foreign exchange dierences, aris- ing during the settlement of such transac- tions and from the conversion of foreign currency denominated assets and liabili- ties based on the current exchange rates Amounts in thousand Euro, unless stated otherwise Contents >> Page 172 of 260 Annual Financial Report as of 31.12.2021 at the reporting date, are recorded in the nancial results. Prots and losses from foreign exchange dierences related to cash reserves and bank obligations are recorded in the statement of comprehen- sive income, under the account “Financial income / (expenses) - Net”. All other prots or losses from foreign exchange dierenc- es are recorded in the statement of com- prehensive income, under the account “Other prots / (losses) - Net”. 2.12.3 Group’s Companies in foreign currency The conversion of the nancial statements of the Group’s companies (none of which operates with a currency belonging to a hy- perination economy), which are recorded in a currency that is dierent from the one of the Group, is conducted as follows: • The assets and liabilities for each state- ment of nancial position are convert- ed based on the eective exchange rates at each reporting date, • Revenues and expenses are converted based on the average exchange rates of each period (unless the average exchange rate does not logically ap- proach the cumulative eect of the exchange rates that were eective at the time of the transactions. In such case, revenues and expenses are con- verted based on the exchange rates eective at the time of the relevant transactions), and • The extracted foreign exchange dier- ences are recorded in other compre- hensive income. 2.14 Dividends 2.13 Acquisition of Treasury Shares Payable dividends are presented as a liability during the time when such are approved by the Annual General Meeting of Shareholders. The paid price to acquire Treasury Shares, including the relevant expenses for their purchase, is presented as a deduction of Equity. Any prot or loss from the sale of Treasury Shares, net of direct transaction costs and taxes, is recognized directly in Equity, in the account “Treasury Share Re- serve”. 2.15 Income 2.15.1 Income from contracts with customers The Parent Company provides Adminis- trative, Financial, Accounting, IT Services to the Subsidiaries of the Group. Income from the provision of services is recog- nized over time in the accounting period during which the services were provided. The Group recognizes income from the sale of goods when the control of the goods is transferred to the customer, usu- ally upon delivery, and there is no unful- lled obligation that could aect the ac- ceptance of the goods by the customer. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 173 of 260 The main product categories are techni- cal fabrics (Geosynthetics and textiles for construction, garden projects, hospital and sanitary products, lter industry, auto- motive industry, industrial use, sports and leisure, carpet weaving, yarn and straps) and packaging products (Big bags, pack- aging lm, packaging fabrics, containers, bins, cups, glasses, containers and trays, plastic boxes, bottles, bags, garbage bags, ropes and strings). The Group accepts re- turns only in case of defective products or products which do not generally meet the required specications. The asset (receivable) is recognized when there is an unconditional right for the en- tity to receive the price for the performed obligations of the contract to the cus- tomer. The contractual asset is recognized when the Group has fullled its obliga- tions to the customer, before the customer pays or before payment becomes due. Payment becomes due after 30 to 90 days. The contractual obligation is recognized when the Group receives a payment from the customer (advance payment) or when it acquires an uncoditional right to a cash amount (deferred income) before the per- formance of the obligations of the contract and the transfer of the goods or services. The contractual obligation is recognized when the obligations of the contract are fullled and the income is recorded in the income statement. 2.15.2 Government Grants - Subsidies Government grants on tangible and intan- gible assets, are deducted from the book value of the asset for which they were re- ceived. The relevant income is recognized with the form of reduced depreciation amounts during the useful life of the rel- evant asset. Government grants that con- cern payroll expenses are recognized as in- come during the period that such relate to the respective expenses and are presented in the Income Statement in the account “Other Operating Income”. 2.15.3 Income from Dividends – Interim Dividends Income from dividends is recognized in the Income Statement as income, during the date when such are approved by the An- nual General Meeting of Shareholders. In- terim dividends are recognized at the date where such are distributed or approved by a General Meeting of Shareholders. 2.15.4 Interest Income Interest income is recognized on an ac- crual basis. 2.16 Expenses Expenses are recognized in the nancial results on an accrual basis. Amounts in thousand Euro, unless stated otherwise Contents >> Page 174 of 260 Annual Financial Report as of 31.12.2021 When a contract enters into force, the Group assesses whether the contract con- stitutes, or involves, a lease. A contract constitutes, or involves, a lease if the con- tract transfers the right to control the use of a recognized asset for a specied period of time in exchange for a consideration. 2.17.1 Leasing Accounting from Lessee The Group applies a unied approach to recognition and measurement for all leases (except for short-term leases and low-value leases). The Group recognizes liabilities from leases for payments and as- sets with a right of use that represent the right to use the underlying assets. 2.17.2 Right-of-use Assets The Group recognizes the assets with the right of use on the date of commence- ment of the lease term (i.e. the date on which the underlying asset is available for use). Assets with the right to use are meas- ured at cost, reduced by any cumulative depreciation and impairment losses and are adjusted based on any revaluation of the obligation from leases. The cost of the assets with the right of use consists of the amount of the obligation from recognized leases, the initial direct costs and any leas- es paid on the date of commencement of the lease period or earlier, minus any lease incentives received. Assets with the right of use are depreciated based on the xed method in the shortest period of time be- tween the duration of the lease and their useful life. If the ownership of the leased asset is transferred to the Group at the end of the lease term or if its cost reects the exercise of a market right, depreciation is calculat- ed in accordance with the estimated use- ful life of the asset. The Group has contracts for the lease of buildings (used as oces, warehouses), means of transport as well as other equip- ment used in its business activities. Lease agreements may contain lease and non- lease information. The Group has chosen not to separate the parts of the contract that are not a lease from the elements of the lease and therefore treats any element of the lease and any related parts that do not constitute a lease as a single lease. As- sets with the right of use are subject to impairment test as described in the ac- counting policy “2.8 Impairments of Non- Financial Assets”. 2.17.3 Liabilities from Leases At the date of commencement of the lease, the Group calculates the obligation from leases at the present value of the leases to be paid during the lease term. Leases consist of xed parts (including substan- tially xed leases) reduced by any lease incentives, oating parts that depend on an index or interest rate and amounts ex- pected to be paid on the basis of residual value guarantees. Leases also include the exercise price of the purchase right if it is rather certain that the Group will exer- cise that right and the payment clause that would allow to terminate the lease if the term of the lease reects the exercise of the right to renounce. To discount the leases, the Group uses the incremental borrowing rate since the implied interest rate related to the leasing cannot be easily determined. 2.17 Leases Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 175 of 260 After the start date of the lease, the amount of the lease liability increases based on the interest on the liability and decreases with the payment of the lease. In addition, the book value of the obligation from leases is recalculated if there are reassessments or amendments to the lease agreement. Analysis of the Group’s leases is included in Note 3.13. 2.17.4 The Group as Lessor When the assets are leased in the context of leasing agreements, the present value of the leasing payments to be collected is recognized as receivable. The dierence between the gross receivable amount and the present value of the claim is recog- nized as non-accrued nancial income. When the assets are leased in the context of leasing agreements, they are recorded in the statement of nancial position ac- cording to the nature of each asset. The income generated from operating leasing agreements is recorded in the nancial re- sults via the straight line method over the leasing period. 2.18 Income Tax Tax burden for the year relates to current and deferred taxes. Current income taxes are payable taxes on taxed income for the year based on eec- tive tax rates as of the balance sheet date, as well as additional income taxes relating to previous years. Deferred taxes are tax burden/exemptions relating to current year’s prot (or losses) that will be charged by the tax authorities in future years. Deferred income taxes are calculated according to tax rates eective as of the dates they will be paid, on the dif- ference between accounting and tax base of individual assets and liabilities, provided that these dierences imply time devia- tions, which will be erased in future. Deferred tax receivables are recognized only to the extent they imply future tax- able income, which will be oset by these deferred tax receivables. Deferred tax re- ceivables might be lowered any time when it is not evident that such future tax relaxa- tion will be certain. Current and deferred tax is recorded in the nancial results or directly in Equity, if it relates to elements directly recognized in Equity. The Group’s companies oset deferred tax receivables with deferred tax liabilities, only if: a) It has a legal applicable right to oset current tax receivables with current tax liabilities. b) The deferred tax receivables and lia- bilities relate to income taxes imposed by the same tax authority. Amounts in thousand Euro, unless stated otherwise Contents >> Page 176 of 260 Annual Financial Report as of 31.12.2021 2.19.1 Short-term liabilities Liabilities for wages and salaries that are expected to be fully settled within 12 months from the end of the period in which the employees provide the relevant service are recognized for the services of the employees until the end of the re- porting period and are measured at the amounts expected to be paid during the settlement of obligations. Liabilities are presented in the statement of nancial po- sition in the other liabilities. 2.19.2 Liabilities after the exit from service The Group has an obligation in a dened benet plan that determines the amount of retirement benet that an employee will receive upon retirement, which depends on more than one factor such as age, years of service and compensation. The liability recorded in the statement of nancial position for the dened benet plan is the present value of the dened benet obligation at the reporting date less the fair value of the plan’s assets. The commitment of the dened benet is cal- culated annually by an independent ac- tuary using the method of the projected credit unit. The present value of the de- ned benet obligation is calculated by discounting the expected future cash out- ows using interest rates of high quality corporate bonds denominated in Euro and having a term approaching the maturity of the relevant retirement obligation. The cost of current employment in the de- ned benet plan is recognized in the in- come statement and reects the increase in the dened benet obligation arising from the employment of employees dur- ing the year. Changes in the present value of the de- ned benet obligation arising from modications or reductions in the plan are recognized immediately in the nancial re- sults as prior service cost. The nancial cost is calculated by applying the discount rate to the balance of the de- ned benet obligation. This cost is includ- ed in the income statement on employee benets. Actuarial gains and losses arising from em- pirical adjustments and from changes in actuarial assumptions are recognized in other comprehensive income in the year in which they arise. They are also included in the nancial results carried forward in the statement of changes in equity and in the statement of nancial position. All the above calculations are being per- formed via an actuary study, conducted by an independent actuary, whereas for the interim periods certain estimates are being made. The estimates which are be- ing utilized for the determination of the net cost for post-employment benets in- clude among other the discount rate, the ination and the average annual salary in- crease. Any alterations in the assumptions aect signicantly the book value of the liabilities for post-employment benets. The discount rate that is used derives from the one of the long-term bonds with AA credit rating and with maturities similar to the liabilities of the plan. Group subsidiaries Don & Low LTD and THRACE POLYBULK A.S have in place de- ned benet plans for their employees which are nanced. The Greek companies of the Group as well as Thrace Ipoma A.D. have dened contri- bution schemes not self-nanced. 2.19 Employee Benefits Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 177 of 260 2.19.3 Benets following termination of employment Termination benets become payable when employment ends before the nor- mal retirement date or when the employee accepts voluntary retirement in exchange for these benets. The Group records these benets no earlier than the following dates: a) when the Group can no longer withdraw the oer for these benets and b) when the Group recognizes restructur- ing costs that are part of the application of IAS 37 which includes the payment of termination benets. In case of an oer for voluntary retirement, the termination ben- ets are calculated according to the num- ber of employees who are expected to ac- cept the oer. Termination benets which are due 12 months after the reporting date are discounted. 2.20 Provisions Provisions are recognized only when there is a liability, due to events that have oc- curred and it is likely (namely more possi- ble than not) that this settlement will cre- ate an outow, the amount of which can be estimated reliably. The recognition of provisions is based on the present value of cash ows that may be needed for the above liabilities to be settled. Amounts paid in order to arrange the repayment of such liabilities are deducted from the recorded provisions. The amounts are also reviewed at the periods when the Financial Statements are prepared. Provi- sions for any future losses should not be recognized. Compensation received from third parties and relate to the aggregate amount or part of the estimated cash ow, should be recognized on the asset side only when there is certainty for the nal payment of the corresponding amount. 2.21 Financial Assets 2.21.1 Financial Assets Initial Measurement and Recognition The Group and the Company measure the nancial assets initially at their fair value by adding transaction costs. The trade receivables initially are being measured / valued according to the transaction price. The nancial assets with embedded deriv- atives are being reviewed in their entirety whenever it is examined if their cash ows are only the payment of capital (principal) and interest. According to the provisions of IFRS 9, the securities are measured at a later stage at fair value via the other com- prehensive income or at fair value via the nancial results for the year. The classica- tion is based on two criteria: a) the busi- ness model concerning the management of nancial assets and b) the conventional cash ows of the instrument, meaning if they represent “only payments of capital and interest” (SPPI criterion) against the pending balance. Subsequent Measurement After initial recognition, nancial assets are classied into three categories: Amounts in thousand Euro, unless stated otherwise Contents >> Page 178 of 260 Annual Financial Report as of 31.12.2021 • at amortized cost • at fair value through other compre- hensive income • at fair value through prot or loss The Group and the Company do not have assets that are valued at fair value through the other comprehensive income or assets that are valued at fair value through the re- sults as of 31 December 2020. Financial assets classied at amortized cost are subsequently measured using the eective interest method (EIR) and are subject to impairment testing. Prots and losses are recognized in prot or loss when the asset ceases to be recognized, modi- ed or impaired. Termination of nancial asset recognition The Group (or Company) ceases to rec- ognize a nancial asset when and only when the contractual rights expire on the cash ows of the nancial asset or when it transfers the nancial asset and the trans- fer meets the conditions for write-o. Reclassication of nancial assets Reclassication of nancial assets takes place in rare cases and is due to a decision of the Group (or Company) to modify the business model it applies with regard to the management of these nancial assets. Impairment The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all nan- cial assets. The expected credit losses are based on the dierence between contrac- tual cash ows and all cash ows that the Group (or Company) expects to receive. The dierence is discounted using an es- timate of the initial eective interest rate of the nancial asset. With regard to the trade receivables, the Group and the Com- pany applied the simplied approach of the standard and estimated the expected credit losses based on the anticipated loss- es for the entire life of these assets. Regarding the remaining nancial assets, the expected credit losses are being calcu- lated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the antici- pated credit losses for the entire life of the nancial assets, which emanates from the probability of a default in the payment of the contractual obligations within the next 12-month period starting from the report- ing date. In case of a signicant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. 2.21.2 Financial Derivatives The Group uses nancial derivatives, main- ly forward foreign exchange contracts, to hedge risks that emanate from changes in exchange rates. Financial derivatives are measured at fair value, during the balance sheet date. The fair value of forward contracts is calculated based on the market prices of contracts with respective maturities (valuation of 1 st level of IFRS 7). Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 179 of 260 Initial Recognition and subsequent measurement of nancial liabilities All nancial liabilities are initially valued at their fair value minus the transaction costs, in the case of loans and liabilities. For later measurement purposes, nancial liabilities are classied as nancial liabilities at am- ortized costs. Loans are characterized as short-term liabilities except if the Group has the nal right to postpone repayment for at least 12 months after the balance sheet date. Bank overdrafts are included in short-term debt in the balance sheet and in investing activities in the statement of cash ows. De-recognition of Financial Liabilities A nancial liability is written o when the commitment arising from the liability is canceled or expires. When an existing - nancial liability is replaced by another by the same lender but on fundamentally dierent terms, or the terms of an existing liability are signicantly modied, this ex- change or amendment is treated as de-rec- ognition of the initial liability and recogni- tion of a new liability. The dierence in the respective book values is recognized in the statement of nancial results. Osetting between nancial assets and liabilities Financial assets and liabilities are oset and the net amount is reected in the statement of nancial position only when the Group or Company has this legal right and intends to oset them on a net basis or to claim the asset and settle the liability at the same time. The legal right should not depend on future events and should be enforceable in the normal course of business and in the event of a breach, insolvency or bankrupt- cy of the company or counterparty. 2.22 Financial Liabilities 2.23 Suppliers and Other Creditors Suppliers and other liabilities are initially recognized at fair value and subsequently measured according to amortized cost, while the eective interest rate method is used. Liabilities are classied as short-term if payment is expected in less than one year. If not, then such are included in long- term liabilities. 2.24 Equity The share capital includes common shares of the Company. The dierence between the nominal value of shares and their issue price is registered in the “Share Premium” account. Direct expenses for the issue of shares, are presented after the deduction of the relevant income tax and reduce the issue proceeds, namely as a deduction from the share premium. During the pur- chase of treasury shares, the amount paid, including the relevant expenses is record- ed as deduction from the shareholders’ eq- uity. No prot or loss is recognized in the statement of comprehensive income from the purchase, sale, issuance or cancella- tion of treasury shares. Expenses which are realized for the issuance of shares are re- corded after the deduction of the relevant income tax, as deduction from the product of the issue. Amounts in thousand Euro, unless stated otherwise Contents >> Page 180 of 260 Annual Financial Report as of 31.12.2021 2.25 Change in Accounting Policy The IFRS Interpretations Committee is- sued in May 2021 the nal decision on the agenda entitled “Distribution of benets in periods of service in accordance with International Accounting Standard (IAS) 19”, which includes explanatory material on how to distribute benets in periods of service on a specic dened benet plan proportional to that dened in article 8 of L.3198 / 1955 regarding the provision of compensation due to retirement (the “Pro- gram of Fixed Benets of Labor Law”). Based on the above Decision, there should be an alteration in the way in which the basic principles of IAS 19 were applied in Greece in the past in this regard. Conse- quently, according to what is dened in the “IASB Due Process Handbook (par. 8.6)”, the economic entities that prepare their nancial statements in accordance with IFRS are required to amend their account- ing policies in relation to the above. Until the issuance of the daily agenda’s decision, for the Greek subsidiaries, the Group applied IAS 19 distributing the benets dened by the article 8 of L.3198 / 1955, L.2112 / 1920, and its amendment by Law 4093/2012 in the period from the recruitment until the date of retirement of the employees. The application of this nal Decision to the attached nancial statements, has brought as requirement the distribution of benets in the last sixteen (16) years until the date of retirement of employees following the scale of Law 4093/2012. In this context, the application of the above Final Decision has been treated as a change in accounting policy, applying the change retroactively from the beginning of the rst comparative period, in accord- ance with paragraphs 19 to 22 of IAS 8. The impact of the implementation of the Final Decision for each specic item on the Income Statement and Other Comprehen- sive Income, as well as in the Statement of Financial Position is analyzed as follows: Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 181 of 260 Amounts in Euro thousand, unless stated otherwise Annual Financial Report of 31.12.2021 Page 162 from 232 31-12-2020 IAS 19 Adjustments 31-12-2020 ASSETS Non-Current Assets 131,512 131,512 13,197 13,197 113 113 10,655 10,655 0 15,068 6 15,074 5,034 5,034 588 -301 287 176,167 -295 175,872 55,338 55,338 278 278 56,863 56,863 7,211 7,211 5,478 5,478 40,824 40,824 165,992 0 165,992 342,159 -295 341,864 Tangible assets Rights-of-use assets Investment property Intangible Assets Investments in subsidiaries Investments in joint ventures Other long term receivables Deferred tax assets Total non-Current Assets Current Assets Inventories Income tax prepaid Trade receivables Other debtors Fixed assets held for sale Cash and Cash Equivalents Total Current Assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share Capital 28,869 28,869 Share premium 21,524 21,524 Other reserves 21,158 21,158 Retained earnings 99,548 1,526 101,074 Total Shareholders' equity 171,099 1,526 172,625 Non controlling interest 3,484 3,484 Total Equity 174,583 1,526 176,109 Long Term Liabilities Long Term Debt 46,691 46,691 Liabilities from leases 3,210 3,210 Provisions for Employee Benefits 16,012 -1,821 14,191 Other provisions 5 5 Deferred Tax Liabilities 2,111 2,111 Other Long Term Liabilities 242 242 Total Long Term Liabilities 68,271 -1,821 66,450 Short Term Liabilities Short Term Debt 26,311 26,311 Liabilities from leases 2,822 2,822 Income Tax 7,383 7,383 Suppliers 29,697 29,697 Other short-term liabilities 33,092 33,092 Total Short Term Liabilities 99,305 0 99,305 TOTAL LIABILITIES 167,576 -1,821 165,755 TOTAL EQUITY & LIABILITIES 342,159 -295 341,864 Group Amounts in thousand Euro, unless stated otherwise Contents >> Page 182 of 260 Annual Financial Report as of 31.12.2021 Amounts in Euro thousand, unless stated otherwise Annual Financial Report of 31.12.2021 Page 163 from 232 31-12-2020 IAS 19 Adjustments 31-12-2020 ASSETS Non-Current Assets Tangible fixed assets 357 357 Rights-of-use assets 55 55 Investment property 0 0 Intangible Assets 401 401 Investments in subsidiaries 73,858 73,858 Investments in joint ventures 3,819 3,819 Other long term receivables 1,157 1,157 Deferred tax assets 166 -36 130 Total non-Current Assets 79,813 -36 79,777 Current Assets Inventories 0 0 Income tax prepaid 26 26 Trade receivables 12 12 Other debtors 194 194 Fixed assets held for sale 0 0 Cash and Cash Equivalents 163 163 Total Current Assets 395 0 395 TOTAL ASSETS 80,208 -36 80,172 EQUITY AND LIABILITIES Equity Share Capital 28,869 28,869 Share premium 21,644 21,644 Other reserves 13,550 13,550 Retained earnings 12,560 124 12,684 Total Shareholders' equity 76,623 124 76,747 Non controlling interest 0 0 Total Equity 76,623 124 76,747 Long Term Liabilities Long Term Debt 0 0 Liabilities from leases 25 25 Provisions for Employee Benefits 238 -160 78 Other provisions 317 317 Deferred Tax Liabilities 0 0 Other Long Term Liabilities 1 1 Total Long Term Liabilities 581 -160 421 Short Term Liabilities Short Term Debt 960 960 Liabilities from leases 31 31 Income Tax 56 56 Suppliers 531 531 Other short-term liabilities 1,426 1,426 Total Short Term Liabilities 3,004 0 3,004 TOTAL LIABILITIES 3,585 -160 3,425 TOTAL EQUITY & LIABILITIES 80,208 -36 80,172 Company Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 183 of 260 Amounts in Euro thousand, unless stated otherwise Annual Financial Report of 31.12.2021 Page 163 from 232 31-12-2020 IAS 19 Adjustments 31-12-2020 ASSETS Non-Current Assets Tangible fixed assets 357 357 Rights-of-use assets 55 55 Investment property 0 0 Intangible Assets 401 401 Investments in subsidiaries 73,858 73,858 Investments in joint ventures 3,819 3,819 Other long term receivables 1,157 1,157 Deferred tax assets 166 -36 130 Total non-Current Assets 79,813 -36 79,777 Current Assets Inventories 0 0 Income tax prepaid 26 26 Trade receivables 12 12 Other debtors 194 194 Fixed assets held for sale 0 0 Cash and Cash Equivalents 163 163 Total Current Assets 395 0 395 TOTAL ASSETS 80,208 -36 80,172 EQUITY AND LIABILITIES Equity Share Capital 28,869 28,869 Share premium 21,644 21,644 Other reserves 13,550 13,550 Retained earnings 12,560 124 12,684 Total Shareholders' equity 76,623 124 76,747 Non controlling interest 0 0 Total Equity 76,623 124 76,747 Long Term Liabilities Long Term Debt 0 0 Liabilities from leases 25 25 Provisions for Employee Benefits 238 -160 78 Other provisions 317 317 Deferred Tax Liabilities 0 0 Other Long Term Liabilities 1 1 Total Long Term Liabilities 581 -160 421 Short Term Liabilities Short Term Debt 960 960 Liabilities from leases 31 31 Income Tax 56 56 Suppliers 531 531 Other short-term liabilities 1,426 1,426 Total Short Term Liabilities 3,004 0 3,004 TOTAL LIABILITIES 3,585 -160 3,425 TOTAL EQUITY & LIABILITIES 80,208 -36 80,172 Company 3. Notes on the Financial Statements 3.1 Evolution and Performance of the Group The following table depicts the Group’s nancial results from continuing operations for the year ended 31/12/2021. Financial Results of Year 2021 (CONTINUING OPERATIONS) (amounts in thousand Euro) Year 2021 Year 2020 Change % Turnover 428,429 339,722 26.1% Gross Prot 140,149 105,959 32.3% Gross Prot Margin 32.7% 31.2% ΕΒΙΤ 83,913 53,857 55.8% EBIT Margin 19.6% 15.9% EBITDA 103,791 72,484 43.2% EBITDA Margin 24.2% 21.3% Adjusted EBITDA 105,799 76,559 38.2% Adjusted EBITDA Margin 24.7% 22.5% EBT 83,920 52,077 61.1% EBT Margin 19.6% 15.3% Total EAT 65,866 41,272 59.6% EAT Margin 15.4% 12.1% Total EATAM 65,436 40,663 60.9% EATAM Margin 15.3% 12.0% Earnings per Share (in euro) 1.5093 0.9314 62.0% Amounts in thousand Euro, unless stated otherwise Contents >> Page 184 of 260 Annual Financial Report as of 31.12.2021 Adjusted EBITDA does not include gains from the sale of tangible assets account- ing for € 763 and impairment losses of tan- gible assets amounting to € 1,973 which concern the operational restructuring of Don & Low LTD. This subsidiary reduced its presence in the market of woven technical fabrics, while increasing its production ca- pacity in the non-woven technical fabrics. Also the above calculations do not include expenses of € 798 concerning extraordi- nary allowance to personnel. These expenses are summarized below: a. Gains from the sale of assets of Don & Low LTD (see note 3.5) amounting to € 763 b. Impairment of mechanical equip- ment of Don & Low LTD (see note 3.8) of € 1,973 c. Extraordinary allowance to person- nel (see note 3.8) accounting for € 798 For the completeness of information pro- vided, the following table presents the Group’s nancial results in total, both from Continuing and Discontinued Operations, for the period ended 31/12/2021: Financial Results of Year 2021 (CONTINUING & DISCONTINUED OPERATIONS) (amounts in thousand Euro) Year 2021 Year 2020 Change % Turnover 428,429 344,806 24.3% Gross Prot 140,149 106,217 31.9% Gross Prot Margin 32.7% 30.8% ΕΒΙΤ 90,397 50,472 79.1% EBIT Margin 21.1% 14.6% EBITDA 110,275 69,444 58.8% EBITDA Margin 25.7% 20.1% Adjusted EBITDA 105,799 76,559 38.2% Adjusted EBITDA Margin 24.7% 22.2% EBT 90,517 48,767 85.6% EBT Margin 21.1% 14.1% Total EAT 72,457 37,956 90.9% EAT Margin 16.9% 11.0% Total EATAM 72,027 37,347 92.9% EATAM Margin 16.8% 10.8% Earnings per Share (in euro) 1.6613 0.8555 94.2% Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 185 of 260 Due to the decision to permanently dis- continue the production activity of Thrace Linq INC, which was decided in order for the Group to focus on protable business activities, this specic activity is recorded in the income statement and other com- prehensive income as discontinued op- erations. More information regarding the completion of the transfer of the property of Thrace Linq INC is included in Section 3.14 “Fixed Assets Held for Sale”. 3.2 Discontinued Activities Discontinued Operations Statement of Income & Other Comprehensive Income Thrace Linq INC 31.12.2021 31.12.2020 Turnover - 5,084 Cost of Sales - (4,826) Gross Prot / (Loss) - 258 Non-Operating Income / (Expenses) 6,294 (3,128) Earnings / (Losses) before Taxes 6,294 (2,870) Taxes (6) (6) Earnings / (Losses) after Taxes 6,288 (2,876) Intra-group Transactions 303 (440) Earnings / (Losses) after Taxes 6,591 (3,316) Discontinued Operations Cash Flows Thrace Linq INC 31.12.2021 Cash Flows from operating activities (290) Cash Flows from investing activities 3,004 Cash Flows from Financing Activities - Change in Cash and Cash Equivalents 2,714 Cash from previous Year 582 Foreign Exchange Dierences 168 Cash Flows at the end of Year 3,464 Amounts in thousand Euro, unless stated otherwise Contents >> Page 186 of 260 Annual Financial Report as of 31.12.2021 3.3 Segment Reporting The Group applies IFRS 8 to monitor its business activities by sector. The areas of activity of the Group have been dened based on the legal structure and the busi- ness activities of the Group. The Group Management, being responsible for mak- ing nancial decisions, monitors the nan- cial information separately as presented by the parent company and by each of its subsidiaries. The operating segments (business units) are structured based on the dierent prod- uct category, the structure of the Group’s management and the internal reporting system. Using the criteria as dened in the nancial reporting standards and based on the Group’s dierent activities, the Group’s business activity is divided into two sectors, namely the “Technical Fabrics” and the “Packaging” sector. The information related to the business activities that do not comprise separate segments for reporting purposes, have been aggregated and depicted in the cat- egory “Other”, which includes the agricul- tural sector and the activities of the Parent Company: The operating segments (business units) of the Group are as follows: Technical Fabrics Packaging Other Production and trade of technical fabrics for industrial and technical use. Production and trade of packaging products, plastic bags, plastic boxes for packaging of food and paints and other packaging materials for agricultural use. It includes the Agricultural sector and the business activity of the Parent company which apart from the investing activities provides also Administrative – Financial – IT services to its subsidiaries. During the year 2020, which was char- acterized by the spread of the Covid-19 coronavirus pandemic, the Group faced signicantly increased demand for specic products of its existing product portfolio and specically for technical fabrics used in personal protection and health applica- tions (Personal Protective Equipment). The Group, taking advantage of the technolog- ical capabilities of its modern production lines and the know-how it has developed in technical fabrics, managed to meet the signicantly increased demand, using the existing production lines and channeling Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 187 of 260 a large part of the already produced vol- umes towards applications in this sector. At the same time the Group proceeded with targeted investments, such as the surgical mask production lines and the Meltblown non-woven fabric production line (as it has been already announced to the investor community via the corporate announce- ments of 04/05/2020 and 01/10/2020). The Group also proceeded with the purchase of machinery for the production of high protection masks (FFP2). From a commercial point of view, the Group during the previous year developed its customer base, through the available sales networks per country, based on the separate needs of the respective markets in each country, through the group sub- sidiaries and regardless of the reference sector. The Group acted in the above man- ner either by channeling the products into the retail market or by entering into agree- ments with the respective local health sys- tems. Regarding the twelve-month period of 2021, the Group continued to support, in line with the market needs, the particular sector maintaining -especially during the rst half of the year- an alternative product mix which resulted into the sale of prod- ucts with higher protability. However, during the third quarter of the year, there was a signicant decline in the demand for these products and an accelerated shift of the product mix towards the traditional portfolio, which continued with an even greater pace during the last quarter of the year. Earnings before Taxes from Continu- ing Operations at the Group level for the year 2021 amounted to € 83.9 million, of which, according to the estimates of the Management, € 51.8 million were the re- sult of the above market conditions and especially of the respective conversion of product mix. The above gure was al- located by € 49.9 million in the Sector of “Technical Fabrics”, and by € 1.9 million in the Sector of “Packaging”. It should be noted that part of the spe- cic investments that were implemented (such as the Meltblown non-woven tech- nical fabrics production line), can be used to produce products serving other sectors and applications. Amounts in thousand Euro, unless stated otherwise Contents >> Page 188 of 260 Annual Financial Report as of 31.12.2021 BALANCE SHEET OF 31.12.2021 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINATIONS GROUP Total consolidated assets 269,145 120,606 88,026 (72,578) 405,199 INCOME STATEMENT FOR THE PERIOD 01.01 - 31.12.2021 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINA- TIONS GROUP Turnover 318,878 120,007 5,668 (16,124) 428,429 Cost of sales (205,633) (93,495) (5,644) 16,492 (288,280) Gross prot 113,245 26,512 24 368 140,149 Other operating income 1,355 459 166 (367) 1,613 Distribution expenses (25,855) (9,611) - (425) (35,891) Administrative expenses (12,099) (4,027) (930) 314 (16,742) Research and Development Expenses (1,483) (339) - - (1,822) Other operating expenses (3,351) (1,144) (99) - (4,594) Other Income / (Losses) 1,124 76 - - 1,200 Operating prot / (loss) 72,936 11,926 (839) (110) 83,913 Interest & Other related (expenses)/income (1,811) (959) (38) 45 (2,763) Income from dividends - - 15,007 (15,007) - Prot / (loss) from companies consolidated with the Equity method 1,311 1,125 334 - 2,770 Earnings / (losses) before tax (Continuing operations) 72,436 12,092 14,464 (15,072) 83,920 Earnings / (losses) before tax (Discontinued operations) 6,597 - - - 6,597 Total Earnings / (losses) before tax 79,033 12,092 14,464 (15,072) 90,517 Depreciation from continuing operations 13,212 6,339 327 - 19,878 Depreciation from discontinued operations - - - - - Total Depreciation 13,212 6,339 327 - 19,878 Earnings / (losses) before interest, tax, depreciation & amortization from continuing operations (EBITDA) 86,148 18,265 (512) (110) 103,791 Earnings / (losses) before interest, tax, depreciation & amortization from discontinued operations (EBITDA) 6,484 - - - 6,484 Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) 92,632 18,265 (512) (110) 110,275 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 189 of 260 BALANCE SHEET AS OF 31.12.2020 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINA- TIONS GROUP Total consolidated assets 218,425 113,363 80,493 (70,417) 341,864 INCOME STATEMENT FOR THE PERIOD 01.01 - 31.12.2020 TECHNICAL FABRICS PACKAGING OTHER INTRA- SEGMENT ELIMINA- TIONS GROUP Turnover 243,103 105,718 4,853 (13,952) 339,722 Cost of sales (168,176) (74,985) (4,545) 13,942 (233,763) Gross prot 74,927 30,733 308 (9) 105,959 Other operating income 1,074 325 164 (394) 1,169 Distribution expenses (21,000) (9,399) - (326) (30,725) Administrative expenses (10,660) (3,969) (1,093) 527 (15,195) Research and Development Expenses (1,166) (296) - - (1,462) Other operating expenses (4,288) (1,523) (73) 10 (5,874) Other Income / (Losses) (62) (62) (3) 112 (15) Operating prot / (loss) 38,825 15,809 (697) (80) 53,857 Interest & Other related (expenses)/income (1,837) (1,430) (316) 27 (3,556) Income from dividends - - 12,757 (12,757) - Prot / (loss) from companies consolidated with the Equity method 712 919 145 - 1,776 Earnings / (losses) before tax (Continuing operations) 37,700 15,298 11,889 (12,810) 52,077 Earnings / (losses) before tax (Discontinued operations) (3,310) - - - (3,310) Total Earnings / (losses) before tax 34,390 15,298 11,889 (12,810) 48,768 Depreciation from continuing operations 11,669 6,673 285 - 18,627 Depreciation from discontinued operations 345 - - - 345 Total Depreciation 12,014 6,673 285 - 18,971 Earnings / (losses) before interest, tax, depreciation & amortization from continuing operations (EBITDA) 50,494 22,482 (412) (80) 72,484 Earnings / (losses) before interest, tax, depreciation & amortization from discontinued operations (EBITDA) (3,040) - - - (3,040) Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) 47,454 22,482 (412) (80) 69,444 Amounts in thousand Euro, unless stated otherwise Contents >> Page 190 of 260 Annual Financial Report as of 31.12.2021 3.5 Other Gains / Losses Other Operating Income Group Company 2021 2020 2021 2020 Grants () 378 168 - - Income from rents 45 57 - - Income from provision of services 131 - - - Income from prototype materials 37 46 - - Reverse entry of not utilized provisions 32 67 11 19 Income from energy management programs 426 482 - - Other operating income 564 349 157 140 Total 1,613 1,169 168 159 * The amount of € 378 refers to the following grants awarded: VAT, research and development, recruitment of new graduates as well as professional training of the Group’s employees. Other Gains / (Losses) Group Company 2021 2020 2021 2020 Gains / (Losses) from sale of tangible assets 98 123 (2) 5 Extraordinary prot / (losses) from sale of tangible assets of Don & Low LTD 763 (11) - - Foreign Exchange Dierences 339 (127) - (3) Total 1,200 (15) (2) 2 3.4 Other Operating Income Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 191 of 260 3.6 Analysis of Expenses (Production-Administrative-Sales & Distribution- Research & Development) Analysis of Expenses (Production-Administrative- Sales & Distribution-Research & Development) Group Company 2021 2020 2021 2020 Payroll expenses 58,544 53,900 3,148 2,981 Third party fees – expenses * 5,707 4,903 1,742 1,383 Electric power – Natural gas 17,046 13,256 18 17 Repairs / Maintenance 6,436 4,905 18 23 Rental expenses 929 859 29 39 Insurance expenses 2,632 1,970 53 29 Exhibitions / travelling expenses 699 460 86 30 IT and telecom expenses 1,302 1,077 631 383 Promotion and advertising expenses 660 1,332 176 125 Transportation expenses 20,003 15,105 - - Consumables 5,783 4,822 2 2 Sundry expenses / Other provisions 4,149 3,985 344 341 Depreciation / Amortization 19,805 18,909 327 285 Total 143,695 125,483 6,574 5,638 * Third party fees – expenses include fees paid to auditors, legal and advisory rms, as well as to the Board of Directors. The analysis of expenses per operating category, is as follows: Analysis of expenses Group Company 2021 2020 2021 2020 Production 89,240 78,101 5,644 4,545 Administrative 16,742 15,195 930 1,093 Sales & Distribution 35,891 30,725 - - Research and Development 1,822 1,462 - - Total 143,695 125,483 6,574 5,638 Amounts in thousand Euro, unless stated otherwise Contents >> Page 192 of 260 Annual Financial Report as of 31.12.2021 The analysis of cost of goods sold is presented below: Analysis of cost of goods sold Group Company 2021 2020 2021 2020 Production expenses 89,240 78,101 5,644 4,545 Cost of materials and inventory 199,040 155,662 - - Total 288,280 233,763 5,644 4,545 * The production expenses in the Company mainly refer to invoiced services oered. 3.7 Payroll Expenses Payroll expenses are as follows: Payroll expenses Group Company 2021 2020 2021 2020 Salaries & Wages 48,629 44,422 2,767 2,640 Employer’s contributions 7,859 7,547 344 296 Retirement benets 1,466 1,252 8 9 Total 57,954 53,221 3,119 2,945 Other Expenses 590 679 29 36 Grand Total 58,544 53,900 3,148 2,981 The number of employed sta at the Group and Company at the end of the nancial year (without including the joint ventures), was as follows: Number of employees Group Company 2021 2020 2021 2020 Full time employees – wage based employees 1,662 1,688 25 21 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 193 of 260 Other Operating Expenses Group Company 2021 2020 2021 2020 Provisions for doubtful receivables 442 691 - - Other taxes and duties non- incorporated in operating cost 221 163 - - Depreciation 73 68 - - Sta indemnities 397 341 92 66 Supplies / other bank expenses 166 100 7 5 Expenses for the purchase of prototype materials (maquettes) 84 116 - - Other operating expenses 440 331 - 2 Sub-Total 1,823 1,810 99 73 Extraordinary and non-recurring expenses 2,771 4,064 - - Total 4,594 5,874 99 73 Analysis of extraordinary and non-recurring expenses Group 2021 2020 Restructuring expenses - Don & Low LTD - 1,525 Expenses of Thrace Nonwovens & Geosynthetics Single Person SA for transferring the assets of Thrace Linq INC into its facilities - 162 Extraordinary allowance to personnel 798 780 Impairment of tangible assets’ value 1,973 1,597 Total 2,771 4,064 3.8 Other Operating Expenses In the context of the restructuring of the Group’s participations, expenses of € 1,973 arose as a result of the operational reorganization of the subsidiary Don & Low LTD. Also a prot of € 763 from tan- gible asset sales emerged (see note 3.5). This subsidiary reduced its presence in woven technical fabrics, while increas- ing its production capacity in non-woven technical fabrics. In addition, there was an expense of € 798 from extraordinary allowance to the personnel. Respectively for the year 2020, there were expenses of € 3,122 of the subsidiary Don & Low LTD and of € 162 of the subsidiary Thrace Nonwovens & Geosynthetics Sin- gle Person SA for the transfer of tangible assets from Thrace Linq INC to its prem- ises. In addition, there had been expenses of € 780 concerning extraordinary allow- ance to personnel. Amounts in thousand Euro, unless stated otherwise Contents >> Page 194 of 260 Annual Financial Report as of 31.12.2021 3.9 Financial income/(expenses) 3.9.1 Financial income Financial income Group Company 2021 2020 2021 2020 Credit interest and similar income 106 53 - - Foreign exchange dierences 859 614 - - Total 965 667 - - Income from dividends - - 15,006 12,757 3.9.2 Financial expenses Financial expenses Group Company 2021 2020 2021 2020 Interest expense and other similar expenses (2,049) (3,225) (37) (315) Foreign exchange dierences (1,208) (418) - - Financial result from Pension Plans (471) (580) - (1) Total (3,728) (4,223) (37) (316) Earnings after tax, per share, are calculated by dividing net earnings (after tax) allocated to shareholders, by the weighted average number of shares outstanding during the relevant nancial year, after the deduction of any treasury shares held. Basic earnings per share (Consolidated, continuing operations) 2021 2020 Earnings allocated to shareholders 65,436 40,663 Number of shares outstanding (weighted) 43,356 43,656 Basic and adjusted earnings per share (Euro in absolute terms) 1.5093 0.9314 3.10 Earnings per Share (Consolidated) Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 195 of 260 Basic earnings per share (Consolidated, discontinued operations) 2021 2020 Earnings allocated to shareholders 6,591 (3,316) Number of shares outstanding (weighted) 43,356 43,656 Basic and adjusted earnings per share (Euro in absolute terms) 0.1520 (0.0760) Basic earnings per share (Consolidated, total operations) 2021 2020 Earnings allocated to shareholders 72,027 37,347 Number of shares outstanding (weighted) 43,356 43,656 Basic and adjusted earnings per share (Euro in absolute terms) 1.6613 0.8555 As of 31 st December 2021, the Company held 541,318 treasury shares. The analysis of tax charged in the year’s nancial results, is as follows: Income Tax Group Company 2021 2020 2021 2020 Income tax (15,826) (10,316) - - Tax of previous years (12) (30) - - Income tax dierences of previous years - (3) - - Deferred tax (expense)/income (2,216) (456) (16) (553) Total (18,054) (10,805) (16) (553) 3.11 Income Tax Amounts in thousand Euro, unless stated otherwise Contents >> Page 196 of 260 Annual Financial Report as of 31.12.2021 The income tax for the period is calculated based on the domestically applicable tax rates. Deferred taxes are calculated on temporary dierences using the appli- cable tax rate in the countries where the Group’s companies operate. The eective tax rate of the Group diers signicantly from the nominal tax rate, as there are tax losses in the companies of the Group for which no deferred tax asset is recognized as well as signicant non tax deductible expenses. According to Law 4799/2021, the income tax rate of legal entities in Greece was reduced from 24% to 22% from the year 2021 onwards. The income tax (reconciliation of the ac- tual tax rate) is as follows: Income Tax Group Company 2021 2020 2021 2020 Earnings / (losses) before tax 83,920 52,077 14,130 11,743 Income tax rate 22% 24% 22% 24% Corresponding income tax (18,462) (12,498) (3,109) (2,818) Eect due to dierent tax rates of subsidiaries abroad 1,902 1,171 - - Non tax-deductible expenses (672) (1,099) (89) (56) Revenues not subject to tax 512 1,974 3,301 3,062 Income tax dierences from previous years (27) (49) - - Deletion of previously recognized deferred tax assets - (549) - (549) Eect from tax losses for which no deferred tax asset has been recognized (159) (579) (105) (192) Eect from osetting tax losses from previous years with taxable earnings for the year - 1,059 - - Eect due to change of tax rate of companies (1,147) (235) (14) - Income Tax (18,054) (10,805) (16) (553) From the scal year 2011 and onwards, the Group’s Greek companies receive an “An- nual Tax Certicate”. The “Annual Tax Cer- ticate” is issued from the Legal External Certied Auditor who audits the annual nancial statements. Following the com- pletion of the tax audit, the Legal External Certied Auditor grants the company with a “Tax Compliance Report” which is later submitted electronically to the Ministry of Finance. (In the above detailed table, re- classication for detailed 2020 gures has taken place for presentation purposes). Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 197 of 260 The tax audit for the year 2020 for the Group’s Greek companies Thrace Plastics Co. SA, Thrace Nonwovens & Geosynthet- ics Single Person SA, Thrace Plastics Pack SA, Thrace Polylms Single Person SA, Thrace Eurobent SA, which was conducted in accordance with the provisions of article 65a of L. 4172/2013, was completed by the audit rm “PricewaterhouseCoopers SA” and revealed no material tax obligations apart from those recorded and depicted in the nancial statements. Tax certicates were issued, with an unqualied opinion, for each of the above companies. For the nancial year 2021, a tax audit for the above companies is already performed by PricewaterhouseCoopers SA in accord- ance with the provisions of article 65 of L. 4172/2013. This audit is underway and the relevant tax certicate is expected to be is- sued following the release of the 2021 - nancial statements. If until the completion of the tax audit additional tax liabilities arise, the Management of the Group assess that such will not have a material eect on the nancial statements. The unaudited tax scal years, in which the tax liabilities have not been nalized, and therefore the probability of a tax audit from the tax authorities exists, are present- ed in the following table: Company Tax un-audited scal years Thrace Plastics Co. Sa 2016-2021 Thrace Nonwovens & Geosynthetics Single Person SA 2016-2021 Thrace Plastics Pack SA 2016-2021 Thrace Polylms Single Person SA 2016-2021 Company Tax un-audited scal years Thrace Protect Single Person S.M.P.C. 2017-2021 Thrace Eurobent SA 2016-2021 Thrace Greenhouses SA 2016-2021 The following table depicts the unaudited tax scal years for which the tax liabilities have not been nalized for the Companies outside Greece. Company Tax un-audited scal years Don & Low LTD 2018-2021 Don & Low Australia LTD 2018-2021 Synthetic Holdings LTD 2018-2021 Synthetic Textiles LTD 2016-2021 Thrace Synthetic Packaging LTD 2016-2021 Thrace Polybulk A.B 2013-2021 Thrace Polybulk A.S 2015-2021 Thrace Greiner Packaging SRL. 2016-2021 Trierina Trading LTD 2016-2021 Thrace Ipoma A.D. 2017-2021 Thrace Plastics Packaging D.O.O. 2016-2021 Lumite INC 2015-2021 Thrace Linq INC 2015-2021 Adrmate LTD 2016-2021 Pareen LTD 2016-2021 Saepe LTD 2016-2021 Thrace Asia LTD 2012-2021 Amounts in thousand Euro, unless stated otherwise Contents >> Page 198 of 260 Annual Financial Report as of 31.12.2021 The changes in the tangible assets during the year are analyzed as follows: Tangible Assets Group 2021 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2021 3,510 57,679 301,826 1,446 9,102 4,381 377,944 Additions 655 2,318 5,429 49 506 21,322 30,279 Disposals - - (6,875) (89) (21) - (6,985) Impairments - - (2,456) - - - (2,456) Transfers - 2,110 8,932 5 95 (11,142) - Transfer from right-of- use assets - - 19,351 - - - 19,351 Foreign exchange dierences 47 1,273 7,617 - 301 27 9,265 Acquisition cost 31.12.2021 4,212 63,380 333,824 1,411 9,983 14,588 427,398 DEPRECIATION Accumulated depreciation 01.01.2021 - (29,055) (208,617) (1,084) (7,677) - (246,433) Depreciation for the period - (1,740) (16,081) (120) (386) - (18,327) Disposals - - 6,143 85 18 - 6,246 Transfer from right-of- use assets - - (9,288) (4) - - (9,292) Foreign exchange dier-ences - (793) (4,656) - (295) - (5,744) Accumulated depreciation 31.12.2021 - (31,588) (232,499) (1,123) (8,340) - (273,550) NET BOOK VALUE 31.12.2020 3,510 28,624 93,209 362 1,425 4,381 131,512 31.12.2021 4,212 31,792 101,325 288 1,643 14,588 153,848 3.12 Tangible Assets Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 199 of 260 Tangible Assets Group 2020 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2020 3,152 55,709 286,881 1,468 9,400 5,829 362,439 Additions 395 1,668 617 69 476 25,796 29,021 Disposals - - (4,277) (90) (532) - (4,899) Impairments - - (1,931) - - - (1,931) Transfers - - 5 - (5) - - Transfer from right-of- use assets - 1,317 25,791 - 54 (27,162) - Foreign exchange dier-ences - - 1,054 - - - 1,054 Liquidations (37) (1,015) (6,314) (1) (291) (82) (7,740) Acquisition cost 31.12.2020 3,510 57,679 301,826 1,446 9,102 4,381 377,944 DEPRECIATION Accumulated depreciation 01.01.2020 - (27,934) (202,272) (1,036) (7,987) - (239,229) Depreciation for the period - (1,896) (13,498) (124) (395) - (15,913) Disposals - 156 3,607 76 427 - 4,266 Other changes - - (5) - 5 - - Transfer from right-of- use assets - - (641) - - - (641) Foreign exchange dier-ences - 619 4,192 (1) 273 - 5,084 Accumulated depreciation 31.12.2020 - (29,055) (208,617) (1,084) (7,677) - (246,433) NET BOOK VALUE 31.12.2019 3,152 27,775 84,609 432 1,413 5,829 123,210 31.12.2020 3,510 28,624 93,209 362 1,425 4,381 131,512 Amounts in thousand Euro, unless stated otherwise Contents >> Page 200 of 260 Annual Financial Report as of 31.12.2021 Tangible Assets Company 2021 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2021 - 392 11,159 221 1,228 - 13,000 Additions - - - - 22 - 22 Disposals - - - - - - - Retirements - - - - - - - Transfers - - - - - - - Acquisition cost 31.12.2021 - 392 11,159 221 1,250 - 13,022 DEPRECIATION Accumulated depreciation 01.01.2021 - (234) (11,124) (214) (1,071) - (12,644) Depreciation for the period - (13) - (2) (37) - (51) Disposals - - - - - - - Transfers - - - - - - - Accumulated depreciation 31.12.2021 - (247) (11,124) (216) (1,108) - (12,695) NET BOOK VALUE 31.12.2020 - 158 35 7 157 - 357 31.12.2021 - 145 35 5 142 - 327 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 201 of 260 Tangible Assets Company 2020 Fields – land plots Buildings & technical works Machinery & technical facilities Transportation means Furniture & other equipment Tangible assets under construction or installation Total ACQUISITION COST Acquisition cost 01.01.2020 - 392 11,154 226 1,222 - 12,994 Additions - - - - 11 - 11 Disposals - - - (5) - - (5) Retirements - - - - - - - Transfers - - 5 - (5) - - Acquisition cost 31.12.2020 - 392 11,159 221 1,228 - 13,000 DEPRECIATION Accumulated depreciation 01.01.2020 - (221) (11,119) (217) (1,040) - (12,597) Depreciation for the period - (13) - (2) (36) - (51) Disposals - - - 5 - - 5 Transfers - - (5) - 5 - - Accumulated depreciation 31.12.2020 - (234) (11,124) (214) (1,071) (12,644) NET BOOK VALUE 31.12.2019 - 171 35 9 182 - 398 31.12.2020 - 158 35 7 157 - 357 There are no liens and guarantees on the Company’s tangible assets, while the liens on the Group’s tangible assets amount to € 5,460. Amounts in thousand Euro, unless stated otherwise Contents >> Page 202 of 260 Annual Financial Report as of 31.12.2021 The right-of-use assets are analyzed as follows: Right-of-use assets Group 2021 Buildings and technical works Machinery equipment Transportation means Furniture and other equipment Total ACQUISITION COST Acquisition cost 01.01.2021 531 19,837 2,980 62 23,410 Additions 724 - 408 4 1,136 Derecognition - - (181) (4) (185) Transfers to tangible assets - (19,351) - - (19,351) Foreign exchange dier- ences 11 - 35 - 46 Acquisition cost 31.12.2021 1,266 486 3,242 62 5,056 DEPRECIATION Accumulated depreciation 01.01.2021 (280) (8,975) (932) (26) (10,213) Depreciation for the period (213) (357) (625) (13) (1,208) Derecognition - - 137 4 141 Transfers to tangible assets - 9,288 4 - 9,292 Foreign exchange dier- ences (3) - (15) - (18) Accumulated depreciation 31.12.2021 (496) (44) (1,431) (35) (2,006) NET BOOK VALUE 01.01.2020 251 10,862 2,049 36 13,197 31.12.2021 770 442 1,811 27 3,050 3.13 Leases Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 203 of 260 Right-of-use assets Group 2020 Buildings and technical works Machinery equipment Transportation means Furniture and other equipment Total ACQUISITION COST Acquisition cost 01.01.2020 768 20,490 2,146 56 23,460 Additions 34 486 1,081 6 1,607 Derecognition (246) (78) (224) - (548) Transfers - (1,054) - - (1,054) Foreign exchange dier- ences (25) (7) (23) - (55) Acquisition cost 31.12.2020 531 19,837 2,980 62 23,410 DEPRECIATION Accumulated depreciation 01.01.2020 (253) (7,681) (541) (14) (8,489) Depreciation for the period (205) (1,956) (542) (12) (2,715) Derecognition 173 19 142 - 334 Transfers - 641 - - 641 Foreign exchange dier- ences 5 2 9 - 16 Accumulated depreciation 31.12.2020 (280) (8,975) (932) (26) (10,213) NET BOOK VALUE 01.01.2020 515 12,809 1,605 42 14,972 31.12.2020 251 10,862 2,049 36 13,197 Amounts in thousand Euro, unless stated otherwise Contents >> Page 204 of 260 Annual Financial Report as of 31.12.2021 Right-of-use assets Company 2021 Buildings and technical works Transportation means Total ACQUISITION COST Acquisition cost 01.01.2021 254 60 314 Additions 368 57 425 Derecognition - - - Transfers - - - Acquisition 31.12.2021 622 117 739 DEPRECIATION Accumulated depreciation 01.01.2021 (232) (27) (259) Depreciation for the period (114) (22) (136) Derecognition - - - Transfers - - - Accumulated depreciation 31.12.2021 (346) (49) (395) NET BOOK VALUE 01.01.2021 22 33 55 31.12.2021 276 68 344 Right-of-use assets Company 2020 Buildings and technical works Transportation means Total ACQUISITION COST Acquisition 01.01.2020 254 62 316 Additions - 40 40 Derecognition - (42) (42) Transfers - - - Acquisition 31.12.2020 254 60 314 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 205 of 260 Right-of-use assets Company 2020 Buildings and technical works Transportation means Total DEPRECIATION Accumulated depreciation 01.01.2020 (116) (24) (140) Depreciation for the period (116) (15) (131) Derecognition - 12 12 Transfers - - - Accumulated depreciation 31.12.2020 (232) (27) (259) NET BOOK VALUE 01.01.2020 138 38 176 31.12.2020 22 33 55 The consolidated and standalone statements of nancial position of year 2021, includes the following amounts related to lease liabilities: Leases from Liabilities Group Company Short-term liabilities from leases 914 139 Long-term liabilities from leases 2,061 208 Total liabilities from Leases 2,975 347 The above amounts include leases related to buildings, cars, clark, printers and other equipment which were initially recog- nized with the application of IFRS 16 in the nancial year 2019. These gures for the Group amount to € 2,034 for 2021 and € 1,713 for 2020. For the Company the amounts settled at € 347 and € 56 respectively. The interest expense related to lease li- abilities of the Group and the Company amounts to € 108 (2020: € 219) and € 14 (2020: € 4) respectively. The expenses related to short-term leases of the Group amount to € 929 (2020: € 859) and are included in the cost of goods sold and the administration and sales & distri- bution expenses. The expenses related to short-term leases of the Company amount to € 29 (2020: € 39) and are included in the administration costs. The total cash outows of the Group and the Company for leases in 2021 amount to € 5,243 (2020: € 5,432) and € 158 (2020: € 154) respectively. The maturity of liabilities from leases is analyzed in Note 3.32. Amounts in thousand Euro, unless stated otherwise Contents >> Page 206 of 260 Annual Financial Report as of 31.12.2021 It refers to the industrial l property that housed Thrace Linq INC, located in South Carolina, USA. The management of the Group decided to sell the particular property. This property is included in the segment of technical fabrics. During the previous year, the transfer of the above property was completed. The total price consideration of the sale amounted to USD 14.5 million. As a result of the existing agreement, Thrace Linq INC received the amount of USD 11 million, while an amount of USD 3.5 million along with the corresponding interest would have to be paid by the Buyer within the year 2021. However, according to the existing agreements and its special covenants (both with the Buyer and with the Bank involved), in case for any reason the Buyer had to breach its obligation to repay the remaining amount at the initially agreed time horizon (up until 15/06/2021 at the latest), the company Thrace Linq INC would have the right to repurchase the property (based on priority and also based on its own discretion), covering the outstanding balance of the loan (and any interest or expenses that would be due) of the buyer as it would have been formed at the time when Thrace Linq INC would exercise this right, thus permanently canceling the sale or alternatively in case such would have been deemed unprotable, the company would have the right to participate in the property’s liquidation process (having as collateral the second registered mortgage). Before deadline expiration, the parties mutually agreed to extend the agreement duration for two months, i.e. repayment of the outstanding amount until 15/08/2021 the latest. On August 18, 2021, the company issued a corporate announcement informing the investor community that after the on time collection of the entire remaining part of the consideration of USD 3.5 million (plus interest due and expenses) and the consequent cancellation of any reservations related to this repayment, the process of selling the property was completed and consequently the above transfer became certain and nal. It should be noted that as a result of the completion of the sale of the property, the Group recorded a capital gain of USD 7.78 million (i.e. EUR 6.57 million). The nal sale of the property of the fully owned by 100% subsidiary Thrace Linq INC. completes in the most benecial manner for the Group the respective action plan, concerning the cessation of the production activity of the particular subsidiary. At the same time, the Group continues to smoothly serve the geotextile market in America from the Group’s own facilities in Europe as well as from Lumite INC., which is a joint venture of the Group in the USA, thus strengthening on a gradual basis its position in this market as well. 3.14 Fixed assets held for sale Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 207 of 260 3.15 Intangible Assets The changes in the intangible assets during the year are analyzed as follows: Intangible Assets Group Company Concessions & industrial property rights Company goodwill Total Concessions & industrial property rights Total ACQUISITION COST Acquisition cost 31.12.2020 2,943 9,808 12,751 1,589 1,589 Additions 141 - 141 - - Transfers - - - - Impairments - - - - - Foreign exchange dierence 45 7 52 - - Acquisition cost 31.12.2021 3,129 9,815 12,944 1,589 1,589 AMORTIZATION Accumulated amortization 31.12.2020 (2,096) - (2,096) (1,188) (1,188) Amortization for the period (342) - (342) (139) (139) Transfers 57 - 57 Impairments - - - Foreign exchange dierence (24) - (24) Accumulated amortization 31.12.2021 (2,405) - (2,405) (1,327) (1,327) NET BOOK VALUE 31.12.2020 847 9,808 10,655 401 401 31.12.2021 724 9,815 10,539 262 262 Intangible Assets Group Company Concessions & industrial property rights Company goodwill Total Concessions & industrial property rights Total ACQUISITION COST Acquisition cost 31.12.2019 5,126 9,811 14,937 1,589 1,589 Additions 27 - 27 - - Transfers - - - - Amounts in thousand Euro, unless stated otherwise Contents >> Page 208 of 260 Annual Financial Report as of 31.12.2021 Intangible Assets Group Company Concessions & industrial property rights Company goodwill Total Concessions & industrial property rights Total Impairments (1,990) - (1,990) - - Foreign exchange dierence (220) (3) (223) - - Acquisition cost 31.12.2020 2,943 9,808 12,751 1,589 1,589 AMORTIZATION Accumulated amortization 31.12.2019 (3,587) - (3,587) (1,086) (1,086) Amortization for the period (344) - (344) (102) (102) Transfers 1 - 1 Impairments 1,669 - 1,669 - - Foreign exchange dierence 165 - 165 - - Accumulated amortization 31.12.2020 (2,096) - (2,096) (1,188) (1,188) NET BOOK VALUE 31.12.2019 1,539 9,811 11,350 503 503 31.12.2020 847 9,808 10,655 401 401 The Group tests on annual basis the goodwill for impairment according to the Group’s accounting principle (see note 2.6.2). The goodwill which derives during the consolidation of companies which have been acquired has been allocated in the following cash ow generating units (CFGU) per subsidiary company. Subsidiaries’ Goodwill 2021 Don & Low LTD 7,490 Trierina Trading LTD 798 Thrace Polybulk AB 680 Thrace Polybulk AS 765 Subsidiaries’ Goodwill 2021 Thrace Nonwovens & Geosynthetics Single Person SA 50 Other 32 Total 9,815 Major Assumptions The recoverable value of a cash ow gen- erating unit is determined according to the calculation of the value in use. This cal- culation uses provisions of cash ows be- fore taxes, based on 5-year nancial budg- ets, which have been approved by the Management and then extrapolated into Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 209 of 260 perpetuity. The value in use for the cash ow generating units is being aected (in terms of sensitivity) from basic factors such as the growth rate to perpetuity which has been set at 0.5%, the projections with re- gard to the forecasted quantities and sales prices according to the 5-year investment plan of the group, the gross prot margin and the discount rates. The discount rates reect the current es- timations of the market for the separate risks of each cash ow generating unit. The calculation of the discount rates is based on the certain conditions in which the Group operates along with its operating segments, and is being extracted from the weighted average cost of capital (WACC). The weighted average cost of capital is based on both the debt and the equity. The cost of equity derives from the expect- ed return required by the Group’s inves- tors for their investment. The cost of debt is based on the interest rate of the Group’s loans that are being repaid. The country’s risk premium is incorporated with the application of individual beta sensitiv- ity factors. Beta sensitivity factors (or beta coecient) are being reviewed annually according to the published market data. The above assumptions vary depending on the dierent market conditions prevail- ing in the countries which the Group acti- vates in. The Group uses the services of an independent valuator who utilizes the Dis- counted Cash Flow method and values the companies based on the future cash ows in order to determine the value in use. The basic assumptions used are consist- ent with independent external sources of information, and are analyzed below per cash ow generating unit. Assumptions – Don & Low LTD 2021 2020 Discount rate, weighted average 6.9% 7.4% Annual growth rate in revenues 5.3% 1.55% Earnings before interest, taxes, depreciation and amortization (5-year) 20% 22% Assumptions – Trierina Trading LTD / Thrace Ipoma A.D. Discount rate, weighted average 5.7% 6.7% Annual growth rate in revenues 7.5% 5% Earnings before interest, taxes, depreciation and amortization (5-year) 13% – 16% 19.5% – 22.6% Assumptions – Thrace Polybulk AS Discount rate, weighted average 8.0% 7.8% Annual growth rate in revenues 9.3% 2.4% Earnings before interest, taxes, depreciation and amortization (5-year) 9.6% - 14% 10.5% - 13.7% Amounts in thousand Euro, unless stated otherwise Contents >> Page 210 of 260 Annual Financial Report as of 31.12.2021 Assumptions – Thrace Polybulk AB Discount rate, weighted average 6.8% 6.9% Annual growth rate in revenues 10.3% 3.8% Earnings before interest, taxes, depreciation and amortization (5-year) 3.2% - 10.6% 4.4% - 6.7% 3.16 Other Long-Term Receivables Due to delays observed in the collection of grants receivable from the Greek State, the Group has reclassied this item in the pre- vious years from short-term to long-term receivables, while proceeding to a partial impairment, and therefore the current out- standing balance of the receivable at pe- riod end is €4,879. The total receivables of the Group that have been recorded before the impairments, amount to € 11,062. The receivable was formed due to a 12% grant on the payroll cost concerning the personnel employed in Xanthi and is to be collected from OAED (Greek Manpower Employment Organization). Other Long-Term Receivables Group Company 2021 2020 2021 2020 Grants receivable 4,879 4,879 1,119 1,119 Other accounts receivable 122 155 37 38 Total 5,001 5,034 1,156 1,157 Based on the results of the impairment test, as of December 31, 2021, no impair- ment losses emerged in the book value of the goodwill of the above cash ow gener- ating units. On December 31, 2021, the recoverable amount for the specic cash ow generat- ing units compared to the corresponding book values, indicates that there is a signif- icant margin and any substantial change in the assumptions used would not result in an impairment in the book value of goodwill. The Group analyzed the sensitivity of the recoverable amounts of each Cash Flow Generating Unit (CFGU) in relation to a ra- tional and probable change in one of the major assumptions (as an indication it is noted the best case scenario which refers to 5% sales growth and 2% increase of gross prot, as well as the worst case scenario which refers to the corresponding opposite and unfavorable changes). As a result of the sensitivity analysis, the recoverable amount for the above cash ow generating units (CFGU) compared to their respective book value, indicates a sucient margin. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 211 of 260 3.17 Inventories Inventories Group Company 2021 2020 2021 2020 Merchandise 8,684 6,970 - - Finished and semi-nished products 29,163 24,353 - - Raw & auxiliary materials 34,687 24,259 - - Provision for impairment of inventory * (1,852) (1,433) - - Spare parts – other inventory 1,153 1,189 - - Total 71,835 55,338 - - Provision for Impairment of Inventory Group Company Opening Balance 1.1.2020 1,073 - Additional provisions 565 - Reverse Entry of Provisions (42) - Utilized provisions (111) - Foreign Exchange Dierences (52) - Total 31.12.2020 1,433 - Additional provisions 356 - Reverse Entry of Provisions - - Utilized provisions - - Foreign Exchange Dierences 63 - Total 31.12.2021 1,852 - On July 17, 2020, the Law 4706/2020 was voted, according to which the outstand - ing receivables of the beneciaries until 31.12.2015, which as mentioned above amount to € 11,062 for the Group, will be oset against existing and future claims of the State, by the entry into force of the above law. The obligations of OAED (Greek Manpower Employment Organization) and the Greek State are exhausted according to the provi - sions of article 87, par. 2 of Law 4706/2020. The companies of the Group have imple - mented the procedures provided by Law 4706/2020, in accordance with the issued circulars of OAED, in order to certify the cor - rectness of the claimed amounts by com- paring the already submitted statements. At the time of preparation of the current report, the process of receivables osetting has not been initiated for all engaged com - panies and therefore the respective process remains in progress. Amounts in thousand Euro, unless stated otherwise Contents >> Page 212 of 260 Annual Financial Report as of 31.12.2021 The Group’s customers balance included notes and checks overdue of € 8,070 for the year 2021 and of € 8,065 for the year 2020. Classication of customer receivables Receivables from customers consist of the amounts due from customers from the sale of products that occur during the normal operation of the Group. In general, credit terms range from 30 to 180 days and there- fore trade receivables are classied as short- term. Receivables from customers are initially recognized in the transaction amount if the Group has the unconditional right to receive the transaction price. The Group holds the receivables from customers in or- der to collect the contractual cash ows and therefore measures them at amortized cost using the eective interest rate method. The dispersion of the Group’s sales is deemed as satisfactory. There is no concen- tration of sales into a limited number of cus- tomers and therefore there is no increased risk of income loss or increased credit risk. Fair value of receivables from customers Given their short-term nature, the fair value of receivables approximates book value. Impairment of receivables from customers For the accounting policy on impairment of receivables from customers, see note 2.10. For information on nancial risk manage- ment, see note 3.32. 3.18.2 Other receivables Other receivables Group Company 2021 2020 2021 2020 Debtors 3,438 2,417 1,066 23 Investment Grant Receivable 2,353 2,193 - - Prepaid expenses 3,818 2,601 187 171 Interim dividend - Dividends 4,750 - 5,750 - Total 14,359 7,211 7,003 194 3.18 Trade and other receivables 3.18.1 Trade Receivables Trade Receivables Group Company 2021 2020 2021 2020 Customers 72,268 64,170 2,626 2,340 Provisions for doubtful debts (7,721) (7,307) (2,317) (2,328) Total 64,547 56,863 309 12 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 213 of 260 The above grant concerns a grant receivable of Law 3299/2004 of the subsidiary Thrace Plastics Pack SA concerning an implemented investment. Accrued expenses mainly concern the receivable for government grants, advance payments of taxes other than income tax and other prepaid expenses. 3.18.3 Analysis of Provisions for Doubtful Receivables and other receivables Analysis of Provisions for Doubtful Receivables Group Company Opening balance 1.1.2020 6,541 2,347 Additional Provisions 908 - Reverse Entry of Provision (20) - Provisions utilized (98) (19) Foreign Exchange Dierences (24) - Total 31.12.2020 7,307 2,328 Opening balance 1.1.2021 7,307 2,328 Additional Provisions 456 - Reverse Entry of Provision (70) - Provisions utilized (11) (11) Foreign Exchange Dierences 39 - Total 31.12.2021 7,721 2,317 * An amount of € 217 concerns the company Thrace Linq INC which is included in the income statement in the discontinued operations. 3.19 Cash & cash equivalents Cash & cash equivalents Group Company 2021 2020 2021 2020 Cash in hand 20 23 5 10 Current and time deposits 63,220 40,801 132 153 Total 63,240 40,824 137 163 Amounts in thousand Euro, unless stated otherwise Contents >> Page 214 of 260 Annual Financial Report as of 31.12.2021 Credit rating of cash & cash equivalents Group Company 2021 2020 2021 2020 AA- 91 1,390 - - Α+ 3,521 713 - - Α 45,315 16,210 - - A- 478 997 - - Β- 2,909 442 53 2 ΒΒΒ- - 60 - - BBB+ 2,540 1,945 - - B 3,306 - 21 - B+ 5,060 - 58 - BB+ - 476 - - CCC+ - 10,600 - 129 CCC - 7,968 - 22 Total 63,220 40,801 132 153 3.20 Share Capital and Share Premium Reserve The Company’s share capital accounted for 28,869,358.32 Euro (absolute number) on 31 December 2021 divided by 43,741,452 common registered shares with nominal value of 0.66 Euro per share. Credit rating of cash & cash equivalents Approximately 13% of the Group’s cash and cash equivalents are deposited in the Greek systemic banks within the Greek region. The Group’s Management deems that there are no risks associated with the above deposits in the current period. Following, cash & cash equivalents are cat- egorized according to the credit rating of banks (conducted by Fitch) where the rel- evant deposits are placed. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 215 of 260 3.21 Reserves 3.21.1 Statutory Reserves In accordance with the provisions of Greek Law, the creation of a statutory re- serve – by transferring to such a reserve an amount equal to 5% of the annual after tax prots realized – is mandatory until the time though the reserve reaches the 1/3 of the Company’s share capital. The statutory reserve can be distributed only upon the dissolution of the Company. However, it can be used to oset accumulated losses. 3.22 Bank Debt The Group’s long term loans have been granted from Greek and foreign banks. The repayment time varies, according to the loan contract, while most loans are linked to Euribor plus a spread. The Group’s short term loans have been granted from Greek and foreign banks with interest rates of Euribor or Libor plus a margin. The book value of loans ap- proaches their fair value during 31 Decem- ber 2021. Analytically, bank debt at the end of the year was as follows: 3.21.2 Tax-exempt and Other Reserves These reserves were formed by the appli- cation of special provisions of tax laws for special incentive laws. In case of their dis- tribution, they will be taxed with the tax rate prevailing at the time of their distribu- tion. 3.21.3 Foreign exchange dierence reserves These reserves are formed from the con- version of the Assets, Liabilities and net income of subsidiaries based abroad into EUR, based on the exchange rate accord- ing to the accounting policies mentioned in note 2.12.3. Debt Group Company 2021 2020 2021 2020 Long-term loans 33,610 46,691 - - Total long-term loans 33,610 46,691 - - Short term portion of long term debt 8,519 15,722 - - Short-term loans 8,874 10,589 1,519 960 Total short-term loans 17,393 26,311 1,519 960 Grand Total 51,003 73,002 1,519 960 Short-term loans include an amount of € 1,396 which relates to a Factoring arrange- ment of Thrace Plastics Pack SA with ABC Factors, which has been received by the aforementioned subsidiary and corre- sponds to non-reinsured customers. The maturity of loans is as follows : Amounts in thousand Euro, unless stated otherwise Contents >> Page 216 of 260 Annual Financial Report as of 31.12.2021 The liabilities of the Company and the Group towards its employees in providing them with certain future benets, depend- ing on the length of service is calculated by an actuarial study on annual basis. The ac- counting treatment is made on the basis of the accrued entitlement, as at the Balance Sheet date, that is anticipated to be paid, discounted to its present value by reference to the anticipated time of payment. The liability for the Company and the Group, as presented in the Balance Sheet, is analyzed as follows: 3.23 Employees Benefits Employees Benets Group Company 2021 2020 2021 2020 Dened contribution plans – Not self nanced 1,599 1,462 79 78 Dened benet plans – Self nanced 1,900 12,729 - - Total provision at the end of the year 3,499 14,191 79 78 3.23.1 Dened contribution plans – Not self-nanced The IFRS Interpretations Committee is- sued in May 2021 the nal decision on the agenda entitled “Distribution of benets in periods of service in accordance with International Accounting Standard (IAS) 19”, which includes explanatory material on how to distribute benets in periods of service on a specic dened benet plan proportional to that dened in article 8 of L.3198 / 1955 regarding the provision of compensation due to retirement (the “Pro- gram of Fixed Benets of Labor Law”). Based on the above Decision, there should be an alteration in the way in which the basic principles of IAS 19 were applied in Greece in the past in this regard. Con- sequently, according to what is dened Maturity of Loans Group Company 2021 2020 2021 2020 Up to 1 year 17,393 26,310 1,519 960 From 1 – 3 years 29,479 32,797 - - Over 3 years 4,131 13,895 - - Total loans 51,003 73,002 1,519 960 It should be noted that the Company does not have any bank debt obligations, while the balance of the debt obligations reported in its Balance Sheet refers to an intragroup loan. Interest rates are linked on a case by case basis with a Euribor or Libor index plus a margin ranging from 1.25% to 3.5%. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 217 of 260 in the “IASB Due Process Handbook (par. 8.6)”, the economic entities that prepare their nancial statements in accordance with IFRS are required to amend their ac- counting policies in relation to the above. Until the issuance of the decision, for the Greek subsidiaries, the Group applied IAS 19 distributing the benets dened by the article 8 of L.3198 / 1955, L. 2112/1920, and its amendment by Law 4093/2012 in the period from the recruitment until the date of retirement of the employees. The application of this nal Decision to the attached nancial statements, has brought as requirement the distribution of benets dened in the last sixteen (16) years until the date of retirement of employees fol- lowing the scale of Law 4093/2012. In this context, the application of the above Final Decision has been treated as a change in accounting policy, applying the change retroactively from the beginning of the rst comparative period, in accord- ance with paragraphs 19 to 22 of IAS 8. The Greek companies of the Group as well as the subsidiary Thrace Ipoma A.D. domi- ciled in Bulgaria participate in the follow- ing plan. Dened contribution plans – Not self- nanced Group Company 2021 2020 2021 2020 Amounts recognized in the balance sheet Present value of liabilities 1,599 1,462 79 78 Net liability recognized in the balance sheet 1,599 1,462 79 78 Amounts recognized in the nancial results Cost of current employment 164 100 12 8 Net interest on the liability / (asset) 6 20 - 2 Ordinary expense in the account of nancial results 170 120 12 10 Recognition of prior service cost (22) 12 - - Cost of curtailment / settlements / service termination 386 219 88 66 Other expense / (income) - (35) - - Total expense in the account of nancial results 534 316 100 76 Change in the present value of the liability Present value of liability at the beginning of period 1,462 2,599 78 215 Change in accounting policy (note 2.25) - (1,821) - (160) Present value of liability at the beginning of period 1,462 778 78 55 Cost of current employment 164 100 12 8 Amounts in thousand Euro, unless stated otherwise Contents >> Page 218 of 260 Annual Financial Report as of 31.12.2021 Dened contribution plans – Not self- nanced Group Company 2021 2020 2021 2020 Interest cost 6 20 - 2 Benets paid from the employer (480) (420) (92) (98) Cost of curtailment / settlements / service termination 386 323 88 66 Other expense / (income) - - - - Cost of prior service during the period 59 12 - - Actuarial loss / (prot) – nancial assumptions (11) 208 3 16 Actuarial loss / (prot) – demographic assumptions 18 358 - 33 Actuarial loss / (prot) – evidence from the period (5) 83 (10) (4) Present value of liability at the end of period 1,599 1,462 79 78 Adjustments Adjustments prot / (loss) in the liabilities due to change of assumptions (88) (532) (3) (16) Empirical adjustments prot / (loss) in liabilities 5 (117) 10 (29) Other - - - - Total actuarial prot / (loss) in the Net Worth (83) (649) 7 (45) Changes in the Net Liability recognized in Balance Sheet Net liability / receivable at the beginning of year 1,462 2,599 78 215 Change in accounting policy (note 2.25) - (1,821) - (160) Net liability / receivable at the beginning of year 1,462 778 78 55 Benets paid from the employer - Other (480) (420) (92) (98) Total expense recognized in the account of nancial results 534 316 100 76 Total amount recognized in the Net Worth 83 649 (7) 45 Other - 139 - - Net liability at the end of year 1,599 1,462 79 78 Cumulative amount in the Net Worth Prot / (Loss) 12 (649) 7 (45) Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 219 of 260 Dened contribution plans – Not self- nanced Group Company 2021 2020 2021 2020 Money ows Expected benets from the plan in the following year 86 59 - - The actuarial assumptions are presented in the following table. Actuarial Assumptions Greek Companies Thrace Ipoma AD 2021 2020 2021 2020 Discount rate 0.50% 0.43% 0.60% 0.50% Ination 2.03% 1.30% 7.80% 0.90% Average annual increase of personnel salaries 2.03% 1.30% 5.00% 5.00% Duration of liabilities 6.7 years 17 years 10.5 years 11.8 years 3.23.2 Dened Benet Plans – Self nanced The subsidiaries Don & Low LTD and Thrace Polybulk AS have formed Pension Plans which operate as separate legal entities in the form of trusts. Therefore the assets of the plans are not dependent to the assets of the companies. The accounting depiction of the plans according to the revised IAS 19 is as follows: Dened Benet Plans – Self nanced Group 2021 2020 Amounts recognized in the balance sheet Present value of liabilities 160,955 158,697 Fair value of the plan’s assets (159,055) (145,968) Net liability recognized in the balance sheet 1,900 12,729 Amounts recognized in the nancial results Cost of current employment 186 156 Net interest on the liability / (asset) 120 229 Ordinary expense in the account of nancial results 306 385 Cost recognition from previous years Cost of curtailment / settlements / service termination - - Other expense / (income) 349 337 Foreign exchange dierences Total expense in the account of nancial results 655 722 Amounts in thousand Euro, unless stated otherwise Contents >> Page 220 of 260 Annual Financial Report as of 31.12.2021 Dened Benet Plans – Self nanced Group 2021 2020 Change in the present value of the liability Present value of liability at the beginning of period 158,697 154,901 Cost of current employment 166 151 Interest cost 2,237 2,844 Benets paid from the plan (5,583) (6,873) Cost of curtailment / settlements / service termination (121) - Other expense / (income) (18) 309 Actuarial loss / (prot) – nancial assumptions (3,490) 15,061 Actuarial loss / (prot) – demographic assumptions (349) 6,294 Actuarial loss / (prot) – evidence from the period (1,441) (5,552) Foreign exchange dierences 10,857 (8,438) Present value of liability at the end of period 160,955 158,697 Change in the value of assets Value of the plan’s assets at the beginning of period 145,968 142,248 Income from interest 2,117 2,616 Return on assets 4,703 14,518 Employer’s contributions 1,971 1,211 Employees’ contributions Benets paid from the plan (5,933) (6,873) Foreign exchange dierences 10,229 (7,752) Present value of assets at the end of period 159,055 145,968 Adjustments Adjustments prot / (loss) in the liabilities due to change of assumptions 5,280 (15,804) Empirical adjustments prot / (loss) in liabilities - - Empirical adjustments prot / (loss) in assets 4,823 14,519 Total actuarial prot / (loss) in the Net Worth 10,103 (1,285) Cost recognition from previous years Foreign exchange dierences Total amount recognized in the Net Worth 10,103 (1,285) Asset allocation Mutual Funds (Equities) 15,640 17,239 Mutual Funds (Bonds) 79,893 76,430 Diversied Growth Funds 52,839 48,721 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 221 of 260 Dened Benet Plans – Self nanced Group 2021 2020 Other 10,683 3,578 Total 159,055 145,968 Changes in the Net Liability recognized in Balance Sheet Net liability / (receivable) at the beginning of year 12,729 12,653 Contributions from the employer / Other (2,009) (1,211) Total expense recognized in the account of nancial results 655 689 Total amount recognized in the Net Worth (10,103) 1,285 Foreign exchange dierences 628 (687) Net liability / (asset) at the end of year 1,900 12,729 Cumulative amount in the Net Worth Prot / (Loss) 18,148 7,206 Money ows Expected benets from the plan in the following year (4,760) (6,896) * The assets of the plan are measured at fair values and include mainly mutual funds of Baillie Giord, of Legal & General Investment Management as well as of Ninety One plc. The category “Other” also includes the plan’s cash reserves. The actuarial assumptions are presented in the following table. Actuarial Assumptions Don & Low LTD Thrace Polybulk AS 2021 2020 2021 2020 Discount rate 1.84% 1.42% 1.70% 1.70% Ination 3.37% 2.91% 2.00% 2.00% Average annual increase of personnel salaries 3.37% 2.91% 2.00% 2.00% Duration of liabilities 18 years 18 years 10 years 10 years 3.24 Deferred Taxes Group The following amounts are recorded in the consolidated balance sheet, after any osetting entries wherever it is required: Amounts in thousand Euro, unless stated otherwise Contents >> Page 222 of 260 Annual Financial Report as of 31.12.2021 Deferred Taxation 2021 2020 Deferred tax assets 2,261 4,612 Deferred tax liabilities (8,623) (6,435) Total deferred taxation (6,362) (1,824) Α. Change of deferred tax in the nancial results 2021 2020 As at 1 January (1,824) (1,674) Change in accounting policy (note 2.25) - (301) As at 1 January Adjusted (1,824) (1,975) Change in the nancial results (2,216) (456) Foreign exchange dierences (176) 48 Change in statement of comprehensive income (2,146) 559 As at 31 December (6, 362) (1,824) Β. Deferred tax (liabilities) Amortization Other Total As at 1 January 2020 (5,507) (714) (6,221) Change in the nancial results (432) 18 (414) Foreign exchange dierences 165 35 200 Change in statement of comprehensive income - - - As at 31 December 2020 (5,774) (661) (6,435) Change in the nancial results (1,858) (5) (1,863) Foreign exchange dierences (292) (33) (325) Change in statement of comprehensive income - - - As at 31 December 2021 (7,924) (699) (8,623) Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 223 of 260 C. Deferred tax assets Liabilities for employee benets Provisions Other Total As at 1 January 2020 2,866 1,221 461 4,548 Change in accounting policy (note 2.25) (301) - - (301) As at 1 January Adjusted 2,565 1,221 461 4,247 Change in the nancial results 125 (255) 89 (41) Change in the other comprehensive income 560 - (1) 559 Foreign exchange dierences (121) - (32) (153) As at 31 December 2020 3,129 966 516 4,612 Change in the nancial results (249) (86) (18) (353) Change in the other comprehensive income (2,146) - - (2,146) Foreign exchange dierences 122 - 27 149 As at 31 December 2021 856 880 525 2,261 Company Α. Change of deferred tax in the nancial results 2021 2020 As at 1 January 130 708 Change in accounting policy (note 2.25) - (36) As at 1 January Adjusted 130 672 Change in the nancial results (16) (552) Change in statement of comprehensive income (1) 10 As at 31 December 113 130 Amounts in thousand Euro, unless stated otherwise Contents >> Page 224 of 260 Annual Financial Report as of 31.12.2021 Β. Deferred tax (liabilities) Depreciation Other Total As at1 January 2020 109 (2) 107 Change in the nancial results 2 - 2 Change in other comprehensive income - - - As at 31 December 2020 111 (2) 109 Change in the nancial results (14) - (14) Change in other comprehensive income - - - As at 31 December 2021 97 (2) 95 C. Deferred tax assets Liabilities for employee benets Provisions Other Total As at 1 January 2020 52 549 - 601 Change in accounting policy (note 2.25) (36) - - (36) As at 1 January Adjusted 16 549 - 565 Change in the nancial results (6) (549) - (555) Change in other comprehensive income 11 - - 11 As at 31 December 2020 21 - - 21 Change in the nancial results (2) - - (2) Change in other comprehensive income (1) - - (1) As at 31 December 2021 18 - - 18 In the Statement of Financial Position, deferred tax assets and liabilities are oset per Company, while in the specic table deferred tax assets and liabilities are presented in detail. Therefore, any reconciliation is made in the change between assets and liabilities. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 225 of 260 Suppliers and Other Short-Term Liabilities are presented analytically in the following ta- bles: 3.25.1 Suppliers Suppliers Group Company 2021 2020 2021 2020 Suppliers 55,441 29,697 1,046 531 Total 55,441 29,697 1,046 531 3.25.2 Other Short-Term Liabilities Other Short-Term Liabilities Group Company 2021 2020 2021 2020 Sundry creditors * 4,531 12,333 16 4 Liabilities from taxes and pensions 4,993 6,178 426 402 Dividends payable 107 85 102 83 Customer prepayments ** 7,794 5,636 - - Personnel salaries payable 1,216 1,339 65 69 Accrued expenses – Other accounts payable 10,354 7,521 997 868 Total short-term liabilities 28,995 33,092 1,606 1,426 The fair value of the liabilities approaches the book value. * The nancial year 2020 includes the amount of 11 million dollars that the company Thrace Linq INC received for the transfer of the property (see note 3.14). ** Customer prepayments refer to the Group’s obligation to deliver products to third parties. Revenues will be recognized in the nancial results upon delivery of the order. Revenue corresponding to previous year’s customer advances has been recognized in the current year. 3.25 Suppliers and Other Short-Term Liabilities Amounts in thousand Euro, unless stated otherwise Contents >> Page 226 of 260 Annual Financial Report as of 31.12.2021 The Annual Ordinary General Meeting of Shareholders of 21 May 2021 approved the distribution (payment) of dividend from the earnings of the closing year 2020. Spe - cically, the General Meeting approved the distribution of an amount of 6,947,002.24 Euros (gross amount), or 0.158820 Euro per Company’s share (gross amount), which af - ter the incremental increase of the dividend concerning 322,688 treasury shares (held by the Company and not entitled to any dividend) amounted to 0.16 Euro. From the above amount, the corresponding tax of 5% on the dividend was withheld, according to the article 40, paragraph 1 and article 64, paragraph 1 of Law 4172/2013 as it is cur - rently in eect following its amendment by Law 4646/2019, and therefore the nal pay - able amount of dividend settled at 0.152 Euro per share. 3.26 Dividend 3.26.1 Dividend for the Year 2020 3.26.2 Interim dividend for the year 2021 The Board of Directors of the Company dur- ing the meeting of September 24th, 2021 approved the distribution of an interim dividend for the nancial year 2021 based on the interim nancial statements for the period 01.01.2021-30.06.2021. The interim dividend amounted in total to 4,750 thou - sand Euros (gross amount), i.e. 0.108592646 Euros per share of the Company. The above amount through the increase correspond - ing to the 504,163 treasury shares held by the Company and which are not entitled to an interim dividend, settled at 0.109858877 Euros per share and was subject to a with - holding tax of 5%, in accordance with the provisions of Law 4646/2019 (Government Gazette A’ 201/12.12.2019). Therefore, the nal amount paid as interim dividend for the year 2021 amounted to 0.104365933 Euros per share. Following the above and af - ter the approval of the nancial statements for the period 01.01.2021-30.06.2021 and especially the registration, as of 6.10.2021, in the General Electronic Commercial Reg - istry (GEMI) of the relevant announcement regarding the publication of the above - nancial statements, the Board of Directors of the Company at its meeting of October 14, 2021, set Wednesday, December 1, 2021 as the cut-o date for the interim dividend, Thursday, December 2, 2021 as the date of determination of the beneciaries to the above dividend (record date), and Wednes - day, December 8, 2021 as the payment com- mencement date. The payment of the inter- im dividend was made through the paying Bank “PIRAEUS BANK SA”. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 227 of 260 The Group classies as related parties the members of the Board of Directors, the di - rectors of the Company’s divisions as well as the shareholders who own over 5% of the Company’s share capital (their related par - ties included). The commercial transactions of the Group with these related parties during the period 01.01.2021 – 31.12.2021 have been con - ducted according to market terms and in the context of the ordinary business activi - ties. The transactions with the Subsidiaries, Joint Ventures and Related companies according to the IFRS 24 during the period 01.01.2021 – 31.12.2021 are presented below. 3.27 Transactions with Related Parties Income Group Company 01.01 – 31.12.2021 01.01 - 31.12.2020 01.01 – 31.12.2021 01.01 - 31.12.2020 Subsidiaries - - 5,664 4,842 Joint Ventures 5,917 5,648 119 118 Aliated Companies 13 11 - - Total 5,930 5,659 5,783 4,960 Expenses Group Company 01.01 – 31.12.2021 01.01 - 31.12.2020 01.01 – 31.12.2021 01.01 - 31.12.2020 Subsidiaries - - 84 76 Joint Ventures 486 335 - - Aliated Companies 800 1,027 403 542 Total 1,286 1,362 487 618 Trade and other receivables Group Company 31.12.2021 31.12.2020 31.12.2021 31.12.2020 Subsidiaries - - 1,297 7 Joint Ventures 1,195 1,370 7 - Aliated Companies 38 26 26 26 Total 1,233 1,396 1,330 33 Amounts in thousand Euro, unless stated otherwise Contents >> Page 228 of 260 Annual Financial Report as of 31.12.2021 Suppliers and Other Liabilities Group Company 31.12.2021 31.12.2020 31.12.2021 31.12.2020 Subsidiaries - - 1,678 1,059 Joint Ventures 48 23 5 19 Aliated Companies 92 180 69 141 Total 140 203 1,752 1,219 Long-term Liabilities Group Company 31.12.2021 31.12.2020 31.12.2021 31.12.2020 Subsidiaries - - 284 313 Joint Ventures - - - 5 Aliated Companies - - - - Total - - 284 318 In the context of the adoption of IFRS 16, the Company’s liabilities to Subsidiaries and Aliated companies include lease liabilities. The Company’s lease liabilities with related parties are analyzed as follows: Company Liabilities from leases Initial balance 01.01.2021 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2021 Subsidiaries 3 (1) - - 2 Aliated Companies 20 (120) 367 9 277 Total 23 (121) 367 9 279 Company Liabilities from leases Initial balance 01.01.2020 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2020 Subsidiaries 5 (2) - - 3 Aliated Companies 157 (140) - 3 20 Total 162 (142) - 3 23 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 229 of 260 In addition, the depreciation of the Com- pany includes depreciation for assets with the right of use, relating to lease agree- ments with related parties, amounting to € 115 (2020: € 116). Also, the Group’s liabilities to aliated companies include lease liabilities which are analyzed as follows: Group Liabilities from leases Initial balance 01.01.2021 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2021 Aliated Companies 21 (186) 708 16 559 Total 21 (186) 708 16 559 Group Liabilities from leases Initial balance 01.01.2020 Payments of leases New Contracts / Amendments of Contracts Interests on Leases Closing Balance 31.12.2020 Aliated Companies 165 (148) - 4 21 Total 165 (148) - 4 21 In addition, the depreciation of the Group includes depreciation for assets with the right to use, relating to lease agreements with related parties, amounting to € 182 (2020: € 123). The Group’s “subsidiaries” include all com- panies consolidated under “Thrace Plastics Group” via the full consolidation method. The “Joint Ventures” include those consoli- dated with the equity method. The Company has granted guarantees to banks against long-term loans of its sub- sidiaries. On 31st December 2021, the outstanding amount for which the Com- pany had provided guarantee settled at € 34,844 and is analyzed as follows. Guarantees for Subsidiaries 2021 ThraceNonwovens&Geosynthetics Single Person S.A. 14,697 Thrace Plastics Pack SA 15,654 Thrace Polylms Single Person SA 4,493 Total 34,844 Amounts in thousand Euro, unless stated otherwise Contents >> Page 230 of 260 Annual Financial Report as of 31.12.2021 BoD Fees Group Company 2021 2020 2021 2020 BoD Fees 4,970 5,339 1,812 2,115 3.28 Remuneration of Board of Directors The Management reviews on annual basis whether there are indications for impair- ment in business interests held in subsidi- aries. On 31.12.2021, the Management re- viewed all equity investments with regard to any evidence of impairment. At the same time it followed the procedures de- scribed in note 2.6 with regard to review for goodwill impairment and at the same time evaluated whether there is an indica- tion of a need for impairment of participa- tions in subsidiaries. Based on the evaluation of the Manage- ment, there is no indication of a need for impairment of investments in subsidiaries as of 31.12.2021. The value of the Company’s investments in the subsidiaries, as of 31st December 2021, is as follows: 3.29 Investments 3.29.1 Investments in companies consolidated with the full consolidation method Companies consolidated with the full consolidation method 2021 2020 Don & Low LTD 37,495 37,495 Thrace Plastics Pack SA 15,507 15,507 Thrace Nonwovens & Geosynthetics Single Person SA 5,710 5,710 Synthetic Holdings LTD 11,728 11,728 Thrace Polylms Single Person SA 3,418 3,418 Total 73,858 73,858 The remuneration concerns the Boards of Directors of 21 companies in which 33 members participate and include salaries of the executive members of the Boards of Directors, other remuneration and ben- ets of both the executive and the non- executive directors. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 231 of 260 The following table presents the compa- nies in which the management is jointly controlled with another shareholder with the right to participate in their net assets. The companies are consolidated accord- ing to the Equity method in line with the provisions of IFRS 11. The parent Company holds direct business interest of 50.91% in Thrace Greenhouses SA with a value of € 3,615 and of 51% in Thrace Eurobent SA with a value of € 204 as at 31/12/2021. The company Thrace Greiner Packaging SRL is 50% owned by Thrace Plastics Pack SA whereas Lumite INC. is 50% owned by Syn- thetic Holdings LTD. 3.29.2 Investments in companies consolidated with the equity method Company Country of Activities Business Activity Percentage of Shareholding Thrace Greiner Packaging SRL Romania The company activates in the production of plastic boxes for food products and paints and belongs to the packaging sector. The company’s shares are not listed. 46.47% Lumite INC United States The company activates in the production of agricultural fabrics and belongs to the technical fabrics sector. The company’s shares are not listed. 50.00% Thrace Greenhouses SA Greece The company activates in the production of agricultural products and belongs to the agricultural sector. The company’s shares are not listed. 50.91% Thrace Eurobent SA Greece The company activates in the manufacturing of waterproof products via the use of Geosynthetic Clay Liner – GCL, and belongs to the technical fabrics sector. 51.00% The company’s shares are not listed. The change of the Group’s Investments in the companies that are consolidated with the equity method is analyzed as follows: Investment in companies consolidated with the equity method THRACE GREINER PACKAGING SRL THRACE GREENHOUSES SA LUMITE INC THRACE EUROBENT SA Total Balance at beginning 01.01.2020 3,655 3,797 6,826 269 14,547 Gain / (losses) from joint ventures 926 146 665 39 1,776 Share capital increase - - - - - Dividends (550) - - - (550) Foreign exchange dierences and other reserves (63) (7) (625) (10) (705) Balance at end 31.12.2020 3,968 3,936 6,866 298 15,068 Balance at beginning 01.01.2021 3,968 3,936 6,866 298 15,068 Gain / (losses) from joint ventures 1,141 333 1,253 43 2,770 Amounts in thousand Euro, unless stated otherwise Contents >> Page 232 of 260 Annual Financial Report as of 31.12.2021 Investment in companies consolidated with the equity method THRACE GREINER PACKAGING SRL THRACE GREENHOUSES SA LUMITE INC THRACE EUROBENT SA Total Share capital increase - - - - - Dividends (401) - - - (401) Foreign exchange dierences and other reserves (64) 16 617 6 575 Balance at end 31.12.2021 4,644 4,285 8,736 347 18,012 The nancial statements of the companies are presented in the following tables: STATEMENT OF FINANCIAL POSITION THRACE GREINER PACKAGING SRL THRACE GREENHOUSES SA LUMITE INC THRACE EUROBENT SA 2021 2020 2021 2020 2021 2020 2021 2020 % of Shareholding 46.47% 46.47% 50.91% 50.91% 50% 50% 51% 51% ASSETS Tangible assets 5,791 6,413 9,163 9,749 4,264 4,326 1,066 1,429 Inventories 4,139 2,904 181 89 12,555 10,696 931 634 Trade and other receivables 3,390 2,933 1,386 3,342 2,886 1,951 169 1,059 Other asset items - - 374 260 8 34 85 44 Cash 2,739 2,147 110 151 4,181 2,838 948 385 LIABILITIES Bank debt 2,684 2,779 1,731 4,866 2,345 3,776 1,035 1,404 Other liabilities 4,027 3,605 1,065 995 4,135 2,385 1,436 1,533 EQUITY 9,349 8,013 8,417 7,730 17,415 13,684 728 614 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 233 of 260 STATEMENT OF COMPREHENSIVE INCOME THRACE GREINER PACKAGING SRL THRACE GREENHOUSES SA LUMITE INC THRACE EUROBENT SA 2021 2020 2021 2020 2021 2020 2021 2020 Turnover 21,099 17,685 8,111 8,182 31,059 24,466 6,218 5,007 Cost of sales (16,102) (13,125) (6,104) (6,164) (26,296) (19,048) (5,241) (4,116) Gross prot 4,997 4,560 2,007 2,018 4,763 5,418 977 891 Distribution expenses (778) (782) (748) (1,067) (2,228) (2,138) (685) (656) Administrative expenses (1,185) (1,233) (506) (428) (1,193) (1,362) (70) (64) Other (expenses) / income (276) (240) 93 4 1,491 (26) (42) (14) Operating prot / loss 2,758 2,305 846 527 2,833 1,892 180 157 Financial result (53) (88) (147) (274) (90) (106) (40) (49) Prot/(loss) before Taxes 2,705 2,217 699 253 2,743 1,786 140 108 Taxes (438) (360) (45) 34 (264) (382) (64) (45) Prot/(loss) after Taxes 2,267 1,857 654 287 2,479 1,404 76 63 3.30 Commitments and Contingent Liabilities On 31 st December 2021 there are no signif- icant legal issues pending that may have a material eect in the nancial position of the Companies in the Group. The letters of guarantee issued by the banks for the account of the Company and in favor of third parties (Greek State, sup- pliers and customers) amount to € 834. Amounts in thousand Euro, unless stated otherwise Contents >> Page 234 of 260 Annual Financial Report as of 31.12.2021 3.31 Fees of auditing firms During the nancial year 2021, the total fees of the Company’s and Group’s external audi- tors, are analyzed as follows: Fees of auditing rms Group Company 2021 2020 2021 2020 Fees of auditing services 419 388 63 63 Fees for tax certicate 153 150 11 12 Fees for non-audit services 28 27 - - Total 600 565 74 75 3.32 Financial risks The nancial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable and payable ac- counts and loans. In general, the Group’s activities create several nancial risks. Such risks include market risk (foreign exchange risk and risk from changes in raw materials prices), credit risk, liquidity risk and interest rate risk. 3.32.1 Risk of Price Fluctuations of Raw Materials The Group is exposed to uctuations in the price of polypropylene (represents 52% of the cost of sales), which are mainly faced by a similar change in the selling price of the nal product. The possibility that the increase in the price of polypropylene can- not be fully passed on to the selling price, causes unavoidably the compression of margins. For this reason, the Company ac- cordingly adjusts, to the extent it is feasi- ble, its inventory policy as well as its com- mercial policy in general. Therefore in any case, the particular risk is deemed as rela- tively controlled. 3.32.2 Credit Risks The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause nancial loss to the Group and the Company as a result of the breach of its contractual ob- ligations. The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the nancial statements is the book value of their - nancial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required. In order to monitor credit risk, customers Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 235 of 260 ● Impairment The Group and the Company, in the - nancial assets that are subject to the new model of expected credit losses, include receivables from customers and other - nancial assets. The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all nan- cial assets. The expected credit losses are based on the dierence between the con- tractual cash ows and the entire cash ows which the Group (or the Company) anticipates to receive. The dierence is discounted by using an estimate concern- ing the initial eective interest rate of the nancial asset. For the trade receivables, the Group and the Company applied the simplied approach of the accounting standard and calculated the expected credit losses based on the expected credit losses for the entire lifetime of these items. Regarding the remaining nancial assets, the expected credit losses are being calcu- lated according to the losses of the next 12 months. The expected credit losses of the following 12 months is part of the antici- pated credit losses for the entire life of the nancial assets, which emanates from the probability of a default in the payment of the contractual obligations within the next 12-month period starting from the report- ing date. In case of a signicant increase in credit risk since the initial recognition, the provision for impairment will be based on the expected credit losses of the entire life of the asset. At the date of the preparation of the nan- cial statements, impairment of receivables from customers and other nancial assets was made on the basis of the above. The following table presents an analysis of the maturity of customers at 31/12/2021. are grouped according to the category they belong to, their credit risk character- istics, the maturity of their receivables and any previous receivables that they have caused, taking into account future factors as well as the economic environment. Maturity of Trade Receivables’ Balances 31.12.2021 Group Company 01 – 30 days 23,443 304 31 – 90 days 37,175 - 91 – 180 days 4,980 - 180 days and over 6,670 2,322 Subtotal 72,268 2,626 Provisions for doubtful receivables (7,721) (2,317) Total 64,547 309 Amounts in thousand Euro, unless stated otherwise Contents >> Page 236 of 260 Annual Financial Report as of 31.12.2021 The above amounts are expressed in terms of due days in the table below: Analysis of not past due/overdue trade receivables 31.12.2021 Group Company Receivables not past due 53,323 297 Overdue receivables 1 – 30 days 9,492 7 Overdue receivables 31 – 90 days 2,639 - Overdue receivables above 91 days 6,814 2,322 Subtotal 72,268 2,626 Provisions for doubtful customer receivables (7,721) (2,317) Total 64,547 309 With regard to uninsured receivables overdue more than 90 days, which the Group has classied as doubtful, relevant provisions have been made which are deemed as su- cient. Correspondingly, the amounts of maturity and past due for the nancial year 2020 are presented in the following tables. Maturity of Trade Receivables’ Balances 31.12.2020 Group Company 01 – 30 days 21,197 - 31 – 90 days 30,357 - 91 – 180 days 5,927 - 180 days and over 6,689 2,340 Subtotal 64,170 2,340 Provisions for doubtful receivables (7,307) (2,328) Total 56,863 12 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 237 of 260 Analysis of not past due/overdue trade receivables 31.12.2020 Group Company Receivables not past due 47,434 - Overdue receivables 1 – 30 days 8,017 - Overdue receivables 31 – 90 days 1,528 - Overdue receivables above 91 days 7,191 2,340 Subtotal 64,170 2,340 Provisions for doubtful customer receivables (7,307) (2,328) Total 56,863 12 3.32.3 Liquidity risk The monitoring of liquidity risk is focused on managing cash inows and outows on a constant basis, in order for the Group to have the ability to meet its cash ow obligations. The management of liquidity risk is applied by maintaining cash equiva- lents and approved bank credits. During the preparation date of the nancial state- ments, there were adequate, unused bank credits, approved to the Group, which are considered sucient to face a possible shortage of cash equivalents. Short-term bank liabilities are renewed at their maturity, as they are part of the ap- proved bank credits. The following table presents the liabilities according to their maturity dates. Group 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 29,665 25,484 292 - - 55,441 Other short-term liabilities 12,723 15,891 381 - - 28,995 Short-term debt 2,601 9,118 5,674 - - 17,393 Liabilities from Leases (short-term part) 75 330 509 - - 914 Long-term debt - - - 33,610 - 33,610 Liabilities from Leases (long-term part) - - - 1,941 120 2,061 Other long-term liabilities - - - 237 - 237 Total 31.12.2021 45,064 50,823 6,856 35,788 120 138,651 Amounts in thousand Euro, unless stated otherwise Contents >> Page 238 of 260 Annual Financial Report as of 31.12.2021 Company 31.12.2021 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 520 526 - - - 1,046 Other short-term liabilities 178 1,331 97 - - 1,606 Short-term debt - 1,519 - - - 1,519 Liabilities from Leases (short-term part) 11 58 70 - - 139 Long-term debt - - - - - - Liabilities from Leases (long-term part) - - - 208 - 208 Other long-term liabilities - - - - 1 1 Total 31.12.2021 709 3,434 167 208 1 4,519 Group 31.12.2020 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 10,706 18,819 172 - - 29,697 Other short-term liabilities 7,904 15,738 9,450 - - 33,092 Short-term debt 514 5,395 20,402 - - 26,311 Liabilities from Leases (short-term part) 455 1,394 973 - - 2,822 Long-term debt - - - 46,691 - 46,691 Liabilities from Leases (long-term part) - - - 2,998 212 3,210 Other long-term liabilities - - - 208 34 242 Total 31.12.2020 19,579 41,346 30,997 49,897 246 142,065 Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 239 of 260 Company 31.12.2020 Up to 1 month 1-6 months 6-12 months 1-5 Years Over 5 years Total Suppliers 126 405 - - - 531 Other short-term liabilities 183 1,177 66 - - 1,426 Short-term debt - 960 - - - 960 Liabilities from Leases (short-term part) 10 21 - - - 31 Long-term debt - - - - - Liabilities from Leases (long-term part) - - - 25 - 25 Other long-term liabilities - - - - 1 1 Total 31.12.2020 319 2,563 66 25 1 2,974 3.32.4 Foreign exchange risk The Group is exposed to foreign exchange risks arising from existing or expected cash ows in foreign currency and investments that have been made in foreign countries. The management of the various risks is made by the use of natural hedge instru- ments. In order to hedge foreign currency risk from foreign currency customer receiv- ables, borrowing is contracted in the same currency, according to the management’s judgment. Sensitivity analysis of the eect of exchange rate changes is given in the table below. Foreign Currency 2021 2020 Change of foreign currency against Euro USD GBP Other USD GBP Other Prot before tax +5% (74) (32) 5 (244) (44) (62) -5% 81 35 (6) 270 49 68 Equity +5% (218) (1.358) (222) 136 169 (277) -5% 241 1.500 246 (151) (187) 307 * Note • Prot before Taxes are converted at the average exchange rates. • Equity is converted at the exchange rate at the closing date of each scal year. Amounts in thousand Euro, unless stated otherwise Contents >> Page 240 of 260 Annual Financial Report as of 31.12.2021 The Group’s long-term loans have been provided by Greek and foreign banks and are mainly denominated in Euro. The re- payment period varies, according to the loan contract each time, while long-term loans are mainly linked to Euribor plus a margin. The Group’s short-term loans have been provided by several banks, under Eu- ribor, plus a margin and Libor plus a mar- gin. It is estimated that a change in the average annual interest rate by 1 percentage point, will result in a (charge) / improvement of Earnings before Tax as follows: Possible interest rate change Eect on Earnings before Tax Group Company 2021 2020 2021 2020 Interest rate increase 1% (540) (790) (16) (10) Interest rate decrease 1% 540 790 16 10 Capital Adequacy Risk Group Company 2021 2020 2021 2020 Long-term debt 33,610 46,691 - - Long-term liabilities from leases 2,061 3,210 208 25 Short-term debt 17,393 26,311 1,519 960 Short-term liabilities from leases 914 2,822 139 31 Total debt 53,978 79,034 1,866 1,016 Minus cash & cash equivalents 63,240 40,824 137 163 Net debt (9,262) 38,210 1,729 853 3.32.5 Interest rate Risk 3.32.6 Capital Adequacy Risk The Group controls capital adequacy us- ing the net debt to operating prot ra- tio and the net debt to equity ratio. The Group’s objective in relation to capital management is to ensure the ability for its smooth operation in the future, while pro- viding satisfactory returns to shareholders and benets to other parties, as well as to maintain an ideal capital structure so as to ensure a low cost of capital. For this pur- pose, it systematically monitors working capital in order to maintain the lowest pos- sible level of external nancing. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 241 of 260 3.33 Significant Events Macroeconomic Environment and Impact of COVID-19 Global macroeconomic conditions have been aected for another year by the re- curring waves of the COVID-19 pandemic, particularly in Europe, with alterations be- tween gradual easing of restrictive meas- ures and re-adoption of such measures within the year. Therefore, it is obvious that the evolution of the pandemic was an important determinant of the economic and business environment, creating at the same time conditions of uncertainty but also business opportunities. At the same time, in the last months of year there has been the phenomenon of rising ination pressures in most world econo- mies and the constantly increasing prices on the cost base of industrial production, i.e. price increases in raw material prices, in secondary materials and packaging ma- terials, in energy costs and transportation costs, while there is still limited evidence of a potential reversal of the above price pressures. The above on the one hand generate chal- lenges, which the Group already faces and will continue to face in the near future and on the other hand create conditions of un- certainty regarding the course of the econ- omies and their growth patterns. Capital Adequacy Risk Group Company 2021 2020 2021 2020 EBITDA 110,275 69,444 (512) (413) NET DEBT / EBITDA* (0,08) 0,55 - - EQUITY 252,250 176,109 82,415 76,747 NET DEBT / EQUITY (0.04) 0.22 0.02 0.01 * Concerns Total Operations ** Since 2018, the Company has transformed into a Holding Company and therefore the net debt to EBITDA ratio does not reect the actual relation between the Company’s debt and its earnings. For this reason, going forward the Company will not be monitoring the particular ratio. It should be noted that the Company does not have any bank debt obligations, while the balance of the debt obligations reported in its Balance Sheet refers to an intragroup loan. Ι. Impact of the pandemic on the operation of the Group for the nancial year 2021 In this extremely dicult environment as described above and in view of the signi- cant disruptions in global supply and de- mand forces, the business and economic activity as well as operation of the Group has not been adversely aected to date and the Group continues to eectively overcome the existing challenges. Amounts in thousand Euro, unless stated otherwise Contents >> Page 242 of 260 Annual Financial Report as of 31.12.2021 Regarding the operation of production, all production units within the Group con- tinued to operate smoothly for the entire year 2021, without facing any operational issues from the spread of the pandemic, regarding the health and safety of the Group’s employees, as a result of the par- ticularly strict protection measures taken by the Group. The scal year 2021 was a year of espe- cially strong nancial performance as the Group achieved a higher protability by successfully osetting the negative impact from the signicant increase seen in raw material costs and the volatility observed in terms of market demand. More speci- cally, the following were observed during the year: • Increase of demand for products in the construction sector. • Signicant demand in the infrastruc- ture and agricultural sector. ; • Signicant demand for products relat- ed to personal protection and health, especially during the rst months of the year, but with a signicant decline in the second half. • Gradual increase of raw material pric- es, while their high levels remained throughout the year. In individual cas- es some additional increases were ob- served, depending on the type of raw material and the geographical area. • Constantly increasing energy costs, es- pecially during the last quarter of the year, in all countries which the Group is operating in. • Signicantly higher transportation costs with signicant lack of capac- ity in both available ground transport and containers. • Signicantly increased cost with re- gard to auxiliary materials as well as and packaging materials. In nancial terms, however, the Group managed to increase its turnover from continuing operations, taking advantage of its production capacity, its ever-grow- ing global network of customers and the business opportunities that arose. The above resulted in sales for 2021 of € 428.4 million, an increase of 26.1% compared to 2020, mainly due to increasing selling prices, Earnings before Taxes (EBT) from continuing operations of € 83.9 million, an increase of 61.1% compared to the year 2020. It should be noted that according to estimates of the Management for the year 2021, Earnings before Taxes at the Group level, related to the products of the exist- ing portfolio used in personal protection and health applications, amounted to € 51.8 million. (see note 3.3 of the nancial statements). Regarding the liquidity levels of the Group and the trading cycle of the subsidiaries, there was no negative impact due to the pandemic crisis. On the contrary, during the year 2021, the Group achieved the fur- ther strengthening of its liquidity, record- ing a Net Cash of € 9.3 million, as cash and cash equivalents exceeded its debt liabili- ties. Regarding the investment plan, the imple- mentation of the Group’s already planned investments is progressing smoothly. The investment plan for 2022, exceeds €40mil. on cash basis. The investments will be made mainly at the Group’s facilities in Greece, but also in other countries of ac- tivity. It is worth mentioning that the new invest- ment plan in its entirety, but also the ex- isting investment actions are fully aligned with the implementation of the Group’s Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 243 of 260 sustainability policy, in the context of its stable, long-term, sustainable growth. From the above it is clearly demonstrated that for the year 2021, the Group did not experience any negative, from a nancial point of view, consequence both in its - nancial results and in its trading cycle and therefore, it did not encounter any nan- cial risk, which would adversely aect its business continuity. On the contrary, the Group managed to achieve historically high protability, which will be the basis of its further growth in the coming years. ΙΙ. Measures taken to reduce the impact of the pandemic The Management of the Group continues to closely monitor the developments re- lated to the pandemic crisis and continues to maintain in full implementation mode a plan to ensure the health and safety of its personnel as well as the smooth business continuity of the entire Group. In particular, in accordance with the guide- lines and recommendations of the World Health Organization (WHO) and the local Public Health and Civil Protection Organi- zations, the following measures have been implemented: h Establishment of sub-crisis manage- ment teams with the participation of the Management teams of the sub- sidiaries and the Group, the Human Resources Departments, the Occupa- tional Physicians and the Safety Tech- nicians. h Informing employees about the coro- navirus, the mode of transmission, the prevention and protection measures and providing recommendations and instructions for personal hygiene, in accordance with the local instructions of the competent authorities. h Provision of personal protective equipment to the personnel (masks, antiseptics, gloves). h Carrying out disinfections at the Com- pany’s premises on a regular basis. h Conduct Covid-19 tests on the person- nel, preventively and as appropriate. h Remote work for oce employees to the greatest possible extent. h Protection of employees belonging to vulnerable groups, by facilitating their immediate removal from the premises, without curtailing their remuneration. h Development of specic procedures and protocols for all visitors to the Company’s facilities (carriers, contrac- tors, technicians, etc.) h Conducting meetings among the em- ployees of all Companies as well as the Management of the Group and con- ducting Board of Directors’ meetings between the Board of Directors with- out physical presence and by using electronic or audiovisual means (e.g. video conference). h Conducting General Meetings by vid- eo conference, in accordance with the provisions of the relevant legislative framework. h Adherence to the required medical protocols, in case of illness of an em- ployee or simple contact with an in- fected case, in collaboration with the occupational physician. Amounts in thousand Euro, unless stated otherwise Contents >> Page 244 of 260 Annual Financial Report as of 31.12.2021 h Continuous monitoring of liquidity and the transaction cycle of the Group companies. h Weekly meetings among the Man- agement of the subsidiaries and the Group, the Human Resources Depart- ment, the Occupational Physicians and the Safety Technicians in order to maintain and enrich the protection measures as well as the monitoring process of vaccinations and infections. It should be noted that the protection measures mentioned above continue to be fully implemented in the most consist- ent manner and to absolute degree at the time of preparation of the current Report. ΙΙΙ. Assessing the impact of the pandemic in the future and prospects of the Group Regarding the prospects for the year 2022, the Management closely monitors the macroeconomic developments, on a glob- al level, which are characterized by the sig- nicantly stronger inationary trends, throughout the economy but also in all cost items that constitute the industrial sector’s cost base, and by the ongoing war between Russia and Ukraine, which is substantially aggravating the economic environment. As a result of the above de- velopments, there is a lag in demand in various sectors of the economy, combined with the presence of signicantly higher prices of both raw materials as well as en- ergy and transportation costs. Regarding the rst quarter of 2022, the Management of the Group remains op- timistic for its satisfactory performance, given the dicult conditions prevailing in the current period. It is estimated that a signicantly stronger protability will be achieved, compared to the corresponding period before the pandemic, but it will set- tle lower than the protability of the cor- responding period of the previous year. However, the comparison with the previ- ous year becomes extremely dicult to be substantiated, due to the extraordinary circumstances of both that period and the current one. Specically concerning the impact of the war, it should be noted that the Group’s sales volume in Russia and Ukraine for 2021 was immaterial (0.6% of sales), but it is not clear how the ongoing war conict will aect more broadly the supply and demand conditions in the mar- ket. Regarding the course of 2022 as a whole, the very challenging as well as volatile macroeconomic environment described above makes especially dicult the devel- opment of any nancial estimates, since the visibility for the nancial results and the level of demand in the coming months remains extremely limited. However, the great eort made by the Management of the Group as well as the Management of the subsidiaries in all the countries of operation, creates conditions of reserved optimism that the Group will be able to implement its strategic plans and to main- tain to a signicant extent the protabil- ity from the traditional portfolio that was formed in 2021. This will be also demon- strating that the Group has entered a new era, characterized by signicantly higher protability compared to pre-pandemic levels. It should be noted, however, that although the implementation of this plan is the fundamental goal of the Manage- ment, the extremely uncertain conditions that arise at the time of preparation of the annual report are likely to redene the an- Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 245 of 260 nual performance estimates made by the Management in the coming months of the year. At the same time, the Group’s Manage- ment is working in seamless manner to- wards the implementation of the new strategy, the extraordinary investment actions that have been decided, as well as the implementation of the new annu- al investment plan for 2022. As already announced, the Group’s priority is the de- velopment of new products as well as the access to new markets, the emphasis on improving protability, the further cost re- duction and consequently the increase in competitiveness and the targeted increase in production capacity in both key sectors of activity. At the same time the Group im- plements important actions regarding re- cycling and the circular economy, actions that are an integral part of the Group’s strategy and will form new dynamics for the future. It is worth noting that for the period 2020 - 2022, the total invest- ment plan of the Group, on a cash basis, will amount to € 101 million. Regarding the level of liquidity of the Group, which in 2021 settled at signi- cantly higher levels, it is estimated that it will remain at similarly high levels. How- ever, the full implementation of the exten- sive investment plan, the greatest part of which will be disbursed in 2022, is mainly carried out via the utilization of own funds and therefore the Net Cash is likely to re- turn to Net Debt. The utilization of excess liquidity for the implementation of actions that will contribute to the further long- term development and viability of the Group, is estimated to be from any per- spective the most appropriate use of this capital, both in terms of sound manage- ment and in terms of required return. The Management of the Group is con- dent that the overall implementation of the respective investment plans but also of the broader strategy creates conditions for the Group to gradually enter into a new era of development, improvement of infrastructure, further expansion of activi- ties and improvement of prot generation, compared to the pre-pandemic levels. At the same time, the strengthening of the Group’s nancial position is the basis for the implementation of the future invest- ment plans, as they will be unveiled in the coming years, actions that in turn will contribute to the successful implementa- tion of the new strategy, always within the framework of protable sustainable devel- opment. Despite the fact that the current condi- tions in the global market place create sig- nicant volatility, making any assessment regarding the impact of the pandemic on the commercial activity and the nancial results of the Company and the Group uncertain, the Group’s Management esti- mates that neither the Group nor any of its individual activities face any potential threat in terms of cessation of business ac- tivity (going concern). Amounts in thousand Euro, unless stated otherwise Contents >> Page 246 of 260 Annual Financial Report as of 31.12.2021 IV. Climate related issues The Company recognizes the risks and the impact that may arise in its business activ- ity from the climate change, such as the occurrence of extreme weather events or rising temperatures, which may aect the production process and lead to signi- cant changes in its activities as well as to abrupt changes in the Group’s income and expenses in the short, medium and long term horizon. In order to mitigate the risks arising from climate change, but also to achieve positive nancial results for both the Group and its broader environment, the Company adapts its business model to reduce its environmental footprint (direct emissions, energy consumption, use of re- cycled material, waste management) and focus on the development of innovative products and services, applying the prin- ciples of the circular economy. Therefore, it has formulated a detailed strategic plan of specic actions, which are already being implemented. More details can be found in the non-nancial information section of this report as well as in the following link: https://www.thracegroup.com/gr/el/sus- tainability/ . V. Expected Credit Losses There are no expected credit losses as a re- sult of the current conditions and circum- stances. In any case, according to the estab- lished policy, most of the companies’ sales remain insured, while additional measures have been taken to ensure the Group car- ries out transactions with reliable custom- ers (credit risk assessment, credit scoring, advances, etc.). More information on credit risk can be found in Chapter 3.32.2. Election of new members of the Board of Directors to replace resigned Directors – Reconstitution of the Board of Directors into a body. The Board of Directors of the Company, during the meeting that took place on 18 th January 2021, elected: (a) Ms. Myrto Papathanou of Christos in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Konstantinos Gianniris of Ioannis, and (b) Ms. Spyridoula Maltezou of Andreas in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Ioannis Apostolakos of George. The above replacement and the election of the specic independent non-executive members of the Board of Directors takes place in the context of the Company’s de- cision for its immediate, substantial and eective compliance and adaptation of its organization to the requirements and reg- ulations of the new Law 4706/2020 with regard to corporate governance. More specically, the election of the above new members of the Board of Directors, on the one hand is in line with the current regulatory framework and in particular with the provisions of the above new law, in terms of substantive criteria and condi- Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 247 of 260 tions of independence of new members, whereas on the other hand is harmonized with the provisions of the new law on suit- ability, diversity and, above all, adequate representation by gender in the Board of Directors. The election of the above new independ- ent non-executive members of the Board of Directors was announced, in accordance with the law and the Company’s Articles of Association, at the Extraordinary General Shareholders Meeting of the Company, on 11 February 2021. Following the above, the Board of Direc- tors of the Company was reconstituted into a body for the remaining of its term, i.e. until March 19 th , 2024, as follows: 1. Konstantinos Chalioris of Stavros, Chairman of the Board of Directors (executive member). 2. Christos-Alexis Komninos of Konstan- tinos, Vice Chairman of the Board of Directors (non-executive member). 3. Dimitrios Malamos of Petros, Chief Executive Ocer of the Company (ex- ecutive member). 4. Vassilios Zairopoulos of Stylianos, Member of the Board of Directors (non-executive member). 5. Christos Shiatis of Panagiotis, Member of the Board of Directors (non-execu- tive member). 6. Petros Fronistas of Christos, Member of the Board of Directors (independ- ent non-executive member). 7. Myrto Papathanou of Christos, Mem- ber of the Board of Directors (inde- pendent non-executive member). 8. Spyridoula Maltezou of Andreas, Member of the Board of Directors (in- dependent non-executive member). 9. Theodoros Kitsos of Konstantinos, Member of the Board of Directors (in- dependent non-executive member). 10. Nikitas Glykas of Ioannis, Member of the Board of Directors (independent non-executive member). Decisions of the Extraordinary General Meeting of the Company’s shareholders of 11 th February 2021 The Extraordinary General Meeting of the Company’s shareholders on 11 th February 2021 took the following decisions: In the 1 st item of the agenda, the Meet- ing decided by majority, in accordance with the provisions of article 3 of Law 3016/2002, the election of the following persons: (a) Ms. Myrto Papathanou of Christos in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Konstantinos Gianniris of Ioannis, and (b) Ms. Spyridoula Maltezou of Andreas in replacement and for the remaining of the term of the resigned independent non-executive member of the Board of Directors Mr. Ioannis Apostolakos of George, The election of the above independent non-executive members of the Board of Directors takes place in the framework of the Company’s decision for the immedi- Amounts in thousand Euro, unless stated otherwise Contents >> Page 248 of 260 Annual Financial Report as of 31.12.2021 ate, substantial and eective compliance and adaptation of its organization to the requirements and regulations of the new Law 4706/2020 with regard to corporate governance. Both members that were elected accord- ing to the above meet the criteria and con- ditions of independence of both the arti- cle 4, par. 1 of Law 3016/2002 valid until 17.07.2021, as well as of article 9 par. 1 and 2 of Law 4706/2020. In the 2 nd item and in the context of har- monization with the requirements, criteria and regulations of the new Law 4706/2020 with regard to corporate governance and concerning both independence and suit- ability, diversity and mainly the adequate representation by gender in the Board of Directors, and following a relevant propos- al of the Remuneration and Nomination Committee (RNC), the Meeting approved by majority the election of a new eleven- member (11-member) Board of Directors, through the re-election of all its outgoing members, as well as the election of Mr. Georgios Samothrakis of Panagiotis as its new member. Following the above, the Board of Direc- tors of the Company, with a term in ac- cordance with the provisions of article 7, par. 2 of the Articles of Association, which is extended until the expiration of the deadline within which the next Ordinary General Meeting must convene and until the relevant decision, will consist of the following members: 1. Konstantinos Chalioris of Stavros 2. Christos-Alexis Komninos of Konstan- tinos 3. Dimitrios Malamos of Petros 4. Vassilios Zairopoulos of Stylianos 5. Christos Shiatis of Panagiotis 6. Petros Fronistas of Christos 7. Georgios Samothrakis of Panagiotis 8. Myrto Papathanou of Christos 9. Spyridoula Maltezou of Andreas 10. Theodoros Kitsos of Konstantinos 11. Nikitas Glykas of Ioannis Simultaneously with the same majority de- cision, the Extraordinary General Meeting appointed as independent members of the Board of Directors of the Company, the following: 1) Georgios Samothrakis of Pa- nagiotis, 2) Myrto Papathanou of Christos, 3) Spyridoula Maltezou of Andreas, 4) The- odoros Kitsos of Konstantinos and 5) Niki- tas Glykas of Ioannis as they all meet the required by the current regulatory frame- work (namely article 4, par. 1 of the current until 17.07.2021 Law 3016/2002 and arti- cle 9, par. 1 and 2 of Law 4706/2020) condi- tions and criteria of independence. The new Board of Directors of the Com- pany, elected by the Extraordinary General Meeting of Shareholders, which took place on 11 February 2021, was formed on the same day (11 February 2021) into body. In the 3 rd item, the Meeting approved by majority, in accordance with the provisions of article 44 of Law 4449/2017, as in force after its amendment by the article 74 of Law 4706/2020, the election of a new Au- dit Committee, which constitutes an Inde- pendent Committee and consists of three (3) members, of which one (1) independ- ent non-executive member of the Board of Directors of the Company and two (2) third parties - non-members of the Board of Directors. Within the above framework, the follow- ing persons were elected as members of the Audit Committee: 1. Mr. Georgios Samothrakis of Panagio- Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 249 of 260 tis, Independent non-executive Mem- ber of the Board of Directors, 2. Mr. Konstantinos Kotsilinis of Elefthe- rios, third party and non-Member of the Board of Directors and 3. Mr. Konstantinos Gianniris of Ioannis, third party and non-Member of the Board of Directors. The members of the Audit Committee as a whole have sucient knowledge of the sector in which the Company operates, while the majority of the members of the Audit Committee and in particular Messrs. George Samothrakis of Panagiotis and Konstantinos Kotsilinis of Eleftherios, are independent of the Company, given that: (a) They do not hold shares greater than 0.5% of the Company’s share capital; and (b) They do not have any dependency re- lationship with the Company or persons related to it, as this (dependency relation- ship) is specied in particular in the provi- sions of article 4 par. 1 of Law 3016/2002, which remains in force until 17.07.2021, as well as of article 9 par. 1 and 2 of Law 4706/2020. Furthermore, the criterion of sucient knowledge and experience in auditing or accounting is met in the person of both Mr. Georgios Samothrakis and Mr. Kon- stantinos Kotsilinis, and therefore each of the above members will be required to at- tend the meetings of the Audit Committee concerning the approval of the nancial statements. Finally, by the same majority decision, the Meeting specied the term of the Audit Committee as ve years, starting on Febru- ary 11, 2021 and ending on February 11, 2026. Following the election of a three-member Audit Committee by the Extraordinary General Meeting of Shareholders of 11 February 2021 and the appointment of the persons holding the positions of its mem- bers, the Audit Committee at the meeting of 16 February 2021 decided the election of Mr. Georgios Samothrakis of Panagiotis, Independent Non-Executive Member of the Board of Directors of the Company, as its Chairman, in accordance with the provi- sions of article 44, par. 1, Law 4449/2017, as in force today. Following the above, the Audit Committee was constituted into a body as follows: 1. Georgios Samothrakis of Panagiotis, Independent Non-Executive Member of the Board of Directors, Chairman of the Audit Committee. 2. Konstantinos Kotsilinis of Eleftherios, third party - non-Member of the Board of Directors, Member of the Audit Committee. 3. Konstantinos Gianniris of Ioannis, third party - non-Member of the Board of Directors, Member of the Audit Com- mittee. It is noted that from the above Members of the Audit Committee, Messrs. Georgios Samothrakis of Panagiotis and Konstanti- nos Kotsilinis of Eleftherios, i.e. the majori- ty of the members of the Audit Committee, meet the required by the current regulato- ry framework (article 4, par. 1 of the eec- tive until 17.07.2021 Law 3016/2002 and article 9, par. 1 and 2 of Law 4706/2020) conditions and criteria of independence. Amounts in thousand Euro, unless stated otherwise Contents >> Page 250 of 260 Annual Financial Report as of 31.12.2021 According to the decision of 12.03.2021 of its Board of Directors and after a relevant proposal made by the Audit Committee, Mr. Lambros Apostolopoulos was appoint- ed as Head of the Internal Audit Depart- ment (Unit). Mr. Apostolopoulos meets the require- ments of the current legal framework (arti- cle 15 of Law 4706/2020), i.e. he is full-time and exclusively employed, has personal and functional independence, is not a member of the Board of Directors or a member with the right to vote in standing committees of the Company, has no close relations with anyone who holds one of the above capacities in the Company and has the appropriate knowledge and rel- evant professional experience to assume the above position. Mr. Apostolopoulos assumed his duties as Head of the Internal Audit Department on 17/03/2021. On 22 March 2021, the Company an- nounced the expiration / completion of the Stock Repurchase Plan in accordance with the provisions of article 49 of Law 4548/2018, as in force, by the Extraordi- nary General Meeting of Shareholders of March 19 th , 2019. Appointment of New Head of the Internal Audit Department Expiration / Completion of the Stock Repurchase Plan Establishment of Committees of the Board of Directors The Board of Directors of the Company during its meeting on 22 nd March 2021, for the purposes of a substantial, eective and appropriate compliance and harmoniza- tion of the Company with the regulations of articles 11 and 12 of Law 4706/2020 re- garding the Committees of the Board of Directors, and also with the parallel adop- tion of best corporate governance prac- tices, decided the following: (a) the abolition of the existing Committee for Benets and Promotion of Nomina- tions (CBPN) and its replacement by the Remuneration and Nomination Com- mittee, (b) the establishment of the Strategy and Investment Committee, (c) the establishment of the Environmen- tal, Social Responsibility and Corporate Governance Committee, and nally (d) the establishment of the Human Re- sources Committee The Board of Directors during the above meeting appointed the members and set the responsibilities of these committees. Annual Ordinary General Meeting of the Company’s shareholders The Annual Ordinary General Meeting of the Company’s shareholders, which took place on May 21, 2021 remotely in real time via videoconference, decided the fol- lowing among others: a) the allocation (distribution) of income for the nancial year 2020 (01.01.2020- 31.12.2020) and specically the Gen- eral Meeting approved the distribution (payment) of a total dividend of Euro Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 251 of 260 6,947,002.24 (gross amount) to the shareholders of the Company from the earnings of the closing nancial year 2020, or 0.158820 Euros per share (gross amount), which after the increase corre- sponding to the 322,688 treasury shares held by the Company and which are ex- cluded from the payment of dividend, will amount to 0.16 Euros per share (gross amount). The Company’s shareholders registered in the records of the Dematerialized Se- curities System (SAT) as of Thursday 27 May 2021 (record date), were those en- titled to receive the above dividend. Wednesday 26 May 2021 was set as the ex-dividend date according to the rele- vant article 5.2 of the Athens Exchange Regulation. The payment of dividend commenced on Wednesday 2 June 2021, and was implemented through the Societe Anonyme under the name “PIRAEUS BANK S.A.”, according to the procedure stipulated by the Regulation of the Ath- ens Exchange in eect. b) the approval by majority of the Remu- neration Report, which was prepared in accordance with the provisions of arti- cle 112 of Law 4548/2018. The Report contains a comprehensive overview of the total remuneration of the members of the Board of Directors (executive and non-executive), and explains how the Remuneration Policy of the Company was implemented for the immediately preceding nancial year. The decisions of the General Meeting of Shareholders are posted on the Compa- ny’s website at the link https://www.thra- cegroup.com/gr/el/general-meetings/ Commencement of Share Buy-Back Plan The Management of the Company in ap- plication of the decisions of the Annual Or- dinary General Meeting of the sharehold- ers of May 21st, 2021 and of the Board of Directors of June 4th, 2021, announced on June 7th, 2021 the commencement of the share buy -back plan. New investment program of € 25.5 million with an emphasis on the production facilities of Xanthi The Board of Directors of the Company, following a relevant proposal by the Man- agement, approved a new, extraordinary investment plan. More specically, the Management, taking into consideration the broader market conditions as well as the strong cash position of the Group, pro- posed the immediate implementation of the above extraordinary investment plan, which is an additional investment com- pared to the current investment plan of 2021, or any other additional investment plan potentially approved at a later time. The new investment plan is oriented to- wards the Sustainable & Protable De- velopment of the Group, with a focus on the following strategic pillars: further re- duction of production costs and boost of competitiveness, improvement of prot margins, vertical integration of production processes and with parallel emphasis on the circular economy and nally, further reduction of the environmental footprint. Amounts in thousand Euro, unless stated otherwise Contents >> Page 252 of 260 Annual Financial Report as of 31.12.2021 The individual actions of the new invest- ment plan that will be implemented at the Group’s facilities, in Xanthi, Greece, are summarized as follows: h investment in mechanical ber production equipment: ber is a basic raw material for the production of non-woven needle punch fabrics. Needle Punch fabrics aim at a variety of applications in the sectors of infra- structure and construction, agricul- ture, automotive, etc. h investment in mechanical recycling equipment in order to increase the recycling capacity with regard to n- ished products or plastic waste, both from internal production and oper- ating processes as well as from third party sources. This action is in line with the commitment of the Group calling on the one hand for the use of more recycled raw materials and on the other hand for further reducing the environmental footprint of its nal products. h investment concerning the instal- lation and commissioning of pho- tovoltaic systems to cover part of the energy needs of the Group’s pro- duction plant complex in the area of Xanthi, Greece (net metering), with a targeted power capacity of 1.5 MW, demonstrating its commitment to- wards sustainable development, in the context of achieving energy sav- ings and for further reducing the envi- ronmental footprint. h investment in infrastructure (land and buildings), which will create con- ditions that are conducive to eciency gains of the production plants, but will also prepare the ground for future de- velopment of the business activity and protability of the Group’s companies. Moreover, under the above extraordinary investment plan, the following will take place at Don & Low’s facilities in Forfar, Scotland: h investment in mechanical laminat- ing equipment to increase produc- tion capacity with regard to the fur- ther processing of non-woven Spun bond fabrics, in order to achieve high- er prot margins. h investment in mechanical recycling equipment to increase the recycling capacity with regard to nished prod- ucts or plastic waste, both from inter- nal production and operating process- es as well as from third party sources. h investment in infrastructure (land and buildings), which will create con- ditions that are conducive to eciency gains of the production plant, but will also facilitate the future development of the business activity and protabil- ity of the company. The new investments amount in total to € 25.5 million, of which € 21.4 million con- cern the investments that will be imple- mented in the production facilities of the Group in Xanthi, Greece and € 4.1 million concern the investments in the Group’s subsidiary in Scotland, whereas all are be- ing related to the eld of Technical Fabrics. The nancing of this new investment plan will be carried out mainly with own funds. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 253 of 260 Election of a new member of the Board of Directors to replace the resigned Director - Reconstitution of the Board of Directors into a body The Board of Directors of the Company, during its meeting as of July 28 th , 2021 and following the relevant proposal made by the Company’s Remuneration & Nomina- tion Committee which took place in ac- cordance with the applicable Policy of Suitability and the procedures applied by the Company, elected: Mr. Athanasios Dimiou of Georgios as non-executive member, in replacement for the remaining term of the resigned non-ex- ecutive member of the Board of Directors Mr. Petros Fronistas of Christos. The above replacement and the election of the specic non-executive member of the Board of Directors will contribute to the further strengthening of the Board of Directors, in particular with the new mem- ber’s many years of experience and spe- cialized knowledge in the eld of plastics and specically in production technolo- gies, while this replacement takes place in the context of the Company’s decision for the substantial and more eective ad- aptation of its organization to the require- ments and regulations of the new Law 4706/2020 (Government Gazette AD 136 / 17.07.2020) on corporate governance and is harmonized with the provisions of the particular law on suitability. The election of the above new non-exec- utive member of the Board of Directors is going to be announced, in accordance with the provisions of the law and the Company’s Articles of Association, at the next General Meeting convened by the Company’s shareholders. Following the above, the Board of Direc- tors of the Company was reconstituted into a body for the remainder of its term, i.e. until February 11th, 2026, as follows: 1. Konstantinos Chalioris of Stavros, Chairman of the Board of Directors (executive member). 2. Theodoros Kitsos of Konstantinos, Vice Chairman of the Board of Direc- tors (independent non-executive member). 3. Dimitrios Malamos of Petros, Chief Ex- ecutive Ocer of the Company (ex- ecutive member). 4. Athanasios Dimiou of Georgios, Mem- ber of the Board of Directors (non- executive member). 5. Vassilios Zairopoulos of Stylianos, Member of the Board of Directors (non-executive member). 6. Christos Alexis Komninos of Konstan- tinos, Member of the Board of Direc- tors (non-executive member). 7. Christos Shiatis of Panagiotis, Mem- ber of the Board of Directors (non- executive member). 8. Georgios Samothrakis of Panagiotis, Member of the Board of Directors (independent non-executive mem- ber). 9. Myrto Papathanou of Christos, Mem- ber of the Board of Directors (inde- pendent non-executive member). 10. Spyridoula Maltezou of Andreas, Member of the Board of Directors (independent non-executive mem- ber). 11. Nikitas Glykas, of Ioannis, Member of the Board of Directors (independ- ent non-executive member). Amounts in thousand Euro, unless stated otherwise Contents >> Page 254 of 260 Annual Financial Report as of 31.12.2021 Completion of the Process concerning the Sale of the Industrial Property of the fully owned, by 100%, subsidiary Thrace Linq INC. The Management of the Company, fol- lowing the relevant announcements on 24.04.2020, 18.06.2020, 28.08.2020 and 17.06.2021, in relation to the transfer –due to the respective sale by its 100% subsidi- ary company Thrace Linq INC.-- of the pri- vately owned industrial property, which is located in South Carolina, U.S.A., after the nal cessation of the production opera- tion of the above subsidiary, informed the investor community on 18/08/2021 about the following: After the collection of the entire remaining part of USD 3.5 million (plus the interest due and related expens- es), and the consequent abolition of any impediments associated with this particu- lar repayment, the sale transaction with re- gard to the above property was completed and consequently the transfer of the prop- erty became certain and nal. It is reminded that the total consideration with regard to the above sale transaction amounted to USD 14.5 million, the great- est part of which (i.e. USD 11 million) had been collected at the time of the trans- fer agreement of the property (i.e. on 15/06/2020). It is noted that as a result of the comple- tion of the above sale transaction of the property as per above, the Group recorded an extraordinary prot for the year 2021, amounting to USD 7.78 million (i.e. ap- proximately EUR 6.57 million). The nalization of sale of the property of the fully owned by 100% subsidiary Thrace Linq INC. has completed in the most ben- ecial way for the Group its action plan regarding the cessation of the production activities of the specic subsidiary. At the same time, the Group continues to serve uninterruptedly the geotextile market in America from the Group’s facilities in Europe and from Lumite INC., a joint ven- ture of the Group in the U.S.A., gradually strengthening its position in the particular market as well. Replacement of the Ocer of Investor Relations and Corporate Announcements Department The Board of Directors of the Company, with a relevant decision, has appointed Mr. Dimitrios Fragkou of Vassilios as the Ocer of the Investors Relation and Corporate An- nouncements Department of the Company in replacement of Mrs. Ioanna Karathanasi daughter of Paraskevas, due to the with- drawal of the latter from the Company. Mr. Dimitrios Fragkou took over his duties as the Ocer of the Investors Relation and Corporate Announcements Department on September 13, 2021. Donation of surgical masks Thrace Plastics Group actively supported the eort of the National Hellenic Wheel- chair Basketball Team to claim the highest possible distinction and awarded 3,000 certied disposable surgical masks, cover- ing the needs for increased protection as part of the organization of the 14 th Euro- pean Men’s Wheelchair Basketball Cham- pionship, which was held at the Peace and Friendship Stadium from 12-18 July 2021. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 255 of 260 Issuance of Tax Certicate of Tax Certicate for the Fiscal Year in accordance with article 65 A of Law 4174/2013 Interim Dividend for the Year 2021 Following the special tax audit carried out for the nancial year 2020 by the statu- tory external auditors in accordance with article 65A of Law 4174/2013, both on the Company and its subsidiaries “Thrace Nonwovens & Geosynthetics S.A.”, “Thrace- Polylms S.A.”, “Thrace Plastics Pack S.A.”, “Thrace Eurobent S.A.” and “Thrace Green- houses S.A.”, the relevant tax certicates were issued with an unqualied opinion. The Board of Directors of the Company during the meeting of September 24th, 2021 approved the distribution of an in- terim dividend for the nancial year 2021 based on the interim nancial statements for the period 01.01.2021-30.06.2021. The Interim dividend amounted in total to 4,750 thousand Euros (gross amount), i.e. 0.108592646 Euros per share of the Company. The above amount through the increase corresponding to the 504,163 treasury shares held by the Company and which are not entitled to an interim divi- dend, settled at 0.109858877 Euros per share and was subject to a withholding tax of 5%, in accordance with the provisions of Law 4646/2019 (Government Gazette A’ 201/12.12.2019). Therefore, the nal amount paid as Interim dividend for the year 2021 amounted to 0.104365933 Euros per share. Following the above and after the approval of the nancial statements for the period 01.01.2021-30.06.2021 and especially the entry, as of 6.10.2021, in the General Electronic Commercial Regis- try (GEMI) of the relevant announcement regarding the publication of the above - nancial statements, the Board of Directors of the Company at its meeting of October 14, 2021, set Wednesday, December 1, 2021 as the cut-o date for the interim div- idend, Thursday, December 2, 2021 as the date of determination of the beneciaries to the above dividend (record date), and Wednesday, December 8, 2021 as the pay- ment commencement date. The payment of the interim dividend was made through the paying Bank “PIRAEUS BANK SA”. The Board of Directors of the Company, during its meeting as of November 18, 2021, made the appointment of Ms. Evan- gelia (Elina) Sideri of Georgios as the Oc- er of the Investor Relations and Corporate Announcements Department of the Com- pany in replacement of Mr. Dimitrios Frag- kou, who had been acting under the above capacity up until November 23, 2021. Ms. Evangelia Sideri took over her duties on November 24, 2021. Appointment of new Ocer of Investor Relations and Corporate Announcements Department Amounts in thousand Euro, unless stated otherwise Contents >> Page 256 of 260 Annual Financial Report as of 31.12.2021 3.34 Events after the Financial Position Date Direct Impact of the War Conict on the Financial of the Group The war outbreak after the Russian mili- tary invasion of Ukraine creates geopoliti- cal instability with macroeconomic conse- quences, the extent of which cannot yet be estimated. The Group does not have signicant business activities in Ukraine and in Russia, i.e. in the areas directly af- fected by the war. Furthermore, the overall exposure to Ukraine and Russia is minimal. Based on the nancial results of 2021, sales in these two countries stood at 0.6% of the Group’s total turnover. Therefore, no direct material impact is expected on the nan- cial performance of the Group, given the non-existence of business activity in the specic area. However, the eects on the Group’s activities from the negative de- velopments in the energy sector and from the wider macroeconomic uncertainty are closely monitored and in case the crisis is prolonged and generates stronger ina- tionary pressures, the Group will re-evalu- ate and may modify its estimates accord- ingly. Appointment of Risk & Compliance Manager The Board of Directors of the Company, during its meeting of 21/02/2022, ap- pointed Mr. Michael Psarros of George as Head of the Department (Unit) of Regula- tory Compliance and Risk Management. Mr. Psarros assumed the duties as Risk & Compliance Manager on 24/02/2022. Proposed Dividend for the Year 2021 The Board of Directors of the Company at the meeting of September 24, 2021 de- cided to distribute an interim dividend for the nancial year 2021 based on the interim nancial statements for the period 01.01.2021-30.06.2021. The distribution and payment of the above dividend took place on December 8, 2021. The Board of Directors will propose the distribution of dividend to the Annual General Meeting of Shareholders, however taking into ac- count the conditions that are constantly changing due to Covid-19 pandemic and the Russian invasion of Ukraine, the nal amount to be proposed will be decided at a later stage and in any case prior to the date of the Annual General Meeting of Shareholders. There are no other events subsequent to the date of the Balance Sheet, which aect the nancial statements of the Group. Amounts in thousand Euro, unless stated otherwise Contents >> Annual Financial Report as of 31.12.2021 Page 257 of 260 The Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, were approved by the Board of Directors on 12 April 2022 and are signed by the representatives of such. The Chairman of the BoD The Chief Executive Ocer The Chief Financial Ocer The Chief Accountant KONSTANTINOS ST. CHALIORIS DIMITRIOS P. MALAMOS DIMITRIOS V. FRAGKOU FOTINI K. KYRLIDOU ID NO. AM 919476 ID NO. ΑΟ 000311 ID NO. ΑΗ 027548 ID NO. ΑΚ 104541 Accountant Lic. Reg. No. 34806 Α’ CLASS Amounts in thousand Euro, unless stated otherwise Contents >> Page 258 of 260 Annual Financial Report as of 31.12.2021 V. ONLINE AVAILABILITY OF THE INTERIM FINANCIAL REPORT The Annual Financial Statements of the Company, the Audit Report of the Chartered Au- ditor-Accountant and the Management Report of the Board of Directors, as well as the Annual Financial Statements, the reports of the Chartered Auditor-Accountant and the Reports of the Board of Directors of the companies that are incorporated in the consoli- dated nancial statements of “THRACE PLASTICS CO SA” are registered on the internet at www.thracegroup.gr. General Commerce Reg. No. 12512246000 Domicile: Magiko, Municipality of Avdira, Xanthi Greece Oces: 20 Marinou Antypa Str. 17455 Alimos, Attica Greece www.thracegroup.com 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